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SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
December 24, 1997
Commission File Number 0-22906
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ABC RAIL PRODUCTS CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 36-3498749
(State or other jurisdiction (IRS Employer
of incorporation) Identification Number)
200 SOUTH MICHIGAN AVENUE
SUITE 1300
CHICAGO, ILLINOIS 60604
(312) 322-0360
(Address and telephone number of principal executive offices)
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ITEM 5. OTHER EVENTS.
ABC Rail Products Corporation (the "Company") is filing herewith
certain exhibits that relate to the Company's Registration Statement on Form
S-3, filed with the Securities and Exchange Commission on November 15, 1996
(Registration No. 333-16241).
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits
1.1 Underwriting Agreement, dated December 17, 1997, by and among the
Company, Robert W. Baird & Co. Incorporated and Piper Jaffray Inc.
4.1 Officer's Certificate dated as of December 17, 1997 pursuant to
Section 301 of the Indenture dated as of January 15, 1997 between the
Company and First Trust National Association, as Trustee.
4.2 Form of the Company's 8-3/4% Senior Subordinated Note, Series B, Due
2004.
2
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SIGNATURES
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Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Current Report on Form 8-K to be signed on
its behalf by the undersigned hereunto duly authorized.
ABC RAIL PRODUCTS CORPORATION
By /s/ D. Chisholm MacDonald
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D. Chisholm MacDonald
Executive Vice President--Administration and
Development and Chief Financial Officer
Date: December 24, 1997
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EXHIBIT INDEX
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<TABLE>
<CAPTION>
EXHIBIT
NUMBER DOCUMENT DESCRIPTION
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1.1 Underwriting Agreement, dated December 17, 1997, by and among the
Company, Robert W. Baird & Co. Incorporated and Piper Jaffray Inc.
4.1 Officer's Certificate dated as of December 17, 1997 pursuant to
Section 301 of the Indenture dated as of January 15, 1997 between the
Company and First Trust National Association, as Trustee.
4.2 Form of the Company's 8-3/4% Senior Subordinated Note, Series B, Due
2004.
</TABLE>
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EXHIBIT 1.1
$25,000,000 PRINCIPAL AMOUNT OF
8 3/4% SENIOR SUBORDINATED NOTES, SERIES B, DUE 2004
ABC RAIL PRODUCTS CORPORATION
UNDERWRITING AGREEMENT
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December 17, 1997
ROBERT W. BAIRD & CO. INCORPORATED
PIPER JAFFRAY INC.
c/o Robert W. Baird & Co. Incorporated
227 West Monroe Street
Chicago, Illinois 60606
Ladies and Gentlemen:
SECTION 1. Introduction. ABC Rail Products Corporation, a Delaware
corporation (the "Company"), proposes to sell the Company's 8 3/4% Senior
Subordinated Notes, Series B, due 2004 (the "Notes"), to the several
underwriters identified in Schedule I annexed hereto (the "Underwriters"), who
are acting severally and not jointly. The Notes shall be issued under an
Indenture, dated as of January 15, 1997, as amended or supplemented from time to
time (the "Indenture"), between the Company and First Trust National
Association, as trustee (the "Trustee") in fully registered form pursuant to a
book-entry system only, in denomination of $1,000 and integral multiples
thereof.
The Company hereby confirms its agreement with the Underwriters as follows:
SECTION 2. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, the several Underwriters, and shall
be deemed to represent and warrant to the several Underwriters on the Closing
Date (as hereinafter defined), that:
(a) A registration statement on Form S-3 (Reg. No. 333-16241) with
respect to an aggregate of $100,000,000 of Common Stock and/or Subordinated
Debt Securities of the Company has been prepared by the Company in
conformity with the requirements of the Securities Act of 1933, as amended
(the "Act") and the rules and regulations of the Securities and Exchange
Commission (the "Commission") and has been filed with the Commission. The
conditions for use of Form S-3, set forth in the General Instructions
thereto, have been satisfied. Such registration statement as amended has
been declared
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effective by the Commission. Such registration statement, as amended and
revised at the time such registration statement was declared effective by
the Commission and as thereafter amended by post-effective amendment, if
any, is herein referred to as the "Registration Statement." The Prospectus
relating to the Notes (as supplemented) in the form in which it has most
recently been transmitted for filing with the Commission pursuant to Rule
424(b) under the Act is referred to herein as the "Prospectus." The
prospectus subject to completion in the form included in the Registration
Statement at the time of the initial filing of the Registration Statement
with the Commission, and each such prospectus as amended and supplemented
from time to time until the date of the Prospectus, is referred to herein
as the "Preliminary Prospectus." Reference made herein to each Preliminary
Prospectus or the Prospectus, as amended or supplemented, shall include all
documents and information incorporated by reference therein and shall be
deemed to refer to and include any documents filed after the date of such
Preliminary Prospectus or Prospectus, as the case may be, and so
incorporated by reference, under the Securities and Exchange Act of 1934,
as amended, and the regulations thereunder (the "Exchange Act"). The
Company has prepared and filed such amendments to the Registration
Statement since its initial filing with the Commission, if any, as may have
been required to the date hereof, and will file such additional amendments
thereto as may hereafter be required. There have been delivered to the
Underwriters one signed copy of the Registration Statement and each
amendment thereto, if any, including any document filed under the Exchange
Act and deemed to be incorporated by reference into the Registration
Statement, together with one copy of each exhibit filed therewith or
incorporated by reference therein, and such number of conformed copies for
each of the Underwriters of the Registration Statement and each amendment
thereto, if any (but without exhibits), and of each Preliminary Prospectus
and of the Prospectus as the Underwriters have requested.
(b) Certain subsidiaries (as defined in the Rules and Regulations) of
the Company that conduct or are expected to conduct business include ABC
Deco Inc., ABC Rail Products China Investment Corporation and American
Systems Technologies, Inc. (individually, a "Significant Subsidiary" and,
collectively, the "Significant Subsidiaries"). The Company and each of its
subsidiaries, including the Significant Subsidiaries (each, individually, a
"Subsidiary" and, collectively, the "Subsidiaries") has been duly
incorporated and is validly existing as a corporation and in good standing
under the laws of its jurisdiction of incorporation, with full corporate
power and authority to own, lease and operate its properties and to conduct
its business as presently conducted and described in the Prospectus and the
Registration Statement; each of the Company and the Significant
Subsidiaries is duly registered and qualified to do business as a foreign
corporation under the laws of, and is in good standing as such in, each
jurisdiction in which such registration or qualification is required,
except where the failure to so register or qualify would not have a
material adverse effect on the condition (financial or other),
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business, property, net worth, results of operations or prospects of the
Company and its Subsidiaries, taken as a whole ("Material Adverse Effect");
and no proceeding has been instituted in any such jurisdiction revoking,
limiting or curtailing, or seeking to revoke, limit or curtail, such power
and authority or qualification. Except for the stock of its subsidiaries
and as disclosed in the Registration Statement, Prospectus and Prospectus
Supplement, the Company does not own, and at the Closing Date will not own,
directly or indirectly, any shares of stock or any other equity or long-
term debt securities of any corporation or have any equity interest in any
firm, partnership, joint venture, association or other entity that conducts
or is expected to conduct any business. Complete and correct copies of the
certificate of incorporation and by-laws, as amended or restated
("Certificate of Incorporation" and "By-laws," respectively), of the
Company and each of the Significant Subsidiaries as in effect on the date
hereof have been delivered to the Underwriters, and no changes thereto will
be made on or subsequent to the date hereof and prior to the Closing Date.
(c) Except as set forth in the Prospectus, the Company beneficially
owns all of the issued and outstanding capital stock of each Subsidiary,
free and clear of any and all liens, claims, encumbrances or security
interests, and all such capital stock has been duly authorized and validly
issued and is fully paid and nonassessable. There are no outstanding
options, warrants or other rights of any description, contractual or
otherwise, entitling any person to subscribe for or purchase any shares of
capital stock of any Subsidiary.
(d) The Notes have been duly and validly authorized and, when
authenticated by the Trustee and issued, delivered, and sold in accordance
with this Agreement and the Indenture, will have been duly and validly
executed, authenticated, issued, and delivered and will constitute valid
and binding obligations of the Company, entitled to the benefits provided
by the Indenture and enforceable against the Company in accordance with
their terms, subject as to the enforcement of remedies, to applicable laws
relating to or affecting enforcement of creditors' rights and to equitable
principles limiting the right to specific performance or other equitable
relief. The form of certificate used to evidence the Notes is in due and
proper form as contemplated by the Indenture. The terms and provisions of
the Notes conform in all material respects to the description thereof
contained in the Prospectus under the captions "Description of the Debt
Securities" and "Description of the Notes". Upon payment for and delivery
of the Notes pursuant to this Agreement, the Underwriters will acquire good
and marketable title to the Notes, free and clear of all liens,
encumbrances, or claims.
(e) The Indenture has been duly qualified under the Trust Indenture
Act of 1939 (the "1939 Act") and the rules and regulations promulgated by
the Commission, conforms in all material respects to the description
thereof contained in the Prospectus
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under the captions "Description of the Debt Securities" and "Description of
the Notes", has been duly and validly authorized by the Company and, when
executed and delivered by the Company and the Trustee, will constitute a
valid and binding instrument of the Company, enforceable against the
Company in accordance with its terms, subject, as to the enforcement of
remedies, to applicable laws relating to or affecting enforcement of
remedies, to applicable laws relating to or affecting enforcement of
creditor's rights and to equitable principles limiting the right to
specific performance or other equitable relief.
(f) The Company has full corporate power and authority to enter into
and perform this Agreement and the Indenture, and the execution and
delivery by the Company of this Agreement and the Indenture and the
performance by the Company of its obligations hereunder and thereunder and
the consummation of the transactions described herein, have been duly
authorized with respect to the Company by all necessary corporate action
and will not: (i) violate any provisions of the Certificate of
Incorporation or By-laws of the Company or any Subsidiary; (ii) violate any
provisions of, or result in the breach, modification or termination of, or
constitute a default under, any provision of any agreement, lease,
franchise, license, indenture, permit, mortgage, deed of trust, evidence of
indebtedness or other instrument to which the Company or any Subsidiary is
a party or by which the Company or any Subsidiary, or any property owned or
leased by the Company or any Subsidiary, may be bound or affected; (iii)
violate any statute, ordinance, rule or regulation applicable to the
Company or any Subsidiary, or order or decree of any court, regulatory or
governmental body, arbitrator, administrative agency or instrumentality of
the United States or other country or jurisdiction having jurisdiction over
the Company or any Subsidiary; or (iv) result in the creation or imposition
of any lien, charge or encumbrance upon any property or assets of the
Company or any Subsidiary. No consent, approval, authorization or other
order of any court, regulatory or governmental body, arbitrator,
administrative agency or instrumentality of the United States or other
country or jurisdiction is required for the execution and delivery of this
Agreement and the Indenture by the Company, the performance of its
obligations hereunder and thereunder or the consummation of the
transactions contemplated hereby, except for compliance with the Act, the
Exchange Act, the Blue Sky Laws applicable to the public offering of the
Notes by the several Underwriters and the clearance of such offering and
the underwriting arrangements evidenced hereby with the National
Association of Securities Dealers, Inc. (the "NASD"). This Agreement has
been duly executed and delivered by and on behalf of the Company and is a
valid and binding agreement of the Company enforceable against the Company
in accordance with its terms.
(g) Neither the Commission nor any state securities commission has
issued any order preventing or suspending the use of any Preliminary
Prospectus, nor, to the knowledge of the Company, have any proceedings for
that purpose been initiated or
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threatened, and each Preliminary Prospectus filed with the Commission as
part of the Registration Statement as originally filed or as part of any
amendment or supplement thereto complied when so filed with the
requirements of the Act and, as of its date, did not include any untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading; provided, however, that this representation and warranty shall
not apply to any statements or omissions made in reliance upon and in
conformity with written information relating to you furnished to the
Company by you expressly for use therein. As of the effective date of the
Registration Statement, and at all times subsequent thereto up to the
Closing Date, the Registration Statement and the Prospectus contained or
will contain all statements that are required to be stated therein in
accordance with the Act and conformed or will conform in all respects to
the requirements of the Act, and neither the Registration Statement nor the
Prospectus included or will include any untrue statement of a material fact
or omitted or will omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading;
provided, however, that this representation and warranty shall not apply to
any statements or omissions made in reliance upon and in conformity with
written information relating to you furnished to the Company by you
expressly for use therein. Neither the Company, nor any person that
controls, is controlled by (including the Subsidiaries) or is under common
control with the Company, has distributed or will distribute prior to the
Closing Date any offering material in connection with the offering and sale
of the Notes other than a Preliminary Prospectus, the Prospectus, the
Registration Statement or other materials permitted by the Act and provided
to the Underwriters.
(h) The documents that are incorporated by reference in each
Preliminary Prospectus, the Prospectus or the Registration Statement or
from which information is so incorporated by reference, when they became
effective or were filed with the Commission, as the case may be, complied
in all material respects with the requirements of the Act or the Exchange
Act, as applicable, and any document so filed and incorporated by reference
subsequent to the effective date of the Registration Statement shall, when
it is filed with the Commission, comply with the requirements of the Act
and the Exchange Act, as applicable, and when read together with the other
information included in such Preliminary Prospectus, the Prospectus or the
Registration Statement, as the case may be, do not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
written information relating to you furnished to the Company by you
expressly for use therein.
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(i) Arthur Andersen LLP, which has expressed its opinion with respect
to the consolidated financial statements and schedules filed with the
Commission or incorporated by reference and included as a part of each
Preliminary Prospectus, the Prospectus or the Registration Statement, are
independent accountants as required by the Act.
(j) The consolidated financial statements and the related notes
thereto included or incorporated by reference in each Preliminary
Prospectus, the Prospectus and the Registration Statement present fairly
the financial condition, results of operations and cash flows of the
Company as of their respective dates or for the respective periods covered
thereby, all in conformity with generally accepted accounting principles
consistently applied throughout the periods involved. The financial
statement schedules, if any, included in the Registration Statement present
fairly the information required to be stated therein on a basis consistent
with the consolidated financial statements of the Company contained
therein. The Company had an outstanding capitalization as set forth in the
Registration Statement and under "Capitalization" in the Prospectus as of
the date indicated therein, and there has been no material change thereto
since such date except as disclosed in the Prospectus. The financial and
statistical information and data relating to the Company in each
Preliminary Prospectus, the Prospectus and the Registration Statement are
accurately presented and prepared on a basis consistent with the audited
consolidated financial statements and books and records of the Company.
The consolidated financial statements and schedules and the related notes
thereto included or incorporated by reference in each Preliminary
Prospectus, the Prospectus or the Registration Statement are the only such
financial statements and schedules required under the Act to be set forth
therein.
(k) Neither the Company nor any Subsidiary is, nor with the giving of
notice or passage of time or both, would be, in violation or in breach of:
(i) its respective Certificate of Incorporation or By-laws; (ii) any
statute, ordinance, order, rule or regulation applicable to the Company or
such Subsidiary; (iii) any order or decree of any court, regulatory body,
arbitrator, administrative agency or other instrumentality of the United
States or other country or jurisdiction having jurisdiction over the
Company or such Subsidiary; or (iv) any provision of any agreement, lease,
franchise, license, indenture, permit, mortgage, deed of trust, evidence of
indebtedness or other instrument to which the Company or such Subsidiary is
a party or by which any property owned or leased by the Company or such
Subsidiary is bound or affected. Neither the Company nor any Subsidiary
has received notice of any violation of any applicable statute, ordinance,
order, rule or regulation applicable to the Company or any Subsidiary. The
Company and each Subsidiary have obtained and hold, and are in compliance
with, all permits, certificates, licenses, approvals, registrations,
franchises, consents and authorizations of governmental or regulatory
authorities required under all laws, rules
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and regulations in connection with their businesses (hereinafter "permit"
or "permits"), and all of such permits are in full force and effect; and
the Company and each Subsidiary have fulfilled and performed all of their
respective obligations with respect to each such permit and no event has
occurred which would result in, or after notice or lapse of time would
result in, revocation or termination of any such permit or result in any
other impairment of the rights of the holder of such permit. Neither the
Company nor any Subsidiary is or has been (by virtue of any action,
omission to act, contract to which it is a party or other occurrence) in
violation of any applicable foreign, federal, state, municipal or local
statutes, laws, ordinances, rules, regulations or orders (including those
relating to environmental protection, occupational safety and health and
equal employment practices) heretofore or currently in effect.
(l) There are no legal or governmental proceedings or investigations
pending or, to the knowledge of the Company, threatened to which the
Company or any Subsidiary is or may be a party or to which any property
owned or leased by the Company or any Subsidiary is or may be subject,
including, without limitation, any such proceedings that are related to
environmental or employment discrimination matters, which are required to
be described in the Registration Statement or the Prospectus which are not
so described, or which question the validity of this Agreement or any
action taken or to be taken pursuant hereto. Except as described in the
Registration Statement or the Prospectus, neither the Company nor any
Subsidiary: (i) is in violation of any statute, ordinance, rule or
regulation, or any decision, order or decree of any court, regulatory body,
arbitrator, administrative agency or other instrumentality of the United
States or other country or jurisdiction having jurisdiction over the
Company or such Subsidiary relating to the use, disposal or release of
hazardous or toxic substances or relating to the protection or restoration
of the environmental or human exposure to hazardous or toxic substances
(collectively, "environmental laws"); (ii) owns or operates any real
property contaminated with any substance that is subject to any
environmental laws; (iii) is liable for any off-site disposal or
contamination pursuant to any environmental laws; or (iv) is subject to any
claim relating to any environmental laws, which violation, contamination,
liability or claim could have a Material Adverse Effect.
(m) There is no transaction, relationship, obligation, agreement or
other document required to be described in the Registration Statement or
the Prospectus or to be filed or deemed to be filed as an exhibit to the
Registration Statement by the Act, which has not been described or filed as
required. All such contracts or agreements to which the Company or any
Subsidiary is a party have been duly authorized, executed and delivered by
the Company or such Subsidiary, constitute valid and binding agreements of
the Company or such Subsidiary, and are enforceable by and against the
Company or such Subsidiary, in accordance with the respective terms
thereof.
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(n) The Company or a Subsidiary has good and valid title to all
property and assets reflected as owned by the Company or such Subsidiary in
the Company's consolidated financial statements included or incorporated by
reference in the Registration Statement (or elsewhere in the Registration
Statement or the Prospectus), free and clear of all liens, claims,
mortgages, security interests or other encumbrance of any kind or nature
whatsoever, except those, if any, reflected in such financial statements
(or elsewhere in the Registration Statement or the Prospectus). All
property (real and personal) held or used by the Company or a Subsidiary
under leases, licenses, franchises or other agreements is held by the
Company or such Subsidiary under valid, subsisting, binding and enforceable
leases, franchises, licenses or other agreements, with such exceptions as
are not material and do not materially interfere with the use made and
proposed to be made of such Prospectus by the Company or the Significant
Subsidiaries.
(o) Except as described in the Registration Statement or the
Prospectus, since the respective dates as of which information is given in
the Registration Statement or the Prospectus and prior to the Closing Date:
(i) neither the Company nor any Subsidiary has or will have incurred any
liability or obligation, direct or contingent, or entered into any
transaction, that is material to the Company, except as in the ordinary
course of business; (ii) the Company has not and will not have paid or
declared any dividend or other distribution with respect to its capital
stock and neither the Company nor any Subsidiary is or will be delinquent
in the payment of principal or interest on any outstanding debt obligation;
and (iii) there has not been and will not have been any change in the
capital stock (other than shares issued pursuant to the exercise of
employees' or directors' stock options), any material change in the
indebtedness of the Company or any Subsidiary, or any change or development
involving or which could be expected to involve, a Material Adverse Effect,
whether or not arising from transactions in the ordinary course of
business.
(p) Neither the Company nor any person that controls, is controlled
by (including the Subsidiaries) or is under common control with the Company
has, directly or indirectly: (i) made any unlawful contribution to any
candidate for political office, or failed to disclose fully any
contribution in violation of law; or (ii) made any payment to any federal,
state or foreign governmental officer or official, or other person charged
with similar public or quasi-public duties, other than payments required or
permitted by the laws of the United States or any jurisdiction thereof or
applicable foreign jurisdictions.
(q) The Company and its Subsidiaries own, or are licensed or
otherwise have the right to use, all material trademarks and trade names
which are used in or necessary for the conduct of their respective
businesses as described in the Prospectus. No claims have been asserted by
any person to the use of any such trademarks or trade names or
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challenging or questioning the validity or effectiveness or any such
trademark or trade name which singly or in the aggregate could reasonably
be expected to have a material adverse effect on the business, properties,
business prospects, condition (financial or otherwise) or results of
operation of the Company and its Subsidiaries. The use in connection with
the business and operations of the Company and its Subsidiaries of such
trademarks and trade names does not, to the Company's knowledge, infringe
on the rights of any person.
(r) The Company or a Subsidiary has in place and effective such
policies of insurance, with limits of liability in such amounts, as are
normal and prudent in the ordinary course of the business of the Company
and its Subsidiaries.
(s) No labor dispute with the employees of the Company or any
Subsidiary exists or, to the knowledge of the Company, is imminent. To the
knowledge of the Company, no union organizational attempts have occurred or
are pending. There has been no change in the relationship of the Company
or any Subsidiary with any of its principal suppliers, manufacturers,
contractors or customers resulting in or that could result in a Material
Adverse Effect.
(t) Neither the Company nor any Subsidiary is an "investment
company", an "affiliated person" of, or "promoter" or "principal
underwriter" for, an "investment company", as such terms are defined in the
Investment Company Act of 1940, as amended.
(u) All federal, state and local tax returns required to be filed by
or on behalf of the Company or any Subsidiary have been filed (or are the
subject of valid extension) with the appropriate federal, state and local
authorities, and all such tax returns, as filed, are accurate in all
material respects; all federal, state and local taxes (including estimated
tax payments) required to be shown on all such tax returns or claimed to be
due from or with respect to the business of the Company or such Subsidiary
have been paid or reflected as a liability on the financial statements of
the Company or such Subsidiary for appropriate periods; all deficiencies
asserted as a result of any federal, state or local tax audits have been
paid or finally settled, and no issue has been raised in any such audit
which, by application of the same or similar principles, reasonably could
be expected to result in a proposed deficiency for any other period not so
audited; no state of facts exists or has existed which would constitute
grounds for the assessment of any tax liability with respect to the periods
which have not been audited by appropriate federal, state or local
authorities; there are no outstanding agreements or waivers extending the
statutory period of limitation applicable to any federal, state or local
tax return of any period; and neither the Company nor any Subsidiary has
ever been a member of an affiliated group of
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corporations filing consolidated federal income tax returns, other than a
group of which the Company is and has been the common parent.
(v) The Company and each Subsidiary maintain a system of internal
accounting controls sufficient to provide reasonable assurances that: (i)
transactions are executed in accordance with management's general or
specific authorizations; (ii) transactions are recorded as necessary to
permit preparation of consolidated financial statements in conformity with
generally accepted accounting principles and to maintain accountability for
assets; (iii) access to assets is permitted only in accordance with
management's general or specific authorizations; and (iv) the recorded
accountability for assets is compared with existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.
(w) All offers and sales of the securities of the Company since the
time of the Company's initial public offering were made in compliance with
the Act and all other applicable state and federal laws or regulations.
SECTION 3. Purchase, Sale and Delivery of Notes.
(a) On the basis of the representations, warranties and agreements
herein contained, and subject to the terms and conditions herein set forth,
the Company agrees to sell to the Underwriters identified in Schedule I
annexed hereto the Notes, and each of the Underwriters agrees, severally
and not jointly, to purchase from the Company the respective principal
amounts of Notes set forth opposite each Underwriters name in Schedule I
hereto. The purchase price payable by the Underwriters to the Company for
each Note shall be 96.5% of the principal amount thereof. The respective
obligation of each Underwriter to the Company shall be to purchase from the
Company that principal amount of Notes set forth opposite the name of such
Underwriter in Schedule I hereto.
(b) On the Closing Date, the Company will deliver to the
Underwriters, at the offices of Robert W. Baird & Co. Incorporated,
Milwaukee, Wisconsin, or through the facilities of The Depository Trust
Company, for the accounts of the several Underwriters, certificates
representing the Notes to be sold by them against payment in Chicago,
Illinois of the purchase price therefor by wire or certified or official
bank check or checks in Federal (same day) funds payable to the order of
the Company. As referred to in this Agreement, the "Closing Date" shall be
on the third full business day after the date of the Prospectus, at 9:00
a.m., Chicago, Illinois time, or at such other date or time not later than
ten full business days after the date of the Prospectus as the Underwriters
and the Company may agree. The certificates for the Notes to be so
delivered will be in denominations and registered in such names as the
Underwriters request by notice to the Company prior to the Closing Date,
and such certificates will be made available for
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checking and packaging at 9:30 a.m., Chicago, Illinois time on the first
full business day preceding the Closing Date at the facilities of The
Depository Trust Company in New York, New York, or at another location to
be designated by the Underwriters.
SECTION 4. Covenants of the Company. The Company covenants and agrees
with the several Underwriters that:
(a) The Company, at the earliest possible time, will furnish the
Underwriters with a copy of the Prospectus to be filed by the Company with
the Commission to comply with Rule 424(b) under the Act and, after giving
the Underwriters a reasonable opportunity to review such document, will
comply with such Rule. Upon compliance with such Rule, the Company will so
advise the Underwriters promptly. The Company will advise the Underwriters
and counsel to the Underwriters promptly of the issuance by the Commission
or any state securities commission of any stop order suspending the
effectiveness of the Registration Statement or of the institution of any
proceedings for that purpose, or of any notification of the suspension of
qualification of the Notes for sale in any jurisdiction or the initiation
or threatening of any proceedings for that purpose, and will also advise
the Underwriters and counsel to the Underwriters promptly of any request of
the Commission for amendment or supplement of the Registration Statement,
of any Preliminary Prospectus or of the Prospectus, or for additional
information, and the Company will not file any amendment or supplement to
the Registration Statement, to any Preliminary Prospectus or to the
Prospectus (including a prospectus filed pursuant to Rule 424(b)), or file
any document under the Exchange Act before the termination of the public
offering of the Notes by the Underwriters if such document would be deemed
to be incorporated by reference in the Registration Statement, if the
Underwriters have not been furnished with a copy prior to such filing (with
a reasonable opportunity to review such amendment or supplement).
(b) If, at any time when a prospectus relating to the Notes is
required by law to be delivered in connection with sales by an Underwriter
or dealer, any event occurs as a result of which the Prospectus would
include an untrue statement of a material fact, or would omit to state any
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, or if it is necessary at any time to supplement the
Prospectus to comply with the Act or to file under the Exchange Act any
document which would be deemed to be incorporated by reference in the
Registration Statement to comply with the Act or the Exchange Act, the
Company promptly will advise the Underwriters and counsel to the
Underwriters which will correct such statement or omission or an amendment
which will effect such compliance. If any Underwriter is required to
deliver a prospectus after the effective date of the Registration
Statement, the Company, upon request of the Underwriters, will prepare
promptly such prospectus or prospectuses as may be necessary
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to permit compliance with the requirements of Section 10(a)(3) of the Act.
In case any Underwriter is required to deliver a prospectus in connection
with sales of any of the Notes at any time nine months or more after the
time of issue of the Prospectus, upon your request but at the expense of
such Underwriter, the Company will prepare and deliver to such Underwriter
as many copies as you may request of an amended or supplemented Prospectus
complying with Section 10(a)(3) of the Act. The Company consents to the
use, in accordance with the provisions of the Act and with the Blue Sky
Laws of the jurisdictions in which the Notes are offered by the several
Underwriters and by dealers, of each Preliminary Prospectus.
(c) The Company will make generally available to its security holders
and the Underwriters an earnings statement as soon as practicable, but in
no event later than 60 days after the end of its fiscal quarter in which
the first anniversary of the effective date of the Registration Statement
occurs, covering a period of twelve consecutive calendar months beginning
after the effective date of the Registration Statement, which will satisfy
the provisions of the last paragraph of Section 11(a) of the Act and Rule
158 promulgated thereunder.
(d) During such period as a prospectus is required by law to be
delivered in connection with sales by an Underwriter or dealer, the Company
will furnish to the Underwriters, at the expense of the Company, copies of
the Registration Statement, the Prospectus, any Preliminary Prospectus and
all amendments and supplements to any such documents, including any
document filed under the Exchange Act and deemed to be incorporated by
reference in the Registration Statement, in each case as soon as available
and in such quantities as the Underwriters may reasonably request.
(e) The Company will apply the net proceeds from the sale of the
Notes to be sold by it hereunder for the purposes set forth in the
Prospectus.
(f) The Company shall promptly prepare and file with the Commission,
from time to time, such reports as may be required to be filed by the Act
and the Exchange Act.
(g) During the period of three years from the date of the Prospectus,
the Company will furnish to each of the Underwriters and to each of the
other Underwriters who may so request, as soon as available, each report,
statement or other document of the Company or its Board of Directors mailed
to its shareholders or filed with the Commission, and such other
information concerning the Company as the Underwriters may reasonably
request.
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SECTION 5. Payment of Expenses. Whether or not the transactions
contemplated hereunder are consummated or this Agreement becomes effective, or
if this Agreement is terminated for any reason, the Company will pay the costs,
fees and expenses incurred in connection with the public offering of the Notes.
Such costs, fees and expenses to be paid by the Company include, without
limitation:
(a) All costs, fees and expenses (excluding the expenses incurred by
the Underwriters and the legal fees and disbursements of counsel for the
Underwriters, but including such fees and disbursements described in
subsection (b) of this section 5 incurred in connection with the
performance of the Company's obligations hereunder, including
without limiting the generality of the foregoing: the registration fees
related to the filing of the Registration Statement with the Commission;
the fees and expenses of the Company's counsel, accountants, transfer agent
and registrar; the costs and expenses incurred in connection with the
preparation, printing, shipping and delivery of the Registration Statement,
each Preliminary Prospectus and the Prospectus (including all exhibits and
financial statements) and all agreements and supplements provided for
herein, and this Agreement, including, without limitation, shipping
expenses via overnight delivery and/or courier service to comply with
applicable prospectus delivery requirements; and the costs and expenses
associated with the production of materials related to, and travel expenses
incurred by the management of the Company in connection with, the various
meetings to be held between the Company's management and prospective
investors.
(b) All fees and expenses related to printing of the certificates for
the Notes, and all transfer taxes, if any, with respect to the sale and
delivery of the Notes.
SECTION 6. Conditions to the Obligations of the Underwriters. The
obligations of the several Underwriters under this Agreement shall be subject to
the accuracy of the representations and warranties on the part of the Company
herein set forth as of the date hereof and as of the Closing Date, to the
accuracy of the statements of the Company's officers made pursuant to the
provisions hereof, to the performance by the Company of its obligations
hereunder, and to the following additional conditions, unless waived in writing
by the Underwriters:
(a) The Registration Statement shall have been declared effective by
the Commission prior to the date of this Agreement; all filings required by
Rules 424(b) and 430A under the Act shall have been timely made; no stop
order suspending the effectiveness of the Registration Statement shall have
been issued by the Commission or any state securities commission nor, to
the knowledge of the Company, shall any proceedings for that purpose have
been initiated or threatened; and any request of the Commission or any
state securities commission for inclusion of additional information
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in the Registration Statement, or otherwise, shall have been complied with
to the reasonable satisfaction of the Underwriters.
(b) Since the dates as of which information is given in the
Registration Statement and Prospectus:
(i) there shall not have occurred any change or development
involving, or which could be expected to involve, a Material Adverse
Effect, whether or not arising from transactions in the ordinary
course of business; and
(ii) the Company shall not have sustained any loss or
interference from any labor dispute, strike, fire, flood, windstorm,
accident or other calamity (whether or not insured) or from any court
or governmental action, order or decree, the effect of which on the
Company, in any such case described in clause (i) or (ii) above, is in
the judgment of the Underwriters so material and adverse as to make it
impracticable or inadvisable to proceed with the public offering or
the delivery of the Notes on the terms and in the manner contemplated
in the Registration Statement and the Prospectus.
(c) The Underwriters shall not have advised the Company that the
Registration Statement or the Prospectus contains an untrue statement of
fact that, in the opinion of the Underwriters or counsel for the
Underwriters, is material, or omits to state a fact that, in the opinion of
the Underwriters or such counsel, is material and is required to be stated
therein or necessary to make the statements therein not misleading.
(d) The Underwriters shall have received an opinion of Jones, Day,
Reavis & Pogue, counsel for the Company addressed to the Underwriters and
dated the Closing Date substantially to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware, and is qualified to do business and is in good standing
in Alabama, Colorado, Illinois, Indiana, Kansas, Maryland, Ohio,
Pennsylvania, Texas, Washington and Wisconsin;
(ii) Each Significant Subsidiary has been duly incorporated and
is validly existing as a corporation in good standing under the laws
of its jurisdiction of incorporation, with full corporate power and
authority to own, lease and operate its properties and to conduct its
business as presently conducted and as described in the Prospectus and
the Registration Statement; each Significant Subsidiary is duly
registered or qualified to do business as a foreign corporation under
the laws
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<PAGE>
of, and is in good standing as such in, each jurisdiction in
which such registration or qualification is required, except where the
failure to so register or qualify would not have a Material Adverse
Effect; all the shares of common stock of each of the Significant
Subsidiaries as of the Closing Date are validly issued and are owned
by the Company of record and to the knowledge of such counsel (A)
beneficially and (B) free and clear of any security interest, adverse
claim or encumbrance except as disclosed in the Prospectus;
(iii) The Notes to be issued and sold by the Company under this
Agreement have been duly authorized by the Company and, when duly
executed, authenticated and delivered to and paid for by the
Underwriters, will be valid and binding obligations of the Company,
entitled to the benefits of the Indenture and enforceable in
accordance with their terms, except to the extent that such validity,
binding effect and enforceability may be limited by (A) bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance or
similar laws relating to or affecting creditors' rights generally, or
(B) general principles of equity, or the possible unavailability of
the remedy of specific performance or injunctive relief, regardless of
whether issues of validity, binding effect or enforceability are
considered in a proceeding in equity or at law;
(iv) This Agreement has been duly authorized, executed and
delivered by the Company and constitutes a valid, legally binding and
enforceable obligation of the Company (a) except as rights and
obligations under Section 8 hereof may be limited by applicable law,
including securities laws, public policy considerations underlying
such laws, and equitable principles, and (b) except to the extent that
such validity, binding effect and enforceability may be limited by (i)
bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or similar laws relating to or affecting creditors' rights
generally, or (ii) general principles of equity, or the possible
unavailability of the remedy of specific performance or injunctive
relief, regardless of whether issues of validity, binding effect or
enforceability are considered in a proceeding in equity or at law;
(v) The Indenture has been duly authorized, executed and
delivered by the Company and duly qualified under the Trust Indenture
Act of 1939 and constitutes a valid, legally binding and enforceable
instrument of the Company, except to the extent that such validity,
binding effect and enforceability may be limited by (a) bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance or
similar laws relating to or affecting creditors' rights generally, or
(b) general principles of equity, or the possible unavailability of
the remedy of specific performance or injunctive relief, regardless of
whether the issues of
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<PAGE>
validity, binding effect or enforceability are considered in a
proceeding in equity or at law;
(vi) The Company has corporate power and authority to execute
and deliver and perform its obligations under this Agreement and the
Indenture;
(vii) The statements contained in the Prospectus, insofar as
they purport to summarize the provisions of the Notes and the
Indenture, present fair summaries of such provisions;
(viii) The performance of this Agreement and the Indenture by
the Company and the consummation by the Company of the transactions
contemplated herein will not (a) result in a breach or default by the
Company under any indenture, mortgage, deed of trust, loan agreement
or other material agreement or instrument known to us by which the
Company is bound or to which the Company is a party or by which any
material properties of the Company are bound, (b) conflict with or
result in any default under the Certificate of Incorporation or the
By-laws, in each case as amended, of the Company; or (c) result in the
violation by the Company of any statute, order, rule or regulation of
any court or governmental agency or body, in each case known to us, by
which the Company is bound (except that with respect to the Act and
the rules and regulation promulgated thereunder, such counsel's
opinion is limited to the matters expressed in paragraphs ix, x, xi,
xii, xiii and xiv below, and it being understood that you have not
requested and such counsel is not expressing any opinion as to any
state securities or "Blue Sky" laws);
(ix) No consent, approval, authorization or order of, or
registration or qualification with, any governmental agency or body or
other regulatory authority is required for the performance by the
Company of the transactions contemplated by this Agreement, except
such as have been obtained under the Act and such as may be required
under state securities or Blue Sky laws in connection with the
purchase and distribution of the Notes by the Underwriters;
(x) The Registration Statement has become effective under the
Act, and to the best of such counsel's knowledge, no stop order
suspending the effectiveness of the Registration Statement has been
issued and no proceeding for that purpose is pending or threatened by
the Commission;
(xi) The conditions for use of Form S-3, set forth in the
General Instructions thereto, have been satisfied;
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<PAGE>
(xii) Such counsel has participated in the preparation of the
Registration Statement and the Prospectus. From time to time in
connection therewith, such counsel has had discussions with the
officers, directors and employees of the Company and Arthur Andersen
LLP, the independent accountants who examined certain of the financial
statements of the Company and its consolidated Subsidiaries included
in the Registration Statement and the Prospectus, and the Underwriters
concerning the information contained in the Registration Statement
and the Prospectus and the proposed responses to various items in Form
S-3. Based thereupon, such counsel is of the opinion that the
Registration Statement and the Prospectus (except for the operating
statistics, financial statements, financial schedules and other
financial data included therein or omitted therefrom, and except for
the information referred to under the caption "Experts" as having been
included in the Prospectus on the authority of Arthur Andersen LLP as
experts, as to which such counsel expresses no opinion), as of their
respective effective and issue dates complied as to form in all
material respects with the requirements of the Act and the rules and
regulations thereunder.
(xiii) Such counsel has not independently verified and is not
passing upon, and does not assume any responsibility for the accuracy,
completeness or fairness of the information contained in the
Registration Statement and the Prospectus. Based on the participation
and discussions described above, however, no facts have come to such
counsel's attention that cause such counsel to believe that the
Registration Statement (except for the operating statistics, financial
statements, financial schedules, and other financial data included
therein or omitted therefrom, and except for the information referred
to under the caption "Experts" as having been included in the
Registration Statement and the Prospectus on the authority of Arthur
Andersen LLP as experts), at the time it became effective contained
any untrue statement of material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the
statements therein not misleading, or that the Prospectus (with the
foregoing exceptions) on the Closing Date contains any untrue
statement of a material fact or omits to state a material fact
required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they
were made, not misleading;
(xiv) Based upon the participation and discussions described
above, such counsel does not know of any litigation or governmental
proceedings, pending or threatened, required to be described in the
Prospectus that are not described as required, or of any contracts or
other documents of a character required to be filed as an exhibit to
the Registration Statement or required to be described in the
Registration Statement or the Prospectus which are not filed or
described as
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<PAGE>
required. With respect to the statements set forth in the preceding
sentence regarding litigation and governmental proceedings, such
counsel has with your consent relied on a review of litigation
summaries furnished by the Company to Arthur Andersen LLP in
connection with its audit of the Company's financial statements for
the fiscal year ended July 31, 1997, and on inquiries of lawyers
presently in such counsel's firm who, according to such counsel's
records, have been engaged in legal services on behalf of the Company
subsequent to July 31, 1997, but such counsel has neither examined nor
requested an examination of the indices or records of any court, or
any governmental or other agency, authority, instrumentality or entity
or made any inquiries of public officials;
(xv) Neither the Company nor any Significant Subsidiary is, nor
with the giving of notice or passage of time or both would be, in
violation of its respective Certificate of Incorporation or By-laws;
and
(xvi) Neither the Company nor any Significant Subsidiary is an
"investment company", an "affiliated person" of, or "promoter" or
"principal underwriter" for, an "investment company", as such terms
are defined in the Investment Company Act of 1940, as amended.
In rendering their opinion, such counsel may rely, to the extent
deemed advisable by such counsel, (a) upon certificates of state officials,
and (b) on opinions of counsel (provided, however, that you shall have
received a copy of each of such opinion which shall be dated the Closing
Date addressed to you or otherwise authorizing you to rely thereon; and
that Jones, Day, Reavis & Pogue, in its opinion to you delivered pursuant
to this subsection, shall state that such counsel are satisfactory to them
and Jones, Day, Reavis & Pogue has no reason to believe that you and they
are not entitled to so rely).
(e) The Underwriters shall have received an opinion of McDermott,
Will & Emery, counsel for the Underwriters, dated the Closing Date, with
respect to the issuance and sale of the Notes by the Company, the
Registration Statement and other related matters as the Underwriters may
require, and the Company shall have furnished to such counsel such
documents and shall have exhibited to them such papers and records as they
request for the purpose of enabling them to pass upon such matters.
(f) The Underwriters shall have received on the Closing Date, a
certificate of Donald W. Grinter, Chairman of the Board and Chief Executive
Officer, and D. Chisholm MacDonald, Executive Vice President-Administration
and Business Development and Chief Financial Officer, of the Company, to
the effect that:
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(i) The representations and warranties of the Company set forth
in section 2 hereof are true and correct as of the date of this
Agreement and as of the date of such certificate, and the Company has
complied with all the agreements and satisfied all the conditions to
be performed or satisfied by it at or prior to the date of such
certificate;
(ii) The Commission has not issued an order preventing or
suspending the use of the Prospectus or any Preliminary Prospectus or
any amendment or supplement thereto; no stop order suspending the
effectiveness of the Registration Statement has been issued; and to
the knowledge of the respective signatories, no proceedings for that
purpose have been initiated or are pending or contemplated under the
Act or under the Blue Sky Laws of any jurisdiction;
(iii) Each of the respective signatories has carefully examined
the Registration Statement and the Prospectus, and any amendment or
supplement thereto, including any documents filed under the Exchange
Act and deemed to be incorporated by reference in the Registration
Statement, and such documents contain all statements required to be
stated therein, and do not include any untrue statement of a material
fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading, and since
the date on which the Registration Statement was initially filed, no
event has occurred that was required to be set forth in an amended or
supplemented prospectus or in an amendment to the Registration
Statement that has not been so set forth, and there has been no
document required to be filed under the Exchange Act that upon such
filing would be deemed to be incorporated by reference in the
Registration Statement that has not been so ordered; and
(iv) Since the date on which the Registration Statement was
initially filed with the Commission, there shall not have occurred any
change or development involving, or which could be expected to
involve, a Material Adverse Effect, whether or not arising from
transactions in the ordinary course of business, except as disclosed
in the Prospectus and the Registration Statement as heretofore amended
or (but only if the Underwriters expressly consent thereto in writing)
as disclosed in an amendment or supplement thereto filed with the
Commission and delivered to the Underwriters after the execution of
this Agreement; since such date and except as so disclosed or in the
ordinary course of business, the Company has not incurred any
liability or obligation, direct or indirect, or entered into any
transaction which is material to the Company; since such date and
except as so
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disclosed, there has not been any change in the outstanding capital
stock of the Company, or any change that is material to the Company in
the short-term debt or long-term debt of the Company; since such date
and except as so disclosed, the Company has not acquired any of the
Common Stock or other capital stock of the Company nor has the Company
declared or paid any dividend, or made any other distribution, upon
its outstanding Common Stock payable to shareholders of record on a
date prior to the Closing Date; since such date and except as so
disclosed, the Company has not incurred any material contingent
obligations, and no material litigation is pending or threatened
against the Company; and, since such date and except as so disclosed,
the Company has not sustained any material loss or interference from
any strike, fire, flood, windstorm, accident or other calamity
(whether or not insured) or from any court or governmental action,
order or decree.
(g) At the time this Agreement is executed and also on the Closing
Date, there shall be delivered to the Underwriters a letter addressed to
the Underwriters from Arthur Andersen LLP, the Company's independent
accountants, the first letter to be dated the date of this Agreement and
the second letter to be dated the Closing Date, which shall be in form and
substance satisfactory to the Underwriters and shall contain information as
of a date within five days of the date of such letter. There shall not have
been any change or decrease set forth in any of the letters referred to in
this subsection (g) which makes it impracticable or inadvisable in the
judgment of the Underwriters to proceed with the public offering or
purchase of the Notes as contemplated hereby.
(h) Such further certificates and documents as the Underwriters may
reasonably request (including certificates of officers of the Company).
(i) Transactions contemplated by the Amended Credit Agreement (as
defined in the Prospectus) shall have been consummated prior to or
simultaneously with the consummation of the transactions contemplated by
this Agreement.
All such opinions, certificates, letters and documents shall be in
compliance with the provisions hereof only if they are reasonably satisfactory
to the Underwriters and to McDermott, Will & Emery, counsel for the
Underwriters. The Company shall furnish the Underwriters with such manually
signed or conformed copies of such opinions, certificates, letters and documents
as the Underwriters may reasonably request.
If any condition to the Underwriters' obligations hereunder to be satisfied
prior to or at the Closing Date is not so satisfied, this Agreement, at the
election of the Underwriters, will terminate upon notification to the Company
without liability on the part of any Underwriter, and the Company will reimburse
the Underwriters for all out-of-pocket expenses (including the fees,
disbursements and other charges of counsel to the Underwriters) reasonably
incurred by them in connection therewith.
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SECTION 7. Maintain Effectiveness of Registration Statement. The Company
will use its best efforts to prevent the issuance of any stop order suspending
the effectiveness of the Registration Statement, and, if such stop order is
issued, to obtain as soon as possible the lifting thereof.
SECTION 8. Indemnification.
(a) The Company agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within
the meaning of the Act or the Exchange Act, from and against any losses,
claims, damages, expenses, liabilities or actions in respect thereof
("Claims"), joint or several, to which such Underwriter or each such
controlling person may become subject under the Act, the Exchange Act or
other federal or state statutory laws or regulations, at common law or
otherwise (including payments made in settlement of any litigation),
insofar as such Claims arise out of or are based upon any breach of any
representation, warranty or covenant made by the Company in this Agreement,
or any untrue statement or alleged untrue statement of any material fact
contained in the Registration Statement, any Preliminary Prospectus, the
Prospectus or any amendment or supplement thereto, or arise out of or are
based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein not misleading. The Company agrees to reimburse each Underwriter
and each such controlling person for any legal fees or other expenses
incurred by such Underwriter or any such controlling person in connection
with investigating or defending any such Claim; provided, however, that the
Company will not be liable in any such case to the extent that any such
Claim arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in the Registration
Statement, any Preliminary Prospectus, the Prospectus or supplement thereto
in reliance upon and in conformity with the written information furnished
to the Company by the Underwriters; and provided, further, that the
indemnity agreement contained in this Section 8(a) with respect to any
Preliminary Prospectus shall not inure to the benefit of any Underwriter
(or any persons controlling such Underwriter) on account of any losses,
claims, damages, liabilities or litigation arising from the sale of Notes
to any person, if such Underwriter fails to send or give a copy of the
Prospectus, as the same may be then supplemented or amended, to such
person, within the time required by the Act and the untrue statement or
alleged untrue statement or omission of a material fact contained in such
Preliminary Prospectus was corrected in the Prospectus, unless such failure
is the result of noncompliance by the Company with Section 4(b) hereof. The
indemnity agreement in Section 8(a) and 8(b) shall be in addition to any
liability which the Company and the Underwriters may otherwise have and
shall extend upon the same terms and conditions to each person, if any, who
controls the Company and any Underwriter within the meaning of the Act or
the Exchange Act.
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(b) Each Underwriter, severally and not jointly, will indemnify and
hold harmless the Company, each of its directors and each of its officers
who signs the Registration Statement, and each person, if any, who controls
the Company within the meaning of the Act or the Exchange Act, against any
Claim to which the Company, or any such director, officer, or controlling
person may become subject under the Act, the Exchange Act or other federal
or state statutory laws or regulations, at common law or otherwise
(including payments made in settlement of any litigation, if such
settlement is effected with the written consent of such Underwriter),
insofar as such Claim arises out of or is based upon any untrue or alleged
untrue statement of any material fact contained in the Registration
Statement, any Preliminary Prospectus, the Prospectus or any amendment or
supplement thereto, or arises out of or is based upon the omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each
case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in the
Registration Statement, any Preliminary Prospectus, the Prospectus, or any
amendment or supplement thereto, in reliance solely upon and in conformity
with the written information furnished by the Underwriters to the Company.
Each Underwriter will severally reimburse any legal fees or other expenses
incurred by the Company, or any such director, officer, controlling person
in connection with investigating or defending any such Claim, and from any
and all Claims solely resulting from failure of an Underwriter to deliver a
Prospectus, if the person asserting such Claim purchased Notes from such
Underwriter and a copy of the Prospectus (as then amended if the Company
shall have furnished any amendments thereto) was not sent or given by or on
behalf of such Underwriter to such person, if required by law so to have
been delivered, at or prior to the written confirmation of the sale of the
Notes to such person, and if the Prospectus (as so amended) would have
cured the defect giving rise to such Claim.
(c) Promptly after receipt by an indemnified party under this section
of notice of the commencement of any action in respect of a Claim, such
indemnified party will, if a Claim in respect thereof is to be made against
an indemnifying party under this section, notify the indemnifying party in
writing of the commencement thereof, but the omission so to notify the
indemnifying party will not relieve an indemnifying party from any
liability it may have to any indemnified party under this section or
otherwise. In case any such action is brought against any indemnified
party, and such indemnified party notifies an indemnifying party of the
commencement thereof, the indemnifying party will be entitled to
participate in and, to the extent that he, she or it may wish, jointly with
all other indemnifying parties, similarly notified, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified party;
provided, however, if the defendants in any such action include both the
indemnified party and any indemnifying party and the indemnified party
shall have reasonably concluded that there may be legal defenses available
to the indemnified party and/or other indemnified parties
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which are different from or additional to those available to any
indemnifying party, the indemnified party or parties shall have the right
to select separate counsel to assume such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified
party or parties. In no event shall the indemnifying parties be liable for
fees and expenses of more than one counsel (in addition to local counsel)
for all indemnified parties in connection with any one action or separate
but similar or related actions in the same jurisdiction arising out of the
same set of allegations or circumstances.
(d) Upon receipt of notice from the indemnifying party to such
indemnified party of the indemnifying party's election to assume the
defense of such action and upon approval by the indemnified party of
counsel selected by the indemnifying party, the indemnifying party will not
be liable to such indemnified party under this section for any legal fees
or other expenses subsequently incurred by such indemnified party in
connection with the defense thereof, unless:
(i) the indemnified party shall have employed separate counsel
in connection with the assumption of legal defenses in accordance with
the proviso to the penultimate sentence of subsection (c) of this
section;
(ii) the indemnifying party shall not have employed counsel
reasonably satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after the indemnified
party's notice to the indemnifying party of commencement of the
action; or
(iii) the indemnifying party has authorized the employment of
counsel at the expense of the indemnifying party.
(e) If the indemnification provided for in this section is
unavailable to an indemnified party under subsection (a) or (b) hereof in
respect of any Claim referred to therein, then each indemnifying party, in
lieu of indemnifying such indemnified party, shall, subject to the
limitations hereinafter set forth, contribute to the amount paid or payable
by such indemnified party as a result of such Claim:
(i) in such proportion as is appropriate to reflect the relative
benefits received by the Company and the Underwriters from the
offering of the Notes; or
(ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i)
above, but also the relative fault of the Company,
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and the Underwriters in connection with the statements or omissions
which resulted in such Claim, as well as any other relevant equitable
considerations.
The relative benefits received by each of the Company and the Underwriters
shall be deemed to be in such proportion so that the Underwriters are
responsible for that portion represented by the percentage that the amount
of the underwriting discount appearing on the cover page of the Prospectus
bears to the public offering price appearing thereon, and the Company
(including its officers and directors and controlling persons), is
responsible for the remaining portion. The relative fault of the Company
and the Underwriters shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company or the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The amount paid or payable
by a party as a result of the Claims referred to above shall be deemed to
include, subject to the limitations set forth in subsections (c) and (d) of
this section, any legal or other fees or expenses reasonably incurred by
such party in connection with investigating or defending any action or
claim.
(f) The Company and the Underwriters agree that it would not be just
and equitable if contribution pursuant to this section were determined by
pro rata or per capita allocation (even if the Underwriters were treated as
one entity for such purpose) or by any other method or allocation which
does not take into account the equitable considerations referred to in
subsection (d) of this section. Notwithstanding the other provisions of
this section, no Underwriter shall be required to contribute any amount
that is greater than the amount by which the total price at which the Notes
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages which such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to contribute
pursuant to this section are several in proportion to their respective
underwriting commitments and not joint.
SECTION 9. Default of Underwriters. It shall be a condition to the
obligations of each Underwriter to purchase the Notes in the manner as described
herein, that, except as hereinafter provided in this section, each of the
Underwriters shall purchase and pay for all the Notes agreed to be purchased by
such Underwriter hereunder upon tender to the Underwriters of all such Notes in
accordance with the terms hereof. If any Underwriter defaults in its obligation
to purchase Notes hereunder on the Closing Date and the aggregate principal
amount of Notes which such defaulting Underwriter agreed but failed to purchase
does not exceed 10% of the aggregate principal amount of Notes which the
Underwriters are obligated to purchase on
-24-
<PAGE>
the Closing Date, the nondefaulting Underwriter may make arrangements for the
purchase of such Notes by other persons, including such nondefaulting
Underwriter, but if no such arrangements are made by the Closing Date the
nondefaulting Underwriter shall be obligated to purchase the Notes which such
defaulting Underwriter agreed but failed to purchase on the Closing Date. If any
Underwriter so defaults and the aggregate principal amount of Notes with respect
to which such default occurs is greater than 10% of the aggregate principal
amount of Notes which the Underwriters are obligated to purchase on the Closing
Date, and arrangements satisfactory to the nondefaulting Underwriter for the
purchase of such Notes by other persons are not made within 36 hours after such
default, this Agreement will terminate without liability on the part of the
nondefaulting Underwriter or the Company except for the expenses to be paid by
the Company pursuant to section 5 hereof and except to the extent provided in
section 8 hereof.
In the event that Notes to which a default relates are to be purchased by
the nondefaulting Underwriter or by another party or parties, the nondefaulting
Underwriter shall have the right to postpone the Closing Date for not more than
seven business days in order that the necessary changes in the Registration
Statement, Prospectus and any other documents, as well as any other
arrangements, may be effected. As used in this Agreement, the term "Underwriter"
includes any person substituted for an Underwriter under this section. Nothing
herein will relieve a defaulting Underwriter from liability for its default.
SECTION 10. Effective Date. This Agreement shall become effective upon
the execution and delivery of this Agreement by the parties hereto. Such
execution and delivery shall include an executed copy of this Agreement sent by
telecopier, facsimile transmission or other means of transmitting written
documents.
SECTION 11. Termination. Without limiting the right to terminate this
Agreement pursuant to any other provision hereof, this Agreement may be
terminated by the Underwriters prior to or on the Closing Date, if in the
judgment of the Underwriters, payment for and delivery of the Notes is rendered
impracticable or inadvisable because:
(a) additional governmental restrictions, not in force and effect on
the date hereof, shall have been imposed upon trading in securities
generally or minimum or maximum prices shall have been generally
established on the New York Stock Exchange or the American Stock Exchange,
or trading in securities generally shall have been suspended or materially
limited on either such exchange or on The Nasdaq Stock Market or a general
banking moratorium shall have been established by either federal or state
authorities in New York or Illinois; and
(b) an outbreak or material escalation of hostilities or other
national or international calamity or any substantial change in political,
financial or economic
-25-
<PAGE>
conditions shall have occurred or shall have accelerated to such extent, in
the judgment of the Underwriters, as to make it impracticable or
inadvisable to proceed with completion of the sale of and payment for the
Notes as provided in this Agreement.
Any termination pursuant to this section shall be without liability on the
part of any Underwriter to the Company, or on the part of the Company to any
Underwriter, except for expenses to be paid by the Company pursuant to section 5
hereof or and except as to indemnification to the extent provided in section 8
hereof.
SECTION 12. Representations and Indemnities to Survive Delivery. The
respective indemnities, agreements, representations, warranties, covenants and
other statements of the Company and of the several Underwriters set forth in or
made pursuant to this Agreement will remain in full force and effect, regardless
of any investigation made by or on behalf of any Underwriter or the Company or
any of its or their partners, officers, directors or any controlling person, as
the case may be, and will survive delivery of and payment for the Notes sold
hereunder.
SECTION 13. Notices. All communications hereunder will be in writing and,
if sent to the Underwriters, will be mailed, delivered, telecopied (with receipt
confirmed) or telegraphed and confirmed to Robert W. Baird & Co. Incorporated at
227 West Monroe Street, Chicago, Illinois 60606, Attention: Paul J. Carbone,
with a copy to McDermott, Will & Emery, 227 West Monroe Street, Chicago,
Illinois 60606, Attention: Thomas J. Murphy, and if sent to the Company, will be
mailed, delivered, telecopied (with receipt confirmed) or telegraphed and
confirmed to the Company at 200 South Michigan Avenue, Chicago, Illinois 60604,
Attention: D. Chisholm MacDonald with a copy to Jones, Day, Reavis & Pogue, 77
West Wacker Drive, Chicago, Illinois 60601, Attention: Gary T. Johnson.
SECTION 14. Successors. This Agreement will inure to the benefit of and
be binding upon the parties hereto and their respective successors, personal
representatives and assigns, and to the benefit of the officers and directors
and controlling persons referred to in section 8 hereof and no other person will
have any right or obligation hereunder. The term "successors" shall not include
any purchaser of the Notes as such from any of the Underwriters merely by reason
of such purchase.
SECTION 15. Partial Unenforceability. If any section, paragraph, clause
or provision of this Agreement is for any reason determined to be invalid or
unenforceable, such determination shall not affect the validity or
enforceability of any other section, paragraph clause or provision hereof.
SECTION 16. Applicable Law; Counterparts. This Agreement shall be
governed by and construed in accordance with the internal laws of the State of
Illinois without reference to
-26-
<PAGE>
conflict of law principles thereunder. This Agreement may be signed in various
counterparts which together shall constitute one and the same instrument, and
shall be effective when at least one counterpart hereof shall have been executed
by or on behalf of each party hereto.
SECTION 17. Time of Essence. Time shall be of the essence of this
Agreement.
If the foregoing is in accordance with your understanding of our agreement,
kindly sign and return to us the enclosed duplicates hereof, whereupon it will
become a binding agreement among the Company and the several Underwriters all in
accordance with its terms.
Very truly yours,
ABC RAIL PRODUCTS CORPORATION
By: /s/ D. Chisholm MacDonald
D. Chisholm MacDonald
Its Executive Vice President-
Administration and Business Development and
Chief Financial Officer
The foregoing Underwriting
Agreement is hereby confirmed
and accepted as of the date
first above written.
ROBERT W. BAIRD & CO. INCORPORATED
By: /s/ Samuel J. Tinaglia
Its: Vice President
PIPER JAFFRAY INC.
By: /s/ Benjamin Oehler
Its: Managing Director
-27-
<PAGE>
ABC Rail Products Corporation
Schedule I
----------
<TABLE>
<CAPTION>
Principal Amount of Notes
Name of Underwriter to be Purchased
- ------------------- ---------------
<S> <C>
Robert W. Baird & Co. Incorporated $15,000,000
Piper Jaffray Inc. $10,000,000
</TABLE>
-28-
<PAGE>
ABC Rail Products Corporation
Schedule I
----------
<TABLE>
<CAPTION>
Principal Amount of Notes
Name of Underwriter to be Purchased
- ------------------- ---------------
<S> <C>
Robert W. Baird & Co. Incorporated $15,000,000
Piper Jaffray Inc. $10,000,000
</TABLE>
-29-
<PAGE>
EXHIBIT 4.1
OFFICER'S CERTIFICATE
---------------------
Reference is hereby made to the Indenture dated as of January 15, 1997 (as
heretofore supplemented and amended through and including the Second
Supplemental Indenture dated December 1, 1997, the "Indenture") between ABC Rail
Products Corporation, a Delaware corporation (the "Company"), and First Trust
National Association, Chicago, Illinois, a national banking association (the
"Trustee"). Capitalized terms used herein that are not defined herein have the
meanings assigned to such terms in the Indenture. Pursuant to Section 301 of
the Indenture, this Officer's Certificate hereby establishes a series of
Securities. All references in this Officer's Certificate to the "Company"
include its consolidated Subsidiaries unless the context otherwise requires.
1. Pursuant to Section 301(1) of the Indenture, the title of the
Securities of the series established by this Officer's Certificate is "8-3/4%
Senior Subordinated Notes, Series B, Due 2004." Such series will be hereinafter
referred to as the "Notes."
2. Pursuant to Section 301(2) of the Indenture, the limit upon the
aggregate principal amount of the Notes which may be authenticated and delivered
under the Indenture is $25,000,000.
3. Pursuant to Section 301(4) of the Indenture, the principal of the Notes
shall be payable on December 31, 2004, subject to the terms of Paragraphs 6 and
7 hereof and Articles Eleven and Fourteen of the Indenture.
4. Pursuant to Section 301(5) of the Indenture, (a) the rate at which the
Notes shall bear interest is 8-3/4%; (b) such interest will accrue from the date
of delivery of the Notes; (c) the Interest Payment Date with respect to the
Notes shall be the first day of each month, commencing February 1, 1998;
provided, however, the Interest Payment Date with respect to interest accruing
from December 1, 2004 to December 31, 2004 shall be December 31, 2004; (d)
interest to be paid on the first Interest Payment Date (February 1, 1998) will
accrue from the date of delivery of the Notes through and including the first
Regular Record Date (January 31, 1998) (such accrued interest calculated as
follows on the basis of a 360-day year consisting of twelve 30-day months: nine
days of interest from the date of delivery of the Notes (December 23, 1997)
through December 31, 1997 and 30 days of interest from January 1, 1998 through
the first Regular Record Date (January 31, 1998)); and (e) interest to be paid
on each subsequent Interest Payment Date will accrue through and including its
respective Regular Record Date from the day following the immediately preceding
Regular Record Date.
5. Pursuant to Section 301(6) of the Indenture, the Regular Record Date
for each Interest Payment Date shall be the last business day of each month
immediately preceding such Interest Payment Date; provided, however, that the
Regular Record Date for the final Interest Payment Date is December 31, 2004.
<PAGE>
6. Pursuant to Section 301(8) of the Indenture, the Notes are not
redeemable prior to December 31, 1999. On or after such date, the Company may,
at its option, redeem the Notes in whole or in part, from time to time, under
the circumstances set forth in this Paragraph 6 and Article Eleven of the
Indenture. At the option of the Company and upon 30 days written notice to the
Trustee, the Notes may be redeemed at any time on or after December 31, 1999 and
through December 30, 2000, in whole or in part, at 102% of the principal amount,
plus accrued and unpaid interest to the Redemption Date. Pursuant to Article
Eleven of the Indenture and at the option of the Company, and upon 30 days'
written notice to the Trustee, the Notes may be redeemed in whole or in part at
any time on or after December 31, 2000, at 100% of the principal amount, plus
accrued and unpaid interest to the Redemption Date.
7. Pursuant to Section 301(9) of the Indenture, the Company has no
obligation to redeem, repay or repurchase the Notes pursuant to any sinking
fund; however, the Company is obligated to redeem, repay or repurchase the Notes
pursuant to Articles Eleven and Fourteen of the Indenture under the following
circumstances:
If a Change of Control (defined below) occurs each Holder will have the
right to require the Company to repurchase such Holder's Notes pursuant to
Article Fourteen of the Indenture, in whole or in part in integral
multiples of $1,000, at a cash purchase price equal to 103% of the
principal amount thereof, plus accrued and unpaid interest, if any, if
prior to December 31, 2000, or 101% of the principal amount thereof, plus
accrued and unpaid interest, if any, if on or after December 31, 2000.
Pursuant to Article Fourteen of the Indenture, the Repurchase Date will be
no earlier than 30 days nor more than 60 days from the date the holders of
the Notes are notified of the occurrence of a Change of Control. If a
Change of Control Default Event (defined below) occurs, the Company must
redeem all of the Notes pursuant to Article Eleven of the Indenture, at a
cash purchase price equal to 103% of the principal amount thereof, plus
accrued and unpaid interest, if any, if prior to December 31, 2000 or 101%
of the principal amount thereof, plus accrued and unpaid interest, if any,
if on or after December 31, 2000. Pursuant to Article Eleven of the
Indenture, the Redemption Date will be no earlier than 30 days nor more
than 60 days from the date the holders of the Notes are notified of the
occurrence of a Change of Control Default Event.
The Trustee shall be under no obligation to ascertain the occurrence of a
Change of Control or a Change of Control Default Event, or to give notice
with respect thereto other than as may be required under certain
circumstances described in Articles Eleven and Fourteen of the Indenture,
upon receipt of the written notice of Change of Control or Change of
Control Default Event from the Company. The Trustee may conclusively
assume, in the absence of written notice to the contrary from the Company,
that no Change of Control or Change of Control Default Event has occurred.
"Change of Control" means the occurrence of one or more of the
following events, whether or not approved by the Board of Directors:
(1) any Person or any Persons acting together that would constitute a
"group" for purposes of Section 13(d) of the Securities Exchange Act, as
amended (a "Group"),
2
<PAGE>
together with any Affiliates thereof, other than any employee stock
ownership plan of the Company or the trusts for any other employee stock
ownership, benefit or pension plans of the Company or any Subsidiary, shall
beneficially own (as defined in Rule 13d-3 of the Commission) at least 50%
of the Voting Stock of the Company;
(2) any one Person or Group (other than the Board of Directors as it
may be constituted from time to time), or any Affiliates thereof, shall
succeed in having sufficient of its or their nominees elected to the Board
of Directors such that such nominees, when added to any existing director
remaining on the Board of Directors after such election who is an Affiliate
of such Group, shall constitute a majority of the Board of Directors;
(3) any sale, lease, exchange or other transfer (in one transaction
or a series of related transactions) of all, or substantially all, the
assets of the Company to any Person or Group;
(4) the shareholders of the Company shall approve any plan for the
liquidation or dissolution of the Company; or
(5) the merger or consolidation of the Company with or into another
corporation or the merger of another corporation into the Company with the
effect that immediately after such transaction any Person or Group holds
more than 50% of the Voting Stock of the surviving corporation of such
merger or consolidation.
"Change of Control Default Event" means (i) the Company or the
successor corporation, as the case may be, is immediately after the Change
of Control, in default in the performance of any covenant or condition
under the Indenture or the Notes or (ii) after giving effect to the Change
of Control, an Event of Default or an event that, after notice or lapse of
time or both, would become an Event of Default, shall have occurred or be
continuing.
8. Pursuant to Section 301(15) of the Indenture, Section 1302 and
Section 1303 of the Indenture will apply to the Notes.
9. Pursuant to Section 301(16) of the Indenture, in addition to the
Events of Default described in Section 501 of the Indenture, the following
events will constitute Events of Default with respect to the Notes:
(a) the entry by a court having jurisdiction in the premises of a decree or
order or decrees or orders adjudging the Company or any of its Subsidiaries
liable for the payment of money of at least in the aggregate $6,000,000,
and the continuance of any such decrees or orders unstayed, unbonded or
uncontested and in effect for a period of 90 consecutive days; and (b) if
because of an event of default as defined in any mortgage, indenture, bond,
debenture, note, or instrument under which there may be issued, or by which
there may be secured or evidenced, any indebtedness of the Company or any
of its Subsidiaries for money borrowed, whether such indebtedness now
exists or shall hereafter be created, more than $6,000,000 (either
individually or in the aggregate) (or its equivalent in any
3
<PAGE>
other currency) in principal amount of such indebtedness becomes or is
declared due and payable before the date on which it would otherwise become
due and payable (in which case the Company shall give notice to the Trustee
of such default as soon as is reasonably practicable), and that
acceleration shall not be rescinded or annulled, or such indebtedness shall
not have been discharged, within a period of 30 days after there has been
given, by registered or certified mail, to the Company by the Trustee or to
the Company and the Trustee by holders of at least 25% in principal amount
of Notes a written notice specifying such acceleration and requiring the
Company to cause the acceleration to be rescinded or annulled or to cause
that indebtedness to be discharged and stating that the notice is a Notice
of Default under the Indenture.
10. Pursuant to Section 301(17) of the Indenture, with respect to the
Notes, the following covenants will be added to the covenants set forth in
Article Ten of the Indenture:
(a) The Company will not pay dividends or other distributions of its
capital stock or purchase such capital stock (whether through redemption or
purchase), unless after giving effect thereto, the aggregate amount
expended for those purposes subsequent to October 31, 1996, does not exceed
the sum of (i) the Company's aggregate Consolidated Net Income for the
fiscal year ended July 31, 1996 ("Fiscal 1996"), plus (ii) 50% of the
aggregate Consolidated Net Income for each fiscal year commencing
subsequent to Fiscal 1996, plus (iii) 100% of the aggregate net proceeds
received by the Company on account of any capital stock offering subsequent
to January 1, 1997, plus (iv) 100% of the aggregate net proceeds received
by the Company on account of any disposition of property received by the
Company from such sales, less (v) 100% of the aggregate Consolidated Net
Loss for each fiscal year commencing subsequent to Fiscal 1996.
Notwithstanding the foregoing, the Company is not prohibited from (1) (a)
issuing capital stock or (b) purchasing its capital stock (whether through
redemption or purchase) in connection with the investment by the Company in
another asset or business or (2) paying dividends or making other
distributions with respect to its capital stock pursuant to the Rights
Agreement, dated as of September 29, 1995 (the "Rights Agreement"), between
the Company and LaSalle National Trust, N.A., as Rights Agent (the "Rights
Agent"), as amended by Amendment Number One to the Rights Agreement, dated
as of November 18, 1996, between the Company and the Rights Agent;
(b) The Company will maintain Consolidated Net Worth at the end of
each of its fiscal quarters at an amount not less than the sum of (i)
Consolidated Net Worth of the Company as of October 31, 1996, plus (ii) 35%
of Consolidated Net Income for each of its fiscal quarters occurring after
October 31, 1996 plus (iii) 85% of the amount of the net proceeds from the
sale of any of the Company's or its Subsidiaries' capital stock, options or
warrants computed on a cumulative basis;
(c) The Company will not, and will not permit any Subsidiary to, Incur
any Funded Debt if, immediately after giving effect to any such creation,
incurrence, assumption or guarantee (including the retirement of any
existing Indebtedness from the
4
<PAGE>
proceeds of such additional Funded Debt), the aggregate amount of Funded
Debt outstanding would exceed 75% of Consolidated Capitalization;
(d) The Company will maintain, at the end of each of its fiscal
quarters, an Operating Coverage Ratio with respect to the four consecutive
fiscal quarters then ended taken as a whole of at least 2.4:1.0; and
(e) The Company will not, directly or indirectly, incur any
Indebtedness that by its terms (or by the terms of the agreement governing
such Indebtedness) is subordinate in right of payment to any other
Indebtedness of the Company unless such Indebtedness is also by its terms
(or the terms of the agreement governing such Indebtedness) made expressly
either (i) Pari Passu in right of payment with the Notes or (ii)
subordinate in right of payment to the Notes in the same manner and at
least to the same extent as the Notes are subordinate to Senior
Indebtedness.
The following defined terms relate to the covenants that will be added
to the covenants currently set forth in Article Ten of the Indenture pursuant to
this Paragraph 10:
"Consolidated Capitalization" means at any time the sum of (i) Funded
Debt plus (ii) Consolidated Net Worth.
"Consolidated EBITDA" means the sum of (i) Consolidated Net Income for
a period (which excludes special charges or gains (including income taxes
thereon), the cumulative effect of accounting changes and extraordinary items),
plus (ii) provision for income taxes of the Company during such period, plus
(iii) depreciation and amortization expense of the Company accrued during such
period (but only to the extent not included in Consolidated Interest Expense)
plus (iv) Consolidated Interest Expense during such period.
"Consolidated Interest Expense" means the sum of (i) interest expense
for borrowed money for a period, plus (ii) imputed interest expense on
capitalized leases for such period plus (iii) one-third of rent expense under
operating leases for such period.
"Consolidated Net Income" means the amount of net income (loss) of the
Company and its Subsidiaries, for a period; provided, however, that there shall
not be included in Consolidated Net Income (i) any net income (loss) of a
Subsidiary for any period during which it was not a consolidated Subsidiary,
(ii) any net income (loss) of businesses, properties or assets acquired or
disposed of (by way of merger, consolidation, purchase, sale or otherwise) by
the Company or any Subsidiary for any period prior to the acquisition thereof or
subsequent to the disposition thereof, (iii) the cumulative effect of accounting
changes and extraordinary items during such period or (iv) special charges or
gains during such period.
"Consolidated Net Worth" means at any time the excess, after making
appropriate deductions for any minority interest in the net worth of
consolidated Subsidiaries, of (i) the assets of the Company and its consolidated
Subsidiaries over (ii) the liabilities of the Company and its consolidated
Subsidiaries; provided, however, that any write-up in the book value of any
assets acquired subsequent to the date of this Officer's Certificate other than
a write-up required for
5
<PAGE>
assets acquired in connection with the purchase of a Person or business and
taken at the time of such acquisition) shall not be taken into account.
"Funded Debt" means any of the following obligations of the Company or
any Subsidiary which by its terms matures at or is extendible or renewable at
the sole option of the obligor without requiring the consent of the obligee to a
date more than twelve months after the date of the creation of incurrence of
such obligation: (i) any Obligations (including all Senior Indebtedness),
contingent or otherwise, for borrowed money or for the deferred purchase price
of property or services (including, without limitation, any interest accrued
subsequent to any Event of Default), (ii) all Obligations (including the Notes)
evidenced by bonds, notes, debentures or other similar instruments, (iii) all
Indebtedness created or arising under any conditional sale or other title
retention agreement with respect to property acquired (even though the rights
and remedies of the seller or lender under such agreement in the event of
default are limited to repossession or sale of such property), except any such
obligation that constitutes a trade payable or an accrued liability arising in
the ordinary course of business, if and to the extent any of the Indebtedness
under this clause (iii) would appear as a liability upon a balance sheet
prepared in accordance with generally accepted accounting principles, (iv) all
capitalized lease Obligations, (v) all Indebtedness of the type referred to in
clause (i), (ii), (iii) or (iv) above secured by (or for which the holder of
such Indebtedness has an existing right, contingent or otherwise, to be secured
by) any Lien upon property of the Company or any Subsidiary (including, without
limitation, accounts and contract rights), even though the Company or any
Subsidiary has not assumed or become liable for the payment of such Indebtedness
and (vi) any guarantee of any obligation of the type referred to in any of the
foregoing clauses (i) through (v), regardless of whether such obligation would
appear on a balance sheet.
"Operating Coverage Ratio" means the ratio of (i) Consolidated EBITDA
during any period to (ii) Consolidated Interest Expense during any such period.
11. Pursuant to Section 301(18) of the Indenture, the Notes shall be
issuable in whole or in part in the form of one or more Global Securities and
The Depository Trust Company will be the Depositary for such Global Security or
Global Securities.
[the remainder of this page is intentionally left blank]
6
<PAGE>
IN WITNESS WHEREOF, the undersigned duly authorized officers of the Company
have caused this Officer's Certificate to be executed in their names as of
December 17, 1997.
ABC RAIL PRODUCTS CORPORATION
By: /s/ D. Chisholm MacDonald
------------------------------------------------
Name: D. Chisholm MacDonald
Title: Executive Vice President - Administration
and Development and Chief Executive
Officer
By: /s/ Charles E. Self
------------------------------------------------
Name: Charles E. Self
Title: Corporate Treasurer
7
<PAGE>
EXHIBIT 4.2
No. R-1 $25,000,000
ABC RAIL PRODUCTS CORPORATION
8 3/4% Senior Subordinated Notes, Series B, Due 2004
<TABLE>
<CAPTION>
============================================================================================
Original
Issue Date Dated Date Maturity Date CUSIP
---------- ---------- ------------- -----
<S> <C> <C> <C>
December 23, 1997 December 23, 1997 December 31, 2004 000752AB1
Interest Regular
Interest Rate Payment Dates Record Dates
------------- ---------------------- ------------------------
8 3/4% First Calendar Day of Last Business Day of the
Each Month, Month Preceding Each
Commencing Interest Payment Date
February 1, 1998 (Except Record Date
(Except Final Interest with Respect to Final
Payment Date Is the Payment of Interest at
Maturity Date Maturity is Maturity
Specified Above) Date Specified Above)
GLOBAL SECURITY REGISTERED OWNER CEDE & CO.
----------------------------
PRINCIPAL AMOUNT TWENTY-FIVE MILLION DOLLARS
----------------------------
============================================================================================
</TABLE>
Unless this certificate is presented by an authorized representative
of The Depository Trust Company, a New York corporation ("DTC"), to the Company
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>
ABC Rail Products Corporation, a Delaware corporation (hereinafter
referred to as the "Company," which term includes any successor corporation
under the hereinafter-defined Indenture), for value received, hereby promises to
pay to the Global Security Registered Owner specified above, or registered
assigns, the Principal Amount specified above on the Maturity Date specified
above, and to pay interest on said sum from the Dated Date hereof, at the
Interest Rate specified above, monthly on the Interest Payment Dates specified
above, to the date on which said principal sum is paid or provided for in
accordance with the hereinafter-defined Indenture. Interest to be paid on the
first Interest Payment Date (February 1, 1998) will accrue from the Dated Date
hereof through and including the first Regular Record Date (January 31, 1998)
(such accrued interest calculated as follows on the basis of a 360-day year
consisting of twelve 30-day months: nine days interest from the Dated Date
hereof (December 23, 1997) through December 31, 1997 and 30 days interest from
January 1, 1998 through the first Regular Record Date (January 31, 1998)).
Interest to be paid on each subsequent Interest Payment Date will accrue through
and including its respective Regular Record Date from the day following the
immediately preceding Regular Record Date. The interest payable on this Note on
any Interest Payment Date will be paid, subject to certain exceptions provided
in the hereinafter-defined Indenture, to the Person in whose name this Note is
registered in the Security Register (hereinafter referred to as the "Holder") at
the close of business on the Regular Record Date for such interest. Such
interest (other than interest due at the Maturity Date specified above or on
redemption or repurchase) will be paid by mailing a check for such interest,
payable in the currency of the United States of America, to or upon the written
order of the Holder of this Note to the address of such Holder as it appears on
the Security Register. Notwithstanding the foregoing sentence, any Holder of
Securities (hereinafter-defined) of any series which pay interest on the same
Interest Payment Date and which are in an aggregate principal amount in excess
of $10,000,000 may elect to receive interest payments (other than interest due
at the Maturity Date specified above or on redemption or repurchase) via wire
transfer in immediately available funds to a bank in New York, New York (or
other bank approved by the Paying Agent under the hereinafter-defined Indenture)
by making arrangements therefor in writing (or such other means as deemed
acceptable by such Paying Agent) with such Paying Agent not later than the
Regular Record Date immediately preceding the applicable Interest Payment Date.
The principal, premium (if any) and interest due on this Note at its Maturity
Date specified above or upon redemption or repurchase will be paid by wire
transfer in immediately available funds against presentation and surrender of
this Note by its Holder at the office of the Paying Agent under the hereinafter-
defined Indenture, but only if appropriate wire transfer instructions have been
received in writing (or such other means as deemed acceptable by such Paying
Agent) by such Paying Agent not less than 15 days before the Maturity Date
specified above or the date on which this Note, in whole or in part, is redeemed
or repurchased. In the event such instructions are not received by such
fifteenth day, such principal, premium (if any) and interest due will be paid by
check against such presentation and surrender.
Any interest which is payable on this Note, but is not punctually paid
or duly provided for, on any Interest Payment Date (hereinafter referred to as
"Defaulted Interest") shall cease to be payable to the Holder hereof on the
relevant Regular Record Date by virtue of having been such Holder, and such
Defaulted Interest may be paid by the Company (1) at the close of business on a
Special Record Date fixed by the Trustee under the hereinafter-defined Indenture
to the Holder hereof at the close of business on such Special Record Date,
notice of such payment
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shall be mailed, first-class posted prepaid, to the Holder of this Note at such
Holder's address as it appears in the Security Register, not less than 10 days
prior to such Special Record Date, or (2) in any other lawful manner not
inconsistent with the requirements of any securities exchange on which this Note
may be listed, and upon such notice as may be required by such exchange, if,
after notice given by the Company to the Trustee under the hereinafter-defined
Indenture of the proposed payment pursuant to this clause (2), such manner of
payment shall be deemed practicable by such Trustee, all as more fully provided
in the hereinafter-defined Indenture.
This Note is one of the unsecured debentures, notes or other evidences
of indebtedness (hereinafter referred to as the "Securities") issued and to be
issued from time to time under and in accordance with the Indenture dated as of
January 15, 1997, executed and delivered by the Company to First Trust National
Association (the "Trustee"), as supplemented by the First Supplemental Indenture
dated as of January 15, 1997 and the Second Supplemental Indenture dated as of
December 1, 1997, each executed and delivered by the Company to the Trustee,
prior to the authentication of this Note. Certain terms of the Notes are set
forth in an Officer's Certificate dated as of December 17, 1997 (collectively
with the indenture and the supplemental indentures referred to in the previous
sentence, the "Indenture") executed and delivered to the Trustee prior to the
authentication of this Note. Reference to the Indenture and to all supplemental
indentures and officer's certificates providing certain terms of Securities as
provided in the Indenture, if any, hereafter executed pursuant to the Indenture
is hereby made for a statement of the respective rights thereunder of the
Company, the Trustee and the Persons in whose names the Securities are
registered, and the terms upon which the Securities are, and are to be,
authenticated and delivered. By the terms of the Indenture, the Securities are
issuable in one or more series unlimited as to principal amount, to bear such
rates of interest, to mature at such times and to have such other provisions as
provided in the Indenture.
To the extent set forth in the Indenture, this Note is and will be
subordinated in right of payment to all existing and future Senior Indebtedness
of the Company and will be structurally subordinated to all existing and future
indebtedness and other liabilities of the Company's subsidiaries. To the extent
set forth in the Indenture, this Note will rank pari passu with any existing and
future senior subordinated indebtedness of the Company and will rank senior to
all other subordinated indebtedness of the Company.
This Note is not redeemable prior to December 31, 1999. On or after
such date, the Company may, at its option, redeem this Note in whole or in part,
from time to time, under the circumstances set forth in the Indenture. At the
option of the Company and upon 30 days' written notice to the Trustee, this Note
may be redeemed at any time on or after December 31, 1999 and through December
30, 2000, in whole or in part, at 102% of the principal amount, plus accrued and
unpaid interest to the date on which such redemption occurs. At the option of
the Company, and upon 30 days' written notice to the Trustee, this Note may be
redeemed at any time on or after December 31, 2000, in whole or in part, at 100%
of the principal amount, plus accrued and unpaid interest to the date on which
such redemption occurs.
Notice of redemption shall be given by first-class mail, postage
prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption
Date, to any Holder of Notes to be
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redeemed, at such Holder's address appearing in the Security Register, all as
more fully provided in the Indenture. This Note may be redeemed in part, but
only in whole multiples of $1,000.
The Company has no obligation to redeem, repay or repurchase the Notes
pursuant to any sinking fund. If, however, a Change of Control occurs the
Registered Owner of this Note will have the right to require the Company to
repurchase this Note, in whole or in part in integral multiples of $1,000, at a
cash purchase price equal to 103% of the principal amount thereof, plus accrued
and unpaid interest, if any, if prior to December 31, 2000, or 101% of the
principal amount thereof, plus accrued and unpaid interest, if any, if on or
after December 31, 2000, all as more fully provided in the Indenture. Such
Repurchase Date will be no earlier than 30 days nor more than 60 days from the
date the Registered Owner of this Note is notified of the occurrence of a Change
of Control. If a Change of Control Default Event occurs, the Company must
redeem this Note in whole at a cash purchase price equal to 103% of the
principal amount hereof, plus accrued and unpaid interest, if any, if prior to
December 31, 2000 or 101% of the principal amount hereof, plus accrued and
unpaid interest, if any, if on or after December 31, 2000, all as more fully
provided in the Indenture. Such Redemption Date will be no earlier than 30 days
nor more than 60 days from the date the Holders of the Notes are notified of the
occurrence of a Change of Control Default Event.
In case of certain Events of Default specified in the Indenture, the
Trustee or the Holders of not less than 25% in aggregate principal amount of the
Outstanding Notes may declare the principal amount of the Notes due and payable
immediately, and upon such declaration, such principal amount, plus any interest
accrued on this Note to the date of such declaration, shall become immediately
due and payable, all as more fully provided in the Indenture.
The Indenture contains provisions for defeasance at any time of the
entire indebtedness on this Note upon compliance by the Company with certain
conditions set forth therein, which provisions apply to this Note.
No recourse under or upon any obligation, covenant or agreement
contained in the Indenture, or any supplemental indenture or officers'
certificate pursuant to the Indenture with respect to the Notes, or in this
Note, because of any indebtedness evidenced hereby, shall be had against any
incorporator, or against any past, present or future shareholder, employee,
officer or director, as such, of the Company or of any successor corporation,
either directly or through the Company or any successor corporation, under any
rule of law, statute or constitutional provision or by the enforcement of any
assessment or penalty or by any legal or equitable proceeding or otherwise, all
such liability, whether at common law, in equity, by any constitution, statute
or otherwise, of incorporators, shareholders, employees, officers or directors
being expressly waived and released by the acceptance of this Note by the Holder
hereof and as part of the consideration of the issuance of this Note.
Prior to due presentment of this Note for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Holder of this Note as the owner hereof for the purpose of receiving payment
of principal of, premium (if any), and (subject to the provisions of the
Indenture) any interest on this Note and for all other purposes whatsoever,
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whether or not this Note be overdue, and none of the Company, the Trustee, or
any agent of the Company or the Trustee shall be affected by notice to the
contrary.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights of the Holders of each
series of Securities to be affected under the Indenture by a supplemental
indenture between the Company and the Trustee with the consent of the Holders of
not less than a majority in aggregate principal amount of the Securities of all
series at the time Outstanding affected by such supplemental indenture (voting
as one class). The Indenture also permits, with certain exceptions as provided
in the Indenture, the Holders of not less than a majority in aggregate principal
amount of the Outstanding Securities of any series to waive on behalf of the
Holders of all the Outstanding Securities of such series any past default under
the Indenture with respect to such series and its consequences.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place and rate, and in the coin or currency, herein prescribed.
EXCEPT UNDER THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE,
THIS GLOBAL NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY OR
BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY, ANOTHER NOMINEE OF THE
DEPOSITARY, A SUCCESSOR OF THE DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR.
As provided in the Indenture and subject to certain limitations set
forth therein, upon surrender for registration of transfer of this Note at the
office or agency in the Place of Payment, the Company shall execute, and the
Trustee under the Indenture shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new notes of this series, of
any authorized denominations and of a like aggregate principal amount and tenor
bearing a number not contemporaneously outstanding; provided, however, that no
note to be issued upon exchange of this Note shall be issued in a denomination
less than $1,000.
As provided in the Indenture and subject to certain limitations set
forth therein, at the option of the Holder hereof, this Note may be exchanged
for other Notes of the same series, of any authorized denomination or
denominations and of a like aggregate principal amount and denomination or
tenor, upon surrender of such Note to be exchanged at such office or agency.
No service charge shall be made for any registration of transfer or
exchange of this Note, but the Company or the Trustee shall require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any registration of transfer or exchange of this Note, other
than exchanges pursuant to the provisions of the Indenture not involving any
transfer.
The Company shall not be required (i) to register the transfer of this
Note during a period beginning at the opening of business 15 days before
selection of this Note to be redeemed in part or in whole and ending at the
close of business on the day of the mailing of a notice of
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such redemption; or (ii) to register the transfer of this Note so selected for
redemption in whole or in part, except the unredeemed portion of this Note being
redeemed in part; or (iii) to register the transfer of this Note during a period
beginning five days before its Maturity Date specified above and ending on such
Maturity Date.
Capitalized terms used herein that are not defined herein have the
meanings assigned to such terms in the Indenture.
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This Note shall not be valid or become obligatory for any purpose
unless and until it shall have been authenticated by the execution by the
Trustee or its successor in trust under the Indenture of the Trustee's
Certificate endorsed hereon.
IN WITNESS WHEREOF, ABC Rail Products Corporation has caused this Note
to be executed in its name by the signature of its Chairman of the Board, and
its corporate seal to be affixed or imprinted hereon and attested by the
signature of its Secretary.
ABC RAIL PRODUCTS CORPORATION
By
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Chairman of the Board
ATTEST:
By
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Corporate Secretary
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
FIRST TRUST NATIONAL ASSOCIATION, as Trustee
By
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Authorized Signatory
