EX-1
SPECIALTY PAPERBOARD, INC.
$100,000,000
9 3/8% Senior Notes due 2006
PURCHASE AGREEMENT
October 4, 1996
BT SECURITIES CORPORATION
Bankers Trust Plaza
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Specialty Paperboard, Inc., a Delaware corporation (the "Company"),
Specialty Paperboard/Endura, Inc., a Delaware corporation and CPG Acquisition
Company, a Delaware corporation (collectively, the "Guarantors" and, together
with the Company, the "Issuers") hereby confirm their agreement with you (the
"Initial Purchaser") as set forth below.
1. The Securities. Subject to the terms and conditions herein
contained, the Company proposes to issue and sell to the Initial Purchaser
$100,000,000 aggregate principal amount of its 9 3/8% Senior Notes due 2006 (the
"Notes"). The Notes will be guaranteed (collectively, the "Guarantees") on a
senior basis by each of the Guarantors. The Notes and the Guarantees are
collectively referred to herein as the "Securities". The Notes are to be issued
under an indenture (the "Indenture") to be dated as of October 15, 1996 by and
among the Company, the Guarantors and Wilmington Trust Company, as Trustee (the
"Trustee").
The Company and CPG Acquisition Company ("Merger Sub"), have entered
into a Merger Agreement (the "Merger Agreement") dated as of August 28, 1996,
pursuant to which Merger Sub will be merged (the "Merger") with and into CPG
Investors Inc., a Delaware corporation ("CPG").
The Company has entered into a Stock Purchase Agreement (the "Stock
Purchase Agreement") dated as of August 28, 1996, pursuant to which the Company
has agreed to purchase all
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of the outstanding capital stock of Arcon Holdings Corp., a Delaware corporation
("Arcon").
The acquisition of the outstanding capital stock of Arcon and the
Merger are referred to herein together as the "Acquisitions." The Merger
Agreement and the Stock Purchase Agreement are referred to herein together as
the "Acquisition Agreements."
The Securities will be offered and sold to the Initial Purchaser
without being registered under the Securities Act of 1933, as amended (the
"Act"), in reliance on exemptions therefrom.
In connection with the sale of the Securities, the Issuers have
prepared a preliminary offering memorandum dated September 19, 1996 (the
"Preliminary Memorandum"), a preliminary offering memorandum supplement dated
October 2, 1996 (the "Supplement") and a final offering memorandum dated October
4, 1996 (the "Final Memorandum"; the Preliminary Memorandum, the Supplement and
the Final Memorandum each herein being referred to as a "Memorandum") setting
forth or including a description of the terms of the Securities, the terms of
the offering of the Securities, a description of the Company, CPG, Arcon and
their respective subsidiaries and any material developments relating to the
Company, CPG, Arcon and their respective subsidiaries occurring after the date
of the most recent historical financial statements included therein.
The Initial Purchaser and its direct and indirect transferees of the
Securities will be entitled to the benefits of the Registration Rights
Agreement, substantially in the form attached hereto as Exhibit A (the
"Registration Rights Agreement"), pursuant to which the Issuers have agreed,
among other things, to file a registration statement (the "Registration
Statement") with the Securities and Exchange Commission (the "Commission")
registering the Securities or the Exchange Notes (as defined in the Registration
Rights Agreement) and related guarantees under the Act.
2. Representations and Warranties. The Issuers, jointly and
severally, represent and warrant to and agree with the Initial Purchaser that:
(a) Neither the Preliminary Memorandum as of the date thereof nor
the Final Memorandum nor any amendment or supplement thereto as of the date
thereof and at all times
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subsequent thereto up to the Closing Date (as defined in Section 3 below)
contained or contains any untrue statement of a material fact or omitted or
omits to state a material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading, except
that the representations and warranties set forth in this Section 2(a) do not
apply to statements or omissions 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 in the Preliminary
Memorandum, the Final Memorandum or any amendment or supplement thereto.
(b) As of the Closing Date, the Company will have the authorized,
issued and outstanding capitalization set forth in the Final Memorandum; as of
the date hereof, all of the subsidiaries of (i) the Company are listed in
Schedule 1 attached hereto (the "Subsidiaries"), (ii) CPG are listed in Schedule
2 attached hereto (the "CPG Subsidiaries") and (iii) of Arcon are listed in
Schedule 3 attached hereto (the "Arcon Subsidiaries"); all of the outstanding
shares of capital stock of the Company, the Subsidiaries, CPG, the CPG
Subsidiaries, Arcon and the Arcon Subsidiaries have been, and as of the Closing
Date will be, duly authorized and validly issued, are fully paid and
nonassessable and were not issued in violation of any preemptive or similar
rights; all of the outstanding shares of capital stock of the Company, the
Subsidiaries, CPG, the CPG Subsidiaries, Arcon and the Arcon Subsidiaries will
be free and clear of all liens, encumbrances, equities and claims or
restrictions on transferability (other than those imposed by the Act and the
securities or "Blue Sky" laws of certain jurisdictions) or voting; except as set
forth in the Final Memorandum, there are no (i) options, warrants or other
rights to purchase (except for such options, warrants and other rights to
purchase the capital stock of CPG and Arcon as set forth in the Merger Agreement
and the Stock Purchase Agreement and will be, cancelled or otherwise terminated
upon consumation of the Acquisitions), (ii) agreements or other obligations to
issue or (iii) other rights to convert any obligation into, or exchange any
securities for, shares of capital stock of or ownership interests in the
Company, the Subsidiaries, CPG, the CPG Subsidiaries, Arcon and the Arcon
Subsidiaries outstanding. Except for the Subsidiaries, the CPG Subsidiaries and
the Arcon Subsidiaries or as disclosed in the Final Memorandum, neither the
Company nor the Subsidiaries, CPG, any CPG Subsidiary, Arcon or any Arcon
Subsidiary owns, directly or indirectly, a material number of shares of capital
stock or any other equity
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or long-term debt securities or have any equity interest in any firm,
partnership, joint venture or other entity.
(c) Each of the Company, the Subsidiaries, CPG, the CPG
Subsidiaries, Arcon and the Arcon Subsidiaries is duly incorporated, validly
existing and in good standing under the laws of its respective jurisdiction of
incorporation and has all requisite corporate power and authority to own its
properties and conduct its business as now conducted and as described in the
Final Memorandum; each of the Company, the Subsidiaries, CPG, the CPG
Subsidiaries, Arcon and the Arcon Subsidiaries is duly qualified to do business
as a foreign corporation in good standing in all other jurisdictions where the
ownership or leasing of its properties or the conduct of its business requires
such qualification, except where the failure to be so qualified would not,
individually or in the aggregate, have a material adverse effect on the
business, condition (financial or otherwise) or results of operations of the
Company, the Subsidiaries, CPG, the CPG Subsidiaries, Arcon and the Arcon
Subsidiaries, taken as a whole (any such event, a "Material Adverse Effect").
(d) The Company has all requisite corporate power and authority to
execute, deliver and perform each of its obligations under the Notes, the
Exchange Notes and the Private Exchange Notes (as defined in the Registration
Rights Agreement). The Notes, when issued, will be in the form contemplated by
the Indenture. The Notes, the Exchange Notes and the Private Exchange Notes have
each been duly and validly authorized by the Company and, when executed by the
Company and authenticated by the Trustee in accordance with the provisions of
the Indenture and, in the case of the Notes, when delivered to and paid for by
the Initial Purchaser in accordance with the terms of this Agreement, will
constitute valid and legally binding obligations of the Company, entitled to the
benefits of the Indenture, and enforceable against the Company in accordance
with their terms, except that the enforcement thereof may be subject to (i)
bankruptcy, insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally and (ii) general
principles of equity and the discretion of the court before which any proceeding
therefor may be brought.
(e) Each Guarantor has all requisite corporate power and authority
to execute, deliver and perform each of its obligations under its Guarantee, its
guarantee of the Exchange Notes (each, an "Exchange Notes Guarantee") and its
guarantee
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of the Private Exchange Notes (each, "Private Exchange Notes Guarantee"). The
Guarantees, when issued, will be in the form contemplated by the Indenture. The
Guarantees, the Exchange Notes Guarantees and the Private Exchange Notes
Guarantees have each been duly and validly authorized by the Guarantors and, in
the case of the Guarantees, when delivered to and paid for by the Initial
Purchaser in accordance with the terms of this Agreement, will constitute valid
and legally binding obligations of the Guarantors, entitled to the benefits of
the Indenture, and enforceable against the Guarantors in accordance with their
terms, except that enforcement thereof may be subject to (i) bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereafter in
effect relating to creditors' rights generally, and (ii) general principles of
equity and the discretion of the court before which any proceeding therefor may
be brought.
(f) Each of the Issuers has all requisite corporate power and
authority to execute, deliver and perform its obligations under the Indenture.
The Indenture meets the requirements for qualification under the Trust Indenture
Act of 1939, as amended (the "TIA"). The Indenture has been duly and validly
authorized by the Issuers and, when executed and delivered by the Issuers
(assuming the due authorization, execution and delivery by the Trustee), will
constitute a valid and legally binding agreement of each of the Issuers,
enforceable against each of the Issuers in accordance with its terms, except
that the enforcement thereof may be subject to (i) bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally and (ii) general principles of equity
and the discretion of the court before which any proceeding therefor may be
brought.
(g) Each of the Issuers has all requisite corporate power and
authority to execute, deliver and perform its obligations under the Registration
Rights Agreement. The Registration Rights Agreement has been duly and validly
authorized by each of the Issuers and, when executed and delivered by the
Issuers, will constitute a valid and legally binding agreement of each of the
Issuers, enforceable against each of the Issuers in accordance with its terms,
except that (A) the enforcement thereof may be subject to (i) bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereafter in
effect relating to creditors' rights generally and (ii) general principles of
equity and the discretion of the court before which any proceeding therefor may
be brought and (B) any rights
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to indemnity or contribution thereunder may be limited by federal and state
securities laws and public policy considerations.
(h) Each of the Issuers has all requisite corporate power and
authority to execute, deliver and perform its obligations under this Agreement
and to consummate the transactions contemplated hereby. This Agreement and the
consummation by the Issuers of the transactions contemplated hereby have been
duly and validly authorized by the Issuers. This Agreement has been duly
executed and delivered by the Issuers.
(i) Except disclosed in the Final Memorandum, no consent, approval,
authorization or order of any court or governmental agency or body, or third
party is required for (i) the issuance and sale by the Company of the Notes to
the Initial Purchaser or the consummation by the Company of the other
transactions contemplated hereby, (ii) the issuance and sale by the Guarantors
of the Guarantees or the consummation by the Guarantors of the other
transactions contemplated hereby, (iii) the consummation by the Company and
Merger Sub, of the transactions contemplated by the Merger Agreement and (iv)
the consummation by the Company of the transactions contemplated by the Stock
Purchase Agreement, except such as have been or, prior to the Closing Date in
the case of clauses (i) and (ii) or the consumation of the applicable
Acquisition in the case of clauses (iii) and (iv), will be obtained and such as
may be required under state securities or "Blue Sky" laws in connection with the
purchase and resale of the Securities by the Initial Purchasers. None of the
Company, the Subsidiaries, CPG, the CPG Subsidiaries, Arcon or the Arcon
Subsidiaries is (i) in violation of its certificate of incorporation or bylaws
(or similar organizational document), (ii) in breach or violation of any
statute, judgment, decree, order, rule or regulation applicable to any of them
or any of their respective properties or assets, except for any such breach or
violation which would not, individually or in the aggregate, have a Material
Adverse Effect, or (iii) in breach of or default under (nor has any event
occurred which, with notice or passage of time or both, would constitute a
default under) or in violation of any of the terms or provisions of any
indenture, mortgage, deed of trust, loan agreement, note, lease, license,
franchise agreement, permit, certificate, contract or other agreement or
instrument to which any of them is a party or to which any of them or their
respective properties or assets is subject (collectively, "Contracts"), except
for any such breach,
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default, violation or event which would not, individually or in the aggregate,
have a Material Adverse Effect.
(j) The execution, delivery and performance by the Issuers of this
Agreement, the Indenture and the Registration Rights Agreement (to the extent a
party thereto) and the consummation by the Issuers of the transactions
contemplated hereby and thereby (including, without limitation, the issuance and
sale of the Securities to the Initial Purchaser) and the execution, delivery and
performance by the Company and Merger Sub of the Acquisition Agreements (to the
extent a party thereto) and the consummation of the Merger will not conflict
with or constitute or result in a breach of or a default under (or an event
which with notice or passage of time or both would constitute a default under)
or violation of any of (A) the terms or provisions of any Contract, except for
any such conflict, breach, violation, default or event which would not,
individually or in the aggregate, have a Material Adverse Effect, (B) the
certificate of incorporation or bylaws (or similar organizational document) of
the Company, any of the Subsidiaries, CPG, any of the CPG Subsidiaries, Arcon or
any of the Arcon Subsidiaries, or (C) (assuming compliance with all applicable
state securities or "Blue Sky" laws and assuming the accuracy of the
representations and warranties of the Initial Purchasers in Section 8 hereof)
any statute, judgment, decree, order, rule or regulation applicable to the
Company, any of the Subsidiaries, CPG, any of the CPG Subsidiaries, Arcon or any
of the Arcon Subsidiaries or any of their respective properties or assets,
except for any such conflict, breach or violation which would not, individually
or in the aggregate, have a Material Adverse Effect.
(k) Coopers & ▇▇▇▇▇▇▇ LLP, who are reporting on the audited
financial statements of the Company included in the Final Memorandum, are
independent public accountants within the meaning of the Act. Coopers & ▇▇▇▇▇▇▇
LLP, who are reporting on the audited consolidated financial statements of CPG
included in the Final Memorandum, are independent public accountants within the
meaning of the Act. Price Waterhouse LLP and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, who are
reporting on the consolidated financial statements of Arcon included in the
Final Memorandum, are independent public accountants within the meaning of the
Act. The consolidated financial statements of the Company and related notes
thereto included in the Final Memorandum present fairly in all material respects
the consolidated financial position of the Company and its consolidated
subsidiaries as of the dates indicated and the results of their operations
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and the changes in their consolidated cash flow for the periods specified. The
consolidated financial statements of CPG included in the Final Memorandum
present fairly in all material respects the consolidated financial position of
CPG 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. The consolidated financial statements of Arcon included in
the Final Memorandum present fairly in all material respects the consolidated
financial position of Arcon and its consolidated subsidiaries as of the dates
indicated and the results of their operations and the changes in their
consolidated cash flow for the periods specified.
(l) The pro forma financial statements (including the notes thereto)
and the other pro forma financial information included in the Final Memorandum
(i) comply as to form in all material respects with the applicable requirements
of Regulation S-X promulgated under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), (ii) have been prepared in all material respects
in accordance with the Commission's rules and guidelines with respect to pro
forma financial statements, and (iii) have been correctly computed on the bases
described therein; the assumptions used in the preparation of the pro forma
financial data and other pro forma financial information included in the Final
Memorandum are reasonable and the adjustments used therein fairly and
accurately, in all material respects, give effect to the transactions or
circumstances referred to therein. The supplemental combined adjusted historical
data included in the Final Memorandum have been correctly computed on the basis
described therein; the assumptions used in the preparation of the supplemental
combined adjusted historical data included in the Final Memorandum are
reasonable and the adjustments used give effect to the transactions or
circumstances referred to therein.
(m) Other than as described in the Final Memorandum, there is not
pending or, to the knowledge of the Issuers, threatened any action, suit,
proceeding, inquiry or investigation to which the Company, any of the
Subsidiaries, CPG, any of the CPG Subsidiaries, Arcon or any of the Arcon
Subsidiaries is a party, or to which the property or assets of the Company, any
of the Subsidiaries, CPG, any of the CPG Subsidiaries, Arcon or any of the Arcon
Subsidiaries is subject, before or brought by any court, arbitrator or
governmental agency or body which, if determined adversely to the Company, any
of the Subsidiaries, CPG, any of the CPG Subsidiaries, Arcon or any of the Arcon
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Subsidiaries, would, individually or in the aggregate, have a Material Adverse
Effect or which seeks to restrain, enjoin, prevent the consummation of or
otherwise challenge the issuance or sale of the Securities to be sold hereunder
or the consummation of the other transactions described in the Final Memorandum.
(n) Each of the Company, the Subsidiaries, CPG, the CPG
Subsidiaries, Arcon and the Arcon Subsidiaries possesses all 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, all self-regulatory organizations and all courts and
other tribunals, presently required or necessary to own or lease, as the case
may be, and to operate its respective properties and to carry on its respective
businesses as now or proposed to be conducted as set forth in the Final
Memorandum ("Permits"), except where the failure to obtain such Permits would
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect; each of the Company, the Subsidiaries, CPG, the CPG
Subsidiaries, Arcon and the Arcon Subsidiaries has fulfilled and performed all
of its obligations with respect to such Permits and no event has occurred which
allows, or after notice or lapse of time would allow, revocation or termination
thereof or results in any other material impairment of the rights of the holder
of any such Permit; and none of the Company, any of the Subsidiaries, CPG, any
of the CPG Subsidiaries, Arcon or any of the Arcon Subsidiaries has received any
written or, to the knowledge of the Issuers, oral notice of any proceeding
relating to revocation or modification of any such Permit, except as described
in the Final Memorandum and except where such revocation or modification would
not, individually or in the aggregate, have a Material Adverse Effect.
(o) Since the date of the most recent financial statements appearing
in the Final Memorandum, except as described therein, (i) none of the Company,
any of the Subsidiaries, CPG, any of the CPG Subsidiaries, Arcon or any of the
Arcon Subsidiaries has incurred any liabilities or obligations, direct or
contingent, or entered into or agreed to enter into any transactions or
contracts (written or oral) not in the ordinary course of business (other than
with respect to bridge financing for the Acquisition of Arcon), which
liabilities, obligations, transactions or contracts would, individually or in
the aggregate, be material to the business, condition (financial or otherwise),
prospects or results of operations of
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the Company, the Subsidiaries, CPG, the CPG Subsidiaries, Arcon and the Arcon
Subsidiaries, taken as a whole, (ii) except as contemplated and permitted by the
Merger Agreement or the Stock Purchase Agreement, none of the Company, any of
the Subsidiaries, CPG, any of the CPG Subsidiaries, Arcon or any of the Arcon
Subsidiaries has purchased any of its outstanding capital stock, nor declared,
paid or otherwise made any dividend or distribution of any kind on its capital
stock (other than with respect to any of such Subsidiaries, CPG Subsidiaries or
Arcon Subsidiaries, the purchase of, or dividend or distribution on, capital
stock owned by the Company, a Subsidiary, CPG, a CPG Subsidiary, Arcon or an
Arcon Subsidiary) and (iii) there shall not have been any material change in the
capital stock or long-term indebtedness of the Company, any of the Subsidiaries,
CPG, any of the CPG Subsidiaries, Arcon or any of the Arcon Subsidiaries.
(p) Each of the Company, the Subsidiaries, CPG, the CPG
Subsidiaries, Arcon and the Arcon Subsidiaries has filed all necessary federal,
state and foreign income and franchise tax returns, except where the failure to
so file such returns would not, individually or in the aggregate, have a
Material Adverse Effect, and has paid all taxes shown as due thereon; and other
than tax deficiencies which the Company, any of the Subsidiaries, CPG, any of
the CPG Subsidiaries, Arcon or any of the Arcon Subsidiaries is contesting in
good faith and for which it has provided reserves in accordance with generally
accepted accounting principles, there is no tax deficiency that has been
asserted against the Company, any of the Subsidiaries, CPG, any of the CPG
Subsidiaries, Arcon or any of the Arcon Subsidiaries that would have,
individually or in the aggregate, a Material Adverse Effect.
(q) The statistical and market-related data included in the Final
Memorandum are based on or derived from sources which the Issuers believe to be
reliable and accurate.
(r) None of the Company, any of the Subsidiaries, CPG, any of the
CPG Subsidiaries, Arcon or any of the Arcon Subsidiaries or any agent acting on
their behalf has taken or will take any action that might cause this Agreement
or the sale of the Securities to violate Regulation G, T, U or X of the Board of
Governors of the Federal Reserve System, in each case as in effect, or as the
same may hereafter be in effect, on the Closing Date.
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(s) Each of the Company, the Subsidiaries, CPG, the CPG
Subsidiaries, Arcon and the Arcon Subsidiaries has good and marketable title to
all real property and good title to all personal property described in the Final
Memorandum as being owned by it and good and marketable title to a leasehold
estate in the real and personal property described in the Final Memorandum as
being leased by it free and clear of all liens, charges, encumbrances or
restrictions, except as described in the Final Memorandum or to the extent the
failure to have such title or the existence of such liens, charges, encumbrances
or restrictions would not, individually or in the aggregate, have a Material
Adverse Effect. All leases, contracts and agreements to which the Company, any
of the Subsidiaries, CPG, any of the CPG Subsidiaries, Arcon or any of the Arcon
Subsidiaries is a party or by which any of them is bound are valid and
enforceable against the Company, such Subsidiary, CPG, such CPG Subsidiary,
Arcon or such Arcon Subsidiary, as the case may be, and are valid and
enforceable against the other party or parties thereto and are in full force and
effect with only such exceptions as would not, individually or in the aggregate,
have a Material Adverse Effect and except as enforcement thereof may be subject
to (i) applicable bankruptcy, insolvency, reorganization or other similar laws
now or hereafter in effect relating to creditor's rights generally and (ii)
general principles of equity and the discretion of the court before which any
proceeding therefor may be brought. The Company, the Subsidiaries, CPG, the CPG
Subsidiaries, Arcon and the Arcon Subsidiaries own or possess 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 Final Memorandum, and none of the
Company, any of the Subsidiaries, CPG, any of the CPG Subsidiaries, Arcon or any
of the Arcon Subsidiaries has received any written or, to the knowledge of the
Issuers, oral notice of infringement of or conflict with (or knows of any such
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.
(t) There are no legal or governmental proceedings involving or
affecting the Company, any of the Subsidiaries, CPG, any of the CPG
Subsidiaries, Arcon or any of the Arcon Subsidiaries or any of their respective
properties or assets which would be required to be described in a prospectus
pursuant to the Act that are not described in the Final Memorandum,
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nor are there any material contracts or other documents which would be required
to be described in a prospectus pursuant to the Act that are not described in
the Final Memorandum.
(u) Except as described in the Final Memorandum or as would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect (A) each of the Company, the Subsidiaries, CPG, the CPG
Subsidiaries, Arcon and the Arcon Subsidiaries is in compliance with and not
subject to liability under applicable Environmental Laws (as defined below), (B)
each of the Company, the Subsidiaries, CPG, the CPG Subsidiaries, Arcon and the
Arcon Subsidiaries has made all filings and provided all notices required under
any applicable Environmental Law, and has, and is in compliance with, all
Permits required under any applicable Environmental Laws and each of them is in
full force and effect, (C) there is no civil, criminal or administrative action,
suit, demand, claim, hearing, notice of violation, investigation, proceeding,
notice or demand letter or request for information pending or, to the knowledge
of the Issuers, threatened against the Company, any of the Subsidiaries, CPG,
any of the CPG Subsidiaries, Arcon or any of the Arcon Subsidiaries under any
Environmental Law, (D) no lien, charge, encumbrance or restriction has been
recorded under any Environmental Law with respect to any assets, facility or
property owned, operated, leased or controlled by the Company, any of the
Subsidiaries, CPG, any of the CPG Subsidiaries, Arcon or any of the Arcon
Subsidiaries, (E) none of the Company, any of the Subsidiaries, CPG, any of the
CPG Subsidiaries, Arcon or any of the Arcon Subsidiaries has received notice
that it has been identified as a potentially responsible party under the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended ("CERCLA"), or any comparable state law, (F) no property or facility of
the Company, any of the Subsidiaries, CPG, any of the CPG Subsidiaries, Arcon or
any of the Arcon Subsidiaries is (i) listed or proposed for listing on the
National Priorities List under CERCLA or is (ii) listed in the Comprehensive
Environmental Response, Compensation, Liability Information System List
promulgated pursuant to CERCLA, or on any comparable list maintained by any
state or local governmental authority.
For purposes of this Agreement, "Environmental Laws" means the
common law and all applicable federal, state and local laws or regulations,
codes, orders, decrees, judgments or injunctions issued, promulgated, approved
or entered thereunder, relating to pollution or protection of public or employee
health and safety or the environment, including, without
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limitation, laws relating to (i) emissions, discharges, releases or threatened
releases of hazardous materials into the environment (including, without
limitation, ambient air, surface water, ground water, land surface or subsurface
strata), (ii) the manufacture, processing, distribution, use, generation,
treatment, storage, disposal, transport or handling of hazardous materials, and
(iii) underground and above ground storage tanks and related piping, and
emissions, discharges, releases or threatened releases therefrom.
(v) Except as described in the Final Memorandum, there is no strike,
labor dispute, slowdown or work stoppage with the employees of the Company, any
of the Subsidiaries, CPG, any of the CPG Subsidiaries, Arcon or any of the Arcon
Subsidiaries which is pending or, to the knowledge of the Issuers, threatened.
(w) Each of the Company, the Subsidiaries, CPG, the CPG
Subsidiaries, Arcon and the Arcon Subsidiaries carries insurance in such amounts
and covering such risks as is adequate for the conduct of its business and the
value of its properties.
(x) None of the Company, any of the Subsidiaries, CPG, any of the
CPG Subsidiaries, Arcon or any of the Arcon Subsidiaries has incurred any
liability for any prohibited transaction or funding deficiency or any complete
or partial withdrawal liability with respect to any pension, profit sharing or
other plan which is subject to the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), to which the Company, any of the Subsidiaries, CPG,
any of the CPG Subsidiaries, Arcon or any of the Arcon Subsidiaries makes or
ever has made a contribution and in which any employee of the Company, any of
the Subsidiaries, CPG, any of the CPG Subsidiaries, Arcon or any of the Arcon
Subsidiaries is or has ever been a participant, which in the aggregate could
have a Material Adverse Effect. With respect to such plans, the Company, the
Subsidiaries, CPG, the CPG Subsidiaries, Arcon and the Arcon Subsidiaries are in
compliance in all respects with all applicable provisions of ERISA, except where
the failure to so comply would not, individually or in the aggregate, have a
Material Adverse Effect.
(y) Each of the Company, the Subsidiaries, CPG, the CPG
Subsidiaries, Arcon and the Arcon Subsidiaries (i) makes and keeps accurate
books and records and (ii) maintains internal accounting controls which provide
reasonable assurance that
-14-
(A) transactions are executed in accordance with management's authorization, (B)
transactions are recorded as necessary to permit preparation of its financial
statements and to maintain accountability for its assets, (C) access to its
assets is permitted only in accordance with management's authorization and (D)
the reported accountability for its assets is compared with existing assets at
reasonable intervals.
(z) None of the Company, any of the Subsidiaries, CPG, any of the
CPG Subsidiaries, Arcon or any of the Arcon Subsidiaries is an "investment
company" or "promoter" or "principal underwriter" for an "investment company,"
as such terms are defined in the Investment Company Act of 1940, as amended, and
the rules and regulations thereunder.
(aa) The Notes, the Guarantees, the Indenture, the Registration
Rights Agreement and the Acquisition Agreements will conform in all material
respects to the descriptions thereof in the Final Memorandum.
(ab) No holder of securities of the Company or any of the
Subsidiaries will be entitled to have such securities registered under the
registration statements required to be filed by the Issuers pursuant to the
Registration Rights Agreement, other than as expressly permitted thereby.
(ac) Immediately after the consummation of the transactions
contemplated by the Acquisition Agreements, this Agreement and the Indenture,
the fair value and present fair saleable value of the assets of each of the
Issuers will exceed the sum of its stated liabilities and identified contingent
liabilities; none of the Issuers is, nor will any of the Issuers be, after
giving effect to the execution, delivery and performance of the Acquisition
Agreements, this Agreement and the Indenture, and the consummation of the
transactions contemplated hereby and thereby, (a) left with unreasonably small
capital with which to carry on its business as it is proposed to be conducted,
(b) unable to pay its debts (contingent or otherwise) as they mature or (c)
otherwise insolvent.
(ad) None of the Issuers or any of their respective Affiliates (as
defined in Rule 501(b) of Regulation D under the Act) has directly, or through
any agent, (i) sold, offered for sale, solicited offers to buy or otherwise
negotiated in respect of, any "security" (as defined in the Act) which is or
could be integrated with the sale of the Securities in a manner that would
require the registration under the Act of the
-15-
Securities or (ii) engaged in any form of general solicitation or general
advertising (as those terms are used in Regulation D under the Act) in
connection with the offering of the Securities or in any manner involving a
public offering within the meaning of Section 4(2) of the Act. Assuming the
accuracy of the representations and warranties of the Initial Purchaser in
Section 8 hereof, it is not necessary in connection with the offer, sale and
delivery of the Securities to the Initial Purchaser in the manner contemplated
by this Agreement to register any of the Securities under the Act or to qualify
the Indenture under the TIA.
(ae) No securities of any of the Issuers are of the same class
(within the meaning of Rule 144A under the Act) as any of the Securities and
listed on a national securities exchange registered under Section 6 of the
Exchange Act, or quoted in a U.S. automated inter-dealer quotation system.
(af) None of the Issuers has taken, nor will any of them take,
directly or indirectly, any action designed to, or that might be reasonably
expected to, cause or result in stabilization or manipulation of the price of
the Securities.
(ag) None of the Issuers, any of their respective Affiliates or any
person acting on any of their behalf (other than the Initial Purchaser) has
engaged in any directed selling efforts (as that term is defined in Regulation S
under the Act ("Regulation S")) with respect to the Securities; the Issuers and
their respective Affiliates and any person acting on any of their behalf (other
than the Initial Purchaser) have complied with the offering restrictions
requirement of Regulation S.
Any certificate signed by any officer of any Issuer and delivered to
the Initial Purchaser or to counsel for the Initial Purchaser shall be deemed a
joint and several representation and warranty by the Issuers to the Initial
Purchaser as to the matters covered thereby.
3. Purchase, Sale and Delivery of the Securities. On the basis of
the representations, warranties, agreements and covenants herein contained and
subject to the terms and conditions herein set forth, the Issuers agree to issue
and sell to the Initial Purchaser, and the Initial Purchaser agrees to purchase
the Notes at 97% of their principal amount. One or more certificates in
definitive form for the Notes and Guarantees that the Initial Purchaser has
agreed to purchase hereunder, and in such denomination or denominations and
registered in
-16-
such name or names as the Initial Purchaser requests upon notice to the Company
at least 36 hours prior to the Closing Date, shall be delivered by or on behalf
of the Issuers to the Initial Purchaser, against payment by or on behalf of the
Initial Purchaser of the purchase price therefor by wire transfer (same day
funds) to such account or accounts as the Company shall specify prior to the
Closing Date, or by such means as the parties hereto shall agree prior to the
Closing Date. Such delivery of and payment for the Securities shall be made at
the offices of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ at
10:00 A.M., New York time, on October 16, 1996, or at such other place, time or
date as the Initial Purchaser, on the one hand, and the Company, on the other
hand, may agree upon, such time and date of delivery against payment being
herein referred to as the "Closing Date." The Company will make such certificate
or certificates for the Securities available for checking and packaging by the
Initial Purchaser at the offices of BT Securities Corporation in New York, New
York, or at such other place as BT Securities Corporation may designate, at
least 24 hours prior to the Closing Date.
4. Offering by the Initial Purchaser. The Initial Purchaser proposes
to make an offering of the Securities at the price and upon the terms set forth
in the Final Memorandum, as soon as practicable after this Agreement is entered
into and as in the judgment of the Initial Purchaser is advisable.
5. Covenants of the Issuers. The Issuers covenant and agree with the
Initial Purchaser that:
(a) The Issuers will not amend or supplement the Final Memorandum or
any amendment or supplement thereto of which the Initial Purchaser shall not
previously have been advised and furnished a copy for a reasonable period of
time prior to the proposed amendment or supplement and as to which the Initial
Purchaser shall not have given its consent. The Issuers will promptly, upon the
reasonable request of the Initial Purchaser or counsel for the Initial
Purchaser, make any amendments or supplements to the Preliminary Memorandum or
the Final Memorandum that may be necessary or advisable in connection with the
resale of the Securities by the Initial Purchaser.
(b) The Issuers will cooperate with the Initial Purchaser in
arranging for the qualification of the Securities for offering and sale under
the securities or "Blue Sky" laws of which jurisdictions as the Initial
Purchaser may designate and
-17-
will continue such qualifications in effect for as long as may be necessary to
complete the resale of the Securities; provided, however, that in connection
therewith, none of the Issuers shall be required to qualify as a foreign
corporation or to execute a general consent to service of process in any
jurisdiction or subject itself to taxation in excess of a nominal dollar amount
in any such jurisdiction where it is not then so subject.
(c) If, at any time prior to the completion of the distribution by
the Initial Purchaser of the Securities or the Private Exchange Notes and
Private Exchange Notes Guarantees, any event occurs or information becomes known
as a result of which the Final Memorandum as then amended or supplemented would
include any untrue statement of a material fact, or omit to state a material
fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, or if for any other reason it is
necessary at any time to amend or supplement the Final Memorandum to comply with
applicable law, the Issuers will promptly notify the Initial Purchaser thereof
and will prepare, at the expense of the Issuers, an amendment or supplement to
the Final Memorandum that corrects such statement or omission or effects such
compliance.
(d) The Issuers will, without charge, provide to the Initial
Purchaser and to counsel for the Initial Purchaser as many copies of the
Preliminary Memorandum and the Final Memorandum or any amendment or supplement
thereto as the Initial Purchaser may reasonably request.
(e) The Company will apply the net proceeds from the sale of the
Securities as set forth under "Use of Proceeds" in the Final Memorandum.
(f) For so long as any of the Securities remain outstanding, the
Company will furnish to the Initial Purchaser copies of all reports and other
communications (financial or otherwise) furnished by the Company to the Trustee
or to the holders of the Notes and, as soon as available, copies of any reports
or financial statements furnished to or filed by the Company with the Commission
or any national securities exchange on which any class of securities of the
Company may be listed.
(g) Prior to the Closing Date, the Company will furnish to the
Initial Purchaser, as soon as they have been prepared, a copy of any available
unaudited interim consolidated
-18-
financial statements of the Company, any unaudited interim consolidated
financial statements of CPG and any available unaudited interim consolidated
financial statements of Arcon for any period subsequent to the period covered by
the most recent consolidated financial statements of the Company, consolidated
financial statements of CPG or the most recent consolidated financial statements
of Arcon appearing in the Final Memorandum.
(h) None of the Issuers or any of their Affiliates will sell, offer
for sale or solicit offers to buy or otherwise negotiate in respect of any
"security" (as defined in the Act) which could be integrated with the sale of
the Securities in a manner which would require the registration under the Act of
the Securities.
(i) The Issuers will not engage in any form of general solicitation
or general advertising (as those terms are used in Regulation D under the Act)
in connection with the offering of the Securities or in any manner involving a
public offering within the meaning of Section 4(2) of the Act.
(j) For so long as any of the Securities remain outstanding, the
Company will make available at its expense, upon request, to any holder of such
Securities and any prospective purchasers thereof the information specified in
Rule 144A(d)(4) under the Act, unless the Company is then subject to Section 13
or 15(d) of the Exchange Act.
(k) The Company will use its best efforts to (i) permit the
Securities to be designated PORTAL securities in accordance with the rules and
regulations adopted by the NASD relating to trading in the Private Offerings,
Resales and Trading through Automated Linkages market (the "Portal Market") and
(ii) permit the Securities to be eligible for clearance and settlement through
The Depository Trust Company.
(l) In connection with Securities offered and sold in an off-shore
transaction (as defined in Regulation S) the Company will not register any
transfer of such Notes not made in accordance with the provisions of Regulation
S and will not, except in accordance with the provisions of Regulation S, if
applicable, issue any such Notes in the form of definitive securities.
6. Expenses. The Issuers jointly and severally agree to pay all
costs and expenses incident to the performance
-19-
of their respective obligations under this Agreement, whether or not the
transactions contemplated herein are consummated or this Agreement is terminated
pursuant to Section 11 hereof, including all costs and expenses incident to (i)
the printing, word processing or other production of documents with respect to
the transactions contemplated hereby, including any costs of printing the
Preliminary Memorandum and the Final Memorandum and any amendment or supplement
thereto, and any "Blue Sky" memoranda, (ii) all arrangements relating to the
delivery to the Initial Purchaser of copies of the foregoing documents, (iii)
the fees and disbursements of the counsel, the accountants and any other experts
or advisors retained by the Issuers, (iv) preparation (including printing),
issuance and delivery to the Initial Purchaser of the Securities, (v) the
qualification of the Securities under state securities and "Blue Sky" laws,
including filing fees and fees and disbursements of counsel for the Initial
Purchaser relating thereto, (vi) expenses in connection with any meetings with
prospective investors in the Securities, (vii) fees and expenses of the Trustee
including fees and expenses of its counsel, (viii) all expenses and listing fees
incurred in connection with the application for quotation of the Securities on
the PORTAL Market and (ix) any fees charged by investment rating agencies for
the rating of the Securities. If the sale of the Securities provided for herein
is not consummated because any condition to the obligations of the Initial
Purchaser set forth in Section 7 hereof is not satisfied, because this Agreement
is terminated or because of any failure, refusal or inability on the part of the
Issuers to perform all obligations and satisfy all conditions on their part to
be performed or satisfied hereunder (other than solely by reason of a default by
the Initial Purchaser of its obligations hereunder after all conditions
hereunder have been satisfied in accordance herewith), the Issuers jointly and
severally agree to promptly reimburse the Initial Purchaser upon demand for all
out-of-pocket expenses (including reasonable fees, disbursements and charges of
▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel for the Initial Purchaser) that shall have been
incurred by the Initial Purchaser in connection with the proposed purchase and
sale of the Securities.
7. Conditions of the Initial Purchaser's Obligations. The obligation
of the Initial Purchaser to purchase and pay for the Notes shall, in its sole
discretion, be subject to the satisfaction or waiver of the following conditions
on or prior to the Closing Date:
-20-
(a) On the Closing Date, the Initial Purchaser shall have received
the opinion, dated as of the Closing Date and addressed to the Initial
Purchaser, of White & Case, counsel for the Issuers, in form and substance
satisfactory to counsel for the Initial Purchaser, to the effect that:
(i) Each of the Issuers is duly incorporated, validly existing and
in good standing under the laws of its respective jurisdiction of
incorporation and has all requisite corporate power and authority to own
its properties and to conduct its business as described in the Final
Memorandum. Each of the Issuers is duly qualified to do business as a
foreign corporation in good standing in the jurisdictions listed on a
schedule to such opinion (which the Company shall have certified are the
only jurisdictions where the failure to be so qualified could,
individually or in the aggregate, have a Material Adverse Effect).
(ii) The Company has the authorized, issued and outstanding
capitalization set forth in the Final Memorandum; all of the outstanding
shares of capital stock of the Issuers have been duly authorized and
validly issued and are fully paid and nonassessable; after consummation of
the Acquisitions, all of the outstanding shares of capital stock of the
Subsidiaries, CPG, the CPG Subsidiaries, Arcon and the Arcon Subsidiaries
will be owned, directly or indirectly, by the Company, free and clear of
all perfected security interests and, to the knowledge of such counsel,
free and clear of all other liens, encumbrances, equities and claims or
restrictions on transferability (other than those imposed by the Act and
the securities or "Blue Sky" laws of certain jurisdictions) or voting.
(iii) To the knowledge of such counsel, except as set forth in the
Final Memorandum (A) no options, warrants or other rights to purchase from
the Company, any of the Subsidiaries, CPG, any of the CPG Subsidiaries,
Arcon or any of the Arcon Subsidiaries shares of capital stock or
ownership interests in the Company, any of the Subsidiaries, CPG, any of
the CPG Subsidiaries, Arcon or any of the Arcon Subsidiaries are
outstanding (except for such options, warrants and other rights to
purchase the capital stock of CPG and Arcon as are set forth in the Merger
Agreement and the Stock Purchase Agreement and will be cancelled or
otherwise terminated upon the consummation of the Acquisitions), (B) no
agreements or other obligations
-21-
to issue, or other rights to convert, any obligation into, or exchange any
securities for, shares of capital stock or ownership interests in the
Company, any of the Subsidiaries, CPG, any of the CPG Subsidiaries, Arcon
or any of the Arcon Subsidiaries are outstanding and (C) no holder of
securities of the Company or any of the Subsidiaries is entitled to have
such securities registered under a registration statement filed pursuant
to the Registration Rights Agreement.
(iv) The Company has all requisite corporate power and authority to
execute, deliver and perform each of its obligations under the Indenture,
the Notes, the Exchange Notes and the Private Exchange Notes; each
Guarantor has all requisite corporate power and authority to execute,
deliver and perform each of its obligations under the Indenture, its
Guarantees, its Exchange Notes Guarantees and its Private Exchange Notes
Guarantees; the Indenture meets the requirements for qualification under
the TIA; the Indenture has been duly and validly authorized by each of the
Issuers and, when duly executed and delivered by each of the Issuers
(assuming the due authorization, execution and delivery thereof by the
Trustee), will constitute the valid and legally binding agreement of each
of the Issuers, enforceable against each of the Issuers in accordance with
its terms, except that the enforcement thereof may be subject to (i)
bankruptcy, insolvency, reorganization, or other similar laws now or
hereafter in effect relating to creditors' rights generally and (ii)
general principles of equity and the discretion of the court before which
any proceeding therefor may be brought.
(v) The Notes have each been duly and validly authorized by the
Company and, when duly executed and delivered by the Company and paid for
by the Initial Purchaser in accordance with the terms of this Agreement
(assuming the due authorization, execution and delivery of the Indenture
by the Trustee and due authentication and delivery of the Notes by the
Trustee in accordance with the Indenture), will constitute the valid and
legally binding obligations of the Company, entitled to the benefits of
the Indenture, and enforceable against the Company in accordance with
their terms, except that the enforcement thereof may be subject to (i)
bankruptcy, insolvency, reorganization, or other similar laws now or
hereafter in effect relating to creditors' rights generally and (ii)
general principles of
-22-
equity and the discretion of the court before which any proceeding
therefor may be brought.
(vi) The Guarantees have each been duly and validly authorized by
the Guarantors and, when duly executed and delivered by the Guarantors in
accordance with terms of this Agreement (assuming the due authorization,
execution and delivery of the Indenture by the Trustee), will constitute
the valid and legally binding obligations of the Guarantors, enforceable
against the Guarantors in accordance with their terms, except that the
enforcement thereof may be subject to (i) bankruptcy, insolvency,
reorganization, or other similar laws now or hereafter in effect relating
to creditors' rights generally and (ii) general principles of equity and
the discretion of the court before which any proceeding therefor may be
brought.
(vii) The Exchange Notes and the Private Exchange Notes have been
duly and validly authorized by the Company, and when the Exchange Notes
and the Private Exchange Notes have been duly executed and delivered by
the Company in accordance with the terms of the Registration Rights
Agreement and the Indenture (assuming the due authorization, execution and
delivery of the Indenture by the Trustee and due authentication and
delivery of the Exchange Notes and the Private Exchange Notes by the
Trustee in accordance with the Indenture), will constitute the valid and
legally binding obligations of the Company, entitled to the benefits of
the Indenture, and enforceable against the Company in accordance with
their terms, except that the enforcement thereof may be subject to (i)
bankruptcy, insolvency, reorganization, or other similar laws now or
hereafter in effect relating to creditors' rights generally and (ii)
general principles of equity and the discretion of the court before which
any proceeding therefor may be brought.
(viii) The Exchange Notes Guarantees and the Private Exchange Notes
Guarantees have been duly and validly authorized by the Guarantors, and
when the Exchange Notes Guarantees and the Private Exchange Notes
Guarantees have been duly executed and delivered by the Guarantors in
accordance with the terms of the Registration Rights Agreement and the
Indenture (assuming due authorization, execution and delivery of the
Indenture by the Trustee), will constitute the valid and legally binding
obligations
-23-
of the Guarantors, and enforceable against the Guarantors in accordance
with their terms, except that the enforcement thereof may be subject to
(i) bankruptcy, insolvency, reorganization, or other similar laws now or
hereafter in effect relating to creditors' rights generally and (ii)
general principles of equity and the discretion of the court before which
any proceeding therefor may be brought.
(ix) Each of the Issuers has all requisite corporate power and
authority to execute, deliver and perform its obligations under the
Registration Rights Agreement; the Registration Rights Agreement has been
duly and validly authorized by each of the Issuers and, when duly executed
and delivered by each of the Issuers (assuming due authorization,
execution and delivery thereof by the Initial Purchaser), will constitute
the valid and legally binding agreement of each of the Issuers,
enforceable against each of the Issuers in accordance with its terms,
except that (A) the enforcement thereof may be subject to (i) bankruptcy,
insolvency, reorganization, or other similar laws now or hereafter in
effect relating to creditors' rights generally and (ii) general principles
of equity and the discretion of the court before which any proceeding
therefor may be brought and (B) any rights to indemnity or contribution
thereunder may be limited by federal and state securities laws and public
policy considerations.
(x) Each of the Issuers has all requisite corporate power and
authority to execute, deliver and perform its obligations under this
Agreement and to consummate the transactions contemplated hereby; this
Agreement and the consummation by each of the Issuers of the transactions
contemplated hereby have been duly and validly authorized by each of the
Issuers. This Agreement has been duly executed and delivered by each of
the Issuers.
(xi) The Indenture, the Notes, the Guarantees, the Registration
Rights Agreement, the Acquisition Agreements conform in all material
respects to the descriptions thereof contained in the Final Memorandum.
(xii) To the knowledge of such counsel, no legal or governmental
proceedings are pending or threatened to which the Company or any of the
Subsidiaries is a party or to which any of their respective properties or
assets is subject which seeks to restrain, enjoin, prevent the
consummation of or otherwise challenge the issuance or sale
-24-
of the Securities to be sold hereunder or the consummation of the other
transactions described in the Final Memorandum under the caption "Use of
Proceeds."
(xiii) The execution, delivery and performance of this Agreement,
the Indenture, the Registration Rights Agreement, the Acquisition
Agreements and the consummation of the transactions contemplated hereby
and thereby (including, without limitation, the issuance and sale of the
Securities to the Initial Purchaser) will not conflict with or constitute
or result in a breach or a default under (or an event which with notice or
passage of time or both would constitute a default under) or violation of
any of (i) the terms or provisions of any Contract known to such counsel,
except for any such conflict, breach, violation, default or event which
would not, individually or in the aggregate, have a Material Adverse
Effect, (ii) the certificate of incorporation or bylaws (or similar
organizational document) of the Company, any of the Subsidiaries, CPG, any
of the CPG Subsidiaries, Arcon or any of the Arcon Subsidiaries, or (iii)
(assuming compliance with all applicable state securities or "Blue Sky"
laws and assuming the accuracy of the representations and warranties of
the Initial Purchaser in Section 8 hereof) any statute, judgment, decree,
order, rule or regulation known to such counsel to be applicable to the
Company, any of the Subsidiaries, CPG, any of the CPG Subsidiaries, Arcon
or any of the Arcon Subsidiaries or any of their respective properties or
assets, except for any such conflict, breach or violation which would not,
individually or in the aggregate, have a Material Adverse Effect.
(xiv) Except for (x) with respect to the transactions contemplated
by the Merger Agreement, the termination of the waiting period under the
HSR Act and (y) as are otherwise set forth in the schedules to the Merger
Agreement and the Stock Purchase Agreement, no consent, approval,
authorization or order of any governmental authority is required for (i)
the issuance and sale by the Company of the Notes to the Initial Purchaser
or the consummation by the Company of the other transactions contemplated
hereby and (ii) the execution and delivery by the Guarantors of the
Guarantees or the consummation by the Guarantors of the other transactions
contemplated hereby and (iii) the consummation by the Company and Merger
Sub (to the extent a party thereto) of the transactions contemplated by
the Acquisition Agreements and except such as may be required
-25-
under Blue Sky laws, as to which such counsel need express no opinion, and
those which have previously been obtained.
(xv) To the knowledge of such counsel, there are no legal or
governmental proceedings involving or affecting the Company, any of the
Subsidiaries, CPG, any of the CPG Subsidiaries, Arcon or any of the Arcon
Subsidiaries or any of their respective properties or assets which would
be required to be described in a prospectus pursuant to the Act that are
not described in the Final Memorandum, nor are there any material
contracts or other documents which would be required to be described in a
prospectus pursuant to the Act that are not described in the Final
Memorandum.
(xvi) None of the Company, any of the Subsidiaries, CPG, any of the
CPG Subsidiaries, Arcon or any of the Arcon Subsidiaries is, or
immediately after the sale of the Securities to be sold hereunder and the
application of the proceeds from such sale (as described in the Final
Memorandum under the caption "Use of Proceeds") will be, an "investment
company" as such term is defined in the Investment Company Act of 1940, as
amended.
(xvii) 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 Final Memorandum or in connection
with the initial resale of the Securities by the Initial Purchaser in
accordance with Section 8 of this Agreement, and prior to the commencement
of the Exchange Offer (as defined in the Registration Rights Agreement) or
the effectiveness of the Shelf Registration Statement (as defined in the
Registration Rights Agreement), the Indenture is not required to be
qualified under the TIA, in each case assuming (i) (A) that the purchasers
who buy such Securities in the initial resale thereof are qualified
institutional buyers as defined in Rule 144A promulgated under the Act
("QIBs") or accredited investors as defined in Rule 501(a) (1), (2), (3)
or (7) promulgated under the Act ("Accredited Investors") or (B) that the
offer or sale of the Securities is made in an offshore transaction as
defined in Regulation S promulgated under the Act (ii) the accuracy of the
Initial Purchaser's representations in Section 8 hereof and those of the
Issuers contained in this Agreement regarding the absence of a general
solicitation in connection with the sale of such Securities to the Initial
-26-
Purchaser and the initial resale thereof and (iii) the due performance by
the Initial Purchaser of the agreements set forth in Section 8 hereof.
(xviii) Neither the consummation of the transactions contemplated by
this Agreement nor the sale, issuance, execution or delivery of the
Securities will violate Regulation G, T, U or X of the Board of Governors
of the Federal Reserve System.
At the time the foregoing opinion is delivered, White & Case shall
additionally state that it has participated in conferences with officers and
other representatives of the Issuers, representatives of the independent public
accountants for the Issuers, representatives of the Initial Purchaser and
counsel for the Initial Purchaser, at which conferences the contents of the
Final Memorandum and related matters were discussed, and, although it has not
independently verified and is not passing upon and assumes no responsibility for
the accuracy, completeness or fairness of the statements contained in the Final
Memorandum (except to the extent specified in subsection 7(a)(xi)), and that its
judgments as to materiality are, to the extent it deems proper, based in part
upon the views of appropriate officers and other representatives of the Company,
it does not believe that the Final Memorandum, on the date thereof or at the
Closing Date, contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements contained therein, in light of the circumstances under which they
were made, not misleading (it being understood that such firm need not express
any opinion with respect to the financial statements and related notes thereto
and the other financial, statistical and accounting data included in the Final
Memorandum).
In rendering the foregoing opinions, White & Case may (i) state that
their opinion is limited to matters governed by the federal laws of the United
States of America, the laws of the State of New York and the corporate laws of
the State of Delaware, and (ii) rely, to the extent such counsel deems proper,
upon the representations set forth herein and on certificates of public
officials and officers of the Company, with respect to the accuracy of factual
matters contained therein which were not independently established.
References to the Final Memorandum in this subsection (a) shall
include any amendment or supplement
-27-
thereto prepared in accordance with the provisions of this Agreement at the
Closing Date.
(b) On the Closing Date, the Initial Purchaser shall have received
the opinion, in form and substance satisfactory to the Initial Purchaser, dated
as of the Closing Date and addressed to the Initial Purchaser, of ▇▇▇▇▇▇ ▇▇▇▇▇▇
& ▇▇▇▇▇▇▇, counsel for the Initial Purchaser, with respect to certain legal
matters relating to this Agreement and such other related matters as the Initial
Purchaser may reasonably require. In rendering such opinion, ▇▇▇▇▇▇ ▇▇▇▇▇▇ &
▇▇▇▇▇▇▇ shall have received and may rely upon such certificates and other
documents and information as it may reasonably request to pass upon such
matters.
(c) The Initial Purchaser shall have received from each of KPMG Peat
Marwick LLP, Coopers & ▇▇▇▇▇▇▇ LLP and Price Waterhouse LLP a comfort letter or
letters dated the date hereof and the Closing Date, in form and substance
satisfactory to counsel for the Initial Purchaser.
(d) The representations and warranties of the Issuers contained in
this Agreement shall be true and correct in all material respects on and as of
the date hereof and on and as of the Closing Date as if made on and as of the
Closing Date; the statements of the Issuers' officers made pursuant to any
certificate delivered in accordance with the provisions hereof shall be true and
correct in all material respects on and as of the date made and on and as of the
Closing Date; the Issuers shall have performed in all material respects all
covenants and agreements and satisfied in all material respects all conditions
on their part to be performed or satisfied hereunder at or prior to the Closing
Date; and, except as described in the Final Memorandum (exclusive of any
amendment or supplement thereto after the date hereof), subsequent to the date
of the most recent financial statements in such Final Memorandum, there shall
have been no event or development, and no information shall have become known,
that, individually or in the aggregate, has or would be reasonably likely to
have a Material Adverse Effect.
(e) The sale of the Securities hereunder shall not be enjoined
(temporarily or permanently) on the Closing Date.
(f) Subsequent to the date of the most recent financial statements
in the Final Memorandum (exclusive of any amendment or supplement thereto after
the date hereof), none of
-28-
the Company, any of the Subsidiaries, CPG, any of the CPG Subsidiaries, Arcon or
any of the Arcon Subsidiaries shall have sustained any loss or interference with
respect to its business or properties from fire, flood, hurricane, accident or
other calamity, whether or not covered by insurance, or from any strike, labor
dispute, slow down or work stoppage or from any legal or governmental
proceeding, order or decree, which loss or interference, individually or in the
aggregate, has or would be reasonably likely to have a Material Adverse Effect.
(g) The Initial Purchaser shall have received a certificate of each
of the Issuers, dated the Closing Date, signed on behalf of each of the Issuers
by its Chairman of the Board, President or any Senior Vice President and the
Chief Financial Officer, to the effect that:
(i) The representations and warranties of the Issuers contained in
this Agreement are true and correct in all material respects on and as of
the date hereof and on and as of the Closing Date, and the Issuers have
performed in all material respects all covenants and agreements and
satisfied in all material respects all conditions on their part to be
performed or satisfied hereunder at or prior to the Closing Date;
(ii) At the Closing Date, since the date hereof or since the date of
the most recent financial statements in the Final Memorandum (exclusive of
any amendment or supplement thereto after the date hereof), no event or
development has occurred, and no information has become known, that,
individually or in the aggregate, has or would be reasonably likely to
have a Material Adverse Effect; and
(iii) The sale of the Securities hereunder has not been enjoined
(temporarily or permanently).
(h) On the Closing Date, the Initial Purchaser shall have received
the Registration Rights Agreement executed by each of the Issuers and such
agreement shall be in full force and effect at all times from and after the
Closing Date.
On or before the Closing Date, the Initial Purchaser and counsel for
the Initial Purchaser shall have received such further documents, opinions,
certificates, letters and schedules or instruments relating to the business,
corporate, legal and financial affairs of the Company, the Subsidiaries, CPG,
-29-
the CPG Subsidiaries, Arcon and the Arcon Subsidiaries as they shall have
heretofore reasonably requested.
All such documents, opinions, certificates, letters, schedules or
instruments delivered pursuant to this Agreement will comply with the provisions
hereof only if they are reasonably satisfactory in all material respects to the
Initial Purchaser and counsel for the Initial Purchaser. The Company shall
furnish to the Initial Purchaser such conformed copies of such documents,
opinions, certificates, letters, schedules and instruments in such quantities as
the Initial Purchaser shall reasonably request.
8. Offering of Securities; Restrictions on Transfer. (a) The Initial
Purchaser represents and warrants that it is a QIB. The Initial Purchaser agrees
with the Issuers that (i) it has not and will not solicit offers for, or offer
or 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; and (ii) it has and will solicit offers for the Securities only from, and
will offer the Securities only to (A) in the case of offers inside the United
States, (x) persons whom the Initial Purchaser reasonably believes to be QIBs
or, if any such person is buying for one or more institutional accounts for
which such person is acting as fiduciary or agent, only when such person has
represented to the Initial Purchaser that each such account is a QIB, to whom
notice has been given that such sale or delivery is being made in reliance on
Rule 144A, and, in each case, in transactions under Rule 144A or (y) a limited
number of other institutional investors reasonably believed by the Initial
Purchaser to be Accredited Investors that, prior to their purchase of the
Securities, deliver to the Initial Purchaser a letter containing the
representations and agreements set forth in Annex A to the Final Memorandum and
(B) in the case of offers outside the United States, to persons other than U.S.
persons ("foreign purchasers," which term shall include dealers or other
professional fiduciaries in the United States acting on a discretionary basis
for foreign beneficial owners (other than an estate or trust)); provided,
however, that, in the case of this clause (B), in purchasing such Securities
such persons are deemed to have represented and agreed as provided under the
caption "Transfer Restrictions" contained in the Final Memorandum (or, if the
Final Memorandum is not in existence, in the most recent Memorandum).
-30-
(b) The Initial Purchaser represents and warrants with respect to
offers and sales outside the United States that (i) it has and will comply with
all applicable laws and regulations in each jurisdiction in which it acquires,
offers, sells or delivers Securities or has in its possession or distributes any
Memorandum or any such other material, in all cases at its own expense; (ii) the
Securities have not been and will not be offered or sold within the United
States or to, or for the account or benefit of, U.S. persons except in
accordance with Regulation S under the Act or pursuant to an exemption from the
registration requirements of the Act; (iii) it has offered the Securities and
will offer and sell the Securities (A) as part of its distribution at any time
and (B) otherwise until 40 days after the later of the commencement of the
offering and the Closing Date, only in accordance with Rule 903 of Regulation S
and, accordingly, neither it nor any persons acting on its behalf have engaged
or will engage in any directed selling efforts (within the meaning of Regulation
S) with respect to the Securities, and any such persons have complied and will
comply with the offering restrictions requirement of Regulation S; and (iv) it
agrees that, at or prior to confirmation of sales of the Securities, 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 (the "Securities Act") and may not be
offered and sold within the United States or to, or for the account or
benefit of, U.S. persons (i) as part of the distribution of the Securities
at any time or (ii) otherwise until 40 days after the later of the
commencement of the offering and the closing date of the offering, except
in either case in accordance with Regulation S (or Rule 144A if available)
under the Securities Act. Terms used above have the meaning given to them
in Regulation S."
Terms used in this Section 8(b) and not defined in this Agreement have the
meanings given to them in Regulation S.
(c) The Initial Purchaser represents and warrants that the source of
funds being used by it to acquire the Securities does not include the assets of
any "employee benefit
-31-
plan" (within the meaning of Section 3 of ERISA) or any "plan" (within the
meaning of Section 4975 of the Code).
9. Indemnification and Contribution. (a) The Issuers jointly and
severally agree to indemnify and hold harmless the Initial Purchaser, and each
person, if any, who controls the Initial Purchaser within the meaning of Section
15 of the Act or Section 20 of the Exchange Act, against any losses, claims,
damages or liabilities to which the Initial Purchaser or such controlling person
may become subject under the Act, the Exchange Act or otherwise, insofar as any
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon:
(i) any untrue statement or alleged untrue statement of any material
fact contained in any Memorandum or any amendment or supplement thereto or
any application or other document, or any amendment or supplement thereto,
executed by an Issuer or based upon written information furnished by or on
behalf of an Issuer filed in any jurisdiction in order to qualify the
Securities under the securities or "Blue Sky" laws thereof or filed with
any securities association or securities exchange (each an "Application");
or
(ii) the omission or alleged omission to state, in any Memorandum or
any amendment or supplement thereto or any Application, 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,
and will reimburse, as incurred, the Initial Purchaser and each such controlling
person for any reasonable legal or other expenses incurred by the Initial
Purchaser or such controlling person in connection with investigating, defending
against or appearing as a third-party witness in connection with any such loss,
claim, damage, liability or action; provided, however, the Issuers will not be
liable (i) in any such case to the extent that any such loss, claim, damage, or
liability arises out of or is based upon any untrue statement or alleged untrue
statement or omission or alleged omission made in any Memorandum or any
amendment or supplement thereto or any Application in reliance upon and in
conformity with written information concerning the Initial Purchaser furnished
to an Issuer by the Initial Purchaser specifically for use therein or (ii) with
respect to the Preliminary Memorandum, to the extent that any
-32-
such loss, claim, damage or liability arises solely from the fact that the
Initial Purchaser sold Securities to a person to whom there was not sent or
given, on or prior to the written confirmation of such sale, a copy of the Final
Memorandum, as amended and supplemented, if the Company shall have previously
furnished copies thereof to the Initial Purchaser in accordance with this
Agreement and the Final Memorandum, as amended and supplemented, would have
corrected any such untrue statement or omission. This indemnity agreement will
be in addition to any liability that the Issuers may otherwise have to the
indemnified parties. The Issuers shall not be liable under this Section 9 for
any settlement of any claim or action effected without their prior written
consent, which shall not be unreasonably withheld. The Initial Purchaser shall
not, without the prior written consent of the Issuers, effect any settlement or
compromise of any pending or threatened proceeding in respect of which any
Issuer is or could have been a party, or indemnity could have been sought
hereunder by any Issuer, unless such settlement (A) included an unconditional
written release of the Issuers, in form and substance reasonably satisfactory to
the Issuers, from all liability on claims that are the subject matter of such
proceeding and (B) does not include any statement as to an admission of fault,
culpability or failure to act by or on behalf of any Issuer.
(b) The Initial Purchaser agrees to indemnify and hold harmless the
Issuers, their respective directors, their respective officers and each person,
if any, who controls an Issuer within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act against any losses, claims, damages or
liabilities to which an Issuer or any such director, officer or controlling
person may become subject under the Act, the Exchange Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon (i) any untrue statement or alleged untrue
statement of any material fact contained in any Memorandum or any amendment or
supplement thereto or any Application, or (ii) the omission or the alleged
omission to state therein a material fact required to be stated in any
Memorandum or any amendment or supplement thereto or any Application, or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, in each case to the extent, but only
to the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in conformity with
written information concerning the Initial Purchaser, furnished to an Issuer by
the Initial Purchaser specifically for use
-33-
therein; and subject to the limitation set forth immediately preceding this
clause, will reimburse, as incurred, any reasonable legal or other expenses
incurred by an Issuer or any such director, officer or controlling person in
connection with investigating or defending against or appearing as a third party
witness in connection with any such loss, claim, damage, liability or action in
respect thereof. This indemnity agreement will be in addition to any liability
that the Initial Purchaser may otherwise have to the indemnified parties. The
Initial Purchaser shall not be liable under this Section 9 for any settlement of
any claim or action effected without its consent, which shall not be
unreasonably withheld. The Issuers shall not, without the prior written consent
of the Initial Purchaser, effect any settlement or compromise of any pending or
threatened proceeding in respect of which the Initial Purchaser is or could have
been a party, or indemnity could have been sought hereunder by the Initial
Purchaser, unless such settlement (A) includes an unconditional written release
of the Initial Purchaser, in form and substance reasonably satisfactory to the
Initial Purchaser, from all liability on claims that are the subject matter of
such proceeding and (B) does not include any statement as to an admission of
fault, culpability or failure to act by or on behalf of the Initial Purchaser.
(c) Promptly after receipt by an indemnified party under this
Section 9 of notice of the commencement of any action for which such indemnified
party is entitled to indemnification under this Section 9, such indemnified
party will, if a claim in respect thereof is to be made against the indemnifying
party under this Section 9, notify the indemnifying party of the commencement
thereof in writing; but the omission to so notify the indemnifying party (i)
will not relieve it from any liability under paragraph (a) or (b) above unless
and to the extent such failure results in the forfeiture by the indemnifying
party of substantial rights and defenses and (ii) will not, in any event,
relieve the indemnifying party from any obligations to any indemnified party
other than the indemnification obligation provided in paragraphs (a) and (b)
above. In case any such action is brought against any indemnified party, and it
notifies the indemnifying party of the commencement thereof, the indemnifying
party will be entitled to participate therein and, to the extent that it may
wish, jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel reasonably satisfactory to such indemnified
party; provided, however, that if (i) the use of counsel chosen by the
indemnifying party to represent the indemnified party would present such counsel
with a conflict of interest,
-34-
(ii) the defendants in any such action include both the indemnified party and
the indemnifying party and the indemnified party shall have been advised by
counsel that there may be one or more legal defenses available to it and/or
other indemnified parties that are different from or additional to those
available to the indemnifying party, or (iii) the indemnifying party shall not
have employed counsel reasonably satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after receipt by the
indemnifying party of notice of the institution of such action, then, in each
such case, the indemnifying party shall not have the right to direct the defense
of such action on behalf of such indemnified party or parties and such
indemnified party or parties shall have the right to select separate counsel to
defend such action on behalf of such indemnified party or parties. After notice
from the indemnifying party to such indemnified party of its election so to
assume the defense thereof and approval by such indemnified party of counsel
appointed to defend such action, the indemnifying party will not be liable to
such indemnified party under this Section 9 for any legal or other expenses,
other than reasonable costs of investigation, subsequently incurred by such
indemnified party in connection with the defense thereof, unless (i) the
indemnified party shall have employed separate counsel in accordance with the
proviso to the immediately preceding sentence (it being understood, however,
that in connection with such action the indemnifying party shall not be liable
for the expenses of more than one separate counsel (in addition to local
counsel) in any one action or separate but substantially similar actions in the
same jurisdiction arising out of the same general allegations or circumstances,
designated by the Initial Purchaser in the case of paragraph (a) of this Section
9 or the Company in the case of paragraph (b) of this Section 9, representing
the indemnified parties under such paragraph (a) or paragraph (b), as the case
may be, who are parties to such action or actions) or (ii) the indemnifying
party has authorized in writing the employment of counsel for the indemnified
party at the expense of the indemnifying party. After such notice from the
indemnifying party to such indemnified party, the indemnifying party will not be
liable for the costs and expenses of any settlement of such action effected by
such indemnified party without the prior written consent of the indemnifying
party (which consent shall not be unreasonably withheld), unless such
indemnified party waived in writing its rights under this Section 9, in which
case the indemnified party may effect such a settlement without such consent.
-35-
(d) In circumstances in which the indemnity agreement provided for
in the preceding paragraphs of this Section 9 is unavailable to, or insufficient
to hold harmless, an indemnified party in respect of any losses, claims, damages
or liabilities (or actions in respect thereof), each indemnifying party, in
order to provide for just and equitable contribution, shall contribute to the
amount paid or payable by such indemnified party as a result of such losses,
claims, damages or liabilities (or actions in respect thereof) in such
proportion as is appropriate to reflect (i) the relative benefits received by
the indemnifying party or parties on the one hand and the indemnified party on
the other from the offering of the Securities or (ii) if the allocation provided
by the foregoing clause (i) is not permitted by applicable law, not only such
relative benefits but also the relative fault of the indemnifying party or
parties on the one hand and the indemnified party on the other in connection
with the statements or omissions or alleged statements or omissions that
resulted in such losses, claims, damages or liabilities (or actions in respect
thereof). The relative benefits received by the Issuers on the one hand and the
Initial Purchaser on the other shall be deemed to be in the same proportion as
the total proceeds from the offering (before deducting expenses) received by the
Issuers bear to the total discounts and commissions received by the Initial
Purchaser. The relative fault of the parties shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Issuers on the one hand, or the Initial
Purchaser on the other, the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission or
alleged statement or omission, and any other equitable considerations
appropriate in the circumstances. The Issuers and the Initial Purchaser agree
that it would not be equitable if the amount of such contribution were
determined by pro rata or per capita allocation or by any other method of
allocation that does not take into account the equitable considerations referred
to in the first sentence of this paragraph (d). Notwithstanding any other
provision of this paragraph (d), the Initial Purchaser shall not be obligated to
make contributions hereunder that in the aggregate exceed the total discounts,
commissions and other compensation received by the Initial Purchaser under this
Agreement, less the aggregate amount of any damages that the Initial Purchaser
has otherwise been required to pay by reason of the untrue or alleged untrue
statements or the omissions or alleged omissions to state a material fact, and
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
-36-
misrepresentation. For purposes of this paragraph (d), each person, if any, who
controls the Initial Purchaser within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act shall have the same rights to contribution as the
Initial Purchaser, and each director of an Issuer, each officer of an Issuer and
each person, if any, who controls an Issuer within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act, shall have the same rights to
contribution as the Issuers.
10. Survival Clause. The respective representations, warranties,
agreements, covenants, indemnities and other statements of the Issuers, their
respective officers and the Initial Purchaser set forth in this Agreement or
made by or on behalf of them pursuant to this Agreement shall remain in full
force and effect, regardless of (i) any investigation made by or on behalf of
the Issuers, any of their respective officers or directors, the Initial
Purchaser or any controlling person referred to in Section 9 hereof and (ii)
delivery of and payment for the Securities. The respective agreements,
covenants, indemnities and other statements set forth in Sections 6, 9 and 15
hereof shall remain in full force and effect, regardless of any termination or
cancellation of this Agreement.
11. Termination. (a) This Agreement may be terminated in the sole
discretion of the Initial Purchaser by notice to the Company given prior to the
Closing Date in the event that any of the Issuers shall have failed, refused or
been unable to perform all obligations and satisfy all conditions on its part to
be performed or satisfied hereunder at or prior thereto or, if at or prior to
the Closing Date:
(i) the Company, any of the Subsidiaries, CPG, any of the CPG
Subsidiaries, Arcon or any of the Arcon Subsidiaries shall have sustained
any loss or interference with respect to its businesses or properties from
fire, flood, hurricane, accident or other calamity, whether or not covered
by insurance, or from any strike, labor dispute, slow down or work
stoppage or any legal or governmental proceeding, which loss or
interference, in the sole judgment of the Initial Purchaser, has had or
has a Material Adverse Effect, or there shall have been, in the sole
judgment of the Initial Purchaser, any event or development that,
individually or in the aggregate, has or could be reasonably likely to
have a Material Adverse Effect
-37-
(including without limitation a change in control of the Company, any of
the Subsidiaries, CPG, any of the CPG Subsidiaries, Arcon or any of the
Arcon Subsidiaries), except in each case as described in the Final
Memorandum (exclusive of any amendment or supplement thereto);
(ii) trading in securities generally on the New York Stock Exchange,
American Stock Exchange or the NASDAQ National Market shall have been
suspended or minimum or maximum prices shall have been established on any
such exchange or market;
(iii) a banking moratorium shall have been declared by New York or
United States authorities;
(iv) there shall have been (A) an outbreak or escalation of
hostilities between the United States and any foreign power, or (B) an
outbreak or escalation of any other insurrection or armed conflict
involving the United States or any other national or international
calamity or emergency, or (C) any material change in the financial markets
of the United States which, in the case of (A), (B) or (C) above and in
the sole judgment of the Initial Purchaser, makes it impracticable or
inadvisable to proceed with the offering or the delivery of the Securities
as contemplated by the Final Memorandum; or
(v) any securities of the Company shall have been downgraded or
placed on any "watch list" for possible downgrading by any nationally
recognized statistical rating organization.
(b) Termination of this Agreement pursuant to this Section 11 shall
be without liability of any party to any other party except as provided in
Section 10 hereof.
12. Information Supplied by the Initial Purchaser. The statements
set forth in the last paragraph on the front cover page and in the second and
third sentences of the third paragraph under the heading "Private Placement" in
the Final Memorandum (to the extent such statements relate to the Initial
Purchaser) constitute the only information furnished by the Initial Purchaser to
the Issuers for the purposes of Sections 2(a) and 9 hereof.
13. Notices. All communications hereunder shall be in writing and,
if sent to the Initial Purchaser, shall be
-38-
mailed or delivered to (i) BT Securities Corporation, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Finance Department; if sent to the
Issuers, shall be mailed or delivered to the Company at ▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Chief Financial Officer; with a copy to
White & Case, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇.
All such notices and communications shall be deemed to have been
duly given: when delivered by hand, if personally delivered; five business days
after being deposited in the mail, postage prepaid, if mailed; and one business
day after being timely delivered to a next-day air courier.
14. Successors. This Agreement shall inure to the benefit of and be
binding upon the Initial Purchaser, the Issuers and their respective successors
and legal representatives, and nothing expressed or mentioned in this Agreement
is intended or shall be construed to give any other person any legal or
equitable right, remedy or claim under or in respect of this Agreement, or any
provisions herein contained; this Agreement and all conditions and provisions
hereof being intended to be and being for the sole and exclusive benefit of such
persons and for the benefit of no other person except that (i) the indemnities
of the Issuers contained in Section 9 of this Agreement shall also be for the
benefit of any person or persons who control the Initial Purchaser within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act and (ii) the
indemnities of the Initial Purchaser contained in Section 9 of this Agreement
shall also be for the benefit of the directors of the Issuers, their respective
officers and any person or persons who control an Issuer within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act. No purchaser of
Securities from the Initial Purchasers will be deemed a successor because of
such purchase.
15. APPLICABLE LAW. THE VALIDITY AND INTERPRETATION OF THIS
AGREEMENT, AND THE TERMS AND CONDITIONS SET FORTH HEREIN SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND TO BE PERFORMED WHOLLY THEREIN, WITHOUT GIVING EFFECT TO ANY
PROVISIONS THEREOF RELATING TO CONFLICTS OF LAW.
16. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
-39-
17. CPG Subsidiaries, Arcon and Arcon Subsidiaries a Party.
Immediately upon (a) consummation of the Merger pursuant to the Merger
Agreement, the Company shall cause each of the CPG Subsidiaries to become a
party hereto as a Guarantor by executing and delivering to the Initial Purchaser
a counterpart hereof and (b) the acquisition of all of the outstanding capital
stock of Arcon pursuant to the Stock Purchase Agreement, the Company shall cause
each of Arcon and the Arcon Subsidiaries to become a party hereto as a Guarantor
by executing and delivering to the Initial Purchaser a counterpart hereof.
If the foregoing correctly sets forth our understanding, please
indicate your acceptance thereof in the space provided below for that purpose,
whereupon this letter shall constitute a binding agreement between the Company,
the Guarantors set forth below and the Initial Purchaser.
Very truly yours,
SPECIALTY PAPERBOARD, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: President
SPECIALTY PAPERBOARD/ENDURA, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: President
CPG ACQUISITION COMPANY
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: President
The foregoing Agreement is hereby confirmed and accepted as of the date first
above written.
BT SECURITIES CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Managing Director
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 opposite its
name:
Date: CPG INVESTORS INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
Date: CPG HOLDINGS INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
Date: CUSTOM PAPERS GROUP INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
Date: CPG-▇▇▇▇▇▇ ▇▇▇▇ INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
Date: ARCON HOLDING CORP.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
Date: ARCON COATING ▇▇▇▇▇, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
SCHEDULE 1
Subsidiaries
Jurisdiction of
Name Stockholder(s) Incorporation
---- -------------- ---------------
Specialty Paperboard/ SPI Delaware
Endura, Inc.
CPG Acquisition Company SPI Delaware
SCHEDULE 2
CPG Subsidiaries
Jurisdiction of
Name Stockholder(s) Incorporation
---- -------------- ---------------
CPG Holdings Inc. CPG Delaware
Custom Papers Group, Inc. CPG Holdings Inc. Virginia
CPG-▇▇▇▇▇▇ ▇▇▇▇ Inc. CPG Holdings Inc. Virginia
SCHEDULE 3
Arcon Subsidiaries
Jurisdiction of
Name Stockholder(s) Incorporation
---- -------------- ---------------
Arcon Coating ▇▇▇▇▇, Arcon Delaware
Inc.