<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 24, 1998
REGISTRATION NO. 333-47493
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
______________
PRE-EFFECTIVE AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
__________________
<TABLE>
<CAPTION>
APPLIED POWER INC. APPLIED POWER CAPITAL TRUST I
<S> <C>
(Exact name of Registrant as APPLIED POWER CAPITAL TRUST II
specified in its charter)
(Exact name of each Registrant as
specified in its Trust Agreement)
WISCONSIN DELAWARE
(State or other jurisdiction of (State or other jurisdiction of
incorporation or organization) incorporation or organization)
39-1068610 EACH TO BE APPLIED FOR
(I.R.S. Employer Identification No.) (I.R.S. Employer Identification No.)
13000 WEST SILVER SPRING DRIVE c/o APPLIED POWER INC.
BUTLER, WISCONSIN 53007-1093 13000 WEST SILVER SPRING DRIVE
(414) 783-9279 BUTLER, WISCONSIN 53007-1093
(Address, including zip code, and (414) 783-9279
telephone (Address, including zip code, and telephone
number, including area code, of number, including area code, of Registrants'
Registrant's principal executive offices)
principal executive offices)
</TABLE>
ROBERT C. ARZBAECHER
SENIOR VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
APPLIED POWER INC.
13000 WEST SILVER SPRING DRIVE
BUTLER, WISCONSIN 53007-1093
(414) 783-9279
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
________________
COPIES TO:
BRUCE C. DAVIDSON GARY W. WOLF
QUARLES & BRADY LLP CAHILL GORDON & REINDEL
411 EAST WISCONSIN AVENUE 80 PINE STREET
MILWAUKEE, WISCONSIN 53202 NEW YORK, NEW YORK 10005
(414) 277-5000 (212) 701-3600
________________
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE SECURITIES TO THE
PUBLIC: At such time or from time to time after the effective date of this
Registration Statement as the Registrants shall determine in light of market
conditions and other factors.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [x]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_] _______________
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_] _______________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
============================================================================================================
PROPOSED
AMOUNT PROPOSED MAXIMUM AMOUNT
TITLE OF EACH CLASS OF TO BE OFFERING PRICE OFFERING REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED PER UNIT PRICE FEE
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Securities of Applied Power Inc.: (1) (2) (3) $300,000,000 (3) $ 88,500 (4)
Debt Securities
Cumulative Preferred Stock, par
value $1.00 per share
Depositary Shares
Class A Common Stock, par value
$.20 per share
Warrants
Stock Purchase Contracts
Stock Purchase Units
Preferred Securities of Applied
Power Capital Trust I
Preferred Securities of Applied
Power Capital Trust II
Guarantees of Preferred Securities
of Applied Power Capital Trust I
and Applied Power Capital Trust II
by Applied Power Inc. (5)
============================================================================================================
</TABLE>
(1) Such indeterminate number or amount of Debt Securities, Cumulative
Preferred Stock, Depositary Shares, Class A Common Stock, Warrants, Stock
Purchase Contracts and Stock Purchase Units of Applied Power Inc. and
Preferred Securities of Applied Power Capital Trust I and Applied Power
Capital Trust II as may from time to time be issued at indeterminate
prices. Junior Subordinated Debt Securities may be issued and sold to
Applied Power Capital Trust I and Applied Power Capital Trust II, in which
event such Junior Subordinated Debt Securities may later be distributed to
the holders of Preferred Securities upon a dissolution of Applied Power
Capital Trust I and Applied Power Capital Trust II and the distribution of
the assets thereof. Securities registered hereunder (the"Securities") may
be sold separately, together or as units with other Securities registered
hereunder.
(2) Such amount in U.S. dollars or the equivalent thereof in foreign currencies
or foreign currency units as shall result in an aggregate initial offering
price for all Securities not to exceed $300,000,000. If any Debt Securities
are issued at an original issue discount, such greater amount as may result
in the initial offering price for Securities aggregating $300,000,000. In
addition, this Registration Statement includes such presently indeterminate
number of Securities as may be issuable from time to time upon conversion
or exchange of the Securities being registered hereunder.
(3) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(o) under the Securities Act of 1933, as amended (the
"Securities Act"). Accordingly, the table does not specify by each class
information as to the amount to be registered or the proposed maximum
offering price per unit.
(4) Calculated pursuant to Rule 457(o) at the statutory rate of .000295 of the
maximum aggregate offering price in effect at the time of and paid with the
filing of the Registration Statement on March 6, 1998.
(5) Applied Power Inc. is also registering under this Registration Statement
all other obligations that it may have with respect to Preferred Securities
issued by Applied Power Capital Trust I and Applied Power Capital Trust II.
No separate consideration will be received for any Guarantee or any other
such obligations.
______________________
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON
SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY
DETERMINE.
==========================================================
<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
PROSPECTUS
SUBJECT TO COMPLETION, DATED DECEMBER 24, 1998
$300,000,000
APPLIED POWER INC.
DEBT SECURITIES, CUMULATIVE PREFERRED STOCK,
CLASS A COMMON STOCK, WARRANTS,
STOCK PURCHASE CONTRACTS AND
STOCK PURCHASE UNITS
________________
APPLIED POWER CAPITAL TRUST I
APPLIED POWER CAPITAL TRUST II
PREFERRED SECURITIES FULLY AND UNCONDITIONALLY GUARANTEED,
AS DESCRIBED HEREIN, BY
APPLIED POWER INC.
Applied Power Inc., a Wisconsin corporation (the "Company"), may offer and
sell from time to time, together or separately, (i) its unsecured debt
securities ("Debt Securities"), which may be senior (the "Senior Debt
Securities"), subordinated (the "Subordinated Debt Securities"), or junior
subordinated (the "Junior Subordinated Debt Securities") in priority of payment,
(ii) shares of its Cumulative Preferred Stock, par value $1.00 per share, which
may be represented by depositary shares as described herein (the "Preferred
Stock"), (iii) shares of its Class A Common Stock, par value $.20 per share (the
"Class A Common Stock"), (iv) warrants (the "Warrants") to purchase any of the
foregoing Debt Securities, Preferred Stock or Class A Common Stock, (v) stock
purchase contracts ("Stock Purchase Contracts") to purchase shares of Class A
Common Stock or (vi) stock purchase units ("Stock Purchase Units"), each
representing ownership of a Stock Purchase Contract and any of (x) Debt
Securities, (y) debt obligations of third parties, including U.S. Treasury
Securities, or (z) Preferred Securities (as defined below) of an Applied Power
Trust (as defined below), securing the holder's obligation to purchase Class A
Common Stock under the Stock Purchase Contract. The Debt Securities, the
Preferred Stock, the Class A Common Stock, the Warrants, the Stock Purchase
Contracts and the Stock Purchase Units, together with the Preferred Securities
and the related Guarantees (as defined below), are collectively referred to
herein as the "Securities." The Securities may be offered in one or more
separate classes or series, in amounts, at prices and on terms to be determined
at the time of the offering thereof and to be set forth in a supplement or
supplements to this Prospectus (each, a "Prospectus Supplement"). The
Securities may be sold for U.S. dollars, foreign currencies or foreign currency
units, and the Securities may be payable in U.S. dollars, foreign currencies or
foreign currency units.
Applied Power Capital Trust I and Applied Power Capital Trust II, each a
statutory business trust created under the laws of the State of Delaware (each,
an "Applied Power Trust," and collectively, the "Applied Power Trusts"), may
severally offer preferred securities (the "Preferred Securities") representing
undivided beneficial ownership interests in the assets of such Applied Power
Trust. The Company will be the owner of the common securities (the "Common
Securities," and, together with the Preferred Securities, the "Trust
Securities") of each Applied Power Trust. The payment of periodic cash
distributions ("Distributions") with respect to Preferred Securities of each of
the Applied
<PAGE>
Power Trusts out of monies held by the Property Trustee (as defined herein) of
such Applied Power Trust, and payments on liquidation of such Applied Power
Trust and on redemption of Preferred Securities of such Applied Power Trust,
will be guaranteed by the Company as and to the extent described herein (each, a
"Guarantee"). See "Description of Guarantees." The Company's obligation under
each Guarantee is an unsecured obligation of the Company and will rank
subordinate and junior in right of payment to all senior indebtedness and
subordinated indebtedness of the Company. Except as otherwise provided in the
applicable Prospectus Supplement, (i) concurrently with the issuance by an
Applied Power Trust of its Preferred Securities, such Applied Power Trust will
invest the proceeds thereof and any contributions made in respect of the Common
Securities in a corresponding series of the Company's Junior Subordinated Debt
Securities (the "Corresponding Junior Subordinated Debt Securities") with terms
directly corresponding to the terms of that Applied Power Trust's Preferred
Securities, (ii) the Corresponding Junior Subordinated Debt Securities will be
the sole assets of that Applied Power Trust and (iii) payments under the
Corresponding Junior Subordinated Debt Securities will be the only revenue of
each Applied Power Trust. Unless otherwise specified in an applicable Prospectus
Supplement, the Company may redeem the Corresponding Junior Subordinated Debt
Securities (and cause the redemption of Trust Securities) or may dissolve each
Applied Power Trust and, after satisfaction of creditors of such Applied Power
Trusts as provided by applicable law, cause the Corresponding Junior
Subordinated Debt Securities to be distributed to the holders of Preferred
Securities in liquidation of their interests in the applicable Applied Power
Trust. See "Description of Preferred Securities -- Liquidation Distribution upon
Dissolution."
This Prospectus may not be used to consummate sales of Securities unless
accompanied by a Prospectus Supplement.
________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
________________
The date of this Prospectus is , 199_.
-2-
<PAGE>
The specific terms of the Securities in respect of which this Prospectus is
being delivered will be set forth in the accompanying Prospectus Supplement or
Supplements, together with the terms of the offering of any such Securities, the
initial price thereof, the net proceeds from the sale thereof and the intended
use or uses of such proceeds. The Prospectus Supplement will also set forth with
respect to the particular Securities offered, certain terms thereof, including,
where applicable, (i) in the case of Debt Securities, the designation, aggregate
principal amount, authorized denominations and priority thereof, the currency,
currencies or currency units for which the Debt Securities may be purchased and
the currency, currencies or currency units in which the principal of and any
interest on such Debt Securities may be payable, the date on which such Debt
Securities will mature, the rate per annum at which such Debt Securities will
bear interest, if any, or the method of determination of such rate, the dates on
which such interest, if any, will be payable, the deferral of payment of any
interest, any conversion or exchange provisions, any redemption or sinking fund
provisions and any additional or other rights, preferences, privileges,
limitations and restrictions relating to such Debt Securities, (ii) in the case
of Preferred Stock, the specific designation, number of shares or fractional
interests therein and any dividend, liquidation, redemption, exchange, voting,
conversion and other rights, preferences and privileges, (iii) in the case of
Class A Common Stock, the aggregate number of shares offered and market price
and dividend information, (iv) in the case of the Warrants, the Debt Securities,
the Preferred Stock or Class A Common Stock, respectively, for which each such
Warrant is exercisable and the exercise price, duration, detachability and other
terms of the Warrants, (v) in the case of Stock Purchase Contracts, the
designation and number of shares of Class A Common Stock issuable thereunder,
the purchase price of the Class A Common Stock, the date or dates on which the
Class A Common Stock is required to be purchased by the holders of the Stock
Purchase Contracts and any periodic payments required to be made by the Company
to the holders of the Stock Purchase Contracts or vice versa, (vi) in the case
of Stock Purchase Units, the specific terms of the Stock Purchase Contracts and
any Debt Securities or debt obligations of third parties or Preferred Securities
of an Applied Power Trust securing the holders' obligation to purchase the Class
A Common Stock under the Stock Purchase Contracts, the ability of a holder of
such Stock Purchase Units to settle early the underlying Stock Purchase Contract
by delivering cash in exchange for the underlying collateral and, if applicable,
whether the Company will issue to such holder a Prepaid Security (as defined
herein) as a result of such early settlement and the specific terms of the
Prepaid Security and (vii) in the case of Preferred Securities of an Applied
Power Trust, the specific designation, number of securities, liquidation amount
per security, any listing on a securities exchange, distribution rate (or method
of calculation thereof), dates on which distributions shall be payable and dates
from which distributions shall accrue, voting rights, if any, terms for any
conversion or exchange into other securities, any redemption or sinking fund
provisions, any other rights, preferences, privileges, limitations or
restrictions relating to the Preferred Securities and the terms upon which the
proceeds of the sale of the Preferred Securities shall be used to purchase a
specific series of Corresponding Junior Subordinated Debt Securities of the
Company. The Prospectus Supplement will also contain information, where
applicable, about certain United States Federal income tax considerations
relating to the Securities described in the Prospectus Supplement. All or a
portion of the Securities may be issued in permanent or temporary global form
(each a "Global Security").
The aggregate initial offering price of all Securities shall not exceed
$300,000,000 (or, if any Securities are issued (i) with any initial offering
price denominated in a foreign currency or currency unit, such amount as shall
result in aggregate gross proceeds equivalent to $300,000,000 at the time of
initial offering or (ii) at an original issue discount, such greater amount as
shall result in aggregate gross proceeds of $300,000,000).
The Securities may be sold through underwriters or dealers or may be sold
by the Company and/or each Applied Power Trust directly or through agents
designated from time to time. The names of any underwriters or agents involved
in the sale of the Securities in respect to which this Prospectus is being
delivered and their compensation will be set forth in the Prospectus Supplement.
________________
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION NOT CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS OR
THE ACCOMPANYING PROSPECTUS SUPPLEMENT AND, IF GIVEN OR MADE, SUCH INFORMATION
OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY OR ANY UNDERWRITER, DEALER OR AGENT. NEITHER THE DELIVERY OF THIS
PROSPECTUS OR THE ACCOMPANYING PROSPECTUS SUPPLEMENT NOR ANY SALE MADE HEREUNDER
OR THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THE
INFORMATION CONTAINED HEREIN OR IN THE ACCOMPANYING PROSPECTUS SUPPLEMENT IS
CORRECT AS OF ANY DATE
-3-
<PAGE>
SUBSEQUENT TO THE DATE HEREOF OR THEREOF OR THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THEREOF. NEITHER THIS PROSPECTUS
NOR THE ACCOMPANYING PROSPECTUS SUPPLEMENT CONSTITUTES AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY SECURITIES IN ANY JURISDICTION IN WHICH SUCH
OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER
OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy or information statements and other information
with the Securities and Exchange Commission (the "Commission"), all of which may
be inspected and copied at the public reference facilities maintained by the
Commission at Room 1024, 450 Fifth Street, N.W., Judiciary Plaza, Washington,
D.C. 20549, and at the following Regional Offices of the Commission: Chicago
Regional Office, Suite 1400, Northwestern Atrium Center, 500 West Madison
Street, Chicago, Illinois 60661; and New York Regional Office, 7 World Trade
Center, 13th Floor, New York, New York 10048. Copies of such material can be
obtained at the prescribed rates from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549,
and accessed electronically at the web site maintained by the Commission
(http://www.sec.gov). Such material can also be inspected at the offices of the
New York Stock Exchange (the "NYSE"), 20 Broad Street, New York, New York 10005,
where the Class A Common Stock is listed (symbol "APW").
This Prospectus constitutes part of a Registration Statement on Form S-3
filed by the Company and the Applied Power Trusts with the Commission under the
Securities Act of 1933, as amended (the "Securities Act"), with respect to the
Securities offered hereby. This Prospectus omits certain of the information
contained in the Registration Statement in accordance with the rules and
regulations of the Commission. Reference is hereby made to the Registration
Statement and related exhibits for further information with respect to the
Company and the Securities. Statements contained herein concerning the
provisions of any document are not necessarily complete and, in each instance,
where a copy of such document has been filed as an exhibit to the Registration
Statement or otherwise has been filed with the Commission, reference is made to
the copy of the applicable document so filed. Each such statement is qualified
in its entirety by such reference.
No separate financial statements of the Applied Power Trusts have been
included herein. The Company and the Applied Power Trusts do not consider that
such financial statements would be material to holders of the Preferred
Securities because (i) all of the voting securities of the Applied Power Trusts
will be owned, directly or indirectly, by the Company, a reporting company under
the Exchange Act, (ii) each Applied Power Trust is a newly formed special
purpose entity, has no operating history or independent operations and is not
engaged in and does not propose to engage in any activity other than holding as
trust assets the Corresponding Junior Subordinated Debt Securities of the
Company and issuing the Trust Securities and (iii) the Company's obligations
described herein and in any accompanying Prospectus Supplement, through the
applicable Guarantee Agreement (as defined herein), the applicable Trust
Agreement (as defined herein), the Corresponding Junior Subordinated Debt
Securities and the applicable Securities Resolution under the Indenture (as
defined herein), taken together, constitute a full, irrevocable and
unconditional guarantee by the Company of payments due on the Preferred
Securities. No single document standing alone or operating in conjunction with
fewer than all of the other documents constitutes such guarantee. It is only
the combined operation of these documents that has the effect of providing a
full, irrevocable and unconditional guarantee of the Applied Power Trust's
obligations under the Preferred Securities. See "The Applied Power Trusts,"
"Description of Preferred Securities," "Description of Debt Securities --
Certain Provisions Relating to Corresponding Junior Subordinated Debt
Securities" and "Description of Guarantees."
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents previously filed by the Company (Commission File
No. 1-11288) with the Commission pursuant to the Exchange Act are incorporated
herein by reference:
(a) The Company's Annual Report on Form 10-K for the fiscal year ended
August 31, 1998;
-4-
<PAGE>
(b) The Company's Current Report on Form 8-K dated September 29, 1998 and
Amendment No. 1 thereto on Form 8-K/A filed December 11, 1998; and
(c) The description of the Class A Common Stock contained in the Company's
Current Report on Form 8-K dated August 12, 1998 filed for the purpose
of updating and superseding the description of the Class A Common
Stock contained in the Company's Registration Statement on Form 8-A
filed on August 11, 1987, as previously updated by the Company's
Current Report on Form 8-K dated January 28, 1991.
All documents filed by the Company with the Commission pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this Prospectus
and prior to the termination of the offering of the Securities made hereby shall
be deemed to be incorporated by reference into this Prospectus from the date of
filing of such documents. Any statement contained in a document incorporated or
deemed to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person to whom a copy of
this Prospectus is delivered, including any beneficial owner of Securities, upon
the written or oral request of any such person, a copy of any and all of the
documents that have been or may be incorporated by reference herein, other than
exhibits to such documents (unless such exhibits are specifically incorporated
by reference into such documents). Such requests should be directed to Investor
Relations, Applied Power Inc., 13000 West Silver Spring Drive, Butler, Wisconsin
53007 (telephone: (414) 783-9279).
________________
Unless otherwise indicated, currency amounts in this Prospectus and any
Prospectus Supplement are stated in United States dollars ("$", "dollars" or
"U.S.$").
FORWARD-LOOKING STATEMENTS AND CAUTIONARY FACTORS
This Prospectus and any Prospectus Supplement (including the documents
incorporated herein or therein by reference) may contain statements that
constitute forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Prospective investors are cautioned
that any such forward-looking statements are not guarantees of future
performance and involve known and unknown risks, uncertainties and other factors
which may cause the actual results, performance or achievements to differ
materially from the future results, performance or achievements expressed or
implied in such forward-looking statements. The words "anticipate," "believe,"
"estimate," "expect," "project," "objective" and similar expressions are
intended to identify forward-looking statements. In addition to the assumptions
and other factors referred to specifically in connection with such statements,
factors that could cause the Company's actual results to differ materially from
those contemplated in the forward-looking statements include factors described
under the caption "Risk Factors That May Affect Future Results" or similar
cautionary captions in the documents incorporated herein by reference.
THE COMPANY
The Company, a Wisconsin corporation incorporated in 1910, is a diversified
global company engaged in the business of providing tools, equipment, systems
and supply items to a variety of end-users and original equipment manufacturers
("OEMs") in the manufacturing, computer, semiconductor, telecommunication,
datacom, construction, electrical, transportation, recreational vehicle, natural
resources, aerospace, defense, and other industries.
The Company's operations are divided into three business segments:
-5-
<PAGE>
. Enclosure Products and Systems
------------------------------
Electronic enclosure products, systems and technical environment
solutions sold into the telecommunications, computer networking,
semiconductor equipment, medical, electronic and manufacturing
environments.
. Engineered Solutions
--------------------
Motion, vibration control and magnetic applications and systems
primarily for OEM customers.
. Tools and Supplies
------------------
Industrial and electrical tools and supplies sold primarily through
distributors and mass merchandisers.
ENCLOSURE PRODUCTS AND SYSTEMS
Enclosure Products and Systems ("EPS"), formerly known as Technical
Environments and Enclosures, provides users and manufacturers of electronic
equipment with technical furniture and electronic enclosure products and
systems. Technical furniture, sold primarily under the Wright Line brand name,
is used to configure the environment in which computers reside, including
computer room, manufacturing or technical office environments. Electronic
enclosure products are cabinets, racks and subracks that are sold under the
Stantron and VERO brand names. Other products include backplanes, power
supplies and cases sold under the VERO, Danica and ZERO Halliburton (R) brand
names, respectively. In addition to providing standard products, EPS sells
customized electronic enclosure systems allowing the Company to provide
completely integrated and tested products to a wide array of customers including
the telecommunication, computer networking, semiconductor manufacturing
equipment and automated teller machines markets. The systems business is driven
by the desire of many producers of electronic components to outsource
manufacturing and it relies heavily on EPS' skills in new product development,
supply chain management, assembly and testing. EPS also has a global drop ship
capability. EPS products are primarily sold direct, with specific standard
products going through distribution in selected markets. EPS sales and
manufacturing locations are mainly in Europe and North America.
ENGINEERED SOLUTIONS
Engineered Solutions ("ES") is a technology based business providing
customized solutions to OEM customers in the truck, aerospace, automotive,
recreational vehicle, electrical/electronic enclosures and other general
industrial markets. ES possesses particular competence in hydraulic,
electromechanical, rubber/elastomer molding, magnetic, thermal systems and
electronic control techniques. Principal brand names that ES trades under
include McLean, Barry Controls, Power Gear, Power Packer, Vlier, Mox-Med and
Eder. The segment's sales, engineering and manufacturing activities are
primarily in Europe and North America. As an OEM supplier, ES operates as a
just-in-time supplier and maintains numerous quality certifications including
ISO 9001 and ISO 9000. Most ES sales are diversified by customer and end user
industry and are primarily sold through direct sales persons, with sales
representatives and distributors used in certain situations.
TOOLS AND SUPPLIES
Tools and Supplies ("TS") provides a wide array of electrical and
industrial tools and supplies to wholesale distributors, catalogs and various
retail channels of distribution. TS provides over 10,000 stock keeping units
("SKUs"), most of which are designed and manufactured by the Company in North
America. TS has particular expertise in hydraulic design and plastic injection
molding. The Company maintains a sophisticated sourcing operation to supply
additional products to supplement its own products and meet its customers'
needs. Principal brand names used by the Company include Enerpac, GB Gardner
Bender, Ancor, Calterm and Del City. End user markets include general
-6-
<PAGE>
industrial, construction, retail marine, retail automotive, do-it-yourself and
production automation. To provide its customers with the service levels
required, TS maintains a sophisticated warehouse and physical distribution
capability in North America, Europe and Asia. Certain products are sold on an
OEM basis.
* * * * *
The Company has had an active acquisition program and regularly reviews
acquisition opportunities in the ordinary course of its business, some of which
may be material. Such opportunities may be under investigation, discussion, or
negotiation at any particular time or from time to time.
The Company's principal executive offices are located at 13000 West Silver
Spring Drive, Butler, Wisconsin 53007, and its telephone number is (414) 783-
9279.
USE OF PROCEEDS
Except as otherwise described in the applicable Prospectus Supplement, the
Company intends to use the net proceeds from the sale of the Securities (other
than the Trust Securities) to refinance, in part, existing indebtedness and/or
for general corporate purposes. Funds not required immediately for such
purposes may be invested temporarily in short-term marketable securities. The
Company expects from time to time to continue to incur short-term and long-term
debt and to effect other financings, the amounts of which cannot now be
determined. Each Applied Power Trust will use all proceeds received from the
sale of its Trust Securities to purchase the applicable Corresponding Junior
Subordinated Debt Securities.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the historical ratios of earnings to fixed
charges for the Company for the periods indicated.
<TABLE>
<CAPTION>
YEARS ENDED AUGUST 31,
-------------------------------
1998(1) 1997 1996 1995 1994
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges (2) (3) 2.6 5.3 7.4 5.5 4.0
</TABLE>
___________________
(1) 1998 net earnings include a non-recurring restructuring charge of
$52,637,000 which related to merger costs, various plant consolidations,
and other cost reductions and product rationalization efforts of the
Company. Excluding this charge and the related tax benefit, the ratio of
earnings to fixed charges would have been 4.6.
(2) The ratios reflect the combined results of operations and financial
position of the Company and ZERO Corporation, acquired by merger on July
31, 1998, restated for all periods presented pursuant to the pooling-of-
interests method of accounting, and reflect the results of other acquired
companies from their respective effective dates of acquisition in
accordance with the purchase method of accounting.
(3) For purposes of computing the ratio of earnings to fixed charges,
"earnings" consist of income before income taxes, cumulative effect of
change in accounting methods, discontinued operations, extraordinary items
and fixed charges. "Fixed charges" consist of interest on indebtedness,
amortization of debt expenses and one-third of rent expense which is deemed
representative of an interest factor.
-7-
<PAGE>
THE APPLIED POWER TRUSTS
Each Applied Power Trust is a statutory business trust created under
Delaware law pursuant to (i) a trust agreement executed by the Company, as
depositor of such Applied Power Trust, and the Issuer Trustees (as defined
herein) of such Applied Power Trust and (ii) a certificate of trust filed with
the Delaware Secretary of State. Each trust agreement will be amended and
restated in its entirety (each as so amended and restated, a "Trust Agreement")
substantially in the form filed as an exhibit to the Registration Statement of
which this Prospectus forms a part. Each Trust Agreement will be qualified as
an indenture under the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"). Each Applied Power Trust exists for the exclusive purposes of
(i) issuing and selling its Trust Securities, (ii) using the proceeds from the
sale of such Trust Securities to acquire a series of Corresponding Junior
Subordinated Debt Securities issued by the Company and (iii) engaging in only
those other activities necessary, convenient or incidental thereto. Each of the
Applied Power Trusts is a separate legal entity, and the assets of one will not
be available to satisfy the obligations of any other similar trust which may be
created.
All of the Common Securities of each Applied Power Trust will be owned by
the Company. The Common Securities of an Applied Power Trust will rank pari
passu, and payments will be made thereon pro rata, with the Preferred Securities
of such Applied Power Trust, except that upon the occurrence and continuance of
a Trust Event of Default (as defined herein) resulting from an Event of Default
with respect to Corresponding Junior Subordinated Debt Securities, the rights of
the Company as holder of the Common Securities to payment in respect of
Distributions and payments upon liquidation, redemption or otherwise will be
subordinated to the rights of the holders of the Preferred Securities of such
Applied Power Trust. See "Description of Preferred Securities -- Subordination
of Common Securities." The Company will acquire Common Securities in an
aggregate liquidation amount equal to not less than 3% of the total capital of
each Applied Power Trust.
Unless otherwise specified in the applicable Prospectus Supplement, each
Applied Power Trust has a term of approximately 50 years, but may dissolve
earlier as provided in the applicable Trust Agreement. Each Applied Power
Trust's business and affairs are conducted by its trustees, each appointed by
the Company as holder of the Common Securities. Unless otherwise specified in
the applicable Prospectus Supplement, the trustees for each Applied Power Trust
will be The First National Bank of Chicago, as the Property Trustee (the
"Property Trustee"), First Chicago Delaware Inc., as the Delaware Trustee (the
"Delaware Trustee"), and two individual trustees (the "Administrative Trustees")
who are employees or officers of or affiliated with the Company (collectively,
the "Issuer Trustees"). The First National Bank of Chicago, as Property
Trustee, will act as sole indenture trustee under each Trust Agreement for
purposes of compliance with the Trust Indenture Act. Unless otherwise specified
in the applicable Prospectus Supplement, The First National Bank of Chicago will
act as trustee under the Guarantee Agreement (as defined herein). See
"Description of Guarantees" and "Description of Debt Securities -- Certain
Provisions Relating to Corresponding Junior Subordinated Debt Securities." The
holder of the Common Securities of an Applied Power Trust, or the holders of a
majority in liquidation amount of the outstanding related Preferred Securities
if a Trust Event of Default resulting from an Event of Default with respect to
Corresponding Junior Subordinated Debt Securities for such Applied Power Trust
has occurred and is continuing, will be entitled to appoint, remove or replace
the Property Trustee and/or the Delaware Trustee for such Applied Power Trust.
In no event will the holders of the Preferred Securities have the right to vote
to appoint, remove or replace the Administrative Trustees; such voting rights
are vested exclusively in the holder of the Common Securities. The duties and
obligations of each Issuer Trustee are governed by the applicable Trust
Agreement. Pursuant to the Indenture, the Company, as borrower, will pay all
fees and expenses related to each Applied Power Trust and the offering of the
Preferred Securities and will pay, directly or indirectly, all ongoing costs,
expenses and liabilities of each Applied Power Trust.
The principal executive office of each Applied Power Trust is c/o Applied
Power Inc., 13000 West Silver Spring Drive, Butler, Wisconsin 53007, and its
telephone number is (414) 783-9279.
-8-
<PAGE>
DESCRIPTION OF DEBT SECURITIES
The Debt Securities will be issued in one or more series under an Indenture
(the "Indenture") between the Company and The First National Bank of Chicago, as
trustee (the "Trustee"), the form of which is filed as an exhibit to the
Registration Statement. The Indenture will be subject to, and governed by, the
Trust Indenture Act. The following summary of certain provisions of the
Indenture does not purport to be complete and is qualified in its entirety by
express reference to the Indenture and the Securities Resolution (which may be
in the form of a resolution or a supplemental indenture) authorizing a series
(copies of which have been or will be filed with the Commission). All article
and section references herein are to the articles and sections of the Indenture,
and all capitalized terms used in this section without definition have the
meanings given such terms in the Indenture.
The Debt Securities will constitute senior, subordinated or junior
subordinated debt of the Company. The Debt Securities will be issued under one
or more separate Securities Resolutions for Senior Debt Securities, Subordinated
Debt Securities or Junior Subordinated Debt Securities. The particular terms of
the Debt Securities offered by a Prospectus Supplement will be described in such
Prospectus Supplement, along with any applicable modifications of or additions
to the general terms of the Debt Securities as described herein and in the
Indenture. Accordingly, for a description of the terms of any series of Debt
Securities, reference must be made to both the Prospectus Supplement relating
thereto and the description of the Debt Securities set forth in this Prospectus.
GENERAL
The Indenture does not limit the amount of Debt Securities that can be
issued thereunder and provides that the Debt Securities may be issued from time
to time in one or more series pursuant to the terms of one or more Securities
Resolutions creating such series. The Indenture does not restrict the amount of
debt that may be incurred by the Company or any subsidiary. The Indenture does
not contain any covenant or other provision that is specifically intended to
afford any Holder special protection in the event of highly leveraged
transactions or any other transactions resulting in a decline in the ratings or
credit quality of the Company. As of the date of this Prospectus, there were no
Debt Securities outstanding under the Indenture. The ranking of a series of
Debt Securities with respect to all indebtedness of the Company will be
established by the Securities Resolution creating such series. As of November
30, 1998, approximately $872 million of existing indebtedness of the Company
would have ranked pari passu with the Senior Debt Securities and senior to the
Subordinated Debt Securities and the Junior Subordinated Debt Securities and
there was no existing indebtedness of the Company that would have ranked pari
passu with the Subordinated Debt Securities and senior to the Junior
Subordinated Debt Securities. Although the Indenture provides for the possible
issuance of Debt Securities in other forms or currencies, the only Debt
Securities covered by this Prospectus will be Debt Securities denominated in
U.S. dollars in registered form without coupons unless otherwise indicated in
the applicable Prospectus Supplement.
TERMS
Reference is made to the Prospectus Supplement for the following terms, if
applicable, of the Debt Securities offered thereby: (1) the designation,
aggregate principal amount, currency or composite currency and denominations;
(2) the price at which such Debt Securities will be issued and, if an index,
formula or other method is used, the method for determining amounts of principal
or interest; (3) the maturity date and other dates, if any, on which principal
will be payable; (4) the interest rate or rates, if any, or method of
calculating the interest rate or rates; (5) the date or dates from which
interest will accrue and on which interest will be payable, and the record dates
for the payment of interest; (6) the manner of paying principal and interest;
(7) the place or places where principal and interest will be payable; (8) the
terms of any mandatory or optional redemption by the Company including any
sinking fund; (9) the terms of any conversion or exchange right; (10) the terms
of any redemption at the option of Holders; (11) any tax indemnity provisions;
(12) if the Debt Securities provide that payments of principal or interest may
be made in a currency other than that in which Debt Securities are denominated,
the manner for determining such payments; (13) the portion of principal payable
upon acceleration of a Discounted Debt Security (as defined below); (14) whether
and upon what terms Debt Securities may be defeased; (15) whether any events of
default or covenants in addition to or in lieu of those set forth in the
Indenture apply; (16) provisions for electronic issuance of Debt Securities or
for Debt Securities in uncertificated form; (17) the ranking of the Debt
Securities, including the relative degree, if any, to which the Debt
-9-
<PAGE>
Securities of such series shall be subordinated to one or more other series of
Debt Securities in right of payment, whether outstanding or not; (18) any
provisions relating to extending or shortening the date on which the principal
and premium, if any, of the Debt Securities of such series is payable; (19) any
provisions relating to the deferral of payment of any interest; (20) if such
Debt Securities are to be issued to an Applied Power Trust, the forms of the
related trust agreement and guarantee agreement relating thereto; (21) the
additions or changes, if any, to the Indenture with respect to the Debt
Securities of such series as shall be necessary to permit or facilitate the
issuance of such Debt Securities to an Applied Power Trust; and (22) any other
terms not inconsistent with the provisions of the Indenture, including any
covenants or other terms that may be required or advisable under United States
or other applicable laws or regulations, or advisable in connection with the
marketing of the Debt Securities. (Section 2.01)
Debt Securities of any series may be issued as registered Debt Securities,
bearer Debt Securities or uncertificated Debt Securities, and in such
denominations as specified in the terms of the series. (Section 2.01)
In connection with its original issuance, no bearer Debt Security will be
offered, sold or delivered to any location in the United States, and a bearer
Debt Security in definitive form may be delivered in connection with its
original issuance only upon presentation of a certificate in a form prescribed
by the Company to comply with United States laws and regulations. (Section
2.04)
Registration of transfer of registered Debt Securities may be requested
upon surrender thereof at any agency of the Company maintained for that purpose
and upon fulfillment of all other requirements of the agent. (Sections 2.03 and
2.07)
Debt Securities may be issued under the Indenture as Discounted Debt
Securities to be offered and sold at a substantial discount from the principal
amount thereof. Special United States federal income tax and other
considerations applicable thereto will be described in the Prospectus Supplement
relating to such Discounted Debt Securities. "Discounted Debt Security" means a
Debt Security where the amount of principal due upon acceleration is less than
the stated principal amount. (Sections 1.01 and 2.10)
CONVERSION AND EXCHANGE
The terms, if any, on which Debt Securities of any series will be
convertible into or exchangeable for Class A Common Stock, Preferred Stock,
Preferred Securities or other securities, property, cash or obligations or a
combination of any of the foregoing, will be summarized in the Prospectus
Supplement relating to such series. Such terms may include provisions for
conversion or exchange, either on a mandatory basis, at the option of the Holder
or at the option of the Company.
CERTAIN COVENANTS
Any restrictive covenants which may apply to a particular series of Debt
Securities will be described in the Prospectus Supplement relating thereto.
RANKING OF DEBT SECURITIES
Unless stated otherwise in a Prospectus Supplement, the Debt Securities
will be unsecured and will rank equally and ratably with other unsecured and
unsubordinated debt of the Company. The Debt Securities will not be secured by
any properties or assets and will represent unsecured debt of the Company. The
Indenture does not limit the ability of any of the Company's subsidiaries to
issue debt, and the Debt Securities will be effectively subordinated to all
existing and future indebtedness and other liabilities and commitments of the
Company's subsidiaries.
SUCCESSOR OBLIGOR
The Indenture provides that, unless otherwise specified in the Securities
Resolution establishing a series of Debt Securities, the Company shall not
consolidate with or merge into, or transfer all or substantially all of its
assets to, any person in any transaction in which the Company is not the
survivor, unless: (1) the person is organized under the laws
-10-
<PAGE>
of the United States or a State thereof; (2) the person assumes by supplemental
indenture all the obligations of the Company under the Indenture, the Debt
Securities and any coupons; (3) all required approvals of any regulatory body
having jurisdiction over the transaction shall have been obtained; and (4)
immediately after the transaction no Default (as defined below) exists. The
successor shall be substituted for the Company, and thereafter all obligations
of the Company under the Indenture, the Debt Securities and any coupons shall
terminate. (Section 5.01)
EXCHANGE OF DEBT SECURITIES
Registered Debt Securities may be exchanged for an equal aggregate
principal amount of registered Debt Securities of the same series and date of
maturity in such authorized denominations as may be requested upon surrender of
the registered Debt Securities at an agency of the Company maintained for such
purpose and upon fulfillment of all other requirements of such agent. (Section
2.07)
DEFAULTS AND REMEDIES
Unless the Securities Resolution establishing the series otherwise provides
(in which event the Prospectus Supplement will so state), an "Event of Default"
with respect to a series of Debt Securities will occur if:
(1) the Company defaults in any payment of interest on any Debt Securities
of such series when the same becomes due and payable and the Default continues
for a period of 30 days;
(2) the Company defaults in the payment of the principal and premium, if
any, of any Debt Securities of the series when the same becomes due and payable
at maturity or upon redemption, acceleration or otherwise;
(3) the Company defaults in the payment or satisfaction of any sinking
fund obligation with respect to any Debt Securities of the series as required by
the Securities Resolution establishing such series;
(4) the Company defaults in the performance of any of its other agreements
applicable to the series and the Default continues for 60 days after the notice
specified below;
(5) the Company pursuant to or within the meaning of any Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief against it in
an involuntary case,
(C) consents to the appointment of a Custodian for it or for all
or substantially all of its property, or
(D) makes a general assignment for the benefit of its creditors;
(6) a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that:
(A) is for relief against the Company in an involuntary case,
(B) appoints a Custodian for the Company or for all or
substantially all of its property, or
(C) orders the liquidation of the Company,
and the order or decree remains unstayed and in effect for 60 days; or
(7) there occurs any other Event of Default provided for in such series.
(Section 6.01)
-11-
<PAGE>
The term "Bankruptcy Law" means Title 11, U.S. Code or any similar federal
or state law for the relief of debtors. The term "Custodian" means any
receiver, trustee, assignee, liquidator or a similar official under any
Bankruptcy Law. (Section 6.01)
"Default" means any event which is, or after notice or passage of time
would be, an Event of Default. A Default under subparagraph (4) above is not an
Event of Default until the Trustee or the Holders of at least 25% in principal
amount of the series notify the Company of the Default and the Company does not
cure the Default within the time specified after receipt of the notice.
(Section 6.01) If an Event of Default occurs and is continuing on a series, the
Trustee by notice to the Company, or the Holders of at least 25% in principal
amount of the series (or, in the case of a series issued to an Applied Power
Trust, so long as any of the related Preferred Securities of such Applied Power
Trust remain outstanding, if, upon such Event of Default, the Trustee or the
Holders of not less than 25% in aggregate principal amount of such series fail
to declare the principal of all the Debt Securities of such series to be so
immediately due and payable, the holders of 25% in aggregate liquidation amount
of such Preferred Securities then outstanding shall have such right) by notice
to the Company and the Trustee, may declare the principal of and accrued
interest on all the Debt Securities of the series to be due and payable
immediately. Discounted Debt Securities may provide that the amount of
principal due upon acceleration is less than the stated principal amount. The
Holders of a majority in principal amount of the series, by notice to the
Trustee, may rescind an acceleration and its consequences if the rescission
would not conflict with any judgment or decree and if all existing Events of
Default on the series have been cured or waived except nonpayment of principal
or interest that has become due solely because of the acceleration; provided,
that in the case of a series issued to an Applied Power Trust, so long as any of
the related Preferred Securities of such Applied Power Trust remain outstanding,
the holders of a majority in aggregate liquidation amount of such Preferred
Securities then outstanding shall also have such right to rescission of
acceleration and its consequences with respect to such series, subject to
the same conditions set forth above. (Section 6.02) If an Event of Default
occurs and is continuing on a series, the Trustee may pursue any available
remedy to collect principal or interest then due on the series, to enforce the
performance of any provision applicable to the series, or otherwise to protect
the rights of the Trustee and Holders of the series. (Section 6.03)
In the case of a series issued to an Applied Power Trust, any holder of the
related Preferred Securities of such Applied Power Trust shall have the right,
upon the occurrence and continuance of an Event of Default described in clauses
(1) and (2) of the first paragraph of this subsection with respect to such
series, to institute a suit directly against the Company to enforce payment to
such holder of the principal of, and premium, if any, and interest on, the Debt
Securities having a principal amount equal to the aggregate liquidation amount
of such Preferred Securities held by such holder. (Section 6.06)
The Trustee may require indemnity satisfactory to it before it enforces the
Indenture or the Debt Securities of the series. (Section 7.01) Subject to
certain limitations, Holders of a majority in principal amount of the Debt
Securities of the series may direct the Trustee in its exercise of any trust or
power with respect to such series. (Section 6.05) Except in the case of Default
in payment on a series, the Trustee may withhold from Holders of such series
notice of any continuing Default if it determines that withholding the notice is
in the interest of Holders of the series. (Section 7.04) The Company is
required to furnish the Trustee annually a brief certificate as to the Company's
compliance with all conditions and covenants under the Indenture. (Section
4.04)
The Indenture does not have a cross-default provision. Thus, a default by
the Company on any other debt, including any other series of Debt Securities,
would not constitute an Event of Default. A Securities Resolution may provide
for a cross-default provision, in which case the Prospectus Supplement will
describe the terms thereof.
AMENDMENTS AND WAIVERS
The Indenture and the Debt Securities or any coupons of the series may be
amended, and any default may be waived as follows: Unless the Securities
Resolution otherwise provides (in which event the Prospectus Supplement will so
state), the Company and the Trustee may amend the Debt Securities, the Indenture
and any coupons with the written consent of the Holders of a majority in
principal amount of the Debt Securities of all series affected voting as one
class; provided that, in the case of a series issued to an Applied Power Trust,
so long as any of the related Preferred Securities of such Applied Power Trust
remain outstanding, no such amendment shall be made that adversely affects the
holders
-12-
<PAGE>
of such Preferred Securities in any material respect, and no termination of the
Indenture shall occur, without the prior consent of the holders of not less than
a majority in aggregate liquidation amount of such Preferred Securities then
outstanding unless and until the principal (and premium, if any) of the Debt
Securities of such series and all accrued and unpaid interest thereon have been
paid in full; and provided further that, in the case of a series issued to an
Applied Power Trust, so long as any of the related Preferred Securities of such
Applied Power Trust remain outstanding, no amendment shall be made to the
provisions of the Indenture described in the fourth paragraph under "Defaults
and Remedies" above without the prior consent of the holders of each such
Preferred Security then outstanding unless and until the principal (and premium,
if any) of the Debt Securities of such series and all accrued and unpaid
interest thereon have been paid in full. (Section 10.02) Unless the Securities
Resolution otherwise provides (in which event the Prospectus Supplement will so
state), a Default on a particular series may be waived with the consent of the
Holders of a majority in principal amount of the Debt Securities of the series
(or, in the case of a series issued to an Applied Power Trust, so long as any of
the related Preferred Securities of such Applied Power Trust remain outstanding,
the holders of a majority in aggregate liquidation amount of such Preferred
Securities then outstanding). (Section 6.04) However, without the consent of
each Debt Security holder affected, no amendment or waiver may (1) reduce the
amount of Debt Securities whose Holders must consent to an amendment or waiver,
(2) reduce the interest on or change the time for payment of interest on any
Debt Security, (3) change the fixed maturity of any Debt Security, (4) reduce
the principal of any non-Discounted Debt Security or reduce the amount of the
principal of any Discounted Debt Security that would be due on acceleration
thereof, (5) change the currency in which the principal or interest on a Debt
Security is payable, (6) make any change that materially adversely affects the
right to convert or exchange any Debt Security, or (7) waive any Default in
payment of interest on or principal of a Debt Security. (Sections 6.04 and
10.02) Without the consent of any Debt Security holder, the Company and the
Trustee may amend the Indenture, the Debt Securities or any coupons to cure any
ambiguity, omission, defect, or inconsistency; to provide for assumption of
Company obligations to Debt Securityholders in the event of a merger or
consolidation requiring such assumption; to provide that specific provisions of
the Indenture shall not apply to a series of Debt Securities not previously
issued; to create a series and establish its terms; to provide for a separate
Trustee for one or more series; or to make any change that does not materially
adversely affect the rights of any Debt Security holder. (Section 10.01)
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Debt Securities of a series may be defeased in accordance with their terms
and, unless the Securities Resolution establishing the terms of the series
otherwise provides, as set forth in the Indenture and described briefly below.
The Company at any time may terminate as to a series all of its obligations
(except for certain obligations, including obligations with respect to the
defeasance trust and obligations to register the transfer or exchange of a Debt
Security, to replace destroyed, lost or stolen Debt Securities and coupons, and
to maintain paying agencies in respect of the Debt Securities) with respect to
the Debt Securities of the series and any related coupons and the Indenture
("legal defeasance"). The Company at any time may terminate as to a series its
obligations, if any, with respect to the Debt Securities and coupons of the
series under any restrictive covenants which may be applicable to a particular
series ("covenant defeasance").
The Company may exercise its legal defeasance option notwithstanding its
prior exercise of its covenant defeasance option. If the Company exercises its
legal defeasance option, a series may not be accelerated because of an Event of
Default. If the Company exercises its covenant defeasance option, a series may
not be accelerated by reference to any restrictive covenants which may be
applicable to a particular series. (Section 8.01)
To exercise either defeasance option as to a series, the Company must (i)
irrevocably deposit in trust (the "defeasance trust") with the Trustee or
another trustee money or U.S. Government Obligations, (ii) deliver a certificate
from a nationally recognized firm of independent accountants expressing their
opinion that the payments of principal and interest when due on the deposited
U.S. Government Obligations, without reinvestment, plus any deposited money
without investment will provide cash at such times and in such amounts as will
be sufficient to pay the principal and interest when due on all Debt Securities
of such series to maturity or redemption, as the case may be, and (iii) comply
with certain other conditions. In particular, the Company must obtain an
opinion of tax counsel that the defeasance will not result in recognition of any
gain or loss to Holders for federal income tax purposes. "U.S. Government
Obligations" means direct obligations of the United States or an agency or
instrumentality of the United States, the payment of which is unconditionally
guaranteed by the United States, which, in either case, have the full faith and
credit of the United
-13-
<PAGE>
States of America pledged for payment and which are not callable at the issuer's
option, or certificates representing an ownership interest in such obligations.
(Section 8.02)
CERTAIN PROVISIONS RELATING TO CORRESPONDING JUNIOR SUBORDINATED DEBT SECURITIES
General. The Corresponding Junior Subordinated Debt Securities may be
issued in one or more series of Junior Subordinated Debt Securities under the
Indenture with terms corresponding to the terms of a series of related Preferred
Securities. Concurrently with the issuance of each Applied Power Trust's
Preferred Securities, such Applied Power Trust will invest the proceeds thereof
and the consideration paid by the Company for the Common Securities in a series
of Corresponding Junior Subordinated Debt Securities issued by the Company to
such Applied Power Trust. Each series of Corresponding Junior Subordinated Debt
Securities will be in the principal amount equal to the aggregate stated
Liquidation Amount of the related Preferred Securities and the Common Securities
of such Applied Power Trust and will rank pari passu with all other series of
Junior Subordinated Debt Securities. Holders of the related Preferred
Securities for a series of Corresponding Junior Subordinated Debt Securities
will have the rights in connection with modifications to the Indenture or upon
occurrence of a Trust Event of Default (as defined under "Description of
Preferred Securities -- Events of Default; Notice") relating to Corresponding
Junior Subordinated Debt Securities described under "-- Amendments and Waivers,"
"-- Defaults and Remedies," and "-- -- Enforcement of Certain Rights by Holders
of Preferred Securities," unless provided otherwise in the Prospectus Supplement
for such related Preferred Securities.
Unless otherwise specified in the applicable Prospectus Supplement, the
Company will covenant, as to each series of Corresponding Junior Subordinated
Debt Securities, (i) to maintain, directly or indirectly, 100% ownership of the
Common Securities of the Applied Power Trust to which Corresponding Junior
Subordinated Debt Securities have been issued, provided that certain successors
which are permitted pursuant to the Indenture may succeed to the Company's
ownership of the Common Securities, (ii) not to voluntarily dissolve, wind-up or
liquidate any Applied Power Trust, except (a) in connection with a distribution
of Corresponding Junior Subordinated Debt Securities to the holders of the
Preferred Securities in liquidation of such Applied Power Trust or (b) in
connection with certain mergers, consolidations or amalgamations permitted by
the related Trust Agreement and (iii) to use its reasonable efforts, consistent
with the terms and provisions of the related Trust Agreement, to cause such
Applied Power Trust to remain classified as a grantor trust and not as an
association taxable as a corporation for United States Federal income tax
purposes. For additional covenants relating to payment of certain expenses of
the Applied Power Trusts, see "Description of Preferred Securities -- Payment of
Expenses."
Option to Extend Interest Payment Date. If provided in the applicable
Prospectus Supplement, the Company shall have the right at any time and from
time to time during the term of any series of Corresponding Junior Subordinated
Debt Securities to defer payment of interest for such number of consecutive
interest payment periods as may be specified in the applicable Prospectus
Supplement (each, an "Extension Period"), subject to the terms, conditions and
covenants, if any, specified in such Prospectus Supplement, provided that such
Extension Period may not extend beyond the maturity date of such series of
Corresponding Junior Subordinated Debt Securities. Certain United States
Federal income tax consequences and special considerations applicable to any
such Corresponding Junior Subordinated Debt Securities will be described in the
applicable Prospectus Supplement.
Redemption. Unless otherwise indicated in the applicable Prospectus
Supplement, the Company may, at its option, redeem the Corresponding Junior
Subordinated Debt Securities of any series in whole at any time or in part from
time to time. Corresponding Junior Subordinated Debt Securities may be redeemed
in the denominations as set forth in the applicable Prospectus Supplement.
Except as otherwise specified in the applicable Prospectus Supplement, the
redemption price for any Corresponding Junior Subordinated Debt Security so
redeemed shall equal any accrued and unpaid interest thereon to the redemption
date, plus the principal amount thereof. Unless otherwise specified in the
applicable Prospectus Supplement, the Company may not redeem a series of
Corresponding Junior Subordinated Debt Securities in part unless all accrued and
unpaid interest has been paid in full on all outstanding Corresponding Junior
Subordinated Debt Securities of such series for all interest periods terminating
on or prior to the redemption date.
Except as otherwise specified in the applicable Prospectus Supplement, if a
Junior Subordinated Debt Security Tax Event (as defined below) or an Investment
Company Event (as defined below) in respect of an Applied Power Trust
-14-
<PAGE>
shall occur and be continuing, the Company may, at its option, redeem the
Corresponding Junior Subordinated Debt Securities held by such Applied Power
Trust at any time within 90 days of the occurrence of such Junior Subordinated
Debt Security Tax Event or Investment Company Event, in whole but not in part,
subject to the provisions of the applicable Securities Resolution. The
redemption price for any such Corresponding Junior Subordinated Debt Securities
shall be equal to 100% of the principal amount of such Corresponding Junior
Subordinated Debt Securities then outstanding plus accrued and unpaid interest
to the date fixed for redemption. For so long as the applicable Applied Power
Trust is the holder of all such outstanding Corresponding Junior Subordinated
Debt Securities, the proceeds of any such redemption will be used by the Applied
Power Trust to redeem the corresponding Trust Securities in accordance with
their terms.
"Junior Subordinated Debt Security Tax Event" means the receipt by the
applicable Applied Power Trust of an opinion of counsel experienced in such
matters to the effect that, as a result of any amendment to, or change
(including any announced proposed change) in, the laws (or any regulations
thereunder) of the United States or any political subdivision or taxing
authority thereof or therein, or as a result of any official administrative
written decision, pronouncement or action or judicial decision interpreting or
applying such laws or regulations, which amendment or change is effective or
which proposed change, pronouncement, action or decision is announced on or
after the date of issuance of the applicable series of Corresponding Junior
Subordinated Debt Securities pursuant to the applicable Securities Resolution,
there is more than an insubstantial risk that (i) the applicable Applied Power
Trust is, or will be within 90 days of the date of such opinion, subject to
United States Federal income tax with respect to income received or accrued on
the corresponding series of Corresponding Junior Subordinated Debt Securities,
(ii) interest payable by the Company on such series of Corresponding Junior
Subordinated Debt Securities is not, or within 90 days of the date of such
opinion, will not be, deductible by the Company, in whole or in part, for United
States Federal income tax purposes or (iii) the applicable Applied Power Trust
is, or will be within 90 days of the date of such opinion, subject to more than
a de minimis amount of other taxes, duties or other governmental charges.
"Investment Company Event" means the receipt by the applicable Applied
Power Trust of an opinion of counsel experienced in such matters to the effect
that, as a result of the occurrence of a change in law or regulation or a change
in interpretation or application of law or regulation by any legislative body,
court, governmental agency or regulatory authority (a "Change in the Investment
Company Act"), the applicable Applied Power Trust is or will be considered an
"investment company" that is required to be registered under the Investment
Company Act of 1940, as amended (the "Investment Company Act"), which Change in
the Investment Company Act becomes effective on or after the date of original
issuance of the series of Preferred Securities issued by the Applied Power
Trust.
Restrictions on Certain Payments. The Company will, unless otherwise
provided in the applicable Prospectus Supplement, covenant, as to each series of
Corresponding Junior Subordinated Debt Securities, that it will not, and will
not permit any subsidiary of the Company to, (i) declare or pay any dividends or
distributions on, or redeem, purchase, acquire, or make a liquidation payment
with respect to, any of the Company's capital stock or (ii) make any payment of
principal, interest or premium, if any, on or repay, repurchase or redeem any
debt securities of the Company (including other Corresponding Junior
Subordinated Debt Securities) that rank pari passu with or junior in interest to
the Corresponding Junior Subordinated Debt Securities or make any guarantee
payments with respect to any guarantee by the Company of the debt securities of
any subsidiary of the Company if such guarantee ranks pari passu or junior in
interest to the Corresponding Junior Subordinated Debt Securities (other than
(a) dividends or distributions in common stock of the Company, (b) redemptions
or purchases of any rights pursuant to the Company's shareholder rights plan
("Rights Agreement"), if any, or any successor to such Rights Agreement, and the
declaration of a dividend of such rights or the issuance of stock under a Rights
Agreement in the future, (c) payments under any Guarantee and (d) purchases of
common stock related to the issuance of common stock under any of the Company's
benefit plans for its directors, officers or employees) if at such time (A)
there shall have occurred any event of which the Company has actual knowledge
(a) that with the giving of notice or the lapse of time, or both, would
constitute an Event of Default under the Indenture with respect to the
Corresponding Junior Subordinated Debt Securities of such series and (b) in
respect of which the Company shall not have taken reasonable steps to cure, (B)
if such Corresponding Junior Subordinated Debt Securities are held by an Applied
Power Trust which is the issuer of a series of related Preferred Securities, the
Company shall be in default with respect to its payment of any obligations under
the Guarantee relating to such related Preferred Securities or (C) the Company
shall have given notice of its selection of an Extension Period as provided
pursuant to the Securities Resolution with respect to the Corresponding Junior
Subordinated Debt Securities
-15-
<PAGE>
of such series and shall not have rescinded such notice, or such Extension
Period, or any extension thereof, shall be continuing.
Enforcement of Certain Rights by Holders of Preferred Securities. If an
Event of Default with respect to a series of Corresponding Junior Subordinated
Debt Securities has occurred and is continuing and such event is attributable to
the failure of the Company to pay principal of or premium, if any, or interest,
if any, on such series of Corresponding Junior Subordinated Debt Securities on
the date such interest, premium or principal is otherwise payable, a holder of
related Preferred Securities may institute a legal proceeding directly against
the Company for enforcement of payment to such holder of the principal of or
premium, if any, or interest, if any, on such Corresponding Junior Subordinated
Debt Securities having a principal amount equal to the aggregate Liquidation
Amount of the related Preferred Securities of such holder (a "Direct Action").
The Company may not amend the Indenture to remove the foregoing right to bring a
Direct Action without the prior written consent of the holders of all of the
Preferred Securities. If the right to bring a Direct Action is removed, the
applicable Applied Power Trust may become subject to the reporting obligations
under the Exchange Act. The Company shall have the right pursuant to the
Indenture to set-off any payment made to such holder of Preferred Securities by
the Company in connection with a Direct Action. Unless otherwise specified in
the applicable Prospectus Supplement, the holders of the related Preferred
Securities will not be able to exercise directly any remedies other than those
set forth in this paragraph available to the holders of the Corresponding Junior
Subordinated Debt Securities.
REGARDING THE TRUSTEE
The First National Bank of Chicago will act as Trustee and Registrar for
Debt Securities issued under the Indenture and, unless otherwise indicated in a
Prospectus Supplement, the Trustee will also act as Transfer Agent and Paying
Agent with respect to the Debt Securities. (Section 2.03) The Company may
remove the Trustee with or without cause if the Company so notifies the Trustee
three months in advance and if no Default occurs during the three-month period.
(Section 7.07) The Trustee, in its individual or any other capacity, may make
loans to, accept deposits from, and perform services for the Company or its
affiliates, and may otherwise deal with the Company or its affiliates, as if it
were not Trustee.
DESCRIPTION OF WARRANTS TO PURCHASE DEBT SECURITIES
The following statements with respect to Warrants to purchase Debt
Securities (the "Debt Warrants") are summaries of, and subject to, the detailed
provisions of a Debt Warrant Agreement (the "Debt Warrant Agreement") to be
entered into by the Company and a warrant agent to be selected at the time of
issue (the "Debt Warrant Agent"), a form of which will be filed with the
Commission.
GENERAL
The Debt Warrants, evidenced by Debt Warrant certificates (the "Debt
Warrant Certificates"), may be issued under the Debt Warrant Agreement
independently or together with any Securities offered by any Prospectus
Supplement and may be attached to or separate from such Securities. If Debt
Warrants are offered, the Prospectus Supplement will describe the terms of the
Debt Warrants, including the following: (i) the offering price, if any; (ii) the
designation, aggregate principal amount, and terms of the Debt Securities
purchasable upon exercise of the Debt Warrants; (iii) if applicable, the
designation and terms of the Securities with which the Debt Warrants are issued
and the number of Debt Warrants issued with each such Security; (iv) if
applicable, the date on and after which the Debt Warrants and the related
Securities will be separately transferable; (v) the principal amount of Debt
Securities purchasable upon exercise of one Debt Warrant and the price at which
such principal amount of Debt Securities may be purchased upon such exercise;
(vi) the date on which the right to exercise the Debt Warrants shall commence
and the date on which such right shall expire; (vii) Federal income tax
consequences; (viii) whether the Debt Warrants represented by the Debt Warrant
Certificates will be issued in registered or bearer form; and (ix) any other
terms of the Debt Warrants.
Debt Warrant Certificates may be exchanged for new Debt Warrant
Certificates of different denominations and may (if in registered form) be
presented for registration of transfer at the corporate trust office of the Debt
Warrant Agent or any Co-Debt Warrant Agent, which will be identified in the
Prospectus Supplement, or at such other office
-16-
<PAGE>
as may be set forth therein. Holders of Debt Warrants do not have any of the
rights of Holders of Debt Securities (except to the extent that the consent of
holders of Debt Warrants may be required for certain modifications of the terms
of the Indenture and the series of Debt Securities issuable upon exercise of the
Debt Warrants) and are not entitled to payments of principal of and interest, if
any, on such Debt Securities.
EXERCISE OF WARRANTS TO PURCHASE DEBT SECURITIES
Debt Warrants may be exercised by surrendering the Debt Warrant Certificate
at the corporate trust office of the Debt Warrant Agent or at the corporate
trust office of the Co-Debt Warrant Agent, if any, with the form of election to
purchase on the reverse side of the Debt Warrant Certificate properly completed
and executed, and by payment in full of the exercise price, as set forth in the
Prospectus Supplement. Upon the exercise of Debt Warrants, the Debt Warrant
Agent or Co-Debt Warrant Agent, if any, will, as soon as practicable, deliver
the Debt Securities in authorized denominations in accordance with the
instructions of the holder exercising the Debt Warrant and at the sole cost and
risk of such holder. If less than all of the Debt Warrants evidenced by the
Debt Warrant Certificate are exercised, a new Debt Warrant Certificate will be
issued for the remaining amount of Debt Warrants.
DESCRIPTION OF PREFERRED STOCK AND COMMON STOCK
The following summary does not purport to be a complete description of the
applicable provisions of the Company's Restated Articles of Incorporation (the
"Articles") and Amended and Restated Bylaws (the "Bylaws"), as amended from time
to time, copies of which have been or will be filed with the Commission, or of
applicable statutory or other law, and is qualified in its entirety by reference
thereto.
The authorized capital stock of the Company as of November 30, 1998,
consisted of 80,000,000 shares of Class A Common Stock, $.20 par value ("Class A
Common Stock"), of which 38,674,551 shares were issued and outstanding;
7,500,000 shares of Class B Common Stock, $.20 par value ("Class B Common
Stock"), none of which were issued and outstanding; and 800,000 shares of
Cumulative Preferred Stock, $1.00 par value ("Preferred Stock"), none of which
have been issued. Class A Common Stock and Class B Common Stock are
collectively referred to herein as "Common Stock."
PREFERRED STOCK
The Preferred Stock may be issued in one or more series providing for such
dividend rates, voting, liquidation, redemption, and conversion rights, and such
other terms and conditions as the Board of Directors of the Company may
determine, without further approval by holders of Common Stock. If any shares
of Class B Common Stock were outstanding, any voting rights conferred on holders
of Preferred Stock would be limited, with respect to the election of directors,
to the power to vote together with holders of Class A Common Stock in electing a
"maximum minority" of the Board of Directors, as described under "Common Stock"
below.
If the Company issues any shares of Preferred Stock, the Company would be
permitted to pay dividends or make other distributions upon the Common Stock
(except for distributions payable in shares of Common Stock) only after paying
or setting apart funds for payment of current dividends and any accrued but
unpaid dividends upon the outstanding Preferred Stock, at the rate or rates
designated for each series of outstanding Preferred Stock, and making provision
for any mandatory sinking fund payments. In the event of voluntary or
involuntary liquidation of the Company, the holders of any outstanding Preferred
Stock would be entitled to receive all accrued dividends on the Preferred Stock
and the liquidation amount specified for each series of Preferred Stock before
any amount may be distributed to holders of the Common Stock.
Each series of Preferred Stock will have such designation, preferences,
limitations and relative rights as shall be stated in the resolution or
resolutions providing for the designation and issue of such series adopted by
the Board of Directors (or any duly authorized committee thereof). The
amendment to the Articles setting forth the terms of each series will be filed
with the Commission in connection with the offering of such series of Preferred
Stock. The Prospectus Supplement relating to an offering of Preferred Stock (or
securities convertible into Preferred Stock) will
-17-
<PAGE>
describe terms relevant thereto including the number of shares offered, the
initial offering price and the relative rights and preferences of the shares of
such series.
Under the Articles, all shares of Preferred Stock shall be identical except
as to the following relative rights and preferences, as to which the Board of
Directors may establish variations between different series not inconsistent
with other provisions in the Articles: (a) the dividend rate; (b) the price at
and terms and conditions on which shares may be redeemed; (c) the amount payable
upon shares in the event of voluntary or involuntary liquidation; (d) sinking
fund provisions for the redemption or purchase of shares; (e) the terms and
conditions on which shares may be converted into Common Stock, if the shares of
any series are issued with the privilege of conversion; and (f) voting rights,
if any, subject to the provisions regarding voting rights described herein.
As described under "Description of Depositary Shares," the Company may, at
its option, elect to offer depositary shares ("Depositary Shares") evidenced by
depositary receipts ("Depositary Receipts"), each representing an interest (to
be specified in the Prospectus Supplement relating to the particular series of
the Preferred Stock) in a share of the particular series of the Preferred Stock
issued and deposited with a Preferred Stock Depositary (as defined below).
The holders of Preferred Stock will have no preemptive rights. Under the
Articles, each series of Preferred Stock will, with respect to dividend rights
and rights on liquidation, dissolution and winding up of the Company, rank prior
to the Common Stock and on a parity with each other series of Preferred Stock.
COMMON STOCK
The rights and preferences of shares of Class A Common Stock and Class B
Common Stock are identical, except as to voting power with respect to the
election of directors and conversion rights.
On all matters other than the election of directors, the holders of Class A
Common Stock and Class B Common Stock possess equal voting power of one vote per
share, voting as a single class of stock (unless otherwise required by the
Wisconsin Business Corporation Law--the "WBCL"). In the election of the Board
of Directors, the holders of Class A Common Stock, voting together as a single
class with the holders of any Preferred Stock which has voting power, are
entitled to elect a "maximum minority" of the number of directors to be elected.
As a result of the "maximum minority" provision, the holders of the Class B
Common Stock, voting as a separate class, are entitled to elect the balance of
the directors, constituting a "minimum majority" of the number of directors to
be elected. If an even number of directors is to be elected, the holders of
Class B Common Stock will be entitled to elect two more directors than the
holders of Class A Common Stock and any Preferred Stock having voting power; if
the number of directors to be elected is an odd number, the holders of Class B
Common Stock will be entitled to elect one more director than the holders of
Class A Common Stock and any Preferred Stock having voting power. In the event
there are no shares of Class B Common Stock outstanding, holders of Class A
Common Stock, together with holders of any Preferred Stock having voting power,
shall elect all of the directors to be elected. A director, once elected and
duly qualified, may be removed only by the requisite affirmative vote of the
holders of that class of stock by which such director was elected.
Holders of both classes of Common Stock are equally entitled to such
dividends as the Company's Board of Directors may declare out of funds legally
available therefor. If the Company were to issue any of its authorized
Preferred Stock, no dividends could be paid or set apart for payment on shares
of Common Stock, unless paid in Common Stock, until dividends on all of the
issued and outstanding shares of Preferred Stock had been paid or set apart for
payment and provision had been made for any mandatory sinking fund payments.
Certain covenants contained in the Company's debt agreements, or in the
provisions of the Articles for the benefit of any Preferred Stock that may be
issued, from time to time could have the direct or indirect effect of limiting
the payment of dividends or other distributions on (including redemptions and
purchases of) the Company's capital stock. Stock dividends on Class A Common
Stock may be paid only in shares of Class A Common Stock and stock dividends on
Class B Common Stock may be paid only in shares of Class B Common Stock.
The Articles contain provisions which provided for the conversion of Class
B Common Stock into shares of Class A Common Stock on a share-for-share basis at
the option of the holder, and for the automatic conversion of all
-18-
<PAGE>
outstanding shares of Class B Common Stock to Class A Common Stock on a share-
for-share basis when the number of outstanding shares of Class B Common Stock
was reduced below a certain threshold. All of the shares of Class B Common Stock
that had been outstanding were converted into Class A Common Stock pursuant to
these conversion provisions. Holders of Class A Common Stock do not have any
conversion rights.
In the event of dissolution or liquidation of the Company, the holders of
both classes of Common Stock are entitled to share ratably all assets of the
Company remaining after payment of the Company's liabilities and satisfaction of
the rights of any series of Preferred Stock which may be outstanding. There are
no redemption or sinking fund provisions with respect to the Common Stock.
The Class A Common Stock is listed on the NYSE. Firstar Bank Milwaukee,
N.A., Milwaukee, Wisconsin, serves as the transfer agent for the Class A Common
Stock.
GENERAL
The Articles provide that the affirmative vote of two-thirds of all shares
entitled to vote thereon is required in order to constitute shareholder approval
of a merger, consolidation, or liquidation of the Company, sale or other
disposition of all or substantially all of its assets, amendment of the Articles
or the Bylaws, or removal of a director.
Directors of the Company are currently elected to serve one-year terms.
The Articles provide that the Bylaws (which may be amended by the Board of
Directors or by the shareholders) may provide for the division of the Board of
Directors into two or three classes, serving staggered two or three-year terms.
When the Company has received the consideration for which the Board of
Directors authorized the issuance of shares, the shares issued for that
consideration are fully paid and nonassessable. Shareholders are subject to
personal liability under Section 180.0622(2)(b) of the WBCL, as judicially
interpreted, for debts owing to employees of the Company for services performed
for the Company, but not exceeding six months' service in any one case.
Holders of capital stock of the Company do not have preemptive or other
subscription rights to purchase or subscribe for unissued stock or other
securities of the Company.
CERTAIN STATUTORY PROVISIONS
Under Section 180.1150(2) of the WBCL, the voting power of shares of a
"resident domestic corporation," such as the Company (as long as it continues to
meet the statutory definition), which are held by any person (including two or
more persons acting in concert) in excess of 20% of the voting power in the
election of directors shall be limited (in voting on any matter) to 10% of the
full voting power of the shares in excess of 20%, unless full voting rights have
been restored at a special meeting of the shareholders called for that purpose.
Shares held or acquired under certain circumstances are excluded from the
application of Section 180.1150(2), including (among others) shares acquired
directly from the Company, shares acquired before April 22, 1986, and shares
acquired in a merger or share exchange to which the Company is a party.
Sections 180.1130 to 180.1134 of the WBCL provide generally that, in
addition to the vote otherwise required by law or the articles of incorporation
of a "resident domestic corporation," such as the Company (as long as it
continues to meet the statutory definition), certain business combinations not
meeting certain fair price standards specified in the statute must be approved
by the affirmative vote of at least (a) 80% of the votes entitled to be cast by
the outstanding voting shares of the corporation and (b) two-thirds of the votes
entitled to be cast by the holders of voting shares other than voting shares
beneficially owned by a "significant shareholder" or an affiliate or associate
thereof who is a party to the transaction. The term "business combination" is
defined to include, subject to certain exceptions, a merger or share exchange of
the resident domestic corporation (or any subsidiary thereof) with, or the sale
or other disposition of all or substantially all of the property and assets of
the resident domestic corporation to, any significant shareholder or affiliate
thereof. "Significant shareholder" is defined generally to mean a person that
is the beneficial owner of 10% or more of the voting power of the outstanding
voting shares of the resident domestic corporation. The statute also
-19-
<PAGE>
restricts the repurchase of shares and the sale of corporate assets by a
resident domestic corporation in response to a take-over offer.
Sections 180.1140 to 180.1144 of the WBCL prohibit certain "business
combinations" between a "resident domestic corporation," such as the Company (as
long as it continues to meet the statutory definition), and a person
beneficially owning 10% or more of the voting power of the outstanding voting
stock of such corporation (an "interested stockholder") within three years after
the date such person became a 10% beneficial owner, unless the business
combination or the acquisition of such stock has been approved before the stock
acquisition date by the corporation's board of directors. Business combinations
after the three-year period following the stock acquisition date are permitted
only if (i) the board of directors approved the acquisition of the stock prior
to the acquisition date, (ii) the business combination is approved by a majority
of the outstanding voting stock not beneficially owned by the interested
stockholder, or (iii) the consideration to be received by shareholders meets
certain fair price requirements of the statute with respect to form and amount.
Under the WBCL, as amended in 1997, a "resident domestic corporation" is
defined to mean a Wisconsin corporation that has a class of voting stock that is
registered or traded on a national securities exchange or that is registered
under Section 12(g) of the Exchange Act and that, as of the relevant date,
satisfies any of the following: (i) its principal offices are located in
Wisconsin; (ii) it has significant business operations located in Wisconsin;
(iii) more than 10% of the holders of record of its shares are residents of
Wisconsin; or (iv) more than 10% of its shares are held of record by residents
of Wisconsin. The Company is a "resident domestic corporation" for purposes of
the above described provisions. A Wisconsin corporation that is otherwise
subject to certain of such statutes may preclude their applicability by an
election to that effect in its articles of incorporation. The Company's
Articles do not contain any such election.
These provisions of the WBCL, the ability to issue additional shares of
Common Stock and Preferred Stock without further shareholder approval (except as
required under NYSE corporate governance standards), and certain other
provisions of the Company's Articles (discussed above) could have the effect,
among others, of discouraging take-over proposals for the Company, delaying or
preventing a change in control of the Company, or impeding a business
combination between the Company and a major shareholder of the Company.
DESCRIPTION OF DEPOSITARY SHARES
The description set forth below and in any Prospectus Supplement of certain
provisions of the Deposit Agreement (as defined below) and of the Depositary
Shares and Depositary Receipts summarizes the material terms of the Deposit
Agreement and of the Depositary Shares and Depositary Receipts, and is qualified
in its entirety by reference to the form of Deposit Agreement and form of
Depositary Receipts relating to each series of the Preferred Stock.
GENERAL
The Company may, at its option, elect to have shares of Preferred Stock
represented by Depositary Shares. The shares of any series of the Preferred
Stock underlying the Depositary Shares will be deposited under a separate
deposit agreement (the "Deposit Agreement") between the Company and a bank or
trust company selected by the Company (the "Preferred Stock Depositary"). The
Prospectus Supplement relating to a series of Depositary Shares will set forth
the name and address of the Preferred Stock Depositary. Subject to the terms of
the Deposit Agreement, each owner of a Depositary Share will be entitled,
proportionately, to all the rights, preferences and privileges of the Preferred
Stock represented thereby (including dividend, voting, redemption, conversion,
exchange and liquidation rights).
The Depositary Shares will be evidenced by Depositary Receipts issued
pursuant to the Deposit Agreement, each of which will represent the applicable
interest in a number of shares of a particular series of the Preferred Stock
described in the applicable Prospectus Supplement.
A holder of Depositary Shares will be entitled to receive the shares of
Preferred Stock (but only in whole shares of Preferred Stock) underlying such
Depositary Shares. If the Depositary Receipts delivered by the holder evidence
a
-20-
<PAGE>
number of Depositary Shares in excess of the whole number of shares of Preferred
Stock to be withdrawn, the Depositary will deliver to such holder at the same
time a new Depositary Receipt evidencing such excess number of Depositary
Shares.
DIVIDENDS AND OTHER DISTRIBUTIONS
The Preferred Stock Depositary will distribute all cash dividends or other
cash distributions in respect to the Preferred Stock to the record holders of
Depositary Receipts in proportion, insofar as possible, to the number of
Depositary Shares owned by such holders.
In the event of a distribution other than in cash in respect to the
Preferred Stock, the Preferred Stock Depositary will distribute property
received by it to the record holders of Depositary Receipts in proportion,
insofar as possible, to the number of Depositary Shares owned by such holders,
unless the Preferred Stock Depositary determines that it is not feasible to make
such distribution, in which case the Preferred Stock Depositary may, with the
approval of the Company, adopt such method as it deems equitable and practicable
for the purpose of effecting such distribution, including sale of such property
and distribution of the net proceeds from such sale to such holders.
The amount so distributed in any of the foregoing cases will be reduced by
any amount required to be withheld by the Company or the Preferred Stock
Depositary on account of taxes.
CONVERSION AND EXCHANGE
If any Preferred Stock underlying the Depositary Shares is subject to
provisions relating to its conversion or exchange as set forth in the Prospectus
Supplement relating thereto, each record holder of Depositary Shares will have
the right or obligation to convert or exchange such Depositary Shares pursuant
to the terms thereof.
REDEMPTION OF DEPOSITARY SHARES
If Preferred Stock underlying the Depositary Shares is subject to
redemption, the Depositary Shares will be redeemed from the proceeds received by
the Preferred Stock Depositary resulting from the redemption, in whole or in
part, of the Preferred Stock held by the Preferred Stock Depositary. The
redemption price per Depositary Share will be equal to the aggregate redemption
price payable with respect to the number of shares of Preferred Stock underlying
the Depositary Shares. Whenever the Company redeems Preferred Stock from the
Preferred Stock Depositary, the Preferred Stock Depositary will redeem as of the
same redemption date a proportionate number of Depositary Shares representing
the shares of Preferred Stock that were redeemed. If less than all the
Depositary Shares are to be redeemed, the Depositary Shares to be redeemed will
be selected by lot or pro rata as may be determined by the Company.
After the date fixed for redemption, the Depositary Shares so called for
redemption will no longer be deemed to be outstanding and all rights of the
holders of the Depositary Shares will cease, except the right to receive the
redemption price upon such redemption. Any funds deposited by the Company with
the Preferred Stock Depositary for any Depositary Shares which the holders
thereof fail to redeem shall be returned to the Company after a period of two
years from the date such funds are so deposited.
VOTING
Upon receipt of notice of any meeting at which the holders of any shares of
Preferred Stock underlying the Depositary Shares are entitled to vote, the
Preferred Stock Depositary will mail the information contained in such notice to
the record holders of the Depositary Receipts. Each record holder of such
Depositary Receipts on the record date (which will be the same date as the
record date for the Preferred Stock) will be entitled to instruct the Preferred
Stock Depositary as to the exercise of the voting rights pertaining to the
number of shares of Preferred Stock underlying such holder's Depositary Shares.
The Preferred Stock Depositary will endeavor, insofar as practicable, to vote
the number of shares of Preferred Stock underlying such Depositary Shares in
accordance with such instructions, and the Company will agree to take all
reasonable action which may be deemed necessary by the Preferred Stock
Depositary in order to enable the Preferred Stock Depositary to do so. The
Preferred Stock Depositary will abstain from voting the Preferred
-21-
<PAGE>
Stock to the extent it does not receive specific written instructions from
holders of Depositary Receipts representing such Preferred Stock.
RECORD DATE
Whenever (i) any cash dividend or other cash distribution shall become
payable, any distribution other than cash shall be made, or any rights,
preferences or privileges shall be offered with respect to the Preferred Stock,
or (ii) the Preferred Stock Depositary shall receive notice of any meeting at
which holders of Preferred Stock are entitled to vote or of which holders of
Preferred Stock are entitled to notice, or of the mandatory conversion of or any
election on the part of the Company to call for the redemption of any Preferred
Stock, the Preferred Stock Depositary shall in each such instance fix a record
date (which shall be the same as the record date for the Preferred Stock) for
the determination of the holders of Depositary Receipts (x) who shall be
entitled to receive such dividend, distribution, rights, preferences or
privileges or the net proceeds of the sale thereof or (y) who shall be entitled
to give instructions for the exercise of voting rights at any such meeting or to
receive notice of such meeting or of such redemption or conversion, subject to
the provisions of the Deposit Agreement.
AMENDMENT AND TERMINATION OF THE DEPOSIT AGREEMENT
The form of Depositary Receipt and any provision of the Deposit Agreement
may at any time be amended by agreement between the Company and the Preferred
Stock Depositary. However, any amendment which imposes or increases any fees,
taxes or other charges payable by the holders of Depositary Receipts (other than
taxes and other governmental charges, fees and other expenses payable by such
holders as stated under "Charges of Preferred Stock Depositary"), or which
otherwise prejudices any substantial existing right of holders of Depositary
Receipts, will not take effect as to outstanding Depositary Receipts until the
expiration of 90 days after notice of such amendment has been mailed to the
record holders of outstanding Depositary Receipts.
Whenever so directed by the Company, the Preferred Stock Depositary will
terminate the Deposit Agreement by mailing notice of such termination to the
record holders of all Depositary Receipts then outstanding at least 30 days
prior to the date fixed in such notice for such termination. The Preferred
Stock Depositary may likewise terminate the Deposit Agreement if at any time 45
days shall have expired after the Preferred Stock Depositary shall have
delivered to the Company a written notice of its election to resign and a
successor depositary shall not have been appointed and accepted its appointment.
If any Depositary Receipts remain outstanding after the date of termination, the
Preferred Stock Depositary thereafter will discontinue the transfer of
Depositary Receipts, will suspend the distribution of dividends to the holders
thereof, and will not give any further notices (other than notice of such
termination) or perform any further acts under the Deposit Agreement except as
provided below and except that the Preferred Stock Depositary will continue (i)
to collect dividends on the Preferred Stock and any other distributions with
respect thereto and (ii) to deliver the Preferred Stock together with such
dividends and distributions and the net proceeds of any sales of rights,
preferences, privileges or other property, without liability for interest
thereon, in exchange for Depositary Receipts surrendered. At any time after the
expiration of two years from the date of termination, the Preferred Stock
Depositary may sell the Preferred Stock then held by it at public or private
sales, at such place or places and upon such terms as it deems proper and may
thereafter hold the net proceeds of any such sale, together with any money and
other property then held by it, without liability for interest thereon, for the
pro rata benefit of the holders of Depositary Receipts which have not been
surrendered.
CHARGES OF PREFERRED STOCK DEPOSITARY
The Company will pay all charges of the Preferred Stock Depositary
including charges in connection with the initial deposit of the Preferred Stock,
the initial issuance of the Depositary Receipts, the distribution of information
to the holders of Depositary Receipts with respect to matters on which Preferred
Stock is entitled to vote, withdrawals of the Preferred Stock by the holders of
Depositary Receipts or redemption or conversion of the Preferred Stock, except
for taxes (including transfer taxes, if any) and other governmental charges and
such other charges as are expressly provided in the Deposit Agreement to be at
the expense of holders of Depositary Receipts or persons depositing Preferred
Stock.
-22-
<PAGE>
MISCELLANEOUS
The Preferred Stock Depositary will make available for inspection by
holders of Depositary Receipts at its corporate office and its New York office,
all reports and communications from the Company which are delivered to the
Preferred Stock Depositary as the holder of Preferred Stock.
Neither the Preferred Stock Depositary nor the Company will be liable if it
is prevented or delayed by law or any circumstance beyond its control in
performing its obligations under the Deposit Agreement. The obligations of the
Preferred Stock Depositary under the Deposit Agreement are limited to performing
its duties thereunder without negligence or bad faith. The obligations of the
Company under the Deposit Agreement are limited to performing its duties
thereunder in good faith. Neither the Company nor the Preferred Stock Depositary
is obligated to prosecute or defend any legal proceeding in respect of any
Depositary Shares or Preferred Stock unless satisfactory indemnity is furnished.
The Company and the Preferred Stock Depositary are entitled to rely upon advice
of or information from counsel, accountants or other persons believed to be
competent and on documents believed to be genuine.
The Preferred Stock Depositary may resign at any time or be removed by the
Company, effective upon the acceptance by its successor of its appointment;
provided, that if a successor Preferred Stock Depositary has not been appointed
or accepted such appointment within 45 days after the Preferred Stock Depositary
has delivered a notice of election to resign to the Company, the Preferred Stock
Depositary may terminate the Deposit Agreement. See "--Amendment and
Termination of the Deposit Agreement" above.
DESCRIPTION OF WARRANTS TO PURCHASE CLASS A
COMMON STOCK OR PREFERRED STOCK
The following statements with respect to the Warrants to purchase Class A
Common Stock or Preferred Stock (the "Stock Warrants") are summaries of, and
subject to, the detailed provisions of a Stock Warrant Agreement (the "Stock
Warrant Agreement") to be entered into by the Company and a warrant agent to be
selected at the time of issue (the "Stock Warrant Agent"), a form of which will
be filed with the Commission.
GENERAL
The Stock Warrants, evidenced by Stock Warrant certificates (the "Stock
Warrant Certificates"), may be issued under the Stock Warrant Agreement
independently or together with any Securities offered by any Prospectus
Supplement and may be attached to or separate from such Securities. If Stock
Warrants are offered, the Prospectus Supplement will describe the terms of the
Stock Warrants, including the following: (i) the offering price, if any; (ii)
the number of shares of Preferred Stock or Class A Common Stock purchasable upon
exercise of each Stock Warrant and the initial price at which such shares may be
purchased upon exercise; (iii) if applicable, the designation and terms of the
Securities with which the Stock Warrants are issued and the number of Stock
Warrants issued with each such Security; (iv) if applicable, the date on and
after which the Stock Warrants and the related Preferred Stock or Class A Common
Stock will be separately transferable; (v) the date on which the right to
exercise the Stock Warrants shall commence and the date on which such right
shall expire; (vi) federal income tax consequences;(vii) call provisions of such
Stock Warrants, if any; (viii) whether the Stock Warrants represented by the
Stock Warrant Certificates will be issued in registered or bearer form; and (ix)
any additional or other rights, preferences, privileges, limitations and
restrictions relating to the Stock Warrants. The shares of Preferred Stock or
Class A Common Stock issuable upon the exercise of the Stock Warrants will, when
issued in accordance with the Stock Warrant Agreement, be fully paid and
nonassessable.
Stock Warrant Certificates may be exchanged for new Stock Warrant
Certificates of different denominations and may (if in registered form) be
presented for registration of transfer at the corporate trust office of the
Stock Warrant Agent or any Co-Stock Warrant Agent, which will be identified in
the Prospectus Supplement, or at such other office as may be set forth therein.
Holders of Stock Warrants do not have any of the rights of holders of Class A
Common Stock or Preferred Stock (except to the extent that the consent of
holders of Stock Warrant may be required for certain modifications of the terms
of the Class A Common Stock or Preferred Stock issuable upon exercise of the
Stock
-23-
<PAGE>
Warrants) and are not entitled to dividend payments on the Class A Common Stock
or Preferred Stock purchasable upon such exercise.
EXERCISE OF STOCK WARRANTS
Stock Warrants may be exercised by surrendering the Stock Warrant
Certificate at the corporate trust office of the Stock Warrant Agent or at the
corporate trust office of the Co-Stock Warrant Agent, if any, with the form of
election to purchase on the reverse side of the Stock Warrant Certificate
properly completed and executed, and by payment in full of the exercise price,
as set forth in the Prospectus Supplement. Upon the exercise of Stock Warrants,
the Stock Warrant Agent or Co-Stock Warrant Agent, if any, will, as soon as
practicable, forward a certificate representing the number of shares of
Preferred Stock or Class A Common Stock purchasable upon such exercise in
accordance with the instructions of the holder exercising the Stock Warrant and
at the sole cost and risk of such holder. If less than all of the Stock Warrants
evidenced by the Stock Warrant Certificate are exercised, a new Stock Warrant
Certificate will be issued for the remaining amount of Stock Warrants.
ANTI-DILUTION PROVISIONS
Unless otherwise specified in the applicable Prospectus Supplement, the
exercise price payable and the number of shares purchasable upon the exercise of
each Stock Warrant will be subject to adjustment in certain events, including
(i) the issuance of a stock dividend to holders of Preferred Stock or Class A
Common Stock or a combination, subdivision or reclassification of the Preferred
Stock or Class A Common Stock; (ii) the issuance of rights, warrants or options
to all holders of Preferred Stock or Class A Common Stock entitling the holders
thereof to subscribe for or purchase Preferred Stock or Class A Common Stock for
an aggregate consideration per share less than the current market price per
share of the Preferred Stock or Class A Common Stock; or (iii) any distribution
by the Company to the holders of its Preferred Stock or Class A Common Stock of
evidences of indebtedness of the Company or of assets (excluding cash dividends
or distributions payable out of capital surplus and dividends and distributions
referred to in (i) above). No fractional shares will be issued upon exercise of
Stock Warrants, but the Company will pay the cash value of any fractional shares
otherwise issuable.
DESCRIPTION OF PREFERRED SECURITIES
The following description sets forth certain general terms and provisions
of the Preferred Securities to which any Prospectus Supplement may relate. The
particular terms of the Preferred Securities offered by any Prospectus
Supplement and the extent, if any, to which such general provisions may apply to
the Preferred Securities so offered will be described in the Prospectus
Supplement relating to such Preferred Securities.
Pursuant to the terms of the Trust Agreement for each Applied Power Trust,
the Administrative Trustees, on behalf of such Applied Power Trust, are
authorized to issue the Preferred Securities and the Common Securities. The
Preferred Securities of a particular issue will represent beneficial ownership
interests in the assets of such Applied Power Trust, and the holders thereof
will be entitled to a preference in certain circumstances with respect to
Distributions and amounts payable on redemption or liquidation over the Common
Securities of such Applied Power Trust, as well as other benefits as described
in the corresponding Trust Agreement. This summary of certain provisions of the
Preferred Securities and each Trust Agreement does not purport to be complete
and is subject to, and is qualified in its entirety by reference to, all the
provisions of each Trust Agreement, including the definitions therein of certain
terms, and the Trust Indenture Act. Wherever particular defined terms of a
Trust Agreement (as amended or supplemented from time to time) are referred to
herein or in a Prospectus Supplement, such defined terms are incorporated herein
or therein by reference. The form of the Trust Agreement has been filed as an
exhibit to the Registration Statement of which this Prospectus forms a part.
Each of the Applied Power Trusts is a legally separate entity, and the assets of
one are not available to satisfy the obligations of the other.
GENERAL
The Preferred Securities of an Applied Power Trust will rank pari passu,
and payments will be made thereon pro rata, with the Common Securities of that
Applied Power Trust except as described under "-- Subordination of
-24-
<PAGE>
Common Securities." Legal title to the Corresponding Junior Subordinated Debt
Securities will be held by the Property Trustee in trust for the benefit of the
holders of the related Preferred Securities and Common Securities. Each
Guarantee Agreement executed by the Company for the benefit of the holders of an
Applied Power Trust's Preferred Securities (each, a "Guarantee Agreement") will
be a guarantee on a junior subordinated basis with respect to the related
Preferred Securities but will not guarantee payment of Distributions or amounts
payable on redemption or liquidation of such Preferred Securities when the
related Applied Power Trust does not have funds on hand available to make such
payments. See "Description of Guarantees."
DISTRIBUTIONS
Distributions on the Preferred Securities will be cumulative, will
accumulate from the date of original issuance and will be payable on such dates
as specified in the applicable Prospectus Supplement. Except as specified in
the applicable Prospectus Supplement, in the event that any date on which
Distributions are payable on the Preferred Securities is not a Business Day (as
defined below), payment of the Distribution payable on such date will be made on
the next succeeding day that is a Business Day (and without any interest or
other payment in respect to any such delay), with the same force and effect as
if made on such date (each date on which Distributions are payable in accordance
with the foregoing, a "Distribution Date"). Except as specified in the
applicable Prospectus Supplement, a "Business Day" shall mean any day other than
a Saturday or a Sunday, or a day on which banking institutions in The City of
New York are authorized or required by law to remain closed or a day on which
the corporate trust office of the Property Trustee or the Trustee under the
Indenture is closed for business.
An Applied Power Trust's Preferred Securities represent beneficial
ownership interests in the assets of such Applied Power Trust, and the
Distributions on each Preferred Security will be payable at a rate specified in
the Prospectus Supplement for such Preferred Securities. The amount of
Distributions payable for any period will be computed on the basis of a 360-day
year of twelve 30-day months unless otherwise specified in the applicable
Prospectus Supplement. Distributions to which holders of Preferred Securities
are entitled will accumulate additional Distributions at the rate per annum if
and as specified in the applicable Prospectus Supplement. The term
"Distributions" as used herein includes any such additional Distributions unless
otherwise stated.
If provided in the applicable Prospectus Supplement, the Company shall have
the right at any time and from time to time during the term of any series of
Corresponding Junior Subordinated Debt Securities to defer payment of interest
for such number of consecutive interest payment periods as may be specified in
the applicable Prospectus Supplement (each, an "Extension Period"), subject to
the terms, conditions and covenants, if any, specified in such Prospectus
Supplement, provided that such Extension Period may not extend beyond the
maturity date of such series of Corresponding Junior Subordinated Debt
Securities. Certain United States Federal income tax consequences and special
considerations applicable to any such Corresponding Junior Subordinated Debt
Securities will be described in the applicable Prospectus Supplement. As a
consequence of any such extension, Distributions on the related Preferred
Securities would be deferred (but would continue to accumulate additional
Distributions thereon at the rate per annum set forth in the Prospectus
Supplement for such Preferred Securities) by the Applied Power Trust which
issued such Preferred Securities during any such Extension Period.
If the Company shall have given notice of its selection of an Extension
Period as provided pursuant to the Indenture with respect to the Corresponding
Junior Subordinated Debt Securities of a series and shall not have rescinded
such notice, or such Extension Period, or any extension thereof, shall be
continuing, the Company may not, and may not permit any subsidiary of the
Company to, (i) declare or pay any dividends or distributions on, or redeem,
purchase, acquire or make a liquidation payment with respect to, any of the
Company's capital stock or (ii) make any payment of principal, interest or
premium, if any, on or repay, repurchase or redeem any debt securities of the
Company (including other Corresponding Junior Subordinated Debt Securities) that
rank pari passu with or junior in interest to the Corresponding Junior
Subordinated Debt Securities of such series or make any guarantee payments with
respect to any guarantee by the Company of debt securities of any subsidiary of
the Company if such guarantee ranks pari passu or junior in interest to the
Corresponding Junior Subordinated Debt Securities of such series (other than (a)
dividends or distributions in common stock of the Company, (b) redemptions or
purchases of any rights pursuant to the Company's Rights Agreement, if any, or
any successor to such Rights Agreement, and the declaration of a dividend of
such rights or the issuance of stock under such plans in the future, (c)
payments under any Guarantee and (d) purchases of common
-25-
<PAGE>
stock related to the issuance of common stock under any of the Company's benefit
plans for its directors, officers or employees). For additional circumstances in
which the Company is restricted in making such payments, see "Description of
Debt Securities -- Certain Provisions Relating to Corresponding Junior
Subordinated Debt Securities -- Restrictions on Certain Payments."
The revenue of each Applied Power Trust available for distribution to
holders of its Preferred Securities will be limited to payments under the
Corresponding Junior Subordinated Debt Securities in which the Applied Power
Trust will invest the proceeds from the issuance and sale of its Trust
Securities. See "Description of Debt Securities -- Certain Provisions Relating
to Corresponding Junior Subordinated Debt Securities." If the Company does not
make interest payments on such Corresponding Junior Subordinated Debt
Securities, the Property Trustee will not have funds available to pay
Distributions of the related Preferred Securities. The payment of Distributions
(if and to the extent the Applied Power Trust has funds legally available for
the payment of such Distributions and cash sufficient to make such payments) is
guaranteed by the Company on a limited basis as set forth herein under
"Description of Guarantees."
Distributions on the Preferred Securities will be payable to the holders
thereof as they appear on the register of such Applied Power Trust on the
relevant record dates, which, as long as the Preferred Securities remain in
book-entry form, will be one Business Day prior to the relevant Distribution
Date. Subject to any applicable laws and regulations and the provisions of the
applicable Trust Agreement, each such payment will be made as described under
"Book Entry Issuance." In the event any Preferred Securities are not in book-
entry form, the relevant record date for such Preferred Securities shall be the
date at least 15 days prior to the relevant Distribution Date, as specified in
the applicable Prospectus Supplement.
PAYMENT OF EXPENSES
Pursuant to the Indenture, the Company, as borrower, has agreed to pay all
debts and obligations (other than with respect to the Trust Securities) and all
costs and expenses of the Applied Power Trusts (including, but not limited to,
all costs and expenses relating to the organization of the Applied Power Trusts,
the fees and expenses of the Property Trustee, the Delaware Trustee and the
Administrative Trustees and all costs and expenses relating to the operation of
the Applied Power Trusts (other than with respect to the Trust Securities)) and
to pay any and all taxes, duties, assessments or other governmental charges of
whatever nature (other than United States withholding taxes) imposed by the
United States or any other taxing authority, so that the net amounts received
and retained by the applicable Applied Power Trust after paying such fees,
expenses, debts and obligations will be equal to the amounts the applicable
Applied Power Trust would have received and retained had no such fees, expenses,
debts and obligations been incurred by or imposed on the applicable Applied
Power Trust. The foregoing obligations of the Company are for the benefit of,
and shall be enforceable by, any person to whom such fees, expenses, debts and
obligations are owed (each, a "Creditor"), whether or not such Creditor has
received notice thereof. Any such Creditor may enforce such obligations of the
Company directly against the Company, and the Company has agreed to irrevocably
waive any right or remedy to require that any such Creditor take any action
against the applicable Applied Power Trust or any other person before proceeding
against the Company. The Company shall execute such additional agreements as
may be necessary to give full effect to the foregoing.
REDEMPTION OR EXCHANGE
Upon the repayment or redemption, in whole or in part, of any Corresponding
Junior Subordinated Debt Securities, whether at maturity or upon earlier
redemption as provided in the Indenture, the proceeds from such repayment or
redemption shall be applied by the Property Trustee to redeem a Like Amount (as
defined below) of the Trust Securities, upon not less than 30 nor more than 60
days notice, at a redemption price (the "Redemption Price") equal to the
aggregate Liquidation Amount of such Trust Securities plus accumulated but
unpaid Distributions thereon to the date of redemption (the "Redemption Date")
and the related amount of the premium, if any, paid by the Company upon the
concurrent redemption of such Corresponding Junior Subordinated Debt Securities.
See "Description of Debt Securities -- Certain Provisions Relating to
Corresponding Junior Subordinated Debt Securities -- Redemption." If less than
all of any series of Corresponding Junior Subordinated Debt Securities are to be
repaid or redeemed on a Redemption Date, then the proceeds from such repayment
or redemption shall be allocated to the redemption pro rata of the related Trust
Securities. The amount of premium, if any, paid by the Company upon the
redemption of all or any
-26-
<PAGE>
part of any series of any Corresponding Junior Subordinated Debt Securities to
be repaid or redeemed on a Redemption Date shall be allocated to the redemption
pro rata of the related Trust Securities.
The Company will have the right to redeem any series of Corresponding
Junior Subordinated Debt Securities (i) subject to the conditions described
under "Description of Debt Securities -- Certain Provisions Relating to
Corresponding Junior Subordinated Debt Securities -- Redemption" or (ii) as may
be otherwise specified in the applicable Prospectus Supplement.
"Like Amount" means (i) with respect to a redemption of any series of Trust
Securities, Trust Securities of such series having a Liquidation Amount (as
defined below) equal to that portion of the principal amount of Corresponding
Junior Subordinated Debt Securities to be contemporaneously redeemed in
accordance with the Indenture, allocated to the Common Securities and to the
Preferred Securities based upon the relative Liquidation Amounts of such classes
and the proceeds of which will be used to pay the Redemption Price of such Trust
Securities, and (ii) with respect to a distribution of Corresponding Junior
Subordinated Debt Securities to holders of any series of Trust Securities in
connection with a dissolution or liquidation of the related Applied Power Trust,
Corresponding Junior Subordinated Debt Securities having a principal amount
equal to the Liquidation Amount of the Trust Securities of the holder to whom
such Corresponding Junior Subordinated Debt Securities are distributed. Unless
otherwise specified in the applicable Prospectus Supplement, "Liquidation
Amount" means the stated amount per Trust Security specified in the applicable
Prospectus Supplement.
At any time, the Company has the right to dissolve an Applied Power Trust
and, after satisfaction of the liabilities of creditors of such Applied Power
Trust as provided by applicable law, cause the Corresponding Junior Subordinated
Debt Securities owned by such Applied Power Trust to be distributed to the
holders of the related Preferred Securities and Common Securities in liquidation
of the Applied Power Trust.
If provided in the applicable Prospectus Supplement, the Company shall have
the right to extend or shorten the maturity of any series of Corresponding
Junior Subordinated Debt Securities at the time that the Company exercises its
right to elect to dissolve the related Applied Power Trust and cause such
Corresponding Junior Subordinated Debt Securities to be distributed to the
holders of such related Preferred Securities and Common Securities in
liquidation of the Applied Power Trust, provided that it can extend the maturity
only if certain conditions specified in the applicable Prospectus Supplement are
met at the time such election is made and at the time of such extension.
After the liquidation date fixed for any distribution of Corresponding
Junior Subordinated Debt Securities for any series of Preferred Securities (i)
such series of Preferred Securities will no longer be deemed to be outstanding,
(ii) The Depository Trust Company ("DTC") or its nominee, as the record holder
of such series of Preferred Securities, will receive a registered global
certificate or certificates representing the Corresponding Junior Subordinated
Debt Securities to be delivered upon such distribution and (iii) any
certificates representing such series of Preferred Securities not held by DTC or
its nominee will be deemed to represent the Corresponding Junior Subordinated
Debt Securities having a principal amount equal to the stated Liquidation Amount
of such series of Preferred Securities, and bearing accrued and unpaid interest
in an amount equal to the accrued and unpaid Distributions on such series of
Preferred Securities until such certificates are presented to the Administrative
Trustees or their agent for transfer or reissuance.
There can be no assurance as to the market prices for the Preferred
Securities or the Corresponding Junior Subordinated Debt Securities that may be
distributed in exchange for Preferred Securities if a dissolution and
liquidation of an Applied Power Trust were to occur. Accordingly, the Preferred
Securities that an investor may purchase, or the Corresponding Junior
Subordinated Debt Securities that an investor may receive on dissolution and
liquidation of an Applied Power Trust, may trade at a discount to the price that
the investor paid to purchase the Preferred Securities.
REDEMPTION AND EXCHANGE PROCEDURES
Preferred Securities redeemed on each Redemption Date shall be redeemed at
the Redemption Price with the applicable proceeds from the contemporaneous
redemption of the Corresponding Junior Subordinated Debt Securities. Redemptions
of the Preferred Securities shall be made and the Redemption Price shall be
payable on each Redemption
-27-
<PAGE>
Date only to the extent that the related Applied Power Trust has funds on hand
available for the payment of such Redemption Price. See "-- Subordination of
Common Securities."
If an Applied Power Trust gives a notice of redemption in respect of its
Preferred Securities, then, by 12:00 noon, New York City time, on the Redemption
Date, to the extent funds are available, the Property Trustee will deposit
irrevocably with DTC funds sufficient to pay the applicable Redemption Price and
will give DTC irrevocable instructions and authority to pay the Redemption Price
to the holders of such Preferred Securities. See "Book-Entry Issuance." If such
Preferred Securities are no longer in book-entry form, the Property Trustee, to
the extent funds are available, will irrevocably deposit with the paying agent
for such Preferred Securities funds sufficient to pay the applicable Redemption
Price and will give such paying agent irrevocable instructions and authority to
pay the Redemption Price to the holders thereof upon surrender of their
certificates evidencing such Preferred Securities. Notwithstanding the
foregoing, Distributions payable on or prior to the Redemption Date for any
Preferred Securities called for redemption shall be payable to the holders of
such Preferred Securities on the relevant record dates for the related
Distribution Dates. If notice of redemption shall have been given and funds
deposited as required, then upon the date of such deposit, all rights of the
holders of such Preferred Securities so called for redemption will cease, except
the right of the holders of such Preferred Securities to receive the Redemption
Price, but without interest on such Redemption Price, and such Preferred
Securities will cease to be outstanding. Except as specified in the applicable
Prospectus Supplement, in the event that any date fixed for redemption of
Preferred Securities is not a Business Day, then payment of the Redemption Price
payable on such date will be made on the next succeeding day which is a Business
Day (and without any interest or other payment in respect of any such delay).
In the event that payment of the Redemption Price in respect of Preferred
Securities called for redemption is improperly withheld or refused and not paid
either by the Applied Power Trust or by the Company pursuant to the Guarantee as
described under "Description of Guarantees," Distributions on such Preferred
Securities will continue to accrue at the then applicable rate, from the
Redemption Date originally established by the Applied Power Trust for such
Preferred Securities to the date such Redemption Price is actually paid, in
which case the actual payment date will be the date fixed for redemption for
purposes of calculating the Redemption Price.
Subject to applicable law (including, without limitation, United States
Federal securities law), the Company or its subsidiaries may at any time and
from time to time purchase outstanding Preferred Securities by tender, in the
open market or by private agreement.
Payment of the Redemption Price on the Preferred Securities and any
distribution of Corresponding Junior Subordinated Debt Securities to holders of
Preferred Securities shall be made to the applicable record holders thereof as
they appear on the register for such Preferred Securities on the relevant record
date, which shall be one Business Day prior to the relevant Redemption Date or
liquidation date, as applicable; provided, however, that in the event that any
Preferred Securities are not in book-entry form, the relevant record date for
such Preferred Securities shall be a date at least 15 days prior to the
Redemption Date or liquidation date, as applicable, as specified in the
applicable Prospectus Supplement.
If less than all of the Preferred Securities and Common Securities issued
by an Applied Power Trust are to be redeemed on a Redemption Date, then the
aggregate Liquidation Amount of such Preferred Securities and Common Securities
to be redeemed shall be allocated pro rata to the Preferred Securities and the
Common Securities based upon the relative Liquidation Amounts of such classes.
The particular Preferred Securities to be redeemed shall be selected on a pro
rata basis not more than 60 days prior to the Redemption Date by the Property
Trustee from the outstanding Preferred Securities not previously called for
redemption. The Property Trustee shall promptly notify the trust registrar in
writing of the Preferred Securities selected for redemption and, in the case of
any Preferred Securities selected for partial redemption, the Liquidation Amount
thereof to be redeemed. For all purposes of each Trust Agreement, unless the
context otherwise requires, all provisions relating to the redemption of
Preferred Securities shall relate, in the case of any Preferred Securities
redeemed or to be redeemed only in part, to the portion of the aggregate
Liquidation Amount of Preferred Securities which has been or is to be redeemed.
Notice of any redemption will be mailed at least 30 days but not more than
60 days before the Redemption Date to each Holder of Trust Securities to be
redeemed at its registered address. Unless the Company defaults in payment of
the Redemption Price on the Corresponding Junior Subordinated Debt Securities,
on and after the Redemption Date
-28-
<PAGE>
interest ceases to accrue on such Junior Subordinated Debt Securities or
portions thereof (and distributions cease to accrue on the related Preferred
Securities or portions thereof) called for redemption.
SUBORDINATION OF COMMON SECURITIES
Payment of Distributions on, and the Redemption Price of, each Applied
Power Trust's Preferred Securities and Common Securities, as applicable, shall
be made pro rata based on the Liquidation Amount of such Preferred Securities
and Common Securities; provided, however, that if on any Distribution Date or
Redemption Date an Event of Default with respect to any Junior Subordinated Debt
Security shall have occurred and be continuing, no payment of any Distribution
on, or Redemption Price of, any of the Applied Power Trust's Common Securities,
and no other payment on account of the redemption, liquidation or other
acquisition of such Common Securities, shall be made unless payment in full in
cash of all accumulated and unpaid Distributions on all of the Applied Power
Trust's outstanding Preferred Securities for all Distribution periods
terminating on or prior thereto, or in the case of payment of the Redemption
Price the full amount of such Redemption Price on all of the Applied Power
Trust's outstanding Preferred Securities then called for redemption, shall have
been made or provided for, and all funds available to the Property Trustee shall
first be applied to the payment in full in cash of all Distributions on, or
Redemption Price of, the Applied Power Trust's Preferred Securities then due and
payable.
In the case of any Event of Default with respect to any Junior Subordinated
Debt Security, the Company as holder of such Applied Power Trust's Common
Securities will be deemed to have waived any right to act with respect to any
such Event of Default under the applicable Trust Agreement until the effect of
all such Events of Default with respect to such Preferred Securities has been
cured, waived or otherwise eliminated. Until any such Events of Default under
the applicable Trust Agreement with respect to the Preferred Securities have
been so cured, waived or otherwise eliminated, the Property Trustee shall act
solely on behalf of the holders of such Preferred Securities and not on behalf
of the Company as holder of the Applied Power Trust's Common Securities, and
only the holders of such Preferred Securities will have the right to direct the
Property Trustee to act on their behalf.
LIQUIDATION DISTRIBUTION UPON DISSOLUTION
Pursuant to each Trust Agreement, each Applied Power Trust shall
automatically dissolve upon expiration of its term and shall dissolve on the
first to occur of: (i) certain events of bankruptcy, dissolution or liquidation
of the Company; (ii) the written direction to the Property Trustee from the
Company, as Depositor, to dissolve such Applied Power Trust and distribute the
Corresponding Junior Subordinated Debt Securities to the holders of the
Preferred Securities in exchange for the Preferred Securities (which direction
is optional and wholly within the discretion of the Company, as Depositor);
(iii) the redemption of all of the Applied Power Trust's Trust Securities; and
(iv) the entry of an order for the dissolution of such Applied Power Trust by a
court of competent jurisdiction.
If an early dissolution occurs as described in clause (i), (ii) or (iv)
above, the Applied Power Trust shall be liquidated by the Issuer Trustees as
expeditiously as the Issuer Trustees determine to be possible by distributing,
after satisfaction of liabilities to creditors of such Applied Power Trust as
provided by applicable law, to the holders of such Trust Securities a Like
Amount of the Corresponding Junior Subordinated Debt Securities, unless such
distribution is determined by the Property Trustee not to be practical, in which
event such holders will be entitled to receive out of the assets of the Applied
Power Trust available for distribution to holders, after satisfaction of
liabilities to creditors of such Applied Power Trust as provided by applicable
law, an amount equal to, in the case of holders of Preferred Securities, the
aggregate of the Liquidation Amount plus accrued and unpaid Distributions
thereon to the date of payment (such amount being the "Liquidation
Distribution"). If such Liquidation Distribution can be paid only in part
because such Applied Power Trust has insufficient assets available to pay in
full the aggregate Liquidation Distribution, then the amounts payable directly
by such Applied Power Trust on its Preferred Securities shall be paid on a pro
rata basis. The holder(s) of such Applied Power Trust's Common Securities will
be entitled to receive distributions upon any such liquidation pro rata with the
holders of its Preferred Securities, except that if a Junior Subordinated Debt
Security Event of Default has occurred and is continuing, the Preferred
Securities shall have a priority over the Common Securities.
-29-
<PAGE>
EVENTS OF DEFAULT; NOTICE
Any one of the following events constitutes an "Event of Default" under
each Trust Agreement (a "Trust Event of Default") with respect to the Preferred
Securities issued thereunder (whatever the reason for such Trust Event of
Default and whether it shall be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(i) the occurrence of an Event of Default with respect to a
Corresponding Junior Subordinated Debt Security under the Indenture
(see "Description of Debt Securities -- Defaults and Remedies"); or
(ii) default by the Property Trustee in the payment of any Distribution
when it becomes due and payable, and continuation of such default
for a period of 30 days; or
(iii) default by the Property Trustee in the payment of any Redemption
Price of any Trust Security when it becomes due and payable; or
(iv) default in the performance, or breach, in any material respect, of
any covenant or warranty of the Issuer Trustees in such Trust
Agreement (other than a covenant or warranty a default in the
performance of which or the breach of which is dealt with in clause
(ii) or (iii) above), and continuation of such default or breach for
a period of 60 days after there has been given, by registered or
certified mail, to the defaulting Issuer Trustee or Trustees by the
holders of at least 25% in aggregate liquidation preference of the
outstanding Preferred Securities of the applicable Applied Power
Trust, a written notice specifying such default or breach and
requiring it to be remedied and stating that such notice is a
"Notice of Default" under such Trust Agreement; or
(v) the occurrence of certain events of bankruptcy or insolvency with
respect to the Property Trustee and the failure by the Company to
appoint a successor Property Trustee within 60 days thereof.
Within five Business Days after the occurrence of any Trust Event of
Default actually known to the Property Trustee, the Property Trustee shall
transmit notice of such Trust Event of Default to the holders of such Applied
Power Trust's Preferred Securities, the Administrative Trustees and the Company,
as Depositor, unless such Trust Event of Default shall have been cured or
waived. The Company, as Depositor, and the Administrative Trustees are required
to file annually with the Property Trustee a certificate as to whether or not
they are in compliance with all the conditions and covenants applicable to them
under each Trust Agreement.
If an Event of Default with respect to a Corresponding Junior Subordinated
Debt Security has occurred and is continuing, the Preferred Securities shall
have a preference over the Common Securities upon termination of each Applied
Power Trust as described above. See "-- Liquidation Distribution upon
Dissolution." The existence of a Trust Event of Default does not entitle the
holders of Preferred Securities to cause the redemption of the Preferred
Securities.
REMOVAL OF ISSUER TRUSTEES
Unless an Event of Default with respect to a Corresponding Junior
Subordinated Debt Security shall have occurred and be continuing, any Issuer
Trustee may be removed at any time by the holder of the Common Securities. If a
Trust Event of Default resulting from an Event of Default with respect to a
Corresponding Junior Subordinated Debt Security has occurred and is continuing,
the Property Trustee and the Delaware Trustee may be removed at such time by the
holders of a majority in Liquidation Amount of the outstanding Preferred
Securities. In no event will the holders of the Preferred Securities have the
right to vote to appoint, remove or replace the Administrative Trustees, which
voting rights are vested exclusively in the Company as the holder of the Common
Securities. No resignation or removal of an Issuer Trustee and no appointment
of a successor trustee shall be effective until the acceptance of appointment by
the successor trustee in accordance with the provisions of the applicable Trust
Agreement.
-30-
<PAGE>
CO-TRUSTEES AND SEPARATE PROPERTY TRUSTEE
Unless a Trust Event of Default shall have occurred and be continuing, at
any time or times, for the purpose of meeting the legal requirements of the
Trust Indenture Act or of any jurisdiction in which any part of the Trust
Property may at the time be located, the Company, as the holder of the Common
Securities, and the Administrative Trustees shall have power to appoint one or
more persons either to act as a co-trustee, jointly with the Property Trustee,
of all or any part of such Trust Property, or to act as separate trustee of any
such property, in either case with such powers as may be provided in the
instrument of appointment, and to vest in such person or persons in such
capacity any property, title, right or power deemed necessary or desirable,
subject to the provisions of the applicable Trust Agreement. In case an Event
of Default with respect to a Corresponding Junior Subordinated Debt Security has
occurred and is continuing, the Property Trustee alone shall have power to make
such appointment.
MERGER OR CONSOLIDATION OF ISSUER TRUSTEES
Any corporation into which the Property Trustee, the Delaware Trustee or
any Administrative Trustee that is not a natural person may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Trustee shall be a
party, or any corporation succeeding to all or substantially all the corporate
trust business of such Trustee, shall be the successor of such Trustee under
each Trust Agreement, provided such corporation shall be otherwise qualified and
eligible.
MERGERS, CONSOLIDATIONS, CONVERSIONS, AMALGAMATIONS OR REPLACEMENTS OF THE
APPLIED POWER TRUSTS
An Applied Power Trust may not merge with or into, consolidate, convert
into, amalgamate, or be replaced by, or convey, transfer or lease its properties
and assets substantially as an entirety to any corporation or other Person,
except as described below, as described in "-- Liquidation Distribution upon
Dissolution" or as described in the Prospectus Supplement with respect to the
Preferred Securities. An Applied Power Trust may, at the request of the
Company, with the consent of the Administrative Trustees and without the consent
of the holders of the Preferred Securities, merge with or into, consolidate,
convert into, amalgamate, or be replaced by or convey, transfer or lease its
properties and assets substantially as an entirety to a trust organized as such
under the laws of any State; provided, that (i) such successor entity either (a)
expressly assumes all of the obligations of such Applied Power Trust with
respect to the Preferred Securities or (b) substitutes for the Preferred
Securities other securities having substantially the same terms as the Preferred
Securities (the "Successor Securities") so long as the Successor Securities rank
the same as the Preferred Securities rank in priority with respect to
distributions and payments upon liquidation, redemption and otherwise, (ii) the
Company expressly appoints a trustee of such successor entity possessing the
same powers and duties as the Property Trustee as the holder of the
Corresponding Junior Subordinated Debt Securities, (iii) the Successor
Securities are listed, or any Successor Securities will be listed upon
notification of issuance, on any national securities exchange or other
organization on which the Preferred Securities are then listed, if any, (iv)
such merger, consolidation, conversion, amalgamation, replacement, conveyance,
transfer or lease does not cause the Preferred Securities (including any
Successor Securities) to be downgraded by any nationally recognized statistical
rating organization, (v) such merger, consolidation, conversion, amalgamation,
replacement, conveyance, transfer or lease does not adversely affect the rights,
preferences and privileges of the holders of the Preferred Securities (including
any Successor Securities) in any material respect, (vi) such successor entity
has a purpose substantially similar to that of the Applied Power Trust, (vii)
prior to such merger, consolidation, conversion, amalgamation, replacement,
conveyance, transfer or lease, the Company has received an opinion from
independent counsel to the Applied Power Trust experienced in such matters to
the effect that (a) such merger, consolidation, conversion, amalgamation,
replacement, conveyance, transfer or lease does not adversely affect the rights,
preferences and privileges of the holders of the Preferred Securities (including
any Successor Securities) in any material respect, and (b) following such
merger, consolidation, conversion, amalgamation, replacement, conveyance,
transfer or lease, neither the Applied Power Trust nor such successor entity
will be required to register as an investment company under the Investment
Company Act and (viii) the Company or any permitted successor or assignee owns
all of the common securities of such successor entity and guarantees the
obligations of such successor entity under the Successor Securities at least to
the extent provided by the Guarantee. Notwithstanding the foregoing, an Applied
Power Trust shall not, except with the consent of holders of 100% in Liquidation
Amount of the Preferred Securities, merge with or into, consolidate, convert
into, amalgamate, or be replaced by or convey, transfer or lease its properties
and assets substantially as an entirety to any other entity or permit any other
entity to consolidate,
-31-
<PAGE>
amalgamate, merge with or into, or replace it if such merger, consolidation,
conversion, amalgamation, replacement, conveyance, transfer or lease would cause
the Applied Power Trust or the successor entity to be classified as other than a
grantor trust for United States Federal income tax purposes.
VOTING RIGHTS; AMENDMENT OF EACH TRUST AGREEMENT
Except as provided below and under "Description of Guarantees -- Amendments
and Assignment" and as otherwise required by law and the applicable Trust
Agreement, the holders of the Preferred Securities will have no voting rights.
Each Trust Agreement may be amended from time to time by the Company, the
Property Trustee and the Administrative Trustees, without the consent of the
holders of the Preferred Securities (i) to cure any ambiguity, correct or
supplement any provisions in such Trust Agreement that may be inconsistent with
any other provision, or to make any other provisions with respect to matters or
questions arising under such Trust Agreement, which shall not be inconsistent
with the other provisions of such Trust Agreement or (ii) to modify, eliminate
or add to any provisions of such Trust Agreement to such extent as shall be
necessary to ensure that the Applied Power Trust will be classified for United
States Federal income tax purposes as a grantor trust at all times that any
Trust Securities are outstanding or to ensure that the Applied Power Trust will
not be required to register as an "investment company" under the Investment
Company Act; provided, however, that in the case of clause (i), such action
shall not adversely affect in any material respect the interests of any holder
of Trust Securities, and any such amendments of such Trust Agreement shall
become effective when notice thereof is given to the holders of Trust
Securities. Each Trust Agreement may be amended by the Issuer Trustees and the
Company with (i) the consent of holders representing not less than a majority
(based upon Liquidation Amounts) of the outstanding Trust Securities and (ii)
receipt by the Issuer Trustees of an opinion of counsel experienced in such
matters to the effect that such amendment or the exercise of any power granted
to the Issuer Trustees in accordance with such amendment will not affect the
Applied Power Trust's status as a grantor trust for United States Federal income
tax purposes or the Applied Power Trust's exemption from status as an
"investment company" under the Investment Company Act, provided that without the
consent of each holder of Trust Securities, such Trust Agreement may not be
amended to (i) change the amount or timing of any Distribution on the Trust
Securities or otherwise adversely affect the amount of any Distribution required
to be made in respect of the Trust Securities as of a specified date or (ii)
restrict the right of a holder of Trust Securities to institute suit for the
enforcement of any such payment on or after such date.
So long as any Corresponding Junior Subordinated Debt Securities are held
by the Property Trustee, the Issuer Trustees shall not (i) direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee under the Indenture, or executing any trust or power conferred on the
Property Trustee with respect to such Corresponding Junior Subordinated Debt
Securities, (ii) waive any past default that is waivable under Section 6.04 of
the Indenture, (iii) exercise any right to rescind or annul a declaration that
the principal of all the Corresponding Junior Subordinated Debt Securities shall
be due and payable or (iv) consent to any amendment, modification or termination
of the Indenture, the applicable Securities Resolution or such Corresponding
Junior Subordinated Debt Securities, where such consent shall be required,
without, in each case, obtaining the prior approval of the holders of a majority
in aggregate Liquidation Amount of all outstanding Preferred Securities;
provided, however, that where a consent under the Indenture would require the
consent of each holder of Corresponding Junior Subordinated Debt Securities
affected thereby, no such consent shall be given by the Property Trustee without
the prior consent of each holder of the related Preferred Securities. The
Issuer Trustees shall not revoke any action previously authorized or approved by
a vote of the holders of the Preferred Securities except by subsequent vote of
the holders of the Preferred Securities. The Property Trustee shall notify each
holder of Preferred Securities of any notice of default with respect to the
Corresponding Junior Subordinated Debt Securities. In addition to obtaining the
foregoing approvals of the holders of the Preferred Securities, prior to taking
any of the foregoing actions, the Issuer Trustees shall obtain an opinion of
counsel to the effect that the Applied Power Trust will not be classified as a
corporation for United States Federal income tax purposes on account of such
action.
Any required approval of holders of Preferred Securities may be given at a
meeting of holders of Preferred Securities convened for such purpose or pursuant
to written consent. The Property Trustee will cause a notice of any
-32-
<PAGE>
meeting at which holders of Preferred Securities are entitled to vote to be
given to each holder of record of Preferred Securities in the manner set forth
in each Trust Agreement.
No vote or consent of the holders of Preferred Securities will be required
for an Applied Power Trust to redeem and cancel its Preferred Securities in
accordance with the applicable Trust Agreement.
Notwithstanding that holders of Preferred Securities are entitled to vote
or consent under any of the circumstances described above, any of the Preferred
Securities that are owned by the Company, the Issuer Trustees or any affiliate
of the Company or any Issuer Trustees, shall, for purposes of such vote or
consent, be treated as if they were not outstanding.
PAYMENT AND PAYING AGENCY
Payments in respect of the Preferred Securities shall be made to the
Depositary, which shall credit the relevant accounts at the Depositary on the
applicable Distribution Dates or, if any Applied Power Trust's Preferred
Securities are not held by the Depositary, such payments shall be made by check
mailed to the address of the holder entitled thereto as such address shall
appear on the Register. Unless otherwise specified in the applicable Prospectus
Supplement, the paying agent (the "Paying Agent") shall initially be the
Property Trustee and any co-paying agent chosen by the Property Trustee and
acceptable to the Administrative Trustees and the Company. The Paying Agent
shall be permitted to resign as Paying Agent upon 30 days' written notice to the
Property Trustee and the Company. In the event that the Property Trustee shall
no longer be the Paying Agent, the Administrative Trustees shall appoint a
successor (which shall be a bank or trust company acceptable to the
Administrative Trustees and the Company) to act as Paying Agent.
REGISTRAR AND TRANSFER AGENT
Unless otherwise specified in the applicable Prospectus Supplement, the
Property Trustee will act as registrar and transfer agent for the Preferred
Securities.
Registration of transfers of Preferred Securities will be effected without
charge by or on behalf of each Applied Power Trust, but upon payment of any tax
or other governmental charges that may be imposed in connection with any
transfer or exchange. The Applied Power Trusts will not be required to register
or cause to be registered the transfer of their Preferred Securities after such
Preferred Securities have been called for redemption.
INFORMATION CONCERNING THE PROPERTY TRUSTEE
The Property Trustee, other than during the occurrence and continuance of a
Trust Event of Default, undertakes to perform only such duties as are
specifically set forth in each Trust Agreement and, after such Trust Event of
Default, must exercise the same degree of care and skill as a prudent person
would exercise or use in the conduct of his or her own affairs. Subject to this
provision, the Property Trustee is under no obligation to exercise any of the
powers vested in it by the applicable Trust Agreement at the request of any
holder of Preferred Securities unless it is offered reasonable indemnity against
the costs, expenses and liabilities that might be incurred thereby. If no Trust
Event of Default has occurred and is continuing and the Property Trustee is
required to decide between alternative causes of action, construe ambiguous
provisions in the applicable Trust Agreement or is unsure of the application of
any provision of the applicable Trust Agreement, and the matter is not one on
which holders of Preferred Securities are entitled under such Trust Agreement to
vote, then the Property Trustee shall take such action as is directed by the
Company and if not so directed, shall take such action as it deems advisable and
in the best interests of the holders of the Trust Securities and will have no
liability except for its own bad faith, negligence or willful misconduct.
MISCELLANEOUS
The Administrative Trustees are authorized and directed to conduct the
affairs of and to operate the Applied Power Trusts in such a way that no Applied
Power Trust will be deemed to be an "investment company" required to be
registered under the Investment Company Act or classified as an association
taxable as a corporation for United States Federal income tax purposes and so
that the Corresponding Junior Subordinated Debt Securities will be treated as
-33-
<PAGE>
indebtedness of the Company for United States Federal income tax purposes. In
this connection, the Company and the Administrative Trustees are authorized to
take any action, not inconsistent with applicable law, the certificate of trust
of each Applied Power Trust or each Trust Agreement, that the Company and the
Administrative Trustees determine in their discretion to be necessary or
desirable for such purposes, as long as such action does not materially
adversely affect the interests of the holders of the related Preferred
Securities.
Holders of the Preferred Securities have no preemptive or similar rights.
No Applied Power Trust may borrow money or issue debt or mortgage or pledge
any of its assets.
DESCRIPTION OF GUARANTEES
A Guarantee Agreement will be executed and delivered by the Company
concurrently with the issuance by each Applied Power Trust of its Preferred
Securities for the benefit of the holders from time to time of such Preferred
Securities. The First National Bank of Chicago will act as indenture trustee
("Guarantee Trustee") under each Guarantee for the purposes of compliance with
the Trust Indenture Act, and each Guarantee will be qualified as an indenture
under the Trust Indenture Act. This summary of certain provisions of the
Guarantees does not purport to be complete and is subject to, and qualified in
its entirety by reference to, all of the provisions of each Guarantee Agreement,
including the definitions therein of certain terms, and the Trust Indenture Act.
The form of the Guarantee has been filed as an exhibit to the Registration
Statement of which this Prospectus forms a part. Reference in this summary to
Preferred Securities means that Applied Power Trust's Preferred Securities to
which a Guarantee relates. The Guarantee Trustee will hold each Guarantee for
the benefit of the holders of the related Applied Power Trust's Preferred
Securities.
GENERAL
The Company will irrevocably agree to pay in full on a junior subordinated
basis, to the extent set forth herein, the Guarantee Payments (as defined below)
to the holders of the Preferred Securities, as and when due, regardless of any
defense, right of set-off or counterclaim that such Applied Power Trust may have
or assert other than the defense of payment. The following payments with
respect to the Preferred Securities, to the extent not paid by or on behalf of
the related Applied Power Trust (the "Guarantee Payments"), will be subject to
the Guarantee: (i) any accumulated and unpaid Distributions required to be paid
on such Preferred Securities, to the extent that such Applied Power Trust has
funds on hand available therefor at such time, (ii) the Redemption Price with
respect to any Preferred Securities called for redemption to the extent that
such Applied Power Trust has funds on hand available therefor at such time or
(iii) upon a voluntary or involuntary dissolution, winding up or liquidation of
such Applied Power Trust (unless the Corresponding Junior Subordinated Debt
Securities are distributed to holders of such Preferred Securities), the lesser
of (a) the Liquidation Distribution and (b) the amount of assets of such Applied
Power Trust remaining available for distribution to holders of Preferred
Securities. The Company's obligation to make a Guarantee Payment may be
satisfied by direct payment of the required amounts by the Company to the
holders of the applicable Preferred Securities or by causing the Applied Power
Trust to pay such amounts to such holders.
Each Guarantee will be an irrevocable guarantee on a junior subordinated
basis of the related Applied Power Trust's obligations under the Preferred
Securities, but will apply only to the extent that such related Applied Power
Trust has funds sufficient to make such payments, and is not a guarantee of
collection.
If the Company does not make interest payments on the Corresponding Junior
Subordinated Debt Securities held by the Applied Power Trust, the Applied Power
Trust will not be able to pay Distributions on the Preferred Securities and will
not have funds legally available therefor. Each Guarantee will rank subordinate
and junior in right of payment to all senior indebtedness and subordinated
indebtedness of the Company. See "-- Status of the Guarantees." The majority of
the operating assets of the Company and its consolidated subsidiaries are owned
by such subsidiaries. The Company relies primarily on funds obtained from such
subsidiaries to meet its obligations for payment of principal and interest on
its outstanding debt obligations and corporate expenses. Accordingly, the
Company's obligations under the Guarantees will be effectively subordinated to
all existing and future liabilities of the Company's subsidiaries, and claimants
should look only to the assets of the Company for payments thereunder. See
"Description of Debt Securities -- General" and --"Ranking of Debt Securities."
Except as otherwise provided in the applicable Prospectus Supplement,
-34-
<PAGE>
the Guarantees do not limit the incurrence or issuance of other secured or
unsecured debt of the Company, whether under the Indenture, any other indenture
that the Company may enter into in the future or otherwise. See the Prospectus
Supplement relating to any offering of Preferred Securities.
The Company has also agreed to irrevocably and unconditionally guarantee
the obligations of the Applied Power Trusts with respect to the Common
Securities to the same extent as the Preferred Securities Guarantee, except that
upon an Event of Default with respect to a Corresponding Junior Subordinated
Debt Security, holders of Preferred Securities shall have priority over holders
of Common Securities with respect to distributions and payments on liquidation,
redemption or otherwise.
The Company's obligations described herein and in any accompanying
Prospectus Supplement, through the applicable Guarantee Agreement, the
applicable Trust Agreement, the Corresponding Junior Subordinated Debt
Securities, and the applicable Securities Resolution under the Indenture, taken
together, constitute a full, irrevocable and unconditional guarantee by the
Company of payments due on the Preferred Securities. No single document
standing alone or operating in conjunction with fewer than all of the other
documents constitutes such guarantee. It is only the combined operation of
these documents that has the effect of providing a full, irrevocable and
unconditional guarantee of the Applied Power Trust's obligations under the
Preferred Securities. See "The Applied Power Trusts," "Description of Preferred
Securities," and "Description of Debt Securities -- Certain Provisions Relating
to Corresponding Junior Subordinated Debt Securities."
STATUS OF THE GUARANTEES
Each Guarantee will constitute an unsecured obligation of the Company and
will rank subordinate and junior in right of payment to all senior indebtedness
and subordinated indebtedness.
Each Guarantee will rank pari passu with all other Guarantees issued by the
Company relating to Preferred Securities. Each Guarantee will constitute a
guarantee of payment and not of collection (i.e., the guaranteed party may
institute a legal proceeding directly against the Guarantor to enforce its
rights under the Guarantee without first instituting a legal proceeding against
any other person or entity). Each Guarantee will be held for the benefit of the
holders of the related Preferred Securities. Each Guarantee will not be
discharged except by payment of the Guarantee Payments in full to the extent not
paid by the Applied Power Trust or upon distribution to the holders of the
Preferred Securities of the Corresponding Junior Subordinated Debt Securities.
None of the Guarantees places a limitation on the amount of additional senior
indebtedness or subordinated indebtedness that may be incurred by the Company.
The Company expects from time to time to incur additional indebtedness
constituting senior indebtedness or subordinated indebtedness.
AMENDMENTS AND ASSIGNMENT
Except with respect to any changes which do not adversely affect the rights
of holders of the related Preferred Securities in any material respect (in which
case no vote will be required), no Guarantee may be amended without the prior
approval of the holders of not less than a majority of the aggregate Liquidation
Amount of the related outstanding Preferred Securities. The manner of obtaining
any such approval will be as set forth under "Description of Preferred
Securities -- Voting Rights; Amendment of Each Trust Agreement." All guarantees
and agreements contained in each Guarantee Agreement shall bind the successors,
assigns, receivers, trustees and representatives of the Company and shall inure
to the benefit of the holders of the related Preferred Securities then
outstanding.
EVENTS OF DEFAULT
An event of default under each Guarantee Agreement will occur upon the
failure of the Company to perform any of its payment or other obligations
thereunder. The holders of not less than a majority in aggregate Liquidation
Amount of the related Preferred Securities have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Guarantee Trustee in respect of such Guarantee Agreement or to direct the
exercise of any trust or power conferred upon the Guarantee Trustee under such
Guarantee Agreement.
-35-
<PAGE>
Any holder of the Preferred Securities may institute a legal proceeding
directly against the Company to enforce its rights under such Guarantee
Agreement without first instituting a legal proceeding against the Applied Power
Trust, the Guarantee Trustee or any other person or entity.
The Company, as guarantor, is required to file annually with the Guarantee
Trustee a certificate as to whether or not the Company is in compliance with all
the conditions and covenants applicable to it under the Guarantee Agreement.
INFORMATION CONCERNING THE GUARANTEE TRUSTEE
The Guarantee Trustee, other than during the occurrence and continuance of
a default by the Company in performance of any Guarantee, undertakes to perform
only such duties as are specifically set forth in each Guarantee Agreement and,
after default with respect to any Guarantee, must exercise the same degree of
care and skill as a prudent person would exercise or use in the conduct of his
or her own affairs. Subject to this provision, the Guarantee Trustee is under
no obligation to exercise any of the powers vested in it by any Guarantee
Agreement at the request of any holder of any Preferred Securities unless it is
offered reasonable indemnity against the costs, expenses and liabilities that
might be incurred thereby.
TERMINATION OF THE GUARANTEES
Each Guarantee will terminate and be of no further force and effect upon
full payment of the Redemption Price of the related Preferred Securities, upon
full payment of the amounts payable upon liquidation of the related Applied
Power Trust or upon distribution of Corresponding Junior Subordinated Debt
Securities to the holders of the related Preferred Securities. Each will
continue to be effective or will be reinstated, as the case may be, if at any
time any holder of the related Preferred Securities must restore payment of any
sums paid under such Preferred Securities or such Guarantee.
GOVERNING LAW
Each Guarantee Agreement will be governed by and construed in accordance
with the laws of the State of New York.
RELATIONSHIP AMONG THE PREFERRED SECURITIES,
THE CORRESPONDING JUNIOR SUBORDINATED DEBT SECURITIES
AND THE GUARANTEES
FULL AND UNCONDITIONAL GUARANTEE
Payments of Distributions and other amounts due on the Preferred Securities
(to the extent the applicable Applied Power Trust has funds available for the
payment of such Distributions) are irrevocably guaranteed by the Company as and
to the extent set forth under "Description of Guarantees." Taken together, the
Company's obligations under each series of Corresponding Junior Subordinated
Debt Securities, the related Securities Resolution, the Indenture, the related
Trust Agreement and the related Guarantee provide, in the aggregate, a full,
irrevocable and unconditional guarantee of payments of distributions and other
amounts due on the related series of Preferred Securities. No single document
standing alone or operating in conjunction with fewer than all of the other
documents constitutes such guarantee. It is only the combined operation of
these documents that has the effect of providing a full, irrevocable and
unconditional guarantee of the Applied Power Trust's obligations under the
Preferred Securities. If and to the extent that the Company does not make
payments on any series of Corresponding Junior Subordinated Debt Securities,
such Applied Power Trust will not pay Distributions or other amounts due on its
Preferred Securities. The Guarantees do not cover payment of Distributions when
the related Applied Power Trust does not have sufficient funds to pay such
Distributions. In such event, the remedy of a holder of a series of Preferred
Securities is to institute a legal proceeding directly against the Company for
enforcement of payment of such Distributions to such holder. The obligations of
the Company under each Guarantee are subordinate and junior in right of payment
to all senior indebtedness and subordinated indebtedness of the Company.
-36-
<PAGE>
SUFFICIENCY OF PAYMENTS
As long as payments of interest and other payments are made when due on
each series of Corresponding Junior Subordinated Debt Securities, such payments
will be sufficient to cover Distributions and other payments due on the related
Preferred Securities, primarily because (i) the aggregate principal amount of
each series of Corresponding Junior Subordinated Debt Securities will be equal
to the sum of the aggregate stated Liquidation Amount of the related Preferred
Securities and related Common Securities; (ii) the interest rate and interest
and other payment dates on each series of Corresponding Junior Subordinated Debt
Securities will match the Distribution rate and Distribution and other payment
dates for the related Preferred Securities; (iii) the Company, as borrower,
shall pay for all and any costs, expenses and liabilities of such Applied Power
Trust except the Applied Power Trust's obligations to holders of its Preferred
Securities under such Preferred Securities; and (iv) each Trust Agreement
further provides that the Applied Power Trust will not engage in any activity
that is not consistent with the limited purposes of such Applied Power Trust.
Notwithstanding anything to the contrary in the Indenture, the Company has
the right to set-off any payment it is otherwise required to make thereunder if
and to the extent the Company has theretofore made, or is concurrently on the
date of such payment making, a payment under the related Guarantee Agreement.
ENFORCEMENT RIGHTS OF HOLDERS OF PREFERRED SECURITIES
A holder of any Preferred Security may institute a legal proceeding
directly against the Company to enforce its rights under the related Guarantee
Agreement without first instituting a legal proceeding against the Guarantee
Trustee, the related Applied Power Trust or any other person or entity.
A default or event of default under any senior or subordinated indebtedness
of the Company would not necessarily constitute a Trust Event of Default.
However, in the event of payment defaults under, or acceleration of, senior or
subordinated indebtedness of the Company, the subordination provisions of the
applicable Securities Resolution will, unless the applicable Securities
Resolution states otherwise, provide that no payments may be made in respect of
the Corresponding Junior Subordinated Debt Securities until such senior or
subordinated indebtedness has been paid in full or any payment default
thereunder has been cured or waived. Failure to make required payments on any
series of Corresponding Junior Subordinated Debt Securities would constitute a
Trust Event of Default.
LIMITED PURPOSE OF APPLIED POWER TRUSTS
Each Applied Power Trust's Preferred Securities evidence undivided
beneficial ownership interests in the assets of such Applied Power Trust, and
each Applied Power Trust exists for the sole purposes of issuing its Preferred
Securities and Common Securities, investing the proceeds thereof in
Corresponding Junior Subordinated Debt Securities and engaging in only those
other activities necessary, convenient or incidental thereto. A principal
difference between the rights of a holder of a Preferred Security and a holder
of a Corresponding Junior Subordinated Debt Security is that a holder of a
Corresponding Junior Subordinated Debt Security is entitled to receive from the
Company the principal amount of and interest accrued on Corresponding Junior
Subordinated Debt Securities held, while a holder of Preferred Securities is
entitled to receive Distributions from such Applied Power Trust (or from the
Company under the applicable Guarantee Agreement) if and to the extent such
Applied Power Trust has funds available for the payment of such Distributions.
RIGHTS UPON DISSOLUTION
Upon any voluntary or involuntary dissolution of any Applied Power Trust
involving the liquidation of the Corresponding Junior Subordinated Debt
Securities, the holders of the related Preferred Securities will be entitled to
receive, out of assets held by such Applied Power Trust and, after satisfaction
of creditors of such Applied Power Trust as provided by applicable law, the
Liquidation Distribution in cash. See "Description of Preferred Securities --
Liquidation Distribution upon Dissolution." Upon any voluntary or involuntary
liquidation or bankruptcy of the Company, the Property Trustee, as holder of the
Corresponding Junior Subordinated Debt Securities, would be a junior
subordinated creditor of the Company, subordinated in right of payment to all
senior indebtedness and subordinated
-37-
<PAGE>
indebtedness, but entitled to receive payment in full of principal and interest,
before any stockholders of the Company receive payments or distributions. Since
the Company is the guarantor under each Guarantee Agreement and pursuant to the
Indenture, as borrower, has agreed to pay for all costs, expenses and
liabilities of each Applied Power Trust (other than the Applied Power Trust's
obligations to the holders of its Preferred Securities), the positions of a
holder of such Preferred Securities and a holder of such Corresponding Junior
Subordinated Debt Securities relative to other creditors and to stockholders of
the Company in the event of liquidation or bankruptcy of the Company are
expected to be substantially the same.
DESCRIPTION OF STOCK PURCHASE CONTRACTS
AND STOCK PURCHASE UNITS
The Company may issue Stock Purchase Contracts, representing contracts
obligating holders to purchase from the Company, and the Company to sell to the
holders, a specified number of shares of Class A Common Stock at a future date
or dates. The price per share of Class A Common Stock may be fixed at the time
the Stock Purchase Contracts are issued or may be determined by reference to a
specific formula set forth in the Stock Purchase Contracts. Stock Purchase
Contracts may be issued separately or as a part of units ("Stock Purchase
Units") consisting of a Stock Purchase Contract and either (x) Senior Debt
Securities, Subordinated Debt Securities or Junior Subordinated Debt Securities,
(y) debt obligations of third parties, including U.S. Treasury securities, or
(z) Preferred Securities of an Applied Power Trust, securing the holder's
obligations to purchase the Class A Common Stock under the Stock Purchase
Contracts. The Stock Purchase Contracts may require the Company to make
periodic payments to the holders of the Stock Purchase Units or vice versa, and
such payments may be unsecured or prefunded on some basis. The Stock Purchase
Contracts may require holders to secure their obligations thereunder in a
specified manner and in certain circumstances the Company may deliver newly
issued prepaid stock purchase contracts ("Prepaid Securities") upon release to a
holder of any collateral securing such holder's obligations under the original
Stock Purchase Contract.
The applicable Prospectus Supplement will describe the terms of any Stock
Purchase Contracts or Stock Purchase Units and, if applicable, Prepaid
Securities. The description in the Prospectus Supplement will not purport to
be complete and will be qualified in its entirety by reference to the Stock
Purchase Contracts, the collateral arrangements and depositary arrangements, if
applicable, relating to such Stock Purchase Contracts or Stock Purchase Units
and, if applicable, the Prepaid Securities and the document pursuant to which
such Prepaid Securities will be issued. Certain material United States Federal
income tax considerations applicable to the Stock Purchase Units and Stock
Purchase Contracts will be set forth in the Prospectus Supplement relating
thereto.
BOOK-ENTRY ISSUANCE
The Debt Securities, Preferred Securities and Corresponding Junior
Subordinated Debt Securities of a series may be issued in whole or in part in
the form of one or more Global Securities that will be deposited with, or on
behalf of, the Depositary identified in the Prospectus Supplement relating to
such series ("Book-Entry Securities"). Unless otherwise indicated in the
applicable Prospectus Supplement for such series, the Depositary will be DTC.
Book-Entry Securities may be issued only in fully registered form and in either
temporary or permanent form. Unless and until it is exchanged in whole or in
part for the individual Book-Entry Securities represented thereby, a Book-Entry
Security may not be transferred except as a whole by the Depositary for such
Book-Entry Security to a nominee of such Depositary or by a nominee of such
Depositary to such Depositary or another nominee of such Depositary or by the
Depositary or any nominee to a successor Depositary or any nominee of such
successor.
DTC has advised the Company as follows: DTC is a limited purpose trust
company organized under the New York Banking Law, a "banking organization"
within the meaning of the New York Banking Law, a member of the Federal Reserve
System, a "clearing corporation" within the meaning of the New York Uniform
Commercial Code, and a "clearing agency" registered pursuant to the provisions
of Section 17A of the Exchange Act. DTC holds securities that its Participants
deposit with DTC. DTC also facilitates the settlement among Participants of
securities transactions, such as transfers and pledges, in deposited securities
through electronic computerized book-entry changes in Participants' accounts,
thereby eliminating the need for physical movement of securities certificates.
Direct Participants include securities brokers and dealers, banks, trust
companies, clearing corporations and certain other organizations ("Direct
Participants"). DTC is owned by a number of its Direct Participants and by the
New York Stock Exchange,
-38-
<PAGE>
Inc., the American Stock Exchange, Inc. and the National Association of
Securities Dealers, Inc. Access to the DTC system is also available to others
such as securities brokers and dealers, banks and trust companies that clear
through or maintain custodial relationships with Direct Participants, either
directly or indirectly ("Indirect Participants"). The rules applicable to DTC
and its Participants are on file with the Commission.
Purchases of Book-Entry Securities within the DTC system must be made by or
through Direct Participants, which will receive a credit for the Book-Entry
Securities on DTC's records. The ownership interest of each actual purchaser of
each Book-Entry Security ("Beneficial Owner") is in turn to be recorded on the
Direct and Indirect Participants' records. Beneficial Owners will not receive
written confirmation from DTC of their purchases, but Beneficial Owners are
expected to receive written confirmations providing details of the transactions,
as well as periodic statements of their holdings, from the Direct or Indirect
Participants through which the Beneficial Owners purchased Book-Entry
Securities. Transfers of ownership interests in the Book-Entry Securities are
to be accomplished by entries made on the books of Participants acting on behalf
of Beneficial Owners. Beneficial Owners will not receive certificates
representing their ownership interests in Book-Entry Securities, except in the
event that use of the book-entry system is discontinued. The laws of some
states require that certain purchasers of securities take physical delivery of
such securities in definitive form. Such limits and such laws may impair the
ability to transfer beneficial interests in a Global Security.
To facilitate subsequent transfers, all Book-Entry Securities deposited by
Participants with DTC are registered in the name of DTC's partnership nominee,
Cede & Co. The deposit of Book-Entry Securities with DTC and their
registration in the name of Cede & Co. effect no change in beneficial ownership.
DTC has no knowledge of the actual Beneficial Owners of the Book-Entry
Securities; DTC's records reflect only the identity of the Direct Participants
to whose accounts such Book-Entry Securities are credited, which may or may not
be the Beneficial Owners. The Participants will remain responsible for keeping
account of their holdings on behalf of their customers.
The Company and the Applied Power Trusts expect that conveyance of notices
and other communications by DTC to Direct Participants, by Direct Participants
to Indirect Participants, and by Direct Participants and Indirect Participants
to Beneficial Owners and the voting rights of Direct Participants, Indirect
Participants and Beneficial Owners will be governed by arrangements among them,
subject to any statutory or regulatory requirements as may be in effect from
time to time.
Redemption notices shall be sent to Cede & Co. as the registered holder of
the Book-Entry Securities.
Although voting with respect to the Book-Entry Securities is limited to the
holders of record of the Book-Entry Securities, in those instances in which a
vote is required, neither DTC nor Cede & Co. will itself consent or vote with
respect to Book-Entry Securities. Under its usual procedures, DTC would mail an
omnibus proxy ( "Omnibus Proxy") to the relevant Trustee as soon as possible
after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or
voting rights to those Direct Participants to whose accounts such Book-Entry
Securities are credited on the record date (identified in a listing attached to
the Omnibus Proxy).
As long as the Book-Entry Securities are held by DTC or its nominee and DTC
continues to make its same-day funds settlement system available to the Company,
all payments on the Book-Entry Securities (other than Preferred Securities or
Corresponding Junior Subordinated Debt Securities) will be made by the Company
in immediately available funds to DTC. Distribution payments on the Preferred
Securities or the Junior Subordinated Debt Securities will be made by the
relevant Trustee to DTC. The Company and the Applied Power Trusts have been
advised that DTC's practice is to credit Direct Participants' accounts on the
relevant payment date in accordance with their respective holdings shown on
DTC's records unless DTC has reason to believe that it will not receive payments
on such payment date. Payments by Participants to Beneficial Owners will be
governed by standing instructions and customary practices and will be the
responsibility of such Participant and not of DTC, the relevant Trustee, the
Applied Power Trust (as applicable) or the Company, subject to any statutory or
regulatory requirements as may be in effect from time to time. Payment on Book-
Entry Securities to DTC is the responsibility of the Company or the relevant
Trustee (as applicable), disbursement of such payments to Direct Participants is
the responsibility of DTC and disbursements of such payments to the Beneficial
Owners is the responsibility of Direct and Indirect Participants
-39-
<PAGE>
Unless otherwise specified in the applicable Prospectus Supplement, if a
Depositary for a series of Preferred Securities is at any time unwilling, unable
or ineligible to continue as depositary and a successor depositary is not
appointed by the Company within 90 days, the Company will issue individual
Preferred Securities of such series in exchange for the Global Security
representing such series of Preferred Securities. In addition, the Company may
at any time and in its sole discretion, subject to any limitations described in
the Prospectus Supplement relating to such Preferred Securities, determine not
to have any Preferred Securities of such series represented by one or more
Global Securities and, in such event, will issue individual Preferred Securities
of such series in exchange for the Global Security or the Securities
representing such series of Preferred Securities. Further, if the Company so
specifies with respect to Preferred Securities of a series, an owner of a
beneficial interest in a Global Security representing Preferred Securities of
such series may, on terms acceptable to the Company, the Property Trustee and
the Depositary for such Global Security, receive individual Preferred Securities
of such series in exchange for such beneficial interests, subject to any
limitations described in the Prospectus Supplement relating to such Preferred
Securities. In any such instance, a Beneficial Owner in such Global Security
will be entitled to physical delivery of individual Preferred Securities of the
series represented by such Global Security equal in principal amount to such
beneficial interest and to have such Preferred Securities registered in its
name. Individual Preferred Securities of such series so issued will be issued
in such denominations as set forth in the accompanying Prospectus Supplement.
DTC may discontinue providing its services as securities depositary with
respect to Debt Securities at any time by giving reasonable notice to the
Company or the Indenture Trustee. Under such circumstances, if a successor
depositary is not appointed by the Company within 90 days, the Company will
issue individual definitive Debt Securities in exchange for all the Global
Securities representing such Debt Securities. In addition, the Company may at
any time and in its sole discretion determine not to have the Debt Securities
represented by Global Securities and, in such event, will issue individual
definitive Debt Securities in exchange for all the Global Securities
representing the Debt Securities. Individual definitive Debt Securities so
issued will be issued in denominations of $1,000 and any larger amount that is
an integral multiple of $1,000 and registered in such names as DTC shall direct.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that the Applied Power Trusts and the Company
believe to be accurate, but the Applied Power Trusts and the Company assume no
responsibility for the accuracy thereof. Neither the Applied Power Trusts nor
the Company has any responsibility for the performance by DTC or its
Participants of their respective obligations as described herein or under the
rules and procedures governing their respective operations.
PLAN OF DISTRIBUTION
The Company and/or any Applied Power Trust may sell the Securities in any
one or more of the following ways from time to time: (i) to or through
underwriters or dealers; (ii) directly to one or more purchasers; or (iii)
through agents. Prospectus Supplement with respect to the Securities being
offered thereby sets forth the terms of the offering of such Securities,
including the name or names of any underwriters, the purchase price of such
Securities and the proceeds to the Company and/or an Applied Power Trust from
such sale, any underwriting discounts and other items constituting underwriters'
compensation, any initial public offering price, any discounts or concessions
allowed or reallowed or paid to dealers, and any securities exchange on which
such Securities may be listed. Only underwriters so named in the Prospectus
Supplement are deemed to be underwriters in connection with the Securities
offered thereby.
If underwriters are used in the sale, the Securities will be acquired by
the underwriters for their own account and may be resold from time to time in
one or more transactions, including negotiated transactions, at a fixed public
offering price or at varying prices determined at the time of sale. The
obligations of the underwriters to purchase such Securities will be subject to
certain conditions precedent, and the underwriters will be obligated to purchase
all the Securities of the series offered by the Company's and/or the applicable
Applied Power Trust's Prospectus Supplement if any of such Securities are
purchased. Any initial public offering price and any discounts or concessions
allowed or reallowed or paid to dealers may be changed from time to time.
Securities may also be offered and sold, if so indicated in the Prospectus
Supplement, in connection with a remarketing upon their purchase, in accordance
with a redemption or repayment pursuant to their terms, by one or more firms
("remarketing firms") acting as principals for their own accounts or as agents
for the Company and/or an
-40-
<PAGE>
applicable Applied Power Trust. Any remarketing firm will be identified and the
terms of its agreement, if any, with the Company and its compensation will be
described in the Prospectus Supplement. Remarketing firms may be deemed to be
underwriters in connection with the Securities remarketed thereby.
Securities may also be sold directly by the Company and/or an Applied Power
Trust or through agents designated by the Company from time to time. Any agent
involved in the offering and sale of the Securities in respect of which this
Prospectus is delivered is named, and any commissions payable by the Company
and/or an Applied Power Trust to such agent are set forth, in the Prospectus
Supplement. Unless otherwise indicated in the Prospectus Supplement, any such
agent is acting on a best efforts basis for the period of its appointment.
If so indicated in the Prospectus Supplement, the Company and/or an Applied
Power Trust will authorize agents, underwriters or dealers to solicit offers by
certain institutional investors to purchase Securities providing for payment and
delivery on a future date specified in the Prospectus Supplement. There may be
limitations on the minimum amount which may be purchased by any such
institutional investor or on the portion of the aggregate principal amount of
the particular Securities which may be sold pursuant to such arrangements.
Institutional investors to which such offers may be made, when authorized,
include commercial and savings banks, insurance companies, pension funds,
investment companies, educational and charitable institutions and such other
institutions as may be approved by the Company and/or an Applied Power Trust.
The obligations of any such purchasers pursuant to such delayed delivery and
payment arrangements will not be subject to any conditions except (i) the
purchase by an institution of the particular Securities shall not at the time of
delivery be prohibited under the laws of any jurisdiction in the United States
to which such institution is subject, and (ii) if the particular Securities are
being sold to underwriters, the Company and/or an Applied Power Trust shall have
sold to such underwriters all of such Securities other than the Securities
covered by such arrangements. Underwriters will not have any responsibility in
respect of the validity of such arrangements or the performance of the Company
or such institutional investors thereunder.
If any underwriter or any selling group member intends to engage in
stabilizing, syndicate short covering transactions, penalty bids or any other
transaction in connection with the offering of Securities that may stabilize,
maintain, or otherwise affect the price of such Securities, such intention and a
description of such transactions will be described in the Prospectus Supplement.
Agents and underwriters may be entitled under agreements entered into with
the Company and/or the applicable Applied Power Trust to indemnification by the
Company against certain civil liabilities, including liabilities under the
Securities Act of 1933, or to contribution with respect to payments which the
agents or underwriters may be required to make in respect thereof. Agents and
underwriters may engage in transactions with, or perform services for, the
Company and its subsidiaries in the ordinary course of business.
CERTAIN LEGAL MATTERS
Unless otherwise indicated in the applicable Prospectus Supplements,
certain legal matters in connection with the Securities will be passed upon (i)
for the Company by Quarles & Brady LLP, Milwaukee, Wisconsin, counsel to the
Company, (ii) for the Applied Power Trusts (with respect to the validity of the
Preferred Securities under Delaware law) by Morris, Nichols, Arsht & Tunnell,
Wilmington, Delaware, special Delaware counsel to the Applied Power Trusts and
the Company, and (iii) for any underwriters by Cahill Gordon & Reindel (a
partnership including a professional corporation), New York, New York. Anthony
W. Asmuth III, the Corporate Secretary of the Company, is a partner in Quarles &
Brady LLP. As of the date of this Prospectus, Mr. Asmuth owned 38,420 shares of
the Company's Class A Common Stock and served as trustee or co-trustee with sole
or shared voting and dispositive powers over trusts that held an aggregate of
270,402 shares of Class A Common Stock.
EXPERTS
The consolidated financial statements of the Company as of and for the year
ended August 31, 1998, and the combination of the consolidated balance sheet as
of August 31, 1997, and the related consolidated statements of earnings,
shareholders' equity and cash flows for each of the two years in the period then
ended, after restatement for the 1998 pooling of interests, incorporated by
reference in this Prospectus, have been incorporated herein in reliance
-41-
<PAGE>
on the report of PricewaterhouseCoopers LLP, independent accountants, given on
the authority of that firm as experts in accounting and auditing.
The consolidated financial statements of the Company for the years ended
August 31, 1997 and 1996, prior to restatement for pooling of interests, and the
separate financial statements of ZERO Corporation included in the 1997 and 1996
restated consolidated financial statements, for the years ended March 31, 1997
and 1996, incorporated in this Prospectus by reference from the Company's Annual
Report on Form 10-K for the year ended August 31, 1998, have been audited by
Deloitte & Touche LLP, independent auditors, as stated in their reports, which
are incorporated herein by reference, and have been so incorporated in reliance
upon the reports of such firm given upon their authority as experts in
accounting and auditing.
The financial statements of Rubicon Group plc for the year ended May 31,
1998, incorporated by reference in this Prospectus, have been incorporated
herein in reliance on the report of PricewaterhouseCoopers, chartered
accountants and registered auditors, given on the authority of that firm as
experts in accounting and auditing.
-42-
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated expenses in connection with the issuance and distribution of
the Securities covered by this Registration Statement are as follows:
<TABLE>
<S> <C>
SEC registration fee (actual)...................... $ 88,500
Trustee's fee and expenses......................... 15,000
Printing and engraving expenses.................... 90,000
Legal fees and expenses............................ 125,000
Accounting fees and expenses....................... 50,000
Rating agency fees................................. 100,000
Miscellaneous...................................... 10,000
--------
Total............................................ $478,500
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company is incorporated under the Wisconsin Business Corporation Law
("WBCL"). Under Section 180.0851(1) of the WBCL, the Company is required to
indemnify a director or officer, to the extent such person is successful on the
merits or otherwise in the defense of a proceeding, for all reasonable expenses
incurred in proceeding if such person was a party because he or she was a
director or officer of the Company. In all other cases, the Company is required
by Section 180.0851(2) of the WBCL to indemnify a director or officer against
liability incurred in a proceeding to which such person was a party because he
or she was an officer or director of the Company, unless it is determined that
he or she breached or failed to perform a duty owed to the Company and the
breach or failure to perform constitutes: (i) a willful failure to deal fairly
with the Company or its shareholders in connection with a matter in which the
director or officer has a material conflict of interest; (ii) a violation of
criminal law, unless the director or officer had reasonable cause to believe his
or her conduct was lawful or no reasonable cause to believe his or her conduct
was unlawful; (iii) a transaction from which the director or officer derived an
improper personal profit; or (iv) willful mis conduct. Section 180.0858(1) of
the WBCL provides that, subject to certain limitations, the mandatory
indemnification provisions do not preclude any additional right to
indemnification or allowance of expenses that a director or officer may have
under the Company's articles of incorporation, bylaws, a written agreement or a
resolution of the Board of Directors or shareholders.
Section 180.0859 of the WBCL provides that it is the public policy of the
State of Wisconsin to require or permit indemnification, allowance of expenses
and insurance to the extent required or permitted under Sections 180.0850 to
180.0858 of the WBCL for any liability incurred in connection with a proceeding
involving a federal or state statute, rule or regulation regulating the offer,
sale or purchase of securities.
Section 180.0828 of the WBCL provides that, with certain exceptions, a
director is not liable to a corporation, its shareholders, or any person
asserting rights on behalf of the corporation or its shareholders, for damages,
settlements, fees, fines, penalties or other monetary liabilities arising from a
breach of, or failure to perform, any duty resulting solely from his or her
status as a director, unless the person asserting liability proves that the
breach or failure to perform constitutes any of the four exceptions to mandatory
indemnification under Section 180.0851(2) referred to above.
II-1
<PAGE>
Under Section 180.0833 of the WBCL, directors of the Company against whom
claims are asserted with respect to the declaration of an improper dividend or
other distribution to shareholders to which they assented are entitled to
contribution from other directors who assented to such distribution and from
shareholders who knowingly accepted the improper distribution, as provided
therein.
Article VIII of the Company's Bylaws contains provisions that generally
parallel the indemnification provisions of the WBCL and cover certain procedural
matters not dealt with in the WBCL. Directors and officers of the Company are
also covered by directors' and officers' liability insurance under which they
are insured (subject to certain exceptions and limitations specified in the
policy) against expenses and liabilities arising out of proceedings to which
they are parties by reason of being or having been directors or officers.
Under each Trust Agreement, the Company will agree to indemnify each of the
Issuer Trustees of the Applied Power Trusts or any predecessor Issuer Trustee
for the Applied Power Trusts, and to hold the Issuer Trustees harmless against,
any loss, damage, claims, liability or expense incurred without negligence or
bad faith on its part, arising out of or in connection with the acceptance or
administration of the Trust Agreements, including the costs and expenses of
defending itself against any claim or liability in connection with the exercise
or performance of any of its powers or duties under the Trust Agreements.
ITEM 16. EXHIBITS.
See Exhibit Index following the Signatures page in this Registration
Statement, which Exhibit Index is incorporated herein by reference.
ITEM 17. UNDERTAKINGS.
The undersigned Registrants hereby undertake (in accordance with the
corresponding lettered undertakings in Item 512 of Regulation S-K):
(a) (1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the Registration
Statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate,
represent a fundamental change in the information set
forth in the Registration Statement. Notwithstanding
the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of
securities offered would not exceed that which was
registered) and any deviation from the low or high end
of the estimated maximum offering range may be
reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no
more than a 20% change in the maximum aggregate
offering price set forth in the "Calculation of
Registration Fee" table in the effective Registration
Statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the
Registration Statement or any material change to such
information in the Registration Statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) of this
section do not apply if the Registration Statement is on Form S-3 or Form S-8,
and the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the Registrant with
the Commission pursuant
II-2
<PAGE>
to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(b) That, for purposes of determining any liability under the Securities
Act of 1933, each filing of the Registrant's annual report pursuant to Section
13(a) or Section 15(d) of the Securities Exchange Act of 1934 that is
incorporated by reference in the Registration Statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(h) Reference is made to the indemnification provisions described in Item
15 of this Registration Statement.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
(i) (1) For purposes of determining any liability under the Securities
Act of 1933, the information omitted from the form of prospectus filed as part
of this Registration Statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this Registration
Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Amendment to this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Butler, State of Wisconsin, on December 23,
1998.
APPLIED POWER INC.
(Registrant)
By: /s/ ROBERT C. ARZBAECHER
----------------------------
Robert C. Arzbaecher
Senior Vice President and
Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this Amendment
to this Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE
/s/ RICHARD G. SIM Chairman of the Board, President and
- -----------------------
Richard G. Sim Chief Executive Officer; Director
/s/ ROBERT C. ARZBAECHER Senior Vice President and Chief Financial
- ------------------------ Officer
Robert C. Arzbaecher (Principal Financial Officer)
/s/ RICHARD D. CARROLL Treasurer, Controller and
- ----------------------
Richard D. Carroll Principal Accounting Officer
/s/ H. RICHARD CROWTHER* Director
- ------------------------
H. Richard Crowther
/s/ JACK L. HECKEL* Director
- -------------------
Jack L. Heckel
/s/ RICHARD A. KASHNOW* Director
- -----------------------
Richard A. Kashnow
/s/ L. DENNIS KOZLOWSKI* Director
- ------------------------
L. Dennis Kozlowski
/s/ JOHN J. McDONOUGH* Director
- ----------------------
John J. McDonough
* By signing his name hereto, Robert C. Arzbaecher signs this document on behalf
of each person indicated above pursuant to the power of attorney duly executed
by such persons.
By /s/ ROBERT C. ARZBAECHER
-------------------------
Robert C. Arzbaecher
Attorney-in-Fact
Each of the above signatures is affixed as of December 23, 1998.
S-1
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Applied Power
Capital Trust I and Applied Power Capital Trust II each certifies that it has
reasonable grounds to believe that it meets all of the requirements for filing
on Form S-3 and has duly caused this Amendment to this Registration Statement to
be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Butler, State of Wisconsin, on December 23, 1998.
APPLIED POWER CAPITAL TRUST I
By: Applied Power Inc., as Depositor
By: /s/ ROBERT C. ARZBAECHER
------------------------
Robert C. Arzbaecher
Senior Vice President and
Chief Financial Officer
APPLIED POWER CAPITAL TRUST II
By: Applied Power Inc., as Depositor
By: /s/ ROBERT C. ARZBAECHER
------------------------
Robert C. Arzbaecher
Senior Vice President and
Chief Financial Officer
S-2
<PAGE>
APPLIED POWER INC
(THE "COMPANY")
(COMMISSION FILE NO. 1-11288)
EXHIBIT INDEX
TO
FORM S-3 REGISTRATION STATEMENT
The following exhibits are filed with or incorporated by reference in this
Registration Statement:
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION INCORPORATED HEREIN FILED
BY REFERENCE TO HEREWITH
<S> <C> <C> <C>
1.1* Form of Purchase Agreement for Debt
Securities and Debt Warrants
1.2* Form of Purchase Agreement for Equity
Securities
1.3* Form of Purchase Agreement for Preferred
Securities, Stock Purchase Contracts or
Stock Purchase Units
3.1 Restated Articles of Incorporation of the Exhibit 4.1 to the
Company Company's Registration
Statement on Form S-8
(File No. 333-46469)
3.2 Amended and Restated By-Laws Exhibit 3.2 to the
of the Company Company's Form 10-K
for fiscal year ended
August 31, 1997
4.1 Articles III, IV and V of the Company's See Exhibit 3.1 above
Restated Articles of Incorporation
4.2 Agreement for Purchase and Sale, dated Exhibit 19.2(a)-(g) to
August 29, 1990, between Minnesota the Company's Form
Mining and Manufacturing Company and 10-Q for quarter ended
Applied Power Inc., and seven related May 31, 1991
Leases, each dated April 29, 1991, between
Bernard Garland and Sheldon Garland, d/b/a
Garland Enterprises, as Landlord, and
Applied Power Inc., as Tenant
</TABLE>
EI-1
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION INCORPORATED HEREIN FILED
BY REFERENCE TO HEREWITH
<S> <C> <C> <C>
4.3 Multicurrency Credit Agreement, dated as of Exhibit 4.4 to the
October 14, 1998, among Applied Power Company's Form 10-K
Inc. and Enerpac B.V., as Borrowers, for fiscal year ended
various financial institutions from time to August 31, 1998 ("1998
time party thereto, as Lenders, the First 10-K")
National Bank of Chicago, as Syndication
Agent, Societe Generale, as Documentation
Agent, and Bank of America National Trust
and Savings Association, as Administrative
Agent, arranged by NationsBanc
Montgomery Securities LLC
4.4 (a) Receivables Purchase Agreement dated Exhibit 4.1 to the
as of November 20, 1997 among Applied Company's Form 10-Q
Power Credit Corporation as Seller, Applied for quarter ended
Power Inc. individually and as Servicer, and November 30, 1997
Barton Capital Corporation as Purchaser and
Societe Generale as Agent
(b) First Amendment to Receivables Exhibit 4.5(b) to 1998
Purchase Agreement dated as of August 28, 10-K
1998
4.5 Form of Indenture for Debt Securities+ X
4.6 Certificate of Trust of Applied Power X
Capital Trust I
4.7 Trust Agreement of Applied Power Capital X
Trust I
4.8 Certificate of Trust of Applied Power X
Capital Trust II
4.9 Trust Agreement of Applied Power Capital X
Trust II
4.10 Form of Amended and Restated Trust X
Agreement for Applied Power Capital Trusts
I and II
4.11 Form of Preferred Security Certificate for X
Applied Power Capital Trusts I and II
(incorporated by reference to Exhibit D of
Exhibit 4.10)
4.12 Form of Guarantee Agreement for Applied X
Power Capital Trusts I and II
5.1 Opinion of Quarles & Brady LLP+ X
</TABLE>
EI-2
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION INCORPORATED HEREIN FILED
BY REFERENCE TO HEREWITH
<S> <C> <C> <C>
5.2 Opinion of Morris, Nichols, Arsht & Tunnell X
as to the legality of the Preferred Securities
to be issued by Applied Power Capital Trust
I and Applied Power Capital Trust II
12 Statement of Computation of Ratio of X
Earnings to Fixed Charges+
23.1 Consent of Deloitte & Touche LLP X
Milwaukee, Wisconsin+
23.2 Consent of Deloitte & Touche LLP X
Los Angeles, California
23.3 Consent of PricewaterhouseCoopers LLP X
Milwaukee, Wisconsin
23.4 Consent of PricewaterhouseCoopers X
Birmingham, England
23.5 Consent of Quarles & Brady LLP Contained in Exhibit 5.1
23.6 Consent of Morris, Nichols, Arsht & Tunnell Contained in Exhibits 5.2
24 Power of Attorney Signature page of
original Registration
Statement
25.1 Form T-1, Statement of Eligibility under the X
Trust Indenture Act of 1939 of The First
National Bank of Chicago with respect to the
Indenture for Debt Securities and the
Guarantees for the benefit of the holders of
Preferred Securities of Applied Power
Capital Trust I and Applied Power Capital
Trust II+
25.2 Form T-1, Statement of Eligibility under the X
Trust Indenture Act of 1939 of The First
National Bank of Chicago with respect to the
Amended and Restated Trust Agreement of
Applied Power Capital Trust I
25.3 Form T-1, Statement of Eligibility under the X
Trust Indenture Act of 1939 of The First
National Bank of Chicago with respect to the
Amended and Restated Trust Agreement of
Applied Power Capital Trust II
</TABLE>
_______________
* To be filed by amendment or under cover of Form 8-K and incorporated herein by
reference.
+ Replaces the form of this Exhibit previously filed with this Registration
Statement.
EI-3
<PAGE>
EXHIBIT 4.5
================================================================================
APPLIED POWER INC.
------------------
DEBT SECURITIES
____________________________
INDENTURE
Dated as of December [ ], 1998
____________________________
THE FIRST NATIONAL BANK OF CHICAGO, TRUSTEE
================================================================================
<PAGE>
PARTIAL CROSS-REFERENCE TABLE
<TABLE>
<CAPTION>
INDENTURE SECTION TIA SECTION
<S> <C>
2.05.............................. 317(b)
2.06.............................. 312(a), 313(c)
2.11.............................. 316(a) (last sentence)
4.04.............................. 314(a)(4)
4.05.............................. 314(a)(1)
6.03.............................. 317(a)(1)
6.04.............................. 316(a)(1)(B)
6.05.............................. 316(a)(1)(A)
6.07.............................. 317(a)(1)
7.01.............................. 315(a), 315(d)
7.04.............................. 315(b)
7.05.............................. 313(a), 313(d)
7.07.............................. 310(a), 310(b)
7.09.............................. 310(a)(2)
8.02.............................. 310(a), 310(b)
10.04............................. 316(c)
11.01............................. 318(a)
11.02............................. 313(c)
11.03............................. 314(c)(1), 314(c)(2)
11.04............................. 314(e)
</TABLE>
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE 1 -- DEFINITIONS
SECTION 1.01. Definitions............................................... 1
SECTION 1.02. Other Definitions......................................... 3
SECTION 1.03. Rules of Construction..................................... 4
ARTICLE 2 -- THE SECURITIES
SECTION 2.01. Issuable in Series........................................ 4
SECTION 2.02. Execution and Authentication.............................. 6
SECTION 2.03. Registrar and Transfer, Paying and Conversion
Agents and Other Agents................................... 7
SECTION 2.04. Bearer Securities......................................... 7
SECTION 2.05. Paying Agent to Hold Money in Trust....................... 8
SECTION 2.06. Securityholder Lists...................................... 8
SECTION 2.07. Transfer and Exchange..................................... 8
SECTION 2.08. Replacement Securities.................................... 9
SECTION 2.09. Outstanding Securities.................................... 9
SECTION 2.10. Discounted Debt Securities................................ 9
SECTION 2.11. Treasury Securities....................................... 10
SECTION 2.12. Global Securities......................................... 10
SECTION 2.13. Temporary Securities...................................... 10
SECTION 2.14. Cancellation.............................................. 10
SECTION 2.15. Defaulted Interest........................................ 11
ARTICLE 3 -- REDEMPTION
SECTION 3.01. Notices to Trustee........................................ 11
SECTION 3.02. Selection of Securities to Be Redeemed.................... 11
SECTION 3.03. Notice of Redemption...................................... 11
SECTION 3.04. Effect of Notice of Redemption............................ 12
SECTION 3.05. Payment of Redemption Price............................... 12
SECTION 3.06. Securities Redeemed in Part............................... 13
ARTICLE 4 -- COVENANTS
SECTION 4.01. Payment of Securities..................................... 13
SECTION 4.02. Overdue Interest.......................................... 13
SECTION 4.03. No Lien Created, etc...................................... 13
SECTION 4.04. Compliance Certificate.................................... 13
SECTION 4.05. SEC Reports............................................... 14
SECTION 4.06. Costs and Expenses of Applied Power Trusts................ 14
</TABLE>
-i-
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE 5 -- SUCCESSORS
SECTION 5.01. When Company May Merge, etc............................... 14
ARTICLE 6 -- DEFAULTS AND REMEDIES
SECTION 6.01. Events of Default......................................... 15
SECTION 6.02. Acceleration.............................................. 16
SECTION 6.03. Other Remedies............................................ 17
SECTION 6.04. Waiver of Past Defaults................................... 17
SECTION 6.05. Control by Majority....................................... 17
SECTION 6.06. Limitation on Suits....................................... 17
SECTION 6.07. Collection Suit by Trustee................................ 18
SECTION 6.08. Priorities................................................ 18
ARTICLE 7 -- TRUSTEE
SECTION 7.01. Rights of Trustee......................................... 18
SECTION 7.02. Individual Rights of Trustee.............................. 19
SECTION 7.03. Trustee's Disclaimer...................................... 19
SECTION 7.04. Notice of Defaults........................................ 19
SECTION 7.05. Reports by Trustee to Holders............................. 20
SECTION 7.06. Compensation and Indemnity................................ 20
SECTION 7.07. Replacement of Trustee.................................... 20
SECTION 7.08. Successor Trustee by Merger, etc.......................... 21
SECTION 7.09. Trustee's Capital and Surplus............................. 21
ARTICLE 8 -- DISCHARGE OF INDENTURE
SECTION 8.01. Defeasance................................................ 22
SECTION 8.02. Conditions to Defeasance.................................. 22
SECTION 8.03. Application of Trust Money................................ 23
SECTION 8.04. Repayment to Company...................................... 23
ARTICLE 9 -- CONVERSION
SECTION 9.01. Conversion Privilege...................................... 23
SECTION 9.02. Conversion Procedure...................................... 24
SECTION 9.03. Taxes on Conversion....................................... 25
SECTION 9.04. Company Determination Final............................... 25
SECTION 9.05. Trustee's and Conversion Agent's Disclaimer............... 25
SECTION 9.06. Company to Provide Conversion Securities.................. 25
SECTION 9.07. Cash Settlement Option.................................... 25
SECTION 9.08. Adjustment in Conversion Rate for Change in
Capital Stock............................................. 26
SECTION 9.09. Adjustment in Conversion Rate for Common Stock
Issued Below Market Price................................. 27
</TABLE>
-ii-
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C>
SECTION 9.10. Adjustment for Other Distributions........................ 28
SECTION 9.11. Voluntary Adjustment...................................... 29
SECTION 9.12. When Adjustment May Be Deferred........................... 29
SECTION 9.13. When No Adjustment Required............................... 30
SECTION 9.14. Notice of Adjustment...................................... 30
SECTION 9.15. Notice of Certain Transactions............................ 30
SECTION 9.16. Reorganization of the Company............................. 31
ARTICLE 10 -- AMENDMENTS
SECTION 10.01. Without Consent of Holders............................... 31
SECTION 10.02. With Consent of Holders.................................. 31
SECTION 10.03. Compliance with Trust Indenture Act...................... 32
SECTION 10.04. Effect of Consents....................................... 32
SECTION 10.05. Notation on or Exchange of Securities.................... 33
SECTION 10.06. Trustee Protected........................................ 33
ARTICLE 11 -- MISCELLANEOUS
SECTION 11.01. Trust Indenture Act...................................... 33
SECTION 11.02. Notices.................................................. 33
SECTION 11.03. Certificate and Opinion as to Conditions Precedent...... 34
SECTION 11.04. Statements Required in Certificate or Opinion........... 35
SECTION 11.05. Rules by Company and Agents.............................. 35
SECTION 11.06. Legal Holidays........................................... 35
SECTION 11.07. No Recourse Against Others............................... 35
SECTION 11.08. Duplicate Originals...................................... 35
SECTION 11.09. Governing Law............................................ 35
SIGNATURES............................................................... S-1
EXHIBIT A: A Form of Registered Security................................ A-1
EXHIBIT B: A Form of Bearer Security.................................... B-1
Notes to Exhibits A and B
EXHIBIT C: Assignment Form.............................................. C-1
EXHIBIT D: Conversion Notice............................................ D-1
</TABLE>
-iii-
<PAGE>
INDENTURE dated as of December [ ], 1998 between APPLIED POWER INC.,
a corporation organized and existing under the laws of the State of Wisconsin
(hereinafter called the "Company"), and THE FIRST NATIONAL BANK OF CHICAGO
("Trustee").
Each party agrees as follows for the benefit of the Holders of the
Company's debt securities issued under this Indenture:
ARTICLE 1 -- DEFINITIONS
SECTION 1.01. Definitions.
"AFFILIATE" means any person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company.
"AGENT" means any Registrar, Transfer Agent, Paying Agent, Conversion
Agent or other Agent appointed by the Company.
"APPLIED POWER TRUST" means a statutory business trust created under
Delaware law pursuant to a trust agreement executed by the Company, as depositor
of such Applied Power Trust, and the trustees of such Applied Power Trust named
therein and pursuant to a certificate of trust filed with the Delaware Secretary
of State, which Applied Power Trust exists for the purposes of (i) issuing and
selling its trust securities, (ii) using the proceeds from the sale of such
trust securities to acquire a series of Securities issued by the Company under
this Indenture and (iii) engaging in only those other activities necessary,
convenient or incidental thereto.
"AUTHORIZED NEWSPAPER" means a newspaper that is:
(1) printed in the English language or in an official language of the
country of publication;
(2) customarily published on each business day in the place of
publication; and
(3) of general circulation in the relevant place or in the financial
community of such place.
Whenever successive publications in an Authorized Newspaper are
required, they may be made on the same or different business days and in the
same or different Authorized Newspapers.
"BEARER SECURITY" means a Security payable to bearer.
"BOARD" means the Board of Directors of the Company or any authorized
committee of the Board.
"CAPITAL STOCK" means any and all shares, interests, participations or
other equivalents (however designated) of capital stock of any person and all
warrants or options to acquire such capital stock.
<PAGE>
-2-
"COMMON STOCK" means the Class A Common Stock, par value $.20 per
share, of the Company.
"COMPANY" means the party named as such above until a successor
replaces it and thereafter means the successor.
"CONVERSION RATE" means such number or amount of shares of Common
Stock or other equity or debt securities for which $1,000 aggregate principal
amount of Securities of any series is convertible, initially as stated in the
Securities Resolution authorizing the series and as adjusted pursuant to the
terms of this Indenture and the Securities Resolution.
"COUPON" means an interest coupon for a Bearer Security.
"DEFAULT" means any event which is, or after notice or passage of time
would be, an Event of Default (as defined below).
"DISCOUNTED DEBT SECURITY" means a Security where the amount of
principal due upon acceleration is less than the stated principal amount.
"HOLDER" or "SECURITYHOLDER" means the person in whose name a
Registered Security is registered and the bearer of a Bearer Security or coupon.
"INDENTURE" means this Indenture and any Securities Resolution as
amended from time to time.
"LIEN" means any mortgage, pledge, security interest or other lien.
"OFFICER" means the Chairman, any Vice-Chairman, the President, any
Executive or Senior Vice President, any Vice-President, the Treasurer or any
Assistant Treasurer, the Secretary or any Assistant Secretary of the Company.
"OFFICERS' CERTIFICATE" means a certificate signed by two Officers of
the Company, and delivered to the Trustee.
"OPINION OF COUNSEL" means a written opinion from legal counsel who is
acceptable to the Trustee, and delivered to the Trustee. The counsel may be an
employee of or counsel to the Company or the Trustee.
"PRINCIPAL" of a debt security means the principal of the security
plus the premium, if and when applicable, on the security.
"REGISTERED SECURITY" means a Security registered as to principal and
interest by the Registrar.
"SEC" means the Securities and Exchange Commission.
"SECURITIES" means the debt securities issued under this Indenture.
<PAGE>
-3-
"SECURITIES RESOLUTION" means a resolution adopted by the Board or by
a committee of Officers or an Officer pursuant to Board delegation authorizing a
series or a supplemental indenture authorizing a series executed by an
authorized Officer.
"SERIES" means a series of Securities or the Securities of the series.
"SUBSIDIARY" means a corporation a majority of whose Voting Stock is
owned by the Company or a Subsidiary.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code (S) 77aaa-
77bbbb), as amended.
"TRADING DAY" means each day on which the securities exchange or
quotation system which is used to determine the Market Price is open for trading
or quotation.
"TRUSTEE" means the party named as such above until a successor
replaces it and thereafter means the successor.
"TRUST OFFICER" means the Chairman of the Board, the President or any
other officer or assistant officer of the Trustee assigned by the Trustee to
administer its corporate trust matters.
"TRUST SECURITIES" means securities issued by an Applied Power Trust.
"UNITED STATES" means the United States of America, its territories
and possessions and other areas subject to its jurisdiction.
"VOTING STOCK" means capital stock having voting power under ordinary
circumstances to elect directors.
"YIELD TO MATURITY" means the yield to maturity on a Security at the
time of its issuance or at the most recent determination of interest on the
Security.
SECTION 1.02. Other Definitions.
<TABLE>
<CAPTION>
TERM DEFINED IN SECTION
<S> <C>
"ACTUAL KNOWLEDGE" 7.01
"BANKRUPTCY LAW" 6.01
"CONDITIONAL REDEMPTION" 3.04
"CONVERSION AGENT" 2.03
"CONVERSION DATE" 9.02
"CONVERSION NOTICE" 9.02
"CONVERSION RIGHT" 9.01
"CUSTODIAN" 6.01
"EVENT OF DEFAULT" 6.01
"LEGAL HOLIDAY" 11.06
"MARKET PRICE" 9.07
"PAYING AGENT" 2.03
"PRICE PER SHARE" 9.09
</TABLE>
<PAGE>
-4-
<TABLE>
<S> <C>
"REGISTRAR" 2.03
"TRANSFER AGENT" 2.03
"TREASURY REGULATIONS" 2.04
"U.S. GOVERNMENT OBLIGATIONS" 8.02
</TABLE>
SECTION 1.03. Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting
principles in the United States;
(3) generally accepted accounting principles are those applicable
from time to time;
(4) all terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC
rule under the TIA have the meanings assigned to them by such
definitions;
(5) "or" is not exclusive; and
(6) words in the singular include the plural, and in the plural
include the singular.
ARTICLE 2 -- THE SECURITIES
SECTION 2.01. Issuable in Series.
The aggregate principal amount of Securities that may be issued under
this Indenture is unlimited. The Securities may be issued from time to time in
one or more series. Each series shall be created by a Securities Resolution
that establishes the terms of the series, which may include the following:
(1) the title of the series;
(2) the aggregate principal amount of the series;
(3) the interest rate or rates, if any, or method of calculating
the interest rate or rates;
(4) the date from which interest will accrue;
(5) the record dates for interest payable on Registered Securities;
(6) the dates when principal and interest are payable;
(7) the manner of paying principal and interest;
<PAGE>
-5-
(8) the places where principal and interest are payable;
(9) the Registrar, Transfer Agent and Paying Agent;
(10) the terms of any mandatory or optional redemption by the
Company including any sinking fund;
(11) the terms of any redemption at the option of Holders;
(12) the denominations in which Securities are issuable;
(13) whether Securities will be issuable as Registered Securities,
Bearer Securities or uncertificated Securities;
(14) whether and upon what terms Registered Securities, Bearer
Securities and uncertificated Securities may be exchanged;
(15) whether any Securities will be represented by a Security in
global form;
(16) the terms of any global Security;
(17) the terms of any tax indemnity;
(18) the currencies (including any composite currency) in which
principal or interest may be paid;
(19) if payments of principal or interest may be made in a currency
other than that in which Securities are denominated, the manner
for determining such payments;
(20) if amounts of principal or interest may be determined by
reference to an index, formula or other method, the manner for
determining such amounts;
(21) provisions for electronic issuance of Securities or for
Securities in uncertificated form;
(22) the portion of principal payable upon acceleration of a
Discounted Debt Security;
(23) whether any Events of Default or covenants in addition to or
in lieu of those set forth in this Indenture apply;
(24) whether and upon what terms Securities may be defeased;
(25) the forms of the Securities or any coupon, which may be in the
form of Exhibit A or B;
(26) any terms that may be required by or advisable under U.S. or
other applicable laws or regulations;
<PAGE>
-6-
(27) whether and upon what terms the Securities will be convertible
into or exchangeable for Common Stock of the Company or other
equity or debt securities, which may include the terms provided
in Article 9;
(28) the ranking of the Securities, including the relative degree,
if any, to which the Securities of such series shall be
subordinated to one or more other series of Securities in right
of payment, whether outstanding or not;
(29) any provisions relating to extending or shortening the date on
which the principal and premium, if any, of the Securities of
such series is payable;
(30) any provisions relating to the deferral of payment of any
interest;
(31) if such Securities are to be issued to an Applied Power Trust,
the forms of the related trust agreement and guarantee
agreement relating thereto;
(32) the additions or changes, if any, to this Indenture with
respect to the Securities of such series as shall be necessary
to permit or facilitate the issuance of such Securities to an
Applied Power Trust; and
(33) any other terms not inconsistent with this Indenture.
All Securities of one series need not be issued at the same time and,
unless otherwise provided, a series may be reopened for issuances of additional
Securities of such series.
The creation and issuance of a series and the authentication and
delivery thereof are not subject to any conditions precedent.
SECTION 2.02. Execution and Authentication.
Two Officers shall sign the Securities by manual or facsimile
signature. The Company's seal shall be reproduced on the Securities. An
Officer shall sign any coupons by facsimile signature.
If an Officer whose signature is on a Security or its coupons no
longer holds that office at the time the Security is authenticated or delivered,
the Security and coupons shall nevertheless be valid.
A Security and its coupons shall not be valid until the Security is
authenticated by the manual or facsimile signature of the Registrar. The
signature shall be conclusive evidence that the Security has been authenticated
under this Indenture.
Each Registered Security shall be dated the date of its
authentication. Each Bearer Security shall be dated the date of its original
issuance or as provided in the Securities Resolution.
Securities may have notations, legends or endorsements required by
law, stock exchange rule, agreement or usage.
In the event Securities are issued in electronic or other
uncertificated form, such Securities may be validly issued without the
signatures or seal contemplated by this Section 2.02.
<PAGE>
-7-
SECTION 2.03. Registrar and Transfer, Paying and Conversion Agents and Other
Agents.
The Company shall maintain an office or agency where Securities may be
authenticated ("Registrar"), where Securities may be presented for registration
of transfer or for exchange ("Transfer Agent"), where Securities may be
presented for payment ("Paying Agent") and where Securities may be presented for
conversion ("Conversion Agent"). Whenever the Company must issue or deliver
Securities pursuant to this Indenture, the Registrar shall authenticate the
Securities at the Company's request. The Transfer Agent shall keep a register
of the Securities and of their transfer and exchange.
The Trustee shall be, and is hereby appointed as, Registrar. The
Company may appoint more than one Transfer Agent, Paying Agent or Conversion
Agent or other Agent for a series. The Company shall notify the Trustee of the
name and address of any Agent not a party to this Indenture. If the Company
does not appoint or maintain a Transfer Agent, Paying Agent or Conversion Agent
for a series, the Trustee shall act as such.
SECTION 2.04. Bearer Securities.
U.S. laws and Treasury Regulations restrict sales or exchanges of and
payments on Bearer Securities. Therefore, except as provided below:
(1) Bearer Securities will be offered, sold or delivered only
outside the United States and will be delivered in connection
with their original issuance only upon presentation of a
certificate in a form prescribed by the Company to comply with
U.S. laws and regulations.
(2) Bearer Securities will not be issued in exchange for Registered
Securities.
(3) All payments of principal and interest (including original
issue discount) on Bearer Securities will be made outside the
United States by a Paying Agent located outside the United
States unless the Company determines that:
(A) such payments may not be made by such Paying Agent
because the payments are illegal or prevented by
exchange controls as described in Treasury Regulation
(S) 1.163-5(c)(2)(v); and
(B) making the payments in the United States would not have
an adverse tax effect on the Company.
If there is a change in the relevant provisions of U.S. laws or
Treasury Regulations or the judicial or administrative interpretation thereof, a
restriction set forth in paragraph (1), (2) or (3) above will not apply to a
series if the Company determines that the relevant provisions no longer apply to
the series or that failure to comply with the relevant provisions would not have
an adverse tax effect on the Company or on Securityholders or cause the series
to be treated as "registration-required" obligations under U.S. law.
The Company shall notify the Trustee of any determinations by the
Company under this Section.
<PAGE>
-8-
"TREASURY REGULATIONS" means regulations of the U.S. Treasury
Department under the Internal Revenue Code of 1986, as amended.
SECTION 2.05. Paying Agent to Hold Money in Trust.
The Company shall require each Paying Agent for a series other than
the Trustee to agree in writing that the Paying Agent will hold in trust for the
benefit of the persons entitled thereto all money held by the Paying Agent for
the payment of principal of or interest on the series, and will notify the
Trustee of any default by the Company in making any such payment.
While any such default continues, the Trustee may require a Paying
Agent to pay all money so held by it to the Trustee. The Company at any time
may require a Paying Agent to pay all money held by it to the Trustee. Upon
payment over to the Trustee, the Paying Agent shall have no further liability
for the money.
If the Company or an Affiliate acts as Paying Agent for a series, it
shall segregate and hold as a separate trust fund all money held by it as Paying
Agent for the series.
The Company may elect not to exchange or register the transfer of any
Security for a period of 15 days before a selection of Securities to be
redeemed.
SECTION 2.06. Securityholder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Securityholders. If the Trustee is not the Transfer Agent, the Company shall
furnish to the Trustee semiannually and at such other times as the Trustee may
request a list in such form and as of such date as the Trustee may reasonably
require of the names and addresses of Holders of Registered Securities and
Holders of Bearer Securities whose names are on the list referred to below.
The Transfer Agent shall keep a list of the names and addresses of
Holders of Bearer Securities who file a request to be included on such list. A
request will remain in effect for two years but successive requests may be made.
Whenever the Company or the Trustee is required to mail a notice to
all Holders of Registered Securities of a series, it also shall mail the notice
to Holders of Bearer Securities of the series whose names are on the list.
Whenever the Company is required to publish a notice to all Holders of
Bearer Securities of a series, it also shall mail the notice to such of them
whose names are on the list.
SECTION 2.07. Transfer and Exchange.
Where Registered Securities of a series are presented to the Transfer
Agent with a request to register a transfer or to exchange them for an equal
principal amount of Registered Securities of other denominations of the same
series, the Transfer Agent shall register the transfer or make the exchange if
its requirements for such transactions are met. Where Bearer Securities of a
series are presented to the Transfer Agent with a request to exchange them for
an equal principal amount of Bearer Securities of other denominations of the
same series, the Transfer Agent shall make the exchange if its requirements for
such transactions are met.
<PAGE>
-9-
The Transfer Agent may require a Holder to pay a sum sufficient to
cover any taxes imposed on a transfer or exchange.
If a series provides for Registered and Bearer Securities and for
their exchange, Bearer Securities may be exchanged for Registered Securities and
Registered Securities may be exchanged for Bearer Securities as provided in the
Securities or the Securities Resolution if the requirements of the Transfer
Agent for such transactions are met and in the case of the exchange of
registered securities for bearer securities if Section 2.04 permits the
exchange.
SECTION 2.08. Replacement Securities.
If the Holder of a Security or coupon claims that it has been lost,
destroyed or wrongfully taken, then, in the absence of notice to the Company or
the Trustee that the Security or coupon has been acquired by a bona fide
purchaser, the Company shall issue a replacement Security or coupon if the
Company and the Trustee receive:
(1) evidence satisfactory to them of the loss, destruction or
taking;
(2) an indemnity bond satisfactory to them; and
(3) payment of a sum sufficient to cover their expenses and any
taxes for replacing the Security or coupon.
A replacement Security shall have coupons attached corresponding to those, if
any, on the replaced Security.
Every replacement Security or coupon is an additional obligation of
the Company.
SECTION 2.09. Outstanding Securities.
The Securities outstanding at any time are all the Securities
authenticated by the Registrar except for those cancelled by it, those delivered
to it for cancellation, and those described in this Section as not outstanding.
If a Security is replaced pursuant to Section 2.08, it ceases to be
outstanding unless the Trustee and the Company receive proof satisfactory to
them that the replaced Security is held by a bona fide purchaser.
If Securities are considered paid under Section 4.01, they cease to be
outstanding and interest on them ceases to accrue.
A Security does not cease to be outstanding because the Company or an
Affiliate holds the Security.
SECTION 2.10. Discounted Debt Securities.
In determining whether the Holders of the required principal amount of
Securities have concurred in any direction, waiver or consent, the principal
amount of a Discounted Debt Security shall be the amount of principal that would
be due as of the date of such determination if payment of the Security were
accelerated on that date.
<PAGE>
-10-
SECTION 2.11. Treasury Securities.
In determining whether the Holders of the required principal amount of
Securities have concurred in any direction, waiver or consent, Securities owned
by the Company or an Affiliate shall be disregarded, except that for the
purposes of determining whether the Trustee shall be protected in relying on any
such direction, waiver or consent, only Securities which the Trustee knows are
so owned shall be so disregarded.
SECTION 2.12. Global Securities.
If the Securities Resolution so provides, the Company may issue some
or all of the Securities of a series in temporary or permanent global form. A
global Security may be in registered form, in bearer form with or without
coupons or in uncertificated form. A global Security shall represent that
amount of Securities of a series as specified in the global Security or as
endorsed thereon from time to time. At the Company's request, the Registrar
shall endorse a global Security to reflect the amount of any increase or
decrease in the Securities represented thereby.
The Company may issue a global Security only to a depository
designated by the Company. A depository may transfer a global Security only as
a whole to its nominee or to a successor depository.
The Securities Resolution may establish, among other things, the
manner of paying principal and interest on a global Security and whether and
upon what terms a beneficial owner of an interest in a global Security may
exchange such interest for definitive Securities.
The Company, an Affiliate, the Trustee and any Agent shall not be
responsible for any acts or omissions of a depository, for any depository
records of beneficial ownership interests or for any transactions between the
depository and beneficial owners.
SECTION 2.13. Temporary Securities.
Until definitive Securities of a series are ready for delivery, the
Company may use temporary Securities. Temporary Securities shall be
substantially in the form of definitive Securities but may have variations that
the Company considers appropriate for temporary Securities. Temporary Securities
may be in global form. Temporary Bearer Securities may have one or more coupons
or no coupons. Without unreasonable delay, the Company shall deliver definitive
Securities in exchange for temporary Securities.
SECTION 2.14. Cancellation.
The Company at any time may deliver Securities to the Registrar for
cancellation. The Transfer Agent and the Paying Agent shall forward to the
Registrar any Securities and coupons surrendered to them for payment, exchange
or registration of transfer. The Registrar shall cancel all Securities or
coupons surrendered for payment, registration of transfer, exchange or
cancellation. The Registrar also will cancel all Bearer Securities and
unmatured coupons unless the Company requests the Registrar to hold the same for
redelivery. Any Bearer Securities so held shall be considered delivered for
cancellation under Section 2.09. The Registrar shall destroy cancelled
Securities and coupons unless the Company otherwise directs.
Unless the Securities Resolution otherwise provides, the Company may
not issue new Securities to replace Securities that the Company has paid or that
the Company has delivered to the Registrar for cancellation.
<PAGE>
-11-
SECTION 2.15. Defaulted Interest.
If the Company defaults in a payment of interest on Registered
Securities, it need not pay the defaulted interest to Holders on the regular
record date. The Company may fix a special record date for determining Holders
entitled to receive defaulted interest, or the Company may pay defaulted
interest in any other lawful manner.
ARTICLE 3 -- REDEMPTION
SECTION 3.01. Notices to Trustee.
Securities of a series that are redeemable before maturity shall be
redeemable in accordance with their terms and, unless the Securities Resolution
otherwise provides, in accordance with this Article.
In the case of a redemption by the Company, the Company shall notify
the Trustee of the redemption date and the principal amount of Securities to be
redeemed. The Company shall notify the Trustee at least 45 days before the
redemption date unless a shorter notice is satisfactory to the Trustee.
If the Company is required to redeem Securities, it may reduce the
principal amount of Securities required to be redeemed to the extent that it is
permitted a credit against such redemption requirement by the terms of the
Securities Resolution and notifies the Trustee of the amount of such credit and
the basis for it. If the reduction is based on a credit for acquired or
redeemed Securities that the Company has not previously delivered to the
Registrar for cancellation, the Company shall deliver the Securities at the same
time as the notice.
SECTION 3.02. Selection of Securities to Be Redeemed.
If less than all the Securities of a series are to be redeemed, the
Trustee shall select the Securities to be redeemed by a method the Trustee
considers fair and appropriate. The Trustee shall make the selection from
Securities of the series outstanding not previously called for redemption. The
Trustee may select for redemption portions of the principal of Securities having
denominations larger than the minimum denomination for the series. Securities
and portions thereof selected for redemption shall be in amounts equal to the
minimum denomination for the series or an integral multiple thereof. Provisions
of this Indenture that apply to Securities called for redemption also apply to
portions of Securities called for redemption.
SECTION 3.03. Notice of Redemption.
At least 30 but not more than 60 days before a redemption date, the
Company shall mail a notice of redemption by first-class mail to each Holder of
Registered Securities whose Securities are to be redeemed.
If Bearer Securities are to be redeemed, the Company shall publish a
notice of redemption in an Authorized Newspaper as provided in the Securities.
A notice shall identify the Securities of the series to be redeemed
and shall state:
(1) the redemption date;
<PAGE>
-12-
(2) the redemption price;
(3) the name and address of the Paying Agent;
(4) that Securities called for redemption, together with all
coupons, if any, maturing after the redemption date, must be
surrendered to the Paying Agent to collect the redemption
price;
(5) that interest on Securities called for redemption ceases to
accrue on and after the redemption date;
(6) whether the redemption by the Company is mandatory or optional;
and
(7) whether the redemption is conditional as provided in Section
3.04, and if so, the terms of the conditions, and that, if the
conditions are not satisfied or are not waived by the Company,
the Securities will not be redeemed and such a failure to
redeem will not constitute an Event of Default.
A redemption notice given by publication need not identify Registered
Securities to be redeemed.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense.
SECTION 3.04. Effect of Notice of Redemption.
Except as provided below, once notice of redemption is given,
Securities called for redemption become due and payable on the redemption date
at the redemption price stated in the notice.
A notice of redemption may provide that it is subject to the
occurrence of any event before the date fixed for such redemption as described
in such notice ("Conditional Redemption"), and such notice of Conditional
Redemption shall be of no effect unless all such conditions to the redemption
have occurred on or before such date or have been waived by the Company in its
sole discretion.
SECTION 3.05. Payment of Redemption Price.
On or before the redemption date, the Company shall deposit with the
Paying Agent money sufficient to pay the redemption price of and accrued
interest on all Securities to be redeemed on that date.
When the Holder of a Security surrenders it for redemption in
accordance with the redemption notice, the Company shall pay to the Holder on
the redemption date the redemption price and accrued interest to such date,
except that:
(1) the Company will pay any such interest (except defaulted
interest) to Holders on the record date of Registered
Securities if the redemption date occurs on an interest payment
date; and
<PAGE>
-13-
(2) the Company will pay any such interest to Holders of coupons
that mature on or before the redemption date upon surrender of
such coupons to the Paying Agent.
Coupons maturing after the redemption date on a called Security are
void absent a payment default on that date. Nevertheless, if a Holder
surrenders for redemption a Bearer Security missing any such coupons, the
Company may deduct the face amount of such coupons from the redemption price.
If thereafter the Holder surrenders to the Paying Agent the missing coupons, the
Company will return the amount so deducted. The Company may waive surrender of
the missing coupons if it receives an indemnity bond satisfactory to the
Company.
SECTION 3.06. Securities Redeemed in Part.
Upon surrender of a Security that is redeemed in part, the Company
shall deliver to the Holder a new Security of the same series equal in principal
amount to the unredeemed portion of the Security surrendered.
ARTICLE 4 -- COVENANTS
SECTION 4.01. Payment of Securities.
The Company shall pay the principal of and interest on a series in
accordance with the terms of the Securities for the series, any related coupons,
and this Indenture. Principal and interest on a series shall be considered paid
on the date due if the Paying Agent for the series holds on that date money
sufficient to pay all principal and interest then due on the series.
SECTION 4.02. Overdue Interest.
Unless the Securities Resolution otherwise provides, the Company shall
pay interest on overdue principal of a Security of a series at the rate (or
Yield to Maturity in the case of a Discounted Debt Security) borne by the
series; the Company shall pay interest on overdue installments of interest at
the same rate or Yield to Maturity to the extent lawful.
SECTION 4.03. No Lien Created, etc.
This Indenture and the Securities do not create a Lien, charge or
encumbrance on any property of the Company or any Subsidiary.
SECTION 4.04. Compliance Certificate.
The Company shall deliver to the Trustee, within 120 days after the
end of each fiscal year of the Company, a brief certificate signed by the
principal executive officer, principal financial officer or principal accounting
officer of the Company, as to the signer's knowledge of the Company's compliance
with all conditions and covenants under this Indenture (determined without
regard to any period of grace or requirement of notice provided herein).
<PAGE>
-14-
Any other obligor on the Securities shall also deliver to the Trustee
such a certificate as to its compliance with this Indenture within 120 days
after the end of each of its fiscal years.
The certificates need not comply with Section 11.04.
SECTION 4.05. SEC Reports.
The Company shall file with the Trustee, within 15 days after the
Company is required to file the same with the SEC, copies of the annual reports
and of the information, documents, and other reports (or such portions of the
foregoing as the SEC may prescribe) which the Company is required to file with
the SEC pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
Any other obligor on the Securities shall do likewise as to the above
items which it is required to file with the SEC pursuant to those sections.
SECTION 4.06. Costs and Expenses of Applied Power Trusts.
The Company shall pay all debts and obligations (other than with
respect to the Trust Securities) and all costs and expenses of any Applied Power
Trust (including, but not limited to, all costs and expenses relating to the
organization of the applicable Applied Power Trust, the fees and expenses of any
trustee or trustees for the Applied Power Trust and all costs and expenses
relating to the operation of the applicable Applied Power Trust (other than with
respect to the Trust Securities)) and to pay any and all taxes, duties,
assessments or other governmental charges of whatever nature (other than United
States withholding taxes) imposed by the United States or any other taxing
authority, so that the net amounts received and retained by the applicable
Applied Power Trust after paying such fees, expenses, debts and obligations will
be equal to the amounts the applicable Applied Power Trust would have received
and retained had no such fees, expenses, debts and obligations been incurred by
or imposed on the applicable Applied Power Trust. The foregoing obligations of
the Company are for the benefit of, and shall be enforceable by, any person to
whom such fees, expenses, debts and obligations are owed (each, a "Creditor"),
whether or not such Creditor has received notice thereof. Any such Creditor may
enforce such obligations of the Company directly against the Company, and the
Company irrevocably waives any right or remedy to require that any such Creditor
take any action against the applicable Applied Power Trust or any other person
before proceeding against the Company. The Company shall execute such
additional agreements as may be necessary to give full effect to the foregoing.
ARTICLE 5 -- SUCCESSORS
SECTION 5.01. When Company May Merge, etc.
Unless the Securities Resolution establishing a Series otherwise
provides, the Company shall not consolidate with or merge into, or transfer all
or substantially all of its assets to, any person in any transaction in which
the Company is not the survivor unless:
(1) the person is organized under the laws of the United States or
a State thereof or is organized under the laws of a foreign
jurisdiction and consents to the jurisdiction of the courts of
the United States or a State thereof;
<PAGE>
-15-
(2) the person assumes by supplemental indenture all the
obligations of the Company under this Indenture, the Securities
and any coupons;
(3) all required approvals of any regulatory body having
jurisdiction over the transaction shall have been obtained;
(4) immediately after the transaction no Default exists; and
(5) the Company provides an Officers' Certificate and an Opinion of
Counsel to the effect that all the provisions in this Section
5.01 have been complied with.
The successor shall be substituted for the Company, and thereafter all
obligations of the Company under this Indenture, the Securities and any coupons
shall terminate.
ARTICLE 6 -- DEFAULTS AND REMEDIES
SECTION 6.01. Events of Default.
Unless the Securities Resolution otherwise provides, an "EVENT OF
DEFAULT" on a series occurs if:
(1) the Company defaults in any payment of interest on any
Securities of the series when the same becomes due and payable
and the Default continues for a period of 30 days;
(2) the Company defaults in the payment of the principal and
premium, if any, of any Securities of the series when the same
becomes due and payable at maturity or upon redemption,
acceleration or otherwise;
(3) the Company defaults in the payment or satisfaction of any
sinking fund obligation with respect to any Securities of the
series as required by the Securities Resolution establishing
such series;
(4) the Company defaults in the performance of any of its other
agreements applicable to the series and the Default continues
for 60 days after the notice specified below;
(5) the Company pursuant to or within the meaning of any Bankruptcy
Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief against it in
an involuntary case,
(C) consents to the appointment of a Custodian for it or for
all or substantially all of its property, or
(D) makes a general assignment for the benefit of its
creditors;
<PAGE>
-16-
(6) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(A) is for relief against the Company in an involuntary case,
(B) appoints a Custodian for the Company or for all or
substantially all of its property, or
(C) orders the liquidation of the Company;
and the order or decree remains unstayed and in effect for 60
days; or
(7) there occurs any other Event of Default provided for in the
series.
The term "BANKRUPTCY LAW" means Title 11, U.S. Code or any similar
Federal or State law for the relief of debtors. The term "CUSTODIAN" means any
receiver, trustee, assignee, liquidator or a similar official under any
Bankruptcy Law.
A Default under clause (4) is not an Event of Default until the
Trustee or the Holders of at least 25% in principal amount of the series notify
the Company of the Default and the Company does not cure the Default within the
time specified after receipt of the notice. The notice must specify the
Default, demand that it be remedied and state that the notice is a "Notice of
Default." If Holders notify the Company of a Default, they shall notify the
Trustee at the same time.
The failure to redeem any Security subject to a Conditional Redemption
is not an Event of Default if any event on which such redemption is so
conditioned does not occur and is not waived before the scheduled redemption
date.
SECTION 6.02. Acceleration.
If an Event of Default occurs and is continuing on a series, the
Trustee by notice to the Company, or the Holders of at least 25% in principal
amount of the series (or, in the case of a series issued to an Applied Power
Trust, so long as any of the related preferred securities of such Applied Power
Trust remain outstanding, if, upon such Event of Default, the Trustee or the
Holders of not less than 25% in aggregate principal amount of such series fail
to declare the principal of all the Securities of such series to be so
immediately due and payable, the holders of 25% in aggregate liquidation amount
of such preferred securities then outstanding shall have such right) by notice
to the Company and the Trustee, may declare the principal of and accrued
interest on all the Securities of the series to be due and payable immediately.
Discounted Debt Securities may provide that the amount of principal due upon
acceleration is less than the stated principal amount.
The Holders of a majority in principal amount of the series by notice
to the Trustee may rescind an acceleration and its consequences if the
rescission would not conflict with any judgment or decree and if all existing
Events of Default on the series have been cured or waived except nonpayment of
principal or interest that has become due solely because of the acceleration;
provided, that in the case of a series issued to an Applied Power Trust, so long
as any of the related preferred securities of such Applied Power Trust remain
outstanding, the holders of a majority in aggregate liquidation amount of such
preferred securities then outstanding shall also have such right to rescission
of acceleration and its consequences with respect to such series, subject to
the same conditions set forth above.
<PAGE>
-17-
SECTION 6.03. Other Remedies.
If an Event of Default occurs and is continuing on a series, the
Trustee may pursue any available remedy to collect principal or interest then
due on the series, to enforce the performance of any provision applicable to the
series, or otherwise to protect the rights of the Trustee and Holders of the
series.
The Trustee may maintain a proceeding even if it does not possess
any of the Securities or coupons or does not produce any of them in the
proceeding. A delay or omission by the Trustee or any Securityholder in
exercising any right or remedy accruing upon an Event of Default shall not
impair the right or remedy or constitute a waiver of or acquiescence in the
Event of Default. All remedies are cumulative to the extent permitted by law.
SECTION 6.04. Waiver of Past Defaults.
Unless the Securities Resolution otherwise provides, the Holders
of a majority in principal amount of a series (or, in the case of a series
issued to an Applied Power Trust, so long as any of the related preferred
securities of such Applied Power Trust remain outstanding, the holders of a
majority in aggregate liquidation amount of such preferred securities then
outstanding) by notice to the Trustee may waive an existing Default on the
series and its consequences except:
(1) a Default in the payment of the principal of or interest on the
series, or
(2) a Default in respect of a provision that under Section 10.02
cannot be amended without the consent of each Securityholder
affected.
SECTION 6.05. Control by Majority.
The Holders of a majority in principal amount of a series may
direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee, or of exercising any trust or power conferred on the
Trustee, with respect to such series. However, the Trustee may refuse to follow
any direction that conflicts with law or this Indenture or if the Trustee in
good faith shall determine that the action or direction might involve the
Trustee in personal liability.
SECTION 6.06. Limitation on Suits.
A Securityholder of a series may pursue a remedy with respect to
the series only if:
(1) the Holder gives to the Trustee notice of a continuing Event
of Default on the series;
(2) the Holders of at least 25% in principal amount of the series
make a request to the Trustee to pursue the remedy;
(3) such Holder or Holders offer to the Trustee indemnity
satisfactory to the Trustee against any loss, liability or
expense;
(4) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer of indemnity; and
<PAGE>
-18-
(5) during such 60-day period the Holders of a majority in
principal amount of the series do not give the Trustee a
direction inconsistent with such request.
A Securityholder may not use this Indenture to prejudice the
rights of another Securityholder or to obtain a preference or priority over
another Securityholder.
In the case of a series issued to an Applied Power Trust, any
holder of the related preferred securities of such Applied Power Trust shall
have the right, upon the occurrence and continuance of an Event of Default
described in Sections 6.01(1) and (2) hereof with respect to such series, to
institute a suit directly against the Company to enforce payment to such holder
of the principal of, and premium, if any, and interest on, the Securities having
a principal amount equal to the aggregate liquidation amount of such preferred
securities held by such holder.
SECTION 6.07. Collection Suit by Trustee.
If an Event of Default in payment of interest, principal or
sinking fund specified in Section 6.01(1), (2) or (3) occurs and is continuing
on a series, the Trustee may recover judgment in its own name and as trustee of
an express trust against the Company for the whole amount of principal and
interest remaining unpaid on the series.
SECTION 6.08. Priorities.
If the Trustee collects any money for a series pursuant to this
Article, it shall pay out the money in the following order:
First: to the Trustee for amounts due under Section 7.06;
Second: to Securityholders of the series for amounts due and
unpaid for principal and interest, ratably, without preference or priority
of any kind, according to the amounts due and payable for principal and
interest, respectively; and
Third: to the Company.
The Trustee may fix a payment date for any payment to
Securityholders.
ARTICLE 7 -- TRUSTEE
SECTION 7.01. Rights of Trustee.
(1) The Trustee may rely on any document believed by it to be
genuine and to have been signed or presented by the proper
person. The Trustee need not investigate any fact or matter
stated in the document.
(2) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel.
The Trustee shall not be liable for any action it takes or
omits to take in good faith in reliance on the Certificate
or Opinion.
<PAGE>
-19-
(3) The Trustee may act through agents and shall not be
responsible for the misconduct or negligence of any agent
appointed with due care.
(4) The Trustee shall not be liable for any action it takes or
omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05.
(5) The Trustee may refuse to perform any duty or exercise any
right or power which it reasonably believes may expose it to
any loss, liability or expense unless it receives indemnity
satisfactory to it against such loss, liability or expense.
(6) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree with the
Company. Money held in trust by the Trustee need not be
segregated from other funds except to the extent required by
law.
(7) The Trustee shall have no duty with respect to a Default
unless a Trust Officer has actual knowledge of the Default.
As used herein, the term "actual knowledge" means the actual
fact or statement of knowing, without any duty to make any
investigation with regard thereto.
(8) The Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be
authorized and within its powers.
(9) Any Agent shall have the same rights and be protected to the
same extent as if it were Trustee.
(10) The Trustee shall not be required to give any bond or surety
in respect of the performance of its powers and duties
hereunder.
SECTION 7.02. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become
the owner or pledgee of Securities or coupons and may otherwise deal with the
Company or an Affiliate with the same rights it would have if it were not
Trustee. Any Agent may do the same with like rights.
SECTION 7.03. Trustee's Disclaimer.
The Trustee makes no representation as to the validity or
adequacy of this Indenture or the Securities or any coupons; it shall not be
accountable for the Company's use of the proceeds from the Securities; it shall
not be responsible for any statement in the Securities or any coupons; it shall
not be responsible for any overissue; it shall not be responsible for
determining whether the form and terms of any Securities or coupons were
established in conformity with this Indenture; it shall not be responsible for
determining whether any Securities were issued in accordance with this
Indenture; and it shall not be responsible for the acts or omissions of any
other Trustees appointed hereunder.
SECTION 7.04. Notice of Defaults.
If a Default occurs and is continuing on a series and if the
Trustee has actual knowledge of such Default, the Trustee shall mail a notice of
the Default within 90 days after it occurs to Holders of Regis-
<PAGE>
-20-
tered Securities of the series. Except in the case of a Default in payment on a
series, the Trustee may withhold the notice if and so long as a committee of its
Trust Officers in good faith determines that withholding the notice is in the
interest of Holders of the series. The Trustee shall withhold notice of a
Default described in Section 6.01(4) until at least 60 days after it occurs.
SECTION 7.05. Reports by Trustee to Holders.
Any report required by TIA (S) 313(a) to be mailed to
Securityholders shall be mailed by the Trustee on or before May 15th of each
year.
A copy of each report at the time of its mailing to
Securityholders shall be filed with the SEC and each stock exchange on which any
Securities are listed. The Company shall notify the Trustee when any Securities
are listed on a stock exchange.
SECTION 7.06. Compensation and Indemnity.
The Company shall pay to the Trustee from time to time reasonable
compensation for its services. The Trustee's compensation shall not be limited
by any law on compensation of a trustee of an express trust. The Company shall
reimburse the Trustee upon request for all reasonable out-of-pocket expenses
incurred by it. Such expenses shall include the reasonable compensation and
expenses of the Trustee's agents and counsel.
The Company shall indemnify the Trustee against any loss or
liability incurred by it. The Trustee shall notify the Company promptly of any
claim for which it may seek indemnity. The Company shall defend the claim and
the Trustee shall cooperate in the defense. The Trustee may have separate
counsel and the Company shall pay the reasonable fees and expenses of such
counsel. The Company need not pay for any settlement made without its consent.
The Company need not reimburse any expense or indemnify against
any loss or liability incurred by the Trustee through negligence or willful
misconduct.
To secure the Company's payment obligations in this Section, the
Trustee shall have a lien prior to the Securities and any coupons on all money
or property held or collected by the Trustee, except that held in trust to pay
principal or interest on particular securities.
When the Trustee incurs expenses or renders services after an
Event of Default specified in Section 6.01(5) or (6) occurs, such expenses and
the compensation for such services are intended to constitute expenses of
administration under any Bankruptcy Law.
The provisions of this Section shall survive any termination or
discharge of this Indenture (including without limitation any termination under
any Bankruptcy Law) and the resignation or removal of the Trustee.
SECTION 7.07. Replacement of Trustee.
A resignation or removal of the Trustee and appointment of a
successor Trustee shall become effective only upon the successor Trustee's
acceptance of appointment as provided in this Section.
<PAGE>
-21-
The Trustee may resign by so notifying the Company. The Holders
of a majority in principal amount of the Securities may remove the Trustee by so
notifying the Trustee and may appoint a successor Trustee with the Company's
consent.
The Company may remove the Trustee if:
(1) the Trustee fails to comply with TIA (S) 310(a) or (S)
310(b) or with Section 7.09;
(2) the Trustee is adjudged a bankrupt or an insolvent;
(3) a Custodian or other public officer takes charge of the
Trustee or its property;
(4) the Trustee becomes incapable of acting; or
(5) an event of the kind described in Section 6.01(5) or (6)
occurs with respect to the Trustee.
The Company also may remove the Trustee with or without cause if
the Company so notifies the Trustee three months in advance and if no Default
occurs during the three-month period.
If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason, the Company shall promptly appoint a
successor Trustee.
If a successor Trustee does not take office within 30 days after
the retiring Trustee resigns or is removed, the retiring Trustee, the Company or
the Holders of a majority in principal amount of the Securities may petition any
court of competent jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with TIA (S) 310(a) or (S) 310(b)
or with Section 7.09, any Securityholder may petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders of Registered Securities. The retiring Trustee shall
promptly transfer all property held by it as Trustee to the successor Trustee,
subject to the lien provided for in Section 7.06.
SECTION 7.08. Successor Trustee by Merger, etc.
If the Trustee consolidates, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation, the successor corporation without any further act shall be the
successor Trustee.
SECTION 7.09. Trustee's Capital and Surplus.
The Trustee at all times shall have a combined capital and
surplus of at least $50,000,000 as set forth in its most recent published report
of financial condition.
<PAGE>
-22-
ARTICLE 8 -- DISCHARGE OF INDENTURE
SECTION 8.01. Defeasance.
Securities of a series may be defeased in accordance with their
terms and, unless the Securities Resolution otherwise provides, in accordance
with this Article.
The Company at any time may terminate as to a series all of its
obligations under this Indenture, the Securities of the series and any related
coupons ("legal defeasance option"). The Company at any time may terminate as
to a series its obligations, if any, under any restrictive covenants which may
be applicable to a particular series ("covenant defeasance option"). However,
in the case of the legal defeasance option, the Company's obligations in
Sections 2.03, 2.04, 2.05, 2.06, 2.07, 2.08, 7.06, 7.07 and 8.04 shall survive
until the Securities of the series are no longer outstanding; thereafter the
Company's obligations in Section 7.06 shall survive.
The Company may exercise its legal defeasance option
notwithstanding its prior exercise of its covenant defeasance option. If the
Company exercises its legal defeasance option, a series may not be accelerated
because of an Event of Default. If the Company exercises its covenant defeasance
option, a series may not be accelerated by reference to any restrictive
covenants as to which the covenant defeasance option applicable to such series
has been so exercised.
The Trustee upon request shall acknowledge in writing the
discharge of those obligations or restrictions that the Company terminates by
defeasance.
SECTION 8.02. Conditions to Defeasance.
The Company may exercise as to a series its legal defeasance
option or its covenant defeasance option if:
(1) the Company irrevocably deposits in trust with the Trustee
or another trustee money or U.S. Government Obligations;
(2) the Company delivers to the Trustee a certificate from a
nationally recognized firm of independent accountants
expressing their opinion that the payments of principal
and interest when due on the deposited U.S. Government
Obligations without reinvestment plus any deposited money
without investment will provide cash at such times and in
such amounts as will be sufficient to pay principal and
interest when due on all the Securities of the series to
maturity or redemption, as the case may be;
(3) immediately after the deposit no Default exists;
(4) the deposit does not constitute a default under any other
agreement binding on the Company;
(5) the deposit does not cause the Trustee to have a
conflicting interest under TIA (S) 310(a) or (S) 310(b) as
to another series;
<PAGE>
-23-
(6) the Company delivers to the Trustee an Opinion of Counsel
to the effect that Holders of the series will not
recognize income, gain or loss for Federal income tax
purposes as a result of the defeasance;
(7) 91 days pass after the deposit is made and during the 91-
day period no Default specified in Section 6.01(5) or (6)
occurs that is continuing at the end of the period; and
(8) the Company provides an Officers' Certificate and an
Opinion of Counsel to the effect that all conditions
precedent pursuant to this Section 8.02 have been
satisfied.
Before or after a deposit the Company may make arrangements
satisfactory to the Trustee for the redemption of Securities at a future date in
accordance with Article 3.
"U.S. GOVERNMENT OBLIGATIONS" means direct obligations of (i) the
United States or (ii) an agency or instrumentality of the United States, the
payment of which is unconditionally guaranteed by the United States, which, in
either case, have the full faith and credit of the United States pledged for
payment and which are not callable at the issuer's option, or certificates
representing an ownership interest in such obligations.
SECTION 8.03. Application of Trust Money.
The Trustee shall hold in trust money or U.S. Government
Obligations deposited with it pursuant to Section 8.02. It shall apply the
deposited money and the money from U.S. Government Obligations through the
Paying Agent and in accordance with this Indenture to the payment of principal
and interest on Securities of the defeased series.
SECTION 8.04. Repayment to Company.
The Trustee and the Paying Agent shall promptly turn over to the
Company upon request any excess money or securities held by them at any time.
The Trustee and the Paying Agent shall pay to the Company upon
request any money held by them for the payment of principal or interest that
remains unclaimed for two years. After payment to the Company, Securityholders
entitled to the money must look to the Company for payment as unsecured general
creditors unless an abandoned property law designates another person.
ARTICLE 9 -- CONVERSION
SECTION 9.01. Conversion Privilege.
If the Securities Resolution establishing the terms of a series
of securities so provides, Securities of any series may be convertible at the
option of the holders into or for Common Stock or other equity or debt
securities (a "Conversion Right"). The Securities Resolution may establish,
among other things, the Conversion Rate, provisions for adjustments to the
Conversion Rate and limitations upon exercise of the Conversion Right.
<PAGE>
-24-
Unless the Securities Resolution otherwise provides, a Holder may
convert a portion of a Security if the portion is $1,000 or an integral
multiples thereof. Provisions of this Indenture that apply to the conversion of
the aggregate principal amount of a Security also apply to conversion of a
portion of it.
The Securities Resolution providing for Securities with a
Conversion Right may establish any terms in addition to, or other than
(including terms inconsistent with), those set forth in this Article 9 with
respect to the conversion of the Securities established thereby (other than
those of Section 9.16).
SECTION 9.02. Conversion Procedure.
To convert a Security a Holder must satisfy all requirements in
the Securities or the Securities Resolution and (i) complete and manually sign
the conversion notice (the "Conversion Notice") provided for in the Securities
Resolution or the Security (or complete and manually sign a facsimile thereof)
and deliver such notice to the Conversion Agent or any other office or agency
maintained for such purpose, (ii) surrender the Security to the Conversion Agent
or at such other office or agency by physical delivery, (iii) if required,
furnish appropriate endorsements and transfer documents, and (iv) if required,
pay all transfer or similar taxes. The date on which such notice shall have been
received by and the Security shall have been so surrendered to the Conversion
Agent is the "Conversion Date." Such Conversion Notice shall be irrevocable and
may not be withdrawn by a Holder for any reason.
The Company will complete settlement of any conversion of
Securities not later than the fifth business day following the Conversion Date
in respect of the cash portion elected to be delivered in lieu of the securities
into which the Security is convertible and not later than the seventh business
day following the Conversion Date in respect of the portion to be settled in
such securities.
If any Security is converted between the record date for the
payment of interest and the next succeeding interest payment date, such Security
must be accompanied by funds equal to the interest payable on such succeeding
interest payment date on the principal amount so converted (unless such Security
shall have been called for redemption during such period, in which case no such
payment shall be required). A Security converted on an interest payment date
need not be accompanied by any payment, and the interest on the principal amount
of the Security being converted will be paid on such interest payment date to
the registered holder of such Security on the immediately preceding record date.
Subject to the aforesaid right of the registered holder to receive interest, no
payment or adjustment will be made on conversion for interest accrued on the
converted Security or for interest, dividends or other distributions payable on
any security issued on conversion.
If a Holder converts more than one Security at the same time, the
securities into which the Security is convertible issuable or cash payable upon
the conversion shall be based on the total principal amount of the Securities
converted.
Upon surrender of a Security that is converted in part the
Trustee shall authenticate for the Holder a new Security equal in principal
amount to the unconverted portion of the Security surrendered; except that if a
global Security is so surrendered the Trustee shall authenticate and, if
applicable, deliver to the depository a new global Security in a denomination
equal to and in exchange for the unconverted portion of the principal of the
global Security so surrendered.
If the last day on which a Security may be converted is a Legal
Holiday in a place where a Conversion Agent is located, the Security may be
surrendered to that Conversion Agent on the next succeeding day that is not a
Legal Holiday.
<PAGE>
-25-
SECTION 9.03. Taxes on Conversion.
If a Holder of a Security exercises a Conversion Right, the
Company shall pay any documentary, stamp or similar issue or transfer tax due on
the issue of the securities into which the Security is convertible upon the
conversion. However, the Holder shall pay any such tax which is due because
securities or other property are issued in a name other than the Holder's name.
Nothing herein shall preclude any income tax or other withholding required by
law or regulations.
SECTION 9.04. Company Determination Final.
Any determination that the Board of Directors makes pursuant to
this Article 9 or consistent with terms provided for in any Securities
Resolution is conclusive, absent manifest error.
SECTION 9.05. Trustee's and Conversion Agent's Disclaimer.
The Trustee (and each Conversion Agent other than the Company)
has no duty to determine when or if an adjustment under this Article 9 or any
Securities Resolution should be made, how it should be made or calculated or
what it should be. The Trustee (and each Conversion Agent other than the
Company) makes no representation as to the validity or value of any securities
issued upon conversion of Securities. The Trustee (and each Conversion Agent
other than the Company) shall not be responsible for the Company's failure to
comply with this Article 9 or any provision of a Securities Resolution relating
to a Conversion Right.
SECTION 9.06. Company to Provide Conversion Securities.
The Company shall reserve out of its authorized but unissued
Common Stock or its Common Stock held in treasury sufficient shares to permit
the conversion of all of the Securities convertible into Common Stock. The
Company shall arrange and make available for issuance upon conversion the full
amount of any other securities into which the Securities are convertible to
permit such conversion of the Securities.
All shares of Common Stock or other equity securities of any
person which may be issued upon conversion of the Securities shall be validly
issued, fully paid and non-assessable, subject to the personal liability which
may be imposed on shareholders by Section 180.0622(2)(b) of the Wisconsin
Business Corporation Law (or any successor provision), as judicially
interpreted, for debts owing to employees for services performed.
The Company will comply with all securities laws regulating the
offer and delivery of securities upon conversion of Securities.
SECTION 9.07. Cash Settlement Option.
If the Securities Resolution so provides, the Company may elect
to satisfy, in whole or in part, a Conversion Right of Securities convertible
into Common Stock or other securities of any person by the delivery of cash. The
amount of cash to be delivered shall be equal to the Market Price on the last
Trading Day preceding the applicable Conversion Date of a share of Common Stock
or other securities of any person into which the Securities are convertible
multiplied by the number of shares of Common Stock or the number of shares or
principal amount of other securities into which the Securities are convertible,
respectively, in respect of which the Company elects to deliver cash. If the
Company elects to satisfy, in whole or in part, a Conversion Right by the
delivery of shares of Common Stock or other securities, no fractional shares or
portion of other securities
<PAGE>
-26-
will be delivered. Instead, the Company will pay cash based on the Market Price
for such fractional share of Common Stock or portion of other securities.
The "MARKET PRICE" of the Common Stock into which Securities or
other equity securities into which the Securities are convertible may be
converted pursuant to a Securities Resolution or this Article 9 on any Trading
Day means the weighted average per share sale price for all sales of the Common
Stock or other equity securities on such Trading Day (or, if the information
necessary to calculate such weighted average per share sale price is not
reported, the average of the high and low sale prices, or if no sales are
reported, the average of the bid and ask prices or, if more than one in either
case, the average of the average bid and average ask prices), as reported in the
composite transactions for the New York Stock Exchange, or if the Common Stock
or other equity securities into which the Securities are convertible are not
listed or admitted to trading on such exchange, as reported in the composite
transactions for the principal national or regional United States securities
exchange on which the Common Stock or other equity securities into which the
Securities are convertible are listed or admitted to trading or, if the Common
Stock or other equity securities into which the Securities are convertible are
not listed or admitted to trading on a United States national or regional
securities exchange, as reported by NASDAQ or by the National Quotation Bureau
Incorporated, or if not so reported, as determined in the manner set forth in
the appropriate Securities Resolution. In the absence of such quotations, the
Company shall be entitled to determine the Market Price on the basis of such
quotations as it considers appropriate.
The "MARKET PRICE" of any debt security into which Securities are
convertible shall be determined as set forth in the applicable Securities
Resolution.
SECTION 9.08. Adjustment in Conversion Rate for Change in Capital Stock.
If the Securities are convertible into Common Stock and the
Company:
(1) pays a dividend or makes a distribution on its Common
Stock in shares of its Common Stock;
(2) subdivides its outstanding shares of Common Stock into a
greater number of shares;
(3) combines its outstanding shares of Common Stock into a
smaller number of shares;
(4) pays a dividend or makes a distribution on its Common
Stock in shares of its Capital Stock other than Common
Stock; or
(5) issues by reclassification of its Common Stock any shares
of its Capital Stock,
then the conversion privilege and the Conversion Rate in effect immediately
prior to such action shall be adjusted so that the Holder of a Security
thereafter converted may receive the number of shares of Capital Stock of the
Company (or, at the Company's option, an equivalent amount in cash) which he
would have owned immediately following such action if he had converted the
Security immediately prior to such action.
The adjustment shall become effective immediately after the
record date in the case of a dividend or distribution and immediately after the
effective date in the case of a subdivision, combination or reclassification.
If the security into which the Securities are convertible is
other than Common Stock of the Company, the conversion rate shall be subject to
adjustment as set forth in the applicable Securities Resolution.
<PAGE>
-27-
If after an adjustment a Holder of a Security may, upon
conversion, receive shares of two or more classes of Capital Stock of the
Company or other securities, the Board of Directors of the Company shall
determine the allocation of the adjusted Conversion Rate between or among the
classes of Capital Stock or other securities. After such allocation, the
conversion privilege and the Conversion Rate of each class of Capital Stock or
other securities shall thereafter be subject to adjustment on terms comparable
to those applicable to Common Stock in this Article or in such Securities
Resolution.
SECTION 9.09. Adjustment in Conversion Rate for Common Stock Issued Below
Market Price.
If the Securities are convertible into Common Stock, and the
Company issues to all holders of Common Stock rights, options or warrants to
subscribe for or purchase shares of Common Stock, or any securities convertible
into or exchangeable for shares of Common Stock, or rights, options or warrants
to subscribe for or purchase such convertible or exchangeable securities at a
Price Per Share (as defined and determined according to the formula given below)
lower than the current Market Price on the date of such issuance, the Conversion
Rate shall be adjusted in accordance with the following formula:
AC = CC . (O + N )
-------
O . R
-
M
where:
AC = the adjusted Conversion Rate.
CC = the then current Conversion Rate.
O = the number of shares of Common Stock outstanding immediately prior to such
issuance (which number shall include shares owned or held by or for the
account of the Company).
N = the "Number of Shares," which (i) in the case of rights, options or
warrants to subscribe for or purchase shares of Common Stock or of
securities convertible into or exchangeable for shares of Common Stock, is
the maximum number of shares of Common Stock initially issuable upon
exercise, conversion or exchange thereof; and (ii) in the case of rights,
options or warrants to subscribe for or purchase convertible or
exchangeable securities, is the maximum number of shares of Common Stock
initially issuable upon the conversion or exchange of the convertible or
exchangeable securities issuable upon the exercise of such rights, options
or warrants.
R = the proceeds received or receivable by the Company, which (i) in the case
of rights, options or warrants to subscribe for or purchase shares of
Common Stock or of securities convertible into or exchangeable for shares
of Common Stock, is the aggregate amount received or receivable by the
Company in consideration for the sale and issuance of such rights, options,
warrants or convertible or exchangeable securities, plus the minimum
aggregate amount of additional consideration, other than the convertible or
exchangeable securities, payable to the Company upon exercise, conversion
or exchange thereof; and (ii) in the case of rights, options or warrants to
subscribe for or purchase convertible or exchangeable securities, is the
aggregate amount received or receivable by the Company in consideration for
the sale and issuance of such rights, options or warrants, plus the minimum
aggregate consideration payable to the Company upon the exercise thereof,
plus the minimum aggregate amount of additional consideration, other than
the convertible or exchangeable securities, payable upon the conversion or
exchange of the convertible or exchangeable securities; provided, that in
--------
each case the proceeds received or receiv-
<PAGE>
-28-
able by the Company shall be deemed to be the amount of gross cash proceeds
without deducting therefrom any compensation paid or discount allowed in
the sale, underwriting or purchase thereof by underwriters or dealers or
others performing similar services or any expenses incurred in connection
therewith.
M = the current Market Price per share of Common Stock on the date of issue of
the rights, options or warrants to subscribe for or purchase shares of
Common Stock or the securities convertible into or exchangeable for shares
of Common Stock or the rights, options or warrants to subscribe for or
purchase convertible or exchangeable securities.
"Price Per Share" shall be defined and determined according to
the following formula:
P = R
-
N
where:
P = Price Per Share
and R and N have the meanings assigned above.
If the Company shall issue rights, options, warrants or
convertible or exchangeable securities with respect to its Common Stock for a
consideration consisting, in whole or in part, of property other than cash the
amount of such consideration shall be determined in good faith by the Board of
Directors whose determination shall be conclusive and evidenced by a resolution
of the Board of Directors filed with the Trustee.
The adjustment shall be made successively whenever any such
additional rights, options, warrants or convertible or exchangeable securities
with respect to its Common Stock are issued, and shall become effective
immediately after the date of issue of such shares, rights, options, warrants or
convertible or exchangeable securities.
To the extent that such rights, options or warrants to acquire
Common Stock expire unexercised or to the extent any convertible or exchangeable
securities with respect to its Common Stock are redeemed by the Company or
otherwise cease to be convertible or exchangeable into shares of Common Stock,
the Conversion Rate shall be readjusted to the Conversion Rate which would then
be in effect had the adjustment made upon the date of issuance of such rights,
options, warrants or convertible or exchangeable securities been made upon the
basis of the issuance of rights, options or warrants to subscribe for or
purchase only the number of shares of Common Stock as to which such rights,
options or warrants were actually exercised and the number of shares of Common
Stock that were actually issued upon the conversion or exchange of the
convertible or exchangeable securities.
If the Securities are convertible into securities other than the
Common Stock, any adjustment in the Conversion Rate required for the issuance or
sale of the securities into which the Securities are convertible shall be made
as set forth in the Securities Resolution.
SECTION 9.10. Adjustment for Other Distributions.
If the Securities are initially convertible into Common Stock and
the Company distributes to all holders of its Common Stock any of its assets or
debt securities or any rights or warrants to purchase assets or
<PAGE>
-29-
debt securities of the Company, the Conversion Rate shall be adjusted in
accordance with the following formula:
AC = CC . (O . M)
---------
((O . M) - F)
where:
AC = the adjusted Conversion Rate.
CC = the then current Conversion Rate.
O = the number of shares of Common Stock outstanding on the record date
mentioned below (which number shall include shares owned or held by or for
the account of the Company).
M = the current Market Price per share of Common Stock on the record date
mentioned below.
F = the fair market value on the record date of the assets, securities, rights
or warrants distributed. The Board of Directors of the Company shall
determine the fair market value.
The adjustment shall become effective immediately after the
record date for the determination of stockholders entitled to receive the
distribution.
If the securities into which the Securities are convertible are
other than Common Stock, any adjustments for such other distribution shall be
made as set forth in the Securities Resolution.
This Section does not apply to cash dividends or distributions or
to reclassifications or distributions referred to in Section 9.08. Also, this
Section does not apply to shares issued below Market Price referred to in
Section 9.09.
SECTION 9.11. Voluntary Adjustment.
The Company at any time may increase the Conversion Rate,
temporarily or otherwise, by any amount but in no event shall such Conversion
Rate result in the issuance of Capital Stock at a price less than the par value
of such Capital Stock at the time such increase is made.
SECTION 9.12. When Adjustment May Be Deferred.
No adjustment in the Conversion Rate need be made unless the
adjustment would require a change of at least 1% in the Conversion Rate. Any
adjustments that are not made due to the immediately preceding sentence shall be
carried forward and taken into account in any subsequent adjustment; provided,
--------
that any adjustment carried forward shall be deferred not in excess of three
years, whereupon any adjustment to the Conversion Rate will be effected.
All calculations under this Article 9 shall be made to the
nearest cent or to the nearest 1/100th of a share, as the case may be.
<PAGE>
-30-
SECTION 9.13. When No Adjustment Required.
No adjustment in the Conversion Rate need be made for rights to
purchase or the sale of Common Stock pursuant to a Company plan providing for
reinvestment of dividends or interest.
No adjustment in the Conversion Rate need be made for a change in
the par value of the Common Stock or other securities having a par value.
No adjustment need be made for a transaction referred to in
Section 9.08, 9.09 or 9.10 if Securityholders are to participate in the
transaction on a basis and with notice that the Board of Directors determines to
be fair and appropriate in light of the basis and notice on which holders of
Common Stock or other securities into which the Securities are convertible
participate in the transaction.
SECTION 9.14. Notice of Adjustment.
Whenever the Conversion Rate is adjusted, the Company shall
promptly mail to Holders of Securities affected a notice of the adjustment. The
Company shall file with the Trustee an Officers' Certificate or a certificate
from the Company's independent public accountants stating the facts requiring
the adjustment and the manner of computing it. The certificate shall be
conclusive evidence that the adjustment is correct, absent manifest error.
SECTION 9.15. Notice of Certain Transactions.
If:
(1) the Company proposes to take any action that would require
an adjustment in the Conversion Rate,
(2) the Company proposes to take any action that would require
a supplemental indenture pursuant to Section 9.16, or
(3) there is a proposed liquidation or dissolution of the
Company or of the issuer of any other security into which
the Securities are convertible,
the Company shall mail to registered Holders of Securities of any affected
series a notice stating the proposed record date for a dividend or distribution
or the proposed effective date of a subdivision, combination, reclassification,
consolidation, merger, transfer, lease, liquidation or dissolution. The Company
shall mail the notice at least 15 days before such date. Failure to mail the
notice or any defect in it shall not affect the validity of the transaction.
<PAGE>
-31-
SECTION 9.16. Reorganization of the Company.
If the Company is a party to a transaction subject to Section
5.01, the successor corporation (if other than the Company) shall enter into a
supplemental indenture which shall provide that the Holder of a Security may
convert it into the kind and amount of securities, cash or other assets which he
would have owned immediately after the consolidation, merger or transfer if he
had converted the Security immediately before the effective date of the
transaction. The supplemental indenture shall provide for adjustments which
shall be as nearly equivalent as may be practical to the adjustments provided
for in this Article. The successor company shall mail to Holders of Securities
of any affected series a notice briefly describing the supplemental indenture.
If this Section applies, Sections 9.08, 9.09 and 9.10 do not
apply.
ARTICLE 10 -- AMENDMENTS
SECTION 10.01. Without Consent of Holders.
The Company and the Trustee may amend this Indenture, the
Securities or any coupons without the consent of any Securityholder:
(1) to cure any ambiguity, omission, defect or inconsistency;
(2) to comply with Article 5 or Section 9.16;
(3) to provide that specific provisions of this Indenture
shall not apply to a series not previously issued;
(4) to create a series and establish its terms;
(5) to provide for a separate Trustee for one or more series;
or
(6) to make any change that does not materially adversely
affect the rights of any Securityholder.
SECTION 10.02. With Consent of Holders.
Unless the Securities Resolution otherwise provides, the Company
and the Trustee may amend this Indenture, the Securities and any coupons with
the written consent of the Holders of a majority in principal amount of the
Securities of all series affected by the amendment voting as one class; provided
that, in the case of a series issued to an Applied Power Trust, so long as any
of the related preferred securities of such Applied Power Trust remains
outstanding, no such amendment shall be made that adversely affects the holders
of such preferred securities in any material respect, and no termination of this
Indenture shall occur, without the prior consent of the holders of not less than
a majority in aggregate liquidation amount of such preferred securities then
outstanding unless and until the principal (and premium, if any) of the
Securities of such series and all accrued and unpaid interest thereon have been
paid in full; and provided further that, in the case a series issued to an
Applied Power Trust, so long as any of the related preferred securities of such
Applied Power Trust remain outstanding, no amendment shall be made to the third
paragraph of Section 6.06 of this Indenture without the
<PAGE>
-32-
prior consent of the holders of each such preferred security then outstanding
unless and until the principal (and premium, if any) of the Securities of such
series and all accrued and unpaid interest thereon have been paid in full.
However, without the consent of each Securityholder affected, an amendment under
this Section may
not:
(1) reduce the amount of Securities whose Holders must consent
to an amendment;
(2) reduce the interest on or change the time for payment of
interest on any Security;
(3) change the fixed maturity of any Security;
(4) reduce the principal of any non-Discounted Debt Security
or reduce the amount of principal of any Discounted Debt
Security that would be due upon an acceleration thereof;
(5) change the currency in which principal or interest on a
Security is payable;
(6) make any change that materially adversely affects the
right to convert or exchange any Security; or
(7) make any change in Section 6.04 or 10.02, except to
increase the amount of Securities whose Holders must
consent to an amendment or waiver or to provide that other
provisions of this Indenture cannot be amended or waived
without the consent of each Securityholder affected
thereby.
An amendment of a provision included solely for the benefit of
one or more series does not affect Securityholders of any other series.
Securityholders need not consent to the exact text of a proposed
amendment or waiver; it is sufficient if they consent to the substance thereof.
SECTION 10.03. Compliance with Trust Indenture Act.
Every amendment pursuant to Section 10.01 or 10.02 shall be set
forth in a supplemental indenture (except any amendment pursuant to Section
10.01(4), which may be set forth in a Securities Resolution) that complies with
the TIA.
If a provision of the TIA requires or permits a provision of this
Indenture and the TIA provision is amended, then the Indenture provision shall
be automatically amended to like effect.
SECTION 10.04. Effect of Consents.
An amendment or waiver becomes effective in accordance with its
terms and thereafter binds every Securityholder entitled to consent to it.
A consent to an amendment or waiver by a Holder of a Security is
a continuing consent by the Holder and every subsequent Holder of a Security
that evidences the same debt as the consenting Holder's Security. Any Holder or
subsequent Holder may revoke the consent as to his Security if the Trustee
receives notice of the revocation before the amendment or waiver becomes
effective.
<PAGE>
-33-
The Company may fix a record date for the determination of
Holders of Registered Securities entitled to give a consent. The record date
shall not be less than 10 nor more than 60 days prior to the first written
solicitation of Securityholders .
SECTION 10.05. Notation on or Exchange of Securities.
The Company or the Trustee may place an appropriate notation
about an amendment or waiver on any Security thereafter authenticated. The
Company may issue in exchange for affected Securities new Securities that
reflect the amendment or waiver.
SECTION 10.06. Trustee Protected.
The Trustee need not sign any supplemental indenture that
adversely affects its rights. The Trustee shall be entitled to receive, and
shall be fully protected in relying upon, an Opinion of Counsel and an Officers'
Certificate each stating that the execution of any amendment or supplement or
waiver authorized pursuant to this Article is authorized or permitted by this
Indenture, and that such amendment or supplement or waiver constitutes the
legal, valid and binding obligation of the Company.
ARTICLE 11 -- MISCELLANEOUS
SECTION 11.01. Trust Indenture Act.
The provisions of TIA (S)(S) 310 through 317 that impose duties
on any person (including the provisions automatically deemed included herein
unless expressly excluded by this Indenture) are a part of and govern this
Indenture, whether or not expressly set forth herein.
If any provision of this Indenture limits, qualifies or conflicts
with another provision which is required to be included in this Indenture by the
TIA, the required provision shall control. If any provision of this Indenture
modifies or excludes any provision of the TIA that may be so modified or
excluded, the latter provision shall be deemed to apply to this Indenture as so
modified or excluded, as the case may be.
SECTION 11.02. Notices.
Any notice by one party to another is duly given if in writing
and delivered in person, sent by facsimile transmission confirmed by mail or
mailed by first-class mail to the other's address shown below:
Company:
Applied Power Inc.
13000 West Silver Spring Drive
Butler, Wisconsin 53007
Fax: (414) 783-9790
Attention: Chief Financial Officer
<PAGE>
-34-
Trustee:
The First National Bank of Chicago
One First National Plaza
Chicago, Illinois 60670-0126
Fax: (312)407-1708
Attention: Corporate Trust Division
A party by notice to the other parties may designate additional
or different addresses for subsequent notices.
Any notice mailed to a Securityholder shall be mailed to his
address shown on the register kept by the Transfer Agent or on the list referred
to in Section 2.06. Failure to mail a notice to a Securityholder or any defect
in a notice mailed to a Securityholder shall not affect the sufficiency of the
notice mailed to other Securityholders or the sufficiency of any published
notice.
If a notice is mailed in the manner provided above within the
time prescribed, it is duly given, whether or not the addressee receives it.
If the Company mails a notice to Securityholders, it shall mail a
copy to the Trustee and each Agent at the same time.
If in the Company's opinion it is impractical to mail a notice
required to be mailed or to publish a notice required to be published, the
Company may give such substitute notice as the Trustee approves. Failure to
publish a notice as required or any defect in it shall not affect the
sufficiency of any mailed notice.
All notices shall be in the English language, except that any
published notice may be in an official language of the country of publication.
A "notice" includes any communication required by this Indenture.
SECTION 11.03. Certificate and Opinion as to Conditions
Precedent.
Upon any request or application by the Company to the Trustee to
take any action under this Indenture, the Company shall if so requested furnish
to the Trustee:
(1) an Officers' Certificate stating that, in the opinion of
the signers, all conditions precedent, if any, provided
for in this Indenture relating to the proposed action have
been complied with; and
(2) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent have been complied
with.
<PAGE>
-35-
SECTION 11.04. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(1) a statement that the person making such certificate or
opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or
opinions contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such person, he has made
such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(4) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with.
SECTION 11.05. Rules by Company and Agents.
The Company may make reasonable rules for action by or a meeting of
Securityholders. An Agent may make reasonable rules and set reasonable
requirements for its functions.
SECTION 11.06. Legal Holidays.
A "LEGAL HOLIDAY" is a Saturday, a Sunday or a day on which banking
institutions are not required to be open. If a payment date is a Legal Holiday
at a place of payment, unless the Securities Resolution establishing a series
otherwise provides with respect to Securities of the series, payment may be made
at that place on the next succeeding day that is not a Legal Holiday, and no
interest shall accrue for the intervening period.
SECTION 11.07. No Recourse Against Others.
All liability described in the Securities of any director, officer,
employee or stockholder, as such, of the Company is waived and released.
SECTION 11.08. Duplicate Originals.
The parties may sign any number of copies of this Indenture. One
signed copy is enough to prove this Indenture.
SECTION 11.09. Governing Law.
The laws of the State of Wisconsin shall govern this Indenture, the
Securities and any coupons, unless federal law governs.
<PAGE>
S-1
SIGNATURES
Dated: December [ ], 1998 APPLIED POWER INC.
By_______________________________
Name:
Title:
Dated: December [ ], 1998 THE FIRST NATIONAL BANK OF CHICAGO
By________________________________
Name:
Title:
<PAGE>
EXHIBIT A
A Form of Registered Security
No. [$]
APPLIED POWER INC.
[Title of Security]
APPLIED POWER INC.
promises to pay to
or registered assigns
the principal sum of Dollars on ,
Interest Payment Dates:
Record Dates:
Dated:
THE FIRST NATIONAL BANK OF CHICAGO
Transfer Agent and Paying Agent
APPLIED POWER INC.
By:________________________________
[Title of Authorized Officer]
By:________________________________
[Assistant] Secretary
(SEAL)
Authenticated:
THE FIRST NATIONAL BANK OF CHICAGO
Registrar
By:_____________________________________
Authorized Signature
A-1
<PAGE>
APPLIED POWER INC.
[Title of Security]
[Explanatory Notes follow Exhibit B]
1. INTEREST./1/
Applied Power Inc. ("Company"), a corporation organized and existing
under the laws of the State of Wisconsin, promises to pay interest on
the principal amount of this Security at the rate per annum shown
above. The Company will pay interest on and
of each year commencing , . Interest on the Securities
will accrue from the most recent date to which interest has been paid
or, if no interest has been paid, from , . Interest
will be computed on the basis of a 360-day year of twelve 30-day
months.
2. METHOD OF PAYMENT./2/
The Company will pay interest on the Securities to the persons who are
registered holders of Securities at the close of business on the
record date for the next interest payment date, except as otherwise
provided in the Indenture. Holders must surrender Securities to a
Paying Agent to collect principal payments. The Company will pay
principal and interest in money of the United States that at the time
of payment is legal tender for payment of public and private debts.
The Company may pay principal and interest by check payable in such
money. It may mail an interest check to a holder's registered
address.
3. SECURITIES AGENTS./2A/
Initially, The First National Bank of Chicago, Attention: Corporate
Trust Division, will act as Paying Agent, Transfer Agent and
Registrar. The Company may change any Paying Agent or Transfer Agent
without notice or provide for more than one such agent. The Company
or any Affiliate may act in any such capacity. Subject to certain
conditions, the Company may change the Trustee.
4. INDENTURE.
The Company issued the securities of this series ("Securities") under
an Indenture dated as of , 1998 ("Indenture") between the
Company and The First National Bank of Chicago ("Trustee"). The terms
of the Securities include those stated in the Indenture and in the
Securities Resolution creating the Securities and those made part of
the Indenture by the Trust Indenture Act of 1939 (15 U.S. Code (S)(S)
77aaa-77bbbb). Securityholders are referred to the Indenture, the
Securities Resolution and the Act for a statement of such terms.
5. OPTIONAL REDEMPTION./3/
On or after , the Company may redeem all the Securities
at any time or some of them from time to time at the following
redemption prices (expressed in percentages of principal amount), plus
accrued interest to the redemption date.
If redeemed during the 12-month period beginning,
A-2
<PAGE>
Year Percentage Year Percentage
and thereafter at 100%.
6. MANDATORY REDEMPTION. /4/
The Company will redeem $ principal amount of Securities on
and on each thereafter through at a
redemption price of 100% of principal amount, plus accrued interest to
the redemption date./5/ The Company may reduce the principal amount
of Securities to be redeemed pursuant to this paragraph by subtracting
100% of the principal amount (excluding premium) of any Securities (i)
that the Company has acquired or that the Company has redeemed other
than pursuant to this paragraph and (ii) that the Company has
delivered to the Registrar for cancellation. The Company may so
subtract the same Security only once.
7. ADDITIONAL OPTIONAL REDEMPTION./6/
In addition to redemptions pursuant to the above paragraph(s), the
Company may redeem not more than $ principal amount of
Securities on and on each thereafter through
at a redemption price of 100% of principal amount, plus accrued
interest to the redemption date.
8. NOTICE OF REDEMPTION./7/
Notice of redemption will be mailed at least 30 but not more than 60
days before the redemption date to each holder of Securities to be
redeemed at his registered address.
A notice of redemption may provide that it is subject to the
occurrence of any event before the date fixed for such redemption as
described in such notice ("Conditional Redemption") and such notice of
Conditional Redemption shall be of no effect unless all such
conditions to the redemption have occurred before such date or have
been waived by the Company.
9. CONVERSION./8/
A Holder of a Security may convert it into Common Stock of the Company
or cash, or a combination thereof, at the Company's option, at any
time before the close of business on ___________, or, if the Security
is called for redemption, the Holder may convert it at any time before
the close of business on the redemption date. The initial Conversion
Rate is ____________ (or an equivalent amount in cash) per $1,000
principal amount of the Securities, subject to adjustment as provided
in Article 9 of the Indenture./9/ The Company will deliver a check in
lieu of any fractional share. On conversion no payment or adjustment
for interest accrued on the Securities will be made nor for dividends
on the Common Stock issued on conversion. If any Security is
converted between the record date for the payment of interest and the
next succeeding interest payment date, such Security must be
accompanied by funds equal to the interest payable on such succeeding
interest payment date on the principal amount so converted (unless
such Security shall have been called for redemption, in which case no
such payment shall be required). A Security converted on an interest
payment date
A-3
<PAGE>
need not be accompanied by any payment, and the interest on the
principal amount of the Security being converted will be paid on such
interest payment date to the registered holder of such Security on the
immediately preceding record date.
To convert a Security a Holder must (1) complete and sign the
conversion notice on the back of the Security, (2) surrender the
Security to a Conversion Agent, (3) furnish appropriate endorsements
and transfer documents if required by the Registrar or Conversion
Agent and (4) pay any transfer or similar tax if required. A Holder
may convert a portion of a Security if the portion is $1,000 or an
integral multiple of $1,000.
10. DENOMINATIONS, TRANSFER, EXCHANGE.
The Securities are in registered form without coupons in denominations
of $1,000/10/ and whole multiples of $1,000. The transfer of
Securities may be registered and Securities may be exchanged as
provided in the Indenture. The Transfer Agent may require a holder,
among other things, to furnish appropriate endorsements and transfer
documents and to pay any taxes and fees required by law or the
Indenture. The Transfer Agent need not exchange or register the
transfer of any Security or portion of a Security selected for
redemption. Also, it need not exchange or register the transfer of
any Securities for a period of 15 days before a selection of
Securities to be redeemed.
11. PERSONS DEEMED OWNERS.
The registered holder of a Security may be treated as its owner for
all purposes.
12. AMENDMENTS AND WAIVERS.
Subject to certain exceptions, the Indenture or the Securities may be
amended with the consent of the holders of a majority in principal
amount of the securities of all series affected by the amendment./11/
Subject to certain exceptions, a default on a series may be waived
with the consent of the holders of a majority in principal amount of
the series.
Without the consent of any Securityholder, the Indenture or the
Securities may be amended, among other things, to cure any ambiguity,
omission, defect or inconsistency; to provide for assumption of
Company obligations to Securityholders; or to make any change that
does not materially adversely affect the rights of any Securityholder.
13. RESTRICTIVE COVENANTS./12/
The Securities are unsecured general obligations of the Company
limited to $ principal amount. The Indenture does not limit
other unsecured debt.
14. SUCCESSORS.
When a successor assumes all the obligations of the Company under the
Securities and the Indenture, the Company will be released from those
obligations.
A-4
<PAGE>
15. DEFEASANCE PRIOR TO REDEMPTION OR MATURITY./13/
Subject to certain conditions, the Company at any time may terminate
some or all of its obligations under the Securities and the Indenture
if the Company deposits with the Trustee money or U.S. Government
Obligations for the payment of principal and interest on the
Securities to redemption or maturity. U.S. Government Obligations are
securities backed by the full faith and credit of the United States of
America or certificates representing an ownership interest in such
Obligations.
16. DEFAULTS AND REMEDIES.
An Event of Default/14/ includes: default for 30 days in payment of
interest on the Securities; default in payment of principal on the
Securities; default in payment or satisfaction of any sinking fund
obligation; default by the Company for a specified period after notice
to it in the performance of any of its other agreements applicable to
the Securities; certain events of bankruptcy or insolvency; and any
other Event of Default provided for in the series. If an Event of
Default occurs and is continuing, the Trustee or the holders of at
least 25% in principal amount of the Securities may declare the
principal/15/ of all the Securities to be due and payable immediately.
Securityholders may not enforce the Indenture or the Securities except
as provided in the Indenture. The Trustee may require indemnity
satisfactory to it before it enforces the Indenture or the Securities.
Subject to certain limitations, holders of a majority in principal
amount of the Securities may direct the Trustee in its exercise of any
trust or power. The Trustee may withhold from Securityholders notice
of any continuing default (except a default in payment of principal
or interest) if it determines that withholding notice is in their
interests. The Company must furnish an annual compliance certificate
to the Trustee.
17. TRUSTEE DEALINGS WITH COMPANY.
The First National Bank of Chicago, the Trustee under the Indenture,
in its individual or any other capacity, may make loans to, accept
deposits from, and perform services for the Company or its Affiliates,
and may otherwise deal with the Company or its Affiliates, as if it
were not Trustee.
18. NO RECOURSE AGAINST OTHERS.
A director, officer, employee or stockholder, as such, of the Company
shall not have any liability for any obligations of the Company under
the Securities or the Indenture or for any claim based on, in respect
of or by reason of such obligations or their creation. Each
Securityholder by accepting a Security waives and releases all such
liability. The waiver and release are part of the consideration for
the issue of the Securities.
19. AUTHENTICATION.
This Security shall not be valid until authenticated by a manual
signature of the Registrar.
A-5
<PAGE>
20. ABBREVIATIONS.
Customary abbreviations may be used in the name of a Securityholder or
an assignee, such as: TEN COM (=tenants in common), TEN ENT (=tenants
by the entirety), JT TEN (=joint tenants with right of survivorship
and not as tenants in common), CUST (=custodian), U/G/M/A (=Uniform
Gifts to Minors Act) and U/T/M/A (=Uniform Transfers to Minors Act).
A-6
<PAGE>
EXHIBIT B
A Form of Bearer Security
No. [$]
APPLIED POWER INC.
[Title of Security]
APPLIED POWER INC.
promises to pay to
bearer
the principal sum of Dollars on ,
Interest Payment Dates:
Record Dates:
Dated:
THE FIRST NATIONAL BANK OF CHICAGO
Transfer Agent and Paying Agent
APPLIED POWER INC.
By:_____________________________
[Title of Authorized Officer]
By:_____________________________
[Assistant] Secretary
(SEAL)
Authenticated:
THE FIRST NATIONAL BANK OF CHICAGO
Registrar
By:________________________________
Authorized Signature
B-1
<PAGE>
APPLIED POWER INC.
[Title of Security]
[Explanatory Notes follow Exhibit B]
1. INTEREST./1/
APPLIED POWER INC. ("Company"), a corporation organized and existing
under the laws of the State of Wisconsin, promises to pay to bearer
interest on the principal amount of this Security at the rate per
annum shown above. The Company will pay interest on and
of each year commencing , . Interest on the Securities
will accrue from the most recent date to which interest has been paid
or, if no interest has been paid, from , . Interest
will be computed on the basis of a 360-day year of twelve 30-day
months.
2. METHOD OF PAYMENT./2/
Holders must surrender Securities and any coupons to a Paying Agent to
collect principal and interest payments. The Company will pay
principal and interest in money of the United States that at the time
of payment is legal tender for payment of public and private debts.
The Company may pay principal and interest by check payable in such
money.
3. SECURITIES AGENTS./2A/
Initially, The First National Bank of Chicago, Attention: Corporate
Trust Division, will act as Transfer Agent, Paying Agent and
Registrar. The Company may change any Paying Agent or Transfer Agent
without notice or provide for more than one such agent. The Company
or any Affiliate may act in any such capacity. Subject to certain
conditions, the Company may change the Trustee.
4. INDENTURE.
The Company issued the securities of this series ("Securities") under
an Indenture dated as of , 1998 ("Indenture") between the
Company and The First National Bank of Chicago ("Trustee"). The terms
of the Securities include those stated in the Indenture and the
Securities Resolution and those made part of the Indenture by the
Trust Indenture Act of 1939 (15 U.S. Code (S)(S) 77aaa-77bbbb).
Securityholders are referred to the Indenture, the Securities
Resolution and the Act for a statement of such terms.
5. OPTIONAL REDEMPTION./3/
On or after , the Company may redeem all the Securities
at any time or some of them from time to time at the following
redemption prices (expressed in percentages of principal amount), plus
accrued interest to the redemption date.
If redeemed during the 12-month period beginning,
Year Percentage Year Percentage
B-2
<PAGE>
and thereafter 100%.
6. MANDATORY REDEMPTION./4/
The Company will redeem $ principal amount of Securities on
and on each thereafter through at a
redemption price of 100% of principal amount, plus accrued interest to
the redemption date./5/ The Company may reduce the principal amount
of Securities to be redeemed pursuant to this paragraph by subtracting
100% of the principal amount (excluding premium) of any Securities (i)
that the Company has acquired or that the Company has redeemed other
than pursuant to this paragraph and (ii) that the Company has
delivered to the Registrar for cancellation. The Company may so
subtract the same Security only once.
7. ADDITIONAL OPTIONAL REDEMPTION./6/
In addition to redemptions pursuant to the above paragraph(s), the
Company may redeem not more than $ principal amount of
Securities on and on each thereafter through
at a redemption price of 100% of principal amount, plus accrued
interest to the redemption date.
8. NOTICE OF REDEMPTION./7/
Notice of redemption will be published once in an Authorized Newspaper
in the City of New York and if the Securities are listed on any stock
exchange located outside the United States and such stock exchange so
requires, in any other required city outside the United States at
least 30 but not more than 60 days before the redemption date. Notice
of redemption also will be mailed to holders who have filed their
names and addresses with the Transfer Agent within the two preceding
years. A holder of Securities may miss important notices if he fails
to maintain his name and address with the Transfer Agent.
A notice of redemption may provide that it is subject to the
occurrence of any event before the date fixed for such redemption as
described in such notice ("Conditional Redemption") and such notice of
Conditional Redemption shall be of no effect unless all such
conditions to the redemption have occurred before such date or have
been waived by the Company.
9. CONVERSION./8/
A Holder of a Security may convert it into Common Stock of the Company
or cash, or a combination thereof, at the Company's option, at any
time before the close of business on ___________, or, if the Security
is called for redemption, the Holder may convert it at any time before
the close of business on the redemption date. The initial Conversion
Rate is ____________ (or an equivalent amount in cash) per $1,000
principal amount of the Securities, subject to adjustment as provided
in Article 9 of the Indenture./9/ The Company will deliver a check in
lieu of any fractional share. On conversion no payment or adjustment
for interest accrued on the Securities will be made nor for dividends
on the Common Stock issued on conversion. If any Security is
converted between the record date for the payment of interest and the
next succeeding interest payment date, such Security must be
accompanied by
B-3
<PAGE>
funds equal to the interest payable on such succeeding interest
payment date on the principal amount so converted (unless such
Security shall have been called for redemption, in which case no such
payment shall be required). A Security converted on an interest
payment date need not be accompanied by any payment, and the interest
on the principal amount of the Security being converted will be paid
on such interest payment date to the registered holder of such
Security on the immediately preceding record date.
To convert a Security a Holder must (1) complete and sign the
conversion notice on the back of the Security, (2) surrender the
Security to a Conversion Agent, (3) furnish appropriate endorsements
and transfer documents if required by the Registrar or Conversion
Agent and (4) pay any transfer or similar tax if required. A Holder
may convert a portion of a Security if the portion is $1,000 or an
integral multiple of $1,000.
10. DENOMINATIONS, TRANSFER, EXCHANGE.
The Securities are in bearer form with coupons in denominations of
$5,000/10/ and whole multiples of $5,000. The Securities may be
transferred by delivery and exchanged as provided in the Indenture.
Upon an exchange, the Transfer Agent may require a holder, among other
things, to furnish appropriate documents and to pay any taxes and fees
required by law or the Indenture. The Transfer Agent need not
exchange any Security or portion of a Security selected for
redemption. Also, it need not exchange any Securities for a period of
15 days before a selection of Securities to be redeemed.
11. PERSONS DEEMED OWNERS.
The holder of a Security or coupon may be treated as its owner for all
purposes.
12. AMENDMENTS AND WAIVERS.
Subject to certain exceptions, the Indenture or the Securities may be
amended with the consent of the holders of a majority in principal
amount of the securities of all series affected by the amendment./11/
Subject to certain exceptions, a default on a series may be waived
with the consent of the holders of a majority in principal amount of
the series.
Without the consent of any Securityholder, the Indenture or the
Securities may be amended, among other things, to cure any ambiguity,
omission, defect or inconsistency; to provide for assumption of
Company obligations to Securityholders; or to make any change that
does not materially adversely affect the rights of any Securityholder.
13. RESTRICTIVE COVENANTS./12/
The Securities are unsecured general obligations of the Company
limited to $ principal amount. The Indenture does not limit
other unsecured debt.
B-4
<PAGE>
14. SUCCESSORS.
When a successor assumes all the obligations of the Company under the
Securities, any coupons and the Indenture, the Company will be
released from those obligations.
15. DEFEASANCE PRIOR TO REDEMPTION OR MATURITY./13/
Subject to certain conditions, the Company at any time may terminate
some or all of its obligations under the Securities, any coupons and
the Indenture if the Company deposits with the Trustee money or U.S.
Government Obligations for the payment of principal and interest on
the Securities to redemption or maturity. U.S. Government Obligations
are securities backed by the full faith and credit of the United
States of America or certificates representing an ownership interest
in such Obligations.
16. DEFAULTS AND REMEDIES.
An Event of Default/14/ includes: default for 30 days in payment of
interest on the Securities; default in payment of principal on the
Securities; default in payment or satisfaction of any sinking fund
obligation; default by the Company for a specified period after notice
to it in the performance of any of its other agreements applicable to
the Securities; certain events of bankruptcy or insolvency; and any
other Event of Default provided for in the series. If an Event of
Default occurs and is continuing, the Trustee or the holders of at
least 25% in principal amount of the Securities may declare the
principal/15/ of all the Securities to be due and payable immediately.
Securityholders may not enforce the Indenture or the Securities except
as provided in the Indenture. The Trustee may require indemnity
satisfactory to it before it enforces the Indenture or the Securities.
Subject to certain limitations, holders of a majority in principal
amount of the Securities may direct the Trustee in its exercise of any
trust or power. The Trustee may withhold from Securityholders notice
of any continuing default (except a default in payment of principal or
interest) if it determines that withholding notice is in their
interests. The Company must furnish annual compliance certificates
to the Trustee.
17. TRUSTEE DEALINGS WITH COMPANY.
The First National Bank of Chicago, the Trustee under the Indenture,
in its individual or any other capacity, may make loans to, accept
deposits from, and perform services for the Company or its Affiliates,
and may otherwise deal with the Company or its Affiliates, as if it
were not Trustee.
18. NO RECOURSE AGAINST OTHERS.
A director, officer, employee or stockholder, as such, of the Company
shall not have any liability for any obligations of the Company under
the Securities or the Indenture or for any claim based on, in respect
of or by reason of such obligations or their creation. Each
Securityholder by accepting a Security waives and releases all such
liability. The waiver and release are part of the consideration for
the issue of the Securities.
B-5
<PAGE>
19. AUTHENTICATION.
This Security shall not be valid until authenticated by a manual
signature of the Registrar.
20. ABBREVIATIONS.
Customary abbreviations may be used in the name of a Securityholder or
an assignee, such as: TEN COM (=tenants in common), TEN ENT (=tenants
by the entirety), JT TEN (=joint tenants with right of survivorship
and not as tenants in common), CUST (=custodian), U/G/M/A (=Uniform
Gifts to Minors Act) and U/T/M/A (=Uniform Transfers to Minors Act).
B-6
<PAGE>
...............
[$]............
Due............
APPLIED POWER INC.
[Title of Security]
Unless the Security attached to this coupon has been called for
redemption, Applied Power Inc. ("Company") will pay to bearer, upon surrender,
the amount shown hereon when due. This coupon may be surrendered for payment to
any Paying Agent listed on the back of this coupon unless the Company has
replaced such Agent. Payment may be made by check. This coupon represents
months' interest.
APPLIED POWER INC.
By________________________________
[REVERSE OF COUPON]
PAYING AGENTS
B-7
<PAGE>
NOTES TO EXHIBITS A AND B
1 If the Security is not to bear interest at a fixed rate per annum, insert a
description of the manner in which the rate of interest is to be
determined. If the Security is not to bear interest prior to maturity, so
state.
2 If the method or currency of payment is different, insert a statement
thereof.
2A As is done in Section 2.03 of the Indenture, the Trustee must be appointed
Registrar under Section 182.23, Wis. Stats., in order for Officers'
signatures on Securities and the corporate seal to be facsimiles.
3 If applicable. If the Security is to be subject to a nonrefunding
restriction, insert a brief summary thereof. If the redemption is to be
subject to a condition, insert a brief summary thereof.
4 Such provisions as are applicable, if any.
5 If the Security is a Discounted Debt Security, insert amount to be redeemed
or method of calculating such amount.
6 If applicable. Also insert, if applicable, provisions for repayment of
Securities at the option of the Securityholder.
7 If applicable.
8 If applicable. If convertible into securities other than Common Stock,
insert appropriate summary.
9 If additional or different adjustment provisions apply so specify.
10 If applicable. Insert additional or different denominations and terms as
appropriate.
11 If different terms apply, insert a brief summary thereof.
12 If applicable. If additional or different covenants apply, insert a brief
summary thereof.
13 If applicable. If different defeasance terms apply, insert a brief summary
thereof.
14 If additional or different Events of Default apply, insert a brief summary
thereof.
15 If the Security is a Discounted Debt Security, set forth the amount due and
payable upon an Event of Default.
Note: U.S. tax law may require certain legends on Discounted Debt and Bearer
Securities.
<PAGE>
EXHIBIT C
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
_________________________________________
:_______________________________________:
(Insert assignee's soc. sec. or tax I.D. no.)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint ____________________________ agent to transfer this
Security on the books of the Company. The agent may substitute another to act
for him.
Date: _______________ Your Signature:______________________________
______________________________
(Sign exactly as your name(s) appear(s) on the other side of this Security)
Signature(s) guaranteed by: _________________________________________
(All signatures must be
guaranteed by an "eligible
guarantor institution" as
defined by Rule 17Ad-15 of
the Securities Exchange Act
of 1934, as amended)
C-1
<PAGE>
EXHIBIT D
CONVERSION NOTICE
To convert this Security, check the box:
_____________
_____________
To convert only part of this Security, state the amount
(must be in integral multiples of $1,000);
$_____________________________
If you want the securities delivered upon conversion made
out in another person's name, fill in the form below:
(Insert other person's Social Security or Tax I.D. Number)
______________________________
______________________________
______________________________
______________________________
(Print or type other person's name, address and zip code
Date: ____________ Signature(s): ____________________________
__________________________________
(Sign exactly as your name(s)
appear(s) on the other side of this Security)
Signature(s) guaranteed by: _________________________________________
(All signatures must be
guaranteed by an "eligible
guarantor institution" as
defined by Rule 17Ad-15 of
the Securities Exchange Act
of 1934, as amended)
D-1
<PAGE>
EXHIBIT 4.6
CERTIFICATE OF TRUST
OF
APPLIED POWER CAPITAL TRUST I
This Certificate of Trust of Applied Power Capital Trust I (the
"Trust"), dated December 23, 1998, is being duly executed and filed by the
undersigned, as trustees, to form a business trust under the Delaware Business
Trust Act (12 Del. C. (S)(S) 3801 et seq.).
------- -- ---
1. Name. The name of the business trust being formed hereby is
----
Applied Power Capital Trust I.
2. Delaware Trustee. The name and business address of the trustee of
----------------
the Trust with a principal place of business in the State of Delaware are as
follows:
First Chicago Delaware Inc.
300 King Street
Wilmington, Delaware 19801
3. Effective Date. This Certificate of Trust shall be effective
--------------
immediately upon its filing with the Secretary of State of the State of
Delaware.
<PAGE>
IN WITNESS WHEREOF, the undersigned, being all of the trustees of the
Trust, have executed this Certificate of Trust as of the date first above
written.
The First National Bank of Chicago,
as Trustee
By: _____________________________
Name:
Title:
First Chicago Delaware Inc.,
as Trustee
By: _____________________________
Name:
Title:
----------------------------------
Richard G. Sim, as Trustee
----------------------------------
Robert C. Arzbaecher, as Trustee
2
<PAGE>
EXHIBIT 4.7
TRUST AGREEMENT
OF
APPLIED POWER CAPITAL TRUST I
This Trust Agreement, dated as of December 23, 1998, between Applied
Power Inc., a Wisconsin corporation, as "Depositor," and The First National Bank
of Chicago, a national banking association organized under the laws of the
United States, First Chicago Delaware Inc., a Delaware corporation, Richard G.
Sim and Robert C. Arzbaecher, each solely as trustee and not in its or his
individual capacity, as "Trustees." The Depositor and the Trustees hereby agree
as follows:
Section 1. The Trust. The trust created hereby shall be known as
---------
Applied Power Capital Trust I (the "Trust"), in which name the Trustees, or the
Depositor to the extent provided herein, may conduct the business of the Trust,
make and execute contracts, and sue and be sued.
Section 2. The Trust Estate. The Depositor hereby assigns, transfers,
----------------
conveys and sets over to the Trustees the sum of $10. The Trustees hereby
acknowledge receipt of such amount in trust from the Depositor, which amount
shall constitute the initial trust estate. The Trustees hereby declare that they
will hold the trust estate in trust for the Depositor. It is the intention of
the parties hereto that the Trust created hereby constitute a business trust
under Chapter 38 of Title 12 of the Delaware Code, 12 Del. C. (S)(S) 3801 et
------- --
seq. (the "Business Trust Act"), and that this document constitutes the
- ----
governing instrument of the Trust. The Trustees are hereby authorized and
directed to execute and file a certificate of trust with the Delaware Secretary
of State in accordance with the provisions of the Business Trust Act.
Section 3. Amended and Restated Trust Agreement. The Depositor and
------------------------------------
the Trustees will enter into an amended and restated Trust Agreement,
satisfactory to each such party and substantially in the form included as an
exhibit to the 1933 Act Registration Statement (as defined below), to provide
for the contemplated operation of the Trust created hereby and the issuance of
the Preferred Securities (as defined below) and common securities referred to
therein. Prior to the execution and delivery of such amended and restated Trust
Agreement, the Trustees shall not have any duty or obligation hereunder or with
respect to the trust estate, except as otherwise required by applicable law or
as may be necessary to obtain prior to such execution and delivery of any
licenses, consents or approvals required by applicable law or otherwise.
Section 4. Certain Authorizations. The Depositor and the Trustees
----------------------
hereby authorize the Depositor, as the sponsor of the Trust, (i) to file with
the Securities and Exchange Commission (the "Commission") and execute, in each
case on behalf of the Trust, (a) the Registration Statement on Form S-3 (the
"1933 Act Registration Statement"), including any pre-effective or post-
effective amendments to such 1933 Act Registration Statement (including the
prospectus and the exhibits contained therein), relating to the registration
under the Securities Act of 1933, as amended, of the preferred securities of the
Trust (the "Preferred Securities") and possibly certain other securities and (b)
a Registration Statement on Form 8-A (the "1934 Act Registration Statement")
(including all pre-effective and post-effective amendments thereto) relating to
the registration of the Preferred Securities of the Trust under Section 12(b) of
the Securities Exchange Act of 1934, as amended; (ii) to file with the New York
Stock Exchange or any other national stock exchange or The Nasdaq National
Market (each, an "Exchange") and
<PAGE>
execute on behalf of the Trust one or more listing applications and all other
applications, statements, certificates, agreements and other instruments as
shall be necessary or desirable to cause the Preferred Securities to be listed
on any of the Exchanges; (iii) to file and execute on behalf of the Trust such
applications, reports, surety bonds, irrevocable consents, appointments of
attorney for service of process and other papers and documents as shall be
necessary or desirable to register the Preferred Securities under the securities
or blue sky laws, and to obtain any permits under the insurance laws of such
jurisdictions as the Depositor, on behalf of the Trust, may deem necessary or
desirable; (iv) to execute on behalf of the Trust letters or documents, or
instruments for filing with, a depository relating to the Preferred Securities;
and (v) to execute on behalf of the Trust one or more underwriting agreements
with one or more underwriters relating to the offering of the Preferred
Securities.
In the event that any filing referred to in clauses (i) through (iv)
above is required by the rules and regulations of the Commission, an Exchange or
any state securities or blue sky laws, to be executed on behalf of the Trust by
the Trustees, in their capacities as Trustees of the Trust, the Trustees are
hereby authorized and directed to join in any such filing and to execute on
behalf of the Trust any and all of the foregoing, it being understood that The
First National Bank of Chicago and First Chicago Delaware Inc., in their
capacities as Trustees of the Trust, shall not be required to join in any such
filing or execute on behalf of the Trust any such document unless required by
the rules and regulations of the Commission, an Exchange or any state securities
or blue sky laws. In connection with all of the foregoing, the Depositor and
each Trustee, solely in its capacity as Trustee of the Trust, hereby constitutes
and appoints Richard G. Sim and Robert C. Arzbaecher, and each of them, as his,
her or its, as the case may be, true and lawful attorneys-in-fact and agents,
with full power of substitution and resubstitution, for the Depositor or in the
Depositor's name, place and stead, in any and all capacities, to sign the 1933
Act Registration Statement and any and all amendments (including post-effective
amendments) thereto and the 1934 Act Registration Statement and any and all
amendments (including post-effective amendments) thereto and to file the same,
with all exhibits thereto, and other documents in connection therewith, with the
Commission, granting unto said attorneys-in-fact and agents full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in connection therewith, as fully to all intents and purposes as the
Depositor might or could do in person, hereby ratifying and confirming all that
said attorneys-in-fact and agents or any of them, or their respective substitute
or substitutes, shall do or cause to be done by virtue hereof.
Section 5. Counterparts. This Trust Agreement may be executed in one
------------
or more counterparts.
Section 6. Trustees. The number of Trustees initially shall be four
--------
(4) and thereafter the number of Trustees shall be such number as shall be fixed
from time to time by a written instrument signed by the Depositor which may
increase or decrease the number of Trustees; provided, however, that to the
extent required by the Business Trust Act, one Trustee shall either be a natural
person who is a resident of the State of Delaware or, if not a natural person,
an entity which has its principal place of business in the State of Delaware and
otherwise meets the requirements of applicable Delaware law. Subject to the
foregoing, the Depositor is entitled to appoint or remove without cause any
Trustee at any time. A Trustee may resign upon thirty days' prior notice to the
Depositor.
-2-
<PAGE>
Section 7. Delaware Trustee. First Chicago Delaware Inc., in its
----------------
capacity as Trustee, shall not have any of the powers or duties of the Trustees
set forth herein (except as may be required under the Business Trust Act) and
shall be a Trustee of the Trust for the sole purpose of satisfying the
requirements of Section 3807(a) of the Business Trust Act.
Section 8. Governing Law. This Trust Agreement shall be governed by,
-------------
and construed in accordance with, the laws of the State of Delaware (without
regard to conflict of laws principles).
IN WITNESS WHEREOF, the parties hereto have caused this Trust
Agreement to be duly executed as of the day and year first above written.
APPLIED POWER INC.,
as Depositor
By: _________________________________
Name:
Title:
THE FIRST NATIONAL BANK OF CHICAGO,
as Trustee
By: _________________________________
Name:
Title:
FIRST CHICAGO DELAWARE INC.,
as Trustee
By: _________________________________
Name:
Title:
__________________________________
Richard G. Sim, as Trustee
__________________________________
Robert C. Arzbaecher, as Trustee
-3-
<PAGE>
EXHIBIT 4.8
CERTIFICATE OF TRUST
OF
APPLIED POWER CAPITAL TRUST II
This Certificate of Trust of Applied Power Capital Trust II (the
"Trust"), dated December 23, 1998, is being duly executed and filed by the
undersigned, as trustees, to form a business trust under the Delaware Business
Trust Act (12 Del. C. (S)(S) 3801 et seq.).
------- -- ---
1. Name. The name of the business trust being formed hereby is Applied
----
Power Capital Trust II.
2. Delaware Trustee. The name and business address of the trustee of the
-----------------
Trust with a principal place of business in the State of Delaware are as
follows:
First Chicago Delaware Inc.
300 King Street
Wilmington, Delaware 19801
3. Effective Date. This Certificate of Trust shall be effective
---------------
immediately upon its filing with the Secretary of State of the State of
Delaware.
<PAGE>
IN WITNESS WHEREOF, the undersigned, being all of the trustees of the
Trust, have executed this Certificate of Trust as of the date first above
written.
The First National Bank of Chicago,
as Trustee
By: _____________________________
Name:
Title:
First Chicago Delaware Inc.,
as Trustee
By: _____________________________
Name:
Title:
------------------------------
Richard G. Sim, as Trustee
-------------------------------
Robert C. Arzbaecher, as Trustee
2
<PAGE>
EXHIBIT 4.9
TRUST AGREEMENTMNAT
OF
APPLIED POWER CAPITAL TRUST II
This Trust Agreement, dated as of December 23, 1998, between Applied
Power Inc., a Wisconsin corporation, as "Depositor," and The First National Bank
of Chicago, a national banking association organized under the laws of the
United States, First Chicago Delaware Inc., a Delaware corporation, Richard G.
Sim and Robert C. Arzbaecher, each solely as trustee and not in its or his
individual capacity, as "Trustees." The Depositor and the Trustees hereby agree
as follows:
Section 1. The Trust. The trust created hereby shall be known as
---------
Applied Power Capital Trust II (the "Trust"), in which name the Trustees, or the
Depositor to the extent provided herein, may conduct the business of the Trust,
make and execute contracts, and sue and be sued.
Section 2. The Trust Estate. The Depositor hereby assigns, transfers,
----------------
conveys and sets over to the Trustees the sum of $10. The Trustees hereby
acknowledge receipt of such amount in trust from the Depositor, which amount
shall constitute the initial trust estate. The Trustees hereby declare that they
will hold the trust estate in trust for the Depositor. It is the intention of
the parties hereto that the Trust created hereby constitute a business trust
under Chapter 38 of Title 12 of the Delaware Code, 12 Del. C. (S)(S) 3801 et
--- -
seq. (the "Business Trust Act"), and that this document constitutes the
governing instrument of the Trust. The Trustees are hereby authorized and
directed to execute and file a certificate of trust with the Delaware Secretary
of State in accordance with the provisions of the Business Trust Act.
Section 3. Amended and Restated Trust Agreement. The Depositor and
------------------------------------
the Trustees will enter into an amended and restated Trust Agreement,
satisfactory to each such party and substantially in the form included as an
exhibit to the 1933 Act Registration Statement (as defined below), to provide
for the contemplated operation of the Trust created hereby and the issuance of
the Preferred Securities (as defined below) and common securities referred to
therein. Prior to the execution and delivery of such amended and restated Trust
Agreement, the Trustees shall not have any duty or obligation hereunder or with
respect to the trust estate, except as otherwise required by applicable law or
as may be necessary to obtain prior to such execution and delivery of any
licenses, consents or approvals required by applicable law or otherwise.
Section 4. Certain Authorizations. The Depositor and the Trustees
----------------------
hereby authorize the Depositor, as the sponsor of the Trust, (i) to file with
the Securities and Exchange Commission (the "Commission") and execute, in each
case on behalf of the Trust, (a) the Registration Statement on Form S-3 (the
"1933 Act Registration Statement"), including any pre-effective or post-
effective amendments to such 1933 Act Registration Statement (including the
prospectus and the exhibits contained therein), relating to the registration
under the Securities Act of 1933, as amended, of the preferred securities of the
Trust (the "Preferred Securities") and possibly certain other securities and (b)
a Registration Statement on Form 8-A (the "1934 Act Registration Statement")
(including all pre-effective and post-effective amendments thereto) relating to
the registration of the Preferred Securities of the Trust under Section 12(b) of
the Securities Exchange Act of 1934, as amended; (ii) to file with the New York
Stock Exchange or any other national stock exchange or The Nasdaq National
Market (each, an "Exchange") and execute on behalf of the Trust one or more
listing applications and all other applications,
<PAGE>
statements, certificates, agreements and other instruments as shall be necessary
or desirable to cause the Preferred Securities to be listed on any of the
Exchanges; (iii) to file and execute on behalf of the Trust such applications,
reports, surety bonds, irrevocable consents, appointments of attorney for
service of process and other papers and documents as shall be necessary or
desirable to register the Preferred Securities under the securities or blue sky
laws, and to obtain any permits under the insurance laws of such jurisdictions
as the Depositor, on behalf of the Trust, may deem necessary or desirable; (iv)
to execute on behalf of the Trust letters or documents, or instruments for
filing with, a depository relating to the Preferred Securities; and (v) to
execute on behalf of the Trust one or more underwriting agreements with one or
more underwriters relating to the offering of the Preferred Securities.
In the event that any filing referred to in clauses (i) through (iv)
above is required by the rules and regulations of the Commission, an Exchange or
any state securities or blue sky laws, to be executed on behalf of the Trust by
the Trustees, in their capacities as Trustees of the Trust, the Trustees are
hereby authorized and directed to join in any such filing and to execute on
behalf of the Trust any and all of the foregoing, it being understood that The
First National Bank of Chicago and First Chicago Delaware Inc., in their
capacities as Trustees of the Trust, shall not be required to join in any such
filing or execute on behalf of the Trust any such document unless required by
the rules and regulations of the Commission, an Exchange or any state securities
or blue sky laws. In connection with all of the foregoing, the Depositor and
each Trustee, solely in its capacity as Trustee of the Trust, hereby constitutes
and appoints Richard G. Sim and Robert C. Arzbaecher, and each of them, as his,
her or its, as the case may be, true and lawful attorneys-in-fact and agents,
with full power of substitution and resubstitution, for the Depositor or in the
Depositor's name, place and stead, in any and all capacities, to sign the 1933
Act Registration Statement and any and all amendments (including post-effective
amendments) thereto and the 1934 Act Registration Statement and any and all
amendments (including post-effective amendments) thereto and to file the same,
with all exhibits thereto, and other documents in connection therewith, with the
Commission, granting unto said attorneys-in-fact and agents full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in connection therewith, as fully to all intents and purposes as the
Depositor might or could do in person, hereby ratifying and confirming all that
said attorneys-in-fact and agents or any of them, or their respective substitute
or substitutes, shall do or cause to be done by virtue hereof.
Section 5. Counterparts. This Trust Agreement may be executed in one
------------
or more counterparts.
Section 6. Trustees. The number of Trustees initially shall be four
--------
(4) and thereafter the number of Trustees shall be such number as shall be fixed
from time to time by a written instrument signed by the Depositor which may
increase or decrease the number of Trustees; provided, however, that to the
extent required by the Business Trust Act, one Trustee shall either be a natural
person who is a resident of the State of Delaware or, if not a natural person,
an entity which has its principal place of business in the State of Delaware and
otherwise meets the requirements of applicable Delaware law. Subject to the
foregoing, the Depositor is entitled to appoint or remove without cause any
Trustee at any time. A Trustee may resign upon thirty days' prior notice to the
Depositor.
-2-
<PAGE>
Section 7. Delaware Trustee. First Chicago Delaware Inc., in its
----------------
capacity as Trustee, shall not have any of the powers or duties of the Trustees
set forth herein (except as may be required under the Business Trust Act) and
shall be a Trustee of the Trust for the sole purpose of satisfying the
requirements of Section 3807(a) of the Business Trust Act.
Section 8. Governing Law. This Trust Agreement shall be governed by,
-------------
and construed in accordance with, the laws of the State of Delaware (without
regard to conflict of laws principles).
IN WITNESS WHEREOF, the parties hereto have caused this Trust
Agreement to be duly executed as of the day and year first above written.
APPLIED POWER INC.,
as Depositor
By: _________________________________
Name:
Title:
THE FIRST NATIONAL BANK OF CHICAGO,
as Trustee
By: _________________________________
Name:
Title:
FIRST CHICAGO DELAWARE INC.,
as Trustee
By: _________________________________
Name:
Title:
_____________________________________
Richard G. Sim, as Trustee
_____________________________________
Robert C. Arzbaecher, as Trustee
-3-
<PAGE>
EXHIBIT 4.10
================================================================================
FORM OF AMENDED AND RESTATED
TRUST AGREEMENT
AMONG
APPLIED POWER INC., AS DEPOSITOR,
THE FIRST NATIONAL BANK OF CHICAGO,
AS PROPERTY TRUSTEE,
FIRST CHICAGO DELAWARE INC.,
AS DELAWARE TRUSTEE
AND
THE ADMINISTRATIVE TRUSTEES NAMED HEREIN
DATED AS OF [ ]
APPLIED POWER CAPITAL TRUST _____
================================================================================
<PAGE>
Certain Sections of this Trust Agreement Relating
to Section 310 through 318 of the
Trust Indenture Act of 1939:
<TABLE>
<CAPTION>
Trust Indenture Sections of this
Act Section Trust Agreement
- --------------- ----------------
<S> <C>
Section 310(a)(1)..................................... 8.7(b)
(a)(2)................................................ 8.7(a)
(a)(3)................................................ 8.9
(a)(4)................................................ 8.5, 2.7(a)(ii)
(b)................................................... 8.8
Section 311(a)........................................ 8.13
(b)................................................... 8.13
Section 312(a)........................................ 5.7
(b)................................................... 5.7
(c)................................................... 5.7
Section 313(a)........................................ 8.14(a)
(a)(4)................................................ 8.14(a)
(b)................................................... 8.14(a)
(c)................................................... 8.14(a), 10.8
Section 314(a)........................................ 8.15
(b)................................................... Not Applicable
(c)(1)................................................ 8.16
(c)(2)................................................ 8.16
(c)(3)................................................ Not Applicable
(d)................................................... Not Applicable
(e)................................................... 1.1, 8.16
Section 315(a)........................................ 8.1(a), (c), 8.3(a)
(b)................................................... 8.2, 10.8
(c)................................................... 8.1(a)
(d)................................................... 8.1, 8.3
(e)................................................... Not Applicable
Section 316(a)........................................ Not Applicable
(a)(1)(A)............................................. Not Applicable
(a)(1)(B)............................................. Not Applicable
(a)(2)................................................ Not Applicable
(b)................................................... 5.14
(c)................................................... 6.7
Section 317(a)(1)..................................... Not Applicable
(a)(2)................................................ Not Applicable
(b)................................................... 5.9
Section 318(a)........................................ 10.10
</TABLE>
Note: This reconciliation and tie sheet shall not, for any purpose, be deemed
to be a part of the Trust Agreement.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I DEFINED TERMS................................................................. 1
Section 1.1. Definitions............................................................. 1
ARTICLE II ESTABLISHMENT OF THE TRUST.................................................... 8
Section 2.1. Name.................................................................... 8
Section 2.2. Office of the Delaware Trustee; Principal Place of Business............. 8
Section 2.3. Initial Contribution of Trust Property; Organizational
Expenses................................................................ 8
Section 2.4. Issuance of the Preferred Securities.................................... 9
Section 2.5. Issuance of the Common Securities; Subscription and Purchase
of Debentures........................................................... 9
Section 2.6. Declaration of Trust.................................................... 9
Section 2.7. Authorization to Enter into Certain Transactions........................ 10
Section 2.8. Assets of Trust......................................................... 13
Section 2.9. Title to Trust Property................................................. 13
ARTICLE III PAYMENT ACCOUNT............................................................... 13
Section 3.1. Payment Account......................................................... 13
ARTICLE IV CERTAIN TERMS OF THE TRUST SECURITIES......................................... 14
Section 4.1. Distributions........................................................... 14
Section 4.2. Redemption.............................................................. 15
Section 4.3. Subordination of Common Securities...................................... 16
Section 4.4. Payment Procedures...................................................... 17
Section 4.5. Tax Returns and Reports................................................. 17
Section 4.7. Payments under Indenture................................................ 17
ARTICLE V TRUST SECURITIES CERTIFICATES................................................. 18
Section 5.1. Initial Ownership....................................................... 18
Section 5.2. The Trust Securities Certificates....................................... 18
Section 5.3. Execution and Delivery of Trust Securities Certificates................. 18
Section 5.4. Registration of Transfer and Exchange of Preferred Securities
Certificates............................................................ 18
Section 5.5. Mutilated, Destroyed, Lost or Stolen Trust Securities
Certificates............................................................ 19
Section 5.6. Persons Deemed Securityholders.......................................... 19
Section 5.7. Access to List of Securityholders' Names and Addresses.................. 19
Section 5.8. Maintenance of Office or Agency......................................... 20
Section 5.9. Appointment of Paying Agent............................................. 20
Section 5.10. Ownership of Common Securities by Depositor............................. 21
Section 5.11. Book-Entry Preferred Securities Certificates; Common
Securities Certificate.................................................. 21
Section 5.12. Notices to Clearing Agency.............................................. 21
Section 5.13. Definitive Preferred Securities Certificates............................ 22
Section 5.14. Rights of Securityholders............................................... 22
</TABLE>
-i-
<PAGE>
<TABLE>
<S> <C>
ARTICLE VI ACTS OF SECURITYHOLDERS; MEETINGS; VOTING.......................................... 24
Section 6.1. Limitations on Voting Rights............................................... 24
Section 6.2. Notice of Meetings......................................................... 25
Section 6.3. Meetings of Preferred Securityholders...................................... 25
Section 6.4. Voting Rights.............................................................. 25
Section 6.5. Proxies, etc............................................................... 25
Section 6.6. Securityholder Action by Written Consent................................... 26
Section 6.7. Record Date for Voting and Other Purposes.................................. 26
Section 6.8. Acts of Securityholders.................................................... 26
Section 6.9. Inspection of Records...................................................... 27
ARTICLE VII REPRESENTATIONS AND WARRANTIES.................................................... 27
Section 7.1. Representations and Warranties of the Property Trustee and
the Delaware Trustee....................................................... 27
Section 7.2. Representations and Warranties of Depositor................................ 28
ARTICLE VIII THE TRUSTEES..................................................................... 29
Section 8.1. Certain Duties and Responsibilities........................................ 29
Section 8.2. Certain Notices............................................................ 30
Section 8.3. Certain Rights of Property Trustee......................................... 30
Section 8.4. Not Responsible for Recitals or Issuance of Securities..................... 32
Section 8.5. May Hold Securities........................................................ 32
Section 8.6. Compensation; Indemnity; Fees.............................................. 32
Section 8.7. Corporate Property Trustee Required; Eligibility of Trustees............... 33
Section 8.8. Conflicting Interests...................................................... 33
Section 8.9. Co-Trustees and Separate Trustee........................................... 34
Section 8.10. Resignation and Removal, Appointment of Successor.......................... 35
Section 8.11. Acceptance of Appointment by Successor..................................... 36
Section 8.12. Merger, Conversion, Consolidation or Succession to Business................ 37
Section 8.13. Preferential Collection of Claims Against Depositor or
Trust...................................................................... 37
Section 8.14. Reports by the Property Trustee............................................ 37
Section 8.15. Reports to the Property Trustee............................................ 37
Section 8.16. Evidence of Compliance with Conditions Precedent........................... 38
Section 8.17. Number of Trustees......................................................... 38
Section 8.18. Delegation of Power........................................................ 38
ARTICLE IX TERMINATION, LIQUIDATION AND MERGER................................................ 39
Section 9.1. Dissolution Upon Expiration Date........................................... 39
Section 9.2. Early Dissolution.......................................................... 39
Section 9.3. Termination................................................................ 39
Section 9.4. Liquidation................................................................ 39
Section 9.5. Mergers, Consolidations, Amalgamations or Replacements of the
Trust...................................................................... 40
ARTICLE X MISCELLANEOUS PROVISIONS............................................................ 41
Section 10.1. Limitation of Rights of Securityholders.................................... 41
Section 10.2. Amendment.................................................................. 42
</TABLE>
-ii-
<PAGE>
<TABLE>
<S> <C>
Section 10.3. Separability.................................................................. 43
Section 10.4. Governing Law................................................................. 43
Section 10.5. Payments Due on Non-Business Day.............................................. 43
Section 10.6. Successors.................................................................... 43
Section 10.7. Headings...................................................................... 44
Section 10.8. Reports, Notices and Demands.................................................. 44
Section 10.9. Agreement Not to Petition..................................................... 44
Section 10.10. Trust Indenture Act; Conflict with Trust Indenture Act........................ 44
Section 10.11. Acceptance of Terms of Trust Agreement, Guarantee and Indenture............... 45
SIGNATURES......................................................................................... S-1
EXHIBIT A Certificate of Trust.................................................................... A-1
EXHIBIT B Letter of Representation................................................................ B-1
EXHIBIT C Form of Common Security................................................................. C-1
EXHIBIT D Form of Preferred Security.............................................................. D-1
</TABLE>
-iii-
<PAGE>
AMENDED AND RESTATED TRUST AGREEMENT, dated as of [ ],
among (i) Applied Power Inc., a Wisconsin corporation (including any successors
or assigns, the "Depositor"), (ii) The First National Bank of Chicago, a
---------
national banking association organized under the laws of the United States, as
property trustee (the "Property Trustee" and, in its separate corporate capacity
----------------
and not in its capacity as Property Trustee, the "Bank"), (iii) First Chicago
----
Delaware Inc., a Delaware corporation, as Delaware trustee (the "Delaware
--------
Trustee"), (iv) __________, an individual, and _______________, an individual,
- -------
each of whose address is c/o Applied Power Inc., 13000 West Silver Spring Drive,
Butler, Wisconsin 53007-1093 (each an "Administrative Trustee" and collectively
----------------------
the "Administrative Trustees") (the Property Trustee, the Delaware Trustee and
-----------------------
the Administrative Trustees referred to collectively as the "Trustees") and (v)
--------
the several Holders, as hereinafter defined (this "Trust Agreement").
---------------
W I T N E S S E T H :
--------------------
WHEREAS, the Depositor and the Trustees have heretofore duly declared
and established a business trust pursuant to the Delaware Business Trust Act by
entering into that certain Trust Agreement, dated as of December [ ], 1998 (the
"Original Trust Agreement"), and by the execution and filing with the Secretary
------------------------
of State of the State of Delaware of the Certificate of Trust, filed on December
[ ], 1998, attached as Exhibit A; and
WHEREAS, the Depositor and the Trustees desire to amend and restate
the Original Trust Agreement in its entirety as set forth herein to provide for,
among other things, (i) the issuance of the Common Securities by the Trust to
the Depositor, (ii) the issuance and sale of the Preferred Securities by the
Trust pursuant to the Underwriting Agreement and (iii) the acquisition by the
Trust from the Depositor of all of the right, title and interest in the
Debentures;
NOW THEREFORE, in consideration of the agreements and obligations set
forth herein and for other good and valuable consideration, the sufficiency of
which is hereby acknowledged, each party, for the benefit of the other parties
and for the benefit of the Securityholders, hereby amends and restates the
Original Trust Agreement in its entirety and agrees as follows:
ARTICLE I
DEFINED TERMS
Section 1.1. Definitions.
-----------
For all purposes of this Trust Agreement, except as otherwise
expressly provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(b) all other terms used herein that are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
<PAGE>
-2-
(c) unless the context otherwise requires, any reference to an
"Article" or a "Section" refers to an Article or a Section, as the case may
be, of this Trust Agreement; and
(d) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Trust Agreement as a whole and not to any
particular Article, Section or other subdivision.
"Act" has the meaning specified in Section 6.8.
---
"Administrative Trustee" means each of ___________ and ______________,
----------------------
solely in such Person's capacity as Administrative Trustee of the Trust created
and continued hereunder and not in such Person's individual capacity, or such
Administrative Trustee's successor in interest in such capacity, or any
successor trustee appointed as herein provided.
"Affiliate" of any specified Person means any other Person directly or
---------
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Bank" has the meaning specified in the preamble to this Trust
----
Agreement.
"Bankruptcy Event" means, with respect to any Person:
----------------
(a) the entry of a decree or order by a court having jurisdiction in
the premises judging such Person a bankrupt or insolvent, or approving as
properly filed a petition seeking reorganization, arrangement, adjudication
or composition of or in respect of such Person under any applicable Federal
or State bankruptcy, insolvency, reorganization or other similar law, or
appointing a receiver, liquidator, assignee, trustee, sequestrator (or
other similar official) of such Person or of any substantial part of its
property or ordering the winding up or liquidation of its affairs, and the
continuance of any such decree or order unstayed and in effect for a period
of 60 consecutive days; or
(b) the institution by such Person of proceedings to be adjudicated a
bankrupt or insolvent, or the consent by it to the institution of
bankruptcy or insolvency proceedings against it, or the filing by it of a
petition or answer or consent seeking reorganization or relief under any
applicable Federal or State bankruptcy, insolvency, reorganization or other
similar law, or the consent by it to the filing of any such petition or to
the appointment of a receiver, liquidator, assignee, trustee, sequestrator
(or similar official) of such Person or of any substantial part of its
property, or the making by it of an assignment for the benefit of
creditors, or the admission by it in writing of its inability to pay its
debts generally as they become due and its willingness to be adjudicated a
bankrupt, or the taking of corporate action by such Person in furtherance
of any such action.
"Bankruptcy Laws" has the meaning specified in Section 10.9.
---------------
"Book-Entry Preferred Securities Certificates" means a beneficial
--------------------------------------------
interest in the Preferred Securities Certificates, ownership and transfers of
which shall be made through book entries by a Clearing Agency as described in
Section 5.11.
<PAGE>
-3-
"Business Day" means a day other than (a) a Saturday or Sunday, (b) a
------------
day on which banking institutions in The City of New York are authorized or
required by law to remain closed, or (c) a day on which the Property Trustee's
Corporate Trust Office or the corporate trust office of the Indenture Trustee is
closed for business.
"Certificate Depository Agreement" means the agreement among the
--------------------------------
Trust, the Depositor and The Depository Trust Company, as the initial Clearing
Agency, dated as of the Closing Date, relating to the Trust Securities
Certificates, substantially in the form attached as Exhibit B, as the same may
be amended and supplemented from time to time.
"Clearing Agency" means an organization registered as a "clearing
---------------
agency" pursuant to Section 17A of the Securities Exchange Act of 1934, as
amended. The Depository Trust Company will be the initial Clearing Agency.
"Clearing Agency Participant" means a broker, dealer, bank, other
---------------------------
financial institution or other Person for whom from time to time a Clearing
Agency effects book-entry transfers and pledges of securities deposited with the
Clearing Agency.
"Closing Date" has the meaning specified in the Underwriting
------------
Agreement.
"Code" means the Internal Revenue Code of 1986, as amended.
----
"Commission" means the Securities and Exchange Commission, as from
----------
time to time constituted, created under the Securities Exchange Act of 1934, as
amended, or, if at any time after the execution of this instrument such
Commission is not existing and performing the duties now assigned to it under
the Trust Indenture Act, then the body performing such duties at such time.
"Common Securities Certificate" means a certificate evidencing
-----------------------------
ownership of Common Securities, substantially in the form attached as Exhibit C.
"Common Security" means an undivided beneficial ownership interest in
---------------
the assets of the Trust, having a Liquidation Amount of $[ ] and having the
rights provided therefor in this Trust Agreement, including the right to receive
Distributions and a Liquidation Distribution as provided herein.
"Corporate Trust Office" means the principal office of the Property
----------------------
Trustee.
"Debenture Redemption Date" means, with respect to any Debentures to
-------------------------
be redeemed under the Indenture, the date fixed for redemption under the
Indenture.
"Debentures" means the aggregate principal amount of the Depositor's
----------
_____% Junior Subordinated Deferrable Interest Debentures, Series _____, issued
pursuant to a Securities Resolution under the Indenture.
"Definitive Preferred Securities Certificates" means either or both
--------------------------------------------
(as the context requires) of (a) Preferred Securities Certificates issued as
Book-Entry Preferred Securities Certificate as provided in Section 5.11(a) and
(b) Preferred Securities Certificates issued in certificated, fully registered
form as provided in Section 5.13.
<PAGE>
-4-
"Delaware Business Trust Act" means Chapter 38 of Title 12 of the
---------------------------
Delaware Code, 12 Del. C. Section 3801, et seq., as it may be amended from time
-- ---
to time.
"Delaware Trustee" means the corporation identified as the "Delaware
---------------- --------
Trustee" in the preamble to this Trust Agreement solely in its capacity as
- -------
Delaware Trustee of the Trust created and continued hereunder and not in its
individual capacity, or its successor in interest in such capacity, or any
successor trustee appointed as herein provided.
"Depositor" has the meaning specified in the preamble to this Trust
---------
Agreement.
"Distribution Date" has the meaning specified in Section 4.1(a).
-----------------
"Distributions" means amounts payable in respect of the Trust
-------------
Securities as provided in Section 4.1.
"Event of Default" means any one of the following events (whatever the
----------------
reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(a) the occurrence of an Event of Default with respect to a Debenture;
or
(b) default by the Property Trustee in the payment of any Distribution
when it becomes due and payable, and continuation of such default for a
period of 30 days; or
(c) default by the Property Trustee in the payment of any Redemption
Price of any Trust Security when it becomes due and payable; or
(d) default in the performance, or breach, in any material respect, of
any covenant or warranty of the Trustees in this Trust Agreement (other
than a covenant or warranty a default in the performance or breach of which
is dealt with in clause (b) or (c) above) and continuation of such default
or breach for a period of 60 days after there has been given, by registered
or certified mail, to the defaulting Trustee or Trustees by the Holders of
at least 25% in aggregate liquidation preference of the Outstanding
Preferred Securities a written notice specifying such default or breach and
requiring it to be remedied and stating that such notice is a "Notice of
Default" hereunder; or
(e) the occurrence of a Bankruptcy Event with respect to the Property
Trustee and the failure by the Depositor to appoint a successor Property
Trustee within 60 days thereof.
"Expiration Date" has the meaning specified in Section 9.1.
---------------
"Guarantee" means the Guarantee Agreement executed and delivered by
---------
the Depositor and The First National Bank of Chicago, as guarantee trustee,
contemporaneously with the execution and delivery of this Trust Agreement, for
the benefit of the Holders of the Trust Securities, as amended from time to
time.
"Indenture" means the Indenture, dated as of December [ ], 1998,
---------
between the Depositor and the Indenture Trustee, together with the Securities
Resolution dated [ ] relating to the Debentures, each as amended
or supplemented from time to time.
<PAGE>
-5-
"Indenture Trustee" means The First National Bank of Chicago, a
-----------------
national banking association organized under the laws of the United States, as
trustee under the Indenture and any successor thereto.
"Lien" means any lien, pledge, charge, encumbrance, mortgage, deed of
----
trust, adverse ownership interest, hypothecation, assignment, security interest
or preference, priority or other security agreement or preferential arrangement
of any kind or nature whatsoever.
"Like Amount" means (a) with respect to a redemption of Trust
-----------
Securities, Trust Securities having a Liquidation Amount equal to the principal
amount of Debentures to be contemporaneously redeemed in accordance with the
Indenture, allocated to the Common Securities and the Preferred Securities based
upon the relative Liquidation Amounts of such classes and the proceeds of which
will be used to pay the Redemption Price of such Trust Securities, and (b) with
respect to a distribution of Debentures to Holders of Trust Securities in
connection with a dissolution or liquidation of the Trust, Debentures having a
principal amount equal to the Liquidation Amount of the Trust Securities of the
Holder to whom such Debentures are distributed.
"Liquidation Amount" means the stated amount (expressed in U.S.
------------------
Dollars) per Trust Security.
"Liquidation Date" means the date on which Debentures are to be
----------------
distributed to Holders of Trust Securities in connection with a termination and
liquidation of the Trust pursuant to Section 9.4(a).
"Liquidation Distribution" has the meaning specified in Section
------------------------
9.4(d).
"Ministerial Action" means the taking of an action, such as filing a
------------------
form or making an election, or pursuing some other similar reasonable measure
that will have no adverse effect on the Trust, the Depositor or the Holders of
the Trust Securities and will involve no material cost.
"1940 Act" means the Investment Company Act of 1940, as amended.
--------
"Officer" means the Chairman, any Vice-Chairman, the President, any
-------
Executive or Senior Vice President, any Vice President, the Treasurer or any
Assistant Treasurer, the Secretary or any Assistant Secretary of the Depositor.
"Officers' Certificate" means a certificate signed by two Officers of
---------------------
the Depositor and delivered to the appropriate Trustee. One of the officers
signing an Officers' Certificate given pursuant to Section 8.16 shall be the
principal executive, financial or accounting officer of the Depositor. Any
Officers' Certificate delivered with respect to compliance with a condition or
covenant provided for in this Trust Agreement shall include:
(a) a statement that each officer signing the Officers' Certificate
has read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers'
Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
<PAGE>
-6-
(d) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
"Opinion of Counsel" means a written opinion of counsel, who may be
------------------
counsel for the Trust, the Property Trustee or the Depositor, and who shall be
reasonably acceptable to the Property Trustee.
"Original Trust Agreement" has the meaning specified in the recitals
------------------------
to this Trust Agreement.
"Outstanding", when used with respect to Preferred Securities, means,
-----------
as of the date of determination, all Preferred Securities theretofore executed
and delivered under this Trust Agreement, except:
(a) Preferred Securities theretofore cancelled by the Property Trustee
or delivered to the Property Trustee for cancellation;
(b) Preferred Securities for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Property Trustee
or any Paying Agent for the Holders of such Preferred Securities; provided
that, if such Preferred Securities are to be redeemed, notice of such
redemption has been duly given pursuant to this Trust Agreement; and
(c) Preferred Securities which have been paid or in exchange for or in
lieu of which other Preferred Securities have been executed and delivered
pursuant to Sections 5.4, 5.5, 5.11 and 5.13;
provided, however, that in determining whether the Holders of the requisite
Liquidation Amount of the outstanding Preferred Securities have given any
request, demand, authorization, direction, notice, consent or waiver hereunder,
Preferred Securities owned by the Depositor, any Trustee or any Affiliate of the
Depositor or any Trustee shall be disregarded and deemed not to be Outstanding,
except that (a) in determining whether any Trustee shall be protected in relying
upon any such request, demand, authorization, direction, notice, consent or
waiver, only Preferred Securities that such Trustee knows to be so owned shall
be so disregarded and (b) the foregoing shall not apply at any time when all of
the outstanding Preferred Securities are owned by the Depositor, one or more of
the Trustees and/or any such Affiliate. Preferred Securities so owned which
have been pledged in good faith may be regarded as outstanding if the pledgee
establishes to the satisfaction of the Administrative Trustees the pledgee's
right so to act with respect to such Preferred Securities and that the pledgee
is not the Depositor or any Affiliate of the Depositor.
"Owner" means each Person who is the beneficial owner of a Book-Entry
-----
Preferred Securities Certificate as reflected in the records of the Clearing
Agency or, if a Clearing Agency Participant is not the Owner, then as reflected
in the records of a Person maintaining an account with such Clearing Agency
(directly or indirectly, in accordance with the rules of such Clearing Agency).
"Paying Agent" means any paying agent or co-paying agent appointed
------------
pursuant to Section 5.9 and shall initially be the Bank.
"Payment Account" means a segregated non-interest-bearing corporate
---------------
trust account maintained by the Property Trustee with the Bank in its trust
department for the benefit of the Securityholders in which all amounts paid in
respect of the Debentures will be held and from which the Property Trustee shall
make payments to the Securityholders in accordance with Sections 4.1 and 4.2.
<PAGE>
-7-
"Person" means any individual, corporation, partnership, joint
------
venture, trust, limited liability company or corporation, unincorporated
organization or government or any agency or political subdivision thereof.
"Preferred Securities Certificate" means a certificate evidencing
--------------------------------
ownership of Preferred Securities, substantially in the form attached as Exhibit
D.
"Preferred Security" means an undivided beneficial ownership interest
------------------
in the assets of the Trust, having a Liquidation Amount of $[ ] and having the
rights provided therefor in this Trust Agreement, including the right to receive
Distributions and a Liquidation Distribution as provided herein.
"Property Trustee" means the commercial bank or trust company
----------------
identified as the "Property Trustee" in the preamble to this Trust Agreement
solely in its capacity as Property Trustee of the Trust heretofore created and
continued hereunder and not in its individual capacity, or its successor in
interest in such capacity, or any successor property trustee appointed as herein
provided.
"Redemption Date" means, with respect to any Trust Security to be
---------------
redeemed, the date fixed for such redemption by or pursuant to this Trust
Agreement; provided that each Debenture Redemption Date and the stated maturity
of the Debentures shall be a Redemption Date for a Like Amount of Trust
Securities.
"Redemption Price" means, with respect to any Trust Security, the
----------------
Liquidation Amount of such Trust Security, plus accumulated but unpaid
Distributions to the Redemption Date, plus the related amount of the premium, if
any, paid by the Depositor upon the concurrent redemption of a Like Amount of
Debentures, allocated on a pro rata basis (based on Liquidation Amounts) among
the Trust Securities.
"Relevant Trustee" shall have the meaning specified in Section 8.10.
----------------
"Securities Register" and "Securities Registrar" have the respective
------------------- --------------------
meanings specified in Section 5.4.
"Securities Resolution" means a resolution of the board of directors
---------------------
of the Depositor or any authorized committee of such board or by a committee of
Officers or an Officer pursuant to delegation by such board authorizing a series
or a supplemental indenture authorizing a series executed by an authorized
Officer.
"Securityholder" or "Holder" means a Person in whose name a Trust
-------------- ------
Security or Trust Securities is registered in the Securities Register; any such
Person being a beneficial owner within the meaning of the Delaware Business
Trust Act.
"series" means a series of securities or the securities of the series
------
issued under the Indenture.
"Trust" means the Delaware business trust created and continued hereby
-----
and identified on the cover page to this Trust Agreement.
"Trust Agreement" means this Amended and Restated Trust Agreement, as
---------------
the same may be modified, amended or supplemented in accordance with the
applicable provisions hereof, including all exhibits hereto, including, for all
purposes of this Trust Agreement and any such modification, amendment or
supplement, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this Trust Agreement and any such modification, amendment or
supplement, respectively.
<PAGE>
-8-
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in
-------------------
force at the date as of which this instrument was executed; provided, however,
that in the event the event the Trust Indenture Act of 1939 is amended after
such date, "Trust Indenture Act" means, to the extent required by any such
amendment, the Trust Indenture Act of 1939 as so amended.
"Trust Property" means (a) the Debentures, (b) any cash on deposit in,
--------------
or owing to, the Payment Account and (c) all proceeds and rights in respect of
the foregoing and any other property and assets for the time being held or
deemed to be held by the Property Trustee pursuant to the terms of this Trust
Agreement.
"Trust Securities Certificate" means any one of the Common Securities
----------------------------
Certificates or the Preferred Securities Certificates.
"Trust Security" means any one of the Common Securities or the
--------------
Preferred Securities.
"Trustees" means, collectively, the Property Trustee, the Delaware
--------
Trustee and the Administrative Trustees.
"Underwriting Agreement" means the Underwriting Agreement, dated as of
----------------------
[ ], among the Trust, the Depositor and the underwriters named therein.
ARTICLE II
ESTABLISHMENT OF THE TRUST
Section 2.1. Name.
----
The Trust continued hereby shall be known as "Applied Power Capital
Trust _____," as such name may be modified from time to time by the
Administrative Trustees following written notice to the Holders of Trust
Securities and the other Trustees, in which name the Trustees may conduct the
business of the Trust, make and execute contracts and other instruments on
behalf of the Trust and sue and be sued.
Section 2.2. Office of the Delaware Trustee; Principal Place of
--------------------------------------------------
Business.
- --------
The address of the Delaware Trustee in the State of Delaware is 300
King Street, Wilmington, Delaware 19801, Attention: Corporate Trust
Administration, or such other address in the State of Delaware as the Delaware
Trustee may designate by written notice to the Securityholders and the
Depositor. The principal executive office of the Trust is c/o Applied Power
Inc., 13000 West Silver Spring Drive, Butler, Wisconsin 53007-1093.
Section 2.3. Initial Contribution of Trust Property; Organizational
------------------------------------------------------
Expenses.
- --------
The Property Trustee acknowledges receipt in trust from the Depositor
in connection with the Original Trust Agreement of the sum of $10, which
constituted the initial Trust Property. The Depositor shall pay organizational
expenses of the Trust as they arise or shall, upon request of any Trustee,
promptly reimburse such Trustee for any such expenses paid by such Trustee. The
Depositor shall make no claim upon the Trust Property for the payment of such
expenses.
<PAGE>
-9-
Section 2.4. Issuance of the Preferred Securities.
------------------------------------
On [ ], the Depositor, on behalf of the Trust and pursuant to
the Original Trust Agreement, executed and delivered the Underwriting Agreement.
Contemporaneously with the execution and delivery of this Trust Agreement, an
Administrative Trustee, on behalf of the Trust, shall execute in accordance with
Section 5.2 and deliver to the Underwriters named in the Underwriting Agreement
Preferred Securities Certificates, registered in the name of the nominee of the
initial Clearing Agency, representing _____________________ Preferred Securities
having an aggregate Liquidation Amount of $__________, against receipt of such
aggregate purchase price of such Preferred Securities of $__________, which
amount the Administrative Trustee shall promptly deliver to the Property
Trustee. If there is a Closing Date as a result of the exercise of an over-
allotment option pursuant to the Underwriting Agreement, an Administrative
Trustee, on behalf of the Trust, shall execute in accordance with Section 5.2
and deliver to the Underwriters named in the Underwriting Agreement Preferred
Securities Certificates, registered in the name of the nominee of the initial
Clearing Agency, representing up to ____________ Preferred Securities having an
aggregate Liquidation Amount of up to $__________, against receipt of such
aggregate purchase price of such Preferred Securities of $__________, which
amount such Administrative Trustees shall promptly deliver to the Property
Trustee in accordance with instructions provided by such Underwriters, on the
date specified pursuant to the Underwriting Agreement.
Section 2.5. Issuance of the Common Securities; Subscription and
---------------------------------------------------
Purchase of Debentures.
- ----------------------
Contemporaneously with the execution and delivery of this Trust
Agreement, an Administrative Trustee, on behalf of the Trust, shall execute in
accordance with Section 5.2 and deliver to the Depositor Common Securities
Certificates, registered in the name of the Depositor, representing
______________ Common Securities having an aggregate Liquidation Amount of
$____________ against payment by the Depositor of such amount.
Contemporaneously therewith, an Administrative Trustee, on behalf of the Trust,
shall subscribe to and purchase from the Depositor Debentures, registered in the
name of the Trust and having an aggregate principal amount equal to
$___________, and, in satisfaction of the purchase price for such Debentures,
the Property Trustee, on behalf of the Trust, shall deliver to the Depositor the
sum of $___________. If there is a Closing Date as a result of the exercise of
an over-allotment option pursuant to the Underwriting Agreement, an
Administrative Trustee, on behalf of the Trust, shall execute in accordance with
Section 5.2 and deliver to the Depositor Common Securities Certificates,
registered in the name of the Depositor, representing up to ___________ Common
Securities having an aggregate Liquidation Amount of up to $__________ against
payment by the Depositor of such amount. Contemporaneously therewith, an
Administrative Trustee, on behalf of the Trust, shall subscribe to and purchase
from the Depositor Debentures, registered in the name of the Trust and having an
aggregate principal amount of up to $__________, and, in satisfaction of the
purchase price for such Debentures, the Property Trustee, on behalf of the
Trust, shall deliver to the Depositor the amount received from one of the
Administrative Trustees pursuant to the last sentence of Section 2.4.
Section 2.6. Declaration of Trust.
--------------------
The exclusive purposes and functions of the Trust are (a) to issue and
sell Trust Securities and use the proceeds from such sale to acquire the
Debentures, and (b) to engage in those activities necessary, convenient or
incidental thereto. The Depositor hereby appoints the Trustees as trustees of
the Trust, to have all the rights, powers and duties to the extent set forth
herein, and the Trustees hereby accept such appointment. The Property Trustee
hereby declares that it will hold the Trust Property in trust upon and subject
to the conditions set forth herein for the benefit of the Trust and the
Securityholders. The Administrative Trustees shall have all rights, powers and
duties set forth herein and in accordance with applicable law with respect to
accomplishing
<PAGE>
-10-
the purposes of the Trust. The Delaware Trustee shall not be entitled to
exercise any powers, nor shall the Delaware Trustee have any of the duties and
responsibilities, of the Property Trustee or the Administrative Trustees set
forth herein, except as required by the Delaware Business Trust Act. The
Delaware Trustee shall be one of the Trustees of the Trust for the sole and
limited purpose of fulfilling the requirements of Section 3807(a) of the
Delaware Business Trust Act.
Section 2.7. Authorization to Enter into Certain Transactions.
------------------------------------------------
(a) The Trustees shall conduct the affairs of the Trust in accordance
with the terms of this Trust Agreement. Subject to the limitations set forth in
paragraph (b) of this Section and Article VIII, and in accordance with the
following provisions (i) and (ii), the Administrative Trustees shall have the
authority to enter into all transactions and agreements determined by the
Trustees to be appropriate in exercising the authority granted to the Trustees
under this Trust Agreement, and to perform all acts in furtherance thereof,
including without limitation, the following:
(i) As among the Trustees, each Administrative Trustee shall have
the power and authority to act on behalf of the Trust with respect to the
following matters:
(A) the issuance and sale of the Trust Securities;
(B) to acquire the Debentures with the proceeds of the sale of
the Trust Securities; provided, however, that the Administrative
Trustees shall cause legal title to the Debentures to be held of record
in the name of the Property Trustee for the benefit of the Holders of
the Preferred Securities and the Holders of the Common Securities;
(C) execution of the Trust Securities in accordance with this
Trust Agreement;
(D) the negotiation of the terms, and execution and delivery,
for and on behalf of the Trust, of the Underwriting Agreement providing
for the sale of the Preferred Securities;
(E) to cause the Trust to enter into, and to execute, deliver
and perform on behalf of the Trust, the Certificate Depository
Agreement and such other agreements as may be necessary or desirable in
connection with the purposes and function of the Trust;
(F) assisting in the registration of the Preferred Securities
under the Securities Act of 1933, as amended, and under state
securities or blue sky laws, and the qualification of this Trust
Agreement as a trust indenture under the Trust Indenture Act;
(G) assisting in the listing of the Preferred Securities upon
such securities exchange or exchanges as shall be determined by the
Depositor and the registration of the Preferred Securities under the
Securities Exchange Act of 1934, as amended, and the preparation and
filing of all periodic and other reports and other documents pursuant
to the foregoing;
<PAGE>
-11-
(H) the sending of notices (other than notices of default) and
other information regarding the Trust Securities and the Debentures to
the Securityholders in accordance with this Trust Agreement;
(I) the appointment of a Paying Agent, authenticating agent and
Securities Registrar in accordance with this Trust Agreement;
(J) registering transfer of the Trust Securities in accordance
with this Trust Agreement;
(K) to the extent provided in this Trust Agreement, the winding
up of the affairs of and liquidation of the Trust and the preparation,
execution and filing of the certificate of cancellation with the
Secretary of State of the State of Delaware;
(L) unless otherwise required by the Trust Indenture Act, to
execute on behalf of the Trust (either acting alone or together with
any or all of the Administrative Trustees) any documents that the
Administrative Trustees have the power to execute pursuant to this
Trust Agreement; and
(M) the taking of any action incidental to the foregoing as the
Trustees may from time to time determine is necessary or advisable to
give effect to the terms of this Trust Agreement for the benefit of the
Securityholders (without consideration of the effect of any such action
on any particular Securityholder).
(ii) As among the Trustees, the Property Trustee shall have the
power, duty and authority to act on behalf of the Trust with respect to the
following matters:
(A) the establishment of the Payment Account;
(B) the receipt of the Debentures;
(C) the collection of interest, principal and any other
payments made in respect of the Debentures in the Payment Account;
(D) the distribution of amounts owed to the Securityholders in
respect of the Trust Securities;
(E) the exercise of all of the rights, powers and privileges of
a holder of the Debentures;
(F) the sending of notices of default and other information
regarding the Trust Securities and the Debentures to the
Securityholders in accordance with this Trust Agreement;
(G) the distribution of the Trust Property in accordance with
the terms of this Trust Agreement;
<PAGE>
-12-
(H) to the extent provided in this Trust Agreement, the winding
up of the affairs of and liquidation of the Trust and the preparation,
execution and filing of the certificate of cancellation with the
Secretary of State of the State of Delaware;
(I) after an event of Default the taking of any action
incidental to the foregoing as the Property Trustee may from time to
time determine is necessary or advisable to give effect to the terms of
this Trust Agreement and protect and conserve the Trust Property for
the benefit of the Securityholders (without consideration of the effect
of any such action on any particular Securityholder);
(J) registering transfers of the Trust Securities in accordance
with this Trust Agreement;
(K) to engage in such Ministerial Activities as shall be
necessary, appropriate, convenient or incidental to effect the
repayment of the Preferred Securities and the Common Securities to the
extent the Debentures mature or are redeemed; and
(L) except as otherwise provided in this Section 2.7(a)(ii),
the Property Trustee shall have none of the duties, liabilities, powers
or the authority of the Administrative Trustees set forth in Section
2.7(a)(i).
(b) So long as this Trust Agreement remains in effect, the Trust (or
the Trustees acting on behalf of the Trust) shall not undertake any business,
activities or transaction except as expressly provided herein or contemplated
hereby. In particular, the Trustees shall not cause the Trust to (i) acquire
any investments or engage in any activities not authorized by this Trust
Agreement, (ii) sell, assign, transfer, exchange, mortgage, pledge, set-off or
otherwise dispose of any of the Trust Property or interests therein, including
to Securityholders, except as expressly provided herein, (iii) take any action
that would cause the Trust to fail or cease to qualify as a "grantor trust" for
United States Federal income tax purposes, (iv) incur any indebtedness for
borrowed money or issue any other debt or (v) take or consent to any action that
would result in the placement of a Lien on any of the Trust Property. The
Administrative Trustees shall defend all claims and demands of all Persons at
any time claiming any Lien on any of the Trust Property adverse to the interest
of the Trust or the Securityholders in their capacity as Securityholders.
(c) In connection with the issue and sale of the Preferred Securities,
the Depositor shall have the right and responsibility to assist the Trust with
respect to, or effect on behalf of the Trust, the following (and any actions
taken by the Depositor in furtherance of the following prior to the date of this
Trust Agreement are hereby ratified and confirmed in all respects):
(i) the preparation and filing by the Trust with the Commission
and the execution on behalf of the Trust of a registration statement on the
appropriate form in relation to the Preferred Securities, including any
amendments thereto;
(ii) the determination of the States in which to take appropriate
action to qualify or register for sale all or part of the Preferred
Securities and the determination of any and all such acts, other than
actions which must be taken by or on behalf of the Trust, and the advice to
the Trustees of actions they must take on behalf of the Trust, and the
preparation for execution and filing of any documents to be executed and
filed by the Trust or on behalf of the Trust, as the Depositor deems
necessary or advisable in order to comply with the applicable laws of any
such States;
<PAGE>
-13-
(iii) the preparation for filing by the Trust and execution on
behalf of the Trust of an application to the New York Stock Exchange or any
other national stock exchange or the Nasdaq National Market for listing
upon notice of issuance of any Preferred Securities;
(iv) the preparation for filing by the Trust with the Commission
and the execution on behalf of the Trust of a registration statement on
Form 8-A relating to the registration of the Preferred Securities under
Section 12(b) or 12(g) of the Exchange Act, including any amendments
thereto;
(v) the negotiation of the terms of, and the execution and
delivery of, the Underwriting Agreement providing for the sale of the
Preferred Securities; and
(vi) the taking of any other actions deemed by the Depositor
necessary or desirable to carry out any of the foregoing activities.
(d) Notwithstanding anything herein to the contrary, the
Administrative Trustees are authorized and directed to conduct the affairs of
the Trust and to operate the Trust so that the Trust will not be deemed to be an
"investment company" required to be registered under the 1940 Act, or taxed as a
corporation for United States Federal income tax purposes and so that the
Debentures will be treated as indebtedness of the Depositor for United States
Federal income tax purposes. In this connection, the Depositor and the
Administrative Trustees are authorized to take any action, not inconsistent with
applicable law, the Certificate of Trust or this Trust Agreement, that each of
the Depositor and the Administrative Trustees determines in their discretion to
be necessary or desirable for such purposes, as long as such action does not
adversely affect in any material respect the interests of the holders of the
Preferred Securities.
Section 2.8. Assets of Trust.
---------------
The assets of the Trust shall consist of the Trust Property.
Section 2.9. Title to Trust Property.
-----------------------
Legal title to all Trust Property shall be vested at all times in the
Property Trustee (in its capacity as such) and shall be held and administered by
the Property Trustee for the benefit of the Trust and the Securityholders in
accordance with this Trust Agreement.
ARTICLE III
PAYMENT ACCOUNT
Section 3.1. Payment Account.
---------------
(a) On or prior to the Closing Date, the Property Trustee shall
establish the Payment Account. The Property Trustee and any agent of the
Property Trustee shall have exclusive control and sole right of withdrawal with
respect to the Payment Account for the purpose of making deposits in and
withdrawals from the Payment Account in accordance with this Trust Agreement.
All monies and other property deposited or held from time to time in the Payment
Account shall be held by the Property Trustee in the Payment Account for the
<PAGE>
-14-
exclusive benefit of the Securityholders and for distribution as herein
provided, including (and subject to) any priority of payments provided for
herein.
(b) The Property Trustee shall deposit in the Payment Account,
promptly upon receipt, all payments of principal of or interest on, and any
other payments or proceeds with respect to, the Debentures. Amounts held in the
Payment Account shall not be invested by the Property Trustee pending
distribution thereof.
ARTICLE IV
CERTAIN TERMS OF THE TRUST SECURITIES
Section 4.1. Distributions.
-------------
(a) Distributions on the Trust Securities shall be cumulative, and
will accumulate whether or not there are funds of the Trust available for the
payment of Distributions. Distributions shall accrue from _________ and shall
be payable quarterly in arrears on [ ],[ ], and [ ]
of each year, commencing on [ ] except as provided below. The
Depositor has the right under the Indenture to defer payments of interest by
extending the interest payment period from time to time on the Debentures for a
period not extending, in the aggregate, beyond the maturity date of the
Debentures (each an "Extension Period"). During such Extension Period, no
----------------
interest shall be due and payable on the Debentures. As a consequence of such
deferral, Distributions will also be deferred. Despite such deferral, quarterly
Distributions will continue to accumulate, compounded quarterly during any such
Extension Period (to the extent permitted by applicable law). Payments of
accrued Distributions will be payable to Holders as they appear on the books and
records of the Trust on the first record date after the end of the Extension
Period. Upon the termination of any Extension Period and the payment of all
amounts then due, the Depositor may commence a new Extension Period; provided
that such Extension Period together with all such previous and further
extensions thereof may not exceed beyond the maturity date of the Debentures.
If any date on which a Distribution is otherwise payable on the Trust Securities
is not a Business Day, then the payment of such Distribution shall be made on
the next succeeding day that is a Business Day (and without any interest or
other payment in respect of any such delay) except that, if such Business Day is
in the next succeeding calendar year, payment of such Distribution shall be made
on the immediately preceding Business Day, in each case with the same force and
effect as if made on such date (each date on which distributions are payable in
accordance with this Section 4.1(a), a "Distribution Date").
-----------------
(b) The Trust Securities represent undivided beneficial ownership
interests in the Trust Property, and, as a practical matter, the Distributions
on the Trust Securities shall be payable at a rate of ___% per annum (the
"Coupon Rate") of the Liquidation Amount of the Trust Securities. Distributions
-----------
in arrears for more than one quarter will accumulate and compound at the Coupon
Rate. The term "Distributions" as used in this Trust Agreement includes such
cash distributions and any such accumulated amounts that are payable unless
otherwise stated. A Distribution is payable only to the extent that payments
are made in respect of the Debentures held by the Property Trustee and to the
extent the Property Trustee has funds available therefor. The amount of
Distributions payable for any full period shall be computed on the basis of a
360-day year of twelve 30-day months.
<PAGE>
-15-
(c) Distributions on the Trust Securities shall be made by the
Property Trustee from the Payment Account and shall be payable on each
Distribution Date only to the extent that the Trust has funds then on hand and
available in the Payment Account for the payment of such Distributions.
(d) Distributions on the Trust Securities with respect to a
Distribution Date shall be payable to the Holders thereof as they appear on the
Securities Register for the Trust Securities on the relevant record date, which
shall be one Business Day prior to such Distribution Date; provided, however,
that in the event that the Preferred Securities do not remain in book-entry-only
form, the relevant record date shall be the date 15 days prior to the relevant
Distribution Date.
Section 4.2. Redemption.
----------
(a) On each Debenture Redemption Date and on the stated maturity of
the Debentures, the Trust will be required to redeem a Like Amount of Trust
Securities at the Redemption Price.
(b) Notice of redemption shall be given by the Property Trustee by
first-class mail, postage prepaid, mailed not less than 30 nor more than 60 days
prior to the Redemption Date to each Holder of Trust Securities to be redeemed,
at such Holder's address appearing in the Security Register. All notices of
redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price;
(iii) the CUSIP number;
(iv) if less than all the Outstanding Trust Securities are to be
redeemed, the identification and the total Liquidation Amount of the
particular Trust Securities to be redeemed; and
(v) that on the Redemption Date the Redemption Price will become
due and payable upon each such Trust Security to be redeemed and that
distributions thereon will cease to accrue on and after said date.
(c) The Trust Securities redeemed on each Redemption Date shall be
redeemed at the Redemption Price with the proceeds from the contemporaneous
redemption of Debentures. Redemptions of the Trust Securities shall be made and
the Redemption Price shall be payable on each Redemption Date only to the extent
that the Trust has funds then on hand and available in the Payment Account for
the payment of such Redemption Price.
(d) If the Property Trustee gives a notice of redemption in respect of
any Trust Securities, then, by 12:00 noon, New York City time, on the Redemption
Date, subject to Section 4.2(c), the Property Trustee will, so long as the Trust
Securities are in book-entry-only form, irrevocably deposit with the Clearing
Agency for the Trust Securities funds sufficient to pay the applicable
Redemption Price and will give such Clearing Agency irrevocable instructions and
authority to pay the Redemption Price to the holders thereof. If the Trust
Securities are no longer in book-entry-only form, the Property Trustee, subject
to Section 4.2(c), will irrevocably deposit with the Paying Agent funds
sufficient to pay the applicable Redemption Price and will give the Paying Agent
irrevocable instructions and authority to pay the Redemption Price to the
Holders thereof upon surrender of their Trust Securities Certificates.
Notwithstanding the foregoing, Distributions payable on or prior
<PAGE>
-16-
to the Redemption Date for any Trust Securities called for redemption shall be
payable to the Holders of such Trust Securities as they appear on the Register
for the Trust Securities on the relevant record dates for the related
Distribution Dates. If notice of redemption shall have been given and funds
deposited as required, then immediately prior to the close of business on the
date of such deposit, all rights of Securityholders holding Trust Securities so
called for redemption will cease, except the right of such Securityholders to
receive the Redemption Price and any Distribution payable on or prior to the
Redemption Date, but without interest, and such Securities will cease to be
outstanding. In the event that any date on which any Redemption Price is payable
is not a Business Day, then payment of the Redemption Price payable on such date
will be made on the next succeeding day that is a Business Day (and without any
interest or other payment in respect of any such delay), except that, if such
Business Day falls in the next calendar year, such payment will be made on the
immediately preceding Business Day, in each case, with the same force and effect
as if made on such date. In the event that payment of the Redemption Price in
respect of any Trust Securities called for redemption is improperly withheld or
refused and not paid either by the Trust or by the Depositor pursuant to the
Guarantee, Distributions on such Trust Securities will continue to accrue, at
the then applicable rate, from the Redemption Date originally established by the
Trust for such Trust Securities to the date such Redemption Price is actually
paid, in which case the actual payment date will be the date fixed for
redemption for purposes of calculating the Redemption Price.
(e) Payment of the Redemption Price on the Trust Securities shall be
made to the recordholders thereof as they appear on the Securities Register for
the Trust Securities on the relevant record date, which shall be one Business
Day prior to the relevant Redemption Date; provided, however, that in the event
that the Preferred Securities do not remain in book-entry-only form, the
relevant record date shall be the date 15 days prior to the relevant Redemption
Date.
(f) Subject to Section 4.3(a), if less than all the Outstanding Trust
Securities are to be redeemed on a Redemption Date, then the aggregate
Liquidation Amount of Trust Securities to be redeemed shall be allocated on a
pro rata basis (based on Liquidation Amounts) among the Common Securities and
the Preferred Securities. The particular Preferred Securities to be redeemed
shall be selected on a pro rata basis (based upon Liquidation Amounts) not more
than 60 days prior to the Redemption Date by the Property Trustee from the
Outstanding Preferred Securities not previously called for redemption which may
provide for the selection for redemption of portions (equal to $[ ] or an
integral multiple of $[ ] in excess thereof) of the Liquidation Amount of
Preferred Securities of a denomination larger than $[___]. The Property Trustee
shall promptly notify the Security Registrar in writing of the Preferred
Securities selected for redemption and, in the case of any Preferred Securities
selected for partial redemption, the Liquidation Amount thereof to be redeemed.
For all purposes of this Trust Agreement, unless the context otherwise requires,
all provisions relating to the redemption of Preferred Securities shall relate,
in the case of any Preferred Securities redeemed or to be redeemed only in part,
to the portion of the Liquidation Amount of Preferred Securities that has been
or is to be redeemed.
Section 4.3. Subordination of Common Securities.
----------------------------------
(a) Payment of Distributions on, and the Redemption Price of, the
Trust Securities, as applicable, shall be made, subject to Section 4.2(f), pro
rata among the Common Securities and the Preferred Securities based on the
Liquidation Amount of the Trust Securities; provided, however, that if on any
Distribution Date or Redemption Date any Event of Default resulting from a
Debenture Event of Default shall have occurred and be continuing, no payment of
any Distribution on, or Redemption Price of, any Common Security, and no other
payment on account of the redemption, liquidation or other acquisition of Common
Securities, shall be made unless payment in full in cash of all accumulated and
unpaid Distributions on all Outstanding Preferred Securities for all
Distribution periods terminating on or prior thereto, or in the case of payment
of the Redemption Price the full amount of such Redemption Price on all
Outstanding Preferred Securities, shall have been
<PAGE>
-17-
made or provided for, and all funds immediately available to the Property
Trustee shall first be applied to the payment in full in cash of all
Distributions on, or the Redemption Price of, Preferred Securities then due and
payable.
(b) In the case of the occurrence of any Event of Default resulting
from any Debenture Event of Default, the Holder of Common Securities will be
deemed to have waived any right to act with respect to any such Event of Default
under this Trust Agreement until the effect of all such Events of Default with
respect to the Preferred Securities have been cured, waived or otherwise
eliminated. Until any such Event of Default under this Trust Agreement with
respect to the Preferred Securities has been so cured, waived or otherwise
eliminated, the Property Trustee shall act solely on behalf of the Holders of
the Preferred Securities and not the Holder of the Common Securities, and only
the Holders of the Preferred Securities will have the right to direct the
Property Trustee to act on their behalf.
Section 4.4. Payment Procedures.
------------------
Payments of Distributions in respect of the Preferred Securities shall
be made by check mailed to the address of the Person entitled thereto as such
address shall appear on the Securities Register or, if the Preferred Securities
are held by a Clearing Agency, such Distributions shall be made to the Clearing
Agency in immediately available funds, which shall credit the relevant Persons'
accounts at such Clearing Agency on the applicable distribution dates. Payments
in respect of the Common Securities shall be made in such manner as shall be
mutually agreed between the Property Trustee and the Common Securityholder.
Section 4.5. Tax Returns and Reports.
-----------------------
The Administrative Trustees shall prepare (or cause to be prepared),
at the Depositor's expense, and file all United States Federal, state and local
tax and information returns and reports required to be filed by or in respect of
the Trust. In this regard, the Administrative Trustees shall (a) prepare and
file (or cause to be prepared and filed) the appropriate Internal Revenue
Service form required to be filed in respect of the Trust in each taxable year
of the Trust and (b) prepare and furnish (or cause to be prepared and furnished)
to each Securityholder the appropriate Internal Revenue Service form required to
be provided or the information required to be provided on such form. The
Administrative Trustees shall provide the Depositor and the Property Trustee
with a copy of all such returns and reports promptly after such filing or
furnishing. The Trustees shall comply with United States Federal withholding
and backup withholding tax laws and information reporting requirements with
respect to any payments to Securityholders under the Trust Securities.
Section 4.6. Payments under Indenture.
------------------------
Any amount payable hereunder to any Holder of Preferred Securities
(and any Owner with respect thereto) shall be reduced by the amount of any
corresponding payment such Holder (and Owner) has directly received pursuant to
Section 6.06 of the Indenture.
<PAGE>
-18-
ARTICLE V
TRUST SECURITIES CERTIFICATES
Section 5.1. Initial Ownership.
-----------------
Upon the creation of the Trust and the contribution by the Depositor
pursuant to Section 2.3 and until the issuance of the Trust Securities, and at
any time during which no Trust Securities are outstanding, the Depositor shall
be the sole beneficial owner of the Trust.
Section 5.2. The Trust Securities Certificates.
---------------------------------
The Preferred Securities Certificates shall be issued in minimum
denominations of $[ ] Liquidation Amount and integral multiples of $[
] in excess thereof, and the Common Securities Certificates shall be issued in
denominations of $[ ] Liquidation Amount and integral multiples of $[ ] in
excess thereof. The Trust Securities Certificates shall be executed on behalf
of the Trust by manual signature of at least one Administrative Trustee. Trust
Securities Certificates bearing the manual signatures of individuals who were,
at the time when such signatures shall have been affixed, authorized to sign on
behalf of the Trust, shall be validly issued and entitled to the benefits of
this Trust Agreement, notwithstanding that such individuals or any of them shall
have ceased to be so authorized prior to the delivery of such Trust Securities
Certificates or did not hold such offices at the date of delivery of such Trust
Securities Certificates. A transferee of a Trust Securities Certificate shall
become a Securityholder, and shall be entitled to the rights and subject to the
obligations of a Securityholder hereunder, upon due registration of such Trust
Securities Certificate in such transferee's name pursuant to Sections 5.4, 5.11
and 5.13.
Section 5.3. Execution and Delivery of Trust Securities Certificates.
-------------------------------------------------------
At each Closing Date, the Administrative Trustees shall cause Trust
Securities Certificates, in an aggregate Liquidation Amount as provided in
Sections 2.4 and 2.5, to be executed on behalf of the Trust and delivered to or
upon the written order of the Depositor, signed by its Chairman or a Vice
Chairman of the Board, President or a Vice President, and by its Treasurer,
Assistant Treasurer, Comptroller, an Assistant Comptroller, Secretary or an
Assistant Secretary without further corporate action by the Depositor, in
authorized denominations.
Section 5.4. Registration of Transfer and Exchange of Preferred
--------------------------------------------------
Securities Certificates.
- -----------------------
The Depositor shall keep or cause to be kept, at the office or agency
maintained pursuant to Section 5.8, a register or registers for the purpose of
registering Trust Securities Certificates and transfers and exchanges of
Preferred Securities Certificates (the "Securities Register") in which, the
-------------------
registrar designated by the Depositor (the "Securities Registrar"), subject to
--------------------
such reasonable regulations as it may prescribe, shall provide for the
registration of Preferred Securities Certificates and Common Securities
Certificates (subject to Section 5.10 in the case of the Common Securities
Certificates) and registration of transfers and exchanges of Preferred
Securities Certificates as herein provided. The Bank shall be the initial
Securities Registrar.
Upon surrender for registration of transfer of any Preferred
Securities Certificate at the office or agency maintained pursuant to Section
5.8, the Administrative Trustees or any one of them shall execute and deliver,
in the name of the designated transferee or transferees, one or more new
Preferred Securities Certificates
<PAGE>
-19-
in authorized denominations of a like aggregate Liquidation Amount dated the
date of execution by such Administrative Trustee or Trustees.
The Securities Registrar shall not be required to register the
transfer of any Preferred Securities that have been called for redemption. At
the option of a Holder, Preferred Securities Certificates may be exchanged for
other Preferred Securities Certificates in authorized denominations of the same
class and of a like aggregate Liquidation Amount upon surrender of the Preferred
Securities Certificates to be exchanged at the office or agency maintained
pursuant to Section 5.8.
Every Preferred Securities Certificate presented or surrendered for
registration of transfer or exchange shall be accompanied by a written
instrument of transfer in form satisfactory to the Property Trustee and the
Securities Registrar duly executed by the Holder or his attorney duly authorized
in writing. Each Preferred Securities Certificate surrendered for registration
of transfer or exchange shall be cancelled and subsequently disposed of by the
Property Trustee in accordance with its customary practice.
No service charge shall be made for any registration of transfer or
exchange of Preferred Securities Certificates, but the Securities Registrar may
require payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any transfer or exchange of Preferred
Securities Certificates.
Section 5.5. Mutilated, Destroyed, Lost or Stolen Trust Securities
-----------------------------------------------------
Certificates.
- ------------
If (a) any mutilated Trust Securities Certificate shall be surrendered
to the Securities Registrar, or if the Securities Registrar shall receive
evidence to its satisfaction of the destruction, lose or theft of any Trust
Securities Certificate and (b) there shall be delivered to the Securities
Registrar and the Administrative Trustees such security or indemnity as may be
required by them to save each of them harmless, then in the absence of notice
that such Trust Securities Certificate shall have been acquired by a bona fide
purchaser, the Administrative Trustees, or any one of them, on behalf of the
Trust shall execute and make available for delivery, in exchange for or in lieu
of any such mutilated, destroyed, lost or stolen Trust Securities Certificate, a
new Trust Securities Certificate of like class, tenor and denomination. In
connection with the issuance of any new Trust Securities Certificate under this
Section, the Administrative Trustees or the Securities Registrar may require the
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection therewith. Any duplicate Trust Securities
Certificate issued pursuant to this Section shall constitute conclusive evidence
of an undivided beneficial ownership interest in the assets of the Trust, as if
originally issued, whether or not the lost, stolen or destroyed Trust Securities
Certificate shall be found at any time.
Section 5.6. Persons Deemed Securityholders.
------------------------------
The Administrative Trustees or the Securities Registrar shall treat
the Person in whose name any Trust Securities Certificate shall be registered in
the Securities Register as the owner of such Trust Securities Certificate for
the purpose of receiving distributions and for all other purposes whatsoever,
and neither the Trustees nor the Securities Registrar shall be bound by any
notice to the contrary.
Section 5.7. Access to List of Securityholders' Names and Addresses.
------------------------------------------------------
At any time when the Property Trustee is not also acting as the
Securities Registrar, the Administrative Trustees or the Depositor shall furnish
or cause to be furnished to the Property Trustee (a) semi-annually on or before
January 15 or July 15 in each year, a list, in such form as the Property Trustee
may rea-
<PAGE>
-20-
sonably require, of the names and addresses of the Securityholders as of the
most recent regular record date (as provided in Section 4.1(d)) and (b) promptly
after receipt by any Administrative Trustee or the Depositor of a request
therefor from the Property Trustee, such other information as the Property
Trustee may reasonably require in order to enable the Property Trustee to
discharge its obligations under this Trust Agreement, in each case to the extent
such information is in the possession or control of the Administrative Trustees
or the Depositor and is not identical to a previously supplied list or has not
otherwise been received by the Property Trustee in its capacity as Securities
Registrar. The rights of Securityholders to communicate with other
Securityholders with respect to their rights under this Trust Agreement or under
the Trust Securities, and the corresponding rights of the Trustee shall be as
provided in the Trust Indenture Act. Each Holder, by receiving and holding a
Trust Securities Certificate, and each Owner shall be deemed to have agreed not
to hold the Depositor, the Property Trustee or the Administrative Trustees
accountable by reason of the disclosure of its name and address, regardless of
the source from which such information was derived.
Section 5.8. Maintenance of Office or Agency.
-------------------------------
The Administrative Trustees shall maintain an office or offices or
agency or agencies where Preferred Securities Certificates may be surrendered
for registration of transfer or exchange and where notices and demands to or
upon the Trustees in respect of the Trust Securities Certificates may be served.
The Administrative Trustees initially designate Applied Power Inc., 13000 West
Silver Spring Drive, Butler, Wisconsin 53007-1093, Attn: Chief Financial
Officer, as its principal corporate trust office for such purposes. The
Administrative Trustees shall give prompt written notice to the Depositor and to
the Securityholder of any change in the location of the Securities Register or
any such office or agency.
Section 5.9. Appointment of Paying Agent.
---------------------------
The Paying Agent shall make distributions to Securityholders from the
Payment Account and shall report the amounts of such distributions to the
Property Trustee and the Administrative Trustees. Any Paying Agent shall have
the revocable power to withdraw funds from the Payment Account for the purpose
of making the distributions referred to above. The Administrative Trustees may
revoke such power and remove the Paying Agent if such Trustees determine in
their sole discretion that the Paying Agent shall have failed to perform its
obligations under this Trust Agreement in any material respect. The Paying
Agent shall initially be the Bank. The Paying Agent may choose any co-paying
agent that is acceptable to the Administrative Trustees and the Depositor. Any
Person acting as Paying Agent shall be permitted to resign as Paying Agent upon
30 days' written notice to the Administrative Trustees, the Property Trustee and
the Depositor. In the event that the Bank shall no longer be the Paying Agent
or a successor Paying Agent shall resign or its authority to act be revoked, the
Administrative Trustees shall appoint a successor that is acceptable to the
Property Trustee and the Depositor to act as Paying Agent (which shall be a bank
or trust company). The Administrative Trustees shall cause such successor
Paying Agent or any additional Paying Agent appointed by the Administrative
Trustees to execute and deliver to the Trustees an instrument in which such
successor Paying Agent or additional Paying Agent shall agree with the Trustees
that as Paying Agent, such successor Paying Agent or additional Paying Agent
will hold all sums, if any, held by it for payment to the Securityholders in
trust for the benefit of the Securityholders entitled thereto until such sums
shall be paid to such Securityholders. The Paying Agent shall return all
unclaimed funds to the Property Trustee and upon removal of a Paying Agent such
Paying Agent shall also return all funds in its possession to the Property
Trustee. The provisions of Sections 8.1, 8.3 and 8.6 herein shall apply to the
Bank also in its role as Paying Agent, for so long as the Bank shall act as
Paying Agent and, to the extent applicable, to any other paying agent appointed
hereunder. Any reference in this Agreement to the Paying Agent shall include
any co-paying agent unless the context requires otherwise.
<PAGE>
-21-
Section 5.10. Ownership of Common Securities by Depositor.
-------------------------------------------
At each Closing Date, the Depositor shall acquire and retain
beneficial and record ownership of the Common Securities. To the fullest extent
permitted by law, other than transactions permitted by Section 5.01of the
Indenture, any attempted transfer of the Common Securities shall be void. The
Administrative Trustees shall cause each Common Securities Certificate issued to
the Depositor to contain a legend stating "THIS CERTIFICATE IS NOT TRANSFERABLE
OTHER THAN IN ACCORDANCE WITH THE TRUST AGREEMENT (AS DEFINED BELOW)" .
Section 5.11. Book-Entry Preferred Securities Certificates; Common
----------------------------------------------------
Securities Certificate.
- ----------------------
(a) The Preferred Securities Certificates, upon original
issuance, will be issued in the form of a typewritten Preferred Securities
Certificate or Certificates representing Book-Entry Preferred Securities
Certificates, to be delivered to The Depository Trust Company, the initial
Clearing Agency, by, or on behalf of, the Trust. Such Preferred Securities
Certificate or Certificates shall initially be registered on the Securities
Register in the name of Cede & Co., the nominee of the initial Clearing Agency,
and no beneficial owner will receive a Definitive Preferred Securities
Certificate representing such beneficial owner's interest in such Preferred
Securities, except as provided in Section 5.13. Unless and until Definitive
Preferred Securities Certificates have been issued to beneficial owners pursuant
to Section 5.13:
(i) the provisions of this Section 5.11(a) shall be in full
force and effect;
(ii) the Securities Registrar, the Paying Agent and the Trustees
shall be entitled to deal with the Clearing Agency for all purposes of this
Trust Agreement relating to the Book-Entry Preferred Securities
Certificates (including the payment of the Liquidation Amount of and
Distributions on the Book-Entry Preferred Securities Certificate and the
giving of instructions or directions to Owners of Book-Entry Preferred
Securities) as the sole Holder of Book-Entry Preferred Securities and shall
have no obligations to the Owners thereof;
(iii) to the extent that the provisions of this Section 5.11
conflict with any other provisions of this Trust Agreement, the provisions
of this Section 5.11 shall control; and
(iv) the rights of the Owners of the Book-Entry Preferred
Securities Certificates shall be exercised only through the Clearing Agency
and shall be limited to those established by law and agreements between
such Owners and the Clearing Agency and/or the Clearing Agency
Participants. Pursuant to the Certificate Depository Agreement, unless and
until Definitive Preferred Securities Certificates are issued pursuant to
Section 5.13, the initial Clearing Agency will make book-entry transfers
among the Clearing Agency Participants and receive and transmit payments on
the Preferred Securities to such Clearing Agency Participants.
(b) A single Common Securities Certificate representing the
Common Securities shall be issued to the Depositor in the form of a definitive
Common Securities Certificate.
Section 5.12. Notices to Clearing Agency.
--------------------------
To the extent that a notice or other communication to the Owners is
required under this Trust Agreement, unless and until Definitive Preferred
Securities Certificates shall have been issued to Owners pursu-
<PAGE>
-22-
ant to Section 5.13, the Trustees shall give all such notices and communications
specified herein to be given to Owners to the Clearing Agency, and shall have no
obligations to the Owners.
Section 5.13. Definitive Preferred Securities Certificates.
--------------------------------------------
If (a) the Depositor advises the Trustees in writing that the Clearing
Agency is no longer willing or able to properly discharge its responsibilities
with respect to the Preferred Securities Certificates, and the Depositor is
unable to locate a qualified successor, (b) the Depositor at its option advises
the Trustees in writing that it elects to terminate the book-entry system
through the Clearing Agency or (c) after the occurrence of a Debenture Event of
Default, Owners of Preferred Securities Certificates representing beneficial
ownership interests aggregating at least a majority of the Liquidation Amount
advise the Property Trustee in writing that the continuation of a book-entry
system through the Clearing Agency is no longer in the best interest of the
Owners of Preferred Securities Certificates, then the Property Trustee shall
notify the Clearing Agency and the Clearing Agency shall notify all Owners of
Preferred Securities Certificates and the other Trustees of the occurrence of
any such event and of the availability of the Definitive Preferred Securities
Certificates to Owners of such class or classes, as applicable, requesting the
same. Upon surrender to the Property Trustee of the typewritten Preferred
Securities Certificate or Certificates representing the Book-Entry Preferred
Securities Certificates by the Clearing Agency, accompanied by registration
instructions, the Administrative Trustees, or any one of them, shall execute the
Definitive Preferred Securities Certificates in accordance with the instructions
of the Clearing Agency. Neither the Securities Registrar nor the Trustees shall
be liable for any delay in delivery of such instructions and may conclusively
rely on, and shall be protected in relying on, such instructions. Upon the
issuance of Definitive Preferred Securities Certificates, the Trustees shall
recognize the Holders of the Definitive Preferred Securities Certificates as
Securityholders. The Definitive Preferred Securities Certificates shall be
printed, lithographed or engraved or may be produced in any other manner as is
reasonably acceptable to the Administrative Trustees, as evidenced by the
execution thereof by the Administrative Trustees or any one of them.
Section 5.14. Rights of Securityholders.
-------------------------
(a) The legal title to the Trust Property is vested exclusively in the
Property Trustee (in its capacity as such) in accordance with Section 2.9, and
the Securityholders shall not have any right or title therein other than the
undivided beneficial ownership interests in the assets of the Trust conferred by
their Trust Securities and they shall have no right to call for any partition or
division of property, profits or rights of the Trust except as described below.
The Trust Securities shall be personal property giving only the rights
specifically set forth therein and in this Trust Agreement. By acceptance of a
beneficial interest in the Trust Securities, Holders agree to treat the
Debentures as indebtedness for all United States tax purposes. The Trust
Securities shall have no preemptive or similar rights and when issued and
delivered to Securityholders against payment of the purchase price therefor will
be fully paid and nonassessable by the Trust. The Holders of the Trust
Securities, in their capacities as such, shall be entitled to the same
limitation of personal liability extended to stockholders of private
corporations for profit organized under the General Corporation Law of the State
of Delaware.
(b) For so long as any Preferred Securities remain Outstanding, if,
upon a Debenture Event of Default, the Indenture Trustee fails or the holders of
not less than 25% in aggregate principal amount of the outstanding Debentures
fail to declare the principal of all of the Debentures to be immediately due and
payable, the Holders of at least 25% in aggregate Liquidation Amount of the
Preferred Securities then Outstanding shall have such right by a notice in
writing to the Depositor and the Indenture Trustee; and upon any such
declaration such principal amount of and the accrued interest on all of the
Debentures shall become immediately due and payable; provided that the payment
of principal and interest on such Debentures shall remain subordinated
<PAGE>
-23-
to the extent provided in the Indenture. At any time after such a declaration of
acceleration with respect to the Debentures has been made and before a judgment
or decree for payment of the money due has been obtained by the Indenture
Trustee as in the Indenture provided, the Holders of a majority in Liquidation
Amount of the Preferred Securities, by written notice to the Property Trustee,
the Depositor and the Indenture Trustee, may rescind and annul such declaration
and its consequences if:
(i) the Depositor has paid or deposited with the Indenture Trustee
a sum sufficient to pay
(A) all overdue installments of interest on all of the
Debentures,
(B) the principal of (and premium, if any, on) any Debentures
which have become due otherwise than by such declaration of
acceleration and interest thereon at the rate borne by the Debentures,
and
(C) all sums paid or advanced by the Indenture Trustee under
the Indenture and the reasonable compensation, expenses, disbursements
and advances of the Indenture Trustee and the Property Trustee, their
agents and counsel; and
(ii) all Events of Default with respect to the Debentures, other
than the non-payment of the principal of the Debentures which has become
due solely by such acceleration, have been cured or waived as provided in
Section 8.01 of the Indenture.
The Holders of a majority in aggregate Liquidation Amount of the
Preferred Securities may, on behalf of the Holders of all the Preferred
Securities, waive any past default under the Indenture, except a default in the
payment of principal or interest (unless such default has been cured and a sum
sufficient to pay all matured installments of interest and principal due
otherwise than by acceleration has been deposited with the Indenture Trustee) or
a default in respect of a covenant or provision which under the Indenture cannot
be modified or amended without the consent of the holder of each outstanding
Debenture. No such rescission shall affect any subsequent default or impair any
right consequent thereon. Upon receipt by the Property Trustee of written
notice declaring such an acceleration, or rescission and annulment thereof, by
Holders of the Preferred Securities all or part of which is represented by Book-
Entry Preferred Securities Certificates, a record date shall be established for
determining Holders of Outstanding Preferred Securities entitled to join in such
notice, which record date shall be at the close of business on the day the
Property Trustee receives such notice. The Holders on such record date, or
their duly designated proxies, and only such Persons, shall be entitled to join
in such notice, whether or not such Holders remain Holders after such record
date; provided, that, unless such declaration of acceleration, or rescission and
--------
annulment, as the case may be, shall have become effective by virtue of the
requisite percentage having joined in such notice prior to the day which is 90
days after such record date, such notice of declaration of acceleration, or
rescission and annulment, as the case may be, shall automatically and without
further action by any Holder be canceled and of no further effect. Nothing in
this paragraph shall prevent a Holder, or a proxy of a Holder, from giving,
after expiration of such 90-day period, a new written notice of declaration of
acceleration, or rescission and annulment thereof, as the case may be, that is
identical to a written notice which has been canceled pursuant to the proviso to
the preceding sentence, in which event a new record date shall be established
pursuant to the provisions of this Section 5.14(b).
(c) For so long as any Preferred Securities remain Outstanding, to the
fullest extent permitted by law and subject to the terms of this Trust Agreement
and the Indenture, upon a Debenture Event of Default specified in Section
8.01(1) or 8.01(2) of the Indenture, any Holder of Preferred Securities shall
have the right to institute a proceeding directly against the Depositor,
pursuant to the Indenture, for enforcement of pay-
<PAGE>
-24-
ment to such Holder of the principal amount of or interest on Debentures having
a principal amount equal to the Liquidation Amount of the Preferred Securities
of such Holder (a "Direct Action"). In connection with any such Direct Action,
-------------
the Holder of the Common Securities will be subrogated to the rights of any
Holder of the Preferred Securities to the extent of any payment made by the
Depositor to such Holder of Preferred Securities as a result of such Direct
Action. Except as set forth in Section 5.14(b) and (c), the Holders of Preferred
Securities shall have no right to exercise directly any right or remedy
available to the holders of, or in respect of, the Debentures.
ARTICLE VI
ACTS OF SECURITYHOLDERS; MEETINGS; VOTING
Section 6.1. Limitations on Voting Rights.
----------------------------
(a) Except as provided in this Section, in Sections 5.14, 8.10
and 10.2 and in the Indenture and as otherwise required by law, no Holder of
Preferred Securities shall have any right to vote or in any manner otherwise
control the administration, operation and management of the Trust or the
obligations of the parties hereto, nor shall anything herein set forth, or
contained in the terms of the Trust Securities Certificates, be construed so as
to constitute the Securityholders from time to time as partners or members of an
association.
(b) So long as any Debentures are held by the Property Trustee,
the Trustees shall not (i) direct the time, method and place of conducting any
proceeding for any remedy available to the Indenture Trustee, or executing any
trust or power conferred an the Indenture Trustee with respect to such
Debentures, (ii) waive any past default which is waivable under Section 6.04 of
the Indenture, (iii) exercise any right to rescind or annul a declaration that
the principal of all the Debentures shall be due and payable or (iv) consent to
any amendment, modification or termination of the Indenture or the Debentures,
where such consent shall be required, without, in each case, obtaining the prior
approval of the Holders of at least a majority in Liquidation Amount of all
Outstanding Preferred Securities; provided, however, that where a consent under
the Indenture would require the consent of each Holder of Debentures affected
thereby, no such consent shall be given by the Property Trustee without the
prior written consent of each Holder of Preferred Securities. The Trustees shall
not revoke any action previously authorized or approved by a vote of the Holders
of Preferred Securities, except by a subsequent vote of the Holders of Preferred
Securities. The Property Trustee shall notify all Holders of the Preferred
Securities of any notice of default received from the Indenture Trustee with
respect to the Debentures. In addition to obtaining the foregoing approvals of
the Holders of the Preferred Securities, prior to taking any of the foregoing
actions, the Trustees shall, at the expense of the Depositor, obtain an Opinion
of Counsel experienced in such matters to the effect that the Trust will not be
classified as an association taxable as a corporation for United States Federal
income tax purposes on account of such action.
(c) If any proposed amendment to the Trust Agreement provides
for, or the Trustees otherwise propose to effect, (i) any action that would
adversely affect in any material respect the powers, preferences or special
rights of the Preferred Securities, whether by way of amendment to the Trust
Agreement or otherwise, or (ii) the dissolution, winding-up or termination of
the Trust, other than pursuant to the terms of this Trust Agreement, then the
Holders of Outstanding Preferred Securities as a class will be entitled to vote
on such amendment or proposal and such amendment or proposal shall not be
effective except with the approval of the Holders of at least a majority in
Liquidation Amount of the Outstanding Preferred Securities. Notwithstanding any
other provision of this Trust Agreement, no amendment to this Trust Agreement
may be made if, as a result
<PAGE>
-25-
of such amendment, the Trust would be classified as an association taxable as a
corporation for United States Federal income tax purposes.
Section 6.2. Notice of Meetings.
------------------
Notice of all meetings of the Preferred Securityholders, stating the
time, place and purpose of the meeting, shall be given by the Property Trustee
pursuant to Section 10.8 to each Preferred Securityholder of record, at his
registered address, at least 15 days and not more than 90 days before the
meeting. At any such meeting, any business properly before the meeting may be
so considered whether or not stated in the notice of the meeting. Any adjourned
meeting may be held as adjourned without further notice.
Section 6.3. Meetings of Preferred Securityholders.
-------------------------------------
No annual meeting of Securityholders is required to be held. The
Administrative Trustees, however, shall call a meeting of Securityholders to
vote on any matter upon the written request of the Preferred Securityholders of
record of 25% in aggregate Liquidation Amount of the Preferred Securities (based
upon their Liquidation Amount) and the Administrative Trustees or the Property
Trustee may, at any time in their discretion, call a meeting of Preferred
Securityholders to vote on any matters as to which Preferred Securityholders are
entitled to vote.
Preferred Securityholders of record of 50% of the Outstanding
Preferred Securities (based upon their Liquidation Amount), present in person or
by proxy, shall constitute a quorum at any meeting of Securityholders.
If a quorum is present at a meeting, an affirmative vote by the
Preferred Securityholders of record present, in person or by proxy, holding a
majority of the Preferred Securities (based upon their Liquidation Amount) held
by the Preferred Securityholders of record present, either in person or by
proxy, at such meeting shall constitute the action of the Securityholders,
unless this Trust Agreement requires a greater number of affirmative votes.
Section 6.4. Voting Rights.
-------------
Securityholders shall be entitled to one vote for each $[ ] of
Liquidation Amount represented by their Trust Securities in respect of any
matter as to which such Securityholders are entitled to vote.
Section 6.5. Proxies, etc.
------------
At any meeting of Securityholders, any Securityholder entitled to vote
thereat may vote by proxy; provided that no proxy shall be voted at any meeting
--------
unless it shall have been placed on file with the Administrative Trustees, or
with such other officer or agent of the Trust as the Administrative Trustees may
direct, for verification prior to the time at which such vote shall be taken.
Pursuant to a resolution of the Property Trustee, proxies may be solicited in
the name of the Property Trustee or one or more officers of the Property
Trustee. Only Securityholders of record shall be entitled to vote. When Trust
Securities are held jointly by several persons, any one of them may vote at any
meeting in person or by proxy in respect of such Trust Securities, but if more
than one of them shall be present at such meeting in person or by proxy, and
such joint owners or their proxies so present disagree as to any vote to be
cast, such vote shall not be received in respect of such Trust Securities. A
proxy purporting to be executed by or on behalf of a Securityholder shall be
deemed valid unless
<PAGE>
-26-
challenged at or prior to its exercise, and the burden of proving invalidity
shall rest on the challenger. No proxy shall be valid more than three years
after its date of execution.
Section 6.6. Securityholder Action by Written Consent.
----------------------------------------
Any action which may be taken by Securityholders at a meeting may be
taken without a meeting if Securityholders holding a majority of all Outstanding
Trust Securities (based upon their Liquidation Amount) entitled to vote in
respect of such action (or such larger proportion thereof as shall be required
by any express provision of this Trust Agreement) shall consent to the action in
writing.
Section 6.7. Record Date for Voting and Other Purposes.
-----------------------------------------
For the purposes of determining the Securityholders who are entitled
to notice of and to vote at any meeting or by written consent, or to participate
in any distribution on the Trust Securities in respect of which a record date is
not otherwise provided for in this Trust Agreement, or for the purpose of any
other action, the Administrative Trustees may from time to time fix a date, not
more than 90 days prior to the date of any meeting of Securityholders or the
payment of a distribution or other action, as the case may be, as a record date
for the determination of the identity of the Securityholders of record for such
purposes.
Section 6.8. Acts of Securityholders.
-----------------------
Any request, demand, authorization, direction, notice, consent, waiver
or other action provided or permitted by this Trust Agreement to be given, made
or taken by Securityholders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Securityholders in
person or by an agent duly appointed in writing; and, except as otherwise
expressly provided herein, such action shall become effective when such
instrument or instruments are delivered to an Administrative Trustee. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Securityholders
signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Trust Agreement and (subject to Section 8.1) conclusive in favor
of the Trustees, if made in the manner provided in this Section.
The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where
such execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which any Trustee receiving the same deems sufficient.
The ownership of Preferred Securities shall be proved by the
Securities Register.
Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Securityholder of any Trust Security shall bind every future
Securityholder of the same Trust Security and the Securityholder of every Trust
Security issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof in respect of anything done, omitted or suffered to
be done by the Trustees or the Trust in reliance thereon, whether or not
notation of such action is made upon such Trust Security.
<PAGE>
-27-
Without limiting the foregoing, a Securityholder entitled hereunder to
take any action hereunder with regard to any particular Trust Security may do so
with regard to all or any part of the Liquidation Amount of such Trust Security
or by one or more duly appointed agents each of which may do so pursuant to such
appointment with regard to all or any part of such liquidation amount.
If any dispute shall arise between the Securityholders and the
Administrative Trustees or among such Securityholders or Trustees with respect
to the authenticity, validity or binding nature of any request, demand,
authorization, direction, consent, waiver or other Act of such Securityholder or
Trustee under this Article VI, then the determination of such matter by the
Property Trustee shall be conclusive with respect to such matter.
Section 6.9. Inspection of Records.
---------------------
Upon reasonable notice to the Administrative Trustees and the Property
Trustee, the records of the Trust shall be open to inspection by Securityholders
during normal business hours for any purpose reasonably related to such
Securityholder's interest as a Securityholder.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
Section 7.1. Representations and Warranties of the Property Trustee
------------------------------------------------------
and the Delaware Trustee.
- ------------------------
The Property Trustee and the Delaware Trustee, each severally on
behalf of and as to itself, hereby represents and warrants for the benefit of
the Depositor and the Securityholders that:
(a) the Property Trustee is a national banking association duly
organized, validly existing and in good standing under the laws of the
United States;
(b) the Property Trustee meets the applicable eligibility requirements
set forth in Section 8.7, has full corporate power, authority and legal
right to execute, deliver and perform its obligations under this Trust
Agreement and has taken all necessary action to authorize the execution,
delivery and performance by it of this Trust Agreement;
(c) the Delaware Trustee is a Delaware corporation duly organized,
validly existing and in good standing in the State of Delaware;
(d) the Delaware Trustee meets the applicable eligibility requirements
set forth in Section 8.7, has full corporate power, authority and legal
right to execute, deliver and perform its obligations under this Trust
Agreement and has taken all necessary action to authorize the execution,
delivery and performance by it of this Trust Agreement;
(e) this Trust Agreement has been duly authorized, executed and
delivered by the Property Trustee and the Delaware Trustee and constitutes
the valid and legally binding agreement of each of the Property Trustee and
the Delaware Trustee enforceable against each of them in accordance with
<PAGE>
-28-
its terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity
principles;
(f) the execution, delivery and performance of this Trust
Agreement have been duly authorized by all necessary corporate or other
action on the part of the Property Trustee and the Delaware Trustee and do
not require any approval of stockholders of the Property Trustee and the
Delaware Trustee and such execution, delivery and performance will not (i)
violate the charter or by-laws of the Property Trustee or the Delaware
Trustee, (ii) violate any provision of, or constitute, with or without
notice or lapse of time, a default under, or result in the creation or
imposition of, any Lien on any properties included in the Trust Property
pursuant to the provisions of, any indenture, mortgage, credit agreement,
license or other agreement or instrument to which the Property Trustee or
the Delaware Trustee is a party or by which it is bound, or (iii) violate
any law, governmental rule or regulation of the United States or the State
of Delaware, as the case may be, governing the corporate, banking, trust or
general powers of the Property Trustee or the Delaware Trustee (as
appropriate in context) or any order, judgment or decree applicable to the
Property Trustee or the Delaware Trustee;
(g) neither the authorization, execution or delivery by the
Property Trustee or the Delaware Trustee of this Trust Agreement nor the
consummation of any of the transactions by the Property Trustee or the
Delaware Trustee (as appropriate in context) contemplated herein or therein
requires the consent or approval of, the giving of notice to, the
registration with or the taking of any other action with respect to any
governmental authority or agency under any existing Federal law governing
the banking, trust or general powers of the Property Trustee or the
Delaware Trustee, as the case may be, or under the laws of the United
States or the State of Delaware; and
(h) there are no proceedings pending or, to the best of each of
the Property Trustee's and the Delaware Trustee's knowledge, threatened
against or affecting the Property Trustee or the Delaware Trustee in any
court or before any governmental authority, agency or arbitration board or
tribunal which, individually or in the aggregate, would materially and
adversely affect the Trust or would question the right, power and authority
of the Property Trustee or the Delaware Trustee, as the case may be, to
enter into or perform its obligations as one of the Trustees under this
Trust Agreement.
Section 7.2. Representations and Warranties of Depositor.
-------------------------------------------
The Depositor hereby represents and warrants for the benefit of the
Securityholders that:
(a) the Trust Securities Certificates issued at each Closing
Date on behalf of the Trust have been duly authorized and will have been,
duly and validly executed, issued and delivered by the Trustees pursuant to
the terms and provisions of, and in accordance with the requirements of,
this Trust Agreement, and the Securityholders will be, as of each such
date, entitled to the benefits of this Trust Agreement; and
(b) there are no taxes, fees or other governmental charges
payable by the Trust (or the Trustees on behalf of the Trust) under the
laws of the State of Delaware or any political subdivision thereof in
connection with the execution, delivery and performance by the Property
Trustee or the Delaware Trustee, as the case may be, of this Trust
Agreement.
<PAGE>
-29-
ARTICLE VIII
THE TRUSTEES
Section 8.1. Certain Duties and Responsibilities.
-----------------------------------
(a) The duties and responsibilities of the Trustees shall be as
provided by this Trust Agreement and, in the case of the Property Trustee,
subject to the Trust Indenture Act. Notwithstanding the foregoing, no provision
of this Trust Agreement shall require the Trustees to expend or risk their own
funds or otherwise incur any financial liability in the performance of any of
their duties hereunder, or in the exercise of any of their rights or powers, if
they shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured to
it. Whether or not therein expressly so provided, every provision of this Trust
Agreement relating to the conduct or affecting the liability of or affording
protection to the Trustees shall be subject to the provisions of this Section.
Nothing in this Trust Agreement shall be construed to release the Property
Trustee from liability for its own gross negligent action, its own gross
negligent failure to act, or its own willful misconduct. To the extent that, at
law or in equity, an Administrative Trustee has duties (including fiduciary
duties) and liabilities relating thereto to the Trust or to the Securityholders,
such Administrative Trustee shall not be liable to the Trust or to any
Securityholder for such Trustee's good faith reliance on the provisions of this
Trust Agreement. The provisions of this Trust Agreement, to the extent that they
restrict the duties and liabilities of the Administrative Trustees otherwise
existing at law or in equity, are agreed by the Depositor and the
Securityholders to replace such other duties and liabilities of the
Administrative Trustees.
(b) All payments made by the Property Trustee or a Paying Agent
in respect of the Trust Securities shall be made only from the revenue and
proceeds from the Trust Property and only to the extent that there shall be
sufficient revenue or proceeds from the Trust Property to enable the Property
Trustee or a Paying Agent to make payments in accordance with the terms hereof.
Each Securityholder, by its acceptance of a Trust Security, agrees that it will
look solely to the revenue and proceeds from the Trust Property to the extent
legally available for distribution to it as herein provided and that the
Trustees are not personally liable to it for any amount distributable in respect
of any Trust Security or for any other liability in respect of any Trust
Security. This Section 8.1(b) does not limit the liability of the Trustees
expressly set forth elsewhere in this Trust Agreement and, in the case of the
Property Trustee, in the Trust Indenture Act.
(c) No provision of this Trust Agreement shall be construed to
relieve the Property Trustee from liability for its own negligent action or its
own negligent failure to act, except that:
(i) the Property Trustee shall not be liable for any error of
judgment made in good faith by an authorized officer of the Property
Trustee, unless it shall be proved that the Property Trustee was negligent
in ascertaining the pertinent facts;
(ii) the Property Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance with
the direction of the Holders of not less than a majority in Liquidation
Amount of the Trust Securities relating to the time, method and place of
conducting any proceeding for any remedy available to the Property Trustee,
or exercising any trust or power conferred upon the Property Trustee under
this Trust Agreement;
<PAGE>
-30-
(iii) the Property Trustee's sole duty with respect to the
custody, safe keeping and physical preservation of the Debentures and the
Payment. Account shall be to deal with such Property in similar manner as
the Property Trustee deals with similar property for its own account,
subject to the protections and limitations on liability afforded to the
Property Trustee under this Trust Agreement and the Trust Indenture Act;
(iv) the Property Trustee shall not be liable for any interest on
any money received by it except as it may otherwise agree with the
Depositor; and money held by the Property Trustee need not be segregated
from other funds held by it except in relation to the Payment Account
maintained by the Property Trustee pursuant to Section 3.1 and except to
the extent otherwise required by law; and
(v) the Property Trustee shall not be responsible for monitoring
the compliance by the Administrative Trustees or the Depositor with their
respective duties under this Trust Agreement, nor shall the Property
Trustee be liable for the default or misconduct of the Administrative
Trustees or the Depositor.
Section 8.2. Certain Notices.
---------------
Within five Business Days after the occurrence of any Event of Default
actually known to the Property Trustee, the Property Trustee shall transmit, in
the manner and to the extent provided in Section 10.8, notice of such Event of
Default to the Securityholders, the Administrative Trustees and the Depositor,
unless such Event of Default shall have been cured or waived.
Within five Business Days after the receipt of notice of the
Depositor's exercise of its right to defer the payment of interest on the
Debentures pursuant to the Indenture, the Administrative Trustee shall transmit,
in the manner and to the extent provided in Section 10.8, notice of such
exercise to the Securityholders and the Property Trustee, unless such exercise
shall have been revoked.
Section 8.3. Certain Rights of Property Trustee.
----------------------------------
Subject to the provisions of Section 8.1:
(a) the Property Trustee may rely and shall be protected in
acting or refraining from acting in good faith upon any resolution, Opinion
of Counsel, certificate, written representation of a Holder or transferee,
certificate of auditors or any other certificate, statement, instrument,
opinion, report, notice, request, consent, order, appraisal, bond,
debenture, note, other evidence of indebtedness or other paper or document
believed by it to be genuine and to have been signed or presented by the
proper party or parties;
(b) if (i) in performing its duties under this Trust Agreement
the Property Trustee is required to decide between alternative courses of
action or (ii) in construing any of the provisions of this Trust Agreement
the Property Trustee finds the same ambiguous or inconsistent with any
other provisions contained herein or (iii) the Property Trustee is unsure
of the application of any provision of this Trust Agreement, then, except
as to any matter as to which the Preferred Securityholders are entitled to
vote under the terms of this Trust Agreement, the Property Trustee shall
deliver a notice to the Depositor requesting written instructions of the
Depositor as to the course of action to be taken and the Property Trustee
shall take such action, or refrain from taking such action, as the Property
Trustee shall be instructed in writing to take, or to refrain from taking,
by the Depositor; provided, however, that if the
<PAGE>
-31-
Property Trustee does not receive such instructions of the Depositor within
ten Business Days after it has delivered such notice, or such reasonably
shorter period of time set forth in such notice (which to the extent
practicable shall not be less than two Business Days), it may, but shall be
under no duty to, take or refrain from taking such action not inconsistent
with this Trust Agreement as it shall deem advisable and in the best
interests of the Securityholders, in which event the Property Trustee shall
have no liability except for its own bad faith, negligence or willful
misconduct;
(c) any direction or act of the Depositor or the Administrative
Trustees contemplated by this Trust Agreement shall be sufficiently
evidenced by an Officers Certificate;
(d) whenever in the administration of this Trust Agreement, the
Property Trustee shall deem it desirable that a matter be established
before undertaking, suffering or omitting any action hereunder, the
Property Trustee (unless other evidence is herein specifically prescribed)
may, in the absence of bad faith on its part, request and rely upon an
Officers' Certificate which, upon receipt of such request, shall be
promptly delivered by the Depositor or the Administrative Trustees;
(e) the Property Trustee shall have no duty to see to any
recording, filing or registration of any instrument (including any
financing or continuation statement or any filing under tax or securities
laws) or any rerecording, refiling or reregistration thereof;
(f) the Property Trustee may consult with counsel (which counsel
may be counsel to the Depositor or any of its Affiliates, and may include
any of its employees) and the advice of such counsel shall be full and
complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance thereon
and in accordance with such advice, such counsel may be counsel to the
Depositor or any of its Affiliates, and may include any of its employees;
the Property Trustee shall have the right at any time to seek instructions
concerning the administration of this Trust Agreement from any court of
competent jurisdiction;
(g) the Property Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Trust Agreement
at the request or direction of any of the Securityholders pursuant to this
Trust Agreement, unless such Securityholders shall have offered to the
Property Trustee reasonable security or indemnity against the costs,
expenses and liabilities which might be incurred by it in compliance with
such request or direction;
(h) the Property Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
consent, order, approval, bond, debenture, note or other evidence of
indebtedness or other paper or document, unless requested in writing to do
so by one or more Securityholders, but the Property Trustee may make such
further inquiry or investigation into such facts or matters as it may see
fit;
(i) the Property Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
its agents or attorneys, provided that the Property Trustee shall be
responsible for its own negligence or recklessness with respect to
selection of any agent or attorney appointed by it hereunder;
(j) whenever in the administration of this Trust Agreement the
Property Trustee shall deem it desirable to receive instructions with
respect to enforcing any remedy or right or taking any other action
hereunder the Property Trustee (i) may request instructions from the
Holders of the Trust
<PAGE>
-32-
Securities which instructions may only be given by the Holders of the same
proportion in Liquidation Amount of the Trust Securities as would be
entitled to direct the Property Trustee under the terms of the Trust
Securities in respect of such remedy, right or action, (ii) may refrain
from enforcing such remedy or right or taking such other action until such
instructions are received, and (iii) shall be protected in acting in
accordance with such instructions; and
(k) except as otherwise expressly provided by this Trust
Agreement, the Property Trustee shall not be under any obligation to take
any action that is discretionary under the provisions of this Trust
Agreement.
No provision of this Trust Agreement shall be deemed to impose any
duty or obligation on the Property Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it, in any
jurisdiction in which it shall be illegal, or in which the Property Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts, or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Property Trustee
shall be construed to be a duty.
Section 8.4. Not Responsible for Recitals or Issuance of Securities.
------------------------------------------------------
The recitals contained herein and in the Trust Securities Certificates
shall be taken as the statements of the Depositor, and the Trustees do not
assume any responsibility for their correctness. The Trustees shall not be
accountable for the use or application by the Depositor of the proceeds of the
Debentures.
Section 8.5. May Hold Securities.
-------------------
Any Trustee or any other agent of any Trustee or the Trust, in its
individual or any other capacity, may become the owner or pledgee of Trust
Securities and, subject to Sections 8.8 and 8.13 and except as provided in the
definition of the term "Outstanding" in Article I, may otherwise deal with the
Trust with the same rights it would have if it were not a Trustee or such other
agent.
Section 8.6. Compensation; Indemnity; Fees.
-----------------------------
Pursuant to the Indenture, the Depositor, as borrower, agrees:
(a) to pay to the Trustees from time to time reasonable
compensation for all services rendered by them hereunder (which
compensation shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust);
(b) except as otherwise expressly provided herein, to reimburse
the Trustees upon request for all reasonable expenses, disbursements and
advances incurred or made by the Trustees in accordance with any provision
of this Trust Agreement (including the reasonable compensation and the
expenses and disbursements of its agents and counsel), except any such
expense, disbursement or advance as may be attributable to its negligence
or bad faith; and
(c) to the fullest extent permitted by applicable law, to
indemnify and hold harmless (i) each Trustee, (ii) any Affiliate of any
Trustee, (iii) any officer, director, shareholder, employee, representative
or agent of any Trustee, and (iv) any employee or agent of the Trust or its
Affiliates, (referred to herein as an "Indemnified Person") from and
against any loss, damage, liability, tax, pen-
<PAGE>
-33-
alty, expense or claim of any kind or nature whatsoever incurred by such
Indemnified Person by reason of the creation, operation or termination of
the Trust or any act or omission performed or omitted by such Indemnified
Person in good faith on behalf of the Trust and in a manner such
Indemnified Person reasonably believed to be within the scope of authority
conferred on such Indemnified Person by this Trust Agreement, except that
no Indemnified Person shall be entitled to be indemnified in respect of any
loss, damage or claim incurred by such Indemnified Person by reason of
gross negligence or willful misconduct with respect to such acts or
omissions.
(d) to the fullest extent permitted by applicable law, to
advance expenses (including legal fees) incurred by an Indemnified Person
in defending any claim, demand, action, suit or proceeding, from time to
time, prior to the final disposition of such claim, demand, action, suit or
proceeding upon receipt by the Depositor of (i) a written affirmation by or
on behalf of the Indemnified Person of its or his good faith belief that it
or he has met the standard of conduct set forth in this Section 8.6 and
(ii) an undertaking by or on behalf of the Indemnified Person to repay such
amount if it shall be determined that the Indemnified Person is not
entitled to be indemnified as authorized in the preceding subsection.
The provisions of this Section 8.6 shall survive the termination of
this Trust Agreement or the resignation or removal of any Trustee.
No Trustee may claim any lien or charge on any Trust Property as a
result of any amount due pursuant to this Section 8.6.
Section 8.7. Corporate Property Trustee Required; Eligibility of
---------------------------------------------------
Trustees.
- --------
(a) There shall at all times be a Property Trustee hereunder
with respect to the Trust Securities. The Property Trustee shall be a Person
that is eligible pursuant to the Trust Indenture Act to act as such and has a
combined capital and surplus of at least $50,000,000. If any such Person
publishes reports of condition at least annually, pursuant to law or to the
requirements of its supervising or examining authority, then for the purposes of
this Section, the combined capital and surplus of such Person shall be deemed to
be its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time the Property Trustee with respect to the
Trust Securities shall cease to be eligible in accordance with the provisions of
this Section, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.
(b) There shall at all times be one or more Administrative
Trustees hereunder with respect to the Trust Securities. Each Administrative
Trustee shall be either a natural person who is at least 21 years of age or a
legal entity that shall act through one or more persons authorized to bind that
entity.
(c) There shall at all times be a Delaware Trustee with respect
to the Trust Securities. The Delaware Trustee shall either be (i) a natural
person who is at least 21 years of age and a resident of the State of Delaware
or (ii) a legal entity with its principal place of business in the State of
Delaware and that otherwise meets the requirements of applicable Delaware law
that shall act through one or more persons authorized to bind such entity.
Section 8.8. Conflicting Interests.
---------------------
If the Property Trustee has or shall acquire a conflicting interest
within the meaning of the Trust Indenture Act, the Property Trustee shall either
eliminate such interest or resign, to the extent and in the
<PAGE>
-34-
manner provided by, and subject to the provisions of, the Trust Indenture Act
and this Trust Agreement. The Depositor and any Trustee may engage in or possess
an interest in other business ventures of any nature or description,
independently or with others, similar or dissimilar to the business of the
Trust, and the Trust and the Holders of Trust Securities shall have no rights by
virtue of this Trust Agreement in and to such independent ventures or the income
or profits derived therefrom, and the pursuit of any such venture, even if
competitive with the business of the Trust, shall not be deemed wrongful or
improper. Neither the Depositor, nor any Trustee, shall be obligated to present
any particular investment or other opportunity to the Trust even if such
opportunity is of a character that, if presented to the Trust, could be taken by
the Trust, and the Depositor or any Trustee shall have the right to take for its
own account (individually or as a partner or fiduciary) or to recommend to
others any such particular investment or other opportunity. Any Trustee may
engage or be interested in any financial or other transaction with the Depositor
or any Affiliate of the Depositor, or may act as depository for, trustee or
agent for, or act on any committee or body of holders of, securities or other
obligations of the Depositor or its Affiliates.
Section 8.9. Co-Trustees and Separate Trustee.
--------------------------------
Unless an Event of Default shall have occurred and be continuing, at
any time or times, for the purpose of meeting the legal requirements of the
Trust Indenture Act or of any jurisdiction in which any part of the Trust
Property may at the time be located, the Depositor and the Administrative
Trustees, by agreed action of the majority of such Trustees, shall have power to
appoint, and upon the written request of the Administrative Trustees, the
Depositor shall for such purpose join with the Administrative Trustees in the
execution, delivery, and performance of all instruments and agreements necessary
or proper to appoint, one or more Persons approved by the Property Trustee
either to act as co-trustee jointly with the Property Trustee, of all or any
part of such Trust Property, or to the extent required by law to act as separate
trustee of any such property, in either case with such powers as may be provided
in the instrument of appointment, and to vest in such Person or Persons in the
capacity aforesaid, any property, title, right or power deemed necessary or
desirable, subject to the other provisions of this Section. If the Depositor
does not join in such appointment within 15 days after the receipt by it of a
request so to do, or in case a Debenture Event of Default has occurred and is
continuing, the Property Trustee alone shall have power to make such
appointment. Any co-trustee or separate trustee appointed pursuant to this
Section shall either be (i) a natural person who is at least 21 years of age and
a resident of the United States or (ii) a legal entity with its principal place
of business in the United States that shall act through one or more persons
authorized to bind such entity.
Should any written instrument from the Depositor be required by any
co-trustee or separate trustee so appointed for more fully confirming to such
co-trustee or separate trustee such property, title, right, or power, any and
all such instruments shall, on request, be executed, acknowledged and delivered
by the Depositor.
Every co-trustee or separate trustee shall, to the extent permitted by
law, but to such extent only, be appointed subject to the following terms,
namely:
(a) The Trust Securities shall be executed and delivered and all
rights, powers, duties, and obligations hereunder in respect of the custody
of securities, cash and other personal property held by, or required to be
deposited or pledged with, the Trustees specified hereunder, shall be
exercised, solely by such Trustees and not by such co-trustee or separate
trustee.
(b) The rights, powers, duties, and obligations hereby conferred
or imposed
<PAGE>
-35-
upon the Property Trustee in respect of any property covered by such
appointment shall be conferred or imposed upon and exercised or performed
by the Property Trustee or by the Property Trustee and such co-trustee or
separate trustee jointly, as shall be provided in the instrument appointing
such co-trustee or separate trustee, except to the extent that under any
law of any jurisdiction in which any particular act is to be performed, the
Property Trustee shall be incompetent or unqualified to perform such act,
in which event such rights, powers, duties and obligations shall be
exercised and performed by such co-trustee or separate trustee.
(c) The Property Trustee at any time, by an instrument in
writing executed by it, with the written concurrence of the Depositor, may
accept the resignation of or remove any co-trustee or separate trustee
appointed under this Section, and, in case a Debenture Event of Default has
occurred and is continuing, the Property Trustee shall have power to accept
the resignation of, or remove, any such co-trustee or separate trustee
without the concurrence of the Depositor. Upon the written request of the
Property Trustee, the Depositor shall join with the Property Trustee in the
execution, delivery and performance of all instruments and agreements
necessary or proper to effectuate such resignation or removal. A successor
to any co-trustee or separate trustee so resigned or removed may be
appointed in the manner provided in this Section.
(d) No co-trustee or separate trustee hereunder shall be
personally liable by reason of any act or omission of the Property Trustee
or any other trustee hereunder.
(e) The Property Trustee shall not be liable by reason of any
act of a co-trustee or separate trustee.
(f) Any Act of Holders delivered to the Property Trustee shall
be deemed to have been delivered to each such co-trustee and separate
trustee.
Section 8.10. Resignation and Removal, Appointment of Successor.
-------------------------------------------------
No resignation or removal of any Trustee (the "Relevant Trustee") and
----------------
no appointment of a successor Trustee pursuant to this Article shall become
effective until the acceptance of appointment by the successor Trustee in
accordance with the applicable requirements of Section 8.11.
Subject to the immediately preceding paragraph, the Relevant Trustee
may resign at any time by giving written notice thereof to the Securityholders.
If the instrument of acceptance by the successor Trustee required by Section
8.11 shall not have been delivered to the Relevant Trustee within 30 days after
the giving of such notice of resignation, the Relevant Trustee may petition
(pursuant to the Indenture, at the expense of the Depositor), any court of
competent jurisdiction for the appointment of a successor Relevant Trustee.
Unless a Debenture Event of Default shall have occurred and be
continuing, any Trustee way be removed at any time by Act of the Common
Securityholder. If a Debenture Event of Default shall have occurred and be
continuing, the Property Trustee or the Delaware Trustee, or both of them, may
be removed at such time by Act of the Holders of a majority in Liquidation
Amount of the Preferred Securities, delivered to the Relevant Trustee (in its
individual capacity and on behalf of the Trust). An Administrative Trustee may
be removed by the Common Securityholder at any time.
If any Trustee shall resign, be removed or become incapable of acting
as Trustee, or if a vacancy shall occur in the office of any Trustee for any
cause, at a time when no Debenture Event of Default shall have occurred and be
continuing, the Common Securityholder, by Act of the Common Securityholder
delivered
<PAGE>
-36-
to the retiring Trustee, shall promptly appoint a successor Trustee or Trustees,
and the retiring Trustee shall comply with the applicable requirements of
Section 8.11. If the Property Trustee or the Delaware Trustee shall resign, be
removed or become incapable of continuing to act as the Property Trustee or the
Delaware Trustee, as the case may be, at a time when a Debenture Event of
Default shall have occurred and be continuing, the Preferred Securityholders, by
Act of the Securityholders of a majority in Liquidation Amount of the Preferred
Securities then Outstanding delivered to the retiring Relevant Trustee, shall
promptly appoint a successor Relevant Trustee or Trustees, and such successor
Trustee shall comply with the applicable requirements of Section 8.11.
If an Administrative Trustee shall resign, be removed or become
incapable of acting as Administrative Trustee, at a time when a Debenture Event
of Default shall have occurred and be continuing, the Common Securityholder by
Act of the Common Securityholder delivered to the Administrative Trustee shall
promptly appoint a successor Administrative Trustee or Administrative Trustees
and such successor Administrative Trustee or Trustees shall comply with the
applicable requirements of Section 8.11. If no successor Relevant Trustee shall
have been so appointed by the Common Securityholder or the Preferred
Securityholders and accepted appointment in the manner required by Section 8.11,
any Securityholder who has been a Securityholder of Trust Securities for at
least six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the appointment of a successor
Relevant Trustee.
The Property Trustee shall give notice of each resignation and each
removal of a Trustee and each appointment of a successor Trustee to all
Securityholders in the manner provided in Section 10.8 and shall give notice to
the Depositor. Each notice shall include the name of the successor Relevant
Trustee and the address of its Corporate Trust Office if it is the Property
Trustee.
Notwithstanding the foregoing or any other provision of this Trust
Agreement, in the event any Administrative Trustee or a Delaware Trustee who is
a natural person dies or becomes, in the opinion of the Depositor, incompetent
or incapacitated, the vacancy created by such death, incompetence or incapacity
may be filled by (a) the unanimous act of remaining Administrative Trustees if
there are at least two of them or (b) otherwise by the Depositor (with the
successor in each case being a Person who satisfies the eligibility requirement
for Administrative Trustees or Delaware Trustee, as the case may be, set forth
in Section 8.7).
Section 8.11. Acceptance of Appointment by Successor.
--------------------------------------
In case of the appointment hereunder of a successor Relevant Trustee,
the retiring Relevant Trustee and each successor Relevant Trustee with respect
to the Trust Securities shall execute and deliver an amendment hereto wherein
each successor Relevant Trustee shall accept such appointment and which (a)
shall contain such provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor Relevant Trustee all the rights,
powers, trusts and duties of the retiring Relevant Trustee with respect to the
Trust Securities and the Trust and (b) shall add to or change any of the
provisions of this Trust Agreement as shall be necessary to provide for or
facilitate the administration of the Trust by more than one Relevant Trustee, it
being understood that nothing herein or in such amendment shall constitute such
Relevant Trustees co-trustees and upon the execution and delivery of such
amendment the resignation or removal of the retiring Relevant Trustee shall
become effective to the extent provided therein and each such successor Relevant
Trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, trusts and duties of the retiring Relevant Trustee; but,
on request of the Trust or any successor Relevant Trustee such retiring Relevant
Trustee shall duly assign, transfer and deliver to such successor Relevant
Trustee all Trust Property, all proceeds thereof and money held by such retiring
Relevant Trustee hereunder with respect to the Trust Securities and the Trust.
<PAGE>
-37-
Upon request of any such successor Relevant Trustee, the Trust shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Relevant Trustee all such rights, powers and trusts
referred to in the first or second preceding paragraph, as the case way be.
No successor Relevant Trustee shall accept its appointment unless at
the time of such acceptance such successor Relevant Trustee shall be qualified
and eligible under this Article.
Section 8.12. Merger, Conversion, Consolidation or Succession to
--------------------------------------------------
Business.
- --------
Any corporation into which the Property Trustee or the Delaware
Trustee may be merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to which such
Relevant Trustee shall be a party, or any corporation succeeding to all or
substantially all the corporate trust business of such Relevant Trustee, shall
be the successor of such Relevant Trustee hereunder, provided such corporation
shall be otherwise qualified and eligible under this Article, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto.
Section 8.13. Preferential Collection of Claims Against Depositor or
------------------------------------------------------
Trust.
- -----
If and when the Property Trustee or the Delaware Trustee shall be or
become a creditor of the Depositor or the Trust (or any other obligor upon the
Debentures or the Trust Securities), the Property Trustee or the Delaware
Trustee, as the case may be, shall be subject to and shall take all actions
necessary in order to comply with the provisions of the Trust Indenture Act
regarding the collection of claims against the Depositor or Trust (or any such
other obligor).
Section 8.14. Reports by the Property Trustee
-------------------------------
(a) The Property Trustee shall transmit to Securityholders such
reports concerning the Property Trustee and its actions under this Trust
Agreement as may be required pursuant to the Trust Indenture Act at the times
and in the manner provided pursuant thereto. If required by Section 313(a) of
the Trust Indenture Act, the Property Trustee shall, within sixty days after
each [ ] following the date of this Trust Agreement deliver to
Securityholders a brief report, dated as of such [ ], which complies with
the provisions of such Section 313(a).
(b) A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Property Trustee with each national
stock exchange, the Nasdaq National Market or such other interdealer quotation
system or self-regulatory organization upon which the Trust Securities are
listed or traded, with the Commission and with the Depositor.
Section 8.15. Reports to the Property Trustee.
-------------------------------
The Depositor and the Administrative Trustees on behalf of the Trust
shall provide to the Property Trustee such documents, reports and information as
required by Section 314 of the Trust Indenture Act (if any) and the compliance
certificate required by Section 314(a) of the Trust Indenture Act in the form,
in the manner and at the times required by Section 314 of the Trust Indenture
Act.
<PAGE>
-38-
Section 8.16. Evidence of Compliance with Conditions Precedent.
------------------------------------------------
Each of the Depositor and the Administrative Trustees on behalf of the
Trust shall provide to the Property Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this Trust Agreement that relate
to any of the matters set forth in Section 314(c) of the Trust Indenture Act.
Any certificate or opinion required to be given by an officer pursuant to
Section 314(c)(1) of the Trust Indenture Act shall be given in the form of an
Officers' Certificate.
Section 8.17. Number of Trustees.
------------------
(a) The number of Trustees shall be four, provided that the
Holder of all of the Common Securities by written instrument may increase or
decrease the number of Administrative Trustees. The Property Trustee and the
Delaware Trustee may be the same Person, subject to the applicable eligibility
requirements set forth herein.
(b) If a Trustee ceases to hold office for any reason and the
number of Administrative Trustees is not reduced pursuant to Section 8.17(a), or
if the number of Trustees is increased pursuant to Section 8.17(a), a vacancy
shall occur. The vacancy shall be filled with a Trustee appointed in accordance
with Section 8.10.
(c) The death, resignation, retirement, removal, bankruptcy,
incompetence or incapacity to perform the duties of a Trustee shall not operate
to annul, dissolve or terminate the Trust. Whenever a vacancy in the number of
Administrative Trustees shall occur, until such vacancy is filled by the
appointment of an Administrative Trustee in accordance with Section 8.10, the
Administrative Trustees in office, regardless of their number (and
notwithstanding any other provision of this Agreement), shall have all the
powers granted to the Administrative Trustees and shall discharge all the duties
imposed upon the Administrative Trustees by this Trust Agreement.
Section 8.18. Delegation of Power.
-------------------
(a) Any Administrative Trustee may, by power of attorney
consistent with applicable law, delegate to any other natural person over the
age of 21 his or her power for the purpose of executing any documents
contemplated in Section 2.7(a), including any registration statement or
amendment thereto filed with the Commission, or making any other governmental
filing; and
(b) The Administrative Trustees shall have power to delegate
from time to time to such of their number or to the Depositor the doing of such
things and the execution of such instruments either in the name of the Trust or
the names of the Administrative Trustees or otherwise as the Administrative
Trustees may deem expedient, to the extent such delegation is not prohibited by
applicable law or contrary to the provisions of this Trust Agreement, as set
forth herein.
<PAGE>
-39-
ARTICLE IX
TERMINATION, LIQUIDATION AND MERGER
Section 9.1. Dissolution Upon Expiration Date.
--------------------------------
Unless earlier dissolved, the Trust shall automatically dissolve on
December 31, 2048 (the "Expiration Date"). Thereafter, the Trust Property shall
---------------
be distributed in accordance with Section 9.4.
Section 9.2. Early Dissolution.
-----------------
The first to occur of any of the following events is an "Early
Termination Event", the occurrence of which shall cause a dissolution of the
Trust:
(a) the occurrence of a Bankruptcy Event in respect of, or the
dissolution or liquidation of, the Depositor;
(b) the written direction to the Property Trustee from the
Depositor at any time (which direction is optional and wholly within the
discretion of the Depositor) to dissolve the Trust and distribute
Debentures to Securityholders in exchange for the Preferred Securities;
(c) the redemption of all of the Preferred Securities; and
(d) the entry of an order for dissolution of the Trust by a
court of competent jurisdiction.
Section 9.3. Termination.
-----------
As soon as is practicable after the occurrence of an event referred to
in Section 9.1 or 9.2, and upon the completion of the winding up and liquidation
of the Trust under Section 9.4, the Trustees (each of whom is hereby authorized
to take such action) shall file a certificate of cancellation with the Secretary
of State of the State of Delaware terminating the Trust and, upon such filing,
the respective obligations and responsibilities of the Trustees and the Trust
created and continued hereby shall terminate.
Section 9.4. Liquidation.
-----------
(a) If an Early Termination Event specified in clause (a), (b)
or (d) of Section 9.2 occurs or upon the Expiration Date, the Trust shall be
liquidated by the Trustees as expeditiously as the Trustees determine to be
possible by distributing, after satisfaction of liabilities to creditors of the
Trust as provided by applicable law, to each Securityholder a Like Amount of
Debentures, subject to Section 9.4(d). Notice of liquidation shall be given by
the Property Trustee by first-class mail, postage prepaid mailed not later than
30 nor more than 60 days prior to the Liquidation Date to each Holder of Trust
Securities at such Holder's address appearing in the Securities Register. All
notices of liquidation shall:
(i) state the Liquidation Date;
<PAGE>
-40-
(ii) state that from and after the Liquidation Date, the Trust
Securities will no longer be deemed to be Outstanding and any Trust
Securities Certificates not surrendered for exchange will be deemed to
represent a Like Amount of Debentures; and
(iii) provide such information with respect to the mechanics by
which Holders may exchange Trust Securities Certificates for Debentures, or
if Section 9.4(d) applies receive a Liquidation Distribution, as the
Administrative Trustees or the Property Trustee shall deem appropriate.
(b) Except where Section 9.2(c) or 9.4(d) applies, in order to
effect the liquidation of the Trust and distribution of the Debentures to
Securityholders, the Property Trustee shall establish a record date for such
distribution (which shall be not more than 45 days prior to the Liquidation
Date) and, either itself acting as exchange agent or through the appointment of
a separate exchange agent, shall establish such procedures as it shall deem
appropriate to effect the distribution of Debentures in exchange for the
Outstanding Trust Securities Certificates.
(c) Except where Section 9.2(c) or 9.4(d) applies, after the
Liquidation Date, (i) the Trust Securities will no longer be deemed to be
Outstanding, (ii) certificates representing a Like Amount of Debentures will be
issued to Holders of Trust Securities Certificates, upon surrender of such
certificates to the Administrative Trustees or their agent for exchange, (iii)
the Depositor shall use its reasonable efforts to have the Debentures listed on
the New York Stock Exchange or on such other exchange, interdealer quotation
system or self-regulatory organization as the Preferred Securities are then
listed, (iv) any Trust Securities Certificates not so surrendered for exchange
will be deemed to represent a Like Amount of Debentures, accruing interest at
the rate provided for in the Debentures from the last Distribution Date on which
a Distribution was made on such Trust Securities Certificates until such
certificates are so surrendered (and until such certificates are so surrendered,
no payments of interest or principal will be made to Holders of Trust Securities
Certificates with respect to such Debentures) and (v) all rights of
Securityholders holding Trust Securities will cease, except the right of such
Securityholders to receive Debentures upon surrender of Trust Securities
Certificates.
(d) In the event that, upon the Expiration Date or the
occurrence of an Early Termination Event, notwithstanding the other provisions
of this Section 9.4, whether because of an order for dissolution entered by a
court of competent jurisdiction or otherwise, distribution of the Debentures in
the manner provided herein is determined by the Property Trustee not to be
practical, the Trust Property shall be liquidated, and the Trust shall be wound-
up by the Property Trustee in such manner as the Property Trustee determines. In
such event, Securityholders will be entitled to receive out of the assets of the
Trust available for distribution to Securityholders, after satisfaction of
liabilities to creditors of the Trust as provided by applicable law, an amount
equal to the Liquidation Amount per Trust Security plus accumulated and unpaid
Distributions thereon to the date of payment (such amount being the "Liquidation
-----------
Distribution"). If, upon any such winding-up, the Liquidation Distribution can
- ------------
be paid only in part because the Trust has insufficient assets available to pay
in full the aggregate Liquidation Distribution, then, subject to the next
succeeding sentence, the amounts payable by the Trust on the Trust Securities
shall be paid on a pro rata basis (based upon Liquidation Amounts). The Holder
of the Common Securities will be entitled to receive Liquidation Distributions
upon any such winding-up pro rata (determined as aforesaid) with Holders of
Preferred Securities, except that, if a Debenture Event of Default has occurred
and is continuing, the Preferred Securities shall have a priority over the
Common Securities.
Section 9.5. Mergers, Consolidations, Amalgamations or Replacements
------------------------------------------------------
of the Trust.
- ------------
The Trust may not merge with or into, consolidate, convert into,
amalgamate, or be replaced by, or convey, transfer or lease its properties and
assets substantially as an entirety to any Person, except pursu-
<PAGE>
-41-
ant to this Section 9.5 or Section 9.4. At the request of the Depositor, with
the consent of the Administrative Trustees and without the consent of the
Holders of the Preferred Securities, the Property Trustee or the Delaware
Trustee, the Trust may merge with or into, consolidate, convert into,
amalgamate, or be replaced by or convey, transfer or lease its properties and
assets substantially as an entirety to a trust organized as such under the laws
of any State; provided, that (i) such successor entity either (a) expressly
assumes all of the obligations of the Trust with respect to the Preferred
Securities or (b) substitutes for the Preferred Securities other securities
having substantially the same terms as the Preferred Securities (the "Successor
---------
Securities") so long as the Successor Securities rank the same as the Preferred
- ----------
Securities rank in priority with respect to distributions and payments upon
liquidation, redemption and otherwise, (ii) the Depositor expressly appoints a
trustee of such successor entity possessing the same powers and duties as the
Property Trustee as the holder of the Debentures, (iii) the Successor Securities
are listed or traded, or any Successor Securities will be listed upon
notification of issuance, on any national securities exchange or other
organization on which the Preferred Securities are then listed or traded, if
any, (iv) such merger, consolidation, conversion, amalgamation, replacement,
conveyance, transfer or lease does not cause the Preferred Securities (including
any Successor Securities) to be downgraded by any nationally recognized
statistical rating organization, (v) such merger, consolidation, conversion,
amalgamation, replacement, conveyance, transfer or lease does not adversely
affect the rights, preferences and privileges of the holders of the Preferred
Securities (including any Successor Securities) in any material respect, (vi)
such successor entity has a purpose substantially identical to that of the
Trust, (vii) prior to such merger, consolidation, conversion, amalgamation,
replacement, conveyance, transfer or lease, the Depositor has received an
Opinion of Counsel to the effect that (a) such merger, consolidation,
conversion, amalgamation, replacement, conveyance, transfer or lease does not
adversely affect the rights, preferences and privileges of the holders of the
Preferred Securities (including any Successor Securities) in any material
respect, and (b) following such merger, consolidation, conversion, amalgamation,
replacement, conveyance, transfer or lease, neither the Trust nor such successor
entity will be required to register as an investment company under the 1940 Act
and (viii) the Depositor owns all of the common securities of such successor
entity and guarantees the obligations of such successor entity under the
Successor Securities at least to the extent provided by the Guarantee.
Notwithstanding the foregoing, the Trust shall not, except with the consent of
Holders of 100% in Liquidation Amount of the Preferred Securities, consolidate,
amalgamate, merge with or into, convert into or be replaced by or convey,
transfer or lease its properties and assets substantially as an entirety to any
other Person or permit any other entity to consolidate, amalgamate, merge with
or into, or replace it if such consolidation, conversion, amalgamation, merger,
replacement, conveyance, transfer or lease would cause the Trust or the
successor entity to be classified as other than a grantor trust for United
States Federal income tax purposes.
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.1. Limitation of Rights of Securityholders.
---------------------------------------
The death, incapacity, dissolution, bankruptcy or termination of any
Person having an interest, beneficial or otherwise, in Trust Securities shall
not operate to terminate this Trust Agreement nor dissolve, terminate or annul
the Trust nor entitle the legal representatives or heirs of such Person or any
Securityholder for such person, to claim an accounting, take any action or bring
any proceeding in any court for a partition or winding-up of the arrangements
contemplated hereby, nor otherwise affect the rights, obligations and
liabilities of the parties hereto or any of them.
<PAGE>
-42-
Section 10.2. Amendment.
---------
(a) This Trust Agreement may be amended from time to time by the
Trustees and the Depositor, without the consent of any Securityholders, (i) to
cure any ambiguity, correct or supplement any provision herein which may be
inconsistent with any other provision herein, or to make any other provisions
with respect to matters or questions arising under this Trust Agreement, which
shall not be inconsistent with the other provisions of this Trust Agreement, or
(ii) to modify, eliminate or add to any provisions of this Trust Agreement to
such extent as shall be necessary to ensure that the Trust will be classified
for United States Federal income tax purposes as a grantor trust at all times
that any Trust Securities are outstanding or to ensure that the Trust will not
be required to register as an investment company under the 1940 Act; provided,
however, that in the case of clause (ii), such action shall not adversely affect
in any material respect the interests of any Securityholder, and any such
amendments of this Trust Agreement shall become effective when notice thereof is
given to the Securityholders.
(b) Except as provided in Section 6.1(c) or Section 10.2(c) hereof,
any provision of this Trust Agreement may be amended by the Trustees and the
Depositor with (i) the consent of Trust Securityholders representing not less
than a majority (based upon Liquidation Amounts) of the Trust Securities then
Outstanding and (ii) receipt by the Trustees of an Opinion of Counsel to the
effect that such amendment or the exercise of any power granted to the Trustees
in accordance with such amendment will not affect the Trust's status as a
grantor trust for United States Federal income tax purposes or the Trust's
exemption from status of an investment company under the 1940 Act.
(c) In addition to and notwithstanding any other provision in this
Trust Agreement, without the consent of each affected Securityholder, this Trust
Agreement may not be amended to (i) change the amount or timing of any
Distribution on the Trust Securities or otherwise adversely affect the amount of
any Distribution required to be made in respect of the Trust Securities as of a
specified date or (ii) restrict the right of a Securityholder to institute suit
for the enforcement of any such payment on or after such date; notwithstanding
any other provision herein, without the unanimous consent of the
Securityholders, this paragraph (c) of this Section 10.2 may not be amended.
(d) Notwithstanding any other provisions of this Trust Agreement, no
Trustee shall enter into or consent to any amendment to this Trust Agreement
which would cause the Trust to fail or cease to qualify for the exemption from
status of an investment company under the 1940 Act or fail or cease to be
classified as a grantor trust for United States Federal income tax purposes.
(e) Notwithstanding anything in this Trust Agreement to the contrary,
without the consent of the Depositor, this Trust Agreement may not be amended in
a manner which imposes any additional obligation on the Depositor.
(f) In the event that any amendment to this Trust Agreement is made,
the Administrative Trustees shall promptly provide to the Depositor a copy of
such amendment.
(g) Neither the Property Trustee nor the Delaware Trustee shall be
required to enter into any amendment to this Trust Agreement which affects its
own rights, duties or immunities under this Trust Agreement. The Property
Trustee shall be entitled to receive an Opinion of Counsel and an Officers'
Certificate stating that any amendment to this Trust Agreement is in compliance
with this Trust Agreement.
<PAGE>
-43-
Section 10.3. Separability.
------------
In case any provision in this Trust Agreement or in the Trust
Securities Certificates shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
Section 10.4. Governing Law.
-------------
THIS TRUST AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
SECURITYHOLDERS, THE TRUST, THE DEPOSITOR AND THE TRUSTEES SHALL BE GOVERNED BY
AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE AND ALL
RIGHTS AND REMEDIES SHALL BE GOVERNED BY SUCH LAWS WITHOUT REGARD TO THE
PRINCIPLES OF CONFLICT OF LAWS OF THE STATE OF DELAWARE OR ANY OTHER
JURISDICTION THAT WOULD CALL FOR THE APPLICATION OF THE LAW OF ANY OTHER
JURISDICTION OTHER THAN THE STATE OF DELAWARE; PROVIDED, HOWEVER, THAT THERE
SHALL NOT BE APPLICABLE TO THE SECURITYHOLDERS, THE TRUST, THE DEPOSITOR, THE
TRUSTEES OR THIS TRUST AGREEMENT ANY PROVISION OF THE LAWS (STATUTORY OR COMMON)
OF THE STATE OF DELAWARE PERTAINING TO TRUSTS THAT RELATE TO OR REGULATE, IN A
MANNER INCONSISTENT WITH THE TERMS HEREOF (A) THE FILING WITH ANY COURT OR
GOVERNMENT BODY OR AGENCY OF TRUSTEE ACCOUNTS OR SCHEDULES OF TRUSTEE FEES AND
CHARGES, (B) AFFIRMATIVE REQUIREMENTS TO POST BONDS FOR TRUSTEES, OFFICERS,
AGENTS OR EMPLOYEES OF A TRUST, (C) THE NECESSITY FOR OBTAINING COURT OR OTHER
GOVERNMENTAL APPROVAL CONCERNING THE ACQUISITION, HOLDING OR DISPOSITION OF REAL
OR PERSONAL PROPERTY, (D) FEES OR OTHER SUMS PAYABLE TO TRUSTEES, OFFICERS,
AGENTS OR EMPLOYEES OF A TRUST, (E) THE ALLOCATION OF RECEIPTS AND EXPENDITURES
TO INCOME OR PRINCIPAL, (F) RESTRICTIONS OR LIMITATIONS ON THE PERMISSIBLE
NATURE, AMOUNT OR CONCENTRATION OF TRUST INVESTMENTS OR REQUIREMENTS RELATING TO
THE TITLING, STORAGE OR OTHER MANNER OF HOLDING OR INVESTING TRUST ASSETS OR (G)
THE ESTABLISHMENT OF FIDUCIARY OR OTHER STANDARDS OF RESPONSIBILITY OR
LIMITATIONS ON THE ACTS OR POWERS OF TRUSTEES THAT ARE INCONSISTENT WITH THE
LIMITATIONS OR LIABILITIES OR AUTHORITIES AND POWERS OF THE TRUSTEES AS SET
FORTH OR REFERENCED IN THIS TRUST AGREEMENT. SECTION 3540 OF TITLE 12 OF THE
DELAWARE CODE SHALL NOT APPLY TO THE TRUST.
Section 10.5. Payments Due on Non-Business Day.
--------------------------------
If the date fixed for any payment on any Trust Security shall be a day
that is not a Business Day, then such payment need not be made on such date but
way be made an the next succeeding day that is a Business Day (except as
otherwise provided in Sections 4.1(a) and 4.2(d)), with the same force and
effect as though made on the date fixed for such payment, and no interest shall
accrue thereon for the period after such date.
Section 10.6. Successors.
----------
This Trust Agreement shall be binding upon and shall inure to the
benefit of any successor to the Depositor, the Trust or the Relevant Trustee,
including any successor by operation of law. Except in connection with
transactions permitted under Article 5 of the Indenture and pursuant to which
the assignee agrees in
<PAGE>
-44-
writing to perform the Depositor's obligations hereunder, the Depositor shall
not assign its obligations hereunder.
Section 10.7. Headings.
--------
The Article and Section headings are for convenience only and shall
not affect the construction of this Trust Agreement.
Section 10.8. Reports, Notices and Demands.
----------------------------
Any report, notice, demand or other communication which by any
provision of this Trust Agreement is required or permitted to be given or served
to or upon any Securityholder or the Depositor may be given or served in writing
by deposit thereof, first-class postage prepaid, in the United States mail, hand
delivery or facsimile transmission, in each case, addressed, (a) in the case of
a Preferred Securityholder, to such Preferred Securityholder as such
Securityholder's name and address may appear on the Securities Register; and (b)
in the case of the Common Securityholder or the Depositor, to Applied Power
Inc., 13000 West Silver Spring Drive, Butler, Wisconsin 53007-1093, Attention:
Chief Financial Officer, facsimile no.: (414) 783-9790. Such notice, demand or
other communication to or upon a Securityholder shall be deemed to have been
sufficiently given or made, for all purposes, upon hand delivery, mailing or
transmission.
Any notice, demand or other communication which by any provision of
this Trust Agreement is required or permitted to be given or served to or upon
the Trust, the Property Trustee, the Delaware Trustee or the Administrative
Trustees shall be given in writing addressed (until another address is published
by the Trust) as follows: (a) with respect to the Property Trustee to [ ],
Attention: Corporate Trust Services Division; (b) with respect to the
Delaware Trustee, to [ ]; and (c) with respect to the Administrative
Trustees, to them at the address above for notices to the Depositor, marked
"Attention Administrative Trustees of Applied Power Capital Trust________." Such
notice, demand or other communication to or upon the Trust or the Property
Trustee shall be deemed to have been sufficiently given or made only upon actual
receipt of the writing by the Trust or the Property Trustee.
Section 10.9. Agreement Not to Petition.
-------------------------
Each of the Trustees and the Depositor agree for the benefit of the
Securityholders that, until at least one year and one day after the Trust has
been terminated in accordance with Article IX, they shall not file, or join in
the filing of, a petition against the Trust under any bankruptcy, insolvency,
reorganization or other similar law (including, without limitation, the United
States Bankruptcy Code) (collectively, "Bankruptcy Laws") or otherwise join in
---------------
the commencement of any proceeding against the Trust under any Bankruptcy Law.
In the event the Depositor takes action in violation of this Section 10.9, the
Property Trustee agrees, for the benefit of Securityholders, that at the expense
of the Depositor, it shall file an answer with the bankruptcy court or otherwise
properly contest the filing of such petition by the Depositor against the Trust
or the commencement of such action and raise the defense that the Depositor has
agreed in writing not to take such action and should be stopped and precluded
therefrom and such other defenses, if any, as counsel for the Trustee or the
Trust may assert. The provisions of this Section 10.9 shall survive the
termination of this Trust Agreement.
Section 10.10. Trust Indenture Act; Conflict with Trust Indenture
--------------------------------------------------
Act.
- ---
(a) This Trust Agreement is subject to the provisions of the Trust
Indenture Act that are required to be part of this Trust Agreement and shall, to
the extent applicable, be governed by such provisions.
<PAGE>
-45-
(b) The Property Trustee shall be the only Trustee which is a trustee
for the purposes of the Trust Indenture Act.
(c) If any provision hereof limits, qualifies or conflicts with
another provision hereof which is required to be included in this Trust
Agreement by any of the provisions of the Trust Indenture Act, such required
provision shall control. If any provision of this Trust Agreement modifies or
excludes any provision of the Trust Indenture Act which may be so modified or
excluded, the latter provision shall be deemed to apply to this Trust Agreement
as so modified or excluded, as the case may be.
(d) The application of the Trust Indenture Act to this Trust Agreement
shall not affect the nature of the Securities as equity securities representing
undivided beneficial ownership interests in the assets of the Trust.
Section 10.11. Acceptance of Terms of Trust Agreement, Guarantee and
-----------------------------------------------------
Indenture.
- ---------
THE RECEIPT AND ACCEPTANCE OF A TRUST SECURITY OR ANY INTEREST THEREIN
BY OR ON BEHALF OF A SECURITYHOLDER OR ANY BENEFICIAL OWNER, WITHOUT ANY
SIGNATURE OR FURTHER MANIFESTATION OF ASSENT, SHALL CONSTITUTE THE UNCONDITIONAL
ACCEPTANCE BY THE SECURITYHOLDER AND ALL OTHERS HAVING A BENEFICIAL OWNERSHIP
INTEREST IN SUCH TRUST SECURITY OF ALL THE TERMS AND PROVISIONS OF THIS TRUST
AGREEMENT AND AGREEMENT TO THE SUBORDINATION PROVISIONS AND OTHER TERMS OF THE
GUARANTEE AND THE INDENTURE, AND SHALL CONSTITUTE THE AGREEMENT OF THE TRUST,
SUCH SECURITYHOLDER AND SUCH OTHERS THAT THE TERMS AND PROVISIONS OF THIS TRUST
AGREEMENT SHALL BE BINDING, OPERATIVE AND EFFECTIVE AS BETWEEN THE TRUST AND
SUCH SECURITYHOLDER AND SUCH OTHERS.
<PAGE>
S-1
THIS TRUST AGREEMENT is executed as of the date first above written.
APPLIED POWER INC.
By: ____________________________________________
Name:
Title:
THE FIRST NATIONAL BANK OF CHICAGO, as Property
Trustee
By: ____________________________________________
Name:
Title:
FIRST CHICAGO DELAWARE INC., as Delaware Trustee
By: ____________________________________________
Name:
Title:
________________________________________________
[ ],
as Administrative Trustee
________________________________________________
[ ],
as Administrative Trustee
<PAGE>
EXHIBIT A
CERTIFICATE OF TRUST
OF
APPLIED POWER CAPITAL TRUST _____
This Certificate of Trust of Applied Power Capital Trust _____ (the
"Trust"), dated December , 1998, is being duly executed and filed by the
undersigned, as trustees, to form a business trust under the Delaware Business
Trust Act (12 Del. C. Section 3801 et seq.).
-- ---
1. Name. The name of the business trust being formed hereby is
Applied Power Capital Trust _____.
2. Delaware Trustee. The name and business address of the trustee of
the Trust with a principal place of business in the State of Delaware are as
follows:
First Chicago Delaware Inc.
300 King Street
Wilmington, Delaware 19801
3. Effective Date. This Certificate of Trust shall be effective
immediately upon its filing with the Secretary of State of the State of
Delaware.
In Witness Whereof, the undersigned, being all of the trustees of the
Trust, have executed this Certificate of Trust as of the date first above
written.
THE FIRST NATIONAL BANK OF CHICAGO, as Trustee
By: __________________________________________
Name:
Title:
FIRST CHICAGO DELAWARE INC., as Trustee
By: __________________________________________
Name:
Title:
<PAGE>
2
______________________________________________
Richard G. Sim, as Trustee
______________________________________________
Robert C. Arzbaecher, as Trustee
<PAGE>
EXHIBIT B
The Depository Trust Company
55 Water Street, 49th Floor
New York, New York 10041-0099
Attention: [ ]
General Counsel's Office
Re:
Ladies and Gentlemen:
The purpose of this letter is to set forth certain matters relating
to the issuance and deposit with The Depository Trust Company ("DTC") of the
---
[TITLE OF PREFERRED SECURITIES] (the "Preferred Securities"), of Applied Power
--------------------
Capital Trust _____, a Delaware business trust (the "Issuer"), formed pursuant
------
to a Trust Agreement between Applied Power Inc. ("API") and The First National
---
Bank of Chicago, as Property Trustee, First Chicago Delaware Inc., as Delaware
Trustee, and the Administrative Trustees named therein. The payment of
distributions on the Preferred Securities, and payments due upon liquidation of
Issuer or redemption of the Preferred Securities, to the extent the Issuer has
funds available for the payment thereof are guaranteed by API to the extent set
forth in a Guarantee Agreement dated _______, _____, _____ by API with respect
to the Preferred Securities. API and the Issuer propose to sell the Preferred
Securities to certain Underwriters (the "Underwriters") pursuant to an
------------
Underwriting Agreement dated [ ] by and among the Underwriters, the
Issuer and API, and the Underwriters wish to take delivery of the Preferred
Securities through DTC. [ ] is acting as transfer agent and registrar
with respect to the Preferred Securities (then "Transfer Agent and Registrar").
----------------------------
To induce DTC to accept the Preferred Securities as eligible for
deposit at DTC, and to act in accordance with DTC's rules with respect to the
Preferred Securities, the Issuer, the Transfer Agent and Registrar and DTC agree
among each other as follows:
1. Prior to the closing of the sale of the Preferred Securities to
the Underwriters, which is expected to occur on or about _____, ________,
_____,there shall be deposited with or on behalf of DTC one or more global
certificates (individually and collectively, the "Global Certificate")
------------------
registered in the name of DTC's Preferred Securities nominee, Cede & Co.,
representing an aggregate of Preferred Securities and bearing the following
legend:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
<PAGE>
-2-
2. The Amended and Restated Trust Agreement of the Issuer provides
for the voting by holders of the Preferred Securities under certain limited
circumstances. The Issuer shall establish a record date for such purposes and
shall, to the extent possible, give DTC notice of such record date not less than
15 calendar days in advance of such record date.
3. In the event of a stock split, conversion, recapitalization,
reorganization or any other similar transaction resulting in the cancellation of
all or any part of the Preferred Securities outstanding, the Issuer or the
Transfer Agent and Registrar shall send DTC a notice of such event at least 5
business days prior to the effective date of such event.
4. In the event of distribution on, or an offering or issuance of
rights with respect to, the Preferred Securities outstanding, the Issuer or the
Transfer Agent and Registrar shall send DTC a notice specifying: (a) the amount
of and conditions, if any, applicable to the payment of any such distribution or
any such offering or issuance of rights; (b) any applicable expiration or
deadline date, or any date by which any action on the part of the holders of
Preferred Securities is required; and (c) the date any required notice is to be
mailed by or on behalf of the Issuer to holders of Preferred Securities or
published by or on behalf of the Issuer (whether by mail or publication, the
"Publication Date"). Such notice shall be sent to DTC by a secure means (e.g.,
legible telecopy, registered or certified mail, overnight delivery) in a timely
manner designed to assure that such notice is in DTC's possession no later than
the close of business on the business day before the Publication Date. The
Issuer or the Transfer Agent and Registrar will forward such notice either in a
separate secure transmission for each CUSIP number or in a secure transmission
of multiple CUSIP numbers (if applicable) that includes a manifest or list of
each CUSIP number submitted in that transmission. (The party sending such notice
shall have a method to verify subsequently the use of such means and the
timeliness of such notice.) The Publication Date shall be not less than 30
calendar days nor more than 60 calendar days prior to the payment of any such
distribution or any such offering or issuance of rights with respect to the
Preferred Securities. After establishing the amount of payment to be made on the
Preferred Securities, the Issuer or the Transfer Agent and Registrar will notify
DTC's Dividend Department of such payment 5 business days prior to payment date.
Notices to DTC's Dividend Department by telecopy shall be sent to (212) 709-
1723. Such notices by mail or by any other means shall be sent to:
Manager, Announcements
Dividend Department
The Depository Trust Company
7 Hanover Square, 23rd Floor
New York, New York 10004-2695
The Issuer or the Transfer Agent and Registrar shall confirm DTC's
receipt of such telecopy by telephoning the Dividend Department at (212) 709-
1270.
5. In the event of a redemption by the Issuer of the Preferred
Securities, notice specifying the terms of the redemption and the Publication
Date of such notice shall be sent by the Issuer or the Transfer Agent and
Registrar to DTC not less than 30 calendar days prior to such event by a secure
means in the manner set forth in paragraph 4. Such redemption notice shall be
sent to DTC's Call Notification Department at (516) 227-4164 or (516) 227-4190,
and receipt of such notice shall be confirmed by telephoning (516) 227-4070.
Notice by mail or by any other means shall be sent to:
<PAGE>
-3-
Call Notification Department
The Depository Trust Company
711 Stewart Avenue
Garden City, New York 11530-4719
6. In the event of any invitation to tender the Preferred Securities,
notice specifying the terms of the tender and the Publication Date of such
notice shall be sent by the Issuer or the Transfer Agent and Registrar to DTC by
a secure means and in a timely manner as described in paragraph 4. Notices to
DTC pursuant to this paragraph and notices of other corporate actions (including
mandatory tenders, exchanges and capital changes) shall be sent, unless
notification to another department is expressly provided for herein, by telecopy
to DTC's Reorganization Department at (212) 709-1093 or (212) 709-1094 and
receipt of such notice shall be confirmed by telephoning (212) 709-6884, or by
mail or any other means to:
Manager, Reorganization Department
Reorganization Window
The Depository Trust Company
7 Hanover Square, 23rd Floor
New York, New York 10004-2695
7. All notices and payment advices sent to DTC shall contain the
CUSIP number or numbers of the Preferred Securities and the accompanying
designation of the Preferred Securities, which, as of the date of this letter,
is "[TITLE OF PREFERRED SECURITIES]."
8. Distribution payments or other cash payments with respect to the
Preferred Securities evidenced by the Global Certificate shall be received by
Cede & Co., as nominee of DTC, or its registered assigns in [ ] funds on each
payment date (or in accordance with existing arrangements between the Issuer or
the Transfer Agent and Registrar and DTC). Such payments shall be made payable
to the order of Cede & Co., and shall be addressed as follows:
NDFS Redemption Department
The Depository Trust Company
7 Hanover Square, 23rd Floor
New York, New York 10004-2695
9. DTC may by prior written notice direct the Issuer and the Transfer
Agent and Registrar to use any other telecopy number or address of DTC as the
number or address to which notices or payments may be sent.
10. In the event of a conversion, redemption, or any other similar
transaction (e.g., tender made and accepted in response to the Issuer's or the
Transfer Agent and Registrar's invitation) necessitating a reduction in the
aggregate number of Preferred Securities outstanding evidenced by Global
Certificates, DTC, in its discretion: (a) may request the Issuer or the Transfer
Agent and Registrar to issue and countersign a new Global Certificate; or (b)
may make an appropriate notation on the Global Certificate indicating the date
and amount of such reduction.
11. DTC may discontinue its services as a securities depositary with
respect to the Preferred Securities at any time by giving at least 90 days'
prior written notice to the Issuer and the Transfer Agent and Registrar (at
which time DTC will confirm with the Issuer or the Transfer Agent and Registrar
the aggregate
<PAGE>
-4-
number of Preferred Securities deposited with it) and discharging its
responsibilities with respect thereto under applicable law. Under such
circumstances, the Issuer may determine to make alternative arrangements for
book-entry settlement for the Preferred Securities, make available one or more
separate global certificates evidencing Preferred Securities to any Participant
having Preferred Securities credited to its DTC account, or issue definitive
Preferred Securities to the beneficial holders thereof, and in any such case,
DTC agrees to cooperate fully with the Issuer and the Transfer Agent and
Registrar, and to return the Global Certificate, duly endorsed for transfer as
directed by the Issuer or the Transfer Agent and Registrar, together with any
other documents of transfer reasonably requested by the Issuer or the Transfer
Agent and Registrar.
12. In the event that the Issuer determines that beneficial owners of
Preferred Securities shall be able to obtain definitive Preferred Securities,
the Issuer or the Transfer Agent and Registrar shall notify DTC of the
availability of certificates. In such event, the Issuer or the Transfer Agent
and Registrar shall issue, transfer and exchange certificates in appropriate
amounts, as required by DTC and others, and DTC agrees to cooperate fully with
the Issuer and the Transfer Agent and Registrar and to return the Global
Certificate, duly endorsed for transfer as directed by the Issuer or the
Transfer Agent and Registrar, together with any other documents of transfer
reasonably requested by the Issuer or the Transfer Agent and Registrar.
13. This letter may be executed in any number of counterparts, each
of which when so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument. Nothing
herein shall be deemed to require the Transfer Agent and Registrar to advance
funds on behalf of Applied Power Capital Trust ______.
Very truly yours,
APPLIED POWER CAPITAL TRUST ___
(As Issuer)
By: ________________________________
Name:
Title:
[ ]
By: ________________________________
Administrative Trustee
[ ]
(As Transfer Agent and Registrar)
By: ________________________________
Name:
Title:
<PAGE>
-5-
Received and Accepted:
THE DEPOSITORY TRUST COMPANY
By: ____________________________
Authorized Officer
<PAGE>
EXHIBIT C
THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT AS
DESCRIBED IN THE TRUST AGREEMENT (AS DEFINED BELOW)
Certificate Number Number Of Common Securities
C-1
Certificate Evidencing Common Securities
of
APPLIED POWER CAPITAL TRUST ___
_____% Common Securities
(Liquidation Amount $[ ] Per Common Security)
Applied Power Capital Trust ________, a statutory business trust
created under the laws of the State of Delaware (the "Trust"), hereby certifies
-----
that Applied Power Inc. (the "Holder") is the registered owner of (__________)
------
common securities of the Trust representing undivided beneficial ownership
interests of the Trust and designated the _____% Common Securities (liquidation
amount $[ ] per Common Security) (the "Common Securities"). To the extent
set forth in Section 5.10 of the Trust Agreement (as defined below) the Common
Securities are not transferable and any attempted transfer hereof shall be void.
The designations, rights, privileges, restrictions, preferences and other terms
and provisions of the Common Securities are set forth in, and this certificate
and the Common Securities represented hereby are issued and shall in all
respects be subject to the terms and provisions of, the Amended and Restated
Trust Agreement of the Trust dated as of ________, _______, _______, as the same
may be amended from time to time (the "Trust Agreement") including the
designation of the terms of the Common Securities as set forth therein. The
Trust will furnish a copy of the Trust Agreement to the Holder without charge
upon written request to the Trust at its principal place of business or
registered office .
Upon receipt of this certificate, the Holder is bound by the Trust
Agreement and is entitled to the benefits thereunder.
In Witness Whereof, one of the Administrative Trustees of the Trust
has executed this certificate this _ day of __________, __________.
APPLIED POWER CAPITAL TRUST ___
By: ________________________________
Name:
Administrative Trustee
<PAGE>
EXHIBIT D
If the Preferred Security is to be a Global Certificate Insert:
THIS PREFERRED SECURITY IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF
THE TRUST AGREEMENT HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME
OF THE DEPOSITORY TRUST COMPANY (THE "DEPOSITORY") OR A NOMINEE OF THE
----------
DEPOSITORY. THIS PREFERRED SECURITY IS EXCHANGEABLE FOR PREFERRED
SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITORY OR
ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE TRUST
AGREEMENT AND NO TRANSFER OF THIS PREFERRED SECURITY (OTHER THAN A TRANSFER
OF THIS PREFERRED SECURITY AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE
DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER
NOMINEE OF THE DEPOSITORY) MAY BE REGISTERED EXCEPT IN LIMITED
CIRCUMSTANCES.
UNLESS THIS PREFERRED SECURITY IN PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK)
TO APPLIED POWER CAPITAL TRUST _____ OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY PREFERRED SECURITY ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY A PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
Certificate Number Number Of Preferred Securities
P-_____ Cusip No. __________
Certificate Evidencing Preferred Securities
of
APPLIED POWER CAPITAL TRUST _____
[DESIGNATION OF PREFERRED SECURITIES]
(Liquidation Amount $[ ] Per Preferred Security)
Applied Power Capital Trust ______, a statutory business trust created
under the laws of the State of Delaware (the "Trust"), hereby certifies that
______________ (the "Holder") is the registered owner of (_____) preferred
------
securities of the Trust representing an undivided beneficial ownership interest
in the assets of the Trust and designated the [DESIGNATION OF PREFERRED
SECURITIES] (the "Preferred Securities"). The Preferred Securities are
--------------------
transferable on the books and records of the Trust, in person or by a duly
authorized attorney, upon surrender of this certificate duly endorsed and in
proper form for transfer as provided in Section 5.4 of the Trust Agreement (as
defined below). The designations, rights, privileges, restrictions, preferences
and other terms and provisions of the Preferred Securities are set forth in, and
this certificate and the Preferred Securities
<PAGE>
-2-
represented hereby are issued and shall in all respects be subject to the terms
and provisions of, the Amended and Restated Trust Agreement of the Trust dated
as of __________, __________ as the same may be amended from time to time (the
"Trust Agreement") including the designation of the terms of Preferred
---------------
Securities as set forth therein. The Holder is entitled to the benefits of the
Guarantee Agreement entered into by Applied Power Inc., a Wisconsin corporation,
and [ ], as guarantee trustee, dated as of [ ], as the same may be
amended from time to time (the "Guarantee"), to the extent provided therein. The
---------
Trust will furnish a copy of the Trust Agreement and the Guarantee to the Holder
without charge upon written request to the Trust at its principal place of
business or registered office.
Upon receipt of this certificate, the Holder is bound by the Trust
Agreement and is entitled to the benefits thereunder.
In Witness Whereof, one of the Administrative Trustees of the Trust
has executed this certificate this _____ day of __________, __________.
APPLIED POWER CAPITAL TRUST ___
By: _______________________________
Name:
Administrative Trustee
<PAGE>
ASSIGNMENT
For Value Received, the undersigned assigns and transfers this
Preferred Security to:
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
(Insert assignee's social security
or tax identification number)
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
agent to transfer this Preferred Security Certificate on the books of the Trust.
The agent may substitute another to act for him or her.
Date: ______________________________
Signature: ______________________________________________________
(Sign exactly as your name appears on the other side
of this Preferred Security Certificate)
_______________________________________________________________
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program), pursuant to
S.E.C. Rule 17Ad-15.
<PAGE>
EXHIBIT 4.12
================================================================================
GUARANTEE AGREEMENT
between
APPLIED POWER INC.
(as Guarantor)
and
THE FIRST NATIONAL BANK OF CHICAGO
(as Trustee)
dated as of
[ ]
================================================================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I. DEFINITIONS.......................................................... 1
Section 1.1. Definitions.................................................... 1
ARTICLE II. TRUST INDENTURE ACT................................................. 4
Section 2.1. Trust Indenture Act; Application............................... 4
Section 2.2. List of Holders................................................ 4
Section 2.3. Reports by the Guarantee Trustee............................... 4
Section 2.4. Periodic Reports to the Guarantee Trustee...................... 4
Section 2.5. Evidence of Compliance with Conditions Precedent............... 5
Section 2.6. Events of Default; Waiver...................................... 5
Section 2.7. Event of Default; Notice....................................... 5
Section 2.8. Conflicting Interests.......................................... 5
ARTICLE III. POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE................. 5
Section 3.1. Powers and Duties of the Guarantee Trustee..................... 5
Section 3.2. Certain Rights of Guarantee Trustee............................ 7
ARTICLE IV. GUARANTEE TRUSTEE................................................... 8
Section 4.1. Guarantee Trustee: Eligibility................................. 8
Section 4.2. Appointment, Removal and Resignation of the Guarantee Trustee.. 9
ARTICLE V. GUARANTEE............................................................ 9
Section 5.1. Guarantee...................................................... 9
Section 5.2. Waiver of Notice and Demand.................................... 9
Section 5.3. Obligations Not Affected....................................... 10
Section 5.4. Rights of Holders.............................................. 10
Section 5.5. Guarantee of Payment........................................... 11
Section 5.6. Subrogation.................................................... 11
Section 5.7. Independent Obligations........................................ 11
ARTICLE VI. COVENANTS AND SUBORDINATION.......................................... 11
Section 6.1. Subordination.................................................. 11
Section 6.2. Pari Passu Guarantees.......................................... 11
ARTICLE VII. TERMINATION........................................................ 12
Section 7.1. Termination.................................................... 12
</TABLE>
<PAGE>
<TABLE>
<S> <C>
ARTICLE VIII. MISCELLANEOUS................................................. 12
Section 8.1. Successors and Assigns..................................... 12
Section 8.2. Amendments................................................. 12
Section 8.3. Notices.................................................... 12
Section 8.4. Benefit.................................................... 13
Section 8.5. Interpretation............................................. 13
Section 8.6. Governing Law.............................................. 14
SIGNATURES................................................................... S-1
</TABLE>
-ii-
<PAGE>
GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT, dated as of ______________, [ ], is
executed and delivered by APPLIED POWER INC., a Wisconsin corporation (the
"Guarantor") having its principal office at 13000 West Silver Spring Drive,
---------
Butler, Wisconsin 53007-1093, and THE FIRST NATIONAL BANK OF CHICAGO, a national
banking association organized under the laws of the United States, as trustee
(the "Guarantee Trustee"), for the benefit of the Holders (as defined herein)
-----------------
from time to time of the Preferred Securities (as defined herein) of Applied
Power Capital Trust ___, a Delaware statutory business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Trust Agreement (the
"Trust Agreement"), dated as of _____________, [ ] among the Issuer Trustees
---------------
named therein, the Guarantor, as Depositor, and the Holders from time to time of
undivided beneficial ownership interests in the assets of the Issuer, the Issuer
is issuing up to $_________ ________ aggregate liquidation preference of its
[TITLE OF PREFERRED SECURITIES] (liquidation preference $[ ] per preferred
security) (the "Preferred Securities") and $_________ aggregate liquidation
preference of its common securities (the "Common Securities" and, together with
-----------------
the Preferred Securities, the "Securities") representing undivided beneficial
----------
ownership interests in the assets of the Issuer and having the terms set forth
in the Trust Agreement;
WHEREAS, the Preferred Securities will be issued by the Issuer and the
proceeds thereof, together with the proceeds from the issuance of the Issuer's
Common Securities (as defined below), will be used to purchase the Debentures
(as defined in the Trust Agreement) of the Guarantor which will be deposited
with The First National Bank of Chicago, as Property Trustee under the Trust
Agreement, as trust assets; and
WHEREAS, as incentive for the Holders to purchase the Securities, the
Guarantor desires irrevocably and unconditionally to agree, to the extent set
forth herein, to pay to the Holders of the Securities the Guarantee Payments (as
defined herein) and to make certain other payments on the terms and conditions
set forth herein.
NOW, THEREFORE, in consideration of the purchase by each Holder of
Securities, which purchase the Guarantor hereby agrees shall benefit the
Guarantor, the Guarantor executes and delivers this Guarantee Agreement for the
benefit of the Holders from time to time of the Securities.
ARTICLE I. DEFINITIONS
Section 1.1. Definitions.
-----------
As used in this Guarantee Agreement, the terms set forth below shall,
unless the context otherwise requires, have the following meanings. Capitalized
or otherwise defined terms used but not otherwise defined herein shall have the
meanings assigned to such terms in the Trust Agreement as in effect on the date
hereof.
"Affiliate" of any specified Person means any other Person directly or
---------
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person; provided, however, that an Affiliate of the
Guarantor shall not be deemed to include the Issuer. For the purposes of this
definition, "control" when used with respect to any specified Person means the
power to direct the management and poli-
<PAGE>
-2-
cies of such Person, directly or indirectly, whether through the ownership of
voting securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Event of Default" means a default by the Guarantor on any of its
----------------
payment or other obligations under this Guarantee Agreement; provided, however,
that, except with respect to a default in payment of any Guarantee Payments, the
Guarantor shall have received notice of default and shall not have cured such
default within 60 days after receipt of such notice.
"Guarantee Payments" means the following payments or distributions,
------------------
without duplication, with respect to the Securities, to the extent not paid or
made by or on behalf of the Issuer; (i) any accumulated and unpaid Distributions
(as defined in the Trust Agreement) required to be paid on such Securities, to
the extent the Issuer shall have funds on hand available therefor at such time,
(ii) the redemption price, including all accumulated and unpaid Distributions to
the date of redemption (the "Redemption Price"), with respect to the Securities
called for redemption by the Issuer to the extent the Issuer shall have funds on
hand available therefor at such time, and (iii) upon a voluntary or involuntary
termination, winding-up or liquidation of the Issuer, unless Debentures are
distributed to the Holders, the lesser of (a) the aggregate of the liquidation
preference of $[ ] per Security plus accumulated and unpaid Distributions on the
Securities to the date of payment to the extent the Issuer shall have funds on
hand available to make such payment at such time and (b) the amount of assets of
the Issuer remaining available for distribution to Holders in liquidation of the
Issuer (in either case, the "Liquidation Distribution").
"Guarantee Trustee" means The First National Bank of Chicago, until a
-----------------
Successor Guarantee Trustee has been appointed and has accepted such appointment
pursuant to the terms of this Guarantee Agreement and thereafter means each such
Successor Guarantee Trustee.
"Holder" means any holder, as registered on the books and records of
------
the Issuer, of any Securities; provided, however, that in determining whether
the holders of the requisite percentage of Preferred Securities have given any
request, notice, consent or waiver hereunder, "Holder" shall not include the
Guarantor, the Guarantee Trustee, or any Affiliate of the Guarantor or the
Guarantee Trustee.
"Indebtedness" means, with respect to a Person, (i) the principal of
------------
and premium, if any, and interest, if any, on, (A) indebtedness of such Person
for money borrowed and (B) indebtedness evidenced by securities, notes,
debentures, bonds or other similar instruments issued by such Person; (ii) all
capital lease obligations of such Person; (iii) all obligations of such Person
issued or assumed as the deferred purchase price of property, all conditional
sale obligations of such Person and all obligations of such Person under any
conditional sale or title retention agreement (but excluding trade accounts
payable and accrued liabilities in the ordinary course of business); (iv) all
obligations, contingent or otherwise, of such Person in respect of any letters
of credit, banker's acceptance, security purchase facilities or similar credit
transactions; (v) all obligations in respect of interest rate swap, cap, floor,
collar or other agreements, interest rate future or option contracts, currency
swap agreements, currency future or option contracts and other similar
agreements; and (vi) all obligations of the type referred to in clauses (i)
through (v) of others for the payment of which such Person is responsible or
liable as obligor, guarantor or otherwise.
"Indenture" means the Junior Subordinated Indenture, dated as of
---------
December [ ], 1998, between the Guarantor and The First National Bank of
Chicago, as Indenture Trustee together with the Securities Resolution dated
[ ] relating to the Debentures, each as amended or Supplemented from time to
time.
<PAGE>
-3-
"Junior Subordinated Indebtedness" means all Indebtedness of the
--------------------------------
Guarantor subordinate and junior to Subordinated Indebtedness and Senior
Indebtedness.
"List of Holders" has the meaning specified in Section 2.2(a).
---------------
"Majority in liquidation preference of the Preferred Securities"
--------------------------------------------------------------
means, except as provided by the Trust Indenture Act, a vote by the Holder(s),
voting separately as a class, of more than 50% of the liquidation preference of
all then outstanding Preferred Securities issued by the Issuer.
"Officers' Certificate" means, with respect to any Person, a
---------------------
certificate signed by the Chairman or a Vice Chairman of the Board, the
President or a Vice President, and by the Treasurer, an Assistant Treasurer, the
Comptroller, an Assistant Comptroller, the Secretary or an Assistant Secretary
of such Person, and delivered to the Guarantee Trustee. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Guarantee Agreement shall include:
(a) a statement that each officer signing the Officers' Certificate
has read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers'
Certificate;
(c) a statement that each officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(d) a statement as to whether, in the opinion of each officer, such
condition or covenant has been complied with.
"Person" means a legal person, including any individual, corporation,
------
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"Responsible Officer" means, with respect to the Guarantee Trustee,
-------------------
any Senior Vice President, any Vice President, any Assistant Vice President, the
Secretary, any Assistant Secretary, the Treasurer, any Assistant Treasurer, any
Trust Officer or Assistant Trust officer or any other officer of the Corporate
Trust Department of the above designated officers and also means, with respect
to a particular corporate trust matter, any other officer to whom such matter is
referred because of that officer's knowledge of and familiarity with the
particular subject.
"Senior Indebtedness" means all Indebtedness of the Guarantor, unless,
-------------------
in the instrument creating or evidencing the same or pursuant to which the same
is outstanding, it is provided that such obligations are not superior in right
of payment to Subordinated Indebtedness or Junior Subordinated Indebtedness or
to other Indebtedness of the Guarantor which is pari passu with, or subordinated
---- -----
to, Subordinated Indebtedness or Junior Subordinated Indebtedness.
"Subordinated Indebtedness" means all Indebtedness of the Guarantor
-------------------------
which is subordinated and Junior in right of payment to Senior Indebtedness, but
does not include Junior Subordinated Indebtedness.
<PAGE>
-4-
"Successor Guarantee Trustee" means a successor Guarantee Trustee
---------------------------
possessing the qualifications to act as Guarantee Trustee under Section 4.1.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
-------------------
amended.
ARTICLE II. TRUST INDENTURE ACT
Section 2.1. Trust Indenture Act; Application.
--------------------------------
(a) This Guarantee Agreement is subject to the provisions of the
Trust Indenture Act that are required to be part of this Guarantee Agreement and
shall, to the extent applicable, be governed by such provisions.
(b) If and to the extent that any provision of this Guarantee
Agreement limits, qualifies or conflicts with the duties imposed by Sections 310
to 317, inclusive, of the Trust Indenture Act, such imposed duties shall
control.
Section 2.2. List of Holders.
---------------
(a) The Guarantor shall furnish or cause to be furnished to the
Guarantee Trustee (a) semiannually, on or before [ ] and [ ] of
each year, a list, in such form as the Guarantee Trustee may reasonably require,
of the names and addresses of the Holders ("List of Holders") as of a date not
more than 15 days prior to the delivery thereof, and (b) at such other times as
the Guarantee Trustee may request in writing, within 30 days after the receipt
by the Guarantor of any such request, a List of Holders as of a date not more
than 15 days prior to the time such list is furnished, in each case to the
extent such information is in the possession or control of the Guarantor and is
not identical to a previously supplied list of Holders or has not otherwise been
received by the Guarantee Trustee in its capacity as such. The Guarantee
Trustee may destroy any List of Holders previously given to it on receipt of a
new List of Holders.
(b) The Guarantee Trustee shall comply with its obligations under
Section 311(a), Section 311(b) and Section 312(b) of the Trust Indenture Act.
Section 2.3. Reports by the Guarantee Trustee.
--------------------------------
Not later than [ ] of each year, commencing [ ], the
Guarantee Trustee shall provide to the Holders such reports as are required by
Section 313 of the Trust Indenture Act, if any, in the form and in the manner
provided by Section 313 of the Trust Indenture Act. The Guarantee Trustee shall
also comply with the requirements of Section 313 (d) of the Trust Indenture Act.
Section 2.4. Periodic Reports to the Guarantee Trustee.
-----------------------------------------
The Guarantor shall provide to the Guarantee Trustee, the Securities
and Exchange Commission and the Holders such documents, reports and information,
if any, as required by Section 314 of the Trust Indenture Act and the compliance
certificate required by Section 314 of the Trust Indenture Act, in the form, in
the manner and at the times required by Section 314 of the Trust Indenture Act.
<PAGE>
-5-
Section 2.5. Evidence of Compliance with Conditions Precedent.
------------------------------------------------
The Guarantor shall provide to the Guarantee Trustee such evidence of
compliance with such conditions precedent, if any, provided for in this
Guarantee Agreement that relate to any of the matters set forth in Section
314(c) of the Trust Indenture Act. Any certificate or opinion required to be
given by an officer pursuant to Section 314(c)(1) may be given in the form of an
Officers' Certificate.
Section 2.6. Events of Default; Waiver.
-------------------------
The Holders of a Majority in liquidation preference of the Preferred
Securities may, by vote, on behalf of the Holders, waive any past Event of
Default and its consequences. Upon such waiver, any such Event of Default shall
cease to exist, and any Event of Default arising therefrom shall be deemed to
have been cured, for every purpose of this Guarantee Agreement, but no such
waiver shall extend to any subsequent or other default or Event of Default or
impair any right consequent therefrom.
Section 2.7. Event of Default; Notice.
------------------------
(a) The Guarantee Trustee shall, within 90 days after the occurrence
of an Event of Default known to the Guarantee Trustee, transmit by mail, first
class postage prepaid, to the Holders, notices of all such Events of Default
unless such defaults have been cured or waived before the giving of such notice;
provided, that, except in the case of a default in the payment of a Guarantee
Payment, the Guarantee Trustee shall be protected in withholding such notice if
and so long as the Board of Directors, the executive committee or a trust
committee of directors and/or Responsible Officers of the Guarantee Trustee in
good faith determines that the withholding of such notice is in the interests of
the Holders.
(b) The Guarantee Trustee shall not be deemed to have knowledge of
any Event of Default unless the Guarantee Trustee shall have received written
notice, or a Responsible Officer charged with the administration of the Trust
Agreement shall have obtained written notice, of such Event of Default.
Section 2.8. Conflicting Interests.
---------------------
The Trust Agreement shall be deemed to be specifically described in
this Guarantee Agreement for the purposes of clause (i) of the first proviso
contained in Section 310(b) of the Trust Indenture Act.
ARTICLE III. POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE
Section 3.1. Powers and Duties of the Guarantee Trustee.
------------------------------------------
(a) This Guarantee Agreement shall be held by the Guarantee Trustee
for the benefit of the Holders, and the Guarantee Trustee shall not transfer
this Guarantee Agreement to any Person except a Holder exercising his or her
rights pursuant to Section 5.4(iv) or to a Successor Guarantee Trustee on
acceptance by such Successor Guarantee Trustee of its appointment to act as
Successor Guarantee Trustee. The right, title and interest of the Guarantee
Trustee shall automatically vest in any Successor Guarantee Trustee, upon
acceptance by such Successor Guarantee Trustee of its appointment hereunder, and
such vesting and cessation of title shall be effective whether or not
conveyancing documents have been executed and delivered pursuant to the
appointment of such Successor Guarantee Trustee.
<PAGE>
-6-
(b) If an Event of Default has occurred and is continuing, the
Guarantee Trustee shall enforce this Guarantee Agreement for the benefit of the
Holders.
(c) The Guarantee Trustee, before the occurrence of any Event of
Default and after the curing or waiver of all Events of Default that may have
occurred, shall undertake to perform only such duties as are specifically set
forth in this Guarantee Agreement, and no implied covenants shall be read into
this Guarantee Agreement against the Guarantee Trustee. In case an Event of
Default has occurred (that has not been cured or waived pursuant to Section
2.6), the Guarantee Trustee shall exercise such of the rights and powers vested
in it by this Guarantee Agreement, and use the same degree of care and skill in
its exercise thereof, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(d) No provision of this Guarantee Agreement shall be construed to
relieve the Guarantee Trustee from liability for its own negligent action, its
own negligent failure to act or its own willful misconduct, except that:
(i) prior to the occurrence of any Event of Default and after
the curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Guarantee Trustee shall
be determined solely by the express provisions of this Guarantee
Agreement, and the Guarantee Trustee shall not be liable except for
the performance of such duties and obligations as are specifically set
forth in this Guarantee Agreement; and
(B) in the absence of bad faith on the part of the Guarantee
Trustee, the Guarantee Trustee may conclusively rely, as to the truth
of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Guarantee
Trustee and conforming to the requirements of this Guarantee
Agreement; but in the case of any such certificates or opinions that
by any provision hereof or of the Trust Indenture Act are specifically
required to be furnished to the Guarantee Trustee, the Guarantee
Trustee shall be under a duty to examine the same to determine whether
or not they conform to the requirements of this Guarantee Agreement;
(ii) the Guarantee Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Guarantee
Trustee, unless it shall be proved that the Guarantee Trustee was negligent
in ascertaining the pertinent facts upon which such judgment was made;
(iii) the Guarantee Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in accordance
with the direction of the Holders of not less than a Majority in
liquidation preference of the Preferred Securities relating to the time,
method and place of conducting any proceeding for any remedy available to
the Guarantee Trustee, or exercising any trust or power conferred upon the
Guarantee Trustee under this Guarantee Agreement; and
(iv) no provision of this Guarantee Agreement shall require the
Guarantee Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties or in
the exercise of any of its rights or powers, if the Guarantee Trustee shall
have reasonable grounds for believing that the repayment of such funds or
liability is not reasonably assured to it under the terms of this Guarantee
Agreement or adequate indemnity against such risk or liability is not
reasonably assured to it.
<PAGE>
-7-
Section 3.2. Certain Rights of Guarantee Trustee.
-----------------------------------
(a) Subject to the provisions of Section 3.1:
(i) The Guarantee Trustee may rely and shall be fully protected
in acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness or
other paper or document reasonably believed by it to be genuine and to have
been signed, sent or presented by the proper party or parties.
(ii) Any direction or act of the Guarantor contemplated by this
Guarantee Agreement shall be sufficiently evidenced by an Officer's
Certificate unless otherwise prescribed herein.
(iii) Whenever, in the administration of this Guarantee
Agreement, the Guarantee Trustee shall deem it desirable that a matter be
proved or established before taking, suffering or omitting to take any
action hereunder, the Guarantee Trustee (unless other evidence is herein
specifically prescribed) may, in the absence of bad faith on its part,
request and rely upon an Officers' Certificate which, upon receipt of such
request from the Guarantee Trustee, shall be promptly delivered by the
Guarantor.
(iv) The Guarantee Trustee may consult with legal counsel, and
the written advice or opinion of such legal counsel with respect to legal
matters shall be full and complete authorization and protection in respect
of any action taken, suffered or omitted to be taken by it hereunder in
good faith and in accordance with such advice or opinion. Such legal
counsel may be legal counsel to the Guarantor or any of its Affiliates and
may be one of its employees. The Guarantee Trustee shall have the right at
any time to seek instructions concerning the administration of this
Guarantee Agreement from any court of competent jurisdiction.
(v) The Guarantee Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Guarantee
Agreement at the request or direction of any Holder, unless such Holder
shall have provided to the Guarantee Trustee such adequate security and
indemnity as would satisfy a reasonable person in the position of the
Guarantee Trustee, against the costs, expenses (including attorneys' fees
and expenses) and liabilities that might be incurred by it in complying
with such request or direction, including such reasonable advances as may
be requested by the Guarantee Trustee; provided that, nothing contained in
this Section 3.2(a)(v) shall be taken to relieve the Guarantee Trustee,
upon the occurrence of an Event of Default, of its obligation to exercise
the rights and powers vested in it by this Guarantee Agreement.
(vi) The Guarantee Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Guarantee Trustee, in its
discretion, may make such further inquiry or investigation into such facts
or matters as it may see fit.
(vii) The Guarantee Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by or
through its agents or attorneys, and the Guarantee Trustee shall not be
responsible for any misconduct or negligence on the part of any such agent
or attorney appointed with due care by it hereunder.
<PAGE>
-8-
(viii) Any action taken by the Guarantee Trustee or its agents
hereunder shall bind the holders, and the signature of the Guarantee
Trustee or its agents alone shall be sufficient and effective to perform
such action. No third party shall be required to inquire as to the
authority of the Guarantee Trustee to so act or as to its compliance with
any of the terms and provisions of this Guarantee Agreement, both of which
shall be conclusively evidenced by the Guarantee's or its agent's taking
such action.
(ix) Whenever in the administration of this Guarantee Agreement
the Guarantee Trustee shall deem it desirable to receive instructions with
respect to enforcing any remedy or right or taking any other action
hereunder, the Guarantee Trustee (A) may request instructions from the
Holders of a Majority in Liquidation Amount of the Securities, (B) may
refrain from enforcing such remedy or right or taking such other action
until such instructions are received, and (C) shall be protected in acting
in accordance with such instructions.
(b) No provision of this Guarantee Agreement shall be deemed to
impose any duty or obligation on the Guarantee Trustee to perform any act or
acts or exercise any right, power, duty or obligation conferred or imposed on it
in any jurisdiction in which it shall be illegal, or in which the Guarantee
Trustee shall be unqualified or incompetent in accordance with applicable law,
to perform any such act or acts or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Guarantee Trustee
shall be construed to be a duty to act in accordance with such power and
authority.
Section 3.3. Indemnity.
---------
The Guarantor agrees to indemnify the Guarantee Trustee for, and to
hold it harmless against, any loss, liability or expense incurred without
negligence or bad faith on the part of the Guarantee Trustee, arising out of or
in connection with the acceptance or administration of this Guarantee Agreement,
including the costs and expenses of defending itself against any claim or
liability in connection with the exercise or performance of any of its powers or
duties hereunder. The Guarantee Trustee will not claim or exact any lien or
charge on any Guarantee Payments as a result of any amount due to it under this
Guarantee Agreement.
ARTICLE IV. GUARANTEE TRUSTEE
Section 4.1. Guarantee Trustee: Eligibility.
------------------------------
(a) There shall at all times be a Guarantee Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a Person that is eligible pursuant to the Trust Indenture
Act to act as such and has a combined capital and surplus of at least
$50,000,000, and shall be a corporation meeting the requirements of Section
310(c) of the Trust Indenture Act. If such corporation publishes reports
of condition at least annually, pursuant to law or to the requirements of
the supervising or examining authority, then, for the purposes of this
Section and to the extent permitted by the Trust Indenture Act, the
combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of
condition so published.
<PAGE>
-9-
(b) If at any time the Guarantee Trustee shall cease to be eligible
to so act under Section 4.1(a), the Guarantee Trustee shall immediately resign
in the manner and with the effect set out in Section 4.2(c).
(c) If the Guarantee Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act, the
Guarantee Trustee and Guarantor shall in all respects comply with the provisions
of Section 310(b) of the Trust Indenture Act.
Section 4.2. Appointment, Removal and Resignation of the Guarantee
-----------------------------------------------------
Trustee.
- -------
(a) Subject to Section 4.2(b), the Guarantee Trustee may be appointed
or removed without cause at any time by the Guarantor.
(b) The Guarantee Trustee shall not be removed until a Successor
Guarantee Trustee has been appointed and has accepted such appointment by
written instrument executed by such Successor Guarantee Trustee and delivered to
the Guarantor.
(c) The Guarantee Trustee appointed hereunder shall hold office until
a Successor Guarantee Trustee shall have been appointed or until its removal or
resignation. The Guarantee Trustee may resign from office (without need for
prior or subsequent accounting) by an instrument in writing executed by the
Guarantee Trustee and delivered to the Guarantor, which resignation shall not
take effect until a Successor Guarantee Trustee has been appointed and has
accepted such appointment by instrument in writing executed by such Successor
Guarantee Trustee and delivered to the Guarantor and the resigning Guarantee
Trustee.
(d) If no Successor Guarantee Trustee shall have been appointed and
accepted appointment as provided in this Section 4.2 within 60 days after
delivery to the Guarantor of an instrument of resignation, the resigning
Guarantee Trustee may petition, at the expense of the Guarantor, any court of
competent jurisdiction for appointment of a Successor Guarantee Trustee. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Guarantee Trustee.
ARTICLE V. GUARANTEE
Section 5.1. Guarantee.
---------
The Guarantor irrevocably and unconditionally agrees to pay in full to
the Holders the Guarantee Payments (without duplication of amounts theretofore
paid by or on behalf of the Issuer), as and when due, regardless of any defense,
right of set-off or counterclaim which the Issuer may have or assert. The
Guarantor's obligation to make a Guarantee Payment may be satisfied by direct
payment of the required amounts by the Guarantor to the Holders or by causing
the Issuer to pay such amounts to the Holders.
Section 5.2. Waiver of Notice and Demand.
---------------------------
The Guarantor hereby waives notice of acceptance of the Guarantee
Agreement and of any liability to which it applies or may apply, presentment,
demand for payment, any right to require a proceeding first against the
Guarantee Trustee, Issuer or any other Person before proceeding against the
Guarantor, protest, notice of nonpayment, notice of dishonor, notice of
redemption and all other notices and demands.
<PAGE>
-10-
Section 5.3. Obligations Not Affected.
------------------------
The obligations, covenants, agreements and duties of the Guarantor
under this Guarantee Agreement shall in no way be affected or impaired by reason
of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied
agreement, covenant, term or condition relating to the Securities to be
performed or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all or any
portion of the Distributions (other than an extension of time for payment
of Distributions that results from the extension of any interest payment
period on the Debentures as so provided in the Indenture), Redemption
Price, Liquidation Distribution or any other sums payable under the terms
of the Securities or the extension of time for the performance of any other
obligation under, arising out of, or in connection with, the Securities;
(c) any failure, omission, delay or lack of diligence on the part of
the Holders to enforce, assert or exercise any right, privilege, power or
remedy conferred on the Holders pursuant to the terms of the Securities, or
any action on the part of the Issuer granting indulgence or extension of
any kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of
any collateral, receivership, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization, arrangement, composition or
readjustment of debt of, or other similar proceedings affecting, the Issuer
or any of the assets of the Issuer;
(e) any invalidity of, or defect or deficiency in, the Securities;
(f) the settlement or compromise of any obligation guaranteed hereby
or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise constitute
a legal or equitable discharge or defense of a guarantor, it being the
intent of this Section 5.3 that the obligations of the Guarantor hereunder
shall be absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or
obtain the consent of, the Guarantor with respect to the happening of any of the
foregoing.
Section 5.4. Rights of Holders.
-----------------
The Guarantor expressly acknowledges that: (i) this Guarantee
Agreement will be deposited with the Guarantee Trustee to be held for the
benefit of the Holders; (ii) the Guarantee Trustee has the right to enforce this
Guarantee Agreement on behalf of the Holders; (iii) the Holders of a Majority in
liquidation preference of the Securities have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Guarantee Trustee in respect of this Guarantee Agreement or exercising any trust
or power conferred upon the Guarantee Trustee under this Guarantee Agreement;
and (iv) if the Guarantee Trustee fails to enforce this Guarantee Agreement
after a Holder has made a written request for the Guarantee Trustee to do so,
any Holder may, to the extent permitted by law, institute a legal proceeding
directly against the Guarantor to enforce its rights under this Guarantee
Agreement, without first instituting a legal proceeding against the
<PAGE>
-11-
Guarantee Trustee, the Issuer or any other Person. Notwithstanding the
foregoing, if the Guarantor has failed to make a Guarantee Payment, a Holder may
directly institute a proceeding against the Guarantor for enforcement of this
Guarantee Agreement for such payment. The Guarantor waives, any right or remedy
to require that any action on this Guarantee Agreement be brought first against
the Issuer or any other Person or entity before proceeding directly against the
Guarantor.
Section 5.5. Guarantee of Payment.
--------------------
This Guarantee Agreement creates a guarantee of payment and not of
collection. This Guarantee Agreement will not be discharged except by payment
of the Guarantee Payments in full (without duplication of amounts theretofore
paid by the Issuer) or upon distribution of Debentures to Holders as provided in
the Trust Agreement.
Section 5.6. Subrogation.
-----------
The Guarantor shall be subrogated to all (if any) rights of the
Holders against the Issuer in respect of any amounts paid to the Holders by the
Guarantor under this Guarantee Agreement and shall have the right to waive
payment by the Issuer pursuant to Section 5.1; provided, however, that the
Guarantor shall not (except to the extent required by mandatory provisions of
law) be entitled to enforce or exercise any rights which it may acquire by way
of subrogation or any indemnity, reimbursement or other agreement, in all cases
as a result of payment under this Guarantee Agreement, if at the time of any
such payment, any amounts are due and unpaid under this Guarantee Agreement. If
any amount shall be paid to the Guarantor in violation of the preceding
sentence, the Guarantor agrees to hold such amount in trust for the Holders and
to pay over such amount to the Holders.
Section 5.7. Independent Obligations.
-----------------------
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Securities and
that the Guarantor shall be liable as principal and as debtor hereunder to make
Guarantee Payments pursuant to the terms of this Guarantee Agreement
notwithstanding the occurrence of any event referred to in subsections (a)
through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI. COVENANTS AND SUBORDINATION
Section 6.1. Subordination.
-------------
This Guarantee Agreement will constitute an unsecured obligation of
the Guarantor and will rank subordinate and junior in right of payment to all
Senior Indebtedness and Subordinated Indebtedness of the Guarantor. If an Event
of Default has occurred and is continuing under the Trust Agreement, the rights
of the holders of the Common Securities to receive Guarantee Payments hereunder
shall be subordinated to the rights of the holders of Preferred Securities to
receive Guarantee Payments under this Guarantee.
Section 6.2. Pari Passu Guarantees.
---------------------
This Guarantee Agreement shall rank pari passu with any similar
---- -----
Guarantee Agreements issued by the Guarantor on behalf of the holders of
Preferred Securities issued by Applied Power Capital Trust __.
<PAGE>
-12-
ARTICLE VII. TERMINATION
Section 7.1. Termination.
-----------
This Guarantee Agreement shall terminate and be of no further force
and effect upon (i) full payment of the Redemption Price of all Securities, (ii)
the distribution of Debentures to the Holders in exchange for all of the
Securities or (iii) full payment of the amounts payable in accordance with the
Trust Agreement upon liquidation of the Issuer. Notwithstanding the foregoing,
this Guarantee Agreement will continue to be effective or will be reinstated, as
the case may be, if at any time any Holder must restore payment of any sums paid
with respect to Preferred Securities or this Guarantee Agreement.
ARTICLE VIII. MISCELLANEOUS
Section 8.1. Successors and Assigns.
----------------------
All guarantees and agreements contained in this Guarantee Agreement
shall bind the successors, assigns, receivers, trustees and representatives of
the Guarantor and shall inure to the benefit of the Holders of the Securities
then outstanding. Except in connection with a consolidation, merger or sale
involving the Guarantor that is permitted under Article 5 of the Indenture and
pursuant to which the assignee agrees in writing to perform the Guarantor's
obligations hereunder, the Guarantor shall not assign its obligations hereunder.
Section 8.2. Amendments.
----------
Except with respect to any changes which do not adversely affect the
rights of the Holders in any material respect (in which case no consent of the
Holders will be required), this Guarantee Agreement may only be amended with the
prior approval of the Holders of not less than a Majority in liquidation
preference of all the outstanding Preferred Securities. The provisions of
Article VI of the Trust Agreement concerning meetings of the Holders shall apply
to the giving of such approval.
Section 8.3. Notices.
-------
Any notice, request or other communication required or permitted to be
given hereunder shall be in writing, duly signed by the party giving such
notice, and delivered, telecopied or mailed by first class mail as follows:
(a) if given to the Guarantee Trustee, at the Guarantee Trustee's
mailing address set forth below (or such other address as the Guarantee
Trustee may give notice of to the Guarantor and the Holders):
The First National Bank of Chicago
One First National Plaza
Chicago, Illinois 60670-0126
Facsimile No.: (312) 407-1708
Attention:
<PAGE>
-13-
(b) if given to the Guarantor, to the address set forth below or such
other address, facsimile number or to the attention of such other Person as
the Guarantor may give notice to the Holders of the Preferred Securities:
Applied Power Inc.
13000 West Silver Spring Drive
Butler, Wisconsin 53007-1093
Facsimile No.: (414) 783-9790
Attention: Chief Financial Officer
(c) if given to the Issuer, in care of the Guarantee Trustee, at the
Issuer's (and the Guarantee Trustee's) address set forth below or such
other address as the Guarantee Trustee on behalf of the Issuer may give
notice to the Holders:
Applied Power Capital Trust __
13000 West Silver Spring Drive
c/o Applied Power Inc.
Butler, Wisconsin 53007-1093
Facsimile No.: (414) 783-9790
Attention: Chief Financial Officer
with a copy to:
The First National Bank of Chicago
One First National Plaza
Chicago, Illinois 60670-0126
Facsimile No.: (312) 407-1708
Attention:
(d) if given to any Holder, at the address set forth on the books and
records of the Issuer.
All notices hereunder shall be deemed to have been given when received
in person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid, except that if a notice or other document is refused delivery
or cannot be delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been delivered on
the date of such refusal or inability to deliver.
Section 8.4. Benefit.
-------
This Guarantee Agreement is solely for the benefit of the Holders and
is not separately transferable from the Preferred Securities.
Section 8.5. Interpretation.
--------------
In this Guarantee Agreement, unless the context otherwise requires:
(a) capitalized terms used in this Guarantee Agreement but not
defined in the preamble hereto have the respective meanings assigned to
them in Section 1.1;
(b) a term defined anywhere in this Guarantee Agreement has the same
meaning throughout;
<PAGE>
-14-
(c) all references to "the Guarantee Agreement" or "this Guarantee
Agreement" are to this Guarantee Agreement as modified, supplemented or
amended from time to time;
(d) all references in this Guarantee Agreement to Articles and
Sections are to Articles and Sections of this Guarantee Agreement unless
otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning
when used in this Guarantee Agreement unless otherwise defined in this
Guarantee Agreement or unless the context otherwise requires;
(f) a reference to the singular includes the plural and vice versa;
and
(g) the masculine, feminine or neuter genders used herein shall
include the masculine, feminine and neuter genders.
Section 8.6. Governing Law.
-------------
THIS GUARANTEE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD
TO THE CONFLICT OF LAW PRINCIPLES THEREOF.
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
<PAGE>
S-1
THIS GUARANTEE AGREEMENT is executed as of the date first above
written.
APPLIED POWER INC.
By: ________________________________________
Name:
Title:
THE FIRST NATIONAL BANK OF CHICAGO,
as Guarantee Trustee
By: ________________________________________
Name:
Title:
<PAGE>
EXHIBIT 5.1
QUARLES & BRADY LLP
411 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
December 23, 1998
Applied Power Inc.
13000 West Silver Spring Drive
Butler, WI 53007-1093
Ladies and Gentlemen:
We are providing this opinion in connection with the Registration Statement
of Applied Power Inc. (the "Company") on Form S-3 (File No. 333-47493), as
amended (the "Registration Statement"), filed with the Securities and Exchange
Commission (the "Commission") under the Securities Act of 1933, as amended (the
"Act"), with respect to the proposed offering on a delayed basis pursuant to
Rule 415 under the Act from time to time, together or separately, of up to
$300,000,000 of the Company's (i) unsecured debt securities ("Debt Securities"),
(ii) Cumulative Preferred Stock, par value $1.00 per share, which may be
represented by depositary shares (the "Preferred Stock"), (iii) Class A Common
Stock, par value $.20 per share (the "Class A Common Stock"), (iv) warrants to
purchase Debt Securities, Preferred Stock or Class A Common Stock (the
"Warrants"), (v) stock purchase contracts to purchase Class A Common Stock (the
"Stock Purchase Contracts") and/or (vi) stock purchase units ("Stock Purchase
Units"), each representing ownership of a Stock Purchase Contract and any of (x)
Debt Securities, (y) debt obligations of third parties, including U.S. Treasury
Securities, or (z) Preferred Securities of Applied Power Capital Trust I or
Applied Power Capital Trust II (each, an "Applied Power Trust"), and/or (vii)
the guarantee by the Company of any Preferred Securities issued by each Applied
Power Trust pursuant to a Guarantee Agreement to be executed by the Company (the
"Guarantees"). The Debt Securities, the Preferred Stock, the Class A Common
Stock, the Warrants, the Stock Purchase Contracts, the Stock Purchase Units and
the Guarantees shall be collectively referred to herein as the "Offered
Securities."
We have examined (i) the Registration Statement; (ii) the Company's
Restated Articles of Incorporation and Amended and Restated Bylaws, as amended
to date; (iii) the proposed form of Indenture for Debt Securities (including, as
exhibits, proposed forms of Registered Security and Bearer Security thereunder)
from the Company to The First National Bank of Chicago, as Trustee (the
"Indenture"), providing for the issuance of the Debt Securities from time to
time in one or more series pursuant to the terms of one or more Securities
Resolutions (as defined in the Indenture) creating such series; (iv) other
exhibits to the Registration Statement relating to the Offered Securities; (v)
corporate proceedings of the Company relating to the Registration Statement, the
<PAGE>
Applied Power Inc.
Page 2
December 23, 1998
Indenture and the transactions contemplated thereby; and (vi) such other
documents, and such matters of law, as we have deemed necessary in order to
render this opinion.
On the basis of and subject to the foregoing, we advise you that, in our
opinion:
1. The Company is a corporation validly existing under the laws of the
State of Wisconsin.
2. When (i) the Registration Statement has become effective under the
Act, (ii) the terms of any class or series of Offered Securities have
been authorized by appropriate action of the Company in a manner that
would not violate any applicable law or result in a default under or
breach of any agreement or instrument binding upon the Company and so
as to comply with any requirement or restriction imposed by a court or
a governmental or regulatory body having jurisdiction over the
Company, (iii) any such class or series of Offered Securities has been
duly issued and sold, and payment has been received for such Offered
Securities in the manner contemplated in the Registration Statement
and any prospectus supplement relating thereto, then (a) the Preferred
Stock and Class A Common Stock will be validly issued, fully paid and
nonassessable, subject to the personal liability which may be imposed
on shareholders by statute for debts owing to employees as described
below; and (b) the Debt Securities, the Warrants, the Stock Purchase
Units and the Guarantees will be duly authorized and legally issued
and will constitute valid and binding obligations of the Company
enforceable in accordance with their respective terms subject to (x)
bankruptcy, insolvency, reorganization, fraudulent transfer,
moratorium and other similar laws now or hereafter in effect relating
to or affecting creditors' rights generally, (y) general principles of
equity (regardless of whether considered in a proceeding at law or in
equity) and (z) the qualification that the remedy of specific
performance and injunctive or other forms of equitable relief may be
subject to equitable defenses and to the discretion of the court
before which any proceeding may be brought.
Our opinion with respect to the nonassessability of the Preferred Stock and
the Class A Common Stock is subject to the personal liability which may be
imposed on shareholders by Section 180.0622(2)(b) of the Wisconsin Business
Corporation Law, as judicially interpreted, for debts owing to employees for
services performed, but not exceeding six months service in any one case.
Although Section 180.0622(2)(b) provides that such personal liability of
shareholders shall be "to
<PAGE>
Applied Power Inc.
Page 3
December 23, 1998
an amount equal to the par value of shares owned by them respectively, and to
the consideration for which their shares without par value was issued," the
Wisconsin Supreme Court, by a split decision without a written opinion, has
affirmed a judgment holding shareholders of a corporation liable under the
substantially identical predecessor statute in effect prior to January 1, 1991
(Section 180.40(6)) for unpaid employee wages to an amount equal to the
consideration for which their par value shares were issued rather than the
shares' lower stated par value. Local 257 of Hotel and Restaurant Employees and
Bartenders International Union v. Wilson Street East Dinner Playhouse, Inc., 126
Wis. 2d 284, 375 N.W.2d 664 (1985) (affirming the 1983 decision of the Circuit
Court for Dane County, Wisconsin, in Case No. 82-CV-0023).
As to the legality of the Preferred Securities to be issued by the Applied
Power Trusts, you are receiving the opinion of Morris, Nichols, Arsht & Tunnell,
special Delaware counsel to the Applied Power Trusts and the Company.
Anthony W. Asmuth III, a partner in our firm, is Corporate Secretary of the
Company.
We consent to the filing of this opinion as an exhibit to the Registration
Statement and to the reference to our firm under the caption "Certain Legal
Matters" in the Prospectus constituting a part thereof. In giving our consent,
we do not admit that we are "experts" within the meaning of Section 11 of the
Act, or that we come within the category of persons whose consent is required by
Section 7 of the Act or the rules and regulations of the Commission thereunder.
Very truly yours,
/s/ Quarles & Brady LLP
QUARLES & BRADY LLP
<PAGE>
EXHIBIT 5.2
[Letterhead of Morris, Nichols, Arsht & Tunnell]
December 23, 1998
The Applied Power Trusts
(as defined below)
c/o Applied Power Inc.
13000 West Silver Spring Drive
Butler, Wisconsin 53007-1093
Re: The Applied Power Trusts
------------------------
Ladies and Gentlemen:
We have acted as special Delaware counsel to Applied Power Capital
Trust I, a Delaware statutory business trust ("AP Trust I"), and Applied Power
Capital Trust II, a Delaware statutory business trust ("AP Trust II" and,
collectively with AP Trust I, the "Applied Power Trusts"), in connection with
certain matters of Delaware law relating to the formation of the Applied Power
Trusts and the proposed issuance of Preferred Securities thereof to beneficial
owners pursuant to and as described in the Registration Statement (and the
prospectus forming a part thereof) on Form S-3 filed with the Securities and
Exchange Commission by Applied Power Inc., a Wisconsin corporation (the
"Company"), on March 6, 1998, as amended by Pre-Effective Amendment No. 1
thereto to be filed on or about the date hereof (as amended, the "Registration
Statement"). Capitalized terms used herein and not otherwise herein defined are
used as defined in the form of Amended and Restated Trust Agreement of the
Applied Power Trusts to be attached as an exhibit to the Registration Statement
(the "Form Governing Instrument").
In rendering this opinion, we have examined copies of the following
documents in the forms provided to us: the Certificate of Trust of AP Trust I as
filed in the Office of the
<PAGE>
The Applied Power Trusts
December 23, 1998
Page 2
Secretary of State of the State of Delaware (the "State Office") on December 23,
1998 (the "AP Trust I Certificate"); the Trust Agreement of AP Trust I dated as
of December 23, 1998 (the "AP Trust I Original Governing Instrument"); the
Certificate of Trust of AP Trust II as filed in the State Office on December 23,
1998 (collectively with the AP Trust I Certificate, the "Certificates"); the
Trust Agreement of AP Trust II dated as of December 23, 1998 (collectively with
the AP Trust I Original Governing Instrument, the "Original Governing
Instruments"); the Form Governing Instrument; the form of Indenture to be
entered into between the Company and The First National Bank of Chicago, as
trustee (the "Indenture"); the form of Guarantee Agreement to be entered into
between the Company and The First National Bank of Chicago, as trustee, with
respect to each Applied Power Trust (each, a "Guarantee"); the Registration
Statement; and a certification of good standing of each Applied Power Trust
obtained as of a recent date from the State Office. In such examinations, we
have assumed the genuineness of all signatures, the conformity to original
documents of all documents submitted to us as drafts or copies or forms of
documents to be executed and the legal capacity of natural persons to complete
the execution of documents. We have further assumed for purposes of this
opinion: (i) the due formation or organization, valid existence and good
standing of each entity that is a party to any of the documents reviewed by us
under the laws of the jurisdiction of its respective formation or organization;
(ii) the due authorization, execution and delivery by, or on behalf of, each of
the parties thereto of the above referenced documents with respect to each
Applied Power Trust; (iii) that the Company, The First National Bank of Chicago,
First Chicago Delaware Inc. and the appropriate Administrative Trustees will
duly authorize, execute and deliver an amended and restated trust agreement in
the form of the Form Governing Instrument (each, a "Governing Instrument") and
all other documents contemplated thereby or by the Registration Statement to be
executed in connection with the formation of each Applied Power Trust and the
issuance by each Applied Power Trust of Preferred Securities, in each case prior
to the first issuance of Preferred Securities of such Applied Power Trust; (iv)
that the Preferred Securities of each Applied Power Trust will be offered and
sold pursuant to the prospectus forming a part of the Registration Statement and
a prospectus supplement thereto (collectively, the "Prospectus") that will be
consistent with, and accurately describe, the terms of the applicable Governing
Instrument and the applicable Guarantee relating to each such Applied Power
Trust and all other relevant documents; (v) that no event has occurred
subsequent to the filing of any Certificate, or will occur prior to the issuance
of all Preferred Securities by each Applied Power Trust, that would cause a
dissolution or liquidation of any Applied Power Trust under the applicable
Original Governing Instrument or the applicable Governing Instrument; (vi) that
the activities of each Applied Power Trust have been and will be conducted in
accordance with its Original Governing Instrument or Governing Instrument, as
applicable, and the Delaware Business Trust Act, 12 Del. C. (S)(S) 3801 et seq.
---- -- -- ----
(the "Delaware Act"); (vii) that prior to the first issuance of Preferred
Securities by each Applied Power Trust, payment of the required consideration
therefor will have been made in accordance with the terms and conditions of the
applicable Governing Instrument and as described in the Prospectus, and that the
Preferred Securities of each Applied Power Trust are otherwise issued and sold
in accordance with the terms, conditions, requirements and procedures set forth
in the Governing Instrument of such Applied Power Trust and as described in the
Prospectus; and (viii) that the documents examined
<PAGE>
The Applied Power Trusts
December 23, 1998
Page 3
by us, or contemplated hereby, express the entire understanding of the parties
thereto with respect to the subject matter thereof and have not been, and, prior
to the issuance of all Preferred Securities by each Applied Power Trust, will
not be, amended, supplemented or otherwise modified, except as herein
referenced. No opinion is expressed with respect to the requirements of, or
compliance with, federal or state securities or blue sky laws. We express no
opinion as to, and assume no responsibility for, the Registration Statement or
any other offering materials relating to the Preferred Securities offered by any
Applied Power Trust. As to any fact material to our opinion, other than those
assumed, we have relied without independent investigation on the above
referenced documents and on the accuracy, as of the date hereof, of the matters
therein contained.
Based on and subject to the foregoing, and limited in all respects to
matters of Delaware law, it is our opinion that:
1. Each of the Applied Power Trusts is a duly formed and validly
existing business trust in good standing under the laws of the State of
Delaware.
2. The Preferred Securities of each Applied Power Trust, upon
issuance, will constitute validly issued and, subject to the qualifications set
forth in paragraph 3 below, fully paid and nonassessable beneficial interests in
the assets of such Applied Power Trust.
3. Under the Delaware Act and the terms of the applicable Governing
Instrument, the Preferred Securityholders of each Applied Power Trust, in such
capacity, will be entitled to the same limitation of personal liability as that
extended to stockholders of private corporations for profit organized under the
General Corporation Law of the State of Delaware; provided, however, we express
no opinion with respect to the liability of any Preferred Securityholder who is,
was or may become a named Trustee of the Trust. Notwithstanding the foregoing,
we note that, pursuant to the applicable Governing Instrument, Preferred
Securityholders of each Applied Power Trust may be obligated to make payments or
provide indemnity or security under the circumstances set forth therein.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of our name and reference to our opinion
under the heading "CERTAIN LEGAL MATTERS" in the prospectus forming a part
thereof. In giving this consent, we do not thereby admit that we come within the
category of persons whose consent is required under Section 7 of the Securities
Act of 1933, as amended, or the rules and regulations of the Securities and
Exchange Commission thereunder. This opinion speaks only as of the date hereof
and is based on our understandings and assumptions as to present facts, and on
our review of the above referenced documents and the application of Delaware law
as the same exist as of the date hereof, and we undertake no obligation to
update or supplement this opinion after the date hereof for the benefit of any
person or entity with respect to any facts or circumstances that may hereafter
come to our attention or any changes in facts or law that may hereafter occur or
take effect. This opinion is intended solely for the benefit of the addressees
hereof in connection with
<PAGE>
The Applied Power Trusts
December 23, 1998
Page 4
the matters contemplated hereby and may not be relied on by any other person or
entity or for any other purpose without our prior written consent.
Very truly yours,
MORRIS, NICHOLS, ARSHT & TUNNELL
/s/ Morris, Nichols, Arsht & Tunnell
<PAGE>
EXHIBIT 12
APPLIED POWER INC.
COMPUTATION OF RATIO OF
EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
EARNINGS TO FIXED CHARGES
(IN THOUSANDS, EXCEPT RATIO DATA)
YEAR ENDED AUGUST 31,
--------------------------------------------------------------
1998(1) 1997 1996 1995 1994
--------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Earnings from continuing operations $26,687 $ 57,925 $50,679 $39,830 $29,747
Add Income Tax Expense 30,698 31,299 26,735 21,269 16,514
Add Interest Expense (2) 28,531 16,158 7,892 9,250 10,859
Portion of Rent deemed interest factor (3) 6,639 4,747 4,223 4,331 4,462
--------------------------------------------------------------
Total Earnings Available
for Fixed Charges $92,555 $110,129 $89,529 $74,680 $61,582
==============================================================
Fixed Charges:
Interest Expense (2) $28,531 $ 16,158 $ 7,892 $ 9,250 $10,859
Portion of Rent deemed interest factor (3) 6,639 4,747 4,223 4,331 4,462
---------------------------------------------------------------
Total Fixed Charges $35,170 $ 20,905 $12,115 $13,581 $15,321
==============================================================
Ratio of Earnings to Fixed Charges 2.6 5.3 7.4 5.5 4.0
==============================================================
</TABLE>
_______________
The ratios reflect the combined results of operations and financial
position of the Company and ZERO Corporation, acquired by merger on July
31, 1998, restated for all periods presented pursuant to the pooling-of-
interests method of accounting, and reflect the results of other acquired
companies from their respective effective dates of acquisition in
accordance with the purchase method of accounting.
(1) 1998 net earnings include a non-recurring restructuring charge of $52,637
which related to merger costs, various plant consolidations, and other cost
reductions and product rationalization efforts of the Company. Excluding
this charge and the related tax benefit, the ratio of earnings to fixed
charges would have been 4.6.
(2) Interest Expense consists of interest on indebtedness and amortization of
debt expense.
(3) 33% of rental expense is deemed representative of the interest factor.
<PAGE>
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Pre-Effective
Amendment No. 1 to this Registration Statement of Applied Power Inc. on Form S-3
of our report dated September 25, 1997 (October 16, 1997 as to Note O),
appearing in the Annual Report on Form 10-K of Applied Power Inc. for the year
ended August 31, 1998, and to the reference to us under the heading "Experts" in
the Prospectus which is part of this Registration Statement.
DELOITTE & TOUCHE LLP
Milwaukee, Wisconsin
December 23, 1998
<PAGE>
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Pre-Effective
Amendment No. 1 to Registration Statement No. 333-47493 of Applied Power Inc. on
Form S-3 of our report dated May 11, 1998 (related to the consolidated financial
statements of ZERO Corporation and subsidiaries not presented separately
therein), appearing in the Annual Report on Form 10-K of Applied Power Inc. for
the year ended August 31, 1998, and to the reference to us under the heading
"Experts" in the Prospectus which is part of this Registration Statement.
DELOITTE & TOUCHE LLP
Los Angeles, California
December 23, 1998
<PAGE>
EXHIBIT 23.3
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Amendment to this
Registration Statement of Applied Power Inc. on Form S-3 of our report dated
September 30, 1998, appearing in the Annual Report on Form 10-K of Applied Power
Inc. for the year ended August 31, 1998, and to the reference to our firm under
the caption "Experts" in the Prospectus which is part of this Registration
Statement.
PRICEWATERHOUSECOOPERS LLP
Milwaukee, Wisconsin
December 23, 1998
<PAGE>
EXHIBIT 23.4
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Amendment to this
Registration Statement of Applied Power Inc. on Form S-3 of our report dated
August 26, 1998 on the consolidated financial statements of Rubicon Group plc as
at May 31, 1998 and for the year then ended, which report is included in the
Current Report on Form 8-K/A of Applied Power Inc. dated December 11, 1998,
filed with the Securities and Exchange Commission, and to the reference to our
firm under the caption "Experts" in the Prospectus which is part of this
Registration Statement.
PRICEWATERHOUSECOOPERS
Chartered Accountants and Registered Auditors
Birmingham, England
December 23, 1998
<PAGE>
Exhibit 25.1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
--------
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) _____
---------------------------------
THE FIRST NATIONAL BANK OF CHICAGO
(Exact name of trustee as specified in its charter)
A National Banking Association 36-0899825
(I.R.S. employer
identification number)
One First National Plaza, Chicago, Illinois 60670-0126
(Address of principal executive offices) (Zip Code)
The First National Bank of Chicago
One First National Plaza, Suite 0286
Chicago, Illinois 60670-0286
Attn: Lynn A. Goldstein, Law Department (312) 732-6919
(Name, address and telephone number of agent for service)
-----------------------------------
APPLIED POWER INC.
(Exact name of obligor as specified in its charter)
Wisconsin 39-1068610
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
13000 West Silver Spring Drive
Butler, Wisconsin 53007-1093
(Address of principal executive offices) (Zip Code)
Debt Securities
Guarantees of Preferred Securities of
Applied Power Capital Trust I and Applied Power Capital Trust II
(Title of Indenture Securities)
<PAGE>
Item 1. General Information. Furnish the following
information as to the trustee:
(a) Name and address of each examining or
supervising authority to which it is subject.
Comptroller of Currency, Washington, D.C.,
Federal Deposit Insurance Corporation,
Washington, D.C., The Board of Governors of
the Federal Reserve System, Washington D.C.
(b) Whether it is authorized to exercise
corporate trust powers.
The trustee is authorized to exercise corporate
trust powers.
Item 2. Affiliations With the Obligor. If the obligor
is an affiliate of the trustee, describe each
such affiliation.
No such affiliation exists with the trustee.
Item 16. List of exhibits. List below all exhibits filed as a
part of this Statement of Eligibility.
1. A copy of the articles of association of the
trustee now in effect.*
2. A copy of the certificates of authority of the
trustee to commence business.*
3. A copy of the authorization of the trustee to
exercise corporate trust powers.*
4. A copy of the existing by-laws of the trustee.*
5. Not Applicable.
6. The consent of the trustee required by
Section 321(b) of the Act.
<PAGE>
7. A copy of the latest report of condition of the
trustee published pursuant to law or the
requirements of its supervising or examining
authority.
8. Not Applicable.
9. Not Applicable.
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, The First National Bank of Chicago, a national
banking association organized and existing under the laws of the United
States of America, has duly caused this Statement of Eligibility to be
signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of Chicago and State of Illinois, on the 21st day of December,
1998.
The First National Bank of Chicago,
Trustee
By /s/ Sandra L. Caruba
Sandra L. Caruba
Vice President
* Exhibits 1, 2, 3 and 4 are herein incorporated by reference to Exhibits
bearing identical numbers in Item 16 of the Form T-1 of The First National Bank
of Chicago, filed as Exhibit 25 to the Registration Statement on Form S-3 of U S
WEST Capital Funding, Inc. filed with the Securities and Exchange Commission on
May 6, 1998 (Registration No. 333-51907-01).
<PAGE>
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT
December 21, 1998
Securities and Exchange Commission
Washington, D.C. 20549
Ladies and Gentlemen:
In connection with the qualification of an indenture between Applied Power Inc.
and The First National Bank of Chicago, the undersigned, in accordance with
Section 321(b) of the Trust Indenture Act of 1939, as amended, hereby consents
that the reports of examinations of the undersigned, made by Federal or State
authorities authorized to make such examinations, may be furnished by such
authorities to the Securities and Exchange Commission upon its request therefor.
Very truly yours,
The First National Bank of Chicago
By: /s/ Sandra L. Caruba
Sandra L. Caruba
Vice President
<PAGE>
EXHIBIT 7
Legal Title of Bank: The First National Bank of Chicago Call Date: 09/30/98
ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0460 Page RC-1
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
---------
Consolidated Report of Condition for Insured Commercial
and State-Chartered Savings Banks for September 30, 1998
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding of the last business day of the
quarter.
Schedule RC--Balance Sheet
<TABLE>
<CAPTION>
Dollar Amounts in thousands C400
RCFD BIL MIL THOU ----
---- ------------
<S> <C> <C> <C>
ASSETS
1. Cash and balances due from depository institutions (from Schedule
RC-A): RCFD
----
a. Noninterest-bearing balances and currency and coin(1).................... 0081 4,898,646 1.a
b. Interest-bearing balances(2)............................................. 0071 4,612,143 1.b
2. Securities
a. Held-to-maturity securities(from Schedule RC-B, column A)................ 1754 0 2.a
b. Available-for-sale securities (from Schedule RC-B, column D)............. 1773 9,817,318 2.b
3. Federal funds sold and securities purchased under agreements to resell...... 1350 6,071,229 3.
4. Loans and lease financing receivables:
RCFD
----
a. Loans and leases, net of unearned income (from Schedule RC-C)............ 2122 26,327,215 4.a
b. LESS: Allowance for loan and lease losses................................ 3123 412,850 4.b
c. LESS: Allocated transfer risk reserve.................................... 3128 0 4.c
RCFD
----
d. Loans and leases, net of unearned income, allowance, and reserve
(item 4.a minus 4.b and 4.c)............................................. 2125 25,914,365 4.d
5. Trading assets (from Schedule RD-D)......................................... 3545 6,924,064 5.
6. Premises and fixed assets (including capitalized leases).................... 2145 731,747 6.
7. Other real estate owned (from Schedule RC-M)................................ 2150 6,424 7.
8. Investments in unconsolidated subsidiaries and associated companies
(from Schedule RC-M)...................................................... 2130 153,385 8.
9. Customers' liability to this bank on acceptances outstanding................ 2155 352,324 9.
10. Intangible assets (from Schedule RC-M)...................................... 2143 295,823 10.
11. Other assets (from Schedule RC-F)........................................... 2160 2,193,803 11.
12. Total assets (sum of items 1 through 11).................................... 2170 61,971,271 12.
</TABLE>
- ------------------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
<PAGE>
Legal Title of Bank: The First National Bank of Chicago Call Date: 09/30/98
ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0460 Page RC-2
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
---------
<TABLE>
<CAPTION>
Schedule RC-Continued Dollar Amounts in
Thousands
---------
<S> <C> <C> <C>
LIABILITIES
13. Deposits: RCON
a. In domestic offices (sum of totals of columns A and C ----
from Schedule RC-E, part 1).................................... 2200 20,965,124 13.a
(1) Noninterest-bearing(1)..................................... 6631 9,191,662 13.a1
(2) Interest-bearing........................................... 6636 11,773,462 13.a2
RCFN
b. In foreign offices, Edge and Agreement subsidiaries, and ----
IBFs (from Schedule RC-E, part II)............................. 2200 15,912,956 13.b
(1) Noninterest bearing........................................ 6631 475,182 13.b1
(2) Interest-bearing........................................... 6636 15,437,774 13.b2
14. Federal funds purchased and securities sold under agreements
to repurchase: RCFD 2800 4,245,925 14
15. a. Demand notes issued to the U.S. Treasury....................... RCON 2840 359,381 15.a
b. Trading Liabilities(from Sechedule RC-D)....................... RCFD 3548 5,614,049 15.b
16. Other borrowed money: RCFD
----
a. With original maturity of one year or less..................... 2332 4,603,402 16.a
b. With original maturity of more than one year................... A547 328,001 16.b
c. With original maturity of more than three years................ A548 324,984 16.c
17. Not applicable
18. Bank's liability on acceptance executed and outstanding........... 2920 352,324 18.
19. Subordinated notes and debentures................................. 3200 2,400,000 19.
20. Other liabilities (from Schedule RC-G)............................ 2930 1,833,935 20.
21. Total liabilities (sum of items 13 through 20).................... 2948 56,940,081 21.
22. Not applicable
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus..................... 3838 0 23.
24. Common stock...................................................... 3230 200,858 24.
25. Surplus (exclude all surplus related to preferred stock).......... 3839 3,192,857 25.
26. a. Undivided profits and capital reserves......................... 3632 1,614,511 26.a
b. Net unrealized holding gains (losses) on available-for-sale
securities..................................................... 8434 27,815 26.b
27. Cumulative foreign currency translation adjustments............... 3284 (4,851) 27.
28. Total equity capital (sum of items 23 through 27)................. 3210 5,031,190 28.
29. Total liabilities, limited-life preferred stock, and equity
capital (sum of items 21, 22, and 28)............................. 3300 61,971,271 29.
</TABLE>
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below that best
describes the most comprehensive level of auditing work performed for the
bank by independent external auditors as of any date during 1996.............
............ RCFD 6724....... N/A Number
M.1.
1 = Independent audit of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm which
submits a report on the bank
2 = Independent audit of the bank's parent holding company conducted in
accordance with generally accepted auditing standards by a certified public
accounting firm which submits a report on the consolidated holding company
(but not on the bank separately)
3 = Directors' examination of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm (may be
required by state chartering authority)
4 = Directors' examination of the bank performed by other external auditors (may
be required by state chartering authority)
5 = Review of the bank's financial statements by external auditors
6 = Compilation of the bank's financial statements by external auditors
7 = Other audit procedures (excluding tax preparation work)
8 = No external audit work
- -------------------
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
<PAGE>
Exhibit 25.2
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
--------
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) _____
---------------------------------
THE FIRST NATIONAL BANK OF CHICAGO
(Exact name of trustee as specified in its charter)
A National Banking Association 36-0899825
(I.R.S. employer
identification number)
One First National Plaza, Chicago, Illinois 60670-0126
(Address of principal executive offices) (Zip Code)
The First National Bank of Chicago
One First National Plaza, Suite 0286
Chicago, Illinois 60670-0286
Attn: Lynn A. Goldstein, Law Department (312) 732-6919
(Name, address and telephone number of agent for service)
-----------------------------------
Applied Power Capital Trust I
(Exact name of obligor as specified in its charter)
Delaware Applied for
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
c/o Applied Power Inc.
1300 West Silver Spring Drive
Butler, Wisconsin 53007-9279
(Address of principal executive offices) (Zip Code)
Trust Preferred Securities
(Title of Indenture Securities)
<PAGE>
Item 1. General Information. Furnish the following
information as to the trustee:
(a) Name and address of each examining or
supervising authority to which it is subject.
Comptroller of Currency, Washington, D.C.,
Federal Deposit Insurance Corporation,
Washington, D.C., The Board of Governors of
the Federal Reserve System, Washington, D.C.
(b) Whether it is authorized to exercise
corporate trust powers.
The trustee is authorized to exercise corporate
trust powers.
Item 2. Affiliations With the Obligor. If the obligor
is an affiliate of the trustee, describe each
such affiliation.
No such affiliation exists with the trustee.
Item 16. List of exhibits. List below all exhibits filed as a
part of this Statement of Eligibility.
1. A copy of the articles of association of the
trustee now in effect.*
2. A copy of the certificates of authority of the
trustee to commence business.*
3. A copy of the authorization of the trustee to
exercise corporate trust powers.*
4. A copy of the existing by-laws of the trustee.*
5. Not Applicable.
6. The consent of the trustee required by
Section 321(b) of the Act.
<PAGE>
7. A copy of the latest report of condition of the
trustee published pursuant to law or the
requirements of its supervising or examining
authority.
8. Not Applicable.
9. Not Applicable.
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, The First National Bank of Chicago, a national
banking association organized and existing under the laws of the United
States of America, has duly caused this Statement of Eligibility to be
signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of Chicago and State of Illinois, on the 21st day of December,
1998.
The First National Bank of Chicago,
Trustee
By /s/ Sandra L. Caruba
-------------------------
Sandra L. Caruba
Vice President
* Exhibits 1, 2, 3 and 4 are herein incorporated by reference to Exhibits
bearing identical numbers in Item 16 of the Form T-1 of The First National Bank
of Chicago, filed as Exhibit 25 to the Registration Statement on Form S-3 of U S
WEST Capital Funding, Inc. filed with the Securities and Exchange Commission on
May 6, 1998 (Registration No. 333-51907-01).
<PAGE>
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT
December 21, 1998
Securities and Exchange Commission
Washington, D.C. 20549
Ladies and Gentlemen:
In connection with the qualification of an indenture between Applied Power
Capital Trust I and The First National Bank of Chicago, the undersigned, in
accordance with Section 321(b) of the Trust Indenture Act of 1939, as amended,
hereby consents that the reports of examinations of the undersigned, made by
Federal or State authorities authorized to make such examinations, may be
furnished by such authorities to the Securities and Exchange Commission upon its
request therefor.
Very truly yours,
The First National Bank of Chicago
By: /s/ Sandra L. Caruba
------------------------
Sandra L. Caruba
Vice President
<PAGE>
EXHIBIT 7
Legal Title of Bank: The First National Bank of Chicago Call Date: 09/30/98
ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0460 Page RC-1
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
---------
Consolidated Report of Condition for Insured Commercial
and State-Chartered Savings Banks for September 30, 1998
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding of the last business day of the
quarter.
Schedule RC--Balance Sheet
<TABLE>
<CAPTION>
Dollar Amounts in thousands C400
RCFD BIL MIL THOU ----
---- ------------
<S> <C> <C> <C>
ASSETS
1. Cash and balances due from depository institutions (from Schedule
RC-A): RCFD
a. Noninterest-bearing balances and currency and ----
coin(1).................................................................. 0081 4,898,646 1.a
b. Interest-bearing balances(2)............................................. 0071 4,612,143 1.b
2. Securities
a. Held-to-maturity securities (from Schedule RC-B,
column A)................................................................ 1754 0 2.a
b. Available-for-sale securities (from Schedule
RC-B, column D).......................................................... 1773 9,817,318 2.b
3. Federal funds sold and securities purchased under agreements to
resell...................................................................... 1350 6,071,229 3.
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income (from Schedule RCFD
----
RC-C).................................................................... 2122 26,327,215 4.a
b. LESS: Allowance for loan and lease losses................................ 3123 412,850 4.b
c. LESS: Allocated transfer risk reserve.................................... 3128 0 4.c
d. Loans and leases, net of unearned income, allowance, and RCFD
----
reserve (item 4.a minus 4.b and 4.c)..................................... 2125 25,914,365 4.d
5. Trading assets (from Schedule RD-D)......................................... 3545 6,924,064 5.
6. Premises and fixed assets (including capitalized leases).................... 2145 731,747 6.
7. Other real estate owned (from Schedule RC-M)................................ 2150 6,424 7.
8. Investments in unconsolidated subsidiaries and associated
companies (from Schedule RC-M).............................................. 2130 153,385 8.
9. Customers' liability to this bank on acceptances outstanding................ 2155 352,324 9.
10. Intangible assets (from Schedule RC-M)...................................... 2143 295,823 10.
11. Other assets (from Schedule RC-F)........................................... 2160 2,193,803 11.
12. Total assets (sum of items 1 through 11).................................... 2170 61,971,271 12.
</TABLE>
- ------------------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
<PAGE>
Legal Title of Bank: The First National Bank of Chicago Call Date: 09/30/98
ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0460 Page RC-2
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
---------
<TABLE>
<CAPTION>
Schedule RC-Continued Dollar Amounts in
Thousands
---------
<S> <C> <C> <C>
LIABILITIES
13. Deposits:
RCON
a. In domestic offices (sum of totals of columns A and C ----
from Schedule RC-E, part 1).................................... 2200 20,965,124 13.a
(1) Noninterest-bearing(1)..................................... 6631 9,191,662 13.a1
(2) Interest-bearing........................................... 6636 11,773,462 13.a2
RCFN
b. In foreign offices, Edge and Agreement subsidiaries, and ----
IBFs (from Schedule RC-E, part II)............................. 2200 15,912,956 13.b
(1) Noninterest bearing........................................ 6631 475,182 13.b1
(2) Interest-bearing........................................... 6636 15,437,774 13.b2
14. Federal funds purchased and securities sold under agreements
to repurchase: RCFD 2800 4,245,925 14
15. a. Demand notes issued to the U.S. Treasury....................... RCON 2840 359,381 15.a
b. Trading Liabilities (from Schedule RC-D)....................... RCFD 3548 5,614,049 15.b
16. Other borrowed money: RCFD
----
a. With original maturity of one year or less..................... 2332 4,603,402 16.a
b. With original maturity of more than one year................... A547 328,001 16.b
c. With original maturity of more than three years................ A548 324,984 16.c
17. Not applicable
18. Bank's liability on acceptance executed and outstanding........... 2920 352,324 18.
19. Subordinated notes and debentures................................. 3200 2,400,000 19.
20. Other liabilities (from Schedule RC-G)............................ 2930 1,833,935 20.
21. Total liabilities (sum of items 13 through 20).................... 2948 56,940,081 21.
22. Not applicable
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus..................... 3838 0 23.
24. Common stock...................................................... 3230 200,858 24.
25. Surplus (exclude all surplus related to preferred stock).......... 3839 3,192,857 25.
26. a. Undivided profits and capital reserves......................... 3632 1,614,511 26.a
b. Net unrealized holding gains (losses) on available-for-sale
securities..................................................... 8434 27,815 26.b
27. Cumulative foreign currency translation adjustments............... 3284 (4,851) 27.
28. Total equity capital (sum of items 23 through 27)................. 3210 5,031,190 28.
29. Total liabilities, limited-life preferred stock, and equity
capital (sum of items 21, 22, and 28)............................. 3300 61,971,271 29.
</TABLE>
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below that best
describes the most comprehensive level of auditing work performed for the
bank by independent external auditors as of any date during 1996......
............ RCFD 6724....... N/A Number
M.1.
1 = Independent audit of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm which
submits a report on the bank
2 = Independent audit of the bank's parent holding company conducted in
accordance with generally accepted auditing standards by a certified public
accounting firm which submits a report on the consolidated holding company
(but not on the bank separately)
3 = Directors' examination of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm (may be
required by state chartering authority)
4 = Directors' examination of the bank performed by other external auditors (may
be required by state chartering authority)
5 = Review of the bank's financial statements by external auditors
6 = Compilation of the bank's financial statements by external auditors
7 = Other audit procedures (excluding tax preparation work)
8 = No external audit work
- -------------------
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
<PAGE>
Exhibit 25.3
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
--------
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) _____
---------------------------------
THE FIRST NATIONAL BANK OF CHICAGO
(Exact name of trustee as specified in its charter)
A National Banking Association 36-0899825
(I.R.S. employer
identification number)
One First National Plaza, Chicago, Illinois 60670-0126
(Address of principal executive offices) (Zip Code)
The First National Bank of Chicago
One First National Plaza, Suite 0286
Chicago, Illinois 60670-0286
Attn: Lynn A. Goldstein, Law Department (312)732-6919
(Name, address and telephone number of agent for service)
-----------------------------------
Applied Power Capital Trust II
(Exact name of obligor as specified in its charter)
Delaware Applied for
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
c/o Applied Power Inc.
1300 West Silver Spring Drive
Butler, Wisconsin 53007-9279
(Address of principal executive offices) (Zip Code)
Trust Preferred Securities
(Title of Indenture Securities)
<PAGE>
Item 1. General Information. Furnish the following
information as to the trustee:
(a) Name and address of each examining or
supervising authority to which it is subject.
Comptroller of Currency, Washington, D.C.,
Federal Deposit Insurance Corporation,
Washington, D.C., The Board of Governors of
the Federal Reserve System, Washington D.C.
(b) Whether it is authorized to exercise
corporate trust powers.
The trustee is authorized to exercise corporate
trust powers.
Item 2. Affiliations With the Obligor. If the obligor
is an affiliate of the trustee, describe each
such affiliation.
No such affiliation exists with the trustee.
Item 16. List of exhibits. List below all exhibits filed as a
part of this Statement of Eligibility.
1. A copy of the articles of association of the
trustee now in effect.*
2. A copy of the certificates of authority of the
trustee to commence business.*
3. A copy of the authorization of the trustee to
exercise corporate trust powers.*
4. A copy of the existing by-laws of the trustee.*
5. Not Applicable.
6. The consent of the trustee required by
Section 321(b) of the Act.
<PAGE>
7. A copy of the latest report of condition of the
trustee published pursuant to law or the
requirements of its supervising or examining
authority.
8. Not Applicable.
9. Not Applicable.
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, The First National Bank of Chicago, a national
banking association organized and existing under the laws of the United
States of America, has duly caused this Statement of Eligibility to be
signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of Chicago and State of Illinois, on the 21st day of December,
1998.
The First National Bank of Chicago,
Trustee
By /S/ Sandra L. Caruba
-------------------------
Sandra L. Caruba
Vice President
* Exhibits 1, 2, 3 and 4 are herein incorporated by reference to Exhibits
bearing identical numbers in Item 16 of the Form T-1 of The First National Bank
of Chicago, filed as Exhibit 25 to the Registration Statement on Form S-3 of U S
WEST Capital Funding, Inc. filed with the Securities and Exchange Commission on
May 6, 1998 (Registration No. 333-51907-01).
<PAGE>
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT
December 21, 1998
Securities and Exchange Commission
Washington, D.C. 20549
Ladies and Gentlemen:
In connection with the qualification of an indenture between Applied Power
Capital Trust II and The First National Bank of Chicago, the undersigned, in
accordance with Section 321(b) of the Trust Indenture Act of 1939, as amended,
hereby consents that the reports of examinations of the undersigned, made by
Federal or State authorities authorized to make such examinations, may be
furnished by such authorities to the Securities and Exchange Commission upon its
request therefor.
Very truly yours,
The First National Bank of Chicago
By: /S/ Sandra L. Caruba
------------------------
Sandra L. Caruba
Vice President
<PAGE>
EXHIBIT 7
Legal Title of Bank: The First National Bank of Chicago Call Date: 09/30/98
ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0460 Page RC-1
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
---------
Consolidated Report of Condition for Insured Commercial
and State-Chartered Savings Banks for September 30, 1998
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding of the last business day of the
quarter.
Schedule RC--Balance Sheet
<TABLE>
<CAPTION>
Dollar Amounts in thousands C400
RCFD BIL MIL THOU ----
---- ------------
<S> <C> <C> <C> <C>
ASSETS
1. Cash and balances due from depository institutions (from Schedule RC-A): RCFD
----
a. Noninterest-bearing balances and currency and coin(1).................. 0081 4,898,646 1.a
b. Interest-bearing balances(2)........................................... 0071 4,612,143 1.b
2. Securities
a. Held-to-maturity securities(from Schedule RC-B, column A).............. 1754 0 2.a
b. Available-for-sale securities (from Schedule RC-B, column D)........... 1773 9,817,318 2.b
3. Federal funds sold and securities purchased under agreements to resell.... 1350 6,071,229 3.
4. Loans and lease financing receivables: RCFD
----
a. Loans and leases, net of unearned income (from Schedule RC-C).......... 2122 26,327,215 4.a
b. LESS: Allowance for loan and lease losses.............................. 3123 412,850 4.b
c. LESS: Allocated transfer risk reserve.................................. 3128 0 4.c
d. Loans and leases, net of unearned income, allowance, and reserve RCFD
----
(item 4.a minus 4.b and 4.c)........................................... 2125 25,914,365 4.d
5. Trading assets (from Schedule RD-D)....................................... 3545 6,924,064 5.
6. Premises and fixed assets (including capitalized leases).................. 2145 731,747 6.
7. Other real estate owned (from Schedule RC-M).............................. 2150 6,424 7.
8. Investments in unconsolidated subsidiaries and associated companies
(from Schedule RC-M)...................................................... 2130 153,385 8.
9. Customers' liability to this bank on acceptances outstanding.............. 2155 352,324 9.
10. Intangible assets (from Schedule RC-M).................................... 2143 295,823 10.
11. Other assets (from Schedule RC-F)......................................... 2160 2,193,803 11.
12. Total assets (sum of items 1 through 11).................................. 2170 61,971,271 12.
</TABLE>
- ------------------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
<PAGE>
Legal Title of Bank: The First National Bank of Chicago Call Date: 09/30/98
ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0460 Page RC-2
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
---------
<TABLE>
<CAPTION>
Schedule RC-Continued Dollar Amounts in
Thousands
---------
<S> <C> <C> <C>
LIABILITIES
13. Deposits:
a. In domestic offices (sum of totals of columns A and C RCON
----
from Schedule RC-E, part 1).................................... 2200 20,965,124 13.a
(1) Noninterest-bearing(1)..................................... 6631 9,191,662 13.a1
(2) Interest-bearing........................................... 6636 11,773,462 13.a2
b. In foreign offices, Edge and Agreement subsidiaries, and RCFN
----
IBFs (from Schedule RC-E, part II)............................. 2200 15,912,956 13.b
(1) Noninterest bearing........................................ 6631 475,182 13.b1
(2) Interest-bearing........................................... 6636 15,437,774 13.b2
14. Federal funds purchased and securities sold under agreements
to repurchase: RCFD 2800 4,245,925 14
15. a. Demand notes issued to the U.S. Treasury....................... RCON 2840 359,381 15.a
b. Trading Liabilities (from Schedule RC-D)....................... RCFD 3548 5,614,049 15.b
16. Other borrowed money: RCFD
----
a. With original maturity of one year or less..................... 2332 4,603,402 16.a
b. With original maturity of more than one year................... A547 328,001 16.b
c. With original maturity of more than three years................ A548 324,984 16.c
17. Not applicable
18. Bank's liability on acceptance executed and outstanding........... 2920 352,324 18.
19. Subordinated notes and debentures................................. 3200 2,400,000 19.
20. Other liabilities (from Schedule RC-G)............................ 2930 1,833,935 20.
21. Total liabilities (sum of items 13 through 20).................... 2948 56,940,081 21.
22. Not applicable
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus..................... 3838 0 23.
24. Common stock...................................................... 3230 200,858 24.
25. Surplus (exclude all surplus related to preferred stock).......... 3839 3,192,857 25.
26. a. Undivided profits and capital reserves......................... 3632 1,614,511 26.a
b. Net unrealized holding gains (losses) on available-for-sale
securities..................................................... 8434 27,815 26.b
27. Cumulative foreign currency translation adjustments............... 3284 (4,851) 27.
28. Total equity capital (sum of items 23 through 27)................. 3210 5,031,190 28.
29. Total liabilities, limited-life preferred stock, and equity
capital (sum of items 21, 22, and 28)............................. 3300 61,971,271 29.
</TABLE>
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below that best
describes the most comprehensive level of auditing work performed for the
bank by independent external auditors as of any date during 1996......
............ RCFD 6724....... N/A Number
M.1.
1 = Independent audit of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm which
submits a report on the bank
2 = Independent audit of the bank's parent holding company conducted in
accordance with generally accepted auditing standards by a certified public
accounting firm which submits a report on the consolidated holding company
(but not on the bank separately)
3 = Directors' examination of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm (may be
required by state chartering authority)
4 = Directors' examination of the bank performed by other external auditors (may
be required by state chartering authority)
5 = Review of the bank's financial statements by external auditors
6 = Compilation of the bank's financial statements by external auditors
7 = Other audit procedures (excluding tax preparation work)
8 = No external audit work
- -------------------
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
