<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 22, 1999
REGISTRATION NO. 333-79947
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- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 1
TO
REGISTRATION STATEMENT ON FORM S-3
UNDER
THE SECURITIES ACT OF 1933
------------------------
AEP INDUSTRIES INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 22-1916107
(State or other jurisdiction of Incorporation) (I.R.S. Employer ID No.)
</TABLE>
125 PHILLIPS AVENUE
SOUTH HACKENSACK, NEW JERSEY 07606-1546
(201) 641-6600
(Address and telephone number of registrant's principal executive offices)
PAUL M. FEENEY
CHIEF FINANCIAL OFFICER
125 PHILLIPS AVENUE
SOUTH HACKENSACK, NEW JERSEY 07606-1546
(201) 641-6600
(Address and telephone number of agent for service)
------------------------
COPIES TO:
<TABLE>
<S> <C>
PAUL E. GELBARD, ESQ. WINTHROP B. CONRAD, JR.
BACHNER, TALLY, POLEVOY & MISHER LLP DAVIS POLK & WARDWELL
380 MADISON AVENUE 450 LEXINGTON AVENUE
NEW YORK, NEW YORK 10017 NEW YORK, NEW YORK 10017
(212) 687-7000 (212) 450-4000
</TABLE>
APPROXIMATE DATE OF PROPOSED COMMENCEMENT OF SALE TO PUBLIC: As soon as
practicable after this Registration Statement becomes effective.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, please check the following box. / /
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier
registration statement for the same offering. / /
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration for the same
offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box. / /
CALCULATION OF REGISTRATION FEE UNDER THE SECURITIES ACT OF 1933
<TABLE>
<CAPTION>
PROPOSED
MAXIMUM AGGREGATE PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE PRICE PER AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED(1) SECURITY(2) OFFERING PRICE REGISTRATION FEE
<S> <C> <C> <C> <C>
Common Stock, $.01 par value...................... 2,774,741 shares $37.1875 $103,185,680.94 $28,685.62
</TABLE>
(1) Includes 361,923 shares to cover the Underwriters' over-allotment option.
(2) Estimated solely for purposes of calculating the registration fee pursuant
to Rule 457(c) under the Securities Act of 1933, as amended, based on the
average of the high and low price of the common stock on the Nasdaq National
Market on June 1, 1999.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The estimated expenses payable by the Registrant in connection with the issuance
and distribution of the securities being registered are as follows:
<TABLE>
<S> <C>
SEC Registration Fee........................................................... $28,685.62
Accounting Fees and Expenses................................................... 75,000.00
Legal Fees and Expenses........................................................ 85,000.00
NASD filing fee................................................................ 10,818.57
Printing....................................................................... 95,000.00
Miscellaneous Expenses......................................................... 5,495.81
----------
Total.......................................................................... $300,000.00
----------
----------
</TABLE>
Item 15. Indemnification of Directors and Officers.
The Certificate of Incorporation and By-Laws of Registrant provide that
Registrant shall indemnify its officers and directors to the full extent
permitted by the Delaware General Corporation Law.
Reference is hereby made to Section 145 of the Delaware General Corporation Law
relating to the indemnification of officers and directors, which Section is
hereby incorporated herein by reference.
The Registrant also has officers and directors liability insurance covering its
officers and directors.
Item 16. Exhibits.
1.1 - Form of Underwriting Agrement
5.1 - Opinion of Bachner, Tally, Polevoy & Misher LLP
10.(j)(1) - Governance Agreement, dated as of June 20, 1996, without exhibits,
between Registrant and Borden, Inc.(1)
10.(j)(2) - Amendment No. 1, dated as of October 11, 1996, to the Governance
Agreement, dated as of June 20, 1996, between the Registrant and Borden, Inc.(2)
23.1 - Consent of Arthur Andersen LLP*
23.2 - Consent of Bachner, Tally, Polevoy & Misher LLP--included in Exhibit 5.1
24 - Power of Attorney--included on II-3*
- ------------------------
* Previously filed.
(1) Incorporated by reference to Exhibit C-2 to Registrant's report on Form 8-K,
dated June 20, 1996.
(2) Incorporated by reference to Exhibit 2(b) to Registrant's report on Form
8-K, dated October 11, 1996.
Item 17. Undertakings
Undertaking Required by Regulation S-K, Item 512(a).
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement to include any material
information with respect to the plan of distribution not previously disclosed in
the registration statement or any material change to such information in the
registration statement;
II-1
<PAGE>
(2) That, for the purpose of determining any liability under the Securities Act
of 1933, as amended (the "Act"), each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of the
offering.
Undertaking Required by Regulation S-K, Item 512(b).
The undersigned registrant hereby undertakes that, for purposes of determining
any liability under the Securities Act, each filing of the registrant's annual
report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934
that is incorporated by reference in the registration statement shall be deemed
to be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be initial
bona fide offering thereof. Undertaking required by Regulation S-K, Item 512(h).
Insofar as indemnification for liabilities arising under the Securities Act may
be permitted to directors, officers or controlling persons pursuant to the
foregoing provisions, or otherwise, the registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
II-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement or amendment thereto to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of New York on the 22nd day of June,
1999.
AEP INDUSTRIES INC.
By: /s/ J. BRENDAN BARBA
-----------------------------------------
J. Brendan Barba
CHAIRMAN OF THE BOARD, PRESIDENT AND
PRINCIPAL EXECUTIVE OFFICER
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, this Registration Statement
or amendment thereto has been signed by the following persons in the capacities
and on the dates indicated.
<TABLE>
<CAPTION>
NAME TITLE DATE
- ------------------------------ --------------------------- -------------------
<C> <S> <C>
/s/ J. BRENDAN BARBA Chairman of the Board,
- ------------------------------ President and Principal June 22, 1999
J. Brendan Barba Executive Officer
/s/ PAUL M. FEENEY Executive Vice President,
- ------------------------------ Principal Financial June 22, 1999
Paul M. Feeney Officer and Director
/s/ LAWRENCE R. NOLL Controller, Principal
- ------------------------------ Accounting Officer and June 22, 1999
Lawrence R. Noll Director
* Director
- ------------------------------ June 22, 1999
Kenneth Avia
* Director
- ------------------------------ June 22, 1999
William Carter
* Director
- ------------------------------ June 22, 1999
Paul E. Gelbard
* Director
- ------------------------------ June 22, 1999
C. Robert Kidder
* Director
- ------------------------------ June 22, 1999
Clifton S. Robbins
* Director
- ------------------------------ June 22, 1999
Lee Stewart
* Director
- ------------------------------ June 22, 1999
Scott A. Stuart
</TABLE>
<TABLE>
<S> <C>
/s/ PAUL M. FEENEY
----------------------------------
Paul M. Feeney
* (ATTORNEY IN FACT)
</TABLE>
II-4
<PAGE>
Exhibit 1.1
AEP INDUSTRIES INC.
2,412,818 SHARES COMMON STOCK
Underwriting Agreement
June __, 1999
J.P. Morgan Securities Inc.
Lehman Brothers Inc.
As Representatives of the several
underwriters listed in Schedule I
hereto
c/o J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260
Ladies and Gentlemen:
Borden, Inc. (the "SELLING STOCKHOLDER"), a stockholder of AEP
Industries, Inc., a Delaware corporation (the "COMPANY"), proposes to sell to
the several Underwriters listed in Schedule I hereto (the "UNDERWRITERS"), for
whom you are acting as representatives (the "REPRESENTATIVES"), an aggregate of
2,412,818 shares of common stock, par value $.01 per share, of the Company (the
"UNDERWRITTEN SHARES"). In addition, the Company agrees to sell, at the option
of the Underwriters and for the sole purpose of covering over-allotments in
connection with the sale of the Underwritten Shares, up to an additional 361,923
shares of common stock of the Company (the "OPTION SHARES"). The Underwrit ten
Shares and the Option Shares are herein referred to as the "SHARES".
The Company has prepared and filed with the Securities and Exchange
Commission (the "COMMISSION") in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and regulations of the
Commission thereunder (collectively, the "SECURITIES ACT"), a registration
statement, including a prospectus, relating to the Shares. The registration
statement as amended at the time when it shall become effective including
information (if any) deemed to be part of the registration statement at the time
of effectiveness pursuant to Rule 430A under the Securities Act, is referred to
in this Agreement as the "REGISTRATION STATEMENT", and the prospectus in the
form first used to confirm sales of Shares is referred to in this Agreement as
the "PROSPEC TUS". If the Company has filed an abbreviated registration
statement pursuant to Rule 462(b) under the Securities Act (the "RULE 462
REGISTRATION STATEMENT"), then any reference herein to the term "Registration
Statement" shall be deemed to include such Rule 462 Registration Statement. Any
reference in this Agreement to the Registration Statement, any preliminary
prospectus or the Prospectus shall be deemed to refer to and include the
documents incorporated by reference therein pursuant to Item 12 of Form S-3
under the Securities Act, as of the effective date of the Registration Statement
or the date of such preliminary prospectus or the Prospectus, as the case may be
and any reference to "amend", "amendment" or "supplement" with respect to the
Registration Statement, any preliminary prospectus or the Prospectus shall be
deemed to refer to and include any documents filed after such date under the
Securities Exchange Act of 1934, as amended, and the rules and regulations of
the Commission thereunder (collec tively, the "EXCHANGE ACT") that are deemed to
be incorporated by reference therein.
<PAGE>
Each of the Selling Stockholder or the Company, as the case may be,
hereby agrees with the Underwriters as follows:
1. The Selling Stockholder agrees to sell the Underwritten Shares to
the several Underwriters as hereinafter provided, and each Underwriter, upon the
basis of the representations and warranties herein contained, but subject to the
conditions hereinafter stated, agrees to purchase, severally and not jointly,
from the Selling Stockholder at a purchase price per share of $o (the "PURCHASE
PRICE") the number of Underwritten Shares set forth opposite the name of such
Underwriter in Schedule I hereto.
In addition, the Company agrees to sell the Option Shares to the
several Underwriters and the Underwriters shall have the option to purchase at
their election up to 361,923 Option Shares for the sole purpose of covering
over-allotments in the sale of the Underwritten Shares. The Underwriters on the
basis of the representations and warranties herein contained, but subject to the
conditions hereinafter stated, shall have the option to purchase, severally and
not jointly, from the Company at the Purchase Price that portion of the number
of Option Shares as to which such election shall have been exercised (to be
adjusted by you so as to eliminate fractional shares) determined by multiplying
such number of Option Shares by a fraction, the numerator of which is the
maximum number of Option Shares which such Underwriter is entitled to purchase
and the denominator of which is the maximum number of Option Shares that all of
the Underwriters are entitled to purchase hereunder for the sole purpose of
covering over-allotments (if any) in the sale of the Underwritten Shares by the
several Underwriters.
The Underwriters may exercise the option to purchase the Option Shares
at any time (but not more than once) on or before the thirtieth day following
the date of this Agreement, by written notice from the Representatives to the
Company. Such notice shall set forth the aggregate number of Option Shares as to
which the option is being exercised and the date and time when the Option Shares
are to be delivered and paid for which may be the same date and time as the
Closing Date (as hereinafter defined) but shall not be earlier than the Closing
Date nor later than the tenth full Business Day (as hereinafter defined) after
the date of such notice (unless such time and date are postponed in accordance
with the provisions of Section 9 hereof). Any such notice shall be given at
least two Business Days prior to the date and time of delivery specified
therein.
2. The Selling Stockholder understands that the Underwriters intend
(i) to make a public offering of the Shares as soon after (A) the Registration
Statement has become effective and (B) the parties hereto have executed and
delivered this Agreement, as in the judgment of the Representatives is advisable
and (ii) initially to offer the Shares upon the terms set forth in the
Prospectus.
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<PAGE>
3. Payment for the Underwritten Shares shall be made by wire transfer
in immediately available funds to the account specified by the Selling
Stockholder to the Representatives on June o, 1999, or at such other time on the
same or such other date, not later than the fifth Business Day thereafter, as
the Representatives and the Selling Stockholder may agree upon in writing.
Payment for the Option Shares shall be made by wire transfer in immediately
available funds to the account specified by the Company to the Representatives
on the date and time specified by the Representatives in the written notice of
the Underwriters' election to purchase such Option Shares. The time and date of
such payment for the Underwritten Shares are referred to herein as the "CLOSING
DATE" and the time and date for such payment for the Option Shares, if other
than the Closing Date, are herein referred to as the "ADDITIONAL CLOSING DATE".
As used herein, the term "BUSINESS DAY" means any day other than a day on which
banks are permitted or required to be closed in New York City.
Payment for the Shares to be purchased on the Closing Date or the
Additional Closing Date, as the case may be, shall be made against delivery to
the Representatives for the respective accounts of the several Underwriters of
the Shares to be purchased on such date registered in such names and in such
denominations as the Representatives shall request in writing not later than two
full Business Days prior to the Closing Date or the Additional Closing Date, as
the case may be, with any transfer taxes payable in connection with the transfer
to the Underwriters of the Underwritten Shares duly paid by the Selling
Stockholder and any transfer taxes payable in connection with the transfer to
the Underwriters of the Option Shares duly paid by the Company. The certificates
for the Shares will be made available for inspection and packaging by the
Representatives at the office of J.P. Morgan Securities Inc. set forth above not
later than 1:00 P.M., New York City time, on the Business Day prior to the
Closing Date or the Additional Closing Date, as the case may be.
As compensation to the Underwriters for their commitments hereunder,
the Selling Stockholder will pay, or cause to be paid, to J.P. Morgan Securities
Inc., for the accounts of the several Underwriters, an amount equal to $o per
share for the Underwritten Shares to be delivered by the Selling Stockholder
hereunder on the Closing Date. On June o, 1999 or on such other date, not later
than the fifth Business Day thereafter, as the Representatives and the Selling
Stockholder may agree upon in writing, the Selling Stockholder will pay or cause
to be paid by wire transfer, in immediately available funds, such commission to
the account specified by J.P. Morgan Securities, Inc. In the case of the Option
Shares, on the date and time specified by the Representatives in the written
notice of the Underwriters' election to purchase such Option Shares, the Company
will pay or cause to be paid by wire transfer, in immediately available funds,
such commission to the account specified by J.P. Morgan Securities Inc.
4. (a) The Company represents and warrants to each Underwriter and
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<PAGE>
the Selling Stockholder that:
(i) no order preventing or suspending the use of any
preliminary prospectus has been issued by the Commission, and each
preliminary prospectus filed as part of the Registration Statement as
originally filed or as part of any amendment thereto, or filed pursuant
to Rule 424 under the Securities Act, complied when so filed in all
material respects with the Securities Act, and did not contain an
untrue statement of a material fact or omit to state 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; PROVIDED that this representation and warranty shall
not apply to any statements or omissions made in reliance upon and in
conformity with information relating to any Underwriter furnished to
the Company in writing by such Underwriter through the Representatives
expressly for use therein;
(ii) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceeding for that
purpose has been instituted or, to the knowledge of the Company,
threatened by the Commission; and the Registration Statement and
Prospectus (as amended or supplemented if the Company shall have
furnished any amendments or supplements thereto) comply, or will
comply, as the case may be, in all material respects with the
Securities Act and do not and will not, as of the applicable effective
date as to the Registration Statement and any amendment thereto and as
of the date of the Prospectus and any amendment or supplement thereto,
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading, and the Prospectus, as amended or
supplemented, if applicable, at the Closing Date or Additional Closing
Date, as the case may be, will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading; except that the foregoing representations and
warranties shall not apply to statements or omissions in the
Registration Statement or the Prospectus made in reliance upon and in
conformity with information relating to any Underwriter or the Selling
Stockholder furnished to the Company in writing by such Underwriter
through the Representatives or the Selling Stockholder, as the case may
be, expressly for use therein;
(iii) the documents incorporated by reference in the
Prospectus, when they became effective or were filed with the
Commission, as the case may be, conformed in all material
-4-
<PAGE>
respects to the requirements of the Exchange Act, as applicable and
none of such documents, as amended, contained an untrue statement of a
material fact or omitted to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading; and any further documents so filed and
incorporated by reference in the Prospectus, when such documents are
filed with the Commission, will conform in all material respects to the
requirements of the Exchange Act, and will not contain an untrue
statement of a material fact or omit to state a material fact necessary
to make the statements therein, in light of the circumstances under
which they were made, not misleading;
(iv) the financial statements, and the related notes thereto,
included or incorporated by reference in the Registration Statement and
the Prospectus present fairly the consolidated financial position of
the Company and its consolidated subsidiaries as of the dates indicated
and the results of their operations and changes in their consolidated
cash flows for the periods specified; said finan cial statements have
been prepared in conformity with generally accepted accounting
principles applied on a consistent basis;
(v) the statistical and market-related data included in the
Prospectus are based on or derived from sources, including, without
limitation, internal Company research, surveys or studies, that the
Company believes are reliable and accurate;
(vi) since the respective dates as of which information is
given in the Registration Statement and the Prospectus, there has not
been any change in the capital stock or long-term debt of the Company
or any of its subsidiaries, or any material adverse change, or any
development involving a prospective material adverse change, in or
affecting the general affairs, business, prospects, management,
financial position, stockholders' equity or results of operations of
the Company and its subsidiaries, taken as a whole (a "MATERIAL ADVERSE
EFFECT"), otherwise than as set forth or contemplated in the
Prospectus. Since the respective dates as of which information is given
in the Registration Statement and Prospectus, neither the Company nor
any of its subsidiaries has entered into any transaction or agreement
material to the Company and its subsidiaries taken as a whole, other
than in the ordinary course of business consistent with past practice;
(vii) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of
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<PAGE>
its jurisdiction of incorporation, with corporate power and authority
to own and lease its properties and conduct its business as described
in the Prospectus, and has been duly qualified as a foreign corporation
for the transaction of business and is in good standing under the laws
of each other jurisdiction in which it owns or leases properties, or
conducts any business, so as to require such qualification, other than
where the failure to be so qualified or in good standing, individually,
or in the aggregate with all other such failures, would not have a
Material Adverse Effect;
(viii) each Significant Subsidiary (as that term is defined in
Regulation S-X under the Securities Act) of the Company that is a
corporation has been duly incorporated and is validly existing as a
corporation under the laws of its jurisdiction of incorporation, with
the corporate power and authority to own and lease its properties and
conduct its business as described in the Registration Statement and
Prospectus, and has been duly qualified as a foreign corporation for
the transaction of business and is in good standing under the laws of
each other jurisdiction in which it owns or leases properties, or
conducts any business, so as to require such qualification, other than
where the failure to be so qualified or in good standing, individually,
or in the aggregate with all other such failures, would not have a
Material Adverse Effect. All of the outstanding shares of capital stock
of each Significant Subsidiary have been duly authorized and validly
issued and are fully paid and non-assessable, and (except as otherwise
set forth in the Registration Statement and Prospectus) are, and as of
the Closing Date, will be owned by the Company, directly or indirectly,
free and clear of all material liens, encumbrances, security interests
or claims;
(ix) this Agreement has been duly authorized, executed and
delivered by the Company;
(x) the Company has, and, as of the Closing Date (prior to the
consummation of the transactions contemplated herein), will have the
capitalization set forth in the Prospectus under the caption
"Capitalization." All of the outstanding shares of capital stock of the
Company have been duly authorized and validly issued, are fully paid
and non-assessable and, except as described in the Prospectus, are not
subject to any preemptive or similar rights; and, except as described
in or expressly contemplated by the Prospectus, there are no
outstanding rights (including, without limitation, preemptive rights),
warrants or options to acquire, or instruments convertible into or
exchangeable for, any shares of capital stock or other equity interest
in the Company or any of the subsidiaries, or any contract, commitment,
agreement,
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<PAGE>
understanding or arrangement of any kind to which the Company or any
Significant Subsidiary is a party relating to the issuance of any
capital stock of the Company or any such Significant Subsidiary, any
such convertible or exchangeable securities or any such rights,
warrants or options;
(xi) neither the Company nor any of the Significant
Subsidiaries is, (i) in violation of its charter or by-laws, (ii) in
default, and no event has occurred which, with the giving of notice or
lapse of time or both would be, in violation of or in default under,
its organizational documents or any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which the Company or
any Significant Subsidiary is a party or by which it or any of them or
any of their respective properties is subject, except for any such
defaults which would not, individually or in the aggregate, have a
Material Adverse Effect or (iii) in violation of any law, ordinance,
governmental rule or regulation or any order, judgment or decree to
which it or any of their respective properties is subject, except for
any such violations which would not, individually or in the aggregate,
have a Material Adverse Effect;
(xii) the execution and delivery by the Company of this
Agreement, the performance by the Company of all of its obligations
under this Agreement and the consummation of the transactions
contemplated herein do not and will not (i) conflict with or result in
a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust,
loan agreement, franchise agreement or other agreement or instrument to
which the Company or any Significant Subsidiary is a party or by which
the Company or any Significant Subsidiary is bound or to which any of
their respective properties is subject or (ii) result in any violation
of (a) the charter or by-laws or similar organizational document of the
Company or any of the subsidiaries or (b) any applicable law or statute
or any order, rule or regulation of any court or governmental agency or
body having jurisdiction over the Company, any Significant Subsidiary
or any of their respective properties, except, in the case of clauses
(i) and (ii)(b), for any such conflicts, breaches, defaults or
violations that, individually, or in the aggregate, would not have a
Material Adverse Effect;
(xiii) no consent, approval, authorization, order, license,
registration or qualification of or with any court or governmental
agency or body is required for the execution and delivery by the
Company of this Agreement, the performance by the Company of
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<PAGE>
its obligations under this Agreement or the consummation of the
transactions contemplated herein, except for such consents, approvals,
authorizations, orders, licenses, registrations or qualifications as
have been obtained under the Securities Act and as may be required
under any state securities or Blue Sky laws in connection with the
purchase and distribution of the Shares by the Underwriters;
(xiv) other than as set forth in the Prospectus there are no
legal or governmental investigations, actions, suits or proceedings
(collectively, "PROCEEDINGS") pending against or affecting the Company
or any of the subsidiaries or any of their respective properties or of
which the Company or any of the subsidiaries is or, to its knowledge,
may be a party or of which any property of the Company or any of the
subsidiaries is or, to its knowledge, may be the subject which,
individually or in the aggregate, could have, or reasonably could be
expected to have, a Material Adverse Effect; and to the Company's best
knowledge, no such Proceedings are threatened or contemplated by
governmental authorities or threatened by others;
(xv) the Company and the subsidiaries have good and marketable
title in fee simple to all items of real property and good and
marketable title to all personal property owned by them, in each case
free and clear of all liens, encumbrances and defects except such as
are described or referred to in the Prospectus and except to the extent
as would not, individually or in the aggregate, have a Material Adverse
Effect; and any real property and buildings held under lease by the
Company and the subsidiaries are held by them under valid, existing and
enforceable leases with such exceptions as would not, individually or
in the aggregate, have a Material Adverse Effect;
(xvi) the Company is not an "investment company" or an entity
"controlled" by an "investment company", as such terms are defined in
the Investment Company Act of 1940, as amended (the "INVESTMENT COMPANY
ACT");
(xvii) Arthur Andersen LLP, who have certified certain
financial statements of the Company and its subsidiaries, are
independent public accountants as required by the Securities Act;
(xviii) the Company and its subsidiaries have filed all
federal, state, local and foreign tax returns which have been required
to be filed and have paid all taxes shown thereon and all assessments
received by them or any of them to the extent that such taxes have
become due and are not being contested in good faith except such
amounts which are not, individually or in the
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aggregate, material to the Company and the subsidiaries, taken as a
whole; and there is no tax deficiency which has been or might
reasonably be expected to be asserted or threatened against the Company
or any subsidiary, except such tax deficiencies in such amounts which
are not, individually or in the aggregate, material to the Company and
the subsidiaries taken as a whole;
(xix) the Company has not taken nor will it 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 Stock;
(xx) each of the Company and its Significant Subsidiaries
owns, possesses or has obtained all licenses, franchises, permits,
certificates, consents, orders, approvals and other authorizations
(collectively, "PERMITS") from, and has made all declarations and
filings with, all federal, state, local and other governmental
authorities (including foreign regulatory agencies), all
self-regulatory organizations, all domestic or foreign courts and other
tribunals necessary to own or lease, as the case may be, and to operate
its properties and to carry on its business as conducted as of the date
hereof, except where the failure to obtain any such Permit or make any
such declaration or filing would not, individually or in the aggregate,
have a Material Adverse Effect and neither the Company nor any such
Significant Subsidiary has received any notice of any proceeding
relating to revocation or modification of any such Permit; and each of
the Company and the Significant Subsidiaries is in compliance with all
laws and regulations relating to the conduct of its business as
conducted as of the date hereof, except to the extent that failure to
so comply would not, individually or in the aggregate, have a Material
Adverse Effect;
(xxi) there are no existing or, to the Company's knowledge,
threatened labor disputes with the employees of the Company or any of
the Significant Subsidiaries which, individually or in the aggregate,
would have a Material Adverse Effect;
(xxii) the Company and the Significant Subsidiaries (i) are in
compliance with any and all applicable foreign, federal, state,
provincial, local or municipal laws, rules, regulations, ordinances,
codes, policies or rules of common law and any judicial or
administrative interpretation thereof, including any judicial or
administrative order, consent, decree or judgment relating to the
protection of human health and safety, the environment or hazardous or
toxic substances or wastes, pollutants or contaminants ("ENVIRONMENTAL
LAWS"), (ii) have received all permits, licenses
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or other approvals required of them under applicable Environmental Laws
to conduct their respective businesses, (iii) are in compliance with
all terms and conditions of any such permit, license or approval and
(iv) have not received any notice of any currently pending or
threatened administrative, regulatory or judicial action, suit, demand,
claim, lien, notice of noncompliance or violation, investigation or
proceeding relating in any way to any Environmental Law, EXCEPT, in
each case, where such noncompliance with Environmental Laws, failure to
receive required permits, licenses or other approvals or failure to
comply with the terms and conditions of such permits, licenses or
approvals would not, individually or in the aggregate, have a Material
Adverse Effect;
(xxiii) in the ordinary course of business, each domestic
operating unit or operating foreign Significant Subsidiary of the
Company periodically reviews the effect of Environmental Laws on the
business, operations and properties of such operating unit or
Significant Subsidiary, in the course of which associated costs and
liabilities are identified and evaluated (including, without
limitation, any capital or operating expenditures required for
clean-up, closure of properties or compliance with Environmental Laws
or any permit, license or approval, any related constraints on
operating activities and any potential liabilities to third parties).
On the basis of such evaluations, the Company has reasonably concluded
that such associated costs and liabilities would not, individually or
in the aggregate, have a Material Adverse Effect on the Company;
(xxiv) each employee benefit plan, within the meaning of
Section 3(3) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), that is maintained, administered or contributed to
by the Company or any of its affiliates for employees or former
employees of the Company and its affiliates has been maintained in
compliance with its terms and the requirements of any applicable
statutes, orders, rules and regulations, including but not limited to
ERISA and the Internal Revenue Code of 1986, as amended (the "CODE"),
except to the extent that any such non-compliance, individually or in
the aggregate, would not have a Material Adverse Effect. No prohibited
transaction, within the meaning of Section 406 of ERISA or Section 4975
of the Code, which is material, has occurred with respect to any such
plan excluding transactions effected pursuant to a statutory or
administrative exemption. For
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each such plan which is subject to the funding rules of
Section 412 of the Code or Section 302 of ERISA no
"accumulated funding deficiency" as defined in Section 412 of
the Code has been incurred, whether or not waived, and the
fair market value of the assets of each such plan (excluding
for these purposes accrued but unpaid contributions) exceeded
the present value of all benefits accrued under such plan
determined using reasonable actuarial assumptions;
(xxv) the Company has all requisite corporate power
and authority to execute this Agreement and to perform its
obligations hereunder; and all corporate action or action by
the stockholders and/or the board of directors of the Company,
as the case may be, required to be taken by the Company for
the due authorization, execution and delivery of this
Agreement and the consummation of the transactions
contemplated herein have been duly and validly taken;
(xxvi) no forward-looking statement (within the
meaning of Section 27A of the Securities Act and Section 21E
of the Exchange Act) contained in the Registration Statement
and Prospectus has been made or reaffirmed without a
reasonable basis or has been disclosed other than in good
faith; and
(xxvii) As used herein, the "Year 2000 Problem"
refers to programs that were written to store only two digits
of the year portion of date-related information in order to
more efficiently handle and store data; such programs are
unable to properly distinguish between the year 1900 and the
year 2000. As stated in the Prospectus, the Company has
completed its inventories and assessments in regard to
embedded technology and has evaluated the impact on it of
compliance by significant third parties. Because of the
general uncertainty inherent in the Year 2000 Problem, the
Company is unable to determine whether the consequences of
Year 2000 failures will have a material impact on its results
of operations.
(b) The Selling Stockholder represents and warrants to, and agrees
with, each of the Underwriters and the Company that:
(i) all consents, approvals, authorizations and
orders necessary for the execution and delivery by the Selling
Stockholder of this Agreement and for the sale and delivery of
the Shares to be sold by the Selling Stockholder hereunder,
have been obtained; and the Selling Stockholder has full
right, power and authority to enter into this Agreement and to
sell, assign, transfer and deliver the Shares to be sold by
the Selling Stockholder hereunder; this Agreement has been
duly authorized, executed and delivered by the Selling
Stockholder;
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<PAGE>
(ii) the sale of the Shares to be sold by the Selling
Stockholder hereunder and the compliance by the Selling
Stockholder with all of the provisions of this Agreement and
the consummation of the transactions herein and therein
contemplated will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute
a default under, any statute, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to
which the Selling Stockholder is a party or by which the
Selling Stockholder is bound or to which any of the property
or assets of the Selling Stockholder is subject, nor will such
action result in any violation of the provisions of the
Certificate of Incorporation or By-laws of the Selling
Stockholder or any statute or any order, rule or regulation of
any court or governmental agency or body having jurisdiction
over the Selling Stockholder or the property of the Selling
Stockholder;
(iii) the Selling Stockholder has good and valid
title to the Shares to be sold at the Closing Date by the
Selling Stockholder hereunder, free and clear of all liens,
encumbrances, equities or adverse claims other than those
created pursuant to this Agreement; such Selling Stockholder
will have, immediately prior to the Closing Date good and
valid title to the Shares to be sold at the Closing Date by
the Selling Stockholder, free and clear of all liens,
encumbrances, equities or adverse claims other than those
created pursuant to this Agreement; and, upon delivery of the
certificates representing such Shares and payment therefor
pursuant hereto, good and valid title to such Shares, free and
clear of all liens, encumbrances, equities or adverse claims,
will pass to the several Underwriters;
(iv) the Selling Stockholder has not taken and will
not take, directly or indirectly, any action which is designed
to or which has constituted or which might reasonably be
expected to cause or result in stabilization or manipulation
of the price of any security of the Company to facilitate the
sale or resale of the Shares; and
(v) information relating to the Selling Stockholder
furnished to the Company in writing by the Selling Stockholder
expressly for use in the Registration Statement and the
Prospectus (as amended or supplemented) (the "SELLING
STOCKHOLDER INFORMATION"), does not and will not, as of the
applicable effective date of the Registration Statement and
any amendment thereto, contain any untrue statement of a
material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein
not misleading, and the Selling Stockholder Information
included in the Prospectus, as amended or
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supplemented, if applicable, at the Closing Date will not
contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements
therein, in light of the circumstances under which they were
made, not misleading.
The Selling Stockholder specifically agrees that the obligations of the
Selling Stockholder hereunder shall not be terminated by operation of law,
whether by dissolution or by the occurrence of any other event. If the Selling
Stockholder should be dissolved, or if any other such event should occur, before
the delivery of the Shares by it hereunder, certificates representing such
Shares shall be delivered by or on behalf of the Selling Stockholder in
accordance with the terms and conditions of this Agreement.
5. (a) The Company covenants and agrees with each of the several
Underwriters as follows:
(i) to use its best efforts to cause the Registration
Statement to become effective at the earliest possible time
and, if required, to file the final Prospectus with the
Commission within the time periods specified by Rule 424(b)
and Rule 430A under the Securities Act and to file promptly
all reports and any definitive proxy or information statements
required to be filed by the Company with the Commission
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange
Act subsequent to the date of the Prospectus and for so long
as the delivery of a prospectus is required in connection with
the offering or sale of the Shares and to furnish copies of
the Prospectus to the Underwriters in New York City prior to
10:00 a.m., New York City time, on the Business Day next
succeeding the date of this Agreement in such quantities as
the Representatives may reasonably request;
(ii) to deliver, at the expense of the Company, to
the Representatives 6 signed copies of the Registration
Statement (as originally filed) and each amendment thereto, in
each case including exhibits and documents incorporated by
reference therein, and to each other Underwriter a conformed
copy of the Registration Statement (as originally filed) and
each amendment thereto, in each case without exhibits but
including the documents incorporated by reference therein and,
during the period mentioned in Section 5(a)(v) below, to each
of the Underwriters as many copies of the Prospectus
(including all amendments and supplements thereto) and
documents incorporated by reference therein as the
Representatives may reasonably request;
(iii) before filing any amendment or supplement to
the Registration Statement or the Prospectus, whether before
or after the time the Registration Statement becomes
effective, to furnish to the Representatives a copy of the
proposed amendment or
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<PAGE>
supplement for review and not to file any such proposed
amendment or supplement to which the Representatives
reasonably object;
(iv) to advise the Representatives promptly, and to
confirm such advice in writing (A) when the Registration
Statement has become effective, (B) when any amendment to the
Registration Statement has been filed or becomes effective,
(C) when any supplement to the Prospectus or any amended
Prospectus has been filed and to furnish the Representatives
with copies thereof, (D) of any request by the Commission for
any amendment to the Registration Statement or any amendment
or supplement to the Prospectus or for any additional
information, (E) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration
Statement or of any order preventing or suspending the use of
any preliminary prospectus or the Prospectus or the initiation
or threatening of any proceeding for that purpose, (F) of the
occurrence of any event, within the period referenced in
Section 5(a)(v) below, as a result of which the Prospectus as
then amended or supplemented would include an untrue statement
of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the
light of the circumstances when the Prospectus is delivered to
a purchaser, not misleading, and (G) of the receipt by the
Company of any notification with respect to any suspension of
the qualification of the Shares for offer and sale in any
jurisdiction or the initiation or threatening of any
proceeding for such purpose; and to use its best efforts to
prevent the issuance of any such stop order, or of any order
preventing or suspending the use of any preliminary prospectus
or the Prospectus, or of any order suspending any such
qualification of the Shares, or notification of any such order
thereof and, if issued, to obtain as soon as possible the
withdrawal thereof;
(v) if, during such period of time after the first
date of the public offering of the Shares as in the opinion of
counsel for the Underwriters a prospectus relating to the
Shares is required by law to be delivered in connection with
sales by the Underwriters or any dealer, any event shall occur
as a result of which it is necessary to amend or supplement
the Prospectus in order to make the statements therein, in
light of the circumstances when the Prospec tus is delivered
to a purchaser, not misleading, or if it is necessary to amend
or supplement the Prospectus to comply with law, forthwith to
prepare and furnish, at the expense of the Company, to the
Underwriters and to the dealers (whose names and addresses the
Representatives will furnish to the Company) to which Shares
may have been sold by the Representatives on behalf
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<PAGE>
of the Underwriters and to any other dealers upon request,
such amendments or supplements to the Prospectus as may be
necessary so that the statements in the Prospectus as so
amended or supplemented will not, in the light of the
circumstances when the Prospectus is delivered to a purchaser,
be misleading or so that the Prospectus will comply with law;
(vi) to endeavor to qualify the Shares for offer and
sale under the securities or Blue Sky laws of such
jurisdictions as the Representatives shall reasonably request
and to continue such qualification in effect so long as
reasonably required for distribution of the Shares; PROVIDED
that the Company shall not be required to file a general
consent to service of process in any jurisdiction;
(vii) to make generally available to its security
holders and to the Representatives as soon as practicable an
earnings statement covering a period of at least twelve months
beginning with the first fiscal quarter of the Company
occurring after the effective date of the Registration
Statement, which shall satisfy the provisions of Section 11(a)
of the Securities Act and Rule 158 of the Commission
promulgated thereunder;
(viii) for a period of five years from the date
hereof, to furnish to the Representatives copies of all
reports or other communications (financial or other) furnished
to holders of the Shares, and copies of any reports and
financial statements furnished to or filed with the Commission
or any national securities exchange;
(ix) for a period of 90 days after the date of the
initial public offering of the Shares not to (A) offer,
pledge, announce the intention to sell, sell, contract to
sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant
to purchase or otherwise transfer or dispose of, directly or
indirectly, any shares of Common Stock, $.01 per share par
value, of the Company (the "COMMON STOCK") or any securities
convertible into or exercisable or exchangeable for Common
Stock or (B) enter into any swap or other agreement that
transfers, in whole or in part, any of the economic
consequences of ownership of the Common Stock, whether any
such transaction described in clause (A) or (B) above is to be
settled by delivery of Common Stock or such other securities,
in cash or otherwise without the prior written consent of the
Representatives, other than any shares of Common Stock of the
Company issued upon the exercise of options granted under
existing employee stock option
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<PAGE>
plans or pursuant to the Company's existing stock purchase
plan or the grant of stock options under the Company's 1995
stock option plan;
(x) to use its best efforts to list for quotation the
Shares on the National Association of Securities Dealers
Automated Quotations National Market (the "NASDAQ NATIONAL
MARKET");
(xi) whether or not the transactions contemplated in
this Agreement are consummated or this Agreement is
terminated, to pay or cause to be paid all costs and expenses
incident to the performance of its obligations hereunder,
including without limiting the generality of the foregoing,
all costs and expenses (A) incident to the preparation,
reregistration, transfer, execution and delivery of the
Shares, (B) incident to the preparation, printing and filing
under the Securities Act of the Registration Statement, the
Prospectus and any preliminary prospectus, (C) incurred in
connection with the registration or qualification of the
Shares under the laws of such jurisdictions as the
Representatives may designate, (D) in connection with the
listing of the Shares on the Nasdaq National Market, (E)
related to the filing with, and clearance of the offering by,
the National Association of Securities Dealers, Inc., (F) in
connection with the printing (including word processing and
duplication costs) and delivery of this Agreement, the
Preliminary and Supplemental Blue Sky Memoranda and the
furnishing to the Underwriters and dealers of copies of the
Registration Statement and the Prospectus, including mailing
and shipping, as herein provided, (G) any expenses incurred by
the Company in connection with a "road show" presentation to
potential investors, (H) the cost of preparing stock
certificates and (I) the cost and charges of any transfer
agent and any registrar, other than fees and expenses of
counsel for the underwriters.
(b) The Selling Stockholder covenants and agrees with each of the
several Underwriters as follows:
(i) for a period of 90 days after the date of the
initial public offering of the Shares not to (A) offer,
pledge, announce the intention to sell, sell, contract to
sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant
to purchase or otherwise transfer or dispose of, directly or
indirectly, any shares of Stock or any securities convertible
into or exercisable or exchangeable for Stock or (B) enter
into any swap or other agreement that transfers, in whole or
in part, any of the economic consequences of ownership of the
Stock, whether any such transaction described in clause (A) or
(B) above is to be settled by delivery of Stock or such other
securities,
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<PAGE>
in cash or otherwise or (C) make any demand for or exercise
any right with respect to the registration of any shares of
Stock or any security convertible into or exercisable or
exchangeable for Stock without the prior written consent of
the J.P. Morgan Securities Inc., in each case other than the
Shares to be sold by the Selling Stockholder hereunder; and
(ii) to pay or cause to be paid all taxes, if any, on
the transfer and sale of the Shares being sold by the Selling
Stockholder.
6. The several obligations of the Underwriters hereunder to purchase
the Shares on the Closing Date or the Additional Closing Date, as the case may
be, are subject to the performance by each of the Company and the Selling
Stockholder of their respective obligations hereunder and to the following
additional conditions:
(a) the Registration Statement shall have become effective (or if a
post-effective amendment is required to be filed under the Securities
Act, such post-effective amendment shall have become effective) not
later than 5:00 P.M., New York City time, on the date hereof; and no
stop order suspending the effectiveness of the Registration Statement
or any post-effective amendment shall be in effect, and no proceedings
for such purpose shall be pending before or threatened by the
Commission; the Prospectus shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period prescribed
for such filing by the rules and regulations under the Securities Act
and in accordance with Section 5(a)(i) hereof; and all requests for
additional information shall have been complied with;
(b) the respective representations and warranties of the Company and
the Selling Stockholder contained herein are true and correct on and as
of the Closing Date in the case of the Company and the Selling
Stockholder, or on and as of the Additional Closing Date in the case of
the Company, as if made on and as of the Closing Date or the Additional
Closing Date, as the case may be, and each of the Company and the
Selling Stockholder shall have complied with all agreements and all
conditions on its part to be performed or satisfied hereunder at or
prior to the Closing Date or the Additional Closing Date, as the case
may be;
(c) subsequent to the execution and delivery of this Agreement and
prior to the Closing Date or the Additional Closing Date, as the case
may be, there shall not have occurred any downgrading, nor shall any
notice have been given of (i) any downgrading, (ii) any intended or
potential downgrading or (iii) any review or possible change that is
with negative implications, in the rating accorded any securities of or
guaranteed by the Company by any "nationally recognized statistical
rating organization", as such term is defined for purposes of Rule
436(g)(2) under the Securities Act;
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<PAGE>
(d) since the respective dates as of which information is given in the
Prospectus there shall not have been any material change in the capital
stock or long-term debt of the Company and its subsidiaries taken as a
whole or any material adverse change, or any development involving the
reasonable likelihood of a prospective material adverse change, in the
business, management, financial position, stockholders' equity or
results of operations of the Company and its subsidiaries, taken as a
whole, other wise, in each case, than as set forth or contemplated in
the Prospectus, the effect of which in the reasonable judgment of the
Representatives makes it impracticable or inadvisable to proceed with
the public offering or the delivery of the Shares on the Closing Date
or the Additional Closing Date, as the case may be, on the terms and in
the manner contemplated in the Prospectus;
(e) the Representatives shall have received (i) on and as of the
Closing Date or the Additional Closing Date, as the case may be, a
certificate of an executive officer of the Company, with specific
knowledge about the Company's financial matters, satisfactory to the
Representatives to the effect set forth in Sections 6(a), 6(b), 6(c)
and 6(d) (with respect to the respective representations, warranties,
agreements and conditions of the Company) and to the further effect
that there has not occurred any material adverse change, or any
development involving a prospective material adverse change, in or
affecting the general affairs, business, prospects, management,
financial position, stockholders' equity or results of operations of
the Company and its subsidiaries taken as a whole from that set forth
or contemplated in the Registration Statement and (ii) on and as of the
Closing Date, a certificate of the Selling Stockholder, satisfactory to
the Representatives to the effect set forth in Section 6(b) (with
respect to the respective representations, warranties, agreements and
conditions of the Selling Stockholder);
(f) Bachner, Tally, Polevoy & Misher LLP, counsel for the Company,
shall have furnished to the Representatives their written opinion,
dated the Closing Date or the Additional Closing Date, as the case may
be, in form and substance satisfactory to the Representatives, to the
effect that:
(i) the Company has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of its jurisdiction of incorporation, with power and
authority (corporate and other) to own its properties and
conduct its business as described in the Prospectus;
(ii) other than as set forth in the Prospectus, to
the best of such counsel's knowledge, there are no legal or
governmental investigations, actions, suits or proceedings
(collectively, "PROCEEDINGS") pending against or affecting the
Company or any of
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the subsidiaries or any of their respective properties or of
which the Company or any of the subsidiaries is or, may be a
party or of which any property of the Company or any of the
subsidiaries is or, may be the subject which, individually or
in the aggregate, could have, or reasonably could be expected
to have, a Material Adverse Effect; and to such counsel's best
knowledge, no such Proceedings are threatened or contemplated
by governmental authorities or threatened by others;
(iii) this Agreement has been duly authorized,
executed and delivered by the Company;
(iv) the authorized capital stock of the Company
conforms as to legal matters to the description thereof
contained in the Prospectus;
(v) the Underwritten Shares have been duly authorized
and are validly issued, fully paid and non-assessable, and the
Option Shares, if issued and paid for in accordance with this
Agreement, will be duly authorized, validly issued, fully paid
and non-assessable;
(vi) the statements in the Prospectus included under
the headings "Description of Capital Stock" and "Underwriting"
and in Item 15 of the Registration Statement in 15, insofar as
such statements constitute a summary of the terms of the
common stock of AEP Industries Inc., legal matters, documents
or proceedings referred to therein, fairly summarize and
present in all material respects the information required to
be presented with respect to such terms, legal matters,
documents or proceedings;
(vii) such counsel is of the opinion that the
Registration Statement and the Prospectus and any amendments
and supplements thereto (other than the financial statements
and related schedules therein, as to which such counsel need
express no opinion) comply as to form in all material respects
with the requirements of the Securities Act;
(viii) such counsel has participated in conferences
with officers and other representatives of the Company,
representatives of the independent public accountants for the
Company and the Representatives, at which the contents of the
Registration Statement and related matters were discussed and,
although such counsel did not independently verify, and are
not passing upon and do not assume any responsibility for, the
accuracy, completeness or fairness of the statements contained
in the Registration Statement (except to the extent set forth
in paragraph (vi) above), based upon such participation
(relying as to materiality, to the extent involving matters of
fact, to a large extent upon the opinions of officers and
other representatives of the Company), no facts have come to
such
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counsel's attention which lead such counsel to believe that
the Registration Statement or any amendment or supplement
thereto contained as of its date or contains as of the date
hereof any untrue statement of a material fact or omitted as
of its date or omits as of the date hereof to state a material
fact necessary in order to make the statements therein, in
light of the circumstances in which they were made, not
misleading (except for the financial statements, notes thereto
and other financial information and statistical data contained
therein, as to which such counsel need not express an
opinion).
(ix) the execution and delivery by the Company of the
Underwriting Agreement, the filing by the Company of the
Registration Statement, the issuance and sale of the Option
Shares, the performance by the Company of all of its
obligations under the Underwriting Agreement and the
consummation of the transactions contemplated thereby do not
and will not (i) result in any violation of the charter or
by-laws of the Company, or (ii) constitute a default under,
any indenture, mortgage, deed of trust, loan agreement,
franchise agreement or other agreement or instrument, in each
case, identified to such counsel as material in a certificate
of the Company or filed by the Company under the Securities
Act or the Exchange Act as a material agreement (the "Material
Agreements"), to which the Company or any of the Significant
Subsidiaries is a party or by which the Company or any of its
Significant Subsidiaries is bound or to which any of their
respective properties is subject, or (iii) result in a
violation of any order, judgment or decree of any Delaware,
New York or Federal court or governmental authority binding on
the Company and identified to such counsel in a certificate of
the Company or violate any material Delaware, New York or
Federal statute or regulation that such counsel has, in the
exercise of customary professional diligence, recognized as
directly applicable to the Company or to transactions of the
type contemplated by the Underwriting Agreement, except, in
the case of clauses (ii) and (iii), for any such conflicts,
breaches, defaults or violations that, individually or in the
aggregate, would not have a Material Adverse Effect. Such
counsel shall express no opinion as to the effect of the
execution, delivery or performance of the Underwriting
Agreement and the consummation of the transactions
centemplated thereby on the Company's compliance with
financial covenants contained in any Material Agreement;
(x) no consent, approval, authorization, order, license,
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registration or qualification of or with any Federal, New York
or Delaware court or governmental agency or body is required
for execution and delivery by the Company of this Agreement,
the issuance of the Option Shares or the consummation by the
Company of the transactions contemplated herein, except such
consents, approvals, authorizations, orders, licenses,
registrations or qualifications as have been obtained under
the Securities Act and as may be required under state
securities or Blue Sky laws in connection with the purchase
and distribution of the Shares by the Underwriters; and
(xi) the Company is not an "investment company" or
entity "controlled" by an "investment company", as such terms
are defined in the Investment Company Act.
In rendering such opinions, such counsel may rely (A) as to matters
involving the application of laws other than the laws of the United States, and
the State of New York and the General Corporation Law of the State of Delaware,
to the extent such counsel deems proper and to the extent specified in such
opinion, if at all, upon an opinion or opinions (in form and substance
reasonably satisfactory to Underwriters' counsel) of other counsel reasonably
acceptable to the Underwriters' counsel, familiar with the applicable laws and
(B) as to matters of fact, to the extent such counsel deems proper, on
certificates of responsible officers of the Company and certificates or other
written statements of officials of jurisdictions having custody of documents
respecting the corporate existence or good standing of the Company. The opinion
of such counsel for the Company shall state that the opinion of any such other
counsel upon which they relied is in form satisfactory to such counsel and, in
such counsel's opinion, the Underwriters and they are justified in relying
thereon. With respect to the matters to be covered in Section 6(f)(ix) above
counsel may state their opinion and belief is based upon their participation in
the preparation of the Registration Statement and the Prospectus and any
amendment or supplement thereto and review and discussion of the contents
thereof (including the documents incorporated by reference therein) but is
without independent check or verification except as specified.
The opinion of Bachner, Tally, Polevoy & Misher LLP described above
shall be rendered to the Underwriters at the request of the Company and shall so
state therein.
(g) Simpson Thacher & Bartlett, counsel to the Selling Stockholder,
shall have furnished to the Representatives their written opinion,
dated the Closing Date, in form and substance satisfactory to the
Representatives, to the effect that:
(i) this Agreement has been duly authorized, executed
and delivered by or on behalf of the Selling Stockholder; and
(ii) the Selling Stockholder is the sole record owner
of all of the Underwritten Shares to be sold by the Selling
Stockholder, the Selling Stockholder has full corporate power,
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rights and authority to sell such Underwritten Shares and upon
payment for and delivery of the Underwritten Shares in
accordance with this Agreement, the Underwriters will acquire
all of the rights of the Selling Stockholder in the
Underwritten Shares and will also acquire their interest in
such Underwritten Shares free of any adverse claim.
In rendering such opinions, such counsel may rely as to matters
involving the application of laws other than the laws of the United States and
the State of New York and the General Corporation Law of the State of Delaware,
to the extent such counsel deems proper and to the extent specified in such
opinion, if at all, upon an opinion or opinions (in form and substance
reasonably satisfactory to Underwriters' counsel) of other counsel reasonably
acceptable to the Underwriters' counsel, familiar with the applicable laws. The
opinion of such counsel for the Selling Stockholder shall state that the opinion
of any such other counsel is in form satisfactory to such counsel and, in such
counsel's opinion, the Underwriters and they are justified in relying thereon.
(h) on the effective date of the Registration Statement and the
effective date of the most recently filed post-effective amendment to
the Registration Statement and also on the Closing Date or Additional
Closing Date, as the case may be, Arthur Andersen LLP shall have
furnished to you letters, dated the respective dates of delivery
thereof, in form and substance satisfactory to you, containing
statements and information of the type customarily included in
accountants' "comfort letters" to underwriters with respect to the
financial statements and certain financial information contained in the
Registration Statement and the Prospectus;
(i) the Representatives shall have received on and as of the Closing
Date or Additional Closing Date, as the case may be, an opinion of
Davis Polk & Wardwell, counsel to the Underwriters, with respect to the
due authorization and valid issuance of the Shares, the Registration
Statement, the Prospectus and other related matters as the
Representatives may reasonably request, and such counsel shall have
received such papers and information as they may reasonably request to
enable them to pass upon such matters;
(j) the Shares to be delivered on the Closing Date or Additional
Closing Date, as the case may be, shall have been approved for listing
on the Nasdaq National Market, subject to official notice of issuance;
(k) on or prior to the Closing Date or Additional Closing Date, as the
case may be, the Company and the Selling Stockholder shall have
furnished to the Representatives such further certificates and
documents as the Representatives shall reasonably request;
(l) The "lock-up" agreements, each substantially in the form of Exhibit
A hereto, between you and certain shareholders, officers and directors
of the Company relating to sales and certain other dispositions of
shares of Stock or certain other securities, delivered to you on or
before the date
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hereof, shall be in full force and effect on the Closing Date or
Additional Closing Date, as the case may be,
7. The Company agrees to indemnify and hold harmless the Selling
Stockholder and each Underwriter, each affiliate of any Underwriter which
assists such Underwriter in the distribution of the Shares and each person, if
any, who controls any Underwriter or the Selling Stockholder within the meaning
of either Section 15 of the Securities Act or Section 20 of the Exchange Act,
from and against any and all losses, claims, damages and liabilities (including,
without limitation, the legal fees and other expenses incurred in connection
with any suit, action or proceeding or any claim asserted) caused by any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement or the Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto) or any
preliminary prospectus, or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as such losses, claims,
damages or liabilities are caused by any untrue statement or omission or alleged
untrue statement or omission made in reliance upon and in conformity with
information relating to any Underwriter furnished to the Company in writing by
such Underwriter through the Repre sentatives expressly for use therein and
except insofar as such losses, claims, damages or liabilities are caused by any
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and conformity with information relating to the Selling
Stockholder furnished to the Company in writing by the Selling Stockholder
expressly for use therein; PROVIDED, that the foregoing indemnity agreement with
respect to any preliminary prospectus shall not inure to the benefit of any
Underwriter (or to the benefit of any person controlling such Underwriter),
from whom the person or persons asserting any such losses, claims, damages or
liabilities purchased Shares if such untrue statement of omission or alleged
untrue statement or omission made in such preliminary prospectus is
eliminated or remedied in the Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto) and, if
required by law, a copy of the Prospectus (as so amended or supplemented)
shall not have been furnished to such person or persons at or prior to the
written confirmation of the sale of such Shares to such person.
The Selling Stockholder agrees to indemnify and hold harmless each
Underwriter, each affiliate of any Underwriter which assists such Underwriter in
the distribution of the Shares, the Company and each person, if any, who
controls any Underwriter or the Company within the meaning of either Section 15
of the Securities Act or Section 20 of the Exchange Act, from and against any
and all losses, claims, damages and liabilities (including, without limitation,
the legal fees and other expenses incurred in connection with any suit, action
or proceeding or
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<PAGE>
any claim asserted) caused by any untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement or the Prospectus (as
amended or supplemented if the Company shall have furnished any amendments or
supplements thereto) or any preliminary prospectus, or caused by any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, but only with
reference to information relating to the Selling Stockholder furnished in
writing by or on behalf of the Selling Stockholder expressly for use in the
Registration Statement or the Prospectus, amendment or supplement thereto, or
any preliminary prospectus; PROVIDED, that the foregoing indemnity agreement
with respect to any preliminary prospectus shall not inure to the benefit of any
Underwriter or the Company (or to the benefit of any person controlling such
Underwriter or the Company) from whom the person or persons asserting any such
losses, claims, damages or liabilities purchased Shares if such untrue statement
of omission or alleged untrue statement or omission made in such preliminary
prospectus is eliminated or remedied in the Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto) and, if required by law, a copy of the Prospectus (as so amended or
supplemented) shall not have been furnished to such person or persons at or
prior to the written confirmation of the sale of such Shares to such person.
Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless the Company, its directors, its officers who sign the Registration
Statement and each person who controls the Company within the meaning of Section
15 of the Securities Act and Section 20 of the Exchange Act and the Selling
Stockholder to the same extent as the foregoing indemnity from the Company and
the Selling Stockholder to each Underwriter, but only with reference to
information relating to such Underwriter furnished to the Company in writing by
such Underwriter through the Representatives expressly for use in the
Registration Statement, the Prospectus, any amendment or supplement thereto, or
any preliminary prospectus.
If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against
any person in respect of which indemnity may be sought pursuant to the preceding
paragraphs of this Section 7, such person (the "INDEMNIFIED PERSON") shall
promptly notify the person or persons against whom such indemnity may be sought
(each an "INDEMNIFYING PERSON") in writing, and such Indemnifying Persons, upon
request of the Indemnified Person, shall retain counsel reasonably satisfactory
to the Indemnified Person to represent the Indemnified Person and any others the
Indemnifying Persons may designate in such proceeding and shall pay the fees and
expenses of such counsel related to such proceeding. In any such proceeding, any
Indemnified Person shall have the right to retain its own counsel, but the fees
and expenses of such counsel shall be at the expense of such Indemnified Person
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<PAGE>
and not the Indemnifying Persons unless (i) the Indemnifying Persons
and the Indemnified Person shall have mutually agreed to the contrary, (ii) the
Indemnifying Persons have failed within a reasonable time to retain counsel
reasonably satisfactory to the Indemnified Person or (iii) the named parties in
any such proceeding (including any impleaded parties) include both an
Indemnifying Person and the Indemnified Person and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that no Indemnifying Person
shall, in connection with any proceeding or related proceeding in the same
jurisdiction, be liable for the fees and expenses of more than one separate firm
(in addition to any local counsel) for all Indemnified Persons, and that all
such fees and expenses shall be reimbursed as they are incurred. Any such
separate firm for the Underwriters, each affiliate of any Underwriter which
assists such Underwriter in the distribution of the Shares and such control
persons of Underwriters shall be designated in writing by J.P. Morgan Securities
Inc. and any such separate firm for the Company, its directors, its officers who
sign the Registration Statement and such control persons of the Company shall be
designated in writing by the Company and any such separate firm for the Selling
Stockholder shall be designated in writing by the Selling Stockholder. No
Indemnifying Person shall be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent or if
there be a final judgment for the plaintiff, each Indemnifying Person agrees to
indemnify any Indemnified Person from and against any loss or liability by
reason of such settlement or judgment. Notwithstanding the foregoing sentence,
if at any time an Indemnified Person shall have requested an Indemnifying Person
to reimburse the Indemnified Person for fees and expenses of counsel as
contemplated by the second and third sentences of this paragraph, such
Indemnifying Person agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by such Indemnifying Person of the
aforesaid request and (ii) such Indemnifying Person shall not have reimbursed
the Indemnified Person in accordance with such request prior to the date of such
settlement. No Indemnifying Person shall, without the prior written consent of
the Indemnified Person, effect any settlement of any pending or threatened
proceeding in respect of which any Indemnified Person is or could have been a
party and indemnity could have been sought hereunder by such Indemnified Person,
unless such settlement includes an unconditional release of such Indemnified
Person from all liability on claims that are the subject matter of such
proceeding.
If the indemnification provided for in the first four paragraphs of
this Section 7 is unavailable to an Indemnified Person or insufficient in
respect of any losses, claims, damages or liabilities referred to therein, then
each Indemnifying Person under such paragraph, in lieu of indemnifying such
Indemnified Person
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<PAGE>
thereunder, shall contribute to the amount paid or payable by such Indemnified
Person as a result of such losses, claims, damages or liabilities (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company and the Selling Stockholder on the one hand and the Underwriters on the
other hand from the offering of the Shares or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appro priate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company and the Selling Stockholder on
the one hand and the Underwriters on the other hand in connection with the
statements or omissions that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the Company and the Selling Stockholder on the one
hand and the Underwriters on the other hand shall be deemed to be in the same
respective proportions as the net proceeds from the offering (before deducting
expenses) received by the Selling Stockholder and the total underwriting
discounts and the commissions received by the Underwriters, in each case as set
forth in the table on the cover of the Prospectus, bear to the aggregate public
offering price of the Shares. The relative fault of the Company and the Selling
Stockholder on the one hand and the Underwriters on the other hand shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company and the Selling
Stockholder by the Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
The Company, the Selling Stockholder and the Underwriters agree that it
would not be just and equitable if contribution pursuant to this Section 7 were
determined by PRO RATA allocation (even if the Selling Stockholder or the
Underwriters were treated as one entity for such purposes) or by any other
method of allocation that does not take account of the equitable considerations
referred to in the immediately preceding paragraph. The amount paid or payable
by an Indemnified Person as a result of the losses, claims, damages and
liabilities referred to in the immediately preceding paragraph shall be deemed
to include, subject to the limitations set forth above, any legal or other
expenses incurred by such Indemnified Person in connection with investigating or
defending any such action or claim. Notwithstanding the provisions of this
Section 7, in no event shall an Underwriter be required to contribute any amount
in excess of the amount by which the total price at which the Shares
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages that such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to
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<PAGE>
contribute pursuant to this Section 7 are several in proportion to the
respective number of Shares set forth opposite their names in Schedule I hereto,
and not joint.
The remedies provided for in this Section 7 are not exclusive and shall
not limit any rights or remedies which may otherwise be available to any
indemnified party at law or in equity.
The indemnity and contribution agreements contained in this Section 7
and the representations and warranties of the Company and the Selling
Stockholder set forth in this Agreement shall remain operative and in full force
and effect regardless of (i) any termination of this Agreement, (ii) any
investigation made by or on behalf of any Underwriter or any person controlling
any Underwriter or by or on behalf of the Company, its officers or directors or
any other person controlling the Company or the Selling Stockholder and (iii)
acceptance of and payment for any of the Shares.
8. Notwithstanding anything herein contained, this Agreement (or the
obligations of the several Underwriters with respect to the Option Shares) may
be terminated in the absolute discretion of the Representatives, by notice given
to the Selling Stockholder, if after the execution and delivery of this
Agreement and prior to the Closing Date (or, in the case of the Option Shares,
prior to the Additional Closing Date) (i) trading generally shall have been
suspended or materially limited on or by, as the case may be, any of the New
York Stock Exchange or the American Stock Exchange or the National Association
of Securities Dealers, Inc., (ii) trading of any securities of or guaranteed by
the Company shall have been suspended on any exchange or in any over-the-counter
market, (iii) a general moratorium on commercial banking activities in New York
shall have been declared by either Federal or New York State authorities, or
(iv) there shall have occurred any outbreak or escalation of hostilities or any
change in financial markets or calamity or crisis that, in the judgment of J.P.
Morgan Securities Inc., is material and adverse and which, in the judgment of
J.P. Morgan Securities Inc., makes it impracticable to market the Shares being
delivered at the Closing Date or the Additional Closing Date, as the case may
be, on the terms and in the manner contemplated in the Prospectus.
9. This Agreement shall become effective upon the later of (x)
execution and delivery hereof by the parties hereto and (y) release of
notification of the effectiveness of the Registration Statement (or, if
applicable, any post-effective amendment) by the Commission.
If on the Closing Date or the Additional Closing Date, as the case may
be, any one or more of the Underwriters shall fail or refuse to purchase Shares
which it or they have agreed to purchase hereunder on such date, and the
aggregate number of Shares which such defaulting Underwriter or Underwriters
agreed but
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<PAGE>
failed or refused to purchase is not more than one-tenth of the aggregate number
of Shares to be purchased on such date, the other Underwriters shall be
obligated severally in the proportions that the number of Shares set forth
opposite their respective names in Schedule I bears to the aggregate number of
Underwritten Shares set forth opposite the names of all such non-defaulting
Underwriters, or in such other proportions as the Representatives may specify,
to purchase the Shares which such defaulting Underwriter or Underwriters agreed
but failed or refused to purchase on such date; PROVIDED that in no event shall
the number of Shares that any Underwriter has agreed to purchase pursuant to
Section 1 be increased pursuant to this Section 9 by an amount in excess of
one-tenth of such number of Shares without the written consent of such
Underwriter. If on the Closing Date or the Additional Closing Date, as the case
may be, any Underwriter or Underwriters shall fail or refuse to purchase Shares
which it or they have agreed to purchase hereunder on such date, and the
aggregate number of Shares with respect to which such default occurs is more
than one-tenth of the aggregate number of Shares to be purchased on such date,
and arrangements satisfactory to the Representatives and the Selling Stockholder
for the purchase of such Shares are not made within 36 hours after such default,
this Agreement (or the obligations of the several Underwriters to purchase the
Option Shares, as the case may be) shall terminate without liability on the part
of any non-defaulting Underwriter or the Selling Stockholder. In any such case
either you or the Selling Stockholder shall have the right to postpone the
Closing Date (or, in the case of the Option Shares, the Addi tional Closing
Date), but in no event for longer than seven days, in order that the required
changes, if any, in the Registration Statement and in the Prospectus or in any
other documents or arrangements may be effected. Any action taken under this
paragraph shall not relieve any defaulting Underwriter from liability in respect
of any default of such Underwriter under this Agreement.
10. If this Agreement shall be terminated by the Underwriters, or any
of them, because of any failure or refusal on the part of the Company or the
Selling Stockholder to comply with the terms or to fulfill any of the conditions
of this Agreement, or if for any reason any of the Company or the Selling
Stockholder shall be unable to perform their respective obligations under this
Agreement or any condition of the Underwriters' obligations cannot be fulfilled,
the Company agrees to reimburse the Underwriters or such Underwriters as
have so terminated this Agreement with respect to themselves, severally, for
all out-of-pocket expenses (including the fees and expenses of its counsel)
reasonably incurred by the Underwriter in connection with this Agreement or
the offering contemplated hereunder; PROVIDED, that if (i) the Closing does
not occur primarily as a result of the failure of the Selling Stockholder to
deliver all of the Underwritten Shares on the Closing Date, to deliver the
certificate contemplated by clause (ii) of paragraph (e) of Section 6 of this
Agreement on the Closing Date or to cause to be delivered the opinion of
counsel contemplated by paragraph (g) of Section 6 of this Agreement on the
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Closing Date and (ii) primarily as a result of the failure of the Selling
Stockholder the Company is required to reimburse the Underwriters for
out-of-pocket expenses pursuant to this Section 10 ("SECTION 10 EXPENSES"), then
the Selling Stockholder hereby agrees to reimburse the Company to the extent
such Section 10 Expenses are actually reimbursed by the Company to the
Underwriters.
11. This Agreement shall inure to the benefit of and be binding upon
the Company, the Selling Stockholder and the Underwriters, each affiliate of any
Underwriter which assists such Underwriter in the distribution of the Shares,
any controlling persons referred to herein and their respective successors and
assigns. Nothing expressed or mentioned in this Agreement is intended or shall
be construed to give any other person, firm or corporation any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision herein contained. No purchaser of Shares from any Underwriter shall be
deemed to be a successor by reason merely of such purchase.
12. Any action by the Underwriters hereunder may be taken by the
Representatives jointly or by J.P. Morgan Securities Inc. alone on behalf of the
Underwriters, and any such action taken by the Representatives jointly or by
J.P. Morgan Securities Inc. alone shall be binding upon the Underwriters. All
notices and other communications hereunder shall be in writing and shall be
deemed to have been duly given if mailed or transmitted by any standard form of
telecommunication. Notices to the Underwriters shall be given to the
Representatives, c/o J.P. Morgan Securities Inc., 60 Wall Street, New York, New
York 10260 (telefax:(212) 648-5705); Attention: Syndicate Department. Notices to
the Company shall be given to it at AEP Industries Inc., 125 Phillips Avenue,
South Hackensack, NJ 07606, Attention: Paul M. Feeney, Executive Vice President
and Chief Financial Officer (telefax: (201) 807-2566); Notices to the Selling
Stockholder shall be given to the Selling Stockholder at Borden, Inc., 180 East
Broad Street, Columbus, Ohio 13215-3799, (telefax: (614) 225-7299); Attention:
William Carter, Executive Vice President and Chief Financial Officer.
13. This Agreement may be signed in counterparts, each of which shall
be an original and all of which together shall constitute one and the same
instrument.
14. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICTS
OF LAWS PROVISIONS THEREOF.
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<PAGE>
If the foregoing is in accordance with your understanding, please sign
and return four counterparts hereof.
Very truly yours,
AEP INDUSTRIES INC.
By:
-------------------------------
Name:
Title:
Selling Stockholder
By:
-------------------------------
Name:
Title:
Accepted: June o, 1999
J.P. Morgan Securities Inc.
Lehman Brothers Inc.
Actingseverally on behalf of themselves and the several Underwriters listed in
Schedule I hereto.
By:
-------------------------------
Name:
Title:
<PAGE>
SCHEDULE I
UNDERWRITER NUMBER OF SHARES
TO BE PURCHASED
J.P. Morgan Securities Inc............................
Lehman Brothers Inc...................................
Total
<PAGE>
Exhibit 5.1
June 21, 1999
AEP Industries Inc.
125 Phillips Avenue
South Hackensack, New Jersey 07606
Gentlemen:
We have acted as counsel to AEP Industries Inc. (the "Company") in
connection with its filing of a registration statement on Form S-3 (File No.
333-79947) under the Securities Act of 1933, as amended (the "Registration
Statement") covering 2,412,818 shares of the Company's common stock being
offered and sold by Borden, Inc., as the selling stockholder, and 361,923 shares
of common stock which may be offered and sold by the Company upon exercise by
the underwriters of the over-allotment option described in the Registration
Statement (collectively, the "Shares").
We have examined originals, or copies certified or otherwise identified
to our satisfaction, of such documents and corporate and public records as we
deem necessary as a basis for the opinion hereinafter expressed. With respect to
such, we have assumed the genuineness of all signatures appearing on all
documents presented to us as originals, and the conformity to the originals of
all documents presented to us as conformed or reproduced copies. Where factual
matters relevant to such opinion were not independently established, we have
relied upon certificates of officers and responsible employees and agents of the
Company.
Based upon the foregoing, it is our opinion that the Shares have been
duly and validly authorized and when sold, paid for and issued as contemplated
by the Registration Statement will be duly and validly issued and fully paid and
nonassessable.
We hereby consent to the use of this opinion as Exhibit 5.1 to the
Registration Statement, and to the use of our name as counsel to the Company in
connection with the Registration Statement and in the prospectus forming a part
thereof. In giving this consent, we do not thereby concede that we come within
the categories of persons whose consent is required by the Act or the General
Rules and Regulations promulgated thereunder.
Very truly yours,
BACHNER, TALLY, POLEVOY & MISHER LLP
e
