INTERFACE, INC. 5,000,000 Shares1 Class A Common Stock ($0.10 par value) Underwriting Agreement
INTERFACE, INC.
5,000,000 Shares1
Class A Common Stock
($0.10 par value)
To the Representatives
named in Schedule I hereto
of the several Underwriters
named in Schedule II hereto
named in Schedule I hereto
of the several Underwriters
named in Schedule II hereto
Ladies and Gentlemen:
Interface, Inc., a corporation organized under the laws of the State of Georgia (the
“Company”), proposes to sell to the several underwriters named in Schedule II hereto (the
“Underwriters”), for whom you (the “Representatives”) are acting as representatives, the number of
shares of Class A Common Stock, $0.10 par value (“Common Stock”), of the Company set forth in
Schedule I hereto (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 the number of additional shares of Common Stock set forth in Schedule I hereto to
cover over-allotments, if any (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, the Base Prospectus, any Preliminary Prospectus or the Final 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 the Base Prospectus, any Preliminary Prospectus or the Final
Prospectus, as the case may be; and any reference herein to the terms “amend,” “amendment” or
“supplement” with respect to the Registration Statement, the Base Prospectus, any Preliminary
Prospectus or the Final Prospectus shall be deemed to refer to and include the filing of any
document under the Exchange Act after the Effective Date of the Registration Statement or the issue
date of the Base Prospectus, any Preliminary Prospectus or the Final Prospectus, as the case may
be, deemed to be incorporated therein by reference. Certain terms used herein are defined in
Section 20 hereof.
1 | Plus an option to purchase from the Company up to 750,000 additional shares to cover over-allotments. |
1. Representations and Warranties. The Company represents and warrants to, and agrees
with, each Underwriter as set forth below in this Section 1.
(a) The Company meets the requirements for use of Form S-3 under the Act and has prepared and
filed with the Commission an automatic shelf registration statement, as defined in Rule 405 (the
file number of which is set forth in Schedule I hereto) on Form S-3, including a related Base
Prospectus, for registration under the Act of the offering and sale of the Securities. Such
Registration Statement, including any amendments thereto filed prior to the Execution Time, became
effective upon filing. The Company may have filed with the Commission, as part of an amendment to
the Registration Statement or pursuant to Rule 424(b), one or more preliminary prospectus
supplements relating to the Securities, each of which has previously been furnished to you. The
Company will file with the Commission a final prospectus supplement relating to the Securities in
accordance with Rule 424(b). As filed, such final prospectus supplement shall contain all
information required by the Act and the rules thereunder, 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 Base Prospectus and any Preliminary Prospectus) as the Company has advised
you, prior to the Execution Time, will be included or made therein. The Registration Statement, at
the Execution Time, meets the requirements set forth in Rule 415(a)(1)(x).
(b) On each Effective Date, the Registration Statement did, and when the Final Prospectus is
first filed 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 Final Prospectus (and any supplement thereto) will, comply in all material respects
with the applicable requirements of the Act and the Exchange Act and the respective rules
thereunder; on each Effective Date and at the Execution Time, the Registration Statement did not
and 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 date of any filing pursuant to Rule 424(b) and on the Closing Date and any settlement
date, the Final 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 Final Prospectus (or
any 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 specifically for
inclusion in the Registration Statement or the Final Prospectus (or any supplement thereto), it
being understood and agreed that the only such information furnished by or on behalf of any
Underwriter consists of the information described as such in Section 8 hereof.
(c) The Disclosure Package and the price to the public, the number of Underwritten Securities
and the number of Option Securities to be included on the cover page of the Final Prospectus, when
taken together as a whole, does not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein,
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in the light of the circumstances under which they were made, not misleading. The preceding
sentence does not apply to statements in or omissions from the Disclosure Package based upon and in
conformity with written information furnished to the Company by any Underwriter through the
Representatives specifically for use therein, it being understood and agreed that the only such
information furnished by or on behalf of any Underwriter consists of the information described as
such in Section 8 hereof.
(d) (i) At the time of filing the Registration Statement, (ii) at the time of the most recent
amendment thereto for the purposes of complying with Section 10(a)(3) of the Act (whether such
amendment was by post-effective amendment, incorporated report filed pursuant to Sections 13 or
15(d) of the Exchange Act or form of prospectus), (iii) at the time the Company or any person
acting on its behalf (within the meaning, for this clause only, of Rule 163(c)) made any offer
relating to the Securities in reliance on the exemption in Rule 163, and (iv) at the Execution Time
(with such date being used as the determination date for purposes of this clause (iv)), the Company
was or is (as the case may be) a “well-known seasoned issuer” as defined in Rule 405. The Company
agrees to pay the fees required by the Commission relating to the Securities within the time
required by Rule 456(b)(1) without regard to the proviso therein and otherwise in accordance with
Rules 456(b) and 457(r).
(e) (i) At the earliest time after the filing of the Registration Statement that the Company
or another offering participant made a bona fide offer (within the meaning of Rule 164(h)(2)) of
the Securities and (ii) as of the Execution Time (with such date being used as the determination
date for purposes of this clause (ii)), the Company was not and is not an Ineligible Issuer (as
defined in Rule 405), without taking account of any determination by the Commission pursuant to
Rule 405 that it is not necessary that the Company be considered an Ineligible Issuer.
(f) Each Issuer Free Writing Prospectus does not include any information that conflicts in any
material way with the information contained in the Registration Statement, including any document
incorporated therein by reference and any prospectus supplement deemed to be a part thereof that
has not been superseded or modified. The foregoing sentence does not apply to statements in or
omissions from any Issuer Free Writing Prospectus based upon and in conformity with written
information furnished to the Company by any Underwriter through the Representatives specifically
for use therein, it being understood and agreed that the only such information furnished by or on
behalf of any Underwriter consists of the information described as such in Section 8 hereof.
(g) 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 Disclosure Package and the Final
Prospectus will not be, an “investment company” within the meaning of the Investment Company Act.
(h) No holders of securities of the Company have rights to the registration of such securities
under the Registration Statement.
(i) The Company has not taken, directly or indirectly, any action designed to cause or which
has constituted or which might reasonably be expected to cause or result, under
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the Exchange Act or otherwise, in the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Securities.
(j) Each of the Company and its Subsidiaries (as defined below) has been duly incorporated or
organized and is validly existing as a corporation, limited liability company or limited
partnership in good standing under the laws of the jurisdiction in which it is chartered or
organized with full 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 Disclosure Package and the Final
Prospectus, and is duly qualified to do business as a foreign corporation, limited liability
company or limited partnership and is in good standing under the laws of each jurisdiction which
requires such qualification, except where the failure so to register or qualify or be in good
standing or be validly existing 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 defined
below) taken as a whole (a “Material Adverse Effect”). All of the Company’s subsidiaries listed on
Exhibit 21 (but excluding those subsidiaries referenced solely in the footnotes to Exhibit 21) to
the Company’s Annual Report on Form 10-K for the fiscal year ended January 1, 2006, are referred to
herein individually as “Subsidiary” and collectively as “Subsidiaries.”
(k) All the outstanding shares of capital stock of each Subsidiary have been duly and validly
authorized and issued and are fully paid and nonassessable, and (except for directors’ qualifying
shares and nominal investments by foreign nationals mandated by applicable law, or similar
interests), all outstanding shares of capital stock of the Subsidiaries are owned by the Company
either directly or through wholly owned subsidiaries free and clear of any perfected security
interest or any other security interests, claims, liens or encumbrances, except as described or
referenced in the Disclosure Package and the Final Prospectus.
(l) the Company’s authorized equity capitalization is as set forth in the Disclosure Package
and the Final Prospectus; the capital stock of the Company conforms in all material respects to the
description thereof contained in the Disclosure Package and the Final Prospectus; the outstanding
shares of Common Stock have been duly and validly authorized and issued and are fully paid and
nonassessable; the Securities have been duly and validly authorized, and, when issued and delivered
to and paid for by the Underwriters pursuant to this Agreement, will be fully paid and
nonassessable; the Securities are duly listed, and admitted and authorized for trading, subject to
official notice of issuance on the Nasdaq Global Market; the certificates, if any, 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 Disclosure Package and the Final 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;
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(m) There is no franchise, contract or other document of a character required to be described
in the Registration Statement, Disclosure Package or Final Prospectus, or to be filed as an exhibit
thereto, which is not described or filed as required; and the statements in the Preliminary
Prospectus and the Final Prospectus under the heading “Description of Capital Stock,” insofar as
such statements summarize legal matters discussed therein, are accurate and fair summaries of such
legal matters.
(n) This Agreement has been duly authorized, executed and delivered by the Company.
(o) No consent, approval, authorization, filing with or order of any court or governmental
agency or body is 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 Disclosure Package and the Final Prospectus.
(p) Neither the execution and delivery of this Agreement, 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 or violation or imposition
of any lien, charge or encumbrance upon any property or assets of the Company or any of its
Subsidiaries (except where such would not have a Material Adverse Effect) pursuant to, (i) the
certificate or articles of incorporation, bylaws or other organizational documents of the Company
or any of its Subsidiaries; (ii) 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 of its Subsidiaries is a party or bound or to
which its or their property is subject; or (iii) any statute, law, rule, regulation, judgment,
order or decree applicable to the Company or any of its Subsidiaries of any court, regulatory body,
administrative agency, governmental body, arbitrator or other authority having jurisdiction over
the Company or any of its Subsidiaries or any of its or their properties.
(q) The consolidated financial statements and schedules of the Company and its consolidated
subsidiaries included or incorporated by reference in the Registration Statement, the Preliminary
Prospectus and the Final Prospectus 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); and the selected financial
data set forth under the caption “Selected Financial Data” in the Preliminary Prospectus and the
Final Prospectus fairly present, on the basis stated in the Preliminary Prospectus and the Final
Prospectus, the information included therein.
(r) 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 its Subsidiaries or its or their property is
pending or, to the knowledge of the Company, threatened that (i) could reasonably be expected to
have a material adverse effect on the performance of this Agreement, or the consummation of any of
the transactions contemplated hereby; or (ii) could reasonably be
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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 Preliminary Prospectus
and the Final Prospectus (exclusive of any amendment or supplement thereto).
(s) Each of the Company and each of its Subsidiaries owns or leases all such properties as are
necessary to the conduct of its operations as presently conducted and as described or referenced in
the Disclosure Package and the Final Prospectus.
(t) 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 indenture, contract, lease, mortgage, deed of trust,
note agreement, loan agreement or other 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,
regulation, 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 violations or defaults in the
aggregate would not have a Material Adverse Effect.
(u) 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 or incorporated by reference in the Registration
Statement, Preliminary Prospectus and Final Prospectus, are independent public accountants with
respect to the Company within the meaning of the Act and the applicable published rules and
regulations thereunder.
(v) There are no stamp or other issuance or transfer taxes or duties or other similar fees or
charges required to be paid in connection with the execution and delivery of this Agreement or the
issuance or sale by the Company of the Securities.
(w) Through the date hereof, 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
Disclosure Package or Final Prospectus (exclusive of any amendment or supplement thereto) 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 Disclosure Package or Final Prospectus.
(x) No labor problem or dispute with the employees of the Company or any of its Subsidiaries
exists, is threatened or imminent to the knowledge of the Company’s senior executive officers in
the ordinary course of such officers’ duties, and the Company is not aware of any existing or
imminent labor disturbance by the employees of any of its or its 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
Disclosure Package and the Final Prospectus.
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(y) The Company and each of its 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
its Subsidiaries or their respective businesses, assets, employees, officers and directors are in
full force and effect; the Company and its Subsidiaries are in compliance with the terms of such
policies and instruments in all material respects; there are no claims by the Company or any of its
Subsidiaries under any such policy or instrument as to which any insurance company is denying
liability or defending under a reservation of rights clause except for such as would not,
individually or in the aggregate, have a Material Adverse Effect; 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 Disclosure Package and the Final Prospectus.
(z) 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 Disclosure Package and the Final
Prospectus.
(aa) The Company and its 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, if either 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 Disclosure Package and the Final Prospectus.
(bb) The Company and each of its 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 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 and its Subsidiaries’
internal controls over financial reporting are effective and the Company and its Subsidiaries are
not aware of any material weakness in their internal controls over financial reporting.
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(cc) The Company and its Subsidiaries maintain “disclosure controls and procedures” (as such
term is defined in Rule 13a — 15(e) under the Exchange Act); such disclosure controls and
procedures are effective.
(dd) The Company and its Subsidiaries (i) are in compliance with any and all applicable
foreign, federal, state and local laws and regulations relating to the protection of human health
and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants
(“Environmental Laws”); (ii) have received 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,
pollutants or contaminants, in each case except where such non-compliance with Environmental Laws,
failure to receive or noncompliance with 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 Disclosure Package and the Final Prospectus. Except as set forth in the
Disclosure Package and the Final Prospectus and except for Bentley Xxxxx (now known as Bentley
Prince Street, Inc.) and Interface Architectural Resources, Inc., which have been named
“potentially responsible parties” at the Xxxxxx Valley Operable Unit of the San Xxxxxxx Valley, and
the Lake Calumet Cluster Superfund sites, respectively, (the “Sites”) and the liability of which
for the cleanup of the Sites will not have a Material Adverse Effect, 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.
(ee) In the ordinary course of its business, the Company periodically reviews the effect of
Environmental Laws on the business, operations and properties of the Company and its 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 not
accrued or reserved or otherwise reflected on the Company’s financial statements 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 Disclosure Package
and the Final Prospectus.
(ff) Except where the failure of any of the following to be true and accurate would not have a
Material Adverse Effect, (i) the minimum funding standard under Section 302 of the Employee
Retirement Income Security Act of 1974, as amended, and the regulations and published
interpretations thereunder (“ERISA”), has been satisfied by each “pension plan” (as defined in
Section 3(2) of ERISA) which has been established or maintained by the Company and/or one or more
of its subsidiaries, and the trust forming part of each such plan which is intended to be qualified
under Section 401 of the Code is so qualified; (ii) each of the Company and its subsidiaries has
fulfilled its obligations, if any, under Section 515 of ERISA; (iii) neither the Company nor any of
its subsidiaries maintains or is required to contribute to a “welfare plan” (as defined in Section
3(1) of ERISA) which provides retiree or other post-employment welfare
8
benefits or insurance coverage (other than “continuation coverage” (as defined in Section 602
of ERISA)); (iv) each pension plan and welfare plan established or maintained by the Company and/or
one or more of its subsidiaries is in compliance in all material respects with the currently
applicable provisions of ERISA; and (v) neither the Company nor any of its subsidiaries has
incurred or could reasonably be expected to incur any withdrawal liability under Section 4201 of
ERISA, any liability under Section 4062, 4063, or 4064 of ERISA, or any other liability under Title
IV of ERISA.
(gg) There is and has been no material failure on the part of the Company and any of the
Company’s directors or officers, in their capacities as such, to comply with any provision of the
Xxxxxxxx-Xxxxx Act of 2002 and the rules and regulations promulgated in connection therewith (the
“Xxxxxxxx-Xxxxx Act”), including Section 402 relating to loans and Sections 302 and 906 relating to
certifications.
(hh) Neither the Company nor any of its Subsidiaries nor, to the knowledge of the Company, any
director, officer, agent, employee or affiliate of the Company or any of its Subsidiaries is aware
of or has taken any action, directly or indirectly, that would result in a material violation by
such persons of the Foreign Corrupt Practices Act of 1977, as amended, and the rules and
regulations thereunder (the “FCPA”), including, without limitation, making use of the mails or any
means or instrumentality of interstate commerce corruptly in furtherance of an offer, payment,
promise to pay or authorization of the payment of any money, or other property, gift, promise to
give, or authorization of the giving of anything of value to any “foreign official” (as such term
is defined in the FCPA) or any foreign political party or official thereof or any candidate for
foreign political office, in contravention of the FCPA and the Company, its Subsidiaries and, to
the knowledge of the Company, its affiliates have conducted their businesses in compliance with the
FCPA and have instituted and maintain policies and procedures designed to ensure, and which are
reasonably expected to continue to ensure, continued compliance therewith.
(ii) The operations of the Company and its Subsidiaries are and have been conducted at all
times in compliance with applicable financial recordkeeping and reporting requirements, and the
money laundering statutes, and the rules and regulations thereunder and any related or similar
rules, regulations or guidelines, issued, administered or enforced by any governmental agency
(collectively, the “Money Laundering Laws”) and 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
its Subsidiaries with respect to the Money Laundering Laws is pending or, to the knowledge of the
Company, threatened.
(jj) Neither the Company nor any of its Subsidiaries nor, to the knowledge of the Company, any
director, officer, agent, employee or affiliate of the Company or any of its Subsidiaries is
currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the
U.S. Treasury Department (“OFAC”); and the Company will not directly or indirectly use the proceeds
of the offering, or lend, contribute or otherwise make available such proceeds to any subsidiary,
joint venture partner or other person or entity, for the purpose of financing the activities of any
person currently subject to any U.S. sanctions administered by OFAC.
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(kk) Except where the failure of any of the following to be true and accurate would not have a
Material Adverse Effect, the Company and its Subsidiaries own, possess, license or have other
rights to use, on reasonable terms, all patents, patent applications, trade and service marks,
trade and service xxxx registrations, trade names, copyrights, licenses, inventions, trade secrets,
technology, know-how and other intellectual property (collectively, the “Intellectual Property”)
necessary for the conduct of the Company’s business as now conducted or as proposed in the
Disclosure Package and the Final Prospectus to be conducted. Except where the failure of any of
the following to be true and accurate would not have a Material Adverse Effect, and except as set
forth in the Disclosure Package and the Final Prospectus (a) there are no rights of third parties
to any such Intellectual Property; (b) to the Company’s best knowledge, there is no material
infringement by third parties of any such Intellectual Property; (c) there is no pending or, to the
Company’s knowledge, threatened action, suit, proceeding or claim by others challenging the
Company’s rights in or to any such Intellectual Property, and the Company is unaware of any facts
which would form a reasonable basis for any such claim; (d) there is no pending or, to the
Company’s knowledge, threatened action, suit, proceeding or claim by others challenging the
validity or scope of any such intellectual Property, and the Company is unaware of any facts which
would form a reasonable basis for any such claim; (e) there is no pending or, to the Company’s
knowledge, threatened action, suit, proceeding or claim by others that the Company infringes or
otherwise violates any patent, trademark, copyright, trade secret or other proprietary rights of
others, and the Company is unaware of any other fact which would form a reasonable basis for any
such claim; and (f) to the Company’s knowledge, there is no U.S. patent or published U.S. patent
application which contains claims that dominate or may dominate any Intellectual Property described
in the Disclosure Package and the Prospectus as being owned by or licensed to the Company or that
interferes with the issued or pending claims of any such Intellectual Property.
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 the purchase price set forth in
Schedule I hereto, the number of Underwritten Securities set forth opposite such Underwriter’s name
in Schedule II 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, the number of Option Securities set forth in Schedule I hereto
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 on or
before the 30th day after the date of the Final Prospectus upon written or telegraphic notice by
the Representatives to the Company setting forth the number of Option
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Securities as to which the several Underwriters are exercising the option and the settlement
date. The number of Option Securities to be purchased by each Underwriter shall be the same
percentage of the total number of 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 immediately preceding the Closing Date) shall be made on the
date and at the time specified in Schedule I hereto 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 instruct.
If the option provided for in Section 2(b) hereof is exercised after the third Business Day
immediately preceding the Closing Date, the Company will deliver the Option Securities (at the
expense of the Company) to the Representatives, at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, xx 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.
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 Final Prospectus.
5. Agreements. The Company agrees with the several Underwriters that:
(a) Prior to the termination of the offering of the Securities, the Company will not file any
amendment of the Registration Statement or supplement (including the Final Prospectus or any
Preliminary Prospectus) to the Base Prospectus unless the Company has furnished you a copy for your
review prior to filing and will not file any such proposed amendment or supplement to which you
reasonably object in writing. The Company will cause the Final Prospectus, properly completed, and
any supplement thereto to be filed in a form approved by the Representatives with the Commission
pursuant to the applicable paragraph of Rule 424(b) within the time period prescribed and will
provide evidence satisfactory to the
11
Representatives of such timely filing. The Company will promptly advise the Representatives
(i) when the Final Prospectus, and any supplement thereto, shall have been filed (if required) with
the Commission pursuant to Rule 424(b), (ii) when, prior to termination of the offering of the
Securities, any amendment to the Registration Statement shall have been filed or become effective,
(iii) 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 Final Prospectus
or for any additional information, (iv) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or of any notice objecting to its use or
the institution or threatening of any proceeding for that purpose and (v) 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 every reasonable effort to prevent the issuance of any such stop order or the
occurrence of any such suspension or objection to the use of the Registration Statement and, upon
such issuance, occurrence or notice of objection, to obtain as soon as possible the withdrawal of
such stop order or relief from such occurrence or objection, including, if necessary, by filing an
amendment to the Registration Statement or a new registration statement and using every reasonable
effort to have such amendment or new registration statement declared effective as soon as
practicable.
(b) If, at any time prior to the filing of the Final Prospectus pursuant to Rule 424(b), any
event occurs as a result of which the Disclosure Package 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 circumstances under which they were made, not misleading, the Company will (i) notify
promptly the Representatives so that any use of the Disclosure Package may cease until it is
amended or supplemented; (ii) amend or supplement the Disclosure Package to correct such statement
or omission; and (iii) supply any amendment or supplement to you in such quantities as you may
reasonably request.
(c) If, at any time when a prospectus relating to the Securities is required to be delivered
under the Act (including in circumstances where such requirement may be satisfied pursuant to Rule
172), any event occurs as a result of which the Final 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 circumstances under which they were made not misleading, or
if it shall be necessary to amend the Registration Statement, file a new registration statement or
supplement the Final Prospectus to comply with the Act or the Exchange Act or the respective rules
thereunder, including in connection with use or delivery of the Final Prospectus, the Company
promptly will (i) notify the Representatives of any such event, (ii) prepare and file with the
Commission, subject to the second sentence of paragraph (a) of this Section 5, an amendment or
supplement or new registration statement which will correct such statement or omission or effect
such compliance, (iii) use every reasonable effort to have any amendment to the Registration
Statement or new registration statement declared effective as soon as practicable in order to avoid
any disruption in use of the Final Prospectus and (iv) supply any supplemented Final Prospectus to
you in such quantities as you may reasonably request.
(d) As soon as practicable, the Company will make generally available to its security holders
and to the Representatives an earnings statement or statements of the Company and its subsidiaries
which will satisfy the provisions of Section 11(a) of the Act and Rule 158.
12
(e) 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 (including in
circumstances where such requirement may be satisfied pursuant to Rule 172), as many copies of each
Preliminary Prospectus, the Final Prospectus and each Issuer Free Writing Prospectus and any
supplement thereto as the Representatives may reasonably request. The Company will pay the
expenses of printing or other production of all documents relating to the offering.
(f) 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.
(g) The Company agrees that, unless it has or shall have obtained the prior written consent of
the Representatives, and each Underwriter, severally and not jointly, agrees with the Company that,
unless it has or shall have obtained, as the case may be, the prior written consent of the Company,
it has not made and will not make any offer relating to the Securities that would constitute an
Issuer Free Writing Prospectus or that would otherwise constitute a “free writing prospectus” (as
defined in Rule 405) required to be filed by the Company with the Commission or retained by the
Company under Rule 433; provided that the prior written consent of the parties hereto shall be
deemed to have been given in respect of the Free Writing Prospectuses included in Schedule III
hereto and any electronic road show. Any such free writing prospectus consented to by the
Representatives or the Company is hereinafter referred to as a “Permitted Free Writing Prospectus.”
The Company agrees that (x) it has treated and will treat, as the case may be, each Permitted Free
Writing Prospectus as an Issuer Free Writing Prospectus and (y) it has complied and will comply, as
the case may be, with the requirements of Rules 164 and 433 applicable to any Permitted Free
Writing Prospectus, including in respect of timely filing with the Commission, legending and record
keeping.
(h) The Company will not, without the prior written consent of Citigroup Global Markets Inc.,
offer, sell, contract to sell, pledge, 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, including the filing (or participation in the filing) of a
registration statement with the 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 Exchange Act, any other shares of Common Stock or any securities convertible into, or
exercisable or exchangeable for, shares of Common Stock; or publicly announce an intention to
effect any such transaction, until the Business Day set forth on Schedule I hereto,
provided, however, that the Company may issue and sell Common Stock pursuant to any
employee stock option plan or agreement, stock ownership plan or dividend
13
reinvestment plan of the Company in effect at the Execution Time and the Company may issue
Common Stock issuable upon the conversion of securities or the exercise of warrants outstanding at
the Execution Time. Notwithstanding the foregoing, if (x) during the last 17 days of the
restricted period under this section, the Company issues an earnings release or material news or a
material event relating to the Company occurs, or (y) prior to the expiration of the restricted
period under this section, the Company announces that it will release earnings results during the
16-day period beginning on the last day of the restricted period, the restrictions imposed in this
clause shall continue to apply until the expiration of the 18-day period beginning on the issuance
of the earnings release or the occurrence of the material news or material event. The Company will
provide the Representatives and any Underwriters and each individual subject to the restricted
period pursuant to the lockup letters described in Section 6(k) with prior notice of any such
announcement that gives rise to an extension of the restricted period.
(i) The Company will not take, directly or indirectly, any action designed to or that would
constitute or that might reasonably be expected to cause or result in, under the Exchange Act or
otherwise, stabilization or manipulation of the price of any security of the Company to facilitate
the sale or resale of the Securities.
(j) 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
Final Prospectus and each Issuer Free Writing 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 Final Prospectus and each Issuer Free Writing 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 preparation, printing,
authentication, issuance and delivery of certificates for the Securities, including any stamp or
transfer 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 Global 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); (vii) any filings required to be made with the
NASD, 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; (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.
14
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) The Final Prospectus, and any supplement thereto, has been filed in the manner and within
the time period required by Rule 424(b); any other material required to be filed by the Company
pursuant to Rule 433(d) under the Act, shall have been filed with the Commission within the
applicable time periods prescribed for such filings by Rule 433; and no stop order suspending the
effectiveness of the Registration Statement or any notice that would prevent its use shall have
been issued and no proceedings for that purpose shall have been instituted or threatened.
(b) The Company shall have requested and caused Xxxxxxxxxx Xxxxxxxx LLP, counsel for the
Company, to have furnished to the Representatives their opinion, dated the Closing Date and
addressed to the Representatives, to the effect set forth in Exhibit B hereto.
(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 set forth in Exhibit C hereto.
(d) The Representatives shall have received from Xxxxxxxx Xxxxxxx LLP, counsel for the
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 Disclosure Package, the Final 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 reasonably request for the purpose of enabling
them to pass upon such matters.
(e) The Company shall have furnished to the Representatives a certificate of the Company,
signed by the President/Chief Executive Officer 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 Final Prospectus, the Disclosure Package and any
supplements or amendments thereto, and this Agreement and that:
(i) the representations and warranties of the Company in this Agreement are true and
correct 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 or any
notice objecting to its use has been issued, and no proceedings for that purpose have been
instituted or, to the Company’s knowledge, threatened; and
15
(iii) since the date of the most recent financial statements included or incorporated
by reference in the Disclosure Package and the Final Prospectus (exclusive of any supplement
thereto), there has been no Material Adverse Effect on the condition (financial or
otherwise), prospects, 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 Disclosure Package and the Final
Prospectus (exclusive of any supplement thereto).
(f) The Company shall have requested and caused BDO Xxxxxxx, LLP to have furnished to the
Representatives, at the Execution Time and at the Closing Date, letters (which may refer to letters
previously delivered to one or more of the Representatives), 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 public accountants within the meaning of the Act and the
Exchange Act and the respective applicable rules and regulations adopted by the Commission
thereunder and that they have performed a review of the unaudited interim financial information of
the Company for the six-month period ended July 2, 2006, and as at July 2, 2006, in accordance with
Statement on Auditing Standards No. 100, and stating in effect that:
(i) in their opinion the audited financial statements and financial statement schedules
included or incorporated by reference in the Registration Statement, the Preliminary
Prospectus and the Final Prospectus and reported on by them comply as to form with the
applicable accounting requirements of the Act and the Exchange Act and the related rules and
regulations adopted by the Commission;
(ii) on the basis of a reading of the latest unaudited financial statements made
available by the Company and its subsidiaries; their limited review, in accordance with
standards established under Statement on Auditing Standards No. 100, of the unaudited
interim financial information for the six-month period ended July 2, 2006, and as at July 2,
2006; 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, the board of directors and the executive and audit
committees of the Company; 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 January 1, 2006, nothing came to their attention
which caused them to believe that:
(1) any unaudited financial statements included or incorporated by reference in
the Registration Statement, the Preliminary Prospectus and the Final Prospectus do
not comply as to form with applicable accounting requirements of the Act and with
the related rules and regulations adopted by the Commission with respect to
financial statements included or incorporated by reference 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
16
audited financial statements included or incorporated by reference in the
Registration Statement, the Preliminary Prospectus and the Final Prospectus;
(2) with respect to the period subsequent to July 2, 2006, 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 of the Company and its subsidiaries or capital stock
of the Company or decreases in the stockholders’ equity of the Company, or decreases
in working capital of the Company and its Subsidiaries as compared with the amounts
shown on the July 2, 2006 consolidated balance sheet included or incorporated by
reference in the Registration Statement, the Preliminary Prospectus and the Final
Prospectus, or for the period from July 3, 2006 to such specified date there were
any decreases, as compared with the corresponding period in the preceding quarter in
net sales or income before income taxes or in total or per share amounts of net
income of the Company and its Subsidiaries or operating income, 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;
(3) the information included or incorporated by reference in the Registration
Statement, the Preliminary Prospectus and Final Prospectus in response to Regulation
S-K, Item 301 (Selected Financial Data), Item 302 (Supplementary Financial
Information), Item 402 (Executive Compensation) and Item 503(d) (Ratio of Earnings
to Fixed Charges) is not in conformity with the applicable disclosure requirements
of Regulation S-K; or
(4) the unaudited amounts of net sales, operating income and net income 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
by reference in the Registration Statement, the Preliminary Prospectus and the Final
Prospectus; and
(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, the Preliminary Prospectus and the Final Prospectus and in Exhibit 12 to the
Registration Statement, including the information included or incorporated by reference in
Items 1, 6, 7, 7A, and 11 of the Company’s Annual Report on Form 10-K, incorporated by
reference in the Registration Statement, the Preliminary Prospectus and the Final
Prospectus, and the information included in the “Management’s Discussion and Analysis of
Financial Condition and Results of Operations” included or incorporated by reference in the
Company’s Quarterly Reports on Form 10-Q, incorporated by reference in the Registration
Statement, the Preliminary Prospectus and the Final Prospectus, agrees with the accounting
records of the Company and its subsidiaries, excluding any questions of legal
interpretation.
17
References to the Final Prospectus in this paragraph (f) include any supplement thereto
at the date of the letter.
(g) 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 Final Prospectus
(exclusive of any amendment or supplement thereto), there shall not have been (i) any change or
decrease specified in the letter or letters referred to in paragraph (f) of this Section 6 or (ii)
any change, or any development involving a prospective change, in or affecting 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 Disclosure Package and the Final Prospectus
(exclusive of any amendment or 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), the Disclosure
Package and the Final Prospectus (exclusive of any amendment or supplement thereto).
(h) 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.
(i) 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.
(j) The Securities shall have been listed and admitted and authorized for trading on the
Nasdaq Global Market, and satisfactory evidence of such actions shall have been provided to the
Representatives.
(k) At the Execution Time, the Company shall have furnished to the Representatives a Lock-up
Agreement substantially in the form of Exhibit A hereto from each executive officer and director of
the Company and addressed to the Representatives.
If any of the conditions specified in this Section 6 shall not have been fulfilled 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 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
Xxxxxxxx Xxxxxxx LLP, counsel for the Underwriters, at Bank of America Plaza, 000 Xxxxxxxxx Xxxxxx,
Xxxxx 0000, Xxxxxxx, Xxxxxxx 00000, on the Closing Date.
18
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, 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 provision hereof other than by reason of a default by any of
the Underwriters, the Company will reimburse the Underwriters severally through Citigroup Global
Markets Inc. on demand for all reasonable 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.
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 or in any amendment
thereof, or in the Base Prospectus, any Preliminary Prospectus or any other preliminary prospectus
supplement relating to the Securities, the Final Prospectus, or any Issuer Free Writing 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. This indemnity agreement will be
in addition to any liability which the Company may otherwise have.
(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 (i) the last paragraph of the cover page regarding delivery of the Securities and,
under the heading “Underwriting” or “Plan of Distribution”, (ii) the list of Underwriters and their
respective participation in the sale of the Securities, (iii) the sentences related to concessions
and reallowances and (iv) the paragraph related to stabilization, syndicate covering transactions
and penalty bids in any Preliminary Prospectus and the Final Prospectus constitute the only
information furnished in writing by or on behalf of the several
19
Underwriters for inclusion in any Preliminary Prospectus, the Final Prospectus or any Issuer
Free Writing 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 (i) the use of counsel chosen by the indemnifying party to represent the indemnified
party would present such counsel with a conflict of 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 in writing the indemnified party to employ separate counsel at
the expense of the indemnifying party. 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), (b) or (c) 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 the 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
20
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 Final
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 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 II 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 II 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 Final 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.
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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 delivery and payment (i) trading in the Company’s
Common Stock shall have been suspended by the Commission or the Nasdaq Global Market or trading in
securities generally on the New York Stock Exchange or the Nasdaq Global Market shall have been
suspended or limited or minimum prices shall have been established on either of such exchanges,
(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 any
Preliminary Prospectus or the Final Prospectus (exclusive of any amendment or 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, employees, agents 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 the
Citigroup Global Markets Inc. General Counsel (fax no.: (000) 000-0000) and confirmed to the
General Counsel, Citigroup Global Markets 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
Interface, Inc. General Counsel (fax no.: (000) 000-0000) and confirmed to Xxxxxxxxxx Xxxxxxxx LLP,
0000 Xxxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxx 00000, Attention: W. Xxxxx Xxxxx.
13. Successors. This Agreement will inure to the benefit of and be binding upon the
parties hereto and their respective successors and the officers, directors, employees, agents and
controlling persons referred to in Section 8 hereof, and no other person will have any right or
obligation hereunder.
14. No fiduciary duty. The Company hereby acknowledges that (a) the purchase and sale
of the Securities pursuant to this Agreement is an arm’s-length commercial transaction between the
Company, on the one hand, and the Underwriters and any affiliates through which they may be acting,
on the other, (b) the Underwriters are acting as principal and not as an agent or fiduciary of the
Company and (c) the Company’s engagement of the Underwriters in connection with the
offering and the process leading up to the offering is as independent contractors and not in any
other capacity. Furthermore, the Company agrees that it is solely responsible for making its own
judgments in connection with the offering (irrespective of whether any of the Underwriters has
advised or is currently advising the Company on related or other matters). The Company agrees that
it will not claim that the Underwriters have rendered advisory services of any nature or respect,
or owe an agency, fiduciary or similar duty to the Company, in connection with such transaction or
the process leading thereto.
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15. Integration. This Agreement supersedes all prior agreements and understandings
(whether written or oral) between the Company and the Underwriters, or any of them, with respect to
the subject matter hereof.
16. 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.
17. Waiver of Jury Trial. The parties hereby irrevocably waive, to the fullest extent
permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out
of or relating to this Agreement or the transactions contemplated hereby.
18. 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.
19. Headings. The section headings used herein are for convenience only and shall not
affect the construction hereof.
20. Definitions. The terms that 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.
“Base Prospectus” shall mean the base prospectus referred to in paragraph 1(a) above
contained in the Registration Statement at the Execution Date.
“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.
“Commission” shall mean the Securities and Exchange Commission.
“Disclosure Package” shall mean (i) the Base Prospectus, (ii) the Preliminary
Prospectus used most recently prior to the Execution Time, (iii) the Issuer Free Writing
Prospectuses, if any, identified in Schedule III hereto, and (iv) any other Free Writing
Prospectus that the parties hereto shall hereafter expressly agree in writing to treat as
part of the Disclosure Package.
“Effective Date” shall mean each date and time that the Registration Statement and any
post-effective amendment or amendments thereto became or becomes 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.
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“Final Prospectus” shall mean the prospectus supplement relating to the Securities that
was first filed pursuant to Rule 424(b) after the Execution Time, together with the Base
Prospectus.
“Free Writing Prospectus” shall mean a free writing prospectus, as defined in Rule 405.
“Issuer Free Writing Prospectus” shall mean an issuer free writing prospectus, as
defined in Rule 433.
“Preliminary Prospectus” shall mean any preliminary prospectus supplement to the Base
Prospectus referred to in paragraph 1(a) above which is used prior to the filing of the
Final Prospectus, together with the Base Prospectus.
“Registration Statement” shall mean the registration statement referred to in paragraph
1(a) above, including exhibits and financial statements and any prospectus supplement
relating to the Securities that is filed with the Commission pursuant to Rule 424(b) and
deemed part of such registration statement pursuant to Rule 430B, as amended on each
Effective Date and, in the event any post-effective amendment thereto becomes effective
prior to the Closing Date, shall also mean such registration statement as so amended.
“Rule 158”, “Rule 163”, “Rule 164”, “Rule 172”, “Rule 405”, “Rule 415”, “Rule 424”,
“Rule 430B” and “Rule 433” refer to such rules under the Act.
“Well-Known Seasoned Issuer” shall mean a well-known seasoned issuer, as defined in
Rule 405.
24
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: | /s/ Xxxxxx X. Xxxxxxx | |||
Name: | Xxxxxx X. Xxxxxxx | |||
Title: | President and Chief Executive Officer | |||
The foregoing Agreement is
hereby confirmed and accepted
as of the date specified in
Schedule I hereto.
hereby confirmed and accepted
as of the date specified in
Schedule I hereto.
Citigroup Global Markets Inc.
By: |
/s/ Xxxxxx Xxxxxxxxx | |
Name: Xxxxxx Xxxxxxxxx | ||
Title: Vice President |
For themselves and the other
several Underwriters, if any,
named in Schedule II to the
foregoing Agreement.
several Underwriters, if any,
named in Schedule II to the
foregoing Agreement.
SCHEDULE I
Underwriting Agreement dated November 6, 2006
Registration Statement No. 333-134168
Representative(s): Citigroup Global Markets Inc.
Title, Purchase Price and Description of Securities:
Title: Class A Common Stock
Number of Underwritten Securities to be sold by the Company: 5,000,000
Number of Option Securities to be sold by the Company: 750,000
Price
per Share to Public (include accrued dividends, if any): $14.6500
Price
per Share to the Underwriters — total: $13.8076
Other provisions:
Closing
Date, Time and Location: November 10, 2006 at 10:00 a.m. at Xxxxxxxx Xxxxxxx LLP, Bank of
America Plaza, 000 Xxxxxxxxx Xxxxxx, X.X., Xxxxx 0000, Xxxxxxx, Xxxxxxx 00000
Type of Offering: Non-Delayed
Date referred to in Section 5(h) after which the Company may offer or sell securities issued by the
Company without the consent of the Representative(s): February 4, 2007
Modification of items to be covered by the letter from BDO Xxxxxxx, LLP delivered pursuant to
Section 6(f) at the Execution Time: None
SCHEDULE II
Number of Underwritten | ||||
Underwriters | Securities to be Purchased | |||
Citigroup Global Markets Inc. |
2,500,000 | |||
Xxxxxxx Xxxxx & Associates, Inc. |
1,250,000 | |||
Xxxxxx, Xxxxxxxx & Company, Incorporated |
500,000 | |||
SunTrust Capital Markets, Inc. |
500,000 | |||
BB&T Capital Markets, a division of
Xxxxx & Xxxxxxxxxxxx, Inc. |
250,000 | |||
Total |
5,000,000 | |||
SCHEDULE III
Schedule of Free Writing Prospectuses included in the Disclosure Package
None