PURCHASE AGREEMENT
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This PURCHASE AGREEMENT (this "Agreement") is made and entered into as of
May 4, 2007 by and among AEP Industries Inc., a Delaware corporation (the
"Company"), 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 L.P., a Delaware limited partnership, Third Point Partners Qualified
L.P., a Delaware limited partnership, Third Point Ultra Ltd., a British Virgin
Islands Corporation, and Third Point Offshore Fund, Ltd., a Cayman Corporation,
(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 the Company desires to purchase, free
and clear of any and all Liens (as defined herein), an aggregate of 300,000
Company Shares for an aggregate purchase price of $13,200,000.00, 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; CLOSING
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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 the Company, and the Company agrees to purchase from Sellers, 300,000 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 the Company of the Purchased Shares, the Company shall
pay to Sellers a price per Purchased Share of $ 44.00, for an aggregate price of
$13,2000,000.00, in cash, in such amounts set forth on Schedule I hereto in
respect of each Seller.
Section 1.3 Expenses. Except as expressly set forth in this Agreement, all
fees and expenses incurred by each 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 Closing. The consummation of the transactions contemplated by
this Agreement (the "Closing") shall take place at as specified below (the
"Closing Date"), provided that the Company's obligation to consummate the
transactions contemplated by this Agreement shall be conditioned upon there
being 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 Delivery.
(a) At or prior to the Closing Date, in accordance with Section 1.1
hereof, each Seller shall deliver or cause to be delivered to American Stock
Transfer & Trust Company (at the address below) the certificates representing
the Purchased Shares to be purchased on the 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 the Company good, valid and marketable title in and to such Purchased
Shares, free and clear of any and all Liens. Unless otherwise specified in
writing, such certificates and related transfer documentation shall be delivered
to American Stock Transfer & Trust Company, Attention: Xxxxxxxxx Xxxxx, Vice
President, 0000 00xx Xxxxxx, Xxxxxxxx, XX, 00000.
(b) On the Closing Date, upon confirmation from American Stock
Transfer & Trust Company that all documents are in good order in accordance with
Section 1.2 hereof, the Company shall deliver or cause to be delivered to
Sellers 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.
(c) Each party hereto further agrees to execute and deliver such
other instruments as shall be reasonably requested by a party hereto to
consummate the transactions contemplated by this Agreement.
ARTICLE II
COVENANTS
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Section 2.1 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 A) 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.
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(b) Promptly following the date hereof, Third Point, Xx. Xxxx and
Sellers shall cause to be filed with the Securities and Exchange Commission an
amendment to their most recent Schedule 13D filing on February 14, 2005, as
amended, and prior to filing will provide the Company and its counsel a
reasonably opportunity to review and comment upon such amendment.
Section 2.2 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.
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 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, to perform its or his obligations hereunder and to consummate the
transactions contemplated hereby and has taken all necessary action to authorize
the execution, delivery and performance of this 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,
assuming due and valid authorization, execution and delivery by the Company,
this Agreement constitutes a legal, valid and binding obligation of each of
Sellers, Third Point, and/or Xx. Xxxx, 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
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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 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.
Section 3.4 Good Title Conveyed. The stock certificates and stock powers
executed and delivered by Sellers at the Closing will be valid and binding
obligations of Sellers, enforceable in accordance with their respective terms,
and will effectively vest in the Company good, valid and marketable title to all
Purchased Shares, free and clear of any and all Liens.
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 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 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 bylaw, any and all claims and causes of action it
has or may have against 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 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 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 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.
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(c) Sellers, Third Point and Xx. Xxxx are "accredited investors" as
defined in Rule 501 promulgated under the Securities Act of 1933, as amended.
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.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF
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THE COMPANY
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The Company makes the following representations and warranties to Sellers:
Section 4.1 Existence; Authority. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. The Company has all requisite corporate power and authority to execute
and deliver this Agreement, to perform its obligations hereunder and to
consummate the transactions contemplated hereby and has taken all necessary
corporate action to authorize the execution, delivery and performance of this
Agreement.
Section 4.2 Enforceability. This Agreement has been duly and validly
executed and delivered by the Company and, assuming due and valid authorization,
execution and delivery by Sellers, Third Point, and Xx. Xxxx, this Agreement
constitutes, a legal, valid and binding obligation of the Company, 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 the Company, threatened against
such party that could impair the ability of 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 Closing.
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 expressly set forth
in this Agreement, no party has made any representation warranty, covenant or
agreement.
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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:
c/o AEP Industries Inc.
000 Xxxxxxxx Xxxxxx
Xxxxx Xxxxxxxxxx, Xxx Xxxxxx 00000
Attn: Xxxx Xxxxxx
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 Securities
Exchange Act of 1934, as amended, and shall include persons who become
Affiliates of any person subsequent to the date hereof; and (b) the Company,
Third Point, Xx. Xxxx and each Seller are referred to herein individually as a
"party" and collectively as "parties."
Section 5.4 Specific Performance. 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.
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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.
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
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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 maybe 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 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]
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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
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Name: Xxxx X. Xxxxxx
Title: Executive Vice President and
Chief Financial Officer
THIRD POINT LLC
By: /s/ Xxxxxx Xxxxxx
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Name: Xxxxxx Xxxxxx
Title: Chief Operating Officer
XXXXXX X. XXXX
/s/ Xxxxxx X. Xxxx
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Name: Xxxxxx X. Xxxx
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THIRD POINT PARTNERS L.P.
By: Third Point LLC, its investment manager
By: /s/ Xxxxxx Xxxxxx
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Name: Xxxxxx Xxxxxx
Title: Chief Operating Officer
THIRD POINT PARTNERS QUALIFIED L.P.
By: Third Point LLC, its investment manager
By: /s/ Xxxxxx Xxxxxx
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Name: Xxxxxx Xxxxxx
Title: Chief Operating Officer
THIRD POINT OFFSHORE FUND, LTD.
By: Third Point LLC, its investment manager
By: /s/ Xxxxxx Xxxxxx
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Name: Xxxxxx Xxxxxx
Title: Chief Operating Officer
THIRD POINT ULTRA LTD.
By: Third Point LLC, its investment manager
By: /s/ Xxxxxx Xxxxxx
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Name: Xxxxxx Xxxxxx
Title: Chief Operating Officer
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