EXHIBIT 1
SOLICITATION AGENT AGREEMENT
SOLICITATION AGENT AGREEMENT
January __, 1999
▇▇▇▇▇ & Company, Inc.
As Solicitation Agent
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Thermwood Corporation, an Indiana corporation (the "Company") plans to
make an offer to exchange (the "Offer to Exchange") 12% 15-year Subordinated
Debentures ("Debentures"), which will be issued pursuant to an indenture (the
"Indenture") for all of its outstanding shares ("Shares") of Common Stock other
than certain Shares owned by two major Shareholders. The Offer to Exchange will
be on the terms and subject to the conditions set forth in the Registration
Statement, as amended (File No. 333- ______) on Form S-4 and the Letter of
Transmittal (including the attachments thereto) attached hereto as Exhibit A.
The Company hereby appoints ▇▇▇▇▇ & Company, Inc. as Solicitation Agent
(the "Solicitation Agent") in connection with the Offer to Exchange and
authorizes the Solicitation Agent to act on its behalf in accordance with this
agreement (the "Agreement") and the terms of the Prospectus, which Prospectus
has been approved by the Company and which the Solicitation Agent is authorized
to use in connection with the solicitation of tenders. The Solicitation Agent
agrees, in accordance with its customary practice, to perform those services in
connection with the Offer to Exchange as are customarily performed by investment
banks in connection with offers to exchange of a like nature, including, but not
limited to, using reasonable efforts to solicit tenders of Shares and
communicating generally regarding the Offer to Exchange with brokers, dealers,
trust companies and other holders of the Shares. In such capacity, the
Solicitation Agent shall act as an independent contractor, and its duties
arising out of its engagement pursuant to this Agreement shall be owed solely to
the Company. The Solicitation Agent agrees to furnish no written material to
holders in connection with the Offer to Exchange other than the Prospectus.
1. Solicitation of Tenders.
(a) The Solicitation Agent will use its best efforts to solicit
tenders of Shares pursuant to the Offer to Exchange. The Solicitation Agent
shall have no liability to the Company hereunder or for any act or omission on
the part of any securities broker or dealer, commercial bank or trust company
which may solicit tenders hereunder except to the extent any losses are finally
judicially determined to have resulted from the gross negligence or willful
misconduct of the Solicitation Agent. In soliciting or obtaining tenders of
Shares, no dealer, bank or trust company is to be deemed to be acting as the
Solicitation Agent's agent or the agent of the Company or any of its affiliates,
and the Solicitation Agent is not to be deemed the agent of any dealer, bank or
trust company or the agent or fiduciary of the Company or any of it affiliates,
equity holders, creditors or of any other person. In soliciting or obtaining
tenders of Shares, the Solicitation Agent shall not be and shall not be deemed
for any purpose to act as a partner or joint venturer of or a member of a
syndicate or group with the Company or any of its affiliates in connection with
the Offer to Exchange, any purchase of the Shares, or otherwise, and neither the
Company nor any of its affiliates shall be deemed to act as the Solicitation
Agent's agent.
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(b) The Company authorizes the Solicitation Agent to communicate
with American Stock Transfer & Trust Company in its capacity as exchange agent
(the "Exchange Agent") with respect to matters relating to the Offer to
Exchange. The Company has instructed the Exchange Agent to advise the
Solicitation Agent at least daily as to the number of Shares that have been
tendered pursuant to the Offer to Exchange, and as to such other matters in
connection with the Offer to Exchange as the Solicitation Agent may request.
(c) The Company will promptly inform the Solicitation Agent of any
events known to the Company that might require any change in the Prospectus. The
Company will promptly inform the Solicitation Agent of any litigation or
administrative action known to the Company with respect to the Offer to
Exchange.
(d) The Company agrees to furnish the Solicitation Agent, at the
Company's expense, with as many copies as the Solicitation Agent may reasonably
request of the Registration Statement, Prospectus, the Letter of Transmittal,
all statements and other documents filed or to be filed with the Securities and
Exchange Commission (the "Commission") or any other federal, state, local or
foreign governmental or regulatory authorities or any court (each an "Other
Agency" and collectively, the "Other Agencies") and any amendments or
supplements to any such statements and documents (the definitive forms of all of
the foregoing materials are hereinafter collectively referred to as the "Offer
to Exchange Material") to be used by the Company in connection with the Offer to
Exchange, and the Solicitation Agent is authorized to use copies of the Offer to
Exchange Material in connection with the Offer to Exchange. The Offer to
Exchange Material has been or will be prepared and approved by, and is the sole
responsibility of, the Company.
(e) The Company agrees that no Offer to Exchange Material will be
used in connection with the Offer to Exchange or filed with the Commission or
any Other Agency with respect to the Offer to Exchange without first submitting
copies thereof to the Solicitation Agent, giving the Solicitation Agent
reasonable opportunity to comment thereon and giving reasonable consideration to
Solicitation Agent's comments, if any, with respect thereto. In the event that
the Company uses or permits the use of any Offer to Exchange Material in
connection with the Offer to Exchange or files any such material with the
Commission or any Other Agency without the Solicitation Agent's prior approval,
then the Solicitation Agent shall be entitled to withdraw as Solicitation Agent
in connection with the Offer to Exchange without any liability or penalty to the
Solicitation Agent or indemnified party, and the Solicitation Agent shall remain
entitled to the indemnification provided in Section 6 hereof and to receive the
payment of all fees and expenses payable under this Agreement which have accrued
to the date of such withdrawal as Solicitation Agent. If the Solicitation Agent
withdraws for any reason other than those described above, the Solicitation
Agent will be entitled to reimbursement for its expenses through the date of
such withdrawal or termination, but shall not be entitled to receive any fee for
services performed hereunder.
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(f) The Company agrees to furnish to the Solicitation Agent, to the
extent the same is available to the Company, the names and addresses of, and
number of Shares held by, the registered holders and beneficial owners of Shares
or interests therein as of a recent date. The Solicitation Agent will use such
information only in connection with the Offer to Exchange and will not furnish
such information to any other person except in connection with the Offer to
Exchange.
(g) The Company represents and warrants to the Solicitation Agent
that it has or, at the time, the Company purchases Shares under the Offer to
Exchange, will have, sufficient funds to enable the Company to pay and the
Company hereby agrees that it will pay promptly, in accordance with the terms
and conditions of the Offer to Exchange and this Agreement, the consideration
(and related costs) for Shares which the Company has offered, and which the
Company may be required, to pay under the Offer to Exchange, and the fees and
expenses payable hereunder.
2. Compensation and Expenses.
(a)The Company shall pay to the Solicitation Agent, as compensation
for its services as Solicitation Agent, a fee of $100,000 plus a solicitation
fee equal to 2% of the face value of the Debentures issued through the Offer to
Exchange, other than Debentures issued to Shareholders whose total personal
holdings are more than 10% of the Company's outstanding stock.
(b) In addition to the Solicitation Agent's compensation for the
Solicitation Agent's services hereunder pursuant to Section 2 hereof, The
Company agrees to pay directly, or reimburse the Solicitation Agent, as the case
may be, for (i) all reasonable expenses incurred by the Solicitation Agent
relating to the preparation, printing, filing, mailing and publishing of all
Offer to Exchange Material, (ii) all fees and expenses of the Exchange Agent,
(iii) all advertising charges in connection with the Offer to Exchange,
including those of any public relations firm or other person or entity rendering
services in connection therewith, (iv) all fees, if any, payable to dealers
(including the Solicitation Agent), and banks and trust companies as
reimbursement for their customary mailing and handling expenses incurred in
forwarding the Offer to Exchange Material to their customers and (v) all other
reasonable fees and expenses incurred by the Solicitation Agent in connection
with the Offer to Exchange or otherwise in connection with the Offer to Exchange
or otherwise in connection with the performance of the Solicitation Agent's
services hereunder (including fees and disbursements of the Solicitation Agent's
legal counsel). All payments to be made by the Company pursuant to this Section
2 shall be made promptly against delivery to the Company of statements therefor
which are itemized in reasonable detail. The Company shall be liable for the
foregoing payments whether or not the Offer to Exchange is commenced, withdrawn,
terminated or canceled prior to the purchase of any Shares or whether the
Company or any of its affiliates acquires any Shares pursuant to the Offer to
Exchange or whether the Solicitation Agent withdraws pursuant to Section 1
hereof. The provisions of this Section 2 are intended to govern the payment of
expenses and fees described in this Section 2 and the Company's obligation to
indemnify an indemnified party are set forth in Section 6 hereof.
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3. Certain Representations and Warranties by the Company.
The Company represents and warrants to the Solicitation Agent that:
(a) The Company is a corporation duly organized, validly existing and
in good standing under the laws of the jurisdiction of its incorporation and is
duly qualified to transact business and is in good standing in each jurisdiction
in which the conduct of its businesses or the ownership or leasing of property
requires such qualification, except to the extent that the failure to be so
qualified or to be in good standing, considering all such cases in the
aggregate, would not have a material adverse effect on the business, properties,
financial position or results of operations of the Company and all of its
subsidiaries and affiliates taken as a whole.
(b) The Company has full corporate power and authority to take and has
duly taken all necessary corporate action to authorize (i) the Offer to Exchange
and (ii) the purchase by the Company of Shares pursuant to the Offer to
Exchange. The execution, delivery and performance of this Agreement has been,
and when executed and delivered by the Company and the relevant Trustee, the
Indenture will be, duly executed and delivered on behalf of the Company, and,
assuming due authorization, execution and delivery of each of the Indenture and
this Agreement by each of the other parties thereto is, or in the case of the
Indenture will be, a legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except that the
enforceability hereof may be limited by (x) bankruptcy, insolvency,
reorganization, moratorium and other laws now or hereafter in effect relating to
creditors' rights generally and (y) general principles of equity.
(c) As of the date hereof, the Company has full corporate power and
authority to take and will have duly taken all necessary corporate action to
authorize any borrowings or financings related to the Offer to Exchange.
(d) All issued and outstanding securities of the Company have been
duly authorized and validly issued and are fully paid and non-assessable; the
holders thereof have no rights of rescission or preemptive rights with respect
thereto and are not subject to personal liability solely by reason of being
securityholders; and none of such securities was issued in violation of the
preemptive rights of any holders of any security of the Company.
(e) The Debentures have been duly authorized and, when issued, will be
validly issued, fully-paid and non-assessable; the holders thereof will not be
subject to personal liability under the Company's Articles of Incorporation or
Bylaws or the laws of the State of Indiana solely by reason of being such
holders; such securities are not and will not be subject to the preemptive
rights of any holder of any security of the Company.
(f) The Offer to Exchange complies or will comply in all material
respects with the applicable provisions of the Securities Exchange Act of 1934,
as amended, and the rules and regulations promulgated by the Commission
thereunder (collectively, the "Exchange Act"). The Offer to Exchange Material
does not and will not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances under which they are
made, not misleading; provided, however, that no representation is made with
respect to any statements contained in, or any matter omitted from the Offer to
Exchange Material in reliance upon and in conformity with information furnished
or confirmed in writing by the Solicitation Agent to the Company expressly for
use therein. In connection with the Offer to Exchange, the Company has complied,
and will continue to comply, with the applicable provisions of the Exchange Act.
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(g) The Company will file, if required, any and all necessary
amendments or supplements to the documents, if any, filed with the Commission or
Other Agency relating to the Offer to Exchange and will promptly furnish to the
Solicitation Agent true and complete copies of each such amendment and
supplement upon the filing thereof.
(h) The Offer to Exchange (including any related borrowings or
financings by the Company or any of its subsidiaries or affiliates), the
purchase by the Company of Shares pursuant to the Offer to Exchange, and the
execution, delivery and performance of each of the Indenture and this Agreement
by the Company, comply and will comply in all material respects with all
applicable requirements of federal, state, local and foreign law, including,
without limitation, any applicable regulations of the Commission and Other
Agencies, and all applicable judgments, orders or decrees; and no consent,
authorization, approval, order, exemption, registration, qualification or other
action of, or filing with or notice to, the Commission or any Other Agency is
required in connection with the execution, delivery and performance of each of
the Indenture and this Agreement by the Company, and, the making or consummation
by the Company of the Offer to Exchange or the consummation of the other
transactions contemplated by this Agreement or the Offer to Exchange, except
where the failure to obtain or make such consent, authorization, approval,
order, exemption, registration, qualification or other action or filing or
notification would not materially adversely affect the ability of the Company,
to execute, deliver and perform each of the Indenture and this Agreement or to
commence and consummate the Offer to Exchange in accordance with its terms. All
such required consents, authorizations, approvals, orders, exemptions,
registrations, qualifications and other actions of and filings with and notices
to the Commission and the Other Agencies will have been obtained, taken or made,
as the case may be, and all statutory or regulatory waiting periods will have
elapsed, prior to the purchase of the Shares pursuant to the Offer to Exchange.
(i) The Offer to Exchange (including any related borrowings or
financings by the Company or any of its subsidiaries or affiliates), the
purchase of Shares by the Company pursuant to the Offer to Exchange, and the
execution, delivery and performance of each of the Indenture and this Agreement
by the Company, do not and will not (i) conflict with or result in a violation
of any of the provisions of the certificate of incorporation or by-laws (or
similar organizational documents) of the Company, (ii) conflict with or violate
in any material respect any law, rule, regulation, order, judgment or decree
applicable to the Company, or any of its subsidiaries or by which any property
or asset of the Company or any of its subsidiaries is or may be bound or (iii)
result in a breach of any of the material terms or provisions of, or constitute
a default (with or without due notice and/or lapse of time) under, any loan or
credit agreement, indenture, mortgage, note or other agreement or instrument to
which the Company or any of its subsidiaries is a party or by which any of them
or any of their respective properties or assets is or may be bound.
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(j) Except as expressly disclosed in the Offer to Exchange Material,
no stop order, restraining order or denial of an application for approval has
been issued and no investigation, proceeding or litigation has commenced or, to
the best of the Company's knowledge, threatened before the Commission or any
other Agency with respect to the making or consummation of the Offer to Exchange
(including the obtaining or use of funds to purchase Shares pursuant thereto) or
the consummation of the other transactions contemplated by this Agreement or the
Offer to Exchange or with respect to the ownership of Shares by the Company or
any of its subsidiaries or affiliates.
(k) The Company has no knowledge of any material fact or information
concerning the Company or any of its subsidiaries, or the operations, assets,
condition (financial or otherwise) or prospects of the Company or any of its
subsidiaries, which is required to be made generally available to the public and
which has not been, or is not being, or will not be, made generally available to
the public through the Offer to Exchange Material or otherwise.
(l) The Company is not, nor will it be as a result of the purchase by
the Company of Shares that it may become obligated to purchase pursuant to the
terms of the Offer to Exchange, an "investment company" under the Investment
Company Act of 1940, as amended, and the rules and regulations promulgated by
the Commission thereunder.
(m) Each of the representations and warranties set forth in this
Agreement will be true and correct on and as of the date on which the Offer to
Exchange is commenced on and as of the date any Offer to Exchange Material is
first distributed to holders of Shares and on and as of the date on which any
Shares are purchased and payments for Shares are made pursuant of the Offer to
Exchange Material.
4. Certain Representations and Warranties by the Solicitation Agent.
The Solicitation Agent represents and warrants to the Company that:
(a) During the period of the Offer to Exchange, none of the
Solicitation Agent nor any of its affiliates shall effect any transactions in
the Shares for the purpose of creating actual, or apparent, active trading in,
or raising or depressing the price of, the Shares.
5. Conditions of Obligation.
The obligation to act as Solicitation Agent hereunder shall at all
times be subject, in its discretion, to the conditions that:
(a) All representations, warranties and other statements of the
Company contained herein are now, and at all times during the Offer to Exchange
will be, true and correct in all material respects.
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(b) The Company at all times during the Offer to Exchange shall have
performed all of its material obligations hereunder and theretofore required to
have been performed.
(c) Legal counsel to the Company acceptable to the Solicitation Agent
shall have furnished to the Solicitation Agent, concurrently with the execution
of this Agreement, an opinion, dated the date hereof, substantially in the form
of Exhibit B hereto.
6. Indemnification.
(a) The Company agrees to indemnify and hold harmless the Solicitation
Agent and any person, if any, who controls the Solicitation Agent within the
meaning of Section 20 of the Securities Exchange Act of 1934, as amended or
Section 15 of the Securities Act of 1933, as amended, from and against any and
all claims, damages, losses, liabilities, costs or expenses (including
attorneys' fees) to which the Solicitation Agent may become subject by reason of
or in connection with (i) the Offer to Exchange, (ii) the execution and delivery
of this Agreement or the performance, or failure to perform, by the Solicitation
Agent of its obligations hereunder, (iii) any breach by the Company of any
warranty, covenant, term or condition in, or the occurrence of any default
under, this Agreement or the Indenture, and (iv) any untrue statement or alleged
untrue statement of a material fact in the Offer to Exchange Material or the
omission or alleged omission to state a material fact required to be stated
therein or necessary to make the statements therein not misleading and (v) any
other event or transaction contemplated by any of the foregoing; provided,
however, the Solicitation Agent shall not be indemnified for any claims,
damages, losses, liabilities, costs or expenses (i) relating to an untrue
statement of a material fact or omission to state a material fact if such
statement or omission was made in reliance upon and in conformity with written
information furnished to the Company with respect to the Solicitation Agent
expressly for use in the offer to exchange material and (ii) to the extent, but
only to the extent, caused by the willful misconduct or gross negligence of the
Solicitation Agent.
(b) The Company agrees to assume the defense of any action against the
Solicitation Agent based upon allegations of any such loss, claim, damage,
liability or action, including the retaining of counsel satisfactory to the
Solicitation Agent and the payment of counsel fees and all other expenses
relating to such defense; provided, however, that the Solicitation Agent may
retain separate counsel in any such action and may participate in the defense
thereof at the expense of the Solicitation Agent unless such retaining of
separate counsel has been specifically authorized by the Company; and provided
further, that if the Solicitation Agent shall have been advised by counsel that
there may be legal defenses available to the Solicitation Agent which are
different from or additional to those available to the Company, then the Company
shall not have the right to assume the defense of the action on behalf of such
Solicitation Agent, and in such event the said fees and expenses of the
Solicitation Agent in defending such action shall be borne by the Company. The
indemnity agreement contained in Section 7(a) hereof will be in addition to any
liability which the Company may otherwise have.
Promptly after receipt by any indemnified party under this Agreement
of notice of the commencement of any action, suit or proceeding, such party
will, if a claim in respect thereof is to be made against the Company, notify
the Company of the commencement thereof, but the omission to notify the Company
will not relieve the Company from any liability which it may have to the
indemnified party.
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(c) In order to provide for just and equitable contribution in any
case in which (a) the Solicitation Agent (or any person who controls the
Solicitation Agent within the meaning of Section 15 of the Securities Act of
1933, as amended or Section 20 of the Securities Exchange Act of 1934, as
amended) would otherwise be entitled to indemnification pursuant to Section 7(a)
hereof but it is judicially determined (by the entry of a final judgment or
decree by a court of competent jurisdiction and the expiration of time to appeal
or the denial of the last right of appeal) that such indemnification may not be
enforced in such case notwithstanding the fact that Section 7(a) provides for
indemnification in such case or (b) contribution may be required on the part of
the Solicitation Agent or any such controlling person in circumstances for which
indemnification is provided under Section 7(a); in each such case, the Company
and the Solicitation Agent shall contribute to the amount paid as a result of
such losses, claims, expenses, damages or liabilities (or actions in respect
thereof) (A) in such proportion as is appropriate to reflect the relative
benefits received by each of the contributing parties on the one hand, and the
party to be indemnified on the other hand, from the Offer to Exchange or (B) if
the allocation provided by clause (A) above is not permitted by applicable law,
in such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (A) above but also the relative fault of each of the
contributing parties on the one hand and the party to be indemnified on the
other hand in connection with statements or omissions that resulted in such
losses, claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations; provided, however, that, in any such case (x) the
Solicitation Agent shall not be required to contribute any amount in excess of
the compensation paid to the Solicitation Agent pursuant to Section 2 hereof,
and (y) no person guilty of a fraudulent misrepresentation shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
Promptly after receipt by any party to this Agreement of notice of the
commencement of any action, suit or proceeding, such party will, if a claim for
contribution in respect thereof is to be made against another party (the
"Contributing Party"), notify the Contributing Party of the commencement
thereof, but the omission to notify the Contributing Party will not relieve it
from any liability which it may have to any other party. In case any such
action, suit or proceeding is brought against any party, and such party notifies
a Contributing Party of the commencement thereof, the Contributing Party will be
entitled to participate therein with the notifying party and any other
Contributing Party similarly notified.
7. Miscellaneous.
(a) The Company shall advise the Solicitation Agent promptly of the
occurrence of any event which, in the Company's judgment, could cause the
Company to withdraw, rescind or modify the Offer to Exchange.
(b) This Agreement is made solely for the benefit of the Solicitation
Agent and the Company and their respective successors, assigns, and legal
representatives, and no other person shall acquire or have any right under or by
virtue of this agreement.
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(c) Except as otherwise expressly provided in this agreement, whenever
notice is required by the provisions of this agreement to be given to (i) the
Company, such notice shall be in writing addressed to the Company, at its office
at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇.▇. ▇▇▇ ▇▇▇, ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇; and (ii) the Solicitation Agent, such notice shall be in writing
addressed to the Solicitation Agent, at ▇▇▇▇▇ & Company, Inc., ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇▇▇▇. Any notice required or
permitted to be given hereunder shall be given in writing and shall be deemed
effective when deposited in the United States mail, postage prepaid, or when
received if delivered personally or by facsimile confirmed transmission.
This Agreement shall be governed by and construed in all respects
under the laws of the State of New York, without reference to its conflict of
laws, rules or principles. Any suit, action, proceeding or litigation arising
out of or relating to this Agreement shall be brought and prosecuted in such
federal or state court or courts located within the State of New York as
provided by law. The parties hereby irrevocably and unconditionally consent to
the jurisdiction of each such court or courts located within the State of New
York and to service of process by registered or certified mail, return receipt
requested, or by any other manner provided by applicable law, and hereby
irrevocably and unconditionally waive any right to claim that any suit, action,
proceeding or litigation so commenced has been commenced in an inconvenient
forum.
(d) This Agreement contains the entire understanding of the parties
with respect to ▇▇▇▇▇ & Company, Inc. acting as Solicitation Agent of the Offer
to Exchange, superseding all prior agreements, understandings and negotiations
with respect to such activities by ▇▇▇▇▇ & Company, Inc., and shall be governed
by and construed in accordance with the laws of the State of New York. This
Agreement may be executed in any number of separate counterparts, each of which
shall be an original, but all such counterparts shall together constitute one
and the same agreement.
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Please sign and return to us a duplicate of this letter, whereupon it
will become a binding agreement.
Very truly yours,
THERMWOOD CORPORATION
By: _____________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
President
The undersigned hereby confirms that the foregoing letter, as of the date
thereof, correctly sets forth the agreement between the Company and the
undersigned.
▇▇▇▇▇ & COMPANY, INC.
By: ____________________________
Name:
Title:
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EXHIBIT A
EXHIBIT B
December __, 1998
▇▇▇▇▇ & Company, Inc.
As Solicitation Agent
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
We have acted as counsel to the Thermwood Corporation (the "Company"),
in connection with the Offer (the "Offer to Exchange") to exchange 12% 15-year
Subordinated Debentures ("Debentures"), which have been issued pursuant to a
certain indenture dated ____________ (the "Indenture"), for all of its
outstanding Shares ("Shares") of common stock other than certain Shares owned by
two major Shareholders.
Such Offer to Exchange and was made on the terms and subject to the
conditions set forth in those certain documents which are attached as Exhibit A
to the Solicitation Agent Agreement referred to below (said documents are
collectively referred to as the "Offer to Exchange Material").
In connection therewith, we have examined the Offer to Exchange
Material, a signed copy of the agreement dated ___________, 1998, between the
Company and you providing for your services as Solicitation Agent for the Offer
to Exchange (the "Solicitation Agent Agreement") and such other documents as we
have deemed appropriate for the purpose of this opinion.
We have not undertaken any independent review or investigation of the
foregoing facts. In our examination, we have assumed the genuineness of all
signatures, the authenticity of all documents submitted to us as originals, the
conformity to originals of all documents submitted to us as photocopies and the
authenticity of the originals of such photocopies. We have also assumed, with
your consent and without undertaking, or having any duty to undertake any
independent investigation, that the representations, warranties, statements and
information as to factual matters made in the agreements and documents mentioned
above or otherwise furnished to us are true and correct.
Based upon such examination and in reliance thereon and having regard
for legal considerations which we deem relevant, we are of the following
opinion:
(i) The Company is a corporation duly organized, validly existing and
in good standing under the laws of the jurisdiction of its
incorporation and is duly qualified to transact business and is
in good standing in each jurisdiction in which the conduct of its
businesses or the ownership or leasing of property requires such
qualification, except to the extent that the failure to be so
qualified or to be in good standing, considering all such cases
in the aggregate, would not have a material adverse effect on the
business, properties, financial position or results of operations
of the Company and all of its subsidiaries and affiliates taken
as a whole.
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(ii) The Company has full corporate power and authority to take and
has duly taken all necessary corporate action to authorize (i)
the Offer to Exchange, (ii) the purchase by the Company of Shares
pursuant to the Offer to Exchange, and (iii) the execution,
delivery and performance of this Agreement has been, and when
executed and delivered by the Company and the relevant Trustee,
the Indenture will be, duly executed and delivered on behalf of
the Company, and, assuming due authorization, execution and
delivery of each of the Indenture and this Agreement by each of
the other parties thereto is, or in the case of the Indenture
will be, a legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms,
except that the enforceability hereof may be limited by (x)
bankruptcy, insolvency, reorganization, moratorium and other laws
now or hereafter in effect relating to creditors' rights
generally and (y) general principles of equity. As of the date
hereof, the Company has full corporate power and authority to
take and will have duly taken all necessary corporate action to
authorize any borrowings or financings related to the Offer to
Exchange.
(iii)All issued and outstanding securities of the Company have been
duly authorized and validly issued and are fully paid and
non-assessable; the holders thereof have no rights of rescission
or preemptive rights with respect thereto and are not subject to
personal liability solely by reason of being securityholders; and
none of such securities was issued in violation of the preemptive
rights of any holders of any security of the Company.
(iv) The Debentures have been duly authorized and, when issued, will
be validly issued, fully-paid and non-assessable; the holders
thereof will not be subject to personal liability under the
Company's Articles of Incorporation or Bylaws or the laws of the
State of Indiana solely by reason of being such holders; such
securities are not and will not be subject to the preemptive
rights of any holder of any security of the Company.
(v) The Offer to Exchange complies or will comply in all material
respects with the applicable provisions of the Securities
Exchange Act of 1934, as amended, and the rules and regulations
promulgated by the Commission thereunder (collectively, the
"Exchange Act"). The Offer to Exchange Material does not and will
not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary
to make the statements made therein, in light of the
circumstances under which they are made, not misleading;
provided, however, that no representation is made with respect to
any statements contained in, or any matter omitted from the Offer
to Exchange Material in reliance upon and in conformity with
information furnished or confirmed in writing by the Solicitation
Agent to the Company expressly for use therein. In connection
with the Offer to Exchange, the Company has complied, and will
continue to comply, with the applicable provisions of the
Exchange Act.
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(vi) The Offer to Exchange (including any related borrowings or
financings by the Company or any of its subsidiaries or
affiliates), the purchase by the Company of Shares pursuant to
the Offer to Exchange, and the execution, delivery and
performance of each of the Indenture and this Agreement by the
Company, comply and will comply in all material respects with all
applicable requirements of federal, state, local and foreign law,
including, without limitation, any applicable regulations of the
Commission and Other Agencies, and all applicable judgments,
orders or decrees; and no consent, authorization, approval,
order, exemption, registration, qualification or other action of,
or filing with or notice to, the Commission or any Other Agency
is required in connection with the execution, delivery and
performance of each of the Indenture and this Agreement by the
Company, and, the making or consummation by the Company of the
Offer to Exchange or the consummation of the other transactions
contemplated by this Agreement or the Offer to Exchange, except
where the failure to obtain or make such consent, authorization,
approval, order, exemption, registration, qualification or other
action or filing or notification would not materially adversely
affect the ability of the Company, to execute, deliver and
perform each of the Indenture and this Agreement or to commence
and consummate the Offer to Exchange in accordance with its
terms.
(vii)The Offer to Exchange (including any related borrowings or
financings by the Company or any of its subsidiaries or
affiliates), the purchase of Shares by the Company pursuant to
the Offer to Exchange, and the execution, delivery and
performance of each of the Indenture and this Agreement by the
Company, do not and will not (i) conflict with or result in a
violation of any of the provisions of the certificate of
incorporation or by-laws (or similar organizational documents) of
the Company, (ii) conflict with or violate in any material
respect any law, rule, regulation, order, judgment or decree
applicable to the Company, or any of its subsidiaries or by which
any property or asset of the Company or any of its subsidiaries
is or may be bound or (iii) result in a breach of any of the
material terms or provisions of, or constitute a default (with or
without due notice and/or lapse of time) under, any loan or
credit agreement, indenture, mortgage, note or other agreement or
instrument to which the Company or any of its subsidiaries is a
party or by which any of them or any of their respective
properties or assets is or may be bound.
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(viii) Except as expressly disclosed in the Offer to Exchange
Material, no stop order, restraining order or denial of an
application for approval has been issued and no investigation,
proceeding or litigation has commenced or, to the best of the
Company's knowledge, threatened before the Commission or any
Other Agency with respect to the making or consummation of the
Offer to Exchange (including the obtaining or use of funds to
purchase Shares pursuant thereto) or the consummation of the
other transactions contemplated by this Agreement or the Offer to
Exchange or with respect to the ownership of Shares by the
Company or any of its subsidiaries or affiliates.
(ix) The Company has no knowledge of any material fact or information
concerning the Company or any of its subsidiaries, or the
operations, assets, condition (financial or otherwise) or
prospects of the Company or any of its subsidiaries, which is
required to be made generally available to the public and which
has not been, or is not being, or will not be, made generally
available to the public through the Offer to Exchange Material or
otherwise.
(x) The Company is not, nor will it be as a result of the purchase by
the Company of Shares that it may become obligated to purchase
pursuant to the terms of the Offer to Exchange, an "investment
company" under the Investment Company Act of 1940, as amended,
and the rules and regulations promulgated by the Commission
thereunder.
The opinions herein are further subject to the following limitations
and qualifications:
(a) We express no opinion as to matters of law in jurisdictions other
than the State of Indiana and the federal laws of the United States.
(b) We express no opinion insofar as to compliance with applicable
anti-fraud statutes, rules or regulations of state, and federal law.
(c) We have assumed, without investigation, there was and will be no
misrepresentation, omission, fraud, duress, undue influence, bad faith or deceit
in connection with the Offer to Exchange.
We are not passing upon and do not assume any responsibility for the
accuracy, completeness or fairness of any of the statements contained in the
Registration Statement and Prospectus and make no representation that we have
independently verified the accuracy, completeness or fairness of any such
statements. In our capacity as counsel to the Company, however, we had
conferences and teleconferences with the Company and representatives of the
Solicitation Agent and others, during which conferences and teleconferences the
contents of the Registration Statement and Prospectus and related matters were
discussed. Based on our participation in the above-mentioned conferences and in
reliance thereon and on the records, documents, certificates and opinions herein
mentioned above, we advise you that, during the course of our representation of
the Company as counsel on this matter, no information came to the attention of
the attorneys in our firm rendering legal services in connection with such
representation which caused us to believe that the Offer to Exchange Material at
its date and as of the date of this opinion contained or contains any untrue
statements of a material fact or omitted or omits to state any 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.
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This opinion is intended for your use and neither this opinion nor any
part hereof may be delivered to, used or relied upon by any other person or
entity, without our prior written consent except this opinion may be relied upon
by ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP.
This opinion is given as of the date hereof and we assume no
obligation to update or supplement this opinion to reflect any facts or
circumstances which may hereafter come to our attention or any changes in law
which may hereafter occur.
Very truly yours,
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