EXHIBIT 1.1
APPLIED POWER INC.
(a Wisconsin corporation)
UNDERWRITING AGREEMENT
March 26, 1999
To the Underwriters set forth
on Schedule A hereto
Ladies and Gentlemen:
Applied Power Inc., a Wisconsin corporation (the "Company"), proposes
to issue and sell certain of its debt securities (the "Securities") to one or
more underwriters (the "Underwriters") named in Schedule A to this purchase
agreement (this "Agreement"). The Securities will be issued under an indenture,
dated as of April 1, 1999 (the "Indenture"), between the Company and The First
National Bank of Chicago, as Trustee (the "Trustee"), in one or more series,
which series may vary as to interest rates, maturities, redemption provisions,
selling prices and other terms, with all such terms for any particular series of
the Securities being determined at the time of sale.
The Company understands that the Underwriters propose to make a public
offering of the Securities as soon as their representative or representatives
(the "Representatives") deem advisable after this Agreement has been executed
and delivered.
The Company and the Underwriters, in accordance with the requirements
of Rule 2710 (c)(8) and Rule 2720 ("Rule 2720") of the National Association of
Securities Dealers, Inc. (the "NASD") and subject to the terms and conditions
stated herein, also hereby confirm the engagement of the services of ▇▇▇▇▇▇▇,
▇▇▇▇▇ & Co. (the "Independent Underwriter") as a "qualified independent
underwriter" within the meaning of Section (b)(15) of Rule 2720 in connection
with the offering and sale of the Securities.
SECTION 1. Representations and Warranties.
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(a) Representations and Warranties by the Company. The Company
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represents and warrants to each Underwriter and the Independent Underwriter as
of the date hereof and as of the Closing Time referred to in Section 2(b)
hereof, and agrees with each Underwriter, as follows:
(i) Compliance with Registration Requirements. A registration
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statement on Form S-3 (File No. 333-47493), as amended by two pre-effective
amendments
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thereto, in respect of the Securities and certain other securities of the
Company and related business trusts, has been filed with the Securities and
Exchange Commission (the "Commission") pursuant to Rule 415 under the
Securities Act of 1933, as amended (the "1933 Act"), and delivered to the
Representatives; such registration statement and any post-effective
amendment thereto, each in the form heretofore delivered to the
Representatives, have been declared effective by the Commission in such
form; and no stop order suspending the effectiveness of such registration
statement has been issued and no proceeding for that purpose has been
initiated or threatened by the Commission; the various parts of such
registration statement, including (i) all exhibits thereto, (ii) the
information contained in the form of prospectus filed with the Commission
pursuant to Rule 424(b) under the 1933 Act ("Rule 424(b)") in accordance
with Section 3(a) hereof and (iii) the documents incorporated by reference
in the prospectus contained in the registration statement at the time such
part of such registration statement became effective, each as amended at
the time such part of such registration statement became effective, are
referred to herein collectively as the "Registration Statement"; the final
prospectus, as supplemented by the related prospectus supplement, in the
form first filed with respect to the Securities pursuant to Rule 424(b), is
referred to herein collectively as the "Prospectus"; any preliminary form
of the Prospectus which has heretofore been filed pursuant to Rule 424(b)
is hereinafter called the "Preliminary Prospectus"; any reference herein to
any Preliminary Prospectus or the Prospectus shall be deemed to refer to
and include the documents incorporated by reference therein pursuant to
Item 12 of Form S-3 under the 1933 Act, as of the date of such Preliminary
Prospectus or Prospectus, as the case may be; and any reference to any
amendment or supplement to any Preliminary Prospectus or the Prospectus
shall be deemed to refer to and include any documents filed after the date
of such Preliminary Prospectus or Prospectus, as the case may be, under the
Securities Exchange Act of 1934, as amended (the "1934 Act"), and
incorporated by reference in such Preliminary Prospectus or Prospectus, as
the case may be; and any reference to any amendment to the Registration
Statement shall be deemed to refer to and include the Company's most recent
annual report on Form 10-K, quarterly reports on Form 10-Q or current
reports on Form 8-K, if any, filed pursuant to Section 13 or 15(d) of the
1934 Act after the effective date of the Registration Statement that is
incorporated by reference in the Registration Statement. No order
preventing or suspending the use of any Preliminary Prospectus has been
issued by the Commission. The Registration Statement and any amendment
thereto heretofore filed, at the time of filing thereof and at the time it
became effective, and each Preliminary Prospectus, at the time of filing
thereof, conformed in all material respects to the requirements of the 1933
Act and the rules and regulations of the Commission thereunder (the "1933
Act Regulations"), and did not contain an untrue statement of a material
fact or omit to state a
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material fact required to be stated therein or necessary to make the
statements therein not misleading; when (a) the Prospectus is first filed
or transmitted for filing pursuant to Rule 424, (b) prior to the Closing
Time, any amendment to the Registration Statement becomes effective
(including the filing of any document incorporated by reference in the
Registration Statement), (c) any amendment or supplement to the Prospectus
is hereafter filed with the Commission and (d) at the Closing Time, (i) the
Registration Statement as then amended as of any such time, and the
Prospectus, as then amended or supplemented as of such time, and the
Indenture will comply in all material respects with the applicable
requirements of the 1933 Act and the 1933 Act Regulations, the Trust
Indenture Act of 1939, as amended (the "1939 Act"), and the rules and
regulations of the Commission thereunder and (ii) neither the Registration
Statement, as then amended as of such time, nor the Prospectus, as then
amended or supplemented, as of such time, will contain an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading;
provided, however, that the Company makes no representations or warranties
as to (i) that part of the Registration Statement which shall constitute
the Statement of Eligibility (Form T-1) under the 1939 Act of the Trustee
or (ii) any statements or omissions made in reliance upon and in conformity
with information furnished in writing to the Company by an Underwriter
through the Representatives expressly for use therein. Each of the
Preliminary Prospectus and the Prospectus delivered to the Underwriters for
use in connection with this offering was identical to the electronically
transmitted copies thereof filed with the Commission pursuant to its
Electronic Data Gathering, Analysis and Retrieval System ("▇▇▇▇▇"), except
to the extent permitted by the rules and regulations governing ▇▇▇▇▇.
All references in this Agreement to financial statements and schedules
and other information which is "contained," "described," "disclosed,"
"included," "referred to" or "stated" in the Registration Statement, any
Preliminary Prospectus or the Prospectus or any amendment or supplement to
any thereof (or other references of like import) shall be deemed to mean
and include all such financial statements and schedules and other
information which is incorporated by reference in the Registration
Statement, any Preliminary Prospectus or the Prospectus, or any amendment
or supplement to any thereof, as the case may be, and each such reference
to any of the foregoing shall be deemed to include the copy filed with the
Commission pursuant to ▇▇▇▇▇ and Regulation S-T.
(ii) Incorporated Documents. The documents incorporated by reference
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in the Prospectus, when they were filed with the Commission, complied in
all material respects to the requirements of the 1934 Act and the rules and
regulations of the
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Commission thereunder (the "1934 Act Regulations"), and none of such
documents 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; and any further documents so filed
and incorporated by reference in the Prospectus or any further amendment or
supplement thereto, when such documents are filed with the Commission, as
the case may be, will conform in all material respects to the requirements
of the 1934 Act and the 1934 Act Regulations and will not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading.
(iii) Independent Accountants. The accountants who certified the
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financial statements and supporting schedules included in the Registration
Statement are independent public accountants as required by the 1933 Act
and the 1933 Act Regulations.
(iv) Financial Statements. The financial statements included in
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the Registration Statement and the Prospectus, together with the related
schedules and notes, present fairly the financial position of the Company
and its consolidated subsidiaries at the dates indicated and the statements
of operations, shareholders' equity and cash flows of the Company and its
consolidated subsidiaries for the periods specified; said financial
statements have been prepared in conformity with generally accepted
accounting principles ("GAAP") applied on a consistent basis throughout the
periods involved. The pooling of interests method of accounting has been
properly applied under GAAP to the combination of the financial statements
of the Company and ZERO Corporation. The supporting schedules, if any,
included in the Registration Statement present fairly in accordance with
GAAP the information required to be stated therein. The selected financial
data and the summary financial information included in the Prospectus
present fairly the information shown therein and have been compiled on a
basis consistent with that of the audited financial statements included in
the Registration Statement. The pro forma financial statements, if any,
and the related notes thereto included in the Registration Statement and
the Prospectus present fairly the information shown therein, have been
prepared in accordance with the Commission's rules and guidelines with
respect to pro forma financial statements and have been properly compiled
on the bases described therein, and the assumptions used in the preparation
thereof are reasonable and the adjustments used therein are appropriate to
give effect to the transactions and circumstances referred to therein.
(v) No Material Adverse Change in Business. Since the respective
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dates as of which information is given in the Registration Statement and
the Prospectus, except as otherwise stated therein, (A) there has been no
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects
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of the Company and its subsidiaries considered as one enterprise, whether
or not arising in the ordinary course of business (a "Material Adverse
Effect"), (B) there have been no transactions entered into by the Company
or any of its subsidiaries, other than those in the ordinary course of
business, which are material with respect to the Company and its
subsidiaries considered as one enterprise, and (C) except for regular
quarterly dividends on the Company's common stock in amounts per share that
are consistent with past practice, there has been no dividend or
distribution of any kind declared, paid or made by the Company on any class
of its capital stock.
(vi) Status of the Company. The Company has been duly organized
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and is validly existing as a corporation in active status under the laws of
the State of Wisconsin and has corporate power and authority to own, lease
and operate its properties and to conduct its business as described in the
Prospectus and to enter into and perform its obligations under this
Agreement; and the Company is duly qualified as a foreign corporation to
transact business and is in good standing (or equivalent status) in each
other jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of business,
except where the failure so to qualify or to be in good standing (or
equivalent status) would not result in a Material Adverse Effect.
(vii) Status of Subsidiaries. Each significant subsidiary of the
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Company listed on Schedule C hereto (each a "Subsidiary" and, collectively,
the "Subsidiaries") has been duly organized and is validly existing as a
corporation in good standing (or equivalent status) under the laws of the
jurisdiction of its incorporation, has corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the Prospectus and is duly qualified as a foreign corporation
to transact business and is in good standing (or equivalent status) in each
jurisdiction in which such qualification is required, whether by reason of
the ownership or leasing of property or the conduct of business, except
where the failure so to qualify or to be in good standing (or equivalent
status) would not result in a Material Adverse Effect; except as otherwise
disclosed in the Registration Statement, all of the issued and outstanding
capital stock of each such Subsidiary has been duly authorized and validly
issued, is fully paid and non-assessable (except as otherwise provided in
Section 180.0622(2)(b) of the Wisconsin Business Corporation Law, as
judicially interpreted) and is owned by the Company, directly or through
Subsidiaries, free and clear of any security interest, mortgage, pledge,
lien, encumbrance, claim or equity; none of the outstanding shares of
capital stock of any Subsidiary was issued in violation of the preemptive
or similar rights of any securityholder of such Subsidiary.
(viii) Capitalization. The authorized, issued and outstanding
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capital stock of the Company is as set forth in the Prospectus in the
Company's consolidated financial
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statements (except for subsequent issuances, if any, pursuant to this
Agreement, pursuant to reservations, agreements or employee benefit plans
referred to in the Prospectus or pursuant to the exercise of convertible
securities or options referred to in the Prospectus). The shares of issued
and outstanding capital stock have been duly authorized and validly issued
and are fully paid and non-assessable (except as otherwise provided in
Section 180.0622(2)(b) of the Wisconsin Business Corporation Law, as
judicially interpreted); none of the outstanding shares of capital stock
was issued in violation of the preemptive or other similar rights of any
securityholder of the Company.
(ix) Authorization of Agreement. This Agreement has been duly
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authorized, executed and delivered by the Company.
(x) Authorization of the Indenture. The Indenture has been duly
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authorized by the Company and duly qualified under the 1939 Act and, when
duly executed and delivered by the Company and the Trustee, will constitute
a valid and binding agreement of the Company, enforceable against the
Company in accordance with its terms, except as the enforcement thereof may
be limited by bankruptcy, insolvency (including, without limitation, all
laws relating to fraudulent transfers), reorganization, moratorium or
similar laws affecting enforcement of creditors' rights generally and
except as enforcement thereof is subject to general principles of equity
(regardless of whether enforcement is considered in a proceeding in equity
or at law).
(xi) Authorization of the Securities. The Securities have been
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duly authorized and, at the Closing Time, will have been duly executed by
the Company and, when authenticated, issued and delivered in the manner
provided for in the Indenture and delivered against payment of the purchase
price therefor as provided in this Agreement, will constitute valid and
binding obligations of the Company, enforceable against the Company in
accordance with their terms, except as the enforcement thereof may be
limited by bankruptcy, insolvency (including, without limitation, all laws
relating to fraudulent transfers), reorganization, moratorium or similar
laws affecting enforcement of creditors' rights generally and except as
enforcement thereof is subject to general principles of equity (regardless
of whether enforcement is considered in a proceeding in equity or at law),
and will be in the form contemplated by, and entitled to the benefits of,
the Indenture.
(xii) Description of the Securities and the Indenture. The
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Securities and the Indenture will conform in all material respects to the
respective statements relating thereto contained in the Prospectus and will
be in substantially the respective forms filed or incorporated by
reference, as the case may be, as exhibits to the Registration Statement.
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(xiii) Absence of Defaults and Conflicts. Neither the Company nor
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any of its Subsidiaries is in violation of its charter or by-laws or in
default in the performance or observance of any obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage, deed
of trust, loan or credit agreement, note, lease or other agreement or
instrument to which the Company or any of its Subsidiaries is a party or by
which it or any of them may be bound, or to which any of the property or
assets of the Company or any Subsidiary is subject (collectively,
"Agreements and Instruments") except for such defaults as would not result
in a Material Adverse Effect; and the execution, delivery and performance
of this Agreement and the consummation of the transactions contemplated
herein and in the Registration Statement (including the issuance and sale
of the Securities and the use of the proceeds from the sale of the
Securities as described in the Prospectus under the caption "Use of
Proceeds") and compliance by the Company with its obligations hereunder
have been duly authorized by all necessary corporate action and do not and
will not, whether with or without the giving of notice or passage of time
or both, conflict with or constitute a breach of, or default or Repayment
Event (as defined below) under, or result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of the Company
or any Subsidiary pursuant to, the Agreements and Instruments (except for
such conflicts, breaches, Repayment Events or defaults or liens, charges or
encumbrances that would not result in a Material Adverse Effect), nor will
such action result in any violation of the provisions of the charter or by-
laws of the Company or any Subsidiary or any applicable law, statute, rule,
regulation, judgment, order, writ or decree of any government, government
instrumentality or court, domestic or foreign, having jurisdiction over the
Company or any Subsidiary or any of their assets, properties or operations.
As used herein, a "Repayment Event" means any event or condition which
gives the holder of any note, debenture or other evidence of indebtedness
(or any person acting on such holder's behalf) the right to require the
repurchase, redemption or repayment (through acceleration or otherwise) of
all or a portion of such indebtedness by the Company or any Subsidiary
other than the intended repayment of indebtedness described under "Use of
Proceeds" in the Prospectus.
(xiv) Absence of Labor Disputes. No labor dispute with the
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employees of the Company or any Subsidiary exists or, to the knowledge of
the Company, is imminent, and the Company is not aware of any existing or
imminent labor disturbance by the employees of any of its or any
Subsidiary's principal suppliers, manufacturers, customers or contractors,
which, in either case, could reasonably be expected to result in a Material
Adverse Effect.
(xv) Absence of Proceedings. There is no action, suit,
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proceeding, inquiry or investigation before or brought by any court or
governmental agency or body, do-
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mestic or foreign, now pending, or, to the knowledge of the Company,
threatened, against or affecting the Company or any Subsidiary, which is
required to be disclosed in the Registration Statement (other than as
disclosed therein), or which might reasonably be expected to result in a
Material Adverse Effect, or which might reasonably be expected to
materially and adversely affect the properties or assets thereof or the
consummation of the transactions contemplated in this Agreement or the
performance by the Company of its obligations hereunder; the aggregate of
all pending legal or governmental proceedings to which the Company or any
Subsidiary is a party or of which any of their respective property or
assets is the subject which are not described in the Registration
Statement, including ordinary routine litigation incidental to the
business, could not reasonably be expected to result in a Material Adverse
Effect.
(xvi) Accuracy of Exhibits. There are no contracts or documents
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which are required to be described in the Registration Statement, the
Prospectus or the documents incorporated by reference therein or to be
filed as exhibits thereto which have not been so described and filed as
required.
(xvii) Possession of Intellectual Property. The Company and its
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Subsidiaries own or possess, or can acquire on reasonable terms, adequate
patents, patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures),
trademarks, service marks, trade names or other intellectual property
(collectively, "Intellectual Property") necessary to carry on the business
now operated by them, and neither the Company nor any of its Subsidiaries
has received any notice or is otherwise aware of any infringement of or
conflict with asserted rights of others with respect to any Intellectual
Property or of any facts or circumstances which would render any
Intellectual Property invalid or inadequate to protect the interest of the
Company or any of its Subsidiaries therein, and which infringement or
conflict (if the subject of any unfavorable decision, ruling or finding) or
invalidity or inadequacy, singly or in the aggregate, would result in a
Material Adverse Effect.
(xviii) Absence of Further Requirements. No filing with, or
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authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency
is necessary or required for the performance by the Company of its
obligations hereunder, in connection with the offering, issuance or sale of
the Securities hereunder or the consummation of the transactions
contemplated by this Agreement, except such as have been already obtained
or as may be required under the 1933 Act or the 1933 Act Regulations or
state securities laws.
(xix) Registration Rights. There are no contracts, agreements or
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understandings between the Company and any person granting such person the
right to
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require the Company to file a registration statement under the 1933 Act
with respect to any securities of the Company owned or to be owned by such
person or to require the Company to include such securities in the
securities registered pursuant to the Registration Statement or in any
securities being registered pursuant to any other registration statement
filed by the Company under the 1933 Act.
(xx) Possession of Licenses and Permits. The Company and its
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Subsidiaries possess such permits, licenses, approvals, consents and other
authorizations (collectively, "Governmental Licenses") issued by the
appropriate federal, state, local or foreign regulatory agencies or bodies
necessary to conduct the business now operated by them; the Company and its
Subsidiaries are in compliance with the terms and conditions of all such
Governmental Licenses, except where the failure so to comply would not,
singly or in the aggregate, have a Material Adverse Effect; all of the
Governmental Licenses are valid and in full force and effect, except where
the invalidity of such Governmental Licenses or the failure of such
Governmental Licenses to be in full force and effect would not have a
Material Adverse Effect; and neither the Company nor any of its
Subsidiaries has received any notice of proceedings relating to the
revocation or modification of any such Governmental Licenses which, singly
or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would result in a Material Adverse Effect.
(xxi) Title to Property. The Company and its Subsidiaries have
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good and marketable title to all real property owned by the Company and its
Subsidiaries and good title to all other properties owned by them, in each
case, free and clear of all mortgages, pledges, liens, security interests,
claims, restrictions or encumbrances of any kind except such as (a) are
described in the Prospectus or (b) do not, singly or in the aggregate,
materially affect the value of such property and do not interfere with the
use made and proposed to be made of such property by the Company or any of
its Subsidiaries; and all of the leases and subleases material to the
business of the Company and its Subsidiaries, considered as one enterprise,
and under which the Company or any of its Subsidiaries holds properties
described in the Prospectus, are in full force and effect, and neither the
Company nor any Subsidiary has any notice of any material claim of any sort
that has been asserted by anyone adverse to the rights of the Company or
any Subsidiary under any of the leases or subleases mentioned above, or
affecting or questioning the rights of the Company or such Subsidiary to
the continued possession of the leased or subleased premises under any such
lease or sublease, except in any such case as could not reasonably be
expected to result in a Material Adverse Effect.
(xxii) Investment Company Act. The Company is not, and upon the
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issuance and sale of the Securities as herein contemplated and the
application of the net pro-
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ceeds therefrom as described in the Prospectus will not be, an "investment
company" or an entity "controlled" by an "investment company" as such terms
are defined in the Investment Company Act of 1940, as amended (the "1940
Act").
(xxiii) Environmental Laws. Except as described in the
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Registration Statement and except as would not, singly or in the aggregate,
result in a Material Adverse Effect, (A) neither the Company nor any of its
Subsidiaries is in violation of any federal, state, local or foreign
statute, law, rule, regulation, ordinance, code, policy or rule of common
law or any judicial or administrative interpretation thereof, including any
judicial or administrative order, consent, decree or judgment, relating to
pollution or protection of human health, the environment (including,
without limitation, ambient air, surface water, ground-water, land surface
or subsurface strata) or wildlife, including, without limitation, laws and
regulations relating to the release or threatened release of chemicals,
pollutants, contaminants, wastes, toxic substances, hazardous substances,
petroleum or petroleum products (collectively, "Hazardous Materials") or to
the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Materials (collectively,
"Environmental Laws"), (B) the Company and its Subsidiaries have all
permits, authorizations and approvals required under any applicable
Environmental Laws and are each in compliance with their requirements, (C)
there are no pending or threatened administrative, regulatory or judicial
actions, suits, demands, demand letters, claims, liens, notices of
noncompliance or violation, investigation or proceedings relating to any
Environmental Law against the Company or any of its Subsidiaries and (D)
there are no events or circumstances that might reasonably be expected to
form the basis of an order for clean-up or remediation, or an action, suit
or proceeding by any private party or governmental body or agency, against
or affecting the Company or any of its Subsidiaries relating to Hazardous
Materials or any Environmental Laws.
(xxiv) The Company is taking reasonable measures to update and
upgrade its operating systems and software to correct for any dating system
flaws which may potentially cause errors in such systems or software due to
the advent of the year 2000 and the description with respect thereto in the
Prospectus is accurate and complete in all material respects.
(b) Officer's Certificates. Any certificate signed by any
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officer of the Company or any of its Subsidiaries delivered to the
Representatives or to counsel for the Underwriters shall be deemed a
representation and warranty by the Company to each Underwriter as to the matters
covered thereby.
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SECTION 2. Sale and Delivery to Underwriters; Closing.
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(a) Securities. On the basis of the representations and warranties
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herein contained and subject to the terms and conditions herein set forth, the
Company agrees to sell to each Underwriter, severally and not jointly, and each
Underwriter, severally and not jointly, agrees to purchase from the Company, at
the price and with the terms set forth in Schedule B, the aggregate principal
amount of Securities set forth in Schedule A opposite the name of such
Underwriter, plus any additional amount of Securities which such Underwriter may
become obligated to purchase pursuant to the provisions of Section 10 hereof.
(b) Payment. Payment of the purchase price for, and delivery of
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certificates for, the Securities shall be made at the offices of the
Representatives, or at such other place as shall be agreed upon by the
Representatives and the Company, at 9:00 A.M. (Eastern time) on the third
(fourth, if the pricing occurs after 4:30 P.M. (Eastern time) on any given day)
business day after the date hereof (unless postponed in accordance with the
provisions of Section 10), or such other time not later than ten business days
after such date as shall be agreed upon by the Representatives and the Company
(such time and date of payment and delivery being herein called "Closing Time").
Payment shall be made to the Company by wire transfer of immediately
available or next day funds as set forth in Schedule B to a bank account(s)
designated by the Company against delivery to the Representatives for the
respective accounts of the Underwriters of certificates for the Securities to be
purchased by them. It is understood that each Underwriter has authorized the
Representatives, for its account, to accept delivery of, receipt for, and make
payment of the purchase price for, the Securities which it has agreed to
purchase.
(c) Denominations; Registration. Certificates for the Securities
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shall be in such principal amounts and registered in such names as the
Representatives may request in writing at least one full business day before the
Closing Time. The certificates for the Securities will be made available for
examination and packaging by the Representatives in The City of New York not
later than 10:00 A.M. (Eastern time) on the business day prior to the Closing
Time.
(d) Engagement of Independent Underwriter. (i) The Company hereby
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confirms its engagement of the services of the Independent Underwriter as, and
the Independent Underwriter hereby confirms its agreement with the Company to
render services as, a "qualified independent underwriter" within the meaning of
Section (b)(15) of Rule 2720 with respect to the offering and sale of the
Securities.
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(ii) The Independent Underwriter hereby represents and warrants to,
and agrees with, the Company and the Underwriters that with respect to the
offering and sale of the Securities as described in the Prospectus:
(A) The Independent Underwriter constitutes a "qualified independent
underwriter" within the meaning of Section (b)(15) of Rule 2720;
(B) The Independent Underwriter has participated in the preparation
of the Registration Statement and the Prospectus and has exercised the
usual standards of "due diligence" in respect thereto;
(C) The Independent Underwriter has undertaken the legal
responsibilities and liabilities of an underwriter under the 1933 Act
specifically including those inherent in Section 11 thereof;
(D) Based upon (I) a review of the Company, including an examination
of the Registration Statement, information regarding the earnings, assets,
capital structure and growth rate of the Company and other pertinent
financial and statistical data, (II) inquiries of and conferences with the
management of the Company and its counsel and independent public
accountants regarding the business and operations of the Company, (III)
consideration of the prospects for the industry in which the Company
competes, estimates of the business potential of the Company, assessments
of its management, the general condition of the securities markets, market
prices of the capital stock and debt securities of, and financial and
operating data concerning, companies believed by the Independent
Underwriter to be comparable to the Company with debt securities of
maturity and seniority similar to the Securities and the demand for
securities of comparable companies similar to the Securities, and (IV) such
other studies, analyses and investigations as the Independent Underwriter
has deemed appropriate, and assuming that the offering and sale of the
Securities is made as contemplated herein and in the Prospectus, the
Independent Underwriter recommends, as of the date of the execution and
delivery of this Agreement, that the yield on the Securities be not less
than 8.75% (corresponding to an initial public offering price of 100.00%),
which minimum yield should in no way be considered or relied upon as an
indication of the value of the Securities; and
(E) Subject to the provisions of Section 5 hereof, the Independent
Underwriter will furnish to the Underwriters at the Closing Time a letter,
dated the Closing Time, in form and substance satisfactory to the
Underwriters, to the effect of clauses (A) through (D) above.
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(iii) The Independent Underwriter hereby agrees with the Company and
the Underwriters that, as part of its services hereunder, in the event of any
amendment or supplement to the Prospectus, the Independent Underwriter will
render services as a "qualified independent underwriter" within the meaning of
Section (b)(15) of Rule 2720 with respect to the offering and sale of the
Securities as described in the Prospectus as so amended or supplemented that are
substantially the same as those services being rendered with respect to the
offering and sale of the Securities as described in the Prospectus (including
those described in subsection (ii) above).
(iv) The Company, the Underwriters and the Independent Underwriter
agree to comply in all material respects with all of the requirements of Rule
2720 applicable to them in connection with the offering and sale of the
Securities. The Company agrees to cooperate with the Underwriters and the
Independent Underwriter to enable the Underwriters to comply with Rule 2720 and
the Independent Underwriter to perform the services contemplated by this
Agreement.
(v) As compensation for the services of the Independent Underwriter
hereunder, the Company agrees to pay the Independent Underwriter $10,000 at the
Closing Time. In addition, the Company agrees promptly to reimburse the
Independent Underwriter for all out-of-pocket expenses, including fees and
disbursements of counsel, reasonably incurred in connection with this Agreement
and the services to be rendered hereunder as the Independent Underwriter.
SECTION 3. Covenants of the Company. The Company covenants with each
------------------------
Underwriter as follows:
(a) Compliance with Securities Regulations and Commission Requests.
--------------------------------------------------------------
The Company, subject to Section 3(b), will prepare the Prospectus in a form
approved by the Representatives and file such Prospectus pursuant to Rule
424(b) within the time prescribed under Rule 424(b) and will notify the
Representatives immediately, and confirm the notice in writing, (i) when
any post-effective amendment to the Registration Statement shall become
effective, or any supplement to the Prospectus or any amended Prospectus
shall have been filed, (ii) of the receipt of any comments from the
Commission, (iii) of any request by the Commission for any amendment to the
Registration Statement or any amendment or supplement to the Prospectus or
for additional information, and (iv) of the issuance by the Commission of
any stop order suspending the effectiveness of the Registration Statement
or of any order preventing or suspending the use of any preliminary
prospectus, or of the suspension of the qualification of the Securities for
offering or sale in any jurisdiction, or of the initiation or threatening
of any proceedings for any of such purposes. The Company will promptly
effect the filings necessary pursuant to Rule 424(b) and will take such
steps as it deems neces-
-14-
sary to ascertain promptly whether the form of prospectus transmitted for
filing under Rule 424(b) was received for filing by the Commission and, in
the event that it was not, it will promptly file such prospectus. The
Company will make every reasonable effort to prevent the issuance of any
stop order and, if any stop order is issued, to obtain the lifting thereof
at the earliest possible moment.
(b) Filing of Amendments. The Company will give the Representatives
--------------------
notice of its intention to file or prepare any amendment to the
Registration Statement or any amendment, supplement or revision to the
Prospectus, whether pursuant to the 1933 Act, the 1934 Act or otherwise,
will furnish the Representatives with copies of any such documents a
reasonable amount of time prior to such proposed filing or use, as the case
may be, and will not file or use any such document to which the
Representatives or counsel for the Underwriters shall reasonably object.
(c) Delivery of Registration Statements. The Company has furnished or
-----------------------------------
will deliver to the Representatives and counsel for the Underwriters,
without charge, signed copies of the Registration Statement as originally
filed and of each amendment thereto (including exhibits filed therewith or
incorporated by reference therein and documents incorporated or deemed to
be incorporated by reference therein) and signed copies of all consents and
certificates of experts, and will also deliver to the Representatives,
without charge, a conformed copy of the Registration Statement as
originally filed and of each amendment thereto (without exhibits) for each
of the Underwriters. The copies of the Registration Statement and each
amendment thereto furnished to the Underwriters will be identical to the
electronically transmitted copies thereof filed with the Commission
pursuant to ▇▇▇▇▇, except to the extent permitted by Regulation S-T.
(d) Delivery of Prospectuses. The Company has delivered to each
------------------------
Underwriter, without charge, as many copies of each Preliminary Prospectus
relating to the Securities as such Underwriter reasonably requested, and
the Company hereby consents to the use of such copies for purposes
permitted by the 1933 Act. The Company will furnish to each Underwriter,
without charge, during the period when the Prospectus is required to be
delivered under the 1933 Act or the 1934 Act, such number of copies of the
Prospectus (as amended or supplemented) as such Underwriter may reasonably
request. The Prospectus and any amendments or supplements thereto
furnished to the Underwriters will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to ▇▇▇▇▇,
except to the extent permitted by Regulation S-T.
(e) Continued Compliance with Securities Laws. The Company will
-----------------------------------------
comply with the 1933 Act and the 1933 Act Regulations and the 1934
-15-
Act and the 1934 Act Regulations so as to permit the completion of the
distribution of the Securities as contemplated in this Agreement and in the
Prospectus. If at any time when a prospectus is required by the 1933 Act to
be delivered in connection with sales of the Securities, any event shall
occur or condition shall exist as a result of which it is necessary, in the
opinion of counsel for the Underwriters or for the Company, to amend the
Registration Statement or amend or supplement the Prospectus in order that
the Prospectus will not include any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
therein not misleading in the light of the circumstances existing at the
time it is delivered to a purchaser, or if it shall be necessary, in the
opinion of such counsel, at any such time to amend the Registration
Statement or amend or supplement the Prospectus in order to comply with the
requirements of the 1933 Act or the 1933 Act Regulations, the Company will
promptly prepare and file with the Commission, subject to Section 3(b),
such amendment or supplement as may be necessary to correct such statement
or omission or to make the Registration Statement or the Prospectus comply
with such requirements, and the Company will furnish to the Underwriters
such number of copies of such amendment or supplement as the Underwriters
may reasonably request.
(f) Blue Sky Qualifications. The Company will use its best efforts,
-----------------------
in cooperation with the Underwriters, to qualify the Securities for
offering and sale under the applicable securities laws of such states and
other jurisdictions (domestic or foreign) as the Representatives may
designate and to maintain such qualifications in effect for a period of not
less than one year from the later of the effective date of the Registration
Statement; provided, however, that the Company shall not be obligated to
file any general consent to service of process or to qualify as a foreign
corporation or as a dealer in securities in any jurisdiction in which it is
not so qualified or to subject itself to taxation in respect of doing
business in any jurisdiction in which it is not otherwise so subject. In
each jurisdiction in which the Securities have been so qualified, the
Company will file such statements and reports as may be required by the
laws of such jurisdiction to continue such qualification in effect for a
period of not less than one year from the effective date of the
Registration Statement.
(g) Rule 158. The Company will timely file such reports pursuant to
--------
the 1934 Act as are necessary in order to make generally available to its
securityholders as soon as practicable an earnings statement for the
purposes of, and to provide the benefits contemplated by, the last
paragraph of Section 11(a) of the 1933 Act.
(h) Use of Proceeds. The Company will use the net proceeds received
---------------
by it from the sale of the Securities in the manner specified in the
Prospectus under "Use of Proceeds."
-16-
(i) Listing. The Company will use its best efforts to effect the
-------
listing of the Securities on any such stock exchange or exchanges as are
set forth in Schedule B hereto.
(j) Restriction on Sale of Securities. During a period of 90 days
---------------------------------
following the Closing Time, the Company will not, without the prior written
consent of ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co., sell or contract to sell or announce the
offering of, any debt securities of the Company with characteristics and
terms similar to those of the Securities.
(k) Reporting Requirements. The Company, during the period when the
----------------------
Prospectus is required to be delivered under the 1933 Act or the 1934 Act,
will file all documents required to be filed with the Commission pursuant
to the 1934 Act within the time periods required by the 1934 Act and the
1934 Act Regulations.
SECTION 4. Payment of Expenses.
-------------------
(a) Expenses. The Company will pay or cause to be paid all expenses
--------
incident to the performance of its obligations under this Agreement, including
(i) the preparation, printing and filing of the Registration Statement
(including financial statements and exhibits and the Form T-1) as originally
filed and of each amendment thereto, (ii) the preparation, printing,
reproduction and delivery to the Underwriters of this Agreement, any Agreement
among Underwriters, the Indenture and such other documents as may be required
in connection with the offering, purchase, sale, issuance or delivery of the
Securities, (iii) the preparation, issuance and delivery of the certificates for
the Securities to the Underwriters, including any transfer taxes and any stamp
or other duties payable upon the sale, issuance or delivery of the Securities to
the Underwriters, (iv) the fees and disbursements of the Company's counsel,
accountants and other advisors, (v) the qualification of the Securities under
securities laws in accordance with the provisions of Section 3(f) hereof,
including filing fees and the reasonable fees and disbursements of counsel for
the Underwriters in connection therewith, (vi) the printing and delivery to the
Underwriters of copies of each Preliminary Prospectus and of the Prospectus and
any amendments or supplements thereto, (vii) the fees and expenses of the
Trustee, including the fees and disbursements of counsel for the Trustee in
connection with the Indenture and the Securities, (viii) any fees payable in
connection with the rating of the Securities, (ix) the fees and expenses
incurred in connection with the listing, if applicable, of the Securities on any
such exchange or exchanges as are listed on Schedule B hereto, and (x) the fees
and expenses of the Independent Underwriter.
(b) Termination of Agreement. If this Agreement is terminated by the
------------------------
Representatives in accordance with the provisions of Section 5 or Section
9(a)(i) hereof, the Company shall reimburse the Underwriters for all of their
out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Underwriters.
-17-
SECTION 5. Conditions of Underwriters' Obligations. The obligations
---------------------------------------
of the several Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Company contained in Section 1(a) hereof
or in certificates of any officer of the Company or any Subsidiary of the
Company delivered pursuant to the provisions hereof, to the performance by the
Company of its covenants and other obligations hereunder, and to the following
further conditions:
(a) Effectiveness of Registration Statement. The Prospectus shall
---------------------------------------
have been filed with the Commission pursuant to Rule 424(b) within the
applicable time period prescribed for such filing by the 1933 Act
Regulations and in accordance with Section 3(a) hereof; and no stop order
suspending the effectiveness of the Registration Statement or any part
thereof shall have been issued and no proceeding for that purpose shall
have been initiated or threatened by the Commission.
(b) Opinion of Counsel for Company. At Closing Time, the
------------------------------
Representatives shall have received the favorable opinion, dated as of
Closing Time, of ▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLP, counsel for the Company, in form and
substance satisfactory to counsel for the Underwriters, together with
signed or reproduced copies of such letter for each of the other
Underwriters and addressed to the Underwriters to the effect set forth in
Exhibit A hereto and to such further effect as counsel to the Underwriters
may reasonably request. In giving such opinion such counsel may rely, as
to all matters governed by the laws of jurisdictions other than the law of
the State of Wisconsin and the federal law of the United States and the
General Corporation Law of the State of Delaware, upon the opinions of
counsel satisfactory to the Representatives, or may arrange for the
Representatives to receive separate opinions of counsel satisfactory to the
Representatives as to such matters. Such counsel may also state that,
insofar as such opinion involves factual matters, they have relied, to the
extent they deem proper, upon certificates of officers of the Company and
its Subsidiaries and certificates of public officials.
(c) Opinion of Counsel for Underwriters. At Closing Time, the
-----------------------------------
Representatives shall have received the favorable opinion, dated as of
Closing Time, of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, the counsel for the Underwriters,
together with signed or reproduced copies of such letter for each of the
other Underwriters and addressed to the Underwriters with respect to such
matters as the Representatives may reasonably request. In giving such
opinion such counsel may rely, as to all matters governed by the laws of
jurisdictions other than the law of the State of New York and the federal
law of the United States and the General Corporation Law of the State of
Delaware, upon the opinions of counsel satisfactory to the Representatives.
Such counsel may also state that, insofar as such opinion involves factual
matters, they have relied, to the extent
-18-
they deem proper, upon certificates of officers of the Company and its
Subsidiaries and certificates of public officials.
(d) Officers' Certificate. At Closing Time, there shall not have
---------------------
been, since the date hereof or since the respective dates as of which
information is given in the Prospectus, any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its Subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, and
the Representatives shall have received a certificate of the President or a
Vice President of the Company and of the chief financial or chief
accounting officer of the Company, dated as of Closing Time, to the effect
that (i) there has been no such material adverse change, (ii) the
representations and warranties in Section 1(a) hereof are true and correct
with the same force and effect as though expressly made at and as of
Closing Time, (iii) the Company has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied at or
prior to Closing Time, and (iv) no stop order suspending the effectiveness
of the Registration Statement has been issued and no proceedings for that
purpose have been instituted or are pending or are, to the knowledge of
such officers, contemplated by the Commission.
(e) Accountant's Comfort Letter. At the time of the execution of this
---------------------------
Agreement, the Representatives shall have received from the Company's
independent public accountants a letter dated such date, in form and
substance satisfactory to the Representatives (substantially in the form of
Exhibit B hereto), together with signed or reproduced copies of such letter
for each of the other Underwriters and addressed to the Underwriters
containing statements and information of the type ordinarily included in
accountants' "comfort letters" to underwriters with respect to the
financial statements and certain financial information contained in the
Registration Statement and the Prospectus.
(f) Bring-down Comfort Letter. At Closing Time, the Representatives
-------------------------
shall have received from the Company's independent public accountants a
letter, dated as of Closing Time, together with signed or reproduced copies
of such letter for each of the other Underwriters and addressed to the
Underwriters, to the effect that they reaffirm the statements made in the
letter furnished pursuant to subsection (e) of this Section, except that
the specified date referred to shall be a date not more than three business
days prior to Closing Time.
(g) Maintenance of Rating. At Closing Time, the Securities shall be
---------------------
rated by each of Moody's Investor's Service Inc. and Standard & Poor's
Ratings Services, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc. as set
forth in Schedule B hereto. Since the date of this Agreement, there shall
not have occurred a downgrading in the rating
-19-
assigned to the Securities or any of the Company's other debt securities by
any "nationally recognized statistical rating agency," as that term is
defined by the Commission for purposes of Rule 436(g)(2) under the 1933
Act, and no such organization shall have publicly announced that is has
under surveillance or review its rating of the Securities or any of the
Company's other debt securities.
(h) Approval of Listing. At Closing Time, the Securities shall have
-------------------
been approved for listing on such exchange or exchanges, if any, as are
listed on Schedule B hereto, subject only to official notice of issuance.
(i) Additional Documents. At Closing Time counsel for the
--------------------
Underwriters shall have been furnished with such documents and opinions as
they reasonably may require for the purpose of enabling them to pass upon
the issuance and sale of the Securities as herein contemplated, or in order
to evidence the accuracy of any of the representations or warranties, or
the fulfillment of any of the conditions, herein contained; and all
proceedings taken by the Company in connection with the issuance and sale
of the Securities as herein contemplated shall be satisfactory in form and
substance to the Representatives and counsel for the Underwriters.
(j) Termination of Agreement. If any condition specified in this
------------------------
Section shall not have been fulfilled when and as required to be fulfilled,
this Agreement may be terminated by the Representatives by notice to the
Company at any time at or prior to Closing Time and such termination shall
be without liability of any party to any other party except as provided in
Section 4 and except that Sections 1, 6, 7 and 8 shall survive any such
termination and remain in full force and effect.
SECTION 6. Indemnification.
---------------
(a) Indemnification of Underwriters. The Company agrees to indemnify
-------------------------------
and hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(or any amendment thereto), or the omission or alleged omission therefrom
of a material fact required to be stated therein or necessary to make the
statements therein not misleading or arising out of any untrue statement or
alleged untrue statement of a material fact included in any Preliminary
Prospectus or the Prospectus (or any amendment or supplement thereto), or
the omission or alleged omission therefrom of a material fact necessary in
order to
-20-
make the statements therein, in the light of the circumstances under which
they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount paid
in settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission; provided that
(subject to Section 6(d) below) any such settlement is effected with the
written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred
(including the reasonable fees and disbursements of counsel chosen by the
Representatives), reasonably incurred in investigating, preparing or
defending against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, to the extent
that any such expense is not paid under (i) or (ii) above;
provided, however, that (i) this indemnity agreement shall not apply to any
loss, liability, claim, damage or expense to the extent arising out of any
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with written information furnished to the
Company by any Underwriter through the Representatives expressly for use in the
Registration Statement (or any amendment thereto) or any Preliminary Prospectus
or the Prospectus (or any amendment or supplement thereto) and (ii) the Company
shall not be liable to any Underwriter (or any person controlling such
Underwriter) under the indemnity agreement in this subsection (a) with respect
to any Preliminary Prospectus to the extent that any such loss, claim, damage or
liability of such Underwriter results from the fact that such Underwriter sold
Securities to a person to whom there was not sent or given, at or prior to the
written confirmation of such sale, a copy of the Prospectus (excluding documents
incorporated by reference) or of the Prospectus as then amended or supplemented
(excluding documents incorporated by reference) in any case where such delivery
is required by the 1933 Act, if the Company had previously furnished copies
thereof to such Underwriter in the quantity requested, and the loss, claim,
damage or liability of such Underwriter arises from an untrue statement or
omission of a material fact or an allegedly untrue statement or omission of a
material fact contained in the Preliminary Prospectus which was corrected in the
Prospectus (excluding documents incorporated by reference) or in the Prospectus
as then amended or supplemented (excluding documents incorporated by reference)
and all changes from the Preliminary Prospectus made to such Prospectus were
made known to the Underwriters by the Company. In addition to and without
limitation of the Company's obligation to indemnify the Independent Underwriter
as an Underwriter, the Company also agrees to indemnify and hold harmless the
Independent Underwriter and each person who controls the Independent Underwriter
within the meaning of either Section 15 of the 1933 Act or ▇▇▇▇▇▇▇ ▇▇ ▇▇ ▇▇▇
-▇▇-
▇▇▇▇ ▇▇▇, from and against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, incurred as a result of the Independent
Underwriter's participation in connection with the offering of the Securities as
such, if any, to the extent not already indemnified as an Underwriter. This
indemnity agreement will be in addition to any liability which the Company may
otherwise have.
(b) Indemnification of Company, Directors and Officers. Each
--------------------------------------------------
Underwriter and the Independent Underwriter severally agrees to indemnify and
hold harmless the Company, its directors, each of its officers who signed the
Registration Statement, and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act against
any and all loss, liability, claim, damage and expense described in the
indemnity contained in subsection (a) of this Section, as incurred, but only
with respect to untrue statements or omissions, or alleged untrue statements or
omissions, made in the Registration Statement (or any amendment thereto) or any
Preliminary Prospectus or the Prospectus (or any amendment or supplement
thereto) in reliance upon and in conformity with written information furnished
to the Company by such Underwriter through the Representatives or by the
Independent Underwriter, as the case may be, expressly for use in the
Registration Statement (or any amendment thereto) or such Preliminary Prospectus
or the Prospectus (or any amendment or supplement thereto).
(c) Actions Against Parties; Notification. Each indemnified party
-------------------------------------
shall give notice as promptly as reasonably practicable to each indemnifying
party of any action commenced against it in respect of which indemnity may be
sought hereunder, but failure to so notify an indemnifying party shall not
relieve such indemnifying party from any liability hereunder to the extent it is
not materially prejudiced as a result thereof and in any event shall not relieve
it from any liability which it may have otherwise than on account of this
indemnity agreement. In the case of parties indemnified pursuant to Section
6(a) above, counsel to the indemnified parties shall be selected by the
Representatives, and, in the case of parties indemnified pursuant to Section
6(b) above, counsel to the indemnified parties shall be selected by the Company.
An indemnifying party may participate at its own expense in the defense of any
such action; provided, however, that counsel to the indemnifying party shall not
(except with the consent of the indemnified party) also be counsel to the
indemnified party. In no event shall the indemnifying parties be liable for
fees and expenses of more than one counsel (in addition to any local counsel)
separate from their own counsel for all indemnified parties in connection with
any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances;
provided that, if indemnity is sought by the Independent Underwriter pursuant to
Section 6(a), then, in addition to the fees and expenses of such counsel for the
indemnified parties, the indemnifying party shall be liable for the reasonable
fees and expenses of not more than one counsel (in addition to any local
counsel) separate from its own counsel and that of the other indemnified
-22-
parties for the Independent Underwriter in its capacity as a "qualified
independent underwriter" and all persons, if any, who control the Independent
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act in connection with any one action or separate but similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances if, in the judgment of the Independent Underwriter,
there may exist a conflict of interest between the Independent Underwriter and
the other indemnified parties. Any such separate counsel for the Independent
Underwriter and such control persons of the Independent Underwriter shall be
designated in writing by the Independent Underwriter. No indemnifying party
shall, without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 6 or Section
7 hereof (whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party.
(d) Settlement Without Consent if Failure to Reimburse. If at any
--------------------------------------------------
time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel, such
indemnifying party agrees that it shall be liable for any settlement of the
nature contemplated by Section 6(a)(ii) effected without its written consent if
(i) such settlement is entered into more than 45 days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party shall
have received notice of the terms of such settlement at least 30 days prior to
such settlement being entered into and (iii) such indemnifying party shall not
have reimbursed such indemnified party in accordance with such request prior to
the date of such settlement.
SECTION 7. Contribution. If the indemnification provided for in
------------
Section 6 hereof is for any reason unavailable to or insufficient to hold
harmless an indemnified party in respect of any losses, liabilities, claims,
damages or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount of such losses, liabilities, claims, damages
and expenses incurred by such indemnified party, as incurred, (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and the Underwriters or the Independent Underwriter, as
the case may be, on the other hand from the offering of the Securities pursuant
to this Agreement or (ii) if the allocation provided by clause (i) is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Company on the one hand and of the Underwriters or the Independent
Underwriter, as the case
-23-
may be, on the other hand in connection with the statements or omissions which
resulted in such losses, liabilities, claims, damages or expenses, as well as
any other relevant equitable considerations.
The relative benefits received by the Company on the one hand and the
Underwriters or the Independent Underwriter, as the case may be, on the other
hand in connection with the offering of the Securities pursuant to this
Agreement shall be deemed to be in the same respective proportions as the total
net proceeds from the offering of the Securities pursuant to this Agreement
(before deducting expenses) received by the Company and the total underwriting
discount received by the Underwriters, in each case as set forth on the cover of
the Prospectus, and the fee payable to the Independent Underwriter pursuant to
the first sentence of Section 2(d)(v) hereof, respectively, bear to the
aggregate initial public offering price of the Securities as set forth on such
cover.
The relative fault of the Company on the one hand and the Underwriters
or the Independent Underwriter, as the case may be, on the other hand shall be
determined by reference to, among other things, whether any such untrue or
alleged untrue statement of a material fact or omission or alleged omission to
state a material fact relates to information supplied by the Company or by an
Underwriter in writing through the Representatives or by the Independent
Underwriter, as the case may be, and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
The Company, the Underwriters and the Independent Underwriter agree
that it would not be just and equitable if contribution pursuant to this Section
7 were determined by pro rata allocation (even if the Underwriters and the
Independent Underwriter were treated as one entity for such purpose) or by any
other method of allocation which does not take account of the equitable
considerations referred to above in this Section 7. The aggregate amount of
losses, liabilities, claims, damages and expenses incurred by an indemnified
party and referred to above in this Section 7 shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party in
investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, neither the
Underwriters nor the Independent Underwriter shall be required to contribute any
amount in excess of the amount by which the total price at which the Securities
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages which any such Underwriter or the Independent
Underwriter, as the case may be, has otherwise been required to pay by reason of
any such untrue or alleged untrue statement or omission or alleged omission.
-24-
No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the ▇▇▇▇ ▇▇▇) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
Underwriter or the Independent Underwriter, as the case may be, within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have
the same rights to contribution as such Underwriter, or the Independent
Underwriter, as the case may be, and each director of the Company, each officer
of the Company who signed the Registration Statement, and each person, if any,
who controls the Company within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act shall have the same rights to contribution as the
Company. The Underwriters' respective obligations to contribute pursuant to this
Section 7 are several in proportion to the number of Securities set forth
opposite their respective names in Schedule A hereto and not joint.
SECTION 8. Representations, Warranties and Agreements to Survive
-----------------------------------------------------
Delivery. All representations, warranties and agreements contained in this
--------
Agreement or in certificates of officers of the Company or any of its
Subsidiaries submitted pursuant hereto, shall remain operative and in full force
and effect, regardless of any investigation made by or on behalf of any
Underwriter or controlling person, or by or on behalf of the Company, and shall
survive delivery of the Securities to the Underwriters.
SECTION 9. Termination of Agreement.
------------------------
(a) Termination; General. The Representatives may terminate this
--------------------
Agreement, by notice to the Company, at any time at or prior to Closing Time (i)
if there has been, since the time of execution of this Agreement or since the
respective dates as of which information is given in the Prospectus, any
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
Subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, or (ii) if there has occurred any material adverse
change in the financial markets in the United States or the international
financial markets, any outbreak of hostilities or escalation thereof or other
calamity or crisis or any change or development involving a prospective change
in national or international political, financial or economic conditions, in
each case the effect of which is such as to make it, in the judgment of the
Representatives, impracticable to market the Securities or to enforce contracts
for the sale of the Securities, or (iii) if trading in any securities of the
Company has been suspended or materially limited by the Commission or the New
York Stock Exchange, or if trading generally on the American Stock Exchange or
the New York Stock Exchange or in the Nasdaq Stock Market has been suspended or
materially limited (other than to provide for an orderly market), or minimum or
maximum prices for trading have been fixed, or maximum ranges for prices have
been required, by any of said ex-
-25-
changes or by such system or by order of the Commission, the National
Association of Securities Dealers, Inc. or any other governmental authority, or
(iv) if a banking moratorium has been declared by either Federal or New York
authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this
-----------
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that Sections
1, 6, 7 and 8 shall survive such termination and remain in full force and
effect.
SECTION 10. Default by One or More of the Underwriters. If one or
------------------------------------------
more of the Underwriters shall fail at Closing Time to purchase the Securities
which it or they are obligated to purchase under this Agreement (the "Defaulted
Securities"), the Representatives shall have the right, within 24 hours
thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than all,
of the Defaulted Securities in such principal amounts as may be agreed upon and
upon the terms herein set forth; if, however, the Representatives shall not have
completed such arrangements within such 24-hour period, then:
(a) if the aggregate principal amount of the Defaulted Securities
does not exceed 10% of the aggregate principal amount of the Securities to
be purchased on such date, each of the non-defaulting Underwriters shall be
obligated, severally and not jointly, to purchase the full amount thereof
in the proportions that their respective underwriting obligations hereunder
bear to the underwriting obligations of all non-defaulting Underwriters, or
(b) if the aggregate principal amount of the Defaulted Securities
exceeds 10% of the aggregate principal amount of the Securities to be
purchased on such date, this Agreement shall terminate without liability on
the part of any non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a
termination of this Agreement either (i) the Representatives or (ii) the Company
shall have the right to postpone Closing Time for a period not exceeding seven
days in order to effect any required changes in the Registration Statement or
Prospectus or in any other documents or arrangements. As used herein, the term
"Underwriter" includes any person substituted for an Underwriter under this
Section 10.
-26-
SECTION 11. Notices. All notices and other communications hereunder
-------
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to the Representatives at the address set forth
on Schedule B; notices to the Company shall be directed to it at ▇.▇. ▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, attention of Chief Financial Officer.
SECTION 12. Parties. This Agreement shall each inure to the benefit
-------
of and be binding upon the Underwriters, the Company and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Underwriters, the Company and their respective successors and the controlling
persons and officers and directors referred to in Sections 6 and 7 and their
heirs and legal representatives, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision herein contained. This
Agreement and all conditions and provisions hereof are intended to be for the
sole and exclusive benefit of the Underwriters, the Company and their respective
successors, and said controlling persons and officers and directors and their
heirs and legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Securities from any Underwriter shall be deemed to
be a successor by reason merely of such purchase.
SECTION 13. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED
----------------------
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. EXCEPT AS
OTHERWISE SET FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 14. Effect of Headings. The Article and Section headings
------------------
herein are for convenience only and shall not affect the construction hereof.
SECTION 15. Counterparts. This Agreement may be executed in one or
------------
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
S-1
If the foregoing correctly sets forth our understanding, please
indicate your acceptance thereof in the space provided below for that purpose,
whereupon this letter shall constitute a binding agreement between the Company
and the Underwriters.
Very truly yours,
APPLIED POWER INC.
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Senior Vice President and
Chief Financial Officer
S-2
The foregoing Agreement is hereby con-
firmed and accepted as of the date first
above written.
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
Credit Suisse First Boston Corporation
NationsBanc ▇▇▇▇▇▇▇▇▇▇ Securities LLC
By: /s/ ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
--------------------------
(▇▇▇▇▇▇▇, Sachs & Co.)
SCHEDULE A
----------
APPLIED POWER INC.
Debt Securities
PRINCIPAL
UNDERWRITER AMOUNT
----------- ------
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. $120,000,000
Credit Suisse First Boston Corporation 50,000,000
NationsBanc ▇▇▇▇▇▇▇▇▇▇ Securities LLC 30,000,000
------------
Total.......................................... $200,000,000
============
SCHEDULE B
----------
APPLIED POWER INC.
Debt Securities
TITLE: 8.75% Senior Subordinated Notes due 2009.
PRINCIPAL AMOUNT: $200,000,000.
INTEREST: 8.75% per annum, from April 1, 1999, payable semiannually
on April 1 and October 1, commencing October 1, 1999, to holders of record on
the preceding March 15 or September 15, as the case may be.
MATURITY: April 1, 2009.
OPTIONAL REDEMPTION: Three year equity claw for 35% at 108.75% on or
before April 1, 2002.
CALLABLE: April 1, 2004 at 104.375%,
April 1, 2005 at 102.916%,
April 1, 2006 at 101.458%, and
April 1, 2007 at 100.000%.
SINKING FUND: None.
LISTING: None.
RATING: ▇▇▇▇▇'▇ Investor's Service Inc.: B1
Standard & Poor's Ratings Services: B+
PURCHASE PRICE: 97.50% of principal amount, plus accrued interest, if
any, from April 1, 1999.
EXPECTED REOFFERING PRICE: 100% of principal amount, subject to
change by the Representatives.
CLOSING: 9:00 A.M. on April 1, 1999, at the offices of ▇▇▇▇▇▇ ▇▇▇▇▇▇
& ▇▇▇▇▇▇▇, in New York, in Federal (same day) funds.
SETTLEMENT AND TRADING: Book-Entry Only via the Depository Trust
Company ("DTC"). The Securities will trade in DTC's Same Day Funds Settlement
System.
NOTICES: Notices to be given to the Underwriters should be directed
to the Representatives as follows:
▇▇▇▇▇▇▇, Sachs & Co.
Credit Suisse First Boston Corporation
NationsBanc ▇▇▇▇▇▇▇▇▇▇ Securities LLC
c/o Goldman, Sachs & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
The respective principal amounts of the Securities to be purchased by each of
the Underwriters are set forth opposite their names in Schedule A hereto.
SCHEDULE C
----------
APPLIED POWER INC.
Debt Securities
List of Significant Subsidiaries
Name of Subsidiary Jurisdiction of Incorporation
------------------ -----------------------------
Applied Power Investments II Inc. Nevada
Versa Technologies, Inc. Delaware
▇▇▇▇▇▇ Line, Inc. Massachusetts
Zero Corporation Delaware
High Speed Production Limited United Kingdom
Vero Electronics Ltd. United Kingdom
EXHIBIT A
FORM OF OPINION OF COMPANY'S COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
Defined terms used herein shall have the same definitions as set forth
in the underwriting agreement (the "Agreement") to which this Exhibit A is
attached.
(i) The Company has been duly incorporated and is validly existing
as a corporation in active status under the laws of the State of Wisconsin.
(ii) The Company has corporate power and authority to own, lease
and operate its properties and to conduct its business as described in the
Prospectus and to enter into and perform its obligations under the Agreement.
(iii) Each Subsidiary is validly existing as a corporation in good
standing (or equivalent status) under the laws of the jurisdiction of its
incorporation, and has corporate power and authority to own, lease and operate
its properties and to conduct its business as described in the Prospectus;
except as otherwise disclosed in the Registration Statement, all of the issued
and outstanding capital stock of each Subsidiary has been duly authorized and
validly issued, is fully paid and non-assessable (except as otherwise provided
in Section 180.0622(2)(b) of the Wisconsin Business Corporation Law, as
judicially interpreted) and, to the best of our knowledge, is owned by the
Company, directly or through Subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity; none of the
outstanding shares of capital stock of any Subsidiary was issued in violation of
the preemptive or similar rights of any securityholder of such Subsidiary.
(iv) The Agreement has been duly authorized, executed and delivered
by the Company.
(v) The Indenture has been duly authorized, executed and delivered
by the Company, has been duly qualified under the 1939 Act and (assuming the due
authorization, execution and delivery thereof by the Trustee) constitutes a
valid and binding agreement of the Company, enforceable against the Company in
accordance with its terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency (including, without limitation, all laws relating to
fraudulent transfers), reorganization, moratorium or similar laws affecting
enforcement of creditors' rights generally and except as enforcement thereof is
subject to general principles of equity (regardless of whether enforcement is
considered in a proceeding in equity or at law).
(vi) The Securities are in the form contemplated by the Indenture,
have been duly authorized by the Company and, assuming that the Securities have
been duly
A-1
authenticated by the Trustee in the manner described in its certificate
delivered to you today (which fact such counsel need not determine by an
inspection of the Securities), the Securities have been duly executed, issued
and delivered by the Company and constitute valid and binding obligations of the
Company, enforceable against the Company in accordance with their terms, except
as the enforcement thereof may be limited by bankruptcy, insolvency (including,
without limitation, all laws relating to fraudulent transfers), reorganization,
moratorium or similar laws affecting enforcement of creditors' rights generally
and except as enforcement thereof is subject to general principles of equity
(regardless of whether enforcement is considered in a proceeding in equity or at
law), and are entitled to the benefits of the Indenture.
(vii) The Securities and the Indenture conform as to legal matters
in all material respects to the descriptions thereof contained in the
Prospectus.
(viii) The Registration Statement has been declared effective under
the 1933 Act; any required filing of the Prospectus pursuant to Rule 424(b) has
been made in the manner and within the time period required by Rule 424(b); and,
to the best of our knowledge, no stop order suspending the effectiveness of the
Registration Statement has been issued under the 1933 Act and no proceedings for
that purpose have been instituted or are pending or threatened by the
Commission.
(ix) The Registration Statement, the Prospectus, excluding the
documents incorporated by reference therein, and each amendment or supplement to
the Registration Statement and Prospectus, excluding the documents incorporated
by reference therein, as of their respective effective or issue dates (other
than the financial statements, including any pro forma financial information,
and supporting schedules included therein or omitted therefrom and the Statement
of Eligibility on Form T-1 of the Trustee, as to which we express no opinion)
complied as to form in all material respects with the requirements of the 1933
Act and the 1933 Act Regulations and the ▇▇▇▇ ▇▇▇.
(x) The documents incorporated by reference in the Prospectus
(other than the financial statements, including any pro forma financial
information, and supporting schedules included therein or omitted therefrom, as
to which we express no opinion), when they became effective or were filed with
the Commission, as the case may be, complied as to form in all material respects
with the requirements of the 1933 Act or the 1934 Act, as applicable, and the
rules and regulations of the Commission thereunder.
(xi) The information in the Registration Statement under Item 15,
to the extent that it constitutes matters of law, summaries of legal matters,
the Company's charter and bylaws or legal proceedings, or legal conclusions, has
been reviewed by us and is correct in all material respects.
(xii) To the best of our knowledge, there are no statutes or
regulations that are required to be described in the Prospectus that are not
described as required.
A-2
(xiii) All descriptions in the Registration Statement of written
contracts and other documents to which the Company or its Subsidiaries are a
party are accurate in all material respects; to the best of our knowledge, there
are no franchises, contracts, indentures, mortgages, loan agreements, notes,
leases or other instruments required to be described or referred to in the
Registration Statement or to be filed as exhibits thereto other than those
described or referred to therein or filed or incorporated by reference as
exhibits thereto, and the descriptions thereof or references thereto are correct
in all material respects.
(xiv) To the best of our knowledge, neither the Company nor any
Subsidiary is in violation of its charter or by-laws and no default by the
Company or any Subsidiary exists in the due performance or observance of any
material obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other agreement or
instrument that is described or referred to in the Registration Statement or the
Prospectus or filed or incorporated by reference as an exhibit to the
Registration Statement.
(xv) No filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, any court or governmental
authority or agency, domestic or foreign (other than under the 1933 Act and the
1933 Act Regulations and the 1939 Act, which have been obtained, or as may be
required under the securities or blue sky laws of the various states, as to
which we express no opinion) is necessary or required in connection with the due
authorization, execution and delivery of the Agreement or for the offering,
issuance, sale or delivery of the Securities.
(xvi) To the best of our knowledge, there are no contracts,
agreements or understandings between the Company and any person granting such
person the right to require the Company to file a registration statement under
the 1933 Act with respect to any securities of the company owned or to be owned
by such person or to require the Company to include such securities in the
securities registered pursuant to the Registration Statement or in any
securities being registered pursuant to any other registration statement filed
by the Company under the ▇▇▇▇ ▇▇▇.
(xvii) The execution, delivery and performance of the Agreement, the
Indenture and the Securities and the consummation of the transactions
contemplated in the Agreement and in the Registration Statement (including the
issuance and sale of the Securities and the use of the proceeds from the sale of
the Securities as described in the Prospectus under the caption "Use Of
Proceeds") and compliance by the Company with its obligations under the
Agreement, the Indenture and the Securities do not and will not, whether with or
without the giving of notice or lapse of time or both, conflict with or
constitute a breach of, or default or Repayment Event under or result in the
creation or imposition of any lien, charge or encumbrance upon any property or
assets of the Company or any Subsidiary pursuant to any written contract,
indenture, mortgage, deed of trust, loan or credit agreement, note, lease or any
other agreement or instrument, known to us, to which the Company or any
Subsidiary is a party or by which it or any of them may be bound, or to which
any of the property or assets of the Company or any Subsidiary is subject
(except for such conflicts, breaches, Repayment Events
A-3
or defaults or liens, charges or encumbrances that would not have a Material
Adverse Effect), nor will such action result in any violation of the provisions
of the charter or by-laws of the Company or any Subsidiary, or any applicable
law, statute, rule, regulation, judgment, order, writ or decree, known to us, of
any government, government instrumentality or court, domestic or foreign, having
jurisdiction over the Company or any Subsidiary or any of their respective
properties, assets or operations.
(xviii) The Company is not an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in the 1940
Act.
We have participated in conferences with officers and other
representatives of the Company, representatives of the Underwriters and
representatives of the independent public accountants for the Company at which
conferences the contents of the Prospectus and the Registration Statement and
related matters were discussed and, although we have not independently verified,
are not passing upon and do not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the Registration
Statement or the Prospectus, we advise you that, on the basis of the foregoing
(relying as to materiality to a certain extent upon the opinions of officers and
other representatives of the Company), no facts have come to our attention that
lead us to believe that the Registration Statement or any amendment thereto, at
the time such Registration Statement or any such amendment became effective,
contained an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading or that the Prospectus, as of its date or as of the date hereof,
contained or contains an untrue statement of a material fact or omitted or omits
to state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading (it
being understood that we express no comment with respect to the Statement of
Eligibility on Form T-1 by the Trustee or the financial statements, including
the notes thereto, or any other financial data found in or derived from the
internal accounting and other records of the Company and its Subsidiaries set
forth or referred to in the Registration Statement or the Prospectus).
In rendering such opinion, such counsel may rely as to matters of fact
(but not as to legal conclusions), to the extent they deem proper, on
certificates of responsible officers of the Company and public officials. In
giving such opinion such counsel may rely, as to all matters governed by the
laws of jurisdictions other than the law of the State of Wisconsin and the
federal law of the United States and the General Corporation Law of the State of
Delaware, upon the opinions of counsel satisfactory to the Representatives.
Such opinion shall not state that it is to be governed or qualified by, or that
it is otherwise subject to, any treatise, written policy or other document
relating to legal opinions, including, without limitation, the Legal Opinion
Accord of the ABA Section of Business Law (1991).
A-4
EXHIBIT B
FORM OF ACCOUNTANTS' COMFORT LETTER PURSUANT TO SECTION 5(e)
------------------------------------------------------------
We are independent public accountants with respect to the Company within the
meaning of the 1933 Act and the applicable published 1933 Act Regulations
(i) in our opinion, the audited financial statements and the related
financial statement schedules included or incorporated by reference in the
Registration Statement and the Prospectus comply as to form in all material
respects with the applicable accounting requirements of the 1933 Act and
the published rules and regulations thereunder; [ ]
(ii) on the basis of procedures (but not an examination in accordance
with generally accepted auditing standards) consisting of a reading of the
unaudited interim consolidated financial statements of the Company for the
three month periods ended ____________ and ____________ , the three and six
month periods ended ____________ and ____________ and the three and nine
month periods ended ____________ and ____________, included or incorporated
by reference in the Registration Statement and the Prospectus
(collectively, the "10-Q Financials") , a reading of the unaudited interim
consolidated financial statements of the Company for the _____-month
periods ended ____________ and ____________, included in the Registration
Statement and the Prospectus (the "____-month financials") , a reading of
the latest available unaudited interim consolidated financial statements of
the Company, a reading of the minutes of all meetings of the stockholders
and directors of the Company and its subsidiaries and the ____________ and
____________ Committees of the Company's Board of Directors and any
subsidiary committees since day after end of last audited period, inquiries
of certain officials of the Company and its subsidiaries responsible for
financial and accounting matters, a review of interim financial information
in accordance with standards established by the American Institute of
Certified Public Accountants in Statement on Auditing Standards No. 71,
Interim Financial Information ("SAS 71"), with respect to the description
of relevant periods and such other inquiries and procedures as may be
specified in such letter, nothing came to our attention that caused us to
believe that:
(A) the 10-Q Financials incorporated by reference in the
Registration Statement and the Prospectus do not comply as to form in
all material respects with the applicable accounting requirements of
the 1934 Act and the 1934 Act Regulations applicable to unaudited
financial statements included in Form 10-Q or any material
modifications should be made to the 10-Q Financials incorporated by
reference in the Registration Statement and the Prospectus for them to
be in conformity with generally accepted accounting principles;
B-1
(B) the _____-month financials included in the Registration
Statement and the Prospectus do not comply as to form in all material
respects with the applicable accounting requirements of the 1933 Act
and the 1933 Act Regulations applicable to unaudited interim financial
statements included in registration statements or any material
modifications should be made to the _____-month financials included in
the Registration Statement and the Prospectus for them to be in
conformity with generally accepted accounting principles;
(C) at ____________ and at a specified date not more than five
days prior to the date of this Agreement, there was any change in the
Shareholders' Equity of the Company and its subsidiaries or any
decrease in the Total Current Assets of the Company and its
subsidiaries or any increase in the Long -term Debt of the Company and
its subsidiaries, in each case as compared with amounts shown in the
latest balance sheet included in the Registration Statement, except in
each case for changes, decreases or increases that the Registration
Statement discloses have occurred or may occur; or
(D) for the period from ____________ to ____________ and for
the period from ____________ to a specified date not more than five
days prior to the date of this Agreement, there was any decrease in
Net Sales, Earnings Before Extraordinary Loss or Net Earnings, in each
case as compared with the comparable period in the preceding year,
except in each case for any decreases that the Registration Statement
discloses have occurred or may occur;
(iii) based upon the procedures set forth in clause (ii) above and a
reading of the Selected Financial Data included in the Registration Statement
and a reading of the financial statements from which such data were derived,
nothing came to our attention that caused us to believe that the Selected
Financial Data included in the Registration Statement do not comply as to form
in all material respects with the disclosure requirements of Item 301 of
Regulation S-K, that the amounts included in the Selected Financial Data are not
in agreement with the corresponding amounts in the audited consolidated
financial statements for the respective periods or that the financial statements
not included in the Registration Statement from which certain of such data were
derived are not in conformity with generally accepted accounting principles;
(iv) we have compared the information in the Registration Statement
under selected captions with the disclosure requirements of Regulation S-K and,
on the basis of limited procedures specified herein, nothing came to our
attention that caused us to believe that this information does not comply as to
form in all material respects with the disclosure requirements of Items 302, 402
and 503(d), respectively, of Regulation S-K;
B-2
(v) based upon the procedures set forth in clause (ii) above, a
reading of the unaudited financial statements of the Company for the most recent
period that have not been included in the Registration Statement and a review of
such financial statements in accordance with SAS No. 71, nothing came to our
attention that caused us to believe that the unaudited amounts for Net Sales,
Net Earnings or Shareholders' Equity for the most recent period do not agree
with the amounts set forth in the unaudited consolidated financial statements
for those periods or that such unaudited amounts were not determined on a basis
substantially consistent with that of the corresponding amounts in the audited
consolidated financial statements;
(vi) we are unable to and do not express any opinion on the Pro
Forma Combining Statement of Operations (the "Pro Forma Statement") included in
the Registration Statement or on the pro forma adjustments applied to the
historical amounts included in the Pro Forma Statement; however, for purposes of
this letter we have:
(A) read the Pro Forma Statement;
(B) performed a review in accordance with SAS No. 71 of the
financial statements to which the pro forma adjustments were applied;
(C) made inquiries of certain officials of the Company who have
responsibility for financial and accounting matters about the basis
for their determination of the pro forma adjustments and whether the
Pro Forma Statement complies as to form in all material respects with
the applicable accounting requirements of Rule 11-02 of Regulation S-
X;
(D) proved the arithmetic accuracy of the application of the
pro forma adjustments to the historical amounts in the Pro Forma
Statement;
on the basis of such procedures and such other inquiries and procedures as
specified herein, nothing came to our attention that caused us to believe that
the Pro Forma Statement included in the Registration Statement does not comply
as to form in all material respects with the applicable 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 those statements;] and
(vii) in addition to the procedures referred to in clause (ii)
above, we have performed other procedures, not constituting an audit, with
respect to certain amounts, percentages, numerical data and financial
information appearing in the Registration Statement, which are specified herein,
and have compared certain of such items with, and have found such items to be in
agreement with, the accounting and financial records of the Company.
B-3