FORM OF DEALER MANAGER AGREEMENT TITAN INTERNATIONAL, INC. DEALER MANAGER AGREEMENT
Exhibit 1.1
FORM OF DEALER MANAGER AGREEMENT
TITAN INTERNATIONAL, INC.
February [•], 2007
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
1. General. Titan International, Inc., an Illinois corporation (the “Company”), plans to make
an offer (the “Offer”) to increase the conversion rate to holders of any and all of up to
$81,200,000 aggregate principal amount of the Company’s outstanding 5.25% Senior Convertible Notes
due 2009 (the “Securities”) who elect to convert their Securities to shares of the Company’s common
stock (“Company Shares”) in accordance with the terms of the Securities and upon the terms and
subject to the conditions set forth in the Preliminary Prospectus dated the date hereof and
included in the Registration Statement (as defined below) (and as amended or supplemented from time
to time prior to effectiveness of the Registration Statement, the “Preliminary Prospectus”), and
the related Letter of Transmittal (the “Letter of Transmittal”) dated the date hereof and filed as
Exhibit 99.1 to the Registration Statement.
The following materials to be used by the Company in connection with the Offer, as any of them
may be amended, modified or supplemented from time to time, are collectively referred to herein as
the “Offer Material”:
(a) The Company’s Registration Statement on Form S-4 filed with the Securities and Exchange
Commission (the “Commission”) on January 19,
2007, as amended on February [16], 2007, in
accordance with the Securities Act of 1933, as amended, and the rules and regulations of the
Commission thereunder (collectively, the “1933 Act”), relating to the Offer and the issuance of the
Company Shares in connection therewith. As used in this agreement (the “Dealer
Manager Agreement” or this “Agreement”), the term “Registration Statement” means such
registration statement, including all exhibits, financial statements, schedules or other
information included or incorporated by reference therein, when it becomes effective under the 1933
Act, and as amended or supplemented from time to time.
(b) The Company’s Prospectus relating to the Offer and the Company Shares to be issued in
connection therewith. As used in this Agreement, the term “Prospectus” means (i) any prospectus, as
amended or supplemented on or prior to the Acceptance Date (as defined below) (including, but not
limited to, the Preliminary Prospectus) that the Company uses, prepares, files, distributes or
approves in writing which is used to solicit tenders of Securities in the Offer, or (ii) after the
effectiveness of the Registration Statement, the prospectus, if any, filed with the Commission
pursuant to Rule 424(b) under the 1933 Act, in the form it was first filed, provided that such
prospectus was used to solicit tenders of Securities in the Offer on or prior to the Acceptance
Date. All references in this Agreement to financial statements and schedules and other information
which is “contained”, “included” or “stated” in the Registration Statement, any preliminary
prospectus or the Prospectus (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, or
deemed to be incorporated, by reference in the Registration Statement, any preliminary prospectus
or the Prospectus, as the case may be. Any reference herein to the Registration Statement or the
Prospectus shall be deemed to refer to and include any documents, financial statements and
schedules incorporated, or deemed to be incorporated, by reference therein pursuant to Form S-4
under the 1933 Act, as of the effective date of the Registration Statement or the date of the
Prospectus, as the case may be, and any reference to any amendment or supplement to the
Registration Statement or the Prospectus shall be deemed to refer to and include any documents,
financial statements and schedules filed after such date under the Securities Exchange Act of 1934,
as amended, and the rules and regulations of the Commission thereunder (collectively, the “1934
Act”) and so incorporated, or deemed to be incorporated, by reference (such incorporated documents,
financial statements and schedules being herein called the “Incorporated Documents”). For purposes
of this Agreement, all references to the Registration Statement, any preliminary prospectus, the
Prospectus or any amendment or supplement to any of the foregoing shall be deemed to include the
copy filed with the Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval
system (“▇▇▇▇▇”).
(c) The Tender Offer Statement on Schedule TO (the “Schedule TO”) filed or to be filed by the
Company with the Commission pursuant to Rule 13e-4 under the 1934 Act and all amendments to the
Schedule TO (each an “amendment” and, collectively, the “Amendments”) and the Letter of
Transmittal.
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(d) The Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9
relating to the Offer.
(e) The form of letter to Registered Holders and The Depository Trust Company Participants
relating to the Offer, and the form of letter to Clients of Registered Holders and The Depository
Trust Company Participants relating to the Offer.
(f) The Letter of Transmittal.
(g) Any other documents or materials whatsoever (including newspaper announcements and press
releases) relating to the Offer that are distributed or made available to the public or the holders
of the Securities by or at the direction of the Company in connection with the Offer.
2. Engagement as Dealer Manager. (a) The Company hereby retains ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co. and
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated to act as the exclusive dealer manager with
respect to the Offer (the “Dealer Manager”). On the basis of the representations and warranties and
agreements of the Company herein contained and subject to and in accordance with the terms and
conditions hereof and of the Offer Material, you hereby agree to act as Dealer Manager in
connection with the Offer and in connection therewith, you shall act in accordance with your
customary practices and shall perform those services in connection with the Offer that are
customarily performed by investment banking firms in connection with acting as a dealer manager of
transactions of a like nature, including, but not limited to, soliciting conversions pursuant to
the Offer and communicating generally regarding the Offer with brokers, dealers, commercial banks
and trust companies and other persons, including the holders of the Securities. The Dealer Manager
shall have no obligation to cause copies of the Offer Material to be transmitted generally to the
holders of the Securities.
(b) The Company acknowledges and agrees that the Dealer Manager has been retained hereunder to
act solely as a Dealer Manager. In such capacity, the Dealer Manager shall act hereunder as an
independent contractor and shall not be deemed the agent or fiduciary of the Company or any of its
affiliates, equity holders or creditors or of any other person, and any of the duties of the Dealer
Manager arising out of the Dealer Manager’s engagement pursuant to this Agreement shall be owed
solely to the Company. The Dealer Manager shall not be liable to the Company, its affiliates,
equity holders or creditors or to any other person for any act or omission on the part of, and
shall not be deemed to be the agent or fiduciary of, any broker or dealer, commercial bank or trust
company and no such broker or dealer, commercial bank or trust company shall be deemed to be acting
as the agent or fiduciary of the Dealer Manager (including, without limitation, for purposes of
Section 10 of this Agreement). Nothing contained in this Agreement shall constitute the Dealer
Manager a partner of or joint venturer with the Company.
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3. Solicitation Material, Withdrawal. The Company agrees to furnish you with as many copies as
you may reasonably request of any Offer Material, and hereby authorizes you to use the Offer
Material in connection with the Offer. The Company agrees that, within a reasonable time prior to
using any Offer Material, it will submit copies of such material to you and your counsel and will
not use or publish any such material to which you reasonably object. The Company agrees that the
Offer Material has been or will be prepared and approved by, and are the sole responsibility of,
the Company. The Company shall inform you promptly after it receives notice or becomes aware of the
happening of any event, or the discovery of any fact, that would require the making of any change
in any Offer Material then being used or that would affect the accuracy or completeness of any
representation or warranty contained in this Agreement if such representation or warranty were
being made immediately after the happening of such event or the discovery of such fact.
In the event that (i) the Company uses or permits the use of any Offer Material (other than
material previously filed with the Commission or material to be filed with the Commission which is
unrelated to the Offer) (a) that has not been submitted to you and your counsel for comment or (b)
that has been so submitted and with respect to which you or your counsel have made comments, but
which comments have not resulted in a response reasonably satisfactory to you to reflect such
comments, (ii) the Company shall have breached any of its representations, warranties, agreements,
obligations or covenants contained herein, (iii) there shall have occurred any material adverse
change, or any development or event involving a material adverse change, in the financial
condition, results of operations, business or prospects of the Company and its subsidiaries, taken
as a whole, whether or not arising in the ordinary course of business (a “Material Adverse
Change”), that, in your judgment, makes it impracticable or inadvisable to carry out the Offer, the
conversion of Securities pursuant thereto or the performance of this Agreement, (iv) the Offer is
terminated or withdrawn for any reason or (v) any stop order, restraining order, injunction or
denial of an application for approval has been issued in connection with the Offer and not
thereafter stayed or vacated or any proceeding, litigation or investigation in connection with the
Offer has been initiated, that, in either case in your judgment, makes it impracticable or
inadvisable to carry out the Offer, the conversion of Securities pursuant thereto or the
performance of this Agreement, then in any such case you shall be entitled to withdraw as Dealer
Manager, by providing written notice of such withdrawal to the Company, without any liability or
penalty to you or any other Indemnified Party (as defined in Section 10) and without loss of any
right to the payment of all expenses payable in accordance with Section 5 hereunder which have been
incurred by you to the date of such withdrawal. If you withdraw as Dealer Manager in accordance
with the foregoing provision, the reimbursement for your expenses through the date of such
withdrawal shall be paid to you promptly after such date. However, the compensation specified in
Section 4 hereunder shall only be paid to you if the Offer is completed. Notwithstanding anything
contained in this Agreement to the
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contrary, the Company may, in its discretion, carry out the Offer after your withdrawal as
Dealer Manager, provided that the Company (y) amends or supplements the Offer Material to disclose
that you have withdrawn as Dealer Manager and (z) utilizes a means reasonably calculated to reach
holders of the Securities to inform them of such withdrawal.
4. Compensation. The Company agrees that it will pay all of the compensation due to the Dealer
Manager for its services as Dealer Manager hereunder and agrees that such compensation will be as
set forth in Schedule I hereto and that such compensation will be paid in cash immediately upon the
completion of the Offer. Such compensation shall be paid to you if and only if the Offer is
completed.
5. Expenses. The Company agrees that it will pay all of the following expenses related to the
Offer: (i) all fees and expenses relating to the preparation, printing, mailing and publishing of
the Offer Material, including the cost of preparation and filing of the Registration Statement and
any amendment thereto and Schedule TO and any Amendments thereto, and the cost of furnishing copies
thereof to the Dealer Manager, (ii) all fees and expenses of the Company’s counsel and accountants
and of the Conversion Agent and Information Agent (each as defined in Section 6), (iii) all
advertising charges, subject to approval by the Company, provided that such approval shall not be
unreasonably withheld), (iv) all fees and expenses of any depositary, transfer agent, conversion
agent or other person rendering services in connection with the Offer, (v) mailing and handling
expenses incurred by brokers and dealers (including you), commercial banks, trust companies and
other nominees in forwarding the Offer Material to their customers, (vi) the cost of the
preparation, issuance and delivery of the Company Shares issued upon conversion of Securities,
including any and all transfer and other taxes payable thereon, except as otherwise stated in the
Letter of Transmittal, (vii) all expenses in connection with the qualification of the Company
Shares for offer and delivery, (viii) all costs and expenses incident to the additional listing of
the Company Shares on the New York Stock Exchange, (ix) all fees and expenses of Shearman &
Sterling LLP as counsel to the Dealer Manager and (x) all other costs and expenses incident to the
performance of the obligations of the Company hereunder for which provision is not otherwise made
in this Section 5. All payments to be made by the Company pursuant to this Section 5 shall be made
promptly after the expiration or termination of the Offer or withdrawal by you from acting as
Dealer Manager in accordance with Section 3 or, if later, promptly after the related fees or
expenses accrue and are invoiced. The Company shall perform its obligations set forth in this
Section 5 whether or not the Offer is commenced or the Company acquires any Securities pursuant to
the Offer or otherwise. However, the compensation specified in Section 4 hereunder shall only be
paid to you if the Offer is completed.
6. Conversion Agent and Information Agent. (a) The Company will arrange for Global Bondholder
Services, to serve as conversion agent (the
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“Conversion Agent”) in connection with the Offer and, as such, to advise you at least daily as
to such matters relating to the Offer as you may request. The Company shall provide you or cause
The Depository Trust Company (“DTC”) to provide you with copies of the records or other lists
showing the names and addresses of, and number of Securities held by, the holders of Securities as
of a recent date and shall, from and after such date, use its commercially reasonable efforts to
cause you to be advised from day to day during the pendency of the Offer of all transfers of
Securities, such notification consisting of the name and address of the transferor and transferee
of any Securities and the date of such transfer. The Company will arrange for Global Bondholder
Services to serve as information agent (“Information Agent”) in connection with the Offer and, as
such, to advise you as to such matters relating to the Offer as you may reasonably request and to
furnish you with any written reports concerning any such information as you may reasonably request.
(b) The Company authorizes you to communicate with the Conversion Agent, the Information Agent
and with DTC in its capacity as depositary, with respect to matters relating to the Offer.
7. Representations, Warranties and Certain Agreements of the Company. The Company represents
and warrants to the Dealer Manager, and agrees with the Dealer Manager, as of the date hereof, as
of the date of commencement of the Offer pursuant to Section 13(e) of the 1934 Act (if different
from the date hereof) (the “Commencement Date”) and as of the date on which the Securities are
accepted by the Company pursuant to the Offer (the “Acceptance Date”) (unless another date is
specifically referenced in which case the representation and warranty shall speak as of such date):
(a) Compliance with Registration Requirements. The Company meets the requirements for
use of Form S-4 under the 1933 Act and, on or prior to the Commencement Date, has filed with the
Commission the Registration Statement and paid the applicable filing fees. As of the Acceptance
Date, the Registration Statement and any post-effective amendment thereto have become effective
under the 1933 Act and no stop order suspending the effectiveness of the Registration Statement and
any post-effective amendment thereto has been issued under the 1933 Act and no proceedings for that
purpose have been instituted or are pending or, to the knowledge of the Company, are contemplated
by the Commission, and any request on the part of the Commission for additional information has
been complied with.
At the respective times the Registration Statement and any post-effective amendments thereto
become effective and at the Acceptance Date, the Registration Statement and any amendments thereto
will comply in all material respects with the requirements of the 1933 Act 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. Neither the
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Prospectus nor any amendments and supplements thereto included or will include an untrue
statement of a material fact or omitted or will omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under which they were made, not
misleading, except that the foregoing does not apply to statements in or omissions from any of such
documents in reliance on and in conformity with written information furnished to the Company by you
or on your behalf specifically for use therein.
Each preliminary prospectus and prospectus filed as part of the Registration Statement as
originally filed or as part of any amendment thereto, complied when so filed in all material
respects with the 1933 Act and each preliminary prospectus and the Prospectus prepared for use in
connection with the Offer will, at the time of such delivery, be identical to any electronically
transmitted copies thereof filed with the Commission pursuant to ▇▇▇▇▇, except to the extent
permitted by Regulation S-T.
(b) Offer Material. A complete and correct copy of the Offer Material has been
furnished to you and your counsel or will be furnished no later than the Commencement Date. The
Offer Material, as then amended or supplemented (other than the Prospectus and the Registration
Statement, and any amendments and supplements thereto, which are covered in subsection (a) above),
complied and will comply in all material respects with the requirements of the 1933 Act and the
1934 Act, as applicable, and did not 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. Neither the Offer Material nor any amendments or supplements thereto (other
than the Prospectus and the Registration Statement, and any amendments and supplements thereto,
which are covered in subsection (a) above) included or will include an untrue statement of a
material fact or omitted or will omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were made, not misleading.
(c) Incorporated Documents. The Company has filed all documents with the Commission
that it is required to file under the 1933 Act and the 1934 Act, as applicable; the Incorporated
Documents, at the time they were or hereafter are filed with the Commission, complied and will
comply in all material respects with the requirements of the 1934 Act, and, when read together with
the other information in the Prospectus, at the date of the Prospectus and at the Acceptance Date,
did not and will not include an untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading.
(d) Financial Statements. The financial statements of the Company, together with the
related schedules and notes to such financial statements, included in the Registration Statement
and the Prospectus present fairly in all material respects the financial position of the Company
and its consolidated
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subsidiaries as of the dates shown and their results of operations and cash flows for the
periods shown, and except as otherwise disclosed in the Prospectus, such financial statements
comply as to form with the applicable accounting requirements of the 1933 Act and have been
prepared in conformity with generally accepted accounting principles (“GAAP”) in the United States
applied on a consistent basis throughout the periods involved (except as stated therein); and any
schedules included in the Registration Statement present fairly in all material respects in
accordance with GAAP the information required to be stated therein. The selected historical
financial data set forth under the caption “Selected Historical Consolidated Financial Data” in the
Prospectus present fairly the information shown therein and have been compiled as described in the
Prospectus under the caption “Selected Historical Consolidated Financial Data.”
(e) Independent Accountants. PricewaterhouseCoopers LLP, who have reported upon the
audited financial statements and schedules included or incorporated by reference in the Prospectus,
are independent public auditors with respect to the Company within the meaning of the rules and
regulations promulgated under the 1933 Act.
(f) No Material Adverse Change in Business. Other than as may be set forth in the
Prospectus, neither the Company nor any of its Significant Subsidiaries has sustained, since the
date of the latest audited financial statements included or incorporated by reference in the
Prospectus, any loss or interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or court or governmental
action, order or decree, which would be reasonably likely to result in any Material Adverse Effect
(as defined below), or any development involving a material adverse change in or affecting the
financial condition, results of operations, business or prospects of the Company and its
subsidiaries, taken as a whole, otherwise than as may be set forth or contemplated in the
Prospectus, and, since the respective dates as of which information is given in the Prospectus or
since the date of the Prospectus, there has not been (i) any material change in the capital stock
or long-term debt of the Company or any of its subsidiaries, (ii) any material adverse change in or
affecting the financial condition, results of operations, business or prospects of the Company and
its subsidiaries, taken as a whole or (iii) any transaction entered into by the Company or any of
its Significant Subsidiaries, other than in the ordinary course of business, that is material to
the Company and its subsidiaries, taken as a whole, otherwise than as disclosed, in each case, in
the Prospectus.
(g) Good Standing of the Company. The Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the State of Illinois, has the
corporate power and authority to own its property and to conduct its business as described in the
Prospectus and is duly qualified to do business and is in good standing in each jurisdiction in
which the conduct of its business or its ownership or leasing of property requires such
qualification, except
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to the extent that the failure to be so qualified or be in good standing would not have a
material adverse effect on the financial condition, results of operations, business or prospects of
the Company and its subsidiaries, taken as a whole (a “Material Adverse Effect”).
(h) Good Standing of Subsidiaries. Each significant subsidiary of the Company (as
defined in Rule 1-02 of Regulation S-X under the 1933 Act (each, a “Significant Subsidiary” and
collectively, the “Significant Subsidiaries”) has been duly organized or validly formed, is validly
existing and in good standing under the laws of the jurisdiction of its formation or incorporation,
has the power (corporate or other) and authority to own its property and to conduct its business as
described in the Prospectus and is duly qualified to do business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or leasing of property requires
such qualification, except to the extent that the failure to be so qualified or be in good standing
would not have a Material Adverse Effect; all of the issued and outstanding shares of capital stock
or other equity interests of each Significant Subsidiary have been duly authorized and validly
issued and, if applicable, are fully paid and nonassessable and, except as disclosed in the
Prospectus and subject to certain encumbrances under the Company’s revolving credit facility, are
owned directly or indirectly by the Company, free and clear of all liens, encumbrances, equities
and claims.
(i) Capital Stock. The Company has an authorized capitalization as set forth in the
Prospectus and Offer Material; all of the issued shares of capital stock of the Company have been
duly authorized and validly issued, are fully paid and nonassessable, and conform to the
description thereof contained in the Prospectus and Offer Material; and none of such shares of
capital stock was issued in violation of preemptive or other similar rights of any securityholder
of the Company.
(j) Authorization of this Agreement. This Agreement has been duly authorized, executed
and delivered by the Company.
(k) Authorization of Company Shares. The Company has duly authorized for issuance a
sufficient number of Company Shares to be issued on conversion of the Securities as contemplated by
the Offer pursuant to its terms and, when any Company Shares are issued and delivered by the
Company [pursuant to the terms of the Indenture dated as of July 26, 2004 between the Company and
U.S. Bank National Association, as trustee, and] as provided in the Offer Material, such Company
Shares will be validly issued and fully paid and non-assessable; the Company Shares conform in all
material respects to the respective statements relating thereto contained in the Prospectus and
Offer Material and the issuance of the Company Shares by the Company is not subject to any
preemptive or other similar rights of any security holder of the Company.
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(l) Noncontravention. The Company has full power and authority to make and consummate
the Offer in accordance with its terms and to execute, deliver and perform its obligations under
this Agreement. The (i) execution, delivery and performance by the Company of this Agreement, (ii)
making and consummation of the Offer by the Company (including but not limited to the issuance and
delivery of Company Shares thereunder), (iii) use of the Offer Material and the filing of the
Registration Statement, the Prospectus and the Schedule TO, and any amendments or supplements
thereto and (iv) consummation by the Company of the transactions contemplated by this Agreement and
in the Offer Material, in each case, have been duly authorized by all necessary action (corporate
or other) on the part of the Company and do not and will not (x) result in any violation of the
charter or by-laws of the Company or (y) conflict with, or result in a breach of any of the terms
or provisions of, or constitute a default or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company under, any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which the Company or any of its
affiliates is a party or by which the Company or any of its affiliates is bound (except for such
conflicts, breaches or defaults, in the case of this clause (y), that would not reasonably be
expected to have a Material Adverse Effect), nor does or will such action result in any violation
of any statute applicable to the Company or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or any of its properties.
(m) Absence of Proceedings. Other than as set forth or incorporated by reference in
the Prospectus, there is no action, suit or proceeding before or by any government, governmental
instrumentality or court, domestic or foreign, now pending or, to the knowledge of the Company,
threatened against or affecting the Company or any Significant Subsidiary or to which any of their
respective properties are subject that would reasonably be expected to result in any Material
Adverse Effect, or that would reasonably be expected to adversely affect the consummation of the
Offer or the other transactions contemplated in this Agreement.
(n) Absence of Further Requirements. No consent, approval, authorization, order,
registration or qualification of or with any such court or governmental agency or body having
jurisdiction over the Company or any of its properties is required for the execution, delivery and
performance by the Company of this Agreement, in connection with the consummation of the Offer or
the other transactions described in the Offer Material by the Company, except as may be required by
the securities or Blue Sky laws of the various states in connection with the Offer.
(o) Possession of Licenses and Permits. The Company and its Significant Subsidiaries
each have obtained all consents, authorizations, approvals, orders, certificates and permits of and
from, and has made all
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declarations and filings with, all federal, state, local and other governmental authorities,
and all courts or other tribunals (collectively, the “Licenses”) necessary to own, hold, or lease,
as the case may be, and to operate its properties and to carry on its business as presently
conducted, except where the failure to possess such Licenses would not reasonably be expected to
have a Material Adverse Effect, and neither the Company nor any of its Significant Subsidiaries has
received any written notice of proceedings relating to revocation or modification of any such
Licenses, except to the extent that any such revocation or modification would not have a Material
Adverse Effect.
(p) Officers’ Certificates. Any certificate signed by any officer of the Company
delivered to you or to your counsel and requested in writing with respect to this Agreement shall
be deemed a representation and warranty by the Company to the Dealer Manager as to the matters
covered thereby.
(q) Absence of Defaults and Conflicts. The Company is not (i) in violation of its
charter or by-laws, as applicable, (ii) in default, and no event has occurred which, with notice or
lapse of time or both, would constitute such a default, in the due performance or observance of any
term, obligation, agreement, covenant or condition contained in any material contract, indenture,
mortgage, deed of trust, loan agreement, lease or other agreement or instrument to which it is a
party or by which it is bound or which any of its properties or assets may be subject or (iii) in
violation of any law, ordinance, governmental rule, regulation or court decree to which it or its
property or assets may be subject, except with respect to (ii) or (iii), for any such violations or
defaults that would not be reasonably likely, singly or in the aggregate, to have a Material
Adverse Effect.
(r) Compliance with Environmental Laws. (i) Each of the Company and its Significant
Subsidiaries (A) is in compliance with applicable federal, state and local (and is not subject to
any foreign) laws and regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or contaminants (“Environmental
Laws”), (B) has received all permits, licenses or other approvals required of it under applicable
Environmental Laws to conduct its business as presently conducted and (C) is in compliance with all
terms and conditions of any such permit, license or approval, except, with respect to (A), (B) and
(C), as may be disclosed in the Prospectus and except where such noncompliance with Environmental
Laws, failure to receive required permits, licenses or other approvals or failure to comply with
the terms and conditions of such permits, licenses or approvals would not be reasonably likely to,
singly or in the aggregate, have a Material Adverse Effect.
(ii) There has been no storage, disposal, generation, manufacture,
refinement, transportation, handling or treatment of toxic wastes, hazardous
wastes or hazardous substances by the Company or any of its Significant
Subsidiaries (or, to the
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knowledge of the Company, any of their predecessors in interest) at, upon
or from any of the property now or previously owned or leased by the Company or
its Significant Subsidiaries in violation of any applicable law, ordinance,
rule, regulation, order, judgment, decree or permit or which would require
remedial action under any applicable law, ordinance, rule, regulation, order,
judgment, decree or permit, except as may be disclosed in the Prospectus and
except for any violation or remedial action which would not be reasonably likely
to have, singularly or in the aggregate, a Material Adverse Effect; there has
been no material spill, discharge, leak, emission, injection, escape, dumping or
release of any kind onto such property or into the environment surrounding such
property of any toxic wastes, solid wastes, hazardous wastes or hazardous
substances due to or caused by the Company or any of its Significant
Subsidiaries or with respect to which the Company or any of its Significant
Subsidiaries have knowledge, except as may be set forth in the Prospectus, and
except for any such spill, discharge, leak, emission, injection, escape, dumping
or release which would not be reasonably likely to have, singularly or in the
aggregate, a Material Adverse Effect; and the terms “hazardous wastes”, “toxic
wastes”, and “hazardous substances” shall have the meanings specified in any
applicable local, state and federal laws or regulations with respect to
environmental protection
(s) Intellectual Property. The Company and each of its Significant 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 Significant Subsidiaries has
received any notice of any infringement of or conflict with asserted rights of others with respect
to any Intellectual Property, 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.
(t) Sarbanes Oxley Act of 2002. Except as described in the Registration Statement and
the Prospectus, there is and has been no failure on the part of the Company and its subsidiaries or
any of the officers and directors of the Company or any of its subsidiaries, in their capacities as
such, to comply in all material respects with the provisions of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 and
the rules and regulations in connection therewith applicable to the Company or its subsidiaries,
including, without limitation, Section 402 thereof related to loans and Sections 302 and 906
thereof related to certifications.
12
(u) Internal Controls. The Company (i) makes and keeps books and records which
accurately reflect transactions and dispositions of the Company’s assets and (ii) maintains
internal accounting controls which provide reasonable assurance that (A) transactions are executed
in accordance with management’s general or specific authorization, (B) transactions are recorded as
necessary to permit preparation of its financial statements and to maintain accountability for its
assets, and (C) access to its assets is permitted only in accordance with management’s general or
specific authorization.
(v) Disclosure Controls and Procedures. (i) (A) The Company has established and
maintains disclosure controls and procedures (as such terms are defined in Rules 13a-15(e) and
15d-15(e) under the 1934 Act); (B) such disclosure controls and procedures are designed to ensure
that information required to be disclosed by the Company in the reports it files or submits under
the 1934 Act is accumulated and communicated to the Company’s management, including its principal
executive officer and its principal financial officer, as appropriate, to allow timely decisions
regarding required disclosure; and (C) such disclosure controls and procedures are effective at a
reasonable assurance level to perform the functions for which they were established.
(ii) Since the date of the filing of the Company’s Quarterly Report on Form
10-Q for the quarter ended September 30, 2006, as amended, the Company’s
auditors and the audit committee of the board of directors of the Company (or
persons fulfilling the equivalent function) have not been advised of (i) any
significant deficiencies or material weaknesses in the design or operation of
internal controls over financial reporting which are reasonably likely to
adversely affect the Company’s ability to record, process, summarize and report
financial data; and (ii) any fraud, whether or not material, that involves
management or other employees who have a significant role in the Company’s
internal controls over financial reporting.
(iii) Since the date of the filing of the Company’s Quarterly Report on
Form 10-Q for the quarter ended September 30, 2006, as amended there have been
no material changes in internal controls over financial reporting that have
materially affected or are reasonably likely to materially affect internal
controls over financial reporting, including any corrective actions with regard
to significant deficiencies and material weaknesses.
(w) Investment Company Act. The Company is not and, after giving effect to the
issuance of the Company Shares in connection with the Offer, will not be an “investment company”
required to be registered under the Investment Company Act of 1940, as amended.
13
(x) ERISA Compliance. Except as disclosed in the Offer Material, the Company is in
compliance in all material respects with all presently applicable provisions of the Employee
Retirement Income Security Act of 1974, as amended, including the regulations and published
interpretations thereunder (“ERISA”); no Reportable Event has occurred with respect to any “pension
plan” (as defined by ERISA) for which the Company would have any material liability; the Company
has not incurred and does not expect to incur material liability under (i) Title IV of ERISA with
respect to termination of, or withdrawal from, any “pension plan” or (ii) Sections 412 or 4971 of
the Internal Revenue Code of 1986, as amended, including the regulations and published
interpretations thereunder (the “Code”); and each “pension plan” for which the Company would have
any liability that is intended to be qualified under Section 401(a) of the Code is so qualified in
all material respects and nothing has occurred, whether by action or by failure to act, which would
reasonably be expected to cause the loss of such qualification. “Reportable Event” means any of
the events set forth in Section 4043(c) of ERISA, other than those events described in Section
4043(c)(3) and other than those events as to which the thirty day notice period is waived under
subsections .22, .24 (solely with respect to partial termination of a Plan), .27, .28, .29, .30,
.31, .32, .34 or .35 of PBGC Reg.§ 4043).
(y) Insurance. Other than as may be set forth in the Prospectus, the Company and its
Significant Subsidiaries carry, or are covered by, insurance in such amounts and covering such
risks as is reasonable for the conduct of their respective businesses and the value of their
properties.
(z) Taxes. The Company and its subsidiaries have filed all federal or state income or
franchise tax returns required to be filed and have paid all taxes shown thereon as due and
required to be paid except for tax assessments, if any, as to which adequate reserves have been
provided in accordance with generally accepted accounting principles. There is no material tax
deficiency which has been asserted against the Company or any of its subsidiaries. All material
tax liabilities are adequately provided for on the books of the Company and its subsidiaries.
(aa) Listing. The Company Shares have been approved for listing on the New York Stock
Exchange.
8. Additional Agreements. (a) The Company shall notify you immediately and, if requested,
shall notify you in writing of (i) when the Registration Statement has become effective and when
any Prospectus is mailed (or otherwise sent) for filing pursuant to Rule 424 under the 1933 Act,
(ii) the receipt of any comments from the Commission, (iii) any request by the Commission for any
amendment to the Registration Statement or any amendment or supplement to the Prospectus or for
additional information, (iv) the filing of any post-effective amendment to the Registration
Statement, (v) the issuance by the Commission of any stop order suspending the effectiveness of the
Registration
14
Statement or any post-effective amendment thereto or of any order preventing or suspending the
use of the Preliminary Prospectus or any Offer Material, 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, (vi) the occurrence of any event that would reasonably be
expected to cause the Company to withdraw or terminate the Offer or would permit the Company to
exercise any right not to accept tendered Securities, (vii) any proposal or requirement to make,
amend or supplement any other Offer Material, (viii) the commencement of any material litigation or
the issuance of any order or the taking of any other action by any administrative or judicial
tribunal or other governmental agency or instrumentality concerning the Offer (and, if in writing,
will furnish you a copy thereof), (ix) the issuance by any state securities commission or other
regulatory authority of any order suspending the qualification or the exemption from qualification
of the Company Shares under state securities or blue sky laws or the initiation or threatening of
any proceeding for that purpose, (x) the occurrence of any event, or the discovery of any fact, the
occurrence or existence of which would reasonably be expected to (a) cause the Company to amend,
withdraw or terminate the Offer, (b) cause any representation or warranty contained in this
Agreement to be untrue or inaccurate, or (c) permit the Company to exercise any right not to
convert the Securities tendered under the Offer (and the Company will so advise you before such
rights are exercised) and (xi) any other information relating to the Offer which you may from time
to time reasonably request.
The Company agrees that if any material event occurs or condition exists as a result of which
the Offer Material (other than the Registration Statement and the Prospectus, which are discussed
in Section 8(f) below) would include an untrue statement of a material fact, or omit to state any
material fact necessary to make the statements therein, in light of the circumstances existing when
the Offer Material is delivered to a holder of Securities, not misleading, or if, in the opinion of
the Company, after consultation with you, it is necessary at any time to amend or supplement the
Offer Material to comply with applicable law, the Company shall immediately notify you, prepare an
amendment or supplement to the Offer Material that will correct such statement or omission or
effect such compliance and supply such amended or supplemented Offer Material to you.
(b) The Company will use its best efforts to promptly effect the filings necessary pursuant to
Rule 424 and will take such steps as it deems necessary to ascertain promptly whether the
Prospectus transmitted for filing under Rule 424 was received for filing by the Commission and, in
the event that it was not, it will promptly file the Prospectus. The Company will use its best
efforts to make every reasonable effort to prevent the issuance of any stop order and, if any stop
order is issued, will make every reasonable effort to obtain the lifting thereof at the earliest
possible moment.
15
The Company will use its best efforts to file promptly all reports or information statements
required to be filed with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the 1934
Act subsequent to the date of the Preliminary Prospectus and for so long as the delivery of a
prospectus is required in connection with the Offer. The Company will use its best efforts to
promptly file with the Commission on the Commencement Date a Schedule TO and will use its best
efforts to promptly file as required any and all necessary Amendments.
(c) Commencing on the Commencement Date, the Company will cause to be delivered to each
registered holder of the Securities, as soon practicable, a copy of the Preliminary Prospectus and
Letter of Transmittal and all other appropriate Offer Material. Thereafter, to the extent
practicable until the expiration or termination of the Offer, the Company will use its best efforts
to cause copies of such material to be mailed to each person who becomes a registered holder of any
Company Shares.
(d) The Company will give you notice of its intention to file or prepare any amendment to the
Registration Statement (including any filing under Rule 462(b) of the 1933 Act regulations), or any
amendment, supplement or revision to either the prospectus included in the Registration Statement
at the time it became effective or to the Prospectus, whether pursuant to the 1933 Act, the 1934
Act or otherwise, will furnish you 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 you shall reasonably object in writing.
(e) The Company will deliver to you, without charge, as many copies of the Prospectus as you
may reasonably request, and the Company hereby consents to the use of such copies for purposes
permitted by the 1933 Act. The Company will furnish to you, 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 you may reasonably request. The Company further agrees that the
Prospectus and any amendments or supplements thereto furnished to you will be identical to any
electronically transmitted copies thereof filed with the Commission pursuant to ▇▇▇▇▇, except to
the extent permitted by Regulation S-T.
(f) The Company will comply with the 1933 Act and the 1934 Act so as to permit the completion
of the distribution of the Company Shares as contemplated in this Agreement and in the Registration
Statement and the Prospectus. If at any time when the Prospectus is required by the 1933 Act or
the 1934 Act to be delivered in connection with the distribution of the Company Shares, any event
shall occur or condition shall exist as a result of which it is necessary, in the opinion of your
counsel or counsel for the Company, to amend the Registration Statement in order that the
Registration Statement will not contain an untrue statement of a material fact or omit to state a
material fact
16
required to be stated therein or necessary to make the statements therein not misleading or to
amend or supplement the Prospectus in order that the Prospectus will not include an untrue
statement of a material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances existing at the time it is delivered to a
holder of Securities, not misleading, 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, the Company will use its best efforts to promptly
prepare and file with the Commission, subject to the terms of this Agreement, 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 you,
without charge, such number of copies of such amendment or supplement as you may reasonably
request.
(g) The Company will use its best efforts, in cooperation with you and in accordance with Rule
13e-4 of the 1934 Act, to qualify the Company Shares for offering and sale under the applicable
securities laws of such states and other domestic jurisdictions as you and the Company may
reasonably designate and to maintain such qualifications in effect for a period of not less than
one year from the date of this Agreement; 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 Company Shares 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 date of this
Agreement.
(h) The Company will not, directly or indirectly, distribute the Offer Material to any holder
of Securities in or from any jurisdiction outside the United States, or otherwise extend the Offer
to any holder of Securities residing in any jurisdiction outside the United States, except under
circumstances that will result in compliance with the applicable laws and regulations of such
jurisdiction.
(i) The Company will timely file such reports pursuant to the 1934 Act as are necessary in
order to make generally available to its security holders 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.
(j) On or prior to the Commencement Date, the Company will have entered into agreements with
the Information Agent and the Conversion Agent and will have made appropriate arrangements, to the
extent applicable, with DTC or any other “qualified” securities depositary to allow for the
book-entry
17
movement of the tendered Securities between depositary participants and the Conversion Agent.
9. Documentary Covenants. (a) The Company covenants that it shall, on the Commencement Date,
deliver or cause to be delivered to you each of (i) the signed opinion, dated the Commencement
Date, of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Vice President, Secretary and General Counsel of the Company, the signed
opinion, dated the Commencement Date, of ▇▇▇▇▇▇ LLP, counsel for the Company, and the signed
opinion, dated the Commencement Date, of Schmeideskamp, ▇▇▇▇▇▇▇▇▇, ▇▇▇ & ▇▇▇▇▇▇▇▇, Illinois counsel
for the Company, each substantially in the form set forth in Exhibits A, B and C hereto with
customary qualifications, assumptions and exceptions reasonably satisfactory to you, (ii) a
certificate of the Chief Executive Officer of the Company, dated as of the Commencement Date, to
the effect that, (y) the Company Shares have been duly approved for listing on the New York Stock
Exchange and (z) since the date of the most recent financial statements included or incorporated by
reference in the Registration Statement and the Prospectus, there has been no Material Adverse
Change (other than as set forth in the Prospectus), (iii) a certificate, dated the Commencement
Date, of the Secretary of the Company in form and substance reasonably satisfactory to you and (iv)
a letter from PricewaterhouseCoopers LLP, dated as of the Commencement Date, in form and substance
reasonably satisfactory to you, containing statements and information of the type ordinarily
included in accountants’ “comfort letters” with respect to the financial statements and certain
financial information contained in the Registration Statement and the Prospectus.
(b) Unless you have previously withdrawn as Dealer Manager, the Company covenants that it
shall, on the Acceptance Date, deliver or cause to be delivered to you each of the documents listed
in clauses (i) through (v) below and that it will not accept Securities tendered pursuant to the
Offer unless on such Acceptance Date: (i) the signed opinion, dated the Acceptance Date, of ▇▇▇▇▇
▇. ▇▇▇▇▇▇, Vice President, Secretary and General Counsel of the Company, the signed opinion, dated
the Acceptance Date, of ▇▇▇▇▇▇ LLP, counsel for the Company, and the signed opinion, dated the
Acceptance Date, of Schmeideskamp, ▇▇▇▇▇▇▇▇▇, Neu & ▇▇▇▇▇▇▇▇, Illinois counsel for the Company,
each substantially in the form set forth in Exhibits A, B and C hereto with customary
qualifications, assumptions and exceptions reasonably satisfactory to you, (ii) the Company shall
have delivered or caused to be delivered written evidence that the Company Shares are duly
authorized for listing on the New York Stock Exchange, (iii) the Company shall have delivered or
caused to be delivered to you a certificate of the Chief Executive Officer of the Company, dated as
of the Acceptance Date, to the effect that (w) since the date of this Agreement, there has been no
Material Adverse Change (other than as set forth in the Prospectus), (x) the Company’s
representations and warranties in this Agreement are true and correct with the same force and
effect as though expressly made at and as of the Acceptance Date, and (y) the Company has complied
with all agreements and taken all actions to be performed or satisfied by the Company
18
pursuant to this Agreement at or prior to the Acceptance Date, and (z) the Registration
Statement has been declared effective by the Commission and no stop order suspending the
effectiveness of the Registration Statement has been issued and no proceedings for that purpose
have been instituted, are pending or, to the best of such officer’s knowledge, are threatened by
the Commission, (iv) the Company shall have delivered or caused to be delivered to you a
certificate, dated the Acceptance Date, of the Secretary of the Company in form and substance
reasonably satisfactory to you and (v) the Company shall have delivered or have caused to be
delivered to you a letter from PricewaterhouseCoopers LLP, dated as of the Acceptance Date, to the
effect that PricewaterhouseCoopers LLP reaffirms the statements made in the letter furnished
pursuant to subsection (a)(iv) of this Section 9, except that the specified date referred to shall
be a date not more than three business days prior to the Acceptance Date.
10. Indemnification and Contribution. (a) The Company agrees to indemnify and hold harmless
the Dealer Manager and the affiliates and respective directors, officers, employees,
representatives, advisors and agents of the Dealer Manager and each person who controls the Dealer
Manager within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act (the Dealer
Manager and each such person being an “Indemnified Party”) as follows:
(i) from and against any and all losses, claims, damages, liabilities and reasonable
expenses whatsoever, joint or several, as incurred, to which such Indemnified Party may
become subject under any applicable federal or state law, or otherwise, and related to,
arising out of, or based on (A) any untrue statement of a material fact or alleged untrue
statement of a material fact contained in the Offer Material, as amended or supplemented,
or the omission or alleged omission therefrom of a material fact required to be stated
therein or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, (B) any breach by the Company of any of its
representations, warranties or agreements contained herein, (C) the Company’s failure to
make or consummate the Offer or the withdrawal, rescission, termination, amendment or
extension of the Offer or any other failure on the Company’s part to comply with the terms
and conditions contained in the Offer Material, (D) any of the transactions contemplated
in the Offer Material or the engagement of the Dealer Manager pursuant to, and the
performance by the Dealer Manager of the services contemplated by, this Agreement except
in the case of this clause (D) to the extent that any losses, claims, damages, liabilities
or expenses are found in a final judgment by a court of competent jurisdiction to have
resulted from the gross negligence, bad faith or willful misconduct of an Indemnified
Party, or (E) any action taken or omitted to be taken by an Indemnified Party with the
consent of the Company or in conformity with the instructions or actions or omissions of
the Company;
19
(ii) from and against any and all losses, claims, damages, liabilities and reasonable
expenses 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 related to, arising out of or based on
any matter described in subparagraph (i) above, provided that any such settlement is
effected with the written consent of the Company (which consent shall not be unreasonably
withheld); and
(iii) from and against any and all reasonable expenses whatsoever, as incurred
(including the fees and disbursements of counsel chosen by you), reasonably incurred in
investigating, preparing or defending against any litigation, or investigation or
proceeding by any governmental agency or body, commenced or threatened, or any claim
whatsoever related to, arising out of or based on any matter described in (i) above,
whether or not such Indemnified Party is a party and whether or not such claim, action or
proceeding is initiated or brought by or on behalf of the Company, to the extent that any
such expense is not paid under subparagraph (i) or (ii) above;
provided, however, that the Company shall not be liable under clause (A) of subparagraph
(i) above to the extent that any losses, claims, damages, liabilities or expenses arise
out of any untrue statement or omission or alleged untrue statement or omission made in
the Offer Material in reliance upon and in conformity with written information furnished
to the Company by the Dealer Manager expressly for use in the Offer Material, it being
understood and agreed that the only such information furnished by the Dealer Manager
consists of the Dealer Manager’s legal and marketing name.
(b) The Company agrees that no Indemnified Party shall have any liability (whether direct or
indirect, in contract or tort or otherwise) to the Company, its security holders or creditors
relating to or arising out of the engagement of the Dealer Manager pursuant to, or the performance
by the Dealer Manager of the services contemplated by, this Agreement except to the extent that any
loss, claim, damage, liability or expense is found in a final judgment by a court of competent
jurisdiction to have resulted from the gross negligence, bad faith or willful misconduct of the
Dealer Manager.
(c) If the indemnification provided for in Section 10(a) 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 (other than as a result of the proviso to Section
10(a) or, in the case of clause (D) of Section 10(a)(i), as a result of the gross negligence, bad
faith or willful misconduct of an Indemnified Party), then the Company agrees to contribute to the
aggregate amount of such losses, liabilities, claims, damages and expenses
20
incurred by such Indemnified Party, as incurred, (i) in such proportion as is appropriate to
reflect the relative benefits to the Company on the one hand and to the Dealer Manager on the other
hand from the Offer (whether or not consummated) or (ii) if, but only if, the allocation provided
by clause (i) is for any reason held unenforceable, 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 Dealer Manager 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 to the Company on the
one hand and the Dealer Manager on the other hand, in connection with the Offer (whether or not
consummated) shall be deemed to be in the same proportion as the total value paid or proposed to be
paid to holders of the Securities pursuant to the Offer (whether or not consummated) bears to the
fees actually received by the Dealer Manager pursuant to Section 4 hereunder. The relative fault of
the Company on the one hand and the Dealer Manager 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 the Dealer Manager and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission. The Company and the
Dealer Manager agree that it would not be just and equitable if contribution pursuant to this
Section 10(c) were determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to above in this Section 10(c). The
aggregate amount of losses, liabilities, claims, damages and expenses incurred by an Indemnified
Party and referred to above in this Section 10(c) 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; provided, however, that to the extent permitted by
applicable law, in no event shall the Dealer Manager be required to contribute any amount which, in
the aggregate, exceeds the aggregate fees received by the Dealer Manager under Section 4 of this
Agreement.
(d) In the event an Indemnified Party is requested or required to appear as a witness in any
action brought by or on behalf of or against the Company in connection with the transactions
contemplated by this agreement, the Company agrees to reimburse such Indemnified Party for all
reasonable expenses as incurred by such Indemnified Party in connection with such Indemnified
Party’s appearing and preparing to appear as such a witness, including, without limitation, the
reasonable fees and disbursements of its legal counsel.
(e) Promptly after receipt by an Indemnified Party of written notice of any claim or
commencement of an action or proceeding with respect to which
21
indemnification or contribution may be sought hereunder, such Indemnified Party shall notify
the Company in writing of such claim or of the commencement of such action, claim or proceeding,
but failure so to notify the Company will not relieve the Company from any liability which it may
have hereunder to such Indemnified Party except to the extent that the Company has been prejudiced
in any material respect by such failure, and in any event will not relieve the Company from any
other liability that it may have to such Indemnified Party. In the event of any such claim, action
or proceeding, if such Indemnified Party shall notify the Company of the commencement thereof, the
Company shall be entitled to participate therein and, to the extent that it wishes, may assume the
defense thereof, with counsel reasonably satisfactory to such Indemnified Party, and shall pay the
reasonable fees and expenses of such counsel; provided, however, (i) if the Company fails to assume
such defense within fifteen business days after receiving written notice of any such claim, action
or proceeding or (ii) if there exists or may exist a conflict of interest that would make it
inappropriate in the reasonable judgment of such Indemnified Party for the same counsel to
represent both the Indemnified Party and the Company, then such Indemnified Party shall be entitled
to retain its own counsel at the reasonable expense of the Company provided, further, however, that
the Company shall not be required to pay the fees and expenses of more than one separate counsel
(in addition to any local counsel) for all Indemnified Parties in any jurisdiction in respect of
any single claim, action or proceeding. In respect of any claim, action or proceeding the defense
of which shall have been assumed by the Company in accordance with the foregoing, each Indemnified
Party shall have the right to participate in such litigation and to retain its own counsel at its
own expense.
(f) The Company agrees that, without your prior written consent, it will not settle,
compromise or consent to the entry of any judgment in or with respect to any pending or threatened
claim, action, investigation or proceeding in respect of which indemnification or contribution
could be sought under this Section 10 (whether or not you or any other Indemnified Party is an
actual or potential party to such claim, action, investigation or proceeding), unless such
settlement, compromise or consent (i) includes an unconditional release of each Indemnified Party
from all liability arising out of such claim, action, investigation or proceeding 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 an Indemnified Party. The Company shall not be liable for any settlement of any
proceeding effected without its written consent (which consent shall not be unreasonably withheld),
but if settled with such consent the Company agrees to indemnify the Indemnified Party from and
against any loss or liability by reason of such settlement.
(g) The rights of any Indemnified Party under this Agreement shall be in addition to and not
in limitation of any rights that any Indemnified Party may have at common law or otherwise.
22
11. Survival of Indemnities, Representations, Warranties, Etc. The indemnity and contribution
agreements contained in Section 10, the provisions of Sections 4 and 5 and the representations and
warranties of the Company set forth in this Agreement shall remain operative and in full force and
effect, subject to the applicable statute of limitations, regardless of (i) any failure to
commence, or the withdrawal, termination or consummation of, the Offer or the termination or
assignment of this Agreement, (ii) any investigation made by or on behalf of the Company or any
Indemnified Party and (iii) any withdrawal by you pursuant to Section 3.
12. Severability of Provisions. If any term or other provision of this Agreement is invalid,
illegal or incapable of being enforced by any rule of law, or public policy, all other provisions
of this Agreement shall nevertheless remain in full force and effect so long as the economic or
legal substance of the agreements contained herein is not affected in any manner adverse to any
party. Upon such determination that any term or provision is invalid, illegal or unenforceable, the
parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in a mutually acceptable manner in order that the
agreements contained herein may be performed as originally contemplated to the fullest extent
possible.
13. Counterparts. This Agreement may be executed and delivered (including by facsimile
transmission) in two or more separate counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.
14. Parties In Interest. This Agreement, including any right to indemnity or contribution
hereunder, shall inure to the benefit of and be binding upon the Company, the Dealer Manager and
the other Indemnified Parties (as defined in Section 10) and their respective successors and
assigns. Nothing in this Agreement is intended, or shall be construed, to give to any other person
or entity any right hereunder or by virtue hereof.
15. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS EXECUTED IN AND PERFORMED IN THAT STATE.
16. References to the Dealer Manager. The Company agrees that any reference to the Dealer
Manager in the Registration Statement, Prospectus or Offer Material, or in any other release or
communication relating to the Offer, is subject to your prior approval, which approval shall not be
unreasonably withheld or delayed.
17. Notices. All notices and other communications required or permitted to be given under this
Agreement shall be in writing and shall be deemed given
23
when so delivered in person, by overnight courier, by facsimile transmission (with receipt
being confirmed by telephone or by automatic transmission report) or two business days after being
sent by registered or certified mail (postage prepaid, return receipt requested), as follows:
| (a) | If to the Dealer Manager: | |||
| ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., | ||||
| ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ | ||||
| Incorporated | ||||
| ▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ | ||||
| ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ | ||||
| Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇ | ||||
| Attention: Liability Management Group | ||||
| with a copy to: | ||||
| Shearman & Sterling LLP | ||||
| ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ | ||||
| ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ | ||||
| Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇ | ||||
| Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq. | ||||
| and | ||||
| (b) | If to the Company: | |||
| Titan International, Inc. | ||||
| ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ | ||||
| ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ | ||||
| Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇ | ||||
| Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Vice President, | ||||
| Secretary and General Counsel | ||||
| with a copy to: | ||||
| Bodman LLP | ||||
| 6th Floor at Ford Field | ||||
| ▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ | ||||
| ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ | ||||
| Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇ | ||||
| Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ |
18. Securities Positions. The Company acknowledges that it has no objection to the fact that,
in the course of trading activities, the Dealer Manager
24
may from time to time have positions in, and, in accordance with applicable law, buy or sell
securities of, the Company and its affiliates.
19. Tombstone. You may place an announcement in such newspapers and periodicals as you may
choose, stating that the Dealer Manager is acting or have acted as exclusive dealer manager to the
Company in connection with the Offer. Any such announcement shall be at your sole option and
expense and subject to the reasonable approval of the Company.
20. Waiver of Right to Trial by Jury and Applicable Law. The Dealer Manager and the Company
each waive any right to trial by jury in any action, claim, suit or proceeding with respect to the
engagement of the Dealer Manager hereunder.
21. Miscellaneous. The descriptive headings contained in this Agreement are incorporated for
convenience of reference only and shall not affect in any way the meaning or interpretation of this
Agreement.
22. Entire Agreement; Amendment. This Agreement supersedes all prior agreements and
undertakings, both written and oral, of the parties hereto, or any of them, with respect to the
subject matter hereof and constitutes the entire understanding of the parties hereto with respect
to the subject matter hereof. This Agreement may not be waived, amended or modified except in
writing signed by each party to be bound hereby.
[SIGNATURE PAGES FOLLOW]
25
Please indicate your willingness to act as Dealer Manager on the terms set forth herein and
your acceptance of the foregoing provisions by signing in the space provided below for that purpose
and returning to us a copy of this letter, whereupon this letter shall constitute a binding
agreement among us.
| Very truly yours, TITAN INTERNATIONAL, INC. |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
Accepted as of the date first above written:
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.,
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
By: |
||||
| Title: |
Schedule I
COMPENSATION
The compensation due to the Dealer Manager shall be a fee equal to $5.00 for each $1,000 principal
amount of the Securities validly tendered and accepted by the Company pursuant to the Offer.
S-I-1
Exhibit A
FORM OF OPINION OF ▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
VICE PRESIDENT, SECRETARY AND GENERAL COUNSEL OF THE
COMPANY, TO BE DELIVERED PURSUANT TO SECTION 9
VICE PRESIDENT, SECRETARY AND GENERAL COUNSEL OF THE
COMPANY, TO BE DELIVERED PURSUANT TO SECTION 9
[To Be Dated the Commencement Date or Acceptance Date, as Applicable]
The information in the Company’s Form 10-K for the year ended December 31, 2005 under “Properties”
and “Legal Proceedings” that is incorporated by reference in the Offer to Increase Conversion Rate
Upon the Conversion of Titan International Inc.’s 5.25% Senior Convertible Notes due 2009
(“Offering”) has been reviewed by me and is correct in all material respects and to the best of my
knowledge, there is no suit, claim, action, inquiry or investigation, to which the Company or any
subsidiary is a party, or to which the property of the Company or any subsidiary thereof is
subject, which would reasonably be expected to result in a Material Adverse Effect as of the date
December 31, 2005.
The information in the Company’s filings on Form 8-K from December 31, 2005 to the present and in
the Company’s 2006 Proxy Statement (other than the financial statements and schedules and other
financial data included or incorporated by reference therein or omitted therefrom, as to which I
express no opinion), when they were filed with the Commission, complied as to form in all material
respects with the requirements of the 1934 Act and the rules and regulations of the Commission
thereunder.
I have reviewed our Legal Proceedings and to the best of my knowledge there is no existing or
threatened litigation that would interfere with this Offering, such as a temporary restraining
order or such other litigation which would reasonably be expected to result in a Material Adverse
Effect as of February 16, 2007.
A-1
Exhibit B
FORM OF OPINION OF ▇▇▇▇▇▇ LLP,
COUNSEL FOR THE COMPANY,
TO BE DELIVERED PURSUANT TO SECTION 9
COUNSEL FOR THE COMPANY,
TO BE DELIVERED PURSUANT TO SECTION 9
[To Be Dated the Commencement Date or Acceptance Date, as Applicable]
(i) Except as described in the Registration Statement or Prospectus, there are no preemptive
or other rights to subscribe for or to purchase, nor any restriction upon the voting or transfer
of, any shares of capital stock of the Company pursuant to the Company’s charter or by-laws or any
agreement or other instrument filed as an exhibit to the documents incorporated by reference into
the Registration Statement or Prospectus.
(ii) Assuming the due authorization, execution and delivery of the Dealer Manager Agreement by
the Company, the Dealer Manager Agreement 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 other similar laws relating to or affecting
enforcement of creditors’ rights generally, or by general principles of equity (regardless of
whether enforcement is considered in a proceeding in equity or at law).
(iii) The documents incorporated by reference in the Registration Statement or Prospectus
(other than the financial statements and supporting schedules therein and the Proxy Statement filed
with the Commission on March 30, 2006, and the Current Reports
on Form 8-K, as to which no opinion need be rendered), when they were
filed with the Commission complied as to form in all material respects with the requirements of the
1934 Act and the rules and regulations of the Commission thereunder.
(iv) No consent, approval, authorization or order of, or filing with, any governmental agency
or body or any court is required for the consummation of, and the consummation of the transactions
contemplated by, the Dealer Manager Agreement or the Offer (including but not limited to the
issuance and delivery of the Shares pursuant to the Offer), except such as have been obtained or
such as may be required under the 1933 Act or the 1934 Act or such as may be required under foreign
or state securities laws, as to which such counsel need express no opinion.
(v) The (a) performance by the Company of the Dealer Manager Agreement, (b) making and
consummation of the Offer by the Company (including but not limited to the issuance and delivery of
Shares thereunder), (c) use of the Offer Material and the filing of the Registration Statement, the
Prospectus and the Schedule TO, and any amendments or supplements thereto and (d) consummation by
the Company of the transactions contemplated by the
B-1
Dealer Manager Agreement, in each case, have been duly authorized by all necessary corporate action
on the part of the Company and (1) will not result in any violation of the charter or by-laws of
the Company, (2) will not result in a breach or violation of any of the terms or provisions of, or
constitute an event of default (or an event which with notice or lapse of time or both would become
an event of default) under, or give to others any rights of termination, amendment, acceleration or
cancellation of, or result in the creation or imposition of any lien, charge or encumbrance upon
any property or assets of the Company under, (i) any agreement or instrument that is listed as an
exhibit to the Company’s Annual Report on Form 10-K, as amended, for the year ended December 31,
2005 or the Company’s Quarterly Reports on Form 10-Q and Current Reports on Form 8-K filed
thereafter or (ii) any existing applicable law, rule or regulation, or any judgment, order or
decree known to such counsel, of any government, governmental or regulatory instrumentality or
agency or court having jurisdiction over the Company or any of its properties or assets, except in
the case of clause (2) such breaches, violations, defaults, rights, creations and impositions which
individually or the aggregate would not result in a Material Adverse Effect.
(vi) To the best of our knowledge, no default by the Company or any “significant subsidiary”
of the Company (as such term is defined in Rule 1-02 of Regulation S-X) exists in the due
performance or observance of any material obligation, agreement, covenant or condition contained in
any material contract, indenture, mortgage, loan agreement, note lease or other agreement or
instrument.
(vii) The Company is not required, and upon consummation of the Offer and any resulting
issuance and delivery of the Shares as contemplated by the Offer, will not be required, to register
as an “investment company” under the Investment Company Act of 1940, as amended.
(viii) The Registration Statement and the Prospectus, excluding the documents incorporated by
reference therein, and any amendment or supplement thereto, excluding the documents incorporated by
reference therein, at the time of filing with the Commission complied as to form in all material
respects with the requirements of the 1933 Act, it being understood that such counsel need express
no opinion as to the financial statements, including the notes thereto and supporting schedules, or
other financial data contained therein or with respect to matters relating to federal income tax
consequences of the Offer.
(ix) The Schedule TO and any amendments thereto, excluding the Incorporated Documents therein,
complies as to form in all material respects with the applicable requirements of the 1934 Act, it
being understood that such counsel need express no opinion as to the financial statements,
including the notes thereto and supporting schedules, or other financial data contained or
incorporated by reference therein or with respect to matters relating to federal income tax
consequences of the Offer.
B-2
(x) The statements in the Prospectus under “The Conversion Offer,” “Description of Our
Convertible Notes” and “Description of Capital Stock,” and in the Registration Statement under Item
20, insofar as such statements constitute a summary of documents referred to therein or matters
of law, fairly summarize in all material respects the information called for with respect to such
documents and matters.
(xi) The statements in the Prospectus under “Material U.S. Federal Income Tax Considerations,”
insofar as such statements constitute a summary of the United States federal tax laws referred to
therein, are accurate and fairly summarize in all material respects the United States federal tax
laws referred to therein.
Such counsel has participated in discussions with officers and other representatives of the Company
and representatives of the Dealer Manager at which discussions the contents of the Registration
Statement, the Prospectus and the Schedule TO and related matters were discussed and, although such
counsel has not independently verified, is not passing upon and does not assume any responsibility
for the accuracy, completeness or fairness of the statements contained in the Registration
Statement, the Prospectus or the Schedule TO (except to the extent provided in paragraphs (xi) and
(xi) in our opinion of even date), such counsel advises you that, on the basis of the foregoing,
nothing has come to such counsel’s attention that would lead such counsel to believe that (a) the
Registration Statement or any amendment thereto, at the time it was filed with the Commission 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 required to be stated therein or necessary to make the statements
therein not misleading; (b) the Prospectus or any amendment or supplement thereto, at the time the
Registration Statement was filed with the Commission or as of the date hereof, included or includes
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 or (c) the Schedule TO or any amendment or supplement thereto at the time it was
filed with the Commission or as of the date hereof, included or includes an untrue statement of a
material fact or omitted or omits to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the circumstances under which
they were made, not misleading. It is understood that such counsel expresses no view as to the
financial statements, including the notes thereto and supporting schedules, or other financial
information and data contained in the Registration Statement, the Prospectus or the Schedule
TO.
B-3
Exhibit C
FORM OF OPINION OF SCHMIEDESKAMP, ROBERTSON, NEU &
▇▇▇▇▇▇▇▇, ILLINOIS COUNSEL TO THE COMPANY,
TO BE DELIVERED PURSUANT TO SECTION 9
▇▇▇▇▇▇▇▇, ILLINOIS COUNSEL TO THE COMPANY,
TO BE DELIVERED PURSUANT TO SECTION 9
[To Be Dated the Commencement Date or Acceptance Date, as Applicable]
(i) The Company is duly incorporated, validly existing as a corporation and in good standing
under the laws of the State of Illinois.
(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, to enter into and perform its
obligations under the Dealer Manager Agreement and to make and consummate the Offer.
(iii) The Company is duly qualified as a foreign corporation to transact business and is in
good standing 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 would not result in a Material Adverse Effect.
(iv) The Shares have been duly authorized for issuance and conform to the description thereof
contained in the Prospectus. When any Shares are issued and delivered by the Company as provided in
the Offer Material, such Shares will be validly issued, fully paid and nonassessable, and the
stockholders of the Company have no preemptive rights with respect to the Shares.
(v) The Dealer Manager Agreement has been duly authorized, executed and delivered by the
Company.
(vi) The (a) performance by the Company of the Dealer Manager Agreement, (b) making and
consummation of the Offer by the Company (including but not limited to the issuance and delivery of
Shares thereunder), (c) use of the Offer Material and the filing of the Registration Statement, the
Prospectus and the Schedule TO, and any amendments or supplements thereto and (d) consummation by
the Company of the transactions contemplated by the Dealer Manager Agreement, in each case, have
been duly authorized by all necessary corporate action on the part of the Company and (1) will not
result in any violation of the charter or by-laws of the Company, (2) will not result in a breach
or violation of any of the terms or provisions of, or constitute an event of default (or an event
which with notice or lapse of time or both would become an event of default) under, or give to
others any rights of termination, amendment, acceleration or cancellation of, or result in the
creation or imposition of any lien, charge or encumbrance upon any property or assets of the
Company under, (i) any agreement or instrument that is listed as an exhibit to the Company’s Annual
C-1
Report on Form 10-K, as amended, for the year ended December 31, 2005 or the Company’s Quarterly
Reports on Form 10-Q and Current Reports on Form 8-K filed thereafter or (ii) any existing
applicable law, rule or regulation, or any judgment, order or decree known to such counsel, of any
government, governmental or regulatory instrumentality or agency or court having jurisdiction over
the Company or any of its properties or assets, except in the case of clause (2) such breaches,
violations, defaults, rights, creations and impositions which individually or the aggregate would
not result in a Material Adverse Effect.
(vii) The statements in the Registration Statement under Item 20, insofar as such statements constitute a
summary of documents referred to therein or matters of law, fairly summarize in all material
respects the information called for with respect to such documents and matters.
C-2