Exhibit 1.2
DRAFT
▇▇▇▇▇▇▇▇▇ WORLD INDUSTRIES, INC.
7,822,322
Shares of Common Stock, Par Value $.01 per Share
of Dal-Tile International Inc.
UNDERWRITING AGREEMENT
November __, 1998
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Dear Sirs and Mesdames:
▇▇▇▇▇▇▇▇▇ World Industries, Inc., a Pennsylvania corporation ("AWI"),
and ▇▇▇▇▇▇▇▇▇ Enterprises, Inc., a Vermont corporation ("AEI") and a direct
wholly-owned subsidiary of AWI (AEI and AWI, collectively being referred to
as the "Sellers"), jointly and severally propose to sell to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
& Co. Incorporated (the "Underwriter") 7,822,322 shares (the "Shares") of
Common Stock, par value $.01 (the "Common Stock"), of Dal-Tile
International Inc. ("Dal-Tile").
In connection with the foregoing, Dal-Tile has filed with the
Commission a registration statement, including, a prospectus relating to
the Shares. The registration statement as amended at the time it becomes
effective, including the information (if any) deemed to be part of the
registration statement at the time of effectiveness pursuant to Rule 430A
under the Securities Act of 1933, as amended (the "Securities Act"), is
hereinafter referred to as the "Registration Statement"; the prospectus in
the form first used to confirm sales of Shares is hereinafter referred to
as the "Prospectus." The term "preliminary prospectus" means a preliminary
prospectus relating to the Shares. As used herein, the terms "Prospectus"
and "preliminary prospectus" shall include in each case the documents, if
any, incorporated by reference therein. If Dal-Tile has filed an
abbreviated registration statement to register additional shares of Common
Stock pursuant to Rule 462(b) under the Securities Act (the "Rule 462
Registration Statement"), then any reference herein to the term
"Registration Statement" shall be deemed to include such Rule 462
Registration Statement.
The terms "supplement," "amendment" and "amend" as used herein shall
include all documents subsequently filed by Dal-Tile with the Commission
pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), that are deemed to be incorporated by reference in the Prospectus.
Dal-Tile has also entered into an indemnification agreement (the
"Dal-Tile Indemnification Agreement") dated as of the date hereof with the
Underwriter, relating to the offering of the Shares and the
above-referenced registration statement filed by Dal-Tile.
1. Representations and Warranties of Sellers.
Each of the Sellers represents and warrants to and agrees with the
Underwriter that:
(a) Each of AWI and AEI has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation.
(b) This Agreement has been duly authorized, executed and
delivered by AWI and AEI.
(c) Each of AWI and AEI is not, and after giving effect to the
offering and sale of the Shares and the application of the proceeds
thereof, will not be an "investment company" as such term is defined
in the Investment Company Act of 1940, as amended.
(d) AEI has, and on the Closing Date will have, valid title to
the Shares and the legal right and power to sell, transfer and deliver
such Shares, and delivery of the Shares to be sold by the Sellers
pursuant to this Agreement will pass title to such Shares free and
clear of any security interests, claims, liens, equities and other
encumbrances.
(e) The execution and delivery by AWI and AEI of, and the
performance by AWI and AEI of their respective obligations under, this
Agreement, will not contravene any provision of applicable law or the
articles of incorporation or by-laws of AWI or any of its subsidiaries
or any agreement or other instrument binding upon AWI or any of its
subsidiaries, or any judgment, order or decree of any governmental
body, agency or court having jurisdiction over AWI or any subsidiary,
and no consent, approval, authorization or order of, or qualification
with, any governmental body or agency is required for the performance
by AWI or AEI of their respective obligations under this Agreement.
The representations, warranties and other statements of the Sellers
contained in this Agreement shall remain operative and in full force and
effect regardless of (i) any termination of this Agreement, (ii) any
investigation made by or on behalf of the Underwriter or any person
controlling the Underwriter or either Seller, its officers or directors or
any person controlling either Seller and (iii) acceptance of any payment
for any of the Shares.
2. Agreements to Sell and Purchase.
The Sellers hereby jointly and severally agree to sell to the
Underwriter, and the Underwriter, upon the basis of the representations and
warranties herein contained, but subject to the conditions hereinafter
stated, agrees to purchase from the Sellers at $_____ a share (the
"Purchase Price") the Shares.
3. Terms of Public Offering.
The Sellers are advised by the Underwriter that the Underwriter
proposes to make a public offering of the Shares as soon after the
Registration Statement, this Agreement and the Dal-Tile Indemnification
Agreement have become effective as in the Underwriter's judgment is
advisable. AWI is further advised by the Underwriter that the Shares are to
be offered to the public initially at $____ a share (the "Public Offering
Price") and to certain dealers selected by the Underwriter at a price that
represents a concession not in excess of $_____ a share under the Public
Offering Price, and that the Underwriter may allow, and such dealers may
reallow, a concession, not in excess of $_____ a share, to certain other
dealers.
4. Payment and Delivery.
Payment for the Shares to be sold by the Sellers shall be made to AEI
in Federal or other funds immediately available in New York City against
delivery of such Shares for the account of the Underwriter at 10:00 A.M.,
New York City time, on __________, 1998, or at such other time on the same
or such other date, not later than ___________, 1998, as shall be
designated in writing by the Underwriter. The time and date of such payment
are hereinafter referred to as the "Closing Date."
Certificates for the Shares shall be in definitive form and registered
in such names and in such denominations as the Underwriter shall request in
writing not later than one full business day prior to the Closing Date. The
certificates evidencing the Shares shall be delivered to the Underwriter on
the Closing Date, for the account of the Underwriter, with any transfer
taxes payable in connection with the transfer of the Shares to the
Underwriter duly paid, against payment of the Purchase Price therefor.
5. Conditions to the Underwriter's Obligations. The obligation of the
Sellers to sell the Shares to the Underwriter and the several obligations
of the Underwriter to purchase and pay for the Shares are subject to the
condition that the Registration Statement shall have become effective not
later than 5:00 P.M., New York City time, on the date hereof.
The obligation of the Underwriter to purchase the Shares is subject to
the following further conditions:
(a) The Underwriter shall have received on the Closing Date a
certificate, dated the Closing Date and signed by an executive officer
of AWI, to the effect that the representations and warranties of the
Sellers contained in this Agreement are true and correct as of the
Closing Date and that each of the Sellers has complied with all of the
agreements and satisfied all of the conditions on its part to be
performed or satisfied hereunder on or before the Closing Date.
(b) The Underwriter shall have received on the Closing Date an
opinion of ▇▇▇▇▇▇▇▇ Ingersoll Professional Corporation, counsel for
AWI, dated the Closing Date, to the effect that:
(i) AWI is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation;
(ii) this Agreement has been duly authorized, executed and
delivered by AWI and AEI;
(iii) the execution and delivery by each of AWI and AEI of,
and the performance by each of AWI and AEI of its respective
obligations under, this Agreement, will not contravene any
provision of applicable law (except to the extent that the
federal securities laws may limit or restrict any indemnification
provisions set forth in this Agreement) or the articles of
incorporation or by-laws of AWI or AEI, and no consent, approval,
authorization or order of, or qualification with, any
governmental body or agency is required for the performance by
AWI or AEI of its obligations under this Agreement;
(iv) delivery of the Shares to be sold by the Sellers
pursuant to this Agreement will pass title to such Shares free
and clear of any security interests, claims, liens, equities and
other encumbrances to the Underwriter; provided that the
Underwriter does not have notice of an "adverse claim" thereto
(as defined in Section 8-102 of the UCC);
(v) each of AWI and AEI is not, and after giving effect to
the offering and sale of the Shares and the application of the
proceeds thereof will not be, an "investment company" as such
term is defined in the Investment Company Act of 1940, as
amended; and
(vi) Dal-Tile Corporation is validly existing as a
corporation in good standing under the laws of the Commonwealth
of Pennsylvania and has the corporate power and authority to own,
lease and operate its properties and to conduct its business as
described in the Dal-Tile Registration Statement and the Dal-Tile
Prospectus.
In rendering its opinion, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Professional
Corporation may rely (i) as to matters of New York law, on the
opinion of ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇ referred to in Section 5(d)
hereof, and (ii) as to factual matters, on certificates of
officers of AWI and its subsidiaries and on certificates of
public officials. With respect to matters of Vermont law,
▇▇▇▇▇▇▇▇ Ingersoll Professional Corporation may state that in
rendering their opinion they have assumed that there are no
differences material to such opinion between the laws of the
State of Vermont and the laws of the Commonwealth of
Pennsylvania.
The opinion of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Professional Corporation
described in this Section 5(b) shall be rendered to the
Underwriters at the request of AWI and shall so state therein.
(c) The Underwriter shall have received on the Closing Date an
opinion of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, General Counsel of AWI, dated the Closing
Date, to the effect that:
(i) the execution and delivery by AWI of, and the
performance by AWI of its obligations under, this Agreement, will
not contravene any provision of the articles of incorporation or
by-laws of AWI or, to the best of such counsel's knowledge, any
agreement or other instrument binding upon AWI or any of its
subsidiaries that is material to AWI and its subsidiaries, taken
as a whole, or, to the best of such counsel's knowledge, any
judgment, order or decree of any governmental body, agency or
court having jurisdiction over AWI or any subsidiary; and
(ii) AEI has valid title to the Shares and the legal right
and power to sell, transfer and deliver the Shares.
(d) The Underwriter shall have received on the Closing Date an
opinion of ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for the Underwriter, dated
the Closing Date, covering the matters referred to in Sections 2(c)(v)
and 2(c)(ix) (but only as to the statements in clause (a) and the
final paragraph thereof) of the Dal-Tile Indemnification Agreement and
to the effect that the statements in the Prospectus under the caption
"The Underwriter," insofar as such statements constitute a summary of
legal matters or documents referred to therein, fairly present the
information called for with respect to such legal matters and
documents and fairly summarize the matters referred to therein.
With respect to such Section 2(c)(ix) of the Dal-Tile
Indemnification Agreement, ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇ may state that their
opinion and belief are based upon its participation in the preparation
of the Registration Statement and the Prospectus and any amendments or
supplements thereto and review and discussion of the contents thereof,
but are without independent check or verification, except as
specified.
(e) The Dal-Tile Indemnification Agreement shall be in effect as
of the Closing Date; the representations and warranties of Dal-Tile
contained in the Dal-Tile Indemnification Agreement shall be true and
correct as of the date hereof and as of the Closing Date; Dal-Tile
shall have complied with all of the agreements and satisfied all of
the conditions on its part to be performed or satisfied under the
Dal-Tile Indemnification Agreement on or before the Closing Date; the
Underwriter shall have received on the Closing Date the certificates,
opinions and letters described in Sections 2(b), 2(c), 2(d), 2(e),
2(f) and 2(g) of the Dal-Tile Indemnification Agreement; and the
Underwriter shall have received on the Closing Date a certificate,
dated the Closing Date and signed by an executive officer of Dal-Tile,
to the effect that the representations and warranties of Dal-Tile
contained in the Dal-Tile Indemnification Agreement are true and
correct as of the Closing Date and that Dal-Tile has complied with all
of the agreements and satisfied all of the conditions on its part to
be performed or satisfied thereunder on or before the Closing Date.
(f) The Shares shall have been listed or approved for listing on
the New York Stock Exchange.
6. Covenants of AWI. In further consideration of the agreements of the
Underwriter herein contained, AWI covenants with the Underwriter as
follows:
(a) To pay all expenses incident to the performance of its
obligations under this Agreement, including: (i) the fees and
disbursements of AWI's counsel and accountants; (ii) the qualification
of the Shares under state securities or Blue Sky laws in accordance
with the provisions of Section 3(d) of the Dal-Tile Indemnification
Agreement, including filing fees and the fees and disbursements of
counsel for the Underwriter in connection therewith and in connection
with the preparation of any Blue Sky or Legal Investment Memoranda
(the cost of which shall not exceed $3,000); (iii) the printing and
delivery to the Underwriter of copies of any Blue Sky or Legal
Investment Memoranda; (iv) all document production charges and
expenses of counsel to the Underwriter incurred in connection with the
preparation of this Agreement and the Dal-Tile Indemnification
Agreement; (v) all costs and expenses related to the transfer and
delivery of the Shares to the Underwriter, including any transfer or
other taxes payable thereon; and (vi) all other costs and expenses
incident to the performance of the obligations of AWI hereunder for
which provision is not otherwise made in this Section.
The provisions of this Section shall not supersede or otherwise affect
any agreement that Dal-Tile and AWI may otherwise have for the allocation
of such expenses among themselves.
7. Termination. This Agreement shall be subject to termination by
notice given by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated to AWI, if (a) after the
execution and delivery of this Agreement and prior to the Closing Date (i)
trading generally shall have been suspended or materially limited on or by,
as the case may be, any of the New York Stock Exchange, the American Stock
Exchange or the National Association of Securities Dealers, Inc., (ii)
trading of any securities of Dal-Tile shall have been suspended on any
exchange or in any over-the-counter market, (iii) a general moratorium on
commercial banking activities in New York shall have been declared by
either Federal or New York State authorities or (iv) there shall have
occurred any outbreak or escalation of hostilities or any change in
financial markets or any calamity or crisis that, in the judgment of ▇▇▇▇▇▇
▇▇▇▇▇▇▇ & Co. Incorporated, is material and adverse and (b) in the case of
any of the events specified in clauses (a)(i) through (iv), such event,
singly or together with any other such event, makes it, in the judgment of
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated, impracticable to market the Shares on
the terms and in the manner contemplated in the Prospectus.
The representations, warranties and other statements of the Sellers
contained in this Agreement shall remain operative and in full force and
effect regardless of (i) any termination of this Agreement, (ii) any
investigation made by or on behalf of the Underwriter or any person
controlling the Underwriter or either Seller, its officers or directors or
any person controlling either Seller and (iii) acceptance of and payment
for any of the Shares.
If this Agreement shall be terminated by the Underwriter because of
any failure or refusal on the part of AWI to comply with the terms or to
fulfill any of the conditions of this Agreement, or if for any reason AWI
shall be unable to perform its obligations under this Agreement, AWI will
reimburse the Underwriter for all out-of-pocket expenses (including the
fees and disbursements of its counsel) reasonably incurred by the
Underwriter in connection with this Agreement or the offering contemplated
hereunder.
8. Effectiveness. This Agreement shall become effective upon the
execution and delivery hereof by the parties hereto.
9. Counterparts. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as
if the signatures thereto and hereto were upon the same instrument.
10. Applicable Law. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of New York.
11. Headings. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part
of this Agreement.
Please confirm your agreement by having an authorized officer sign a
copy of this Agreement in the space set forth below.
Very truly yours,
▇▇▇▇▇▇▇▇▇ WORLD INDUSTRIES, INC.
By:
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Name:
Title:
▇▇▇▇▇▇▇▇▇ ENTERPRISES, INC.
By:
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Name:
Title:
Accepted as of the date hereof:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
By:
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Name:
Title: