EXHIBIT 1.1
THE TIMKEN COMPANY
(an Ohio corporation)
12,895,973 Shares of Common Stock
PURCHASE AGREEMENT
Dated: October 15, 2003
Table of Contents
PURCHASE AGREEMENT
SECTION 1. Representations and Warranties........................................... 3
(a) Representations and Warranties by the Company....................... 3
(i) Compliance with Registration Requirements................... 3
(ii) Incorporated Documents...................................... 3
(iii) Independent Accountants..................................... 4
(iv) Financial Statements........................................ 4
(v) No Material Adverse Change in Business...................... 4
(vi) Good Standing of the Company................................ 5
(vii) Good Standing of Subsidiaries............................... 5
(viii) Venture Entities............................................ 5
(ix) Authorization of Agreement.................................. 5
(x) Authorization and Description of Securities................. 6
(xi) Absence of Defaults and Conflicts........................... 6
(xii) Distributions and Dividend Payments......................... 6
(xiii) Internal Controls........................................... 7
(xiv) Absence of Labor Dispute.................................... 7
(xv) Absence of Proceedings...................................... 7
(xvi) Possession of Intellectual Property......................... 7
(xvii) Absence of Further Requirements............................. 8
(xviii) Possession of Licenses and Permits.......................... 8
(xix) Title to Property........................................... 8
(xx) Investment Company Act...................................... 8
(xxi) Registration Rights......................................... 8
(xxii) Environmental Laws.......................................... 9
(b) Representations and Warranties by the Selling Stockholder........... 9
(i) Information Furnished by the Selling Stockholder............ 9
(ii) Authorization of Agreements................................. 9
(iii) Good and Marketable Title................................... 10
(iv) Absence of Manipulation..................................... 10
(v) Absence of Further Requirements............................. 10
(vi) Restriction on Sale of Securities........................... 10
(vii) IR Shares Suitable for Transfer............................. 11
(viii) No Association with NASD.................................... 11
(ix) Selling Stockholder Information............................. 11
(c) Officer's Certificates.............................................. 11
SECTION 2. Sale and Delivery to Underwriter; Closing................................ 11
(a) The Securities...................................................... 11
(b) Payment............................................................. 11
(c) Denominations; Registration......................................... 12
SECTION 3. Covenants of the Company................................................. 12
SECTION 4. Payment of Expenses...................................................... 15
(a) Expenses of the Company............................................. 15
(b) Expenses of the Selling Stockholder................................. 15
(c) Termination of Agreement............................................ 15
SECTION 5. Conditions of Underwriter's Obligations.................................. 16
SECTION 6. Indemnification.......................................................... 18
(a) Indemnification of the Underwriter and the Selling Stockholder
by the Company...................................................... 18
(b) Indemnification of the Company, the Selling Stockholder, Directors
and Officers by the Underwriter..................................... 20
(c) Indemnification of the Company, the Underwriter, Directors and
Officers by the Selling Stockholder................................. 20
(d) Actions Against Parties; Notification............................... 20
(e) Settlement Without Consent if Failure to Reimburse.................. 21
(f) Acknowledgement..................................................... 21
SECTION 7. Contribution............................................................. 21
SECTION 8. Representations, Warranties and Agreements to Survive Delivery........... 23
SECTION 9. Termination of Agreement................................................. 23
(a) Termination; General................................................ 23
(b) Liabilities......................................................... 23
SECTION 10. Notices................................................................. 23
SECTION 11. Parties................................................................. 24
SECTION 12. GOVERNING LAW AND TIME.................................................. 24
SECTION 13. Effect of Headings...................................................... 24
SCHEDULES
Schedule A - Pricing Information....................................... Sch A-1
Schedule B - List of Subsidiaries...................................... Sch B-1
Schedule C - List of Persons and Entities Subject to Lock-up........... Sch C-1
EXHIBITS
Exhibit A - Form of Opinion of Company's Counsel....................... A-1
Exhibit B - Form of Letter of Company's Counsel........................ B-1
Exhibit C - Form of Opinion of Company's In-house Counsel.............. C-1
Exhibit D - Form of Opinion of Selling Stockholder's Counsel........... D-1
Exhibit E - Form of Lock-up Agreement.................................. E-1
THE TIMKEN COMPANY
(an Ohio corporation)
12,895,973 Shares of Common Stock
(No Par Value)
PURCHASE AGREEMENT
October 15, 2003
Xxxxxx Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
The Timken Company, an Ohio corporation (the "Company"), and
Xxxxxxxxx-Xxxx Company, a New Jersey corporation (the "Selling Stockholder"),
confirm their respective agreements with Xxxxxx Xxxxxxx & Co. Incorporated (the
"Underwriter") with respect to the issue and sale by the Company and the
purchase by the Underwriter of 3,500,000 shares (the "Company Shares") of Common
Stock, without par value, of the Company ("Common Stock") and the sale by the
Selling Stockholder and the purchase by the Underwriter of 9,395,973 shares (the
"IR Shares") of Common Stock. The Company Shares and the IR Shares are
hereinafter referred to collectively as the "Securities."
The Company and the Selling Stockholder understand that the Underwriter
proposes to make a public offering of the Securities as soon as the Underwriter
deems advisable after this Agreement has been executed and delivered.
The Company has filed with the Securities and Exchange Commission (the
"Commission") (i) a shelf registration statement on Form S-3 (No. 333-100731)
covering the registration of the Company Shares under the Securities Act of
1933, as amended (the "1933 Act"), including the related base prospectus
relating to the Company Shares (the "Company Registration Statement") and (ii) a
shelf registration statement on Form S-3 (No. 333-108792) covering the
registration of the IR Shares under the 1933 Act, including the related base
prospectus relating to the IR Shares (the "IR Registration Statement"). Promptly
after execution and delivery of this Agreement, the Company will prepare and
file a prospectus in accordance with the provisions of Rule 430A ("Rule 430A")
of the rules and regulations of the Commission under the 1933 Act (the "1933 Act
Regulations") and paragraph (b) of Rule 424 ("Rule 424(b)") of the 1933 Act
Regulations relating to each of the Company Registration Statement and the IR
Registration Statement. The information included in such prospectus that was
omitted from either the Company Registration Statement or the IR Registration
Statement at the respective
1
times they became effective but that is deemed to be part of either the Company
Registration Statement or the IR Registration Statement, as applicable, at the
respective times they became effective pursuant to paragraph (b) of Rule 430A is
referred to as "Rule 430A Information." The Company Registration Statement and
the IR Registration Statement, including the exhibits thereto, schedules
thereto, if any, and the documents incorporated or deemed incorporated by
reference therein pursuant to Item 12 of Form S-3 under the 1933 Act, at the
time they became effective, and including the Rule 430A Information, are herein
referred to collectively as the "Registration Statements." Any registration
statement filed pursuant to Rule 462(b) of the 1933 Act Regulations is herein
referred to as a "Rule 462(b) Registration Statement," and after such filing the
term "Registration Statements" shall be deemed to include any Rule 462(b)
Registration Statement. The final prospectus, including both the base prospectus
contained in the Company Registration Statement and the base prospectus
contained in the IR Registration Statement and any prospectus supplement
relating to the Securities included in the Registration Statements and the
documents incorporated or deemed incorporated by reference therein pursuant to
Item 12 of Form S-3 under the 1933 Act, in the form first furnished to the
Underwriter for use in connection with the offering of the Securities, is herein
called the "Prospectus." For purposes of this Agreement, all references to the
Registration Statements, the Prospectus or any amendment or supplement to any of
the foregoing shall be deemed to refer to and include the copy filed with the
Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval
system ("XXXXX").
Pursuant to a stock and asset purchase agreement dated as of October
16, 2002 (the "Acquisition Agreement") with Xxxxxxxxx-Xxxx Company Limited
("IR") on behalf of itself and other sellers party thereto (collectively, the
"Acquisition Parties"), on February 18, 2003 the Company acquired, directly or
indirectly, (i) all or a portion of the outstanding shares of capital stock, as
set forth in the Acquisition Agreement, of the companies listed on Schedule B of
the Acquisition Agreement (the "Acquisition Subsidiaries"), (ii) all or a
portion of the equity interests, as set forth in the Acquisition Agreement, of
the companies listed on Schedule C of the Acquisition Agreement (the "Venture
Entities") and (iii) those assets listed in Schedule E of the Acquisition
Agreement (the "Separate Assets"). The Acquisition Subsidiaries, the Venture
Entities and the Separate Assets are hereinafter referred to collectively as
"Torrington," and the purchase of Torrington by the Company pursuant to the
Acquisition Agreement is hereafter referred to as the "Torrington Acquisition."
All references in this Agreement to financial statements and schedules
and other information which is "contained," "included" or "stated" in the
Registration Statements or the Prospectus (or other references of like import)
shall be deemed to mean and include all such financial statements and schedules
and other information which is or is deemed to be incorporated by reference in
the Registration Statements or the Prospectus, as the case may be; and all
references in this Agreement to amendments or supplements to the Registration
Statements or the Prospectus shall be deemed to mean and include the filing of
any document under the Securities Exchange Act of 1934 (the "1934 Act") which is
incorporated by reference in the Registration Statements or the Prospectus, as
the case may be.
2
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company. The Company
represents and warrants to the Underwriter as of the date hereof and as of the
Closing Time referred to in Section 2(c) hereof, and agrees with the
Underwriter, as follows:
(i) Compliance with Registration Requirements. The
Company meets the requirements for use of Form S-3 under the 1933 Act.
Each of the Registration Statements and any Rule 462(b) Registration
Statement has become effective under the 1933 Act and no stop order
suspending the effectiveness of either of the Registration Statements
or any Rule 462(b) Registration Statements is in effect under the 1933
Act and no proceedings for that purpose have been instituted or are
pending or, to the knowledge of the Company, are contemplated by the
Commission, and any request on the part of the Commission for
additional information has been complied with.
At the respective times the Registration Statements, any Rule
462(b) Registration Statements and any post-effective amendments
thereto became effective and at the Closing Time, the Registration
Statements, the Rule 462(b) Registration Statements and any amendments
and supplements thereto with respect to the Securities complied and
will comply in all material respects with the requirements of the 1933
Act and the 1933 Act Regulations and did not and will not contain any
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading. Neither the Prospectus nor any amendments or
supplements thereto, at the time the Prospectus or any such amendment
or supplement was issued and at the Closing Time, included or will
include any untrue statement of a material fact or omitted or will omit
to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading. The representations and warranties in this subsection
shall not apply to statements in or omissions from the Registration
Statements or Prospectus made in reliance upon and in conformity with
(i) information furnished to the Company in writing by the Underwriter
expressly for use in the Registration Statements or Prospectus or (ii)
information furnished to the Company in writing by the Selling
Stockholder expressly for use in the IR Registration Statement or in
the Prospectus.
The prospectuses filed as part of each of the Registration
Statements as originally filed or as part of any amendment thereto, or
filed pursuant to Rule 424 under the 1933 Act with respect to the
Securities, complied when so filed in all material respects with the
1933 Act Regulations and the Prospectus delivered to the Underwriter
for use in connection with this offering was identical to the
electronically transmitted copies thereof filed with the Commission
pursuant to XXXXX, except to the extent permitted by Regulation S-T
under the 1933 Act ("Regulation S-T").
(ii) Incorporated Documents. The documents incorporated or
deemed to be incorporated by reference in the Registration Statements
and the Prospectus, at the respective times they were or hereafter are
filed with the Commission, complied and will comply in all material
respects with the requirements of the 1934 Act and the rules and
regulations of the Commission thereunder (the "1934 Act Regulations"),
as applicable,
3
and, when read together with the other information in the Prospectus,
at the respective times the Registration Statements became effective,
at the time the Prospectus was issued and at the Closing Time, did not
and will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading.
(iii) Independent Accountants. (A) Ernst & Young LLP, the
accountants who certified the financial statements and supporting
schedules of the Company incorporated by reference in the Registration
Statements, are independent public accountants with respect to the
Company within the meaning of the 1933 Act and the 1933 Act
Regulations; and (B) PricewaterhouseCoopers LLP, the accountants who
certified the financial statements and supporting schedules of
Torrington which were incorporated by reference in the Registration
Statements and used in the preparation of the pro forma financial
information set forth or incorporated by reference in the Registration
Statements, are independent public accountants with respect to
Torrington within the meaning of the 1933 Act and the 1933 Act
Regulations.
(iv) Financial Statements. The financial statements for
each of the Company and Torrington incorporated by reference in the
Registration Statements and the Prospectus, together with the related
schedule and notes thereto, present fairly, in all material respects,
the financial position of each of the Company and Torrington and their
respective consolidated subsidiaries at the dates indicated and the
statement of operations, stockholders' equity and cash flows of each of
the Company and Torrington and their respective consolidated
subsidiaries for the periods specified; said financial statements have
been prepared in conformity with generally accepted accounting
principles ("GAAP") applied on a consistent basis throughout the
periods involved subject, in the case of the unaudited interim
financial statements, to normal year-end adjustments that have not been
made and are not expected to be material in amount. The supporting
schedule incorporated by reference in the Registration Statements
presents fairly, in all material respects, in accordance with GAAP the
information required to be stated therein. The pro forma financial
statements and the related notes thereto incorporated by reference in
the Registration Statements and the Prospectus present fairly, in all
material respects, the information shown therein, have been prepared in
accordance with the Commission's rules and guidelines with respect to
pro forma financial statements and have been properly compiled on the
bases described therein, and the assumptions used in the preparation
thereof are reasonable and the adjustments used therein are appropriate
to give effect to the transactions and circumstances referred to
therein.
(v) No Material Adverse Change in Business. Since the
respective dates as of which information is given in the Registration
Statements and the Prospectus, except as otherwise stated therein, (A)
there has been no material adverse change in the condition, financial
or otherwise, or in the earnings, business affairs or business
prospects of the Company and its subsidiaries taken as a whole, whether
or not arising in the ordinary course of business, (B) there have been
no transactions entered into by the Company or any of its subsidiaries,
other than those in the ordinary course of business or in connection
with the integration of Torrington, which are material with respect to
the Company and its subsidiaries, taken as a whole, and (C) except for
regular quarterly
4
dividends on the Common Stock in amounts per share that are consistent
with past practice, there has been no dividend or distribution of any
kind declared, paid or made by the Company on any class of its capital
stock.
(vi) Good Standing of the Company. The Company has been
duly incorporated and is validly existing as a corporation in good
standing under the laws of the State of Ohio and has corporate power
and authority to own, lease and operate its properties and to conduct
its business as described in the Prospectus and to enter into and
perform its obligations under this Agreement; and the Company is duly
qualified as a foreign corporation to transact business and is in good
standing in each other jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or
the conduct of business, except where the failure so to qualify or to
be in good standing would not result in a Material Adverse Effect. As
used in this Agreement, the term "Material Adverse Effect" means any
material adverse change in the condition, financial or otherwise, or in
the earnings, business affairs or business prospects of the Company and
its subsidiaries, taken as a whole, whether or not arising in the
ordinary course of business.
(vii) Good Standing of Subsidiaries. Each subsidiary of the
Company that is material to the business, financial condition or
results of operations of the Company, taken as a whole, (A) is set
forth on Schedule B hereto (each a "Subsidiary" and, collectively, the
"Subsidiaries"), (B) has been duly organized and is validly existing
and, where applicable, is in good standing under the laws of the
jurisdiction of its incorporation, formation or organization, as
applicable, and has the requisite corporate or similar power, as the
case may be, and authority to own, lease and operate its assets and
properties and to conduct its business as it is now being conducted and
as described in the Prospectus; and (C) is duly qualified or licensed
to transact business and is, where applicable, in good standing in each
other jurisdiction in which such qualification or license is required,
whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure so to qualify or to be in
good standing would not result in a Material Adverse Effect; except as
otherwise disclosed in the Registration Statements, all of the issued
and outstanding capital stock of each such Subsidiary has been duly
authorized and validly issued, is fully paid and non-assessable and is
owned by the Company, directly or through subsidiaries, free and clear
of any security interest, mortgage, pledge, lien, encumbrance, claim or
equity; and none of the outstanding shares of capital stock of any
Subsidiary was issued in violation of the preemptive or similar rights
of any securityholder of such Subsidiary. The only subsidiaries of the
Company are (a) the Subsidiaries listed on Schedule B hereto and (b)
certain other subsidiaries which, considered in the aggregate as a
single subsidiary, are not material to the business, financial
condition or results of operations of the Company, taken as a whole.
(viii) Venture Entities. None of the Venture Entities is
material to the business, financial condition or results of operations
of the Company, taken as a whole.
(ix) Authorization of Agreement. This Agreement has been
duly authorized, executed and delivered by the Company.
5
(x) Authorization and Description of Securities. The
Company Shares have been duly authorized for issuance and sale to the
Underwriter pursuant to this Agreement and, when issued and delivered
by the Company pursuant to this Agreement against payment of the
consideration set forth herein, will be validly issued, fully paid and
non-assessable; the Common Stock conforms to all statements relating
thereto contained in the Prospectus and such description conforms to
the rights set forth in the instruments defining the same; no holder of
the Securities will be personally liable for any debts, obligations or
liabilities of the Company by reason of being such a holder; and, the
issuance and sale of the Company Shares by the Company is not subject
to the preemptive or other similar rights of any securityholder of the
Company.
(xi) Absence of Defaults and Conflicts. Neither the
Company nor its Subsidiaries is in violation of its charter or by-laws
or similar charter document. Neither the Company nor its Subsidiaries
is in default in the performance or observance of any obligation,
agreement, covenant or condition contained in any contract, indenture,
mortgage, deed of trust, loan or credit agreement, note, lease or other
agreement or instrument to which the Company or its Subsidiaries is a
party or by which it or any of them may be bound, or to which any of
the property or assets of the Company or its Subsidiaries is subject
(collectively, "Agreements and Instruments"), except for such defaults
that would not result in a Material Adverse Effect. The execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated herein and in the Registration Statements,
the issuance and sale of the Company Shares and the use of proceeds
from the sale of the Company Shares as described in the Prospectus
under the caption "Use of Proceeds", and compliance by the Company with
its obligations hereunder have been duly authorized by all necessary
corporate action and do not and will not, whether with or without the
giving of notice or passage of time or both, conflict with or
constitute a breach of, or default or Repayment Event (as defined
below) under, or result in the creation or imposition of any lien,
charge or encumbrance upon any of the respective property or assets of
the Company or its subsidiaries pursuant to the Agreements and
Instruments (except for such conflicts, breaches, Repayment Events or
defaults or liens, charges or encumbrances that would not result in a
Material Adverse Effect), nor will such action result in any violation
of (A) the provisions of the charter or by-laws or similar charter
document of the Company or its Subsidiaries or (B) any applicable law,
statute, rule, regulation, judgment, order, writ or decree of any
government, government instrumentality or court, domestic or foreign,
having jurisdiction over the Company or its subsidiaries, or any of
their respective assets, properties or operations (except with respect
to clause (B) above, as would not result in a Material Adverse Effect).
As used herein, a "Repayment Event" means any event or condition which
gives the holder of any note, debenture or other evidence of
indebtedness (or any person acting on such holder's behalf) the right
to require the repurchase, redemption or repayment of all or a portion
of such indebtedness by the Company or its subsidiaries, as the case
may be.
(xii) Distributions and Dividend Payments. Except as
described in or contemplated by the Registration Statements and the
Prospectus and except as prohibited by local law in circumstances that
would not, individually or in the aggregate, result in a Material
Adverse Effect, no Subsidiary of the Company is currently prohibited,
directly
6
or indirectly, from paying any dividends to the Company, from making
any other distribution on such Subsidiary's capital stock or other
equity interests, as applicable, from repaying to the Company any loans
or advances to such Subsidiary from the Company, or from transferring
any of such Subsidiary's property or assets to the Company or any other
Subsidiary of the Company.
(xiii) Internal Controls. The Company maintains a system of
internal accounting controls sufficient to provide reasonable assurance
that (1) transactions are executed in accordance with management's
general or specific authorizations; (2) transactions are recorded as
necessary to permit preparation of financial statements in conformity
with GAAP and to maintain asset accountability; (3) access to assets is
permitted only in accordance with management's general or specific
authorization; and (4) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(xiv) Absence of Labor Dispute. No labor dispute with the
employees of the Company or any of its subsidiaries exists or, to the
knowledge of the Company, is 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, manufacturers, customers
or contractors, which, in either case, may reasonably be expected to
result in a Material Adverse Effect.
(xv) Absence of Proceedings. There are no legal or
governmental proceedings pending or, to the Company's knowledge,
threatened to which the Company or any of its Subsidiaries is subject,
or to which any of the properties of the Company or any of its
Subsidiaries is subject, that are required to be described in the
Registration Statements or the Prospectus and are not so described or
any statutes, regulations, contracts or other documents that are
required to be described in the Registration Statements or the
Prospectus or to be filed as an exhibit to the Registration Statements
that are not described or filed as required.
(xvi) Possession of Intellectual Property. Each of the
Company and its Subsidiaries own or possess, or can acquire on
reasonable terms, adequate patents, rights to use patents, licenses,
inventions, copyrights, know-how (including trade secrets and other
unpatented and/or unpatentable proprietary or confidential information,
systems or procedures), trademarks, service marks, trade names or other
intellectual property (collectively, "Intellectual Property") necessary
to carry on the business now operated by them, except where the failure
to own or possess such Intellectual Property would not result, singly
or in the aggregate, in a Material Adverse Effect, and neither the
Company nor its Subsidiaries has received any notice or has a
reasonable basis to believe that the conduct of their respective
businesses will result in any infringement of or conflict with asserted
rights of others with respect to any Intellectual Property or of any
facts or circumstances which would render any Intellectual Property
invalid or inadequate to protect the interest of any of the Company and
its subsidiaries therein, and which infringement or conflict (if the
subject of any unfavorable decision, ruling or finding) or invalidity
or inadequacy, singly or in the aggregate, would result in a Material
Adverse Effect.
7
(xvii) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or
agency is necessary or required for the performance by the Company of
its obligations hereunder, in connection with the offering, issuance or
sale of the Securities hereunder or the consummation of the
transactions contemplated by this Agreement and the Prospectus, except
such as have already been obtained or as may be required under the 1933
Act or the 1933 Act Regulations or state securities laws.
(xviii) Possession of Licenses and Permits. Except as would
not result, singly or in the aggregate, in a Material Adverse Effect,
each of the Company and its Subsidiaries own or possess such permits,
licenses, approvals, consents and other authorizations (collectively,
"Governmental Licenses") issued by the appropriate federal, state,
local or foreign regulatory agencies or bodies necessary to conduct
their respective businesses as now operated; each of the Company and
its Subsidiaries are in compliance with the terms and conditions of all
such Governmental Licenses, except where the failure so to comply would
not, singly or in the aggregate, have a Material Adverse Effect; all of
the Governmental Licenses are valid and in full force and effect,
except when the invalidity of such Governmental Licenses or the failure
of such Governmental Licenses to be in full force and effect would not
have a Material Adverse Effect; and neither the Company nor its
Subsidiaries has received any notice of proceedings relating to the
revocation or modification of any such Governmental Licenses which,
singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would result in a Material Adverse Effect.
(xix) Title to Property. (A) Each of the Company and its
subsidiaries have good and marketable title to all real property owned
by them and good title to all other properties owned by them, in each
case, free and clear of all mortgages, pledges, liens, security
interests, claims, restrictions or encumbrances of any kind except such
as (a) are described in the Prospectus or (b) do not, singly or in the
aggregate, materially affect the value of such property and do not
interfere with the use made of such property by the Company; and (B)
except as would not result, singly or in the aggregate, in a Material
Adverse Effect, all of the leases and subleases which are material to
the business of the Company and its subsidiaries and under which any of
them hold properties described in the Prospectus, are in full force and
effect, and none of them has any notice of any material claim of any
sort that has been asserted by anyone adverse to any of their rights
under any of the leases or subleases mentioned above, or affecting or
questioning any of their rights to the continued possession of the
leased or subleased premises under any such lease or sublease.
(xx) Investment Company Act. The Company is not, and upon
the issuance and sale of the Company Shares as contemplated herein and
the application of the net proceeds therefrom as described in the
Prospectus will not be, an "investment company" or an entity
"controlled" by an "investment company" as such terms are defined in
the Investment Company Act of 1940, as amended (the "1940 Act").
(xxi) Registration Rights. Except as disclosed in the
Registration Statements, there are no persons with registration rights
or other similar rights to have any securities
8
registered pursuant to the Registration Statements or otherwise
registered by the Company under the 1933 Act.
(xxii) Environmental Laws. Except as disclosed in the
Registration Statements and except as would not, singly or in the
aggregate, result in a Material Adverse Effect, (A) neither the Company
nor its Subsidiaries is in violation of any federal, state, local or
foreign statute, law, rule, regulation, ordinance, code, policy or any
judicial or administrative interpretation thereof, relating to
pollution or protection of human health, the environment (including,
without limitation, ambient air, surface water, groundwater, land
surface or subsurface strata) or wildlife, including, without
limitation, laws and regulations relating to the release or threatened
release of chemicals, pollutants, contaminants, wastes, toxic
substances, hazardous substances, petroleum or petroleum products
(collectively, "Hazardous Materials") or to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport
or handling of Hazardous Materials (collectively, "Environmental
Laws"), (B) each of the Company and its Subsidiaries have all permits,
authorizations and approvals required under any applicable
Environmental Laws and are each in compliance with their requirements,
(C) there are no pending or, to the Company's knowledge, threatened
administrative, regulatory or judicial actions, suits, demands, demand
letters, claims, liens, notices of noncompliance or violation,
investigation or proceedings relating to any Environmental Law against
any of the Company or its Subsidiaries and (D) the Company is not aware
of any events or circumstances that might reasonably be expected to
form the basis of an order for clean-up or remediation, or an action,
suit or proceeding by any private party or governmental body or agency,
against or affecting any of the Company or its Subsidiaries relating to
Hazardous Materials or any Environmental Laws.
(b) Representations and Warranties by the Selling Stockholder. The
Selling Stockholder represents and warrants to the Underwriter as of the date
hereof and as of the Closing Time, and agrees with the Underwriter, as follows:
(i) Information Furnished by the Selling Stockholder.
None of the "Selling Stockholder Information" (as defined in Section
1(b)(ix) below) included at the time the IR Registration Statement
became effective, or includes as of the date hereof, any untrue
statement of a material fact or as of such effective date omitted, or
as of the date hereof omits, to state a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
(ii) Authorization of Agreements. The Selling Stockholder
has the full right, power and authority to enter into this Agreement
and to sell, transfer and deliver the IR Shares. The execution and
delivery of this Agreement and the sale and delivery of the IR Shares
and compliance by the Selling Stockholder with its obligations
hereunder have been duly authorized by the Selling Stockholder and do
not and will not, whether with or without the giving of notice or
passage of time or both, conflict with or constitute a breach of, or
default under, or result in the creation or imposition of any lien,
charge or encumbrance upon the IR Shares nor will such action result in
any violation of the provisions of the charter or by-laws or other
organizational instrument of the Selling Stockholder, if applicable, or
any applicable treaty, law, statute, rule, regulation,
9
judgment, order, writ or decree of any government, government
instrumentality or court, domestic or foreign, having jurisdiction over
the Selling Stockholder or any of its properties.
(iii) Good and Marketable Title. The Selling Stockholder,
together with its parents, including Xxxxxxxxx-Xxxx Company Limited, is
the record and beneficial owner of the IR Shares and has and will at
the Closing Time have good and unencumbered title to the IR Shares
hereunder, free and clear of any security interest, mortgage, pledge,
lien, charge, claim, equity or encumbrance of any kind, other than
pursuant to this Agreement; and upon delivery of the IR Shares and
payment of the purchase price therefor as herein contemplated, assuming
the Underwriter has no notice of any adverse claim, (within the meaning
of Section 8-105 of the New York Uniform Commercial Code ("NYUCC")) at
the time such IR Shares are credited to the Underwriter's account or
accounts maintained with The Depository Trust Company ("DTC") or other
securities intermediary (each, a "Securities Account"), the
Underwriter, by making payment therefore as provided herein will have
acquired a security entitlement (within the meaning of Section
8-102(a)(17) of the NYUCC) to such IR Shares, and no action based on an
adverse claim (within the meaning of Section 8-105 of the NYUCC)
whether framed in conversion, replevin, constructive trust, equitable
lien or other theory, may be asserted against the Underwriter with
respect to such IR Shares.
(iv) Absence of Manipulation. The Selling Stockholder has
not taken, and will not take, directly or indirectly, any action which
is designed to or which has constituted or which might reasonably be
expected to cause or result, under the 1934 Act or otherwise, in
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the IR Shares.
(v) Absence of Further Requirements. No filing with, or
consent, approval, authorization, order, registration, qualification or
decree of, any court or governmental authority or agency, domestic or
foreign, is necessary or required for the performance by the Selling
Stockholder of its obligations hereunder or in connection with the sale
and delivery of the IR Shares hereunder, except such as may have
previously been made or obtained or as may be required under the 1933
Act or the 1933 Act Regulations or state securities laws.
(vi) Restriction on Sale of Securities. During a period of
90 days from the date of the Prospectus, the Selling Stockholder will
not, without the prior written consent of the Underwriter, (i) directly
or indirectly offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant
any option, right or warrant to purchase or otherwise transfer or
dispose of, directly or indirectly, any share of Common Stock or any
securities convertible into or exercisable or exchangeable for Common
Stock or cause or participate in the filing of any registration
statement under the 1933 Act with respect to any of the foregoing or
(ii) enter into any swap or any other agreement or any transaction that
transfers, in whole or in part, directly or indirectly, the economic
consequence of ownership of the Common Stock, whether any such swap or
transaction described in clause (i) or (ii) above is to be settled by
delivery of Common
10
Stock or such other securities, in cash or otherwise. The foregoing
sentence shall not apply to the Securities to be sold hereunder.
(vii) IR Shares Suitable for Transfer. At the Closing Time,
the IR Shares shall be in suitable form for transfer to the Underwriter
pursuant to The Depository Trust Company's FAST closing program and
free from any restrictions on transfer.
(viii) No Association with NASD. Neither the Selling
Stockholder nor any of its affiliates directly, or indirectly through
one or more intermediaries, controls, or is controlled by, or is under
common control with, or has any other association with (within the
meaning of Article I, Section 1(m) of the By-laws of the National
Association of Securities Dealers, Inc.), any member firm of the
National Association of Securities Dealers, Inc.
(ix) Selling Stockholder Information. The Selling
Stockholder agrees that it furnished to the Company the following
written information expressly for use in the Prospectus and the IR
Registration Statement: the information under the heading "Selling
Stockholder" in the prospectus supplement contained in the Prospectus;
and the last sentence in the first paragraph, the first sentence in the
second paragraph and the fifth paragraph under the heading "Selling
Stockholders" in the base prospectus contained in the IR Registration
Statement (collectively, the "Selling Stockholder Information").
(c) Officer's Certificates. Any certificate signed by any officer
of the Company delivered to the Underwriter or to counsel for the Underwriter in
connection with the offering of the Securities contemplated hereby shall be
deemed a representation and warranty by the Company made as of the date of such
certificate (except to the extent a date is specified in such representation or
warranty, in which case such representation or warranty shall be deemed made as
of such date) to the Underwriter as to the matters covered thereby, and any
certificate signed by any officer of the Selling Stockholder delivered to the
Underwriter or to counsel for the Underwriter in connection with the offering of
the Securities contemplated hereby shall be deemed a representation and warranty
by the Selling Stockholder made as of the date of such certificate (except to
the extent a date is specified in such representation or warranty, in which case
such representation or warranty shall be deemed made as of such date) to the
Underwriter as to the matters covered thereby.
SECTION 2. Sale and Delivery to Underwriter; Closing.
(a) The Securities. On the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, (i) the Company agrees to sell to the Underwriter, and the Underwriter
agrees to purchase from the Company, the Company Shares and (ii) the Selling
Stockholder agrees to sell to the Underwriter, and the Underwriter agrees to
purchase from the Selling Stockholder, the IR Shares, in each case, at the price
set forth in Schedule A hereto.
(b) Payment. Payment of the purchase price for, and delivery of,
the Securities shall be made at the offices of Xxxxx Day, located at 000 Xxxx
00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx, or at such other place as shall be agreed upon
by the Underwriter, the Company and the Selling
11
Stockholder, at 10:00 A.M. (Eastern time) on the third business day after the
date hereof, or such other time not later than ten business days after such date
as shall be agreed upon by the Underwriter, the Company and the Selling
Stockholder (such time and date of payment and delivery being herein called
"Closing Time").
Payment for the Company Shares shall be made to the Company by wire
transfer of immediately available funds to a bank account of the Company
designated by the Company, against delivery of the Company Shares for the
account of the Underwriter. Payment for the IR Shares shall be made to the
Selling Stockholder by wire transfer of immediately available funds to a bank
account of the Selling Stockholder designated by the Selling Stockholder,
against delivery of the IR Shares for the account of the Underwriter.
(c) Denominations; Registration. Certificates for the Securities
shall be in such denominations and registered in such names as the Underwriter
may request in writing at least one full business day before the Closing Time.
The certificates for the Securities will be made available for examination and
packaging by the Underwriter in The City of New York not later than 10:00 A.M.
(Eastern time) on the business day prior to the Closing Time.
Section 3. Covenants of the Company. The Company covenants with the
Underwriter as follows:
(a) Compliance with Securities Regulations and Commission
Requests. The Company, subject to Section 3(b), will comply with the
requirements of Rule 430A and will notify the Underwriter promptly, and
confirm the notice in writing, (i) when any post-effective amendment to
either of the Registration Statements shall become effective, or any
supplement to the Prospectus or any amended Prospectus shall have been
filed, (ii) of the receipt of any comments from the Commission, (iii)
of any request by the Commission for any amendment to either of the
Registration Statements or any amendment or supplement to the
Prospectus or for additional information relating thereto, and (iv) of
the issuance by the Commission of any stop order suspending the
effectiveness of either of the Registration Statements or of the
suspension of the qualification of the Securities for offering or sale
in any jurisdiction or of the initiation or threatening of any
proceedings for any of such purposes. The Company will promptly effect
the filings necessary pursuant to Rule 424(b) and will take such steps
as it deems necessary to ascertain promptly whether the form of
prospectus transmitted for filing under Rule 424(b) was received for
filing by the Commission and, in the event that it was not, it will
promptly file such prospectus. The Company will make every reasonable
effort to prevent the issuance of any stop order and, if any stop order
is issued, to obtain the lifting thereof as soon as possible.
(b) Filing of Amendments. Until the completion of the
distribution of the Securities, the Company will give the Underwriter
notice of its intention to file or prepare any amendment to either of
the Registration Statements (including any filing under Rule 462(b)),
or any amendment, supplement or revision to either the base prospectus
included in either of the Registration Statements at the respective
times they became effective or to the Prospectus, whether pursuant to
the 1933 Act, the 1934 Act or otherwise, will furnish the Underwriter
with copies of any such documents a reasonable
12
amount of time prior to such proposed filing or use, as the case may
be, and will not file or use any such document to which the Underwriter
or counsel for the Underwriter shall reasonably object.
(c) Delivery of Registration Statements. The Company has
furnished or will deliver to the Underwriter and counsel for the
Underwriter, without charge, signed copies of the Registration
Statements as originally filed and of each amendment thereto (including
exhibits filed therewith or incorporated by reference therein and
documents incorporated or deemed to be incorporated by reference
therein) and will also deliver to the Underwriter, without charge, a
conformed copy of the IR Registration Statement as originally filed and
of each amendment thereto (without exhibits). Such copies of the IR
Registration Statement and each amendment thereto furnished to the
Underwriter will be identical to the electronically transmitted copies
thereof filed with the Commission pursuant to XXXXX, except to the
extent permitted by Regulation S-T.
(d) Delivery of Prospectuses. The Company will furnish to the
Underwriter, without charge, during the period when the Prospectus is
required to be delivered under the 1933 Act or the 1934 Act, such
number of copies of the Prospectus (as amended or supplemented) as the
Underwriter may reasonably request. The Prospectus and any amendments
or supplements thereto furnished to the Underwriter will be identical
to the electronically transmitted copies thereof filed with the
Commission pursuant to XXXXX, except to the extent permitted by
Regulation S-T.
(e) Continued Compliance with Securities Laws. The Company
will comply with the 1933 Act and the 1933 Act Regulations and the 1934
Act and the 1934 Act Regulations so as to permit the completion of the
distribution of the Securities as contemplated in this Agreement and in
the Prospectus. If at any time when a prospectus is required by the
1933 Act to be delivered in connection with sales of the Securities,
any event shall occur or condition shall exist as a result of which it
is necessary, in the opinion of counsel for the Underwriter or in the
judgment of the Company, to amend either of the Registration Statements
or amend or supplement the Prospectus in order that the Prospectus will
not include any untrue statements of a material fact or omit to state a
material fact necessary in order to make the statements therein not
misleading in the light of the circumstances existing at the time it is
delivered to a purchaser, or if it shall be necessary, in the opinion
of such counsel, at any such time to amend either of the Registration
Statements or amend or supplement the Prospectus in order to comply
with the requirements of the 1933 Act or the 1933 Act Regulations, the
Company will promptly prepare and file with the Commission, subject to
Section 3(b), such amendment or supplement as may be necessary to
correct such statement or omission or to make the Registration
Statements or the Prospectus comply with such requirements, and the
Company will furnish to the Underwriter such number of copies of such
amendment or supplement as the Underwriter may reasonably request.
(f) Blue Sky Qualifications. The Company will use its
reasonable best efforts, in cooperation with the Underwriter, to
qualify the Securities for offering and sale under the applicable
securities laws of such states and other jurisdictions (domestic or
foreign) as the Underwriter may reasonably designate and to maintain
such qualifications in effect
13
for a period of not less than one year from the later of the effective
date of the IR Registration Statement and any Rule 462(b) Registration
Statement; provided, however, that the Company shall not be obligated
to file any general consent to service of process or to qualify as a
foreign corporation or as a dealer in securities in any jurisdiction in
which it is not so qualified or to subject itself to taxation in
respect of doing business in any jurisdiction in which it is not
otherwise so subject. In each jurisdiction in which the Securities have
been so qualified, the Company will file such statements and reports as
may be required by the laws of such jurisdiction to continue such
qualification in effect for a period of not less than one year from the
effective date of the IR Registration Statement and any Rule 462(b)
Registration Statement.
(g) Rule 158. The Company will timely file such reports
pursuant to the 1934 Act as are necessary in order to make generally
available to its securityholders within the required time periods an
earnings statement covering a period of at least twelve months,
beginning with the first fiscal quarter of the Company after the
effective date of the IR Registration Statement (as the term "effective
date" is defined in Rule 158(c) under the 1933 Act), which earnings
statement shall satisfy the provisions of Section 11(a) of the 1933
Act.
(h) Use of Proceeds. The Company will use the net proceeds
received by it from the sale of the Company Shares in the manner
specified in the Prospectus under the caption "Use of Proceeds."
(i) Listing. The Company will use its best efforts to effect
and maintain the listing of the Securities on The New York Stock
Exchange and will file with the New York Stock Exchange all documents
and notices required by the New York Stock Exchange of companies that
have securities listed on the New York Stock Exchange.
(j) Restriction on Sale of Securities. During a period of 90
days from the date of the Prospectus, the Company will not, without the
prior written consent of the Underwriter, (i) directly or indirectly,
offer, pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase or otherwise transfer or dispose of any
share of Common Stock or any securities convertible into or exercisable
or exchangeable for Common Stock or file any registration statement
under the 1933 Act with respect to any of the foregoing or (ii) enter
into any swap or any other agreement or any transaction that transfers,
in whole or in part, directly or indirectly, the economic consequence
of ownership of the Common Stock, whether any such swap or transaction
described in clause (i) or (ii) above is to be settled by delivery of
Common Stock or such other securities, in cash or otherwise. The
foregoing sentence shall not apply to (A) the Securities to be sold
hereunder, (B) any shares of Common Stock issued by the Company upon
the exercise of an option outstanding on the date hereof, (C) any
shares of Common Stock issued or options to purchase Common Stock
granted in the ordinary course of business pursuant to existing
employee or director compensation plans of the Company (and with
respect to sales of any shares of Common Stock issued pursuant to any
such plan, the Company shall be permitted to file a Registration
Statement on Form S-8 under the 1933 Act), or (D) any
14
shares of Common Stock issued in the ordinary course of business
pursuant to any existing dividend reinvestment plan of the Company.
(k) Reporting Requirements. The Company, during the period
when the Prospectus is required to be delivered under the 1933 Act or
the 1934 Act, will file all documents required to be filed with the
Commission pursuant to the 1934 Act within the time periods required by
the 1934 Act and the 1934 Act Regulations.
Section 4. Payment of Expenses.
(a) Expenses of the Company. The Company will pay all expenses
incident to the performance of its obligations under this Agreement, including
(i) the preparation, printing and filing of the Registration Statements
(including financial statements and exhibits) as originally filed and of each
amendment thereto, (ii) the reproduction and delivery to the Underwriter of this
Agreement, and such other documents as may be required in connection with the
offering, purchase, sale, issuance or delivery of the Company Shares, (iii) the
preparation, issuance and delivery of the certificates for the Company Shares,
including any stock or other transfer taxes and any stamp or other duties
payable upon the sale, issuance or delivery of the Company Shares, to the
Underwriter, (iv) the fees and disbursements of the Company's counsel,
accountants and other advisors, (v) the qualification of the Securities under
securities laws in accordance with the provisions of Section 3(f) hereof,
including filing fees and the reasonable fees and disbursements of counsel for
the Underwriter in connection therewith and in connection with the preparation
of the Blue Sky Survey and any supplement thereto, (vi) the printing and
delivery to the Underwriter of copies of the Prospectus and any amendments or
supplements thereto, (vii) the reproduction and delivery to the Underwriter of
copies of the Blue Sky Survey and any supplement thereto, (viii) the fees and
expenses of any transfer agent or registrar for the Securities and (ix) the fees
and expenses incurred in connection with the listing of the Securities on the
New York Stock Exchange.
(b) Expenses of the Selling Stockholder. The Selling Stockholder
will pay all expenses incident to the performance of its obligations under this
Agreement, including (i) the preparation, and delivery of the certificates for
the IR Shares, including any stock or other transfer taxes and any stamp duties,
capital duties or other duties payable upon the sale and delivery of the IR
Shares to the Underwriter and (ii) the fees and disbursements of its counsel and
accountants. Notwithstanding the foregoing, in the event of any conflict between
this Section 4(b) and the provisions of the Registration Rights Agreement dated
February 18, 2003 between the Company and the Selling Stockholder (the
"Registration Rights Agreement"), the provisions of the Registration Rights
Agreement shall control.
(c) Termination of Agreement. (i) If this Agreement is terminated
by the Underwriter in accordance with the provisions of Section 5 hereof because
of the failure of the Selling Stockholder to perform its obligations under
Sections 5(d), 5(e) or 5(h), or to furnish any items required to be provided by
it pursuant to Section 5(l), or because of any error or omission or failure on
the part of the Selling Stockholder with respect to any other provision of
Section 5 that results in the failure of a condition set forth in Section 5 to
be satisfied, the Selling Stockholder shall reimburse the Underwriter for all of
its reasonable out-of-pocket expenses, including the reasonable fees and
disbursements of counsel for the Underwriter. (ii) If this
15
Agreement is terminated by the Underwriter in accordance with the provisions of
Section 5 hereof because of the failure of the Company to perform any of its
obligations (which obligations do not include the obligations of the Selling
Shareholder set forth in 4(c)(i) above) under Section 5 or Section 9(a)(i)
hereof, the Company shall reimburse the Underwriter for all of its reasonable
out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Underwriter.
Section 5. Conditions of Underwriter's Obligations. The obligations of
the Underwriter hereunder are subject to the accuracy of the representations and
warranties of the Company and the Selling Stockholder contained in Section 1
hereof or in certificates of any officer of the Company and the Selling
Stockholder delivered pursuant to the provisions hereof, to the performance by
the Company and the Selling Stockholder of each of their respective covenants
and other obligations hereunder, and to the following further conditions:
(a) Effectiveness of Registration Statements. Each of the
Registration Statements, including any Rule 462(b) Registration
Statement, has become effective and at Closing Time no stop order
suspending the effectiveness of either of the Registration Statements
shall have been issued under the 1933 Act or proceedings therefor
initiated or, to the Company's knowledge, threatened by the Commission,
and any request on the part of the Commission for additional
information shall have been complied with to the reasonable
satisfaction of counsel to the Underwriter. A prospectus containing the
Rule 430A Information shall have been filed with the Commission in
accordance with Rule 424(b) (or a post-effective amendment providing
such information shall have been filed and declared effective in
accordance with the requirements of Rule 430A).
(b) Opinion of Counsel for Company. At Closing Time, the
Underwriter shall have received (A) the favorable opinion and (B) a
letter, each dated as of Closing Time, of Xxxxx Day, special counsel
for the Company, in the form set forth in Exhibit A and Exhibit B,
respectively.
(c) Opinion of the General Counsel of the Company. At Closing
Time, the Underwriter shall have received the favorable opinion of
Xxxxxxx X. Xxxxxxxx, Senior Vice President and General Counsel of
Company, in form and substance satisfactory to the Underwriter,
substantially to the effect set forth in Exhibit C.
(d) Opinion of Counsel for the Selling Stockholder. At Closing
Time, the Underwriter shall have received the favorable opinion, dated
as of Closing Time, of Xxxxxxx Xxxxxxx & Xxxxxxxx LLP, counsel for the
Selling Stockholder, in the form set forth in Exhibit D.
(e) Opinion of the General Counsel of the Selling Stockholder.
At the Closing Time, the Underwriter shall have received the favorable
opinion, dated as of Closing Time, of Xxxxxxxx Xxxxxxxxx, the General
Counsel of the Selling Stockholder, in form and substance satisfactory
to the Underwriter, substantially to the effect set forth in Exhibit E.
(f) Opinion of Counsel for Underwriter. At Closing Time, the
Underwriter shall have received the favorable opinion, dated as of
Closing Time, of Shearman & Sterling
16
LLP, counsel for the Underwriter, in form and substance reasonably
satisfactory to the Underwriter. In giving such opinion such counsel
may rely, as to all matters governed by the laws of jurisdictions other
than the law of the State of New York, and the federal law of the
United States, upon the opinions of counsel satisfactory to the
Underwriter. Such counsel may also state that, insofar as such opinion
involves factual matters, they have relied, to the extent they deem
proper, upon certificates of officers of the Company and its
Subsidiaries, certificates of officers of the Selling Stockholder and
certificates of public officials.
(g) Officers' Certificate. At Closing Time, there shall not
have been, since the date hereof or since the respective dates as of
which information is given in the Prospectus, any material adverse
change in the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company and its
subsidiaries, taken as whole, whether or not arising in the ordinary
course of business, which, individually or in the aggregate with all
other of such changes, is materially adverse to the Company and its
subsidiaries, taken as a whole; and the Underwriter shall have received
a certificate of the President or a Vice President of the Company and
of the chief financial or chief accounting officer of the Company,
dated as of Closing Time, to the effect that, to such officer's
knowledge, (i) there has been no such material adverse change referred
to above, (ii) the representations and warranties in Section 1(a)
hereof are true and correct with the same force and effect as though
expressly made at and as of Closing Time and (iii) the Company has
complied with all agreements and satisfied all conditions on its part
to be performed or satisfied at or prior to Closing Time.
(h) Certificate of Selling Stockholder. At Closing Time, the
Underwriter shall have received a certificate of the Senior Vice
President and Chief Financial Officer of the Selling Stockholder, dated
as of Closing Time, to the effect that (i) the representations and
warranties of the Selling Stockholder contained in Section 1(b) hereof
are true and correct in all respects with the same force and effect as
though expressly made at and as of Closing Time and (ii) the Selling
Stockholder has complied with all agreements and satisfied all
conditions on its part to be performed under this Agreement at or prior
to Closing Time.
(i) Comfort Letters of Accountants. (A) At the date hereof,
the Underwriter shall have received from each of Ernst & Young LLP and
PricewaterhouseCoopers LLP a letter dated the date hereof, in form and
substance satisfactory to the Underwriter containing statements and
information of the type ordinarily included in accountants' "comfort
letters" to underwriters with respect to the financial statements and
certain financial information contained in the Registration Statements
and the Prospectus. (B) At Closing Time, the Underwriter shall have
received from Ernst & Young LLP a letter dated as of the Closing Date
to the effect that they reaffirm the statements made in the letter
furnished by them pursuant to subsection (A) of this Section 5(i),
except that the procedures performed by Ernst & Young LLP in connection
with the letter shall have been completed not more than three business
days prior to Closing Time.
17
(j) Approval of Listing. At Closing Time, the Securities shall
have been approved for listing on The New York Stock Exchange subject
only to official notice of issuance with respect to the Company Shares.
(k) Lock-up Agreements. As of the date of this Agreement, the
Company shall have used its best efforts to provide the Underwriter an
agreement substantially in the form of Exhibit F hereto signed by the
persons listed on Schedule C hereto. At the Closing Time, the
Underwriter shall have received any of such agreements not provided at
the date of this Agreement in accordance with the preceding sentence.
(l) Additional Documents. At Closing Time, counsel for the
Underwriter shall have been furnished with such documents and opinions
as they may reasonably require for the purpose of enabling them to pass
upon the issuance and sale of the Securities as herein contemplated, or
in order to evidence the accuracy of any of the representations or
warranties, or the fulfillment of any of the conditions, herein
contained; and all proceedings taken by the Company and the Selling
Stockholder in connection with the issue and sale of the Company Shares
and the sale of the IR Shares as herein contemplated shall be
satisfactory in form and substance to the Underwriter and counsel for
the Underwriter.
(m) Termination of Agreement. If any condition specified in
this Section shall not have been fulfilled when and as required to be
fulfilled, this Agreement the obligations of the Underwriter to
purchase the Securities, may be terminated by the Underwriter by notice
to the Company and to the Selling Stockholder at any time at or prior
to Closing Time and such termination shall be without liability of any
party to any other party except as provided in Section 4 and except
that Sections 1, 6, 7 and 8 shall survive any such termination and
remain in full force and effect.
(n) Registration Rights Agreement. For the avoidance of doubt,
the Selling Stockholder shall have agreed (which agreement shall be
evidenced by the Selling Stockholder's execution of this Agreement)
that the offering and sale of the Company Shares pursuant to this
Agreement shall be deemed to be a public sale or distribution as part
of the IR Registration Statement consistent with the exception set
forth in the parenthetical in clause (i) of Section 4(b) of the
Registration Rights Agreement.
Section 6. Indemnification.
(a) Indemnification of the Underwriter and the Selling Stockholder
by the Company. The Company agrees to indemnify and hold harmless each of the
Underwriter and the Selling Stockholder and each person, if any, who controls
the Underwriter or the Selling Stockholder within the meaning of Section 15 of
the 1933 Act or Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, to which the Underwriter or the
Selling Stockholder or any such control person may become subject
arising out of any untrue statement or alleged untrue statement of a
material fact contained in either of the Registration Statements (or
any amendment thereto), including the Rule 430A Information, if
applicable, or the omission
18
or alleged omission therefrom of a material fact required to be stated
therein or necessary to make the statements therein not misleading or
arising out of any untrue statement or alleged untrue statement of a
material fact included in the Prospectus (or any amendment or
supplement thereto), or the omission or alleged omission therefrom of a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, to the extent of the aggregate
amount paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened,
or of any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission; provided
that (subject to Section 6(d) below) any such settlement is effected
with the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by the
Underwriter), reasonably incurred in investigating, preparing or
defending against any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, to the extent that any such
expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to (1) any
loss, liability, claim, damage or expense to the extent arising out of any
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with written information furnished to the
Company by the Underwriter expressly for use in the Registration Statements (or
any amendment thereto), including the Rule 430A Information or the Prospectus
(or any amendment or supplement thereto), or (2) any loss, liability, claim,
damage or expense to the extent arising out of any untrue statement or omission
or alleged untrue statement or omission made in reliance upon and in conformity
with written information furnished to the Company by the Selling Stockholder
expressly for use in the IR Registration Statement (or any amendment thereto),
including the Rule 430A Information, or the prospectus supplement relating to
the Securities or the base prospectus contained in the IR Registration Statement
(or any amendment or supplement thereto); and provided further that the
indemnity agreement, with respect to the Underwriter and its related control
persons, contained in this Section 6(a) shall not apply to any loss, liability,
claim, damage or expense resulting from the fact that a court of competent
jurisdiction shall have made a determination that the untrue statement or
omission shall have been corrected in the Prospectus and a copy of the
Prospectus was delivered to the Underwriter in accordance with the terms hereof
and was not sent or given to such person by the Underwriter as required and
within the time required by the 1933 Act.
Insofar as this indemnity agreement may permit indemnification for
liabilities under the 1933 Act of any person who is a partner of the Underwriter
or the Selling Stockholder or who controls the Underwriter or the Selling
Stockholder within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act and who, at the date of this Agreement, is a director or officer of
the Company or controls the Company within the meaning of Section 15 of the 1933
Act or
19
Section 20 of the 1934 Act, such indemnity agreement is subject to the
undertaking of the Company in the Registration Statements under Item 17.
(b) Indemnification of the Company, the Selling Stockholder,
Directors and Officers by the Underwriter. The Underwriter agrees to indemnify
and hold harmless each of the Company and the Selling Stockholder, their
respective directors, each of the Company's officers who signed the Registration
Statements, and each person, if any, who controls the Company or the Selling
Stockholder within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act against any and all loss, liability, claim, damage and expense
whatsoever to which the Company or the Selling Stockholder may become subject as
described in the indemnity contained in subsection (a) of this Section, as
incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in either of the Registration Statements
(or any amendment thereto), including the Rule 430A Information or the
Prospectus (or any amendment or supplement thereto), but only to the extent made
in reliance upon and in conformity with written information furnished to the
Company by the Underwriter expressly for use in either of the Registration
Statements (or any amendment thereto) or the Prospectus (or any amendment or
supplement thereto).
(c) Indemnification of the Company, the Underwriter, Directors and
Officers by the Selling Stockholder. The Selling Stockholder agrees to indemnify
and hold harmless the Company and the Underwriter, their respective directors,
each of the Company's officers who signed the IR Registration Statement, and
each person, if any, who controls the Company or the Underwriter within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act against any
and all loss, liability, claim, damage and expense whatsoever to which such
person may become subject as described in the indemnity contained in subsection
(a) of this Section, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the IR
Registration Statement (or any amendment thereto), including the Rule 430A
Information or the prospectus supplement relating to the Securities or the base
prospectus contained in the IR Registration Statement (or any amendment or
supplement thereto), made in reliance upon and in conformity with written
information furnished to the Company by the Selling Stockholder expressly for
use in the IR Registration Statement (or any amendment thereto) or the
prospectus supplement relating to the Securities or the base prospectus
contained in the IR Registration Statement (or any amendment or supplement
thereto); provided, however, that the Selling Stockholder shall not be liable
for any amounts exceeding the product of the purchase price per share of the
Securities (not including discounts or commissions but before expenses), as set
forth in Schedule A hereto, and the number of IR Shares.
(d) Actions Against Parties; Notification. Each indemnified party
shall give notice as promptly as reasonably practicable to each indemnifying
party of any actiand inon commenced against it in respect of which indemnity may
be sought hereunder, but failure to so notify an indemnifying party shall not
relieve such indemnifying party from any liability hereunder unless and only to
the extent it did not otherwise learn of such action and it is not materially
prejudiced as a result thereof and in any event shall not relieve it from any
liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 6(a) or
Section 6(c) above, counsel to the indemnified parties shall be selected by the
Underwriter and, if the Company is an indemnified party, the Company, and in
20
the case of parties indemnified pursuant to Section 6(b) above, counsel to the
indemnified parties shall be selected by the Company. An indemnifying party may
participate at its own expense in the defense of any such action; provided,
however, that counsel to the indemnifying party shall not (except with the
consent of the indemnified party) also be counsel to the indemnified party. In
no event shall the indemnifying parties be liable for fees and expenses of more
than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 6 or Section
7 hereof (whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party.
(e) Settlement Without Consent if Failure to Reimburse. If at any
time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel, such
indemnifying party agrees that it shall be liable for any settlement of the
nature contemplated by Section 6(a)(ii) effected without its written consent if
(i) such settlement is entered into more than 45 days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party shall
have received notice of the terms of such settlement at least 30 days prior to
such settlement being entered into, and (iii) such indemnifying party shall not
have reimbursed such indemnified party in accordance with such request prior to
the date of such settlement; provided that an indemnifying party shall not be
liable for any such settlement effected without its consent if such indemnifying
party, prior to the date of such settlement, (1) reimburses such indemnified
party in accordance with such request for the amount of such fees and expenses
of counsel as the indemnifying party believes in good faith to be reasonable,
and (2) provides written notice to the indemnified party that the indemnifying
party disputes in good faith the reasonableness of the unpaid balance of such
fees and expenses.
(f) Acknowledgement. The Company, the Selling Stockholder and the
Underwriter agree that, as regards indemnification between the Company and the
Selling Stockholder, notwithstanding anything to the contrary in this Section 6,
and in the event of any conflict between this Section 6 and Section 6 of the
Registration Rights Agreement the provisions of Section 6 of the Registration
Rights Agreement shall control.
Section 7. Contribution. If the indemnification provided for in Section
6 hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company and the
Selling Stockholder on the one hand, and the Underwriter on the other hand, from
the offering of the Securities pursuant to this Agreement
21
or (ii) if the allocation provided by clause (i) is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of the
Company and the Selling Stockholder on the one hand, and of the Underwriter on
the other hand, in connection with the statements or omissions which resulted in
such losses, liabilities, claims, damages or expenses, as well as any other
relevant equitable considerations.
The relative benefits received by the Company and the Selling
Stockholder on the one hand and the Underwriter on the other hand in connection
with the offering of the Securities pursuant to this Agreement shall be deemed
to be in the same respective proportions as the total net proceeds from the
offering of the Securities pursuant to this Agreement (before deducting
expenses) received by each of the Company and the Selling Stockholder and the
total underwriting discount received by the Underwriter, in each case as set
forth on the cover of the Prospectus, bear to the aggregate initial public
offering price of the Securities as set forth on such cover.
The relative fault of the Company and the Selling Stockholder on the
one hand and the Underwriter on the other hand shall be determined by reference
to, among other things, whether any such untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Company or the Selling Stockholder on the one
hand or by the Underwriter on the other hand and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Company, the Selling Stockholder and the Underwriter agree that it
would not be just and equitable if contribution pursuant to this Section were
determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to above in this
Section. The aggregate amount of losses, liabilities, claims, damages and
expenses incurred by an indemnified party and referred to above in this Section
shall be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section, the Underwriter shall
not be required to contribute any amount in excess of the amount by which the
total price at which the Securities underwritten by it and distributed to the
public were offered to the public exceeds the amount of any damages which the
Underwriter has otherwise been required to pay by reason of any such untrue or
alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 0000 Xxx) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section, each person, if any, who controls the
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as the Underwriter, and
each director of the Company or the Selling Stockholder,
22
each officer of the Company who signed either of the Registration Statements,
and each person, if any, who controls the Company or the Selling Stockholder
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act
shall have the same rights to contribution as the Company or the Selling
Stockholder, as applicable.
The provisions of this Section shall not affect any agreement
among the Company and the Selling Stockholder with respect to contribution,
including the agreement in the Registration Rights Agreement.
Section 8. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company or the Selling
Stockholder submitted pursuant hereto shall remain operative and in full force
and effect, regardless of any investigation made by or on behalf of any party
hereto or any controlling person, and shall survive delivery of the Securities
to the Underwriter.
Section 9. Termination of Agreement.
(a) Termination; General. The Underwriter may terminate this
Agreement, by notice to the Company and the Selling Stockholder, at any time at
or prior to Closing Time (i) if there has been, since the time of execution of
this Agreement or since the respective dates as of which information is given in
the Prospectus, any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Company and its subsidiaries, taken as a whole, whether or not arising in the
ordinary course of business, or (ii) if there has occurred any material adverse
change in the financial markets in the United States or in the international
financial markets, any outbreak of hostilities or escalation thereof or other
calamity or crisis or any change or development involving a prospective change
in national or international political, financial or economic conditions, in
each case the effect of which is such as to make it, in the judgment of the
Underwriter, impracticable to market the Securities or to enforce contracts for
the sale of the Securities, or (iii) if trading in any securities of the Company
has been suspended or materially limited by the Commission or The New York Stock
Exchange, or if trading generally on the American Stock Exchange or the New York
Stock Exchange or in the Nasdaq National Market has been suspended or materially
limited, or minimum or maximum prices for trading have been fixed, or maximum
ranges for prices have been required, by any of said exchanges or by such system
or by order of the Commission, the National Association of Securities Dealers,
Inc. or any other governmental authority, or a material disruption has occurred
in commercial banking or securities settlement or clearance services in the
United States, or (iv) if a banking moratorium has been declared by either
Federal or New York authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that Sections
1, 6, 7 and 8 shall survive such termination and remain in full force and
effect.
Section 10. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard
23
form of telecommunication. Notices to the Underwriter shall be directed to it at
0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000 attention of Equity Syndicate
Department; notices to the Company shall be directed to it at 0000 Xxxxxx
Xxxxxx, X.X., Xxxxxx, Xxxx 00000-0000, attention of the Senior Vice President
and General Counsel; and notices to the Selling Stockholder shall be directed to
it at 000 Xxxxxxxx Xxxxx Xxxx, Xxxxxxxxx Xxxx, Xxx Xxxxxx 00000, attention of
Senior Vice President and General Counsel.
Section 11. Parties. This Agreement shall inure to the benefit of and
be binding upon the Underwriter, the Company and the Selling Stockholder and
their respective successors. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any person, firm or corporation, other
than the Underwriter, the Company and the Selling Stockholder and their
respective successors and the controlling persons and officers and directors
referred to in Sections 6 and 7 and their heirs and legal representatives, any
legal or equitable right, remedy or claim under or in respect of this Agreement
or any provision herein contained. This Agreement and all conditions and
provisions hereof are intended to be for the sole and exclusive benefit of the
Underwriter, the Company and the Selling Stockholder and their respective
successors, and said controlling persons and officers and directors and their
heirs and legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Securities from the Underwriter shall be deemed to
be a successor by reason merely of such purchase.
Section 12. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. SPECIFIED
TIMES OF DAY REFER TO NEW YORK CITY TIME.
Section 13. Effect of Headings. The Article and Section headings herein
and the Table of Contents are for convenience only and shall not affect the
construction hereof.
[SIGNATURE PAGES FOLLOW]
24
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company and the Selling Stockholder counterparts
hereof, whereupon this instrument, along with all counterparts, will become a
binding agreement among the Underwriter, the Company and the Selling Stockholder
in accordance with its terms.
Very truly yours,
THE TIMKEN COMPANY
By /s/ Xxxxx X. Xxxxxxxxx
-----------------------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Executive Vice President - Finance and
Administration
By /s/ Xxxxxxx X. Xxxxxxxx
-----------------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Senior Vice President and General Counsel
XXXXXXXXX-XXXX COMPANY
By /s/ Xxxxxxx X. XxXxxxxx
-----------------------------------------------
Name: Xxxxxxx X. XxXxxxxx
Title: Senior Vice President and Chief Financial
Officer
By /s/ Xxxxxx X. Xxxxxx
-----------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President and Secretary
CONFIRMED AND ACCEPTED,
as of the date first above written:
XXXXXX XXXXXXX & CO. INCORPORATED
By /s/ Xxxxxx Xxxxxxx
--------------------------------------
Xxxxxx Xxxxxxx
Vice President
