EXHIBIT 10.1
Baldor Electric
Company
10,294,118 shares of
Common Stock, par value
$0.10
U NDERWRITING A GREEMENT
U NDERWRITING A GREEMENT
January 25, 2007
UBS Securities LLC
as Managing
Underwriters
299 Park Avenue
New York, New York
10171-0026
Ladies and Gentlemen:
Baldor Electric Company, a Missouri
corporation (the “ Company ”), proposes to issue
and sell to the underwriters named in Schedule A annexed
hereto (the “ Underwriters ”), for whom you are
acting as representatives, an aggregate of 10,294,118 shares (the
“ Firm Securities ”) of its Common Stock, par
value $0.10 (including associated Common Stock purchase rights
described in the prospectus which is referred to below, the
“Common Stock”). In addition, solely for the purpose of
covering over-allotments, the Company proposes to grant to the
Underwriters the option to purchase from the Company up to an
aggregate of 1,430,882 shares (the “ Additional
Securities ”) of the Company’s Common Stock, par
value $0.10. The Firm Securities and the Additional Securities are
hereinafter collectively sometimes referred to as the “
Securities .”
The offering of Securities is
conditioned on the concurrent closing of the acquisition (the
“ Acquisition ”) by the Company of the Reliance
Electric industrial motors and Dodge mechanical power transmission
businesses of Rockwell Automation, Inc. (the “ Acquired
Business ”). The Acquisition includes the issuance by the
Company to Rockwell Automation, Inc. of approximately
1.58 million shares of the Company’s Common Stock. At or
prior to the closing of the Acquisition, the Company intends to
enter into a new $1,200 million secured credit facility pursuant to
a new credit agreement (the “ Credit Agreement
”); and intends to offer $550 million aggregate principal
amount of senior notes (the “ Senior Notes ”),
each as more fully described in the Prospectus, as hereinafter
defined (the “ Concurrent Offering ,” and,
together with the entry into the Credit Agreement and the
application of the proceeds therefrom and from the Concurrent
Offering as described in the Registration Statement, each
pre-Pricing Prospectus and the Prospectus, the “ Financing
Transactions ”). The Financing Transactions are
conditioned upon the closing of the Acquisition. Under a Commitment
Letter from BNP Paribas, BNP Paribas has committed to provide,
subject to certain conditions, the additional financing (the
“ Bridge Facility ”) required for the
Acquisition through a bridge loan (a “ Bridge Loan
”) in the event that sufficient funds are not raised from the
offering of the Securities and/or the Concurrent Offering to pay
the purchase price of the Acquisition. The Acquisition, the
Financing Transactions and the Bridge Facility are together
referred to as the “ Transactions .”
The Company has prepared and filed,
in accordance with the provisions of the Securities Act of 1933, as
amended, and the rules and regulations thereunder (collectively,
the “ Act ”), with the Securities and Exchange
Commission (the “ Commission ”) a registration
statement on Form S-3 (File No. 333-139854) under the Act (the
“ registration statement ”),
including a prospectus, which registration
statement registers the offer and sale of the Securities under the
Act and incorporates by reference documents which the Company has
filed, or will file, in accordance with the provisions of the
Securities Exchange Act of 1934, as amended, and the rules and
regulations thereunder (collectively, the “ Exchange
Act ”). Such registration statement became effective
under the Act upon filing.
Except where the context otherwise
requires, “ Registration Statement ,” as used
herein, means the registration statement, as amended at the time of
such registration statement’s effectiveness for purposes of
Section 11 of the Act, as such section applies to the
respective Underwriters (the “ Effective Time
”), including (i) all documents filed as a part thereof
or incorporated or deemed to be incorporated by reference therein,
(ii) any information contained or incorporated by reference in
a prospectus filed with the Commission pursuant to Rule 424(b)
under the Act, to the extent such information is deemed, pursuant
to Rule 430B or Rule 430C under the Act, to be part of the
registration statement at the Effective Time, and (iii) any
registration statement filed to register the offer and sale of
Securities pursuant to Rule 462(b) under the Act.
The Company has furnished to you,
for use by the Underwriters and by dealers in connection with the
offering of the Securities, copies of one or more preliminary
prospectus supplements relating to the Securities. Except where the
context otherwise requires, “ Pre-Pricing Prospectus
,” as used herein, means each such preliminary prospectus
supplement, in the form so furnished, including any basic
prospectus (whether or not in preliminary form) furnished to you by
the Company and attached to or used with such preliminary
prospectus supplement. Except where the context otherwise requires,
“ Basic Prospectus ,” as used herein, means any
such basic prospectus and any basic prospectus furnished to you by
the Company and attached to or used with the Prospectus Supplement
(as defined below).
Except where the context otherwise
requires, “ Prospectus Supplement ,” as used
herein, means the final prospectus supplement, relating to the
Securities, filed by the Company with the Commission pursuant to
Rule 424(b) under the Act on or before the second business day
after the date hereof (or such earlier time as may be required
under the Act), in the form furnished by the Company to you for use
by the Underwriters and by dealers in connection with the offering
of the Securities.
Except where the context otherwise
requires, “ Prospectus ,” as used herein, means
the Prospectus Supplement together with the Basic Prospectus
attached to or used with the Prospectus Supplement.
“ Permitted Free Writing
Prospectuses ,” as used herein, means the documents
listed on Schedule B attached hereto and each “road
show” (as defined in Rule 433 under the Act), if any, related
to the offering of the Securities contemplated hereby that is a
“written communication” (as defined in Rule 405 under
the Act). The Underwriters have not offered or sold and will not
offer or sell, without the Company’s consent, any Securities
by means of any “free writing prospectus” (as defined
in Rule 405 under the Act) that is required to be filed by the
Underwriters with the Commission pursuant to Rule 433 under the
Act, other than a Permitted Free Writing Prospectus.
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“ Disclosure Package
,” as used herein, means any Pre-Pricing Prospectus or Basic
Prospectus, in either case together with any combination of one or
more Permitted Free Writing Prospectuses, if any. For the sake of
clarity, the Current Reports on Form 8-K filed on January 11,
2007 and January 25, 2007 shall be considered a part of the
Disclosure Package.
Any reference herein to the
registration statement, the Registration Statement, any Basic
Prospectus, any Pre-Pricing Prospectus, the Prospectus Supplement,
the Prospectus or any Permitted Free Writing Prospectus shall be
deemed to refer to and include the documents, if any, incorporated
by reference, or deemed to be incorporated by reference, therein
(the “ Incorporated Documents ”), including,
unless the context otherwise requires, the documents, if any, filed
as exhibits to such Incorporated Documents and specifically
incorporated by reference therein. Any reference herein to the
terms “ amend ,” “ amendment
” or “ supplement ” with respect to the
Registration Statement, any Basic Prospectus, any Pre-Pricing
Prospectus, the Prospectus Supplement, the Prospectus or any
Permitted Free Writing Prospectus shall be deemed to refer to and
include the filing of any document under the Exchange Act on or
after the initial effective date of the Registration Statement, or
the date of such Basic Prospectus, such Pre-Pricing Prospectus, the
Prospectus Supplement, the Prospectus or such Permitted Free
Writing Prospectus, as the case may be, and deemed to be
incorporated therein by reference.
As used in this Agreement, “
business day ” shall mean a day on which the New York
Stock Exchange (the “ NYSE ”) is open for
trading. The terms “herein,” “hereof,”
“hereto,” “hereinafter” and similar terms,
as used in this Agreement, shall in each case refer to this
Agreement as a whole and not to any particular section, paragraph,
sentence or other subdivision of this Agreement. The term
“or,” as used herein, is not exclusive.
The Company and the Underwriters
agree as follows:
1. Sale and Purchase . Upon
the basis of the representations and warranties and subject to the
other terms and conditions herein set forth, the Company agrees to
issue and sell to the respective Underwriters and each of the
Underwriters, severally and not jointly, agrees to purchase from
the Company the number of Firm Securities set forth opposite the
name of such Underwriter in Schedule A attached hereto,
subject to adjustment in accordance with Section 8 hereof, in
each case at a purchase price of $32.47 per Security. The Company
is advised by you that the Underwriters intend (i) to make a
public offering of their respective portions of the Firm Securities
as soon after the effectiveness of this Agreement as in your
judgment is advisable and (ii) initially to offer the Firm
Securities upon the terms set forth in the Prospectus. You may from
time to time increase or decrease the public offering price after
the initial public offering to such extent as you may
determine.
In addition, the Company hereby
grants to the several Underwriters the option (the “
Over-Allotment Option ”) to purchase, and upon the
basis of the representations and warranties and subject to the
terms and conditions herein set forth, the Underwriters shall have
the right to purchase, severally and not jointly, from the Company,
ratably in accordance with the number of Firm Securities to be
purchased by each of them, all or a portion of the Additional
Securities as may be necessary to cover over-allotments made in
connection with the offering of the Firm Securities, at a purchase
price of $32.47 per Security. The Over-Allotment Option may be
exercised by UBS Securities LLC (“ UBS ”) on
behalf of the several Underwriters at any time
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and from time to time on or before the thirtieth
day following the date of the Prospectus Supplement by written
notice to the Company. Such notice shall set forth the aggregate
number of Additional Securities as to which the Over-Allotment
Option is being exercised and the date and time when the Additional
Securities are to be delivered (any such date and time being herein
referred to as an “ additional time of purchase
”); provided , however , that no additional
time of purchase shall be earlier than the “time of
purchase” (as defined below) nor earlier than the second
business day after the date on which the Over-Allotment Option
shall have been exercised nor later than the tenth business day
after the date on which the Over-Allotment Option shall have been
exercised. The number of Additional Securities to be sold to each
Underwriter shall be the number which bears the same proportion to
the number of Additional Securities being purchased as the number
of Firm Securities set forth opposite the name of such Underwriter
on Schedule A hereto bears to the aggregate total number of
Firm Securities, subject to adjustment in accordance with
Section 8 hereof.
2. Payment and Delivery .
Payment of the purchase price for the Firm Securities shall be made
to the Company by Federal Funds wire transfer, against delivery of
the Firm Securities to you through the facilities of The Depository
Trust Company (“ DTC ”) for the respective
accounts of the Underwriters. Such payment and delivery is
conditioned upon the concurrent closing of the Acquisition and
receipt of the funds under the Credit Agreement along with the
proceeds from the Concurrent Offering and/or a Bridge Loan in an
aggregate amount sufficient to pay the purchase price of the
Acquisition; and shall be made at 10:00 A.M., New York City time,
on January 31, 2007 (unless another time shall be agreed to by
you and the Company or unless postponed in accordance with the
provisions of Section 8 hereof) (the “ Closing
Date ”). The time at which such payment and delivery are
to be made is hereinafter sometimes called the “ time of
purchase .” Electronic transfer of the Firm Securities
shall be made to you at the time of purchase in such names and in
such denominations as you shall specify.
Payment of the purchase price for
the Additional Securities shall be made at the additional time of
purchase in the same manner and at the same office and time of day
as the payment for the Firm Securities. Electronic transfer of the
Additional Securities shall be made to you at the additional time
of purchase in such names and in such denominations as you shall
specify.
For the purpose of expediting the
review of the certificates representing the Securities by you, the
Company agrees to make such certificates available to you for such
purpose at least one full business day preceding the time of
purchase or the additional time of purchase, as the case may
be.
Deliveries of the documents
described in Section 6 hereof with respect to the purchase of
the Securities shall be made at the offices of Shearman &
Sterling LLP at 599 Lexington Avenue, New York, NY 10022, at 9:00
A.M., New York City time, on the date of the closing of the
purchase of the Firm Securities or the Additional Securities, as
the case may be.
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3. Representations and Warranties
of the Company . The Company represents and warrants to and
agrees with each of the Underwriters that:
(a) the Registration Statement has
heretofore become effective under the Act or, with respect to any
registration statement to be filed to register the offer and sale
of Securities pursuant to Rule 462(b) under the Act, will be filed
with the Commission and become effective under the Act no later
than 10:00 P.M., New York City time, on the date hereof; no stop
order of the Commission preventing or suspending the use of any
Basic Prospectus, any Pre-Pricing Prospectus, the Prospectus
Supplement, the Prospectus or any Permitted Free Writing
Prospectus, or the effectiveness of the Registration Statement, has
been issued, and no proceedings for such purpose have been
instituted or, to the Company’s knowledge, are contemplated
by the Commission;
(b) the Registration Statement
complied when it became effective, complies as of the date hereof
and, as amended or supplemented, at the time of purchase, each
additional time of purchase, if any, and at all times during which
a prospectus is required by the Act to be delivered (whether
physically or through compliance with Rule 172 under the Act or any
similar rule) in connection with any sale of Securities, will
comply, in all material respects, with the requirements of the Act;
the conditions to the use of Form S-3 in connection with the
offering and sale of the Securities as contemplated hereby have
been satisfied; the Registration Statement constitutes an
“automatic shelf registration statement” (as defined in
Rule 405 under the Act); the Company has not received from the
Commission a notice pursuant to Rule 401(g)(2), of objection to the
use of the automatic shelf registration statement form; as of the
determination date applicable to the Registration Statement (and
any amendment thereof) and the offering contemplated hereby, and as
of each time, if any, an “offer by or on behalf of”
(within the meaning of Rule 163 under the Act) the Company was made
prior to the initial filing of the Registration Statement, the
Company is and was a “well-known seasoned issuer” as
defined in Rule 405 under the Act; the Registration Statement
meets, and the offering and sale of the Securities as contemplated
hereby complies with, the requirements of Rule 415 under the Act
(including, without limitation, Rule 415(a)(5) under the Act); the
Registration Statement did not, as of the Effective Time, 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; each Pre-Pricing Prospectus
complied, at the time it was filed with the Commission, and
complies as of the date hereof, in all material respects with the
requirements of the Act; at no time during the period that begins
on the earlier of the date of such Pre-Pricing Prospectus and the
date such Pre-Pricing Prospectus was filed with the Commission and
ends at the time of purchase did or will any Pre-Pricing
Prospectus, as then amended or supplemented, when considered
together with the Current Reports on Form 8-K filed on
January 11, 2007 and January 25, 2007 and incorporated by
reference herein, include an untrue statement of a material fact or
omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which
they were made, not misleading, and at no time during such period
did or will any Pre-Pricing Prospectus, as then amended or
supplemented, together with any combination of one or more of the
then issued Permitted Free Writing Prospectuses, if any, include an
untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading; each Basic Prospectus complied or will comply, as of
its date and the date it was or will be filed with the Commission,
complies as of the date hereof (if filed with the Commission on or
prior to
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the date hereof) and, at the time of
purchase, each additional time of purchase, if any, and at all
times during which a prospectus is required by the Act to be
delivered (whether physically or through compliance with Rule 172
under the Act or any similar rule) in connection with any sale of
Securities, will comply, in all material respects, with the
requirements of the Act; at no time during the period that begins
on the earlier of the date of such Basic Prospectus and the date
such Basic Prospectus was filed with the Commission and ends at the
time of purchase did or will any Basic Prospectus, as then amended
or supplemented, when considered together with the Current Reports
on Form 8-K filed on January 11, 2007 and January 25,
2007 and incorporated by reference therein, include an untrue
statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading, and
at no time during such period did or will any Basic Prospectus, as
then amended or supplemented, together with the then issued
Permitted Free Writing Prospectuses, if any, include an untrue
statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading; each
of the Prospectus Supplement and the Prospectus will comply, as of
the date that it is filed with the Commission, the date of the
Prospectus Supplement, the time of purchase, each additional time
of purchase, if any, and at all times during which a prospectus is
required by the Act to be delivered (whether physically or through
compliance with Rule 172 under the Act or any similar rule) in
connection with any sale of Securities, in all material respects,
with the requirements of the Act (in the case of the Prospectus,
including, without limitation, Section 10(a) of the Act); at
no time during the period that begins on the earlier of the date of
the Prospectus Supplement and the date the Prospectus Supplement is
filed with the Commission and ends at the later of the time of
purchase, the latest additional time of purchase, if any, and the
end of the period during which a prospectus is required by the Act
to be delivered (whether physically or through compliance with Rule
172 under the Act or any similar rule) in connection with any sale
of Securities did or will any Prospectus Supplement or the
Prospectus, as then amended or supplemented, when considered
together with the Current Reports on Form 8-K filed on
January 11, 2007 and January 25, 2007 and incorporated by
reference herein, include an untrue statement of a material fact or
omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which
they were made, not misleading; at no time during the period that
begins on the date of such Permitted Free Writing Prospectus and
ends at the time of purchase did or will any Permitted Free Writing
Prospectus include an untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were
made, not misleading; provided , however , that the
Company makes no representation or warranty in this
Section 3(b) with respect to any statement contained in the
Registration Statement, any Pre-Pricing Prospectus, the Prospectus
or any Permitted Free Writing Prospectus in reliance upon and in
conformity with information concerning an Underwriter and furnished
in writing by or on behalf of such Underwriter through you to the
Company expressly for use in the Registration Statement, such
Pre-Pricing Prospectus, the Prospectus or such Permitted Free
Writing Prospectus (it being understood and agreed that the only
such information furnished by any Underwriter consists of the
information described as such in Section 10); each
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Incorporated Document, at the time
such document was filed, or will be filed, with the Commission or
at the time such document became or becomes effective, as
applicable, complied or will comply, in all material respects, with
the requirements of the Exchange Act and did not or will not, as
applicable, include an untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were
made, not misleading;
(c) prior to the execution of this
Agreement, the Company has not, directly or indirectly, offered or
sold any Securities by means of any “prospectus”
(within the meaning of the Act) or used any
“prospectus” (within the meaning of the Act) in
connection with the offer or sale of the Securities, in each case
other than the Pre-Pricing Prospectuses and the Permitted Free
Writing Prospectuses, if any; the Company has not, directly or
indirectly, prepared, used or referred to any Permitted Free
Writing Prospectus except in compliance with Rule 163 or with Rules
164 and 433 under the Act; assuming that such Permitted Free
Writing Prospectus is so sent or given after the Registration
Statement was filed with the Commission (and after such Permitted
Free Writing Prospectus was, if required pursuant to Rule 433(d)
under the Act, filed with the Commission), the sending or giving,
by any Underwriter, of any Permitted Free Writing Prospectus will
satisfy the provisions of Rule 164 and Rule 433 (without reliance
on subsections (b), (c) and (d) of Rule 164); the
conditions set forth in one or more of subclauses (i) through
(iv), inclusive, of Rule 433(b)(1) under the Act are satisfied, and
the registration statement relating to the offering of the
Securities contemplated hereby, as initially filed with the
Commission, includes a prospectus that, other than by reason of
Rule 433 or Rule 431 under the Act, satisfies the requirements of
Section 10 of the Act; neither the Company nor the
Underwriters are disqualified, by reason of subsection (f) or
(g) of Rule 164 under the Act, from using, in connection with
the offer and sale of the Securities, “free writing
prospectuses” (as defined in Rule 405 under the Act) pursuant
to Rules 164 and 433 under the Act; the Company is not an
“ineligible issuer” (as defined in Rule 405 under the
Act) as of the eligibility determination date for purposes of Rules
164 and 433 under the Act with respect to the offering of the
Securities contemplated by the Registration Statement, without
taking into account any determination by the Commission pursuant to
Rule 405 under the Act that it is not necessary under the
circumstances that the Company be considered an “ineligible
issuer”; the parties hereto agree and understand that the
content of any and all “road shows” (as defined in Rule
433 under the Act) related to the offering of the Securities
contemplated hereby is solely the property of the
Company;
(d) in accordance with Rule
2710(b)(7) of the NASD, the Securities have been registered with
the Commission on Form S-3 under the Act pursuant to the standards
for such Form S-3 in effect prior to October 21,
1992;
(e) as of the date of this
Agreement, the Company has an authorized and outstanding
capitalization as set forth in the Registration Statement, the
Pre-Pricing Prospectuses and the Prospectus in the column entitled
“Actual” under the caption “Capitalization”
and “Description of Capital Stock” (and any similar
sections or information, if any, contained in any Permitted Free
Writing Prospectus), and, as of the time of purchase and any
additional time of purchase, as the case may be, assuming
the
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closing of the Concurrent Offering
concurrently therewith or prior thereto, the Company shall have an
authorized and outstanding capitalization as set forth in the
Registration Statement and the Prospectus in the column entitled
“Pro Forma” under the caption
“Capitalization” and under “Description of
Capital Stock” (and any similar sections or information, if
any, contained in any Permitted Free Writing Prospectus) (subject,
in each case, to the issuance of shares of Common Stock upon
exercise of stock options and warrants disclosed as outstanding in
the Registration Statement (excluding the exhibits thereto), each
Pre-Pricing Prospectus and the Prospectus and the grant of options
under existing stock option plans described in the Registration
Statement (excluding the exhibits thereto), each Pre-Pricing
Prospectus and the Prospectus); all of the issued and outstanding
shares of capital stock, including the Common Stock and the other
shares of capital stock contemplated to be issued as part of the
Transactions, of the Company have been (or will be upon the
consummation of the Transactions) duly authorized and validly
issued and are fully paid and non-assessable, have been (or will be
upon the consummation of the Transactions) issued in compliance
with all applicable securities laws and were not issued in
violation of any preemptive right, resale right, right of first
refusal or similar right; the Securities are duly listed, and
admitted and authorized for trading, subject to official notice of
issuance, on the NYSE;
(f) the Company has been duly
incorporated and is validly existing as a corporation in good
standing under the laws of the State of Missouri, with full
corporate power and authority to own, lease and operate its
properties and conduct its business as described in the
Registration Statement, the Pre-Pricing Prospectuses, the
Prospectus and the Permitted Free Writing Prospectuses, if any, to
execute and deliver this Agreement and to issue, sell and deliver
the Securities as contemplated by this Agreement and to consummate
the Transactions and enter into the agreements and instruments
related thereto to which the Company is a party, including the
indenture relating to the Senior Notes (the “ Senior Notes
Indenture ”), the acquisition agreement relating to the
Acquisition (the “ Acquisition Agreement ”) and
the Credit Agreement;
(g) the Company is duly qualified to
do business as a foreign corporation and is in good standing in
each jurisdiction where the ownership or leasing of its properties
or the conduct of its business requires such qualification, except
where the failure to be so qualified and in good standing would
not, individually or in the aggregate, (i) have a material
adverse effect on the business, properties, financial condition,
results of operations or prospects of the Company and the
Subsidiaries (as defined below) taken as a whole, (ii) prevent
or materially interfere with consummation of the transactions
contemplated by this Agreement (including the Transactions) or
(iii) result in the delisting of shares of Common Stock from
the NYSE (the occurrence of any such effect or any such prevention
or interference or any such result described in the foregoing
clauses (i), (ii) and (iii) being herein referred to as a
“ Material Adverse Effect ”);
(h) the Company has no
“subsidiaries” (as defined under the Act) other than
the entities listed on Exhibit D hereto, which list includes the
entities comprising the Acquired Business (the “ Acquired
Business Subsidiaries ”) and the existing subsidiaries of
the Company (the “ Historic Subsidiaries ” and,
together with the Acquired Business Subsidiaries, the “
Subsidiaries ”) but excludes Rockwell Automation Asia
Pacific
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Limited, Reliance Electric Limited
(a company organized under the laws of Japan) and Federal Pacific
Electric Co., to the extent each is temporarily a subsidiary of
Reliance Electric Company as of the Closing Date as contemplated in
the Acquisition Agreement; the term “ Significant
Subsidiaries ” refers to Reliance Electric Company,
Reliance Electrical Technologies, LLC and REC Holding, Inc. (each a
“ Reliance Significant Subsidiary ” and
together, the “ Reliance Significant Subsidiaries
”); excluding the Reliance Significant Subsidiaries, the
Company has no “significant subsidiary,” as that term
is defined in Rule 1-02(w) of Regulation S-X under the Act;
except in respect of Rockwell Automation Power Systems (Shanghai)
Company Limited, as provided for in Section 4.5 of the
Acquisition Agreement, as of the time of purchase, the Company will
own directly or indirectly all of the issued and outstanding shares
of capital stock, membership interests or other equity units, as
the case may be, of each of the Subsidiaries (except as indicated
in Exhibit D); other than the capital stock, membership interests
or other equity units, as the case may be, of the Subsidiaries and
entities in which the Company owns less than as 5% interest the
shares of which are publicly traded, the Company does not own,
directly or indirectly, any shares of stock or any other equity
interests or long-term debt securities of any corporation, firm,
partnership, joint venture, association or other entity; complete
and correct copies of the charters and the bylaws or other
organizational documents of the Company and each Significant
Subsidiary and all amendments thereto have been delivered to you,
and no changes therein will be made on or after the date hereof
through and including the time of purchase or, if later, any
additional time of purchase; each Subsidiary has been duly
incorporated, organized and is validly existing in good standing
under the laws of the jurisdiction of its incorporation or
formation, with full power and authority to own, lease and operate
its properties and to conduct its business as described in the
Registration Statement, the Pre-Pricing Prospectuses, the
Prospectus and the Permitted Free Writing Prospectuses, if any;
each Subsidiary is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction where the
ownership or leasing of its properties or the conduct of its
business requires such qualification, except where the failure to
be so qualified and in good standing would not, individually or in
the aggregate, have a Material Adverse Effect; all of the issued
and outstanding shares of capital stock, membership interests or
other equity units, as the case may be, of each of the Subsidiaries
have been, and upon the consummation of the Transactions will be,
duly authorized and validly issued, are fully paid and
non-assessable, have been (or will be upon the consummation of the
Transactions) issued in compliance with all applicable securities
laws, were not issued in violation of any preemptive right, resale
right, right of first refusal or similar right and are owned by the
Company subject to no security interest, other encumbrance or
adverse claims; no options, warrants or other rights to purchase,
agreements or other obligations to issue or other rights to convert
any obligation into shares of capital stock or ownership interests
in the Subsidiaries are (or will be upon the consummation of the
Transactions) outstanding;
(i) all corporate action, required
to be taken by the Company for the due and proper authorization,
execution and delivery of this Agreement, the Senior Note
Indenture, the Credit Agreement and the Acquisition Agreement; for
the consummation of the transactions contemplated hereby (including
the Transactions); and for the authorization, issuance and delivery
of the Securities, has been duly and validly taken;
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(j) the Securities, when issued,
sold and delivered in accordance with the terms hereof, will be
duly and validly issued, fully paid and nonassessable;
(k) the terms of the Securities
conform in all material respects to each description thereof
contained in the Registration Statement, the Pre-Pricing
Prospectuses, the Prospectus and the Permitted Free Writing
Prospectuses, if any;
(l) neither the Company nor any of
the Subsidiaries is in breach or violation of or in default under
(nor has any event occurred which, with notice, lapse of time or
both, would result in any breach or violation of, constitute a
default under or give the holder of any indebtedness (or a person
acting on such holder’s behalf) the right to require the
repurchase, redemption or repayment of all or a part of such
indebtedness under) (A) its charter or bylaws, or (B) any
indenture, mortgage, deed of trust, bank loan or credit agreement
or other evidence of indebtedness, or any license, lease, contract
or other agreement or instrument to which it is a party or by which
it or any of its properties may be bound or affected, or
(C) any federal, state, local or foreign law, regulation or
rule, or (D) any rule or regulation of any self-regulatory
organization or other non-governmental regulatory authority
(including, without limitation, the rules and regulations of the
NYSE), or (E) any decree, judgment or order applicable to it
or any of its properties;
(m) the execution, delivery and
performance of this Agreement and the consummation of the
transactions contemplated hereby and thereby, including the
Transactions and issuance and sale of the Securities will not
conflict with, result in any breach or violation of or constitute a
default under (nor constitute any event which, with notice, lapse
of time or both, would result in any breach or violation of,
constitute a default under or give the holder of any indebtedness
(or a person acting on such holder’s behalf) the right to
require the repurchase, redemption or repayment of all or a part of
such indebtedness under) (or result in the creation or imposition
of a lien, charge or encumbrance on any property or assets of the
Company or any Subsidiary pursuant to) (A) the charter or
bylaws or other organizational documents of the Company or any of
the Subsidiaries, or (B) any indenture, mortgage, deed of
trust, bank loan or credit agreement or other evidence of
indebtedness, or any license, lease, contract or other agreement or
instrument to which the Company or any of the Subsidiaries is a
party or by which any of them or any of their respective properties
may be bound or affected, or (C) any federal, state, local or
foreign law, regulation or rule, or (D) any rule or regulation
of any self-regulatory organization or other non-governmental
regulatory authority (including, without limitation, the rules and
regulations of the NYSE, or (E) any decree, judgment or order
applicable to the Company or any of the Subsidiaries or any of
their respective properties;
(n) no approval, authorization,
consent or order of or filing with any federal, state, local or
foreign governmental or regulatory commission, board, body,
authority or agency, or of or with any self-regulatory organization
or other non-governmental regulatory authority (including, without
limitation, the NYSE), or approval of the stockholders of the
Company, is required in connection with the issuance and sale of
the Securities or the consummation of the transactions contemplated
by this Agreement
10
(including the Transactions) other
than (i) as have been or will be obtained or made prior to the
Closing Date, (ii) as may be required under the securities or
blue sky laws of the various jurisdictions in which the Securities
are being offered by the Underwriters; or (iii) under the
Conduct Rules of the NASD;
(o) except as described in the
Registration Statement (excluding the exhibits thereto), each
Pre-Pricing Prospectus and the Prospectus, (i) no person has
the right, contractual or otherwise, to cause the Company to issue
or sell to it any shares of Common Stock or shares of any other
capital stock or other equity interests of the Company,
(ii) no person has any preemptive rights, resale rights,
rights of first refusal or other rights to purchase any shares of
Common Stock or shares of any other capital stock of or other
equity interests in the Company and (iii) no person has the
right to act as an underwriter or initial purchaser or as a
financial advisor to the Company in connection with the offer and
sale of the Securities; except as described in the Registration
Statement (excluding the exhibits thereto), each Pre-Pricing
Prospectus and the Prospectus, no person has the right, contractual
or otherwise, to cause the Company to register under the Act any
shares of Common Stock or shares of any other capital stock of or
other equity interests in the Company, or to include any such
shares or interests in the Registration Statement or the offering
contemplated thereby;
(p) each of the Company and the
Subsidiaries has all necessary licenses, authorizations, consents
and approvals and has made all necessary filings required under any
applicable law, regulation or rule, and has obtained all necessary
licenses, authorizations, consents and approvals from other
persons, in order to conduct their respective businesses as
described in the Registration Statement; neither the Company nor
any of the Subsidiaries is in violation of, or in default under, or
has received notice of any proceedings relating to revocation or
modification of, any such license, authorization, consent or
approval or any federal, state, local or foreign law, regulation or
rule or any decree, order or judgment applicable to the Company or
any of the Subsidiaries, except where such violation, default,
revocation or modification would not, individually or in the
aggregate, have a Material Adverse Effect or prevent or materially
interfere with consummation of the transactions contemplated
hereby;
(q) except as described in the
Registration Statement (excluding the exhibits thereto), each
Pre-Pricing Prospectus and the Prospectus, there are no actions,
suits, claims, investigations or proceedings pending or, to the
Company’s knowledge, threatened or contemplated to which the
Company or any of the Subsidiaries or any of their respective
directors or officers is or would be a party or of which any of
their respective properties is or would be subject at law or in
equity, before or by any federal, state, local or foreign
governmental or regulatory commission, board, body, authority or
agency, or before or by any self-regulatory organization or other
non-governmental regulatory authority (including, without
limitation, the NYSE, except any such action, suit, claim,
investigation or proceeding which, if resolved adversely to the
Company or any Subsidiary, would not, individually or in the
aggregate, have a Material Adverse Effect or prevent or materially
interfere with consummation of the transactions contemplated
hereby;
11
(r) Ernst & Young LLP,
whose report on the consolidated financial statements of the
Company and its Historic Subsidiaries is included or incorporated
by reference in the Registration Statement, the Pre-Pricing
Prospectuses and the Prospectus, are independent registered public
accountants as required by the Act and by the rules of the Public
Company Accounting Oversight Board (“ PCAOB
”);
(s) Deloitte & Touche LLP,
whose report on the consolidated financial statements of the Power
Systems operating segment of Rockwell Automation, Inc. (“
Power Systems ”) included or incorporated by reference
in the Registration Statement, the Pre-Pricing Prospectus and the
Prospectus, are independent registered public accountants as
required by the Act and the rules of the PCAOB;
(t) the financial statements
included or incorporated by reference in the Registration
Statement, the Pre-Pricing Prospectuses, the Prospectus and the
Permitted Free Writing Prospectuses, if any, together with the
related notes and schedules, present fairly the consolidated
financial position of the Company and the Historic Subsidiaries as
of the dates indicated and of Power Systems as of the dates
indicated and the consolidated results of operations, cash flows
and changes in stockholders’ equity of the Company for the
periods specified and of Power Systems for the periods specified
and have been prepared in compliance with the requirements of the
Act and Exchange Act and in conformity with U.S. generally accepted
accounting principles applied (with respect to the Company and the
Historic Subsidiaries, on the one hand, and Power Systems, on the
other) on a consistent basis during the periods involved, except as
described therein; all pro forma financial statements or data
included or incorporated by reference in the Registration
Statement, the Pre-Pricing Prospectuses, the Prospectus and the
Permitted Free Writing Prospectuses, if any, comply with the
requirements of the Act and the Exchange Act, and the assumptions
used in the preparation of such pro forma financial statements and
data are reasonable, the pro forma adjustments used therein are
appropriate to give effect to the transactions or circumstances
described therein and the pro forma adjustments have been properly
applied to the historical amounts in the compilation of those
statements and data; the other financial and statistical data
contained or incorporated by reference in the Registration
Statement, the Pre-Pricing Prospectuses, the Prospectus and the
Permitted Free Writing Prospectuses, if any, are accurately and
fairly presented and prepared on a basis consistent with the
financial statements and books and records of the Company and Power
Systems, as the case may be; there are no financial statements
(historical or pro forma) that are required to be included or
incorporated by reference in the Registration Statement, any
Pre-Pricing Prospectus or the Prospectus that are not included or
incorporated by reference as required; the Company and the
Subsidiaries do not have any material liabilities or obligations,
direct or contingent (including any off-balance sheet obligations
as defined under the Act), not described in the Registration
Statement (excluding the exhibits thereto), each Pre-Pricing
Prospectus and the Prospectus; and all disclosures contained or
incorporated by reference in the Registration Statement, the
Pre-Pricing Prospectuses, the Prospectus and the Permitted Free
Writing Prospectuses, if any, regarding “non-GAAP financial
measures” (as such term is defined by the rules and
regulations of the Commission) comply with Regulation G of the
Exchange Act and Item 10 of Regulation S-K under the Act, to
the extent applicable;
12
(u) subsequent to the respective
dates as of which information is given in the Registration
Statement, the Pre-Pricing Prospectuses, the Prospectus and the
Permitted Free Writing Prospectuses, if any, in each case excluding
any amendments or supplements to the foregoing made after the
execution of this Agreement, except with respect to the
Transactions, there has not been (i) any material adverse
change, or any development involving a prospective material adverse
change, in the business, properties, management, financial
condition or results of operations of the Company and the
Subsidiaries taken as a whole, (ii) any transaction that is
material to the Company and the Subsidiaries taken as a whole,
(iii) any obligation or liability, direct or contingent
(including any off-balance sheet obligations), incurred by the
Company or any Subsidiary, which is material to the Company and the
Subsidiaries taken as a whole, (iv) any change in the capital
stock or outstanding indebtedness of the Company or any
Subsidiaries or (v) other than regular quarterly dividends,
any dividend or distribution of any kind declared, paid or made on
the capital stock of the Company or any Subsidiary;
(v) the Company has obtained for the
benefit of the Underwriters the agreement (a “ Lock-Up
Agreement ”), in the form set forth as Exhibit A
hereto, of each of its directors and “officers” (within
the meaning of Rule 16a-1(f) under the Exchange Act), except as
indicated in Exhibit A-1 hereto;
(w) neither the Company nor any
Subsidiary is, and at no time during which a prospectus is required
by the Act to be delivered (whether physically or through
compliance with Rule 172 under the Act or any similar rule) in
connection with any sale of Securities will either of them be, and,
after giving effect to the Transactions and offering and sale of
the Securities and the application of the proceeds thereof, none of
them will be an “investment company” as such term is
defined in the Investment Company Act of 1940, as amended (the
“ Investment Company Act ”);
(x) except as described in the
Registration Statement (excluding the exhibits thereto), each
Pre-Pricing Prospectus and the Prospectus, the Company and each of
the Subsidiaries have good and marketable title to all property
(real and personal) described in the Registration Statement, the
Pre-Pricing Prospectuses, the Prospectus and the Permitted Free
Writing Prospectuses, if any, as being owned by any of them, free
and clear of all liens, claims, security interests or other
encumbrances; all the property described in the Registration
Statement, the Pre-Pricing Prospectuses, the Prospectus and the
Permitted Free Writing Prospectuses, if any, as being held under
lease by the Company or a Subsidiary is held thereby under valid,
subsisting and enforceable leases;
(y) each of the Company and the
Subsidiaries owns or possesses all inventions, patent applications,
patents, trademarks (both registered and unregistered), tradenames,
service names, copyrights, trade secrets and other proprietary
information described in the Registration Statement, the
Pre-Pricing Prospectuses, the Prospectus and the Permitted Free
Writing Prospectuses, if any, as being owned or licensed by it or
which is necessary
