EXHIBIT 10.1
DELCO REMY INTERNATIONAL, INC.
$145,000,000
8-5/8% Senior Notes Due 2007
Underwriting Agreement
New York, New York
December 17, 1997
Salomon Brothers Inc
Credit Suisse First Boston Corporation
Xxxxxx Xxxxxxx & Co. Incorporated
In care of Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048
Ladies and Gentlemen:
Delco Remy International, Inc., a Delaware corporation (the
"Company"), proposes to sell to you (the "Underwriters") $145,000,000 principal
amount of its 8-5/8% Senior Notes Due 2007 (the "Notes") to be unconditionally
guaranteed on a senior basis (the "Guarantees" and, together with the Notes, the
"Securities") by each of the Company's subsidiaries that are signatories hereto,
together with Ballantrae Corporation ("Ballantrae") and Tractech Inc.
("Tractech") following the Company's acquisition of Ballantrae (each
individually a "Guarantor", and collectively the "Guarantors"). The Securities
are to be issued under an indenture to be dated as of December 22, 1997 (the
"Indenture"), among the Company, the Guarantors and United States Trust Company
of New York, as trustee (the "Trustee").
1. Representations and Warranties. The Company and the Guarantors
-------------------------------
jointly and severally represent and warrant to, and agree with, each Underwriter
as set forth below in this Section 1. Certain terms used in this Section 1 are
defined in Section 17 hereof.
(a) The Company and the Guarantors have filed with the Securities and
Exchange Commission (the "Commission") a registration statement (file
number
2
333-37703) on Form S-1, including a related preliminary prospectus, for the
registration under the Act of the offering and sale of the Securities. The
Company may have filed one or more amendments thereto, including a related
preliminary prospectus, each of which has previously been furnished to you.
The Company and the Guarantors will next file with the Commission either
(i) prior to the effectiveness of such registration statement, a further
amendment to such registration statement (including the form of final
prospectus) or (ii) after the effectiveness of such registration statement,
a final prospectus in accordance with Rules 430A and 424(b)(1) or (4). In
the case of clause (ii), the Company and the Guarantors have included in
such registration statement, as amended at the Effective Date, all
information (other than Rule 430A Information) required by the Act and the
rules thereunder to be included in such registration statement and the
Prospectus. As filed, such amendment and form of final prospectus, or such
final prospectus, shall contain all Rule 430A Information, together with
all other such required information, and, except to the extent the
Underwriters shall agree in writing to a modification, shall be in all
substantive respects in the form furnished to them prior to the Execution
Time or, to the extent not completed at the Execution Time, shall contain
only such specific additional information and other changes (beyond that
contained in the latest Preliminary Prospectus) as the Company has advised
the Underwriters, prior to the Execution Time, will be included or made
therein.
(b) On the Effective Date, the Registration Statement did or will,
and when the Prospectus is first filed (if required) in accordance with
Rule 424(b) and on the Closing Date (as defined in Section 3), the
Prospectus (and any supplements thereto) will, comply in all material
respects with the applicable requirements of the Act and the Trust
Indenture Act and the respective rules thereunder; on the Effective Date,
the Registration Statement did not or will not contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein not
misleading; on the Effective Date and on the Closing Date, the Indenture
did or will comply in all material
3
respects with the applicable requirements of the Trust Indenture Act and
the rules thereunder; and, on the Effective Date, the Prospectus, if not
filed pursuant to Rule 424(b), will not, and on the date of any filing
pursuant to Rule 424(b) and on the Closing Date, the Prospectus (together
with any supplement thereto) will not, include any untrue statement of a
material fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading; provided, however, that the Company and the
-------- -------
Guarantors make no representations or warranties as to (i) that part of the
Registration Statement which shall constitute the Statement of Eligibility
and Qualification (Form T-1) under the Trust Indenture Act of the Trustee
or (ii) the information contained in or omitted from the Registration
Statement or the Prospectus (or any supplement thereto) in reliance upon
and in conformity with information furnished in writing to the Company by
or on behalf of the Underwriters specifically for inclusion in the
Registration Statement or the Prospectus (or any supplement thereto), it
being understood that the only such information is that described in
Section 8(b).
(c) Neither the Company nor any Guarantor has taken, nor will it
take, directly or indirectly, any action prohibited by Regulation M under
the Exchange Act in connection with any offering of the Securities.
(d) Each of the Company and the Guarantors has full corporate power
and authority to enter into and deliver this Agreement, the Indenture, the
Securities and the fourth amended and restated financing agreement
(together with all other documents and agreements entered into in
connection therewith, the "Credit Agreement") relating to the Senior Credit
Facility (as defined in the Prospectus) and to perform the actions
contemplated hereby and thereby and to perform the other Transactions (as
defined in the Prospectus). This Agreement has been duly authorized,
executed and delivered by the Company and each Guarantor and constitutes a
valid and binding obligation of the Company and each Guarantor. The
execution and delivery of the Indenture, the Securities and the Credit
Agreement have been duly authorized by the
4
Company and each Guarantor party thereto and, when duly executed and
delivered by the parties thereto, will constitute valid and binding
obligations of the Company and each such Guarantor, enforceable against the
Company and each such Guarantor in accordance with their respective terms,
subject to applicable bankruptcy, insolvency, reorganization, moratorium
and similar laws affecting creditors' rights and remedies generally and to
general principles of equity (regardless of whether enforcement is sought
in a proceeding at law or in equity).
(e) Upon execution and delivery of the Indenture, and when the Notes
are issued, authenticated and delivered in accordance with the Indenture
and paid for in accordance with the terms of this Agreement, (i) the Notes
will constitute valid and binding obligations of the Company enforceable
against the Company in accordance with their terms and entitled to the
benefits of the Indenture and (ii) the Guarantees will constitute valid and
binding obligations of the Guarantors enforceable against the Guarantors in
accordance with their terms, in each case subject to applicable bankruptcy,
insolvency, reorganization, moratorium and similar laws affecting
creditors' rights and remedies generally and to general principles of
equity (regardless of whether enforcement is sought in a proceeding at law
or in equity).
(f) The execution, delivery and performance of this Agreement, the
Indenture and the Credit Agreement by the Company and each Guarantor party
thereto and the consummation of the actions contemplated hereby and thereby
and of the other Transactions will not result in a breach or violation of
any of the terms and provisions of, or constitute a default under, (i) the
articles of incorporation, by-laws or other organizational documents of the
Company or any of its subsidiaries, (ii) any material statute, rule or
regulation applicable to the Company or any of its subsidiaries or any
order of any court, regulatory body, administrative agency or other
governmental body having jurisdiction over the Company or any of its
subsidiaries or any of their respective properties, (iii) any agreement or
instrument relating to borrowed money to which the Company or any of its
subsidiaries is a party or by which the Company or any of its subsidiaries
is bound or to which any of their respective properties is subject or (iv)
any other material agreement or instrument to which the Company or any of
its subsidiaries is a party or by which the Company or any of its
5
subsidiaries is bound or to which any of their respective properties is
subject. No consent, approval, authorization or other order of any court,
regulatory body, administrative agency or other governmental body that has
not already been obtained is required for the execution and delivery of
this Agreement, the Indenture, the Securities, the Credit Agreement or the
consummation of the actions contemplated hereby or thereby or of the other
Transactions, except for compliance with the Act and state securities or
blue sky laws. References in this Agreement to "subsidiaries" of the
Company shall mean each person of which a majority of the voting equity
securities or other interests is owned, directly or indirectly, by the
Company, and as of the Closing Date, shall be deemed to include Ballantrae,
Tractech and Kraftube, Inc., notwithstanding the fact that the Company may
not have consummated its acquisition of Ballantrae prior to the Closing
Date.
(g) Except as disclosed in the Prospectus, (i) there are no legal or
governmental actions, suits or proceedings pending or, to the best of the
Company's and the Guarantors' knowledge, threatened to which the Company or
any of its subsidiaries is or is threatened to be made a party or of which
property owned or leased by the Company or any of its subsidiaries is or is
threatened to be made the subject, which actions, suits or proceedings
could, individually or in the aggregate, have a material adverse effect on
the condition (financial or otherwise), properties, business, results of
operations or prospects of the Company and its subsidiaries, taken as a
whole, or materially and adversely affect the ability of the Company or any
of its subsidiaries to perform its obligations under this Agreement, the
Indenture, the Securities or the Credit Agreement or to consummate the
actions contemplated hereby or thereby or the other Transactions (in either
case a "Material Adverse Effect"), and (ii) no labor disturbance by the
employees of the Company or any of its subsidiaries exists or, to the best
of the Company's and the Guarantors' knowledge, is imminent or
6
threatened, in either case which could have a Material Adverse Effect.
Neither the Company nor any of its subsidiaries is a party or subject to
the provisions of any material injunction, judgment, decree or order of any
court, regulatory body, administrative agency or other governmental body.
(h) Except as disclosed in or specifically contemplated by the
Prospectus, the Company and its subsidiaries have sufficient trademarks,
trade names, patent rights, copyrights, licenses, approvals and
governmental authorizations to conduct their businesses as now conducted;
the Company's and its subsidiaries' controlling persons, key employees and
stockholders have all necessary permits, licenses and other authorizations
required by applicable law for the Company and its subsidiaries to conduct
their businesses as now conducted; and the expiration of any trademarks,
trade names, patent rights, copyrights, licenses, approvals or governmental
authorizations would not have a Material Adverse Effect.
(i) Except as disclosed in the Prospectus, the Company and its
subsidiaries are conducting business in compliance with all applicable
laws, rules and regulations of the jurisdictions in which they are
conducting business, including, without limitation, all applicable local,
state and federal environmental laws and regulations, except where the
failure to be so in compliance would not have a Material Adverse Effect.
(j) Neither the Company nor any Guarantor is an "investment company"
within the meaning of the Investment Company Act of 1940 (the "Investment
Company Act"), without taking account of any exemption arising out of the
number of holders of the Company's or such Guarantor's securities.
(k) Neither the Company nor any Guarantor has paid or agreed to pay
to any person any compensation for soliciting another to purchase any
securities of the Company or such Guarantor (except as contemplated by this
Agreement).
(l) The Credit Agreement has been executed and delivered by the
parties thereto and is in full force
7
and effect, and the Underwriters have received conformed counterparts of
the Credit Agreement. There exists, and at and as of the Closing Date
(after giving effect to the actions contemplated hereby and to the other
Transactions) shall exist, no condition that would constitute a default (or
an event that with notice or lapse of time, or both, would constitute a
default) under the Senior Credit Facility.
(m) There are no contracts, agreements or understandings between the
Company or any of its subsidiaries and any person granting such person the
right to require the Company or any of its subsidiaries to file a
registration statement under the Act with respect to any securities of the
Company or any such subsidiary (except as described in the Prospectus
(exclusive of any amendments or supplements thereto subsequent to the date
of this Agreement)) or to require the Company or any of its subsidiaries to
include such securities with the Securities registered pursuant to the
Registration Statement.
(n) The Securities have been approved for listing on the New York
Stock Exchange, subject to official notice of issuance.
Any certificate signed by any officer of the Company or a Guarantor and
delivered to the Underwriters or counsel for the Underwriters in connection with
the offering of the Securities shall be deemed a representation and warranty by
the Company and the Guarantors to each Underwriter as to the matters covered
thereby.
2. Purchase and Sale. Subject to the terms and conditions and in
------------------
reliance upon the representations and warranties herein set forth, the Company
agrees to sell to each Underwriter, and each Underwriter agrees, severally and
not jointly, to purchase from the Company, at a purchase price of 97.5% of the
principal amount thereof, plus accrued interest, if any, on the Securities from
December 22, 1997, to the Closing Date, the principal amount of the Securities
set forth opposite such Underwriter's name in Schedule I attached hereto.
3. Delivery and Payment. Delivery of and payment for the Securities
---------------------
shall be made at 10:00 AM, New York City
8
time, on December 22, 1997, or at such time on such later date (not later than
December 30, 1997) as the Underwriters shall designate, which date and time may
be postponed by agreement between the Underwriters and the Company or as
provided in Section 9 hereof (such date and time of delivery and payment for the
Securities being herein called the "Closing Date"). Delivery of the Securities
shall be made to the respective accounts of the several Underwriters against
payment by the several Underwriters of the purchase price thereof to or upon the
order of the Company by wire transfer payable in same-day funds to an account
specified by the Company. Delivery of the Securities shall be made through the
facilities of The Depository Trust Company unless the Underwriters shall
otherwise reasonably designate at least one Business Day in advance of the
Closing Date.
4. Offering by Underwriters. It is understood that the several
-------------------------
Underwriters propose to offer the Securities for sale to the public as set forth
in the Prospectus.
5. Agreements. The Company and the Guarantors jointly and severally
-----------
agree with the several Underwriters that:
(a) The Company and the Guarantors will use their respective best
efforts to cause the Registration Statement, if not effective at the
Execution Time, and any amendment thereof, to become effective. Prior to
the termination of the offering of the Securities, the Company and the
Guarantors will not file any amendment of the Registration Statement or
supplement to the Prospectus or any Rule 462(b) Registration Statement to
which you reasonably object in writing within five Business Days after
receipt of a copy of such proposed amendment, supplement or Rule 462(b)
Registration Statement. Subject to the foregoing sentence, if the
Registration Statement has become or becomes effective pursuant to Rule
430A, or filing of the Prospectus is otherwise required under Rule 424(b),
the Company and the Guarantors will cause the Prospectus, properly
completed, and any supplement thereto to be filed with the Commission
pursuant to the applicable paragraph of Rule 424(b) within the time period
prescribed and will provide evidence satisfactory to the Underwriters of
such timely filing. The Company will promptly advise
9
the Underwriters (i) when the Registration Statement, if not effective at
the Execution Time, and any amendment thereto, shall have become effective,
(ii) when the Prospectus, and any supplement thereto, shall have been filed
(if required) with the Commission pursuant to Rule 424(b) or when any Rule
462(b) Registration Statement shall have been filed with the Commission,
(iii) when, prior to termination of the offering of the Securities, any
amendment to the Registration Statement shall have been filed or become
effective, (iv) of any request by the Commission or its staff for any
amendment of the Registration Statement, any Rule 462(b) Registration
Statement or any supplement to the Prospectus or for any additional
information, (v) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the
institution or threatening of any proceeding for that purpose and (vi) of
the receipt by the Company of any notification with respect to the
suspension of the qualification of the Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose. The Company and the Guarantors will use their respective best
efforts to prevent the issuance of any such stop order or the suspension of
any such qualification and, if issued, to obtain as soon as possible the
withdrawal thereof.
(b) If, at any time when a prospectus relating to the Securities is
required to be delivered under the Act, any event occurs as a result of
which the Prospectus as then supplemented would include any untrue
statement of a material fact or omit to state any material fact necessary
to make the statements therein in the light of the circumstances under
which they were made not misleading, or if it shall be necessary to amend
the Registration Statement or supplement the Prospectus to comply with the
Act or the rules thereunder, the Company and the Guarantors promptly will
(i) prepare and file with the Commission, subject to the second sentence of
paragraph (a) of this Section 5, an amendment or supplement which will
correct such statement or omission or effect such compliance and (ii)
supply any supplemented Prospectus to you in such quantities as you may
reasonably request.
10
(c) As soon as practicable, the Company will make generally available
to its security holders and to the Underwriters an earnings statement or
statements of the Company and its subsidiaries that will satisfy the
provisions of Section 11(a) of the Act and Rule 158 under the Act.
(d) The Company will furnish to the Underwriters and counsel for the
Underwriters, without charge, signed copies of the Registration Statement
(including exhibits thereto) and all correspondence to or from the
Commission or its staff with respect to the Registration Statement and, so
long as delivery of a prospectus by an Underwriter or dealer may be
required by the Act, as many copies of each Preliminary Prospectus and the
Prospectus and any supplement thereto as the Underwriters may reasonably
request. The Company will pay the expenses of printing or other production
of all documents relating to the offering of the Securities.
(e) The Company and the Guarantors will arrange for the qualification
of the Securities for sale under the laws of such jurisdictions as the
Underwriters may designate and will maintain such qualifications in effect
so long as required for the distribution of the Securities; provided,
--------
however, neither the Company nor any Guarantor shall be required to qualify
-------
to do business in any jurisdiction where it is not now so qualified, become
subject to taxation where it is not now so subject, or to take any action
which would subject it to general or unlimited service of process in any
jurisdiction where it is not now so subject. Each of the Company and the
Guarantors will promptly advise the Underwriters of the receipt by it of
any notification with respect to the suspension of the qualification of the
Securities for sale in any jurisdiction or the initiation or threatening of
any proceeding for such purpose. The Company and the Guarantors will
arrange for the determination of the legality of the Securities for
purchase by institutional investors and will pay any fee of the National
Association of Securities Dealers, Inc. in connection with its review of
the offering of the Securities.
11
(f) The Company will not, for a period of 180 days following the
Closing Date, offer, sell, contract to sell, grant an option to purchase or
otherwise dispose of, directly or indirectly, or announce the offering of,
or file a registration statement for, any debt securities issued or
guaranteed by the Company or any Guarantor, or enter into any agreement to
do any of the foregoing, without the prior written consent of Salomon
Brothers Inc, other than (i) the offering of the Securities contemplated
hereby, (ii) pursuant to the registration rights agreement for the
Company's outstanding Senior Subordinated Notes (as defined in the
Prospectus) or (iii) in connection with the negotiation, syndication or
arrangement of the Senior Credit Facility.
(g) The Company and the Guarantors will use their best efforts in
cooperation with the Underwriters to permit the Securities to be eligible
for clearance and settlement through The Depository Trust Company.
(h) The Company will apply the net proceeds from the sale of the
Securities sold by it, together with the net proceeds from the Equity
Offering (as defined in the Prospectus), substantially in accordance with
its statements under the caption "Use of Proceeds" in the Prospectus.
(i) Without limiting the other provisions of this Section 5 and
elsewhere in this Agreement, on the Closing Date the Company shall file a
post-effective amendment to the Registration Statement that registers the
issuance on the Closing Date of the Guarantees by Ballantrae and Tractech.
6. Conditions to the Obligations of the Underwriters. The
--------------------------------------------------
obligations of the Underwriters to purchase the Securities shall be subject to
the accuracy of the representations and warranties on the part of the Company
and the Guarantors contained herein as of the Execution Time and the Closing
Date, to the accuracy of the statements of the Company and the Guarantors made
in any certificates pursuant to the provisions hereof, to the performance by the
Company and the Guarantors of their respective obligations hereunder and to the
following additional conditions:
12
(a) If the Registration Statement has not become effective prior to
the Execution Time, unless the Underwriters agree in writing to a later
time, the Registration Statement will become effective not later than (i)
6:00 PM New York City time on the date of determination of the public
offering price, if such determination occurred at or prior to 3:00 PM New
York City time on such date or (ii) 9:30 AM on the Business Day following
the day on which the public offering price was determined, if such
determination occurred after 3:00 PM New York City time on such date; if
filing of the Prospectus, or any supplement thereto, is required pursuant
to Rule 424(b), the Prospectus, and any such supplement, will be filed in
the manner and within the time period required by Rule 424(b); and no stop
order suspending the effectiveness of the Registration Statement shall have
been issued and no proceedings for that purpose shall have been instituted
or threatened.
(b) The Company shall have furnished to the Underwriters the opinion
of Dechert Price & Xxxxxx, counsel for the Company, dated the Closing Date,
to the effect that:
(i) each of the Company and the Guarantors (other than the
Relevant Subsidiaries (as hereinafter defined), the "Subject
Guarantors") has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the jurisdiction in
which it is chartered or organized, with full corporate power and
corporate authority to own its properties and conduct its business as
described in the Prospectus; and each of the Company and the
Guarantors is duly qualified to do business as a foreign corporation
and is in good standing under the laws of each jurisdiction set forth
in a schedule to such opinion (which schedule shall identify, based
solely on a certificate of an officer of the Company, each
jurisdiction in which the Company or any Guarantor owns or leases
material properties or conducts material business);
(ii) all the outstanding shares of capital
13
stock of each Subject Guarantor have been duly and validly authorized
and issued and are fully paid and nonassessable, and, except as
otherwise set forth in the Prospectus, all outstanding shares of
capital stock of the Guarantors are owned by the Company either
directly or through wholly owned subsidiaries free and clear of any
perfected security interest and, to the knowledge of such counsel,
after due inquiry, any other security interests, claims, liens or
encumbrances (other than the pledges of capital stock of the
Guarantors pursuant to the Senior Credit Facility);
(iii) the Company's authorized equity capitalization is as set
forth in the Prospectus; the Securities conform to the description
thereof contained in the Prospectus; and the Securities have been
approved for listing on the New York Stock Exchange, subject to
official notice of issuance;
(iv) the Indenture has been duly authorized, executed and
delivered by the Company and each of the Subject Guarantors, has been
duly qualified under and complies in all material respects with the
requirements of the Trust Indenture Act and the rules and regulations
of the Commission, and (assuming due authorization, execution and
delivery thereof by the Trustee) constitutes a valid and legally
binding instrument enforceable in accordance with its terms, subject
to applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer and similar laws affecting creditors' rights and
remedies generally and to general principles of equity (regardless of
whether enforcement is sought in a proceeding at law or in equity);
the Securities are in the form contemplated by the Indenture and have
been duly authorized and executed by the Company and each Subject
Guarantor and, upon the due authentication and delivery thereof by the
Trustee pursuant to the Indenture, will be duly and validly issued and
outstanding and will constitute valid and legally binding obligations
entitled to the benefits of the Indenture and enforceable in
accordance with
14
their terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer and similar laws
affecting creditors' rights and remedies generally and to general
principles of equity (regardless of whether enforcement is sought in a
proceeding at law or in equity);
(v) to the best knowledge of such counsel, there is no pending
or threatened action or suit or judicial, arbitral or other
administrative proceeding to which the Company or any of its
subsidiaries is a party or of which any property or assets of the
Company or any of its subsidiaries is the subject that, singly or in
the aggregate, (A) questions the validity of this Agreement, the
Indenture or the Credit Agreement or any action taken or to be taken
pursuant hereto or thereto or pursuant to the other Transactions, or
(B) if determined adversely to the Company or any of its subsidiaries,
is reasonably likely to have a Material Adverse Effect, except as
described in the Prospectus; and the summaries in the Registration
Statement or the Prospectus, of statutes, legal and governmental
proceedings and contracts and other documents accurately describe in
all material respects the provisions purported to be so summarized;
and the statements in the Prospectus under the caption "Description of
Certain Federal Income Tax Consequences" accurately reflect in all
material respects the United States tax consequences generally
applicable to U.S. and Non-U.S. Holders (as such terms are defined in
the Prospectus) (subject to the qualifications and assumptions set
forth in such discussion and assuming the accuracy of the discussion
in the Prospectus relating to the Company's business and activities);
(vi) the Registration Statement has become effective under the
Act; any required filing of the Prospectus, and any supplements
thereto, pursuant to Rule 424(b) has been made in the manner and
within the time period required by Rule 424(b); to the best knowledge
of such counsel, no stop order suspending the effectiveness of
15
the Registration Statement has been issued and no proceedings for that
purpose have been instituted or threatened; and the Registration
Statement and the Prospectus (other than the financial statements and
other financial information contained therein, as to which such
counsel need express no opinion) comply as to form in all material
respects with the applicable requirements of the Act and the Trust
Indenture Act and the respective rules thereunder;
(vii) the Credit Agreement has been duly authorized, executed
and delivered by the Company and each of the Subject Guarantors that
is a party thereto, and constitutes a valid and legally binding
agreement, enforceable in accordance with its terms subject to
applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer and similar laws affecting creditors' rights and
remedies generally and to general principles of equity (regardless of
whether enforcement is sought in a proceeding at law or in equity);
(viii) this Agreement has been duly authorized, executed and
delivered by the Company and each of the Subject Guarantors;
(ix) neither the Company nor any of its subsidiaries is, before
or after the consummation of the actions contemplated by this
Agreement, the Indenture, the Credit Agreement or the other
Transactions, an "investment company" or a company "controlled" by an
investment company within the meaning of the Investment Company Act
and the rules and regulations of the Commission thereunder, without
taking account of any exemption under the Investment Company Act
arising out of the number of holders of the Company's securities;
(x) no authorization, approval, consent or order of, or filing
or registration with, any court, regulatory body, administrative
agency or other governmental body is required for the execution,
delivery and performance of this
16
Agreement, the Indenture or the Credit Agreement or for the
consummation of the actions contemplated hereby or thereby or of the
other Transactions, except as contemplated by Section 5(e);
(xi) the execution, delivery and performance of this Agreement,
the Indenture, the Securities and the Credit Agreement by the Company
and each Guarantor party hereto or thereto and the consummation of the
actions contemplated hereby or thereby and of the other Transactions
will not result in a breach or violation of any of the terms and
provisions of, or constitute a default under, (A) the articles of
incorporation, by-laws or other organizational documents of the
Company or any Subject Guarantor, (B) any material statute, rule or
regulation applicable to the Company or any Guarantor or any order of
any court, regulatory body, administrative agency or other
governmental body having jurisdiction over the Company or any of its
subsidiaries or any of their respective properties and which order is
known to such counsel or (C) any agreement or instrument known to such
counsel to which the Company or any of its subsidiaries is a party or
by which the Company or any of its subsidiaries is bound or to which
any of their respective properties is subject; and the Company and
each of the Subject Guarantors that is a party thereto has full
corporate power and corporate authority to execute and deliver this
Agreement, the Indenture, the Securities and the Credit Agreement and
to perform its respective obligations hereunder and thereunder and to
consummate the other Transactions; and all corporate action required
to be taken for the due and proper authorization, execution and
delivery of this Agreement, the Indenture, the Securities and the
Credit Agreement and the consummation of the actions contemplated
hereby or thereby and of the other Transactions have been duly and
validly taken; and
(xii) no holders of securities of the Company or any of its
subsidiaries have rights to the registration of such securities under
the
17
Registration Statement.
Such opinion may be limited to the laws of the United States of America,
the States of New York and New Jersey and the Delaware General Corporation
Law. In rendering such opinion, such counsel may rely as to matters of
fact, to the extent they deem proper, on certificates of responsible
officers of the Company and public officials. References to the Prospectus
in this paragraph (b) include any supplements thereto at the Closing Date.
Such counsel shall also state, in a separate letter, that, in the
course of preparation by the Company of the Prospectus, such counsel has
participated in conferences with directors, officers and other
representatives of the Company, representatives of the independent public
accountants for the Company, representatives of the Underwriters and
representatives of counsel for the Underwriters, at which conferences the
contents of the Prospectus and related matters were discussed and, although
such counsel has not independently verified and is not passing upon and
assumes no responsibility for the accuracy, completeness or fairness of the
statements contained in the Prospectus (except as expressly provided
above), and noting that they have relied as to materiality to a large
extent upon the statements of directors, officers and other representatives
of the Company, no facts have come to such counsel's attention which have
caused such counsel to believe that at the Effective Date the Registration
Statement contained an untrue statement of a material fact or omitted to
state any material fact required to be stated therein or necessary in order
to make the statements therein not misleading or that the Prospectus
includes an untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading (it
being understood that such counsel need express no view with respect to the
financial statements and the notes related thereto and other financial and
accounting data included in the Prospectus).
(c) The Company shall have furnished to the
18
Underwriters the opinions of the following local counsels, or such other
local counsels as shall be reasonably acceptable to the Underwriters: (1)
Xxxxxxx Xxxxxxx & Associates, local counsel to Power Investments, Inc.,
Franklin Power Products, Inc., International Fuel Systems, Inc. and Marine
Corporation of America, each an Indiana corporation; (2) Young, Williams,
Xxxxxxxxx & Xxxxxxxx, local counsel to the A&B Group, Inc., A&B
Enterprises, Inc., Dalex, Inc., A&B Cores, Inc., R&L Tool Company, Inc. and
MCA, Inc. of Mississippi, each a Mississippi corporation; (3) Xxxxxxxx &
White, local counsel to Nabco, Inc., a Michigan corporation; (4) Jenkens &
Xxxxxxxxx, local counsel to Powrbilt Products, Inc., a Texas corporation;
and (5) Hunton & Xxxxxxxx, local counsel to World Wide Automotive, Inc., a
Virginia corporation (each such Guarantor, with respect to the applicable
local counsel, a "Relevant Subsidiary"), each dated as of the Closing Date
and to the effect that:
(i) each of the Relevant Subsidiaries has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction in which it is chartered or
organized, with full corporate power and corporate authority to own
its properties and conduct its business as described in the
Prospectus;
(ii) all the outstanding shares of capital stock of each
Relevant Subsidiary have been duly and validly authorized and issued
and are fully paid and nonassessable;
(iii) each of this Agreement, the Indenture and the Credit
Agreement has been duly authorized, executed and delivered by each of
the Relevant Subsidiaries that is a party hereto or thereto; and
(iv) the execution, delivery and performance of this Agreement,
the Indenture and the Credit Agreement by each Relevant Subsidiary
that is a party hereto or thereto and the consummation of the actions
contemplated hereby or thereby and of the other Transactions will not
result in a breach or violation of any of the terms and provisions
19
of, or constitute a default under, the articles of incorporation,
by-laws or other organizational documents of the Relevant Subsidiary;
each of the Relevant Subsidiaries that is a party hereto or thereto
has full corporate power and corporate authority to execute and
deliver this Agreement, the Indenture and the Credit Agreement and to
perform its respective obligations hereunder and thereunder and to
consummate the other Transactions; and all corporate action required
to be taken by the Relevant Subsidiaries party hereto or thereto for
the due and proper authorization, execution and delivery of this
Agreement, the Indenture and the Credit Agreement and the consummation
of the actions contemplated hereby or thereby and of the other
Transactions have been duly and validly taken.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the
jurisdiction in which the Relevant Subsidiaries are chartered or organized
or the United States, to the extent they deem proper and specified in such
opinion, upon the opinion of other counsel who are satisfactory to counsel
for the Underwriters, and (B) as to matters of fact, to the extent they
deem proper, on certificates of responsible officers of the Relevant
Subsidiaries and public officials. References to the Prospectus in this
paragraph (d) include any supplements thereto at the Closing Date.
(d) The Underwriters shall have received from Cravath, Xxxxxx &
Xxxxx, counsel for the Underwriters, such opinion or opinions, dated the
Closing Date, with respect to the issuance and sale of the Securities, the
Indenture, the Registration Statement, the Prospectus (together with any
supplement thereto) and other related matters as the Underwriters may
reasonably require, and the Company shall have furnished to such counsel
such documents as they request for the purpose of enabling them to pass
upon such matters.
(e) The Company shall have furnished to the Underwriters a
certificate of the Company, signed by the Chairman of the Board or the
President and the
20
principal financial or accounting officer of the Company, dated the Closing
Date, to the effect that the signers of such certificate have carefully
examined the Registration Statement, the Prospectus, any supplement to the
Prospectus and this Agreement and that:
(i) the representations and warranties of the Company and the
Guarantors in this Agreement are true and correct in all material
respects on and as of the Closing Date with the same effect as if made
on the Closing Date and the Company and the Guarantors have complied
with all the agreements and satisfied all the conditions on their part
to be performed or satisfied at or prior to the Closing Date;
(ii) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been instituted or, to the Company's knowledge,
threat ened; and
(iii) since the date of the most recent financial statements
included in the Prospectus (exclusive of any supplement thereto),
there has been no material adverse change in the condition (financial
or other), earnings, business or properties of the Company and its
subsidiaries, which is material to the Company and its subsidiaries
taken as a whole, whether or not arising from transactions in the
ordinary course of business, except as set forth in or contemplated in
the Prospectus (exclusive of any supplement thereto).
(f) At the Execution Time and at the Closing Date, Xxxxx & Young LLP
shall have furnished to the Underwriters a letter or letters, dated
respectively as of the Execution Time and as of the Closing Date, in form
and substance satisfactory to the Underwriters, stating in effect that:
(i) they are independent certified public accountants with
respect to the Company, World Wide Automotive, Inc. ("World Wide"),
the Tractech Division of Titan Wheel International, Inc. and
Ballantrae, in each such case within the meaning
21
of Rule 101 of the American Institute of Certified Public Accountants'
Code of Professional Conduct and its interpretations and rulings;
(ii) in their opinion the audited consolidated financial
statements included in the Prospectus and reported on by them comply
in form in all material respects with the accounting requirements of
the Act and the Exchange Act and the related published rules and
regulations thereunder;
(iii) based upon a reading of the latest unaudited consolidated
financial statements made available by the Company, the procedures of
the American Institute of Certified Public Accountants for a review of
interim financial information as described in Statement of Auditing
Standards No. 71, reading of minutes and inquiries of certain
officials of the Company who have responsibility for financial and
accounting matters and certain other limited procedures requested by
the Underwriters and described in detail in such letter, nothing has
come to their attention that causes them to believe that:
(1) any unaudited financial statements included in the
Prospectus do not comply in form in all material respects with
applicable accounting requirements and with the published rules
and regulations of the Commission with respect to financial
statements included or incorporated by reference in quarterly
reports on Form 10-Q under the Exchange Act;
(2) said unaudited financial statements are not in
conformity with generally accepted accounting principles applied
on a basis substantially consistent with that of the audited
financial statements included in the Prospectus; or
(3) the consolidated financial and other information
included under the headings "Pro Forma Condensed Consolidated
Financial Data",
22
"Selected Consolidated Historical Financial Data", "Prospectus
Summary--Summary Consolidated Historical and Pro Forma Financial
Data", "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and "Management" is not in
conformity with the disclosure requirements of Regulation S-K
under the Act;
(iv) based upon the procedures detailed in such letter with
respect to the period subsequent to the date of the last available
balance sheet, including the reading of minutes and inquiries of
certain officials of the Company who have responsibility for financial
and accounting matters, nothing has come to their attention that
causes them to believe that:
(1) at a specified date not more than five days prior to
the date of the letter, there were any changes in the capital
stock of the Company, increases in the long-term debt of the
Company or decreases in the stockholders' equity or net current
assets of the Company, in each case on a consolidated basis, as
compared with the amounts shown in the October 31, 1997,
unaudited consolidated balance sheet included in the Prospectus;
or
(2) for the period from October 31, 1997, to a specified
date not more than five days prior to the date of the letter,
there were any decreases, as compared with the corresponding
period in the immediately preceding fiscal quarter, in net sales,
income from continuing operations, net income or EBITDA (as
defined under "Prospectus Summary" in the Prospectus), or
increases in costs of goods sold, of the Company and its
subsidiaries on a consolidated basis, except in all instances for
increases or decreases that the Prospectus discloses have
occurred or which are set forth in such letter, in which case the
letter shall be accompanied by an explanation by the Company as
to the significance thereof unless said explanation
23
is not deemed necessary by the Underwriters;
(v) they have performed certain other specified procedures as a
result of which they determined that certain information of an
accounting, financial or statistical nature (which is limited to
accounting, financial or statistical information derived from the
general accounting records of the Company and its subsidiaries) set
forth in the Prospectus agrees with the accounting records of the
Company and its subsidiaries excluding any questions of legal
interpretation; and
(vi) on the basis of a reading of the unaudited pro forma
financial statements included in the Prospectus (the "pro forma
financial statements"); carrying out certain specified procedures;
reading of minutes and inquiries of certain officials of the Company,
World Wide, Tractech, Ballantrae and Kraftube who have responsibility
for financial and accounting matters; and proving the arithmetic
accuracy of the application of such pro forma adjustments to the
historical amounts in the pro forma financial statements, nothing came
to their attention which caused them to believe that the pro forma
financial statements do not comply in form in all material respects
with the applicable accounting requirements of Rule 11-02 of
Regulation S-X or that the pro forma adjustments have not been
properly applied to the historical amounts in the compilation of such
statements.
References to the Prospectus in this paragraph (f) include any
amendment or supplement thereof or thereto at the date of the letter.
(g) Subsequent to the Execution Time or, if earlier, the dates as of
which information is given in the Registration Statement (exclusive of any
amendment thereof) and the Prospectus (exclusive of any supplement
thereto), there shall not have been (i) any change, decrease or increase
specified in the letter or letters referred to in paragraph (f) of this
Section 6 or (ii) any change, or any development involving a
24
prospective change, in or affecting the business or properties of the
Company and its subsidiaries the effect of which, in any case referred to
in clause (i) or (ii) above, is, in the judgment of the Underwriters, so
material and adverse as to make it impractical or inadvisable to proceed
with the offering or delivery of the Securities as contemplated by the
Registration Statement (exclusive of any amendment thereof) and the
Prospectus (exclusive of any supplement thereto).
(h) Subsequent to the Execution Time, there shall not have been (i)
any decrease in the rating of the Securities or any of the Company's or any
Guarantor's other debt securities by any "nationally recognized statistical
rating organization" (as defined for purposes of Rule 436(g) under the Act)
or (ii) any notice given of any intended or potential decrease in any such
rating or that such organization has under surveillance or review (other
than any such notice with positive implications of a possible upgrading)
its rating of the Securities or any of the Company's or any Guarantor's
other debt securities.
(i) The Equity Offering (as defined in the Prospectus), the Company's
acquisition of Ballantrae and each of the other Transactions shall have
been consummated on the terms described in the Prospectus.
(j) World Wide and Power Investments, Inc. shall have been
recapitalized so that all of their respective voting interests are owned by
the Company.
(k) All conditions precedent to the obligations of the lenders to
extend loans and issue letters of credit under the Credit Agreement shall
have been fully satisfied or waived.
(l) Prior to the Closing Date, the Company shall have furnished to
the Underwriters such further information, certificates and documents as
the Underwriters may reasonably request.
If any of the conditions specified in this Section 6 shall not have
been fulfilled in all material respects when and as provided in this Agreement,
or if any of the opinions and certificates mentioned above or elsewhere
25
in this Agreement shall not be in all material respects reasonably satisfactory
in form and substance to the Underwriters and counsel for the Underwriters, this
Agreement and all obligations of the Underwriters hereunder may be canceled at,
or at any time prior to, the Closing Date by the Underwriters. Notice of such
cancelation shall be given to the Company in writing or by telephone or
facsimile confirmed in writing.
The documents required to be delivered by this Section 6 shall be
delivered at the office of Dechert, Price & Xxxxxx, counsel for the Company, at
00 Xxxxxxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx, on the Closing Date.
7. Reimbursement of Underwriters' Expenses. If the sale of the
----------------------------------------
Securities provided for herein is not consummated because any condition to the
obligations of the Underwriters set forth in Section 6 hereof is not satisfied,
because of any termination pursuant to Section 10 hereof or because of any
refusal, inability or failure on the part of the Company or any Guarantor to
perform any agreement herein or comply with any provision hereof in each case
other than by reason of a default by any of the Underwriters, the Company and
the Guarantors jointly and severally will reimburse the Underwriters severally
upon demand for all out-of-pocket expenses (including reasonable fees and
disbursements of counsel) that shall have been incurred by them in connection
with the proposed purchase and sale of the Securities.
8. Indemnification and Contribution. (a) The Company and the
---------------------------------
Guarantors jointly and severally agree to indemnify and hold harmless each
Underwriter, the directors, officers, employees and agents of each Underwriter
and each person who controls any Underwriter within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act against any and all losses, claims,
damages or liabilities, joint or several, to which they or any of them may
become subject under the Act, the Exchange Act or other Federal or state
statutory law or regulation, at common law or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of a material
fact contained in the registration statement for the registration of the
Securities as originally filed or in any amendment thereof, or in any
26
Preliminary Prospectus or the Prospectus, or in any amendment thereof or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and agrees to reimburse
each such indemnified party, as incurred, for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action; provided, however, that neither
-------- -------
the Company nor any Guarantor will be liable in any such case to the extent that
any such loss, claim, damage or liability arises out of or is based upon any
such untrue statement or alleged untrue statement or omission or alleged
omission made therein in reliance upon and in conformity with written
information furnished to the Company by or on behalf of the Underwriters
specifically for inclusion therein, it being understood that the only such
information is that described in Section 8(b); and provided further, however,
-------- ------- -------
that such indemnity with respect to any Preliminary Prospectus shall not inure
to the benefit of the Underwriter (or any of the directors, officers, employees
and agents of such Underwriter or any person controlling such Underwriter) from
whom the person asserting any such loss, claim, damage or liability purchased
the Securities which are the subject thereof if such person did not receive a
copy of the Prospectus at or prior to the confirmation of the sale of such
Securities to such person in any case where such delivery is required by the Act
and the untrue statement or alleged untrue statement or omission or alleged
omission of a material fact contained in such Preliminary Prospectus was
corrected in the Prospectus included in the Registration Statement at the time
it was declared effective by the Commission and it is finally judicially
determined that such delivery was required to be made under the Act and was not
so made.
(b) The Underwriters severally and not jointly agree to indemnify and
hold harmless each of the Company and the Guarantors, each of their respective
directors, each of their respective officers who sign the Registration Statement
and each person who controls the Company or any Guarantor within the meaning of
either the Act or the Exchange Act, to the same extent as the foregoing
indemnity from the Company and the Guarantors to each Underwriter, but only with
reference to written information relating to such Underwriter furnished to the
Company by or on behalf of such
27
Underwriter specifically for inclusion in the documents referred to in the
foregoing indemnity. This indemnity agreement will be in addition to any
liability which any Underwriter may otherwise have. The Company and the
Guarantors acknowledge that the statements set forth in the last paragraph of
the cover page, the second paragraph on page three and under the heading
"Underwriting" in any Preliminary Prospectus and the Prospectus constitute the
only information furnished in writing by or on behalf of the several
Underwriters for inclusion in the registration statement for the registration of
the Securities, any Preliminary Prospectus, the Prospectus or any amendment
thereof or supplement thereto.
(c) Promptly after receipt by an indemnified party under this Section
8 of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 8, notify the indemnifying party in writing of the commencement
thereof; but the failure so to notify the indemnifying party (i) will not
relieve it from liability under paragraph (a) or (b) above unless and to the
extent it did not otherwise learn of such action and such failure results in the
forfeiture by the indemnifying party of substantial rights and defenses and (ii)
will not, in any event, relieve the indemnifying party from any obligations to
any indemnified party other than the indemnification obligation provided in
paragraph (a) or (b) above. The indemnifying party shall be entitled to appoint
as counsel one firm of attorneys of the indemnifying party's choice at the
indemnifying party's expense, which counsel, together with one local counsel in
each jurisdiction, shall act on behalf of all the indemnified parties in any
action for which indemnification is sought (in which case the indemnifying
party shall not thereafter be responsible for the fees and expenses of any
separate counsel retained by the indemnified party or parties except as set
forth below); provided, however, that such counsel shall be satisfactory to the
-------- -------
indemnified party. Notwithstanding the indemnifying party's election to appoint
counsel to represent the indemnified party in an action, the indemnified party
shall have the right to employ separate counsel (including local counsel), and
the indemnifying party shall bear the reasonable fees, costs and expenses of
such separate counsel, if (i) the use of counsel chosen by the indemnifying
party to represent the indemnified party would
28
present such counsel with a conflict of interest, (ii) the actual or potential
defendants in, or targets of, any such action include both the indemnified party
and the indemnifying party and the indemnified party shall have reasonably
concluded that there may be legal defenses available to it and/or other
indemnified parties which are different from or additional to those available to
the indemnifying party, (iii) the indemnifying party shall not have employed
counsel satisfactory to the indemnified party to represent the indemnified party
within a reasonable time after notice of the institution of such action or (iv)
the indemnifying party shall authorize the indemnified party to employ separate
counsel at the expense of the indemnifying party. No indemnifying party shall be
liable for any settlement of any such action effected without its written
consent (which consent shall not be unreasonably withheld), but if settled with
its written consent or if there be a final judgment for the plaintiff in any
such action, the indemnifying party agrees to indemnify and hold harmless any
indemnified party from and against any loss or liability by reason of such
settlement or judgment. An indemnifying party will not, without the prior
written consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any pending or threatened claim,
action, suit or proceeding in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified parties are actual or
potential parties to such claim or action) unless such settlement, compromise or
consent includes an unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a) or (b)
of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company and the Guarantors on the one hand
and the Underwriters on the other hand agree to contribute to the aggregate
losses, claims, damages and liabilities (including legal or other expenses
reasonably incurred in connection with investigating or defending the same)
(collectively "Losses") to which the Company and the Guarantors or one or more
of the Underwriters, as applicable, may be subject in such proportion as is
appropriate to reflect the relative benefits received by the Company and the
Guarantors or by the Underwriters, as applicable, from the offering of the
Securities; provided,
--------
29
however, that in no case shall any Underwriter be responsible for any amount in
-------
excess of the underwriting discount or commission applicable to the Securities
purchased by such Underwriter hereunder. If the allocation provided by the
immediately preceding sentence is unavailable for any reason, the Company and
the Guarantors on the one hand and the Underwriters on the other hand shall
contribute in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company and the Guarantors
or of the Underwriters, as applicable, in connection with the statements or
omissions which resulted in such Losses as well as any other relevant equitable
considerations. Benefits received by the Company and the Guarantors shall be
deemed to be equal to the total net proceeds from the offering (before deducting
expenses), and benefits received by the Underwriters shall be deemed to be equal
to the total underwriting discounts and commissions, in each case as set forth
on the cover page of the Prospectus. Relative fault shall be determined by
reference to whether any untrue or any alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information provided by the Company or any Guarantor on the one hand or the
Underwriters on the other hand. The Company, the Guarantors and the Underwriters
agree that it would not be just and equitable if contribution were determined
by pro rata allocation or any other method of allocation which does not take
account of the equitable considerations referred to above. Notwithstanding the
provisions of this paragraph (d), no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 8, each person who controls an
Underwriter within the meaning of either the Act or the Exchange Act and each
director, officer, employee and agent of an Underwriter shall have the same
rights to contribution as such Underwriter, and each person who controls the
Company or any Guarantor within the meaning of either the Act or the Exchange
Act, each officer of the Company or any Guarantor who shall have signed the
Registration Statement and each director of the Company or any Guarantor shall
have the same rights to contribution as the Company and the Guarantors, subject
in each case to the applicable terms and conditions of this paragraph (d).
9. Default by an Underwriter. If any one or more
-------------------------
30
Underwriters shall fail to purchase and pay for any of the Securities agreed to
be purchased by such Underwriter or Underwriters hereunder and such failure to
purchase shall constitute a default in the performance of its or their
obligations under this Agreement, the remaining Underwriters shall be obligated
severally to take up and pay for (in the respective proportions which the
principal amount of Securities set forth opposite their names in Schedule I
attached hereto bears to the aggregate principal amount of Securities set forth
opposite the names of all the remaining Underwriters) the Securities which the
defaulting Underwriter or Underwriters agreed but failed to purchase; provided,
--------
however, that in the event that the aggregate principal amount of Securities
-------
which the defaulting Underwriter or Underwriters agreed but failed to purchase
shall exceed 10% of the aggregate principal amount of Securities set forth in
Schedule I hereto, the remaining Underwriters shall have the right to purchase
all, but shall not be under any obligation to purchase any, of the Securities,
and if such nondefaulting Underwriters do not purchase all the Securities, this
Agreement will terminate without liability to any nondefaulting Underwriter, the
Company or any Guarantor. In the event of a default by any Underwriter as set
forth in this Section 9, the Closing Date shall be postponed for such period,
not exceeding five Business Days, as the Underwriters shall determine in order
that the required changes in the Registration Statement and the Prospectus or in
any other documents or arrangements may be effected. Nothing contained in this
Agreement shall relieve any defaulting Underwriter of its liability, if any, to
the Company and any nondefaulting Underwriter for damages occasioned by its
default hereunder.
10. Termination. This Agreement shall be subject to termination in
------------
the absolute discretion of the Underwriters, by notice given to the Company
prior to delivery of and payment for the Securities, if prior to such time (i)
trading in securities generally on the New York Stock Exchange or the National
Association of Securities Dealers Automated Quotation System ("NASDAQ") shall
have been suspended or limited or minimum prices shall have been established on
either of such Exchange or NASDAQ, (ii) a banking moratorium shall have been
declared either by Federal or New York State authorities or (iii) there shall
have occurred any outbreak or escalation of hostilities, declaration by the
United States of a national emergency or
31
war or other calamity or crisis the effect of which on financial markets is such
as to make it, in the sole judgment of the Underwriters, impractical or
inadvisable to proceed with the offering or delivery of the Securities as
contemplated by the Prospectus (exclusive of any supplement thereto).
11. Representations and Indemnities to Survive. The respective
-------------------------------------------
agreements, representations, warranties, indemnities and other statements of the
Company or its officers and of the Underwriters set forth in or made pursuant to
this Agreement will remain in full force and effect, regardless of any
investigation made by or on behalf of any Underwriter or the Company or any of
the officers, directors, employees, agents or controlling persons referred to in
Section 8 hereof, and will survive delivery of and payment for the Securities.
The provisions of Sections 7 and 8 hereof shall survive the termination or
cancelation of this Agreement.
12. Notices. All communications hereunder will be in writing and
--------
effective only on receipt, and, if sent to the Underwriters, will be mailed,
delivered or sent by fax (000-000-0000) and confirmed to them in care of Salomon
Brothers Inc, Seven World Trade Center, New York, New York, 10048; or, if sent
to the Company or any Guarantor, will be mailed, delivered or sent by fax (765-
000-0000) and confirmed to it, in care of Delco Remy International, Inc., 0000
Xxxxxxxxxx Xxxxx, Xxxxxxxx, Xxxxxxx 00000, Attention: Chief Financial Officer,
with a copy mailed, delivered or sent by fax (000-000-0000) and confirmed to
Xxxxxxxxxxx X. Xxxxxx, Esq., Dechert Price & Xxxxxx, 0000 Xxxx Xxxxxxxx Xxxxx,
0000 Xxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000.
13. Successors. This Agreement will inure to the benefit of and be
-----------
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 8 hereof, and no
other person will have any right or obligation hereunder.
14. APPLICABLE LAW. THIS AGREEMENT WILL BE GOVERNED BY AND
---------------
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD
TO THE CONFLICT OF LAW PROVISIONS THEREOF).
15. Counterparts. This Agreement may be signed
------------
32
in one or more counterparts, each of which shall constitute an original and all
of which together shall constitute one and the same agreement.
16. Headings. The Section headings used herein are for convenience
---------
only and shall not affect the construction hereof.
17. Definitions. The terms which follow, when used in this
------------
Agreement, shall have the meanings indicated.
"Act" shall mean the Securities Act of 1933.
"Business Day" shall mean any day other than a Saturday, a Sunday or a
federal legal holiday.
"Effective Date" shall mean each date and time that the Registration
Statement, any post-effective amendment or amendments thereto and any Rule
462(b) Registration Statement became or become effective.
"Exchange Act" shall mean the Securities Exchange Act of 1934.
"Execution Time" shall mean the date and time that this Agreement is
executed and delivered by the parties hereto.
"Preliminary Prospectus" shall mean any preliminary prospectus
referred to in Section 1(a) above and any preliminary prospectus included
in the Registration Statement at the Effective Date that omits Rule 430A
Information.
"Prospectus" shall mean the prospectus relating to the Securities that
is first filed pursuant to Rule 424(b) after the Execution Time or, if no
filing pursuant to Rule 424(b) is required, shall mean the form of final
prospectus relating to the Securities included in the Registration
Statement at the Effective Date.
"Registration Statement" shall mean the registration statement
referred to in Section 1(a) above, including exhibits and financial
statements, as amended at the Execution Time (or, if not effective at the
33
Execution Time, in the form in which it shall become effective) and, in the
event any post-effective amendment thereto or any Rule 462(b) Registration
Statement becomes effective prior to the Closing Date, shall also mean such
registration statement as so amended or such Rule 462(b) Registration
Statement, as the case may be. Such term shall include any Rule 430A
Information deemed to be included therein at the Effective Date as provided
by Rule 430A.
"Rule 424", "Rule 430A" and "Rule 462" refer to such rules under the
Act.
"Rule 430A Information" shall mean information with respect to the
Securities and the offering thereof permitted to be omitted from the
Registration Statement when it becomes effective pursuant to Rule 430A.
"Rule 462(b) Registration Statement" shall mean a registration
statement and any amendments thereto filed pursuant to Rule 462(b) relating
to the offering covered by the initial registration statement.
"Trust Indenture Act" shall mean the Trust Indenture Act of 1939.
34
If the foregoing is in accordance with your under standing of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement among the
Company, the Guarantors and the several Underwriters.
Very truly yours,
DELCO REMY INTERNATIONAL, INC.,
by
Name: Xxxxxx X. Xxxxxx
Title: President
SUBSIDIARY GUARANTORS:
DELCO REMY AMERICA, INC.,
by
Name: Xxxxxx X. Xxxxxx
Title: President
REMY INTERNATIONAL, INC.,
by
Name: Xxxxxx X. Xxxxxx
Title: President
REMAN HOLDINGS, INC.,
by
Name: Xxxxxx X. Xxxxxx
Title: President
NABCO, INC.,
by
35
Name: Xxxxx X. Xxxxxxx
Title: Vice President
THE A&B GROUP, INC.,
by
Name: Xxxxx X. Xxxxxxx
Title: Vice President
A&B ENTERPRISES, INC.,
by
Name: Xxxxx X. Xxxxxxx
Title: Vice President
DALEX, INC.,
by
Name: Xxxxx X. Xxxxxxx
Title: Vice President
A&B CORES, INC.,
by
Name: Xxxxx X. Xxxxxxx
Title: Vice President
R&L TOOL COMPANY, INC.,
by
Name: Xxxxx X. Xxxxxxx
Title: Vice President
MCA, INC. OF MISSISSIPPI,
36
by
Name: Xxxxx X. Xxxxxxx
Title: Vice President
POWER INVESTMENTS, INC.,
by
Name: Xxxxx X. Xxxxxxx
Title: Vice President
FRANKLIN POWER PRODUCTS, INC.,
by
Name: Xxxxx X. Xxxxxxx
Title: Vice President
INTERNATIONAL FUEL SYSTEMS,
INC.,
by
Name: Xxxxx X. Xxxxxxx
Title: Vice President
MARINE DRIVE SYSTEMS, INC.,
by
Name: Xxxxx X. Xxxxxxx
Title: Vice President
MARINE CORPORATION OF AMERICA,
by
Name: Xxxxx X. Xxxxxxx
Title: Vice President
37
POWRBILT PRODUCTS, INC.,
by
Name: Xxxxx X. Xxxxxxx
Title: Vice President
WORLDWIDE AUTOMOTIVE, INC.,
by
---
Name: Xxxxx X. Xxxxxxx
Title: Vice President
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
SALOMON BROTHERS INC
CREDIT SUISSE FIRST BOSTON CORPORATION
XXXXXX XXXXXXX & CO. INCORPORATED
by SALOMON BROTHERS INC,
by
____________________________
Name:
Title:
38
SCHEDULE I
Underwriters Principal Amount
------------ of Securities to
be Purchased
-----------------
Salomon Brothers Inc................................... $ 87,000,000
Credit Suisse First Boston Corporation................. 29,000,000
Xxxxxx Xxxxxxx & Co. Incorporated...................... 29,000,000
------------
Total........................................ $145,000,000
============
