INTERFACE, INC.
1,500,000 Shares
Class A Common Stock
($.10 par value)
Underwriting Agreement
March 31, 1998
Xxxxx Xxxxxx Inc.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
The Xxxxxxxx-Xxxxxxxx Company, LLC
Wheat First Securities, Inc.
c/o Xxxxx Xxxxxx Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Interface, Inc., a Georgia corporation (the "Company"),
proposes to sell to the several underwriters named in Schedule I
hereto (the "Underwriters"), for whom you (the "Representatives")
are acting as representatives, 1,500,000 shares of Class A Common
Stock, $.10 par value ("Common Stock") of the Company (said
shares to be issued and sold by the Company being hereinafter
called the "Underwritten Securities"). The Company also proposes
to grant to the Underwriters an option to purchase up to 225,000
additional shares of Common Stock to cover over-allotments (the
"Option Securities"; the Option Securities, together with the
Underwritten Securities, being hereinafter called the
"Securities"). To the extent there are no additional
Underwriters listed on Schedule I other than you, the term
Representatives as used herein shall mean you, as Underwriters,
and the terms Representatives and Underwriters shall mean either
the singular or plural as the context requires. Any reference
herein to the Registration Statement, a Preliminary Prospectus or
the Prospectus shall be deemed to refer to and include the
documents incorporated by reference therein pursuant to Item 12
of Form S-3 which were filed under the Exchange Act on or before
the Effective Date of the Registration Statement or the Issue
Date of such Preliminary Prospectus or the Prospectus, as the
case may be; and any reference herein to the terms "amend,"
"amendment," or "supplement" with respect
to the Registration Statement, any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include the filing of
_____________________
[FN]
Plus an option to purchase from the Company, up to 225,000
additional shares of Common Stock to cover over-allotments.
Xxxxx Xxxxxx Inc.
March 31, 1998
Page 2
any document under the Exchange Act after the Effective Date of
the Registration Statement, or the Issue Date of any Preliminary
Prospectus or the Prospectus, as the case may be, deemed to be
incorporated therein by reference. Certain terms used herein are
defined in Section 17 hereof.
1. REPRESENTATIONS AND WARRANTIES. The Company represents
and warrants to, and agrees with, each Underwriter as set forth
below in this Section 1.
The Company meets the requirements for use of Form S-
3 under the Act and has prepared and filed with the
Commission a registration statement (file number 333-46611)
on such Form, and pre-effective amendment No. 1 thereto,
including a related preliminary prospectus, for the
registration under the Act of the Securities and certain
debt securities and preferred stock and the offering thereof
from time to time in accordance with Rule 415 of the rules
and regulations under the Act. The Company may have filed
one or more other amendments thereto, including a related
preliminary prospectus, each of which has previously been
furnished to you. The Company will next file with the
Commission one of the following: (1) prior to the Effective
Date of such registration statement, a further amendment to
such registration statement, including the form of final
prospectus, (2) after the Effective Date of such
registration statement, a final prospectus in accordance
with Rules 430A and 424(b), or (3) a final prospectus in
accordance with Rules 415 and 424(b). In the case of clause
(2), the Company has included in such registration
statement, as amended at the Effective Date, all information
(other than Rule 430A Information) required by the Act and
the rules thereunder to be included in such registration
statement and the Prospectus. As filed, such amendment and
form of final prospectus, or such final prospectus, shall
contain all Rule 430A Information, together with all other
such required information, and, except to the extent the
Representatives shall agree in writing to a modification,
shall be in all substantive respects in the form furnished
to you prior to the Execution Time or, to the extent not
completed at the Execution Time, shall contain only such
specific additional information and other changes (beyond
that contained in the latest Preliminary Prospectus) as the
Company has advised you, prior to the Execution Time, will
be included or made therein. If the Registration Statement
contains the undertaking specified by Regulation S-K Item
512(a), the Registration Statement, at the Effective Time,
meets the requirements set forth in Rule 415(a)(1)(x).
On the Effective Date, the Registration Statement did
or will, and when the Prospectus is first filed (if
required) in accordance with Rule 424(b) and on the Closing
Date (as defined herein) and on any date on which Option
Securities are purchased, if such date is not the Closing
Date (a "settlement date"), the Prospectus (and any
supplements thereto) will, comply in all material respects
Xxxxx Xxxxxx Inc.
March 31, 1998
Page 3
with the applicable requirements of the Act, the Exchange
Act and the rules thereunder; on the Effective Date and at
the Execution Time, the Registration Statement did not or
will not contain any untrue statement of a material fact or
omit to state any material fact required to be stated
therein or necessary in order to make the statements therein
not misleading; and, on the Effective Date, the Prospectus,
if not filed pursuant to Rule 424(b), will not, and on the
date of any filing pursuant to Rule 424(b) and on the
Closing Date and any settlement date, the Prospectus
(together with any supplement thereto) will not, include any
untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements
therein, in the light of the circumstances under which they
were made, not misleading; provided, however, that the
Company makes no representations or warranties as to the
information contained in or omitted from the Registration
Statement, or the Prospectus (or any supplement thereto) in
reliance upon and in conformity with information furnished
herein or in writing to the Company by or on behalf of any
Underwriter through the Representatives specifically for
inclusion in the Registration Statement or the Prospectus
(or any supplement thereto).
The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Georgia with full corporate power and authority to own,
lease and operate its properties and to conduct its business
as described in the Prospectus, and is duly registered and
qualified to conduct its business and is in good standing in
each jurisdiction or place where the nature of its
properties or the conduct of its business requires such
registration or qualification, except where the failure so
to register or qualify or be in good standing would,
individually or in the aggregate, not have a material
adverse effect on the condition (financial or otherwise),
business, earnings, prospects, properties, net worth or
results of operations of the Company and its Subsidiaries
(as herein defined) taken as a whole (a "Material Adverse
Effect").
All the Company's subsidiaries (as defined in the
Act), exclusive of the subsidiaries listed on Schedule II
hereto (the "Inactive Subsidiaries"), are referred to herein
individually as a "Subsidiary" and collectively as the
"Subsidiaries." Each Subsidiary is a corporation duly
organized, validly existing and in good standing in the
jurisdiction of its incorporation, with full corporate power
and authority to own, lease and operate its properties and
to conduct its business as described in the Prospectus, and
is duly registered and qualified to conduct its business and
is in good standing in each jurisdiction or place where the
nature of its properties or the conduct of its business
requires such registration or qualification, and where the
failure so to register or qualify or be in good standing
would, individually or in the aggregate, have a Material
Xxxxx Xxxxxx Inc.
March 31, 1998
Page 4
Adverse Effect. None of the Inactive Subsidiaries is
engaged in any material business activities or operations or
has any material assets or liabilities. All the outstanding
shares of capital stock of each of the Subsidiaries have
been duly authorized and validly issued, are fully paid and
nonassessable, and (except for (i) directors' qualifying
shares or similar interests and (ii) Shanghai Interface
Carpet Co., Ltd. and Interface Modernform Co. Ltd., which
are majority owned subsidiaries of the Company) are wholly
owned by the Company directly or indirectly through one of
the other Subsidiaries, free and clear of any lien, adverse
claim, security interest, equity or other encumbrance,
except as described in the Prospectus.
The Company's authorized and outstanding equity
capitalization is as set forth in the Prospectus; the
capital stock of the Company conforms in all material
respects to the description thereof contained in the
Prospectus; the outstanding shares of Common Stock have been
duly authorized and validly issued and are fully paid and
nonassessable; the Securities have been duly authorized,
and, when issued and delivered to and paid for by the
Underwriters pursuant to this Agreement, will be validly
issued, fully paid and nonassessable and will conform in all
material respects to the description of Common Stock
contained in the Prospectus; the Securities are duly listed,
and admitted and authorized for quotation, subject to
official notice of issuance, on the Nasdaq National Market;
the certificates for the Securities are in valid and
sufficient form; the holders of outstanding shares of
capital stock of the Company are not entitled to preemptive
or other rights to subscribe for the Securities; and, except
as set forth in the Prospectus, no options, warrants or
other rights to purchase, agreements or other obligations to
issue, or rights to convert any obligations into or exchange
any securities for, shares of capital stock of or ownership
interests in the Company are outstanding;
This Agreement has been duly authorized, executed and
delivered by the Company and constitutes a valid and binding
obligation of the Company enforceable in accordance with its
terms, except as enforcement thereof may be limited by
bankruptcy, insolvency or other similar laws affecting
creditors' rights generally and subject to the applicability
of general principles of equity, and conforms in all
material respects to the description thereof in the
Prospectus.
The Company is not and, after giving effect to the
offering and sale of the Securities and the application of
the proceeds thereof as described in the Prospectus, will
not be an "investment company" as defined in the Investment
Company Act of 1940, as amended.
No consent, approval, authorization, filing with or
order of any court or governmental agency or body is
Xxxxx Xxxxxx Inc.
March 31, 1998
Page 5
required in connection with the transactions contemplated
herein, except such as have been obtained under the Act and
such as may be required under the blue sky laws of any
jurisdiction in connection with the purchase and
distribution of the Securities by the Underwriters in the
manner contemplated herein and in the Prospectus.
Neither the issue and sale of the Securities nor the
consummation of any other of the transactions herein
contemplated nor the fulfillment of the terms hereof will
conflict with, result in a breach, default or violation or
the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or
any of the Subsidiaries (except where such would not have a
Material Adverse Effect) pursuant to, (A) the certificate or
articles of incorporation, bylaws or other organization
documents of the Company or any of the Subsidiaries, (B) the
terms of any indenture, contract, lease, mortgage, deed of
trust, note agreement, loan agreement or other material
agreement, obligation, condition, covenant or material
instrument to which the Company or any Subsidiary is a party
or bound or to which its or their property is subject, or
(C) any statute, law, rule, regulation, judgment, order or
decree applicable to the Company or any Subsidiary of any
court, regulatory body, administrative agency, governmental
body, arbitrator or other authority having jurisdiction over
the Company or any of the Subsidiaries or any of its or
their properties.
No holders of securities of the Company have rights
to the registration of such securities under the
Registration Statement.
The consolidated historical financial statements and
schedules of the Company and its consolidated subsidiaries
included in the Prospectus and the Registration Statement
present fairly in all material respects the financial
condition, results of operations and cash flows of the
Company as of the dates and for the periods indicated,
comply as to form with the applicable accounting
requirements of the Act and have been prepared in conformity
with generally accepted accounting principles applied on a
consistent basis throughout the periods involved (except as
otherwise noted therein). The selected financial data set
forth under the caption "Selected Consolidated Financial
Information" in the Prospectus and Registration Statement
fairly present, on the basis stated in the Prospectus and
the Registration Statement, the information included
therein.
No action, suit or proceeding by or before any court
or governmental agency, authority or body or any arbitrator
involving the Company or any of the Subsidiaries or its or
their property is pending or, to the best knowledge of the
Company, threatened that (i) could reasonably be expected to
have a material adverse effect on the performance of this
Xxxxx Xxxxxx Inc.
March 31, 1998
Page 6
Agreement or the consummation of any of the transactions
contemplated hereby or (ii) could reasonably be expected to
have a Material Adverse Effect, whether or not arising from
transactions in the ordinary course of business, except as
set forth in or contemplated in the Prospectus (exclusive of
any supplement thereto).
Neither the Company nor any Subsidiary is in
violation or default of (i) any provision of its charter or
bylaws, (ii) the terms of any material indenture, contract,
lease, mortgage, deed of trust, note agreement, loan
agreement or other material agreement, obligation,
condition, covenant or instrument to which it is a party or
bound or to which its property is subject, or (iii) any
statute, law, rule or regulation applicable to the Company
or any Subsidiary or any judgment, order or decree of any
court, regulatory body, administrative agency, governmental
body, arbitrator or other authority having jurisdiction over
the Company or such Subsidiary or any of its properties, as
applicable; except where such violation or violations in the
aggregate would not have a Material Adverse Effect.
BDO Xxxxxxx, LLP, who have certified certain financial
statements of the Company and its consolidated subsidiaries
and delivered their report with respect to the audited
consolidated financial statements and schedules included in
the Prospectus, are independent public accountants with
respect to the Company within the meaning of the Act and the
applicable published rules and regulations thereunder.
The Company has filed all foreign, federal, state and
local tax returns that are required to be filed or has
requested extensions thereof (except in any case in which
the failure so to file would not have a Material Adverse
Effect, whether or not arising from transactions in the
ordinary course of business, except as set forth in or
contemplated in the Prospectus and has paid all taxes
required to be paid by it and any other assessment, fine or
penalty levied against it, to the extent that any of the
foregoing is due and payable, except for any such
assessment, fine or penalty that is currently being
contested in good faith or as would not have a Material
Adverse Effect, whether or not arising from transactions in
the ordinary course of business, except as set forth in or
contemplated in the Prospectus.
No labor problem or dispute with the employees of the
Company or any of the Subsidiaries exists to the knowledge
of the Company or is threatened or imminent, and the Company
is not aware of any existing or imminent labor disturbance
by the employees of any of its or the Subsidiaries'
principal suppliers, contractors or customers, that could
have a Material Adverse Effect, whether or not arising from
transactions in the ordinary course of business, except as
set forth in or contemplated in the Prospectus.
Xxxxx Xxxxxx Inc.
March 31, 1998
Page 7
The Company and each of the Subsidiaries are insured
by insurers of recognized financial responsibility against
such losses and risks and in such amounts as are prudent and
customary in the businesses in which they are engaged; all
policies of insurance insuring the Company or any of the
Subsidiaries or their respective businesses, assets,
employees, officers and directors are in full force and
effect; the Company and the Subsidiaries are in compliance
with the terms of such policies and instruments in all
material respects; and there are no claims by the Company or
any of the Subsidiaries under any such policy or instrument
as to which any insurance company is denying liability or
defending under a reservation of rights clause; neither the
Company nor any Subsidiary has been refused any insurance
coverage sought or applied for; and neither the Company nor
any Subsidiary has any reason to believe that it will not be
able to renew its existing insurance coverage as and when
such coverage expires or to obtain similar coverage from
similar insurers as may be necessary to continue its
business at a cost that would not have a Material Adverse
Effect, whether or not arising from transactions in the
ordinary course of business, except as set forth in or
contemplated in the Prospectus.
No Subsidiary of the Company (other than Shanghai
Interface Carpet Co., Ltd. and Interface Modernform Co.
Ltd.) is currently prohibited, directly or indirectly, from
(i) paying any dividends to the Company, (ii) making any
other distribution on such Subsidiary's capital stock, (iii)
repaying to the Company any loans or advances to such
Subsidiary from the Company or (iv) transferring any of
such Subsidiary's property or assets to the Company or any
other Subsidiary of the Company, except as described in or
contemplated by the Prospectus.
The Company and the Subsidiaries possess all
licenses, certificates, permits and other authorizations
issued by the appropriate federal, state or foreign
regulatory authorities necessary to conduct their respective
businesses, and neither the Company nor any such Subsidiary
has received any notice of proceedings relating to the
revocation or modification of any such certificate,
authorization or permit which, singly or in the aggregate,
either if not possessed by the Company or if the subject of
an unfavorable decision, ruling or finding, would have a
Material Adverse Effect, whether or not arising from
transactions in the ordinary course of business, except as
set forth in or contemplated in the Prospectus.
The Company and each of the Subsidiaries maintain a
system of internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in
accordance with management's general or specific
authorizations; (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity
with generally accepted accounting principles and to
Xxxxx Xxxxxx Inc.
March 31, 1998
Page 8
maintain asset accountability; (iii) access to assets is
permitted only in accordance with management's general or
specific authorization; and (iv) the recorded accountability
for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with
respect to any differences.
The Company has not taken, directly or indirectly,
any action designed to or which has constituted or which
might reasonably be expected to cause or result, under the
Exchange Act or otherwise, in stabilization or manipulation
of the price of any security of the Company to facilitate
the sale or resale of the Securities.
The Company and the Subsidiaries are (i) in
compliance with any and all applicable foreign, federal,
state and local laws and regulations with respect to their
respective operations and properties relating to the
protection of human health and safety, the environment or
hazardous or toxic substances or wastes ("Environmental
Laws"), (ii) have received and are in compliance with all
permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct their respective
businesses and (iii) have not received notice of any actual
or potential liability for the investigation or remediation
of any disposal or release of hazardous or toxic substances
or wastes, relating to their respective operations or
properties, except where such non-compliance with
Environmental Laws, failure to receive required permits,
licenses or other approvals, or liability would not,
individually or in the aggregate, have a Material Adverse
Effect, whether or not arising from transactions in the
ordinary course of business, except as set forth in or
contemplated in the Prospectus. Except as set forth in the
Prospectus, neither the Company nor any of the Subsidiaries
has been named as a "potentially responsible party" under
the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended.
The Company periodically reviews the effect of
Environmental Laws on the business, operations and
properties of the Company and the Subsidiaries, in the
course of which it identifies and evaluates associated costs
and liabilities (including, without limitation, any capital
or operating expenditures required for clean-up, closure of
properties or compliance with Environmental Laws, or any
permit, license or approval, any related constraints on
operating activities and any potential liabilities to third
parties). On the basis of such review, the Company has
reasonably concluded that such associated costs and
liabilities would not, singly or in the aggregate, have a
Material Adverse Effect, whether or not arising from
transactions in the ordinary course of business, except as
set forth in or contemplated in the Prospectus.
Xxxxx Xxxxxx Inc.
March 31, 1998
Page 9
Each of the Company and the Subsidiaries has
fulfilled its obligations, if any, under the minimum
funding standards of Xxxxxxx 000 xx xxx Xxxxxx Xxxxxx
Employee Retirement Income Security Act of 1974 ("ERISA")
and the regulations and published interpretations thereunder
with respect to each "plan" (as defined in Section 3(3) of
ERISA and such regulations and published interpretations) in
which employees of the Company and the Subsidiaries are
eligible to participate and each such plan is in compliance
in all material respects with the presently applicable
provisions of ERISA and such regulations and published
interpretations. The Company and the Subsidiaries have not
incurred any unpaid liability to the Pension Benefit
Guaranty Corporation (other than for the payment of premiums
in the ordinary course) or to any such plan under Title IV
of ERISA.
The Company and the Subsidiaries own or possess all
patents, trademarks, trademark registration, service marks,
service xxxx registrations, trade names, copyrights,
licenses, inventions, trade secrets and rights described in
the Prospectus as being owned by any of them or necessary
for the conduct of their respective businesses, and the
Company is not aware of any claim to the contrary or any
challenge by any other person to the rights of the Company
and the Subsidiaries with respect to the foregoing.
The Company is in compliance with the Commission's
Staff Legal Bulletin No. 5 dated January 12, 1998 related to
Year 2000 compliance.
Any certificate signed by any officer of the Company
and delivered to the Representatives or counsel for the
Underwriters in connection with the offering of the Securities
shall be deemed a representation and warranty by the Company, as
to matters covered thereby, to each Underwriter.
2. PURCHASE AND SALE.
(a) Subject to the terms and conditions and in reliance
upon the representations and warranties herein set forth,
the Company agrees to sell to each Underwriter, and each
Underwriter agrees, severally and not jointly, to purchase
from the Company, at a purchase price of $38.7125 per share,
the amount of the Underwritten Securities set forth opposite
such Underwriter's name in Schedule I hereto.
(b) Subject to the terms and conditions and in
reliance upon the representations and warranties herein set
forth, the Company hereby grants an option to the several
Underwriters to purchase, severally and not jointly, up to
225,000 Option Securities at the same purchase price per
share as the Underwriters shall pay for the Underwritten
Securities. Said option may be exercised only to cover
over-allotments in the sale of the Underwritten Securities
by the Underwriters. Said option may be exercised in whole
or in part at any time (but not more than once) on or before
Xxxxx Xxxxxx Inc.
March 31, 1998
Page 10
the 30th day after the date of the Prospectus upon written
or telegraphic notice by the Representatives to the Company
setting forth the number of shares of the Option Securities
as to which the several Underwriters are exercising the
option and the settlement date. Delivery of certificates
for the shares of Option Securities by the Company, and
payment therefor to the Company, shall be made as provided
in Section 3 hereof. The number of Option Securities to be
purchased by each Underwriter shall be the same percentage
of the total number of shares of the Option Securities to be
purchased by the several Underwriters as such Underwriter is
purchasing of the Underwritten Securities, subject to such
adjustments as you in your absolute discretion shall make to
eliminate any fractional shares.
3. DELIVERY AND PAYMENT. Delivery of and payment for the
Underwritten Securities and the Option Securities (if the option
provided for in Section 2(b) hereof shall have been exercised on
or before the third Business Day prior to the Closing Date) shall
be made at 10:00 AM, New York City time, on April 3, 1998, or at
such time on such later date not more than three Business Days
after the foregoing date as the Representatives shall designate,
which date and time may be postponed by agreement between the
Representatives and the Company or as provided in Section 9
hereof (such date and time of delivery and payment for the
Securities being herein called the "Closing Date"). Delivery of
the Securities shall be made to the Representatives for the
respective accounts of the several Underwriters against payment
by the several Underwriters through the Representatives of the
purchase price thereof to or upon the order of the Company by
wire transfer payable in same-day funds to an account specified
by the Company. Delivery of the Underwritten Securities and the
Option Securities shall be made through the facilities of The
Depository Trust Company unless the Representatives shall
otherwise provide.
If the option provided for in Section 2(b) hereof is
exercised after the third Business Day prior to the Closing Date,
the Company will deliver the Option Securities (at the expense of
the Company) to the Representatives on the date specified by the
Representatives (which shall be within three Business Days after
exercise of said option) for the respective accounts of the
several Underwriters, against payment by the several Underwriters
through the Representatives of the purchase price thereof to or
upon the order of the Company by wire transfer payable in
same-day funds to an account specified by the Company. If
settlement for the Option Securities occurs after the Closing
Date, the Company will deliver to the Representatives on the
settlement date for the Option Securities, and the obligation of
the Underwriters to purchase the Option Securities shall be
conditioned upon receipt of, supplemental opinions, certificates
and letters confirming as of such date the opinions, certificates
and letters delivered on the Closing Date pursuant to Section 6
hereof.
Xxxxx Xxxxxx Inc.
March 31, 1998
Page 11
4. OFFERING BY UNDERWRITERS. It is understood that the
several Underwriters propose to offer the Securities for sale to
the public as set forth in the Prospectus.
5. AGREEMENTS. The Company agrees with the several
Underwriters that:
(a) The Company will use its best efforts to cause the
Registration Statement, if not effective at the Execution
Time, and any amendment thereof, to become effective. Prior
to the termination of the offering of the Securities, the
Company will not file any amendment of the Registration
Statement or supplement to the Prospectus or any Rule 462(b)
Registration Statement and will not file any such proposed
amendment or supplement to which you reasonably object
unless the Company has furnished you a copy for your review
prior to filing. Subject to the foregoing sentence, if the
Registration Statement has become or becomes effective
pursuant to Rule 430A, or filing of the Prospectus is
otherwise required under Rule 424(b), the Company will cause
the Prospectus, properly completed, and any supplement
thereto to be filed with the Commission pursuant to the
applicable paragraph of Rule 424(b) within the time period
prescribed and will provide evidence satisfactory to the
Representatives of such timely filing. The Company will
promptly advise the Representatives (1) when the
Registration Statement, if not effective at the Execution
Time, shall have become effective, (2) when the Prospectus,
and any supplement thereto, shall have been filed (if
required) with the Commission pursuant to Rule 424(b) or
when any Rule 462(b) Registration Statement shall have been
filed with the Commission, (3) when, prior to termination of
the offering of the Securities, any amendment to the
Registration Statement shall have been filed or become
effective, (4) of any request by the Commission or its staff
for any amendment of the Registration Statement, or any Rule
462(b) Registration Statement, or for any supplement to the
Prospectus or for any additional information, (5) of the
issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the
institution or threatening of any proceeding for that
purpose and (6) of the receipt by the Company of any
notification with respect to the suspension of the
qualification of the Securities for sale in any jurisdiction
or the institution or threatening of any proceeding for such
purpose. The Company will use its best efforts to prevent
the issuance of any such stop order or the suspension of any
such qualification and, if issued, to obtain as soon as
possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to the
Securities is required to be delivered under the Act, any
event occurs as a result of which, in the judgment of the
Company or in the opinion of your counsel, the Prospectus as
then supplemented would include any untrue statement of a
material fact or omit to state any material fact necessary
to make the statements therein in the light of the
Xxxxx Xxxxxx Inc.
March 31, 1998
Page 12
circumstances under which they were made not misleading, or
if it shall be necessary to amend the Registration Statement
or supplement the Prospectus to comply with the Act or the
Exchange Act or the respective rules thereunder, the Company
promptly will (1) notify the Representatives of any such
event, or promptly respond to the opinion of your counsel,
as the case may be; (2) prepare and file with the
Commission, subject to the second sentence of paragraph (a)
of this Section 5, an amendment or supplement which will
correct such statement or omission or effect such
compliance; and (3) supply any supplemented Prospectus to
you in such quantities as you may reasonably request.
(c) As soon as practicable, the Company will make
generally available to its security holders and to the
Representatives a consolidated earnings statement of the
Company and its subsidiaries which will satisfy the
provisions of Section 11(a) of the Act and Rule 158 under
the Act.
(d) The Company will furnish to the Representatives
and counsel for the Underwriters, without charge, signed
copies of the Registration Statement (including exhibits
thereto) and to each other Underwriter a copy of the
Registration Statement (without exhibits thereto) and, so
long as delivery of a prospectus by an Underwriter or dealer
may be required by the Act, as many copies of each
Preliminary Prospectus and the Prospectus and any supplement
thereto as the Representatives may reasonably request.
(e) The Company will arrange, if necessary, for the
qualification of the Securities for sale under the laws of
such jurisdictions as the Representatives may designate and
will maintain such qualifications in effect so long as
required for the distribution of the Securities; provided
that in no event shall the Company be obligated to qualify
to do business in any jurisdiction where it is not now so
qualified or to take any action that would subject it to
service of process in suits, other than those arising out of
the offering or sale of the Securities, in any jurisdiction
where it is not now so subject.
(f) The Company will not, without the prior written
consent of Xxxxx Xxxxxx Inc., for a period of 90 days
following the date of the Prospectus Supplement, offer, sell
or contract to sell, or otherwise dispose of (or enter into
any transaction which is designed to, or might reasonably be
expected to, result in the disposition (whether by actual
disposition or effective economic disposition due to cash
settlement or otherwise) by the Company or any affiliate of
the Company or any person in privity with the Company or any
affiliate of the Company) directly or indirectly, or
announce the offering of, any other shares of Common Stock
or any securities convertible into, or exchangeable for,
shares of Common Stock; provided, however, that the Company
may issue and sell Common Stock pursuant to any employee
Xxxxx Xxxxxx Inc.
March 31, 1998
Page 13
stock option plan, stock ownership plan or dividend
reinvestment plan of the Company in effect at the date of
the Prospectus Supplement and the Company may issue Common
Stock issuable upon the conversion of securities or the
exercise of warrants outstanding at the date of the
Prospectus Supplement.
(g) The Company will not take, directly or indirectly,
any action designed to or which has constituted or which
might reasonably be expected to cause or result, under the
Exchange Act or otherwise, in stabilization or manipulation
of the price of any security of the Company to facilitate
the sale or resale of the Securities.
(h) The Company agrees to pay the costs and expenses
relating to the following matters: (i) the preparation,
printing or reproduction and filing with the Commission of
the Registration Statement (including financial statements
and exhibits thereto), each Preliminary Prospectus, the
Prospectus, and each amendment or supplement to any of them;
(ii) the printing (or reproduction) and delivery (including
postage, air freight charges and charges for counting and
packaging) of such copies of the Registration Statement,
each Preliminary Prospectus, the Prospectus, and all
amendments or supplements to any of them, as may, in each
case, be reasonably requested for use in connection with the
offering and sale of the Securities; (iii) the printing,
authentication, issuance and delivery of certificates for
the Securities, including any stamp taxes in connection with
the original issuance and sale of the Securities; (iv) the
printing (or reproduction) and delivery of this Agreement,
any blue sky memorandum and all other agreements or
documents printed (or reproduced) and delivered in
connection with the offering of the Securities; (v) the
registration of the Securities under the Exchange Act and
the listing of the Securities on the Nasdaq National Market;
(vi) any registration or qualification of the Securities for
offer and sale under the securities or blue sky laws of the
several states (including filing fees and the reasonable
fees and expenses of counsel for the Underwriters relating
to such registration and qualification; provided that such
fees shall not exceed $5,000); (vii) any filings required to
be made with the National Association of Securities Dealers,
Inc. (including filing fees and the reasonable fees and
expenses of counsel for the Underwriters relating to such
filings); (viii) the transportation and other expenses
incurred by or on behalf of Company representatives in
connection with presentations to prospective purchasers of
the Securities (which shall not include any such expenses
incurred by the Underwriters); (ix) the fees and expenses of
the Company's accountants and the fees and expenses of
counsel (including local and special counsel) for the
Company; and (x) all other costs and expenses incident to
the performance by the Company of its obligations hereunder.
Xxxxx Xxxxxx Inc.
March 31, 1998
Page 14
(i) The Company, during the period when the prospectus
is required to be delivered under the Act or the Exchange
Act, will file all documents required to be filed with the
Commission pursuant to the Exchange Act within the time
periods required by the Exchange Act and the regulations
thereunder.
(j) The Company will apply the net proceeds from the
sale of Securities to be sold by it hereunder substantially
in accordance with the description set forth in the
Prospectus.
6. CONDITIONS TO THE OBLIGATIONS OF THE UNDERWRITERS. The
obligations of the Underwriters to purchase the Underwritten
Securities and the Option Securities, as the case may be, shall
be subject to the accuracy of the representations and warranties
on the part of the Company contained herein as of the Execution
Time, the Closing Date and any settlement date pursuant to
Section 3 hereof, to the accuracy of the statements of the
Company made in any certificates pursuant to the provisions
hereof, to the performance by the Company of its obligations
hereunder and to the following additional conditions:
(a) If the Registration Statement has not become
effective prior to the Execution Time, unless the
Representatives agree in writing to a later time, the
Registration Statement will become effective not later than
(i) 6:00 PM New York City time on the date of determination
of the public offering price, if such determination occurred
at or prior to 3:00 PM New York City time on such date or
(ii) 9:30 AM on the Business Day following the day on which
the public offering price was determined, if such
determination occurred after 3:00 PM New York City time on
such date; if filing of the Prospectus, or any supplement
thereto, is required pursuant to Rule 424(b), the
Prospectus, and any such supplement, will be filed in the
manner and within the time period required by Rule 424(b);
and no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no
proceedings for that purpose shall have been instituted or
threatened.
(b) The Company shall have furnished to the
Representatives the opinion of Xxxxxxxxxx Xxxxxxxx LLP,
counsel for the Company, dated the Closing Date and
addressed to the Representatives, to the effect that:
(i) each of (A) the Company and (B) each Material
U.S. Subsidiary (as defined in the Prospectus) has been
duly organized and is validly existing as a corporation
in good standing under the laws of the jurisdiction in
which it is chartered or organized, with full corporate
power and authority to own or lease, as the case may
be, and to operate its properties and conduct its
business as described in the Registration Statement and
the Prospectus;
Xxxxx Xxxxxx Inc.
March 31, 1998
Page 15
(ii) all the outstanding shares of capital stock
of each Material U.S. Subsidiary have been duly
authorized and validly issued and are fully paid and
nonassessable (except for directors' qualifying shares
or similar interests), and, except as otherwise set
forth in the Prospectus, all outstanding shares of
capital stock of the Material U.S. Subsidiaries to the
knowledge of such counsel, in the course of its normal
inquiry, are owned by the Company either directly or
through wholly owned subsidiaries free and clear of any
perfected security interest or, to the knowledge of
such counsel, in the course of its normal inquiry, any
other security interest, claim, lien or encumbrance;
(iii) the Company's authorized and outstanding
equity capitalization is as set forth in the Prospectus
under the caption "Capitalization"; the capital stock
of the Company conforms in all material respects to the
description thereof contained in the Prospectus; the
outstanding shares of Common Stock have been duly
authorized and validly issued and are fully paid and
nonassessable; the Securities have been duly
authorized, and, when issued and delivered to and paid
for by the Underwriters pursuant to this Agreement,
will be validly issued, fully paid and nonassessable
and will conform in all material respects to the
description of Common Stock contained in the
Prospectus; the Securities are duly listed, and
admitted and authorized for quotation, subject to
official notice of issuance, on the Nasdaq National
Market; the certificates for the Securities are in
valid and sufficient form; and, except as set forth in
the Prospectus, no options, warrants or other rights to
purchase, agreements or other obligations to issue, or
rights to convert any obligations into or exchange any
securities for, shares of capital stock of or ownership
interests in the Company are outstanding;
(iv) to the knowledge of such counsel (A) there
is no pending or threatened action, suit or proceeding
by or before any court or governmental agency,
authority or body or any arbitrator involving the
Company or the Subsidiaries or its or their property of
a character required to be disclosed in the
Registration Statement which is not adequately
disclosed in the Prospectus, and (B) there is no
material franchise, contract, indenture, agreement or
other document of a character required to be described
in the Registration Statement or Prospectus, or to be
filed as an exhibit thereto or as an exhibit to any
document filed under the Exchange Act, which is not
described or filed as required;
(v) the Registration Statement has become
effective under the Act; any required filing of the
Prospectus, and any supplements thereto, pursuant to
Xxxxx Xxxxxx Inc.
March 31, 1998
Page 16
Rule 424(b) has been made in the manner and within the
time period required by Rule 424(b); to the knowledge
of such counsel, no stop order suspending the
effectiveness of the Registration Statement has been
issued, no proceedings for that purpose have been
instituted or threatened and the Registration Statement
and the Prospectus, including the documents
incorporated by reference therein (other than the
financial statements and other financial information
contained therein, as to which such counsel need
express no opinion) comply as to form in all material
respects with the applicable requirements of the Act
and the Exchange Act and the respective rules
thereunder; and such counsel has no reason to believe
that on the Effective Date or at the Execution Time the
Registration Statement contains or contained any untrue
statement of a material fact or omitted or omits 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 and on
the Closing Date includes any untrue statement of a
material fact or omitted or omits to state a material
fact necessary to make the statements therein, in the
light of the circumstances under which they were made,
not misleading (in each case, other than the financial
statements and other financial information contained
therein, as to which such counsel need express no
opinion);
(vi) the Company has the corporate power and
authority to enter into this Agreement and to issue,
sell and deliver the Securities to be sold as provided
herein, and this Agreement has been duly authorized,
executed and delivered by the Company and is a valid,
legal and binding agreement of the Company, enforceable
against the Company in accordance with its terms,
except as enforcement of rights to indemnity and
contribution hereunder may be limited by federal or
state securities laws or principles of public policy
and subject to the qualification that the
enforceability of the Company's obligations hereunder
may be limited by bankruptcy, fraudulent conveyance,
insolvency, reorganization, moratorium and other laws
relating to or affecting creditors rights generally and
by general equitable principles;
(vii) the Company is not and, after giving effect
to the offering and sale of the Securities and the
application of the proceeds thereof as described in the
Prospectus, will not be, an "investment company" as
defined in the Investment Company Act of 1940, as
amended; and
(viii) no consent, approval, authorization, or
other action by, or filing with or order of any court
or governmental agency or body is required in
Xxxxx Xxxxxx Inc.
March 31, 1998
Page 17
connection with the transactions contemplated herein,
except such as have been obtained under the Act or the
Exchange Act and such as may be required under the blue
sky laws of any jurisdiction in connection with the
purchase and distribution of the Securities by the
Underwriters and such other approvals (specified in
such opinion) as have been obtained.
The opinion of such counsel shall be limited to the laws of
the United States, the State of Georgia and the Delaware
General Corporation Law.
In rendering such opinion, such counsel may rely, as to
matters of fact, to the extent they deem proper, on
certificates of responsible officers of the Company and
public officials. References to the Prospectus in this
paragraph (b) include any supplements thereto at the Closing
Date. The opinion or opinions of such counsel shall be
rendered to the Underwriters at the request of the Company
and shall so state therein.
(c) The Company shall have furnished to the
Representatives an opinion of Xxxxxxx Xxxxxxx, Esq., General
Counsel of the Company, dated the Closing Date and addressed
to the Representatives, to the effect that:
(i) Each of the Company and each Material U.S.
Subsidiary is duly registered and qualified to conduct
its business and is in good standing as a foreign
corporation in each jurisdiction or place where the
nature of its properties or the conduct of its business
requires such registration or qualification, except
where the failure so to register or qualify or to be in
good standing does not have a Material Adverse Effect;
(ii) neither the Company nor any Subsidiary
incorporated in the United States (each a "U.S.
Subsidiary") is in violation in any material respect of
(A) its respective certificate or articles of
incorporation or bylaws or other organizational
documents or, (B) to the knowledge of such counsel,
obtained in the ordinary course of such counsel's
duties, without special inquiry, is in any material
respect in default in the performance of any
obligation, agreement or condition contained in any
bond, debenture, note or other evidence of indebtedness
or in any material agreement, indenture, lease or other
material instrument to which the Company or any such
Subsidiaries is a party or by which any of them or any
of their respective properties may be bound, or (C) to
the knowledge of such counsel, obtained in the ordinary
course of such counsel's duties, without special
inquiry, in any material violation of any law,
ordinance, administrative or governmental rule or
regulation applicable to the Company or any of the
Subsidiaries or of any decree of any court or
Xxxxx Xxxxxx Inc.
March 31, 1998
Page 18
governmental agency or body having jurisdiction over
the Company or any U.S. Subsidiary, except as may be
disclosed in the Prospectus, and except where such
violation or violations in the aggregate would not have
a Material Adverse Effect;
(iii) neither the issue and sale of the
Securities, nor the consummation of any other of the
transactions herein contemplated nor the fulfillment of
the terms hereof does or will conflict with, result in
a breach, default or violation of or the creation or
imposition of any lien, charge or encumbrance upon any
property or assets of the Company or the U.S.
Subsidiaries pursuant to, (A) the certificate or
articles of incorporation, bylaws or other
organizational documents of the Company or the U.S.
Subsidiaries, (B) the terms of any material indenture,
contract, lease, mortgage, deed of trust, note
agreement, loan agreement or other agreement,
obligation, condition, covenant or instrument to which
the Company or any U.S. Subsidiary is a party or bound
or to which its or their property is subject, or (C)
any statute, law, rule, regulation, judgment, order or
decree known to such counsel to be applicable to the
Company or the U.S. Subsidiaries of any court,
regulatory body, administrative agency, governmental
body, arbitrator or other authority having jurisdiction
over the Company or the U.S. Subsidiaries or any of its
or their properties, except where such violation or
violations in the aggregate would not have a Material
Adverse Effect; and
(iv) no holders of securities of the Company have
rights to the registration of such securities under the
Registration Statement.
(d) The Company shall have furnished to the
Representatives an opinion of Xxx xxx Xxxxx, Senior Vice
President and Counsel to Interface Europe, B.V., dated the
Closing Date and addressed to the Representatives, to that
effect that:
(i) Each of Interface Europe B.V., Interface
Scherpenzeel B.V. and Interface Europe Limited (which are
the only non-U.S. Subsidiaries which are Material
Subsidiaries (as defined in the Indenture) (collectively,
the "European Subsidiaries") is duly organized and validly
existing under the laws of the jurisdiction of its
organization, with full corporate power and authority to
own, lease and operate its properties and to conduct its
business as described in the Prospectus (and any supplement
thereto); and all the outstanding shares of capital stock of
each such European Subsidiary have been duly authorized and
validly issued, are fully paid and nonassessable, and to the
knowledge of such counsel, are wholly owned by the Company
directly, or indirectly through one of the other
Xxxxx Xxxxxx Inc.
March 31, 1998
Page 19
Subsidiaries, free and clear of any security interest, lien,
adverse claim, equity or other encumbrance, except as
described in the Prospectus and except for the shares of
capital stock of such Subsidiaries pledged in connection
with credit agreements with SunTrust Bank, Atlanta and The
First National Bank of Chicago;
(ii) None of the European Subsidiaries is in
violation in any material respect of its respective
certificate or articles of incorporation or bylaws, or other
organizational documents or, to the best knowledge of such
counsel obtained in the ordinary course of such counsel's
duties without special inquiry, is in default in any
material respect in the performance of any material
obligation, agreement or conditions contained in any bond,
debenture, note or other evidence of indebtedness or in any
material agreement, indenture, lease or other material
instrument to which any of such Subsidiaries is a party or
by which any of them or any of their respective properties
may be bound, except as disclosed in the Prospectus and
except to the extent that any such violation or default
would not have a Material Adverse Effect;
(iii) To the best knowledge of such counsel
obtained in the ordinary course of such counsel's duties
without special inquiry, none of the European Subsidiaries
is in material violation of any law, ordinance,
administrative or governmental rule or regulation applicable
to any such Subsidiaries or of any decree of any court or
governmental agency or body having jurisdiction over any
such Subsidiaries, except to the extent that any such
violation would not have a Material Adverse Effect; and
(iv) Neither the offer, sale or delivery of the
Securities, the execution, delivery or performance by the
Company of this Agreement, compliance by the Company with
the provisions hereof nor consummation by the Company of the
transactions contemplated hereby conflicts or will conflict
with or constitutes or will constitute a breach of, or a
default under, in any material respect, the certificate or
articles of incorporation or bylaws of other organizational
documents of any of the European Subsidiaries or any
material agreement, indenture, lease or other material
instrument to which any European Subsidiary is a party or by
which any of them or any of their respective properties is
bound that is known to such counsel, or will result in the
creation or imposition of any lien, charge or encumbrance
upon any property or assets of any European Subsidiary
pursuant to the terms of any material agreement or
instrument to which any of them is a party or by which any
European Subsidiary may be bound or to which any of the
property or assets or any of them is subject that is known
to such counsel.
(e) The Representatives shall have received from
Xxxxx, Xxxxxxxx & Xxxxxxx, LLP, counsel for the
Xxxxx Xxxxxx Inc.
March 31, 1998
Page 20
Underwriters, such opinion or opinions, dated the Closing
Date and addressed to the Representatives, with respect to
the issuance and sale of the Securities, the Registration
Statement, the Prospectus (together with any supplement
thereto) and other related matters as the Representatives
may reasonably require, and the Company shall have furnished
to such counsel such documents as they request for the
purpose of enabling them to pass upon such matters. The
opinion or opinions of such counsel shall be rendered to the
Underwriters at the request of the Company and shall so
state therein.
(f) The Company shall have furnished to the
Representatives a certificate of the Company, signed by the
Chairman of the Board or the President and the principal
financial or accounting officer of the Company, dated the
Closing Date, to the effect that the signers of such
certificate have carefully examined the Registration
Statement, the Prospectus, any supplements to the Prospectus
and this Agreement and that:
(i) the representations and warranties of the
Company in this Agreement are true and correct in all
material respects on and as of the Closing Date with
the same effect as if made on the Closing Date and the
Company has complied with all the agreements and
satisfied all the conditions on its part to be
performed or satisfied at or prior to the Closing Date;
(ii) no stop order suspending the effectiveness
of the Registration Statement has been issued and no
proceedings for that purpose have been instituted or,
to the Company's knowledge, threatened; and
(iii) since the date of the most recent financial
statements included in the Prospectus (exclusive of any
supplement thereto), there has been no Material Adverse
Effect, whether or not arising from transactions in the
ordinary course of business, except as set forth in or
contemplated in the Prospectus.
(g) At the Execution Time and at the Closing Date, BDO
Xxxxxxx, LLP shall have furnished to the Representatives
letters, dated respectively as of the Execution Time and as
of the Closing Date, in form and substance satisfactory to
the Representatives, confirming that they are independent
accountants within the meaning of the Act and the Exchange
Act and the applicable published rules and regulations
thereunder and stating in effect that:
(i) in their opinion the audited financial
statements and financial statement schedules included
or incorporated in the Registration Statement and the
Prospectus and reported on by them comply as to form in
all material respects with the applicable accounting
requirements of the Act and the Exchange Act and the
related published rules and regulations;
Xxxxx Xxxxxx Inc.
March 31, 1998
Page 21
(ii) on the basis of a reading of the amounts
included or incorporated in the Registration Statement
and the Prospectus in response to Item 301 of
Regulation S-K; carrying out certain specified
procedures (but not an examination in accordance with
generally accepted auditing standards) which would not
necessarily reveal matters of significance with respect
to the comments set forth in such letter; a reading of
the minutes of the meetings of the stockholders,
directors and committees of the Board of Directors of
the Company and the Subsidiaries; and inquiries of
certain officials of the Company who have
responsibility for financial and accounting matters of
the Company and its Subsidiaries as to transactions and
events subsequent to December 28, 1997, nothing came
to their attention which caused them to believe that:
(1) the amounts in the "Selected Consolidated
Financial Data," if any, included or incorporated
in the Registration Statement and the Prospectus
do not agree with the corresponding amounts in the
audited financial statements from which such
amounts were derived;
(2) any unaudited financial statements
included or incorporated by reference in the
Registration Statement and the Prospectus do not
comply as to form in all material respects with
applicable accounting requirements of the Act and
with the published rules and regulations of the
Commission with respect to financial statements
included or incorporated in quarterly reports on
Form 10-Q under the Exchange Act; and said
unaudited financial statements are not in
conformity with generally accepted accounting
principles applied on a basis substantially
consistent with that of the audited financial
statements included or incorporated in the
Registration Statement and the Prospectus;
(3) with respect to the period subsequent to
the date of the most recent financial statements
(other than capsule information), audited or
unaudited, in or incorporated in the Registration
Statement and the Prospectus, there were any
changes, at a specified date not more than five
days prior to the date of the letter, in the
long-term debt due within one year and long-term
debt (exclusive of current portion) of the Company
and its Subsidiaries or capital stock of the
Company or decreases in the shareholders' equity
of the Company and its consolidated Subsidiaries,
as compared with the amounts shown on the most
recent consolidated balance sheet included or
Xxxxx Xxxxxx Inc.
March 31, 1998
Page 22
incorporated in the Registration Statement and the
Prospectus, or for the period from the date of the
most recent financial statements included or
incorporated in the Registration Statement and the
Prospectus to the date of the most recently
available monthly unaudited financial information,
there were any decreases relating to continuing
operations, as compared with the corresponding
period in the preceding year in total revenues or
income before income taxes or in total or per
share amounts of net income of the Company and its
subsidiaries, except in all instances for changes
or decreases set forth in such letter, in which
case the letter shall be accompanied by an
explanation by the Company as to the significance
thereof unless said explanation is not deemed
necessary by the Representatives; or
(4) the amounts included in any unaudited
"capsule" information included or incorporated in
the Registration Statement or Prospectus do not
agree with the amounts set forth in the unaudited
financial statements for the same periods or were
not determined on a basis substantially consistent
with that of the corresponding amounts in the
audited financial statements included or
incorporated in the Registration Statement and the
Prospectus;
(iii) they have performed certain other specified
procedures as a result of which they determined that
certain information of an accounting, financial or
statistical nature (which is limited to accounting,
financial or statistical information derived from the
general accounting records of the Company and its
Subsidiaries) set forth in the Registration Statement
and the Prospectus, including the information included
in the "Management's Discussion and Analysis of
Financial Condition and Results of Operations" included
or incorporated in the Company's Quarterly Reports on
Form 10-Q incorporated in the Registration Statement
and the Prospectus, agrees with the accounting records
of the Company and the Subsidiaries, excluding any
questions of legal interpretation.
References to the Prospectus in this paragraph (g)
include any supplement thereto at the date of the
letter.
(h) Subsequent to the Execution Time or, if earlier,
the dates as of which information is given in the
Registration Statement (exclusive of any amendment thereof)
and the Prospectus (exclusive of any supplement thereto),
there shall not have been (i) any material change or
decrease specified in the letter or letters referred to in
paragraph (g) of this Section 6 or (ii) any change, or any
development involving a prospective change, in or affecting
Xxxxx Xxxxxx Inc.
March 31, 1998
Page 23
the condition (financial or otherwise), earnings, business
or properties of the Company and its subsidiaries taken as a
whole, whether or not arising from transactions in the
ordinary course of business, except as set forth in or
contemplated in the Prospectus (exclusive of any supplement
thereto) the effect of which, in any case referred to in
clause (i) or (ii) above, is, in the sole judgment of the
Representatives, so material and adverse as to make it
impractical or inadvisable to proceed with the offering or
delivery of the Securities as contemplated by the
Registration Statement (exclusive of any amendment thereof)
and the Prospectus (exclusive of any supplement thereto).
(i) Subsequent to the Execution Time, there shall not
have been any decrease in the rating of any of the Company's
debt securities by any "nationally recognized statistical
rating organization" (as defined for purposes of Rule 436(g)
under the Act) or any notice given of any intended or
potential decrease in any such rating or of a possible
change in any such rating that does not indicate the
direction of the possible change.
(j) At the Execution Time, the Company shall have
furnished to the Representatives a letter substantially in
the form of Exhibit A hereto from each officer and director
of the Company and addressed to the Representatives.
(k) 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.
If any of the conditions specified in this Section 6 shall
not have been fulfilled in all material respects when and as
provided in this Agreement, or if any of the opinions and
certificates mentioned above or elsewhere in this Agreement shall
not be in all material respects reasonably satisfactory in form
and substance to the Representatives and counsel for the
Underwriters, this Agreement and all obligations of the
Underwriters hereunder may be canceled at, or at any time prior
to, the Closing Date by the Representatives. Notice of such
cancellation shall be given to the Company in writing or by
telephone or facsimile confirmed in writing.
The documents required to be delivered by this Section 6
shall be delivered at the office of Xxxxx, Xxxxxxxx & Xxxxxxx,
LLP, counsel for the Underwriters, at 0000 Xxxxxxxxx Xxxxxx,
Xxxxx 0000, Xxxxxxx, Xxxxxxx 00000, on the Closing Date.
7. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If the sale
of the Securities provided for herein is not consummated because
any condition to the obligations of the Underwriters set forth in
Section 6 hereof is not satisfied, other than in paragraph (e)
hereof, because of any termination pursuant to Section 10 hereof
or because of any refusal, inability or failure on the part of
the Company to perform any agreement herein or comply with any
Xxxxx Xxxxxx Inc.
March 31, 1998
Page 24
provision hereof other than by reason of a default by any of the
Underwriters, the Company will reimburse the Underwriters
severally through Xxxxx Xxxxxx Inc. on demand for all
out-of-pocket expenses (including reasonable fees and
disbursements of counsel) that shall have been incurred by them
in connection with the proposed purchase and sale of the
Securities. Notwithstanding the foregoing, the Company shall not
be liable in any event to the Underwriters for the loss of
anticipated profits from the transactions covered by this
Agreement.
8. INDEMNIFICATION AND CONTRIBUTION. (a) The Company
agrees to indemnify and hold harmless each Underwriter, the
directors, officers, employees and agents of each Underwriter and
each person who controls any Underwriter within the meaning of
either the Act or the Exchange Act against any and all losses,
claims, damages or liabilities, joint or several, to which they
or any of them may become subject under the Act, the Exchange Act
or other federal or state statutory law or regulation, at common
law or otherwise, insofar as such losses, claims, damages or
liabilities (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 Securities as originally filed or in any
amendment thereof, or in any Preliminary Prospectus or the
Prospectus, or in any amendment thereof or supplement thereto, or
arise out of or are based 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, and
agrees to reimburse each such indemnified party, as incurred, for
any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that the Company
will not be liable in any such case to the extent that any such
loss, claim, damage or liability 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
specifically for inclusion therein; provided, however, that the
indemnification contained in this paragraph (a) with respect to
the Registration Statement or the Preliminary Prospectus or the
Prospectus shall not inure to the benefit of any Underwriter on
account of any such loss, claim, damage, liability or expense
arising from the sale of Securities by such Underwriter to any
person if a copy of the Prospectus shall not have been delivered
or sent to such person within the time required by the Act and
the regulations thereunder, and the untrue statement or alleged
untrue statement or omission or alleged omission of a material
fact contained in the Registration Statement or the Preliminary
Prospectus or the Prospectus was corrected in the Prospectus,
provided that the Company has delivered the Prospectus to the
several Underwriters in requisite quantity on a timely basis to
permit such delivery or sending. This indemnity agreement will
be in addition to any liability which the Company may otherwise
have.
Xxxxx Xxxxxx Inc.
March 31, 1998
Page 25
(b) Each Underwriter severally and not jointly agrees to
indemnify and hold harmless the Company, each of its directors,
each of its officers who signs the Registration Statement, and
each person who controls the Company within the meaning of either
the Act or the Exchange Act, to the same extent as the foregoing
indemnity from the Company to each Underwriter, but only with
reference to written information relating to such Underwriter
furnished to the Company by or on behalf of such Underwriter
through the Representatives specifically for inclusion in the
documents referred to in the foregoing indemnity. This indemnity
agreement will be in addition to any liability which any
Underwriter may otherwise have. The Company acknowledges that
the statements set forth in the last paragraph of the cover page
regarding delivery of the Securities, the legend in block capital
letters on page S-2 related to stabilization, syndicate covering
transactions and penalty bids and, under the heading
"Underwriting," (i) the sentences related to concessions and
reallowances; (ii) the paragraph related to stabilization,
syndicate covering transactions and penalty bids; (iii) the
paragraph describing the relationship between the Underwriters
and the Company; and (iv) the paragraphs describing the
relationship between certain Underwriters and their parents or
subsidiaries; and the second sentence under the heading "Legal
Matters" in any Preliminary Prospectus and the Prospectus
constitute the only information furnished in writing by or on
behalf of the several Underwriters for inclusion in any
Preliminary Prospectus or the Prospectus.
(c) Promptly after receipt by an indemnified party under
this Section 8 of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be
made against the indemnifying party under this Section 8, notify
the indemnifying party in writing of the commencement thereof;
but the failure so to notify the indemnifying party (i) will not
relieve it from liability under paragraph (a) or (b) above unless
and to the extent it did not otherwise learn of such action and
such failure results in the forfeiture by the indemnifying party
of substantial rights and defenses and (ii) will not, in any
event, relieve the indemnifying party from any obligations to any
indemnified party other than the indemnification obligation
provided in paragraph (a) or (b) above. The indemnifying party
shall be entitled to appoint counsel of the indemnifying party's
choice at the indemnifying party's expense to represent the
indemnified party in any action for which indemnification is
sought (in which case the indemnifying party shall not thereafter
be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth
below); provided, however, that such counsel shall be reasonably
satisfactory to the indemnified party. Notwithstanding the
indemnifying party's election to appoint counsel to represent the
indemnified party in an action, the indemnified party shall have
the right to employ separate counsel (including local counsel),
and the indemnifying party shall bear the reasonable fees, costs
and expenses of such separate counsel if and only if (i) the use
of counsel chosen by the indemnifying party to represent the
indemnified party would present such counsel with a conflict of
Xxxxx Xxxxxx Inc.
March 31, 1998
Page 26
interest, (ii) the actual or potential defendants in, or targets
of, any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have
reasonably concluded that there may be legal defenses available
to it and/or other indemnified parties which are different from
or additional to those available to the indemnifying party, (iii)
the indemnifying party shall not have employed counsel reasonably
satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of the
institution of such action or (iv) the indemnifying party shall
authorize the indemnified party to employ separate counsel at the
expense of the indemnifying party; provided that the indemnifying
party shall be required to pay the expenses of only one such
counsel who shall be qualified to represent all such indemnified
parties. An indemnifying party will not, without the prior
written consent of the indemnified parties, settle or compromise
or consent to the entry of any judgment with respect to any
pending or threatened claim, action, suit or proceeding in
respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or
potential parties to such claim or action) unless such
settlement, compromise or consent includes an unconditional
release of each indemnified party from all liability arising out
of such claim, action, suit or proceeding.
(d) In the event that the indemnity provided in paragraph
(a) or (b) of this Section 8 is unavailable to or insufficient
to hold harmless an indemnified party for any reason, the Company
and the Underwriters severally agree to contribute to the
aggregate losses, claims, damages and liabilities (including
legal or other expenses reasonably incurred in connection with
investigating or defending same) (collectively "Losses") to which
the Company and one or more of the Underwriters may be subject in
such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and by the
Underwriters on the other from the offering of the Securities;
provided, however, that in no case shall any Underwriter (except
as may be provided in any agreement among underwriters relating
to the offering of the Securities) be responsible for any amount
in excess of the underwriting discount or commission applicable
to the Securities purchased by such Underwriter hereunder. If
the allocation provided by the immediately preceding sentence is
unavailable for any reason, the Company and the Underwriters
severally shall contribute in such proportion as is appropriate
to reflect not only such relative benefits but also the relative
fault of the Company on the one hand and of the Underwriters on
the other in connection with the statements or omissions which
resulted in such Losses as well as any other relevant equitable
considerations. Benefits received by the Company shall be deemed
to be equal to the total net proceeds from the offering (before
deducting expenses) received by it, and benefits received by the
Underwriters shall be deemed to be equal to the total
underwriting discounts and commissions, in each case as set forth
on the cover page of the Prospectus. Relative fault shall be
determined by reference to, among other things, whether any
untrue or any alleged untrue statement of a material fact or the
Xxxxx Xxxxxx Inc.
March 31, 1998
Page 27
omission or alleged omission to state a material fact relates to
information provided by the Company on the one hand or the
Underwriters on the other, the intent of the parties and their
relative knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission. The
Company and the Underwriters agree that it would not be just and
equitable if contribution were determined by pro rata allocation
or any other method of allocation which does not take account of
the equitable considerations referred to above. Notwithstanding
the provisions of this paragraph (d), 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, each person who controls an
Underwriter within the meaning of either the Act or the Exchange
Act and each director, officer, employee and agent of an
Underwriter shall have the same rights to contribution as such
Underwriter, and each person who controls the Company within the
meaning of either the Act or 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 the
applicable terms and conditions of this paragraph (d).
9. DEFAULT BY AN UNDERWRITER. If any one or more
Underwriters shall fail to purchase and pay for any of the
Securities agreed to be purchased by such Underwriter or
Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their
obligations under this Agreement, the remaining Underwriters
shall be obligated severally to take up and pay for (in the
respective proportions which the amount of Securities set forth
opposite their names in Schedule I hereto bears to the aggregate
amount of Securities set forth opposite the names of all the
remaining Underwriters) the Securities which the defaulting
Underwriter or Underwriters agreed but failed to purchase;
provided, however, that in the event that the aggregate amount of
Securities which the defaulting Underwriter or Underwriters
agreed but failed to purchase shall exceed 10% of the aggregate
amount of Securities set forth in Schedule I hereto, the
remaining Underwriters shall have the right to purchase all, but
shall not be under any obligation to purchase any, of the
Securities, and if such nondefaulting Underwriters do not
purchase all the Securities, this Agreement will terminate
without liability to any nondefaulting Underwriter or the
Company. In the event of a default by any Underwriter as set
forth in this Section 9, the Closing Date shall be postponed for
such period, not exceeding five Business Days, as the
Representatives shall determine in order that the required
changes in the Registration Statement and the Prospectus or in
any other documents or arrangements may be effected. Nothing
contained in this Agreement shall relieve any defaulting
Underwriter of its liability, if any, to the Company and any
nondefaulting Underwriter for damages occasioned by its default
hereunder.
Xxxxx Xxxxxx Inc.
March 31, 1998
Page 28
10. TERMINATION. This Agreement shall be subject to
termination in the absolute discretion of the Representatives, by
notice given to the Company prior to delivery of and payment for
the Securities, if at any time prior to such time (i) trading in
the Company's Common Stock shall have been suspended by the
Commission or the Nasdaq National Market or trading in securities
generally on the New York Stock Exchange or the Nasdaq National
Market shall have been suspended or limited or minimum prices
shall have been established on either of such Exchange or
National Market, (ii) a banking moratorium shall have been
declared either by federal or New York State authorities or (iii)
there shall have occurred any outbreak or escalation of
hostilities, declaration by the United States of a national
emergency or war or other calamity or crisis the effect of which
on financial markets is such as to make it, in the sole judgment
of the Representatives, impractical or inadvisable to proceed
with the offering or delivery of the Securities as contemplated
by the Prospectus (exclusive of any supplement thereto).
11. REPRESENTATIONS AND INDEMNITIES TO SURVIVE. The
respective agreements, representations, warranties, indemnities
and other statements of the Company or its officers and of the
Underwriters set forth in or made pursuant to this Agreement will
remain in full force and effect, regardless of any investigation
made by or on behalf of any Underwriter or the Company or any of
the officers, directors or controlling persons referred to in
Section 8 hereof, and will survive delivery of and payment for
the Securities. The provisions of Sections 7 and 8 hereof shall
survive the termination or cancellation of this Agreement.
12. NOTICES. All communications hereunder will be in
writing and effective only on receipt, and, if sent to the
Representatives, will be mailed, delivered or telefaxed to Xxxxx
Xxxxxx Inc. General Counsel (fax no.: (000)000-0000) and
confirmed to Xxxxx Xxxxxx Inc. at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx, 00000, Attention: General Counsel; or, if sent to the
Company, will be mailed, delivered or telefaxed to (000) 000-0000
and confirmed to it at 0000 Xxxxx Xxxxx Xxxx, Xxxxx 0000,
Xxxxxxx, Xxxxxxx 00000, attention: General Counsel.
13. SUCCESSORS. This Agreement will inure to the benefit
of and be binding upon the parties hereto and their respective
successors and the officers and directors and controlling persons
referred to in Section 8 hereof, and no other person will have
any right or obligation hereunder.
14. APPLICABLE LAW. This Agreement will be governed by and
construed in accordance with the laws of the State of New York
applicable to contracts made and to be performed within the State
of New York.
15. COUNTERPARTS. This Agreement may be signed in one or
more counterparts, each of which shall constitute an original and
all of which together shall constitute one and the same
agreement.
Xxxxx Xxxxxx Inc.
March 31, 1998
Page 29
16. HEADINGS. The section headings used herein are for
convenience only and shall not affect the construction hereof.
17. DEFINITIONS. The terms which follow, when used in this
Agreement, shall have the meanings indicated.
"Act" shall mean the Securities Act of 1933, as
amended, and the rules and regulations of the Commission
promulgated thereunder.
"Business Day" shall mean any day other than a
Saturday, a Sunday or a legal holiday or a day on which
banking institutions or trust companies are authorized or
obligated by law to close in New York City.
"Closing Date" shall have the meaning set forth in
paragraph 3 herein.
"Commission" shall mean the Securities and Exchange
Commission.
"Effective Date" shall mean each date and time that the
Registration Statement, any post-effective amendment or
amendments thereto and any Rule 462(b) Registration
Statement became or become effective.
"Exchange Act" shall mean the Securities Exchange Act
of 1934, as amended, and the rules and regulations of the
Commission promulgated thereunder.
"Execution Time" shall mean the date and time that this
Agreement is executed and delivered by the parties hereto.
"Material Adverse Effect" shall have the meaning set
forth in paragraph 1(c) herein.
"Preliminary Prospectus" shall mean any preliminary
prospectus and any prospectus supplement thereto referred to
in paragraph 1(a) above and any preliminary prospectus
included in the Registration Statement at the Effective Date
that omits Rule 430A Information.
"Prospectus" shall mean the final prospectus and any
prospectus supplement relating to the Securities that is
filed pursuant to Rule 424(b) after the Execution Time or,
if no filing pursuant to Rule 424(b) is required, shall mean
the form of final prospectus relating to the Securities
included in the Registration Statement at the Effective
Date.
"Registration Statement" shall mean the registration
statement referred to in paragraph 1(a) above, including
incorporated documents, exhibits and financial statements,
as amended at the Execution Time (or, if not effective at
the Execution Time, in the form in which it shall become
effective) and, in the event any post-effective amendment
thereto or any Rule 462(b) Registration Statement becomes
Xxxxx Xxxxxx Inc.
March 31, 1998
Page 30
effective prior to the Closing Date, shall also mean such
registration statement as so amended or such Rule 462(b)
Registration Statement, as the case may be. Such term shall
include any Rule 430A Information deemed to be included
therein at the Effective Date as provided by Rule 430A.
"Rule 415," "Rule 424," "Rule 430A," and "Rule 462"
refer to such rules under the Act.
"Rule 430 Information" shall mean information with
respect to the Securities and the offering thereof permitted
to be omitted from the Registration Statement when it
becomes effective pursuant to Rule 430A
"Rule 462 Registration Statement" shall mean a
registration statement and any amendments thereto filed
pursuant to Rule 462 relating to the offering covered by the
initial registration statement.
Xxxxx Xxxxxx Inc.
March 31, 1998
Page 31
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us the enclosed
duplicate hereof, whereupon this letter and your acceptance shall
represent a binding agreement among the Company and the several
Underwriters.
Very truly yours,
INTERFACE, INC.
By:___________________________
Name: Xxxxxx X. Xxxxxxx
Title: Senior Vice President-Finance
The foregoing Agreement is hereby confirmed and accepted as of
the date first above written.
XXXXX XXXXXX INC.
XXXXXXX LYNCH, PIERCE,
XXXXXX & XXXXX
INCORPORATED
THE XXXXXXXX-XXXXXXXX
COMPANY, LLC
WHEAT FIRST SECURITIES, INC.
By: XXXXX XXXXXX INC.
By: ______________________________
Name:
Title:
For themselves and the other several Underwriters named in
Schedule I to the foregoing Agreement.
SCHEDULE I
Number of Underwritten
Securities to be
Underwriters Purchased
------------ -----------------------
Xxxxx Xxxxxx Inc. ....................................................................... 375,000
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated ...................................... 375,000
The Xxxxxxxx-Xxxxxxxx Company, LLC ..................................................... 375,000
Wheat First Securities, Inc. ............................................................ 375,000
---------
Total ......................................................... 1,500,000
SCHEDULE II
-----------
Inactive Subsidiaries
---------------------
Company Jurisdiction
------- ------------
Camborne North America, Inc. Delaware
Camborne Fabrics, Inc. North Carolina
Craft Acquisition Corp. Mississippi
Interface Disc Corp. Georgia
Interface Environmental, Inc. Georgia
Interface Installations, Inc. Georgia
Interface Service Management, Georgia
KCI, Inc. Georgia
Macroseptic Systems, Inc. Georgia
Pioneer Acquisition Corp. Massachusetts
Camborne Textile Systems United Kingdom
Xxxxxx Xxxxxxx & Son Limited United Kingdom
EXHIBIT A
[Letterhead of officer, director or major shareholder of Interface, Inc.]
Interface, Inc.
Public Offering of Common Stock
_________, 1998
Xxxxxxx Xxxxx Xxxxxx
Xxxxxxx Xxxxx & Co.
The Xxxxxxxx-Xxxxxxxx Company
Wheat First Union
As Representatives of the
several Underwriters
c/o Xxxxxxx Xxxxx Xxxxxx
8700 Sears Tower
Xxxxxxx, Xxxxxxxx 00000
Re: Interface Inc.; Offering of up to 1,725,000 Shares of
Class A Common Stock
Ladies and Gentlemen:
This letter is being delivered to you in connection with the
proposed Underwriting Agreement (the "Underwriting Agreement"),
between Interface, Inc., a Georgia corporation (the "Company"),
and each of you as representatives of a group of Underwriters
named therein, relating to an underwritten public offering (the
"Public Offering") of Class A Common Stock, $.10 par value (the
"Common Stock"), of the Company. In order to induce you and the
other Underwriters to enter into the Underwriting Agreement, the
undersigned will not, without the prior written consent of
Xxxxxxx Xxxxx Xxxxxx, offer, sell, contract to sell, pledge or
otherwise dispose of, or file (or participate in the filing of) a
registration statement with the Securities and Exchange
Commission in respect of, or establish or increase a put
equivalent position or liquidate or decrease a call equivalent
position within the meaning of Section 16 of the Securities
Exchange Act of 1934, as amended, and the rules and regulations
of the Securities and Exchange Commission promulgated thereunder
with respect to, any shares of capital stock of the Company or
any securities convertible into or exercisable or exchangeable
for such capital stock, or publicly announce an intention to
effect any such transaction, for a period of 90 days after the
commencement of the Public Offering (which commencement date
shall be deemed to be the date of the final prospectus used in
connection with the Public Offering), other than shares of Common
Stock disposed of as bona fide gifts approved by Xxxxxxx Xxxxx
Barney.
The undersigned agrees that the provisions of this Lock-Up
Agreement shall be binding also upon the successors, assigns,
heirs and personal representatives of the undersigned.
In furtherance of the foregoing, the Company and its
transfer agent are hereby authorized to decline to make any
transfer of securities if such transfer would constitute a
violation or breach of this Lock-Up Agreement.
If for any reason the Underwriting Agreement shall be
terminated prior to the Closing Date (as defined in the
Underwriting Agreement), this Lock-up Agreement shall likewise be
terminated.
Very truly yours,
______________________________
Name:
Address:
