TEKNI-PLEX, INC.
$275,000,000
12 3/4% Senior Subordinated Notes due 2010
Purchase Agreement
June 15, 2000
X.X. Xxxxxx Securities Inc.
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
Tekni-Plex, Inc., a corporation formed under the laws of Delaware (the
"Company"), proposes to issue and sell (the "Offering") to X.X. Xxxxxx
Securities Inc. (the "Initial Purchaser") $275,000,000 principal amount of its
12 3/4% Senior Subordinated Notes due 2010 (the "Notes"). The Notes will be
issued pursuant to the provisions of an Indenture to be dated as of June 21,
2000 (the "Indenture") among the Company, the Guarantors (as defined) and HSBC
Bank USA, as trustee (the "Trustee"). The Notes will be guaranteed (the
"Guarantee" and, collectively with the Notes, the "Securities") on a senior
subordinated basis by each of the domestic subsidiaries of the Company listed on
Schedule A attached hereto (the "Guarantors").
The sale of the Securities to the Initial Purchaser will be made
without registration of the Securities under the Securities Act of 1933, as
amended (the "Act" or the "Securities Act"), in reliance upon the exemption
therefrom provided by Section 4(2) of the Act. Holders of the Securities will
have the benefits of a Registration Rights Agreement to be dated as of June 21,
2000 among the Company, the Guarantors and the Initial Purchaser, substantially
in the form attached hereto as Exhibit A (the "Registration Rights Agreement")
pursuant to which the Issuers will agree to file with the Securities and
Exchange Commission (the "Commission") (i) a registration statement under the
Securities Act (the "Exchange Registration Statement") registering an issue of
senior subordinated notes of the Company which are identical in all material
respects to the Securities (except that the Exchange Notes will not contain
terms with respect to transfer restrictions or liquidated damages) (such notes,
together with any Private Exchange Securities (as defined in the Registration
Rights Agreement), are referred to herein as the "Exchange Notes") and (ii)
under certain limited circumstances, a shelf registration statement with respect
to the resale of the Securities pursuant to Rule 415 under the Securities Act
(the "Shelf Registration Statement"). This Agreement, the Indenture, the Notes,
the Exchange Notes and the Registration Rights Agreement and the Guarantees are
collectively referred to herein as the "Offering Agreements."
The Securities are being sold in connection with (i) the
recapitalization of the Company (the "Recapitalization"), pursuant to a
recapitalization agreement (together with all exhibits thereto and related
documents and agreements, the "Recapitalization Agreement") dated as of April
12, 2000 among the Company, and the parties named on the signature pages
attached thereto, (ii) the execution of a Credit Agreement (together with all
exhibits thereto and related documents and agreements, the "Credit Agreement")
providing for a $100.0 million term loan facility (the "A Term Loan Facility"),
a $244.0 million term loan facility (the "B Term Loan Facility" and, together
with the A Term Loan Facility, the "Term Loan Facilities") and a $100.0 million
revolving credit facility (the "Revolving Credit Facility" and together with the
Term Loan Facilities, the "Bank Financing") and (iii) the consent solicitations
and tender offers (the "Debt Tender Offers") by the Company for all of its
outstanding 11 1/4% Senior Subordinated Notes due 2007 (the "11 1/4% Notes") and
all of its outstanding 9 1/4% Senior Subordinated Notes due 2008 (the "9 1/4%
Notes" and, together with the 11 1/4% Notes, the "Retired Notes") pursuant to an
offer to purchase and consent solicitation statement (the "Offer to Purchase"
and, together with all related documents and agreements, including but not
limited to the Dealer Manager Agreement dated as of May 19, 2000 between the
Company and the Initial Purchaser and the Supplemental Indentures (as defined
below), the "Tender Offer Documents"). In connection with the Recapitalization,
(w) Tekni-Plex Partners LLC will contribute not less than $47.0 million to the
Company (the "Equity Contribution"), (x) the Company will purchase shares of its
common stock from certain investors holding through MST/TP Partners, L.P. (the
"Repurchase"), (y) the Company will repay substantially all of its outstanding
debt under its existing credit facility (the "Refinancing") and (z) pursuant to
the Debt Tender Offers, the Company will accept for payment and purchase not
less than a majority of each issue of Retired Notes and amend the indenture
governing each issue of Retired Notes (the "Old Indentures") to delete or amend
such provisions as the Company requires and execute and deliver supplemental
indentures to effect such amendments (the "Supplemental Indentures"). The
Recapitalization, the Equity Contribution, the Repurchase, the Bank Financing,
the Debt Tender Offers and the Refinancing are collectively referred to herein
as the "Transactions." The Recapitalization Agreement, the Credit Agreement and
the Tender Offer Documents are referred to herein as the "Transaction
Documents."
The Company and the Guarantors hereby agree, jointly and severally,
with the Initial Purchaser as follows:
1. The Company agrees to issue and sell the Notes and the Guarantors
agree to issue the Guarantees to the Initial Purchaser as hereinafter provided,
and the Initial Purchaser, upon the basis of the representations and warranties
herein contained, but subject to the conditions hereinafter stated, agrees to
purchase from the Company all of the Securities at a price (the "Purchase
Price") equal to 95.88% of their principal amount. No additional consideration
shall be paid by the Initial Purchaser for the Guarantee.
2. The Company and the Guarantors understand that the Initial Purchaser
intends (x) to offer privately the Securities as soon after this Agreement has
become effective as in the
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judgment of the Initial Purchaser is advisable and (y) initially to offer the
Securities upon the terms set forth in the Offering Memorandum (as defined
below).
The Company and the Guarantors confirm that they have authorized the
Initial Purchaser, subject to the restrictions set forth below, to distribute
copies of the Offering Memorandum in connection with the offering of the
Securities. The Initial Purchaser hereby makes to the Company and the Guarantors
the following representations and agreements:
(i) it is a qualified institutional buyer within the meaning of
Rule 144A under the Act; and
(ii) (A) it will not solicit offers for, or offer to sell, the
Securities by any form of general solicitation or general advertising
(as those terms are used in Regulation D under the Act) or in any
manner involving a public offering within the meaning of Section 4(2)
of the Act, (B) it will solicit offers for the Securities only from,
and will offer, sell or deliver the Securities only to, (1) persons
whom it reasonably believes to be "qualified institutional buyers"
within the meaning of Rule 144A under the Act to whom notice has been
given that such offer, sale or delivery is being made in reliance on
Rule 144A in transactions under Rule 144A or (2) upon the terms and
conditions set forth in Annex I to this Agreement, and (C) it is not
purchasing with a view to or for offer or sale in connection with any
distribution that would be in violation of federal or state law.
3. Payment for the Securities shall be made by wire transfer in
immediately available funds, to the account specified by the Company to the
Initial Purchaser no later than noon on the Business Day (as defined below)
prior to the Closing Date (as defined below), on June 21, 2000, or at such other
time on the same or such other date, not later than the fifth Business Day
thereafter, as the Initial Purchaser and the Company may agree upon in writing.
The time and date of such payment are referred to herein as the "Closing Date".
As used herein, the term "Business Day" means any day other than a day on which
banks are permitted or required to be closed in New York City.
Payment for the Securities shall be made against delivery to the
nominee of The Depository Trust Company for the account of the Initial Purchaser
of one or more global notes representing the Securities (collectively, the
"Global Notes"), with any transfer taxes payable in connection with the transfer
to the Initial Purchaser of the Securities duly paid by the Company. The Global
Notes will be made available for inspection by the Initial Purchaser at the
office of X.X. Xxxxxx Securities Inc. at the address set forth above, or at such
other location as the Company and the Initial Purchaser agree, not later than
1:00 P.M., New York City time, on the Business Day prior to the Closing Date.
4. Each of the Company and each Guarantor represents and warrants to
the Initial Purchaser that:
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(a) a preliminary offering memorandum, dated June 2, 2000 (the
"Preliminary Offering Memorandum") and an offering memorandum, dated June
15, 2000 (the "Offering Memorandum") have been prepared in connection with
the offering of the Securities. Any reference to the Preliminary Offering
Memorandum or the Offering Memorandum shall be deemed to refer to and
include any Rule 144A(d)(4) Information (as defined in Section 5(m))
furnished by the Company prior to the completion of the distribution of the
Securities. The Preliminary Offering Memorandum or the Offering Memorandum
and any amendments or supplements thereto did not and will not, as of their
respective dates, contain an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading;
provided that this representation and warranty does not apply to statements
or omissions made in reliance upon and in conformity with information
furnished in writing by the Initial Purchaser relating to the Initial
Purchaser to the Company expressly for use in the Preliminary Offering
Memorandum, the Offering Memorandum or any amendment or supplement thereto;
(b) the financial statements, and the related notes thereto, included
in the Offering Memorandum present fairly the consolidated financial
position of each of the Company and its consolidated subsidiaries and of
PureTec Corporation and its consolidated subsidiaries, as of the dates
indicated and the results of their operations and the changes in their
consolidated cash flows for the periods specified; said financial
statements have been prepared in conformity with generally accepted
accounting principles and practices applied on a consistent basis; and the
pro forma financial information, and the related notes thereto, included in
the Offering Memorandum are based upon good faith estimates and assumptions
believed by the Company to be reasonable;
(c) since the respective dates as of which information is given in the
Offering Memorandum, except as otherwise stated therein, there has not been
any material change in the capital stock or long-term debt of the Company
or the Subsidiaries (as defined below), or any material adverse change, or
any development involving a prospective material adverse change, in or
affecting the business, condition (financial or other), results of
operations or prospects of the Company and the Subsidiaries, taken as a
whole (a "Material Adverse Change" or "Prospective Material Adverse
Change", respectively), otherwise than as set forth or contemplated in the
Offering Memorandum; and except as set forth or contemplated in the
Offering Memorandum, neither the Company, nor any of the Subsidiaries, has
entered into any transaction or agreement (whether or not in the ordinary
course of business) material to the Company and the Subsidiaries, taken as
a whole;
(d) the Company has been duly incorporated and is validly existing as
a corporation under the laws of its jurisdiction of incorporation, with
power and authority (corporate and other) to own its properties and conduct
its business as described in
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the Offering Memorandum, and has been duly qualified as a foreign
corporation for the transaction of business and is in good standing under
the laws of each other jurisdiction in which it owns or leases properties,
or conducts any business, so as to require such qualification, other than
where the failure to be so qualified or in good standing would not have a
material adverse effect on the business, condition (financial or other),
results of operations or prospects of the Company and the Subsidiaries,
taken as a whole (a "Material Adverse Effect"); the authorized, issued and
outstanding capital stock of the Company, prior to the Recapitalization is,
and after giving effect to the Recapitalization will be, as set forth in
the Offering Memorandum, and is, or after giving effect to the
Recapitalization will be, owned by the persons and in the amounts as set
forth therein; the shares of issued and outstanding capital stock of the
Company have been duly authorized and validly issued and are fully paid and
non-assessable; none of the outstanding shares of capital stock of the
Company was issued in violation of any preemptive or other similar rights;
the respective percentage equity interests of investors in MST/TP Partners
LLC and Tekni-Plex Partners LLC, after giving effect to the
Recapitalization, will be as set forth in the Offering Memorandum;
(e) the Company has no subsidiaries other than those set forth on
Schedule A attached hereto (each a "Subsidiary" and together, the
"Subsidiaries"); each of the Subsidiaries has been duly incorporated and,
unless otherwise indicated on Schedule A, is validly existing as a
corporation under the laws of its jurisdiction of incorporation, with power
and authority (corporate and other) to own its properties and conduct its
business as described in the Offering Memorandum, and has been duly
qualified as a foreign corporation for the transaction of business and is
in good standing under the laws of each jurisdiction in which its owns or
leases properties or conducts any business, so as to require such
qualification, other than where the failure to be so qualified or in good
standing would not have a Material Adverse Effect; and all the outstanding
shares of capital stock of the Subsidiaries has been duly authorized and
validly issued, are fully-paid and non-assessable under the corporate laws
of the jurisdiction of incorporation, and (except as described in the
Offering Memorandum) owned by the Company free and clear of all liens,
encumbrances, security interests and claims;
(f) this Agreement has been duly authorized, executed and delivered by
the Company and the Guarantors and (assuming the due authorization,
execution and delivery by the Initial Purchaser) will constitute a valid
agreement of the Company and the Guarantors and, subject to (i) the effect
of applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance and other laws affecting creditors' rights generally,
(ii) general principles of equity and (iii) principles of public policy
limiting the rights to enforce indemnification provisions (clauses (i),
(ii) and (ii) being referred to herein as the "Creditors' Rights
Limitations"), will be binding and will be enforceable in accordance with
its terms; and will conform, in all material respects, to the description
thereof in the Offering Memorandum;
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(g) the Registration Rights Agreement has been duly authorized by each
of the Company and the Guarantors, and when executed and delivered by them
and (assuming the due authorization, execution and delivery by the Initial
Purchaser) will constitute a valid agreement of the Company and the
Guarantors and, subject to the Creditors' Rights Limitations, will be
binding and will be enforceable in accordance with its terms; and will
conform, in all material respects, to the description thereof in the
Offering Memorandum;
(h) the Notes and the Exchange Notes have been duly authorized by the
Company, and when issued and delivered pursuant to this Agreement (and the
Registration Rights Agreement in the case of the Exchange Notes), will have
been duly executed, issued and delivered and, when the Notes and the
Exchange Notes are authenticated by the Trustee in accordance with the
terms of the Indenture (assuming the due authorization, execution and
delivery by the Trustee) and are delivered to and paid for by the Initial
Purchaser in accordance with the terms of this Agreement (and the
Registration Rights Agreement in the case of the Exchange Notes), will
constitute valid obligations of the Company entitled to the benefits
provided by the Indenture and, subject to the Creditors' Rights
Limitations, will be binding and will be enforceable in accordance with
their terms; and the Securities will conform, in all material respects, to
the descriptions thereof in the Offering Memorandum;
(i) the Guarantees have been duly authorized by the Guarantors, and
when the Notes or Exchange Notes, as the case may be, are issued and
delivered pursuant to this Agreement (and the Registration Rights Agreement
in the case of the Exchange Notes), will have been duly executed and
delivered and, when the Notes or Exchange Notes, as the case may be, are
authenticated by the Trustee in accordance with the terms of the Indenture
(assuming the due authorization, execution and delivery by the Trustee) and
are delivered to and paid for by the Initial Purchaser in accordance with
the terms of this Agreement (and the Registration Rights Agreement in the
case of the Exchange Notes), will constitute a valid obligation of the
Guarantors and, subject to the Creditors' Rights Limitations, will be
binding and will be enforceable in accordance with its terms;
(j) the Indenture has been duly authorized by the Company and the
Guarantors and, when executed and delivered by each of the Company and the
Guarantors (assuming the due authorization, execution and delivery by the
Trustee), the Indenture will constitute a valid instrument of the Company
and each such Guarantor and, subject to the Creditors' Rights Limitations,
will be binding and will be enforceable in accordance with its terms; and
the Indenture will conform, in all material respects, to the descriptions
thereof in the Offering Memorandum;
(k) the Company and the Guarantors have the corporate power and
authority to execute and deliver the Transaction Documents (to the extent
each is a party thereto) and to perform their respective obligations,
thereunder; all action to be taken
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by the Company and the Guarantors for the due and proper authorization,
execution and delivery of each of the Transaction Documents to which it is
a party and the consummation of the transactions contemplated thereby will
have been duly and validly taken as of the Closing Date; each of the
Transaction Documents has been duly authorized by the Company and the
Guarantors to the extent that each is a party thereto and when executed and
delivered by each of the parties thereto, each of the Transaction Documents
will constitute a valid instrument or agreement of each of the Company and
the Guarantors, as the case may be to the extent they are a party thereto,
and subject to the Creditors' Rights Limitations, will be binding and
enforceable in accordance with its terms; and the Transaction Documents
conform, in all material respects, to the descriptions thereof in the
Offering Memorandum;
(l) none of the transactions contemplated by this Agreement
(including, without limitation, the use of the proceeds from the sale of
the Securities) will violate or result in a violation of Section 7 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), or any
regulation promulgated thereunder, including, without limitation,
Regulations T, U, and X of the Board of Governors of the Federal Reserve
System;
(m) neither the Company nor any Subsidiary is, or with the giving of
notice or lapse of time or both would be, in violation of or in default
under its Certificate of Incorporation or By-Laws (or similar
organizational documents) or any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which it is a party or by
which it or any of its properties is bound, except for violations and
defaults which individually and in the aggregate would not have a Material
Adverse Effect or are not material to the holders of the Securities as
such; the issue and sale of the Securities and the performance by each of
the Company and the Guarantors of all of the provisions of their
obligations under the Offering Agreements and the Transaction Documents and
the consummation of the transactions herein and therein contemplated will
not conflict with or result in a breach of any of the terms or provisions
of, or constitute a default under, any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which the Company or any
Guarantor is a party or by which the Company or any Guarantor is bound or
to which any of the property or assets of the Company or any Guarantor is
subject, except such as would not have a Material Adverse Effect, nor will
any such action result in any violation of the provisions of the
Certificate of Incorporation or By-Laws of the Company or any Guarantor or
(assuming the accuracy of the representations by, and compliance with the
agreements of, the Initial Purchaser set forth in paragraph 2 of this
Agreement) any applicable law or statute or any order, rule or regulation
of any court or governmental agency or body having jurisdiction over the
Company, any Guarantor or any of their respective properties; and no
consent, approval, authorization, order, license, registration or
qualification of or with any such court or governmental agency or body is
required for the issue and sale of the Securities or the consummation by
the Company or any Guarantor of the transactions contemplated by the
Offering Agreements and the Transaction Docu-
7
ments, except such consents, approvals, authorizations, registrations or
qualifications as may be required under any state securities or Blue Sky
Laws in connection with the purchase and distribution of the Securities by
the Initial Purchaser and except as such as would not have a Material
Adverse Effect;
(n) other than as set forth or contemplated in the Offering
Memorandum, there are no legal or governmental investigations, actions,
suits or proceedings pending or, to the knowledge of the Company,
threatened against or affecting the Company or any Subsidiary or any of
their respective properties or to which the Company or any Subsidiary is or
may be a party or to which any property of the Company or any Subsidiary is
or may be the subject which could individually or in the aggregate have, or
reasonably be expected to have, a Material Adverse Effect and, to the best
of the Company's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;
(o) neither the Company nor any affiliate (as defined in Rule 501(b)
of Regulation D under the Act ("Regulation D")) of the Company has
directly, or through any agent, sold, offered for sale, solicited offers to
buy or otherwise negotiated in respect of, any security (as defined in the
Act) which is or will be integrated with the sale of the Securities in a
manner that would require the registration under the Act of the offering
contemplated by the Offering Memorandum;
(p) neither the Company, the Guarantors nor any person (other than the
Initial Purchaser, as to which the Company makes no representation) acting
on their behalf has offered or sold the Securities by means of any general
solicitation or general advertising within the meaning of Rule 502(c) under
the Act or, with respect to Securities sold outside the United States to
non-U.S. persons (as defined in Rule 902 under the Act), by means of any
directed selling efforts within the meaning of Rule 902 under the Act and
the Company, the Guarantors and any of their affiliates and any person
(other than the Initial Purchaser) acting on their behalf has complied with
and will implement the "offering restriction" within the meaning of such
Rule 902;
(q) the Company is not, and will not be after giving effect to the
offering and sale of the Securities to be sold and the application of the
proceeds from such sale (as described in the Offering Memorandum under the
caption "Use of Proceeds"), an "investment company" as such term is defined
in the Investment Company Act of 1940, as amended;
(r) assuming that the representations of the Initial Purchaser set
forth in paragraph 2 of this Agreement are true, correct and complete and
assuming compliance by the Initial Purchaser with its agreements in
paragraph 2 of this Agreement, it is not necessary in connection with the
offer, sale and delivery of the Securities in the manner contemplated by
this Agreement to register the Securities under the Act or to qualify an
indenture under the Trust Indenture Act of 1939, as amended (the "TIA");
8
(s) the Securities satisfy the requirements set forth in Rule
144A(d)(3) under the Act;
(t) BDO Xxxxxxx, LLP, who has certified certain financial statements
of the Company and its subsidiaries and Deloitte and Touche LLP who has
certified certain financial statements of PureTec Corporation and its
subsidiaries, are independent public accountants as required by the Act;
(u) the Company and the Subsidiaries have good and marketable title in
fee simple to all material items of real property and good and marketable
title to all material personal property owned by them, in each case free
and clear of all liens, encumbrances and defects except such as are
otherwise described or referred to in the Offering Memorandum or such as do
not interfere with the use made or proposed to be made of such property by
the Company and the Subsidiaries; and any real property and buildings held
under lease by the Company or the Subsidiaries are held by them under
valid, existing and enforceable leases (subject to the Creditors' Rights
Limitations) with such exceptions as are not material and do not interfere
with the use made or proposed to be made of such property and buildings by
the Company or the Subsidiaries. The Company and the Subsidiaries own or
possess, or have no reason to believe they cannot acquire on reasonable
terms, adequate licenses or other rights to use all patents, trademarks,
service marks, trade names, copyrights and know-how necessary to conduct
the businesses now or proposed to be operated by them as described in the
Offering Memorandum, except where the failure to own, possess or have the
ability to acquire any such licenses or other rights could not,
individually or in the aggregate, be reasonably expected to have a Material
Adverse Effect, and neither the Company nor any Subsidiary has received any
written or, to the best knowledge of the Company, oral notice of
infringement of or conflict with asserted rights of others with respect to
any patents, trademarks, service marks, trade names, copyrights or know-how
which, if such assertion of infringement or conflict were sustained, would
have a Material Adverse Effect;
(v) the Company and the Subsidiaries have filed all federal, state,
local and foreign tax returns which have been required to be filed and have
paid all taxes shown thereon and all assessments received by them or any of
them to the extent that such taxes have become due and are not being
contested in good faith except in any case where the failure to file or pay
would not individually or in the aggregate have a Material Adverse Effect,
and, except as disclosed in the Offering Memorandum, the Company has no
knowledge of any material tax deficiency which has been or might reasonably
be expected to be asserted or threatened against the Company;
(w) each of the Company and each Subsidiary owns, possesses or has
obtained all material licenses, permits, certificates, consents, orders,
approvals and other authorizations from, and has made all declarations and
filings with, all federal, state, local and other governmental authorities
(including foreign regulatory agencies), all
9
self-regulatory organizations and all courts and other tribunals, domestic
or foreign, necessary to own or lease, as the case may be, and to operate
its properties and to carry on its business as conducted as of the date
hereof, except to the extent that the failure to so obtain or file,
individually or in the aggregate, could not reasonably be expected to have
a Material Adverse Effect, and neither the Company nor any Subsidiary has
received any actual notice, or is not aware, of any proceeding relating to
revocation or modification of any such license, permit, certificate,
consent, order, approval or other authorization, except as described in the
Offering Memorandum; and each of the Company and each Subsidiary is in
compliance with all laws and regulations relating to the conduct of its
business as of the date hereof;
(x) there are no existing or, to the best knowledge of the Company,
threatened labor disputes with the employees of the Company and the
Subsidiaries which are likely to have a Material Adverse Effect;
(y) each of the Company and each Subsidiary (i) is in compliance with
any and all applicable federal, state and local laws and regulations
relating to the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants
("Environmental Laws"), (ii) has received all permits, licenses or other
approvals required of it under applicable Environmental Laws to conduct its
business and (iii) is in compliance or is in the process of complying with
all terms and conditions of any such permit, license or approval, except
where such noncompliance with Environmental Laws, failure to receive
required permits, licenses or other approvals or failure to comply with the
terms and conditions of such permits, licenses or approvals would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect; associated costs and liabilities (including, without
limitation, any capital or operating expenditures required for clean-up,
closure of properties or compliance with Environmental Laws or any permit,
license or approval, any related constraints on operating activities and
any potential liabilities to third parties) would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect;
and
(z) each employee benefit plan, within the meaning of Section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
that is maintained, administered or contributed to by the Company or any
affiliates of the Company for employees or former employees of the Company
and its affiliates has been maintained, in all material respects, in
compliance with its terms and the requirements of any applicable statutes,
orders, rules and regulations, including but not limited to ERISA and the
Internal Revenue Code of 1986, as amended (the "Code"); no prohibited
transaction, within the meaning of Section 406 of ERISA or Section 4975 of
the Code has occurred with respect to any such plan excluding transactions
effected pursuant to a statutory or administrative exemption and excluding
transactions which would not have a Material Adverse Effect; and for each
such plan which is subject to the funding rules of Section 412 of the Code
or Section 302 of ERISA no "ac-
10
cumulated funding deficiency" as defined in Section 412 of the Code has
been incurred, whether or not waived, and the fair market value of the
assets of each such plan which is subject to Title IV of ERISA (excluding
for these purposes accrued but unpaid contributions) exceeded the present
value of all benefits accrued under such plan as determined using
reasonable actuarial assumptions.
5. Each of the Company and each Guarantor covenants and agrees with the
Initial Purchaser as follows:
(a) before distributing any amendment or supplement to the Offering
Memorandum, to furnish to the Initial Purchaser a copy of the proposed
amendment or supplement for review and not to distribute any such proposed
amendment or supplement to which the Initial Purchaser reasonably objects;
(b) if, at any time prior to the completion of the initial placement
of the Securities, any event shall occur as a result of which it is
necessary to amend or supplement the Offering Memorandum in order that the
Offering Memorandum does not contain an untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances when the Offering Memorandum is
delivered to a purchaser, not misleading, or if it is necessary to amend or
supplement the Offering Memorandum to comply with law, forthwith to prepare
and furnish, at the expense of the Company, to the Initial Purchaser and to
the dealers (whose names and addresses the Initial Purchaser will furnish
to the Company) to which Securities may have been sold by the Initial
Purchaser on behalf of the Initial Purchaser and to any other dealers upon
request, such amendments or supplements to the Offering Memorandum as may
be necessary so that the Offering Memorandum as so amended or supplemented
will not contain an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances when the Offering Memorandum is delivered to a
purchaser, not misleading or so that the Offering Memorandum will comply
with law;
(c) to cooperate with you and your counsel in connection with the
registration or qualification of the Securities for offering and sale by
the Initial Purchaser and by dealers under the securities or Blue Sky laws
of such jurisdictions as you may designate and will file such consents to
service of process or other documents necessary or appropriate in order to
effect such registration or qualification; provided that in no event shall
the Company or the Guarantors be obligated to qualify to do business in any
jurisdiction where it is not now so qualified or to take any action that
would subject it to taxation or service of process in suits, other than
those arising out of the Offering or sale of the Securities, in any
jurisdiction where it is not now so subject;
(d) so long as the Securities are outstanding, to furnish to the
Initial Purchaser copies of all reports or other communications (financial
or other) furnished to
11
holders of Securities, and copies of any reports and financial statements
furnished to or filed with the Commission or any national securities
exchange;
(e) during the period beginning on the date hereof and continuing to
and including the Business Day following the Closing Date, not to offer,
sell, contract to sell, or otherwise dispose of any debt securities of or
guaranteed by the Company or the Guarantors which are substantially similar
to the Securities;
(f) to use the net proceeds received by the Company from the sale of
the Securities pursuant to this Agreement in the manner specified in the
Offering Memorandum under the caption "Use of Proceeds";
(g) if requested by you, to use its best efforts to cause such
Securities to be eligible for the PORTAL trading system of the National
Association of Securities Dealer, Inc.;
(h) to furnish to the holders of the Securities as soon as practicable
after the end of each fiscal year an annual report (including a balance
sheet and statements of income, stockholders' equity and cash flows of the
Company and the Subsidiaries certified by independent public accountants)
and, as soon as practicable after the end of each of the first three
quarters of each fiscal year (beginning with the fiscal quarter ending
after the date of the Offering Memorandum), consolidated summary financial
information of the Company and the Subsidiaries of such quarter in
reasonable detail;
(i) during the period of two years after the Closing Date, not to, and
to use its best efforts not to permit any of its "affiliates" (as defined
in Rule 144 under the Act) to, resell any of the Securities which
constitute "restricted securities" under Rule 144 that have been reacquired
by any of them;
(j) whether or not the transactions contemplated by this Agreement are
consummated or this Agreement is terminated and in addition to any
obligations they may have under any other agreements with you and/or your
affiliates, to pay or cause to be paid all costs and expenses incident to
the performance of their obligations hereunder, including without limiting
the generality of the foregoing, all costs and expenses (i) incident to the
preparation, issuance, execution, authentication and delivery of the
Securities, including any expenses of the Trustee, (ii) incident to the
preparation, printing and distribution of the Offering Memorandum and any
preliminary offering memorandum (including in each case all exhibits,
amendments and supplements thereto), (iii) incurred in connection with the
registration or qualification and determination of eligibility for
investment of the Securities under the laws of such jurisdictions as the
Initial Purchaser may designate (including fees of counsel for the Initial
Purchaser and their disbursements), (iv) in connection with the application
for eligibility for trading of the Securities in the PORTAL trading system,
(v) in connection with the printing (including word processing and
duplication costs) and delivery of this
12
Agreement, the Indenture, the Registration Rights Agreement, the
Preliminary and Supplemental Blue Sky Memoranda and any Legal Investment
Survey and the furnishing to the Initial Purchaser and dealers of copies of
the Offering Memorandum, including mailing and shipping, as herein
provided, (vi) payable to rating agencies in connection with the rating of
the Securities, and (vii) incurred by the Company in connection with a
"road show" presentation to potential investors;
(k) to take all reasonable action that is appropriate or necessary to
assure that its offerings of other securities will not be integrated for
purposes of the Act with the offerings contemplated hereby;
(l) not to solicit any offer to buy or offer to sell Securities by
means of any form of general solicitation or general advertising within the
meaning of Rule 502(c) of Regulation D under the Act;
(m) while the Securities remain outstanding and are "restricted
securities" within the meaning of Rule 144(a)(3) under the Act, during any
period in which it is not subject to Section 13 or 15(d) under the Exchange
Act, to make available to the Initial Purchaser and any holder of
Securities in connection with any sale thereof and any prospective
purchaser of Securities, in each case upon request, the information
specified in, and meeting the requirements of, Rule 144A(d)(4) ("Rule
144A(d)(4) Information") under the Act (or any successor thereto); and
(n) not to take any action prohibited by Regulation M under the
Exchange Act (or any successor provision), in connection with the
distribution of the Securities contemplated hereby.
6. The obligations of the Initial Purchaser hereunder to purchase the
Securities on the Closing Date are subject to the performance, in all material
respects, by each of the Company and the Guarantors of their obligations
hereunder and to the following additional conditions:
(a) the representations and warranties of each of the Company and the
Guarantors contained herein are true and correct on and as of the Closing
Date as if made on and as of the Closing Date and each of the Company and
the Guarantors shall have complied, in all material respects, with all
agreements and all conditions on its part to be performed or satisfied
hereunder at or prior to the Closing Date;
(b) subsequent to the execution and delivery of this Agreement and
prior to the Closing Date, there shall not have occurred any downgrading,
nor shall any notice have been given of (i) any downgrading, (ii) any
intended or potential downgrading or (iii) any review or possible change
that does not indicate an improvement, in the rating accorded any
securities of or guaranteed by the Company by any "nationally recog-
13
nized statistical rating organization", as such term is defined for
purposes of Rule 436(g)(2) under the Act;
(c) since the respective dates as of which information is given in the
Offering Memorandum, except as otherwise stated therein, there shall not
have been any material change in the capital stock or long-term debt of any
of the Company or the Guarantors or any Material Adverse Change, or any
development involving a Prospective Material Adverse Change, otherwise than
as set forth or contemplated in the Offering Memorandum, the effect of
which in the judgment of the Initial Purchaser makes it impracticable or
inadvisable to proceed with the offering or the delivery of the Securities
on the Closing Date on the terms and in the manner contemplated in the
Offering Memorandum; and neither the Company nor the Subsidiaries has
sustained since the date of the latest audited financial statements
included in the Offering Memorandum any loss or interference with its
respective business from fire, flood, hurricane, accident or other
calamity, whether or not covered by insurance, or from any labor dispute or
legal or governmental proceeding, which loss or interference, in the
judgment of the Initial Purchaser, has had or has a Material Adverse
Effect, otherwise than as set forth or contemplated in the Offering
Memorandum;
(d) the Initial Purchaser shall have received on and as of the Closing
Date a certificate of the Company signed for the Company by an executive
officer of the Company with specific knowledge about the Company's and
Guarantors' financial matters, satisfactory to the Initial Purchaser to the
effect set forth in subsections (a) and (b) of this Section and to the
further effect that there has not occurred any Material Adverse Change, or
any development involving a Prospective Material Adverse Change, from those
set forth or contemplated in the Offering Memorandum;
(e) Xxxxx Xxxx & Xxxxxxxx, Counsel for the Company, shall have
furnished to the Initial Purchaser their written opinion, dated the Closing
Date in form and substance satisfactory to the Initial Purchaser, to the
effect that:
(i) the Company has been duly organized and is validly existing
as a corporation in good standing under the laws of Delaware with the
corporate power and authority to own its properties and conduct its
business as described in the Offering Memorandum;
(ii) each Guarantor organized under the laws of the State of
Delaware or New York is a corporation validly existing under the laws
of its jurisdiction of incorporation with power and authority to enter
into the Offering Agreements;
(iii) to such counsel's knowledge, other than as set forth or
contemplated in the Offering Memorandum, there are no legal or
governmental investigations, actions, suits or proceedings (i) pending
or threatened against or af-
14
fecting the Company or the Subsidiaries or any of their respective
properties or to which the Company or any Subsidiary is or may be a
party or to which any property of the Company or any Subsidiary is or
may be the subject which, if determined adversely to the Company or
such Subsidiary, could individually or in the aggregate have, or
reasonably be expected to have, a Material Adverse Effect or (ii)
which seek to restrain, enjoin, prevent the consummation of or
otherwise challenge the issuance or sale of the Securities in the
manner contemplated by the Offering Memorandum or the consummation of
the Offering or the Transactions; to such counsel's knowledge, no such
proceedings are threatened by governmental authorities or by others;
(iv) this Agreement has been duly authorized, executed and
delivered by each of the Company and each Guarantor organized under
the laws of the State of Delaware or New York;
(v) the Registration Rights Agreement has been duly authorized,
executed and delivered by each of the Company and each Guarantor
organized under the laws of the State of Delaware or New York and is a
valid agreement of each of the Company and each such Guarantor and,
subject to the Creditors' Rights Limitations, is binding and is
enforceable in accordance with its terms;
(vi) the Guarantee has been duly authorized, executed and
delivered by each Guarantor organized under the laws of the State of
Delaware or New York and, and upon delivery to and payment for the
Notes by the Initial Purchaser in accordance with the terms of this
Agreement, will constitute a valid obligation of each such Guarantor
and, subject to the Creditors' Rights Limitations, is binding and is
enforceable against each such Guarantor in accordance with its terms;
(vii) the Notes have been duly authorized, executed and delivered
by the Company and, when duly authenticated in accordance with the
terms of the Indenture and delivered to and paid for by the Initial
Purchaser in accordance with the terms of this Agreement, will
constitute valid obligations of the Company entitled to the benefits
provided by the Indenture and, subject to the Creditors' Rights
Limitations, are binding and are enforceable against the Company in
accordance with their terms;
(viii) the Indenture has been duly authorized, executed and
delivered by the Company and each Guarantor organized under the laws
of the State of Delaware or New York and (assuming the due
authorization, execution and delivery by the Trustee) constitutes a
valid agreement of the Company and each such Guarantor and, subject to
the Creditors' Rights Limitations, is binding and is enforceable
against the Company and each such Guarantor, respectively, in
accordance with its terms;
15
(ix) the Transaction Documents have been duly authorized,
executed and delivered by the Company and each Subsidiary organized
under the laws of the State of Delaware or New York (to the extent
such person is a party thereto), and are valid agreements of each of
the Company and such Subsidiary, as the case may be, and, subject to
the Creditors' Rights Limitations, the Transaction Documents are
binding and are enforceable in accordance with their terms;
(x) The purchase of the Retired Notes pursuant to the Debt Tender
Offers, and the execution and delivery of, and the consummation by
Company of the transactions contemplated by the Tender Offer
Documents, assuming they were undertaken in the manner described
therein, (i) does not require any filing with the Securities and
Exchange Commission pursuant to Section 14, Rule 13e-3 or Rule 13e-4
of the Exchange Act and (ii) will require no material consent,
authorization, approval, order, exemption, or other action of, or
filing with, any governmental agency, authority, or instrumentality of
the United States under the Securities Act, the Exchange Act and the
TIA.
(xi) other than the subject matter of subparagraphs (xiii) and
(xvii), the issue and sale of the Securities and the performance by
the Company and the Guarantors of their obligations under the
Securities, the execution and delivery of the Transaction Documents
and the Offering Agreements and the consummation by the Company and
the Guarantors of the transactions contemplated hereby and thereby
will not conflict with or constitute or result in a breach or a
default under or violation of any of (i) the terms or provisions of
any indenture, mortgage, deed of trust, loan agreement or other
material agreement or instrument known to such counsel to which the
Company or such Guarantor is a party or by which they or any of their
properties is known by such counsel to be bound except as such as
would not have a Material Adverse Effect, (ii) the Certificate of
Incorporation or By-Laws of the Company or such Guarantor, or (iii)
any applicable federal or New York statute or, to the best of such
counsel's knowledge, any federal or New York order, rule or regulation
of any federal or New York governmental agency or body having
jurisdiction over the Company, the Guarantors or any of their
respective properties or any judgment, decree or order of any court to
which the Company or such Guarantor is a named party;
(xii) other than the subject matter of paragraph (xiii), to their
knowledge, no consent, approval, authorization, order, license,
registration or qualification of or with any court or governmental
agency or body is required for the issue and sale of the Securities or
the consummation of the other transactions contemplated by this
Agreement or the Indenture, except as may be required under state
securities or Blue Sky laws in connection with the purchase and
16
distribution of the Securities or the Exchange Notes or the federal
securities laws with respect to the Exchange Notes;
(xiii) no registration under the Act of the Securities is
required in connection with the sale of the Securities to the Initial
Purchaser as contemplated by this Agreement and the Offering
Memorandum or in connection with the initial resale of the Securities
by the Initial Purchaser in accordance with Section 2 (including Annex
I) of this Agreement, and prior to the commencement of the Exchange
Offer or the effectiveness of the Shelf Registration Statement, the
Indenture is not required to be qualified under the TIA, in each case
assuming (i) that the purchasers who buy the Securities in the initial
resales are qualified institutional buyers (as defined in Rule 144A
under the Act) or non-U.S. Persons (as defined in Rule 902 under the
Act) and (ii) the accuracy of the Initial Purchaser's representations
and those of the Company and the Guarantors contained in this
Agreement regarding the absence of a general solicitation in
connection with the sale of the Securities to the Initial Purchaser
and the initial resales thereof (it being understood that such counsel
need express no opinion as to any subsequent resale of any Notes);
(xiv) the Securities satisfy the requirements set forth in Rule
144A(d)(3) under the Act;
(xv) the statements in the Offering Memorandum under "The
Recapitalization," "Governance of Tekni-Plex," "Certain Transactions
-- Investors' Agreement" and the first paragraph of "Certain
Transactions -- Common Stock Purchase Agreement," "Description of
Notes," and "Certain United States Federal Income Tax Considerations,"
insofar as such statements constitute a description of the legal
matters, documents or proceedings referred to therein, fairly present
the information called for with respect to such legal matters,
documents or proceedings;
(xvi) on the basis stated below, no facts have come to the
attention of such counsel that lead such counsel to believe, except
for the financial statements, related financial statement schedules,
and other financial and statistical information contained in the
Offering Memorandum as to which such counsel expresses no belief, that
the Offering Memorandum, as of its date of issuance and, as amended or
supplemented, if applicable, as of the Closing Date, contained an
untrue statement of a material fact or omitted to state a material
fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading; and
(xvii) the Company is not and, after giving effect to the
offering and sale of the Securities to be sold and the application of
the proceeds from such sale (as described in the Offering Memorandum
under the caption "Use of Pro-
17
ceeds") will not be, an "investment company" as defined in the
Investment Company Act of 1940, as amended.
In rendering such opinions, such counsel may rely (A) as to
matters involving the application of laws other than the federal laws
of the United States, the corporate law of the State of Delaware and
the laws of the State of New York, to the extent such counsel deems
proper and to the extent specified in such opinion, if at all, upon an
opinion or opinions (reasonably satisfactory to the Initial
Purchaser's counsel) of other counsel, reasonably acceptable to the
Initial Purchaser's counsel, familiar with the applicable laws; and
(B) as to matters of fact, to the extent such counsel deems proper, on
the representations and warranties made by the Company and the
Guarantors herein, and certificates and statements of public officials
and officers and other representatives of the Company and the
Guarantors (and such counsel has not independently verified or
investigated, nor does such counsel assume any responsibility for, the
factual accuracy or completeness of such representations and
warranties or certificates or of such factual statements). The opinion
of such counsel for the Company shall state that the opinion of any
such other counsel upon which they relied is in form satisfactory to
such counsel and, in such counsel's opinion, the Initial Purchaser and
they are justified in relying thereon. With respect to the matters to
be covered in subparagraph (xvi) above counsel may state that their
opinion and belief is based upon their participation in the
preparation of the Offering Memorandum and any amendment or supplement
thereto, and that since such counsel has not conducted any independent
investigation with regard to the information set forth in the Offering
Memorandum and any amendment or supplement thereto, such counsel is
not passing upon and does not assume any responsibility for the
accuracy, completeness or fairness of the statements contained therein
except with respect to the opinions set forth in subparagraph (xv)
above.
The opinion of Xxxxx Xxxx & Xxxxxxxx described above shall be
rendered to the Initial Purchaser at the request of the Company and
shall so state therein.
(f) the Company shall have furnished to the Initial Purchaser a
solvency certificate dated the Closing Date in form and substance
satisfactory to the Initial Purchaser;
(g) on the date of the issuance of the Offering Memorandum and
also on the Closing Date, BDO Xxxxxxx, LLP shall have furnished to the
Initial Purchaser letters, dated the respective dates of delivery
thereof, in form and substance satisfactory to you, containing
statements and information of the type customarily included in
accountants "comfort letters" to underwriters with respect to the
financial statements and certain financial information contained in
the Offering Memorandum;
(h) the Supplemental Indentures shall have been executed and
delivered by the Company, the Guarantors and the Trustee, the Debt
Tender Offers shall have been
18
consummated and the 11 1/4% Notes and 9 1/4% Notes tendered in the
Debt Tender Offers shall have been accepted for payment;
(i) the Company shall have previously executed the Credit
Agreement (as defined in the Offering Memorandum) in form and
substance reasonably satisfactory to the Initial Purchaser and shall
have funds available thereunder as contemplated by the Offering
Memorandum;
(j) the Transaction Documents and the Offering Agreements shall
have been executed and delivered by the Company and the Guarantors to
the extent that each is a party thereto, the Registration Rights
Agreement being substantially in the form attached hereto as Annex II;
(k) (i) all material conditions in the Transaction Documents
required to be performed on or prior to the Closing Date shall have
been satisfied and not waived or modified (provided, that the debt
financing condition contained in Section 6.02(d) of the
Recapitalization Agreement shall have been waived in a manner
reasonably satisfactory to the Initial Purchaser), (ii) all covenants
in the Recapitalization Agreement shall have been satisfied in all
material respects, (iii) all representations and warranties contained
in the Transaction Documents shall be true and correct in all material
respects, (iv) the new equity (including not less than $85.0 million
of undrawn equity) described in the Offering Memorandum to be
committed to Tekni-Plex Partners LLC shall have been committed on
terms reasonably satisfactory to the Initial Purchaser and (v) the
Equity Contribution shall have been made and the Recapitalization
shall have been (or shall substantially concurrently be) consummated
(including, without limitation, the Repurchase);
(l) the Initial Purchaser shall have received on and as of the
Closing Date an opinion of Xxxxxx Xxxxxx & Xxxxxxx, counsel to the
Initial Purchaser, with respect to the validity of the Indenture and
the Securities, and such other related matters as the Initial
Purchaser may reasonably request, and such counsel shall have received
such papers and information as they may reasonably request to enable
them to pass upon such matters; and
(m) on or prior to the Closing Date, the Company shall have
furnished to the Initial Purchaser such further certificates and
documents as the Initial Purchaser shall reasonably request.
7. Each of the Company and each Guarantor, jointly and severally,
agrees to indemnify and hold harmless the Initial Purchaser, each affiliate of
the Initial Purchaser which assists the Initial Purchaser in the distribution of
the Securities, its officers and directors, and each person, if any, who
controls the Initial Purchaser within the meaning of either Section 15 of the
Act or Section 20 of the Exchange Act, from and against any and all losses,
claims, damages and liabilities (including without limitation the legal fees and
other expenses rea-
19
sonably incurred in connection with any suit, action or proceeding or any claim
asserted) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Offering Memorandum (and any amendment or
supplement thereto if the Company shall have furnished any amendments or
supplements thereto) or any Preliminary Offering Memorandum, or caused by any
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, except insofar as such
losses, claims, damages or liabilities are caused by any untrue statement or
omission or alleged untrue statement or omission (i) made in reliance upon and
in conformity with information relating to the Initial Purchaser furnished to
the Company in writing by the Initial Purchaser expressly for use therein or
(ii) contained in the Preliminary Offering Memorandum if the Initial Purchaser
failed to send or deliver a copy of the Offering Memorandum to the person
asserting such losses, claims, damages or liabilities on or prior to the
delivery of written confirmation of sale of the Securities to such person and
such Offering Memorandum would have corrected such untrue statement or omission
and it shall have been determined that such losses, claims, damages or
liabilities would not have arisen had the Offering Memorandum been delivered or
sent.
The Initial Purchaser agrees to indemnify and hold harmless each of the
Company, the Guarantors, their respective directors and officers and each person
who controls the Company within the meaning of Section 15 of the Act and Section
20 of the Exchange Act, to the same extent as the foregoing indemnity from the
Company to the Initial Purchaser, but only with reference to information
relating to the Initial Purchaser furnished to the Company in writing by the
Initial Purchaser expressly for use in the Offering Memorandum, any amendment or
supplement thereto, or any preliminary offering memorandum.
If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against
any person in respect of which indemnity may be sought pursuant to either of the
two preceding paragraphs, such person (the "Indemnified Person") shall promptly
notify the person against whom such indemnity may be sought (the "Indemnifying
Person") in writing, and the Indemnifying Person, upon request of the
Indemnified Person, shall retain counsel reasonably satisfactory to the
Indemnified Person to represent the Indemnified Person and any others the
Indemnifying Person may designate in such proceeding and shall pay the fees and
expenses of such counsel related to such proceeding. In any such proceeding, any
Indemnified Person shall have the right to retain its own counsel, but the fees
and expenses of such counsel shall be at the expense of such Indemnified Person
unless (i) the Indemnifying Person and the Indemnified Person shall have
mutually agreed in writing to the contrary, (ii) the Indemnifying Person has
failed within a reasonable time to retain counsel reasonably satisfactory to the
Indemnified Person or (iii) the named parties in any such proceeding (including
any impleaded parties) include both the Indemnifying Person and the Indemnified
Person and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. It is
understood that the Indemnifying Person shall not, in connection with any
proceeding or related proceeding in the same jurisdiction, be liable for the
fees and expenses of more than one sepa-
20
rate firm (in addition to any local counsel) for all Indemnified Persons, and
that all such fees and expenses shall be reimbursed as they are incurred. Any
such separate firm for the Initial Purchaser, each affiliate of the Initial
Purchaser which assists the Initial Purchaser in the distribution of the
Securities, its officers and directors and such control persons of the Initial
Purchaser shall be designated in writing by X.X. Xxxxxx Securities Inc. and any
such separate firm for the Company, the Guarantors, their directors, their
officers and such control persons of the Company shall be designated in writing
by the Company. The Indemnifying Person shall not be liable for any settlement
of any proceeding effected without its written consent, but if settled with such
consent or if there be a final judgment for the plaintiff, the Indemnifying
Person agrees to indemnify any Indemnified Person from and against any loss or
liability by reason of such settlement or judgment. Notwithstanding the
foregoing sentence, if at any time an Indemnified Person shall have requested in
writing to the chief legal officer or, if no chief legal officer exists, to the
chief executive officer of the Indemnifying Person to reimburse the Indemnified
Person for fees and expenses of counsel as contemplated by the third sentence of
this paragraph, the Indemnifying Person agrees that it shall be liable for any
settlement of any proceeding or claim effected without its written consent if
(i) such settlement is entered into more than 60 days after receipt by such
Indemnifying Person of the aforesaid request, (ii) a second such written request
shall have been sent to and received by the chief legal officer or, if no chief
legal officer exists, by the chief executive officer of the Indemnifying Person
at least 30 days after the first such request but at least 15 days prior to the
date of such settlement, and (iii) with respect to such request, such
Indemnifying Person shall not have reimbursed such Indemnified Person for all
reasonable fees and expenses of such counsel prior to the date of such
settlement. No Indemnifying Person shall, without the prior written consent of
the Indemnified Person, effect any settlement of any pending or threatened
proceeding in respect of which any Indemnified Person is or could have been a
party and indemnity could have been sought hereunder by such Indemnified Person,
unless such settlement includes an unconditional release of such Indemnified
Person from all liability on claims that are the subject matter of such
proceeding.
If the indemnification provided for in the first and second paragraphs
of this Section 7 is unavailable to an Indemnified Person in respect of any
losses, claims, damages or liabilities referred to therein, then each
Indemnifying Person under such paragraph, in lieu of indemnifying such
Indemnified Person thereunder, shall contribute to the amount paid or payable by
such Indemnified Person as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company and the Guarantors on the one hand and the
Initial Purchaser on the other hand from the offering of the Securities or (ii)
if the allocation provided by clause (i) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of the
Company and the Guarantors on the one hand and the Initial Purchaser on the
other in connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company and the Guarantors
on the one hand and the Initial Purchaser on the other shall be deemed to be in
the same respective proportions as the net proceeds from the offering (before
deducting expenses) received by the
21
Company and the total discounts and commissions received by the Initial
Purchaser, in each case as set forth in the table on the cover of the
Offering Memorandum, bear to the aggregate offering price of the
Securities. The relative fault of the Company and the Guarantors on the one
hand and the Initial Purchaser on the other 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 Company or the
Guarantors or by the Initial Purchaser and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Company, the Guarantors and the Initial Purchaser agree that it
would not be just and equitable if contribution pursuant to this Section 7 were
determined by pro rata allocation or by any other method of allocation that does
not take account of the equitable considerations referred to in the immediately
preceding paragraph. The amount paid or payable by an Indemnified Person as a
result of the losses, claims, damages and liabilities referred to in the
immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses incurred by such
Indemnified Person in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this Section 7, in no event shall
the Initial Purchaser be required to contribute any amount in excess of the
amount by which the total price at which the Securities purchased by it were
offered exceeds the amount of any damages that the Initial Purchaser has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation.
The remedies provided for in this Section 7 are not exclusive and shall
not limit any rights or remedies which may otherwise be available to any
indemnified party at law or in equity.
The indemnity and contribution agreements contained in this Section 7
and the representations and warranties made as of the date hereof and as of
Closing Date of the Company, the Guarantors and the Initial Purchaser set forth
in this Agreement shall remain operative and in full force and effect regardless
of (i) any termination of this Agreement, (ii) any investigation made by or on
behalf of the Initial Purchaser or any person controlling the Initial Purchaser
or by or on behalf of the Company, the Guarantors, such Company's officers or
directors or any other person controlling the Company and (iii) acceptance of
and payment for any of the Securities.
8. Notwithstanding anything herein contained, this Agreement may be
terminated in the absolute discretion of the Initial Purchaser, by notice given
to the Company, if after the execution and delivery of this Agreement and prior
to the Closing Date (i) trading generally shall have been suspended or
materially limited on or by, as the case may be, any of the New York Stock
Exchange, the American Stock Exchange or the National Association of Securities
Dealers, Inc., the Chicago Board Options Exchange, the Chicago Mercantile
Exchange or
22
the Chicago Board of Trade (ii) trading of any securities of or guaranteed by
the Company shall have been suspended on any exchange or in any over-the-counter
market, (iii) a general moratorium on commercial banking activities in New York
shall have been declared by either Federal or New York State authorities, or
(iv) there shall have occurred any outbreak or escalation of hostilities or any
change in financial markets or any calamity or crisis that, in the judgment of
the Initial Purchaser, is material and adverse and which, in the judgment of the
Initial Purchaser, makes it impracticable to market the Securities on the terms
and in the manner contemplated in the Offering Memorandum.
9. This Agreement shall become effective upon the execution and
delivery hereof by the parties hereto.
10. If this Agreement shall be terminated by the Initial Purchaser,
because of any failure or refusal on the part of any of the Issuers to comply
with the terms or to fulfill any of the conditions of this Agreement, or if for
any reason any of the Issuers shall be unable to perform its obligations under
this Agreement or any condition of the Initial Purchaser's obligations cannot be
fulfilled other than solely by reason of a default by the Initial Purchaser in
payment for the Securities on the Closing Date, the Company agrees to reimburse
the Initial Purchaser for all out-of-pocket expenses (including the fees and
expenses of its counsel) reasonably incurred by the Initial Purchaser in
connection with this Agreement or the offering contemplated hereunder.
11. This Agreement shall inure to the benefit of and be binding upon
the Company, the Initial Purchaser, any controlling persons referred to herein
and their respective successors and assigns. Nothing in this Agreement is
intended or shall be construed to give any other person, firm or corporation any
legal or equitable right, remedy or claim under or in respect of this Agreement
or any provision herein contained. No purchaser of Securities from the Initial
Purchaser shall be deemed to be a successor by reason merely of such purchase.
12. All notices and other communications hereunder shall be in writing
and shall be deemed to have been duly given if mailed or transmitted by any
standard form of telecommunication. Notices to the Initial Purchaser shall be
given to them at the following address: X.X. Xxxxxx Securities Inc., 00 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000; Attention: Syndicate Department. Notices to
the Company shall be given to them at the following address: Tekni-Plex, Inc.,
000 Xxxxxxxxxx Xxxxxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000; Attention: Dr. F. Xxxxxxx
Xxxxx; with a copy to Xxxxx Xxxx & Xxxxxxxx, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, XX
00000; Attention: Xxxxxxxx Xxxxxx, Esq.
13. This Agreement may be signed in counterparts, each of which shall
be an original and all of which together shall constitute one and the same
instrument.
14. Pursuant to Section 5-1401 of the General Obligations Laws of the
State of New York, this Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without giving effect to any
other conflicts of laws provisions.
23
If the foregoing is in accordance with your understanding, please sign
and return four counterparts hereof.
Very truly yours,
TEKNI-PLEX, INC.
By:_______________________
Name:
Title:
Accepted: June , 2000
X.X. XXXXXX SECURITIES INC.
By:_____________________________
Name:
Title:
24
Each of the undersigned by its execution hereof agrees to become a
party to this Agreement as a Guarantor as of the date set forth above:
PURETEC CORPORATION
PLASTIC SPECIALTIES AND
TECHNOLOGIES, INC.
PLASTIC SPECIALTIES AND
TECHNOLOGIES INVESTMENTS, INC.
BURLINGTON RESINS, INC.
DISTRIBUTORS RECYCLING, INC.
REI DISTRIBUTORS INC.
ALUMET SMELTING CORP.
XXXXXX HOLDINGS, INC
TRI-SEAL HOLDINGS, INC
PURE TECH RECYCLING OF
CALIFORNIA
MULTI CONTAINER RECYCLER, INC.
COAST RECYCLING NORTH, INC.
Pure Tech APR, Inc.
collectively, the Guarantors
By:_____________________________
Name:
Title:
25
ANNEX I
(A) In addition to offers pursuant to clause (B)(1) of paragraph 2(ii)
of the Agreement, the Initial Purchaser intends to offer and sell the Securities
in accordance with Regulation S under the Act. Accordingly, the Initial
Purchaser agrees that neither it, its affiliates nor any persons acting on its
or their behalf has engaged or will engage in any directed selling efforts
within the meaning of Rule 902 under the Act with respect to the Securities and
it and they have complied and will comply with the offering restrictions
requirement of Regulation S. The Initial Purchaser agrees that, at or prior to
confirmation of sale of Securities (other than a sale pursuant to and in
accordance with paragraph 2(ii) of the Agreement to purchasers described in
clause (B)(1) thereof), it will have sent to each distributor, dealer or person
receiving a selling concession, fee or other remuneration that purchases
Securities from it during the restricted period a confirmation or notice to
substantially the following effect:
"The Securities covered hereby have not been registered under
the United States Securities Act of 1933, as amended (the "Act"), and
may not be offered, sold or delivered within the United States or to,
or for the account or benefit of, U.S. persons (i) as part of their
distribution at any time or (ii) otherwise until 40 days after the
later of the commencement of the offering and the closing date, except
in either case in accordance with Regulation S (or Rule 144A if
available) under the Act. Terms used above have the meaning given to
them by Regulation S."
Terms used in this paragraph have the meanings given to them by Regulation S.
The Initial Purchaser agrees that it has not entered and will not enter
into any contractual arrangement with respect to the distribution or delivery of
the Securities in accordance with this paragraph (A), except with its affiliates
or with the prior written consent of the Company.
(B) The Initial Purchaser represents and agrees that (i) it has not
offered or sold, and prior to the date six months after the Closing Date will
not offer or sell any Securities to persons in the United Kingdom except to
persons whose ordinary activities involve them in acquiring, holding, managing
or disposing of investments (as principal or agent) for the purposes of their
businesses or otherwise in circumstances which have not resulted and will not
result in an offer to the public in the United Kingdom within the meaning of the
Public Offers of Securities Regulations 1995, (ii) it has complied, and will
comply, with all applicable provisions of the Financial Services Xxx 0000 with
respect to anything done by it in relation to the Securities in, from or
otherwise involving the United Kingdom, and (iii) it has only issued or passed
on, and will only issue or pass on, in the United Kingdom, any document received
by it in connection with the issuance of the Securities to a person who is of a
kind described in Article 11(3) of the Financial Services Xxx 0000 (Investment
Advertisements) (Exemptions) Order 1996 or is a person to whom such document may
otherwise lawfully be issued or passed on.
(C) The Initial Purchaser agrees that it will not directly or
indirectly offer, sell or deliver any of the Securities or distribute any
offering memorandum, prospectus or other document or information in any
jurisdiction outside the United States except under circumstances that will
result in compliance with the applicable laws thereof, and that it will take at
its own expense whatever action is required to permit its purchase and resale of
the Securities in such jurisdictions. The Initial Purchaser understands that no
action has been taken by the Company to permit a public offering in any
jurisdiction outside the United States where action would be required for such
purposes. The Initial Purchaser agrees not to cause any advertisement of the
Securities to be published in any newspaper or periodical or posted in any
public place and not to issue any circular relating to the Securities in any
jurisdiction outside of the United States. Without prejudice to the generality
of the foregoing, the Initial Purchaser is not authorized to give any
information or to make any representation in connection with the offering or
sale of the Securities other than those contained in the Offering Memorandum.
-2-
ANNEX II
[Form of Registration Rights Agreement]
SCHEDULE A
Domestic Subsidiaries
PureTec Corporation (Delaware)
Plastic Specialties and Technologies, Inc. (Delaware)
Plastic Specialties and Technologies Investments, Inc. (Delaware)
Burlington Resins, Inc. (Delaware)
Distributors Recycling, Inc. (New Jersey)*
REI Distributors Inc. (New Jersey)*
Alumet Smelting Corporation (New Jersey)*
Xxxxxx Holdings, Inc. (Delaware)
Tri-Seal Holdings, Inc. (Delaware)
Pure Tech Recycling of California (California)*
Multi Container Recycler, Inc. (Michigan)*
Coast Recycling North, Inc. (California)*
Pure Tech APR, Inc. (New York)
Foreign Subsidiaries
PurePlast Acquisition Limited (Nova Scotia)
PurePlast Inc. (Ontario)
Tekni-Plex Europe, N.V. (Belgium)
Action Technology Italia S.p.A (Italy)
Colorite Europe, Ltd. (Northern Ireland)
Colorite Plastics Canada Ltd. (Ontario)
------------------------------
* Not currently in good standing.
