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EXHIBIT 1.1
2,000,000 CONVERTIBLE TRUST PREFERRED SECURITIES
WALBRO CAPITAL TRUST
[ ]% Convertible Trust Preferred Securities
(Liquidation amount $25 per Convertible
Trust Preferred Security)
Guaranteed by and Convertible
into Common Stock of
WALBRO CORPORATION
UNDERWRITING AGREEMENT
January [ ], 1997
XXXXX XXXXXX INC.
INTERSTATE/XXXXXXX LANE CORPORATION
As Representatives of the Several Underwriters
c/o XXXXX XXXXXX INC.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Walbro Capital Trust (the "Trust"), a statutory business trust
created under the Business Trust Act (the "Delaware Act") of the State of
Delaware (Chapter 38, Title 12, of the Delaware Code, 12 Del. C. Section 3801
et seq.), proposes, upon the terms and conditions set forth herein, to issue
and sell 2,000,000 [ ]% Convertible Trust Preferred Securities, liquidation
amount $25 per security (the "Firm Preferred Securities"), to the several
Underwriters named in Schedule I hereto (the "Underwriters"). The Trust also
proposes, upon the terms and conditions set forth herein and solely for the
purpose of covering over-allotments, to issue and sell to the Underwriters up
to an additional 300,000 [ ]% Convertible Trust Preferred Securities,
liquidation amount $25 per security (the "Additional Preferred Securities").
The Firm Preferred Securities and the Additional Preferred Securities are
hereinafter collectively referred to as the "Preferred Securities."
Each Preferred Security is convertible at the option of the holder
thereof into shares of common stock, par value
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$.50 per share (the "Conversion Shares"), of Walbro Corporation (the "Company"
and together with the Trust, the "Offerors") at a conversion rate of [ ]
Conversion Shares for each Preferred Security, subject to adjustment in certain
circumstances. The Preferred Securities will be guaranteed by the Company, to
the extent set forth in the Prospectus (as defined below), with respect to
distributions and amounts payable upon liquidation or redemption (the
"Preferred Securities Guarantee") pursuant to the Preferred Securities
Guarantee Agreement (the "Preferred Securities Guarantee Agreement") to be
dated as of the Closing Date (as defined below) executed and delivered by the
Company and Bankers Trust Company (the "Guarantee Trustee"), a New York banking
corporation, not in its individual capacity but solely as trustee, for the
benefit of the holders from time to time of the Preferred Securities. The
entire proceeds from the sale of the Preferred Securities will be combined with
the entire proceeds from the sale by the Trust to the Company of its common
securities (the "Common Securities") which will be guaranteed by the Company,
to the extent set forth in the Prospectus, with respect to distributions and
amounts payable upon liquidation or redemption (the "Common Securities
Guarantee" and, together with the Preferred Securities Guarantee, the
"Guarantees") pursuant to the Common Securities Guarantee Agreement (the
"Common Securities Guarantee Agreement" and, together with the Preferred
Securities Guarantee Agreement, the "Guarantee Agreements"), to be dated as of
the Closing Date, executed and delivered by the Company for the benefit of the
holders from time to time of the Common Securities, and will be used by the
Trust to purchase the [ ]% Convertible Subordinated Debentures due 2017 (the
"Convertible Debentures") issued by the Company. The Preferred Securities and
the Common Securities will be issued pursuant to the Amended and Restated
Declaration of Trust of the Trust, to be dated as of Closing Date (the
"Declaration"), among the Company, as Sponsor, Bankers Trust Company, as
institutional trustee (the "Institutional Trustee"), Bankers Trust (Delaware),
as Delaware trustee (the "Delaware Trustee"), and Xxxxxxx X. Xxxxxxxx, Xxxxxx
X. Xxxxxxx and Xxxxxxx X. Xxxxx, as regular trustees (the "Regular Trustees,"
and together with the Institutional Trustee and the Delaware Trustee, the
"Trustees"), and the holders from time to time of undivided beneficial
interests in the assets of the Trust. The Convertible Debentures will be
issued pursuant to an Indenture, to be dated as of the Closing Date (the
"Indenture"), between the Company and Bankers Trust Company, as trustee (the
"Indenture Trustee"). The Preferred Securities, the Preferred Securities
Guarantee, the Convertible Debentures and the Conversion Shares are
collectively referred to herein as the "Securities."
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Capitalized terms used herein without definition have the respective meanings
specified in the Prospectus.
The Offerors wish to confirm as follows their agreement with you
and the other several Underwriters on whose behalf you are acting, in
connection with the several purchases of the Preferred Securities by the
Underwriters.
1. Registration Statement and Prospectus. The Offerors have
prepared and filed with the Securities and Exchange Commission (the
"Commission") in accordance with the provisions of the Securities Act of 1933,
as amended, and the rules and regulations of the Commission thereunder
(collectively, the "Securities Act"), a registration statement on Form S-3
(File No. 333-18317) under the Securities Act (the "registration statement"),
including a prospectus subject to completion relating to the Securities. The
term "Registration Statement" as used in this Agreement means the registration
statement (including all financial schedules and exhibits), as amended at the
time it becomes effective, or, if the registration statement became effective
prior to the execution of this Agreement, as supplemented or amended prior to
the execution of this Agreement. If it is contemplated, at the time this
Agreement is executed, that a post-effective amendment to the registration
statement will be filed and must be declared effective before the offering of
the Preferred Securities may commence, the term "Registration Statement" as
used in this Agreement means the registration statement as amended by said
post-effective amendment. If an additional registration statement is prepared
and filed with the Commission in accordance with Rule 462(b) under the
Securities Act (an "Additional Registration Statement"), the term "Registration
Statement" as used in this Agreement includes the Additional Registration
Statement. The term "Prospectus" as used in this Agreement means the
prospectus in the form included in the Registration Statement as supplemented
by the addition of Rule 430A information contained in the prospectus filed with
the Commission pursuant to Rule 424(b) under the Securities Act. The term
"Prepricing Prospectus" as used in this Agreement means the prospectus subject
to completion relating to the Preferred Securities in the form included in the
registration statement at the time of the initial filing of the registration
statement with the Commission, and as such prospectus shall have been amended
from time to time prior to the date of the Prospectus. Any reference in this
Agreement to the registration statement, the Registration Statement, any
Prepricing Prospectus or the Prospectus shall be deemed to refer to and include
the documents incorporated by
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reference therein pursuant to Form S-3 under the Securities Act, as of the date
of the registration statement, the Registration Statement, such Prepricing
Prospectus or the Prospectus, as the case may be, and any reference to any
amendment or supplement to the registration statement, the Registration
Statement, any Prepricing Prospectus or the Prospectus shall be deemed to refer
to and include any documents filed after such date under the Securities
Exchange Act of 1934, as amended, and the rules and regulations of the
Commission thereunder (collectively, the "Exchange Act") which, upon filing,
are incorporated by reference therein, as required by Form S-3. As used
herein, the term "Incorporated Documents" means the documents which at the time
are incorporated by reference in the registration statement, the Registration
Statement, any Prepricing Prospectus, the Prospectus, or any amendment or
supplement thereto.
2. Agreements to Sell and Purchase. The Trust hereby agrees,
subject to all the terms and conditions set forth herein, to issue and sell to
each Underwriter and, upon the basis of the representations, warranties and
agreements of the Offerors herein contained and subject to all the terms and
conditions set forth herein each Underwriter agrees, severally and not jointly,
to purchase from the Trust, at a purchase price of $[ ] per Firm Preferred
Security, plus accrued distributions, if any from [ ], 1997, the
number of Firm Preferred Securities set forth opposite the name of such
Underwriter in Schedule I hereto (or such number of Firm Preferred Securities
increased as set forth in Section 10 hereof).
The Company agrees that, in view of the fact that the proceeds of
the sale of the Preferred Securities will be invested in the Convertible
Debentures, it shall pay to the Underwriters as compensation ("Underwriters'
Compensation") for their arranging the investment of the proceeds therein, on
the Closing Date, $[ ] per Firm Preferred Security. The Underwriters
shall inform the Company in writing on the Closing Date of the aggregate number
of Firm Preferred Securities so sold.
The Trust also agrees, subject to all the terms and conditions set
forth herein, to sell to the Underwriters, and upon the basis of the
representations, warranties and agreements of the Company herein contained and
subject to all the terms and conditions set forth herein, the Underwriters
shall have the right to purchase from the Trust pursuant to an option (the
"over-allotment option") which may be exercised at any one
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time prior to 9:00 P.M., New York City time, on the 30th day after the date of
the Prospectus (or, if such 30th day shall be a Saturday or Sunday or a
holiday, on the next business day thereafter when the Nasdaq National Market
("Nasdaq") is open for trading), up to 300,000 Additional Preferred Securities
at the same purchase price as the Firm Preferred Securities, plus accrued
distributions, if any, from [ ], 1997. Upon exercise of the
over-allotment option, each Underwriter, severally and not jointly, agrees to
purchase that number of Additional Preferred Securities (subject to such
adjustments as you may determine in order to avoid fractional securities) which
bears the same proportion to the aggregate number of Additional Preferred
Securities to be purchased by the Underwriters as the number of Firm Preferred
Securities set forth opposite the name of such Underwriter bears in Schedule I
hereto (or such number of Firm Preferred Securities increased as set forth in
Section 10 hereof) to the aggregate number of Firm Preferred Securities. The
Company agrees that it will pay Underwriters' Compensation on the Option
Closing Date (as hereinafter defined) in the amounts per Preferred Security set
forth in the immediately preceding paragraph with respect to any Additional
Preferred Securities purchased by the Underwriters.
3. Terms of Public Offering. The Offerors have been advised by
you that the Underwriters propose to make a public offering of their respective
portions of the Preferred Securities as soon as the Underwriters deem advisable
after the Registration Statement has become effective, this Agreement has been
executed and delivered, and the Declaration, the Preferred Securities Guarantee
Agreement and the Indenture have been qualified under the Trust Indenture Act
of 1939, as amended (the "1939 Act"). The entire proceeds from the sale of the
Preferred Securities will be combined with the entire proceeds from the sale by
the Trust to the Company of its Common Securities, and will be used by the
Trust to purchase an equivalent amount of the Convertible Debentures.
4. Delivery of the Preferred Securities and Payment Therefor.
Delivery to the Underwriters of and payment for the Firm Preferred Securities
shall be made at the office of Xxxxx Xxxxxx Inc., 000 Xxxxxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, at 8:30 A.M., New York City time, on [ ], 1997
(the "Closing Date"). The place of closing for the Preferred Securities and
the Closing Date may be varied by agreement between you and the Company.
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Delivery to the Underwriters of and payment for any Additional
Preferred Securities to be purchased by the Underwriters shall be made at the
aforementioned office of Xxxxx Xxxxxx Inc. at such time and on such date (the
"Option Closing Date"), which may be the same as the Closing Date but shall in
no event be earlier than the Closing Date nor earlier than two nor later than
ten business days after the giving of the notice hereinafter referred to, as
shall be specified in a written notice from you to the Offerors of the
Underwriters' determination to purchase the number of Additional Preferred
Securities specified in such notice. The place of closing for any Additional
Preferred Securities and the Option Closing Date for such Additional Preferred
Securities may be varied by agreement between you and the Offerors.
The Firm Preferred Securities and any Additional Preferred
Securities which the Underwriters may elect to purchase shall be delivered to
you for the accounts of the several Underwriters registered in the name of Cede
& Co., as nominee for the Depository Trust Company, against payment of the
purchase price therefor in immediately available funds. The Preferred
Securities to be delivered to the Underwriters shall be made available to you
in New York City for inspection and packaging not later than 9:30 A.M., New
York City time, on the business day next preceding the Closing Date or the
Option Closing Date, as the case may be.
5. Agreements of the Offerors. The Company and the Trust,
jointly and severally, agree with the several Underwriters as follows:
(a) If, at the time this Agreement is executed and delivered, it
is necessary for the Registration Statement or a post-effective amendment
thereto (or any Additional Registration Statement) to be declared or to
become effective before the offering of the Securities may commence,
the Offerors will endeavor to cause the Registration Statement or such
post-effective amendment to become effective as soon as possible and will
advise you promptly and, if requested by you, will confirm such advice in
writing, when the Registration Statement or such post-effective amendment
(or any Additional Registration Statement) has become effective.
(b) The Offerors will advise you promptly and, if requested by
you, will confirm such advice in writing: (i) of any request by the
Commission for amendment of or a
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supplement to the Registration Statement, any Prepricing Prospectus or
the Prospectus or for additional information; (ii) of the issuance by
the Commission of any stop order suspending the effectiveness of the
Registration Statement or of the suspension of qualification of the
Securities for offering or sale in any jurisdiction or the initiation of
any proceeding for such purpose; and (iii) within the period of time
referred to in paragraph (f) below, of the happening of any event, which
makes any statement of a material fact made in the Registration Statement
or the Prospectus (as then amended or supplemented) untrue or which
requires the making of any additions to or changes in the Registration
Statement or the Prospectus (as then then amended or supplemented) in
order to state a material fact required by the Securities Act or the
regulations thereunder to be stated therein or necessary in order to
make the statements therein not misleading, or of the necessity to
amend or supplement the Prospectus (as then amended or supplemented) to
comply with the Securities Act or any other law. If at any time the
Commission shall issue any stop order suspending the effectiveness of the
Registration Statement, the Offerors will make every reasonable effort to
obtain the withdrawal of such order at the earliest possible time.
(c) The Offerors will furnish to you, without charge, (i) 3 copies
of the registration statement as originally filed with the Commission via
XXXXX and of each amendment thereto so filed, including financial
statements and all exhibits to the registration statement, and will
furnish you with an equal number of copies of executed signature pages
regarding the same, (ii) such number of conformed copies of the
registration statement as originally filed and of each amendment thereto,
but without exhibits, as you may reasonably request and (iii) such number
of copies of the Declaration, the Preferred Securities Guarantee
Agreement, the Common Securities Guarantee Agreement and the Indenture
and of the Incorporated Documents, as you may reasonably request.
(d) Prior to the end of the period of time referred to in the
first sentence in subsection (f) below, the Offerors will not file any
amendment to the Registration Statement or any Additional Registration
Statement or make any amendment or supplement to the Prospectus to which
you shall reasonably object or file with the Commission any document
which upon filing becomes an Incorporated
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Document and of which you shall not previously have been advised.
(e) Prior to the execution and delivery of this Agreement, the
Offerors have delivered to you, without charge, in such quantities as you
have reasonably requested, copies of each Prepricing Prospectus. The
Offerors consent to the use, in accordance with the provisions of the
Securities Act and with the securities or Blue Sky laws of the
jurisdictions in which the Preferred Securities are offered by the
several Underwriters and by dealers, prior to the date of the Prospectus,
of each Prepricing Prospectus so furnished by the Offerors.
(f) As soon after the execution and delivery of this Agreement as
possible and thereafter from time to time for such period as in the
opinion of counsel for the Underwriters a Prospectus is required by the
Securities Act to be delivered in connection with sales by any
Underwriter or dealer, the Offerors will expeditiously deliver to each
Underwriter and each dealer, without charge, as many copies of the
Prospectus (and of any amendment or supplement thereto) as you may
reasonably request. The Offerors' consent to the use of the Prospectus
(and of any amendment or supplement thereto) in accordance with the
provisions of the Securities Act and with the securities or Blue Sky laws
of the jurisdictions in which the Preferred Securities are offered by the
several Underwriters and by all dealers to whom Preferred Securities may
be sold, both in connection with the offering and sale of the Preferred
Securities and for such period of time thereafter as the Prospectus is
required by the Securities Act to be delivered in connection with sales
by any Underwriter or dealer. If during such period of time any event
shall occur that in the judgment of the Offerors or in the opinion of
counsel for the Underwriters is required to be set forth in the
Prospectus (as then amended or supplemented) or should be set forth
therein in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it is
necessary to supplement or amend the Prospectus (or to file under the
Exchange Act any document which upon filing, becomes an Incorporated
Document) in order to comply with the Securities Act or any other law,
the Offerors will forthwith prepare and, subject to the provisions of
paragraph (d) above, file with the Commission an appropriate supplement
or amendment thereto (or to such document), and
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will expeditiously furnish to the Underwriters and dealers a reasonable
number of copies thereof. In the event that the Offerors and you, as
Representatives of the several Underwriters, agree that the Prospectus
should be amended or supplemented, the Offerors or the Company, if
requested by you, will promptly issue a press release announcing or
disclosing the matters to be covered by the proposed amendment or
supplement.
(g) The Offerors will cooperate with you and with counsel for the
Underwriters in connection with the registration or qualification of the
Securities for offering and sale by the several Underwriters and by
dealers under the securities or Blue Sky Laws of such jurisdictions as
you may designate and will file such consents to service of process or
other documents necessary or appropriate in order to effect such
registration or qualification; provided that in no event shall the
Company or the Trust be obligated to qualify to do business in any
jurisdiction where it is not now so qualified or to take any action which
would subject it to taxation or service of process in suits, other than
those arising out of the offering or sale of the Preferred Securities, in
any jurisdiction where it is not now so subject.
(h) The Offerors will make generally available to the Trust's
security holders a consolidated earnings statement of the Company, which
need not be audited, covering a twelve-month period commencing after the
effective date of the Registration Statement and ending not later than 15
months thereafter, as soon as practicable after the end of such period,
which consolidated earnings statement shall satisfy the provisions of
Section 11(a) of the Securities Act.
(i) For a period of five years following the date of issuance of
the Securities, the Company will furnish to you, (i) as soon as
available, a copy of all reports and other communications (financial or
otherwise) of the Company mailed to stockholders or filed by the Company
with the Commission or any national securities exchange on which any
security of the Company may be listed or quoted and a copy of each Annual
Report on Form 10-K, each quarterly report on Form 10-Q and each current
report on Form 8-K filed by the Company with the Commission under the
Exchange Act, and (ii) from time to time such other information
concerning the Company as you may reasonably
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request and the Trust will furnish to you, upon your request, a copy of
each report of the Trust mailed to holders of Preferred Securities or
Common Securities.
(j) If this Agreement shall terminate or shall be terminated after
execution pursuant to any provisions hereof (otherwise than pursuant to
the second paragraph of Section 10 hereof or by notice given by you
terminating this Agreement pursuant to Section 10 hereof) or if this
Agreement shall be terminated by the Underwriters because of any failure
or refusal on the part of the Offerors to comply with the terms or
fulfill any of the conditions of this Agreement, the Company agrees to
reimburse the Underwriters for all reasonable out-of-pocket expenses
(including reasonable fees and expenses of counsel for the Underwriters)
incurred by you in connection herewith.
(k) The Trust will apply the net proceeds from the sale of the
Preferred Securities, and the Company will apply the net proceeds from
the sale of the Convertible Debentures, substantially in accordance with
the description set forth in the Prospectus under "Use of Proceeds".
(l) If required by the rules of the Commission, the Offerors will
timely file the Prospectus pursuant to Rule 424(b) under the Securities
Act and will advise you of the time and manner of such filing.
(m) Each of the Trust and the Company agree, during the period
beginning on the date of this Agreement and continuing to and including
the date that is 90 days after the Closing Date, not to offer, sell,
contract to offer, sell or otherwise dispose of any preferred securities,
any preferred stock, any common stock or any other securities (including
any backup undertakings for such preferred stock or other securities) of
the Company or of the Trust, in each case that are substantially similar
to the Preferred Securities, or any securities convertible into or
exchangeable for the Preferred Securities or such substantially similar
securities of either the Trust or the Company, without the prior written
consent of Xxxxx Xxxxxx Inc.
(n) Except as stated in this Agreement and in the Prepricing
Prospectus and Prospectus, the Company has not taken, nor will it take,
directly or indirectly, any action designed to or that might reasonably
be expected to
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cause or result in stabilization or manipulation of the price of the
Preferred Securities to facilitate the sale or resale of the Preferred
Securities.
(o) The Company will use its best efforts to have the Preferred
Securities listed on the Nasdaq. If the Convertible Debentures are
distributed on the occurrence of a Tax Event (as defined in the
Prospectus), the Company will use its best efforts to have such
Convertible Debentures listed on Nasdaq or such other exchange where
the Preferred Securities are listed.
6. Representations and Warranties of the Offerors. The Company
and the Trust, jointly and severally, represent and warrant to, and agree with,
each Underwriter that as of the date hereof, as of the Closing Date referred to
in Section 4 hereof, and as of each Option Closing Date if any, as referred to
in Section 4 hereof:
(a) Each Prepricing Prospectus complied in all material respects
with the provisions of the Securities Act. The Commission has not issued
any order preventing or suspending the use of any Prepricing Prospectus.
(b) Each of the Offerors and the transactions contemplated by this
Agreement meet the requirements for using Form S-3 under the Securities
Act. The registration statement in the form in which it became or
becomes effective and also in such form as it may be when any
post-effective amendment thereto shall become effective, any Additional
Registration statement when filed with the Commission pursuant to Rule
462(b) under the Securities Act and the Prospectus and any supplement and
amendment thereto when filed with the Commission under Rule 424(b) under
the Securities Act complied or will comply in all material respects with
the provisions of the Securities Act and will not at any such times
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, except that this representation and
warranty does not apply to statements in or omissions from the
registration statement or the Prospectus made in reliance upon and in
conformity with information relating to any Underwriter furnished to the
Offerors in writing by or on behalf of any Underwriter through you
expressly for use therein.
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(c) The Incorporated Documents heretofore filed, when they were
filed (or, if any amendment with respect to any such document was filed,
when such amendment was filed), conformed in all material respects with
the requirements of the Exchange Act and the rules and regulations
thereunder, any further Incorporated Documents so filed will, when they
are filed, conform in all material respects with the requirements of the
Exchange Act and the rules and regulations thereunder; no such document
when it was filed (or, if an amendment with respect to any such document
was filed, when such amendment was filed), contained an untrue statement
of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein not
misleading; and no such further document, when it is filed, will contain
an untrue statement of a material fact or will omit to state a material
fact required to be stated therein or necessary in order to make the
statements therein not misleading.
(d) The execution and delivery of, and the performance by the
Company and the Trust of their respective obligations under this
Agreement have been duly and validly authorized by the Company and the
Trust, respectively, and this Agreement has been duly executed and
delivered by the Company and the Trust, respectively, and is enforceable
in accordance with its terms, except as the enforcement thereof may be
limited by bankruptcy, insolvency (including without limitation, all laws
relating to fraudulent transfers), reorganization, moratorium or other
similar laws affecting enforcement of creditors rights generally and
subject to the applicability of general principles of equity and except
as rights to indemnity hereunder may be limited by federal securities
laws.
(e) The Offerors have not distributed and, prior to the later to
occur of (i) the Closing Date and (ii) completion of the distribution of
the Preferred Securities, will not distribute any offering materials in
connection with the offering and sale of the Preferred Securities other
than the Registration Statement, the Prepricing Prospectus, the
Prospectus or other materials, if any, permitted by the Securities Act.
(f) Each of: (i) Xxxxxx Xxxxxxxx, LLP, the accountants who
certified the financial statements and supporting schedules of the
Company included in the Xxxxxxxxxxxx
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Xxxxxxxxx, (xx) Deloitte & Touche, LLP, the accountants who certified
the financial statements and supporting schedules of the Fuel Tank
Division of Dyno Industrier A.S. ("Dyno"), incorporated by reference in
the Registration Statement and (iii) Ernst & Young Audit (Paris,
France), the accountants who certified the financial statements and
supporting schedules of Xxxxxx Systems, S.N.C. ("Xxxxxx"), incorporated
by reference in the Registration Statement, are independent public
accountants as required by the Securities Act and Securities Act
regulations.
(g) The financial statements included in the Registration
Statement and the Prospectus (or incorporated by reference therein, as
the case may be), together with the related schedules and notes, present
fairly the financial position of the Company and its consolidated
subsidiaries, Dyno and Xxxxxx at the dates indicated and the statement of
operations, stockholders' equity and cash flows of the Company and its
consolidated subsidiaries, Dyno and Xxxxxx 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.
(h) 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") and (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)
there has been no dividend or distribution of any kind declared, paid or
made by
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the Company on any class of its capital stock except as is described
in the Prospectus.
(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
and has corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Registration
Statement and the Prospectus and to enter into and perform its
obligations under this Agreement, the Declaration, the Indenture, the
Guarantees and the Convertible Debentures and to purchase, own and hold
the Common Securities issued by the Trust; and the Company is duly
registered and qualified as a foreign corporation to conduct its business
and is in good standing in each other jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing
of property or the conduct of business, except where the failure so to
qualify or to be in good standing would not result in a Material Adverse
Effect.
(j) Each significant subsidiary of the Company as defined in Rule
1-02 of Regulation S-X under the Securities Act (a "Significant
Subsidiary") has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation (which is listed opposite the name of each subsidiary in
Schedule II hereto), has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Registration Statement and the Prospectus and is duly registered and
qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which the nature of its properties or
the conduct of its business requires such registration or qualification,
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 and the Prospectus, all of the issued and
outstanding capital stock of each such Significant 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
Significant Subsidiary was issued in violation of the preemptive or
similar rights of any securityholder of such subsidiary.
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The only subsidiaries of the Company are the subsidiaries listed in
Schedule II hereto.
(k) The authorized, issued and outstanding capital stock of the
Company is as set forth in the Prospectus as of the respective dates
presented; and the Preferred Securities, the Common Securities, the
Conversion Shares, the Convertible Debentures, the Declaration, the
Preferred Securities Guarantee Agreement and the Indenture conform in all
material respects to the descriptions thereof in the Prospectus under the
captions "Description of the Preferred Securities," "Description of the
Guarantee," "Description of the Convertible Debentures," "Effect of
Obligations Under the Convertible Debentures and the Guarantee" and
"Description of Capital Stock".
(l) The Trust has been duly created and is validly existing in
good standing as a business trust under the Delaware Act with the power
and authority to own property and to conduct its business as described in
the Registration Statement and the Prospectus, and any amendment or
supplement thereto, and to enter into and perform its obligations under
this Agreement, the Preferred Securities, the Common Securities and the
Declaration; the Trust is duly qualified to transact business as a
foreign corporation in good standing in each jurisdiction in which such
qualification is necessary, except to the extent that the failure to so
qualify would not have a Material Adverse Effect on the Trust; and the
Trust is not a party to or otherwise bound by any agreement other than
those described in the Prospectus, and any amendment or supplement
thereto.
(m) The Common Securities have been duly authorized by the
Declaration and, when issued and delivered by the Trust to the Company in
accordance with the terms of the Declaration and against payment therefor
as described in the Prospectus, will be validly issued undivided
beneficial interests in the assets of the Trust; the issuance of the
Common Securities is not subject to preemptive or other similar rights;
and at the Closing Date, all of the issued and outstanding Common
Securities of the Trust will be directly owned by the Company free and
clear of any security interest, mortgage, pledge, lien, encumbrance,
claim or equity.
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(n) All of the outstanding shares of capital stock of the Company
have been duly authorized and validly issued and are fully paid and
nonassessable; and none of the outstanding shares of capital stock of
the Company was issued in violation of the preemptive or other similar
rights of any stockholder of the Company.
(o) The Declaration has been duly authorized by the Company and,
when validly executed and delivered by the Company and the Regular
Trustees, and assuming the due authorization, execution and delivery of
the Declaration by the Delaware Trustee and the Institutional Trustee,
the Declaration will be a valid and legally binding obligation of the
Company and the Regular Trustees, enforceable against the Company and the
Regular Trustees in accordance with its terms, except as enforcement
thereof may be limited by bankruptcy, insolvency (including, without
limitation, all laws relating to fraudulent transfers), reorganization,
moratorium or similar laws affecting enforcement of creditors' rights
generally and except as enforcement thereof is subject to general
principles of equity regardless of whether enforcement is considered a
proceeding in equity or at law; and the Declaration has been duly
qualified under the 1939 Act and conforms to the description thereof in
the Registration Statement and the Prospectus and any amendment or
supplement thereto;
(p) The Regular Trustees of the Trust are officers of the Company
and have been duly authorized by the Company to execute and deliver the
Declaration.
(q) The Preferred Securities Guarantee Agreement has been duly and
validly authorized by the Company and, when validly executed and
delivered by the Company, and assuming due authorization, execution and
delivery of the Preferred Securities Guarantee Agreement by the Guarantee
Trustee, will constitute a valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except as
enforcement thereof may be limited by bankruptcy, insolvency (including,
without limitation, all laws relating to the fraudulent transfers),
reorganization, moratorium or other similar laws affecting enforcement of
creditors' rights generally and except as enforcement thereof is subject
to general principles of equity regardless of whether enforcement is
considered a
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proceeding in equity or at law; and the Preferred Securities
Guarantee Agreement has been duly qualified under the 1939 Act and
conforms to the description thereof in the Registration Statement and the
Prospectus and any amendment or supplement thereto;
(r) The Preferred Securities have been duly authorized by the
Declaration and, when authenticated in the manner provided for in the
Declaration and issued and delivered pursuant to this Agreement against
payment of the consideration set forth herein, will be validly issued and
(subject to the terms of the Declaration) fully paid and nonassessable
undivided beneficial interests in the assets of the Trust; the issuance
of the Preferred Securities is not subject to preemptive or other similar
rights; and holders of Preferred Securities will be entitled to the same
limitation of personal liability extended to stockholders of private
corporations for profit incorporated under the General Corporation Law of
the State of Delaware and the Preferred Securities have been registered
under the Exchange Act and authorization for quoting the Preferred
Securities on Nasdaq has been given, subject only to official notice
of issuance.
(s) The Indenture has been duly authorized by the Company, and,
when validly executed and delivered by the Company, and assuming the due
authorization, execution and delivery of the Indenture by the Indenture
Trustee, will be a valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except as
enforcement thereof may be limited by bankruptcy, insolvency (including,
without limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or other similar laws affecting enforcement of
creditors' rights generally and except as enforcement thereof is subject
to general principles of equity regardless of whether enforcement is
considered a proceeding in equity or at law; and the Indenture has been
(or will have been) duly qualified under the 1939 Act and conforms to the
description thereof in the Registration Statement and the Prospectus, and
any amendment or supplement thereto.
(t) The Convertible Debentures have been duly authorized by the
Company, and when validly executed, authenticated, issued and delivered
in the manner provided for in the Indenture and sold and paid for as
provided in this Agreement, the Convertible Debentures
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will be valid and binding obligations of the Company entitled to the
benefits of the Indenture and enforceable against the Company in
accordance with their terms, except as enforcement thereof may be limited
by bankruptcy, insolvency (including, without limitation, all laws
relating to fraudulent transfers), reorganization, moratorium or similar
laws affecting enforcement of creditors' rights generally and except as
enforcement thereof is subject to general principles of equity regardless
of whether enforcement is considered a proceeding in equity or at law;
and the Indenture conforms to the description thereof in the Registration
Statement and the Prospectus, and any amendment or supplement thereto.
(u) The Company's obligations under the Preferred Security
Guarantee are (i) subordinated and junior to all other liabilities of the
Company except any liabilities that may be pari passu expressly by their
terms, (ii) pari passu with the most senior preferred stock or preference
stock, if any, issued from time to time by the Company and with any
guarantee now or hereafter entered into by the Company in respect of any
preferred or preference stock or preferred securities of any affiliate of
the Company and (iii) senior to the Common Stock.
(v) The Convertible Debentures are subordinate in right of payment
to all existing and future Senior Indebtedness (as defined in the
Indenture) of the Company.
(w) To the knowledge of the Offerors, neither the Company nor any
of its subsidiaries is in violation of its charter, by-laws or other
organizational documents; the Trust is not in violation of the
Declaration or its Certificate of Trust filed with the State of Delaware
on December [ ], 1996; and neither the Company, any Significant
Subsidiaries of the Company or the Trust is in default in the performance
or observance of any obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, deed of trust, loan or
credit agreement, note, lease or other agreement or instrument to which
the Company, any of its subsidiaries or the Trust 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, any subsidiary or the Trust is subject (collectively,
"Agreements and Instruments"), except for such defaults that would not
result in a Material Adverse Effect.
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(x) 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.
(y) Except as described in the Registration Statement and 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, any Significant
Subsidiary of the Company or the Trust, which is required to be disclosed
in the Registration Statement (other than as disclosed therein), or which
could reasonably be expected to result in a Material Adverse Effect, or
which could 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 or the
Trust of their respective obligations hereunder; the aggregate of all
pending legal or governmental proceedings to which the Company or any
subsidiary of the Company or the Trust 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.
(z) There are not contracts or documents which are required to be
described in the Registration Statement or the Prospectus or to be filed
as exhibits thereto which have not been so described and filed as
required.
(aa) Neither the issuance and sale of the Preferred Securities by
the Trust, the extension of the Guarantee by the Company, the issuance
and sale of the Convertible Debentures by the Company, the execution,
delivery or performance of the Declaration, the Indenture and the
Guarantees by the Offerors, nor the consummation by the Offerors of the
transactions contemplated hereby and thereby and compliance by the
Offerors with their respective obligations hereunder and thereunder (A)
requires any consent, approval, authorization or other order of or
registration
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or filing with, any court, regulatory body, administrative agency or
other governmental body, agency or official (except such as may be
required for the registration of the Securities under the Securities Act
and the Exchange Act and compliance with the securities or Blue Sky laws
of various jurisdictions, all of which have been or will be effected in
accordance with this Agreement) or conflicts or will conflict with or
constitutes or will constitute a breach of, or a default under, the
certificate or articles of incorporation or bylaws, or other
organizational documents, of the Company or any of its Significant
Subsidiaries or the Declaration or Certificate of Trust of the Trust or
(B) conflicts or will conflict with, in any material respect, or
constitutes or will constitute a breach of, or a default, in any material
respect, under, any material agreement, indenture, lease or other
instrument to which the Company, any of its Significant Subsidiaries or
the Trust is a party or by which any of them or any of their respective
properties may be bound, except any such conflict or conflicts that in
the aggregate would not result in a Material Adverse Effect or (C)
violates or will violate any statute, law, regulation or filing or
judgment, injunction, order or decree of any government, government
instrumentality or court, domestic or foreign, applicable to the Company,
any of its Significant Subsidiaries or the Trust or any of their
respective properties, except any such violation or violations that in
the aggregate would not result in a Material Adverse Effect, or (D) will
result in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company, any of its Significant
Subsidiaries or the Trust pursuant to the terms of any agreement or
instrument to which any of them is a party or by which any of them may be
bound or to which any of the property or assets of any of them is
subject.
(bb) The Company and its Significant 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 and to the knowledge of the
Company such Governmental Licenses are in full force and effect; the
Company and its Significant Subsidiaries are in material compliance with
the terms and conditions of all such Governmental Licenses, except where
the failure so to comply would not, singly or in the
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aggregate, have a Material Adverse Effect; and neither the Company nor
any of its Significant 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.
(cc) The Company and its Significant Subsidiaries have good and
marketable title to all real property owned by the Company and its
Significant Subsidiaries and good title to all other properties owned by
them, in each case, free and clear of all material liens, security
interests, claims, restrictions, mortgages, pledges, or encumbrances of
any kind except such as (A) are described in the Prospectus; or (B) do
not, singly or in the aggregate, materially affect the value of such
property and do not interfere with the use made and currently proposed to
be made of such property by the Company or any of its Significant
Subsidiaries; and all of the leases and subleases material to the
business of the Company and its Significant Subsidiaries, considered as
one enterprise, and under which the Company or any of its Significant
Subsidiaries holds properties described in the Prospectus, are valid,
existing and enforceable, and neither the Company nor any Significant
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
Significant Subsidiary under any of the leases or subleases mentioned
above, or affecting or questioning the rights of the Company or such
Significant Subsidiary to the continued possession of the leased or
subleased premises under any such lease or sublease, except as such would
not in the aggregate result in a Material Adverse Effect.
(dd) Neither the Company nor the Trust is, and upon the issuance
and sale of the Preferred Securities as herein contemplated and the
application of the net proceeds therefrom as described in the Prospectus
neither will 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").
(ee) Except as would not, singly or in the aggregate, result in a
Material Adverse Effect, (A) neither the Company nor any of its
Significant Subsidiaries is in
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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, ground-water, 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 Significant Subsidiaries
have all permits, authorizations and approvals required under any
applicable Environmental Laws and are each in compliance with their
requirements, (C) there are no pending or, to the knowledge of the
Company, 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 Significant Subsidiaries and (D)
there are no events or circumstances to the knowledge of the Company 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 Company or any of
its Significant Subsidiaries relating to Hazardous Materials or any
Environmental Laws.
(ff) There are no persons with registrations rights or other
similar rights to have any security registered pursuant to the
Registration Statement or otherwise registered by the Company under the
Securities Act.
(gg) The Company and each of its Significant Subsidiaries have
filed all federal or state income and franchise tax returns required to
be filed and have paid all taxes shown thereon as due, and there is no
material tax deficiency which has been or is reasonably likely to be
asserted against the Company or any of its Significant Subsidiaries,
except where the failure to file such returns or pay such taxes would not
have a Material Adverse Effect; all material tax liabilities of the
23
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Company and its Significant Subsidiaries are adequately provided for on
the books of the Company and its Significant Subsidiaries.
(hh) The Company and each of the Company's Significant
Subsidiaries own or possess all patents, trademarks, trademark
registrations, service marks, service xxxx registrations, trade names,
copyrights, licenses, inventions, trade secrets and rights described in
the Prospectus or Registration Statement as being owned by them or any of
them and owns, possesses or has the right to use all patents, trademarks,
trademark registrations, service marks, service xxxx registrations, trade
names, copyrights, licenses, inventions, trade secrets and rights
necessary for the conduct of their respective businesses, and the Company
is not aware of any claim to the contrary or any challenge by any other
person to the rights of the Company and its Significant Subsidiaries with
respect to the foregoing.
(ii) Each of the Company and its Significant Subsidiaries has
fulfilled its obligations, if any, under the minimum funding standards of
Xxxxxxx 000 xx xxx Xxxxxx Xxxxxx Employee Retirement Income Security Act
of 1974 ("ERISA") and such regulations and published interpretations
thereunder with respect to each "plan" (as defined in ERISA and such
regulations and published interpretations) in which employees of the
Company and its Significant Subsidiaries are eligible to participate and
each such plan is in compliance in all material respects with the
presently applicable provisions of ERISA and such regulations and
published interpretations, and has not incurred any unpaid liability to
the Pension Benefit Guaranty Corporation (other than for the payment of
premiums in the ordinary course) or to any such plan under Title IV of
ERISA.
7. Indemnification and Contribution. (a) Each of the Trust and
the Company, jointly and severally, agrees to indemnify and hold harmless each
of you and each other Underwriter and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act from and against any and all losses, claims, damages,
liabilities and expenses (including reasonable costs of investigation) arising
out of or based upon any untrue statement or alleged untrue statement of a
material fact contained in any Prepricing Prospectus or in the
24
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Registration Statement or the Prospectus or in any amendment or supplement
thereto, or arising out of or based upon any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, except insofar as such losses,
claims, damages, liabilities or expenses arise out of or are based upon any
untrue statement or omission or alleged untrue statement or omission which has
been made therein or omitted therefrom in reliance upon and in conformity with
the information relating to such reliance upon and in conformity with the
information relating to such Underwriter furnished in writing to the Offerors
by or on behalf of any Underwriter through you expressly for use in connection
therewith; provided, however, that the indemnification contained in this
paragraph (a) with respect to any Prepricing Prospectus shall not inure to the
benefit of any Underwriter (or to the benefit of any person controlling such
Underwriter) to the extent that any such loss, claim, damage, liability or
expense arises from the sale of the Preferred Securities by such Underwriter to
any person if it shall be established that a copy of the Prospectus shall not
have been delivered or sent to such person within the time required by the
Securities Act and the regulations thereunder, and the untrue statement or
alleged untrue statement or omission or alleged omission of a material fact
contained in such Prepricing Prospectus was corrected in the Prospectus and
such correction would have cured the defect giving rise to such loss, claim,
damage, liability or expense, provided that the Offerors have delivered the
Prospectus to the several Underwriters in such quantity as the Underwriters
reasonably request on a timely basis to permit such delivery or sending. The
foregoing indemnity agreement shall be in addition to any liability which the
Trust or the Company may otherwise have.
(b) If any action, suit or proceeding shall be brought against any
Underwriter or any person controlling any Underwriter in respect of which
indemnity may be sought against the Trust or the Company, such underwriter or
such controlling person shall promptly notify the Trust and the Company, and
the Trust or the Company shall assume the defense thereof, including the
employment of counsel and payment of all fees and expenses. Such Underwriter
or any such controlling person shall have the right to employ separate counsel
in any such action, suit or proceeding and to participate in the defense
thereof, but the fees and expenses of such counsel shall be at the expense of
such Underwriter or such controlling person unless (i) the Trust or the Company
has agreed in writing to pay such fees and expenses, (ii) the Trust or the
Company has
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failed to assume the defense and employ counsel, or (iii) the named parties to
any such action, suit or proceeding (including any impleaded parties) include
both such Underwriter or such controlling person and the Trust or the Company,
and such Underwriter or such controlling person shall have been advised by its
counsel that representation of such indemnified party and the Trust or the
Company by the same counsel would be inappropriate under applicable standards
of professional conduct (whether or not such representation by the same counsel
has been proposed) due to actual or potential differing interests between them
(in which case the Trust or the Company shall not have the right to assume the
defense of such action, suit or proceeding on behalf of such Underwriter or
such controlling person). It is understood, however, that the Trust and the
Company together shall, in connection with any one such action, suit or
proceeding or separate but substantially similar or related actions, suits or
proceedings in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees and expenses of
only one separate firm of attorneys (in addition to any local counsel) at any
time for all such Underwriters and controlling persons not having actual or
potential differing interests with you or among themselves, which firm shall be
designated in writing by Xxxxx Xxxxxx Inc., and that all such fees and expenses
shall be reimbursed as they are incurred. The Trust and the Company shall not
be liable for any settlement of any such action, suit or proceeding effected
without the Company's written consent, but if settled with such written
consent, or if there be a final judgment for the plaintiff in any such action,
suit or proceeding, the Trust and the Company agree to indemnify and hold
harmless any Underwriter, to the extent provided in the preceding paragraph,
and any such controlling person from and against any loss, claim, damage,
liability or expense by reason of such settlement or judgment.
(c) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Trust, the Company, the Company's directors,
the Company's officers and the Regular Trustees who sign the Registration
Statement, and any person who controls the Company within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act, to the same
extent as the foregoing indemnity from the Trust and the Company to each
Underwriter, but only with respect to information relating to such Underwriter
furnished in writing by or on behalf of such Underwriter through you expressly
for use in the Registration Statement, the Prospectus or any Prepricing
Prospectus, or any amendment or supplement thereto. If any
26
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action, suit or proceeding shall be brought against the Trust, the Company, any
of the Company's directors, any such officer or Regular Trustee, or any such
controlling person, based on the Registration Statement, the Prospectus or any
Prepricing Prospectus, or any amendment or supplement thereto, and in respect
of which indemnity may be sought against any Underwriter pursuant to this
paragraph (c), such Underwriter shall have the rights and duties given to the
Trust or the Company by paragraph (b) above (except that if the Trust or the
Company shall have assumed the defense thereof, such Underwriter shall not be
required to do so, but may employ separate counsel therein and participate in
the defense thereof, but the fees and expenses of such counsel shall be at such
Underwriter's expense), and the Trust, the Company, the Company's directors,
any such officer or Regular Trustee, and any such controlling person shall have
the rights and duties given to the Underwriters by paragraph (b) above. The
foregoing indemnity agreement shall be in addition to any liability which the
Underwriters may otherwise have.
(d) If the indemnification provided for in this Section 7 is
unavailable to an indemnified party under paragraphs (a) or (c) hereof in
respect of any losses, claims, damages, liabilities or expenses referred to
therein, then an indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages, liabilities or expenses (i) in
such proportion as is appropriate to reflect the relative benefits received by
the Trust and the Company on the one hand and the Underwriters on the other
hand from the offering of the Preferred Securities, or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Trust and the Company
on the one hand and the Underwriters on the other in connection with the
statements or omissions that resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable
considerations. The relative benefits received by the Trust and the Company on
the one hand and the Underwriters on the other shall be deemed to be in the
same proportion as the total net proceeds from the offering (before deducting
expenses) received by the Trust bear to the total compensation received by the
Underwriters, in each case as set forth in the table on the cover page of the
Prospectus. The relative fault of the Trust and the Company on the one hand
and the Underwriters on the other hand shall be determined by
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reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Offerors on the one hand
or by the Underwriters on the other hand and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
(e) The Trust, the Company and the Underwriters agree that it
would not be just and equitable if contribution pursuant to this Section 7 were
determined by a pro rata allocation (even if the Underwriters were treated as
one entity for such purpose) or by any other method of allocation that does not
take account of the equitable considerations referred to in paragraph (d)
above. The amount paid or payable by an indemnified party as a result of the
losses, claims, damages, liabilities and expenses referred to in paragraph (d)
above shall be deemed to include, subject to the limitations set forth above,
any legal or other expenses reasonably incurred by such indemnified party in
connection with investigating any claim or defending any such action, suit or
proceeding. Notwithstanding the provisions of this Section 7, no Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price of the Preferred Securities underwritten by it and distributed to
the public exceeds the amount of any damages which such Underwriter has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to contribute
pursuant to this Section 7 are several in proportion to the respective numbers
of Preferred Securities set forth opposite their names in Schedule I hereto (or
such numbers of Preferred Securities increased as set forth in Section 10
hereof) and not joint.
(f) No indemnifying party shall, without the prior written consent
of the indemnified party, effect any settlement, compromise or consent relating
to any pending or threatened action, suit or proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement, compromise
or consent (i) includes an unconditional release of such indemnified party from
all liability on claims that are the subject matter of such action, suit or
proceeding and (ii) does not include a statement as to or an
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admission of fault or culpability by or on behalf of any indemnified party.
(g) Any losses, claims, damages, liabilities or expenses for which
an indemnified party is entitled to indemnification or contribution under this
Section 7 shall be paid by the indemnifying party to the indemnified party as
such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 7 and the
representations and warranties of the Trust and the Company set forth in this
Agreement shall remain operative and in full force and effect, regardless of
(i) any investigation made by or on behalf of any Underwriter or any person
controlling any Underwriter, the Trust, the Company, the Company's directors or
officers, the Regular Trustees, or any person controlling the Company, (ii)
acceptance of any Preferred Securities and payment therefor hereunder, and
(iii) any termination of this Agreement. A successor to any Underwriter or any
person controlling any Underwriter, or to the Trust, the Company, the Company's
directors or officers, the Regular Trustees, or any person controlling the
Company, shall be entitled to the benefits of the indemnity, contribution, and
reimbursement agreements contained in this Section 7.
8. Conditions of Underwriters' Obligations. The obligations of
the several Underwriters to purchase and pay for the Preferred Securities as
provided herein shall be subject to the accuracy, as of the date of this
Agreement and the Closing Date (as if made at the Closing Date), of the
representations and warranties of the Offerors herein, to the performance by
the Offerors of their obligations hereunder, and to the following additional
conditions:
(a) If, at the time this Agreement is executed and delivered, it
is necessary for the registration statement or a post-effective amendment
thereto (or an Additional Registration Statement) to be declared or to become
effective before the offering of the Preferred Securities may commence, the
registration statement or such post-effective amendment or Additional
Registration Statement shall have become effective not later than 5:30 P.M.,
New York City time, on the date hereof, or at such later date and time as shall
be consented to in writing by you, and all filings, if any, required by Rules
424 and 430A under the Securities Act shall have been timely made; and no stop
order suspending the effectiveness of the registration statement shall have
been issued and no proceeding for that purpose shall have been instituted or,
to the knowledge of
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the Offerors or any Underwriter, threatened by the Commission, and any request
of the Commission for additional information (to be included in the
registration statement or the Prospectus or otherwise) shall have been complied
with to your satisfaction.
(b) Subsequent to the effective date of this Agreement, there
shall not have occurred (i) any change, or any development involving a
prospective change, in or affecting the condition (financial or other),
business, properties, net worth or results of operations of the Company or its
Significant Subsidiaries which, in your opinion as Representatives of the
several Underwriters, would materially adversely affect the market for the
Preferred Securities, or (ii) any event or development relating to or involving
the Company or any officer of director of the Company which makes any statement
made in the Prospectus untrue or which, in the opinion of the Company and its
counsel or the Underwriters and their counsel, requires the making of any
addition to or change in the Prospectus in order to state a material fact
required by the Securities Act or any other law to be stated therein or
necessary in order to make the statements therein not misleading, if amending
or supplementing the Prospectus to reflect such event or development would, in
your opinion, as Representatives of the several Underwriters, materially
adversely affect the market for the Preferred Securities.
(c) You shall have received an opinion, dated the Closing Date, of
Xxxxxx Xxxxxx & Zavis, counsel to the Offerors, substantially in the form
attached hereto as Exhibit A.
(d) You shall have received an opinion, dated the Closing Date, of
Xxxxxxxx Xxxxxx & Finger, special Delaware counsel to the Offerors,
substantially in the form attached hereto as Exhibit B.
(e) You shall have received an opinion, dated the Closing Date, of
White & Case, counsel to the Delaware Trustee, the Institutional Trustee, the
Indenture Trustee and the Guarantee Trustee, substantially in the form attached
hereto as Exhibit C.
(f) You shall have received an opinion, dated the Closing Date, of
Xxxxxx Xxxxxx & Xxxxxxx, counsel for the Underwriters, with respect to such
matters regarding the
30
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Offering of the Preferred Securities as you shall reasonably request.
(g) The Company and the Trust shall each have furnished the
Underwriters with a certificate, dated the Closing Date, and, in the case of
the Company, signed by the Chairman of the Board, any Vice Chairman, the
President, any Executive Vice President, any Vice President, or the Treasurer,
and the principal financial or accounting officer of the Company and, in the
case of the Trust, signed by one of the Regular Trustees to the effect that the
signers of such certificate have carefully examined the Registration Statement,
the Prospectus and this Agreement and that:
(i) the representations and warranties of the Company or the
Trust, as the case may be, in this Agreement are true and correct on and
as of the Closing Date with the same effect as if made on the Closing
Date, and the Company or the Trust, as the case may be, has complied in
all material respects with all the agreements and satisfied all the
conditions on its part to be performed or satisfied by it hereunder at or
prior to the Closing Date; and
(ii) no stop order suspending the effectiveness of Registration
Statement has been issued, and no proceedings for that purpose have been
instituted or, to their knowledge, threatened.
(h) You shall have received on the date hereof and on the Closing
Date a letter from Xxxxxx Xxxxxxxx LLP, dated as of the date hereof and the
Closing Date, substantially in the form heretofore approved by you.
(i) On or after the date of this Agreement no downgrading shall
have occurred in the rating accorded the Preferred Securities or the Company's
debt securities by any "nationally recognized statistical rating organization"
(as defined for purposes of Rule 436(g) under the Securities Act).
(j) The Preferred Securities shall have been registered under the
Exchange Act and shall have been approved for quotation on Nasdaq.
(k) Prior to the Closing Date, the Company shall have furnished to
you such further information, certificates and documents as you may reasonably
request.
31
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The obligations of the Underwriters to purchase any Additional
Preferred Securities hereunder are subject to the satisfaction on and as of any
Option Closing Date of the conditions set forth in this Section 8, except that,
if any Option Closing Date is other than the Closing Date, the certificates,
opinions and letters referred to in this Section 8 shall be dated the Option
Closing Date and shall be revised to reflect the sale of the Additional
Preferred Securities.
9. Expenses. The Company agrees to pay the following costs and
expenses and all other costs and expenses incident to the performance by it and
by the Trust of its and the Trust's respective and joint obligations hereunder:
(i) the preparation, printing or reproduction, and filing (including filing
fees) with the Commission of the registration statement (including financial
statements and exhibits thereto), each Prepricing Prospectus, the Prospectus,
each amendment or supplement to any of them and the Statement of Eligibility
and Qualification of each of the Institutional Trustee, the Guarantee Trustee
and the Indenture Trustee; (ii) the printing (or reproduction) and delivery
(including postage, air freight charges and charges for counting and packaging)
of such copies of the registration statement, each Prepricing Prospectus, the
Prospectus, the documents incorporated by reference in the Registration
Statement, and all amendments or supplements to any of them, as may be
reasonably requested for use in connection with the offering and sale of the
Preferred Securities; (iii) the preparation, printing, authentication, issuance
and delivery of the Securities, including any stamp taxes in connection with
the original issuance and sale of the Preferred Securities; (iv) the
preparation of the preliminary and supplemental Blue Sky Memoranda in
connection with the offering of the Preferred Securities; (v) the registration
of the Preferred Securities under the Exchange Act and the listing of the
Preferred Securities on the Nasdaq; (vi) the registration or qualification of
the Preferred Securities for offer and sale under the securities or Blue Sky
laws of the several states as provided in Section 5(g) hereof (including the
reasonable fees, expenses and disbursements of counsel for the Underwriters
relating to the preparation, printing (or reproduction), and delivery of the
preliminary and supplemental Blue Sky Memoranda and such registration and
qualification); (vii) the filing fees and the reasonable fees and expenses of
counsel for the Underwriters in connection with any filings required to be made
with the National Association of Securities Dealers, Inc.; (viii) the fees and
expenses of the Institutional Trustee, the Delaware Trustee, the Guarantee
Trustee and the Indenture
32
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Trustee; (ix) the fees and expenses associated with obtaining ratings for the
Preferred Securities from nationally recognized statistical rating
organizations; (x) the transportation and other expenses incurred by or on
behalf of the Offerors and the Underwriters in connection with presentations to
prospective purchasers of the Preferred Securities; and (xi) the fees and
expenses of the Company's accountants and the fees and expenses of counsel
(including special Delaware counsel) for the Offerors.
10. Effective Date of Agreement. This Agreement shall become
effective: (i) upon the execution and delivery hereof by the parties hereto;
or (ii) if, at the time this Agreement is executed and delivered, it is
necessary for the registration statement or a post-effective amendment thereto
or an Additional Registration Statement to be declared effective before the
offering of the Preferred Securities may commence, when notification of the
effectiveness of the registration statement or such post-effective amendment
has been released by the Commission or, in the case of an Additional
Registration Statement, upon the filing of such Additional Registration
Statement. Until such time as this Agreement shall have become effective, it
may be terminated by the Company or the Trust, by notifying you, or by you, as
Representatives of the several Underwriters, by notifying the Offerors.
If any one or more of the Underwriters shall fail or refuse to
purchase Firm Preferred Securities which it or they are obligated to purchase
hereunder, and the aggregate number of Firm Preferred Securities which such
defaulting Underwriter or Underwriters are obligated but fail or refuse to
purchase is not more than one-tenth of the aggregate number of the Firm
Preferred Securities, each non-defaulting Underwriter shall be obligated,
severally, in the proportion which the number of Firm Preferred Securities set
forth opposite its name in Schedule I hereto bears to the aggregate number of
Firm Preferred Securities set forth opposite the names of all non-defaulting
Underwriters, to purchase the Firm Preferred Securities which such defaulting
Underwriter or Underwriters are obligated, but fail or refuse, to purchase. If
any Underwriter or Underwriters shall fail or refuse to purchase Firm Preferred
Securities and the aggregate number of Firm Preferred Securities with respect
to which such default occurs is more than one-tenth of the aggregate number of
the Firm Preferred Securities and arrangements satisfactory to you and the
Offerors for the purchase of such Firm Preferred Securities by one or more
non-defaulting Underwriters or other party or
33
-33-
parties approved by you and the Offerors are not made within 36 hours after
such default, this Agreement will terminate without liability on the part of
any non-defaulting Underwriter or the Offerors. In any such case which does
not result in termination of this Agreement, either you or the Offerors shall
have the right to postpone the Closing Date, but in no event for longer than
seven days, in order that the required changes, if any, in the Registration
Statement and the Prospectus or any other documents or arrangements may be
effected. Any action taken under this paragraph shall not relieve any
defaulting Underwriter from liability in respect of any such default of any
such Underwriter under this Agreement. The term "Underwriter" as used in this
Agreement includes, for all purposes of this Agreement, any party not listed in
Schedule I hereto, who, with your approval and the approval of the Offerors,
purchases Firm Preferred Securities which a defaulting Underwriter is
obligated, but fails or refuses, to purchase.
Any notice under this Section 10 may be given by telegram, telecopy
or telephone but shall be subsequently confirmed by letter.
11. Termination of Agreement. This Agreement shall be subject to
termination in your absolute discretion, without liability on the part of any
Underwriter to the Offerors, by notice to the Offerors, if prior to the Closing
Date or any Option Closing Date (if different from the Closing Date and then
only as to the Additional Preferred Securities) there shall have occurred: (i)
any suspension or limitation of trading in securities generally on the New York
Stock Exchange, the American Stock Exchange or the NASDAQ National Market, or
any setting of minimum prices for trading on any such exchange, or any
suspension of trading of any securities of the Company on any exchange or in
the over-the-counter market; (ii) any banking moratorium declared by Federal or
New York authorities; or (iii) any outbreak or escalation of hostilities or
other international or domestic calamity, crisis or change in political,
financial or economic conditions, the effect of which on the financial markets
of the United States is such as to make it, in your judgment, impracticable or
inadvisable to commence or continue the offering of the Preferred Securities on
the terms set forth on the cover page of the Prospectus or to enforce contracts
for the resale of the Preferred Securities by the Underwriters. Notice of such
termination may be given to the Company by telegram, telecopy or telephone and
shall be subsequently confirmed by letter.
34
-34-
12. Information Furnished by the Underwriters. The statements
set forth in the last paragraph on the cover page, the stabilization legend on
the third page, and the statements in the first paragraph and the sixth
paragraph under the caption "Underwriting" in the Prospectus, constitute the
only information furnished by or on behalf of the Underwriters through you as
such information is referred to in Sections 6(b) and 7 hereof.
13. Miscellaneous. Except as otherwise provided herein, notice
given pursuant to any provision of this Agreement shall be in writing and shall
be delivered (i) if to the Offerors, to the Company or to the Trust, care of
the Company, at the office of the Company at 0000 Xxxxxxxx Xxxxxx, Xxxx Xxxx,
Xxxxxxxx 00000, Attention: Xxxxxxx X. Xxxxxxxx, with a copy to Xxxxxx Xxxxxx &
Zavis, 000 Xxxx Xxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000-0000,
Attention: Xxxxxx X. Xxxxxxx, Esq.; or (ii) if to you, as Representatives of
the several Underwriters, care of Xxxxx Xxxxxx Inc., 000 Xxxxxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Manager, Investment Banking Division, with a
copy to General Counsel, Investment Banking Division and to Xxxxxx Xxxxxx &
Xxxxxxx, 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxxx X.
Xxxxxxxx, Esq.
This Agreement has been and is made solely for the benefit of the
several Underwriters, the Trust, the Company, the Company's directors and
officers, the Regular Trustees,, and the other controlling persons referred to
in Section 7 hereof and their respective successors and assigns, to the extent
provided herein, and no other person shall acquire or have any right under or
by virtue of this Agreement. Neither the term "successor" nor the term
"successors and assigns" as used in this Agreement shall include a purchaser
from any Underwriter of any of the Preferred Securities in his status as such
purchaser.
14. Applicable Law; Counterparts. This Agreement shall be
governed by and construed in accordance with the laws of the State of New York
applicable to contracts made and to be performed within the Sate of New York.
This Agreement may be signed in various counterparts which together
constitute one and the same instrument. If signed in counterparts, this
Agreement shall not become effective unless at least one counterpart hereof
shall have been executed and delivered on behalf of each party hereto.
35
-35-
Please confirm that the foregoing correctly sets forth the
agreement among the Trust, the Company and the several Underwriters.
Very truly yours,
WALBRO CAPITAL TRUST
By: WALBRO CORPORATION,
as Sponsor
By:
----------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Chairman and Chief
Executive Officer
WALBRO CORPORATION
By
----------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Chairman and Chief
Executive Officer
Confirmed as of the date first
above mentioned on behalf of
themselves and the other several
Underwriters named in Schedule I
hereto.
XXXXX XXXXXX INC.
INTERSTATE/XXXXXXX XXXX CORPORATION
As Representatives of the Several Underwriters
By XXXXX XXXXXX INC.
By
---------------------------
Name:
Title:
36
SCHEDULE I
WALBRO CAPITAL TRUST
[ ]% Convertible Trust Preferred Securities
Number of Firm
Underwriters Preferred Securities
------------ --------------------
Xxxxx Xxxxxx Inc. ..............................
Interstate/Xxxxxxx Lane ........................ _________
Total .................................... 2,000,000
37
SCHEDULE II
Significant Subsidiaries of Walbro Corporation
Subsidiary Jurisdiction
---------- ------------
Walbro Automotive Corporation Delaware
Walbro Engine Management Corporation Delaware
Xxxxxxxxx Engineered Products, Inc. Delaware
Walbro Netherlands B.V. Netherlands
Walbro Automotive GmbH Germany
38
EXHIBIT A
[Form of Opinion of Xxxxxx Xxxxxx & Zavis]
1. The Company is a corporation duly organized, existing, and in
good standing under the laws of the State of Delaware with corporate power and
authority to own, lease and operate its properties and to conduct its business
as described in the Registration Statement and the Prospectus (and any
amendment or supplement thereto), and is duly registered and qualified to
conduct its business and is in good standing as a foreign corporation in each
jurisdiction listed on Schedule A hereto.
2. The shares of issued and outstanding Common Stock of the
Company have been duly authorized and validly issued and are fully paid and
nonassessable.
3. Each significant subsidiary of the Company listed on Schedule
B hereto (the "Subsidiaries") is a corporation duly organized, existing, and
in good standing under the laws of the jurisdiction of its organization, with
corporate power and authority to own, lease and operate its properties and to
conduct its business as described in the Prospectus.
4. Except as described in the Prospectus, all of the issued and
outstanding capital stock of each Subsidiary has been duly authorized and
validly issued, is fully paid and nonassessable and is owned by the Company,
directly or through Subsidiaries, free and clear of any: (i) perfected
security interest, and (ii) to our knowledge any other security interest, lien,
adverse claim or other encumbrance.
5. Each Subsidiary is duly registered and qualified to conduct
its business and is in good standing as a foreign corporation in each
jurisdiction listed on Schedule B hereto.
6. To our knowledge, none of the outstanding shares of capital
stock of any Subsidiary was issued in violation of the preemptive or similar
rights of any securityholder of such Subsidiary.
A-1
39
7. To our knowledge, except as disclosed in or specifically
contemplated by the Prospectus, there are no outstanding options, warrants or
other rights calling for the issuance of, and no commitments, obligations,
plans or arrangements to issue, any shares of capital stock of the Company or
any security convertible into or exchangeable for capital stock of the Company.
8. To our knowledge, all issued and outstanding stock options
relating to the Common Stock have been duly authorized and validly issued and
the description thereof contained in the Prospectus is accurate in all material
respects.
9. To our knowledge, no default exists in the due performance or
observance by the Offerors of any material obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, loan agreement, note,
lease or other instrument so described or referred to in the Registration
Statement or filed as an exhibit thereto.
10. The Company has the corporate power and authority to enter
into the Agreement, and the Agreement has been duly authorized, executed and
delivered by the Company.
11. The Indenture has been duly authorized, executed and
delivered by the Company and is enforceable against the Company in accordance
with its terms, except to the extent that enforcement thereof may be limited by
bankruptcy, insolvency (including, without limitation, all laws relating to
fraudulent transfers), reorganization, receivership, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights
generally, the effects of general principles of equity, whether applied by a
court of law or equity, and rights to indemnity and contribution by federal or
state securities laws or principles of public policy.
12. The Convertible Debentures have been duly authorized for
issuance by the Company and, when issued and delivered by the Company against
payment therefor by the Trust in accordance with the Indenture and the
Declaration, will constitute valid and binding obligations of the Company
entitled to the benefits of the Indenture and enforceable against the Company
in accordance with their terms, except to the extent that enforcement thereof
may be limited by bankruptcy, insolvency (including, without limitation, all
laws relating to fraudulent transfers), reorganization, receivership,
moratorium or other similar laws now or thereafter in effect relating to
creditors' rights generally, the effects of
A-2
40
general principles of equity, whether applied by a court of law or equity, and
rights to indemnity and contribution by federal or state securities laws or
principles of public policy.
13. The Declaration has been duly authorized, executed and
delivered by the Company.
14. The Guarantees have been duly authorized, executed and
delivered by the Company, and constitute valid and binding agreements of the
Company enforceable in accordance with their terms, except as enforcement
thereof may be limited by bankruptcy, insolvency (including, without
limitation, all laws relating to fraudulent transfers), reorganization,
receivership, moratorium or other similar laws affecting creditors' rights
generally, the effects of general principles of equity, whether applied by a
court of law or equity, and rights to indemnity and contribution by federal or
state securities laws or principles of public policy.
15. The Conversion Shares have been duly authorized by the
Company and reserved for issuance upon conversion of the Convertible Debentures
and, if and when issued in accordance with the Indenture at conversion prices
at or in excess of the par value of such Conversion Shares, such Conversion
Shares will be validly issued, fully paid and nonassessable.
16. The holders of outstanding shares of capital stock of the
Company are not entitled to any preemptive rights under the Certificate of
Incorporation or By-Laws of the Company or the DGCL to subscribe for the
Preferred Securities, the Convertible Debentures or the Conversion Shares.
17. The statements made in the Prospectus under the captions
"Description of the Preferred Securities," "Description of the Guarantee,"
"Description of the Convertible Debentures," "Effect of Obligations Under the
Convertible Debentures and the Guarantee," and "Description of Capital Stock,"
insofar as such statements purport to summarize certain provisions of the
Securities, the Indenture, the Declaration and Certificate of Incorporation of
the Company, have been reviewed by us and provide a fair summary thereof.
18. Neither of the Offerors is required to be registered under
the Investment Company Act of 1940, as amended.
19. The Registration Statement and all post-effective
amendments, if any, have become effective under the
A-3
41
Securities Act and we have been orally advised by the Commission that no stop
order suspending the effectiveness of the Registation Statement has been issued
and no proceedings for that purpose are pending before or contemplated by the
Commission; and any required filing of the Prospectus pursuant to Rule 424(b)
has been made in accordance with Rule 424(b).
20. The Registration Statement, as of its effective date, and the
Prospectus, as of its date, and any amendments or supplements thereto (except
for the financial statements and the notes thereto and the schedules and other
financial and statistical data included therein, as to which such counsel need
not express any opinion) comply as to form in all material respects to the
requirements of the Securities Act and the rules and regulations promulgated by
the Commission thereunder.
21. To our knowledge no consent, approval, authorization or other
order of, or registration or qualification with, any court or other
governmental agency or body (except as have been obtained or such as may be
required under state securities or Blue Sky laws governing the purchase and
distribution of the Preferred Securities) is required on the part of the
Company in connection with the authorization, issuance and delivery of the
Preferred Securities by the Trust to the Underwriters pursuant to the
Underwriting Agreement (the "Agreement"), or the performance by the Offerors
of their respective obligations under the Declaration, the Guarantees, the
Indenture and the Agreement (collectively, the "Transaction Documents"), the
Convertible Debentures, the Preferred Securities and the Common Securities.
22. The execution, delivery and performance by each Offeror of
the Transaction Documents, the consummation by each Offeror of the transactions
contemplated thereby and in the Prospectus, the filing of the Certificate of
Trust with the Secretary of State of the State of Delaware, compliance by each
Offeror with the terms of the foregoing and the application of the proceeds
from the sale of the Preferred Securities and the Convertible Debentures as
contemplated by the Prospectus do not and will not result in any violation of
the Certificate of Incorporation or By-laws of the Company or the Certificate
of Trust, and do not and will not (a) conflict with, or constitute a breach of
any of the terms or provisions of, or constitute a default under, in any
material respect, of any material agreement, indenture, lease, or other
instrument known to us to which the Offerors are a party, or other than as
described in the Prospectus, result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Offerors under any
contract, indenture, mortgage, loan agreement, note, lease or any other
agreement or instrument filed as
A-4
42
an exhibit to or incorporated by reference in the Registration Statement
(except for such conflicts, breaches or defaults or liens, charges or
encumbrances that would not have a Material Adverse Effect) or (b) result in
any violation in any material respect of any existing applicable law,
regulation, judgment, injunction, order or decree known to us, applicable to
the Offerors or any of their properties.
23. To the best of our knowledge, there are no persons with
written registration or other similar rights to have any securities registered
by the Company under the Registration Statement.
24. The statements made in the Prospectus set forth under the
captions "Risk Factors -- Option to Extend Interest Payment Periods," "Risk
Factors -- Proposed Tax Legislation," "Description of the Convertible
Debentures -- Proposed Tax Legislation" and "United States Federal Income
Taxation" fairly present the material U.S. federal income tax consequences of
an investment in the Preferred Securities as described under "United States
Federal Income Taxation -- General."
25. There are no agreements, contracts, indentures, leases or
other instruments, that are required to be described in the Registration
Statement or the Prospectus (or any amendment or supplement thereto) or to be
filed as an exhibit to the Registration Statement or any Incorporated Documents
that are not described or filed as required, as the case may be.
26. The Trust will be classified as a grantor trust and not as an
association taxable as a corporation for United States federal income tax
purposes. Accordingly, for United States federal income tax purposes, each
holder of Preferred Securities will generally be considered the owner of an
undivided interest in the Convertible Debentures, and each holder will be
required to include in its gross income any original issue discount accrued
with respect to its allocable share of those Convertible Debentures.
27. Each of the Declaration, the Indenture and the Preferred
Securities Guarantee have been duly qualified under the Trust Indenture Act of
1939.
A-5
43
In addition, we have participated in conferences with officers, the
Trustees and other representatives of the Offerors, representatives of the
independent accountants for the Company, your representatives and
representatives of your counsel at which the contents of the Registration
Statement and the Prospectus 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 made no independent check or
verification thereof, except to the extent set forth in paragraph [22] above,
on the basis of the foregoing, no facts have come to our attention that have
led us to believe that the Registration Statement, at the time it became
effective, contained an untrue statement of a material fact or omitted to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading or that the Prospectus, as of its date and as
of the date hereof, contained or contains 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 light of the circumstances under which they were
made, not misleading, except that we express no belief with respect to the
financial statements and other financial or statistical data included or
incorporated by reference therein or excluded therefrom, including the Forms
T-1.
We also confirm that, based solely on a review of our litigation
docket, an officer's certificate from a Company officer having general
responsibility for such matters and a review of recent attorneys' letters to
independent public accountants, to our knowledge, there are no actions or
proceedings against the Company pending or threatened in writing before any
court, governmental agency or arbitrator, which (i) seek to affect the
enforceability of the Agreement or the Transaction Documents or (ii) are
required to be described in the Prospectus which are not described.
Our opinions above are limited to the laws of the State of
Illinois, the laws of the United States of America and the General Corporation
Law of the State of Delaware, and we do not express any opinion herein
concerning any other law. We have assumed for the purposes of this opinion
that the law of New York is identical to the law of Illinois.
This opinion is given as of the date hereof and we assume no
obligation to advise you of any changes that may hereafter be brought to our
attention. This opinion is furnished to you solely for your benefit in
connection with the closing under the Underwriting Agreement occurring today
and is
A-6
44
not to be quoted in whole or part or otherwise referred to, nor is it to be
filed with any government agency or other person without our prior written
consent. No one other than the addressees hereof are entitled to rely on this
opinion.
A-7
45
EXHIBIT B
[Form of Opinion of Xxxxxxxx Xxxxxx & Finger]
1. The Trust has been duly created and is validly existing in
good standing as a business trust under the Delaware Act.
2. Under the Declaration and the Delaware Act, the Trust has the
trust power and authority to enter into and perform its obligations under the
Agreement, and under the Declaration and the Delaware Act the Agreement has
been duly authorized, executed and delivered by all necessary trust action on
the part of the Trust.
3. The Declaration constitutes a valid and binding obligation of
the Company and the Delaware Trustee, and is enforceable against the Company
and the Delaware Trustee, in accordance with its terms subject to the effect
upon the Declaration of (i) bankruptcy, insolvency, moratorium, receivership,
reorganization, liquidation, fraudulent conveyance or transfer and other
similar laws relating to or affecting the rights and remedies of creditors
generally, (ii) principles of equity, including applicable law relating to
fiduciary duties (regardless of whether considered and applied in a proceeding
in equity or at law), and (iii) the effect of applicable public policy on the
enforceability of provisions relating to indemnification or contribution.
4. Under the Declaration and the Delaware Act, the Trust has the
trust power and authority to issue and sell and perform its obligations under
the Trust Securities and to purchase and hold the Convertible Debentures.
5. The Preferred Securities have been duly authorized for
issuance by the Declaration and, when issued, executed and authenticated
pursuant to the Declaration and delivered and paid for in accordance with the
Agreement, will be, subject to the qualifications set forth herein, fully paid
and nonassessable undivided beneficial interests in the assets of the Trust and
will entitle the holders thereof to the benefits of the Declaration (subject to
the terms of the Declaration), except to the extent that the enforcement of the
Declaration is subject to (i) bankruptcy, insolvency, moratorium, receivership,
reorganization, liquidation, fraudulent conveyance or transfer and other
similar laws relating to or affecting the right and remedies of creditors
generally, (ii) principles of equity, including applicable law relating to
fiduciary duties (regardless of whether considered and applied in a proceeding
in equity or at law), and (iii) the effect of applicable public policy on the
enforceability of provisions relating to indemnification or contribution. The
holders of the Preferred
B-1
46
Securities, as beneficial owners of the Trust, will be entitled to the same
limitation of personal liability extended to stockholders of private
corporations for profit organized under the General Corporation Law of the
State of Delaware. We note that the holders of the Preferred Securities may be
obligated, pursuant to the Declaration, (A) to provide indemnity and/or
security in connection with and pay taxes or governmental charges arising from
transfers or exchanges of Preferred Security certificates and the issuance of
replacement Preferred Security certificates, and (B) to provide security or
indemnity in connection with requests of or directions to the Institutional
Trustee to exercise its rights and powers under the Declaration.
6. The issuance and sale by the Trust of the Trust Securities,
the performance by the Trust of its obligations under the Trust Securities and
the Agreement and the purchase by the Trust of the Convertible Debentures, do
not violate the Declaration or any applicable law of the State of Delaware or
require any approval of any governmental authority of the State of Delaware.
7. The holders of the Preferred Securities (other than those
holders who reside or are domiciled in the State of Delaware) will have no
liability for income taxes imposed by the State of Delaware solely as a result
of their participation in the Trust, and the Trust will not be liable for any
income tax imposed by the State of Delaware or any political subdivision or
taxing authority thereof.
B-2
47
Very truly yours,
B-3
48
EXHIBIT C
[Form of Opinion of White & Case,
counsel to the Institutional Trustee,
the Guarantee Trustee and the Indenture Trustee
(collectively, the "Trustee")]
1. The Trust Company is duly incorporated and is validly existing in good
standing as a banking corporation with trust powers under the laws of the State
of New York.
2. The Indenture Trustee has the requisite power and authority to execute,
deliver and perform its obligations under the Indenture, and has taken all
necessary corporate action to authorize the execution, delivery and performance
by it of the Indenture.
3. The Preferred Securities Guarantee Trustee has the requisite power and
authority to execute, deliver and perform its obligations under the Guarantee
Agreement, and has taken all necessary corporate action to authorize the
execution, delivery and performance by it of the Guarantee Agreement.
4. The Institutional Trustee has the requisite power and authority to
execute and deliver the Trust Agreement, and has taken all necessary corporate
action to authorize the execution and delivery of the Trust Agreement.
5. Each of the Indenture and the Preferred Securities Guarantee
Agreement has been duly executed and delivered by the Indenture Trustee and the
Preferred Securities Guarantee Trustee, respectively, and constitutes a legal,
valid and binding obligation of the Indenture Trustee and the Preferred
Securities Guarantee Trustee, respectively, enforceable against the Indenture
Trustee and the Preferred Securities Guarantee Trustee, respectively in
accordance with its respective terms, except that certain payment obligations
may be enforceable solely against the assets of the Trust and except that such
enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium, liquidation, fraudulent conveyance and transfer or other similar
laws affecting the enforcement of creditors' rights generally, and by general
principles of equity, including, without limitation, concepts of materiality,
reasonableness, good faith and fair dealing (regardless of whether such
enforceability is considered in a proceeding in equity or at law), and by the
effect of applicable public policy on the enforceability of provisions relating
to indemnification or contribution.
6. The Convertible Subordinated Debentures delivered on the date hereof
have been duly authenticated by the Indenture Trustee in accordance with the
terms of the Indenture.
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