1
Exhibit 1.1
XXXX-XXXXXX AUTOMOTIVE, INC.
(a Delaware corporation)
3,600,000 Shares of Common Stock
U.S. PURCHASE AGREEMENT
Dated: February ____, 1997
2
Exhibit 1.1 S&S DRAFT
1/23/97
XXXX-XXXXXX AUTOMOTIVE, INC.
(a Delaware corporation)
3,600,000 Shares of Common Stock
(Par Value $.01 Per Share)
U.S. PURCHASE AGREEMENT
February __, 1997
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
XXXXXX BROTHERS INC.
XXXXXX XXXXXXX & CO. INCORPORATED
As Representatives of the several U.S. Underwriters
x/x Xxxxxxx Xxxxx & Xx.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxxxxxx Xxxxx World Headquarters
Xxxxx Xxxxx
Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
The stockholders of Xxxx-Xxxxxx Automotive, Inc., a Delaware
corporation (the "Company"), named in Schedule A (collectively, the "Selling
Stockholders") propose to sell severally and not jointly to the underwriters
named in Schedule B (collectively, the "U.S. Underwriters", which shall also
include any person substituted for a U.S. Underwriter under Section 11 hereof),
for whom you are acting as representatives (the "U.S. Representatives"), an
aggregate of 3,600,000 outstanding shares of Common Stock of the Company, par
value $.01 per share (shares of which class of stock of the Company are
hereinafter referred to as "Common Stock"). Such shares of Common Stock are to
be sold to each U.S. Underwriter, acting severally and not jointly, in such
amounts as are set forth in Schedule B hereto opposite the name of such U.S.
Underwriter. The Selling Stockholders also grant to the
3
2
U.S. Underwriters, severally and not jointly, the option described in Section 2
to purchase all or any part of 507,627 additional shares of Common Stock to
cover over-allotments. The aforesaid 3,600,000 shares of Common Stock (the
"Initial U.S. Shares"), together with all or any part of the 507,627
additional shares of Common Stock subject to the option described in Section 2
(the "U.S. Option Shares"), are collectively herein called the "U.S. Shares".
The U.S. Shares are more fully described in the U.S. Prospectus referred to
below.
It is understood that the Company is concurrently entering
into an agreement, dated the date hereof (the "International Purchase
Agreement"), providing for the sale by the Selling Stockholders of 900,000
shares of Common Stock (the "Initial International Shares") through arrangements
with certain underwriters outside the United States and Canada (the
"International Underwriters"), for whom Xxxxxxx Xxxxx International, Xxxxxx
Xxxxxxx & Co. International Limited and Xxxxxx Brothers International (Europe)
are acting as representatives (the "International Representatives"). It is
further understood that the Selling Stockholders are concurrently granting the
International Underwriters an option to purchase all or any part of 126,907
additional shares of Common Stock (the "International Option Shares") from the
Selling Stockholders to cover over-allotments. The International Shares and the
International Option Shares are hereinafter collectively referred to as the
"International Shares". The U.S. Shares and the International Shares are
hereinafter collectively referred to as the "Shares".
The Company understands that the U.S. Underwriters will
simultaneously enter into an agreement with the International Underwriters dated
the date hereof (the "Intersyndicate Agreement") providing for the coordination
of certain transactions among the U.S. Underwriters and the International
Underwriters, under the direction of Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated ("MLPF&S").
You have advised us that you and the other U.S. Underwriters,
acting severally and not jointly, desire to purchase the U.S. Shares and that
you have been authorized by the other U.S. Underwriters to execute this
Agreement and the U.S. Price Determination Agreement referred to below on their
behalf.
The price to the public per share for the U.S. Shares and the
purchase price per share for the U.S. Shares shall be agreed upon by the Selling
Stockholders and the U.S. Representatives, acting on behalf of the several U.S.
Underwriters, and such agreement shall be set forth in a separate written
instrument substantially in the form of Exhibit A hereto (the "U.S. Price
Determination Agreement"). The U.S. Price Determination Agreement may take the
form of an exchange of any standard form of written telecommunication between
the Selling Stockholders and the U.S. Representatives and shall specify such
applicable information as is indicated in Exhibit A hereto. The offering of the
U.S. Shares will be governed by this Agreement, as supplemented by the U.S.
Price Determination Agreement.
4
3
From and after the date of the execution and delivery of the U.S. Price
Determination Agreement, this Agreement shall be deemed to incorporate, and all
reference herein to "this Agreement" shall be deemed to include, the U.S. Price
Determination Agreement.
The Company has prepared and filed with the Securities and
Exchange Commission (the "Commission") a registration statement on Form S-3
(Registration No. 333-_____) covering the registration of the Shares under the
Securities Act of 1933, as amended (the "1933 Act"), including the related
preliminary prospectuses, and either (A) has prepared and proposes to file,
prior to the effective date of such registration statement, an amendment to such
registration statement, including final prospectuses, or (B) if the Company has
elected to rely upon Rule 430A ("Rule 430A") of the rules and regulations of the
Commission under the 1933 Act (the "1933 Act Regulations"), will prepare and
file prospectuses, in accordance with the provisions of Rule 430A and Rule
424(b) ("Rule 424(b)") of the 1933 Act Regulations, promptly after execution and
delivery of the U.S. Price Determination Agreement. Two forms of prospectus are
to be used in connection with the offering and sale of the Shares: one relating
to the U.S. Shares (the "Form of U.S. Prospectus") and one relating to the
International Shares (the "Form of International Prospectus"). The Form of
International Prospectus is identical to the Form of U.S. Prospectus, except for
the front cover page, inside front cover page, the sections captioned
"Underwriting" and "Available Information" and the back cover page.
Additionally, if the Company has elected to rely upon Rule 434 ("Rule 434") of
the 1933 Act Regulations, the Company will prepare and file a term sheet (a
"Term Sheet") in accordance with the provisions of Rule 434 and Rule 424(b),
promptly after execution and delivery of the U.S. Price Determination Agreement.
The information, if any, included in such prospectuses that was omitted from any
prospectuses included in such registration statement at the time it becomes
effective but that is deemed, (i) pursuant to paragraph (b) of Rule 430A, to be
part of such registration statement at the time it becomes effective is referred
to herein as the "Rule 430A Information", and (ii) pursuant to paragraph (d) of
Rule 434, to be part of such registration statement at the time it becomes
effective is referred to herein as "Rule 434 Information". Each Form of U.S.
Prospectus and Form of International Prospectus used before the time such
registration statement becomes effective, and any Form of U.S. Prospectus and
Form of International Prospectus that omits the Rule 430A Information or the
Rule 434 Information, if applicable, that is used after such effectiveness and
prior to the execution and delivery of the U.S. Price Determination Agreement or
the International Price Determination Agreement, is herein called a "preliminary
prospectus". Such registration statement, including the exhibits thereto and the
documents incorporated by reference therein pursuant to Item 12 of Form S-3
under the 1933 Act ("Item 12"), as amended, and Rule 412 of the 1933 Act
Regulations ("Rule 412") at the time it becomes effective and including, if
applicable, the Rule 430A Information or the Rule 434 Information, is herein
called the "Original Registration Statement". Any registration statement filed
pursuant to Rule 462(b) of the 1933 Act Regulations is herein referred to as the
"Rule 462(b) Registration Statement", and the Original Registration Statement
and any Rule 462(b) Registration
5
4
Statement are herein referred to collectively as the "Registration Statement".
The Form of U.S. Prospectus and Form of International Prospectus, including the
documents incorporated by reference therein pursuant to Item 12 and Rule 412,
included in the Original Registration Statement at the time it becomes
effective, are herein called the "U.S. Prospectus" and the "International
Prospectus", respectively, and, collectively, the "Prospectuses", and,
individually, a "Prospectus", except that, (i) if the final U.S. Prospectus or
International Prospectus, as the case may be, first furnished to the U.S.
Underwriters or the International Underwriters after the execution of the U.S.
Price Determination Agreement or the International Price Determination Agreement
for use in connection with the offering of the Shares differs from the
prospectuses included in the Original Registration Statement at the time it
becomes effective (whether or not such prospectus is required to be filed
pursuant to Rule 424(b)), the terms "U.S. Prospectus", "International
Prospectus", "Prospectuses" and "Prospectus" shall refer to the final U.S.
Prospectus or International Prospectus first furnished to the U.S. Underwriters
or the International Underwriters, as the case may be, for such use, and (ii) if
Rule 434 is relied upon, the terms "U.S. Prospectus", "International
Prospectus", "Prospectuses" and "Prospectus" shall refer to the preliminary U.S.
Prospectus or International Prospectus last furnished to the U.S. Underwriters
or the International Underwriters, as the case may be, in connection with the
offering of the Shares, in each case together with the Term Sheet.
The Company and the Selling Stockholders understand that the
U.S. Underwriters propose to make a public offering of the U.S. Shares as soon
as you deem advisable after the Registration Statement becomes effective and the
U.S. Price Determination Agreement has been executed and delivered.
Section 1. Representations and Warranties. (a) The Company
represents and warrants to and agrees with each of the U.S. Underwriters and
each of the Selling Stockholders that:
(i) The Company meets the requirements for use of Form S-3
under the 1933 Act and when the Registration Statement or any
post-effective amendment thereto shall become effective and at all
times subsequent thereto up to the Closing Time referred to below (and,
if any U.S. Option Shares are purchased, up to the Date of Delivery
referred to below), (A) the Registration Statement and the
Prospectuses, including any amendments and supplements thereto, will
comply in all material respects with the requirements of the 1933 Act
and the 1933 Act Regulations; (B) neither the Registration Statement
nor any amendment or supplement thereto will 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; (C) neither of the Prospectuses nor any amendment or
supplement thereto will include an untrue statement of a material fact
or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which
6
5
they were made, not misleading; and (D) if Rule 434 is relied upon, the
Prospectuses shall not be "materially different", as such term is used
in Rule 434, from the prospectuses included in the Registration
Statement at the time it becomes effective; except that this
representation and warranty does not apply to statements or omissions
made in reliance upon and in conformity with information furnished in
writing to the Company by or on behalf of any U.S. Underwriter or
International Underwriter through you or the International
Representatives expressly for use in the Registration Statement or the
Prospectuses or any amendment or supplement thereof.
(ii) The documents incorporated by reference in the
Prospectuses pursuant to Item 12 of Form S-3 under the 1933 Act, at the
time they were filed with the Commission, complied in all material
respects with the requirements of the Securities Exchange Act of 1934,
as amended (the "1934 Act"), and the rules and regulations of the
Commission thereunder (the "1934 Act Regulations"), and, when read
together and with the other information in the Prospectus, at the time
the Registration Statement becomes effective and at all times
subsequent thereto up to the Closing Time (as hereinafter defined)
(and, if any Option Shares are purchased, up to the Date of Delivery
(as hereinafter defined)), will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements therein not
misleading.
(iii) (A) Deloitte & Touche LLP, who have certified the
financial statements of the Company and the schedules included or
incorporated by reference in the Registration Statement and
Prospectuses, (B) KPMG Peat Marwick, who have certified the financial
statements of NSK-Xxxxxx X.X. ("NSK-Xxxxxx") included or incorporated
by reference in the Registration Statement and the Prospectuses and (C)
Xxxxxx Xxxxxxxx LLP, who have certified the financial statements of
Xxxxxx Automotive Inc, Xxxxxx Automotive Group, Ltd., Xxxxxx Automotive
Systems GmbH, Coltec Automotive Inc, and Performance Friction Products,
a division of Stemco Inc, an indirect, wholly-owned subsidiary of
Coltec Industries Inc. (collectively, the "Coltec Subsidiaries"),
included or incorporated by reference in the Registration Statement and
the Prospectuses, are independent public accountants as required by the
1933 Act and the 1933 Act Regulations.
(iv) The Company has all requisite corporate power and
authority to execute, deliver and perform its obligations under this
Agreement; and this Agreement has been duly authorized, executed and
delivered by the Company.
(v) The consolidated financial statements and the related
notes of the Company, its Subsidiaries (as defined below) and the
Coltec Subsidiaries included or incorporated by reference in the
Registration Statement present fairly the consolidated financial
position of the Company, its Subsidiaries and the Coltec Subsidiaries
as of
7
6
the dates indicated and the consolidated earnings and cash flows of the
Company, its Subsidiaries and the Coltec Subsidiaries for the periods
specified. Such financial statements have been prepared in conformity
with generally accepted accounting principles applied on a consistent
basis throughout the periods involved (except as set forth in the notes
thereto) and subject, in the case of any interim statements, to normal
year-end audit adjustments. The financial statement schedules, if any,
included in the Registration Statement present fairly the information
required to be stated therein. The selected financial data included or
incorporated by reference in the Prospectuses present fairly the
information shown therein and have been compiled on a basis consistent
with that of the audited consolidated financial statements included or
incorporated by reference in the Registration Statement. The pro forma
financial information included or incorporated by reference in the
Prospectuses present fairly the information shown therein, has been
prepared in accordance with the applicable requirements of Rule 11-02
of Regulation S-X, has been properly compiled on the pro forma bases
described therein, and, in the opinion of the Company, the assumptions
used in the preparation thereof are reasonable and the adjustments used
therein are appropriate to give effect to the transactions or
circumstances referred to therein.
(vi) The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware
with corporate power and authority under such laws to own, lease and
operate its properties and conduct its business as described in the
Prospectuses. The Company is duly qualified to transact business as a
foreign corporation and is in good standing in each other jurisdiction
in which it owns or leases property of a nature, or transacts business
of a type, that would make such qualification necessary, except to the
extent that the failure to so qualify or be in good standing would not
have a material adverse effect on the Company and the Subsidiaries,
considered as one enterprise.
(vii) The Company's only subsidiaries are set forth in Exhibit
B hereto (each such corporation is referred to herein as a "Subsidiary"
and, collectively, the "Subsidiaries"). Each Subsidiary is a
corporation duly organized, validly existing and in good standing under
the laws of the jurisdiction of its incorporation with corporate power
and authority under such laws to own, lease and operate its properties
and conduct its business; and each Subsidiary is duly qualified to
transact business as a foreign corporation and is in good standing in
each other jurisdiction in which it owns or leases property of a
nature, or transacts business of a type, that would make such
qualification necessary, except to the extent that the failure to so
qualify or be in good standing would not have a material adverse effect
on the Company and the Subsidiaries, considered as one enterprise. All
of the outstanding shares of capital stock of each Subsidiary have been
duly authorized and validly issued and are fully paid and
non-assessable and are owned by the Company, directly or through one or
8
7
more of the Subsidiaries, in the percentages set forth in Exhibit B
hereto, free and clear of any pledge, lien, security interest, charge,
claim, equity or encumbrance of any kind.
(viii) The Company had at the date indicated a duly authorized
and outstanding capitalization as set forth in the Prospectuses under
the caption "Capitalization".
(ix) The Shares have been duly authorized and validly issued
and are fully paid and non-assessable; no holder thereof will be
subject to personal liability by reason of being such a holder; and
such Shares are not subject to the preemptive rights of any stockholder
of the Company.
(x) All of the other outstanding shares of capital stock of
the Company have been duly authorized and validly issued and are fully
paid and non-assessable; no holder thereof is or will be subject to
personal liability by reason of being such a holder; and none of the
outstanding shares of capital stock of the Company was issued in
violation of the preemptive rights of any stockholder of the Company.
(xi) Since the respective dates as of which information is
given in the Registration Statement and the Prospectuses, except as
described in the Registration Statement or any amendment or supplement
thereto, there has not been (A) any material adverse change in the
condition (financial or otherwise), results of operations, business
affairs or business prospects of the Company and the Subsidiaries,
considered as one enterprise, whether or not arising in the ordinary
course of business, (B) any transaction entered into by the Company or
any Subsidiary, other than in the ordinary course of business, that is
material to the Company and the Subsidiaries, considered as one
enterprise, or (C) any dividend or distribution of any kind declared,
paid or made by the Company on its capital stock, other than regular
quarterly cash dividends declared or paid on its Common Stock.
(xii) Neither the Company nor any of its Subsidiaries is in
violation of its certificate of incorporation or in default in the
performance or observance of any obligation, agreement, covenant or
condition contained in any indenture, mortgage, loan agreement, note,
lease or other agreement or instrument to which it is a party or by
which it may be bound or to which any of its properties may be subject,
except for such defaults that would not have a material adverse effect
on the condition (financial or otherwise), results of operations,
business affairs or business prospects of the Company and the
Subsidiaries, considered as one enterprise. The execution and delivery
of this Agreement and the International Purchase Agreement by the
Company, the consummation by the Company of the transactions
contemplated in this Agreement, the International Purchase Agreement,
and the Registration Statement and
9
8
compliance by the Company with the terms of this Agreement and the
International Purchase Agreement have been duly authorized by all
necessary corporate action on the part of the Company and do not
violate and will not result in any violation of the certificate of
incorporation or by-laws of the Company or any Subsidiary, and do not
and will not conflict with, or result in a breach of any of the terms
or provisions of, or constitute a default under, or result in the
creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any Subsidiary under (A) any
indenture, mortgage, loan agreement, note, lease or other agreement or
instrument to which the Company or any Subsidiary is a party or by
which any of them may be bound or to which any of their properties may
be subject, except for such conflicts, breaches or defaults or liens,
charges or encumbrances that in the aggregate would not have a material
adverse effect on the condition (financial or otherwise), results of
operations, business affairs or business prospects of the Company and
the Subsidiaries, considered as one enterprise or (B) any existing
applicable law, rule, regulation, judgment, order or decree of any
government, governmental instrumentality or court, domestic or foreign,
having jurisdiction over the Company or any Subsidiary or any of their
respective properties, except for such conflicts, breaches or defaults
or liens, charges or encumbrances that in the aggregate would not have
a material adverse effect on the condition (financial or otherwise),
results of operations, business affairs or business prospects of the
Company and the Subsidiaries, considered as one enterprise.
(xiii) No authorization, approval, consent or license of, or
any material filing with, any government, governmental instrumentality
or court, domestic or foreign (other than under the 1933 Act and the
1933 Act Regulations and the securities or Blue Sky laws of the various
states, the securities laws of Canada and its provinces and the
securities laws of any jurisdiction outside the United States in which
International Shares are offered or sold by the International
Underwriters pursuant to the International Purchase Agreement), is
legally required for the valid authorization, issuance, sale and
delivery of the Shares.
(xiv) Except as disclosed or incorporated by reference in the
Prospectuses, there is no action, suit or proceeding before or by any
government, governmental instrumentality or court, domestic or foreign,
now pending or, to the knowledge of the Company, threatened against the
Company or any Subsidiary that is required to be disclosed in the
Prospectuses or that could result in any material adverse change in the
condition (financial or otherwise), results of operations, business
affairs or business prospects of the Company and its Subsidiaries,
considered as one enterprise, or that could reasonably be expected to
adversely affect the consummation of the transactions contemplated by
this Agreement and the International Purchase Agreement.
10
9
(xv) There are no contracts or documents of a character
required pursuant to the 1933 Act to be described in the Registration
Statement or the Prospectuses or to be filed as exhibits to the
Registration Statement that are not described and filed as required.
(xvi) Each of the Company and the Subsidiaries has good and
marketable title to all properties and assets described in the
Prospectuses as owned by it, free and clear of all liens, charges,
encumbrances or restrictions, except such as (A) are described in the
Prospectuses or (B) are neither material in amount nor materially
significant in relation to the business of the Company and the
Subsidiaries, considered as one enterprise; all of the leases and
subleases material to the business of the Company and the Subsidiaries,
considered as one enterprise, and under which the Company or any
Subsidiary holds properties described in the Prospectuses, are in full
force and effect, and neither the Company nor any Subsidiary has any
notice of any material claim of any sort that has been asserted by
anyone adverse to the rights of the Company or any Subsidiary under any
of the leases or subleases mentioned above, or affecting or questioning
the rights of such corporation to the continued possession of the
leased or subleased premises under any such lease or sublease.
(xvii) The Company and the Subsidiaries each owns, possesses
or has obtained all material governmental licenses, permits,
certificates, consents, orders, approvals and other authorizations, and
has made all filings with all governmental authorities, necessary to
own or lease, as the case may be, and to operate its properties and to
carry on its business as presently conducted, and neither the Company
nor any Subsidiary has received any notice of proceedings relating to
revocation or modification of any such licenses, permits, certificates,
consents, orders, approvals or authorizations, which, singly or in the
aggregate, if not so owned, possessed or obtained or the subject of an
unfavorable ruling, decision or finding, could materially adversely
affect the condition (financial or otherwise), results of operations,
business affairs or business prospects of the Company and the
Subsidiaries, considered as one enterprise.
(xviii) The Company and the Subsidiaries each owns or
possesses, or can acquire on reasonable terms, adequate patents, patent
licenses, trademarks, service marks and trade names necessary to carry
on its business as presently conducted, and neither the Company nor any
Subsidiary has received any notice of infringement of or conflict with
asserted rights of others with respect to any patents, patent licenses,
trademarks, service marks or trade names that in the aggregate, if the
subject of an unfavorable decision, ruling or finding, could reasonably
be expected to materially adversely affect the condition (financial or
otherwise), results of operations, business affairs or business
prospects of the Company and the Subsidiaries, considered as one
enterprise.
11
10
(xix) Except as disclosed in the Prospectuses, to the best
knowledge of the Company, no labor problem exists with its employees or
with employees of the Subsidiaries or is imminent that could reasonably
be expected to materially adversely affect the Company and the
Subsidiaries, considered as one enterprise and, to the knowledge of the
Company, except as disclosed in the Prospectuses, the Company is not
aware of any material existing or imminent labor dispute by the
employees of any of its or the Subsidiaries' principal customers that
could be expected to materially adversely affect the Company and the
Subsidiaries, considered as one enterprise.
(xx) The Company has not taken and will not take, directly or
indirectly, any action designed to, or that might be reasonably
expected to, cause or result in stabilization or manipulation of the
price of the Common Stock.
(xxi) Except as disclosed in the Registration Statement and
except as would not individually or in the aggregate have a material
adverse effect on the condition (financial or otherwise), results of
operations, business affairs or business prospects of the Company and
the Subsidiaries, considered as one enterprise, (A) the Company and the
Subsidiaries are each in compliance with all applicable Environmental
Laws, (B) the Company and the 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 threatened Environmental Claims against the
Company or any Subsidiary, and (D) there are no circumstances with
respect to any property or operations of the Company or the
Subsidiaries that could reasonably be anticipated to form the basis of
an Environmental Claim against the Company or the Subsidiaries.
For purposes of this Agreement, the following terms shall have
the following meanings: "Environmental Law" means any United States (or
other applicable jurisdiction's) federal, state, local or municipal
statute, law, rule, regulation, ordinance, code, policy or rule of
common law and any judicial or administrative interpretation thereof
including any judicial or administrative order, consent decree or
judgment, relating to the environment, health, safety or any chemical,
material or substance, exposure to which is prohibited, limited or
regulated by any governmental authority. "Environmental Claims" means
any and all administrative, regulatory or judicial actions, suits,
demands, demand letters, claims, liens, notices of noncompliance or
violation, investigations or proceedings relating in any way to any
Environmental Law.
(xxii) All United States federal income tax returns of the
Company (and any of the Subsidiaries, if not included in the Company's
U.S. consolidated federal income tax return) required by law to be
filed have been properly prepared and filed, and all taxes shown on
such returns or otherwise assessed which are due and payable
12
11
have been paid. All of the Company's United States federal tax returns
(and any of the Subsidiaries' tax returns, if applicable) for taxable
periods through and including the 1992 federal taxable year have been
audited by the Internal Revenue Service or the statute of limitations
for such taxable years has run and thus, all taxes for such periods
have been finally determined (excluding the effect of any net operating
loss or credit carryovers to such periods). All other tax returns of
the Company and the Subsidiaries required to be filed pursuant to
applicable foreign, state, local or other law have been filed, except
insofar as the failure to file such returns would not have a material
adverse effect on the condition (financial or otherwise), earnings,
business affairs or business prospects of the Company and the
Subsidiaries, considered as one enterprise. The Company and the
Subsidiaries have paid (or there has been paid on their behalf) all
taxes which are due and for which no tax return is required. There are
no liens on any of the Company's or the Subsidiaries' assets for taxes,
other than for taxes which have accrued but which are not yet due and
payable. Neither the Company nor any Subsidiary is liable for any taxes
that are imposed on any other person or corporation (other than for
taxes imposed on the Company or the Subsidiaries), except as set forth
in Treasury Regulation 1.1502-6 with respect to prior consolidated
groups of which the Company or its subsidiaries were members.
(xxiii) With respect to each employee benefit plan, program
and arrangement (including, without limitation, any "employee benefit
plan" as defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA")) maintained or contributed
to by the Company or any Subsidiary, or with respect to which the
Company or any Subsidiary could incur any liability under ERISA
(collectively, the "Benefit Plans"), no event has occurred and, to the
best knowledge of the Company, there exists no condition or set of
circumstances, in connection with which the Company or any Subsidiary
could be subject to any liability under the terms of such Benefit
Plans, applicable law (including, without limitation, ERISA and the
Internal Revenue Code of 1986, as amended (the "Code")) or any
applicable agreement (including, without limitation, the agreement
dated as of January 14, 1993 (the "PBGC Agreement"), among the Pension
Benefit Guaranty Corporation (the "PBGC"), the Company and Xxxx-Xxxxxx
Security Corporation ("BWSC")), that could materially adversely affect
the condition (financial or otherwise), results of operations, business
affairs or business prospects of the Company and the Subsidiaries,
considered as one enterprise. The Company is in compliance in all
respects with its obligations under the PBGC Agreement.
(xxiv) The Company has obtained the written agreement, in the
form previously furnished to you, of (A) each holder of at least 1% of
the outstanding shares of Common Stock who is a party to the
Registration Rights Agreement dated as of January 27, 1993 among the
Company and the Stockholders who are parties thereto (the "Registration
Rights Agreement") that for a period beginning seven days
13
12
before, and ending 180 days after, the effective date of the
Registration Statement, not to effect any public sale or distribution,
including any sale pursuant to Rule 144 under the 1933 Act, of Common
Stock or any securities convertible into or exchangeable for Common
Stock, or any rights or warrants to acquire Common Stock and (B)
executive officers and directors of the Company that for a period
beginning seven days before, and ending 180 days after, the effective
date of the Registration Statement, such holders will not, without your
prior written consent, directly or indirectly, sell, offer to sell,
grant any option for the sale of, or otherwise dispose of, any Common
Stock or securities convertible into or exchangeable or exercisable for
Common Stock.
(xxv) There are no persons, corporations, partnerships or
other entities with registration or other similar rights to have any
securities registered pursuant to the Registration Statement, except as
such registration or other similar rights have been disclosed in the
Prospectuses. All such registration or other similar rights have been
complied with or waived.
(xxvi) The Shares have been approved for listing on the New
York Stock Exchange, Inc.
(b) Each of the Selling Stockholders severally represents and
warrants to and agrees with each of the U.S. Underwriters as follows:
(i) When the Registration Statement or any post-effective
amendment thereto shall become effective, and at all times subsequent
thereto up to the Closing Time (and, if any U.S. Option Shares are
purchased, at the Date of Delivery), (A) neither the Registration
Statement nor any amendment or supplement thereto will 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, and (B) neither of the Prospectuses nor any
amendment or supplement thereto will include an untrue statement of a
material fact or omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading; provided, however, that, as to
each Selling Stockholder, the representations and warranties in this
subsection (b)(i) apply only to statements or omissions made in
reliance upon and in conformity with information furnished in writing
to the Company by or on behalf of such Selling Stockholder, in its
capacity as such, expressly for use in the Registration Statement or
the Prospectuses.
(ii) No authorization, approval, consent or license of, or any
material filing with, any government, governmental instrumentality or
court, domestic or foreign (other than under the 1933 Act and the 1933
Act Regulations and the
14
13
securities or Blue Sky laws of the various states, the securities laws
of Canada and its provinces and the securities laws of any jurisdiction
outside the United States in which the International Shares are offered
and sold by the International Underwriters pursuant to the
International Purchase Agreement), is required for the consummation by
such Selling Stockholder of the transactions contemplated in this
Agreement or the International Purchase Agreement, including, without
limitation, the sale and delivery of the Shares.
(iv) The execution and delivery of this Agreement and the
International Purchase Agreement and the consummation of the
transactions contemplated in this Agreement and the International
Purchase Agreement will not result in (a) a breach by such Selling
Stockholder of, or constitute a default by such Selling Stockholder
under, any agreement or instrument or any decree, judgment or order to
which such Selling Stockholder is a party or by which such Selling
Stockholder is bound or the properties of such Selling Stockholder are
subject or (b) violate (1) any provision of the certificate of
incorporation, by-law, partnership agreement or comparable governing
documents of such Selling Stockholder or any law, rule or regulation
applicable to such Selling Stockholder or (2) to which its properties
are subject (other than for the securities or Blue Sky laws of the
various states, the securities laws of Canada and its provinces and the
securities laws of any jurisdiction outside the United States in which
the International Shares are offered or sold by the International
Underwriters pursuant to the International Purchase Agreement).
(v) Such Selling Stockholder has good and marketable title to
the Shares to be sold by such Selling Stockholder pursuant to this
Agreement and the International Purchase Agreement, free and clear of
any pledge, lien, security interest, charge, claim, equity or
encumbrance of any kind, other than pursuant to this Agreement, the
International Purchase Agreement, the Registration Rights Agreement,
and the Investors Stockholders Agreement dated January 27, 1993; and
such Selling Stockholder will at the Closing Time and, if any Option
Shares are to be purchased, on the Date of Delivery have good and
marketable title to the Shares to be sold by such Selling Stockholder
pursuant to this Agreement and the International Purchase Agreement,
free and clear of any pledge, lien, security interest, charge, claim,
equity or encumbrance of any kind; such Selling Stockholder has full
right, power and authority to sell, transfer and deliver such Shares
pursuant to this Agreement or the International Purchase Agreement;
and, upon delivery of such Shares and payment of the purchase price
therefor as contemplated in this Agreement and the International
Purchase Agreement, each of the U.S. Underwriters and the International
Underwriters, as the case may be, will receive good and marketable
title to the Shares purchased by it from such Selling Stockholder, free
and clear of any pledge, lien, security interest, charge, claim, equity
or encumbrance of any kind.
15
14
(vi) Certificates for all of the shares of Common Stock, or
with respect to Selling Stockholders that own shares of the Company's
Non-Voting Common Stock, par value $.01 per share, (the "Non-Voting
Stock"), certificates for all of the Shares of Non-Voting Stock
(accompanied by a written notice requesting conversion of such shares,
which notice shall comply with Section 2(4)(iii) of the Company's
Restated Certificate of Incorporation), to be sold by such Selling
Stockholder pursuant to this Agreement and the International Purchase
Agreement, in suitable form for transfer by delivery or accompanied by
duly executed instruments of transfer or assignment executed in blank,
are available for delivery pursuant to this Agreement and the
International Purchase Agreement.
(vii) Such Selling Stockholder has not taken and will not
take, directly or indirectly, any action designed to, or that might be
reasonably expected to, cause or result in stabilization or
manipulation of the price of the Common Stock; and such Selling
Stockholder has not distributed and will not distribute any prospectus
or other offering material in connection with the offering and sale of
the Shares other than any preliminary prospectus filed with the
Commission or the Prospectuses or other material permitted by the 1933
Act or the 1933 Act Regulations.
(viii) Such Selling Stockholder, if such Selling Stockholder
is not a natural person, is duly organized, validly existing and in
good standing under the laws of its jurisdiction of incorporation or
organization, as the case may be, with all necessary power and
authority to enter into and perform each of this Agreement and the
International Purchase Agreement and to sell and deliver the Shares to
the U.S. Underwriters and the International Underwriters, as the case
may be, in accordance with each of this Agreement and the International
Purchase Agreement.
(c) Any certificate signed by any officer of the Company or
any Subsidiary and delivered to you or to counsel for the U.S. Underwriters
shall be deemed a representation and warranty by the Company to each U.S.
Underwriter as to the matters covered thereby; and any certificate signed by or
on behalf of the Selling Stockholders as such and delivered to you or to counsel
for the U.S. Underwriters shall be deemed a representation and warranty by the
Selling Stockholders to each U.S. Underwriter as to the matters covered thereby.
Section 2. Sale and Delivery to the U.S. Underwriters;
Closing. (a) On the basis of the representations and warranties herein
contained, and subject to the terms and conditions herein set forth, each
Selling Stockholder agrees, severally and not jointly, to sell to each U.S.
Underwriter the number of Initial U.S. Shares set forth opposite the name of
such Selling Stockholder on Schedule A, and each U.S. Underwriter agrees,
severally and not jointly, to purchase from each Selling Stockholder, at the
purchase price per share for the Initial U.S. Shares to be agreed upon by the
U.S. Representatives and the Selling
16
15
Stockholders, in accordance with Section 2(b) or 2(c) hereof, and set forth in
the U.S. Price Determination Agreement, the number of Initial U.S. Shares that
bears the same relation to 3,600,000 as the number of Initial U.S. Shares set
forth opposite the name of such U.S. Underwriter in Schedule B bears to the
total number of Initial U.S. Shares (such proportion is hereinafter referred to
as such U.S. Underwriter's "underwriting obligation proportion"), subject to
such adjustments as you in your discretion, shall make to eliminate any sales or
purchases of fractional shares. If the Company elects to rely on Rule 430A,
Schedules A and B may be attached to the U.S. Price Determination Agreement.
(b) If the Company has elected not to rely upon Rule 430A, the
price to the public per share for the Initial U.S. Shares and the purchase price
per share for the Initial U.S. Shares to be paid by the several U.S.
Underwriters shall be agreed upon and set forth in the U.S. Price Determination
Agreement, dated the date hereof, and an amendment to the Original Registration
Statement containing such per share price information will be filed before the
Original Registration Statement becomes effective.
(c) If the Company has elected to rely upon Rule 430A, the
price to the public per share for the Initial U.S. Shares and the purchase price
per share for the Initial U.S. Shares to be paid by the several U.S.
Underwriters shall be agreed upon and set forth in the U.S. Price Determination
Agreement. In the event that the U.S. Price Determination Agreement has not been
executed by the close of business on the fourteenth business day following the
later of the date on which the Original Registration Statement and any Rule
462(b) Registration Statement becomes effective, this Agreement shall terminate
forthwith, without liability of any party to any other party except that
Sections 7, 8 and 9 shall remain in effect.
(d) In addition, on the basis of the representations and
warranties herein contained, and subject to the terms and conditions herein set
forth, the Selling Stockholders hereby grant an option to the U.S. Underwriters,
severally and not jointly, to purchase up to an aggregate of 507,627
additional U.S. Option Shares, as set forth opposite such Selling Stockholder's
name on Schedule A, at the same purchase price per share as shall be applicable
to the Initial U.S. Shares. The option hereby granted will expire 30 days after
the later of the date upon which the Original Registration Statement and any
Rule 462(b) Registration Statement becomes effective or, if the Company has
elected to rely upon Rule 430A, the date of the U.S. Price Determination
Agreement, and may be exercised, in whole or in part (but not more than once),
only for the purpose of covering over-allotments that may be made in connection
with the offering and distribution of the Initial U.S. Shares upon notice by the
U.S. Representatives to the Selling Stockholders setting forth the aggregate
number of U.S. Option Shares as to which the several U.S. Underwriters are
exercising the option, and the time and date of payment and delivery thereof.
Such time and date of delivery (the "Date of Delivery") shall be determined by
the U.S. Representatives but shall not be later than seven full business days
after the exercise of such option, nor in any event
17
16
prior to the Closing Time. If the option is exercised as to only a portion of
the U.S. Option Shares, the Selling Stockholders will sell their pro rata
portion of the U.S. Option Shares to be purchased by the U.S. Underwriters. If
the option is exercised as to all or any portion of the U.S. Option Shares, the
U.S. Option Shares as to which the option is exercised shall be purchased by the
U.S. Underwriters, severally and not jointly, in their respective underwriting
obligation proportions except as otherwise provided in the U.S. Price
Determination Agreement, subject to such adjustments as the U.S. Underwriters,
in their discretion, shall make to eliminate any sales or purchases of
fractional shares.
(e) Payment of the purchase price for, and delivery of
certificates for, the Initial U.S. Shares shall be made at the offices of
Shearman & Sterling, 000 Xxxxxxxxx Xxxxxx or 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, or at such other place as shall be agreed upon by the Company, the
Selling Stockholders and you, at 10:00 A.M. either (i) on the third full
business day after the later of the effective date of the Original Registration
Statement and any Rule 462(b) Registration Statement (or, if pricing of the
Shares occurs after 4:30 P.M. Eastern time, on the fourth full business day
thereafter), or (ii) if the Company has elected to rely upon Rule 430A, on the
third full business day after execution of the U.S. Price Determination
Agreement (or, if pricing of the Shares occurs after 4:30 P.M. Eastern time, on
the fourth full business day thereafter) (unless, in either case, postponed
pursuant to Section 11 or 12), or at such other time not more than ten full
business days thereafter as you, the Selling Stockholders and the Company shall
determine (such date and time of payment and delivery being herein called the
"Closing Time"). In addition, in the event that any or all of the U.S. Option
Shares are purchased by the U.S. Underwriters, payment of the purchase price
for, and delivery of certificates for, such U.S. Option Shares shall be made at
the offices of Shearman & Sterling, 000 Xxxxxxxxx Xxxxxx or 000 Xxxx 00xx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or at such other place as the Company, the
Selling Stockholders and you shall determine, on the Date of Delivery as
specified in the notice from you to the Company. Payment shall be made to the
Selling Stockholders by wire transfer in immediately available funds against
delivery to you for the respective accounts of the several U.S. Underwriters of
certificates for the U.S. Shares to be purchased by them.
(f) Certificates for the Initial U.S. Shares and U.S. Option
Shares to be purchased by the U.S. Underwriters shall be in such denominations
and registered in such names as you may request in writing at least two full
business days before the Closing Time or the Date of Delivery, as the case may
be. The certificates for the Initial U.S. Shares and U.S. Option Shares will be
made available in New York City for examination and packaging by you not later
than 10:00 A.M. on the business day prior to the Closing Time or the Date of
Delivery, as the case may be.
(g) It is understood that each U.S. Underwriter has authorized
you, for its account, to accept delivery of, receipt for, and make payment of
the purchase price for, the U.S. Shares that it has agreed to purchase. You,
individually and not as U.S.
18
17
Representatives, may (but shall not be obligated to) make payment of the
purchase price for the Initial U.S. Shares, or U.S. Option Shares, to be
purchased by any U.S. Underwriter whose check or checks shall not have been
received by the Closing Time or the Date of Delivery, as the case may be.
Section 3. Certain Covenants of the Company. The Company
covenants with each U.S. Underwriter as follows:
(a) The Company will use its best efforts to cause the
Registration Statement to become effective and, if the Company elects
to rely upon Rule 430A and subject to Section 3(b) hereof, will comply
with the requirements of Rule 430A and will notify the U.S.
Representatives immediately (i) when the Registration Statement, or any
post-effective amendment to the Registration Statement, shall have
become effective, or any supplement to the Prospectuses or any amended
Prospectuses shall have been filed, (ii) of the receipt of any comments
from the Commission, (iii) of any request by the Commission to amend
the Registration Statement or amend or supplement any Prospectus or for
additional information and (iv) of the issuance by the Commission of
any stop order suspending the effectiveness of the Registration
Statement or of any order preventing or suspending the use of any
preliminary prospectus, or of the suspension of the qualification of
the Shares for offering or sale in any jurisdiction, or of the
institution or threatening of any proceedings for any of such purposes.
The Company will use every reasonable effort to prevent the issuance of
any such stop order or of any order preventing or suspending such use
and, if any such order is issued, to obtain the lifting thereof at the
earliest possible moment.
(b) The Company will not at any time file or make any
amendment to the Registration Statement, (including any filing under
Rule 462(b)), file a Term Sheet or file or make any amendment or
supplement (i) if the Company has not elected to rely upon Rule 430(A),
to the Prospectuses (including amendments of the documents incorporated
by reference into the Prospectuses) or (ii) if the Company has elected
to rely upon Rule 430A, to either the prospectuses included in the
Original Registration Statement at the time it becomes effective or to
the Prospectuses (including amendments of the documents incorporated by
reference into the Prospectuses or to the Prospectuses pursuant to Item
12 and Rule 412), of which you shall not have previously been advised
and furnished a copy, or to which you or counsel for the U.S.
Underwriters shall reasonably object in writing.
(c) The Company has furnished or will furnish to you and
counsel for the U.S. Underwriters, without charge, as many copies
(including at least 1 signed copy) of the Registration Statement as
originally filed and of all amendments thereto, whether filed before or
after the Registration Statement becomes effective, copies of all
exhibits and documents filed therewith (including documents
incorporated by
19
18
reference into the Prospectuses pursuant to Item 12 and Rule 412) and
signed copies of all consents and certificates of experts, as you may
reasonably request and has furnished or will furnish to you, for each
other U.S. Underwriter, one conformed copy of the Registration
Statement as originally filed and of each amendment thereto (including
documents incorporated by reference into the Prospectus but without
exhibits).
(d) The Company will deliver to each U.S. Underwriter, without
charge, from time to time until the later of the effective date of the
Original Registration Statement and any Rule 462(b) Registration
Statement (or, if the Company has elected to rely upon Rule 430A, until
the time the U.S. Price Determination Agreement is executed and
delivered), as many copies of each preliminary prospectus as such U.S.
Underwriter may reasonably request, and the Company hereby consents to
the use of such copies for purposes permitted by the 1933 Act. The
Company will deliver to each U.S. Underwriter, without charge, as soon
as the Registration Statement shall have become effective (or, if the
Company has elected to rely upon Rule 430A, as soon as practicable
after the U.S. Price Determination Agreement has been executed and
delivered) and thereafter from time to time as requested during the
period when the Prospectus is required to be delivered under the 1933
Act, such number of copies of the Prospectuses (as supplemented or
amended) as such U.S. Underwriter may reasonably request.
(e) The Company will comply in all material respects 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
Shares as contemplated in this Agreement and in the Prospectuses. If at
any time when a prospectus is required by the 1933 Act or the 1933 Act
Regulations to be delivered in connection with sales of the Shares any
event shall occur or condition exist as a result of which it is
necessary, in the opinion of counsel for the U.S. Underwriters or
counsel for the Company, to amend the Registration Statement or amend
or supplement any Prospectus in order that the Prospectuses will not
include an untrue statement 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 either such counsel, at any such time to amend the Registration
Statement or amend or supplement any Prospectus in order to comply with
the requirements of the 1933 Act or the 1933 Act Regulations, the
Company will promptly upon becoming aware of such event or condition
prepare and file with the Commission, subject to Section 3(b) hereof,
such amendment or supplement as may be necessary to correct such untrue
statement or omission or to make the Registration Statement or the
Prospectuses comply with such requirements.
20
19
(f) The Company will use its best efforts, in cooperation with
the U.S. Underwriters, to qualify the Shares for offering and sale
under the applicable securities laws of such states and other
jurisdictions as you may designate and to maintain such qualifications
in effect for a period of not less than one year from the later of the
effective date of the Original 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. The Company will
file such statements and reports as may be required by the laws of each
jurisdiction in which the Shares have been qualified as above provided.
The company will also supply you with such information as is necessary
for the determination of the legality of the Shares for investment
under the laws of such jurisdictions as you may request.
(g) The Company will make generally available to its security
holders as soon as practicable, but not later than 90 days after the
close of the period covered thereby, an earnings statement of the
Company (in form complying with the provisions of Rule 158 of the 1933
Act Regulations), covering a period of 12 months beginning after the
later of the effective date of the Original Registration Statement and
any Rule 462(b) Registration Statement and covering a period of 12
months beginning after the effective date of any post-effective
amendment to the Registration Statement but not later than the first
day of the Company's fiscal quarter next following such respective
effective dates.
(h) The Company, during the period when the Prospectuses are
required to be delivered under the 1933 Act, will file promptly all
documents required to be filed with the Commission pursuant to Section
13 or 14 of the 1934 Act subsequent to the time the Registration
Statement becomes effective.
(i) For a period of two years after the Closing Time, the
Company will furnish to you and, upon request, to each U.S.
Underwriter, copies of all annual reports, quarterly reports and
current reports filed with the Commission on Forms 10-K, 10-Q and 8-K,
or such other similar forms as may be designated by the Commission, and
such other documents, reports and information as shall be furnished by
the Company to its stockholders generally.
(j) For a period of 180 days from the date hereof, the Company
will not, without your prior written consent, directly or indirectly,
sell, offer to sell, grant any option for the sale of, or otherwise
dispose of, any Common Stock or securities convertible into Common
Stock, other than to the U.S. Underwriters pursuant to this Agreement
and the International Underwriters pursuant to the International
Purchase
21
20
Agreement (except for options to purchase shares of Common Stock
granted to the Company's officers, directors or employees in the
ordinary course of business, consistent with past practice, or the
exercise of such options and similar options currently outstanding).
(k) If the Company has elected to rely upon Rule 430A, it 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.
(l) If the Company has elected to rely on Rule 434, it will
comply with the requirements of Rule 434, and the Prospectuses will not
be "materially different," as such term is used in Rule 434, from the
prospectus included in the Registration Statement at the time it
becomes effective.
(m) If the Company elects to rely upon Rule 462(b), the
Company shall both file a Rule 462(b) Registration Statement with the
Commission in compliance with Rule 462(b) and pay the applicable fees
in accordance with Rule 111 of the 1933 Act Regulations by the earlier
of (i) 10:00 P.M. Eastern time on the date of the U.S. Price
Determination Agreement and (ii) the time confirmations are sent or
given, as specified by Rule 462(b).
(n) If applicable, the Company will comply with all the
provisions of Florida H.B. 1771, codified as Section 517.075 of the
Florida statutes, and all regulations promulgated thereunder relating
to issuers doing business in Cuba.
(o) The Company will use its best efforts to effect the
listing of the Shares on the New York Stock Exchange on or prior to the
date of the U.S. Price Determination Agreement.
Section 4. Payment of Expenses. The Company will pay and bear
all costs and expenses incident to the performance of the obligations of the
Company and of the Selling Stockholders under this Agreement, including (a) the
preparation, printing and filing of the Registration Statement (including
financial statements and exhibits), as originally filed and as amended, the
preliminary prospectuses and the Prospectuses and any amendments or supplements
thereto, and the cost of furnishing copies thereof to the U.S. Underwriters, (b)
the preparation, printing and distribution of this Agreement (except for the
U.S. Price Determination Agreement), the Intersyndicate Agreement among the U.S.
Underwriters and International Underwriters, the Agreement Among International
Underwriters and the Blue Sky Survey (which shall not be typeset), (c) the
delivery of the certificates for the U.S. Shares to the U.S. Underwriters
(except for any stock transfer taxes payable upon the sale of the U.S. Shares to
the U.S. Underwriters, which shall be paid by the Selling Stockholders),
22
21
(d) the fees and disbursements of the Company's counsel and accountants and the
Selling Stockholders' counsel, (e) the qualification of the U.S. Shares under
the applicable securities laws in accordance with Section 3(f) and any filing
for review of the offering with the National Association of Securities Dealers,
Inc. (the "NASD"), including filing fees and reasonable fees and disbursements
of Shearman & Sterling as counsel for the U.S. Underwriters solely in connection
therewith, and in connection with the Blue Sky Survey and (f) the listing fees
and expenses incurred in connection with listing the Shares on the New York
Stock Exchange, Inc.
If this Agreement is terminated by you in accordance with the
provisions of Section 5, 10(a)(i) or 12, the Company shall reimburse the U.S.
Underwriters for all their out-of-pocket expenses, including the reasonable fees
and disbursements of Shearman & Sterling as counsel for the U.S. Underwriters.
Section 5. Conditions of U.S. Underwriters' Obligations. In
addition to the execution and delivery of the U.S. Price Determination
Agreement, the obligations of the several U.S. Underwriters to purchase and pay
for the U.S. Shares that they have respectively agreed to purchase pursuant to
this Agreement (including any U.S. Option Shares as to which the option granted
in Section 2 has been exercised and the Date of Delivery determined by you is
the same as the Closing Time) are subject to the accuracy of the representations
and warranties of the Company and the Selling Stockholders contained herein
(including those contained in the U.S. Price Determination Agreement) or in
certificates of any officer of the Company or any Subsidiary or certificates by
or on behalf of the Selling Stockholders delivered pursuant to the provisions
hereof, to the performance by the Company and the Selling Stockholders of their
obligations hereunder, and to the following further conditions:
(a) The Original Registration Statement shall have become
effective not later than 5:30 P.M. on the date of this Agreement or,
with your consent, at a later time and date not later, however, than
5:30 P.M. on the first business day following the date hereof and if
the Company has elected to rely upon Rule 462(b), the Rule 462(b)
Registration Statement shall have become effective not later than the
earlier of (i) 9:00 A.M. Eastern time on the day following the date of
the U.S. Price Determination Agreement, and (ii) the time confirmations
are sent or given, as specified by Rule 462(b), or, with respect to the
Original Registration Statement, at such later time or on such later
date as you may agree to in writing with the approval of a majority in
interest of the several U.S. Underwriters; and at the Closing Time no
stop order suspending the effectiveness of the Registration Statement
shall have been issued under the 1933 Act and no proceedings for that
purpose shall have been instituted or shall be pending or, to your
knowledge or the knowledge of the Company, shall be contemplated by the
Commission, and any request made to the Company on the part of the
Commission for additional information with respect to the
23
22
Registration Statement shall have been complied with to the
satisfaction of Shearman & Sterling as counsel for the U.S.
Underwriters. If the Company has elected to rely upon Rule 430A,
prospectuses 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). If the
Company has elected to rely upon Rule 434, a Term Sheet, which together
with the preliminary prospectus last furnished to the U.S. Underwriters
in connection with the offering of the Shares shall not be "materially
different," as such term is used in Rule 434, from the prospectus
included in the Original Registration Statement at the time it becomes
effective, shall have been filed with the Commission in accordance with
Rule 424(b).
(b) At the Closing Time, you shall have received a signed
opinion of Wachtell, Lipton, Xxxxx & Xxxx, special counsel for the
Company, dated as of the Closing Time, together with signed or
reproduced copies of such opinion for each of the other U.S.
Underwriters, in form and substance reasonably satisfactory to counsel
for the U.S. Underwriters, in the form set forth in Exhibit C hereto.
(c) At the Closing Time, you shall have received a signed
opinion of Xxxxxxx X. Xxxxxxxx, Esq., Vice President, Secretary and
General Counsel for the Company, dated as of the Closing Time, together
with signed or reproduced copies of such opinion for each of the other
U.S. Underwriters, in form and substance reasonably satisfactory to
counsel for the U.S. Underwriters, in the form set forth in Exhibit D
hereto.
(d) At the Closing Time, you shall have received a signed
opinion of NSK-Warner's Japanese counsel, dated as of the Closing Time,
together with signed or reproduced copies of such opinion for each of
the other U.S. Underwriters, in form and substance reasonably
satisfactory to counsel for the U.S. Underwriters, in the form set
forth in Exhibit E hereto.
(e) At the Closing Time you shall have received a signed
opinion of the attorneys listed on Schedule C attached hereto for the
Selling Stockholders specified opposite such attorney's name, each
dated as of the Closing Time, together with signed or reproduced copies
of such opinion for each of the other U.S. Underwriters, in form and
substance reasonably satisfactory to counsel for the U.S. Underwriters,
each, with respect to the Selling Stockholders that such counsel
represents, in the form set forth in Exhibit F hereto.
(f) At the Closing Time, you shall have received the favorable
opinion of Shearman & Sterling, counsel for the U.S. Underwriters,
dated as of the Closing
24
23
Time, together with signed or reproduced copies of such opinion for
each of the other U.S. Underwriters, to the effect that the opinions
delivered pursuant to Sections 5(b), 5(c), 5(d) and 5(e) hereof appear
on their face to be appropriately responsive to the requirements of
this Agreement except, specifying the same, to the extent waived by
you, and with respect to the incorporation and legal existence of the
Company, this Agreement, the Registration Statement, the Prospectuses
and such other related matters as you may require. 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, the
federal law of the United States and the General Corporation Law of the
State of Delaware, upon the opinions of counsel satisfactory to you.
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 the Subsidiaries and the
Selling Stockholders and certificates of public officials.
(g) At the Closing Time, (i) the Registration Statement and
the Prospectuses, as they may then be amended or supplemented, shall
comply in all material respects with the requirements of the 1933 Act
and the 1933 Act Regulations, the Company shall have complied in all
material respects with Rule 430A (if it shall have elected to rely
thereon) and Rule 434 (if it shall have elected to rely thereon) and
neither the Registration Statement nor the Prospectuses, as they may
then be amended or supplemented, shall 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,
(ii) there shall not have been, since the respective dates as of which
information is given in the Registration Statement, any material
adverse change in the condition (financial or otherwise), results of
operations, business affairs or business prospects of the Company and
the Subsidiaries, considered as one enterprise, whether or not arising
in the ordinary course of business, (iii) no action, suit or proceeding
at law or in equity shall be pending or, to the knowledge of the
Company, threatened against the Company or any Subsidiary that would be
required to be set forth in the Prospectuses other than as set forth
therein and no proceedings shall be pending or, to the knowledge of the
Company, threatened against the Company or any Subsidiary before or by
any federal, state or other commission, board or administrative agency
wherein an unfavorable decision, ruling or finding could materially
adversely affect the condition (financial or otherwise), results of
operations, business affairs or business prospects of the Company and
the Subsidiaries, considered as one enterprise, other than as set forth
in the Prospectuses, (iv) the Company shall have complied with all
agreements and satisfied all conditions set forth in this Agreement on
its part to be performed or satisfied at or prior to the Closing Time
and (v) the other representations and warranties of the Company set
forth in Section 1(a) shall be accurate as though expressly made at and
as of the Closing Time. At the Closing Time, you shall have
25
24
received a certificate of the President or a Vice President, and the
Treasurer or an Assistant Treasurer, of the Company, dated as of the
Closing Time, to such effect.
(h) At the Closing Time, the representations and warranties of
each Selling Stockholder set forth in Section 1(b) shall be accurate as
though expressly made at and as of the Closing Time. At the Closing
Time, you shall have received a certificate of or on behalf of each
Selling Stockholder, dated as of the Closing Time, to such effect with
respect to such Selling Stockholder.
(i) At the time that this Agreement is executed by the
Company, you shall have received from Deloitte & Touche LLP a letter,
dated such date, in form and substance satisfactory to you, together
with signed or reproduced copies of such letter for each of the other
U.S. Underwriters, confirming that they are independent public
accountants with respect to the Company within the meaning of the 1933
Act and the applicable published 1933 Act Regulations, and stating in
effect that:
(i) in their opinion, the audited financial
statements and the related financial statement schedules
included or incorporated by reference in the Registration
Statement and the Prospectuses comply as to form in all
material respects with the applicable accounting requirements
of the 1933 Act and the 1933 Act Regulations;
(ii) on the basis of procedures (but not an
examination in accordance with generally accepted auditing
standards) consisting of a reading of the unaudited interim
consolidated financial statements of the Company included or
incorporated by reference in the Registration Statement and
the Prospectuses (collectively, the "10-Q Financials"), a
reading of the latest available unaudited interim consolidated
financial statements of the Company, a reading of the minutes
of all meetings of the stockholders and directors of the
Company and the Subsidiaries and each Committee of the
Company's Board of Directors and of each Committee of the
Board of Directors of any Subsidiary since [January 1], 1996,
inquiries of certain officials of the Company and the
Subsidiaries responsible for financial and accounting matters,
and such other inquiries and procedures as may be specified in
such letter, nothing came to their attention that caused them
to believe that:
(A) the 10-Q Financials incorporated by
reference in the Registration Statement and the
Prospectuses do not comply as to form in all
material respects with the accounting requirements
of the 1934 Act and the 1934 Act Regulations
applicable to unaudited financial statements
included in Form 10-Q or any material modifications
should be made to the 10-Q Financials included or
incorporated by reference
26
25
in the Registration Statement and the Prospectuses
for them to be in conformity with generally accepted
accounting principles;
(B) at [December 31], 1996 and at a
specified date not more than five days prior to the
date of this Agreement, there was any change in the
capital stock of the Company and the Subsidiaries or
any decrease in the consolidated net current assets
or stockholders' equity of the Company and the
Subsidiaries or any increase in long-term debt of
the Company and the Subsidiaries, in each case as
compared with amounts shown in the latest
consolidated balance sheet included or incorporated
by reference in the Registration Statement, except
in each case for changes, decreases or increases
that the Registration Statement discloses have
occurred or may occur; or
(C) for the period from [January 1], 1997 to
a specified date not more than five days prior to
the date of this Agreement, there was any decrease
in net sales, equity in affiliate earnings and other
income, earnings before interest and finance charges
and income taxes or net earnings, in each case as
compared with the comparable period in the preceding
year;
(iii) based upon the procedures set forth in clause
(ii) above and a reading of the Selected Historical Financial
Data included in the Registration Statement and a reading of
the financial statements from which certain of such data were
derived, nothing has come to their attention that gives them
reason to believe that the Selected Historical Financial Data
included in the Registration Statement do not comply as to
form in all material respects with the applicable accounting
requirements of the 1933 Act and the 1933 Act Regulations,
that the information set forth therein is not fairly stated in
relation to the financial statements from which it was derived
or that the financial statements not included in the
Registration Statement from which certain of such data were
derived are not in conformity with generally accepted
accounting principles applied on a basis substantially
consistent with that of the audited financial statements
included in the Registration Statement; and
(iv) they are unable to and do not express any
opinion on the Pro Forma Financial Data (the "Pro Forma
Statement") included or incorporated by reference in the
Registration Statement or on the pro forma adjustments applied
to the historical amounts included in the Pro Forma Statement;
however, for purposes of such letter they have:
(A) read the Pro Forma Statement;
27
26
(B) made inquiries of certain officials of
the Company and of the Coltec Subsidiaries who have
responsibility for financial and accounting matters
about the basis for their determination of the pro
forma adjustments and whether the Pro Forma
Statement complies as to form in all material
respects with the applicable accounting requirements
of Rule 11-02 of Regulation S-X; and
(C) proved the arithmetic accuracy of the
application of the pro forma adjustments to the
historical amounts in the Pro Forma Statement; and
on the basis of such procedures, and such other inquiries and
procedures as may be specified in such letter, nothing came to
their attention that caused them to believe that the Pro Forma
Statement included or incorporated by reference in the
Registration Statement does not comply as to form in all
material respects with the applicable requirements of Rule
11-02 of Regulation S-X or that the pro forma adjustments have
not been properly applied to the historical amounts in the
compilation of those statements;
(v) in addition to the procedures referred to in
clause (ii) above, they have performed other
specified procedures, not constituting an audit,
with respect to certain amounts, percentages,
numerical data and financial information appearing
in the Registration Statement, which have previously
been specified by you and which shall be specified
in such letter, and have compared certain of such
items with, and have found such items to be in
agreement with, the accounting and financial records
of the Company.
(j) At the time that this Agreement is executed by the
Company, you shall have received from KPMG Peat Marwick a letter, dated
such date, in form and substance satisfactory to you, together with
signed or reproduced copies of such letter for each of the other U.S.
Underwriters, confirming that they are independent public accountants
with respect to the NSK-Warner within the meaning of the 1933 Act and
applicable published 1933 Act Regulations, and stating in effect that:
(i) in their opinion, the audited financial
statements and the related financial statement schedules for
NSK-Warner included or incorporated by reference in the
Registration Statement and the Prospectuses comply as to form
in all material respects with the applicable accounting
requirements of the 1933 Act and the 1933 Act Regulations;
28
27
(ii) they have read the latest available unaudited
interim consolidated financial statements of NSK-Warner, the
minutes of all meetings of the stockholders and directors of
NSK-Warner and each Committee of the Board of Directors since
[October 1], 1996, inquired of certain officials of NSK-Warner
responsible for financial and accounting matters, and made
such other inquiries and performed such other procedures as
may be specified in such letter, and officials of NSK-Warner
stated that:
(A) at [December 31], 1996 and at a
specified date not more than five days prior to the
date of this Agreement, there was no change in the
common stock of NSK-Warner or decrease in the net
current assets or stockholders' equity of NSK-Warner
or increase in the notes payable or long-term debt
of NSK-Warner, in each case as compared with amounts
shown in the latest balance sheet included or
incorporated by reference in the Registration
Statement; or
(B) for the period from [October 1], 1996 to
[December 31], 1996 and for the period from
[December 31], 1996 to a specified date not more
than five days prior to the date of this Agreement,
there was no decrease in sales, earnings before
income taxes or net earnings, in each case as
compared with the corresponding period in the
preceding year.
(k) At the time that this Agreement is executed, you shall
have received from Xxxxxx Xxxxxxxx LLP a letter, dated such date, in
form and substance satisfactory to you, together with signed or
reproduced copies of such letter for each of the other U.S.
Underwriters, confirming that they are independent public accountants
with respect to the Coltec Subsidiaries and the Company within the
meaning of the 1933 Act and applicable published 1933 Act Regulations,
and stating in effect that:
(i) in their opinion, the audited financial
statements and the related financial statement schedules for
the Coltec Subsidiaries included or incorporated by reference
in the Registration Statement and the Prospectuses comply as
to form in all material respects with the applicable
accounting requirements of the 1933 Act, the 1934 Act, the
1933 Act Regulations and the 1934 Act Regulations;
(ii) they have read the latest available unaudited
interim consolidated financial statements of the Coltec
Subsidiaries, the minutes of all meetings of the stockholders
and directors of the Coltec Subsidiaries and each Committee of
the Boards of Directors since [January 1], 1996, inquired of
certain officials
29
28
of the Coltec Subsidiaries responsible for financial and
accounting matters, and made such other inquiries and
performed such other procedures as may be specified in such
letter, and officials of the Coltec Subsidiaries stated that:
(A) at June 17, 1996, there was no change in
the capital stock of the Coltec Subsidiaries or any
decrease in the consolidated net current assets or
stockholders' equity of the Coltec Subsidiaries or
any increase in long-term debt of the Coltec
Subsidiaries, in each case as compared with amounts
shown in the latest consolidated balance sheet
included or incorporated by reference in the
Registration Statement, except in each case for
changes, decreases or increases that the
Registration Statement discloses have occurred or
may occur; or
(B) for the period from April 1, 1996 to May
31, 1996, there was no decrease in net sales,
earnings before income taxes or net earnings, in
each case as compared with the comparable period in
the preceding year, except in each case for any
decreases that the Registration Statement discloses
have occurred or may occur; and
(iii) based upon the procedures set forth in clause
(ii) above, nothing has come to their attention that gives
them reason to believe that the information set forth in the
latest available unaudited interim consolidated financial
statements of the Coltec Subsidiaries is not fairly stated in
relation to the financial statements from which it was derived
or that the financial statements not included in the
Registration Statement from which certain of such data were
derived are not in conformity with generally accepted
accounting principles applied on a basis substantially
consistent with that of the audited financial statements
included in the Registration Statement.
(l) At the Closing Time, you shall have received from each of
Deloitte & Touche LLP, KPMG Peat Marwick and Xxxxxx Xxxxxxxx LLP a
letter, in form and substance satisfactory to you and dated as of the
Closing Time, to the effect that they reaffirm the statements made in
the letters furnished pursuant to Sections 5(i), 5(j) and 5(k),
respectively, except that the specified date referred to shall be a
date not more than five days prior to the Closing Time.
(m) At the Closing Time, counsel for the U.S. Underwriters
shall have been furnished with all such documents, certificates and
opinions as they may reasonably request for the purpose of enabling
them to pass upon the sale of the Shares as contemplated in this
Agreement and the matters referred to in Section 5(f) and in order to
evidence the accuracy and completeness of any of the representations,
warranties or statements of the Company and the Selling Stockholders,
the
30
29
performance of any of the covenants of the Company, or the fulfillment
of any of the conditions herein contained; and all proceedings taken by
the Company and the Selling Stockholders at or prior to the Closing
Time in connection with the sale of the Shares as contemplated in this
Agreement shall be reasonably satisfactory in form and substance to you
and to counsel for the U.S. Underwriters.
(n) The "lock-up" letters which are substantially in the form
of Exhibit G attached hereto from (a) each executive officer or
director of the Company and (b) each stockholder of the Company who (i)
owns at least 1% of the outstanding shares of Common Stock and (ii) who
is a party to the Registration Rights Agreement have been delivered to
you on or before the date hereof.
If any of the conditions specified in this Section 5 shall not
have been fulfilled when and as required by this Agreement, this Agreement may
be terminated by you on notice to the Company and the Selling Stockholders at
any time at or prior to the Closing Time, and such termination shall be without
liability of any party to any other party, except as provided in Section 4
hereof. Notwithstanding any such termination, the provisions of Sections 7, 8
and 9 herein shall remain in effect.
Section 6. Conditions to Purchase of U.S. Option Shares. In
the event that the U.S. Underwriters exercise their option granted in Section 2
hereof to purchase all or any of the U.S. Option Shares and the Date of Delivery
determined by you pursuant to Section 2 hereof is later than the Closing Time,
the obligations of the several U.S. Underwriters to purchase and pay for the
U.S. Option Shares that they shall have respectively agreed to purchase pursuant
to this Agreement are subject to the accuracy of the representations and
warranties of the Company and the Selling Stockholders herein contained, to the
performance by the Company and the Selling Stockholders of their obligations
hereunder and to the following further conditions:
(a) The Registration Statement shall remain effective at the
Date of Delivery, and, at the Date of Delivery, no stop order
suspending the effectiveness of the Registration Statement shall have
been issued under the 1933 Act and no proceedings for that purpose
shall have been instituted or shall be pending or, to your knowledge or
the knowledge of the Company, shall have been 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 for the U.S. Underwriters.
(b) At the Date of Delivery, the provisions of Sections
5(g)(i) through 5(g)(v) shall have been complied with at and as of the
Date of Delivery and, at the Date of Delivery, you shall have received
a certificate of the President or a Vice
31
30
President, and the Treasurer or an Assistant Treasurer, of the Company,
dated as of the Date of Delivery, to such effect.
(c) At the Date of Delivery, you shall have received the
favorable opinions of Wachtell, Lipton, Xxxxx & Xxxx, special counsel
for the Company, Xxxxxxx X. Xxxxxxxx, General Counsel of the Company,
NSK-Warner's Japanese counsel and counsel for the Selling Stockholders,
together with signed or reproduced copies of such opinions for each of
the other U.S. Underwriters, in each case in form and substance
reasonably satisfactory to counsel for the U.S. Underwriters, dated as
of the Date of Delivery, relating to the U.S. Option Shares and
otherwise to the same effect as the opinions required by Section 5(b),
5(c), 5(d) and 5(e), respectively.
(d) At the Date of Delivery, you shall have received the
favorable opinion of Shearman & Sterling, counsel for the U.S.
Underwriters, dated as of the Date of Delivery, relating to the U.S.
Option Shares and otherwise to the same effect as the opinion required
by Section 5(f).
(e) At the Date of Delivery, you shall have received a letter
from each of Deloitte & Touche LLP, KPMG Peat Marwick and Xxxxxx
Xxxxxxxx LLP, in form and substance satisfactory to you and dated as of
the Date of Delivery, to the effect that they reaffirm the statements
made in the letters furnished pursuant to Section 5(i), 5(j) and 5(k),
respectively, except that the specified date referred to shall be a
date not more than five days prior to the Date of Delivery.
(f) At the Date of Delivery, you shall have received from each
of the Selling Stockholders (or on their behalf) certificates
substantially in the form of the certificates furnished to you pursuant
to Section 5(h), except that such certificates shall be as of the Date
of Delivery.
(g) At the Date of Delivery, the representations and
warranties of each Selling Stockholder set forth in Section 1(b) hereof
shall be accurate as though expressly made at and as of the Date of
Delivery.
(h) At the Date of Delivery, counsel for the U.S. Underwriters
shall have been furnished with all such documents, certificates and
opinions as they may reasonably request for the purpose of enabling
them to pass upon the sale of the U.S. Option Shares as contemplated in
this Agreement and the matters referred to in Section 6(d) and in order
to evidence the accuracy and completeness of any of the
representations, warranties or statements of the Company or the Selling
Stockholders, the performance of any of the covenants of the Company,
or the fulfillment of any of the conditions herein contained; and all
proceedings taken by the Company and the Selling Stockholders at or
prior to the Date of Delivery in connection with the sale of
32
31
the U.S. Option Shares as contemplated in this Agreement shall be
reasonably satisfactory in form and substance to you and to counsel for
the U.S. Underwriters.
Section 7. Indemnification. (a) The Company agrees to
indemnify and hold harmless each U.S. Underwriter and each person, if any, who
controls any U.S. Underwriter within the meaning of Section 15 of the 1933 Act
or Section 20 of the 1934 Act to the extent and in the manner set forth in
clauses (i), (ii) and (iii) below. In addition, each Selling Stockholder,
severally and not jointly (but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the Registration
Statement (or any amendment thereto) in reliance upon and in conformity with
written information furnished by such Selling Stockholder, expressly for use in
the Registration Statement (or any amendment thereto) or any preliminary
prospectus or the Prospectuses (or any amendment or supplement thereto), a copy
of which written information shall have been previously delivered to you),
agrees to indemnify and hold harmless each U.S. Underwriter and each person, if
any, who controls any U.S. Underwriter 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, arising out of an untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), including the Rule
430A Information and the Rule 434 Information, if applicable, and all
documents incorporated therein by reference, or the omission 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 an untrue statement or alleged untrue statement of a material fact
contained in any preliminary prospectus or the Prospectuses (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, or if Rule 434 is used, if the Prospectus is
"materially different", as such term is used in Rule 434, from the
prospectus included in the Original Registration Statement at the time
it becomes effective;
(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 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, if such settlement is
effected with the written consent of the Company and the Selling
Stockholders; and
(iii) against any and all expense whatsoever, as incurred
(including, subject to Section 7(c) hereof, fees and disbursements of
counsel chosen by you), reasonably
33
32
incurred in investigating, preparing or defending against any
litigation, or 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 subparagraph (i) or (ii) above;
provided, however, that this indemnity agreement does not apply to any loss,
liability, claim, damage or expense to the extent arising out of an 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 any
U.S. Underwriter through you expressly for use in the Registration Statement (or
any amendment thereto) including the Rule 430A Information and the Rule 434
Information, if applicable, or any preliminary prospectus or the Prospectuses
(or any amendment or supplement thereto); provided further that the liability of
a Selling Stockholder pursuant to this Section 7 is limited to the amount of the
net proceeds of the offering of the U.S. Shares (after deducting the
underwriting discount, but before deducting expenses) received by such Selling
Stockholder.
Insofar as this indemnity agreement may permit indemnification
for liabilities under the 1933 Act of any person who is a partner of a U.S.
Underwriter or who controls a U.S. Underwriter 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, officer or controlling person of the Company, such
indemnity agreement is subject to the undertaking of the Company in the
Registration Statement under Item 17 thereof.
(b) Each U.S. Underwriter severally agrees to indemnify and
hold harmless the Company, its directors, each of its officers who signed the
Registration Statement, and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act and each
Selling Stockholder and each person, if any, who controls any 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
described in the indemnity contained in Section 7(a), as incurred, but only with
respect to untrue statements or omissions, or alleged untrue statements or
omissions, made in the Registration Statement (or any amendment thereto)
including the Rule 430A Information and the Rule 434 Information, if applicable,
or any preliminary prospectus or the Prospectuses (or any amendment or
supplement thereto) in reliance upon and in conformity with written information
furnished to the Company by MLPF&S through you expressly for use in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information, if applicable, or such preliminary
prospectus or the Prospectuses (or any amendment or supplement thereto).
(c) The Company agrees to indemnify and hold harmless, to the
extent permitted by law, each Selling Stockholder, its directors and officers or
general and limited
34
33
partners (and the directors and officers thereof), and each other person, if
any, who controls such Selling Stockholder within the meaning of Section 15 of
the 1933 Act or Section 20 of the 1934 Act, against any and all losses, claims,
damages or liabilities, joint or several, and expenses (including any amounts
paid in any settlement effected with the Company's consent) to which such
Selling Stockholder, any such director or officer or general or limited partner
or controlling person may become subject under the 1933 Act, common law or
otherwise, insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of or are based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information, if applicable, and all documents
incorporated therein by reference, or the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, (ii) any untrue statement or alleged untrue
statement of a material fact contained in any preliminary prospectus, together
with the documents incorporated by reference therein (as amended or supplemented
if the Company shall have filed with Commission any amendment thereof or
supplemented thereto), if used prior to the effective date of the Registration
Statement, or contained in the Prospectus (as amended or supplemented if the
Company shall have filed with the Commission any amendment thereof or
supplemented if the Company shall have filed with the Commission any amendment
thereof or supplement thereto), or the omission or alleged omission to state
therein a material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading or (iii) any violation by the Company of any federal,
state or common law rule or regulation applicable to the Company and relating to
action required of or inaction by the Company in connection with the offering,
and the Company will reimburse each such Selling Stockholder and each such
director, officer, general or limited partner, and controlling person for any
legal or any other expenses reasonably incurred by any of them in connection
with investigating or defending any such loss, claim, liability, action or
proceeding; provided, that the Company shall not be liable to such Selling
Stockholder or any such director, officer, general or limited partner or
controlling person in any such case to the extent that any such loss, claim,
damage, liability (or action or proceeding in respect thereof) or expense arises
out of or is based upon any untrue statement or alleged untrue statement or
omission or alleged omission made in such Registration Statement (or any
amendment or supplement thereto), including the Rule 430A Information and the
Rule 434 Information, if applicable, or in any such preliminary prospectus or
the Prospectuses (or any amendment or supplement thereto) in reliance upon and
in conformity with written information furnished to the Company by or on behalf
of such Selling Stockholder or any such director, officer, general or limited
partner or controlling person, specifically stating that it is for use in the
preparation thereof.
(d) Each Selling Stockholder agrees to indemnify and hold
harmless (in the same manner and to the same extent as set forth in Section
7(c)) the Company and its directors and officers and each person controlling the
Company within the meaning of
35
34
Section 15 of the 1933 Act or Section 20 of the 1934 Act and all other Selling
Stockholders and their directors, officers, general and limited partners and
respective controlling persons with respect to any statement or alleged
statement in or omission or alleged omission from the Registration Statement (or
any amendment or supplement thereto), including the Rule 430A Information and
the Rule 434 Information, if applicable, any preliminary prospectus or the
Prospectuses (or any amendment or supplement thereto), if such statement or
alleged statement or omission or alleged omission was made in reliance upon and
in conformity with written information furnished to the Company or its
representatives by or on behalf of the undersigned specifically stating that it
is for use in the preparation of the Registration Statement (or any amendment or
supplement thereto), including the Rule 430A Information and the Rule 434
Information, if applicable, preliminary prospectus or the Prospectuses (or any
amendment or supplement thereto), or a document incorporated by reference into
any of the foregoing; provided, however, that the liability of each Selling
Stockholder pursuant to this Section 7(d) is limited to the proceeds received by
such Selling Stockholder from the sale of the Shares pursuant to this Agreement.
Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of the Company or any of the other Selling
Stockholders or any of its respective directors, officers, general or limited
partners or controlling persons and shall survive the transfer of the Shares by
each Selling Stockholder.
(e) Each indemnified party shall give notice as promptly as
reasonably practicable to each indemnifying party of any action commenced
against it in respect of which indemnity may be sought hereunder, but failure to
so notify an indemnifying party 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 7(a) above, counsel to the indemnified
parties shall be selected by MLPF&S, in the case of parties indemnified pursuant
to Sections 7(b) and (d) above, counsel to the indemnified parties shall be
selected by the Company, and, in the case of parties indemnified pursuant to
Section 7(c) above, counsel to the indemnified parties shall be selected by the
respective Selling Stockholder. 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 party or parties be liable for the 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.
(f) No indemnifying party shall, without the prior written
consent of the indemnified parties, which consent shall not be unreasonably
withheld, 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
36
35
Section 7 or Section 8 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.
(g) 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 7(a)(ii) effected without its
written consent if (i) such settlement is entered into more than 60 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 45 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 for fees and expenses of counsel prior to the date
of such settlement.
Section 8. Contribution. If the indemnification provided for
in Section 7 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 or the Selling Stockholders] on the one hand and the U.S. Underwriters
on the other hand from the offering of the Shares pursuant to this Agreement 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 or the Selling Stockholders] on the one hand and of the U.S.
Underwriters 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 the [Company or the Selling
Stockholders] on the one hand and the U.S. Underwriters on the other hand in
connection with the offering of the Shares pursuant to this Agreement shall be
deemed to be in the same respective proportions as the total net proceeds from
the offering of the Shares pursuant to this Agreement (before deducting
expenses) received by the Selling Stockholders and the total underwriting
discount received by the U.S. Underwriters, in each case as set forth on the
cover of the Prospectus, or, if Rule 434 is used, the corresponding location on
the Term Sheet, bear to the aggregate initial public offering price of the
Shares as set forth on such cover.
The relative fault of the [Company or the Selling
Stockholders] on the one hand and the U.S. Underwriters on the other hand shall
be determined by reference to,
37
36
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 related
to information supplied by the Company or the Selling Stockholders or by the
U.S. Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company, the Selling Stockholders and the U.S.
Underwriters agree that it would not be just and equitable if contribution
pursuant to this Section 8 were determined by pro rata allocation (even if the
U.S. Underwriters were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable considerations
referred to above in this Section 8. The aggregate amount of losses,
liabilities, claims, damages and expenses incurred by an indemnified party and
referred to above in this Section 8 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 8, no U.S.
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Shares underwritten by it and distributed
to the public were offered to the public exceeds the amount of any damages which
such U.S. 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 8, each person, if any, who
controls a U.S. 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 such
U.S. Underwriter, and each director of the Company, each officer of the Company
who signed the Registration Statement, and each person, if any, who controls the
Company or a 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 a Selling Stockholder, as the case may be. The U.S. Underwriters'
respective obligations to contribute pursuant to this Section 8 are several in
proportion to the principal amount of Shares set forth opposite their respective
names in Schedule A hereto and not joint.
Section 9. Representations, Warranties and Agreements to
Survive Delivery. The representations, warranties, indemnities, agreements and
other statements of the Company or its officers or the Selling Stockholders set
forth in or made pursuant to this
38
37
Agreement will remain operative and in full force and effect regardless of any
investigation made by or on behalf of the Selling Stockholders, the Company, any
U.S. Underwriter or any person who controls a Selling Stockholder or any U.S.
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act, and will survive delivery of and payment for the U.S. Shares.
Section 10. Termination of Agreement. (a) You may terminate
this Agreement, by notice to the Company and the Selling Stockholders, at any
time at or prior to the Closing Time (i) if there has been, since the time of
the execution of this Agreement or since the respective dates as of which
information is given in the Registration Statement, any material adverse change
in the condition (financial or otherwise), earnings, business affairs or
business prospects of the Company and the Subsidiaries, considered as one
enterprise, 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 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 on the financial markets of the United States is
such as to make it, in your judgment, impracticable to market the Shares or
enforce contracts for the sale of the Shares or (iii) if trading in any
securities of the Company has been suspended 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 for securities have been required, by such exchange or
by such system or by order of the Commission, the New York Stock Exchange, the
NASD or any other governmental authority or (iv) if a banking moratorium has
been declared by either federal, New York or Illinois authorities. For purposes
of this Section 10(a), the deployment of circuit breakers by the American Stock
Exchange, the New York Stock Exchange or the Nasdaq National Market shall not
constitute a material limitation on trading on such exchanges or by such system.
(b) If this Agreement is terminated pursuant to this Section,
such termination shall be without liability of any party to any other party,
except to the extent provided in Section 4. Notwithstanding any such
termination, the provisions of Sections 1, 7, 8 and 9 shall remain in effect.
(c) This Agreement may also terminate pursuant to the
provisions of Section 2(c), with the effect stated in such Section.
Section 11. Default by One or More of the U.S. Underwriters.
If one or more of the U.S. Underwriters shall fail at the Closing Time to
purchase the Initial U.S. Shares that it or they are obligated to purchase
pursuant to this Agreement (the "Defaulted U.S. Shares"), you shall have the
right, within 24 hours thereafter, to make arrangements for
39
38
one or more of the non-defaulting U.S. Underwriters, or any other U.S.
Underwriters, to purchase all, but not less than all, of the Defaulted U.S.
Shares in such amounts as may be agreed upon and upon the terms set forth in
this Agreement; if, however, you have not completed such arrangements within
such 24-hour period, then:
(a) if the number of Defaulted U.S. Shares does not exceed 10%
of the total number of Initial U.S. Shares, the non-defaulting U.S.
Underwriters shall be obligated to purchase the full amount thereof in
the proportions that their respective Initial U.S. Share underwriting
obligation proportions bear to the underwriting obligations of all
non-defaulting U.S. Underwriters; or
(b) if the number of Defaulted U.S. Shares exceeds 10% of the
total number of Initial U.S. Shares, this Agreement shall terminate
without liability on the part of any non-defaulting U.S. Underwriter.
No action taken pursuant to this Section shall relieve any
defaulting U.S. Underwriter from liability in respect of its default.
In the event of any such default that does not result in a
termination of this Agreement, either you or the Company shall have the right to
postpone the Closing Time for a period not exceeding seven days in order to
effect any required changes in the Registration Statement or Prospectuses or in
any other documents or arrangements. As used herein, the term "U.S. Underwriter"
includes any person substituted for a U.S. Underwriter under this Section 11.
Section 12. Default by a Selling Stockholder. If any Selling
Stockholder shall fail at the Closing Time to sell and deliver the number of
Initial U.S. Shares that such Selling Stockholder is obligated to sell, then the
U.S. Underwriters may, at your option, by notice from you to the Company and the
Selling Stockholders, either (a) terminate this Agreement without any liability
on the part of any non-defaulting party, except to the extent provided in
Section 4 and except that the provisions of Sections 7 and 8 shall remain in
effect or (b) elect to purchase the Initial U.S. Shares that the remaining
Selling Stockholders have agreed to sell pursuant to this Agreement.
In the event of any such default under this Section that does
not result in a termination of this Agreement, either you or the Company shall
have the right to postpone the Closing Time for a period not exceeding seven
days in order to effect any required changes in the Registration Statement or
Prospectuses or in any other documents or arrangements.
No action taken pursuant to this Section 12 shall relieve any
Selling Stockholder so defaulting from liability, if any, in respect of such
default.
40
39
Section 13. Notices. All notices and other communications
under this Agreement shall be in writing and shall be deemed to have been duly
given if delivered, mailed or transmitted by any standard form of
telecommunication. Notices to you or the U.S. Underwriters shall be directed to
you, c/o Merrill Lynch, Pierce, Xxxxxx & Xxxxx Incorporated, at Xxxxxxx Xxxxx
World Headquarters, North Tower, World Financial Center, New York, New York
10281, Attention: Xxxxxx X. Xxxxxx; notices to the Company shall be directed to
it at 000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000, Attention: General
Counsel and notices to the Selling Stockholders shall be directed to Xxxxxxx
Xxxxx & Co., Inc., World Financial Center, Xxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000-0000, Attention: Xxxxx X. Xxxxxx.
Section 14. Parties. This Agreement is made solely for the
benefit of the several U.S. Underwriters, the Company and the Selling
Stockholders and, to the extent expressed, any person controlling the Company,
any Selling Stockholder or any of the U.S. Underwriters, and the directors of
the Company, its officers who have signed the Registration Statement, and their
respective executors, administrators, successors and assigns and, subject to the
provisions of Section 11, no other person shall acquire or have any right under
or by virtue of this Agreement. The term "successors and assigns" shall not
include any purchaser, as such purchaser, from any of the several U.S.
Underwriters of the U.S. Shares. All of the obligations of the U.S. Underwriters
hereunder are several and not joint.
Section 15. Representation of U.S. Underwriters. You will act
for the several U.S. Underwriters in connection with this financing, and any
action under or in respect of this Agreement taken by you as U.S.
Representatives will be binding upon all U.S. Underwriters.
Section 16. Governing Law and Time. This Agreement shall be
governed by the laws of the State of New York. Specified times of the day refer
to New York City time.
Section 17. Counterparts. This Agreement may be executed in
one or more counterparts, and when a counterpart has been executed by each
party, all such counterparts taken together shall constitute one and the same
agreement.
41
40
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us a counterpart hereof, whereupon this
instrument will become a binding agreement between the Company, the Selling
Stockholders and the several U.S. Underwriters in accordance with its terms.
Very truly yours,
XXXX-XXXXXX AUTOMOTIVE, INC.
By:__________________________________
Name:
Title:
ML EMPLOYEES LBO PARTNERSHIP XXXXXXX XXXXX CAPITAL
NO. I, L.P. APPRECIATION PARTNERSHIP
NO. VIII, L.P.
By: ML Employees LBO By: Xxxxxxx Xxxxx LBO
Managers, Inc., Partners No. II, L.P.,
as General Partner as General Partner
By:_______________________________ By:__________________________________
Name: Name:
Title: Title:
XXXXXXX XXXXX KECALP L.P. 1986 XXXXXXX XXXXX KECALP L.P. 1987
By: KECALP Inc., By: KECALP Inc.,
as General Partner as General Partner
By:_______________________________ By:__________________________________
Name: Name:
Title: Title:
42
41
ML OFFSHORE LBO PARTNERSHIP MERCHANT BANKING L.P. NO. 1
NO. VIII
By: Xxxxxxx Xxxxx MBP Inc.,
By: Xxxxxxx Xxxxx LBO as General Partner
Partners No. II, L.P.,
as Investment General Partner By:__________________________________
Name:
By: Xxxxxxx Xxxxx Capital Title:
Partners, Inc.,
as General Partner
ML VENTURE PARTNERS II, L.P.
By:_______________________________
Name: By: MLVP II CO., L.P.,
Title: as General Partner
By: Xxxxxxx Xxxxx Venture Capital
Inc., as General Partner
ML IBK POSITIONS, INC.
By:__________________________________
By:_______________________________ Name:
Name: Title:
Title:
43
42
Confirmed and accepted as of
the date first above written:
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
XXXXXX BROTHERS INC.
XXXXXX XXXXXXX & CO. INCORPORATED
By: Xxxxxxx Xxxxx & Co.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
By___________________________________________
Name:
Title:
Investment Banking Group
For themselves and as U.S. Representatives of the
other U.S. Underwriters named in Schedule B.
44
SCHEDULE A
NUMBER OF NUMBER OF
INITIAL U.S. U.S. OPTION
SELLING STOCKHOLDER SHARES TO BE SOLD SHARES TO BE SOLD
------------------- ----------------- -----------------
Xxxxxxx Xxxxx KECALP L.P. 1986
Xxxxxxx Xxxxx KECALP L.P. 1987
Merchant Banking L.P. No. I
ML Venture Partners II, X.X.
Xxxxxxx Xxxxx Capital Appreciation
Partnership No. VIII, L.P.
ML Offshore LBO Partnership No. VIII
ML Employees LBO Partnership No. I, L.P.
ML IBK Positions, Inc.
-------- -------
Total ======== =======
45
SCHEDULE B
NUMBER OF
INITIAL U.S. SHARES
U.S. UNDERWRITER TO BE PURCHASED
---------------- ---------------
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated .....................................
Xxxxxx Brothers Inc...........................................
Xxxxxx Xxxxxxx & Co. Incorporated.............................
--------------
Total ==============
46
SCHEDULE C
ATTORNEY SELLING STOCKHOLDER
-------- -------------------
Xxxxxx X. Tu, Esq. - ML IBK Positions, Inc.
- Xxxxxxx Xxxxx Capital Appreciation Partnership
No. VIII, L.P.
- ML Employees LBO Partnership No. I, L.P.
- ML Venture Partners II, L.P.
Xxxxxxxx X. Xxxxxx, Esq. - Xxxxxxx Xxxxx KECALP L.P. 1986
- Xxxxxxx Xxxxx KECALP L.P. 1987
- Merchant Banking L.P. No. I
Xxxx Xxxxxxxx, Esq. - ML Offshore LBO Partnership No. VIII
47
Exhibit A
XXXX-XXXXXX AUTOMOTIVE, INC.
(a Delaware corporation)
[3,574,000] Shares of Common Stock
U.S. PRICE DETERMINATION AGREEMENT
February __, 1997
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
XXXXXX BROTHERS INC.
XXXXXX XXXXXXX & CO. INCORPORATED
As Representatives of the several U.S. Underwriters
x/x Xxxxxxx Xxxxx & Xx.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxxxxxx Xxxxx World Headquarters
Xxxxx Xxxxx
Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
Reference is made to the U.S. Purchase Agreement dated
February __, 1997 (the "U.S. Purchase Agreement") among Xxxx-Xxxxxx Automotive,
Inc. (the "Company"), the Selling Stockholders named in Schedule A thereto (the
"Selling Stockholders") and the several U.S. Underwriters named in Schedule B
thereto or hereto (the "U.S. Underwriters"), for whom Xxxxxxx Xxxxx & Co.,
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated, Xxxxxx Brothers Inc. and
Xxxxxx Xxxxxxx & Co. Incorporated are acting as representatives (the "U.S.
Representatives"). The U.S. Purchase Agreement provides for the purchase by the
U.S. Underwriters from the Selling Stockholders, subject to the terms and
conditions set forth therein, of an aggregate of 3,600,000 shares (the
"Initial U.S. Shares") of the Company's common stock, par value $.01 per share.
This Agreement is the U.S. Price Determination Agreement referred to in the U.S.
Purchase Agreement. Terms not defined herein are used herein as defined in the
U.S. Purchase Agreement.
48
A-2
Pursuant to Section 2 of the U.S. Purchase Agreement, the
Company and the Selling Stockholders agree with the U.S. Representatives as
follows:
1. The price to the public per share for the Initial U.S.
Shares shall be $_______.
2. The purchase price per share for the Initial U.S. Shares to
be paid by the several U.S. Underwriters shall be $_____, representing
an amount equal to the public offering price set forth above, less
$____ per share.
The Company represents and warrants to each of the U.S.
Underwriters that the representations and warranties of the Company set forth in
Section 1(a) of the U.S. Purchase Agreement are accurate as though expressly
made at and as of the date hereof.
Additionally, if the Company elects to rely on Rule 462(b),
the Company convenants to each of the U.S. Underwriters that:
(a) the Company will file a Rule 462(b) Registration Statement in
compliance with, and that is effective upon filing pursuant
to, Rule 462(b) prior to the time confirmations are sent or
given, as specified in Rule 462(b) of the 1933 Act; and
(b) the Company will give irrevocable instructions for
transmission of the applicable filing fee in connection with
the filing of the Rule 462(b) Registration Statement, in
compliance with Rule 111 of the 1933 Act Regulations or the
Commission will have received payment of such filing fee upon
filing of the Rule 462(b) Registration Statement.
Each Selling Stockholder represents and warrants to each of
the U.S. Underwriters that the representations and warranties of such Selling
Stockholder set forth in Section 1(b) of the U.S. Purchase Agreement are
accurate as though expressly made at and as of the date hereof.
As contemplated by Section 2 of the U.S. Purchase Agreement,
attached as Schedule A is a completed list of the Selling Stockholders and
attached as Schedule B is a complete list of the several U.S. Underwriters,
which shall be a part of this Agreement and the U.S. Purchase Agreement.
This Agreement shall be governed by the laws of the State of
New York.
49
A-3
If the foregoing is in accordance with the understanding of
the U.S. Representatives of the agreement between the U.S. Underwriters, the
Company and the Selling Stockholders, please sign and return to the Company a
counterpart hereof, whereupon this instrument, along with all counterparts and
together with the U.S. Purchase Agreement, shall be a binding agreement between
the U.S. Underwriters, the Company and the Selling Stockholders in accordance
with its terms and the terms of the U.S. Purchase Agreement.
Very truly yours,
XXXX-XXXXXX AUTOMOTIVE, INC.
By:______________________________
Name:
Title:
ML EMPLOYEES LBO PARTNERSHIP XXXXXXX XXXXX CAPITAL
NO. I, L.P. APPRECIATION PARTNERSHIP
NO. VIII, L.P.
By: ML Employees LBO By: Xxxxxxx Xxxxx LBO
Managers, Inc., Partners No. II, L.P.,
as General Partner as General Partner
By:_______________________________ By:___________________________________
Name: Name:
Title: Title:
XXXXXXX XXXXX KECALP L.P. 1986 XXXXXXX XXXXX KECALP L.P. 1987
By: KECALP Inc., By: KECALP Inc.,
as General Partner as General Partner
By:_______________________________ By:___________________________________
Name: Name: Xxxxx X. Xxxxxx
Title: Title: Xxxx-Xxxxxxxxx
00
X-0
XX XXXXXXXX XXX PARTNERSHIP MERCHANT BANKING L.P. NO. 1
NO. VIII
By: Xxxxxxx Xxxxx MBP Inc.,
By: Xxxxxxx Xxxxx LBO as General Partner
Partners No. II, L.P.,
as Investment General Partner By:___________________________________
Name:
By: Xxxxxxx Xxxxx Capital Title:
Partners, Inc.,
as General Partner
ML VENTURE PARTNERS II, L.P.
By:_______________________________
Name: By: MLVP II CO., L.P.,
Title: as General Partner
By: Xxxxxxx Xxxxx Venture Capital
Inc., as General Partner
ML IBK POSITIONS, INC.
By:___________________________________
By:_______________________________ Name:
Name: Title:
Title:
51
A-5
Confirmed and accepted as of
the date first above written:
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
XXXXXX BROTHERS INC.
XXXXXX XXXXXXX & CO. INCORPORATED
By: Xxxxxxx Xxxxx & Co.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
By__________________________________________
Name:
Title:
Investment Banking Group
For themselves and as U.S. Representatives of the
other U.S. Underwriters named in Schedule B.
52
Exhibit B
SUBSIDIARIES
Percent of
Capital Stock
Beneficially Owned by
Xxxx-Xxxxxx Automotive,
Name of Subsidiary Inc. or the Subsidiaries
------------------ ------------------------
Xxxx-Xxxxxx Automotive Powertrain Systems Corporation 100
Xxxx-Xxxxxx Automotive South Asia Corporation 100
Xxxxx-Xxxxxx Pvt., Ltd. 60
Huazhong Warner Transmission Company 60
Xxxx-Xxxxxx Automotive Powertrain
Service Center Corporation 100
Xxxx-Xxxxxx Automotive Powdered Metals Corporation 100
Xxxx-Xxxxxx Automotive Diversified Transmission
Products Corporation 100
Xxxx-Xxxxxx Automotive Air/Fluid Systems Corporation 100
Xxxx-Xxxxxx Automotive Air/Fluid Systems
Corporation of Michigan 100
Xxxx-Xxxxxx Automotive Control Systems Holding Corporation 100
Xxxx-Xxxxxx Automotive Control Systems Europe S.A.S. 90
Societe de l'Usine de la Marque 100
Xxxx-Xxxxxx Automotive Xxxxx TEC Corporation 100
Xxxx-Xxxxxx Automotive (Canada) Ltd. 100
Xxxx-Xxxxxx Automotive Japan Corporation 100
Xxxx-Xxxxxx Automotive K.K. 100
Xxxx-Xxxxxx Automotive Taiwan Co., Ltd. 100
B.W. Componentes Mexicanos de Transmissiones S.A. de C.V. 86
Xxxxx TEC Europe, Sp.A 100
Xxxx-Xxxxxx Automotive Foreign Sales Corporation 100
53
B-2
Xxxx-Xxxxxx Automotive Automatic Transmission Systems Corporation 100
Xxxx-Xxxxxx Automotive Europe Corporation 100
Xxxx-Xxxxxx Automotive GmbH 100
Borg & Xxxx Torque Systems, Inc. 100
Xxxx-Xxxxxx Automotive-NW Corporation 100
Xxxx-Xxxxxx Automotive Korea, Inc. 60
Creon Insurance Agency, Ltd. 100
Creon Trustees, Ltd. 100
