Exhibit 2.1
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IDEX CORPORATION
(a Delaware corporation)
5,000,000 Shares of Common Stock
PURCHASE AGREEMENT
Dated: ., 2002_______________
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Table of Contents
PURCHASE AGREEMENT
SECTION 1. Representations and Warranties ........................................................... 3
(a) Representations and Warranties by the Company ............................................. 3
(b) Representations and Warranties by the Selling Shareholders ................................ 9
(c) Officer's Certificates ....................................................................12
SECTION 2. Sale and Delivery to Underwriters; Closing ...............................................12
(a) Initial Securities ........................................................................12
(b) Option Securities .........................................................................12
(c) Payment ...................................................................................13
(d) Denominations; Registration ...............................................................13
SECTION 3. Covenants of the Company .................................................................13
SECTION 4. Payment of Expenses ......................................................................16
(a) Expenses ..................................................................................16
(b) Termination of Agreement ..................................................................16
(c) Allocation of Expenses ....................................................................17
SECTION 5. Conditions of Underwriters' Obligations ..................................................17
SECTION 6. Indemnification...........................................................................20
(a) Indemnification of Underwriters by the Company ............................................20
(b) Indemnification of Underwriters by the Selling Shareholders ...............................21
(c) Indemnification of Company, Directors, Officers and the Selling Shareholders ..............22
(d) Actions against Parties; Notification .....................................................22
(e) Settlement without Consent if Failure to Reimburse ........................................22
(f) Other Agreements with Respect to Indemnification ..........................................23
SECTION 7. Contribution .............................................................................23
SECTION 8. Representations, Warranties and Agreements to Survive Delivery ...........................24
SECTION 9. Termination of Agreement .................................................................24
(a) Termination; General ......................................................................24
(b) Liabilities ...............................................................................25
SECTION 10. Default by One or More of the Underwriters ..............................................25
SECTION 11. Default by One or More of the Selling Shareholders or the Company .......................26
SECTION 12. Notices .................................................................................26
i
SECTION 13. Parties ..........................................................26
SECTION 14. GOVERNING LAW AND TIME ...........................................27
SECTION 15. Effect of Headings ...............................................27
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SCHEDULES
Schedule A - List of Underwriters .............................................................. Sch A-1
Schedule B - Shares to be Sold by the Company and Selling Shareholders ........................ Sch B-1
Schedule C - Pricing Information ............................................................... Sch C-1
Schedule D - List of Subsidiaries .............................................................. Sch D-1
Schedule E - List of Persons and Entities Subject to Lock-up ................................... Sch E-1
EXHIBITS
Exhibit A - Form of Opinion of Company's Counsel ................................................... A-1
Exhibit B - Form of Opinion of Selling Shareholders ................................................ B-1
Exhibit C - Form of Lock-up Letter ................................................................. C-1
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DRAFT 4/26/02
IDEX CORPORATION
(a Delaware corporation)
5,000,000 Shares of Common Stock
(Par Value $.01 Per Share)
PURCHASE AGREEMENT
., 2002
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Credit Suisse First Boston Corporation
as Representatives of the several Underwriters
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281
Ladies and Gentlemen:
IDEX Corporation, a Delaware corporation (the "Company") and the
persons listed in Schedule B hereto (the "Selling Shareholders"), confirm their
respective agreements with Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner &
Smith Incorporated ("Merrill Lynch"), Credit Suisse First Boston Corporation and
each of the other Underwriters named in Schedule A hereto (collectively, the
"Underwriters", which term shall also include any underwriter substituted as
hereinafter provided in Section 10 hereof), for whom Merrill Lynch and Credit
Suisse First Boston Corporation are acting as representatives (in such capacity,
the "Representatives"), with respect to the issue and sale by the Company and
the Selling Shareholders, acting severally and not jointly, and the purchase by
the Underwriters, acting severally and not jointly, of the respective numbers of
shares of Common Stock, par value $.01 per share, of the Company ("Common
Stock") set forth in said Schedule A, and with respect to the grant by KKR
Associates, L.P., a Selling Shareholder ("KKR"), to the Underwriters, acting
severally and not jointly, of the option described in Section 2(b) hereof to
purchase all or any part of 750,000 additional shares of Common Stock to cover
over-allotments, if any. The aforesaid 5,000,000 shares of Common Stock (the
"Initial Securities") to be purchased by the Underwriters and all or any part of
the 750,000 shares of Common Stock subject to the option described in Section
2(b) hereof (the "Option Securities") are hereinafter called, collectively, the
"Securities."
The Underwriters will concurrently enter into an Agreement Among
Underwriters of even date herewith providing for the coordination of certain
transactions among the Underwriters under the direction of Merrill Lynch & Co.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated (in such capacity, the
"Global Coordinator").
The Company and the Selling Shareholders understand that the
Underwriters propose to make a public offering of the Securities as soon as the
Representatives deem advisable after this Agreement has been executed and
delivered.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-84036) covering the
registration of the Securities under the Securities Act of 1933, as amended (the
"1933 Act"), including the related preliminary prospectus or prospectus.
Promptly after execution and delivery of this Agreement, the Company will
prepare and file a prospectus in accordance with the provisions of Rule 430A
("Rule 430A") of the rules and regulations of the Commission under the 1933 Act
(the "1933 Act Regulations") and paragraph (b) of Rule 424 ("Rule 424(b)") of
the 1933 Act Regulations. The information included in any such prospectus that
was omitted from such registration statement at the time it became effective but
that is deemed to be part of such registration statement at the time it became
effective pursuant to paragraph (b) of Rule 430A is referred to as "Rule 430A
Information." Any prospectus used before such registration statement became
effective and any prospectus that omitted the Rule 430A Information that was
used after such effectiveness and prior to the execution and delivery of this
Agreement, is herein called a "preliminary prospectus". Such registration
statement, including the exhibits thereto, schedules thereto, if any, and the
documents incorporated by reference therein pursuant to Item 12 of Form S-3
under the 1933 Act, at the time it became effective and including the Rule 430A
Information is herein called the "Registration Statement". Any registration
statement filed pursuant to Rule 462(b) of the 1933 Act Regulations is herein
referred to as the "Rule 462(b) Registration Statement," and after such filing
the term "Registration Statement" shall include the Rule 462(b) Registration
Statement. The final prospectus, including the documents incorporated by
reference therein pursuant to Item 12 of Form S-3 under the 1933 Act, in the
form first furnished to the Underwriters for use in connection with the offering
of the Securities is herein called the "Prospectus." For purposes of this
Agreement, all references to the Registration Statement, any preliminary
prospectus, the Prospectus or any amendment or supplement to any of the
foregoing shall be deemed to include the copy filed with the Commission pursuant
to its Electronic Data Gathering, Analysis and Retrieval system ("EDGAR").
All references in this Agreement to financial statements and schedules
and other information which is "contained", "included" or "stated" in the
Registration Statement, any preliminary prospectus or the Prospectus (or other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
by reference in the Registration Statement, any preliminary prospectus or the
Prospectus, as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement, any preliminary
prospectus or the Prospectus shall be deemed to mean and include the filing of
any document under the Securities Exchange Act of 1934 (the "1934 Act") which is
incorporated by reference in the Registration Statement, such preliminary
prospectus or the Prospectus, as the case may be.
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Section 1. Representations and Warranties.
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(a) Representations and Warranties by the Company. The Company
represents and warrants to each Underwriter as of the date hereof, as of the
Closing Time referred to in Section 2(c) hereof, and as of each Date of Delivery
(if any) referred to in Section 2(b) hereof, and agrees with each Underwriter,
as follows:
(i) Compliance with Registration Requirements. The Company meets the
requirements for use of Form S-3 under the 1933 Act. Each of the
Registration Statement and any Rule 462(b) Registration Statement has
become effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b)
Registration Statement has been issued under the 1933 Act and no
proceedings for that purpose have been instituted or are pending or, to
the knowledge of the Company, are contemplated by the Commission, and
any request on the part of the Commission for additional information
has been complied with.
At the respective times the Registration Statement, any Rule
462(b) Registration Statement and any post-effective amendments thereto
became effective and at the Closing Time (and, if any Option Securities
are purchased, at the Date of Delivery), the Registration Statement,
the Rule 462(b) Registration Statement and any amendments and
supplements thereto complied and will comply in all material respects
with the requirements of the 1933 Act and the 1933 Act Regulations and
did not and will not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading. Neither the
Prospectus nor any amendments or supplements thereto (including any
prospectus wrapper), at the time the Prospectus or any amendments or
supplements thereto were issued and at the Closing Time (and, if any
Option Securities are purchased, at the Date of Delivery), included or
will include an untrue statement of a material fact or omitted or will
omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading. The representations and warranties in this subsection
shall not apply to statements in or omissions from the Registration
Statement or the Prospectus made in reliance upon and in conformity
with information furnished to the Company in writing by any Underwriter
through the Representatives expressly for use in the Registration
Statement or the Prospectus.
Each preliminary prospectus and the Prospectus filed as part of
the Registration Statement as originally filed or as part of any
amendment thereto, or filed pursuant to Rule 424 under the 1933 Act,
complied when so filed in all material respects with the 1933 Act
Regulations and each preliminary prospectus and the Prospectus
delivered to the Underwriters for use in connection with this offering
was identical to the electronically transmitted copies thereof filed
with the Commission pursuant to EDGAR, except to the extent permitted
by Regulation S-T.
(ii) Incorporated Documents. The documents incorporated or deemed
to be incorporated by reference in the Registration Statement and the
Prospectus, when they became effective or at the time they were or
hereafter are filed with the Commission,
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complied and will comply in all material respects with the requirements of the
1933 Act and the 1933 Act Regulations or the 1934 Act and the rules and
regulations of the Commission thereunder (the "1934 Act Regulations"), as
applicable, and, when read together with the other information in the
Prospectus, at the time the Registration Statement became effective, at the time
the Prospectus was issued and at the Closing Time (and, if any Option Securities
are purchased, at the Date of Delivery), did not and will not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading.
(iii) Independent Accountants. The accountants who certified the financial
statements and supporting schedules included in the Registration Statement are
independent public accountants as required by the 1933 Act and the 1933 Act
Regulations.
(iv) Financial Statements. The financial statements included in the
Registration Statement and the Prospectus, together with the related schedules
and notes, present fairly the financial position of the Company and its
consolidated subsidiaries at the dates indicated and the statement of
operations, stockholders' equity and cash flows of the Company and its
consolidated subsidiaries for the periods specified; said financial statements
have been prepared in conformity with generally accepted accounting principles
("GAAP") applied on a consistent basis throughout the periods involved. The
supporting schedules, if any, included in the Registration Statement present
fairly in accordance with GAAP the information required to be stated therein.
The selected financial data and the summary financial information included in
the Prospectus present fairly the information shown therein and have been
compiled on a basis consistent with that of the audited financial statements
included in the Registration Statement.
(v) No Material Adverse Change in Business. Since the respective dates as
of which information is given in the Registration Statement and the Prospectus,
except as otherwise stated therein, (A) there has been no material adverse
change in the condition, financial or otherwise, or in the earnings, business
affairs or business prospects of the Company and its subsidiaries considered as
one enterprise, whether or not arising in the ordinary course of business (a
"Material Adverse Effect"), (B) there have been no transactions entered into by
the Company or any of its subsidiaries, other than those in the ordinary course
of business, which are material with respect to the Company and its subsidiaries
considered as one enterprise, and (C) except for regular dividends on the
Company's Common Stock in amounts per share that are consistent with past
practice, there has been no dividend or distribution of any kind declared, paid
or made by the Company on any class of its capital stock.
(vi) Good Standing of the Company. The Company has been duly organized and
is validly existing as a corporation in good standing under the laws of the
State of Delaware and has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectus and to enter into and perform its obligations under this Agreement;
and the Company is duly qualified as a foreign corporation to transact business
and is in good standing in each other jurisdiction in which such qualification
is required, whether by reason of the ownership or leasing of
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property or the conduct of business, except where the failure so to qualify or
to be in good standing would not result in a Material Adverse Effect.
(vii) Good Standing of Subsidiaries. Each "significant subsidiary" of the
Company (as such term is defined in Rule 1-02 of Regulation S-X) (each a
"Subsidiary" and, collectively, the "Subsidiaries") has been duly organized and
is validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has corporate power and authority to own,
lease and operate its properties and to conduct its business as described in the
Prospectus and is duly qualified as a foreign corporation to transact business
and is in good standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure so to qualify or to be in good
standing would not result in a Material Adverse Effect; except as otherwise
disclosed in the Registration Statement, all of the issued and outstanding
capital stock of each such Subsidiary has been duly authorized and validly
issued, is fully paid and non-assessable and is owned by the Company, directly
or through subsidiaries, free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim or equity; none of the outstanding shares of
capital stock of any Subsidiary was issued in violation of the preemptive or
similar rights of any security holder of such Subsidiary. The only Subsidiaries
of the Company are the subsidiaries listed on Schedule D hereto.
(viii) Capitalization. The authorized, issued and outstanding capital stock
of the Company is as set forth in the Prospectus in the column entitled "Actual"
under the caption "Capitalization" (except for subsequent issuances, if any,
pursuant to this Agreement, pursuant to reservations, agreements or employee
benefit plans referred to in the Prospectus or pursuant to the exercise of
convertible securities or options referred to in the Prospectus or the buy back
contemplated by Section 3(i)(E) hereof). The shares of issued and outstanding
capital stock of the Company, including the Securities to be purchased by the
Underwriters from the Selling Shareholders, have been duly authorized and
validly issued and are fully paid and non-assessable; none of the outstanding
shares of capital stock of the Company, including the Securities to be purchased
by the Underwriters from the Selling Shareholders, was issued in violation of
the preemptive or other similar rights of any security holder of the Company.
(ix) Authorization of Agreement. This Agreement has been duly authorized,
executed and delivered by the Company.
(x) Authorization and Description of Securities. The Securities to be
purchased by the Underwriters from the Company have been duly authorized for
issuance and sale to the Underwriters pursuant to this Agreement, and, when
issued and delivered by the Company pursuant to this Agreement, against payment
of the consideration set forth herein, will be validly issued, fully paid and
non-assessable; the Common Stock conforms to all statements relating thereto
contained in the Prospectus and such description conforms to the rights set
forth in the instruments defining the same; no holder of the Securities will be
subject to personal liability by reason of being such a holder; and the issuance
of the Securities is not subject to the preemptive or other similar rights of
any security holder of the Company.
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(xi) Absence of Defaults and Conflicts. Neither the Company nor any of its
subsidiaries is in violation of its charter or by-laws or in default in the
performance or observance of any obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, deed of trust, loan or credit
agreement, note, lease or other agreement or instrument to which the Company or
any of its subsidiaries is a party or by which it or any of them may be bound,
or to which any of the property or assets of the Company or any subsidiary is
subject (collectively, "Agreements and Instruments") except for such defaults
that would not result in a Material Adverse Effect; and the execution, delivery
and performance of this Agreement and the consummation of the transactions
contemplated in this Agreement and in the Registration Statement (including the
issuance and sale of the Securities and the use of the proceeds from the sale of
the Securities as described in the Prospectus under the caption "Use of
Proceeds") and compliance by the Company with its obligations under this
Agreement have been duly authorized by all necessary corporate action and do not
and will not, whether with or without the giving of notice or passage of time or
both, conflict with or constitute a breach of, or default or Repayment Event (as
defined below) under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any
subsidiary pursuant to, the Agreements and Instruments (except for such
conflicts, breaches or defaults or liens, charges or encumbrances that would not
result in a Material Adverse Effect), nor will such action result in any
violation of the provisions of (i) the charter or by-laws of the Company or any
subsidiary or (ii) except for such violation that would not result in a Material
Adverse Effect any applicable law, statute, rule, regulation, judgment, order,
writ or decree of any government, government instrumentality or court, domestic
or foreign, having jurisdiction over the Company or any subsidiary or any of
their assets, properties or operations. As used herein, a "Repayment Event"
means any event or condition which gives the holder of any note, debenture or
other evidence of indebtedness (or any person acting on such holder's behalf)
the right to require the repurchase, redemption or repayment of all or a portion
of such indebtedness by the Company or any subsidiary.
(xii) Absence of Labor Dispute. No labor dispute with the employees of the
Company or any subsidiary exists or, to the knowledge of the Company, is
imminent, and the Company is not aware of any existing or imminent labor
disturbance by the employees of any of its or any subsidiary's principal
suppliers, manufacturers, customers or contractors, which, in either case, may
reasonably be expected to result in a Material Adverse Effect.
(xiii) Absence of Proceedings. Except as described in the Registration
Statement or the Prospectus, there is no action, suit, proceeding, inquiry or
investigation before or brought by any court or governmental agency or body,
domestic or foreign, now pending, or, to the knowledge of the Company,
threatened, against or affecting the Company or any subsidiary, which is
required to be disclosed in the Registration Statement (other than as disclosed
therein), or which might reasonably be expected to result in a Material Adverse
Effect, or which might reasonably be expected to materially and adversely affect
the properties or assets thereof or the consummation of the transactions
contemplated in this Agreement or the performance by the Company of its
obligations hereunder; the aggregate of all pending legal or governmental
proceedings to
6
which the Company or any subsidiary is a party or of which any of their
respective property or assets is the subject which are not described in the
Registration Statement, including ordinary routine litigation incidental to the
business, could not reasonably be expected to result in a Material Adverse
Effect; all pending legal or governmental proceedings to which the Company or
any subsidiary is a party described in the Registration Statement or Prospectus,
to the extent such information constitutes summaries of legal matters, is
correct in all material respects.
(xiv) Accuracy of Exhibits. There are no contracts or documents which are
required to be described in the Registration Statement, the Prospectus or the
documents incorporated by reference therein or to be filed as exhibits thereto
which have not been so described and filed as required.
(xv) Possession of Intellectual Property. The Company and its subsidiaries
own or possess, or can acquire on reasonable terms, adequate patents, patent
rights, licenses, inventions, copyrights, know-how (including trade secrets and
other unpatented and/or unpatentable proprietary or confidential information,
systems or procedures), trademarks, service marks, trade names or other
intellectual property (collectively, "Intellectual Property") necessary to carry
on the business now operated by them, and neither the Company nor any of its
subsidiaries has received any notice or is otherwise aware of any infringement
of or conflict with asserted rights of others with respect to any Intellectual
Property or of any facts or circumstances which would render any Intellectual
Property invalid or inadequate to protect the interest of the Company or any of
its subsidiaries therein, and which infringement or conflict (if the subject of
any unfavorable decision, ruling or finding) or invalidity or inadequacy, singly
or in the aggregate, would result in a Material Adverse Effect.
(xvi) Absence of Further Requirements. No filing with, or authorization,
approval, consent, license, order, registration, qualification or decree of, any
court or governmental authority or agency is necessary or required for the
performance by the Company of its obligations hereunder, in connection with the
offering, issuance or sale of the Securities under this Agreement or the
consummation of the transactions contemplated by this Agreement, except such as
have been already obtained or as may be required under the 1933 Act or the 1933
Act Regulations and foreign or state securities or blue sky laws.
(xvii) Possession of Licenses and Permits. The Company and its subsidiaries
possess such permits, licenses, approvals, consents and other authorizations
(collectively, "Governmental Licenses") issued by the appropriate federal,
state, local or foreign regulatory agencies or bodies necessary to conduct the
business now operated by them except where the failure to possess the same would
not, individually or in the aggregate, have a Material Adverse Effect. The
Company and its subsidiaries are in compliance with the terms and conditions of
all such Governmental Licenses, except where the failure so to comply would not,
singly or in the aggregate, have a Material Adverse Effect; all of the
Governmental Licenses are valid and in full force and effect, except when the
invalidity of such Governmental Licenses or the failure of such Governmental
Licenses to be in full force and effect would not have a Material Adverse
Effect; and
7
neither the Company nor any of its subsidiaries has received any notice of
proceedings relating to the revocation or modification of any such Governmental
Licenses which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would result in a Material Adverse Effect.
(xviii) Title to Property. The Company and its subsidiaries have good and
marketable title to all real property owned by the Company and its subsidiaries
and good title to all other properties owned by them, in each case, free and
clear of all mortgages, pledges, liens, security interests, claims, restrictions
or encumbrances of any kind except such as (a) are described in the Prospectus
or (b) do not, singly or in the aggregate, have a Material Adverse Effect; and
all of the leases and subleases material to the business of the Company and its
subsidiaries, considered as one enterprise, and under which the Company or any
of its subsidiaries holds properties described in the Prospectus, are in full
force and effect, and neither the Company nor any subsidiary has any notice of
any material claim of any sort that has been asserted by anyone adverse to the
rights of the Company or any subsidiary under any of the leases or subleases
mentioned above, or affecting or questioning the rights of the Company or such
subsidiary to the continued possession of the leased or subleased premises under
any such lease or sublease.
(xix) Investment Company Act. The Company is not, and upon the issuance and
sale of the Securities as herein contemplated and the application of the net
proceeds therefrom as described in the Prospectus will not be, an "investment
company" or an entity "controlled" by an "investment company" as such terms are
defined in the Investment Company Act of 1940, as amended (the "1940 Act").
(xx) Environmental Laws. Except as described in the Registration Statement
and except as would not, singly or in the aggregate, result in a Material
Adverse Effect, (A) neither the Company nor any of its subsidiaries is in
violation of any federal, state, local or foreign statute, law, rule,
regulation, ordinance, code, policy or rule of common law or any judicial or
administrative interpretation thereof, including any judicial or administrative
order, consent, decree or judgment, relating to pollution or protection of human
health, the environment (including, without limitation, ambient air, surface
water, groundwater, land surface or subsurface strata) or wildlife, including,
without limitation, laws and regulations relating to the release or threatened
release of chemicals, pollutants, contaminants, wastes, toxic substances,
hazardous substances, petroleum or petroleum products (collectively, "Hazardous
Materials") or to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of Hazardous Materials (collectively,
"Environmental Laws"), (B) the Company and its subsidiaries have all permits,
authorizations and approvals required under any applicable Environmental Laws
and are each in compliance with their requirements, (C) there are no pending or
threatened administrative, regulatory or judicial actions, suits, demands,
demand letters, claims, liens, notices of noncompliance or violation,
investigation or proceedings relating to any Environmental Law against the
Company or any of its subsidiaries and (D) there are no events or circumstances
that might reasonably be expected to form the basis of an order for clean-up or
remediation, or an action, suit or proceeding by any private party or
governmental body or agency, against or affecting the
8
Company or any of its subsidiaries relating to Hazardous Materials or any
Environmental Laws.
(xxi) Registration Rights.
-------------------
Except as disclosed in the Prospectus, there are no persons with
registration rights or other similar rights to have any securities
registered pursuant to the Registration Statement.
(xxii) Insurance.
---------
The Company and its subsidiaries carry or are entitled to the benefits
of insurance, with financially sound and reputable insurers, in such
amounts and covering such risks as is generally maintained by companies of
established repute engaged in the same or similar business, and all such
insurance is in full force and effect except where the failure for any such
insurance to be in full force would not result in a Material Adverse
Effect.
(xxiii) Relationships with Directors and Stockholders.
---------------------------------------------
No relationship, direct or indirect, exists between or among any of
the Company or any affiliate of the Company, on the one hand, and any
director, officer or stockholder of any of them, on the other hand, which
is required by the 1933 Act or by the 1933 Act Regulations to be described
in the Registration Statement or the Prospectus which is not so described
or is not described as required.
(b) Representations and Warranties by the Selling Shareholders. Each
Selling Shareholder, severally and not jointly, represents and warrants to each
Underwriter as of the date hereof, as of the Closing Time, and, if such Selling
Shareholder is selling Option Securities on a Date of Delivery, as of such Date
of Delivery, and agrees with each Underwriter, as follows:
(i) Accurate Disclosure.
-------------------
In respect of any statements in or omission from the Registration
Statement or the Prospectus or any supplements thereto, in each case made
in reliance upon and in conformity with information furnished in writing to
the Company by each Selling Shareholder specifically for use in connection
with the preparation thereof, such statements comply in all material
respects with the applicable requirements of the 1993 Act and the rules
thereunder, and on the date hereof, on the date of any filing of the
Prospectus pursuant to Rule 424(b) and on the Closing Time (and, if any
Option Securities are purchased, on any Date of Delivery) and any
settlement date, such statements did not or will not contain any untrue
statement of material fact or omit to state any material fact required to
be stated therein or necessary in order to make the statements therein not
misleading. Such Selling Shareholder is not prompted to sell the Securities
to be sold by such Selling Shareholder hereunder by any information
concerning the Company or any subsidiary of the Company which is not set
forth in the Prospectus.
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(ii) Authorization of Agreements.
---------------------------
Such Selling Shareholder has the full right, power and authority
to enter into this Agreement and to sell, transfer and deliver the
Securities to be sold by such Selling Shareholder hereunder. The
execution and delivery of this Agreement and the sale and delivery of
the Securities to be sold by such Selling Shareholder and the
consummation by it of the transactions contemplated herein and
compliance by such Selling Shareholder with its obligations hereunder
do not and will not, whether with or without the giving of notice or
passage of time or both, conflict with or constitute a breach of, or
default under, or result in the creation or imposition of any tax,
lien, charge or encumbrance upon the Securities to be sold by such
Selling Shareholder pursuant to any contract, indenture, mortgage,
deed of trust, loan or credit agreement, or other material agreement
to which such Selling Shareholder is a party or by which such Selling
Shareholder may be bound (such Selling Shareholder hereby certifying
that there are no such material agreements), or to which any of the
property or assets of any Selling Shareholder may be subject nor will
such action result in any violation of any law, administrative
regulation, judgment or order of any governmental agency or body or
any administrative or court decree having jurisdiction over such
Selling Shareholder or any of its properties. In addition, such action
will not result in any violation of the provisions of the general
partnership agreement or similar organizational document of the
Selling Shareholder.
(iii) Right to Transfer Securities.
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The Securities to be sold by the Selling Shareholder pursuant to
this Agreement are certificated securities in registered form and are
not held by or through any securities intermediary within the meaning
of the Uniform Commercial Code as in effect in the State of New York
(the "NYUCC"). The Selling Shareholder has, and, at the Closing Time
will have, full right, power and authority to hold, sell, transfer and
deliver the Securities to be sold by the Selling Shareholder
hereunder. Upon the delivery to the Depository Trust Company ("DTC")
or its agent of the Securities registered in the name of Cede & Co.,
as nominee for DTC against payment by the several Underwriters
therefor, and the crediting by DTC of the Securities to the securities
accounts of the several Underwriters with DTC, DTC will be a
"protected purchaser" of the Securities (as defined in Section 8-303
of the NYUCC) and will acquire its interest in the Securities
(including, without limitation, all rights that the Selling
Shareholder had or has the power to transfer in such Securities) free
of any adverse claim (as defined in Section 8-102(a)(1) of the NYUCC)
assuming neither DTC nor any Underwriter has notice of any adverse
claim. The Underwriters will acquire valid security entitlements
(within the meaning of Section 8-501 of the NYUCC) in respect of the
Securities to be purchased by them, and no action (whether framed in
conversion, replevin, constructive trust, equitable lien, or other
theory) based on an adverse claim to such Securities may be asserted
against the Underwriters assuming they have no notice of any adverse
claim.
(iv) Deposit and Delivery of the Securities.
--------------------------------------
10
On or prior to the date hereof, such Selling Shareholder shall
have opened an account with a Merrill Lynch brokerage office and
deposited certificates for the Securities to be sold by such Selling
Shareholder pursuant to this Agreement into such Merrill Lynch
brokerage account, duly endorsed in blank or to DTC's designee (i.e.,
Cede & Co.) in accordance with Sections 8-107 and 8-304 of the NYUCC
or accompanied by appropriate stock powers and written instrument(s)
of transfer executed in proper form to permit the transfer on the
books of the Company of the Securities; and any general partner of a
Selling Shareholder, is authorized to execute and deliver this
Agreement and the certificate referred to in Section 5(f) or that may
be required pursuant to Sections 5(k) and 5(l) on behalf of such
Selling Shareholder, to sell, assign and transfer to the Underwriters
the Securities to be sold by such Selling Shareholder hereunder, to
determine the purchase price to be paid by the Underwriters to such
Selling Shareholder, as provided in Section 2(b) hereof, to authorize
the delivery of the Securities to be sold by such Selling Shareholder
hereunder, to accept payment therefor, and otherwise to act on behalf
of such Selling Shareholder in connection with this Agreement.
(v) Absence of Manipulation.
-----------------------
Such Selling Shareholder has not taken, and will not take,
directly or indirectly, any action which is designed to or which has
constituted or which might reasonably be expected to cause or result
in stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Securities.
(vi) Absence of Further Requirements.
-------------------------------
No filing with, or consent, approval, authorization, order,
registration, qualification or decree of, any court or governmental
authority or agency, domestic or foreign, is necessary or required for
the performance by such Selling Shareholder of its obligations
hereunder or in connection with the sale and delivery of the
Securities hereunder by such Selling Shareholder or the consummation
by such Selling Shareholders of the transactions contemplated by this
Agreement, except (i) such as may have previously been made or
obtained or as may be required under the 1933 Act or the 1933 Act
Regulations or under the 1934 Act, as amended, and the rules and
regulations of the Commission thereunder, with respect to the Common
Stock, or under state securities or blue sky laws or under foreign
securities laws, (ii) which shall have been obtained or made prior to
Closing Time or, if applicable, the Date of Delivery, and (iii) such
as have been already obtained or as may be required under the laws and
regulations of jurisdictions outside the United States in which the
Securities are offered.
(vii) Restriction on Sale of Securities.
---------------------------------
During a period of 90 days from the date of the Prospectus, such
Selling Shareholder will be subject to the restrictions set forth in
Exhibit C hereto and such Selling Shareholder agrees and consents to
the entry of stop transfer instructions with the Company's transfer
agent and registrar against the transfer of such Selling Shareholder's
securities except in compliance with such restrictions.
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(viii) No Association with NASD.
------------------------
Neither such Selling Shareholder nor any of its affiliates directly,
or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, or has any other
association with (within the meaning of Article I, Section 1(m) of the
By-laws of the National Association of Securities Dealers, Inc.), any
member firm of the National Association of Securities Dealers, Inc.
(c) Officer's Certificates. Any certificate signed by any officer of the
Company or any of its subsidiaries delivered to the Global Coordinator, the
Representatives or to counsel for the Underwriters shall be deemed a
representation and warranty by the Company to each Underwriter as to the matters
covered thereby and any certificate signed by or on behalf of the Selling
Shareholders as such and delivered to the Representatives or to counsel for the
Underwriters pursuant to the terms of this Agreement shall be deemed a
representation and warranty by such Selling Shareholder to the Underwriters as
to the matters covered thereby.
SECTION 2. Sale and Delivery to Underwriters; Closing.
------------------------------------------
(a) Initial Securities. On the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, the
Company and each Selling Shareholder, severally and not jointly, agree to sell
to each Underwriter, severally and not jointly, and each Underwriter, severally
and not jointly, agrees to purchase from the Company and the Selling
Shareholders, at the price per share set forth in Schedule C, the number of
Initial Securities set forth in Schedule A opposite the name of such
Underwriter, plus any additional number of Initial Securities which such
Underwriter may become obligated to purchase pursuant to the provisions of
Section 10 hereof.
(b) Option Securities. In addition, on the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, KKR hereby grants an option to the Underwriters, severally and not
jointly, to purchase up to an additional 750,000 shares of Common Stock at the
price per share set forth in Schedule C, less an amount per share equal to any
dividends or distributions declared by the Company and payable on the Initial
Securities but not payable on the Option Securities. The option hereby granted
will expire 30 days after the date hereof and may be exercised in whole or in
part from time to time only for the purpose of covering over-allotments which
may be made in connection with the offering and distribution of the Initial
Securities upon notice by the Global Coordinator to the Company and KKR setting
forth the number of Option Securities as to which the several Underwriters are
then exercising the option and the time and date of payment and delivery for
such Option Securities. Any such time and date of delivery for the Option
Securities (a "Date of Delivery") shall be determined by the Global Coordinator,
but shall not be later than seven full business days after the exercise of said
option, nor in any event prior to the Closing Time, as hereinafter defined. If
the option is exercised as to all or any portion of the Option Securities, each
of the Underwriters, acting severally and not jointly, will purchase that
proportion of the total number of Option Securities then being purchased which
the number of Initial Securities set forth in Schedule A opposite the name of
such Underwriter bears to the total number of Initial Securities, subject in
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each case to such adjustments as the Global Coordinator in its discretion shall
make to eliminate any sales or purchases of fractional shares.
(c) Payment. Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the offices of
Shearman & Sterling, 599 Lexington Avenue, New York, New York 10022, or at such
other place as shall be agreed upon by the Global Coordinator, the Company and
the Selling Shareholders, at 9:00 A.M. (Eastern time) on the third (fourth, if
the pricing occurs after 4:30 P.M. (Eastern time) on any given day) business day
after the date hereof (unless postponed in accordance with the provisions of
Section 10), or such other time not later than ten business days after such date
as shall be agreed upon by the Global Coordinator, the Company and the Selling
Shareholders (such time and date of payment and delivery being herein called
"Closing Time").
In addition, in the event that any or all of the Option Securities are
purchased by the Underwriters, payment of the purchase price for, and delivery
of certificates for, such Option Securities shall be made at the above-mentioned
offices, or at such other place as shall be agreed upon by the Global
Coordinator, the Company and the Selling Shareholders, on each Date of Delivery
as specified in the notice from the Global Coordinator to the Company and the
Selling Shareholders.
Payment shall be made to the Company and the Selling Shareholders by wire
transfer of immediately available funds to a bank account designated by the
Company and by each Selling Shareholder against delivery through the facilities
of The Depository Trust Company to the Representatives for the respective
accounts of the Underwriters of certificates for the Securities to be purchased
by them. It is understood that each Underwriter has authorized the
Representatives, for its account, to accept delivery of, receipt for, and make
payment of the purchase price for, the Initial Securities and the Option
Securities, if any, which it has agreed to purchase. Merrill Lynch, individually
and not as representative of the Underwriters, may (but shall not be obligated
to) make payment of the purchase price for the Initial Securities or the Option
Securities, if any, to be purchased by any Underwriter whose funds have not been
received by the Closing Time or the relevant Date of Delivery, as the case may
be, but such payment shall not relieve such Underwriter from its obligations
hereunder.
(d) Denominations; Registration. Certificates for the Initial Securities
and the Option Securities, if any, shall be in such denominations and registered
in such names as the Representatives may request in writing at least one full
business day before the Closing Time or the relevant Date of Delivery, as the
case may be. The certificates for the Initial Securities and the Option
Securities, if any, will be made available for examination and packaging by the
Representatives in The City of New York not later than 10:00 A.M. (Eastern time)
on the business day prior to the Closing Time or the relevant Date of Delivery,
as the case may be.
SECTION 3. Covenants of the Company. The Company covenants with each
Underwriter as follows:
(a) Compliance with Securities Regulations and Commission Requests.
The Company, subject to Section 3(b), will comply with the requirements of
Rule 430A and will notify the Global Coordinator immediately, and confirm
the notice in writing,
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(i) when any post-effective amendment to the Registration Statement
shall become effective, or any supplement to the Prospectus or any
amended Prospectus shall have been filed, (ii) of the receipt of any
comments from the Commission, (iii) of any request by the Commission
for any amendment to the Registration Statement or any amendment or
supplement to the Prospectus or for additional information, and (iv)
of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of any order preventing
or suspending the use of any preliminary prospectus, or of the
suspension of the qualification of the Securities for offering or sale
in any jurisdiction, or of the initiation or threatening of any
proceedings for any of such purposes. The Company will promptly effect
the filings necessary pursuant to Rule 424(b) and will take such steps
as it deems necessary to ascertain promptly whether the form of
prospectus transmitted for filing under Rule 424(b) was received for
filing by the Commission and, in the event that it was not, it will
promptly file such prospectus. The Company will make every reasonable
effort to prevent the issuance of any stop order and, if any stop
order is issued, to obtain the lifting thereof at the earliest
possible moment.
(b) Filing of Amendments. The Company will give the Global
Coordinator notice of its intention to file or prepare any amendment
to the Registration Statement (including any filing under Rule
462(b)), or any amendment, supplement or revision to either any
prospectus included in the Registration Statement at the time it
became effective or to the Prospectus, whether pursuant to the 1933
Act, the 1934 Act or otherwise) will furnish the Global Coordinator
with copies of any such documents a reasonable amount of time prior to
such proposed filing or use, as the case may be, and will not file or
use any such document to which the Global Coordinator or counsel for
the Underwriters shall reasonably object.
(c) Delivery of Registration Statements. The Company has
furnished or will deliver to the Representatives and counsel for the
Underwriters, without charge, signed copies of the Registration
Statement as originally filed and of each amendment thereto (including
exhibits filed therewith or incorporated by reference therein and
documents incorporated or deemed to be incorporated by reference
therein) and signed copies of all consents and certificates of
experts, and will also deliver to the Representatives, without charge,
a conformed copy of the Registration Statement as originally filed and
of each amendment thereto (without exhibits) for each of the
Underwriters. The copies of the Registration Statement and each
amendment thereto furnished to the Underwriters will be identical to
the electronically transmitted copies thereof filed with the
Commission pursuant to EDGAR, except to the extent permitted by
Regulation S-T.
(d) Delivery of Prospectus. The Company has delivered to each
Underwriter, without charge, as many copies of each preliminary
prospectus as such Underwriter reasonably requested, and the Company
hereby consents to the use of such copies for purposes permitted by
the 1933 Act. The Company will furnish to each Underwriter, without
charge, during the period when the Prospectus is required to be
delivered under the 1933 Act or the 1934 Act, such number of copies of
the Prospectus (as amended or supplemented) as such Underwriter may
reasonably request. The Prospectus and any amendments or supplements
thereto furnished to the Underwriters will be identical to the
14
electronically transmitted copies thereof filed with the Commission
pursuant to EDGAR, except to the extent permitted by Regulation S-T.
(e) Continued Compliance with Securities Laws. The Company will
comply with the 1933 Act and the 1933 Act Regulations and the 1934 Act
and the 1934 Act Regulations so as to permit the completion of the
distribution of the Securities as contemplated in this Agreement and
in the Prospectus. If at any time when a prospectus is required by the
1933 Act to be delivered in connection with sales of the Securities,
any event shall occur or condition shall exist as a result of which it
is necessary, in the opinion of counsel for the Underwriters or for
the Company, to amend the Registration Statement or amend or
supplement the Prospectus in order that the Prospectus will not
include any untrue statements of a material fact or omit to state a
material fact necessary in order to make the statements therein not
misleading in the light of the circumstances existing at the time the
Prospectus is delivered to a purchaser, or if it shall be necessary,
in the opinion of such counsel, at any such time to amend the
Registration Statement or amend or supplement the Prospectus in order
to comply with the requirements of the 1933 Act or the 1933 Act
Regulations, the Company will promptly, upon becoming aware of such
event, condition or circumstance, prepare and file with the
Commission, subject to Section 3(b), such amendment or supplement as
may be necessary to correct such statement or omission or to make the
Registration Statement or the Prospectus comply with such
requirements, and the Company will furnish to the Underwriters such
number of copies of such amendment or supplement as the Underwriters
may reasonably request.
(f) Rule 158. The Company will timely file such reports pursuant
to the 1934 Act as are necessary in order to make generally available
to its security holders as soon as practicable an earnings statement
for the purposes of, and to provide the benefits contemplated by, the
last paragraph of Section 11(a) of the 1933 Act.
(g) Use of Proceeds. The Company will use the net proceeds
received by it from the sale of the Securities in the manner specified
in the Prospectus under "Use of Proceeds."
(h) Listing. The Company will use its best efforts to effect the
listing of the Securities on the New York Stock Exchange.
(i) Restriction on Sale of Securities. During a period of 90
days from the date of the Prospectus, the Company will not, without
the prior written consent of the Global Coordinator, (i) directly or
indirectly, offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant
any option, right or warrant to purchase or otherwise transfer or
dispose of any share of Common Stock or any securities convertible
into or exercisable or exchangeable for Common Stock or file any
registration statement under the 1933 Act with respect to any of the
foregoing or (ii) enter into any swap or any other agreement or any
transaction that transfers, in whole or in part, directly or
indirectly, the economic consequence of ownership of the Common Stock,
whether any such swap or transaction described in clause (i) or (ii)
above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise. The
15
foregoing sentence shall not apply to (A) any shares of Common Stock
issued by the Company upon the exercise of an option or warrant or the
conversion of a security outstanding on the date hereof and referred
to in the Prospectus, (B) any shares of Common Stock issued or options
to purchase Common Stock granted pursuant to existing employee benefit
plans of the Company referred to in the Prospectus, (C) any shares of
Common Stock issued pursuant to any non-employee director stock plan
or dividend reinvestment plan, (D) the filing of any registration
statement on Form S-8 referred to in the Prospectus covering shares of
Common Stock that may be issued pursuant to the exercise of options
under the Company's stock option plans described in the Prospectus and
(E) the surrender to the Company of 30,135 shares of Common Stock by
Dennis K. Williams to satisfy tax obligations arising in connection
with the April 2002 vesting of his restricted stock award.
(j) Reporting Requirements. The Company, during the period when
the Prospectus is required to be delivered under the 1933 Act or the
1934 Act, will file all documents required to be filed with the
Commission pursuant to the 1934 Act within the time periods required
by the 1934 Act and the 1934 Act Regulations.
Section 4. Payment of Expenses. Expenses. The Company will pay all
expenses incident to the performance of its and the Selling Shareholders'
obligations under this Agreement, including (i) the preparation, printing and
filing of the Registration Statement (including financial statements and
exhibits) as originally filed and of each amendment thereto, (ii) the
preparation, printing and delivery to the Underwriters of this Agreement, any
Agreement among Underwriters and such other documents as may be required in
connection with the offering, purchase, sale, issuance or delivery of the
Securities, (iii) the preparation, issuance and delivery of the certificates for
the Securities to the Underwriters, including any stock or other transfer taxes
and any stamp or other duties payable upon the sale, issuance or delivery of the
Securities to the Underwriters, (iv) the fees and disbursements of the Company's
counsel, the Selling Shareholder's counsel, accountants and other advisors, (v)
the filing fees incident to any necessary filings under state securities laws
and the reasonable fees and disbursements of counsel for the Underwriters in
connection therewith and in connection with the preparation, printing and
delivery of the Blue Sky Survey and any supplement thereto, (vi) the printing
and delivery to the Underwriters of copies of each preliminary prospectus and of
the Prospectus and any amendments or supplements thereto, (vii) the fees and
expenses of any transfer agent or registrar for the Securities, and (viii) the
fees and expenses incurred in connection with the listing of the Securities on
the New York Stock Exchange, but excluding: (A) transfer taxes relating to the
Securities sold hereunder by the Selling Shareholders; and (B) the expenses of
any announcement ("tombstone") published in connection with the offering of
Securities made by the Underwriters.
Each Selling Shareholder will pay all applicable transfer taxes
relating to the transfer to the several Underwriters of the Securities to be
purchased by them from such Selling Shareholder.
(b) Termination of Agreement. If this Agreement is terminated by the
Representatives in accordance with the provisions of Section 5 or Section
9(a)(i) hereof, the Company and the
16
Selling Shareholders shall reimburse the Underwriters for all of their
out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Underwriters.
(c) Allocation of Expenses. The provisions of this Section shall not
affect any agreement that the Company and the Selling Shareholders may make for
the sharing of such costs and expenses, in particular the agreements set forth
in the Registration Rights Agreement dated January 22, 1988 by and among the
Company and the Selling Shareholders.
Section 5. Conditions of Underwriters' Obligations. The obligations of
the several Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Company and the Selling Shareholders
contained in Section 1 hereof or in certificates of any officer of the Company
or any subsidiary of the Company delivered pursuant to the provisions hereof, to
the performance by the Company of its covenants and other obligations hereunder,
and to the following further conditions:
(a) Effectiveness of Registration Statement. The Registration
Statement, including any Rule 462(b) Registration Statement, has
become effective and at Closing Time no stop order suspending the
effectiveness of the Registration Statement shall have been issued
under the 1933 Act or proceedings therefor initiated or threatened by
the Commission, and any request on the part of the Commission for
additional information shall have been complied with to the reasonable
satisfaction of counsel to the Underwriters. A prospectus containing
the Rule 430A Information shall have been filed with the Commission in
accordance with Rule 424(b) (or a post-effective amendment providing
such information shall have been filed and declared effective in
accordance with the requirements of Rule 430A).
(b) Opinion of Counsel for Company. At Closing Time, the
Representatives shall have received the favorable opinion, dated as of
Closing Time, of Latham & Watkins, counsel for the Company, in form
and substance satisfactory to counsel for the Underwriters, together
with signed or reproduced copies of such letter for each of the other
Underwriters to the effect set forth in Exhibit A hereto and to such
further effect as counsel to the Underwriters may reasonably request.
(c) Opinion of Counsel for the Selling Shareholders. At Closing
Time, the Representatives shall have received the favorable opinion,
dated as of Closing Time, of Latham & Watkins, counsel for the Selling
Shareholders, in form and substance satisfactory to counsel for the
Underwriters, together with signed or reproduced copies of such letter
for each of the other Underwriters to the effect set forth in Exhibit
B hereto and to such further effect as counsel to the Underwriters may
reasonably request.
(d) Opinion of Counsel for Underwriters. At Closing Time, the
Representatives shall have received the favorable opinion, dated as of
Closing Time, of Shearman & Sterling, counsel for the Underwriters,
together with signed or reproduced copies of such letter for each of
the other Underwriters with respect to the matters set forth in
clauses (i), (ii), (v), (vi) (solely as to preemptive or other similar
rights arising by operation of law or under the charter or by-laws of
the Company), (viii) through (x), inclusive, (xii), (xiv) (solely as
to the information in the Prospectus under "Description of Capital
Stock
17
Common Stock") and the penultimate paragraph of Exhibit A hereto. In
giving such opinion such counsel may rely, as to all matters governed
by the laws of jurisdictions other than the law of the State of New
York and the federal law of the United States and the General
Corporation Law of the State of Delaware, upon the opinions of counsel
satisfactory to the Representatives. Such counsel may also state that,
insofar as such opinion involves factual matters, they have relied, to
the extent they deem proper, upon certificates of officers of the
Company and its subsidiaries and certificates of public officials.
(e) Company Officers' Certificate. At Closing Time, there shall
not have been, since the date hereof or since the respective dates as
of which information is given in the Prospectus, any material adverse
change in the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising in
the ordinary course of business, and the Representatives shall have
received a certificate of the President or a Vice President of the
Company and of the chief financial or chief accounting officer of the
Company, dated as of Closing Time, to the effect that (i) there has
been no such material adverse change, (ii) the representations and
warranties in Section 1(a) hereof are true and correct with the same
force and effect as though expressly made at and as of Closing Time,
(iii) the Company has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied at or prior to
Closing Time, and (iv) no stop order suspending the effectiveness of
the Registration Statement has been issued and no proceedings for that
purpose have been instituted or are pending or, to the best of such
officers' knowledge, are threatened by the Commission.
(f) Certificate of Selling Shareholders. At Closing Time, the
Representatives shall have received a certificate of a general partner
of each of the Selling Shareholders, dated as of the Closing Time, to
the effect that (i) the representations and warranties of each of the
Selling Shareholders contained in Section 1(b) hereof are true and
correct in all respects with the same force and effect as though
expressly made at and as of Closing Time and (ii) each of the Selling
Shareholders has complied in all material respects with all agreements
and conditions on its part to be performed under this Agreement at or
prior to Closing Time.
(g) Accountants' Comfort Letter. At the time of the execution of
this Agreement, the Representatives shall have received from Deloitte
& Touche LLP a letter dated such date, in form and substance
satisfactory to the Representatives, together with signed or
reproduced copies of such letter for each of the other Underwriters
containing statements and information of the type ordinarily included
in accountants' "comfort letters" to underwriters with respect to the
financial statements and certain financial information contained in
the Registration Statement and the Prospectus.
(h) Bring-down Comfort Letter. At Closing Time, the
Representatives shall have received from Deloitte & Touche LLP a
letter, dated as of Closing Time, to the effect that they reaffirm the
statements made in the letter furnished pursuant to subsection (g) of
this Section, except that the specified date referred to shall be a
date not more than three business days prior to Closing Time.
18
(i) Approval of Listing. At Closing Time, the Securities shall
have been approved for listing on the New York Stock Exchange, subject
only to official notice of issuance.
(j) Lock-up Agreements. At the date of this Agreement, the
Representatives shall have received an agreement substantially in the
form of Exhibit C hereto signed by the persons listed on Schedule E
hereto.
(k) Conditions to Purchase of Option Securities. In the event
that the Underwriters exercise their option provided in Section 2(b)
hereof to purchase all or any portion of the Option Securities, the
representations and warranties of the Company and any Selling
Shareholders contained herein and the statements in any certificates
furnished by the Company or any subsidiary of the Company and any
Selling Shareholders hereunder shall be true and correct as of each
Date of Delivery and, at the relevant Date of Delivery, the
Representatives shall have received:
(i) Company Officers' Certificate. A certificate, dated such
Date of Delivery, of the President or a Vice President of the
Company and of the chief financial or chief accounting officer of
the Company confirming that the certificate delivered at Closing
Time pursuant to Section 5(e) hereof remains true and correct as
of such Date of Delivery.
(ii) Certificate of Selling Shareholders. A certificate,
dated such Date of Delivery, of a general partner of each Selling
Shareholder confirming that the certificate delivered at Closing
Time pursuant to Section 5(f) hereof remains true and correct as
of such Date of Delivery.
(iii) Opinion of Counsel for Company. The favorable opinion
of Latham & Watkins, counsel for the Company, in form and
substance satisfactory to counsel for the Underwriters, dated
such Date of Delivery, relating to the Option Securities to be
purchased on such Date of Delivery and otherwise to the same
effect as the opinion required by Section 5(b) hereof.
(iv) Opinion of Counsel for Selling Shareholders. The
favorable opinion of Latham & Watkins, counsel for the Selling
Shareholders, in form and substance satisfactory to counsel for
the Underwriters, dated such Date of Delivery, relating to the
Option Securities to be purchased on such Date of Delivery and
otherwise to the same effect as the opinion required by Section
5(c) hereof.
(v) Opinion of Counsel for Underwriters. The favorable
opinion of Shearman & Sterling, counsel for the Underwriters,
dated such Date of Delivery, relating to the Option Securities to
be purchased on such Date of Delivery and otherwise to the same
effect as the opinion required by Section 5(d) hereof.
(vi) Bring-down Comfort Letter. A letter from Deloitte &
Touche LLP, in form and substance satisfactory to the
Representatives and dated such Date of Delivery, substantially in
the same form and substance as the letter furnished to
19
the Representatives pursuant to Section 5(h) hereof, except that
the "specified date" in the letter furnished pursuant to this
paragraph shall be a date not more than five days prior to such
Date of Delivery.
(l) Additional Documents. At Closing Time and at each Date of
Delivery, counsel for the Underwriters shall have been furnished with
such documents and opinions as they may require for the purpose of
enabling them to pass upon the issuance and sale of the Securities as
herein contemplated, or in order to evidence the accuracy of any of
the representations or warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the Company
and the Selling Shareholders in connection with the issuance and sale
of the Securities as herein contemplated shall be satisfactory in form
and substance to the Representatives and counsel for the Underwriters.
(m) Termination of Agreement. If any condition specified in this
Section shall not have been fulfilled when and as required to be
fulfilled, this Agreement, or, in the case of any condition to the
purchase of Option Securities on a Date of Delivery which is after the
Closing Time, the obligations of the several Underwriters to purchase
the relevant Option Securities, may be terminated by the
Representatives by notice to the Company and the Selling Shareholders
at any time at or prior to Closing Time or such Date of Delivery, as
the case may be, and such termination shall be without liability of
any party to any other party except as provided in Section 4 and
except that Sections 1, 6, 7 and 8 shall survive any such termination
and remain in full force and effect.
Section 6. Indemnification.
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(a) Indemnification of Underwriters by the Company. The Company agrees
to indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement
or alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), including the Rule
430A Information, or the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to make the
statements therein not misleading or arising out of any untrue
statement or alleged untrue statement of a material fact included in
any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto), or the omission or alleged omission therefrom of
a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or
threatened, or of any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or
omission, provided that (subject to
20
Section 6(e) below) any such settlement is effected with the written
consent of the Company; and
(iii) against any and all expense whatsoever, as incurred (including
the fees and disbursements of counsel chosen by Merrill Lynch), reasonably
incurred in investigating, preparing or defending against any litigation,
or any investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or omission, to
the extent that any such expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
Underwriter through the Representatives expressly for use in the Registration
Statement (or any amendment thereto), including the Rule 430A Information, or
any preliminary prospectus or the Prospectus (or any amendment or supplement
thereto); and provided further that the Company will not be liable to any
Underwriter with respect to any Prospectus to the extent that the Company shall
sustain the burden of proving that any such loss, liability, claim, damage or
expense resulted from the fact that such Underwriter, in contravention of a
requirement of this Agreement or applicable law, sold Securities to a person to
whom such Underwriter failed to send or give, at or prior to the Closing Date, a
copy of the Final Prospectus, as then amended or supplemented if: (i) the
Company has previously furnished copies thereof (sufficiently in advance of the
Closing Date to allow for distribution by the Closing Date) to the Underwriter
and the loss, liability, claim, damage or expense of such Underwriter resulted
from an untrue statement or omission of a material fact contained in or omitted
from the Preliminary Prospectus which was corrected in the Final Prospectus as,
if applicable, amended or supplemented prior to the Closing Date and such Final
Prospectus was required by law to be delivered at or prior to the written
confirmation of sale to such person and (ii) such failure to give or send such
Final Prospectus by the Closing Date to the party or parties asserting such
loss, liability, claim, damage or expense would have constituted the sole
defense to the claim asserted by such person.
(b) Indemnification of Underwriters by the Selling Shareholders. Each
Selling Shareholder 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, each Underwriter, the directors, officers,
employees, employees and agents of each Underwriter and each person who controls
the Company or any Underwriter within the meaning of either the 1933 Act or the
1934 Act and each other Selling Shareholder, if any, to the same extent as the
foregoing indemnity from the Company to each Underwriter, but only with
reference to written information furnished to the Company by or on behalf of
such Selling Shareholder specifically for inclusion in the documents referred to
in the foregoing indemnity; and such indemnity will be limited to an amount
equal to the aggregate gross proceeds, net of the underwriting discounts,
received by such Selling Shareholder from the sale of the Securities to the
Underwriters. This indemnity agreement will be in addition to any liability
which any Selling Shareholder may otherwise have. Each Underwriter acknowledges
that the name of each Selling Shareholder, the number of securities each Selling
Shareholder is offering, the number of securities owned by each Selling
21
Shareholder, and the information contained in footnote (3) on page 37 of the
Prospectus constitutes the only information furnished in writing by or on behalf
of each of the Selling Shareholders for inclusion in any preliminary prospectus
or the Prospectus.
(c) Indemnification of Company, Directors, Officers and the Selling
Shareholders. Each Underwriter severally agrees to indemnify and hold harmless
the Company, its directors, each of its officers who signed the Registration
Statement, and each person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act and each Selling
Shareholder and each person, if any, who controls the Selling Shareholder within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 against any
and all loss, liability, claim, damage and expense described in the indemnity
contained in subsection (a)(1) of this Section, as incurred, but only with
respect to untrue statements or omissions, or alleged untrue statements or
omissions, made in the Registration Statement (or any amendment thereto),
including the Rule 430A Information, or any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Company by such Underwriter
through the Representatives expressly for use in the Registration Statement (or
any amendment thereto) or such preliminary prospectus or the Prospectus (or any
amendment or supplement thereto).
(d) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 6(a)(1) or (b)
above, counsel to the indemnified parties shall be selected by Merrill Lynch,
and, in the case of parties indemnified pursuant to Section 6(c) above, counsel
to the indemnified parties shall be selected by the Company. An indemnifying
party may participate at its own expense in the defense of any such action;
provided, however, that counsel to the indemnifying party shall not (except with
the consent of the indemnified party) also be counsel to the indemnified party.
In no event shall the indemnifying parties be liable for fees and expenses of
more than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 6 or Section
7 hereof (whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party.
(e) Settlement without Consent if Failure to Reimburse. If at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and
22
expenses of counsel, such indemnifying party agrees that it shall be liable for
any settlement of the nature contemplated by Section 6(a)(1)(ii) effected
without its written consent if (i) such settlement is entered into more than 45
days after receipt by such indemnifying party of the aforesaid request, (ii)
such indemnifying party shall have received notice of the terms of such
settlement at least 30 days prior to such settlement being entered into and
(iii) such indemnifying party shall not have reimbursed such indemnified party
in accordance with such request prior to the date of such settlement.
(f) Other Agreements with Respect to Indemnification
The provisions of this Section shall not affect any agreement among the
Company and the Selling Shareholders with respect to indemnification.
SECTION 7. Contribution. If the indemnification provided for in Section 6
hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company and the
Selling Shareholders on the one hand and the Underwriters on the other hand from
the offering of the Securities pursuant to this Agreement or (ii) if the
allocation provided by clause (i) is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company and the
Selling Shareholders on the one hand and of the Underwriters on the other hand
in connection with the statements or omissions which resulted in such losses,
liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.
The relative benefits received by the Company and the Selling Shareholders
on the one hand and the Underwriters on the other hand in connection with the
offering of the Securities pursuant to this Agreement shall be deemed to be in
the same respective proportions as the total net proceeds from the offering of
the Securities pursuant to this Agreement (before deducting expenses) received
by the Company and the Selling Shareholders and the total underwriting discount
received by the Underwriters, in each case as set forth on the cover of the
Prospectus.
The relative fault of the Company and the Selling Shareholders on the one
hand and the Underwriters on the other hand shall be determined by reference to,
among other things, whether any such untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Company, the Selling Shareholders or by the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
The Company, the Selling Shareholders and the Underwriters agree that it
would not be just and equitable if contribution pursuant to this Section were
determined by pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above in this Section.
The aggregate amount of losses, liabilities, claims, damages and expenses
incurred by an indemnified party and referred to above in this Section shall be
deemed to include any legal or
23
other expenses reasonably incurred by such indemnified party in investigating,
preparing or defending against any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened, or any
claim whatsoever based upon any such untrue or alleged untrue statement or
omission or alleged omission.
Notwithstanding the provisions of this Section, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of any such untrue or
alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter, and
each director of the Company, each officer of the Company who signed the
Registration Statement, and each person, if any, who controls the Company or any
Selling Shareholder within the meaning of Section 15 of the 1933 Act or Section
20 of the 1934 Act shall have the same rights to contribution as the Company or
such Selling Shareholder, as the case may be. The Underwriters' respective
obligations to contribute pursuant to this Section are several in proportion to
the number of Initial Securities set forth opposite their respective names in
Schedule A hereto and not joint.
The liability of each Selling Shareholder under such Selling Shareholder's
representations and warranties contained in Section 1(b) hereof and under the
indemnity and contribution agreements contained in Sections 6 and 7 hereof shall
be limited to an amount equal to the aggregate gross proceeds, net of
underwriting discounts, received by such Selling Shareholder from the sale of
the Securities to the Underwriters. The Company and the Selling Shareholders may
agree, as among themselves and without limiting the rights of the Underwriting
under this Agreement, as to the respective amounts of such liability for which
they each shall be responsible.
SECTION 8. Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this Agreement or in
certificates of officers of the Company or any of its subsidiaries or the
Selling Shareholders submitted pursuant hereto shall remain operative and in
full force and effect, regardless of any investigation made by or on behalf of
any Underwriter or controlling person, or by or on behalf of the Company or the
Selling Shareholders, and shall survive delivery of the Securities to the
Underwriters.
SECTION 9. Termination of Agreement
(a) Termination; General. The Representatives may terminate this Agreement,
by notice to the Company and the Selling Shareholders at any time at or prior to
Closing Time (i) if there has been, since the time of execution of this
Agreement or since the respective dates as of which information is given in the
Prospectus (exclusive of any supplement thereto), any material
24
adverse change in the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company and its subsidiaries
considered as one enterprise, whether or not arising in the ordinary course of
business, or (ii) if there has occurred any material adverse change in the
financial markets in the United States or in the international financial
markets, any outbreak of hostilities or escalation thereof or other calamity or
crisis or any change or development involving a prospective change in national
or international political, financial or economic conditions, in each case the
effect of which is such as to make it, in the judgment of the Representatives,
impracticable or inadvisable to market the Securities or to enforce contracts
for the sale of the Securities, or (iii) if trading in any securities of the
Company has been suspended or materially limited by the Commission or the New
York Stock Exchange, or if trading generally on the American Stock Exchange or
the New York Stock Exchange or in the Nasdaq National Market has been suspended
or materially limited, or minimum or maximum prices for trading have been fixed,
or maximum ranges for prices have been required, by any of said exchanges or by
such system or by order of the Commission, the National Association of
Securities Dealers, Inc. or any other governmental authority, or a material
disruption has occurred in commercial banking or securities settlement or
clearance services in the United States or with respect to Clearstream or
Euroclear systems in Europe, or (iv) if a banking moratorium has been declared
by either federal or New York authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this Section,
such termination shall be without liability of any party to any other party
except as provided in Section 4 hereof, and provided further that Sections 1, 6,
7 and 8 shall survive such termination and remain in full force and effect.
Section 10. Default by One or More of the Underwriters. If one or more of
the Underwriters shall fail at Closing Time or a Date of Delivery to purchase
the Securities which it or they are obligated to purchase under this Agreement
(the "Defaulted Securities"), the Representatives shall have the right, within
24 hours thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than all,
of the Defaulted Securities in such amounts as may be agreed upon and upon the
terms herein set forth; if, however, the Representatives shall not have
completed such arrangements within such 24-hour period, then:
(i) if the number of Defaulted Securities does not exceed 10% of the
number of Securities to be purchased on such date, the non-defaulting
Underwriters shall be obligated, each severally and not jointly, to
purchase the full amount thereof in the proportions that their respective
underwriting obligations hereunder bear to the underwriting obligations of
all non-defaulting Underwriters, or
(ii) if the number of Defaulted Securities exceeds 10% of the number
of Securities to be purchased on such date, this Agreement or, with respect
to any Date of Delivery which occurs after Closing Time, the obligation of
the Underwriters to purchase and of KKR to sell the Option Securities to be
purchased and sold on such Date of Delivery shall terminate without
liability on the part of any non-defaulting Underwriter.
(iii) No action taken pursuant to this Section shall relieve any
defaulting Underwriter from liability in respect of its default.
25
In the event of any such default which does not result in a termination of
this Agreement or, in the case of a Date of Delivery which is after Closing
Time, which does not result in a termination of the obligation of the
Underwriters to purchase and KKR to sell the relevant Option Securities, as the
case may be, either the Representatives, the Company or any Selling Shareholder
shall have the right to postpone Closing Time or the relevant Date of Delivery,
as the case may be, for a period not exceeding seven days in order to effect any
required changes in the Registration Statement or Prospectus or in any other
documents or arrangements. As used herein, the term "Underwriter" includes any
person substituted for an Underwriter under this Section.
SECTION 11. Default by One or More of the Selling Shareholders or the
Company. (a) If a Selling Shareholder shall fail at Closing Time or at a Date of
Delivery to sell and deliver the Securities which such Selling Shareholder is
obligated to sell hereunder, and the remaining Selling Shareholders or the
Company do not exercise the right hereby granted to increase, pro rata or
otherwise, the number of Securities to be sold by them hereunder to the total
number to be sold by all Selling Shareholders as set forth in Schedule B hereto,
then the Underwriters may, at the option of the Representatives, by notice from
the Representatives to the Company and the non-defaulting Selling Shareholders,
either (a) terminate this Agreement without any liability on the part of any
non-defaulting party except that the provisions of Sections 1, 4, 6, 7 and 8
shall remain in full force and effect or (b) elect to purchase the Securities
which the non-defaulting Selling Shareholders or the Company have agreed to sell
hereunder. No action taken pursuant to this Section shall relieve any Selling
Shareholder so defaulting from liability in respect of such default.
In the event of a default by any Selling Shareholder as referred to in
this Section, each of the Representatives, the Company and the non-defaulting
Selling Shareholders shall have the right to postpone Closing Time or the
relevant Date of Delivery for a period not exceeding seven days in order to
effect any required change in the Registration Statement or Prospectus or in any
other documents or arrangements.
(b) If the Company shall fail at Closing Time or at a Date of Delivery
to sell the number of Securities that it is obligated to sell hereunder, then
this Agreement shall terminate without any liability on the part of any
non-defaulting party; provided, however, that the provisions of Sections 1, 4,
6, 7 and 8 shall remain in full force and effect. No action taken pursuant to
this Section shall relieve the Company from liability in respect of such
default.
SECTION 12. Notices. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to the Representatives at North Tower, World
Financial Center, New York, New York 10281, attention of Equity Capital Markets;
notices to the Selling Shareholders shall be directed to it at 9 West 57th
Street, New York, NY 10018, attention of Paul E. Raether; and notices to the
Company shall be directed to it at 630 Dundee Road, Northbrook, IL 60062-2745
attention of Wayne P. Sayatovic and Frank J. Notaro.
SECTION 13. Parties. This Agreement shall inure to the benefit of and be
binding upon the Underwriters, the Company, the Selling Shareholders and their
respective successors.
26
Nothing expressed or mentioned in this Agreement is intended or shall be
construed to give any person, firm or corporation, other than the Underwriters,
the Company, the Selling Shareholders and their respective successors and the
controlling persons and officers and directors referred to in Sections 6 and 7
and their heirs and legal representatives, any legal or equitable right, remedy
or claim under or in respect of this Agreement or any provision herein
contained. This Agreement and all conditions and provisions hereof are intended
to be for the sole and exclusive benefit of the Underwriters, the Company, the
Selling Shareholders and their respective successors, and said controlling
persons and officers and directors and their heirs and legal representatives,
and for the benefit of no other person, firm or corporation. No purchaser of
Securities from any Underwriter shall be deemed to be a successor by reason
merely of such purchase.
SECTION 14. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. SPECIFIED TIMES
OF DAY REFER TO NEW YORK CITY TIME.
SECTION 15. Effect of Headings. The Article and Section headings herein and
the Table of Contents are for convenience only and shall not affect the
construction hereof.
27
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company and the Selling Shareholders a counterpart
hereof, whereupon this instrument, along with all counterparts, will become a
binding agreement between the Underwriters, the Selling Shareholders and the
Company in accordance with its terms.
Very truly yours,
IDEX CORPORATION
By:
------------------------------------
Name:
Title:
IDEX ASSOCIATES, L.P.
By: KKR Associates, L.P.
Its General Partner
By:
--------------------------------
Paul E. Raether, General Partner
and
KKR ASSOCIATES, L.P.
By:
------------------------------------
Paul E. Raether, General Partner
[ADDITIONAL SIGNATURE PAGE FOLLOWS]
28
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: __________________________________
Authorized Signatory
CREDIT SUISSE FIRST BOSTON CORPORATION
By: __________________________________
Authorized Signatory
For themselves and as Representative of the other Underwriters named in Schedule
A hereto.
29
SCHEDULE A
Number of
Initial
Name of Underwriter Securities
- ------------------- ----------
Merrill Lynch, Pierce, Fenner & Smith
Incorporated ...........................................
Credit Suisse First Boston Corporation .............................
Robert W. Baird & Co. ..............................................
Banc of America Securities. ........................................
Bear Stearns & Co. .................................................
----------
Total .............................................................. 5,000,000
==========
Sch A
SCHEDULE B
Shares to be sold by the Company and Selling Shareholders
- ------------------------------------------------------------------------------------
Number of Initial Securities to be Maximum Number of Option
----------------------------------- ------------------------
be Sold Securities to be Sold
------- ---------------------
- ------------------------------------------------------------------------------------
IDEX Corporation 1,500,000 0
- ------------------------------------------------------------------------------------
IDEX Associates, L.P. 2,939,199 0
- ------------------------------------------------------------------------------------
KKR Associates, L.P. 560,801 750,000
- ------------------------------------------------------------------------------------
Total 5,000,000 750,000
- ------------------------------------------------------------------------------------
Sch B
SCHEDULE C
IDEX CORPORATION
5,000,000 Shares of Common Stock
(Par Value $.01 Per Share)
1. The initial public offering price per share for the Securities,
determined as provided in said Section 2, shall be $..
2. The purchase price per share for the Securities to be paid by the
several Underwriters shall be $., being an amount equal to the initial public
offering price set forth above less $. per share; provided that the purchase
price per share for any Option Securities purchased upon the exercise of the
over-allotment option described in Section 2(b) shall be reduced by an amount
per share equal to any dividends or distributions declared by the Company and
payable on the Initial Securities but not payable on the Option Securities.
Sch C
SCHEDULE D
List of subsidiaries
Domestic Subsidiaries:
- ----------------------
Band-IT-IDEX, Inc.
Fluid Management, Inc.
Gast Manufacturing, Inc.
Hale Products, Inc.
Liquid Controls, Inc.
Pulsafeeder, Inc.
Viking Pump, Inc.
Warren Rupp, Inc.
Foreign Subsidiary:
- -------------------
Fluid Management Europe B.V.
Sch D
SCHEDULE E
List of persons and entities subject to lock-up
Selling Shareholders:
- --------------------
IDEX Associates, L.P.
KKR Associates, L.P.
Management:
- ----------
Bell, Bradley J.
Derck, Jerry N.
Kaplan, Harley B.
Kenny, Gregory B.
Kooman, Clinton L.
Lennox, Douglas C.
Leurs, William H.
McMurray, John L.
Metcalf, Dennis L.
Notaro, Frank J.
Raether, Paul E.
Sayatovic, Wayne P.
Springer, Neil A.
Tokarz, Michael T.
Usher, Rodney L.
Williams, Dennis K.
Windmuller, David T.
Sch E
Exhibit A
FORM OF OPINION OF COMPANY'S COUNSEL
(i) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware.
(ii) The Company has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectus and to enter into and perform its obligations under the Purchase
Agreement.
(iii) Based solely on certification from public officials, we confirm that
the Company is duly qualified as a foreign corporation to transact business and
is in good standing in the states of [states where the Company conducts
business.]
(iv) The authorized, issued and outstanding capital stock of the Company is
as set forth in the Prospectus in the column entitled "Actual" under the caption
"Capitalization" (except for subsequent issuances, if any, pursuant to the
Purchase Agreement or pursuant to reservations, agreements or employee benefit
plans referred to in the Prospectus or pursuant to the exercise of convertible
securities or options referred to in the Prospectus or the buy back contemplated
by Section 3(i)(E) of the Purchase Agreement); the shares of issued and
outstanding capital stock of the Company, including the Securities to be
purchased by the Underwriters from the Selling Shareholders, have been duly
authorized and validly issued and are fully paid and non-assessable; and, to our
knowledge, none of the outstanding shares of capital stock of the Company was
issued in violation of the preemptive or other similar rights of any security
holder of the Company.
(v) The Securities to be purchased by the Underwriters from the Company
have been duly authorized for issuance and sale to the Underwriters pursuant to
the Purchase Agreement, and, when issued and delivered by the Company pursuant
to the Purchase Agreement, against payment of the consideration set forth in the
Purchase Agreement, will be validly issued and fully paid and non-assessable
under the Delaware General Corporation Law; and no holder of the Securities is
or will be subject to personal liability for the debts and obligations of the
Company as a result of its status as a shareholder except as any shareholder may
be liable by reason of its own conduct or acts.
(vi) The issuance and sale of the Securities by the Company and the sale of
the Securities by the Selling Shareholders is not subject to the preemptive or
other similar rights of any security holder of the Company arising under the
Delaware General Corporation Law, any federal or New York law, statute, rule or
regulation or the certificate of incorporation or bylaws of the Company or, to
our knowledge, under any agreement or instrument to which the Company is a
party.
(vii) Each Subsidiary has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the jurisdiction of its
incorporation, has corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Prospectus. Based
solely on certificates from public officials, we confirm that
A-1
each of the Subsidiaries is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdictions set forth opposite its
name on Schedule I of this opinion. Except as otherwise disclosed in the
Registration Statement, all of the issued and outstanding capital stock of each
Subsidiary has been duly authorized and validly issued, is fully paid and
non-assessable and, to the best of our knowledge, is owned by the Company,
directly or through subsidiaries, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity. As used in this paragraph
(vii), the term "Subsidiary" shall mean all domestic subsidiaries listed on
Schedule D of this Purchase Agreement.
(viii) The Purchase Agreement has been duly authorized, executed and
delivered by the Company.
(ix) The Registration Statement, including any Rule 462(b) Registration
Statement, has been declared effective under the 1933 Act; any required filing
of the Prospectus pursuant to Rule 424(b) has been made in the manner and within
the time period required by Rule 424(b); and, to our knowledge, no stop order
suspending the effectiveness of the Registration Statement or any Rule 462(b)
Registration Statement has been issued under the 1933 Act and, to our knowledge,
no proceedings for that purpose have been instituted or are pending or
threatened by the Commission.
(x) The Registration Statement, including any Rule 462(b) Registration
Statement, the Rule 430A Information, the Prospectus, excluding the documents
incorporated by reference therein, and each amendment or supplement to the
Registration Statement and the Prospectus, excluding the documents incorporated
by reference therein, as of their respective effective or issue dates (other
than the financial statements and supporting schedules and notes included
therein or omitted therefrom and other financial data included therein or
omitted therefrom, as to which we need express no opinion) complied as to form
in all material respects with the requirements of the 1933 Act and the 1933 Act
Regulations. In passing upon compliance as to form, such counsel may assume that
the statements made and incorporated by reference therein are true, correct and
complete.
(xi) The documents incorporated by reference in the Prospectus (other than
the financial statements and supporting schedules and notes included therein or
omitted therefrom, as to which we need express no opinion), when they were filed
with the Commission, complied as to form in all material respects with the
requirements of the 1933 Act or the 1934 Act, as applicable, and the rules and
regulations of the Commission thereunder. In passing upon compliance as to form,
such counsel may assume that the statements made and incorporated by reference
therein are true, correct and complete.
(xii) The form of certificate used to evidence the Common Stock complies in
all material respects with all applicable statutory requirements of the Delaware
General Corporation Law, with any applicable requirements of the charter and
by-laws of the Company and the requirements of the New York Stock Exchange.
(xiii) To our knowledge, and except as disclosed in the Prospectus, there
is not pending or threatened any action, suit, proceeding, inquiry or
investigation, to which the Company or any subsidiary is a party, or to which
the property of the Company or any subsidiary is subject,
A-2
before or brought by any court or governmental agency or body, domestic or
foreign, which is required to be described in the Registration Statement or the
Prospectus.
(xiv) The information in the Prospectus under "Description of Capital Stock
- -- Common Stock," "Description of Capital Stock -- Preferred Stock," the first
paragraph of "Ownership of Common Stock by Selling Shareholders, Management and
Principal Shareholder," "Shares Eligible for Future Sale," and the second and
third paragraph under "Underwriting -- General", "Underwriting -- Over-allotment
Option" and "Underwriting -- No Sales of Similar Securities," and in the
Registration Statement under Item 15, to the extent that such information
constitutes summaries of legal matters under federal or New York law or the
Delaware General Corporation Law, agreements described therein or the Company's
certificate of incorporation or by laws, have been reviewed by us and are
accurate in all material respects.
(xv) To the best of our knowledge, there are no statutes or regulations
that are required to be described in the Prospectus that are not described as
required.
(xvi) All descriptions in the Registration Statement of contracts and other
documents to which the Company or its subsidiaries are a party are accurate in
all material respects; to the best of our knowledge, there are no franchises,
contracts, indentures, mortgages, loan agreements, notes, leases or other
instruments required to be described or referred to in the Registration
Statement or to be filed as exhibits thereto other than those described or
referred to therein or filed or incorporated by reference as exhibits thereto,
and the descriptions thereof or references thereto are correct in all material
respects.
(xvii) No person (other than the Selling Shareholders as described in the
Registration Statement and Prospectus) has the right to require the Company to
include any securities for registration pursuant to the Registration Statement,
which has not been waived, as a result of the registration rights described in
the Registration Statement and the Prospectus, which the Company has certified
to us are the only agreements that contain provisions relating to registration
rights with respect to the Company's securities.
(xviii) No filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, any federal court of the United
States or New York courts or governmental authority or agency, or under the
Delaware General Corporate Law, (other than under the 1933 Act and the 1933 Act
Regulations, which have been obtained, or as may be required under the
securities or blue sky laws of the various states, as to which we need express
no opinion) is necessary or required in connection with the due authorization,
execution and delivery of the Purchase Agreement or for the offering, issuance,
sale or delivery of the Securities by the Company pursuant to the Purchase
Agreement.
(xix) The execution, delivery and performance of the Purchase Agreement and
the consummation of the transactions contemplated in the Purchase Agreement and
in the Registration Statement (including the issuance and sale of the
Securities, and the use of the proceeds from the sale of the Securities as
described in the Prospectus under the caption "Use Of Proceeds") and compliance
by the Company with its obligations under the Purchase Agreement do not on the
date hereof (A) whether with or without the giving of notice or lapse of time or
both, conflict with or constitute a breach of, or default or Repayment Event (as
defined in
A-3
Section 1(a)(xi) of the Purchase Agreement) under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of the
Company or any subsidiary pursuant to, any contract, indenture, mortgage, deed
of trust, loan or credit agreement, note, lease or any other agreement or
instrument to which the Company or any subsidiary is a party or by which it or
any of them may be bound, or to which any of the property or assets of the
Company or any subsidiary is subject, and which is listed as Exhibit 4 or
Exhibit 10 to the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 2001, (except for such conflicts, breaches or defaults or liens,
charges or encumbrances that would not have a Material Adverse Effect); (B)
violate any of the provisions of the charter or by-laws of the Company; (C)
violate any applicable federal or New York law, statute, rule, regulation, or
any provision of the Delaware General Corporation Law applicable to the Company;
or (D) violate any judgment, order, writ or decree, of any government,
government instrumentality or court, domestic or foreign, having jurisdiction
over the Company or any subsidiary or any of their respective properties, assets
or operations directed to the Company and identified to us by an officer of the
Company. The Company has certified to us that the only agreements that are
material to the Company are listed as Exhibit 4 or Exhibit 10 to the Company's
Annual Report on 10-K.
(xx) The Company is not, and upon the issuance and sale of the Securities
as herein contemplated and the application of the net proceeds therefrom as
described in the Prospectus will not be, an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in the 1940
Act.
We have participated in conferences with officers and other representatives
of the Company, representatives of the independent public accountants for the
Company and your representatives, at which the contents of the Registration
Statement and the Prospectus and any supplements or amendments thereto, and
related matters were discussed, and, although we are not passing upon, and do
not assume any responsibility for, the accuracy, completeness or fairness of the
statements contained in the Registration Statement or the Prospectus and have
not made any independent check or verification thereof, during the course of
such participation, no facts came to our attention that caused us to believe
that the Registration Statement or any amendment thereto, including the Rule
430A Information, (except for financial statements and schedules and other
financial data included or incorporated by reference therein or omitted
therefrom, as to which we need make no statement), at the time such Registration
Statement or any such amendment became effective, contained an untrue statement
of a material fact or omitted to state a 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 (except for financial
statements and schedules and other financial data included or incorporated by
reference therein or omitted therefrom, as to which we need make no statement),
at the time the Prospectus was issued, at the time any such amended or
supplemented prospectus was issued or at the Closing Time, included or includes
an untrue statement of a material fact or omitted or omits to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
In rendering such opinion, such counsel may rely as to matters of fact (but
not as to legal conclusions), to the extent they deem proper, on certificates of
responsible officers of the Company and public officials. Such opinion shall not
state that it is to be governed or qualified by, or that it is otherwise subject
to, any treatise, written policy or other document relating to
A-4
legal opinions, including, without limitation, the Legal Opinion Accord of the
ABA Section of Business Law (1991).
A-5
Schedule I
Significant Subsidiaries State of Incorporation State(s) qualified to do Business
- --------------------------------------------------------------------------------------
(other than state of incorporation)
Band-It-IDEX, Inc. Delaware Colorado, Pennsylvania
Fluid Management, Inc. Delaware Alabama, California, Colorado,
Connecticut, Florida, Georgia,
Maryland, Missouri, Ohio, Texas,
Washington
GAST Manufacturing, Inc. Michigan Illinois
Hale Products, Inc. Pennsylvania North Carolina, Tennessee
Liquid Controls, Inc. Delaware Illinois
Pulsafeeder, Inc. Delaware California, Florida, New York
Viking Pump, Inc. Delaware Iowa
Warren Rupp, Inc. Delaware Ohio
A-6
Exhibit B
FORM OF OPINION OF COUNSEL FOR THE SELLING SHAREHOLDERS
(i) The Purchase Agreement has been duly authorized, executed and delivered
by or on behalf of each Selling Shareholder.
(ii) No filing with, or consent, approval, authorization, license, order,
registration, qualification or decree of, any court or governmental authority or
agency, domestic or foreign, (other than the issuance of the order of the
Commission declaring the Registration Statement effective and such
authorizations, approvals or consents as may be necessary under state or foreign
securities laws, as to which we need express no opinion) is necessary or
required to be obtained by the Selling Shareholders for the performance by each
Selling Shareholder of its obligations under the Purchase Agreement, or in
connection with the offer, sale or delivery of the Securities, including the
Option Securities, if any, to be sold by the Selling Shareholders.
(iii) The execution, delivery and performance by the Selling Shareholders
of the Purchase Agreement, the sale and delivery by the Selling Shareholders of
the Securities and the sale and delivery by KKR of the Option Securities and the
consummation of the transactions by the Selling Shareholders contemplated in the
Purchase Agreement and in the Registration Statement and compliance by the
Selling Shareholders with their obligations under the Purchase Agreement have
been duly authorized by all necessary action on the part of the Selling
Shareholders and, to the best of our knowledge, such execution, delivery and
performance on or prior to the date hereof, such sale and delivery of the
Securities and Option Securities, and such consummation and compliance on or
prior to the date hereof, (A) do not and will not, whether with or without the
giving of notice or passage of time or both, conflict with or constitute a
breach of, or default under or result in the creation or imposition of any tax,
lien, charge or encumbrance upon the Securities or any property or assets of the
Selling Shareholders pursuant to, any contract, indenture, mortgage, deed of
trust, loan or credit agreement, or other material agreement identified to us
and to which any Selling Shareholder is a party or by which it may be bound, or
to which any of the property or assets of any Selling Shareholder may be subject
(the Selling Shareholder having certified to us that there are no such material
agreements), nor (B) will such action result in any violation of any law,
administrative regulation, judgment or order of any governmental agency or body
or any administrative or court decree having jurisdiction over such Selling
Shareholder or any of its properties. In addition, such action will not result
in any violation of the provisions of the general partnership agreement or
similar organizational document of the Selling Shareholder.
(iv) Each Selling Shareholder has full right, power and authority to hold,
sell, transfer and deliver the Securities to be sold by the Selling Shareholder
pursuant to the Purchase Agreement. Upon the delivery to DTC or its agent of the
Securities registered in the name of Cede & Co., as nominee for DTC, and the
crediting by DTC of the Securities to the securities accounts of the several
Underwriters with DTC, DTC will be a "protected purchaser" of the Securities (as
defined in Section 8-303 of the NYUCC) and will acquire its interest in the
Securities (including, without limitation, all rights that the Selling
Shareholder had or has the
B-1
power to transfer in such Securities) free of any adverse claim (as defined in
Section 8-102(a)(1) of the NYUCC) (assuming neither DTC nor any Underwriter has
notice of any adverse claim) and the Underwriters will acquire valid security
entitlements (within the meaning of Section 8-501 of the NYUCC) in respect of
the Securities to be purchased by them, and no action (whether framed in
conversion, replevin, constructive trust, equitable lien, or other theory) based
on an adverse claim to such Securities may be asserted against the Underwriters
(assuming that the Underwriters have no notice of any adverse claim).
In rendering such opinion, such counsel may rely as to matters of fact (but
not as to legal conclusions), to the extent they deem proper on certificates of
the Selling Shareholders and of responsible officers of the Company and public
officials. Such counsel may also rely on opinions of other counsel, to the
extent they deem proper, as to matters governed by the laws of a jurisdiction in
which such counsel are not admitted to practice law.
B-2
[Form of lock-up from directors, officers or other stockholders ]
Exhibit C
., 2002
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated,
Credit Suisse First Boston Corporation
Robert W. Baird & Co.
Banc of America Securities LLC
Bear, Strearns & Co., Inc.
as Representatives of the several
Underwriters to be named in the
within-mentioned Purchase Agreement
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281
Re: Proposed Public Offering by IDEX Corporation
--------------------------------------------
Dear Sirs:
The undersigned, a stockholder [and an officer and/or director] of IDEX
Corporation, a Delaware corporation (the "Company"), understands that Merrill
Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill
Lynch") and Credit Suisse First Boston Corporation propose to enter into a
Purchase Agreement (the " Purchase Agreement") with the Company and the Selling
Shareholders providing for the public offering of shares (the "Securities") of
the Company's common stock, par value $.01 per share (the "Common Stock"). In
recognition of the benefit that such an offering will confer upon the
undersigned as a stockholder [and an officer and/or director of the Company,]
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the undersigned agrees with each underwriter to
be named in the Purchase Agreement that, during a period of 90 days from the
date of the Purchase Agreement, the undersigned will not, without the prior
written consent of Merrill Lynch, directly or indirectly, (i) offer, pledge,
sell, contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant for the sale of,
or otherwise dispose of or transfer any shares of the Company's Common Stock or
any securities convertible into or exchangeable or exercisable for Common
C-1
Stock, whether now owned or hereafter acquired by the undersigned or with
respect to which the undersigned has or hereafter acquires the power of
disposition, or file any registration statement under the Securities Act of
1933, as amended, with respect to any of the foregoing or (ii) enter into any
swap or any other agreement or any transaction that transfers, in whole or in
part, directly or indirectly, the economic consequence of ownership of the
Common Stock, whether any such swap or transaction is to be settled by delivery
of Common Stock or other securities, in cash or otherwise.
Very truly yours,
Signature:
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Print Name:
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C-2