EXHIBIT 4.2
INTERFACE, INC.
$175,000,000
10 3/8% Senior Notes Due 2010
Purchase Agreement
New York, New York
January 11, 2002
Xxxxxxx Xxxxx Xxxxxx Inc.
First Union Securities, Inc.
SunTrust Capital Markets, Inc.
Fleet Securities, Inc.
As Representatives of the Initial Purchasers
c/o Xxxxxxx Xxxxx Barney Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Interface, Inc., a corporation organized under the laws of the state
of Georgia (the "Company"), proposes to issue and sell to the several parties
named in Schedule I hereto (the "Initial Purchasers"), for whom you (the
"Representatives") are acting as representatives, $175,000,000 principal amount
of its 10 3/8% Senior Notes Due 2010 (the "Notes"). The Notes will be
guaranteed, jointly and severally, on an unsecured senior basis (the
"Guarantees") as to principal, premium, if any, and interest by the subsidiary
guarantors listed on Schedule III hereto (the "Subsidiary Guarantors") (the
Notes and the Guarantees, collectively, are referred to as the "Securities").
The Securities are to be issued under an indenture (the "Indenture"), to be
dated as of January 16, 2002, between the Company, as issuer, the Subsidiary
Guarantors and First Union National Bank, as trustee (the "Trustee"). The
Securities have the benefit of a registration rights agreement (the
"Registration Rights Agreement"), dated as of January 11, 2002, between the
Company and the Initial Purchasers, pursuant to which the Company has agreed to
register the Securities under the Act subject to the terms and conditions
therein specified. To the extent there are no additional parties listed on
Schedule I other than you, the term Representatives as used herein shall mean
you as the Initial Purchasers, and the terms Representatives and Initial
Purchasers shall mean either the singular or plural as the context requires. The
use of the neuter in this Agreement shall include the feminine and masculine
wherever appropriate. Certain terms used herein are defined in Section 17
hereof.
The sale of the Securities to the Initial Purchasers will be made
without registration of the Securities under the Act in reliance upon
exemptions from the registration requirements of the Act.
In connection with the sale of the Securities, the Company has
prepared a preliminary offering memorandum, dated January 7, 2002 (as amended
or supplemented at the Execution Time, including any and all exhibits thereto
and any information incorporated by reference therein, the "Preliminary
Memorandum"), and a final offering memorandum, dated January 11, 2002 (as
amended or supplemented at the Execution Time, including any and all exhibits
thereto and any information incorporated by reference therein, the "Final
Memorandum"). Each of the Preliminary Memorandum and the Final Memorandum sets
forth certain information concerning the Company and the Securities. The
Company hereby confirms that it has authorized the use of the Preliminary
Memorandum and the Final Memorandum, and any amendment or supplement thereto,
in connection with the offer and sale of the Securities by the Initial
Purchasers.
1. Representations and Warranties. The Company represents and
warrants to each Initial Purchaser as set forth below in this Section 1.
(a) The Preliminary Memorandum, at the date thereof, did
not contain 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.
At the Execution Time, on the Closing Date and on any settlement date,
the Final Memorandum did not, and will not (and any amendment or
supplement thereto, at the date thereof, at the Closing Date and on
any settlement date, will not), contain 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; provided, however, that the Company makes
no representation or warranty as to the information contained in or
omitted from the Preliminary Memorandum or the Final Memorandum, or
any amendment or supplement thereto, in reliance upon and in
conformity with information furnished in writing to the Company by or
on behalf of the Initial Purchasers through the Representatives
specifically for inclusion therein.
(b) Neither the Company, nor any of its Affiliates, nor
any person acting on its or their behalf has, directly or indirectly,
made offers or sales of any security, or solicited offers to buy or
otherwise negotiated in respect of any securities of the Company of
any class such that, as a result of the doctrine of "integration"
referred to in Rule 502 under the Securities Act, such offer and sale
would be rendered invalid or unavailable (for the purpose of (i) the
sale of the Notes by the Company to the Initial Purchasers, (ii) the
resale of the Notes by the Initial Purchasers or (iii) the further
resale of the Notes) the exemption from the registration requirements
of the Securities Act provided by Section 4(2) thereof or by Rule 144A
or by Regulation S thereunder or otherwise.
(c) Neither the Company, nor any of its Affiliates, nor
any person acting on its or their behalf has engaged in any form of
general solicitation or general advertising (within the meaning of
Regulation D) in connection with any offer or sale of the Securities
in the United States.
(d) The Securities satisfy the eligibility requirements
of Rule 144A(d)(3) under the Act.
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(e) Neither the Company, nor any of its Affiliates, nor
any person acting on its or their behalf has engaged in any directed
selling efforts with respect to the Securities, and each of them has
complied with the offering restrictions requirement of Regulation S.
Terms used in this paragraph have the meanings given to them by
Regulation S.
(f) The Company has been advised by the NASD's PORTAL
Market that the Securities have been designated PORTAL-eligible
securities in accordance with the rules and regulations of the NASD.
(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 Final Memorandum will not be, an
"investment company" within the meaning of the Investment Company Act.
(h) The Company is subject to and is in compliance with
the reporting requirements of Section 13 or Section 15(d) of the
Exchange Act in all material respects.
(i) The Company has not paid or agreed to pay to any
person any compensation for soliciting another to purchase any
Securities of the Company (except as contemplated by this Agreement).
(j) 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 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.
(k) The information provided by the Company pursuant to
Section 5(h) hereof will not, at the date thereof, contain 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.
(l) Each of the Company and its Subsidiaries (as defined
below) has been duly incorporated or organized and is validly existing
as a corporation or limited liability company 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 Final Memorandum, and is duly qualified to do
business as a foreign corporation 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
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 (as
defined in the Act), exclusive of the subsidiaries listed on Schedule
II hereto (the "Inactive Subsidiaries"), are referred to herein
individually as "Subsidiary" and collectively as "Subsidiaries." None
of the
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Inactive Subsidiaries is engaged in any material business activities
or operations or has any material assets or liabilities.
(m) 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 (i) directors'
qualifying shares and nominal investments by foreign nationals
mandated by applicable law, or similar interests and (ii) Shanghai
Interface Carpet Co., Ltd. and Interface Modernform Co. Ltd., which
are majority owned subsidiaries of the Company), 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 Final Memorandum.
(n) The Securities conform in all material respects to
the description thereof contained in the Final Memorandum.
(o) The statements in the Final Memorandum under the
headings "Description of Certain Indebtedness and Other Obligations,"
"Description of the Notes," and "U.S. Federal Income Tax
Considerations" fairly summarize the matters therein described.
(p) This Agreement has been duly authorized, executed
and delivered by the Company and the Subsidiary Guarantors; the
Indenture has been duly authorized and, assuming due authorization,
execution and delivery thereof by the Trustee, when executed and
delivered by the Company and the Subsidiary Guarantors, will
constitute a legal, valid, binding instrument enforceable against the
Company and the Subsidiary Guarantors in accordance with its terms
(except as enforcement thereof may be limited by applicable
bankruptcy, reorganization, insolvency, moratorium or other laws
affecting creditors' rights generally from time to time in effect and
to general principles of equity); the Notes have been duly authorized,
and, when executed and authenticated in accordance with the provisions
of the Indenture and delivered to and paid for by the Initial
Purchasers, will have been validly issued and delivered by the Company
and will constitute valid and binding obligations of the Company
entitled to the benefits of the Indenture and enforceable in
accordance with their terms (except as enforcement thereof may be
limited by applicable bankruptcy, insolvency, moratorium or other laws
affecting creditors' rights generally from time to time in effect and
to general principles of equity); the Guarantees have been duly
authorized by the Subsidiary Guarantors and, when the Notes and
Guarantees have been executed by the Company and the Subsidiary
Guarantors, respectively, and authenticated by the Trustee in
accordance with the Indenture and delivered to the Initial Purchasers
against payment therefor in accordance with the terms hereof, will
constitute valid and binding obligations of the Subsidiary Guarantors
entitled to the benefits of the Indenture and enforceable in
accordance with their terms, (except as enforcement thereof may be
limited by applicable bankruptcy, reorganization, insolvency,
moratorium or other laws affecting creditors' rights generally from
time to time in effect and to general principles of equity); and the
Registration Rights Agreement has been duly authorized and, when
executed and delivered by the Company, will constitute the legal,
valid, binding and enforceable instrument of the Company (except as
enforcement thereof may be limited by applicable bankruptcy,
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reorganization, insolvency, moratorium or other laws affecting
creditors' rights generally from time to time in effect and to general
principles of equity).
(q) Subsidiary Guarantors listed on Schedule III hereto
are the only Subsidiaries of the Company that (i) are incorporated in
the United States or any state thereof and (ii) are Material
Subsidiaries. For purposes of the preceding sentence "Material
Subsidiary" shall mean each Subsidiary that has total assets in excess
of $10,000,000, or holds any fixed assets material to the operations
or business of another Material Subsidiary.
(r) 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 or in the
Indenture or the Registration Rights Agreement, except such as will be
obtained under the Act and the Trust Indenture 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 Initial
Purchasers in the manner contemplated herein and in the Final
Memorandum and the Registration Rights Agreement.
(s) Neither the execution and delivery of the Indenture,
this Agreement or the Registration Rights Agreement, the issue and
sale of the Securities, nor the consummation of any other of the
transactions herein or therein contemplated (other than entering into
an amended and restated credit facility as contemplated in the
Indenture and the Final Memorandum), nor the fulfillment of the terms
hereof or thereof 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.
(t) The consolidated financial statements and schedules
of the Company and its consolidated subsidiaries included in the Final
Memorandum 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 Consolidated Financial Data" in the Final
Memorandum fairly present, on the basis stated in the Final
Memorandum, the information included therein.
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(u) 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 best knowledge of the Company, threatened that (i)
could reasonably be expected to have a material adverse effect on the
performance of this Agreement, the Indenture or the Registration
Rights Agreement, or the consummation of any of the transactions
contemplated hereby or thereby; 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 Final Memorandum (exclusive of any amendment
or supplement thereto).
(v) 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 Final Memorandum.
(w) 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, 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 violation or violations in the aggregate would not have a
Material Adverse Effect.
(x) 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 incorporated by reference in the
Final Memorandum, are independent public accountants with respect to
the Company within the meaning of the Act and the applicable published
rules and regulations thereunder.
(y) 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.
(z) 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 Final
Memorandum (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 Final Memorandum.
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(aa) No labor problem or dispute with the employees of
the Company or any of its Subsidiaries exists to the knowledge of the
Company's senior executive officers in the ordinary course of such
officers' duties, 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 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 Final Memorandum.
(bb) 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; and 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; 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 Final
Memorandum.
(cc) 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 Final Memorandum.
(dd) 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 Final Memorandum.
(ee) 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
7
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.
(ff) 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 Final Memorandum. Except as set forth in the Final
Memorandum and except for Bentley Xxxxx which has been named a
"potentially responsible party" at the Xxxxxx Valley Operable Unit of
the San Xxxxxxx Valley Superfund site (the "Site") and the liability
of which for the cleanup of the Site 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.
(gg) 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 Final Memorandum.
(hh) Each of the Company and its 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, as amended ("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 its
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 its Subsidiaries have not incurred
any unpaid liability to the Pension Benefit Guaranty Corporation
(other than
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for the payment of premiums in the ordinary course) or to any such
plan under Title IV of ERISA.
Any certificate signed by any officer of the Company and delivered to
the Representatives or counsel for the Initial Purchasers 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 Initial Purchaser.
2. Purchase and Sale. Subject to the terms and conditions and in
reliance upon the representations and warranties herein set forth, the Company
agrees to sell to each Initial Purchaser, and each Initial Purchaser agrees,
severally and not jointly, to purchase from the Company, at a purchase price of
100.00% of the principal amount thereof, plus accrued interest from January 11,
2002 to the Closing Date, the principal amount of the Securities set forth
opposite such Initial Purchaser's name in Schedule I hereto.
3. Delivery and Payment. Delivery of and payment for the
Securities shall be made at 10:00 a.m., New York City time, on January 17,
2002, or at such time on such later date (not later than January 18, 2002) 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 Initial
Purchasers against payment by the several Initial Purchasers 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 the account specified by
the Company. Delivery of the Securities shall be made through the facilities of
The Depository Trust Company unless the Representatives shall otherwise
instruct.
4. Offering by Initial Purchasers. Each Initial Purchaser,
severally and not jointly, represents and warrants to and agrees with the
Company that:
(a) It has not offered or sold, and will not offer or
sell, any Securities except (i) to those it reasonably believes to be
qualified institutional buyers (as defined in Rule 144A under the Act)
and that, in connection with each such sale, it has taken or will take
reasonable steps to ensure that the purchaser of such Securities is
aware that such sale is being made in reliance on Rule 144A; or (ii)
in accordance with the restrictions set forth in Exhibit A hereto.
(b) Neither it nor any person acting on its behalf has
made or will make offers or sales of the Securities in the United
States by means of any form of general solicitation or general
advertising (within the meaning of Regulation D) in the United States.
5. Agreements. The Company agrees with each Initial Purchaser
that:
(a) The Company will furnish to each Initial Purchaser
and to counsel for the Initial Purchasers, without charge, during the
period referred to in paragraph (c) below, as many copies of the Final
Memorandum and any amendments and supplements thereto as they may
reasonably request.
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(b) The Company will not amend or supplement the Final
Memorandum, other than by filing documents under the Exchange Act that
are incorporated by reference therein, without the prior written
consent of the Representatives; provided, however, that, prior to the
completion of the distribution of the Securities by the Initial
Purchasers (as determined by the Initial Purchasers), the Company will
not file any document under the Exchange Act that is incorporated by
reference in the Final Memorandum unless, prior to such proposed
filing, the Company has furnished the Representatives with a copy of
such document for their review and the Representatives have not
reasonably objected to the filing of such document. The Company will
promptly advise the Representatives when any document filed under the
Exchange Act that is incorporated by reference in the Final Memorandum
shall have been filed with the Commission.
(c) If at any time prior to the completion of the sale
of the Securities by the Initial Purchasers (as determined by the
Representatives), any event occurs as a result of which, in the
judgment of the Company or in the opinion of your counsel, the Final
Memorandum, as then amended or 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
should be necessary to amend or supplement the Final Memorandum to
comply with applicable law, the Company promptly (i) will notify the
Representatives of any such event or promptly respond to the opinion
of your counsel, as the case may be; (ii) subject to the requirements
of paragraph (b) of this Section 5, will prepare an amendment or
supplement that will correct such statement or omission or effect such
compliance; and (iii) will supply any supplemented or amended Final
Memorandum to the several Initial Purchasers and counsel for the
Initial Purchasers without charge in such quantities as they may
reasonably request.
(d) The Company will arrange, if necessary, for the
qualification of the Securities for sale by the Initial Purchasers
under the laws of such jurisdictions as the Initial Purchasers may
designate and will maintain such qualifications in effect so long as
required for the sale 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. The Company will promptly
advise the Representatives 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 initiation or
threatening of any proceeding for such purpose.
(e) The Company will not, and will not permit any of its
Affiliates to, resell any Securities that have been acquired by any of
them, except, with respect to such Affiliates, in compliance with Rule
144 under the Act.
(f) Neither the Company, nor any of its Affiliates, nor
any person acting on its or their behalf will, directly or indirectly,
solicit any offer to buy, sell or make any offer or sale of, or
otherwise negotiate in respect of, securities of the Company of any
class if, as a result of the doctrine of "integration" referred to in
Rule 502 under the
10
Securities Act, such offer or sale would render invalid or unavailable
(for the purpose of (i) the sale of the Notes by the Company to the
Initial Purchasers, (ii) the resale of the Notes by the Initial
Purchasers or (iii) the further resale of the Notes) the exemption
from the registration requirements of the Securities Act provided by
Section 4(2) thereof or by Rule 144A or by Regulation S thereunder or
otherwise.
(g) Neither the Company, nor any of its Affiliates, nor
any person acting on its or their behalf will engage in any form of
general solicitation or general advertising (within the meaning of
Regulation D) in connection with any offer or sale of the Securities
in the United States.
(h) So long as any of the Securities are "restricted
securities" within the meaning of Rule 144(a)(3) under the Act, the
Company will, during any period in which it is not subject to and in
compliance with Section 13 or 15(d) of the Exchange Act or it is not
exempt from such reporting requirements pursuant to and in compliance
with Rule 12g3-2(b) under the Exchange Act, provide to each holder of
such restricted securities and to each prospective purchaser (as
designated by such holder) of such restricted securities, upon the
request of such holder or prospective purchaser, any information
required to be provided by Rule 144A(d)(4) under the Act. This
covenant is intended to be for the benefit of the holders, and the
prospective purchasers designated by such holders, from time to time
of such restricted securities.
(i) Neither the Company, nor any of its Affiliates, nor
any person acting on its or their behalf will engage in any directed
selling efforts with respect to the Securities, and each of them will
comply with the offering restrictions requirement of Regulation S.
Terms used in this paragraph have the meanings given to them by
Regulation S.
(j) The Company will cooperate with the Representatives
and use its best efforts to permit the Securities to be eligible for
clearance and settlement through The Depository Trust Company.
(k) The Company will not for a period of 90 days
following the Execution Time, without the prior written consent of
Xxxxxxx Xxxxx Xxxxxx, 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
debt securities issued or guaranteed by the Company (other than the
Securities).
(l) 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.
(m) The Company agrees to pay the costs and expenses
relating to the following matters: (i) the preparation of the
Indenture and the Registration Rights
11
Agreement (but not including the fees and expenses of counsel to the
Initial Purchasers in such regard), the issuance of the Securities and
the fees of the Trustee; (ii) the preparation, printing or
reproduction of the Preliminary Memorandum and Final Memorandum and
each amendment or supplement to either of them (but not including the
fees and expenses of counsel to the Initial Purchasers in such
regard); (iii) the printing (or reproduction) and delivery (including
postage, air freight charges and charges for counting and packaging)
of such copies of the Preliminary Memorandum and Final Memorandum, and
all amendments or supplements to either of them, as may, in each case,
be reasonably requested for use in connection with the offering and
sale of the Securities; (iv) 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; (v) 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; (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
Initial Purchasers relating to such registration and qualification);
(vii) admitting the Securities for trading in the PORTAL Market;
(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.
6. Conditions to the Obligations of the Initial Purchasers. The
obligations of the Initial Purchasers to purchase the Securities, shall be
subject to the accuracy of the representations and warranties on the part of
the Company contained herein at the Execution Time and the Closing Date 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 Company shall have requested and caused
Xxxxxxxxxx Xxxxxxxx LLP, counsel for the Company, to furnish to the
Representatives its opinion, dated the Closing Date and addressed to
the Representatives, to the effect that:
(i) each of (A) the Company, (B) each
Subsidiary Guarantor and (C) each other Material U.S.
Subsidiary (as defined in the Indenture) 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
Final Memorandum;
(ii) all the outstanding shares of capital stock
of each Subsidiary Guarantor and 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 Final Memorandum, all outstanding
shares of capital stock of the Subsidiary
12
Guarantors and 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
interests, claims, liens or encumbrances;
(iii) the Securities conform in all material
respects as to legal matters to the description thereof
contained in the Final Memorandum under the caption
"Description of the Notes";
(iv) each of the Subsidiary Guarantors has
corporate power and authority to enter into this Agreement
and to issue the Guarantees, and this Agreement has been duly
authorized, executed and delivered by each of the Subsidiary
Guarantors;
(v) the Notes have been duly and validly
authorized by the Company and when executed by the Company in
accordance with the Indenture and, assuming due
authentication of the Notes by the Trustee, upon delivery to
the Initial Purchasers against payment therefor in accordance
with the terms hereof, will have been validly issued and
delivered;
(vi) the Guarantees have been duly and validly
authorized by each of the Subsidiary Guarantors and, when the
Notes have been executed by the Company in accordance with
the Indenture and delivered to the Initial Purchasers against
payment therefor in accordance with the terms hereof, the
Guarantees will have been validly issued and delivered;
(vii) the Indenture has been duly authorized,
executed and delivered, and, assuming due authorization,
execution and delivery by the Trustee, constitutes a legal,
valid and binding instrument enforceable against the Company
and the Subsidiary Guarantors in accordance with its terms
(except as enforcement thereof may be limited by applicable
bankruptcy, reorganization, insolvency, moratorium or other
laws affecting creditors' rights generally from time to time
in effect and to general principles of equity); the
Registration Rights Agreement has been duly authorized,
executed and delivered and constitutes the legal, valid,
binding and enforceable instrument of the Company (except as
enforcement thereof may be limited by applicable bankruptcy,
reorganization, insolvency, moratorium or other laws
affecting creditors' rights generally from time to time in
effect and to general principles of equity); and the
statements set forth under the heading "Description of the
Notes" in the Final Memorandum, insofar as such statements
purport to summarize certain provisions of the Securities,
the Indenture and the Registration Rights Agreement, provide
a fair summary of such provisions;
(viii) 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 any of its
13
Subsidiaries or its or their property that is not adequately
disclosed in the Final Memorandum; (B) there is no material
franchise, contract, indenture, agreement or other document
of a character required to be filed as an exhibit to any
document filed under the Exchange Act and incorporated by
reference in the Final Memorandum, which is not filed as
required; and (C) the statements in the Final Memorandum
under the heading "U.S. Federal Income Tax Considerations"
fairly summarize the matters therein described;
(ix) the documents incorporated by reference in
the Final Memorandum (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
Exchange Act and the rules thereunder; and such counsel has
no reason to believe that at the Execution Time and on the
Closing Date the Final Memorandum contained or contains any
untrue statement of a material fact or omitted or omits to
state any 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).
(x) 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;
(xi) assuming the accuracy of the
representations and warranties and compliance with the
agreements contained herein, no registration of the
Securities under the Act, and no qualification of an
indenture under the Trust Indenture Act, are required for the
offer and sale by the Initial Purchasers of the Securities in
the manner contemplated by this Agreement; and
(xii) 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 Final
Memorandum, will not be an "investment company" as defined in
the Investment Company Act.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the State of
Georgia or the federal laws of the United States, to the extent they deem
proper and specified in such opinion, upon the opinion of other counsel of good
standing whom they believe to be reliable and who are satisfactory to
14
counsel for the Initial Purchasers; and (B) 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 Final Memorandum in this Section 6(a)
include any amendment or supplement thereto at the Closing Date.
(b) 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 Subsidiary
Guarantor 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")
(A) is in violation in any material respect of 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 Subsidiary 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, is 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 governmental agency or body having jurisdiction
over the Company or any U.S. Subsidiary, except as may be
disclosed in the Final Memorandum, and except where such
violation or violations in the aggregate would not have a
Material Adverse Effect;
(iii) neither the execution and delivery of the
Indenture, 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,
known to such counsel in the ordinary course of such
counsel's duties, 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 in the ordinary
15
course of such counsel's duties, without special inquiry, 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
subparagraphs (B) and (C) hereof in the aggregate would not
have a Material Adverse Effect; and
(iv) such counsel has no reason to believe that
at the Execution Time and on the Closing Date the Final
Memorandum contained or contains any untrue statement of a
material fact or omitted or omits to state any 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).
(c) The Representatives shall have received from Xxxxx,
Xxxxxxxx & Xxxxxxx, LLP, counsel for the Initial Purchasers, such
opinion or opinions, dated the Closing Date and addressed to the
Representatives, with respect to the issuance and sale of the
Securities, the Indenture, the Registration Rights Agreement, the
Final Memorandum (as amended or supplemented at the Closing Date) 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.
(d) The Company shall have furnished to the
Representatives a certificate of the Company, signed by 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 Final Memorandum, any
amendment or supplement to the Final Memorandum 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 hereunder
at or prior to the Closing Date; and
(ii) since the date of the most recent financial
statements included in the Final Memorandum (exclusive of any
amendment or supplement thereto), there has been no material
adverse change in 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 by the Final
Memorandum (exclusive of any amendment or supplement
thereto).
(e) At the Execution Time and at the Closing Date, the
Company shall have requested and caused BDO Xxxxxxx, LLP to furnish
to the Representatives letters, dated respectively as of the
Execution Time and as of the Closing Date, in form and substance
16
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, that they have performed a review of the unaudited interim
financial information of the Company for the nine-month period ended
September 30, 2001 and as at September 30, 2001, and stating in effect
that:
(i) in their opinion the audited financial
statements and financial statement schedules included or
incorporated by reference in the Final Memorandum and
reported on by them comply as to form in all material
respects with the applicable accounting requirements of the
Exchange Act and the related published rules and regulations
thereunder;
(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
the standards established under Statement on Auditing
Standards No. 71, of the unaudited interim financial
information for the nine-month period ended September 30,
2001, and as at September 30, 2001, as indicated in their
report included or incorporated in the Final Memorandum;
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 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 31, 2000, nothing came to their attention which
caused them to believe that:
(1) any unaudited financial statements
included or incorporated in the Final Memorandum do
not comply in form in all material respects with
applicable accounting requirements 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
Final Memorandum; or
(2) with respect to the period
subsequent to September 30, 2001, 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 stockholders' equity of the Company
and its consolidated Subsidiaries as compared with
the amounts shown on the September 30, 2001
consolidated balance sheet included or incorporated
in the Final Memorandum, or for the period from
October 1, 2001 to such specified
17
date there were any decreases, 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
(3) the information included under the
headings "Selected Consolidated Financial Data" and
"Management's Discussion and Analysis of Financial
Condition and Results of Operations" is not in
conformity with the disclosure requirements of
Regulation S-K; or
(4) the unaudited amounts included in
any "capsule" information included or incorporated
in the Final Memorandum 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
Final Memorandum;
(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 Final
Memorandum, including the information set forth under the
caption "Management's Discussion and Analysis of Financial
Condition and Results of Operations" in the Final Memorandum,
the information included in the Company's Annual Report on
Form 10-K, incorporated in the Final Memorandum, and the
information included in the "Management's Discussion and
Analysis of Financial Condition and Results of Operations" in
the Company's Quarterly Reports on Form 10-Q, incorporated in
the Final Memorandum agrees with the accounting records of
the Company and its Subsidiaries, excluding any questions of
legal interpretation.
References to the Final Memorandum in this Section 6(e)
include any amendment or supplement thereto at the date of the
applicable letter.
(f) Subsequent to the Execution Time or, if earlier, the
dates as of which information is given in the Final Memorandum
(exclusive of any amendment or supplement thereto), there shall not
have been (i) any material change or decrease specified in the letter
or letters referred to in paragraph (e) of this Section 6; or (ii) any
change, or any development involving a prospective change, in or
affecting 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 Final
Memorandum (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
18
material and adverse as to make it impractical or inadvisable to
proceed with the sale and delivery of the Securities on the Closing
Date on the terms and in the manner contemplated by the Final
Memorandum (exclusive of any amendment or supplement thereto).
(g) The Securities shall have been designated as
PORTAL-eligible securities in accordance with the rules and
regulations of the NASD, and the Securities shall be eligible for
clearance and settlement through The Depository Trust Company.
(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 in order to consummate the closing of the transactions
contemplated hereby.
(j) All conditions precedent to the consummation of the
Amended Credit Agreement (as defined in the Final Memorandum) have
been fulfilled other than the consummation of the purchase of the
Securities hereunder by the Initial Purchasers and the Company's
receipt of the purchase price thereof (it being the express intent of
the Company, the Initial Purchasers and the Representatives that
consummation of the Amended Credit Agreement and the consummation of
the purchase of the Securities hereunder occur in a substantially
concurrent fashion).
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 Initial Purchasers,
this Agreement and all obligations of the Initial Purchasers hereunder may be
cancelled 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 will be
delivered at the offices of Xxxxx, Xxxxxxxx & Xxxxxxx, LLP, 0000 Xxxxxxxxx
Xxxxxx, X.X., Xxxxx 0000, Xxxxxxx, Xxxxxxx 00000-0000, on the Closing Date.
7. Reimbursement of Expenses. If the sale of the Securities
provided for herein is not consummated because any condition to the obligations
of the Initial Purchasers set forth in Section 6 hereof is not satisfied (other
than in paragraph (c) thereof), 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 Initial Purchasers, the Company
will reimburse the
19
Initial Purchasers severally through Xxxxxxx Xxxxx Barney 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. Notwithstanding the foregoing,
the Company shall not be liable in any event to the Initial Purchasers 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 Initial Purchaser, the directors, officers,
employees and agents of each Initial Purchaser and each person who controls any
Initial Purchaser 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, to the extent that 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 Preliminary
Memorandum, the Final Memorandum (or in any supplement or amendment thereto) or
any information provided by the Company to any holder or prospective purchaser
of Securities pursuant to Section 5(h), 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, in the light of the circumstances
under which they were made, 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 in the
Preliminary Memorandum or the Final Memorandum, or in any amendment thereof or
supplement thereto, in reliance upon and in conformity with written information
furnished to the Company by or on behalf of any Initial Purchaser 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 Initial Purchaser severally and not jointly agrees to
indemnify and hold harmless the Company, each of its directors, each of its
officers, employees, agents, 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 Initial Purchaser, but only with
reference to written information relating to such Initial Purchaser furnished
to the Company by or on behalf of such Initial Purchaser through the
Representatives specifically for inclusion in the Preliminary Memorandum or the
Final Memorandum (or in any amendment or supplement thereto). This indemnity
agreement will be in addition to any liability which any Initial Purchaser may
otherwise have. The Company acknowledges that the statements set forth in the
last paragraph of the cover page regarding the delivery of the Securities, and,
under the heading "Plan of Distribution", the paragraph related to
stabilization, syndicate covering transactions and penalty bids in the
Preliminary Memorandum and the Final Memorandum, constitute the only
information furnished in writing by or on behalf of the Initial Purchasers for
inclusion in the Preliminary Memorandum or the Final Memorandum (or in any
amendment or supplement thereto).
20
(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 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 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 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 Initial Purchasers
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 Initial Purchasers 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 Initial Purchasers on the other from the
offering of the Securities; provided, however, that in no case shall any
Initial Purchaser (except as may be provided in any agreement among the Initial
Purchasers relating to the offering of the Securities) be responsible for any
amount in excess of the purchase discount or commission applicable to the
Securities purchased by such Initial
21
Purchaser hereunder. If the allocation provided by the immediately preceding
sentence is unavailable for any reason, the Company and the Initial Purchasers
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 Initial Purchasers 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 Initial Purchasers shall
be deemed to be equal to the total purchase discounts and commissions agreed
upon and paid in connection with the sale of the Notes. 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 Initial Purchasers on the other, the intent of the parties and
their relative knowledge, information and opportunity to correct or prevent
such untrue statement or omission. The Company and the Initial Purchasers 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
Initial Purchaser within the meaning of either the Act or the Exchange Act and
each director, officer, employee and agent of an Initial Purchaser shall have
the same rights to contribution as such Initial Purchaser, and each person who
controls the Company within the meaning of either the Act or the Exchange Act
and each officer, director, employee and agent 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 Initial Purchaser. If any one or more of the
Initial Purchasers shall fail to purchase and pay for any of the Securities
agreed to be purchased by such Initial Purchaser hereunder and such failure to
purchase shall constitute a default in the performance of its or their
obligations under this Agreement, the remaining Initial Purchasers 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 Initial Purchasers) the Securities which the defaulting Initial
Purchaser or Initial Purchasers agreed but failed to purchase; provided,
however, that in the event that the aggregate amount of Securities which the
defaulting Initial Purchaser or Initial Purchasers agreed but failed to
purchase shall exceed 10% of the aggregate amount of Securities set forth in
Schedule I hereto, the remaining Initial Purchasers shall have the right to
purchase all, but shall not be under any obligation to purchase any, of the
Securities, and if such nondefaulting Initial Purchasers do not purchase all
the Securities, this Agreement will terminate without liability to any
nondefaulting Initial Purchaser or the Company. In the event of a default by
any Initial Purchaser 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 Final
Memorandum or in any other documents or arrangements may be effected. Nothing
contained in this Agreement shall relieve any defaulting Initial Purchaser of
its liability, if any, to the Company or any nondefaulting Initial Purchaser
for damages occasioned by its default hereunder.
22
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 Stock Market or trading in securities
generally on the New York Stock Exchange or the Nasdaq Stock Market shall have
been suspended or limited or minimum prices shall have been established on
either of such Exchange or the Nasdaq Stock 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, impracticable or inadvisable
to proceed with the offering or delivery of the Securities as contemplated by
the Final Memorandum (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 Initial Purchasers 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 the Initial Purchasers 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 the Xxxxxxx Xxxxx Xxxxxx General Counsel (fax no.:
(000) 000-0000) and confirmed to the General Counsel, Xxxxxxx Xxxxx Barney 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 of the 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, directors, employees, agents and controlling persons referred to in
Section 8 hereof, and, except as expressly set forth in Section 5(h) hereof, 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 executed in one or more
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same instrument.
16. Headings. The section headings used herein are for
convenience only and shall not affect the construction hereof.
23
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.
"Affiliate" shall have the meaning specified in Rule 501(b) of
Regulation D.
"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 The City of New York.
"Commission" shall mean the Securities and Exchange Commission.
"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.
"Investment Company Act" shall mean the Investment Company Act of
1940, as amended, and the rules and regulations of the Commission promulgated
thereunder.
"NASD" shall mean the National Association of Securities Dealers, Inc.
"Regulation D" shall mean Regulation D under the Act.
"Regulation S" shall mean Regulation S under the Act.
"Xxxxxxx Xxxxx Xxxxxx" shall mean Xxxxxxx Xxxxx Barney Inc.
"Trust Indenture Act" shall mean the Trust Indenture Act of 1939, as
amended, and the rules and regulations of the Commission promulgated
thereunder.
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 Agreement and your acceptance shall represent a binding
agreement between the Company and the several Initial Purchasers.
Very truly yours,
INTERFACE, INC.
By /s/ XXXXXX X. XXXXXXX
--------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: President and Chief Executive Officer
Each of the Subsidiary Guarantors Listed On
Schedule III
By /s/ XXXXXX X. XXXXXXX
--------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Senior Vice President
(As to Interface Real Estate Holdings, LLC, on
behalf of Bentley Xxxxx, Inc., its sole member)
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
Xxxxxxx Xxxxx Barney Inc.
First Union Securities, Inc.
SunTrust Capital Markets, Inc.
Fleet Securities, Inc.
By: Xxxxxxx Xxxxx Xxxxxx Inc.
By /s/ XXXXXXX X. XXXXXXXX
--------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Managing Director
For themselves and the other several Initial
Purchasers named in Schedule I to
the foregoing Agreement.
25
SCHEDULE I
Principal Amount of
Securities
Initial Purchasers to Be Purchased
------------------ -------------------
Xxxxxxx Xxxxx Barney Inc............................................... $ 70,000,000
First Union Securities, Inc............................................ 70,000,000
SunTrust Capital Markets, Inc.......................................... 26,250,000
Fleet Securities, Inc.................................................. 8,750,000
------------
Total......................................................... $175,000,000
============
SCHEDULE II
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, Inc. Georgia
KCI, Inc. Georgia
Macroseptic Systems, Inc. Georgia
Pioneer Acquisition Corp. Massachusetts
Camborne Textile Systems Limited United Kingdom
Xxxxxx Xxxxxxx & Son Limited United Kingdom
Manchaug Reservoir Corporation Massachusetts
Mumford River Reservoir Corporation Massachusetts
Premier Carpet Cleaning, Inc. Colorado
SCHEDULE III
Bentley Xxxxx, Inc., a Delaware corporation
Bentley Royalty Company, a Nevada corporation
Chatham, Inc., a North Carolina corporation
Chatham Marketing Co., a North Carolina corporation
Commercial Flooring Systems, Inc., a Pennsylvania corporation
Flooring Consultants, Inc., an Arizona corporation
Guilford of Maine, Inc., a Nevada corporation
Guilford of Maine Finishing Services, Inc., a Nevada corporation
Guilford of Maine Marketing Co., a Nevada corporation
Intek, Inc., a Georgia corporation
Intek Marketing Co., a Nevada corporation
Interface Americas, Inc., a Georgia corporation
Interface Americas Holdings, Inc., a Georgia corporation
Interface Americas Re:Source Technologies, Inc., a Georgia corporation
Interface Architectural Resources, Inc., a Michigan corporation
Interface Fabrics Group, Inc., a Delaware corporation
Interface Flooring Systems, Inc., a Georgia corporation
Interface Licensing Company, a Nevada corporation
Interface Overseas Holdings, Inc., a Georgia corporation
Interface Real Estate Holdings, LLC, a Georgia limited liability company
Interface Royalty Company, a Nevada corporation
Pandel, Inc., a Georgia corporation
Prince Street Royalty Company, a Nevada corporation
Quaker City International, Inc., a Pennsylvania corporation
Re:Source Americas Enterprises, Inc., a Georgia corporation
Re:Source Massachusetts Floor Covering, Inc., a Massachusetts corporation
Re:Source New Jersey, Inc., a New Jersey corporation
Re:Source New York, Inc., a New York corporation
Re:Source Washington, D.C., Inc., a Virginia corporation
Superior/Xxxxxx Flooring Resources, Inc., a Texas corporation
Toltec Fabrics, Inc., a Georgia corporation
as Guarantors
EXHIBIT A
Selling Restrictions for Offers and
Sales outside the United States
(1)(a) The Securities have not been and will not be registered under
the Act and may not be offered or sold within the United States or to, or for
the account or benefit of, U.S. persons except in accordance with Regulation S
under the Act or pursuant to an exemption from the registration requirements of
the Act. Each Initial Purchaser represents and agrees that, except as otherwise
permitted by Section 4(a)(i) or (ii) of the Agreement to which this is an
exhibit, it has offered and sold the Securities, and will offer and sell the
Securities, (i) as part of their distribution at any time; and (ii) otherwise
until 40 days after the later of the commencement of the offering and the
Closing Date, only in accordance with Rule 903 of Regulation S under the Act.
Accordingly, each Initial Purchaser represents and agrees that neither it, nor
any of its Affiliates nor any person acting on its or their behalf has engaged
or will engage in any directed selling efforts with respect to the Securities,
and that it and they have complied and will comply with the offering
restrictions requirement of Regulation S. Each Initial Purchaser agrees that,
at or prior to the confirmation of sale of Securities (other than a sale of
Securities pursuant to Section 4(a)(i) or (ii) of the Agreement to which this
is an exhibit), it shall have sent to each distributor, dealer or person
receiving a selling concession, fee or other remuneration that purchases
Securities from it during the distribution compliance period a confirmation or
notice to substantially the following effect:
"The Securities covered hereby have not been registered under the U.S.
Securities Act of 1933 (the "Act") and may not be offered or sold
within the United States or to, or for the account or benefit of, U.S.
persons (i) as part of their distribution at any time or (ii) otherwise
until 40 days after the later of the commencement of the offering and
[specify closing date of the offering], except in either case in
accordance with Regulation S or Rule 144A under the Act. Terms used
above have the meanings given to them by Regulation S."
(b) Each Initial Purchaser also represents and agrees that it has not
entered and will not enter into any contractual arrangement with any distributor
with respect to the distribution of the Securities, except with its Affiliates
or with the prior written consent of the Company.
(c) Terms used in this section have the meanings given to them by
Regulation S.
(2) Each Initial Purchaser represents and agrees that (i) it has not
offered or sold and, prior to the date six months after the date of issuance of
the Securities, will not offer or sell any Securities to persons in the United
Kingdom except to persons whose ordinary activities involve them in acquiring,
holding, managing or disposing of investments (as principal or as agent) for the
purposes of their businesses or otherwise in circumstances which have not
resulted and will not result in an offer to the public in the United Kingdom
within the meaning of the Public Offers of Securities Regulations 1995; (ii) it
has complied and will comply with all applicable provisions of the Financial
Services Xxx 0000 of the United Kingdom with respect to anything done by it in
relation to the Securities in, from or otherwise involving the United
A-1
Kingdom; and (iii) it has only issued or passed on and will only issue or pass
on in the United Kingdom any document received by it in connection with the
issue of the Securities to a person who is of a kind described in Article 9(3)
of the Financial Services Xxx 0000 (Investment Advertisements) (Exemptions)
Order 1996 or is a person to whom the document may otherwise lawfully be issued
or passed on.
A-2
