REGAL-BELOIT CORPORATION
3,000,000 Shares*
Common Stock
UNDERWRITING AGREEMENT
March __, 2002
XXXXXX X. XXXXX & CO. INCORPORATED
ABN AMRO ROTHSCHILD LLC
CIBC WORLD MARKETS CORP.
As Representatives of the Several Underwriters
Identified in Schedule A Annexed Hereto
c/o Xxxxxx X. Xxxxx & Co. Incorporated
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
SECTION 1. Introductory. Regal-Beloit Corporation, a Wisconsin
corporation (the "Company"), proposes to issue and sell 3,000,000 shares of
authorized but unissued shares (the "Firm Shares") of its authorized but
unissued common stock, $.01 par value per share (the "Common Stock"), to the
several underwriters identified in Annex A annexed hereto (the "Underwriters"),
who are acting severally and not jointly. In addition, the Company has agreed to
grant to the Underwriters an option to purchase up to 450,000 additional shares
of Common Stock (the "Optional Shares") as provided in Section 5 hereof. The
Firm Shares and, to the extent such option is exercised, the Optional Shares are
hereinafter collectively referred to as the "Shares."
You, as representatives of the several Underwriters (the
"Representatives"), have advised the Company that the Underwriters propose to
make a public offering of their respective portions of the Shares as soon
hereafter as in your judgment is advisable and that the public offering price of
the Shares initially will be $_________ per share.
The Company hereby confirms its agreement with the Underwriters as
follows:
SECTION 2. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, the several Underwriters, and shall
be deemed to represent and warrant to the several Underwriters on each Closing
Date (as hereinafter defined), that:
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* Plus an option to acquire up to 450,000 additional shares of Common Stock
from the Company to cover over-allotments.
(a) Each of the Company and its subsidiaries (individually, a
"Subsidiary" and collectively, the "Subsidiaries") has been duly
incorporated and is validly existing as a corporation or limited
liability company in active status or good standing under the laws of
its jurisdiction of organization, with full corporate power and
authority to own, lease and operate its properties and to conduct its
business as presently conducted and as described in the Prospectus (as
hereinafter defined) and the Registration Statement (as hereinafter
defined); each of the Company and the Subsidiaries is duly registered
and qualified to do business as a foreign corporation under the laws
of, and is in good standing as such in, each jurisdiction in which such
registration or qualification is required, except where the failure to
so register or qualify would not have a material adverse effect on the
condition (financial or other), business, property, net worth or
results of operations of the Company and the Subsidiaries, taken as a
whole ("Material Adverse Effect"). Annexed hereto as Annex B is a
complete and correct list of all of the Subsidiaries, including their
jurisdiction of organization and direct equity owners. Annex B also
identifies each Subsidiary that is a "Significant Subsidiary" for
purposes hereof. Complete and correct copies of the articles of
incorporation and by-laws (or their equivalent), as amended or restated
("Articles of Incorporation" and "By-laws," respectively), of the
Company and each Significant Subsidiary as in effect on the date hereof
have been delivered to the Representatives, and no changes thereto will
be made on or subsequent to the date hereof and prior to each Closing
Date.
(b) The shares of Common Stock issued and outstanding
immediately prior to the issuance and sale of the Shares to be sold by
the Company hereunder as set forth in the Prospectus have been duly
authorized and validly issued, are fully paid and nonassessable (except
as otherwise provided in Section 180.0622(2)(b) of the Wisconsin
Business Corporation Law, as judicially interpreted), and conform to
the description thereof contained in the Prospectus and the
Registration Statement. There are no preemptive, preferential or,
except as described in the Prospectus, other rights to subscribe for or
purchase any shares of Common Stock (including the Shares), and no
shares of Common Stock have been issued in violation of such rights.
The Shares to be issued and sold by the Company to the Underwriters
have been duly authorized and, when issued, delivered and paid for
pursuant to this Agreement, will be validly issued, fully paid and
nonassessable (except as otherwise provided in Section 180.0622(2)(b)
of the Wisconsin Business Corporation Law), and will conform to the
description thereof contained in the Prospectus and the Registration
Statement. The delivery of certificates for the Shares to be issued and
sold by the Company hereunder and payment therefor pursuant to the
terms of this Agreement will pass valid title to such Shares to the
Underwriters, free and clear of any lien, claim, encumbrance or defect
in title. Except as described in the Prospectus, there are no
outstanding options, warrants or other rights of any description,
contractual or otherwise, entitling any person to be issued any class
of security by the Company or any Significant Subsidiary, and there are
no holders of Common Stock or other securities of the Company or any
Significant Subsidiary, or of securities that are convertible or
exchangeable into Common Stock or other
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securities of the Company or any Significant Subsidiary, that have
rights to the registration of such Common Stock or securities under the
Securities Act of 1933, as amended, and the regulations thereunder
(together, the "Act"), or the securities laws or regulations of any of
the states of the United States or the province of Ontario, Canada (the
"Blue Sky Laws").
(c) Except for the Subsidiaries, and as otherwise set forth in
the Prospectus or on Annex B, the Company has no subsidiaries and does
not own any equity interest of 5% or more in or control, directly or
indirectly, any other corporation, limited liability company,
partnership, joint venture, association, trust or other business
organization that is material to the Company and its Subsidiaries on a
consolidated basis. Except as set forth in the Prospectus or on Annex B
and except for director qualifying shares (if any), the Company owns
directly all of the issued and outstanding capital stock of each
Subsidiary, free and clear of any and all liens, claims, encumbrances
or security interests, and all such capital stock has been duly
authorized and validly issued and is fully paid and nonassessable
(except, to the extent applicable, as otherwise provided in Section
180.0622(2)(b) of the Wisconsin Business Corporation Law, as judicially
interpreted). There are no outstanding options, warrants or other
rights of any description, contractual or otherwise, entitling any
person to subscribe for or purchase any shares of capital stock of any
Subsidiary.
(d) The Company has full corporate power and authority to
enter into and perform this Agreement, and the execution and delivery
by the Company of this Agreement and the performance by the Company of
its obligations hereunder and the consummation of the transactions
described herein, have been duly authorized with respect to the Company
by all necessary corporate action and will not: (i) violate any
provision of the Articles of Incorporation or Bylaws of the Company or
any Significant Subsidiary; (ii) violate in any material respect any
provisions of, or result in the breach, modification or termination of,
or constitute a default under, any provision of any material agreement,
lease, franchise, license, indenture, permit, mortgage, deed of trust,
evidence of indebtedness or other instrument to which the Company or
any Significant Subsidiary is a party or by which the Company or any
Significant Subsidiary, or any property owned or leased by the Company
or any Subsidiary, may be bound or affected; (iii) violate in any
material respect any statute, ordinance, rule or regulation applicable
to the Company or any Significant Subsidiary, or order or decree of any
court, regulatory or governmental body, arbitrator, administrative
agency or instrumentality of the United States or other country or
jurisdiction having jurisdiction over the Company or any Significant
Subsidiary; or (iv) result in the creation or imposition of any
material lien, charge or encumbrance upon any property or assets of the
Company or any Subsidiary. No consent, approval, authorization or other
order of any court, regulatory or governmental body, arbitrator,
administrative agency or instrumentality of the United States or other
country or jurisdiction is required for the execution and delivery of
this Agreement by the Company, the performance of
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its obligations hereunder or the consummation of the transactions
contemplated hereby, except for compliance with the Act, the Securities
Exchange Act of 1934, as amended, and the regulations thereunder
(together, the "Exchange Act"), the Blue Sky Laws applicable to the
public offering of the Shares by the several Underwriters and the
clearance of such offering and the underwriting arrangements evidenced
hereby with the National Association of Securities Dealers, Inc. (the
"NASD"). This Agreement has been duly executed and delivered by and on
behalf of the Company and is a valid and binding agreement of the
Company enforceable against the Company in accordance with its terms.
(e) A registration statement on Form S-3 (Reg. No. 333-81968)
with respect to the Shares, including the related preliminary form of
prospectus, has been prepared by the Company in conformity with the
requirements of the Act and has been filed with the Securities and
Exchange Commission (the "Commission"). The conditions for use of Form
S-3, set forth in the General Instructions thereto, have been
satisfied. Such registration statement, as finally amended and revised
at the time such registration statement was or is declared effective by
the Commission (including the information contained in the form of
final prospectus, if any, filed with the Commission pursuant to Rule
424(b) and Rule 430A under the Act and deemed to be part of the
registration statement if the registration statement has been declared
effective pursuant to Rule 430A(b)) and as thereafter amended by
post-effective amendment, if any, together with any registration
statement and amendment filed pursuant to Rule 462 under the Act, is
herein referred to as the "Registration Statement." The related final
prospectus in the form first filed with the Commission pursuant to Rule
424(b) or, if no such filing is required, as included in the
Registration Statement, or any supplement thereto, is herein referred
to as the "Prospectus." The prospectus subject to completion in the
form included in the Registration Statement at the time of the initial
filing of the Registration Statement with the Commission, and each such
prospectus as amended from time to time until the date of the
Prospectus, is referred to herein as the "Preliminary Prospectus."
Reference made herein to each Preliminary Prospectus or the Prospectus,
as amended or supplemented, shall include all documents and information
incorporated by reference therein and shall be deemed to refer to and
include any documents filed after the date of such Preliminary
Prospectus or Prospectus, as the case may be, and so incorporated by
reference, under the Exchange Act. The Company has prepared and filed
such amendments to the Registration Statement since its initial filing
with the Commission, if any, as may have been required to the date
hereof, and will file such additional amendments thereto as may
hereafter be required. There have been delivered to the Representatives
one signed copy of the Registration Statement and each amendment
thereto, if any, together with a copy of each exhibit filed therewith,
and such number of conformed copies for each of the Underwriters of the
Registration Statement and each amendment thereto, if any (but without
exhibits), and of each Preliminary Prospectus and of the Prospectus as
the Representatives have reasonably requested.
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(f) Neither the Commission nor any state securities commission
has issued any order preventing or suspending the use of any
Preliminary Prospectus, nor, to the knowledge of the Company, have any
proceedings for that purpose been initiated or threatened. As of the
effective date of the Registration Statement, and at all times
subsequent thereto up to each Closing Date, the Registration Statement
and the Prospectus conformed or will conform in all material respects
to the requirements of the Act, and neither the Registration Statement
nor the Prospectus included or will include any untrue statement of a
material fact or omitted or will omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading. The representations and warranties of the Company in this
subsection shall not apply to statements in or omissions from the
Registration Statement or Prospectus made in reliance upon and in
conformity with information furnished by the Representatives to the
Company pursuant to Section 4 hereof. Neither the Company, nor any
person that controls, is controlled by (including the Subsidiaries) or
is under common control with the Company, has distributed or will
distribute prior to each Closing Date any offering material in
connection with the offering and sale of the Shares other than a
Preliminary Prospectus, the Prospectus, the Registration Statement or
other materials permitted by the Act and provided to the
Representatives.
(g) The documents that are incorporated by reference in the
Prospectus or the Registration Statement or from which information is
so incorporated by reference, when they became effective or were filed
with the Commission, as the case may be, complied in all material
respects with the requirements of the Act or the Exchange Act, as
applicable, and any document so filed and incorporated by reference
subsequent to the effective date of the Registration Statement shall,
when it is filed with the Commission, comply in all material respects
with the requirements of the Act and the Exchange Act, as applicable,
and when read together with the other information included in the
Prospectus, at the time the Registration Statement became effective, at
the time the Prospectus was issued, and at each Closing Date, did not
or will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which
they were made, not misleading.
(h) Xxxxxx Xxxxxxxx LLP, which has expressed its opinion with
respect to the consolidated financial statements and schedules of the
Company filed with the Commission or incorporated by reference and
included as a part of the Prospectus or the Registration Statement, are
independent accountants with respect to the Company and the
Subsidiaries as required by the Act.
(i) The consolidated financial statements of the Company and
the related notes thereto included or incorporated by reference in the
Prospectus and the Registration Statement present fairly, in all
material respects, the financial position, results of operations and
cash flows of the Company as of their respective dates or
5
for the respective periods covered thereby, all in conformity with
generally accepted accounting principles consistently applied
throughout the periods involved (except as otherwise noted therein).
The financial statement schedules, if any, incorporated by reference
into the Registration Statement present fairly, in all material
respects, the information required to be stated therein on a basis
consistent with the consolidated financial statements of the Company
contained therein. The Company had an outstanding capitalization as set
forth in the Prospectus in the column entitled "Actual" under the
caption "Capitalization" as of the date indicated therein, and there
has been no change therein since such date, except for subsequent
issuances, if any, pursuant to this Agreement or pursuant to the
exercise of stock options or defined contribution or benefit plans
outstanding on the date hereof. The financial and statistical
information and data relating to the Company in the Prospectus and the
Registration Statement are accurately presented in all material
respects and prepared on a basis consistent with the audited
consolidated financial statements and books and records of the Company.
The consolidated financial statements and schedules of the Company and
the related notes thereto, included in the Prospectus or the
Registration Statement are the only such financial statements and
schedules required under the Act to be set forth therein.
(j) Neither the Company nor any Significant Subsidiary is, nor
with the giving of notice or passage of time or both, would be, in
violation or in breach of: (i) its respective Articles of Incorporation
or By-laws; (ii) any statute, ordinance, order, rule or regulation
applicable to the Company or such Significant Subsidiary; (iii) any
order or decree of any court, regulatory body, arbitrator,
administrative agency or other instrumentality of the United States or
other country or jurisdiction having jurisdiction over the Company or
such Significant Subsidiary; (iv) any provision of any agreement,
lease, franchise, license, indenture, permit, mortgage, deed of trust,
evidence of indebtedness or other instrument to which the Company or
such Significant Subsidiary is a party or by which any property owned
or leased by the Company or such Significant Subsidiary is bound or
affected, except, in each case above, for such violations or breaches
as do not or would not have a Material Adverse Effect. Neither the
Company nor any Significant Subsidiary has received notice of any
violation of any applicable statute, ordinance, order, rule or
regulation applicable to the Company or any Significant Subsidiary, the
consequence of which would have a Material Adverse Effect. Except where
it would not have a Material Adverse Effect, each of the Company and
the Significant Subsidiaries has obtained and holds, and is in
compliance with, all permits, certificates, licenses, approvals,
registrations, franchises, consents and authorizations of governmental
or regulatory authorities required under all laws, rules and
regulations in connection with their businesses (hereinafter "permit"
or "permits"), and all of such permits are in full force and effect;
and, except where it would not have a Material Adverse Effect, each of
the Company and the Significant Subsidiaries has fulfilled and
performed its obligations with respect to each such permit, and no
event has occurred which would result in, or after notice or lapse of
time would result in, revocation or termination of any such permit or
result in any other impairment of the rights of the
6
holder of such permit. Neither the Company nor any Subsidiary is or has
been (by virtue of any occurrence) in violation of any applicable
foreign, federal, state, municipal or local statutes, laws, ordinances,
rules, regulations or orders (including those relating to environmental
protection, occupational safety and health and equal employment
practices) heretofore or currently in effect, the consequence of which
would have a Material Adverse Effect.
(k) There are no legal or governmental proceedings or
investigations pending or, to the knowledge of the Company, threatened
to which the Company or any Subsidiary is or may be a party or of which
any property owned or leased by the Company or any Subsidiary is or may
be the subject that are required to be described in the Registration
Statement or the Prospectus but which are not so described, or which
question the validity of this Agreement or any action taken or to be
taken pursuant hereto. Except as described in the Registration
Statement or the Prospectus, neither the Company nor any Subsidiary:
(i) is in violation of any statute, ordinance, rule or regulation, or
any decision, order or decree of any court, regulatory body,
arbitrator, administrative agency or other instrumentality of the
United States or other country or jurisdiction having jurisdiction over
the Company or such Subsidiary relating to the use, disposal or release
of hazardous or toxic substances or relating to the protection or
restoration of the environmental or human exposure to hazardous or
toxic substances (collectively, the "environmental laws"); (ii) owns or
operates any real property contaminated with any substance that is
subject to any environmental laws; (iii) is liable for any off-site
disposal or contamination pursuant to any environmental laws; or (iv)
is subject to any claim relating to any environmental laws, which
violation, contamination, liability or claim contemplated by
subparagraphs (i), (ii), (iii) or (iv) above would have a Material
Adverse Effect.
(l) There is no transaction, relationship, obligation,
agreement or other document required to be described in the
Registration Statement or the Prospectus or to be filed or deemed to be
filed as an exhibit to the Registration Statement by the Act, which has
not been described or filed as required. All such contracts or
agreements to which the Company or any Subsidiary is a party have been
duly authorized, executed and delivered by the Company or such
Subsidiary, constitute valid and binding agreements of the Company or
such Subsidiary, and are enforceable by and against the Company or such
Subsidiary, in accordance with the respective terms thereof.
(m) The Company or a Subsidiary has marketable title to all
real property and good and valid title to all other property and assets
reflected as owned by the Company or such Subsidiary in the Company's
consolidated financial statements incorporated by reference into the
Registration Statement (or elsewhere in the Registration Statement or
the Prospectus), free and clear of all liens, claims, mortgages,
security interests or other encumbrance of any kind or nature
whatsoever except (i) those, if any, reflected in such financial
statements (or
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elsewhere in the Registration Statement or the Prospectus) or (ii)
those which do not, individually or in the aggregate, materially affect
the value of such property or interfere with the use of made or
proposed to be made of such property by the Company of its
Subsidiaries. All material items of property (real and personal) held
or used by the Company or a Subsidiary under leases, licenses,
franchises or other agreements is held by the Company or such
Subsidiary under valid and binding leases, franchises, licenses or
other agreements.
(n) Neither the Company nor any person that controls, is
controlled by (including the Subsidiaries) or is under common control
with the Company has taken or will take, directly or indirectly, any
action designed to cause or result in, or which constituted, or which
could cause or result in, stabilization or manipulation, under the
Exchange Act or otherwise, of the price of any security of the Company
to facilitate the sale or resale of the Common Stock.
(o) Except as described in the Registration Statement or the
Prospectus, since the respective dates as of which information is given
in the Registration Statement or the Prospectus and prior to each
Closing Date: (i) neither the Company nor any Subsidiary has or will
have incurred any liability or obligation, direct or contingent, or
entered into any transaction, that is material to the Company, except
in the ordinary course of business; (ii) the Company has not and will
not have paid or declared any dividend or other distribution with
respect to its capital stock (other than its regular quarterly
dividend), and neither the Company nor any Subsidiary is or will be
delinquent in the payment of principal or interest on any material
outstanding debt obligation; and (iii) there has not been and will not
have been any change in the terms of the capital stock, any material
change in the indebtedness of the Company or any Subsidiary, or any
change or development involving or which could be expected to involve a
Material Adverse Effect, whether or not arising from transactions in
the ordinary course of business.
(p) The Company or a Subsidiary owns or possesses adequate
rights to use all material patents, patent applications, trademarks,
service marks, trade names, trademark registrations, service xxxx
registrations, copyrights and licenses presently used in or necessary
for the conduct of its business or ownership of its properties, and
neither the Company nor any Subsidiary has violated or infringed upon
the rights of others, or received any notice of conflict with the
asserted rights of others, in respect thereof, except for such
violations or infringements as have not or would not have a Material
Adverse Effect.
(q) The Company and the Subsidiaries have in place and
effective such policies of insurance, with limits of liability in such
amounts, as are prudent and customary in the businesses in which they
are engaged.
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(r) No material labor dispute with, or material grievances by,
the employees of the Company or any Significant Subsidiary is pending
or, to the knowledge of the Company, is imminent. Since the initial
filing of the Registration Statement, there has been no change in the
relationship of the Company or any Subsidiary with any of its principal
suppliers, manufacturers, contractors or customers resulting in or that
would be reasonably likely to result in a Material Adverse Effect.
(s) Neither the Company nor any Subsidiary is an "investment
company," an "affiliated person" of, or "promoter" or "principal
underwriter" for, an "investment company," as such terms are defined in
the Investment Company Act of 1940, as amended.
(t) All federal, state and local tax returns required to be
filed by or on behalf of the Company or any Significant Subsidiary have
been filed (or are the subject of valid extension) with the appropriate
federal, state and local authorities, and all such tax returns, as
filed, are accurate in all material respects; and the Company or any
Significant Subsidiary has paid all taxes required to be paid by it and
any other assessment, fine or penalty levied against it, to the extent
that any of the foregoing is due and payable, except for any such tax,
assessment, fine or penalty that is currently being contested in good
faith or that would not have a Material Adverse Effect.
(u) The Company and each Significant Subsidiary maintain a
system of internal accounting controls sufficient to provide reasonable
assurances that: (i) transactions are executed in accordance with
management's general or specific authorizations; (ii) transactions are
recorded as necessary to permit preparation of consolidated financial
statements in conformity with generally accepted accounting principals
and to maintain accountability for assets; (iii) access to assets is
permitted only in accordance with management's general or specific
authorizations; and (iv) the recorded accountability for assets is
compared with existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
(v) Other than as described in the Prospectus, none of the
Company, any Subsidiary, any officer or director of the Company or any
Subsidiary, or any person who owns, of record or beneficially, any
class of securities issued by the Company is: (i) an officer, director
or partner of any brokerage firm, broker or dealer that is a member of
the NASD ("NASD member"); or (ii) directly or indirectly, a "person
associated with" an NASD member or an "affiliate" of an NASD member, as
such terms are used in the NASD Rules or By-laws. In addition, neither
the Company nor any Subsidiary has issued or transferred any Common
Stock, warrants, options or other securities, or any other items of
value, to any of the Underwriters or any "related person" of any
Underwriter, as such terms is used in the NASD Rules, expect as
provided in this Agreement.
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(w) The Common Stock has been registered pursuant to Section
12(b) of the Exchange Act. The Common Stock is authorized for listing
on the American Stock Exchange, and the Shares will be authorized for
listing on the American Stock Exchange, subject only to official notice
of issuance.
(x) All offers and sales of the securities of and by the
Company prior to the date hereof were made in compliance in all
material respects with the Act and all other applicable state and
federal laws or regulations.
(y) The Company has obtained for the benefit of the
Underwriters the agreement, substantially in the form annexed hereto as
Annex C (each, a "Lock-Up Agreement"), enforceable by Xxxxxx X. Xxxxx &
Co. Incorporated ("Baird"), of each of the executive officers and
directors of the Company listed on Annex D annexed hereto, that, for a
period of 90 days after the date of the Prospectus, such persons will
not, without the prior written consent of Baird or except as permitted
in the Lock-Up Agreement, directly or indirectly, offer, sell,
transfer, or pledge, contract to sell, transfer or pledge, or cause or
in any way permit to be sold, transferred, pledged, or otherwise
disposed of, any: (i) shares of Common Stock; (ii) rights to purchase
shares of Common Stock (including, without limitation, shares of Common
Stock that may be deemed to be beneficially owned by any such
shareholder in accordance with the applicable regulations of the
Commission and shares of Common Stock that may be issued upon the
exercise of a stock option, warrant or other convertible security); or
(iii) securities that are convertible or exchangeable into shares of
Common Stock. As described more fully, and subject to the exceptions,
in the Lock-Up Agreements, the Company hereby represents and warrants
that it will not release or purport to release any person from any
Lock-Up Agreement without the prior written consent of Baird.
A certificate signed by any officer of the Company and delivered to the
Representatives or to counsel for the Underwriters shall be deemed a
representation and warranty by the Company to the Underwriters as to the matters
covered thereby. A certificate delivered by the Company to its counsel for
purposes of enabling such counsel to render the opinion referred to in Section
8(d) will also be furnished to the Representatives and counsel for the
Underwriters and shall be deemed to be additional representations and warranties
to the Underwriters by the Company as to the matters covered thereby.
SECTION 3. Representation of Underwriters. The Representatives will act
as the representatives for the several Underwriters in connection with the
public offering of the Shares, and any action under or in respect of this
Agreement taken by the Representatives will be binding upon all the
Underwriters.
SECTION 4. Information Furnished by the Underwriters. The information
set forth (i) in the second paragraph of the Table of Contents page of the
Prospectus, (ii) in the table of participating Underwriters and the concession
and reallowance amounts appearing under the caption "Underwriting" in the
Prospectus, and (iii) in the last two paragraphs ap-
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pearing under the caption "Underwriting" in the Prospectus constitutes all of
the information furnished to the Company by and on behalf of the Underwriters
for use in connection with the preparation of the Registration Statement and the
Prospectus, as such information is referred to in this Agreement.
SECTION 5. Purchase, Sale and Delivery of Shares.
(a) On the basis of the representations, warranties and
agreements herein contained, and subject to the terms and conditions
herein set forth, the Company agrees to sell to the Underwriters
identified in Annex A hereto 3,000,000 Firm Shares, and each of the
Underwriters agrees, severally and not jointly, to purchase from the
Company the number of Firm Shares set forth opposite its name on Annex
A at the price per share of $__________.
(b) On the First Closing Date (as hereinafter defined), the
Company will deliver to the Representatives, at the offices of Xxxxxx
X. Xxxxx & Co. Incorporated, 000 Xxxx Xxxxxxxxx Xxxxxx, Xxxxxxxxx,
Xxxxxxxxx 00000, or through the facilities of The Depository Trust
Company, for the accounts of the several Underwriters, certificates
representing the Firm Shares to be sold by them against payment in
Milwaukee, Wisconsin of the purchase price therefor by wire transfer of
immediately available funds payable to the order of the Company with
respect to the Firm Shares being sold by the Company. As referred to in
this Agreement, the "First Closing Date" shall be on the fourth (or
third, if the price set forth in Section 5(a) above is determined
before 3:30 p.m., Milwaukee, Wisconsin time on the date of this
Agreement) full business day after the date of the Prospectus, at 9:00
a.m., Milwaukee, Wisconsin time, or at such other date or time not
later than ten full business days after the date of the Prospectus as
the Representatives and the Company may agree. The certificates for the
Firm Shares to be so delivered will be in denominations and registered
in such names as the Representatives request by written notice to the
Company prior to the First Closing Date, and such certificates will be
made available for checking and packaging at 9:00 a.m., Milwaukee,
Wisconsin time on the first full business day preceding the First
Closing Date at a location to be designated by the Representatives.
(c) In addition, on the basis of the representations,
warranties and agreements herein contained, and subject to the terms
and conditions herein set forth, the Company hereby agrees to issue and
sell to the Underwriters, and the Underwriters, severally and not
jointly, shall have the right at any time within 30 days after the date
of the Prospectus to purchase up to 450,000 Optional Shares from the
Company at the purchase price per share to be paid for the Firm Shares,
for use solely in covering any over-allotments made by the Underwriters
in the sale and distribution of the Firm Shares. The option granted
hereunder may be exercised in whole or in part at any time (but not
more than once) upon written notice by the Representatives to the
Company within 30 days after the date of the Prospectus setting forth
the aggregate number of Optional Shares to be purchased by the
Underwriters and sold
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by the Company, the names and denominations in which the certificates
for such shares are to be registered and the date and place at which
such certificates will be delivered. Such date of delivery (the "Second
Closing Date") shall be determined by the Representatives, provided
that the Second Closing Date, which may be the same as the First
Closing Date, shall not be earlier than the First Closing Date and, if
after the First Closing Date, shall not be earlier than three nor later
than ten full business days after delivery of such notice to exercise.
The number of Optional Shares to be sold by the Company pursuant to
such notice shall equal that number of full Optional Shares which (as
nearly as practicable in full shares as determined by the
Representatives) bears the same proportion to the number of Optional
Shares to be purchased by the Underwriters as the number of Firm Shares
to be sold by the Company under this Agreement bears to the total
number of Firm Shares. Certificates for the Optional Shares will be
made available for checking and packaging at 9:00 a.m., Milwaukee,
Wisconsin time, on the first full business day preceding the Second
Closing Date at a location to be designated by the Representatives. The
manner of payment for and delivery of (including the denominations of
and the name in which certificates are to be registered) the Optional
Shares shall be the same as for the Firm Shares.
(d) The Representatives have advised the Company that each
Underwriter has authorized the Representatives to accept delivery of
the Shares and to make payment therefor. It is understood that the
Representatives, individually and not as the representatives of the
Underwriters, may (but shall not be obligated to) make payment for any
Shares to be purchased by any Underwriter whose funds shall not have
been received by the Representatives by the First Closing Date or the
Second Closing Date, as the case may be, for the account of such
Underwriter, but any such payment shall not relieve such Underwriter
from any obligation under this Agreement. As referred to in this
Agreement, "Closing Date" shall mean either the First Closing Date or
the Second Closing Date.
SECTION 6. Covenants of the Company. The Company covenants and agrees
with the several Underwriters that:
(a) If the effective time of the Registration Statement is not
prior to the execution and delivery of this Agreement, the Company will
use its best efforts to cause the Registration Statement to become
effective at the earliest possible time and, upon notification from the
Commission that the Registration Statement has become effective, will
so advise the Representatives and counsel for the Underwriters
promptly. If the effective time of the Registration Statement is prior
to the execution and delivery of this Agreement and any information
shall have been omitted therefrom in reliance upon Rule 430A, the
Company, at the earliest possible time, will furnish the
Representatives with a copy of the Prospectus to be filed by the
Company with the Commission to comply with Rule 424(b) and Rule 430A
under the Act, and, if the Representatives do not reasonably object to
the contents thereof, will comply with such Rules. Upon compliance with
such Rules,
12
the Company will so advise the Representatives promptly. The Company
will advise the Representatives and counsel to the Underwriters
promptly of the issuance by the Commission or any state securities
commission of any stop order suspending the effectiveness of the
Registration Statement or of the institution of any proceedings for
that purpose, or of any notification of the suspension of qualification
of the Shares for sale in any jurisdiction or the initiation or
threatening of any proceedings for that purpose, and will also advise
the Representatives and counsel for the Underwriters promptly of any
request of the Commission for amendment or supplement of the
Registration Statement, of any Preliminary Prospectus or of the
Prospectus, or for additional information, and the Company will not
file any amendment or supplement to the Registration Statement (either
before or after it becomes effective), to any Preliminary Prospectus or
to the Prospectus (including a prospectus filed pursuant to Rule
424(b)) or file any document under the Exchange Act before the
termination of the public offering of the Shares by the Underwriters if
such document would be deemed to be incorporated by reference in the
Registration Statement, if the Representatives have not been furnished
with a copy prior to such filing (with a reasonable opportunity to
review such amendment or supplement) or if the Representatives
reasonably object to such filing.
(b) The Company will not file any amendment to the
Registration Statement or supplement to the Prospectus of which the
Representatives shall not previously have been advised and furnished
with a copy (with a reasonable opportunity to review such amendment or
supplement) or to which the Representatives shall have reasonably
objected to in writing.
(c) If, at any time when a prospectus relating to the Shares
is required by law to be delivered in connection with sales by an
Underwriter or dealer, any event occurs as a result of which the
Prospectus would include an untrue statement of a material fact, or
would omit to state any material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it is
necessary at any time to supplement the Prospectus to comply with the
Act or to file under the Exchange Act any document which would be
deemed to be incorporated by reference in the Registration Statement to
comply with the Act or the Exchange Act, the Company promptly will
advise the Representatives and counsel for the Underwriters thereof and
will promptly prepare and file with the Commission, at its expense, an
amendment to the Registration Statement or file such document which
will correct such statement or omission or an amendment which will
effect such compliance; and, if any Underwriter is required to deliver
a prospectus after the effective date of the Registration Statement,
the Company, upon request of the Representatives, will prepare promptly
such prospectus or prospectuses as may be necessary to permit
compliance with the requirements of Section 10(a)(3) of the Act. The
Company consents to the use, in accordance with the provisions of the
Act and with the Blue Sky Laws of the jurisdictions in which the Shares
are offered by the several Underwriters and by dealers, of each
Preliminary Prospectus.
13
(d) Neither the Company nor any Subsidiary will, prior to the
Second Closing Date, if any, incur any liability or obligation, direct
or contingent, or enter into any material transaction, other than in
the ordinary course of business, or enter into any transaction with an
"affiliate," as defined in Rule 405 of the Act, which is required to be
disclosed in the Prospectus pursuant to Item 404 of Regulation S-K
under the Act, except as described in the Prospectus.
(e) Neither the Company nor any Subsidiary will, prior to the
Second Closing Date, if any, acquire any of the Common Stock nor will
the Company declare or pay any dividend or make any other distribution
upon its Common Stock payable to shareholders of record on a date prior
to such earlier date, except as described in the Prospectus.
(f) The Company will make generally available to its security
holders and the Representatives an earnings statement as soon as
practicable, but in no event later than 60 days after the end of its
fiscal quarter in which the first anniversary of the effective date of
the Registration Statement occurs, covering a period of 12 consecutive
calendar months beginning after the effective date of the Registration
Statement, which will satisfy the provisions of the last paragraph of
Section 11(a) of the Act and Rule 158 promulgated thereunder.
(g) During such period as a prospectus is required by law to
be delivered in connection with sales by an Underwriter or dealer, the
Company will furnish to the Representatives, at the expense of the
Company, copies of the Registration Statement, the Prospectus, any
Preliminary Prospectus and all amendments and supplements to any such
documents, including any document filed under the Exchange Act and
deemed to be incorporated by reference in the Registration Statement,
in each case as soon as available and in such quantities as the
Representatives may reasonably request.
(h) The Company will apply the net proceeds from the sale of
the Shares to be sold by it hereunder for the purposes set forth in the
Prospectus.
(i) The Company will cooperate with the Representatives and
counsel for the Underwriters in qualifying or registering the Shares
for sale under the Blue Sky Laws of such jurisdictions as the
Representatives designate, and will continue such qualifications or
registrations in effect so long as reasonably requested by the
Representatives to effect the distribution of the Shares. The Company
shall not be required to qualify as a foreign corporation or to file a
general consent to service of process in any such jurisdiction where it
is not presently qualified. In each jurisdiction where any of the
Shares shall have been qualified as provided above, the Company will
file such reports and statements as may be required to continue such
qualification for a period of not less than one year from the date of
this Agreement. The Company shall promptly prepare and file with the
Commission, from time to time, such reports as may be required to be
filed by the Act and the
14
Exchange Act, and the Company shall comply in all respects with the
undertakings given by the Company in connection with the qualification
or registration of the Shares for offering and sale under the Blue Sky
Laws.
(j) During the period of three years from the date of the
Prospectus, the Company will furnish to each of the Representatives and
to each of the other Underwriters who may so request, each report,
statement or other document of the Company or its Board of Directors
mailed to its shareholders or filed with the Commission, and such other
information concerning the Company as the Representatives may
reasonably request.
(k) The Company shall take all necessary or appropriate action
within its power to maintain the authorization for trading of the
Common Stock on the American Stock Exchange, or take such action to
authorize the Common Stock for listing on the Nasdaq National Market or
the New York Stock Exchange, for a period of at least 36 months after
the date of the Prospectus.
(l) Except for the issuance and sale by the Company of Common
Stock upon exercise of currently outstanding stock options, the sale of
the Shares to be sold by the Company pursuant to this Agreement, the
issuance of Common Stock under presently existing defined contribution
or benefit plans, and the grant of employee stock options pursuant to
the Company's presently existing stock option plans, the Company shall
not, for a period of 90 days after the date of the Prospectus, without
the prior written consent of Baird, directly or indirectly, offer, sell
or otherwise dispose of, contract to sell or otherwise dispose of, or
cause or in any way permit to be sold or otherwise disposed of, any:
(i) shares of Common Stock; (ii) rights to purchase shares of Common
Stock; or (iii) securities that are convertible or exchangeable into
shares of Common Stock.
(m) The Company will maintain a transfer agent and, if
required by law or the rules of the American Stock Exchange or any
national securities exchange on which the Common Stock is listed, a
registrar (which, if permitted by applicable laws and rules, may be the
same entity as the transfer agent) for its Common Stock.
(n) If the sale to the Underwriters of the Shares is not
consummated for any reason other than termination of this Agreement
pursuant to Section 11 hereof, without limiting any other rights the
Underwriters may have, the Company agrees to reimburse the Underwriters
upon demand for all out-of-pocket expenses (including, without
limitation, reasonable fees and expenses of counsel for the
Underwriters), that shall have been incurred by the Underwriters in
connection with the proposed purchase and sale of the Shares, and the
provisions of Section 7 and 10 hereof shall at all times be effective
and apply.
15
(o) The Company will use its reasonable best efforts to comply
or cause to be complied with the conditions to the obligations of the
Underwriters in Section 8 hereof.
SECTION 7. Payment of Expenses. Whether or not the transactions
contemplated hereunder are consummated or this Agreement becomes effective, or
if this Agreement is terminated for any reason, the Company will pay the costs,
fees and expenses incurred in incident to the performance of its obligations
under this Agreement. Such costs, fees and expenses to be paid by the Company
include, without limitation:
(a) All costs, fees and expenses (excluding the expenses
incurred by the Underwriters and the legal fees and disbursements of
counsel for the Underwriters, but including such fees and disbursements
described in subsection (b) of this Section 7) incurred in connection
with the performance of the Company's obligations hereunder, including,
without limiting the generality of the foregoing: the registration fees
related to the filing of the Registration Statement with the
Commission; the fees and expenses related to the listing of the Shares
on the American Stock Exchange; the fees and expenses of the Company's
counsel, accountants, transfer agent and registrar; the costs and
expenses incurred in connection with the preparation, printing,
shipping and delivery of the Registration Statement, each Preliminary
Prospectus and the Prospectus (including all exhibits and financial
statements) and all amendments and supplements provided for herein,
this Agreement, the Preliminary and Supplemental Blue Sky Memoranda,
including, without limitation, shipping expenses via overnight delivery
and/or courier service to comply with applicable prospectus delivery
requirements (provided, however, that the Company shall only be liable
for the costs of shipping such materials to the Underwriters and not to
the customers or clients of the Underwriters); and the costs and
expenses associated with the production of materials related to, and
travel expenses incurred by the management of the Company in connection
with, the various meetings to be held between the Company's management
and prospective investors.
(b) All registration fees and expenses, including legal fees
(of up to $10,000) and disbursements of counsel for the Underwriters
incurred in connection with qualifying or registering all or any part
of the Shares for offer and sale (or otherwise preparing and filing
notices, applications and other forms) under the Blue Sky Laws and the
clearing of the public offering and underwriting arrangements evidenced
hereby with the NASD.
(c) All fees and expenses related to printing of the
certificates for the Shares, and all transfer taxes, if any, with
respect to the sale and delivery of the Shares.
16
SECTION 8. Conditions of the Obligations of the Underwriters. The
obligations of the several Underwriters under this Agreement shall be subject to
the accuracy of the representations and warranties on the part of the Company
herein set forth as of the date hereof and as of each Closing Date, to the
accuracy of the statements of the Company's officers made pursuant to the
provisions hereof, to the performance by the Company of its obligations
hereunder, and to the following additional conditions, unless waived in writing
by the Representatives:
(a) The Registration Statement shall have been declared
effective by the Commission not later than 5:30 p.m., Washington, D.C.
time, on the date of this Agreement, or such later time and date as
shall have been consented to by the Representatives, which consent
shall be deemed to have been given if the Registration Statement shall
have been declared effective on or before the date and time requested
in the acceleration request submitted on behalf of the Representatives
pursuant to Rule 461 under the Act; all filings required by Rules
424(b) and 430A under the Act shall have been timely made; no stop
order suspending the effectiveness of the Registration Statement shall
have been issued by the Commission or any state securities commission
nor, to the knowledge of the Company, shall any proceedings for that
purpose have been instituted or threatened; and any request of the
Commission or any state securities commission for inclusion of
additional information in the Registration Statement, or otherwise,
shall have been complied with to the satisfaction of the
Representatives acting in good faith.
(b) Since the dates as of which information is given in the
Registration Statement:
(i) There shall not have occurred any change or
development involving, or which could be expected to involve,
a Material Adverse Effect, whether or not arising from
transactions in the ordinary course of business; and
(ii) The Company shall not have sustained any loss or
interference from any labor dispute, strike, fire, flood,
windstorm, accident or other calamity (whether or not insured)
or from any court or governmental action, order or decree;
the effect of which on the Company, in any such case described in
clause (i) or (ii) above, is in the good faith opinion of the
Representatives so material and adverse as to make it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Shares on the terms and in the manner contemplated in the Registration
Statement and the Prospectus.
17
(c) The Representatives shall not have advised the Company
that the Registration Statement or Prospectus contains an untrue
statement of fact that, in the good faith opinion of the
Representatives or counsel for the Underwriters, is material or omits
to state a fact that, in the good faith opinion of the Representatives
or such counsel, is material and is required to be stated therein or
necessary to make the statements therein not misleading.
(d) The Representatives shall have received an opinion of
Xxxxx & Lardner, counsel for the Company addressed to the
Representatives, as the representatives of the Underwriters, and dated
the First Closing Date or the Second Closing Date, as the case may be,
to the effect that:
(i) The Company is validly existing as a corporation
and whose status is active under the laws of Wisconsin, with
full corporate power and authority to own, lease and operate
its properties and conduct its business as presently conducted
and as described in the Prospectus and the Registration
Statement;
(ii) The authorized capital stock of the Company
consists of 50,000,000 shares of Common Stock, par value $.01
per share, and all such stock conforms as to legal matters to
the descriptions thereof in the Prospectus and the
Registration Statement;
(iii) The issued and outstanding shares of capital
stock of the Company immediately prior to the issuance and
sale of the Shares to be sold by the Company hereunder have
been duly authorized and validly issued, are fully paid and
nonassessable (except as otherwise provided in Section
180.0622(2)(b) of the Wisconsin Business Corporation Law, as
judicially interpreted), and, to such counsel's knowledge,
there are no preemptive, preferential or, except as described
in the Prospectus, other rights to subscribe for or purchase
any shares of capital stock of the Company and, to such
counsel's knowledge, no shares of capital stock of the Company
have been issued in violation of such rights;
(iv) Each Significant Subsidiary that is incorporated
under the laws of the State of Wisconsin or Delaware (a
"Significant U.S. Subsidiary") is validly existing as a
corporation in good standing or active status under the laws
of its jurisdiction of incorporation, with full corporate
power and authority to own, lease and operate its properties
and to conduct its business as presently conducted and as
described in the Prospectus and the Registration Statement; to
such counsel's knowledge, the Company owns directly or
indirectly and beneficially all of the issued and outstanding
capital stock of each Significant U.S. Subsidiary;
18
(v) The certificates for the Shares to be delivered
hereunder are in due and proper form and conform to the
requirements of applicable law; and when duly countersigned by
the Company's transfer agent, and delivered to the
Representatives or upon the order of the Representatives
against payment of the agreed consideration therefor in
accordance with the provisions of this Agreement, the Shares
to be sold by the Company represented thereby will be duly
authorized and validly issued, fully paid and nonassessable
(except as otherwise provided in Section 180.0622(2)(b) of the
Wisconsin Business Corporation Law, as judicially
interpreted), and, to such counsel's knowledge, free of any
preemptive, preferential or other rights to subscribe for or
purchase shares of Common Stock;
(vi) The Registration Statement has become effective
under the Act and, to such counsel's knowledge, no stop order
suspending the effectiveness of the Registration Statement has
been issued and no proceedings for that purpose have been
instituted or are threatened under the Act or any Blue Sky
Laws; the Registration Statement and the Prospectus and any
amendment or supplement thereto, including any document
incorporated by reference into the Registration Statement
(except for the financial statements and other statistical or
financial data included therein, as to which such counsel need
express no opinion) comply as to form in all material respects
with the requirements of the Act; the conditions for use of
Form S-3, set forth in the General Instructions thereto, have
been satisfied; to such counsel's knowledge, there are no
pending or threatened legal or governmental proceedings that
are required to be described in the Registration Statement or
the Prospectus which are not so described or which question
the validity of this Agreement or any action taken or to be
taken pursuant thereto, nor, to such counsel's knowledge, is
there any transaction, relationship, agreement, contract or
other document of a character required to be described in the
Registration Statement or the Prospectus, or required to be
filed under the Exchange Act if upon such filing they would be
incorporated, in whole or in part, by reference therein, or to
be filed as an exhibit to or incorporated by reference in the
Registration Statement by the Act, which is not described,
filed or incorporated by reference required;
(vii) The Company has full corporate power and
authority to enter into and perform this Agreement; the
performance of the Company's obligations hereunder and the
consummation of the transactions described herein have been
duly authorized by the Company by all necessary corporate
action and this Agreement has been duly executed and delivered
by and on behalf of the Company, and is a legal, valid and
binding agreement of the Company enforceable against the
Company in accordance with its terms, except that rights to
indemnity or contribution hereunder may be limited by
applicable law and except as to enforceability of this
Agreement may be limited by bankruptcy, insolvency,
reorganization,
19
moratorium or other similar laws affecting creditors' rights
generally, and by equitable principles limiting the right to
specific performance or other equitable relief; and, to such
counsel's knowledge, no consent, approval, authorization or
other order or decree of any court, regulatory or governmental
body, arbitrator, administrative agency or other
instrumentality of the United States having jurisdiction over
the Company, is required for the execution and delivery of
this Agreement or the consummation of the transactions
contemplated by this Agreement (except for compliance with the
Act, the Exchange Act, applicable Blue Sky Laws and the
clearance of the underwriting arrangements with the NASD);
(viii) The execution, delivery and performance of
this Agreement by the Company will not: (A) violate any
provisions of the Articles of Incorporation or By-laws of the
Company or any Significant U.S. Subsidiary; (B) violate any of
the provisions of, or result in the breach, modification or
termination of, or constitute a default under, any agreement,
lease, franchise, license, indenture, permit, mortgage, deed
of trust, other evidence of indebtedness or other instrument
to which the Company or any Significant U.S. Subsidiary is a
party or by which the Company or such Significant U.S.
Subsidiary, or any of their respective owned or leased
property is bound, and which is filed or incorporated by
reference as an exhibit to the Registration Statement; or (C)
violate any statute, ordinance, order, rule, decree or
regulation of any court, regulatory or governmental body,
arbitrator, administrative agency or other instrumentality of
the United States having jurisdiction over the Company or any
Significant U.S. Subsidiary (assuming compliance with all
applicable federal and state securities laws);
(ix) To such counsel's knowledge, there are no
holders of Common Stock or other securities of the Company, or
securities that are convertible or exchangeable into Common
Stock or other securities of the Company, that have rights to
the registration of such securities under the Act or any Blue
Sky Laws;
(x) The Shares are authorized for trading on the
American Stock Exchange;
(xi) Neither the Company nor any Significant U.S.
Subsidiary is, nor with the giving of notice or passage of
time or both would be, in violation of its respective Articles
of Incorporation or By-laws; and
20
(xii) Neither the Company nor any Subsidiary is an
"investment company," an "affiliated person" of, or "promoter"
or "principal underwriter" for, an "investment company," as
such terms are defined in the Investment Company Act of 1940,
as amended, and, upon its receipt of any proceeds from the
sale of the Shares, the Company will not thereby become or be
deemed to be an "investment company" thereunder.
Such counsel shall also state that they have participated in
conferences with officers and other representatives of the Company and
representatives of the Underwriters and their counsel during which the content
of the Registration Statement and the Prospectus and related matters were
discussed and reviewed, and that, although such counsel is not passing upon and
does not assume any responsibility for the accuracy, completeness or fairness of
the statements contained or incorporated by reference into the Registration
Statement or the Prospectus, on the basis of the information that was developed
in the course of the performance of such services, they have no reason to
believe that the Registration Statement including any document incorporated by
reference therein, on its effective date and as of the Closing Date, contained
or contains any untrue statement of material fact or omitted or omits to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading, or that the Prospectus, or any amendment or
supplement thereto including any document incorporated by reference therein, as
of its issue date and as of the Closing Date, contained or contains any untrue
statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading (provided that such counsel need
express no belief regarding the financial statements and related schedules and
other financial or statistical data contained in the Registration Statement, any
amendment thereto including any document incorporated by reference therein, or
the Prospectus, or any amendment or supplement thereto including any document
incorporated by reference therein).
To the extent that any of such opinions are stated to be based upon
such counsel's knowledge or to be given "to the knowledge of such counsel," such
qualification shall signify that no information has come to the attention of the
attorneys in such firm who have been involved in the preparation or review of
the Registration Statement or the Prospectus that would give them actual current
knowledge of the existence or absence of such matter in question.
In rendering such opinion, counsel for the Company may rely, to the
extent counsel deems such reliance proper, as to matters of fact upon
certificates of officers of the Company and any governmental officials, and
copies of all such certificates shall be furnished to the Representatives and
for the Underwriters on or before each Closing Date.
21
(e) The Representatives shall have received an opinion of Xxxxxxx &
Xxxxx LLP, counsel for the Underwriters, dated the First Closing Date or the
Second Closing Date, as the case may be, with respect to the issuance and sale
of the Shares by the Company, the Registration Statement and other related
matters as the Representatives may require, and the Company shall have furnished
to such counsel such documents and shall have exhibited to them such papers and
records as they reasonably request for the purpose of enabling them to pass upon
such matters.
(f) The Representatives shall have received on each Closing Date, a
certificate of Xxxxx X. Xxxxxxx, Chairman, President and Chief Executive
Officer, and Xxxxxxx X. Xxxxxx, Vice President, Secretary and Chief Financial
Officer, of the Company, to the effect that:
(i) The representations and warranties of the Company set
forth in Section 2 hereof are true and correct as of the date of this
Agreement and as of the date of such certificate, and the Company has
complied with all the agreements and satisfied all the conditions to be
performed or satisfied by it at or prior to the date of such
certificate;
(ii) The Commission has not issued an order preventing or
suspending the use of the Prospectus or any Preliminary Prospectus or
any amendment or supplement thereto; no stop order suspending the
effectiveness of the Registration Statement has been issued; and to the
knowledge of the respective signatories, no proceedings for that
purpose have been initiated or are pending or contemplated under the
Act or under the Blue Sky Laws of any jurisdiction;
(iii) Each of the respective signatories has examined the
Registration Statement and the Prospectus, and any amendment or
supplement thereto, including any documents filed under the Exchange
Act and deemed to be incorporated by reference in the Registration
Statement, and such documents contain all statements required to be
stated therein, and do not include any untrue statement of a material
fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading, and since
the date on which the Registration Statement was initially filed, no
event has occurred that was required to be set forth in an amended or
supplemented prospectus or in an amendment to the Registration
Statement that has not been so set forth, and there has been no
document required to be filed under the Exchange Act that upon such
filing would be deemed to be incorporated by reference in the
Registration Statement that has not been so filed; and
(iv) Since the date on which the Registration Statement was
initially filed with the Commission, there shall not have occurred any
change or development involving, or which could be expected to involve,
a Material Adverse Effect, whether or not arising from transactions in
the ordinary course of business, except as disclosed in the Prospectus
and the Registration Statement as heretofore amended or as disclosed in
an amendment or supplement thereto filed with the Commission and
22
delivered to the Representatives after the execution of this Agreement;
since such date and except as so disclosed or in the ordinary course of
business, the Company has not incurred any liability or obligation,
direct or indirect, or entered into any transaction which is material
to the Company; since such date and except as so disclosed, there has
not been any change in the outstanding capital stock of the Company
(other than the grant of stock options under presently existing stock
option plans, the issuance of shares of common stock upon exercise of
currently outstanding stock options or the issuance of shares of Common
Stock under presently existing defined contribution or benefit plans),
or any change that is material to the Company in the short-term funded
debt or long-term debt of the Company; since such date and except as so
disclosed, the Company has not acquired any of the Common Stock or
other capital stock of the Company nor has the Company declared or paid
any dividend (other than its regular quarterly dividend), or made any
other distribution, upon its outstanding Common Stock payable to
shareholders of record on a date prior to such Closing Date; since such
date and except as so disclosed, the Company has not incurred any
material contingent obligations, and no material litigation is pending
or threatened against the Company; and, since such date and except as
so disclosed, the Company has not sustained any material loss or
interference from any strike, fire, flood, windstorm, accident or other
calamity (whether or not insured) or from any court or governmental
action, order or decree.
The delivery of the certificate provided for in this subsection (f)
shall be and constitute a representation and warranty of the Company as to the
facts required in the immediately foregoing clauses (i), (ii), (iii), and (iv)
to be set forth in said certificate.
(g) At the time this Agreement is executed and also on each Closing
Date, there shall be delivered to the Representatives a letter addressed to the
Representatives, as the representatives of the Underwriters, from Xxxxxx
Xxxxxxxx LLP, the Company's independent accountants, the first letter to be
dated the date of this Agreement, the second letter to be dated the First
Closing Date and the third letter (if applicable) to be dated the Second Closing
Date, which letters shall be in form and substance satisfactory to the
Representatives, acting in good faith and shall contain information as of a date
within five days of the date of such letters. There shall not have been any
change or decrease in any specified items relating to the Company or the
Subsidiaries set forth in any of the letters referred to in this subsection (g)
which makes it impracticable or inadvisable in the good faith judgment of the
Representatives to proceed with the public offering or purchase of the Shares as
contemplated thereby.
(h) The Shares shall have been qualified or registered for sale under
the Blue Sky Laws (or exempt from such qualification or registration) of such
jurisdictions as shall have been specified by the Representatives, the
underwriting terms and arrangements for the offering shall have been cleared by
the NASD, and the Shares shall have been authorized for listing on the American
Stock Exchange and the Common Stock shall remain registered under the Exchange
Act.
23
(i) Such further certificates and documents as the Representatives may
reasonably request (including certificates of officers of the Company).
All such opinions, certificates, letters and documents shall be in
compliance with the provisions hereof only if they are satisfactory to the
Representatives and Xxxxxxx & Xxxxx LLP, counsel for the Underwriters, each
acting reasonably under the circumstances. The Company shall furnish the
Representatives with such manually signed or conformed copies of such opinions,
certificates, letters and documents as the Representatives may reasonably
request.
If any condition to the Underwriters' obligations hereunder to be
satisfied prior to or at either Closing Date is not so satisfied, this Agreement
at the election of the Representatives will terminate upon notification to the
Company without liability on the part of any Underwriter, including the
Representatives, the Company except for the provisions of Section 6(n) hereof,
the expenses to be paid by the Company pursuant to Section 7 hereof and except
to the extent provided in Section 10 hereof.
SECTION 9. Maintain Effectiveness of Registration Statement. The
Company will use its reasonable best efforts to prevent the issuance of any stop
order suspending the effectiveness of the Registration Statement, and, if such
stop order is issued, to obtain as soon as possible the lifting thereof.
SECTION 10. Indemnification.
(a) The Company agrees to indemnify and hold harmless each
Underwriter and each person (including each director, member, partner
or officer thereof) who controls any Underwriter within the meaning of
the Act or the Exchange Act from and against any losses, claims,
damages, expenses, liabilities or actions in respect thereof
("Claims"), joint or several, to which such Underwriter or each such
controlling person may become subject under the Act, the Exchange Act,
Blue Sky Laws or other federal or state statutory laws or regulations,
at common law or otherwise (including payments made in settlement of
any litigation), insofar as such Claims arise out of or are based upon
any breach of any representation, warranty or covenant made by the
Company in this Agreement, or any untrue statement or alleged untrue
statement of any material fact contained in the Registration Statement,
any Preliminary Prospectus, the Prospectus, or any amendment or
supplement thereto, or in any application filed under any Blue Sky Law
or other document executed by the Company for that purpose or based
upon written information furnished by the Company and filed in any
state or other jurisdiction to qualify any or all of the Shares under
the securities laws thereof (any such document, application or
information being hereinafter called a "Blue Sky Application") or arise
out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, and the Company further
agrees to reimburse each Underwriter and each such controlling person
for any legal or other expenses
24
reasonably incurred by such Underwriter or any such controlling person
in connection with investigating or defending any such Claim as such
expenses are incurred; provided, however, that the Company will not be
liable in any such case to the extent that any such Claim arises out of
or is based upon an untrue statement or alleged untrue statement or
omission or alleged omission made in the Registration Statement, any
Preliminary Prospectus, the Prospectus or supplement thereto or in any
Blue Sky Application in reliance upon and in conformity with the
written information furnished to the Company pursuant to Section 4 of
this Agreement; and provided further that the Company shall not be
liable in any such case for any Claim arising out of any such defect or
alleged defect in any Preliminary Prospectus if a copy of the
Prospectus shall not have been given or sent by or on behalf of such
Underwriter to the person asserting such Claim, if required by law to
have been delivered, at or prior to the written confirmation of the
sale of the Shares to such person, to the extent that the Prospectus
would have cured such defect or alleged defect giving rise to such
Claim. The indemnification obligations of the Company as provided above
are in addition to and in no way limit any liabilities the Company may
otherwise have.
(b) Each Underwriter, severally and not jointly, agrees to
indemnify and hold harmless the Company, each of its directors and each
of its officers who signs the Registration Statement, and each person
if any who controls the Company within the meaning of the Act or the
Exchange Act, from and against any Claim to which the Company, or any
such director, officer or controlling person may become subject, under
the Act, the Exchange Act, Blue Sky Laws or other federal or state
statutory laws or regulations, at common law or otherwise (including
payments made in settlement of any litigation, if such settlement is
effected with the written consent of such Underwriter and Xxxxx),
insofar as such Claim arises out of or is based upon any untrue or
alleged untrue statement of any material fact contained in the
Registration Statement, any Preliminary Prospectus, the Prospectus, or
any amendment or supplement thereto, or in any Blue Sky Application, in
reliance solely upon and in conformity with the written information
furnished by the Representatives to the Company pursuant to Section 4
of this Agreement, and from and against any Claim to the extent that
such Claim results from the failure of an Underwriter to deliver a
Prospectus, if the person asserting such Claim purchased Shares from
such Underwriter and a copy of the Prospectus (as then amended if the
Company shall have furnished any amendments thereto) was not sent or
given by or on behalf of such Underwriter to such person, if required
by law so to have been delivered, at or prior to the written
confirmation of the sale of the Shares to such person, and if the
Prospectus (as so amended) would have cured the defect giving rise to
such Claim. Each Underwriter will severally reimburse any legal or
other expenses reasonably incurred by the Company, or any such
director, officer or controlling person in connection with
investigating or defending any such Claim as such expenses are
incurred. The indemnification obligations of each Underwriter as
provided above are in addition to any liabilities any such Underwriter
may otherwise have. Notwithstanding the provisions of this Section, no
Underwriter
25
shall be required to indemnify or reimburse the Company, or any
officer, director or controlling person in an aggregate amount in
excess of the total price at which the shares purchased by any such
Underwriter hereunder were offered to the public, less the amount of
any damages such Underwriter has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or
alleged omission.
(c) Promptly after receipt by an indemnified party under this
Section of notice of the commencement of any action in respect of a
Claim, such indemnified party will, if a Claim in respect thereof is to
be made against an indemnifying party under this Section, notify the
indemnifying party in writing of the commencement thereof, but the
omission so to notify the indemnifying party will not relieve an
indemnifying party from any liability it may have to any indemnified
party under this Section or otherwise, except to the extent the
indemnifying party is materially prejudiced thereby. In case any such
action is brought against any indemnified party, and such indemnified
party notifies an indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate in and, to the
extent that he, she or it may wish, jointly with all other indemnifying
parties, similarly notified, to assume the defense thereof, with
counsel reasonably satisfactory to such indemnified party; provided,
however, if the defendants in any such action include both the
indemnified party and any indemnifying party and the indemnified party
shall have reasonably concluded that there may be legal defenses
available to the indemnified party and/or other indemnified parties
which are different from or additional to those available to the
indemnifying party, the indemnified party or parties shall have the
right to select separate counsel to assume such legal defenses and to
otherwise participate in the defense of such action on behalf of such
indemnified party or parties. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement
of any pending or threatened action in respect of which any indemnified
party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party unless such settlement (i)
includes an unconditional release of such indemnified party from all
liability on any claims that are the subject matter of such action 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 an indemnified
party.
(d) Upon receipt of notice from the indemnifying party to such
indemnified party of the indemnifying party's election to assume the
defense of such action and upon approval by the indemnified party of
counsel selected by the indemnifying party, the indemnifying party will
not be liable to such indemnified party under this Section for any
legal fees or other expenses subsequently incurred by such indemnified
party in connection with the defense thereof, unless :
(i) The indemnified party shall have employed
separate counsel in connection with the assumption of legal
defenses in accordance with the proviso to the second to last
sentence of subsection (c) of this Section (it
26
being understood, however, that the indemnifying party shall
not be liable for the legal fees of more than one separate
counsel, approved by Xxxxx, if one or more of the Underwriters
or their controlling persons are the indemnified parties);
(ii) The indemnifying party shall not have employed
counsel reasonably satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after
the indemnified party's notice to the indemnifying party of
commencement of the action; or
(iii) The indemnifying party has authorized the
employment of counsel at the expense of the indemnifying
party.
(e) If the indemnification provided for in this Section is
unavailable to an indemnified party under subsection (a) or (b) hereof
in respect of any Claim referred to therein, then each indemnifying
party, in lieu of indemnifying such indemnified party, shall, subject
to the limitations hereinafter set forth, contribute to the amount paid
or payable by such indemnified party as a result of such Claim:
(i) In such proportion as is appropriate to reflect
the relative benefits received by the Company and the
Underwriters from the offering of the Shares; or
(ii) If the allocation provided by clause (i) above
is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred
to in clause (i) above, but also the relative fault of the
Company and the Underwriters in connection with the statements
or omissions which resulted in such Claim, as well as any
other relevant equitable considerations.
The relative benefits received by each of the Company and the
Underwriters shall be deemed to be in such proportion so that the
Underwriters are responsible for that portion represented by the
percentage that the amount of the underwriting discounts and
commissions per share appearing on the cover page of the Prospectus
bears to the public offering price per share appearing thereon, and the
Company (including its officers and directors and controlling persons),
is responsible for the remaining portion. The relative fault of the
Company and the Underwriters shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material
fact relates to information supplied by the Company or the Underwriters
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The
amount paid or payable by a party as a result of the Claims referred to
above shall be deemed to include, subject to the limitations set forth
in subsections (c) and (d) of this Section, any legal or
27
other fees or expenses reasonably incurred by such party in connection
with investigating or defending any action or claim.
(f) The Company and the Underwriters agree that it would not
be just and equitable if contribution pursuant to this Section were
determined by pro rata or per capita allocation (even if the
Underwriters were treated as one entity for such purpose) or by any
other method or allocation which does not take into account the
equitable considerations referred to in subsection (c) of this Section.
Notwithstanding the other provisions of this Section, no Underwriter
shall be required to contribute any amount that is greater than 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 Underwriter has otherwise been
required to pay by reason of 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 Act)
shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. The Underwriters' obligations to
contribute pursuant to this Section are several in proportion to their
respective underwriting commitments and not joint.
SECTION 11. Default of Underwriters. It shall be a condition to the
obligations of each Underwriter to purchase the Shares in the manner as
described herein, that, except as hereinafter provided in this Section, each of
the Underwriters shall purchase and pay for all the Shares agreed to be
purchased by such Underwriter hereunder upon tender to the Representatives of
all such Shares in accordance with the terms hereof. If any Underwriter or
Underwriters default in their obligations to purchase Shares hereunder on either
the First Closing Date or the Second Closing Date, and the aggregate number of
Shares which such defaulting Underwriter or Underwriters agreed but failed to
purchase does not exceed 10% of the total number of Shares which the
Underwriters are obligated to purchase on such Closing Date, the Representatives
may make arrangements for the purchase of such Shares by other persons,
including any of the Underwriters, but if no such arrangements are made by such
Closing Date the nondefaulting Underwriters shall be obligated severally, in
proportion to their respective commitments hereunder, to purchase the Shares
which such defaulting Underwriters agreed but failed to purchase on such Closing
Date. If any Underwriter or Underwriters so default and the aggregate number of
Shares with respect to which such default or defaults occur is greater than 10%
of the total number of Shares which the Underwriters are obligated to purchase
on such Closing Date, and arrangements satisfactory to the Representatives for
the purchase of such Shares by other persons are not made within 36 hours after
such default, this Agreement will terminate without liability on the part of any
nondefaulting Underwriter or the Company except for the expenses to be paid by
the Company pursuant to Section 7 hereof and except to the extent provided in
Section 10 hereof.
In the event that Shares to which a default relates are to be purchased
by the nondefaulting Underwriters or by another party or parties, the
Representatives shall have the right to postpone the First Closing Date or the
Second Closing Date, as the case may be, for not
28
more than seven business days in order that the necessary changes in the
Registration Statement, Prospectus and any other documents, as well as any other
arrangements, may be effected. As used in this Agreement, the term "Underwriter"
includes any person substituted for an Underwriter under this Section. Nothing
herein will relieve a defaulting Underwriter from liability for its default.
SECTION 12. Effective Date. This Agreement shall become effective upon
the execution and delivery of this Agreement by the parties hereto. Such
execution and delivery shall include an executed copy of this Agreement sent by
telecopier, facsimile transmission or other means of transmitting written
documents.
SECTION 13. Termination. Without limiting the right to terminate this
Agreement pursuant to any other provision hereof, this Agreement may be
terminated by the Representatives prior to or on the First Closing Date, and the
over-allotment option from the Company referred to in Section 5 hereof, if
exercised, may be canceled by the Representatives at any time prior to or on the
Second Closing Date, if in the good faith judgment of the Representatives,
payment for and delivery of the Shares is rendered impracticable or inadvisable
because:
(a) Additional material governmental restrictions,
not in force and effect on the date hereof, shall have been
imposed upon the trading in securities generally, or minimum
or maximum prices or maximum ranges for prices shall have been
generally established on the New York Stock Exchange or the
American Stock Exchange, trading in securities generally shall
have been suspended or materially limited on either such
exchange or on The Nasdaq Stock Market, trading in the Common
Stock of the Company shall have been suspended by the
Commission or the American Stock Exchange, or a general
banking moratorium shall have been established by either
federal or state authorities in New York or Wisconsin;
(b) Any event shall have occurred or shall exist
which makes untrue or incorrect in any material respect any
statement or information contained in the Registration
Statement or which is not reflected in the Registration
Statement but should be reflected therein to make the
statements or information contained therein not misleading in
any material respect;
(c) After the date hereof, there is an outbreak or
material escalation of hostilities or other national or
international calamity or crisis, the declaration by the
United States of a national emergency or war, or any change in
political, financial or economic conditions shall have
occurred or shall have accelerated to such extent, in the good
faith judgment of the Representatives, as to have a material
adverse effect on the financial markets of the United States,
or to make it impracticable or inadvisable to proceed with the
completion of the sale of and payment for the Shares as
provided in this Agreement.
29
Any termination pursuant to this Section shall be without liability on
the part of any Underwriter to the Company, or on the part of the Company to any
Underwriter, except for expenses to be paid by the Company pursuant to Section 7
hereof or reimbursed by the Company pursuant to Section 6(n) hereof and except
as to indemnification to the extent provided in Section 10 hereof.
SECTION 14. Representations and Indemnities to Survive Delivery. The
respective indemnities, agreements, representations, warranties, covenants and
other statements of the Company, of its officers or directors, and of the
several Underwriters set forth in or made pursuant to this Agreement will remain
in full force and effect, regardless of any investigation made by or on behalf
of any Underwriter or the Company or any of its or their partners, officers,
directors or any controlling person, as the case may be, and will survive
delivery of and payment for the Shares sold hereunder.
SECTION 15. Notices. All communications hereunder will be in writing
and, if sent to the Representatives, will be mailed, delivered, or telecopied
(with receipt confirmed) to Xxxxxx X. Xxxxx & Co. Incorporated at 000 Xxxx
Xxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxx 00000, Fax No. (000) 000-0000, Attention:
Xxxxxx X. Xxxxx, Managing Director, with a copy to Xxxxxxx X. Xxxxx, Xxxxxxx &
Xxxxx LLP, 000 Xxxx Xxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxx 00000-0000, Fax No.
(000) 000-0000, and if sent to the Company, will be mailed, delivered, or
telecopied (with receipt confirmed) to Regal-Beloit Corporation, 000 Xxxxx
Xxxxxx, Xxxxxx, Xxxxxxxxx 00000, Fax No. (000) 000-0000, Attention: Xxxxx X.
Xxxxxxx, Chairman, President and CEO, with a copy to Xxxxxxxx X. Xxxxxx, III,
Xxxxx & Xxxxxxx, 000 X. Xxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxx 00000, Fax. No.
(000) 000-0000.
SECTION 16. Successors. This Agreement will inure to the benefit of and
be binding upon the parties hereto and their respective successors, personal
representatives and assigns, and to the benefit of the officers and directors
and controlling persons referred to in Section 10 hereof and no other person
will have any right or obligation hereunder. The term "successors" shall not
include any purchaser of the Shares as such from any of the Underwriters merely
by reason of such purchase.
SECTION 17. Partial Unenforceability. If any Section, paragraph, clause
or provision of this Agreement is for any reason determined to be invalid or
unenforceable, such determination shall not affect the validity or
enforceability of any other Section, paragraph, clause or provision hereof.
SECTION 18. Applicable Law; Counterparts. This Agreement shall be
governed by and construed in accordance with the internal laws of the State of
Wisconsin without reference to conflict of law principles thereunder. This
Agreement may be signed in various counterparts which together shall constitute
one and the same instrument, and shall be effective when at least one
counterpart hereof shall have been executed by or on behalf of each party
hereto. If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to us the enclosed duplicates hereof,
whereupon it will be-
30
come a binding agreement among the Company and the several Underwriters,
including the Representatives, all in accordance with its terms.
Very truly yours,
REGAL-BELOIT CORPORATION
("Company")
By:
-----------------------------------------
Xxxxx X. Xxxxxxx, Chairman, President
and CEO
The foregoing Underwriting Agreement is hereby
confirmed and accepted as of the date first above
written.
XXXXXX X. XXXXX & CO. INCORPORATED
ABN AMRO ROTHSCHILD LLC
CIBC WORLD MARKETS CORP.
By: Xxxxxx X. Xxxxx & Co. Incorporated
Acting as Representatives of the several
Underwriters (including themselves)
identified Annex A attached hereto.
By:
------------------------------------------------
Its:
-----------------------------------------------
31
ANNEX A
Name of Underwriter Number of Firm Shares to be Purchased
Xxxxxx X. Xxxxx & Co. Incorporated
ABN AMRO Rothschild LLC
CIBC World Markets Corp.
-------
Total 3,000,000
ANNEX B
SUBSIDIARIES
State of
Subsidiary Organization Equity Owners (Including %)
---------- ------------ ---------------------------
Marathon Electric
Manufacturing Corporation* Wisconsin Regal-Beloit Corporation (100%)
Xxxxxx Electric Corporation* Wisconsin Regal-Beloit Corporation (100%)
Hub City, Inc.* Delaware Regal-Beloit Corporation (100%)
Marathon Special Products Ohio Marathon Electric Manufacturing
Corporation* Corporation (100%)
Thomson Technology, Inc.* British Columbia Regal-Beloit Holdings, Inc.
(Canada) (100%)
Xxxxxx Canada, Inc.* Ontario (Canada) Xxxxxx Electric Corporation
(100%)
Mastergear GmbH Germany Regal-Beloit Corporation (100%)
Xxxxxxxx Mastergear Limited United Kingdom Regal-Beloit Corporation (100%)
Costruzioni Meccaniche Italy Regal-Beloit Corporation (100%)
Legnanesi
New York Twist Drill, Inc. Delaware Regal-Beloit Corporation (100%)
Regal-Beloit Foreign Barbados Regal-Beloit Corporation (100%)
Sales Corporation
Regal-Beloit Flight Wisconsin Marathon Electric Manufacturing
Services, Inc. Corporation (60%)
Regal-Beloit Corporation (40%)
Regal-Beloit Holdings Ltd. Yukon Territory Regal-Beloit Corporation (100%)
(Canada)
Marathon Redevelopment Missouri Marathon Electric Manufacturing
Corporation Corporation (100%)
Marathon Electric Far Singapore Marathon Electric Manufacturing
East Pte Ltd. Corporation (100%)
Thomson Finance, Ltd. British Columbia Regal-Beloit Holdings, Inc,
(Canada) (100%)
Patent Holdings Ltd. British Columbia Regal-Beloit Holdings, Inc,
(Canada) (100%)
Xxxxxx Electric Wisconsin Xxxxxx Electric Corporation
International, Inc. (100%)
State of
Subsidiary Organization Equity Owners (Including %)
---------- ------------ ---------------------------
Shanghai Marathon GeXin China Marathon Electric Manufacturing
Electric Company Ltd. Corporation (55%)
_________________________ (45%)
----------------
* Denotes a "significant subsidiary" of the Company for purposes of this
Agreement.
OWNERSHIP OF EQUITY INTERESTS OF 5% OR MORE IN, OR CONTROL OF, OTHER
CORPORATIONS, LIMITED LIABILITY COMPANIES, PARTNERSHIPS, JOINT VENTURES,
ASSOCIATIONS, TRUSTS OR OTHER BUSINESS ORGANIZATIONS THAT ARE MATERIAL
TO THE COMPANY OR ITS SUBSIDIARIES ON A CONSOLIDATED BASIS.
None
ANNEX C
FORM OF LOCK-UP AGREEMENT
Xxxxxx X. Xxxxx & Co. Incorporated
ABN AMRO Rothschild LLC
CIBC World Markets Corp.
As Representatives of the Several Underwriters
c/o Xxxxxx X. Xxxxx & Co. Incorporated
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Re: Regal-Beloit Corporation (the "Company")
Ladies & Gentlemen:
The undersigned is an owner of record or beneficially of certain shares
of Common Stock of the Company (the "Common Stock") or securities convertible
into or exchangeable or exercisable for Common Stock. The Company proposes to
carry out a public offering of Common Stock (the "Offering") for which you will
act as the representatives (the "Representatives") of the underwriters. The
undersigned recognizes that the Offering will be of benefit to the undersigned
and will benefit the Company by, among other things, raising additional capital
for its operations. The undersigned acknowledges that you and the other
underwriters are relying on the representations and agreements of the
undersigned contained in this letter in carrying out the Offering and in
entering into underwriting arrangements with the Company with respect to the
Offering.
In consideration of the foregoing, the undersigned hereby agrees that,
without the prior written consent of Xxxxxx X. Xxxxx & Co. Incorporated, the
undersigned will not, directly or indirectly, for a period commencing on the
date hereof and continuing to a date 90 days after the date of the final
prospectus for the Offering (the "Lock-up Period"), offer, sell, transfer, or
pledge, contract to sell, transfer or pledge, or cause or in any way permit to
be sold, transferred, pledged, or otherwise disposed of (collectively, a
"Disposition") any (i) shares of Common Stock; (ii) rights, options, or warrants
to purchase shares of Common Stock (including, without limitation, shares of
Common Stock that may be deemed to be beneficially owned by any such shareholder
in accordance with the applicable regulations of the Commission and shares of
Common Stock that may be issued upon the exercise of a stock option, warrant or
other convertible security), it being agreed, however, that neither the exercise
of a stock option nor the withholding or surrender of Securities to cover
applicable taxes on an option exercise shall be considered a Disposition; or
(iii) securities that are convertible or exchangeable into shares of Common
Stock now owned or hereafter acquired directly by such person or with respect to
which such person has or hereafter acquires the power of disposition
(collectively, the "Securities"). The foregoing sentence shall not apply to the
Disposition of any or all of the Securities by gift, will or intestacy, provided
that in any such case it shall be a condition to the Disposition that the
transferee execute an agreement stating that the transferee is receiving and
holding the Securities subject to the provisions of
C-1
this Lock-up Letter and there shall be no further Disposition of such Securities
except in accordance with this Lock-up Letter.
The foregoing restriction has been expressly agreed to preclude the
holder of the Securities from engaging in any hedging or other transaction which
is designed to or reasonably expected to lead to or result in a Disposition of
the Securities during the Lock-up Period, even if such Securities would be
disposed of by someone other than such holder. Such prohibited hedging or other
transactions would include, without limitation, any short sale (whether or not
against the box) or any purchase, sale or grant of any right (including, without
limitation, any put or call option) with respect to any Securities or with
respect to any security (other than a broad-based market basket or index) that
includes, relates to or derives any significant part of its value from the
Securities. The undersigned also agrees and consents to the entry of stop
transfer instructions with the Company's transfer agent and registrar against
the transfer of Securities held by the undersigned except in compliance with the
foregoing restrictions.
The undersigned represents and warrants that the undersigned has full
power and authority to enter into this agreement and acknowledges that this
agreement is enforceable against the undersigned by the Representative. This
agreement is irrevocable and will be binding on the undersigned and the
respective successors, heirs, personal representatives, and assigns of the
undersigned.
Very truly yours,
------------------------------------
[Name of officer or director]
C-2
ANNEX D
LIST OF OFFICERS AND DIRECTORS SUBJECT TO LOCK-UP
Xxxxx X. Xxxxxxx
Xxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxxx
Xxxxx X. Xxxxxxxxxx
Xxxx X. Xxxxxxxx
Xxxxx Xxxxxxxxxx
Xxxxx X. Xxxxxxxxx
X. Xxxx Xxxxxxx
Xxxx X. Xxxxxx
Xxxxxxx X. Xxxxx
Xxxx X. Xxxxx
G. Xxxxxxxxx Xxxxxx, Xx.
Xxxx X. XxXxx
