Exhibit 1.1 - Underwriting Agreement
International Controls Corp.
$165,000,000
% Senior Secured Notes Due 2002
100,000 Units, each Unit consisting of $1,000 principal
amount of ___% Senior Subordinated Notes
Due 2004 and one Warrant to Purchase ___
Shares of Common Stock
UNDERWRITING AGREEMENT
____________ ___, 1994
ALEX. BROWN & SONS INCORPORATED
SPP HAMBRO & CO.
c/o Alex. Brown & Sons Incorporated
787 7th Avenue
New York, NY 10019
Dear Sirs:
International Controls Corp., a Florida corporation (the "Company"),
proposes to sell to Alex. Brown & Sons Incorporated and SPP Hambro & Co. (the
"Underwriters") an aggregate of (a) $165,000,000 principal amount of the
Company's ___% Senior Secured Notes due 2002 (the "Senior Notes"), to be issued
pursuant to the provisions of an indenture to be dated as of ____________, 1994
(the "Senior Note Indenture"), between the Company and First Fidelity Bank,
National Association, as trustee (the "Senior Note Trustee"), and (b) 100,000
units (the "Units"), each Unit consisting of (i) $1,000 principal amount of the
Company's ___% Senior Subordinated Notes Due 2004 (the "Senior Subordinated
Notes" and, together with the Senior Notes, the "Notes"), to be issued pursuant
to the provisions of an indenture to be dated as of ____________, 1994 (the
"Senior Subordinated Note Indenture" and, together with the Senior Note
Indenture, the "Indentures"), between the Company and Marine Midland Bank, as
trustee (the "Senior Subordinated Note Trustee" and, together with the Senior
Note Trustee, the "Trustees"), and (ii) one warrant (the "Warrants") entitling
the holder thereof to acquire __ shares of common stock of the Company, par
value $.01 per share (the "Shares"), to be issued pursuant to the provisions of
a warrant agreement to be dated as of ____________, 1994 (the "Warrant
Agreement") between the Company and American Stock Transfer & Trust
Company, as warrant agent (the "Warrant Agent"). The Senior Notes, the Senior
Subordinated Notes and the Warrants are collectively referred to herein as the
"Securities".
1. REGISTRATION STATEMENT AND PROSPECTUS. The Company has 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 called the
"Act"), a registration statement on Form S-1 (File No. 033-52255), including a
prospectus relating to the Securities, which has been and is proposed to be
amended. The registration statement as amended at the time when it becomes
effective, including information (if any) deemed to be a part of the
registration statement at the time of effectiveness pursuant to Rule 430A under
the Act, is hereinafter referred to as the "Registration Statement"; and the
prospectus in the form first used to confirm sales of Securities is hereinafter
referred to as the "Prospectus."
2. AGREEMENTS TO SELL AND PURCHASE. On the basis of the
representations and warranties contained in this Agreement, and subject to its
terms and conditions, the Company agrees to issue and sell, and the
Underwriters, acting severally and not jointly, agree to purchase from the
Company (i) the respective principal amounts of Senior Notes set forth in
Schedule I opposite the name of such Underwriter at __% of the principal amount
thereof (the "Senior Note Purchase Price") and (ii) the respective number of
Units set forth in Schedule I opposite the name of such Underwriter at $____ per
Unit (the "Unit Purchase Price" and, together with the Senior Note Purchase
Price, the "Purchase Price"), plus, in each case, accrued interest on the Senior
Notes and the Senior Subordinated Notes, respectively, from ____________, 1994,
if any.
The Senior Notes will be secured on an equal and ratable basis
with the indebtedness incurred under the New Credit Facility (as defined herein)
by a pledge of all of the outstanding capital stock of Great Dane Trailers, Inc.
and Checker Motors Corporation (collectively, the "Collateral") pursuant to a
pledge and intercreditor agreement to be dated as of _____, 1994 (the "Pledge
Agreement") between the Company, the Senior Note Trustee and NBD Bank, N.A., as
collateral agent (the "Collateral Agent"), as amended from time to time as
permitted thereby, providing for such security interest in the Collateral for
the benefit of the holders of the Senior Notes. This Agreement, the Notes, the
Warrants, the Indentures, the Warrant Agreement, the Pledge Agreement, the
Escrow Agreement (as defined herein) and the New Credit Facility are hereinafter
sometimes referred to collectively as the "Operative Documents."
3. TERMS OF PUBLIC OFFERING. The Company is advised by the
Underwriters that the Underwriters propose (i) to make a public offering of the
Securities as soon after the effective date of the Registration Statement as in
the Underwriters'
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judgment is advisable and (ii) initially to offer the Securities upon the terms
set forth in the Prospectus.
4. DELIVERY AND PAYMENT. Delivery to the Underwriters of, and
payment for, the Securities shall be made at 10:00 A.M., New York City time, on
the fifth business day (the "Closing Date") following the date of the initial
public offering thereof, at the offices of Alex. Brown & Sons Incorporated, 787
7th Avenue, New York, New York 10019 or at such other place as the Underwriters
shall designate. (As used herein, "business day" means a day on which the New
York Stock Exchange is open for trading and on which banks in New York are open
for business and not permitted by law or executive order to be closed.) The
Closing Date and the location of delivery of and the form of payment for the
Securities may be varied by agreement between the Underwriters and the Company.
Certificates for the Securities shall be registered in such names
and issued in such denominations as the Underwriters shall request in writing
not later than two full business days prior to the Closing Date. Such
certificates shall be made available to the Underwriters for inspection not
later than 9:30 A.M., New York City time, on the business day next preceding the
Closing Date. Certificates in definitive form evidencing the Securities shall
be delivered to the Underwriters on the Closing Date with any transfer taxes
thereon duly paid by the Company, for the account of the Underwriters, against
payment of the Purchase Price therefor by wire or book transfer to an account or
accounts specified in writing by notice to the Underwriters from the Company no
later than two full business days prior to the Closing Date.
5. AGREEMENTS OF THE COMPANY. The Company agrees with the
Underwriters:
(a) As soon as practicable after the execution and delivery of
this Agreement, to (i) file an amendment to the Registration Statement or
(ii) comply with the provisions of Rule 430A of the Act and file the final
prospectus under Rule 424 of the Act and to use its best efforts to cause
the Registration Statement to become effective at the earliest possible
time.
(b) To advise the Underwriters promptly and, if requested by
the Underwriters, to confirm such advice in writing, (i) when the
Registration Statement has become effective and when any post-effective
amendment to it becomes effective, (ii) of any request by the Commission
for amendments to the Registration Statement or amendments or supplements
to the Prospectus or for additional information, (iii) 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 purposes, and (iv) of the happening of any
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event during the period referred to in paragraph (e) below which makes any
statement of a material fact made in the Registration Statement or the
Prospectus untrue or which requires the making of any additions to or
changes in the Registration Statement or the Prospectus in order to make
the statements therein not misleading. If at any time the Commission shall
issue any stop order suspending the effectiveness of the Registration
Statement, the Company will make every reasonable effort to obtain the
withdrawal or lifting of such order at the earliest possible time.
(c) To furnish to the Underwriters, without charge, such number
of signed copies of the Registration Statement as first filed with the
Commission and of each amendment to it, including all exhibits, and such
number of conformed copies of the Registration Statement as so filed and of
each amendment to it, without exhibits, as the Underwriters may reasonably
request.
(d) Not to file any amendment or supplement to the Registration
Statement, whether before or after the time when it becomes effective, or
to make any amendment or supplement to the Prospectus of which the
Underwriters shall not previously have been advised or to which the
Underwriters shall reasonably object; and to prepare and file with the
Commission, promptly upon the Underwriters' reasonable request, any
amendment to the Registration Statement or supplement to the Prospectus
which may be necessary or advisable in connection with the distribution of
the Securities by the Underwriters, and to use its best efforts to cause
the same to become promptly effective.
(e) Promptly after the Registration Statement becomes
effective, and from time to time thereafter for such period as in the
opinion of counsel for the Underwriters a prospectus is required by law to
be delivered in connection with sales by the Underwriters or a dealer, to
furnish to the Underwriters and each dealer as many copies of the
Prospectus (and of any amendment or supplement to the Prospectus) as the
Underwriters or such dealer may reasonably request.
(f) If during the period specified in paragraph (e) above any
event shall occur as a result of which, in the judgment of the Company or
in the opinion of counsel for the Underwriters, it becomes necessary to
amend or supplement the Prospectus in order to make the statements therein,
in the light of the circumstances under which they are made, not
misleading, or if it is necessary to amend or supplement the Prospectus to
comply with the Act, forthwith to prepare and file with the Commission an
appropriate amendment or supplement to the Prospectus so that the
statements in the Prospectus, as so amended or supplemented, will not in
the light of the circumstances under which they are made, be misleading, or
so that the Prospectus will comply with the Act.
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(g) Prior to any public offering of the Securities, to
cooperate with the Underwriters and counsel for the Underwriters in
connection with the registration or qualification of the Securities for
offer and sale by the Underwriters and by dealers under the state
securities or Blue Sky laws of such jurisdictions as the Underwriters may
reasonably request, to continue such qualification in effect so long as
required for distribution of the Securities and to file such consents to
service of process or other documents as may be necessary in order to
effect such registration or qualification; PROVIDED that, in connection
therewith, the Company shall not be required to file as a foreign
corporation or to file a general consent to service of process, or to take
any action which would subject it to a general service of process, in any
jurisdiction where it is not now so subject.
(h) To mail and make generally available to its securityholders
as soon as it is practicable to do so, but in any event not later than 15
months after the effective date of the Registration Statement, an earnings
statement (which need not be audited) in reasonable detail, covering a
period of at least twelve consecutive months commencing no later than 90
days after the effective date of the Registration Statement which shall
satisfy the provisions of Section 11(a) and Rule 158 of the Act, and to
advise the Underwriters in writing when such statement has been so made
available.
(i) During the period of five years after the date of this
Agreement, (i) to mail as soon as reasonably practicable after the end of
each fiscal year to the record holders of the Senior Notes, the Senior
Subordinated Notes and the Warrants, a financial report of the Company and
its Subsidiaries (as defined herein) on a consolidated basis, all such
financial reports to include a consolidated balance sheet, a consolidated
statement of operations, a consolidated statement of cash flows and a
consolidated statement of shareholders' equity as of the end of and for
such fiscal year, together with comparable information as of the end of and
for the preceding year, certified by independent certified public
accountants, and (ii) to mail and make generally available as soon as
practicable after the end of each quarterly period (except for the last
quarterly period of each fiscal year) to such holders, a consolidated
balance sheet, a consolidated statement of operations and a consolidated
statement of cash flows as of the end of and for such period, and for the
period from the beginning of such year to the close of such quarterly
period, together with comparable information for the corresponding periods
of the preceding year.
(j) During the period referred to in paragraph (i) above, to
furnish to each of the Underwriters as soon as available a copy of each
report or other publicly available information of the Company mailed to the
holders of securities of the Company or filed with the Commission and such
other publicly
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available information concerning the Company and its Subsidiaries as the
Underwriters may reasonably request.
(k) To pay all costs, expenses, fees and taxes incident to
(i) the preparation, printing, filing and distribution under the Act of the
Registration Statement (including financial statements and exhibits), each
preliminary prospectus and all amendments and supplements to any of them
prior to or during the period specified in paragraph (e) above, (ii) the
printing and delivery of the Prospectus and all amendments or supplements
to it during the period specified in paragraph (e) above, (iii) the
preparation, printing and delivery of the Operative Documents and the
filing of the Indentures under the Trust Indenture Act, as amended (the
"Trust Indenture Act"), (iv) the registration or qualification of the
Securities for offer and sale under the securities or Blue Sky laws of the
several states (including in each case the fees and disbursements of
counsel for the Underwriters relating to such registration or qualification
and memoranda relating thereto (it being hereby agreed that such fees are
to be paid on the Closing Date in next day funds), (v) filings with the
National Association of Securities Dealers, Inc. (the "NASD") in connection
with the offering, (vi) creating and perfecting a security interest in the
Collateral in favor of the Collateral Agent pursuant to the Pledge
Agreement and (vii) furnishing such copies of the Registration Statement,
the Prospectus and all amendments and supplements thereto as may be
requested for use in connection with the offering or sale of the Securities
by the Underwriters or by dealers to whom Securities may be sold.
(l) To use its best efforts to do and perform all things
required or necessary to be done and performed under this Agreement by the
Company prior to the Closing Date and to satisfy all conditions precedent
to the delivery of the Securities.
(m) To use the net proceeds received from the sale of the
Securities in the manner specified in the Prospectus under the heading "Use
of Proceeds," including executing an Escrow Deposit Agreement substantially
in the form heretofore provided by the Underwriters (the "Escrow
Agreement") and depositing the funds contemplated thereby with the Agent
thereunder for the purposes described therein.
(n) During the period when the Prospectus is required to be
delivered under the Act, to file promptly all documents required to be
filed with the Commission pursuant to Section 13, 14 or 15 of the
Securities Exchange Act of 1934, as amended, and the rules and regulations
of the Commission thereunder, subsequent to the time the Registration
Statement becomes effective.
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(o) If the Company has elected to rely upon Rule 430A under the
Act, to take such steps as it deems necessary to ascertain promptly whether
the form of prospectus transmitted for filing under Rule 424(b) under the
Act was received for filing by the Commission and, in the event that it was
not, to promptly file such prospectus.
(p) Except as contemplated by this Agreement, prior to the
expiration of 90 days after the date of the Prospectus, not to issue, offer
to sell, grant any option for the sale of, or otherwise dispose of any debt
securities of the Company, Shares or securities convertible, exercisable or
exchangeable into Shares in a public offering (including any offering under
Rule 144A under the Act), other than with the Underwriters' written
consent.
6. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to the Underwriters that:
(a) (i) The Registration Statement and any amendments thereto
complied as of their respective dates, as of the date hereof comply and on
the Closing Date will comply, in all material respects, with the provisions
of the Act and will not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary
to make the statements therein not misleading; (ii) the Prospectus and any
supplements thereto will not contain any untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, except that the representations and warranties
contained in this paragraph shall not apply to (A) statements or omissions
in the Registration Statement or the Prospectus (or any supplement or
amendment to them) based upon information relating to the Underwriters
furnished to the Company in writing by the Underwriters specifically for
use therein or (B) that part of the Registration Statement that constitutes
the respective statements of eligibility and qualification (Form T-1) of
the Trustees under the Trust Indenture Act; and (iii) the Commission has
not issued an order preventing or suspending the use of any preliminary
prospectus relating to the offering of the Securities nor instituted
proceedings for that purpose.
(b) Each preliminary prospectus filed as part of the
registration statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the Act, complied when so
filed in all material respects with the provisions of the Act.
(c) The Company has been duly incorporated, is validly existing
as a corporation in good standing under the laws of the State of Florida
and has the corporate power and authority to carry on its business as
described in the
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Prospectus and to own, lease and operate its properties; the Company is
duly qualified and in good standing as a foreign corporation authorized to
do business in each jurisdiction in which the nature of its business or its
ownership or leasing of property requires such qualification, except where
the failure to be so qualified would not have a material adverse effect on
the condition (financial or otherwise), earnings or business affairs of the
Company and its Subsidiaries (as defined in paragraph (d) below),
considered as one enterprise.
(d) Each corporation at least 50% of whose securities having
ordinary voting power (other than securities having such voting power only
by reason of the happening of a contingency) are directly or indirectly
owned by the Company, and each partnership or joint venture (a
"partnership") at least 50% of the equity ownership of which is directly or
indirectly owned by the Company, or of which the Company directly or
indirectly controls the controlling general partner, whether in the form of
a general, special or limited partnership (each such corporation or other
entity, a "Subsidiary") has been duly incorporated (in the case of
corporate Subsidiaries) or duly formed (in the case of partnership
Subsidiaries) and is validly existing as a corporation in good standing or
is validly existing as a partnership, as the case may be, under the laws of
its jurisdiction of organization, with the corporate power or partnership
power, as the case may be, and authority to own, lease and operate its
properties and conduct its business as described in the Prospectus and each
is duly qualified to do business as a foreign corporation in good standing
or as a foreign partnership, as the case may be, in each jurisdiction in
which such qualification is required, whether by reason of the ownership or
leasing of property or conduct of business, except where the failure to be
so qualified or be in good standing would not have a material adverse
effect on the condition (financial or otherwise), earnings or business
affairs of the Company and its Subsidiaries, considered as one enterprise.
(e) The Company has all requisite corporate power and authority
to execute, deliver and perform its obligations under this Agreement, the
Indentures and the other Operative Documents and to issue, sell and deliver
the Securities to the Underwriters as provided herein.
(f) The authorized, issued and outstanding capital stock of the
Company has been duly and validly authorized and issued, is fully paid and
nonassessable and was not issued in violation of or subject to any
preemptive or similar rights. The Company had, at the date of the
Prospectus, an authorized and outstanding capitalization as set forth in
the Registration Statement and the Prospectus.
(g) All of the issued and outstanding shares of capital stock
of each of the Company's corporate Subsidiaries have been duly authorized
and are
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fully paid and non-assessable and all such shares and each of the equity
interests in the Company's partnership Subsidiaries are validly issued and,
except for a 10% equity interest of South Charleston Stamping &
Manufacturing Company and directors' qualifying shares of American Country
Insurance Company, are owned by the Company directly or through one or more
Subsidiaries of the Company, free and clear of any security interest,
charge, claim, lien, encumbrance or adverse interest of any nature, except
for the security interests created by the Operative Documents, and no
options, warrants or other rights to purchase, agreements or other
obligations to issue or other rights to convert any obligations into shares
of capital stock or ownership interests in the Subsidiaries are outstanding
except for those created by the Operative Documents.
(h) The Notes have been duly authorized and, when executed and
authenticated in accordance with the provisions of the applicable Indenture
and delivered to the Underwriters against payment therefor as provided by
this Agreement, will be entitled to the benefits of the applicable
Indenture and will be valid and binding obligations of the Company,
enforceable in accordance with their terms except as (i) the enforceability
thereof may be limited by bankruptcy, insolvency or similar laws affecting
creditors' rights generally and (ii) rights of acceleration and the
availability of equitable remedies may be limited by equitable principles
of general applicability.
(i) The Warrant Agreement has been duly authorized by the
Company and, when duly executed and delivered by the Company and the
Warrant Agent, will constitute a valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms,
except as (i) the enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting creditors' rights generally and
(ii) the availability of equitable remedies may be limited by equitable
principles of general applicability. The Warrant Agreement conforms in all
material respects to the description thereof contained in the Prospectus.
(j) The Warrants have been duly authorized by the Company and,
when duly executed, issued and delivered by the Company and duly
countersigned by the Warrant Agent in the manner provided for in the
Warrant Agreement and delivered to the Underwriters against payment
therefor as provided in this Agreement, will constitute valid and binding
obligations of the Company, entitled to the benefits of the Warrant
Agreement and enforceable against the Company in accordance with their
terms, except as (i) the enforceability thereof may be limited by
bankruptcy, insolvency or similar laws affecting creditors' rights
generally and (ii) the availability of equitable remedies may be limited by
equitable principles of general applicability. The Warrants and the Shares
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conform in all material respects to the descriptions thereof contained in
the Prospectus.
(k) The Company has duly reserved such number of authorized and
unissued Shares deliverable upon exercise of the Warrants as is sufficient
to permit the exercise in full of the Warrants. All Shares issued upon
exercise of the Warrants, when issued in accordance with the Warrant
Agreement, will be duly authorized, validly issued, fully paid and non-
assessable and free of preemptive rights, and none of such Shares will be
subject to any pledge, lien, security interest, charge, claim, equity or
encumbrance of any kind.
(l) The Pledge Agreement has been duly authorized and, when
executed and delivered by the Company, the Senior Note Trustee and the
Collateral Agent, will constitute a valid and legally binding instrument,
enforceable in accordance with its terms except as (i) the enforceability
thereof may be limited by bankruptcy, insolvency or similar laws affecting
creditors' rights generally and (ii) the availability of equitable remedies
may be limited by equitable principles of general applicability; the
Company is the sole beneficial owner of the Collateral and no Lien (as
defined in the Senior Note Indenture) exists upon such Collateral (and no
right or option to acquire the same exists in favor of any other person or
entity), except for the pledge and security interest in favor of the
Collateral Agent for the benefit of the holders of the Senior Notes and the
lenders under the New Credit Facility to be created or provided for in the
Pledge Agreement, which pledge and security interest constitutes a first
priority perfected pledge and security interest in and to all of the
Collateral.
(m) This Agreement has been duly authorized, executed and
delivered by the Company and constitutes a valid and binding agreement of
the Company, enforceable in accordance with its terms, except as (i) the
enforceability hereof may be limited by bankruptcy, insolvency or similar
laws affecting creditors' rights generally; (ii) the availability of
equitable remedies may be limited by equitable principles of general
applicability; and (iii) rights to indemnity and contribution hereunder may
be limited by applicable law.
(n) The Indentures have been duly qualified under the Trust
Indenture Act of 1939, as amended, have been duly authorized, and, when
executed and delivered by the Company, will be valid and binding agreements
of the Company, enforceable in accordance with their terms, except as
(i) the enforceability thereof may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights generally and (ii) rights of
acceleration and the availability of equitable remedies may be limited by
equitable principles of general applicability.
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(o) The Notes conform in all material respects to the
descriptions thereof contained in the Prospectus.
(p) Neither the Company nor any of its Subsidiaries is in
violation of its charter or governing document, as the case may be, or its
by-laws (if any) or in default in the performance of any obligation,
agreement or condition contained in any bond, debenture, note or any other
evidence of indebtedness or in any other agreement, indenture or instrument
material to the conduct of the business of the Company and its
Subsidiaries, considered as one enterprise, to which the Company or any of
its Subsidiaries is a party, or by which it or any of its Subsidiaries or
their respective property is bound except for defaults for which waivers,
consents or agreement modifications have been obtained.
(q) The execution, delivery and performance of the Operative
Documents by the Company, the compliance by the Company with all the
provisions hereof and thereof and the consummation of the transactions
contemplated hereby and thereby (i) will not require any consent, approval,
authorization or other order of any federal, state, foreign or other court,
regulatory body, administrative agency or other governmental body or
authority (except such as may be required under the Act, the securities or
Blue Sky laws of the various states or the by-laws of the NASD) or, if so
required, all such consents, approvals, authorizations and orders, have
been obtained and are in full force and effect, (ii) will not conflict with
or constitute a breach of any of the terms or provisions of, or a default
under, the charter or governing documents, as the case may be, or by-laws
(if any) of the Company or any of its Subsidiaries, or any material
agreement, indenture or other instrument to which it or any of them is a
party or by which the Company or any of its Subsidiaries is a party or by
which the Company or any of its Subsidiaries or their respective assets or
property is bound or (iii) violate or conflict with any laws,
administrative regulations or rulings or court decrees applicable to the
Company, any of its Subsidiaries or their respective property.
(r) There are no legal or governmental proceedings pending to
which the Company or any of its Subsidiaries is a party or of which any of
their respective property is the subject that are required to be described
in the Registration Statement and are not so described, and, to the best of
the Company's knowledge, no such proceedings are threatened or
contemplated. No contract or document of a character required to be
described in the Registration Statement or the Prospectus or to be filed as
an exhibit to the Registration Statement is not so described or filed as
required.
(s) Neither the Company nor any of its Subsidiaries has
violated any foreign, federal, state or local law or regulation relating to
the protection of human health and safety, the environment or hazardous or
toxic substances or
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wastes, pollutants or contaminants, nor any federal or state law relating
to discrimination in the hiring, promotion or pay of employees nor any
applicable federal or state wages and hours laws, nor any provisions of the
Employee Retirement Income Security Act or the rules and regulations
promulgated thereunder except where any such violations would not, singly
or in the aggregate, have a material adverse effect on the condition
(financial or otherwise), earnings or business affairs of the Company and
its Subsidiaries, considered as one enterprise.
(t) The Company and each of its Subsidiaries has good and
marketable title, free and clear of all liens, claims, encumbrances and
restrictions except for the security interests created by the Operative
Documents and except liens for taxes not yet due and payable and other
liens not material to the condition (financial or otherwise), earnings or
business affairs of the Company and its Subsidiaries, considered as one
enterprise, to all property and assets described in the Registration
Statement as being owned by the Company or its Subsidiaries or by any of
the Company's predecessors. All leases to which the Company or any of its
Subsidiaries is a party are valid and binding and no default has occurred
or is continuing thereunder, except for defaults that will not result in
any material adverse change in the condition (financial or otherwise),
earnings or business affairs of the Company and its Subsidiaries,
considered as one enterprise, and the Company and its Subsidiaries enjoy
peaceful and undisturbed possession under all such leases to which any of
them is a party as lessee or an assignee of a lessee with such exceptions
as do not materially interfere with the use made of such leased property by
the Company or its Subsidiaries.
(u) The Company and its Subsidiaries have in effect with
insurers of recognized financial responsibility insurance against such
losses and risks and in amounts the Company reasonably believes are
adequate in light of the business conducted by the Company and its
Subsidiaries and the properties owned by them.
(v) Ernst & Young, who have certified certain of the financial
statements filed with the Commission as part of the Registration Statement,
are independent public accountants with respect to the Company as required
by the Act.
(w) The financial statements, together with related schedules
and notes, forming part of the Registration Statement and the Prospectus
(and any amendment or supplement thereto), present fairly the consolidated
financial position, results of operations and changes in financial position
of the Company and its Subsidiaries on the basis stated in the Registration
Statement and the Prospectus (and any amendment or supplement thereto) at
the respective dates or for the respective periods to which they apply;
such statements and related
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schedules and notes have been prepared in accordance with generally
accepted accounting principles consistently applied throughout the periods
involved, except as disclosed therein; and the other financial and
statistical information and data set forth in the Registration Statement
and the Prospectus (and any amendment or supplement thereto) is, in all
material respects, accurately presented and prepared on a basis consistent
with such financial statements and the books and records of the Company.
The other financial information included in the Prospectus presents fairly
the information shown therein, has been prepared in accordance with the
Commission's rules and regulations with respect thereto, and, in the
opinion of the Company, the assumptions used in the preparation thereof are
reasonable and the adjustments used therein are appropriate to give effect
to the transactions or circumstances referred to therein.
(x) The Company and each of its Subsidiaries have such permits,
licenses, franchises, trademarks and authorizations of governmental or
regulatory authorities ("Permits") as are necessary to own, lease and
operate their respective properties and to conduct their respective
businesses in the manner described in the Prospectus; the Company and each
of its Subsidiaries have fulfilled and performed all of their material
obligations with respect to Permits and no event has occurred which allows,
or after notice or lapse of time would allow, revocation or termination
thereof or result in any other material impairment of the rights of the
holder of any Permit, except for any such impairments which would not,
singly or in the aggregate, have a materially adverse effect on the
condition (financial or otherwise), earnings or business affairs of the
Company and its Subsidiaries, considered as one enterprise; and, except as
described in the Prospectus, the Permits contain no restrictions that are
materially burdensome to the Company or any of its Subsidiaries, considered
as one enterprise.
(y) Since the respective dates as of which information is given
in the Registration Statement and the Prospectus, except as otherwise
stated therein or contemplated thereby, there has not been (i) any material
adverse change in the condition (financial or otherwise), earnings or
business affairs of the Company and its Subsidiaries, considered as one
enterprise, whether or not arising in the ordinary course of business,
(ii) any transaction entered into by the Company or any of its
Subsidiaries, other than in the ordinary course of business, that could
have a material adverse effect on the condition (financial or otherwise),
earnings or business affairs of the Company and its Subsidiaries,
considered as one enterprise, or (iii) any dividend or distribution of any
kind declared, paid or made by the Company on the Shares. The Company and
its subsidiaries have no material contingent obligations which are not
disclosed in the Registration Statement, as it may be amended or
supplemented.
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(z) Each of the Company and its Subsidiaries owns or possesses,
or can acquire on reasonable terms, adequate patents, patent rights,
licenses, inventions, copyrights, know-how (including trade secrets and
other patented and/or unpatented proprietary or confidential information,
systems or procedures), trademarks, service marks and trade names
(collectively, "Intellectual Property") presently employed by them in
connection with the business now operated by them, except where the failure
to own or possess or have the ability to acquire any such Intellectual
Property would not have a material adverse effect on the condition
(financial or otherwise), earnings or business affairs of the Company and
its Subsidiaries, considered as one enterprise, and neither the Company nor
any of its Subsidiaries has received any notice of infringement of or
conflict with asserted rights of others with respect to any of the
foregoing that, individually or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would result in any material
adverse change in the condition (financial or otherwise), earnings or
business affairs of the Company and its Subsidiaries, considered as one
enterprise.
(aa) No labor disturbance, strike or slowdown exists with the
employees of the Company or any of its Subsidiaries or to its knowledge is
imminent, which, individually or in the aggregate, has or would have a
material adverse effect on the condition (financial or otherwise), earnings
or business affairs of the Company and its Subsidiaries, considered as one
enterprise.
(bb) The Company and its Subsidiaries each have filed all
federal, state and foreign income or other tax returns which have been
required to be filed and have paid all taxes indicated by said returns to
be due and all assessments received by them or any of them to the extent
such taxes have become due and are not being contested in good faith (with
proper reserves in accordance with generally accepted accounting principles
for any such taxes being so contested).
(cc) The Company and its Subsidiaries each maintain a system of
internal accounting controls sufficient to provide reasonable assurances
that (i) transactions are executed in accordance with management's general
or specific authorization; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with United States
generally accepted accounting principles and to maintain accountability for
assets; (iii) access to assets is permitted only in accordance with
management's general or specific authorization; and (iv) the recorded
accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
difference.
(dd) The Company is, and immediately after the Closing Date and
the application of the proceeds of the offering of the Securities as
described under
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the caption "Use of Proceeds" in the Registration Statement and the
Prospectus will be, Solvent. As used herein, the term "Solvent" means,
with respect to the Company on a particular date, that on such date (i) the
fair market value of the assets of the Company is greater than the total
amount of liabilities (including contingent liabilities) of the Company,
(ii) the present fair salable value of the assets of the Company is greater
than the amount that will be required to pay the probable liabilities of
the Company on its debts as they become absolute and matured, (iii) the
Company is able to realize upon its assets and pay its debts and other
liabilities, including contingent obligations, as they mature and (iv) the
Company does not have unreasonably small capital.
(ee) The Company is not an "investment company" or a company
"controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
(ff) No holder of any security of the Company has any right to
have any Shares or other securities of the Company included in the
Registration Statement or any right, as a result of the filing of the
Registration Statement, to require registration of any Shares or any other
security of the Company under the Act.
(gg) The Company has delivered to the Underwriters a true and
correct executed copy of the loan and security agreement and the related
documents between the Company and NBD Bank, N.A. concerning a five-year
term loan facility of $50 million and a five-year revolving credit facility
of up to $95 million entered into concurrently with the execution of this
Agreement, including the related agreements which appear as exhibits
thereto, and all schedules thereto (collectively, the "New Credit
Facility"). Each such document has been duly and validly authorized by the
Company, and when duly executed and delivered by the Company (assuming due
execution and delivery thereof by the other parties thereto), will be a
legal, valid and binding obligation of the Company, enforceable in
accordance with its terms, except (i) as the enforceability thereof may be
limited by bankruptcy, insolvency or similar laws affecting creditor's
rights generally and (ii) that the availability of equitable remedies may
be limited by equitable principles of general applicability. There shall
exist at and as of the Closing Date (after giving effect to the
transactions contemplated by this Agreement and the other Operative
Documents) no conditions that would constitute a default (or an event that
with notice or the lapse of time, or both, would constitute a default)
under the Indentures, the New Credit Facility or any other indebtedness of
the Company. The New Credit Facility, when executed and delivered, will
conform in all material respects to the description thereof in the
Prospectus and Registration Statement.
-15-
(hh) The Company and its affiliates do not do business with the
government of Cuba or with any person or affiliate located in Cuba.
(ii) There are no business relationships or related-party
transactions of the nature described in Item 404 of Regulation S-K
involving the Company or any of its Subsidiaries and any person described
in such Item that are required to be disclosed in the Prospectus and which
have not been so disclosed.
7. INDEMNIFICATION. (a) The Company agrees to indemnify and hold
harmless each Underwriter and each person, if any, who controls any Underwriter
within the meaning of the Act against any losses, claims, damages or liabilities
to which such Underwriter or such controlling person may become subject under
the Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions or proceedings in respect thereof) arise out of or are based upon
(i) any untrue statement or alleged untrue statement of any material fact
contained in the Registration Statement, any preliminary prospectus, the
Prospectus, or any amendment or supplement thereto or (ii) the omission or
alleged omission to state (A) with respect to the Prospectus or any amendment or
supplement thereto, a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading and (B) with respect to the Registration Statement or
any amendment or supplement thereto, a material fact required to be stated
therein or necessary to make the statements therein not misleading, and will
reimburse each Underwriter and each such controlling person for any legal or
other expenses reasonably incurred by such Underwriter or such controlling
person in connection with investigating or defending any such loss, claim,
damage, liability, action or proceeding; PROVIDED, however, that the Company
will not be liable to an Underwriter or such controlling person of that
Underwriter in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement, or alleged untrue
statement, or omission or alleged omission made in the Registration Statement,
any preliminary prospectus, the Prospectus, or such amendment or supplement, in
reliance upon and in conformity with written information furnished to the
Company by such Underwriter specifically for use in the preparation thereof; and
FURTHER PROVIDED that such indemnity with respect to any preliminary prospectus
shall not inure to the benefit of any Underwriter or controlling person of such
Underwriter, if the person asserting any such loss, claim, damage or liability
did not receive a copy of the Prospectus (or the Prospectus, as amended or
supplemented) at or prior to the written confirmation of the sale of such
Securities by such Underwriter to such person where such delivery of the
Prospectus (or the Prospectus, as amended or supplemented) is required by the
Act, unless such failure to deliver was a result of its failure to deliver the
Prospectus to such Underwriter, and if the untrue statement or omission of a
material fact contained in such preliminary prospectus was corrected in the
Prospectus (or the Prospectus, as amended or supplemented). This indemnity
agreement is in addition to any liability which the Company may otherwise have.
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(b) The Underwriters agree, severally and not jointly, that
they will indemnify and hold harmless the Company, each of its directors, each
of its officers who have signed the Registration Statement and each person, if
any, who controls the Company within the meaning of the Act, against any losses,
claims, damages or liabilities to which the Company or any such director,
officer, or controlling person may become subject under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of or are based upon (i) any untrue
statement or alleged untrue statement of any material fact contained in the
Registration Statement, any preliminary prospectus, the Prospectus or any
amendment or supplement thereto, or (ii) the omission or the alleged omission to
state (A) with respect to the Prospectus or any amendment or supplement thereto,
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading and (B) with respect to the Registration Statement or any
amendment or supplement thereto, a material fact required to be stated therein
or necessary to make the statements therein not misleading, and will reimburse
any legal or other expenses reasonably incurred by the Company or any such
director, officer, or controlling person in connection with investigating or
defending any such loss, claim, damage, liability, action or proceeding;
PROVIDED, however, that an Underwriter will be liable in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission has been made in the Registration
Statement, any preliminary prospectus, the Prospectus or such amendment or
supplement, in reliance upon and in conformity with written information
furnished to the Company by or through such Underwriter specifically for use in
the preparation thereof. This indemnity agreement is in addition to any
liability which the Underwriters may otherwise have.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to this Section 7, such person (the
"Indemnified Party") shall promptly notify the person against whom such
indemnity may be sought (the "Indemnifying Party") in writing. No
indemnification provided for in Section 7(a) or (b) shall be available to any
party who shall fail to give notice as provided in this Section 7(c) if the
party to whom notice was not given was unaware of the proceeding to which such
notice would have related and was materially prejudiced by failure to give such
notice, but the failure to give such notice shall not relieve the Indemnifying
Party or Parties from any liability which it or they may have to the Indemnified
Party for contribution or otherwise than on account of the provisions of Section
7(a) or (b). In case any such proceeding shall be brought against any
Indemnified Party and it shall notify the Indemnifying Party of the commencement
thereof, the Indemnifying Party shall be entitled to participate therein and, to
the extent that it shall wish, jointly with any other Indemnifying Party
similarly notified, to assume the defense thereof, with counsel reasonably
satisfactory to such Indemnified Party and shall pay as incurred the fees and
disbursements of such counsel related to such proceeding. In any such
proceeding, any Indemnified Party shall have the
-17-
right to retain its own counsel at its own expense. Notwithstanding the
foregoing, the Indemnifying Party shall pay as incurred the fees and expenses of
the counsel retained by the Indemnified Party in the event (i) the Indemnifying
Party and the Indemnified Party shall have mutually agreed to the retention of
such counsel or (ii) the named parties to any such proceeding (including any
impleaded parties) include both the Indemnifying Party and the Indemnified Party
and representation of both parties by the same counsel would be inappropriate
due to actual or potential differing interests between them. It is understood
that unless representation of more than one Indemnified Party by the same
counsel would be inappropriate due to actual or potential differing interests
between them, the Indemnifying Party shall not, in connection with any
proceeding or related proceedings in the same jurisdiction, be liable for the
reasonable fees and expenses of more than one separate firm for all such
Indemnified Parties. Such firm shall be designated in writing by the
Underwriters in the case of parties indemnified pursuant to Section 7(a) and by
the Company in the case of parties indemnified pursuant to Section 7(b). The
Indemnifying Party shall not be liable for any settlement of any proceeding
effected without its written consent but if settled with such consent or if
there be a final judgment for the plaintiff, the Indemnifying Party agrees to
indemnify the Indemnified Party from and against any loss or liability by reason
of such settlement or judgment. Notwithstanding the foregoing sentence, if at
any time an Indemnified Party shall have requested an Indemnifying Party to
reimburse the Indemnified Party for fees and expenses of counsel as contemplated
by the fifth sentence of this paragraph, the Indemnifying Party agrees that it
shall be liable for any settlement of any proceeding effected without its
written consent if (i) such settlement is entered into more than [30][60]
business days after receipt by such Indemnifying Party of the aforesaid request
and (ii) such Indemnifying Party shall not have reimbursed the Indemnified Party
in accordance with such request prior to the date of such settlement [other than
with respect to requests for reimbursement of an Indemnified Party contested in
good faith] [the Company requests either 60 days above or this language here].
No Indemnifying Party shall, without the prior written consent of the
Indemnified Party, effect any settlement of any pending or threatened 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 includes an unconditional release of such Indemnified Party from
all liability on claims that are the subject matter of such proceeding.
(d) If the indemnification provided for in this Section 7 is
unavailable to or insufficient to hold harmless an Indemnified Party under
Section 7(a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) referred to therein,
then each Indemnifying Party shall contribute to the amount paid or payable by
such Indemnified Party as a result of such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) in such proportion as
is appropriate to reflect the relative benefits received by the Company on the
one hand and the Underwriters on the other from the offering of the Securities.
If,
-18-
however, the allocation provided by the immediately preceding sentence is not
permitted by applicable law or if the Indemnified Party failed to give the
notice required under Section 7(c) above, then each Indemnifying Party shall
contribute to such amount paid or payable by such Indemnified Party in such
proportion as is appropriate to reflect not only such relative benefits but also
the relative fault of the Company on the one hand and the Underwriters on the
other in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities (or actions or proceedings in respect
thereof), as well as any other relevant equitable considerations. The relative
benefits received by 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 Company bear to
the total underwriting discounts and commissions received by the Underwriters,
in each case as set forth in the table on the cover page of the Prospectus. The
relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Company on the one hand or the Underwriters on the other and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
The Company and the Underwriters agree that it would not be just
and equitable if contributions pursuant to this Section 7(d) were determined by
pro rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to above in this Section 7(d).
The amount paid or payable by an Indemnified Party as a result of the losses,
claims, damages or liabilities (or actions or proceedings in respect thereof)
referred to above in this Section 7(d) shall be deemed to include any legal or
other expenses reasonably incurred by such Indemnified Party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this subsection (d), (i) no Underwriter shall be required to
contribute any amount in excess of the underwriting discounts and commissions
applicable to the Securities purchased by such Underwriter and (ii) 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.
(e) In any proceeding relating to the Registration Statement,
any preliminary prospectus, the Prospectus or any supplement or amendment
thereto, each party against whom contribution may be sought under this Section 7
hereby consents to the jurisdiction of any court having jurisdiction over any
other contributing party, agrees that process issuing from such court may be
served upon him or it by any other contributing party and consents to the
service of such process and agrees that any other contributing party may join
him or it as an additional defendant in any such proceeding in which such other
contributing party is a party.
-19-
8. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations of the
Underwriters to purchase the Securities under this Agreement are subject to the
satisfaction of each of the following conditions:
(a) All of the representations and warranties of the Company
contained in this Agreement shall be true and correct on the Closing Date
with the same force and effect as if made on and as of the Closing Date.
(b) The Registration Statement shall have become effective (or
if a post-effective amendment is required to be filed pursuant to Rule 430A
under the Act, such post-effective amendment shall have become effective)
not later than 5:00 P.M., New York City time, on the date of this Agreement
or at such later date and time as the Underwriters may approve in writing,
and at the Closing Date no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall have been commenced or shall be pending before or
contemplated by the Commission.
(c) Subsequent to the execution and delivery of this Agreement
and prior to the Closing Date, there shall not have been any downgrading,
nor shall any notice have been given of any intended or potential
downgrading or of any review for a possible change that does not indicate
the direction of the possible change, in the rating accorded any of its
securities by any "nationally recognized statistical rating organization,"
as such term is defined for purposes of Rule 436(g)(2) under the Act.
(d) (i) Since the date of the latest balance sheet included in
the Registration Statement and the Prospectus, there shall not have been
any material adverse change, or any development involving a prospective
material adverse change, in the condition, financial or otherwise, or in
the earnings, affairs or business prospects, whether or not arising in the
ordinary course of business, of the Company and its Subsidiaries,
considered as one enterprise, (ii) since the date of the latest balance
sheet included in the Registration Statement and the Prospectus, there
shall not have been any change, or any development involving a prospective
material adverse change, in the capital stock or in the long-term debt of
the Company from that set forth in the Registration Statement and
Prospectus and (iii) the Company and its Subsidiaries shall not have any
liability or obligation, direct or contingent, which is material to the
condition (financial or otherwise), earnings or business affairs of the
Company and its Subsidiaries, considered as one enterprise, other than
those reflected in the Registration Statement and the Prospectus.
(e) The Underwriters shall have received on the Closing Date an
opinion (satisfactory to the Underwriters and counsel for the
Underwriters), dated
-20-
the Closing Date, of Hutton, Ingram, Yuzek, Gainen, Carroll & Bertolotti,
counsel for the Company, to the effect that:
(i) The Company and each corporate Subsidiary of the
Company listed on Schedule II hereto have been duly incorporated and
are validly existing as corporations in good standing under the laws
of their respective jurisdictions of incorporation, and each of its
partnership Subsidiaries listed on Schedule II hereto is validly
existing as a general or limited partnership under the laws of its
jurisdiction of organization (each Subsidiary listed on Schedule II
hereto, a "Significant Subsidiary"), and each has the corporate power
or partnership power, as the case may be, and authority required to
carry on its business as described in the Prospectus and to own and
lease its properties;
(ii) The Company has all requisite corporate power and
authority to execute, deliver and perform its obligations under this
Agreement and the other Operative Documents. The Company has the
requisite corporate power and authority to issue, sell and deliver the
Securities to the Underwriters as provided herein;
(iii) Each of the Company and its Significant Subsidiaries
is duly qualified and in good standing as a foreign corporation or as
a foreign partnership, as the case may be, authorized to do business
in each jurisdiction in which the nature of its business or its
ownership or leasing of property requires such qualification, except
where the failure to be so qualified would not have a material adverse
effect on the Company and its Subsidiaries, considered as one
enterprise;
(iv) The authorized, issued and outstanding capital stock
of the Company has been duly and validly authorized and issued, is
fully paid and nonassessable and was not issued in violation of or
subject to any preemeptive or similar rights. The Company had, at the
date of the Prospectus, an authorized and outstanding capitalization
as set forth in the Registration Statement and the Prospectus;
(v) All of the issued and outstanding shares of capital
stock of each of the Company's corporate Significant Subsidiaries have
been duly and validly authorized and are fully paid and non-assessable
and to the knowledge of such counsel all such shares and each of the
equity interests in the Company's partnership Significant Subsidiaries
are validly issued and, except for a 10% equity interest of South
Charleston Stamping & Manufacturing Company and directors' qualifying
shares of American Country Insurance Company, are owned by the Company
free and clear of
-21-
any security interest, charge, claim, lien, encumbrance or adverse
interest of any nature except for the security interests created by
the Operative Documents, and no options, warrants or other rights to
purchase, agreements or other obligations to issue or other rights to
convert any obligations into any shares of capital stock or of
ownership interests in the Subsidiaries are outstanding except for
those created by the Operative Documents;
(vi) The execution, delivery and performance of this
Agreement and the other Operative Documents and the compliance by the
Company with all the provisions hereof and thereof and the
consummation of the transactions contemplated hereby and thereby
(including, without limitation, the issuance and sale of the
Securities), will not require any consent, approval, authorization or
other order of any court, regulatory body, administrative agency or
other governmental body (except such as may be required under the Act,
the securities or Blue Sky laws of the various states or the by-laws
of the NASD) or, if so required, all such consents, approvals,
authorizations and orders have been obtained and are in full force and
effect and will not conflict with or constitute a breach of any of the
terms or provisions of, or a default under, the charter or by-laws of
the Company or any of the Significant Subsidiaries, or assuming
application of the proceeds of the sale of the Securities and of the
initial borrowing under the New Credit Facility in accordance with the
section entitled "Use of Proceeds" in the Registration Statement, any
agreement, indenture or other instrument to which the Company or any
of the Significant Subsidiaries is a party or by which the Company or
any of the Significant Subsidiaries or any of their respective
properties is bound and which is listed on Schedule III hereto, which
schedule, according to a certificate of the Company dated as of the
date hereof, contains all agreements, indentures or instruments
material to the business of the Company, considered as one enterprise,
or violate or conflict with any material laws, administrative
regulations or rulings or court decrees applicable to the Company or
any of the Significant Subsidiaries or their respective properties;
(vii) The Indentures have been duly qualified under the
Trust Indenture Act of 1939, as amended, have been duly authorized,
executed and delivered by the Company and are valid and binding
agreements of the Company, enforceable in accordance with their terms
except as (a) the enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting creditors' rights generally and
(b) rights of acceleration and the availability of equitable remedies
may be limited by equitable principles of general applicability;
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(viii) The Notes have been duly authorized, and when
executed and authenticated in accordance with the provisions of the
applicable Indenture and delivered to the Underwriters against payment
therefor as provided by this Agreement, will be entitled to the
benefits of the applicable Indenture and will be valid and binding
obligations of the Company, enforceable in accordance with their
terms, except as (a) the enforceability thereof may be limited by
bankruptcy, insolvency or similar laws affecting creditors' rights
generally and (b) rights of acceleration and the availability of
equitable remedies may be limited by equitable principles of general
applicability;
(ix) This Agreement has been duly authorized, executed
and delivered by the Company and constitutes a valid and binding
agreement of the Company, enforceable in accordance with its terms;
(x) The Warrant Agreement has been duly authorized,
executed and delivered by the Company and, assuming due authorization,
execution and delivery thereof by the Warrant Agent, constitutes a
valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms, except as (i) the enforceability
thereof may be limited by bankruptcy, insolvency or similar laws
affecting creditors' rights generally and (ii) the availability of
equitable remedies may be limited by equitable principles of general
applicability;
(xi) The Warrants have been duly authorized, executed,
issued and delivered by the Company and, assuming due countersignature
thereof by the Warrant Agent, the Warrants constitute valid and
binding obligations of the Company entitled to the benefits of the
Warrant Agreement and enforceable against the Company in accordance
with their terms, except as (i) the enforceability thereof may be
limited by bankruptcy, insolvency or similar laws affecting creditors'
rights generally and (ii) the availiability of equitable remedies may
be limited by equitable principles of general applicability;
(xii) All Shares issuable upon exercise of the Warrants
have been duly authorized and reserved for issuance upon such
exercise, and when issued and delivered upon such exercise in
accordance with the Warrant Agreement, will be duly authorized and
validly issued and will be fully paid and non-assessable; and none of
such shares are presently subject to preemptive rights of any
stockholder of the Company;
(xiii) The Company has duly and validly authorized,
executed and delivered the Pledge Agreement, and (assuming the due
-23-
authorization, execution and delivery thereof by the Collateral Agent)
the Pledge Agreement is a legally valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms,
except as (i) the enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting creditor's rights generally and
(ii) the availability of equitable remedies may be limited by
equitable principles of general applicability;
(xiv) The Pledge Agreement, together with delivery to the
Collateral Agent on the date hereof in pledge under the Pledge
Agreement of the certificates evidencing the Collateral, creates under
the Uniform Commercial Code of the State of New York (the "UCC") in
favor of the Senior Note Trustee for the benefit of the holders of the
Senior Notes, as security for the obligations of the Company under the
Senior Note Indenture, a valid and perfected security interest in all
of the Company's right, title and interest in the Collateral.
Assuming the Collateral Agent has taken delivery of the Collateral
under the Pledge Agreement in good faith and without notice of any
"adverse claim" (as defined in the UCC) in respect of any Collateral
under the UCC, such perfected security interest in favor of the Senior
Note Trustee under the Pledge Agreement in the Collateral has priority
over any conflicting consensual security interest therein except for
the security interest of the obligations under the New Credit Facility
which shall rank PARI PASSU with the security interest in favor of the
Senior Note Trustee;
(xv) The Registration Statement has become effective
under the Act, and such counsel does not know of the issuance of any
stop order suspending the effectiveness of the Registration Statement
by the Commission or of any proceedings for that purpose under the
Act;
(xvi) The statements in the Prospectus under "Risk Factors
- Impact of City Regulation and Expiration of Annual Limit on New
Medallion Insurance", "Business - Legal Proceedings", "Management -
Compensation Committee Interlocks and Insider Participation", "Certain
Relationships and Related Transactions", "Description of New Credit
Facility", "Description of Notes", "Description of Units",
"Description of Warrants", "Description of Capital Stock" and the
statements in Part II of the Registration Statement insofar as such
statements constitute a summary of legal matters, documents or
proceedings referred to therein, fairly present the information called
for with respect to such legal matters, documents and proceedings;
-24-
(xvii) Such counsel does not know of any legal or
governmental proceeding to which the Company or any of its
Subsidiaries is a party or of which any of their respective property
is the subject which is required to be described in the Registration
Statement or the Prospectus and is not so described, or of any
contract or other document which is required to be described in the
Registration Statement or the Prospectus or is required to be filed as
an exhibit to the Registration Statement which is not described or
filed as required;
(xviii) The Company is not an "investment company" or a
company "controlled" by an "investment company" within the meaning of
the Investment Company Act of 1940, as amended;
(xix) To such counsel's actual knowledge, no holder of any
security of the Company has any right to have any Shares or other
securities of the Company included in the Registration Statement or
any right, as a result of the filing of the Registration Statement, to
require registration of any Shares or any other security of the
Company under the Act;
(xx) The Registration Statement, the Prospectus and each
supplement or amendment thereto (except for financial statements and
notes thereto and other financial and statistical data included
therein as to which no opinion need be expressed) appear on their face
to be appropriately responsive as to form in all material respects
with the Act; and
(xxi) To such counsel's actual knowledge, true and correct
copies of the New Credit Facility have been delivered to the
Underwriters. The Company has duly and validly authorized, executed
and delivered the New Credit Facility, and (assuming the due
authorization, execution and delivery thereof by the other parties
thereto) the New Credit Facility is the legally valid and binding
obligation of the Company, enforceable against the Company in
accordance with its terms, except as (i) the enforceability thereof
may be limited by bankruptcy, insolvency or similar laws affecting
creditor's rights generally and (ii) the availability of equitable
remedies may be limited by equitable principles of general
applicability.
Such counsel will state that it has not undertaken, except
as otherwise indicated in their opinion, to determine independently, and
does not assume any responsibility for, the accuracy or completeness of the
statements in the Registration Statement; however, such counsel has
participated in the preparation of the Registration Statement and the
Prospectus, including review and discussion of the contents thereof, and
nothing has come to the attention of such counsel that has caused it to
believe that the Registration Statement at the time the
-25-
Registration Statement became effective, contained an untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading or that
the Prospectus or any amendment or supplement to the Prospectus, as of its
respective date and as of the Closing Date, contained or contains any
untrue statement of a material fact or omitted or omits to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they are made, not misleading (it being
understood that such counsel need express no comment with respect to the
financial statements and the notes thereto and the financial schedules and
other financial data included in the Registration Statement or the
Prospectus).
In rendering such opinion, counsel may rely (A) as to
matters of fact, to the extent such counsel deems proper, on (1) the
representations and warranties of the Company set forth in this Agreement,
and (2) certificates of responsible officers of the Company and public
officials; and (B) upon an opinion or opinions, each dated the Closing
Date, of other counsel retained by them or the Company as to laws of any
jurisdiction other than the United States or the State of New York provided
that (1) each such local counsel is acceptable to the Underwriters, (2)
such reliance is expressly authorized by each opinion so relied upon and a
copy of each such opinion is delivered to the Underwriters and is, in form
and substance reasonably satisfactory to them and their counsel, and (3)
counsel shall state in their opinion that they believe that they and the
Underwriters are justified in relying thereon.
(f) The Underwriters shall have received on the Closing Date an
opinion, dated the Closing Date, of Fried, Frank, Harris, Shriver &
Jacobson, counsel for the Underwriters, as to the matters referred to in
clauses (vii), (viii), (ix), (x), (xi), (xii) and (xiii) of paragraph (e)
above and to the further effect that the statements in the Prospectus under
the captions "Description of Units," "Description of Warrants,"
"Description of Notes" and "Underwriting," insofar as such statements
constitute a summary of the documents referred to therein, fairly present
the information called for with respect to such documents.
Hutton, Ingram, Yuzek, Gainen, Carroll & Bertolotti and
Fried, Frank, Harris, Shriver & Jacobson may state their respective
opinion, insofar as it relates to matters involving the application of laws
other than the laws of the United States and jurisdictions in which they
are admitted, is made in reliance, to the extent specified in such opinion,
upon the opinion or opinions of Greenberg, Traurig, Hoffman, Lipoff, Rosen
& Quentel, P.A. as to matters concerning the laws of the State of Florida,
and an opinion or opinions (in form and substance satisfactory to
Underwriters' counsel) of other counsel acceptable to Underwriters'
counsel, admitted to practice in the governing jurisdiction, but is
-26-
without independent check or verification except as specified, PROVIDED
that a copy of all such opinions shall be attached to such counsel's
opinion.
(g) The Underwriters shall have received at or prior to the
Closing Date from Fried, Frank, Harris, Shriver & Jacobson a memorandum or
survey, in form and substance satisfactory to the Underwriters, with
respect to the qualification for offering and sale by the Underwriters of
the Securities under the state securities or Blue Sky laws of such
jurisdictions as the Underwriters may reasonably have designated to the
Company.
(h) The Underwriters shall have received on the Closing Date a
certificate or certificates of the President and the Chief Financial
Officer of the Company to the effect that, as of the Closing Date, each of
them severally represents as follows:
(i) confirmation of the matters set forth in paragraphs
(a), (b), (c) and (d) of this Section 8.
(ii) He does not know of any litigation instituted or
threatened against the Company of a character required to be disclosed
in the Registration Statement which is not so disclosed; he does not
know of any material contract required to be filed as an exhibit to
the Registration Statement which is not so filed.
(iii) He has carefully examined the Registration Statement
and the Prospectus and, in his opinion, as of the effective date of
the Registration Statement, the statements contained in the
Registration Statement and the Prospectus were true and correct, and
such Registration Statement and Prospectus did not omit to state a
material fact required to be stated therein or necessary in order to
make the statements therein (A) with respect to the Prospectus or any
amendment or supplement thereto, in light of the circumstances under
which they were made, and (B) with respect to the Registration
Statement or any amendment or supplement thereto not misleading and,
in his opinion, since the effective date of the Registration
Statement, no event has occurred which should have been set forth in a
supplement to or an amendment of the Prospectus which has not been so
set forth in such supplement or amendment.
(i) The Underwriters shall have received a letter on and as of
the Closing Date, in form and substance satisfactory to the Underwriters,
from Ernst & Young, independent public accountants, with respect to the
financial statements and certain financial information contained in the
Registration Statement and the Prospectus and substantially in the form and
substance of the letter delivered to the Underwriters by Ernst & Young on
the date of this Agreement.
-27-
(j) The Company shall not have failed at or prior to the
Closing Date to perform or comply with any of the agreements contained
herein and required to be performed or complied with by the Company at or
prior to the Closing Date.
(k) The Company shall have received all consents and approvals
required such that the execution, delivery and performance of the Operative
Documents will not conflict with or constitute a breach of any of the terms
or provisions of, or a default under any agreement filed as an Exhibit to
the Registration Statement.
(l) On the Closing Date, the Senior Note Trustee for the
benefit of the holders of the Senior Notes shall have a perfected security
interest in the Collateral to the extent provided in the Pledge Agreement,
and the Underwriters shall have received on the Closing Date an executed
copy of the Pledge Agreement.
If any of the conditions hereinabove provided for in this Section
8 shall not have been fulfilled when and as required by this Agreement to be
fulfilled, the obligations of the Underwriters hereunder may be terminated by
notifying the Company of such termination in writing or by telegram or telecopy
at or prior to the Closing Date.
In such event, the Company and the Underwriters shall not be
under any obligation to each other (except to the extent provided in Sections
5(k), 7, 10 or otherwise expressly provided herein).
9. EFFECTIVE DATE OF AGREEMENT AND TERMINATION. This Agreement
shall become effective when notification of the effectiveness of the
Registration Statement has been released by the Commission.
This Agreement may be terminated by the Underwriters (A) by
written notice to the Company at any time prior to the earlier of (i) the time
the Securities are released by the Underwriters for sale or (ii) 11:30 A.M. on
the first business day following the effectiveness of this Agreement; (B) at any
time prior to the Closing Date by the Underwriters by written notice to the
Company if any of the following has occurred: (i) since the respective dates as
of which information is given in the Registration Statement and the Prospectus,
any adverse change or development involving a prospective adverse change in the
condition, financial or otherwise, of the Company or any of its Subsidiaries,
considered as one enterprise, or the earnings, affairs, or business prospects of
the Company or its Subsidiaries, considered as one enterprise, whether or not
arising in the ordinary course of business, which would, in the judgment of the
Underwriters, make it impracticable to market the Securities on the terms and in
the manner contemplated in the Prospectus, (ii) any outbreak or escalation of
hostilities or other national or international calamity or crisis or change in
economic or political
-28-
conditions or in the financial markets of the United States or elsewhere that,
in the judgment of the Underwriters, is material and adverse and would, in the
judgment of the Underwriters, make it impracticable to market the Securities on
the terms and in the manner contemplated in the Prospectus, (iii) the suspension
or material limitation of trading in securities on the New York Stock Exchange,
the American Stock Exchange or the NASDAQ National Market System or limitation
on prices for securities on any such exchange or National Market System,
(iv) the enactment, publication, decree or other promulgation of any federal or
state statute, regulation, rule or order of any court or other governmental
authority which in the opinion of the Underwriters materially and adversely
affects, or will materially and adversely affect, the business or operations of
the Company and its Subsidiaries, considered as one enterprise, (v) the
declaration of a banking moratorium by either federal or New York State
authorities or (vi) the taking of any action by any federal, state or local
government or agency in respect of its monetary or fiscal affairs which in the
opinion of the Underwriters has a material adverse effect on the financial
markets in the United States; or (C) as provided in Section 8 of this Agreement.
10. MISCELLANEOUS. Notices given pursuant to any provision of this
Agreement shall be addressed as follows:
(a) if to the Company, to International Controls Corp., 2016
North Pitcher Street, Kalamazoo, Michigan 49007, Attention: David R.
Markin, President and Chief Executive Officer; and
(b) if to the Underwriters, c/o Alex. Brown & Sons
Incorporated, 787 7th Avenue, New York, New York 10019, Attention: High
Yield Syndicate Department, or in any case to such other address as the
person to be notified may have requested in writing.
The respective indemnities, contribution agreements,
representations, warranties and other statements of the Company, its officers
and directors and of the Underwriters set forth in or made pursuant to this
Agreement shall remain operative and in full force and effect, and will survive
delivery of and payment for the Securities, regardless of (i) any investigation,
or statement as to the results thereof, made by or on behalf of the Underwriters
or by or on behalf of the Company, the officers or directors of the Company or
any controlling person of the Company, (ii) acceptance of the Securities and
payment for them hereunder and (iii) termination of this Agreement.
If this Agreement shall be terminated by the Underwriters because
of any failure or refusal on the part of the Company to comply with the terms or
to fulfill any of the conditions of this Agreement, the Company agrees to
reimburse the Underwriters for all out-of-pocket expenses (including the fees
and disbursements of counsel) reasonably incurred by them.
-29-
Except as otherwise provided, this Agreement has been and is made
solely for the benefit of and shall be binding upon the Company, the
Underwriters, any controlling persons referred to herein and their respective
successors and assigns, all as and to the extent provided in this Agreement, and
no other person shall acquire or have any right under or by virtue of this
Agreement. The term "successors and assigns" shall not include a purchaser of
any of the Securities from the Underwriters merely because of such purchase.
This Agreement shall be governed and construed in accordance with
the laws of the State of New York without giving effect to the conflicts of laws
principles thereof.
This Agreement may be signed in various counterparts which
together shall constitute one and the same instrument.
Please confirm that the foregoing correctly sets forth the
agreement between the Company and the Underwriters.
Very truly yours,
INTERNATIONAL CONTROLS CORP.
By:_____________________________
Name:
Title:
ALEX. BROWN & SONS INCORPORATED
SPP HAMBRO & CO.
By: ALEX. BROWN & SONS INCORPORATED
By:___________________________________
Name:
Title:
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SCHEDULE I
Senior Notes Units
------------ -------------
Alex. Brown & Sons Incorporated $
SPP Hambro & Co. $
I-1
SCHEDULE II
SIGNIFICANT SUBSIDIARIES OF
INTERNATIONAL CONTROLS CORP.
Jurisdiction of
Company Name(1) Incorporation/Organization
- ------------ --------------------------
Checker Motors Corporation New Jersey
Checkers Motors Co., L.P. Delaware
American Country Insurance Company(2) Illinois
South Charleston Stamping & West Virginia
Manufacturing Company(3)
Great Dane Trailers, Inc. Georgia
Great Dane Trailers Nebraska, Inc. Nebraska
Great Dane Trailers Tennessee, Inc. Tennessee
Los Angeles Great Dane, Inc. Georgia
____________________
(1) The voting securities of each company whose name is indented are owned by
the company set forth immediately above whose name is not so indented.
(2) American Country Insurance Company ("Country") is 99.96% owned by Checker
Motor Co., L.P., and .04% owned by Country's directors.
(3) South Charleston Stamping and Manufacturing Company is 90% owned by Checker
Motors Corporation and 10% owned by a nominee of Executive Life Insurance
Company.
II-1
SCHEDULE III
MATERIAL AGREEMENTS,
INDENTURES OR INSTRUMENTS
-III-