<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 29, 1996
REGISTRATION NO. 333-09377
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- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20459
------------------------
AMENDMENT NO. 4
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
SYNTHETIC INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
------------------------
<TABLE>
<S> <C> <C>
DELAWARE 2221 58-1049400
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation or Classification Code Number) Identification Number)
organization
</TABLE>
------------------------
309 LAFAYETTE ROAD
CHICKAMAUGA, GEORGIA 30707
(706) 375-3121
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
------------------------
LEONARD CHILL
PRESIDENT AND CHIEF EXECUTIVE OFFICER
SYNTHETIC INDUSTRIES, INC.
309 LAFAYETTE ROAD
CHICKAMAUGA, GEORGIA 30707
(706) 375-3121
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
------------------------
Copies to:
<TABLE>
<S> <C>
MARK ZVONKOVIC, ESQ. THOMAS POLLOCK, ESQ.
ANDREWS & KURTH L.L.P. PAUL, HASTINGS, JANOFSKY & WALKER LLP
425 LEXINGTON AVENUE 399 PARK AVENUE
NEW YORK, NEW YORK 10017 NEW YORK, NEW YORK 10022
(212) 850-2800 (212) 318-6000
</TABLE>
------------------------
Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this Registration Statement.
If any of the securities being registered on this Form are to be offered on
a delayed or continuing basis pursuant to Rule 415 under the Securities Act of
1933 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, please check the following box
and list the Securities Act registration statement number of the earlier
effective 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 statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
------------------------
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 THIS 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> 2
enterprise, to the fullest extent permitted under Section 145 of the DGCL, as
the same may be amended or supplemented. The indemnification provided by the
Amended Certificate shall not be deemed exclusive of any other rights to which
any of those seeking indemnification or advancement of expenses may be entitled
under any by-law, agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in his or her official capacity and as to action in
another capacity while holding such office, and shall continue as to a person
who has ceased to be a director, officer, employee or agent and shall inure to
the benefit of the heirs, executors and administrators of such a person.
The foregoing statements are subject to the detailed provisions of Section
145 of the DGCL and Article Eleventh of the Amended Certificate.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES
Not applicable
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits
<TABLE>
<S> <C>
1 -- Form of Underwriting Agreement*
2.1 -- Acquisition Agreement dated November 21, 1986 between Synthetic
Industries, Inc., Synthetic Industries Limited, Polyweave
Corporation, the stockholders of Synthetic Industries, Inc.,
Synthetic Industries Limited and SI Holding Inc., including exhibits
thereto+
2.2 -- Plan and Agreement of Merger dated December 4, 1986+
2.3 -- Asset Purchase Agreement dated October 12, 1990 between Synthetic
Industries, Inc. and Chicopee+
3.1 -- Certificate of Incorporation of Synthetic Industries, Inc. (including
all amendments to date) filed with the Secretary of the State of
Delaware (incorporated by reference to Synthetic Industries, Inc.'s
Registration Statement on Form 8-A filed October 24, 1996)
3.2 -- Amended and Restated By-Laws of Synthetic Industries, Inc. (including
all amendments to date) (incorporated by reference to Synthetic
Industries, Inc.'s Registration Statement on Form 8-A filed October
24, 1996)
4.1 -- Specimen of Common Stock Certificate (incorporated by reference to
Synthetic Industries, Inc.'s Registration Statement on Form 8-A filed
October 24, 1996)
4.2 -- Form of Indenture between Synthetic Industries, Inc. and United
States Trust Company of New York, Trustee, in respect to the 12 3/4%
Senior Subordinated Debentures due 2002+
4.3 -- Supplemental Form of Indenture between Synthetic Industries, Inc. and
United States Trust Company of New York, Trustee, in respect to the
12 3/4% Senior Subordinated Debentures due 2002+
5.1 -- Opinion of Andrews & Kurth L.L.P. regarding the legality of Common
Stock being registered+
10.1 -- Fourth Amended and Restated Revolving Credit and Security Agreement
dated as of October 20, 1995 among Synthetic Industries, Inc., The
First National Bank of Boston and other Lenders listed on Schedule 1
thereto, and The First National Bank of Boston, as agent on behalf of
the Lenders+
10.2 -- Amendment No. 1 to the Fourth Amended and Restated Revolving Credit
and Security Agreement dated as of December 1, 1995+
10.3 -- Amendment No. 2 to the Fourth Amended and Restated Revolving Credit
and Security Agreement dated as of February 14, 1996+
10.4 -- Amendment No. 3 to the Fourth Amended and Restated Revolving Credit
and Security Agreement dated as of March 15, 1996+
10.5 -- US Patent No. 4,867,614, Reinforced Soil and Method (Exp. December
13, 2003)+
10.6 -- US Patent No. 4,790,691, Fiber Reinforced Soil and Method (Exp.
December 13, 2003)+
</TABLE>
II-2
<PAGE> 3
<TABLE>
<S> <C>
10.7 -- US Patent No. 5,007,766, Shaped Barrier for Erosion Control and
Sediment Collection (Exp. April 16, 2008)+
10.8 -- Lease agreement dated November 22, 1971 between Murray Sobel and
Synthetic Industries, Inc. (including all amendments to date)+
10.9 -- Lease agreement dated February 13, 1969, between Murray Sobel and
wife, Marcella S. Sobel, and Joseph F. Decosimo, Frank M. Thompson
and Murray Sobel, Trustees, Synthetic Industries, Inc. (including all
amendments to date)+
10.10 -- Lease agreement dated December 17, 1990 between Chicopee and
Synthetic Industries, Inc.+
10.11 -- Lease agreement dated January 17, 1991 between Herchel L. Webster and
Allie Ree Webster and Synthetic Industries, Inc. (the "Lumite
Lease")+
10.12 -- Amendment to the Lumite Lease dated October 1, 1992+
10.13 -- Consulting Agreement dated July 23, 1991 between Texpro Limitada y
Cia S.C.A. and Synthetic Industries, Limited+
10.14 -- Supply Contract between Eastman Chemical Products, Inc. and Synthetic
Industries, Inc. dated December 13, 1991+
10.15 -- Agreement dated September 6, 1996 between Leonard Chill and Synthetic
Industries, Inc.+
10.16 -- Agreement dated September 6, 1996 between W. Wayne Freed and
Synthetic Industries, Inc.+
10.17 -- Agreement dated September 6, 1996 between Ralph A. Kenner and
Synthetic Industries, Inc.+
10.18 -- Agreement dated September 6, 1996 between William Gardner Wright, Jr.
and Synthetic Industries, Inc.+
10.19 -- Agreement dated September 6, 1996 between John M. Long and Synthetic
Industries, Inc.+
10.20 -- Agreement dated September 6, 1996 between Charles T. Koerner and
Synthetic Industries, Inc.+
10.21 -- Agreement dated September 1, 1984 between Robert J. Breyley, Sr. and
Fibermesh Company+
10.22 -- Agreement dated September 6, 1996 between Joseph Sinicropi and
Synthetic Industries, Inc.+
10.23 -- Agreement dated September 6, 1996 between W.O. Falkenberry and
Synthetic Industries, Inc.+
10.24 -- Agreement dated September 6, 1996 between Bobby Callahan and
Synthetic Industries, Inc.+
10.25 -- 1994 Stock Option Plan for Non-Employee Directors+
10.26 -- 1994 Stock Option Plan+
10.27 -- 1996 Stock Option Plan+
10.28 -- Incentive Compensation Plan Fiscal Year 1994/1995+
10.29 -- Incentive Compensation Plan Fiscal Year 1995/1996+
10.30 -- Form of Registration Rights Agreement+
10.31 -- Amendment No. 4 to the Fourth Amended and Restated Revolving Credit
and Security Agreement dated as of September 27, 1996+
21 -- List of Subsidiaries of Synthetic Industries, Inc.+
23.1 -- Consent of Deloitte & Touche LLP, independent auditors+
23.2 -- Consent of Andrews & Kurth L.L.P. (included in the opinion filed as
Exhibit 5)
24 -- Power of Attorney of the Board of Directors (included in Part II of
the Registration Statement)
</TABLE>
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* Filed herewith
+ Previously filed
++ To be supplied by amendment
(b) Not applicable
II-3
<PAGE> 4
ITEM 17. UNDERTAKINGS
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
registrant 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 the by final
adjudication of such issue.
The undersigned registrant hereby undertakes that:
(a) For purposes of determining any liability under the Securities
Act, the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(b) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus 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 the initial bona fide offering thereof.
II-4
<PAGE> 5
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of
Chickamauga, State of Georgia, on October 29, 1996.
SYNTHETIC INDUSTRIES, INC.
By: /s/ LEONARD CHILL
Leonard Chill
President
POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Amendment No. 4 to the Registration Statement has been signed below by the
following persons in the capacities and on the dates indicated:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------------------------------------------- ----------------------------- ------------------
<S> <C> <C>
/s/ LEONARD CHILL President, Chief Executive October 29, 1996
Leonard Chill Officer and Director
(Principal Executive
Officer)
/s/ JOSEPH SINICROPI Chief Financial Officer and October 29, 1996
Joseph Sinicropi Secretary (Principal
Accounting Officer)
*/s/ JOSEPH F. DANA Director October 29, 1996
Joseph F. Dana
*/s/ LEE J. SEIDLER Director October 29, 1996
Lee J. Seidler
*/s/ WILLIAM J. SHORTT Director October 29, 1996
William J. Shortt
*/s/ ROBERT L. VOIGT Director October 29, 1996
Robert L. Voight
*By: /s/ JOSEPH SINICROPI October 29, 1996
Joseph Sinicropi
Attorney-in-Fact
</TABLE>
II-5
<PAGE> 6
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBITS
- --------------------
<S> <C>
1 -- Form of Underwriting Agreement*
2.1 -- Acquisition Agreement dated November 21, 1986 between Synthetic
Industries, Inc., Synthetic Industries Limited, Polyweave
Corporation, the stockholders of Synthetic Industries, Inc.,
Synthetic Industries Limited and SI Holding Inc., including exhibits
thereto+
2.2 -- Plan and Agreement of Merger dated December 4, 1986+
2.3 -- Asset Purchase Agreement dated October 12, 1990 between Synthetic
Industries, Inc. and Chicopee+
3.1 -- Certificate of Incorporation of Synthetic Industries, Inc. (including
all amendments to date) filed with the Secretary of the State of
Delaware (incorporated by reference to Synthetic Industries, Inc.'s
Registration Statement on Form 8-A filed October 24, 1996)
3.2 -- Amended and Restated By-Laws of Synthetic Industries, Inc. (including
all amendments to date) (incorporated by reference to Synthetic
Industries, Inc.'s Registration Statement on Form 8-A filed October
24, 1996)
4.1 -- Specimen of Common Stock Certificate (incorporated by reference to
Synthetic Industries, Inc.'s Registration Statement on Form 8-A filed
October 24, 1996)
4.2 -- Form of Indenture between Synthetic Industries, Inc. and United
States Trust Company of New York, Trustee, in respect to the 12 3/4%
Senior Subordinated Debentures due 2002+
4.3 -- Supplemental Form of Indenture between Synthetic Industries, Inc. and
United States Trust Company of New York, Trustee, in respect to the
12 3/4% Senior Subordinated Debentures due 2002+
5.1 -- Opinion of Andrews & Kurth L.L.P. regarding the legality of Common
Stock being registered+
10.1 -- Fourth Amended and Restated Revolving Credit and Security Agreement
dated as of October 20, 1995 among Synthetic Industries, Inc., The
First National Bank of Boston and other Lenders listed on Schedule 1
thereto, and The First National Bank of Boston, as agent on behalf of
the Lenders+
10.2 -- Amendment No. 1 to the Fourth Amended and Restated Revolving Credit
and Security Agreement dated as of December 1, 1995+
10.3 -- Amendment No. 2 to the Fourth Amended and Restated Revolving Credit
and Security Agreement dated as of February 14, 1996+
10.4 -- Amendment No. 3 to the Fourth Amended and Restated Revolving Credit
and Security Agreement dated as of March 15, 1996+
10.5 -- US Patent No. 4,867,614, Reinforced Soil and Method (Exp. December
13, 2003)+
10.6 -- US Patent No. 4,790,691, Fiber Reinforced Soil and Method (Exp.
December 13, 2003)+
10.7 -- US Patent No. 5,007,766, Shaped Barrier for Erosion Control and
Sediment Collection (Exp. April 16, 2008)+
10.8 -- Lease agreement dated November 22, 1971 between Murray Sobel and
Synthetic Industries, Inc. (including all amendments to date)+
10.9 -- Lease agreement dated February 13, 1969, between Murray Sobel and
wife, Marcella S. Sobel, and Joseph F. Decosimo, Frank M. Thompson
and Murray Sobel, Trustees, Synthetic Industries, Inc. (including all
amendments to date)+
10.10 -- Lease agreement dated December 17, 1990 between Chicopee and
Synthetic Industries, Inc.+
10.11 -- Lease agreement dated January 17, 1991 between Herchel L. Webster and
Allie Ree Webster and Synthetic Industries, Inc. (the "Lumite
Lease")+
</TABLE>
<PAGE> 7
<TABLE>
<CAPTION>
EXHIBITS
- --------------------
<S> <C>
10.12 -- Amendment to the Lumite Lease dated October 1, 1992+
10.13 -- Consulting Agreement dated July 23, 1991 between Texpro Limitada y
Cia S.C.A. and Synthetic Industries, Limited+
10.14 -- Supply Contract between Eastman Chemical Products, Inc. and Synthetic
Industries, Inc. dated December 13, 1991+
10.15 -- Agreement dated September 6, 1996 between Leonard Chill and Synthetic
Industries, Inc.+
10.16 -- Agreement dated September 6, 1996 between W. Wayne Freed and
Synthetic Industries, Inc.+
10.17 -- Agreement dated September 6, 1996 between Ralph A. Kenner and
Synthetic Industries, Inc.+
10.18 -- Agreement dated September 6, 1996 between William Gardner Wright, Jr.
and Synthetic Industries, Inc.+
10.19 -- Agreement dated September 6, 1996 between John M. Long and Synthetic
Industries, Inc.+
10.20 -- Agreement dated September 6, 1996 between Charles T. Koerner and
Synthetic Industries, Inc.+
10.21 -- Agreement dated September 1, 1984 between Robert J. Breyley, Sr. and
Fibermesh Company+
10.22 -- Agreement dated September 6, 1996 between Joseph Sinicropi and
Synthetic Industries, Inc.+
10.23 -- Agreement dated September 6, 1996 between W.O. Falkenberry and
Synthetic Industries, Inc.+
10.24 -- Agreement dated September 6, 1996 between Bobby Callahan and
Synthetic Industries, Inc.+
10.25 -- 1994 Stock Option Plan for Non-Employee Directors+
10.26 -- 1994 Stock Option Pla+
10.27 -- 1996 Stock Option Plan+
10.28 -- Incentive Compensation Plan Fiscal Year 1994/1995+
10.29 -- Incentive Compensation Plan Fiscal Year 1995/1996+
10.30 -- Form of Registration Rights Agreement+
10.31 -- Amendment No. 4 to the Fourth Amended and Restated Revolving Credit
and Security Agreement dated as of September 27, 1996+
21 -- List of Subsidiaries of Synthetic Industries, Inc.+
23.1 -- Consent of Deloitte & Touche LLP, independent auditors+
23.2 -- Consent of Andrews & Kurth L.L.P. (included in the opinion filed as
Exhibit 5)
24 -- Power of Attorney of the Board of Directors (included in Part II of
the Registration Statement)
</TABLE>
- ---------------
* Filed herewith
+ Previously filed
++ To be supplied by amendment
(b) Not applicable
<PAGE> 1
EXHIBIT 1
3,400,000 Shares of Common Stock
SYNTHETIC INDUSTRIES, INC.
UNDERWRITING AGREEMENT
October ___, 1996
BEAR, STEARNS & CO. INC.
FURMAN SELZ LLC
As Representatives (the "Representatives")
of the several Underwriters named
in Schedule I attached hereto
c/o BEAR, STEARNS & CO. INC.
245 Park Avenue
New York, New York 10167
Ladies and Gentlemen:
Synthetic Industries, Inc., a Delaware corporation (the "Company"),
proposes, subject to the terms and conditions stated herein, to issue and sell
to the several underwriters named in Schedule I hereto (the "Underwriters") an
aggregate of 3,400,000 shares (the "Firm Shares") of its common stock, par
value $1.00 per share (the "Common Stock"). The Company also proposes to sell
to the Underwriters for the sole purpose of covering over-allotments in
connection with the sale of the Firm Shares, at the option of the Underwriters,
an aggregate of up to 510,000 additional shares of Common Stock ("Additional
Shares"). The Firm Shares and any Additional Shares purchased by the
Underwriters are herein referred to as the "Shares." The Shares are more fully
described in the Registration Statement referred to below.
1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to, and agrees with, the several Underwriters that:
(a) The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement, and _____________
amendment or amendments thereto, on Form S-1 (No. 333-09377), for the
registration of the Shares
<PAGE> 2
under the Securities Act of 1933, as amended (the "Act"). Such registration
statement, including the prospectus, financial statements, schedules, exhibits
and all other documents filed as a part thereof, as amended to the time of
effectiveness of the registration statement, including any information deemed
to be a part thereof as of the time of effectiveness pursuant to paragraph (b)
of Rule 430A of the rules and regulations of the Commission under the Act (the
"Regulations"), is herein called the "Registration Statement," and the
prospectus, in the form first filed with the Commission pursuant to Rule 424(b)
of the Regulations or filed as part of the Registration Statement at the time
of effectiveness if no Rule 424(b) filing is required, is herein called the
"Prospectus." The term "preliminary prospectus" as used herein means a
preliminary prospectus as described in Rule 430 of the Regulations.
(b) At the time the Registration Statement is first filed with
the Commission, at the time any amendment to the Registration Statement is
filed with the Commission, at the time of the effectiveness of the Registration
Statement or the effectiveness of any post-effective amendment to the
Registration Statement, at the time the Prospectus is first filed with the
Commission pursuant to Rule 424(b) of the Regulations, at the time any
supplement to or amendment of the Prospectus is filed with the Commission and
at the Closing Date and the Additional Closing Date, if any (as hereinafter
respectively defined), the Registration Statement and the Prospectus and any
amendments thereof and supplements thereto complied or will comply in all
material respects with the applicable provisions of the Act and the Regulations
and did not, do not and will not contain an untrue statement of a material fact
and did not, do not and will not omit to state any material fact required to be
stated therein or necessary in order to make the statements therein (i) in the
case of the Registration Statement, not misleading and (ii) in the case of the
Prospectus, in light of the circumstances under which they were made, not
misleading. When any related preliminary prospectus was first filed with the
Commission (whether filed as part of the registration statement for the
registration of the Shares or any amendment thereto or pursuant to Rule 424(a)
of the Regulations) and when any amendment thereof or supplement thereto was
first filed with the Commission, such preliminary prospectus and any amendments
thereof and supplements thereto complied in all material respects with the
applicable provisions of the Act and the Regulations and did not contain an
untrue statement of a material fact and did not omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. No representation and warranty is made in this subsection (b),
however, with respect to any information contained in or omitted from the
Registration Statement or the Prospectus or any related preliminary prospectus
or any amendment thereof or supplement thereto in reliance upon and in
conformity with information furnished in writing to the Company by or on behalf
of any Underwriter through the Representatives expressly for use in connection
with the preparation thereof. The Company acknowledges that the statements set
forth in the last paragraph of the cover page of the Prospectus, in the
paragraph on the inside front cover page of the Prospectus relating to
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<PAGE> 3
possible stabilization transactions, in the table listing Underwriters under
the caption "Underwriting" in the Prospectus and in [third] and [eighth]
paragraphs under the caption "Underwriting" in the Prospectus constitute the
only information furnished in writing by or on behalf of any Underwriter
expressly for use in any registration statement relating to the Shares as
originally filed, in the Registration Statement or in any amendment thereof,
any related preliminary prospectus or the Prospectus or in any amendment
thereof or supplement thereto, as the case may be.
(c) Neither the Commission nor the "Blue Sky" or securities
authority of any jurisdiction has issued an order (a "Stop Order") suspending
the effectiveness of the Registration Statement, preventing or suspending the
use of any preliminary prospectus, the Prospectus, the Registration Statement,
or any amendment or supplement thereto, refusing to permit the effectiveness of
the Registration Statement, or suspending the registration or qualification of
the Firm Shares or the Additional Shares, nor, to the best knowledge of the
Company, has any of such authorities instituted or threatened to institute any
proceedings with respect to a Stop Order.
(d) Deloitte & Touche LLP, who have certified the financial
statements and supporting schedules included in the Registration Statement and
whose reports are filed with the Commission as part of the Registration
Statement, are independent public accountants with regard to the Company and
its subsidiaries as required by the Act and the Regulations.
(e) Subsequent to the respective dates as of which information is
given in the Registration Statement (and, as to the representation made at the
Closing Date and the Additional Closing Date, the Prospectus), except as set
forth in the Registration Statement (and, as to the representation made at the
Closing Date and the Additional Closing Date, the Prospectus) there has been no
material adverse change, or any fact known to the Company which could
reasonably be expected to result in a material adverse change, in the business,
prospects, properties, assets, earnings, operations, condition (financial or
other) or results of operations of the Company and its subsidiaries taken as a
whole, whether or not arising from transactions in the ordinary course of
business or any loss of, or damage to, properties (whether or not insured)
which could reasonably be expected to affect materially and adversely the
business, prospects, properties, assets, earnings, operations, condition
(financial or other) or results of operations of the Company and its
subsidiaries taken as a whole. Since the date of the latest balance sheet
presented in the Registration Statement (and, as to the representation made at
the Closing Date and the Additional Closing Date, the Prospectus), except as
expressly disclosed in the Registration Statement (and, as to the
representation made at the Closing Date and the Additional Closing Date, the
Prospectus), neither the Company nor any of its subsidiaries has (i) incurred
or undertaken any liabilities or obligations, direct or contingent, that are
material to the Company and its subsidiaries taken as a whole, (ii) entered
into any material transaction not in the ordinary course of business
-3-
<PAGE> 4
and consistent with past practice or (iii) declared or paid any dividend or
made any distribution on any shares of its capital stock or redeemed, purchased
or otherwise acquired or agreed to redeem, purchase or otherwise acquire any
shares of its capital stock.
(f) The Company has the corporate power and the authority to
enter into this Agreement, perform each of its obligations hereunder and to
issue, sell and deliver the Shares to be sold by it hereunder. This Agreement
and the transactions contemplated herein have been duly and validly authorized
by the Company and this Agreement has been duly and validly executed and
delivered by the Company and is a valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except (i) as the
enforceability thereof may be limited by bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium or other similar laws affecting the
enforcement of creditors rights generally and by general equitable principles
and (ii) to the extent that rights to indemnity and contribution hereunder may
be limited by federal or state securities laws or the public policy underlying
such laws.
(g) The execution, delivery and performance of this Agreement by
the Company and the consummation of the transactions contemplated hereby
(including the issuance, sale and delivery of Firm Shares and the Additional
Shares by the Company) do not and will not (i) conflict with or result in a
breach of any of the terms and provisions of, or constitute a default (or an
event which with notice or lapse of time, or both, would constitute a default),
give rise to any right to accelerate the maturity or require the prepayment of
any obligation of the Company or any of its subsidiaries or require any
consent, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or its subsidiaries,
pursuant to the terms of any agreement, instrument, franchise, license or
permit to which the Company or any of its subsidiaries is a party or by which
any of such corporations or their respective properties or assets may be bound
or (ii) violate or conflict with any provision of the certificate of
incorporation or by-laws (or equivalent instruments) of the Company or any of
its subsidiaries or any judgment, decree, order, statute, rule or regulation of
any court or any public, governmental or regulatory agency or body having
jurisdiction over the Company or any of its subsidiaries or any of their
respective properties or assets.
(h) No consent, approval, authorization, order, registration,
filing, qualification, license or permit of or with any court or any public,
governmental or regulatory agency or body having jurisdiction over the Company
or any of its subsidiaries or any of their respective properties or assets is
required for the valid execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated hereby, including the
issuance, sale and delivery of the Shares to be issued, sold and delivered by
the Company hereunder, except such consents, approvals,
-4-
<PAGE> 5
authorizations, orders, registrations, filings, qualifications, licenses and
permits as may be required under the Act (which exception shall not apply once
the Registration Statement becomes effective) and state securities or "Blue
Sky" laws in connection with the purchase and distribution of the Shares by the
Underwriters.
(i) All of the outstanding shares of capital stock of the Company
are duly and validly authorized and issued, fully paid and nonassessable, were
issued in compliance with all applicable federal and state securities laws and
were not issued in violation of or subject to any preemptive rights, or, except
as disclosed in the Registration Statement, co-sale rights, registration
rights, repurchase rights, right of first refusal or any other similar right.
Those of the Shares to be sold by the Company to the Underwriters hereunder
have been duly and validly authorized and when delivered and sold in accordance
with this Agreement, will be duly and validly authorized, issued and
outstanding, fully paid and nonassessable, will not have been issued in
violation of or subject to any preemptive rights, co-sale rights, transfer
restrictions, rights of first refusal, repurchase rights or any similar rights
and will be free and clear of any pledges, liens, security interests, charges,
claims or encumbrances of any kind. The Company had, at June 30, 1996, a duly
authorized and outstanding capitalization as set forth under the caption
"Capitalization" in the Registration Statement and as shall be set forth in the
Prospectus. The Common Stock conforms to the description thereof contained in
the Registration Statement and as shall be set forth in the Prospectus. There
is no commitment, plan or arrangement to issue, and no outstanding option,
warrant or other right which requires, permits or provides for the issuance,
subscription or purchase of, any share of capital stock of the Company or any
security or other instrument which by its terms is convertible into,
exercisable for, or exchangeable for capital stock of the Company, except as
accurately described in the Registration Statement. There is outstanding no
security or other instrument which by its terms is convertible into or
exchangeable for capital stock of the Company. Except as described in the
Registration Statement, there are no restrictions on the voting or transfer of
any shares of capital stock of the Company.
(j) The Company and each of its subsidiaries has been duly
organized and is validly existing as a corporation in good standing under the
laws of its jurisdiction of incorporation. The Company and each of its
subsidiaries is duly qualified and in good standing as a foreign corporation in
each jurisdiction in which the character or location of its properties (owned,
leased or licensed) or the nature or conduct of its business makes such
qualification necessary, except for those failures to be so qualified or in
good standing which could not, individually or the aggregate, have a material
adverse effect on the business, prospects, properties, assets, earnings,
operations, condition (financial or other) or results of operations of the
Company and its subsidiaries taken as a whole, and neither the Company nor any
of its subsidiaries has received any claim or notice from any official in any
jurisdiction that it is required to be qualified or licensed to do business in
any jurisdiction in which it is not so qualified or licensed. The Company and
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<PAGE> 6
each of its subsidiaries has all requisite power and authority, and all
necessary consents, approvals, authorizations, orders, registrations,
qualifications, licenses and permits of and from all public, regulatory or
governmental agencies and bodies, to own, lease and operate its properties and
conduct its business as now being conducted and as described in the
Registration Statement and as shall be described in the Prospectus, and the
Company has not received any notice of any proceedings relating to the
revocation or modification of any thereof, nor is the Company aware of any
basis therefor, and no such consent, approval, authorization, order,
registration, qualification, franchise, license or permit contains a materially
burdensome restriction that is not adequately and accurately disclosed in the
Prospectus.
(k) As of June 30, 1996 and as of the date hereof, Synthetic
Industries Europe Limited, a corporation organized under the laws of [the
United Kingdom], and Fibermesh GmbH, a corporation organized under the laws of
[Germany], were the Company's only subsidiaries (as defined in the
Regulations). All of the outstanding shares of capital stock of such
subsidiaries have been duly and validly issued, are fully paid and
non-assessable and were not issued in violation of preemptive rights,
repurchase rights or rights of first refusal and, are owned directly or
indirectly by the Company, free and clear of any lien, pledge, encumbrance,
claim, security interest, restriction on transfer, stockholders' agreement,
voting trust or other defect of title whatsoever. The Company owns no
controlling interest in any other corporation, partnership or other entity and
does not directly or indirectly own any shares of stock or any other securities
of any corporation or have any equity interest in any firm, partnership,
association or other entity, other than minority investments in marketable
securities that may be made in the ordinary course of business as a part of its
investment of excess cash assets.
(l) Except as described in the Registration Statement and as
shall be described in the Prospectus, there is no action, suit, investigation
or proceeding, governmental or otherwise, to which the Company or any of its
subsidiaries is a party or to which any property of the Company or any of its
subsidiaries is subject or which is pending or, to the best knowledge of the
Company, threatened against the Company or any of its subsidiaries which (i) if
adversely decided or concluded, could reasonably be expected to have a material
adverse effect on the Company or its business, prospects, properties, assets,
earnings, operations, condition (financial or other) or results of operations
or (ii) is required to be disclosed in the Registration Statement, or (iii)
seeks to restrain, enjoin, prevent the consummation of, or otherwise challenge
the issuance of, the Shares or the execution and delivery of this Agreement or
any of the other transactions contemplated hereby, or questions the legality or
validity of any such transactions or that seeks to recover damages or obtain
other relief in connection with any of such transactions.
(m) Except as provided for in this Agreement, the Company has not
taken and will not take, directly or indirectly, any action designed to cause
or result in,
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<PAGE> 7
or which constitutes or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of the shares of Common Stock to
facilitate the sale or resale of the Shares or otherwise.
(n) The consolidated financial statements, including the notes
thereto, and supporting schedules included in the Registration Statement and as
will be set forth in the Prospectus present fairly the financial condition,
results of operations, shareholders' equity and cash flows and other
information purported to be shown therein of the Company and its subsidiaries
at the dates and for the periods indicated; and the supporting schedules
included in the Registration Statement present fairly the information required
to be stated therein. Such consolidated financial statements have been
prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved, are complete and correct,
and are in accordance with the books and records of the Company and its
subsidiaries in all material respects. No other financial statements are
required by Form S-1 or otherwise to be included in the Registration Statement
or the Prospectus. The financial data set forth in the Registration Statement
and as will be set forth in the Prospectus under the captions "Summary
Consolidated Financial Information", "Capitalization", "Selected Consolidated
Financial Information" and "Management's Discussion and Analysis of Financial
Condition and Results of Operations" fairly present, on the basis stated in the
Registration Statement and as will be stated in the Prospectus, the information
set forth therein and have been compiled on a basis consistent with that of the
audited financial statements included in the Registration Statement and as will
be set forth in the Prospectus. All other financial information and
statistical data set forth in the Registration Statement and as will be set
forth in the Prospectus have been prepared on an accounting basis consistent
with the financial statements included in the Registration Statement and as
will be included in the Prospectus. The pro forma and "as adjusted" financial
information included in the Registration Statement and as will be included in
the Prospectus that gives effect to the issuance of the Shares, the application
of the net proceeds therefrom and the other transactions and events specified
therein has been properly compiled on the basis of the assumptions set forth
with respect thereto; the pro forma adjustments to the historical figures have
been properly applied to such figures and such pro forma financial information
complies in all material respects with the applicable accounting requirements
of the Commission.
(o) Each of the Company and each of its subsidiaries has good and
marketable title to all the properties and assets reflected as owned in the
financial statements (or elsewhere) in the Registration Statement and as will
be set forth in the Prospectus, subject to no lien, mortgage, pledge, charge or
encumbrance of any kind except (i) those, if any, reflected in the financial
statements, or (ii) those which are not material in amount and do not adversely
affect the use made and proposed to be made of such property by the Company and
its subsidiaries. Each of the Company and its subsidiaries holds its leased
properties under valid, subsisting and enforceable leases,
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<PAGE> 8
with such exceptions as are not, individually or in the aggregate, material and
do not, individually or in the aggregate, interfere with the use made or
proposed to be made of such properties by the Company or any of its
subsidiaries. Except as disclosed in the Registration Statement and as will be
disclosed in the Prospectus, the Company and each of its subsidiaries owns or
leases all such properties as are necessary to its operations as now conducted
or as proposed to be conducted.
(p) The Company is not, and upon consummation of the transactions
contemplated hereby will not be, subject to registration as an "investment
company" or an entity "controlled by" an "investment company" within the
meaning of Investment Company Act of 1940 and the rules and regulations
promulgated thereunder; the Company will conduct its business and financial
affairs in such a manner as to ensure that it will not become on "investment
company" or an entity "controlled" by an "investment company". The Company is
not, and upon consummation of the transactions contemplated hereby will not be,
subject to registration as an "investment company" or an entity "controlled by"
an "investment company" within the meaning of the Investment Company Act of
1940 and the rules and regulations promulgated thereunder.
(q) The Company and each of its subsidiaries have (i) filed all
federal, state and local and foreign tax returns which are required to be filed
through the date hereof, and all such tax returns are true, complete and
accurate in all material respects, or (ii) received valid extensions thereof
and have paid all taxes shown on such returns and all assessments received by
them except where, in the case of state and local and foreign tax returns, the
failure to file, extend the due date of or pay the same, in the aggregate,
could not reasonably be expected to have a material adverse effect on the
business, prospects, properties, assets, earnings, operations, condition
(financial or other) or results of operations of the Company; the Company has
no knowledge of any tax deficiency which has been or might be asserted against
the Company or any of its subsidiaries which could materially and adversely
affect the business or properties of the Company and its subsidiaries taken as
a whole; to the Company's best knowledge, all tax liabilities are adequately
provided for on the consolidated books of the Company.
(r) The Company and each of its subsidiaries own or possess
adequate licenses or other rights to use all patents, trademarks, service
marks, trade names, copyrights, technology and know-how necessary to conduct
the business now or proposed to be conducted by the Company and each of its
subsidiaries as described in the Registration Statement and as will be
described in the Prospectus, and, except as disclosed in the Registration
Statement and as will be disclosed in the Prospectus, neither the Company nor
any of its subsidiaries has received any notice of infringement of or conflict
with (or knows of such infringement of or conflict with) rights of others with
respect to any patents, trademarks, service marks, trade names, copyrights or
know-how; and to the best knowledge of the Company, the Company and each of its
subsidiaries do
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<PAGE> 9
not in the conduct of their business as now conducted or proposed to be
conducted, infringe or conflict with any such rights of any third party.
(s) There are no contracts, indentures, mortgages, loan
agreements, notes, leases or other agreements or instruments or other documents
(collectively, "Documents") required to be described or referred to in, or
filed with, the Registration Statement and, in respect of the representation
made at the Closing Date and the Additional Closing Date, the Prospectus, other
than those described or referred to therein or filed as exhibits thereto; all
such descriptions are accurate in all material respects and present fairly the
information described therein. All such Documents to which the Company is a
party have been duly authorized, executed and delivered by the Company,
constitute valid and binding agreements of the Company and are enforceable
against the Company in accordance with the terms thereof, except as the
enforceability thereof may be limited by bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights generally and by general equitable principles.
(t) There are no outstanding loans, advances (except normal
advances for business expenses in the ordinary course of business), or
guarantees of indebtedness by the Company or any of its subsidiaries to or for
the benefit of any of the officers or directors of the Company or any of its
subsidiaries or any of the members of the families of any of them, except as
adequately disclosed in the Registration Statement and as will be disclosed in
the Prospectus; all such descriptions are accurate in all material respects and
present fairly the information required to be described in the Registration
Statement and as will be described in the Prospectus.
(u) There are no rights of return or other agreements between the
Company and any customer of the Company which would cause any sales reflected
in the Company's consolidated financial statements for the fiscal year ended
September 30, 1995 or the nine months ended June 30, 1996 included in the
Registration Statement and to be included in the Prospectus to fail to qualify
as sales in accordance with generally accepted accounting principles or the
Company's revenue recognition policy as reflected in the audited financial
statements included in the Registration Statement and to be included in the
Prospectus.
(v) Each of the Company and each of its subsidiaries maintains a
system of internal accounting controls sufficient to provide reasonable
assurances that (A) transactions are executed in accordance with management's
general or specific authorizations; (B) transactions are recorded as necessary
to permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for assets; (C)
access to assets is permitted only in accordance with management's general or
specific authorization; and (D) the recorded accountability
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<PAGE> 10
for assets is compared with existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(w) Neither the Company nor any of its subsidiaries is in
violation or breach of, or in default (nor has any event occurred which with
notice, or lapse of time, or both, would constitute a default) of any contract,
agreement, indenture, loan or other agreement, instrument, mortgage, note,
permit, lease, license, arrangement or understanding to which the Company or
any of its subsidiaries is a party or by which the Company, any of its
subsidiaries or any of their respective properties may be bound where such
default, either individually or together with all such other defaults, could
reasonably be expected to have a material adverse effect on the business,
prospects, properties, assets, earnings, operations, or condition (financial or
other) or results of operations of the Company or on the ability of the Company
to perform its obligations hereunder. Each such contract, agreement,
indenture, instrument, mortgage, note, permit, lease, license, arrangement and
understanding is in full force and effect and is the legal, valid, and binding
obligation of the Company or its subsidiaries, as the case may be, and, to the
Company's knowledge, the other parties thereto and is enforceable against the
Company or its subsidiaries, as the case may be, and, to the Company's
knowledge, against the other parties thereto in accordance with its terms.
Each of the Company and each of its subsidiaries enjoys peaceful and
undisturbed possession under all material leases and material licenses under
which the Company and its subsidiaries are operating. Neither the Company nor
any of its subsidiaries is a party to or bound by any contract, agreement,
indenture, instrument, mortgage, note, permit, lease, license, arrangement, or
understanding, or subject to any charter or other restriction, which has had or
is reasonably expected in the future to have a material adverse effect on the
business, prospects, properties, assets, earnings, operation, condition
(financial or other) or results of operations of the Company. Neither the
Company nor any of its subsidiaries is in violation or breach of, or in default
with respect to, any term of its respective articles of incorporation or bylaws
and neither the Company nor any of its subsidiaries is in default (nor has an
event occurred which with notice, lapse of time or both would constitute a
default) in the performance of any obligation, agreement or condition contained
in any loan agreement of the Company or any such subsidiary where such default
could have a material adverse effect on the Company and its subsidiaries taken
as a whole. Neither the Company nor any of its subsidiaries is in violation
of, or in default with respect to, any law, rule, regulation, order, judgment
or decree, except such as are described in the Registration Statement and as
will be described in the Prospectus or such as, individually or in the
aggregate, could not reasonably be expected to have a material adverse effect
upon the business, prospects, properties, assets, earnings, operations,
condition (financial or other) or results of operations of the Company.
(x) The Company has obtained from each of the Company's executive
officers, senior management and directors an enforceable written agreement (a
"Lock-Up
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<PAGE> 11
Agreement"), in a form or forms approved by the Representatives and their
counsel, that for a period of 270 days from the date of the Prospectus each
such holder will not, without the prior written consent of Bear, Stearns & Co.
Inc., offer, sell, agree to sell, grant any option for the sale of or otherwise
dispose of, directly or indirectly, (other than by gift provided that the donee
agrees in writing with the Company to be bound by the terms of such written
agreement) of any shares of capital stock (or any security convertible into,
exercisable for or exchangeable for capital stock) of the Company now owned or
hereafter acquired by such holder and thereafter, until December 31, 1997, such
holder will not, without the prior written consent of Bear, Stearns & Co. Inc.,
offer, sell, agree to sell, grant any option for the sale of or otherwise
dispose of, directly or indirectly, any shares of capital stock (or any
security convertible into, exercisable for or exchangeable for capital stock)
of the Company now owned or hereafter acquired by such holder except pursuant
to a registration statement that has become effective under the Act.
(y) The Company has obtained from Synthetic Industries, L.P., a
Delaware limited partnership (the "Partnership") an enforceable written
agreement (the "Partnership Lock-Up Agreement"), in a form approved by the
Representatives and their counsel, that for a period of 270 days from the date
of the Prospectus such holder will not, without the prior written consent of
Bear, Stearns & Co. Inc., offer, sell, agree to sell, grant any option for the
sale of or otherwise dispose of, directly or indirectly, any shares of capital
stock (or any security convertible into, exercisable for or exchangeable for
capital stock) of the Company now owned or hereafter acquired by such holder
and thereafter, until December 31, 1997, such holder will not, without the
prior written consent of Bear, Stearns & Co. Inc., offer, sell, agree to sell,
grant any option for the sale of or otherwise dispose of, directly or
indirectly, any shares of capital stock (or any security convertible into,
exercisable for or exchangeable for capital stock) of the Company now owned or
hereafter acquired by such holder except pursuant to a registration statement
that has become effective under the Act
(z) The Common Stock has been approved for quotation on the
Nasdaq National Market, subject to official notice of issuance.
(aa) Except as described in the Registration Statement and as will
be described in the Prospectus, no labor dispute with the employees of the
Company and any of its subsidiaries exists or, to the best knowledge of the
Company, is threatened and the Company is not aware of any labor disturbance by
the employees of any of its significant manufacturers, suppliers, customers or
contractors that could reasonably be expected to have a material adverse effect
on the business, prospects, properties, assets, earnings, operations, condition
(financial or other) or results of operations of the Company.
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<PAGE> 12
(bb) Except as described in the Registration Statement and as will
be described in the Prospectus, (i) the Company is not a party to or bound by
any stockholders agreements or voting trusts with respect to any securities of
the Company and (ii) there are no contracts, agreements or understandings
between the Company or any of its subsidiaries and any person or entity
granting such person or entity the right to require the Company to file a
registration statement under the Act with respect to any securities of the
Company owned or to be owned by such person or entity or to require the Company
to include such securities in the securities registered pursuant to the
Registration Statement.
(cc) To the best knowledge of the Company, except as disclosed in
the Registration Statement and as will be disclosed in the Prospectus, neither
the Company nor any of its subsidiaries is in violation of any federal or state
law or regulation relating to occupational safety and health or to the storage,
handling or transportation of hazardous or toxic materials, and the Company and
each of its subsidiaries have received all permits, licenses or other approvals
required under applicable federal and state occupational safety and health and
environmental laws and regulations to conduct their respective businesses; the
Company and each of its subsidiaries is in compliance with all terms and
conditions of any such permits, licenses or approvals, except any such
violation of law or regulation, failure to receive required permits, licenses
or other approvals or failure to comply with the terms and conditions of such
permits, licenses or approvals which could not, individually or together with
all such other violations or failures, have a material adverse effect on the
Company or its business, prospects, properties, assets, earnings, operations,
condition (financial or other) or results of operations.
(dd) The Company has not incurred any liability for any finder's
fees or similar payments in connection with the transactions herein
contemplated.
(ee) The Company, either directly or through one or more of its
subsidiaries, has in effect, with financially sound insurers, insurance with
respect to its business and properties and the business and properties of its
subsidiaries against loss or damage of the kind customarily insured against by
corporations engaged in the same or similar businesses and similarly situated,
of such type and in such amounts as are customarily carried under similar
circumstances by such other corporations.
(ff) The Company has complied and will comply with all provisions
of Florida Statutes Section 517.075 (Chapter 92-198, Laws of Florida). Neither
the Company, nor any affiliate thereof, does business with the government of
Cuba or with any person or affiliate located in Cuba.
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<PAGE> 13
2. PURCHASE, SALE AND DELIVERY OF THE SHARES.
(a) The Company agrees to sell to the respective Underwriters the
Firm Shares, and, on the basis of the representations, warranties, covenants
and agreements herein contained, but subject to the terms and conditions herein
set forth, each of the Underwriters agrees, severally and not jointly, to
purchase from the Company, at a price per share of $___________, the number of
Firm Shares set forth in Schedule I hereto, plus any additional number of
Shares which such Underwriter may become obligated to purchase pursuant to the
provisions of Section 9 hereof.
(b) Delivery of certificates for the Firm Shares and payment of
the purchase price shall be made at the office of Bear, Stearns & Co. Inc., 245
Park Avenue, New York, New York 10167, or at such other place or places as
shall be agreed upon by the Representatives and the Company, at 10:00 A.M., New
York City time, on the [fourth] [third] business day (unless postponed in
accordance with the provisions of Section 9 hereof) following the date of the
effectiveness of the Registration Statement (or, if the Company has elected to
rely upon Rule 430A of the Regulations, the [fourth] [third] business day after
execution of this Agreement), or such other time not later than ten business
days after such date as shall be agreed upon by the Representatives and the
Company (such time and date of payment and delivery being herein called the
"Closing Date"). Payment shall be made to the Company, by immediately
available funds, whether in the form of New York Clearing House funds, payable
to the order of the Company, or wire transfer, against delivery to the
Representatives for the respective accounts of the Underwriters of certificates
for the Firm Shares to be purchased by the Underwriters. Certificates of Firm
Shares shall be registered in such name or names and in such authorized
denominations as the Representatives may request in writing at least two full
business days prior to the Closing Date, provided that, if so specified by the
Representatives, the Firm Shares may be represented by a global certificate
registered in the name of Cede & Co., as nominee of The Depositary Trust
Company ("Cede"). The Company will permit the Representatives to examine and
package such certificates for delivery at least one full business day prior to
the Closing Date at the office of Bear, Stearns & Co. Inc., 245 Park Avenue,
New York, New York 10167.
(c) In addition, the Company hereby grants to the several
Underwriters the option (the "Option") to purchase all or any portion of the
Additional Shares at the same purchase price per share to be paid by the
several Underwriters to the Company for the Firm Shares as set forth in Section
2(a), for the sole purpose of covering over- allotments in the sale of Firm
Shares by the several Underwriters. The number of Additional Shares to be
purchased from the Company by each Underwriter (as adjusted by the
Representatives to eliminate fractions) shall be determined by multiplying the
number of Additional Shares to be sold by the Company by a fraction, the
numerator of which is the number of Firm Shares purchased by such Underwriter
and the denominator of which is the aggregate number of Firm Shares purchased
by all the Underwriters from
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<PAGE> 14
the Company hereunder, plus any additional number of Shares which the
Underwriters may become obligated to purchase pursuant to the provisions of
Section 9 hereof. The Option may be exercised at any time in whole or in part
on one occasion only, on or before the thirtieth (30th) calendar day following
the date of this Agreement, by written notice by the Representatives to the
Company in the manner specified in Section 12 hereof. Such notice shall set
forth the aggregate number of Additional Shares as to which the Option is being
exercised and the date and time, as reasonably determined by the
Representatives, when the Additional Shares are to be delivered (such date and
time being herein sometimes referred to as the "Additional Closing Date");
provided, however, that the Additional Closing Date shall not be earlier than
the Closing Date or earlier than the second full business day after the date on
which the Option shall have been exercised nor later than the tenth full
business day after the date on which the Option shall have been exercised
(unless such time and date are postponed in accordance with the provisions of
Section 9 hereof). Certificates for the Additional Shares shall be registered
in such name or names and in such authorized denominations as the
Representatives may request in writing at least two full business days prior to
the Additional Closing Date, provided that, if so specified by the
Representatives, the Additional Shares may be represented by a global
certificate registered in the name of Cede. The Company will permit the
Representatives to examine and package such certificates for delivery at least
one full business day prior to the Additional Closing Date at the office of
Bear, Stearns & Co. Inc., 245 Park Avenue, New York, New York 10167.
Delivery of the certificates for the Additional Shares shall be
made to the Representatives, for the respective accounts of the Underwriters,
against payment by the Representatives, on behalf of the respective
Underwriters, for the Additional Shares in immediately available funds by New
York Clearing House funds, payable to the order of the Company, or by wire
transfer.
(d) The Underwriters shall not be obligated to purchase any Firm
Shares from the Company except upon tender to the Underwriters by the Company
of all of the Firm Shares. The Company shall not be obligated to sell or
deliver Firm Shares except upon tender of payment by the Underwriters for all
the Firm Shares agreed to be purchased by them hereunder.
3. OFFERING. As soon after the Registration Statement becomes
effective as the Representatives deem it advisable to do so, the several
Underwriters propose to offer the Shares for sale to the public upon the terms
set forth in the Prospectus.
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<PAGE> 15
4. COVENANTS OF THE COMPANY. The Company covenants and agrees
with the several Underwriters that:
(a) If the Registration Statement or any post-effective amendment
thereto has not yet been declared effective, the Company will use its best
efforts to cause the Registration Statement and any amendments thereto to
become effective as promptly as possible. If the Registration Statement has or
becomes effective pursuant to Rule 430A of the Regulations, or the filing of
the Prospectus is otherwise required under Rule 424(b) of the Regulations, the
Company will file with the Commission the Prospectus (properly completed)
pursuant to Rule 424(b) within the prescribed time period and will provide
evidence satisfactory to the Representatives of such timely filing.
The Company will promptly advise the Representatives, and confirm
such advice in writing, (1) when the Registration Statement or any
post-effective amendment thereto has become effective, (2) of the initiation or
threatening of any proceedings for, or receipt by the Company of any notice
with respect to, the suspension of the qualification of the Shares for sale in
any jurisdiction or the issuance of any order suspending the effectiveness of
the Registration Statement, and (3) of receipt by the Company or any
representative or attorney of the Company of any other communications from the
Commission relating to the Company, the Registration Statement, any preliminary
prospectus, the Prospectus or the transactions contemplated by this Agreement.
The Company will make every reasonable effort to prevent the issuance of an
order suspending the effectiveness of the Registration Statement or any post-
effective amendment thereto and if any such order is issued to obtain its
lifting as soon as possible. The Company will not file any amendment to the
Registration Statement or any amendment of or supplement to the Prospectus to
which the Representatives shall reasonably object in writing after being timely
furnished in advance a copy thereof.
(b) If, at any time when a prospectus relating to the Shares is
required to be delivered under the Act, any event shall occur as a result of
which the Prospectus as then amended or supplemented includes an untrue
statement of a material fact or omits to state any material fact required to be
stated therein or necessary to make the statements made therein, in the light
of the circumstances under which they were made, not misleading, or if it shall
be necessary at any time to amend the Registration Statement or supplement the
Prospectus to comply with the Act and the Regulations, the Company will notify
the Representatives promptly and prepare and file with the Commission an
appropriate post- effective amendment or supplement (in form and substance
reasonably satisfactory to the Representatives) that will correct such
statement or omission and which will effect such compliance and will use its
best efforts to have any such post-effective amendment to the Registration
Statement declared effective as soon as possible.
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<PAGE> 16
(c) The Company will promptly deliver to the Representatives two
signed copies of the Registration Statement, including exhibits and all
documents incorporated by reference therein and all amendments thereto, and the
Company will promptly deliver to those persons, including the Representatives,
whom the Representatives identify to the Company, such number of copies of any
preliminary prospectus, the Prospectus, the Registration Statement, and all
amendments of and supplements to such documents, if any, without exhibits, as
the Representatives may reasonably request. The Company consents to the
respective use of any preliminary prospectus or the Prospectus or any amendment
or supplement thereto by the Representatives and by all dealers to whom the
Shares may be sold, in connection with the offering or sale of the Shares, as
appropriate, and as to the Prospectus or any amendment or supplement thereto
during such period of time thereafter as the Prospectus is required by law to
be delivered in connection therewith.
(d) The Company will take such action as the Representatives may
request, at or prior to the time of effectiveness of the Registration
Statement, to qualify or register the Shares for offering and sale under the
securities (or "Blue Sky") laws of such jurisdictions as the Representatives
may designate and to maintain such qualifications and registrations in effect
for so long as required for the distribution thereof; except that in no event
shall the Company be obligated in connection therewith to qualify as a foreign
corporation or to execute a general consent to service of process in any action
other than one arising out of the offering or sale of the Shares in such
jurisdiction.
(e) The Company will make generally available (with the meaning
of Section 11(a) of the Act) to its securityholders and to the Representatives
(in such numbers as the Representatives may reasonably request for distribution
to the Underwriters) as soon as practicable, but not later than 45 days after
the end of its fiscal quarter in which the first anniversary date of the
effective date of the Registration Statement occurs, an earnings statement of
the Company (in form complying with the provisions of Rule 158 of the
Regulations) covering a period of at least twelve consecutive months beginning
on the first day of the first full calendar month after the effective date of
the Registration Statement.
(f) During the period of 270 days from the date of the
Prospectus, the Company will not, without the prior written consent of Bear,
Stearns & Co. Inc., issue, sell, offer or agree to sell, grant any option for
the sale of, or otherwise dispose of, directly or indirectly, any capital stock
(or any securities convertible into, exercisable for or exchangeable for
capital stock) other than the sale of the Shares hereunder and the issuance of
shares of Common Stock upon the exercise of options granted under the Company's
stock option plans, and the Company will obtain and deliver to the
Representatives concurrently with the execution hereof the Lock-Up Agreements
and the Partnership Lock-Up Agreement referred to in Sections 1 (x) and 1 (y),
respectively.
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(g) The Company will furnish to its stockholders as soon as
practicable after the end of each fiscal year an annual report (including a
balance sheet and statements of income, stockholders' equity and cash flow of
the Company certified by independent public accountants) and, as soon as
practicable after the end of each of the first three quarters of each fiscal
year (beginning with the fiscal quarter ending after the effective date of the
Registration Statement), summary financial information of the Company for such
quarter in reasonable detail.
(h) During a period of five years from the effective date of the
Registration Statement, the Company will furnish to the Representatives copies
of all reports or other communications (financial or other) furnished to
stockholders, and deliver to the Representatives as soon as they are available,
copies of any reports and financial statements furnished to or filed with the
Commission or any national securities exchange on which any class of securities
of the Company is listed.
(i) The Company will apply the proceeds from the sale of the
Shares being sold by the Company as set forth under the caption "Use of
Proceeds" in the Prospectus.
(j) The Company will use its best efforts to obtain and maintain
in effect the quotation of the Shares on the Nasdaq Stock Market and will take
all necessary steps to cause the Shares to be included on the Nasdaq National
Market and to maintain such inclusion for a period of three years after the
date hereof or until such earlier date as the Shares shall be listed for
regular trading privileges on the New York Stock Exchange or another national
securities exchange approved by the Representatives.
(k) The Company will file with the Commission such reports on
Form SR as may be required pursuant to Rule 463 of the Regulations.
(l) The Company will comply with all registration, filing and
reporting requirements of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), which may from time to time be applicable to the Company.
(m) The Company will comply with all provisions of all
undertakings contained in the Registration Statement.
(n) Prior to the Closing Date or any Additional Closing Date, as
the case may be, the Company will not issue any press release or other
communication directly or indirectly and will not hold any press conference
with respect to the Company, or its business, prospects, properties, assets,
earnings, condition (financial or other), results of operations or this
offering without the Representatives' prior written consent which consent will
not be unreasonably withheld.
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(o) The Company will not, without the prior written consent of
Bear, Stearns & Co. Inc., consent to any person or entity that is subject to a
Lock-Up Agreement selling, transferring, assigning, granting any option for the
sale of, or making any other disposition of any shares of capital stock of the
Company during the 270 day period from the date of the Prospectus.
(p) The Company will not, without the prior written consent of
the Bear, Stearns & Co. Inc., consent to the Partnership selling, transferring,
assigning, granting any option for the sale of, or making any other disposition
of any shares of capital stock of the Company except as provided in the
Partnership Lock-Up Agreement.
[(q) The Company will elect at least ______ independent
director[s] to its Board of Directors within ______ days following the date of
the Prospectus.]
5. PAYMENT OF EXPENSES.
(a) Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, the Company
covenants and agrees with the several Underwriters that the Company will pay or
cause to be paid (i) the fees, disbursements and expenses of the Company's
counsel and accountants in connection with registration of the Shares under the
Act; (ii) the cost of preparing, printing, duplicating, filing and distributing
the Registration Statement, as originally filed and all amendments thereof
(including all exhibits thereto), any preliminary prospectus, the Prospectus
and any amendments thereof or supplements thereto, the underwriting documents
(including this Agreement, the Agreement Among Underwriters and the Selling
Agreement) and all other documents related to the public offering of the Shares
(including those supplied to the Underwriters in quantities as hereinabove
stated), (iii) all costs and expenses relating to the issuance, transfer and
delivery of the Shares to the Underwriters, including any transfer or other
taxes payable thereon, (iv) all costs and expenses relating to the
qualification of the Shares under state or foreign securities or "Blue Sky"
laws, including the costs of printing and mailing a preliminary and final "Blue
Sky Survey" and the fees of counsel for the Underwriters and such counsel's
disbursements in relation thereto, (v) all costs and expenses relating to
quotation of the Shares on the Nasdaq National Market, (vi) all filing fees of
the Commission and the National Association of Securities Dealers, Inc.
("NASD"), (vii) all costs and expenses incident to any review by the NASD of
the terms of the sale of the Shares (including, without limitation, fees and
expenses of Underwriters' counsel in relation thereto), (viii) the cost of
printing certificates representing the Shares, (ix) the cost and charges of any
transfer agent or registrar, (x) all other costs and expenses incident to the
performance of the Company's obligations hereunder which are not otherwise
specifically provided in this Section 5. It is understood, however, that the
Company shall bear the cost of any other matters not directly relating to the
sale and purchase of the Shares pursuant to this Agreement, and that, except as
provided in this Section 5 and Sections 7, 8 and 11(d) hereof, the
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<PAGE> 19
Underwriters will pay all of their own costs and expenses, including the fees
of their counsel and stock transfer taxes on resale of any of the Shares by
them.
6. CONDITIONS OF THE UNDERWRITERS' OBLIGATIONS. The obligations
of the several Underwriters to purchase and pay for the Firm Shares and the
Additional Shares provided herein shall be subject, in the Representatives'
discretion, to the condition that all of the representations and warranties of
the Company herein contained are true and correct, as of the date hereof and as
of the Closing Date (for purposes of this Section 6, "Closing Date" shall refer
to the Closing Date for the Firm Shares and the Additional Closing Date, if
any, for the Additional Shares), to the absence from any certificates,
opinions, written statements or letters furnished to the Representatives or to
Paul, Hastings, Janofsky & Walker LLP ("Underwriters' Counsel"), pursuant to
this Section 6 of any qualification or limitation not previously approved in
writing by the Representatives, to the performance by the Company of their
respective obligations hereunder, and to the following additional conditions:
(a) the Registration Statement shall have become effective not
later than 5:30 p.m., New York City time, on the date of this Agreement, or at
such later time and date as shall have been consented to in writing by the
Representatives; if the Company shall have elected to rely upon Rule 430A of
the Regulations, the Prospectus shall have been filed with the Commission
pursuant to Rule 424(b) under the Act within the applicable time period
prescribed for such filing by the Regulations and in accordance with Section
4(a) hereof; and at or prior to the Closing Date, (i) no stop order suspending
the effectiveness of the Registration Statement or any post-effective amendment
thereof or the qualification or registration of the Shares under the securities
or "Blue Sky" laws of any jurisdiction shall have been issued and in effect and
no proceedings therefor shall have been initiated or threatened by the
Commission or the authorities of any such jurisdiction; (ii) all requests for
additional information on the part of the Commission shall have been complied
with to the Representatives' reasonable satisfaction and (iii) after the date
hereof, no amendment or supplement to the Registration Statement or the
Prospectus shall have been filed unless a copy thereof was first submitted to
the Underwriters and the Underwriters did not reasonably object thereto.
(b) At the Closing Date, the Representatives shall have received
the opinion of Andrews & Kurth L.L.P., counsel for the Company, dated the
Closing Date addressed to the Underwriters and in form and substance
satisfactory to Underwriters' Counsel, to the effect that:
(i) The Company and each of its subsidiaries has been duly
organized and is validly existing as a corporation in good standing under the
laws of its jurisdiction of incorporation. The Company and each of its
subsidiaries is duly qualified and in good standing as a foreign corporation in
each jurisdiction in which the character
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<PAGE> 20
or location of its properties (owned, leased or licensed) or the nature or
conduct of its business makes such qualification necessary, except for those
failures to be so qualified or in good standing that, individually or in the
aggregate, will not have a material adverse effect on the business, prospects,
properties, assets, earnings, operations, conditions (financial and other) or
results of operations of the Company and its subsidiaries taken as a whole.
The Company and each of its subsidiaries has all requisite corporate authority
to own, lease and license its respective properties and conduct its business as
now being conducted and as described in the Registration Statement and the
Prospectus. All of the issued and outstanding shares of capital stock of each
subsidiary of the Company have been duly and validly issued and are fully paid
and nonassessable, and to the best of such counsel's knowledge were not issued
in violation of preemptive rights, repurchase rights, rights of first refusal
or other similar rights and, are owned directly or indirectly by the Company,
free and clear of any lien, adverse claim, security interest, restriction on
transfer, and to the best of such counsel's knowledge stockholders' agreement,
voting trust or other defect of title whatsoever. Except as described in the
Registration Statement and the Prospectus and, to the best knowledge of such
counsel, there are no outstanding rights, subscriptions, warrants, calls,
options or other agreements of any kind with respect to the capital stock of
the Company's subsidiaries.
(ii) The Company has authorized capital stock as set forth
in the Registration Statement and the Prospectus under the caption
"Capitalization." All of the outstanding shares of capital stock of the
Company are duly and validly authorized and issued, are fully paid and
nonassessable and were not issued in violation of or subject to any preemptive
rights or, except as disclosed in the Prospectus, to such counsel's knowledge,
co-sale right, registration right, repurchase right, right of first refusal or
other similar right. The Shares to be delivered on the Closing Date have been
duly and validly authorized and when sold and delivered by the Company in
accordance with this Agreement, will be duly and validly issued, fully paid and
nonassessable, free of any pledge, lien, adverse claim and security interest
and, will not have been issued in violation of or subject to any statutory
preemptive rights, or to such counsel's knowledge co-sale rights, registration
rights, rights of first refusal or other similar rights (other than those
resulting from any action taken by the Underwriters). Upon delivery of the
Shares and payment therefor as contemplated hereby, the Underwriters will
receive good, valid and marketable title to the Firm Shares (and the Additional
Shares, if any). The Common Stock, the Firm Shares and the Additional Shares
conform to the descriptions thereof contained in the Registration Statement and
the Prospectus under the caption "Description of Capital Stock." The form of
certificate evidencing the Shares to be delivered hereunder is in due and
proper form under Delaware law, and the holders of the Shares will not be
subject to personal liability solely by reason of being such holders.
(iii) Except as disclosed in or described in the Prospectus,
to the best of such counsel's knowledge, there are no outstanding options,
warrants or other rights requiring, permitting or providing for the issuance
of, and no written commitments
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<PAGE> 21
entered into by the Company to issue, any shares of capital stock of the
Company or any security convertible into or exchangeable for capital stock of
the Company. Except as described in the Prospectus, to the best of such
counsel's knowledge, there are no restrictions on the voting or transfer of
shares of capital stock of the Company.
(iv) Except as described in the Prospectus, to the best of
such counsel's knowledge, (i) the Company is not a party to or bound by any
stockholders' agreements or voting trusts with respect to any securities of the
Company and (ii) there are no contracts, written agreements or written
understandings between the Company or any of its subsidiaries and any person or
entity granting such person or entity the right to require the Company to file
a registration statement under the Act with respect to any securities of the
Company owned or to be owned by such person or entity or to require the Company
to include such securities in the securities registered pursuant to the
Registration Statement.
(v) The Shares to be sold under this Agreement to the
Underwriters are duly authorized for quotation on the Nasdaq National Market.
(vi) The Company has all corporate power and authority to
enter into this Agreement, perform each of its obligations hereunder, and to
issue, sell and deliver to the Underwriters the Shares. This Agreement has
been duly and validly authorized, executed and delivered by the Company and is
a valid and binding obligation of the Company, enforceable against the Company
in accordance with its terms, except to the extent that rights to indemnity and
contribution hereunder may be limited by federal or state securities laws or
the public policy underlying such laws and except to the extent that
enforcement may be limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or other similar laws relating to or affecting
creditors' rights generally or by general equitable principles.
(vii) To the best of such counsel's knowledge, there is no
litigation, action, suit, investigation or proceeding, governmental or
otherwise, before any court or before or by any public, regulatory or
governmental agency or body pending or threatened against, or involving the
properties or business of, the Company or any of its subsidiaries or relating
to the issuance or sale of the Shares, which, if resolved against the Company
or any of such subsidiaries, individually or, to the extent involving related
claims or issues, in the aggregate, is of a character required to be disclosed
in the Registration Statement and the Prospectus which has not been adequately
disclosed therein.
(viii) The execution, delivery, and performance of this
Agreement and the consummation of the transactions contemplated hereby by the
Company do not and will not (A) conflict with or result in a breach of any of
the terms and provisions of, or constitute a default (or an event which with
notice or lapse of time, or both, would
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<PAGE> 22
constitute a default), give rise to any right to accelerate the maturity or
require the prepayment of any obligation or require consent under, or result in
the creation or imposition of any lien, charge or encumbrance upon any property
or asset of the Company or any of its subsidiaries pursuant to the terms of,
any agreement, instrument, franchise, license or permit known to such counsel
to which the Company or any of its subsidiaries is a party or by which any of
such corporations or their respective properties or assets may be bound or (B)
violate or conflict with any provision of the certificates of incorporation or
by-laws of the Company or any of its subsidiaries, or, to the best knowledge of
such counsel, any judgment, decree, order, statute, rule or regulation of any
court or any public, governmental or regulatory agency or body having
jurisdiction over the Company or any of its subsidiaries or any of their
respective properties or assets.
(ix) No consent, approval, authorization, order,
registration, filing, qualification, license or permit of or with any court or
any public, governmental, or regulatory agency or body having jurisdiction over
the Company or any of its subsidiaries or any of their respective properties or
assets is required for the valid execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby by the
Company, except for (1) such as may be required under state securities or "Blue
Sky" laws in connection with the purchase and distribution of the Shares by the
Underwriters (as to which such counsel need express no opinion) and (2) such as
have been made or obtained under the Act.
(x) The Registration Statement and the Prospectus and any
amendments thereof or supplements thereto (other than the financial statements
and schedules and financial and statistical data derived therefrom included
therein, as to which no opinion need be rendered) comply as to form in all
material respects with the requirements of the Act and the Regulations.
(xi) The Registration Statement is effective under the Act,
and, to the best knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement or any post-effective amendment
thereof has been issued and no proceedings therefor have been initiated or, to
the best knowledge of such counsel, threatened by the Commission or any state
securities or "Blue Sky" authority and all filings required by Rule 424(b) of
the Regulations have been made.
(xii) There are no contracts, indentures, mortgages, loan
agreements, notes, leases or other agreements or instruments or other documents
(collectively, "Documents") which are required under the Act to be described or
referred to in, or filed with, the Registration Statement and the Prospectus
other than those described or referred to therein or filed as exhibits thereto;
all such descriptions are accurate in all material respects and present fairly
the information described therein.
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<PAGE> 23
(xiii) To the best of such counsel's knowledge, neither the
Company nor any of its subsidiaries is in violation or breach of, or in default
(nor has any event occurred which with notice, or lapse of time, or both, would
constitute a default) of any contract, agreement, indenture, loan or other
agreement, instrument, mortgage, note, permit, lease, license, arrangement, or
understanding to which the Company or any of its subsidiaries is a party or by
which the Company, any of its subsidiaries or any of their respective
properties may be bound where such default could reasonably be expected to have
a material adverse effect on the business, prospects, properties, assets,
earnings, operations, or condition (financial or other) or results of
operations of the Company or on the ability of the Company to perform its
obligations hereunder, and to the best of such counsel's knowledge each such
contract, agreement, instrument, lease, license, arrangement, and understanding
is in full force and effect and is the legal, valid, and binding obligation of
the Company or its subsidiaries, as the case may be, and, to the best of such
counsel's knowledge, the other parties thereto and is enforceable against the
Company or its subsidiaries, as the case may be, and, to the best of such
counsel's knowledge, against the other parties thereto in accordance with its
terms. Neither the Company nor any of its subsidiaries is in violation or
breach of, or in default with respect to, any term of its respective
certificate of incorporation or bylaws.
(xiv) Insofar as statements in the Prospectus purport to
summarize the provision of laws, rules, regulations, orders, judgments,
decrees, contracts, agreements, instruments, leases or licenses, such
statements have been prepared or reviewed by such counsel and, to such
counsel's best knowledge, accurately reflect the provisions purported to be
summarized and are correct in all material respects.
(xv) To the best of such counsel's knowledge: (a) the
Company and each of its subsidiaries have received all consents, permits,
licenses, authorizations, and other approvals as may be required of it under
any applicable federal, state or local laws or regulations to own, lease and
operate its properties and to conduct its business as described in the
Prospectus; and (b) the Company is in compliance with all terms and conditions
of any such permit, license or approval, except for such violations of law or
regulation, such failure to receive required permits, licenses or other
approvals, or such failure to comply with the terms and conditions of such
permits, licenses or approvals as would not, individually or in the aggregate,
have a material adverse effect on the business, prospects, properties, assets,
earnings, operations, condition (financial or other) or results of operations
of the Company.
(xvi) The Company is not, and upon consummation of the
transactions contemplated hereby will not be, subject to registration as an
"investment company" or an entity "controlled by" an "investment company"
within the meaning of Investment Company Act of 1940 and the rules and
regulations promulgated thereunder.
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[(xvii) Immediately prior to the Closing, the Partnership was
the sole registered owner of all of the outstanding shares of Common Stock.]
In addition, at the Closing Date such counsel shall also have
furnished you a letter, dated the date thereof, advising you that, as counsel
to the Company, they have participated in conferences with officers and other
representatives of the Company and its subsidiaries, representatives of the
independent certified public accountants of the Company and its subsidiaries
and the Underwriters and their counsel at which the contents of the
Registration Statement, the Prospectus and any amendment thereof or supplement
thereto and related matters were discussed and, although such counsel has not
undertaken to investigate or verify independently, and does not assume any
responsibility for, the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectus or any amendment
thereof or supplement thereto (except as to matters referred to in clause (xiv)
and the second to last sentence and the first sentence of clause (ii) above),
on the basis of the foregoing (relying as to materiality to a large extent upon
the opinions of officers and other representatives of the Company), such
counsel has no reason to believe that the Registration Statement at the time it
became effective (or any post-effective amendment thereof as of the date of
such amendment) contained an untrue statement of a material fact or omitted to
state any material fact required to be stated therein or necessary to make the
statements therein not misleading or that the Prospectus as of its date (or any
amendment thereof or supplement thereto as of the date of such amendment or
supplement) and as of the date of such opinion contained an untrue statement of
a material fact or omitted to state any material fact required to be stated
therein or necessary to make the statements made therein, in light of the
circumstances under which they were made, not misleading (it being understood
that such counsel need express no view with respect to the financial statements
and schedules and other financial and statistical data included therein or with
respect to the exhibits to the Registration Statement).
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws other than the laws of the United States and
jurisdictions in which they are admitted, 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 Underwriters' Counsel,
familiar with the applicable laws; and (B) as to matters of fact, to the extent
they deem proper, on certificates of responsible officers of the Company and
certificates or other written statements of officers of departments of various
jurisdictions having custody of documents respecting the corporate existence or
good standing of the Company and each of its subsidiaries, provided that copies
of any such statements or certificates shall be delivered to Underwriters'
Counsel. The opinion of such counsel for the Company shall state that the
opinion of any such other counsel is in form satisfactory to such counsel and,
in their opinion, the Representatives and they are justified in relying
thereon.
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<PAGE> 25
(c) At the Closing Date, the Representatives shall have received
a certificate of the Company, executed on behalf of the Company by the
President and the Chief Financial Officer of the Company, dated the Closing
Date to the effect that (i) the conditions set forth in subsection (a) of this
Section 6 have been satisfied, (ii) as of the date hereof and as of the Closing
Date, the representations and warranties of the Company set forth in Section 1
hereof are true and accurate, (iii) at the time of the Closing on the Closing
Date, the obligations of the Company to be performed hereunder on or prior
thereto have been duly performed and (iv) subsequent to the respective dates as
of which information is given in the Registration Statement and the Prospectus,
the Company and each of its subsidiaries have not sustained any material loss
or interference with their respective businesses or properties from fire,
flood, hurricane, accident or other calamity, whether or not covered by
insurance, or from any labor dispute or any legal or governmental proceeding,
and there has not been any material adverse change, or any development
involving a material adverse change, in the business, prospects, properties,
assets, earnings, operations, condition (financial or other) or results of
operations of the Company and its subsidiaries taken as a whole, except in each
case as described in or expressly contemplated by the Prospectus.
(d) At the time this Agreement is executed and at the Closing
Date, the Representatives shall have received a letter, from Deloitte & Touche,
LLP, independent public accountants for the Company, dated as of the date of
this Agreement and as of the Closing Date, as appropriate, addressed to the
Underwriters and in form and substance satisfactory to the Representatives, to
the effect that: (i) they are independent certified public accountants with
respect to the Company within the meaning of the Act and the Regulations and
stating that the answer to Item 10 of the Registration Statement is correct
insofar as it relates to them; (ii) in their opinion, the financial statements
and schedules of the Company included in the Registration Statement and the
Prospectus and covered by their opinion therein comply as to form in all
material respects with the applicable accounting requirements of the Act and
the applicable published rules and regulations of the Commission thereunder;
(iii) on the basis of procedures (but not an examination made in accordance
with generally accepted auditing standards) consisting of a reading of the
latest available unaudited interim consolidated financial statements of the
Company and its subsidiaries, a reading of the minutes of meetings and consents
of the stockholder and boards of directors of the Company and its subsidiaries
and the committees of such boards subsequent to June 30, 1996, inquiries of
officers and other employees of the Company and its subsidiaries who have
responsibility for financial and accounting matters of the Company and its
subsidiaries with respect to transactions and events subsequent to June 30,
1996, and other specified procedures and inquiries to a date not more than five
days prior to the date of such letter, nothing has come to their attention that
would cause them to believe that: (A) the unaudited consolidated financial
statements and schedules of the Company presented in the Registration Statement
and the Prospectus do not comply as to form in all material respects with the
applicable accounting requirements of the Act and the applicable published
rules and regulations of
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<PAGE> 26
the Commission thereunder or that such unaudited consolidated financial
statements are not fairly presented in conformity with generally accepted
accounting principles applied on a basis substantially consistent with that of
the audited consolidated financial statements included in the Registration
Statement and the Prospectus; (B) the unaudited pro forma financial statements
and other information contained in the Registration Statement and the
Prospectus do not comply as to form in all material respects with the
applicable accounting requirements of the Act and the Regulations or the pro
forma adjustments have not been properly applied to the historical amounts in
the compilation of these statements; (C) with respect to the period subsequent
to June 30, 1996, there were, as of the date of the most recent available
monthly consolidated financial statements of the Company and its subsidiaries,
if any, and as of a specified date not more than five days prior to the date of
such letter, any changes in the capital stock or long-term indebtedness of the
Company or any decrease in the net current assets or stockholders' equity of
the Company, in each case as compared with the amounts shown in the most recent
balance sheet presented in the Registration Statement and the Prospectus,
except for changes or decreases which the Registration Statement and the
Prospectus disclose have occurred or may occur or which are set forth in such
letter or (D) that during the period from June 30, 1996, to the date of the
most recent available monthly consolidated financial statements of the Company
and its subsidiaries, if any, and to a specified date not more than five days
prior to the date of such letter, there was any decrease, as compared with the
corresponding period in the prior fiscal year, in total revenues, or total or
per share net income, except for decreases which the Registration Statement and
the Prospectus disclose have occurred or may occur or which are set forth in
such letter; and (iv) stating that they have compared specific dollar amounts,
numbers of shares, percentages of revenues and earnings, and other financial
information pertaining to the Company and its subsidiaries set forth in the
Registration Statement and the Prospectus, which have been specified by the
Representatives prior to the date of this Agreement, to the extent that such
amounts, numbers, percentages, and information may be derived from the general
accounting and financial records of the Company and its subsidiaries or from
schedules furnished by the Company, with the results obtained from the
application of specified readings, inquiries, and other appropriate procedures
specified by the Representatives (which procedures do not constitute an
examination in accordance with generally accepted auditing standards) set forth
in such letter, and found them to be in agreement.
(e) All proceedings in connection with the sale of the Firm
Shares and the Additional Shares as herein contemplated shall be satisfactory
in form and substance to the Representatives and to Underwriters' Counsel, and
the Underwriters shall have received from Underwriters' Counsel a favorable
opinion, dated as of the Closing Date with respect to the issuance and sale of
the Shares, the Registration Statement and the Prospectus and such other
related matters as the Representatives may reasonably require, and the Company
shall have furnished to Underwriters' Counsel such documents as they request
for the purpose of enabling them to pass upon such matters.
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<PAGE> 27
(f) Prior to the Closing Date, the Company shall have furnished
to the Representatives such further information, certificates and documents as
the Representatives may reasonably request.
(g) The Representatives shall have received from each person who
is a director or executive officer of the Company and from the Partnership the
agreements required by Section 4(f).
(h) The NASD, upon review of the terms of the public offering of
the Firm Shares and the Additional Shares, shall not have objected to the
Underwriters' participation in such offering.
(i) The Company shall not have sustained, (i) since the date of
the latest audited financial statements included in the Prospectus, any loss or
interference with its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor dispute or court or
governmental action, order or decree otherwise than as set forth or expressly
contemplated in the Prospectus, and (ii) since the respective dates as of which
information is given in the Prospectus, there shall not have been any change in
the capital stock (other than as disclosed in the Prospectus) or increase in
principal amounts of long-term or short-term debt of the Company or any change,
or any development involving a prospective change, in or affecting the general
affairs, management, financial position, stockholders' equity or results of
operations of the Company, otherwise than as set forth or expressly
contemplated in the Prospectus, the effect of which, in any such case described
in clause (i) or (ii) of this Section 6(i), in the Representatives' judgment,
makes it impracticable or inadvisable to proceed with the public offering or
the delivery of the Shares being delivered on the Closing Date on the terms and
in the manner contemplated in the Prospectus.
(j) The Shares shall have been duly approved for quotation
through the Nasdaq National Market under the symbol disclosed in the
Prospectus.
If any of the conditions specified in this Section 6 shall not have
been fulfilled when and as required by this Agreement, or if any of the
certificates, opinions, written statements or letters furnished to the
Representatives or to Underwriters' Counsel pursuant to this Section 6 shall
not be in all material respects reasonably satisfactory in form and substance
to the Representatives and to Underwriters' Counsel, all obligations of the
Underwriters hereunder may be canceled by the Representatives at, or at any
time prior to, the Closing Date and the obligations of the Underwriters to
purchase the Additional Shares may be canceled by the Representatives at, or at
any time prior to, the Additional Closing Date. Notice of such cancellation
shall be given to the Company in writing, or by telephone, telex or telegraph,
confirmed in writing.
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<PAGE> 28
7. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless each
Underwriter, its officers, directors, partners, employees, agents and counsel,
and each person, if any, who controls any Underwriter within the meaning of
Section 15 of the Act or Section 20(a) of the Exchange Act, against any and all
losses, liabilities, claims, damages and expenses whatsoever (including but not
limited to attorneys' fees and any and all expenses whatsoever reasonably
incurred in investigating, preparing or defending against any litigation,
commenced or threatened, or any claim whatsoever, and any and all amounts paid
in settlement of any claim or litigation), joint or several, to which they or
any of them may become subject (1) as a result of the failure of any
representation or warranty made by the Company under Section 1 to be true and
correct when made, (2) under the Act, the Exchange Act, any state securities or
Blue Sky law or otherwise, insofar as with respect to clause (2) such losses,
liabilities, claims, damages, obligations, penalties, judgments, awards, costs,
disbursements or expenses (or actions in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of a material fact
contained in the registration statement for the registration of the Shares, as
originally filed or any amendment thereof, or any related preliminary
prospectus or the Prospectus, or in any supplement thereto or amendment
thereof, in any blue sky application or other document prepared or executed by
the Company (or based upon any written information furnished by the Company)
specifically for the purpose of qualifying any or all of the Shares under the
securities laws of any state or other jurisdiction (any such application,
document or information being hereinafter called a "Blue Sky Application"), or
arise out of or are based upon the omission or alleged omission to state in any
preliminary prospectus, the Registration Statement for the registration of the
Shares or the Prospectus, or in any amendment thereof or supplement thereto, or
in any Blue Sky Application, any material fact required to be stated therein or
necessary to make the statements therein not misleading; provided, however,
that with respect to clause (2), (i) the Company will not be liable in any such
case to the extent, but only to the extent, that any such loss, liability,
claim, damage, obligation, penalty, judgment, award, cost, disbursement or
expense arises out of or is based upon any such untrue statement or alleged
untrue statement or omission or alleged omission made therein in reliance upon
and in conformity with written information furnished to the Company by or on
behalf of any Underwriter through the Representatives expressly for use therein
and (ii) the indemnity agreement contained in this Section 7(a) with respect to
any preliminary prospectus (or the Prospectus) shall not inure to the benefit
of any Underwriter (or to the benefit of any person controlling such
Underwriter) from whom the person asserting any such losses, liabilities,
claims, damages or expenses purchased the Shares which is the subject thereof
(or to the benefit of any person controlling such Underwriter) if at or prior
to the written confirmation of the sale of such Shares a copy of the Prospectus
(or the Prospectus as amended or supplemented) was not sent or delivered to
such person and the untrue statement or omission of a material fact contained
in such preliminary prospectus (or the Prospectus) was corrected in the
Prospectus (or
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<PAGE> 29
the Prospectus as amended or supplemented) and delivery of such Prospectus (or
the Prospectus as amended or supplemented) would have eliminated any such loss,
liability, claim, damage or expense unless the failure is the result of
non-compliance by the Company with Section 4(c) hereof, or (3) as a result of,
relating to or arising from any claim, suit or proceeding brought by the
limited partners of the Partnership against SI Management L.P., the sole
general partner of the Partnership, the Underwriters or the Company in respect
of or in any way relating to this Agreement or the Offering or any of the
transactions contemplated hereby or related hereto; provided, however, the
indemnity agreement in this Section 7(a) shall not apply to any portion of any
such loss, liability, claim, damage, obligation, penalty, judgment, award,
cost, disbursement or expense to the extent it is found in a final judgment by
a court of competent jurisdiction (not subject to further appeal) to have
resulted primarily and directly from the gross negligence or willful misconduct
of the Underwriters. This indemnity agreement will be in addition to any
liability which the Company may otherwise have including, without limitation,
under this Agreement. Without limiting the rights of any Underwriter or
controlling person thereof, the provisions of this Section 7 shall not affect
any existing arrangements between the Company and any Underwriter relating to
indemnification.
(b) Each Underwriter severally, and not jointly, agrees to
indemnify and hold harmless the Company, each of the directors of the Company,
each of the officers of the Company who shall have signed the Registration
Statement, and each other person, if any, who controls the Company within the
meaning of Section 15 of the Act or Section 20(a) of the Exchange Act, against
any losses, liabilities, claims, damages and expenses whatsoever as incurred
(including but not limited to attorneys' fees and any and all expenses
whatsoever incurred in investigating, preparing or defending against any
litigation, commenced or threatened, or any claim whatsoever, and any and all
amounts paid in settlement of any claim or litigation), joint or several, to
which they or any of them may become subject under the Act, the Exchange Act or
otherwise, insofar as such losses, liabilities, claims, damages or expenses (or
actions in respect thereof) are based solely upon any untrue statement or
alleged untrue statement of a material fact contained in the registration
statement for the registration of the Shares, as originally filed or any
amendment thereof, or any related preliminary prospectus or the Prospectus, or
in any amendment thereof or supplement thereto, or in any Blue Sky Application,
or are based solely upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent,
that any such loss, liability, claim, damage or expense arises is based solely
upon any such untrue statement or alleged untrue statement or omission or
alleged omission made therein in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any Underwriter through
the Representatives expressly for use therein; provided, however, that in no
case shall any Underwriter be liable or responsible for any amount in excess of
the underwriting discount applicable to the Shares purchased by such
Underwriter hereunder. The Company acknowledges that the statements set forth
in the last paragraph of the
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cover page, in the paragraph on the inside front cover page of the Prospectus
relating to possible stabilization transactions, in the table listing
Underwriters under the caption "Underwriting" in the Prospectus and in the
third and eighth paragraphs under the caption "Underwriting" in the Prospectus
constitute the only information furnished in writing by or on behalf of any
Underwriter expressly for use in the registration statement relating to the
Shares as originally filed or in any amendment thereof, any related preliminary
prospectus or the Prospectus or in any amendment thereof or supplement thereto,
as the case may be.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against
the indemnifying party under such subsection, notify each party against whom
indemnification is to be sought in writing of the commencement thereof (but the
failure to so notify an indemnifying party shall not relieve it from any
liability which it may have under this Section 7 except to the extent the
indemnifying party is materially prejudiced by such failure). In case any such
action is brought against any indemnified party, and it notifies an
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate therein, and to the extent it may elect by written
notice delivered to the indemnified party promptly after receiving the
aforesaid notice from such indemnified party, to assume the defense thereof
with counsel reasonably satisfactory to such indemnified party.
Notwithstanding the foregoing, the indemnified party or parties shall have the
right to employ its or their own counsel in any such case, but the fees and
expenses of such counsel shall be at the expense of such indemnified party or
parties unless (i) the employment of such counsel shall have been authorized in
writing by one of the indemnifying parties in connection with the defense of
such action, (ii) the indemnifying parties shall not have employed counsel to
have charge of the defense of such action within a reasonable time after notice
of commencement of the action, or (iii) such indemnified party or parties shall
have reasonably concluded that there may be defenses available to it or them
which are different from or additional to those available to one or all of the
indemnifying parties (in which case the indemnifying parties shall not have the
right to direct the defense of such action on behalf of the indemnified party
or parties), in any of which events such fees and expenses shall be borne by
the indemnifying parties. In no event will the indemnifying parties hereunder
be responsible for the fees and expenses of more than one such counsel
(together with appropriate local counsel). Anything in this subsection to the
contrary notwithstanding, an indemnifying party shall not be liable for any
settlement of any claim or action effected without its written consent;
provided, however, that such consent was not unreasonably withheld.
8. CONTRIBUTION. In order to provide for contribution in
circumstances in which the indemnification provided for in Section 7 hereof is
for any reason unavailable from any indemnifying party or is insufficient to
hold harmless a party indemnified thereunder, then each indemnifying party
shall contribute to the aggregate
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<PAGE> 31
losses, claims, damages, liabilities and expenses of the nature contemplated by
such indemnification provision (including without limitation any investigation,
legal and other expenses reasonably incurred in connection with, and any amount
paid in settlement of, any action, suit or proceeding or any claims asserted,
but after deducting in the case of losses, claims, damages, liabilities and
expenses suffered by the Company, any contribution received by the Company from
persons, other than the Underwriters, who may also be liable for contribution,
including persons who control the Company within the meaning of Section 15 of
the Act or Section 20(a) of the Exchange Act, officers of the Company who
signed the Registration Statement and directors of the Company) as incurred to
which the Company and one or more of the Underwriters may be subject, in such
proportions as it is appropriate to reflect the relative benefits received by
the Company, on the one hand, and the Underwriters, on the other hand, from the
offering of the Shares or, if such allocation is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to above but also the relative fault of the Company, on the
one hand, and the Underwriters, on the other hand, in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable
considerations. The relative benefits received by the Company, on the one
hand, and the Underwriters, on the other hand, shall be deemed to be in the
same proportion as (x) the total proceeds from the offering (net of
underwriting discounts and commissions but before deducting expenses) received
by the Company, and (y) the underwriting discounts and commissions received by
the Underwriters, respectively, in each case as set forth in the table on the
cover page of the Prospectus, bear to the aggregate public offering price of
the Shares. The relative fault of the Company, 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 or the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company and the Underwriters agree
that it would not be just and equitable if contribution pursuant to this
Section 8 were determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations referred to above.
[The Company shall be liable for the amounts to be contributed by it pursuant
to the provisions of this Section 8.] Notwithstanding the provisions of this
Section 8, (i) in no case shall any Underwriter be liable or responsible for
any portion of the contribution obligation imposed on all Underwriters in
excess of its pro rata share of the total underwriting discount set forth in
the table on the cover page of the Prospectus based on the number of shares
underwritten by it as compared to the number of shares underwritten by all
Underwriters who do not default on their obligations under this Section 8 less
all amounts paid or payable by such Underwriter pursuant to Section 7, and (ii)
no person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this Section 8,
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<PAGE> 32
each person, if any, who controls an Underwriter within the meaning of Section
15 of the Act or Section 20(a) of the Exchange Act shall have the same rights
to contribution as such Underwriter, and each person, if any, who controls the
Company within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act, each officer of the Company who shall have signed the
Registration Statement and each director of the Company shall have the same
rights to contribution as the Company, subject in each case to clauses (i) and
(ii) of the immediately preceding sentence. Any party entitled to contribution
will, promptly after receipt of notice of commencement of any action, suit or
proceeding against such party in respect of which a claim for contribution may
be made against another party or parties, notify each party or parties from
whom contribution may be sought, but the omission to so notify such party or
parties shall not relieve the party or parties from whom contribution may be
sought from any obligation it or they may have under this Section 8 or
otherwise. No party shall be liable for contribution with respect to any
action or claim settled without consent; provided, however, that such consent
was not unreasonably withheld.
9. DEFAULT BY AN UNDERWRITER.
(a) If any Underwriter or Underwriters shall default in its or
their obligation to purchase Firm Shares or Additional Shares hereunder, and if
the Firm Shares or Additional Shares with respect to which such default relates
do not (after giving effect to arrangements, if any, made by the
Representatives pursuant to subsection (b) below) exceed in the aggregate 10%
of the number of Firm Shares or Additional Shares, as the case may be, which
all Underwriters have agreed to purchase hereunder, then such Firm Shares or
Additional Shares to which the default relates shall be purchased by the
non-defaulting Underwriters in proportion to the respective proportions which
the numbers of Firm Shares set forth opposite their respective names in
Schedule I hereto bear to the aggregate number of Firm Shares set forth
opposite the names of the non-defaulting Underwriters.
(b) If such default relates to more than 10% of the Firm Shares
or Additional Shares, as the case may be, the Representatives may in their
discretion arrange for themselves or for another party or parties (including
any non- defaulting Underwriter or Underwriters who so agree) to purchase such
Firm Shares or Additional Shares, as the case may be, to which such default
relates on the terms contained herein. If within five calendar days after such
a default the Representatives do not arrange for the purchase of the Firm
Shares or Additional Shares, as the case may be, to which such default relates
as provided in this Section 9, this Agreement (or, in the case of a default
with respect to the Additional Shares, the obligations of the Underwriters to
purchase and the Company to sell the Additional Shares) shall thereupon
terminate, without liability on the part of the Company with respect thereto
(except in each case as provided in Sections 5, 7 and 8 hereof) or the several
non-defaulting Underwriters, but nothing in this Agreement shall relieve a
defaulting Underwriter or Underwriters (except as
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<PAGE> 33
provided in Sections 5, 7 and 8 hereof) of its or their liability, if any, to
the other several Underwriters or the Company for damages occasioned by its or
their default hereunder.
(c) If the Firm Shares or Additional Shares to which the default
relates are to be purchased by the non- defaulting Underwriters, or are to
purchased by another party or parties as aforesaid, the Representatives or the
Company shall have the right to postpone the Closing Date or Additional Closing
Date, as the case may be, for a period, not exceeding five business days, in
order to effect whatever changes may thereby be made necessary in the
Registration Statement or the Prospectus or in any other documents and
arrangements, and the Company agrees to file promptly any amendment or
supplement to the Registration Statement or the Prospectus which, in the
opinion of Underwriters' Counsel, may thereby be made necessary or advisable.
The term "Underwriter" as used in this Agreement shall include any party
substituted under this Section 9 with the like effect as if it had originally
been a party to this Agreement with respect to such Firm Shares and Additional
Shares.
10. SURVIVAL OF REPRESENTATIONS AND AGREEMENTS. All
representations and warranties, covenants and agreements of the Underwriters
and the Company contained in this Agreement, including the agreements contained
in Section 5, the indemnity agreements contained in Section 7 and the
contribution agreements contained in Section 8, shall remain operative and in
full force and effect regardless of any investigation made by or on behalf of
any Underwriter or any controlling person thereof or by or on behalf of the
Company, any of its officers and directors or any controlling person thereof,
and shall survive delivery of and payment for the Shares to and by the several
Underwriters. The representations contained in Section 1 and the agreements
contained in Sections 5, 7, 8 and 11(d) hereof shall survive the termination of
this Agreement, including termination pursuant to Section 9 or 11 hereof.
11. EFFECTIVE DATE OF AGREEMENT; TERMINATION.
(a) This Agreement shall become effective (i) if Rule 430A under
the Act is not used, when the Representatives shall have received notification
of the effectiveness of the Registration Statement, or (ii) if Rule 430A under
the Act is used, when the parties hereto have executed and delivered this
Agreement. If either the initial public offering price or the purchase price
per Share has not been agreed upon prior to 5:00 P.M., New York City time, on
the fourteenth full business day after the Registration Statement shall have
become effective, this Agreement shall thereupon terminate without liability to
the Company or the Underwriters except as herein expressly provided. Until
this Agreement becomes effective as aforesaid, it may be terminated by the
Company by notifying the Representatives or by the Representatives notifying
the Company. Notwithstanding the foregoing, the provisions of this Section 11
and of Sections 1, 5, 7 and 8 hereof shall at all times be in full force and
effect.
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<PAGE> 34
(b) The Representatives shall have the right to terminate this
Agreement and the obligations of the Underwriters hereunder at any time prior
to the Closing Date (and, with respect to the Additional Shares, the Additional
Closing Date) by notice to the Company from you, without liability (other than
with respect to Sections 7 and 8 hereof) on the part of any Underwriter to the
Company, if, on or prior to such date, (i) the Company shall have failed,
refused or been unable to perform in any material respect any agreement on its,
his or her part to be performed hereunder, (ii) any other condition to the
Underwriters' obligations hereunder set forth in Section 6 is not fulfilled
when and as required in any material respect, (iii) trading in securities on
the New York or American Stock Exchanges or in the over-the-counter market
shall have been suspended or materially limited, or minimum or maximum prices
shall have been established or maximum price ranges for prices for securities
shall have been required, on the New York or American Stock Exchanges or in the
over-the-counter market by the Commission, or by such exchange or other
regulatory body or governmental authority having jurisdiction, (iv) a general
banking moratorium shall have been declared by a federal or state authority or
any new restriction materially and adversely affecting the Firm Shares or the
Additional Shares, as the case may be, shall have become effective, (v) there
shall have occurred an outbreak or escalation of armed hostilities involving
the United States on or after the date hereof, or if there has been a
declaration by the United States of a national emergency or war, the effect of
which shall be, in the Representatives' judgment, to make it inadvisable or
impracticable to proceed with the sale and delivery of the Shares on the terms
and in the manner contemplated in the Prospectus, (vi) in the Representatives'
reasonable opinion any material adverse change shall have occurred since the
respective dates as of which information is given in the Registration Statement
or the Prospectus in the condition (financial or other) of the Company and its
subsidiaries taken as a whole, whether or not arising in the ordinary course of
business other than as set forth in the Prospectus, or (vii) there shall have
occurred such a material adverse change in general economic, political or
financial conditions or if the effect of international conditions on the
financial markets in the United States shall be such as, in the
Representatives' judgment, makes it inadvisable or impracticable to proceed
with the sale and delivery of the Firm Shares or the Additional Shares, as the
case may be, on the terms contemplated hereby and by the Prospectus. The right
of the Representatives to terminate this Agreement will not be waived or
otherwise relinquished by their failure to give notice of termination prior to
the time that the event giving rise to the right to terminate shall have ceased
to exist, provided that notice is given prior to the Closing Date (and, with
respect to the Additional Shares, the Additional Closing Date).
(c) Any notice of termination pursuant to this Section 11 shall
be by telephone, telex, or telegraph, confirmed in writing by letter.
(d) If this Agreement shall be terminated pursuant to any of the
provisions hereof (otherwise than pursuant to (i) notification by the
Representatives as
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<PAGE> 35
provided in Section 11(a) hereof or (ii) Section 9(b) or 11(b) (except clauses
(i) and (ii) thereof), or if the sale of the Shares provided for herein is not
consummated because any condition to the obligations of the several
Underwriters set forth herein is not satisfied or because of any refusal,
inability or failure on the part of the Company to perform any agreement herein
or comply with any provision hereof, the Company will, subject to demand by the
Representatives, reimburse the several Underwriters for all out-of-pocket
expenses (including the fees and expenses of their counsel), incurred by the
several Underwriters in connection herewith.
12. NOTICE. All communications hereunder, except as may be
otherwise specifically provided herein, shall be in writing and if sent to any
Underwriter, shall be mailed, delivered, or telexed or telegraphed and
confirmed in writing, to such Underwriter c/o Bear, Stearns & Co. Inc., 245
Park Avenue, New York, New York 10167, Attention: Corporate Finance Department;
and if sent to the Company, shall be mailed, delivered, or telexed or
telegraphed and confirmed in writing to Synthetic Industries, Inc., 309
LaFayette Road, Chickamauga, Georgia 30707, Attention: Chief Executive
Officer.
In all dealings hereunder, the Representatives shall act on behalf
of each of the Underwriters, and the parties hereto shall be entitled to act
and rely upon any statement, request, notice or agreement on behalf of any
Underwriter made or given by the Representatives jointly or by Bear, Stearns &
Co. Inc. on behalf of the Representatives.
13. PARTIES. This Agreement shall inure solely to the benefit
of, and shall be binding upon the several Underwriters and the Company and the
controlling persons, directors, officers, employees and agents referred to in
Sections 7 and 8 hereof, and their respective successors and assigns, and no
other person shall have or be construed to have any legal or equitable right,
remedy or claim under or in respect of or by virtue of this Agreement or any
provision herein contained. The term "successor and assigns" shall not include
a purchaser, in its capacity as such, of Shares from any of the Underwriters.
14. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, without regard
to principles of conflicts of laws.
15. COUNTERPARTS. This Agreement may be executed by any one or
more of the parties hereto in any number of counterparts, each of which shall
be deemed to be an original, but all such counterparts shall together
constitute one and the same agreement.
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<PAGE> 36
16. PARTIAL INVALIDITY. In case any provision of this Agreement
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
[remainder of page intentionally left blank]
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<PAGE> 37
If the foregoing correctly sets forth your understanding, please so
indicate in the space provided below for that purpose and return to us five
counterparts hereof, and upon acceptance hereof by the Representatives, on
behalf of each of the Underwriters, this letter and such acceptance hereof
shall constitute a binding agreement among each of the Underwriters and the
Company. It is understood that the acceptance by the Representatives of this
letter on behalf of each of the Underwriters is pursuant to the authority set
forth in a form of Agreement Among Underwriters, the form of which shall be
submitted to the Company for examination, upon request, but without warranty on
the part of the Representatives as to the authority of the signers thereof.
Very truly yours,
SYNTHETIC INDUSTRIES, INC.
By:
--------------------------------
Name:
--------------------------
Title:
-----------------------
Accepted as of the date first above written at New York, New York, on behalf of
themselves severally and the other several Underwriters named in Schedule I
hereto.
BEAR, STEARNS & CO. INC.
FURMAN SELZ LLC
By: Bear, Stearns & Co. Inc.
Name:
----------------------
Title:
---------------------
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<PAGE> 38
SCHEDULE I
<TABLE>
<CAPTION> Number of
Additional Shares
Number of Firm To Be Purchased If
Shares To Be Maximum Option
Name of Underwriter Purchased Exercised
- ------------------- --------------- ------------------
<S> <C> <C>
Bear, Stearns & Co. Inc.
Furman Selz LLC
--------------- ------------------
Total 3,400,000 510,000
</TABLE>
<PAGE> 39
SCHEDULE II
<TABLE>
<CAPTION> Number of
Total Additional Shares
Number of To Be Sold If
Firm Shares Maximum Option
To Be Sold Exercised
----------- ------------------
<S> <C> <C>
The Company: 3,400,000 510,000
----------- ------------------
Total 3,400,000 510,000
</TABLE>
<PAGE> 40
SCHEDULE III
Lock-Ups
<PAGE> 41
THIS PAGE MUST BE KEPT AS THE LAST PAGE OF THE DOCUMENT.
SoftSolution Network ID: NY-175258.5 Type: AGR
