<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 5, 1997
REGISTRATION NO. 333-5978
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 2
TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
EURAMAX INTERNATIONAL PLC
EURAMAX EUROPEAN HOLDINGS PLC
EURAMAX EUROPEAN HOLDINGS, B.V.
AMERIMAX HOLDINGS, INC.
(Exact name of registrants as specified in their charter)
<TABLE>
<S> <C> <C>
ENGLAND & WALES NONE
ENGLAND & WALES NONE
THE NETHERLANDS NONE
DELAWARE 3355 52-1994016
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of Classification Code Number) Identification
incorporation or organization) Number)
</TABLE>
------------------------
11 BROOK BUSINESS CENTER CT CORPORATION SYSTEM
COWLEY MILL ROAD 1633 BROADWAY
UXBRIDGE, MIDDLESEX NEW YORK, NEW YORK 10019
ENGLAND, UB82FX (212) 664-1666
44 1895 257 882
(Address, including Zip Code, and (Name, Address, including Zip Code,
Telephone Number, including Area Code, and
of Registrant's Principal Business Telephone Number, including Area Code,
Office) of Agent for Service)
------------------------
COPIES TO:
LANCE C. BALK J. DAVID SMITH
KIRKLAND & ELLIS CHIEF EXECUTIVE OFFICER
153 EAST 53RD STREET EURAMAX INTERNATIONAL PLC
NEW YORK, NEW YORK 10022-4675 5535 TRIANGLE PARKWAY
(212) 446-4800 NORCROSS, GEORGIA 30092
(770) 449-7066
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
AS SOON AS PRACTICABLE AFTER THIS REGISTRATION STATEMENT BECOMES EFFECTIVE.
------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to those securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any state in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
<PAGE>
SUBJECT TO COMPLETION, DATED FEBRUARY 5, 1997
PROSPECTUS
, 1997
EURAMAX INTERNATIONAL PLC
EURAMAX EUROPEAN HOLDINGS PLC
EURAMAX EUROPEAN HOLDINGS, B.V.
OFFER TO EXCHANGE THEIR
$135,000,000 11 1/4% SENIOR SUBORDINATED NOTES DUE 2006
WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT
FOR ANY AND ALL OUTSTANDING
$135,000,000 11 1/4% SENIOR SUBORDINATED NOTES DUE 2006
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME ON
, 1997, UNLESS EXTENDED.
Euramax International plc, a corporation formed under the laws of England and
Wales ("Euramax" or the "Company"), Euramax European Holdings plc, a corporation
formed under the laws of England and Wales and a wholly owned subsidiary of the
Company ("Euramax U.K."), and Euramax European Holdings, B.V., a corporation
formed under the laws of The Netherlands and a wholly owned subsidiary of the
Company ("Euramax B.V., " and together with the Company and Euramax U.K, the
"Issuers"), hereby offer (the "Exchange Offer"), upon the terms and subject to
the conditions set forth in this Prospectus (the "Prospectus") and the
accompanying Letter of Transmittal (the "Letter of Transmittal"), to exchange
$1,000 principal amount (or fraction thereof) of their 11 1/4% Senior
Subordinated Notes due 2006 (the "New Notes"), which will have been registered
under the Securities Act of 1933, as amended (the "Securities Act"), pursuant to
a Registration Statement of which this Prospectus is a part, for each $1,000
principal amount (or fraction thereof) of its 11 1/4% Senior Subordinated Notes
due 2006 (the "Old Notes"), of which $135,000,000 principal amount was
outstanding as of the date hereof. The form and terms of the New Notes are the
same as the form and terms of the Old Notes except that (i) the New Notes will
have been registered under the Securities Act and thus will not bear restrictive
legends restricting their transfer pursuant to the Securities Act and (ii)
holders of New Notes will not be entitled to certain rights of holders of Old
Notes under the Registrations Rights Agreement (as defined). The Old Notes and
the New Notes are sometimes referred to herein collectively as the "Notes."
The Issuers will accept for exchange any and all Old Notes validly tendered and
not withdrawn prior to 5:00 p.m., New York City time on , 1997,
unless extended by the Issuers in their sole discretion (the "Expiration Date").
Tenders of Old Notes may be withdrawn at any time prior to the Expiration Date.
The Exchange Offer is subject to certain customary conditions. See "The Exchange
Offer."
The Old Notes were sold by the Issuers on September 25, 1996 to J.P. Morgan
Securities Inc. and Goldman, Sachs & Co. (collectively, the "Initial
Purchasers") in a transaction not registered under the Securities Act in
reliance upon certain exemptions under the Securities Act (the "Initial
Offering"). The Initial Purchasers subsequently placed the Old Notes with
qualified institutional buyers in reliance upon Rule 144A under the Securities
Act and qualified buyers outside the United States in reliance upon Regulation S
under the Securities Act. Accordingly, the Old Notes may not be reoffered,
resold or otherwise transferred in the United States unless registered under the
Securities Act or unless an applicable exemption from the registration
requirements of the Securities Act is available. The New Notes are being offered
hereunder in order to satisfy the obligations of the Issuers and the Guarantor
under the Registration Rights Agreement (as defined) entered into by the
Issuers, the Guarantor and the Initial Purchasers in connection with the Initial
Offering. See "The Exchange Offer."
The Issuers will be jointly and severally liable for all payments due under the
New Notes. The New Notes will be fully and unconditionally guaranteed (the
"Guarantee") on a senior subordinated basis by Amerimax Holdings, Inc., a
Delaware corporation and a wholly owned subsidiary of the Company ("Amerimax" or
the "Guarantor"). The New Notes will mature on October 1, 2006. Interest on the
New Notes will accrue at the rate of 11 1/4% per annum from September 25, 1996,
the date of original issuance of the Old Notes, and will be payable in cash
semi-annually in arrears on each April 1 and October 1, commencing April 1,
1997. Holders whose Old Notes are accepted upon consummation of the Exchange
Offer will be deemed to have waived their rights to receive all accrued interest
on the Old Notes.
(COVER PAGE CONTINUED ON NEXT PAGE)
------------------------
SEE "RISK FACTORS" BEGINNING ON PAGE 12 HEREOF FOR DISCUSSION OF CERTAIN FACTORS
WHICH SHOULD BE CONSIDERED IN CONNECTION WITH THE EXCHANGE OFFER AND AN
INVESTMENT IN THE NEW NOTES OFFERED HEREBY.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<PAGE>
(COVER PAGE CONTINUED)
The New Notes will be redeemable at the option of the Issuers, in whole or in
part, at any time on or after October 1, 2001 at the redemption prices set forth
herein, plus accrued and unpaid interest, if any, to the date of redemption. In
addition, prior to October 1, 1999 the Issuers may redeem up to 40% of the
aggregate principal amount of the New Notes at a redemption price of 111.25% of
the principal amount thereof, plus accrued and unpaid interest thereon to the
redemption date, with the net cash proceeds of one or more public offerings of
Capital Stock (as defined) (other than Disqualified Stock (as defined) of the
Company; provided that at least $75.0 million in aggregate principal amount of
the Notes remain outstanding immediately after the occurrence of each such
redemption. In the event of certain changes affecting the withholding tax
treatment of certain payments on the New Notes, the New Notes will also be
redeemable at the option of the Issuers, as a whole but not in part, at 100% of
the principal amount thereof, plus accrued and unpaid interest, if any, to the
date of redemption. Upon a Change of Control (as defined) and in certain
circumstances following Asset Sales (as defined), each holder of New Notes will
have the right to require the Issuers to repurchase such holder's New Notes at a
price of 101% of the principal amount thereof, plus accrued and unpaid interest,
if any, to the date of repurchase. The New Notes will not be subject to any
sinking fund requirement. See "Description of the New Notes."
The New Notes will be unsecured obligations of the Issuers subordinated in right
of payment to all Senior Debt (as defined) including all of the obligations
under the Credit Agreement (as defined). The Guarantee will be a general
unsecured obligation of Amerimax, subordinated in right of payment to all Senior
Debt including all obligations under the Credit Agreement. The New Notes will be
effectively subordinated to all existing and future indebtedness of the
subsidiaries of the Issuers and the Guarantor including all of their obligations
under the Credit Agreement. As of September 25, 1996, the aggregate amount of
indebtedness and other liabilities which the New Notes and the Guarantee are
effectively subordinated to is approximately $165.8 million. There is currently
no outstanding indebtedness of the Issuers or the Guarantor to which the Notes
are senior. The Indenture (as defined) will permit the Issuers, the Guarantor
and their subsidiaries to incur additional indebtedness, subject to certain
limitations. See "Description of the New Notes."
Prior to the Exchange Offer, there had been no public market for the Notes.
Application has been made to list the Old Notes and the New Notes on the
Luxembourg Stock Exchange; however, there can be no assurance that the Issuers
will meet the applicable listing requirements of the Luxembourg Stock Exchange
or any other recognized stock exchange, and there can be no assurance that an
active market for the Notes or New Notes will develop. To the extent that a
market for the New Notes does develop, the market value of the New Notes will
depend on market conditions (such as yields on alternative investments), general
economic conditions, the Issuers' financial condition and other conditions. Such
conditions might cause the New Notes, to the extent that they are actively
traded, to trade at a significant discount from face value. See "Risk Factors --
Certain United States and United Kingdom Tax Considerations" and "Risk Factors
- -- Absence of Public Market."
Based upon an interpretation by the staff of the Securities and Exchange
Commission (the "Commission") set forth in certain no-action letters issued to
third parties, the Issuers believe that the New Notes or interests therein
issued pursuant to the Exchange Offer in exchange for Old Notes or interests
therein may be offered for resale, resold and otherwise transferred by a holder
thereof (other than (i) a broker-dealer who purchases such New Notes directly
from the Issuers to resell pursuant to Rule 144A or any other available
exemption under the Securities Act or (ii) a person that is an "affiliate" of
the Issuers within the meaning of Rule 405 under the Securities Act), without
compliance with the registration and prospectus delivery requirements of the
Securities Act, PROVIDED that the holder is acquiring the New Notes in the
ordinary course of its business and not participating, and had no arrangement or
understanding with any person to participate, in the distribution of New Notes.
Holders of Old Notes wishing to accept the Exchange Offer must represent to the
Issuers, as required by the Registration Rights Agreement, that such conditions
have been met. Each broker-dealer that receives the New Notes for its own
account in exchange for the Old Notes, where such Old Notes were acquired by
such broker-dealer as a result of market-making activities or other trading
activities, must acknowledge that it will deliver a prospectus in connection
with any resale of such New Notes. The Issuers believe that none of the
registered holders of the Old Notes is an "affiliate," as such term is defined
in Rule 405 under the Securities Act, of the Issuers.
(COVER PAGE CONTINUED ON NEXT PAGE)
ii
<PAGE>
(COVER PAGE CONTINUED)
Each broker-dealer that receives New Notes for its own account pursuant to the
Exchange Offer must acknowledge that it will deliver a prospectus in connection
with any resale of such New Notes. The Letter of Transmittal states that by so
acknowledging and by delivering a prospectus, a broker-dealer will not be deemed
to admit that it is an "underwriter" within the meaning of the Securities Act.
This Prospectus, as it may be amended or supplemented from time to time, may be
used by a broker-dealer in connection with resales of New Notes received in
exchange for Old Notes where Old Notes were acquired by such broker-dealer as a
result of market-making activities or other trading activities. The Issuers have
indicated their intention to make this Prospectus (as it may be amended or
supplemented) available to any broker-dealer for use in connection with any such
resale for a period of 180 days after the Expiration Date. See "Plan of
Distribution."
The Issuers will not receive any proceeds from the Exchange Offer. The Issuers
have agreed to bear the expenses of the Exchange Offer. No underwriter is being
used in connection with the Exchange Offer.
THE EXCHANGE OFFER IS NOT BEING MADE TO, NOR WILL THE ISSUERS' ACCEPT SURRENDERS
FOR EXCHANGE FROM, HOLDERS OF OLD NOTES IN ANY JURISDICTION IN WHICH THE
EXCHANGE OFFER OR THE ACCEPTANCE THEREOF WOULD NOT BE IN COMPLIANCE WITH THE
SECURITIES OR BLUE SKY LAWS OF SUCH JURISDICTION.
NO PERSON IS AUTHORIZED IN CONNECTION WITH ANY OFFERING HEREBY TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS OR
THE ACCOMPANYING LETTER OF TRANSMITTAL, AND, IF GIVEN OR MADE, SUCH INFORMATION
OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
ISSUERS OR THE GUARANTOR. NEITHER THE DELIVERY OF THIS PROSPECTUS OR THE
ACCOMPANYING LETTER OF TRANSMITTAL, NOR ANY EXCHANGE MADE HEREUNDER SHALL UNDER
ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED HEREIN
IS CORRECT AS OF ANY DATE SUBSEQUENT TO THE DATE HEREOF.
UNTIL , 1997 (90 DAYS AFTER COMMENCEMENT OF THE EXCHANGE OFFER), ALL
DEALERS EFFECTING TRANSACTIONS IN THE NEW NOTES, WHETHER OR NOT PARTICIPATING IN
THE EXCHANGE OFFER, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS IS IN ADDITION
TO THE OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS
AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.
THE NEW NOTES WILL BE AVAILABLE INITIALLY ONLY IN BOOK-ENTRY FORM. THE ISSUERS
EXPECT THAT THE NEW NOTES ISSUED PURSUANT THE EXCHANGE OFFER WILL BE REPRESENTED
BY A GLOBAL NOTE (AS DEFINED) IN BEARER FORM, WHICH WILL BE DEPOSITED WITH THE
BOOK-ENTRY DEPOSITARY (AS DEFINED). THE BOOK-ENTRY DEPOSITARY WILL ISSUE A
CERTIFICATELESS INTEREST FOR THE GLOBAL NOTE TO THE DEPOSITORY TRUST COMPANY
("DTC"). BENEFICIAL INTERESTS IN THE GLOBAL NOTE REPRESENTING THE NEW NOTES WILL
BE SHOWN ON, AND TRANSFERS THEREOF WILL BE EFFECTED THROUGH, RECORDS MAINTAINED
BY DTC AND ITS PARTICIPANTS. AFTER THE INITIAL ISSUANCE OF THE GLOBAL NOTE,
NOTES IN CERTIFICATED FORM WILL BE ISSUED IN EXCHANGE FOR THE GLOBAL NOTE ONLY
UNDER LIMITED CIRCUMSTANCES AS SET FORTH IN THE INDENTURE. SEE "DESCRIPTION OF
THE NEW NOTES-BOOK-ENTRY, DELIVERY AND FORM."
PROSPECTIVE INVESTORS IN THE NEW NOTES ARE NOT TO CONSTRUE THE CONTENTS OF THIS
PROSPECTUS AS INVESTMENT, LEGAL OR TAX ADVICE. EACH INVESTOR SHOULD CONSULT ITS
OWN COUNSEL, ACCOUNTANT AND OTHER ADVISORS AS TO LEGAL, TAX, BUSINESS, FINANCIAL
AND RELATED ASPECTS OF THE NEW NOTES. NEITHER THE ISSUERS OR THE GUARANTOR IS
MAKING ANY REPRESENTATION TO ANY PROSPECTIVE INVESTOR IN THE NEW NOTES REGARDING
THE LEGALITY OF AN INVESTMENT THEREIN BY SUCH PERSON UNDER APPROPRIATE LEGAL
INVESTMENT OR SIMILAR LAWS.
(COVER PAGE CONTINUED ON NEXT PAGE)
iii
<PAGE>
(COVER PAGE CONTINUED)
ENFORCEABILITY OF CERTAIN CIVIL LIABILITIES
THE COMPANY AND EURAMAX U.K. ARE INCORPORATED UNDER THE LAWS OF ENGLAND AND
WALES. EURAMAX B.V. IS A CORPORATION INCORPORATED UNDER THE LAWS OF THE
NETHERLANDS. SOME OF THE DIRECTORS AND OFFICERS OF THE ISSUERS RESIDE OUTSIDE OF
THE UNITED STATES AND ALL OR A PORTION OF THE ASSETS OF SUCH PERSONS AND OF THE
ISSUERS ARE LOCATED OUTSIDE OF THE UNITED STATES. ALTHOUGH THE COMPANY, EURAMAX
U.K. AND EURAMAX B.V. HAVE EACH AGREED, IN ACCORDANCE WITH THE TERMS OF THE
INDENTURE, TO ACCEPT SERVICE IN THE UNITED STATES BY ITS AGENT DESIGNATED FOR
SUCH PURPOSE, IT MAY BE DIFFICULT OR IMPOSSIBLE FOR HOLDERS OF NOTES (A) TO
EFFECT SERVICE UPON CERTAIN OF THE DIRECTORS AND OFFICERS OF THE COMPANY,
EURAMAX U.K. AND EURAMAX B.V. AND (B) TO REALIZE IN THE UNITED STATES UPON
JUDGMENTS OF COURTS OF THE UNITED STATES PREDICATED UPON THE CIVIL LIABILITY OF
SUCH PERSONS UNDER THE UNITED STATES FEDERAL SECURITIES LAWS. THERE IS DOUBT AS
TO THE ENFORCEABILITY OUTSIDE OF THE UNITED STATES AGAINST ANY OF THESE PERSONS,
IN ORIGINAL ACTIONS OR IN ACTIONS FOR ENFORCEMENT OF JUDGMENTS OF UNITED STATES
COURTS, OF LIABILITIES PREDICATED SOLELY ON THE UNITED STATES FEDERAL SECURITIES
LAWS.
CERTAIN UK REGULATORY ISSUES
THE NEW NOTES WILL ONLY BE AVAILABLE FOR EXCHANGE IN THE UK PURSUANT TO THE
EXCHANGE OFFER BY PERSONS WHOSE ORDINARY ACTIVITIES INVOLVE THEM IN ACQUIRING,
HOLDING, MANAGING OR DISPOSING OF INVESTMENTS (AS PRINCIPAL OR AGENT) FOR THE
PURPOSES OF THEIR BUSINESSES OR OTHERWISE IN CIRCUMSTANCES WHICH DO NOT
CONSTITUTE AN OFFER TO THE PUBLIC IN THE UK FOR PURPOSES OF THE PUBLIC OFFERS OF
SECURITIES REGULATIONS 1995.
THIS PROSPECTUS IS BEING DISTRIBUTED ON THE BASIS THAT EACH PERSON IN THE UK TO
WHOM THIS PROSPECTUS IS ISSUED IS REASONABLY BELIEVED TO BE A PERSON FALLING
WITHIN AN EXEMPTION TO SECTION 57 OF THE FINANCIAL SERVICES ACT OF 1986, AS
AMENDED, AS SET OUT IN THE FINANCIAL SERVICES ACT 1986 (INVESTMENT
ADVERTISEMENTS) (EXEMPTIONS) ORDER 1995 OR THE FINANCIAL SERVICES ACT 1986
(INVESTMENT ADVERTISEMENTS) (EXEMPTIONS) (NO 2) ORDER 1995 AND, ACCORDINGLY, BY
ACCEPTING DELIVERY OF THIS PROSPECTUS THE RECIPIENT WARRANTS AND ACKNOWLEDGES
THAT IT IS A PERSON FALLING WITHIN ANY SUCH EXEMPTION.
(COVER PAGE CONTINUED ON NEXT PAGE)
iv
<PAGE>
(COVER PAGE CONTINUED)
NOTICE WITH RESPECT TO THE NETHERLANDS
THE NEW NOTES MAY NOT BE OFFERED, TRANSFERRED OR SOLD, WHETHER DIRECTLY OR
INDIRECTLY, TO ANY INDIVIDUAL OR LEGAL ENTITY INCORPORATED, ESTABLISHED OR
RESIDENT IN THE NETHERLANDS.
EURAMAX B.V. REPRESENTS THAT ANY ANNOUNCEMENT OF THE EXCHANGE OFFER, ANY
ADVERTISEMENT RELATING TO THE EXCHANGE OFFER AND THE EXCHANGE OFFER ITSELF IS IN
COMPLIANCE WITH ALL APPLICABLE LAWS AND REGULATIONS IN EACH JURISDICTION IN
WHICH THE NEW NOTES ARE OFFERED FOR EXCHANGE.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information..................................................... 2
Prospectus Summary........................................................ 3
Risk Factors.............................................................. 12
The Company............................................................... 17
The Transactions.......................................................... 17
Use of Proceeds........................................................... 19
Capitalization............................................................ 20
Selected Historical Financial Data........................................ 21
Pro Forma Condensed Combined Financial Data............................... 22
The Exchange Offer........................................................ 26
Management's Discussion and Analysis of Financial Condition and Results of
Operations............................................................... 34
Business.................................................................. 42
Management................................................................ 52
Description of Preference Shares.......................................... 54
Security Ownership........................................................ 55
Certain Transactions...................................................... 55
Description of Credit Agreement........................................... 55
Description of the New Notes.............................................. 58
Certain Tax Consequences of the Exchange Offer............................ 86
Certain Income Tax Considerations......................................... 86
Plan of Distribution...................................................... 91
Legal Matters............................................................. 91
Experts................................................................... 91
Listing and General Information........................................... 91
Index to Combined Financial Statements.................................... F-1
</TABLE>
v
<PAGE>
AVAILABLE INFORMATION
The Issuers and the Guarantor have filed with the Securities and Exchange
Commission (the "Commission"), a Registration Statement on Form S-4 (the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act") for the registration of the New Notes offered hereby. This
Prospectus, which constitutes a part of the Registration Statement, does not
contain all of the information set forth in the Registration Statement, certain
items of which are contained in exhibits and schedules to the Registration
Statement as permitted by the rules and regulations of the Commission. For
further information with respect to the Issuers and the Guarantor and the New
Notes offered hereby, reference is made to the Registration Statement, including
the exhibits thereto, and financial statements and notes filed as a part
thereof. Statements made in this Prospectus concerning the contents of any
document referred to herein are not necessarily complete but are complete in all
material respects for the purposes used herein. With respect to each such
document filed with the Commission as an exhibit to the Registration Statement,
reference is made to the exhibit for a more complete description of the matter
involved, and each such statement shall be deemed qualified in its entirety by
such reference. The Registration Statement and the exhibits and schedules
thereto and reports and other information filed by the Issuers and the Guarantor
with the Commission can be inspected and copied at the public reference
facilities maintained by the Commission at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and the Commission's Regional Offices at Suite 1300,
Seven World Trade Center, New York, New York 10048, and the Northwestern Atrium
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. In
addition, reports and other information filed by the Issuers and the Guarantor
can be accessed via the Commission's internet home page at http://www.sec.gov/.
Copies of such material also can be obtained from the Public Reference Section
of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at
prescribed rates.
As a result of the filing of the Registration Statement with the Commission, the
Company will become subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith will be required to file periodic reports and other information with
the Commission. The obligation of the Company to file periodic reports and other
information with the Commission will be suspended if the Notes are held of
record by fewer than 300 holders as of the beginning of any fiscal year of the
Company other than the fiscal year in which the Registration Statement is
declared effective. The Company will nevertheless be required to continue to
file reports with the Commission if the Notes are listed on a national
securities exchange. The Company has agreed that, whether or not they are
required to do so by the rules and regulations of the Commission, for so long as
any of the Notes remain outstanding, they will furnish to the holders of the
Notes, file with the Commission (unless the Commission will not accept such a
filing) and make available to securities analysts and prospective investors upon
request (i) all quarterly and annual financial information that would be
required to file such forms, including a "Management's Discussion and Analysis
of Financial Condition and Results of Operations" and, with respect to the
annual information only, a report thereon by the Company's certified independent
accountants and (ii) all current reports that would be required to be filed with
the Commission on Form 8-K if the Issuers were required to file such reports. In
addition, for so long as any of the Notes remain outstanding, the Company has
agreed to furnish to the holders of the Notes and to securities analysts and
prospective investors, upon their request the information required to be
delivered by Rule 144A(d)(4) under the Securities Act.
2
<PAGE>
PROSPECTUS SUMMARY
THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY THE MORE DETAILED
INFORMATION AND FINANCIAL STATEMENTS, INCLUDING THE NOTES THERETO, APPEARING
ELSEWHERE IN THIS PROSPECTUS. UNLESS OTHERWISE INDICATED, ALL FINANCIAL
STATEMENTS USED IN THIS PROSPECTUS HAVE BEEN PREPARED IN ACCORDANCE WITH UNITED
STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES AND ALL DOLLAR REFERENCES ARE TO
U.S. DOLLARS. SEE "BUSINESS -- GLOSSARY" FOR THE DEFINITION OF CERTAIN INDUSTRY
AND TECHNICAL TERMS USED HEREIN. UNLESS THE CONTEXT OTHERWISE REQUIRES,
REFERENCES IN THIS PROSPECTUS TO "EURAMAX" OR THE "COMPANY" ARE TO EURAMAX
INTERNATIONAL PLC ITS SUBSIDIARIES AND THEIR PREDECESSORS, AFTER GIVING EFFECT
TO THE TRANSACTIONS (AS DEFINED).
THE COMPANY
Euramax is a leading international producer of aluminum and steel products with
facilities in the United States ("U.S."), the United Kingdom ("U.K."), The
Netherlands and France. Euramax's products include painted sheet and coil,
siding, roofing, raincarrying systems, windows, doors and various fabricated
trim parts and components. The Company is a leading supplier to several niche
markets. The Company believes that in 1995 it sold at least 40% and 65% of the
aluminum sidewalls used by RV manufacturers in the U.S. and Europe,
respectively. In the same year, the Company sold aluminum and steel gutters and
downspouts to more than 30 of the largest 50 home centers in the U.S. The
Company believes that in 1995 it sold at least 70% of all metal Do-It-Yourself
raincarrying products sold to U.S. home centers. The Company also believes that
it sold at least 40% of the steel siding sold to producers of manufactured
housing in the U.S. Net sales for 1995 in the U.S. and Europe were $287.8
million and $195.7 million, respectively.
Euramax operates downstream of aluminum and steel coil and ingot producers which
supply it with aluminum and steel coil and aluminum extrusions. The Company sold
approximately 139.2 and 160.7 million pounds of aluminum and steel,
respectively, in 1995. To a lesser extent, the Company also distributes and
fabricates products manufactured from vinyl and fiberglass. The Company's
products are sold primarily to manufacturers of RV's and manufactured housing,
rural building contractors, distributors and home centers.
Euramax is the only national supplier in several of its key U.S. product lines
and the only national supplier with in-house coil coating capabilities to supply
steel siding to manufactured housing customers and aluminum sidewalls to RV
manufacturers. This gives the Company a significant competitive advantage over
regional suppliers who do not have in-house manufacturing capabilities or
national distribution networks. In addition, extensive in-house manufacturing
capabilities coupled with product offerings made from alternate raw materials
better enable Euramax to react to changing customer preferences.
Euramax is a holding company formed by (i) ACP Holding Company ("ACP"), an
affiliate of Citicorp Venture Capital, Ltd. and (ii) CVC European Equity
Partners, L.P. ("CVCEEP") and CVC European Equity Partners (Jersey), L.P.,
(collectively with CVCEEP, "CVC Europe", and collectively with CVCEEP and ACP,
the "Investor Group") to acquire certain portions of the fabricated products
operations of Alumax Inc. ("Alumax") pursuant to the Acquisition (as defined).
See "The Transactions." The Company's operations are conducted through
subsidiaries in the U.S. and Europe.
BUSINESS STRATEGY
The Company's strategy is to expand its leadership position as a producer of
aluminum and steel products and to further broaden its current diversity of
products, customers and geographic regions in which it operates. To enhance the
Company's operations and profitability, the Company expects to pursue a strategy
of identifying and acquiring businesses and assets that would enable it to offer
complementary products or expand geographic coverage. The Company believes that
its strategy of expanding market share, broadening the diversity of its
businesses and continuing to provide customers with superior products through a
responsive, efficient and cost effective distribution system will be an
effective means of increasing profitability while preserving cash flow
stability.
MARKET LEADERSHIP AND DIVERSITY OF BUSINESS
The Company's position as a leading international downstream producer of
aluminum and steel products has enabled it to benefit from diversification
across economic and product cycles among different geographic regions and
customer groups. This diversification has historically enabled Euramax to
maintain stable margins even though demand for certain products may be affected
by changes in general and regional economic conditions such as trends in
disposable income.
LEADERSHIP IN SEVERAL MARKETS: The Company's leadership in a variety of niche
markets has enabled it to maintain consistent operating results. For example,
the Company is a leading supplier of steel and aluminium sidewalls and siding to
U.S. RV and
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manufactured housing producers. The Company believes that its 1995 sales of
raincarrying systems represent a majority of such products sold to U.S. home
centers. Similar leading positions are enjoyed by the Company's roll formed
aluminum sheet and coil products sold to RV manufacturers in the U.S. and
Europe.
MANUFACTURING EXPERTISE AND DIVERSITY OF PRODUCTS: The Company's technological
expertise and its ability to fabricate from alternative materials has allowed it
to develop new products and applications and to respond to the changing product
requirements of its customers. Over time, Euramax has increased its ability to
offer products manufactured from steel, vinyl and fiberglass, allowing it to
meet regional material preferences, to provide substitute products for end-users
and to retain customers in the event of demand shifts between raw materials.
GEOGRAPHIC DIVERSITY: The Company's sales span both the continental U.S. and
Europe, with each representing approximately 60% and 40% of 1995 net sales,
respectively. The Company has manufacturing or distribution facilities
strategically located in the U.K., The Netherlands, France and all regions of
the continental U.S. The Company's geographic diversity of sales limits reliance
on any single regional economy in the U.S. or national economy in Europe.
CUSTOMER DIVERSITY. The Company is diversified by both size and type of
customer. Of the Company's more than 3,700 customers, no single customer
accounted for more than 4.5% of net sales in 1995. The top ten customers
accounted for approximately 19.5% of 1995 net sales and represented five
distinct end-use markets. These characteristics minimize the Company's reliance
on individual customers or end-use markets.
DISTRIBUTION CAPABILITY. The Company's manufacturing and distribution network
consists of 29 strategically located facilities, of which 24 are located in all
major regions of the United States, and five are located in Europe. Euramax's
network of facilities allows the Company to offer a more comprehensive service
than its regional competitors and to meet the increasing demands of its
customers for short delivery lead times.
THE TRANSACTIONS
Pursuant to a purchase agreement (the "Acquisition Agreement") dated June 24,
1996 between the Company and Alumax on September 25, 1996 (the "Closing Date"),
the Company purchased (the "Acquisition"), through its wholly-owned
subsidiaries, all of the issued and outstanding capital stock of certain of
Alumax's subsidiaries which operate certain portions of Alumax's fabricated
products operation. The purchase price was approximately $253.7 million, which
includes estimated acquisition expenses of $3.9 million and adjustments for
certain items including cash acquired and working capital. The purchase price is
subject to further adjustment upon determination of the final working capital.
In order to finance the purchase price, including the payment of deferred
financing fees which were approximately $9.9 million, the Company and certain of
its wholly-owned subsidiaries (i) incurred approximately $100.0 million of
indebtedness, (out of a total credit facility of $125.0 million) under the
Credit Agreement (as defined), (ii) the Issuers consummated the Initial Offering
of the Old Notes and (iii) the Investor Group, certain members of management of
the Company and an affiliate of Banque Paribas (the agent under the Credit
Agreement), made an aggregate equity contribution of approximately $35.0 million
(the "Equity Contribution"). See "The Transactions."
THE EXCHANGE OFFER
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REGISTRATION RIGHTS AGREEMENT.................. In connection with the Initial Offering, the
Issuers, the Guarantor, and the Initial Purchasers
entered into a Registration Rights Agreement,
dated as of September 25, 1996 (the "Registration
Rights Agreement"), which grants the holders of
the Old Notes certain exchange and registration
rights. This Exchange Offer is intended to satisfy
such rights with respect to the Old Notes.
Therefore, holders of New Notes will not be
entitled to any exchange or registration rights
with respect to such New Notes (with certain
exceptions). See "The Exchange Offer -- Purpose
and Effect of the Exchange Offer" and "The
Exchange Offer -- Termination of Certain Rights."
THE EXCHANGE OFFER............................. $1,000 principal amount (or fraction thereof) of
New Notes will be exchanged for each $1,000
principal amount (or fraction thereof) of Old
Notes. As of the date hereof, $135,000,000
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principal amount of Old Notes is outstanding. The
Issuers will issue the New Notes to holders on the
earliest practicable date following the Expiration
Date (the "Exchange Date").
EXPIRATION DATE................................ 5:00 p.m., New York City time, on ,
1997, unless the Exchange Offer is extended by the
Issuers in their sole discretion, in which case
the term "Expiration Date" means the latest date
and time to which the Exchange Offer is extended.
CONDITIONS TO THE EXCHANGE OFFER............... The Exchange Offer is subject to certain customary
conditions, which may be waived by the Issuers.
See "The Exchange Offer -- Conditions of the
Exchange Offer."
PROCEDURES FOR TENDERING BOOK-ENTRY INTERESTS
IN THE OLD NOTES.............................. The Old Notes were issued as global securities in
bearer form without interest coupons (each, a
"Global Note"). Concurrently with the issuance
thereof, the Global Notes were deposited with The
Chase Manhattan Bank, as book-entry depositary
(the "Book-Entry Depositary"), which issued a
certificateless depositary interest (each, a
"Depositary Interest") in each Global Note
representing a 100% interest therein to The
Depository Trust Company ("DTC"). Beneficial
interests in the Global Notes, held by or through
participants in DTC through the Depositary
Interests (the "Book-Entry Interests"), are shown
on, and transfers thereof are effected only
through, records maintained in book-entry form by
DTC (with respect to its participants) and its
participants.
Each holder of Book-Entry Interests wishing to
accept the Exchange Offer must deliver the
Book-Entry Interests via DTC's ATOP system (as
defined), each holder of Book-Entry Interests will
represent to the Issuers and the Guarantor that,
among other things, (i) the Book-Entry Interests
in the New Notes to be acquired by such holder and
any beneficial owner(s) (the "Beneficial
Owner(s)") of the Book-Entry Interests in the Old
Notes being tendered in the Exchange Offer are
being acquired by such holder and any Beneficial
Owner(s) in the ordinary course of business of the
holder and any Beneficial Owner(s), (ii) the
holder and each Beneficial Owner are not
participating, do not intend to participate, and
have no arrangement or understanding with any
person to participate, in the distribution of the
New Notes, (iii) the holder and each Beneficial
Owner acknowledge and agree that any person who is
a broker-dealer registered under the Securities
Exchange Act of 1934, as amended (the "Exchange
Act") or is participating in the Exchange Offer
for the purpose of distributing the New Notes must
comply with the registration and prospectus
delivery requirements of the Securities Act in
connection with a secondary resale transaction of
Book-Entry Interests in the New Notes acquired by
such person and cannot rely on the position of the
staff of the Commission set forth in certain
no-action letters (see "The Exchange Offer --
Resales of the New Notes"), (iv) the holder and
each Beneficial Owner understands that a secondary
resale transaction described in clause (iii) above
and any resales of Book-Entry Interests in the New
Notes obtained
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5
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by such holder in exchange for Book-Entry
Interests in the Old Notes originally acquired by
such holder directly from the Company should be
covered by an effective registration statement
containing the selling security holder information
required by Item 507 or Item 508, as applicable,
of Regulation S-K of the Commission and (v)
neither the holder nor any Beneficial Owner(s) is
an "affiliate," as defined in Rule 405 under the
Securities Act, of the Issuers or the Guarantor.
If the holder is a broker-dealer that will receive
Book-Entry Interests in the New Notes for its own
account in exchange for Book-Entry Interests in
the Old Notes that were acquired as a result of
market-making activities or other trading
activities, the holder is required to acknowledge
in the Letter of Transmittal that it will deliver
a prospectus in connection with any resale of such
Book-Entry Interests in the New Notes and provide
written notice to the Company thereof; however, by
so acknowledging and by delivering a prospectus,
the holder will not be deemed to admit that it is
an "underwriter" within the meaning of the
Securities Act. See "The Exchange Offer --
Procedures for Tendering."
SPECIAL PROCEDURES FOR BENEFICIAL OWNERS....... Any beneficial owner of Book-Entry Interests in
the Old Notes whose Book-Entry Interests are
recorded in the name of a broker, dealer,
commercial bank, trust company or other nominee
and who wishes to tender such Book-Entry Interests
in the Exchange Offer should contact such record
holder promptly and instruct such holder to tender
on such beneficial owner's behalf. See "The
Exchange Offer -- Procedures for Tendering."
GUARANTEED DELIVERY PROCEDURES................. Holders of Book-Entry Interests in the Old Notes
who wish to tender but cannot deliver such
Book-Entry Interests prior to the Expiration Date
must satisfy the provisions set forth under "The
Exchange Offer -- Guaranteed Delivery Procedures."
WITHDRAWAL RIGHTS.............................. Tenders of Book-Entry Interests in the Old Notes
may be withdrawn at any time prior to the
Expiration Date. See "The Exchange Offer --
Withdrawal Tenders."
ACCEPTANCE OF THE OLD NOTES AND DELIVERY OF THE
NEW NOTES..................................... Subject to the satisfaction or waiver of the
conditions to the Exchange Offer, the Issuers will
accept for exchange any and all Book-Entry
Interests in the Old Notes that are properly
tendered in the Exchange Offer prior to the
Expiration Date. The New Notes issued pursuant to
the Exchange Offer, and Book-Entry Interests
therein, will be issued and delivered on the
Exchange Date, which will be the earliest
practicable date following the Expiration Date.
See "The Exchange Offer -- Terms of the Exchange
Offer."
CERTAIN TAX CONSIDERATIONS..................... For a discussion of certain federal income tax
consequences of the exchange of the Old Notes see
"Certain Tax Consequences of the Exchange Offer."
EXCHANGE AGENT................................. The Chase Manhattan Bank is serving as exchange
agent (the "Exchange Agent") in connection with
the Exchange Offer.
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SPECIAL LUXEMBOURG EXCHANGE AGENT.............. Kredietbank S.A. Luxembourgeoise is serving as the
Special Luxembourg Exchange Agent in connection
with the Exchange Offer.
TENDERS OF DEFINITIVE REGISTERED NOTES......... Subject to certain conditions, holders of
Book-Entry Interests in the Old Notes are entitled
to receive in exchange therefor Old Notes in
registered form (each, a "Definitive Registered
Note") in equal principal amount; however, as of
the date hereof, no Definitive Registered Notes
were issued and outstanding. If a holder of
Book-Entry Interests acquires Definitive
Registered Notes prior to the Expiration Date,
such holder may participate in the Exchange Offer,
PROVIDED that such holder follows the procedures
set forth herein except with respect to
transmission by means of DTC's ATOP system. See
"The Exchange Offer -- Procedures for Tender of
Definitive Registered Notes."
THE NEW NOTES.................................. The form and terms of the New Notes are the same
as the form and terms of the Old Notes except that
(i) the New Notes will have been registered under
the Securities Act and thus will not bear
restrictive legends restricting their transfer
pursuant to the Securities Act and (ii) holders of
New Notes will not be entitled to certain rights
of holders of Old Notes under the Registration
Rights Agreement. See "Description of the New
Notes."
ISSUERS........................................ Euramax International plc, Euramax European
Holdings plc and Euramax European Holdings, B.V.,
as joint and several obligors.
GUARANTOR...................................... Amerimax Holdings, Inc.
SECURITIES OFFERED............................. $135.0 million of 11 1/4% Senior Subordinated
Notes due 2006.
MATURITY DATE.................................. October 1, 2006.
INTEREST PAYMENT DATES......................... April 1 and October 1, commencing April 1, 1997.
OPTIONAL REDEMPTION............................ The New Notes will be redeemable at the option of
the Issuers, in whole or in part, at any time on
or after October 1, 2001, at the redemption prices
set forth herein, plus accrued and unpaid interest
to the redemption date. In addition, prior to
October 1, 1999, the Issuers may redeem up to 40%
of the aggregate principal amount of the New Notes
with the net cash proceeds received by the Company
from one or more public offerings of its Capital
Stock (other than Disqualified Stock) at a
redemption price of 111.25% of the principal
amount thereof, plus accrued and unpaid interest
to the redemption date; provided, however, that at
least $75.0 million in aggregate principal amount
of the Notes remains outstanding immediately after
any such redemption.
TAX REDEMPTION................................. In the event of certain changes affecting
withholding taxes applicable to certain payments
on the New Notes, the New Notes will be redeemable
at any time in whole, and not in part, at the
option of the Issuers, at 100% of the principal
amount thereof, plus accrued and unpaid interest
to the redemption date.
RANKING AND GUARANTY........................... The New Notes will constitute unsecured debt
obligations of the Issuers and will rank
subordinate in right of payment to
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all Senior Debt including all obligations under
the Credit Agreement. The New Notes will be
effectively subordinated to all liabilities of the
subsidiaries of the Issuers and the Guarantor,
except to the extent that one or more of the
Issuers is itself recognized as a creditor to such
subsidiary, in which case the claims of such
Issuer or Issuers would be subordinate to any
security interest in the assets of such
subsidiary, and indebtedness of such subsidiary
senior to that held by such Issuer or Issuers. The
New Notes will be fully and unconditionally
guaranteed on a senior subordinated basis by
Amerimax. The Guarantee will be a general
unsecured obligation of the Guarantor and will
rank subordinate in right of payment to all Senior
Debt including all of the obligations under the
Credit Agreement. At September 25, 1996, after
giving effect to the Transactions, the aggregate
amount of consolidated indebtedness and other
liabilities which the New Notes or the Guarantee
are effectively subordinated to is $165.8 million,
of which approximately $100.0 million is
outstanding under the Credit Agreement. In
addition, the subsidiaries of the Issuers or the
Guarantor may incur up to an additional $25.0
million of indebtedness under the Credit Agreement
which would rank senior to the New Notes. See
"Description of Credit Agreement."
CHANGE OF CONTROL.............................. Upon a Change of Control, each holder of the New
Notes may require the Issuers to repurchase such
holder's New Notes, in whole or in part, at a
purchase price equal to 101% of the principal
amount thereof plus accrued and unpaid interest to
the purchase date. See "Description of the New
Notes -- Change of Control." The Credit Agreement
will prohibit the purchase of outstanding New
Notes prior to repayment of the borrowings under
the Credit Agreement. There can be no assurance
that upon a Change of Control the Company will
have sufficient funds to repurchase any of the New
Notes. See "Description of Credit Agreement."
CERTAIN COVENANTS.............................. The Indenture contains certain covenants that,
among other things, limit the ability of the
Issuers, the Guarantor or any of their
subsidiaries to incur additional Indebtedness,
make certain Restricted Payments and Investments,
create Liens, permit dividend or other payment
restrictions to apply to subsidiaries, enter into
certain transactions with Affiliates or Related
Persons or consummate certain merger,
consolidation or similar transactions. In
addition, in certain circumstances, the Issuers
will be required to offer to purchase New Notes at
100% of the principal amount thereof with the net
proceeds of certain asset sales. These covenants
are subject to a number of significant exceptions
and qualifications. See "Description of the New
Notes."
ADDITIONAL AMOUNTS............................. All payments with respect to the New Notes made by
the Issuers will be made without withholding or
deduction for UK taxes unless required by law or
the interpretation or administration thereof, in
which case the Issuer will pay such additional
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<S> <C>
amounts as may be necessary so that the amount
received by the holders of the New Notes and
beneficial interest therein after such withholding
or deduction will not be less than the amount that
would have been received in the absence of such
withholding or deduction. However, the Issuers
will not be required to pay such additional
amounts if such withholding or deduction occurs as
the result of a request by a holder of New Notes
to have such New Notes issued in registered,
rather than bearer, form. See "Description of the
New Notes -- Additional Amounts," "Description of
the New Notes -- Book Entry; Delivery and Form"
and "Certain Income Tax Considerations."
USE OF PROCEEDS................................ The Issuers will not receive any cash proceeds
from the issuance of the New Notes pursuant to the
Exchange Offer. See "Use of Proceeds."
FORM OF NEW NOTES.............................. The New Notes will be issued initially as a Global
Note in an aggregate principal amount equal to
100% of the aggregate principal amount of all New
Notes issued under the Indenture and will be held
by the Book-Entry Depositary. Beneficial interests
in the Global Note will be shown on, and transfers
thereof will be effected only through, records
maintained in book-entry form by DTC with respect
to its participants.
Ownership of the Book-Entry Interests will be
limited to persons that have accounts with DTC
("Participants") or persons that may hold
interests through Participants ("Indirect
Participants"). Investors may elect to own
book-entry interests through DTC in the U.S. or
through Morgan Guaranty Trust Company of New York,
Brussels Office, as operator of the Euroclear
System ("Euroclear"), or Cedel, Societe Anonyme
("Cedel") in Europe, if they are participants in
such systems or indirectly through organizations
which are participants in such systems. Euroclear
and Cedel will hold interests on behalf of their
participants through their respective
depositaries, Morgan Guaranty Trust Company of New
York and Citibank, N.A., which in turn will hold
such interests in accounts as Participants.
Except as set forth under "Description of the New
Notes," Participants or Indirect Participants will
not be entitled to receive physical delivery of
New Notes in definitive form or to have New Notes
issued and registered in their names and will not
be considered the owners or holders thereof under
the Indenture.
GLOBAL CLEARANCE AND SETTLEMENT................ Book-Entry Interests will trade in DTC's Same Day
Funds Settlement System. Book-Entry Interests will
be credited to the securities custody accounts of
Euroclear holders on the business day following
the settlement date against payment for value on
the settlement date and of Cedel holders on the
settlement date against payment in same-day funds.
Any secondary market trading of Book-Entry
Interests will occur through participants in DTC,
Euroclear and Cedel and will settle in same-day
funds.
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RISK FACTORS
Prospective investors of the New Notes should carefully consider the specific
matters set forth under "Risk Factors" as well as the other information and data
included in this Prospectus prior to making an investment in the New Notes.
SUMMARY HISTORICAL AND PRO FORMA FINANCIAL DATA
Set forth below are summary historical and pro forma financial data of the
Company as of the dates and for the periods presented. For purposes of this
presentation, all historical financial data represents such data for the Company
when it was a division of Alumax. The summary historical financial data as of
and for each of the three years in the period ended December 31, 1995 were
derived from the audited Combined Financial Statements of the Company. The
summary historical financial data as of and for each of the nine month periods
ended September 29, 1995 and September 25, 1996 were derived from the unaudited
Combined Financial Statements of the Company for such periods, which, in the
opinion of management of the Company, reflect all adjustments necessary to
present fairly the combined financial position and results of operations of the
unaudited periods. The information contained in this table should be read in
conjunction with "Selected Historical and Pro Forma Financial Data," "Pro Forma
Condensed Combined Financial Data (Unaudited)," "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and the Combined
Financial Statements and accompanying notes thereto appearing elsewhere in this
Prospectus.
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<CAPTION>
-------------------------------------------------------------------------------------------
NINE MONTHS ENDED
YEAR ENDED DECEMBER 31, -------------------------------------------
---------------------------------------------- PRO FORMA
PRO FORMA SEPTEMBER 29, SEPTEMBER 25, SEPTEMBER 25,
1993 1994 1995 1995(1) 1995 1996 1996(1)
---------- ---------- ---------- ---------- ------------- ------------- -------------
DOLLARS IN THOUSANDS
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STATEMENT OF EARNINGS DATA:
Net sales $ 385,487 $ 446,572 $ 483,462 $ 483,462 $ 372,524 $ 363,308 $ 363,308
Earnings from operations 25,665 29,759 34,142 32,659 24,550 22,842 21,631
Interest expense 1,950 1,155 4,089 24,702 2,254 930 18,528
Earnings before income taxes 24,167 29,219 31,057 8,961 23,518 21,922 3,113
Net earnings 15,459 17,181 19,658 5,737 14,878 13,580 1,730
OTHER DATA:
Depreciation and amortization 7,645 7,672 7,980 9,692 6,141 6,995 8,279
Capital expenditures 7,700 9,595 17,429 17,429 16,848 11,518 11,518
Cash interest expense (2) 1,950 1,155 4,089 23,210 2,254 930 17,408
Ratio of earnings to fixed charges
(3) 8.76x 13.04x 6.83x 1.47x 8.37x 12.63x 1.16x
BALANCE SHEET DATA (END OF PERIOD):
Working capital $ 102,707 $ 126,659 $ 127,380 $ 146,168 $ 120,940
Total assets 196,541 236,771 236,649 266,401 335,765
Total long-term debt, including
current maturities -- -- -- -- 235,000
Redeemable preference shares -- -- -- -- 34,000
Total ordinary shareholders' equity 110,523 133,786 151,461 154,819 1,000
</TABLE>
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(1) Gives pro forma effect to the Transactions as if they had occurred on
January 1, 1995. See "Pro Forma Condensed Combined Financial Data
(Unaudited)." The pro forma adjustments give effect to purchase accounting,
the financing of the Transactions and the related income tax effects.
(2) Cash interest expense is defined as interest expense less amortization of
debt issuance costs. Because the Company utilized the Alumax cash
management system, cash interest expense for historical periods mainly
represents interest that was accrued into an intercompany account. Before
giving pro forma effect to the Transactions, all of the Company's borrowing
was through Alumax and its affiliates.
(3) Earnings used in computing the ratio of earnings to fixed charges consist
of earnings before income taxes plus fixed charges. Fixed charges consist
of interest expense, including amortization of debt issuance costs and the
estimated interest component of rent expense.
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RISK FACTORS
PROSPECTIVE PURCHASERS OF THE NEW NOTES SHOULD CONSIDER CAREFULLY THE FOLLOWING
FACTORS AS WELL AS THE OTHER INFORMATION AND DATA INCLUDED IN THIS OFFERING
MEMORANDUM PRIOR TO MAKING AN INVESTMENT IN THE NOTES.
SUBSTANTIAL LEVERAGE
The Company incurred significant debt in connection with the Transactions. As of
September 25, 1996, after giving effect to the Transactions, including the
initial borrowings under the Credit Agreement and the Initial Offering, the
Company had outstanding indebtedness of $235.0 million, $34.0 million of
Preference Shares (as defined) and $1.0 million of ordinary shareholders'
equity. For the nine months ended September 25, 1996, after giving effect to the
Transactions, the Company's ratio of earnings to fixed charges was 1.16 to 1.
The Company's leveraged financial position poses substantial consequences to
holders of the Notes, including the risks that: (i) a substantial portion of the
Company's cash flow from operations will be dedicated to the payment of interest
on the Notes and the payment of principal and interest under the Credit
Agreement and other indebtedness; (ii) the Company's leveraged position may
impede its ability to obtain financing in the future for working capital,
capital expenditures and general corporate purposes, including acquisitions; and
(iii) the Company's highly leveraged financial position may make it more
vulnerable to economic downturns and may limit its ability to withstand
competitive pressures. The Company believes that, based on its current level of
operations, it will have sufficient capital to carry on its business and will be
able to meet its scheduled debt service requirements. However, there can be no
assurance that the future cash flow of the Company will be sufficient to meet
the Company's obligations and commitments. In addition, the Credit Agreement
contemplates that all borrowings thereunder will become due prior to 2003. If
the Company is unable to generate sufficient cash flow from operations in the
future to service its indebtedness and to meet its other commitments, the
Company will be required to adopt one or more alternatives, such as refinancing
or restructuring its indebtedness, selling material assets or operations or
seeking to raise additional debt or equity capital. There can be no assurance
that any of these actions could be effected on a timely basis or on satisfactory
terms or that these actions would enable the Company to continue to satisfy its
capital requirements. In addition, the terms of existing or future debt
agreements, including the Indenture and the Credit Agreement, may prohibit the
Company from adopting any of these alternatives. See "Management's Discussion
and Analysis of Financial Condition and Results of Operations -- Liquidity and
Capital Resources," "Description of Credit Agreement" and "Description of the
New Notes."
CUSTOMERS IN CYCLICAL INDUSTRIES
Demand for most of the Company's products is cyclical in nature and subject to
changes in general economic conditions that affect market demand. Sales to the
building and construction markets are driven by trends in commercial and
residential construction, housing starts, residential repair and remodelings.
Transportation sales are also cyclical in nature and typically follow the trends
in the automotive, truck and recreational vehicle manufacturing industries.
Historically, lower demand has led to lower margins, lower production levels, or
both.
DEPENDENCE ON ALUMINUM
The Company's primary raw material is aluminum coil. Because changes in aluminum
prices are generally passed through to the Company's customers, increases or
decreases in aluminum prices generally cause corresponding increases and
decreases in reported net sales, causing fluctuations in reported revenues that
are unrelated to the level of business activity. However, if the Company is
unable to pass through aluminum price changes to its customers in the future,
the Company could be materially adversely affected. Any major dislocation in the
supply and/or price of aluminum could have a material adverse effect on the
Company's business and financial condition. The Company is therefore subject to
the short-term commodity risk of carrying aluminum in its inventory. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."
SUBORDINATION OF NEW NOTES; HOLDING COMPANY STRUCTURE
The New Notes and the Guarantee (as well as the Old Notes and the guarantee
thereof) will be contractually subordinated to all Senior Debt including all
obligations under the Credit Agreement. In the event of a circumstance in which
the contractual subordination provisions apply, holders of the Notes will not be
entitled to receive, and will have an obligation to pay over to holders of
Senior Debt, any payments they may receive in respect of the Notes, including
any payments received in respect of any Claims (as defined in the Indenture). At
September 25, 1996, after giving effect to the Transactions, the aggregate
amount of consolidated indebtedness and other liabilities which the Notes or the
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Guarantee are effectively subordinated to is approximately $165.8 million, of
which approximately $100.0 million is outstanding under the Credit Agreement.
The indebtedness under the Credit Agreement will become due prior to the time
the principal obligations under the Notes become due. The Issuers and the
Guarantor are holding companies and do not have any independent operations.
Accordingly, the Notes and the Guarantee will be structurally subordinated to
all existing and future indebtedness of the subsidiaries of the Issuers and the
Guarantor, through which the Company's operations are conducted, including
obligations under the Credit Agreement. Subject to certain limitations, the
Indenture will permit the Issuers and their subsidiaries to incur additional
indebtedness. See "The Transactions -- Organizational Structure" and
"Description of the New Notes -- Covenants -- Limitation on Indebtedness." The
holders of any indebtedness of the Issuers' subsidiaries will be entitled to
payment of their indebtedness from the assets of such subsidiaries prior to the
holders of any general unsecured obligations of the Issuers, including the
Notes. In addition, substantially all of the assets of the Company and its
subsidiaries will or may in the future be pledged to secure other indebtedness
of the Company. See "Description of Credit Agreement" and "Description of the
New Notes."
RESTRICTIONS IMPOSED BY THE CREDIT AGREEMENT AND THE INDENTURE
The Credit Agreement requires the Company to maintain specified financial ratios
and tests, among other obligations, including a minimum interest coverage ratio,
a minimum fixed charge coverage ratio, a maximum leverage ratio, a minimum
EBITDA requirement and maximum amounts of capital expenditures. In addition, the
Credit Agreement restricts, among other things, the Issuers' ability to incur
additional indebtedness and make acquisitions. A failure to comply with the
restrictions contained in the Credit Agreement could lead to an event of default
thereunder which could result in an acceleration of such indebtedness. Such an
acceleration would constitute an event of default under the Indenture relating
to the Notes. In addition, the Indenture restricts, among other things, the
Company's ability to incur additional indebtedness, sell assets, make certain
payments and dividends or merge or consolidate. A failure to comply with the
restrictions in the Indenture could result in an event of default under the
Indenture. See "Description of Credit Agreement" and "Description of the New
Notes."
ACQUISITION STRATEGY
Although no agreements have been reached, the Company has engaged in and
continues to engage in evaluations of and discussions with potential acquisition
candidates. Any such transaction(s) may be financed by the incurring of
additional indebtedness which could be material. See "Risk Factors --
Substantial Leverage." Any such transaction(s) would be subject to negotiations
of definitive agreements, satisfactory financing arrangements (including
compliance with the limitations on issuance of indebtedness in the Indenture and
in the Credit Agreement) and applicable governmental approvals and consents. No
such agreements have been reached to date, and there can be no assurance that
any additional acquisitions will be completed or that such acquired entities or
assets will be successfully integrated into the Company's operations, or will be
able to operate profitably.
RISK OF CURRENCY EXCHANGE RATE FLUCTUATIONS AND INTERNATIONAL MANUFACTURING
In 1995, approximately 40% of the Company's net sales were made outside the
United States. The U.S. dollar value of the Company's sales varies with currency
exchange rate fluctuations. Changes in currency exchange rates could have an
adverse effect on the Company's results of operations and its ability to meet
interest and principal obligations on the Notes. International manufacturing and
sales are subject to risks including labor unrest, potentially high costs of
terminating labor contracts, restrictions on transfers of funds, export duties
and quotas, domestic and international customs and tariffs, unexpected changes
in regulatory environments, difficulty in obtaining distribution and support,
potentially adverse tax consequences and changes in effective tax rates. There
can be no assurance that any of the foregoing factors will not have a material
adverse effect on the Company's ability to increase or maintain its
international sales or on the Company's results of operations. See "Business."
IMPACT OF ENVIRONMENTAL REGULATION
The Company's U.S. and European facilities are subject to the requirements of
federal, state, local and foreign environmental and occupational health and
safety laws and regulations. There can be no assurance that Euramax is at all
times in compliance with all such requirements. Euramax has made and will
continue to make capital expenditures to comply with environmental requirements.
As is the case with manufacturers in general, if a release of hazardous
substances occurs on or from Euramax's properties or any offsite disposal
location used by Euramax, or if contamination from prior activities is
discovered at any of Euramax's properties, Euramax may be held liable for
cleanup costs, natural
12
<PAGE>
resource damages and associated transaction costs. The amount of such liability
could be material. Euramax has been named a party potentially responsible for
the costs of investigating and remediating nine waste disposal sites, pursuant
to the federal Comprehensive Environmental Response, Compensation, and Liability
Act of 1990. In addition, Euramax is currently engaged in environmental
remediation or has reason to believe that remediation may be required at three
properties currently operated by the Company. See "Business -- Environmental,
Health and Safety Matters."
DEPENDENCE ON KEY PERSONNEL
The Company is dependent on the continued services of its senior management
team. Although the Company believes it could replace key employees in an orderly
fashion should the need arise, the loss of such key personnel could have a
material adverse effect on the Company. The Company does not maintain key-person
insurance for any of its officers, employees or directors. See "Management --
Directors and Key Officers."
COMPETITION
The markets in which the Company competes are highly competitive. In the United
States, competition comes largely from privately held companies that are
generally much smaller than the Company. In Europe, competitors of the Company
include three to four integrated companies in the specialty coil coating
business. Other smaller companies compete with the Company in the building and
construction, RV and transportation markets in Europe, both on a regional basis
and some on a pan-European basis. There can be no assurance that the Company
will be able to compete effectively in each of its markets in the future. See
"Business -- Competition."
CONTROLLING SHAREHOLDERS
The Investor Group owns 79.2% of the outstanding ordinary shares of the Company
and collectively controls the affairs and policies of the Company. Circumstances
may occur in which the interests of the Investor Group, as shareholders of the
Company, could be in conflict with the interests of the holders of the Notes. In
addition, the Investor Group may have an interest in pursuing acquisitions,
divestitures or other transactions that, in their judgment, could enhance their
equity investment, even though such transactions might involve risks to the
holders of the Notes. See "Security Ownership."
LIMITATIONS ON CHANGE OF CONTROL
In the event of a Change of Control, the Issuers will be required to make an
offer for cash to repurchase the Notes at 101% of the principal amount thereof,
plus accrued and unpaid interest, if any, thereon to the repurchase date. A
Change of Control will result in an event of default under the Credit Agreement
and may result in a default under other indebtedness of the Company that may be
incurred in the future. The Credit Agreement will prohibit the purchase of
outstanding Notes prior to repayment of the borrowings under the Credit
Agreement and any exercise by the holders of the Notes of their right to require
the Company to repurchase the Notes will cause an event of default under the
Credit Agreement. Finally, there can be no assurance that the Company will have
the financial resources necessary to repurchase the Notes upon a Change of
Control. See "Description of the New Notes -- Covenants -- Change of Control."
RISK OF FRAUDULENT TRANSFER
Amerimax, as Guarantor, will guarantee the entire aggregate principal amount of
the Notes. Amerimax has issued an intercompany note (the "Intercompany Note") to
the Company representing that portion of the proceeds of the Initial Offering
lent by the Company to Amerimax, approximately $80.2 million. Under applicable
provisions of the U.S. Bankruptcy Code or comparable provisions of state
fraudulent transfer or conveyance laws, if Amerimax, at the time it issued the
Guarantee, (i) incurred such indebtedness with intent to hinder, delay or
defraud creditors, or (ii)(a) received less than reasonably equivalent value or
fair consideration for incurring such indebtedness and (b)(1) was insolvent at
the time of incurrence, (2) was rendered insolvent by reason of such incurrence
(and the application of the proceeds thereof), (3) was engaged or was about to
engage in a business or transaction for which the assets remaining with the
Company constituted unreasonably small capital to carry on its businesses, or
(4) intended to incur, or believed that it would incur, debts beyond its ability
to pay such debts as they mature, then, in each case, a court of competent
jurisdiction could void, in whole or in part, the Notes, or, in the alternative,
subordinate the Guarantee to existing and future indebtedness of Amerimax. To
the extent that the Guarantee and/or the Intercompany Note were determined to be
a fraudulent conveyance or held unenforceable for any reason, the holders of the
Notes would cease to have a claim, or would have a limited claim, in respect to
Amerimax. In such event, the claims of the holders of the Notes would be
13
<PAGE>
subject to the prior payment of all liabilities of Amerimax. The measure of
insolvency for purposes of the foregoing will vary depending upon the law
applied in such case. Generally, however, Amerimax would be considered insolvent
if the sum of its debts, including contingent liabilities, was greater than all
of its assets at fair valuation or if the present fair saleable value of its
assets was less than the amount that would be required to pay the probable
liability on its existing debts, including contingent liabilities, as they
become absolute and matured.
Each of Euramax, Euramax U.K. and Euramax B.V. will be severally liable for the
entire aggregate principal amount of the Notes. To the extent that insolvency,
bankruptcy or fraudulent transfer laws, or their equivalents, in the
jurisdictions of incorporation of Euramax, Euramax U.K. or Euramax B.V. have
provisions similar to those described above and an administrator or a court of
competent jurisdiction were to make a finding of insolvency or a similar
holding, all or a portion of the claims with respect to that Issuer in respect
of the Notes could be avoided or subordinated to other debts of such Issuer. In
the event an administrator, a court, or other equivalent person were to avoid or
subordinate the Notes, holders of the Notes would cease to have a claim in
respect to such Issuer and would be solely creditors of the remaining Issuers
and the Guarantor.
Management believes that, for purposes of all such insolvency, bankruptcy and
fraudulent transfer or conveyance laws, the Notes and the Guarantee are being
issued without the intent to hinder, delay or defraud creditors and for proper
purposes and in good faith and that the Issuers and the Guarantor, after the
issuance of the Notes and the Guarantee and the application of the proceeds
thereof, will be solvent, will have sufficient capital for carrying on their
respective business and will be able to pay their respective debts as they
mature. There can be no assurance, however, that a court passing on such
questions would agree with management's view.
CERTAIN CONSIDERATIONS RELATING TO BOOK-ENTRY INTERESTS
Until and unless Definitive Registered Notes are issued in exchange for the
Book-Entry Interests in the New Notes, owners of the Book-Entry Interests will
not be considered owners or Holders of any New Notes. The Book-Entry Depositary,
or its nominee, will be the sole holder of the Global Note representing the New
Notes. After payment to the Book-Entry Depositary, the Issuers will have no
responsibility or liability for the payment of interest, principal or other
amounts to DTC or to owners of Book-Entry Interests. Accordingly, each person
owning Book-Entry Interests must rely on the procedures of the Book-Entry
Depositary and DTC, Euroclear and Cedel and, if such person is not a Participant
in DTC, on the procedures of the Participant through which such person owns its
interest, to exercise any rights and obligations of a holder under the
Indenture. See "Description of the New Notes -- Book-Entry; Delivery and Form."
Payments of principal, interest and other amounts owing on or in respect of the
Global Note will be made to the Book-Entry Depositary, which will in turn
distribute payments to Cede & Co, as nominee of DTC, and, thereafter, payments
will be made to Participants (and then by the Participants to Indirect
Participants). None of the Issuers, the Trustee, the Book-Entry Depositary, any
paying agent or any registrar will have any responsibility or liability for any
aspect of the records relating to, or payments made on account of, such
Book-Entry Interests or for maintaining, supervising or reviewing any records
relating to such Book-Entry Interests.
Unlike holders of the New Notes themselves, owners of Book-Entry Interests will
not have the direct rights to act upon solicitations by the Issuers for consents
or requests by the Issuers for waivers or other actions from holders of the New
Notes. Instead, an owner of Book-Entry Interests will be permitted to act only
to the extent it has received appropriate proxies to do so from the Book Entry
Depositary, DTC or, if applicable, from a Participant. There can be no assurance
that procedures implemented for the granting of such proxies will be sufficient
to enable owners of Book-Entry Interests to vote on any requested actions on a
timely basis. Similarly, upon the occurrence of an Event of Default (as defined)
under the Indenture, unless and until Definitive Registered Notes are issued,
owners of Book-Entry Interests will be restricted to acting through DTC and the
Book-Entry Depositary. There can be no assurance that the procedures to be
implemented by DTC and the Book-Entry Depositary under such circumstances will
be adequate to ensure the timely exercise of remedies under the New Notes. The
Book-Entry Depositary, or its nominee, will be the only entity with the rights
to bring a claim under Section 316(b) under the Trust Indenture Act for
nonpayment of principal and interest; therefore, the holders of Book-Entry
Interests must rely upon the procedures of the Book-Entry Depositary, unless and
until Definitive Registered Notes are issued. See "Description of the New Notes
- -- Book-Entry; Delivery and Form."
14
<PAGE>
CERTAIN UNITED STATES AND UNITED KINGDOM TAX CONSIDERATIONS
The Issuers will be subject to UK withholding tax requirements with respect to
payments of interest on the New Notes, unless the New Notes have been listed on
a stock exchange recognized by the UK Inland Revenue on or prior to the first
interest payment date with respect thereto, in which case the Issuers will be
exempt from such UK withholding tax requirements. Application has been made to
list the Old Notes and New Notes on the Luxembourg Stock Exchange; however,
there can be no assurance that the Issuers will meet the applicable listing
requirements of the London Stock Exchange or the Luxembourg Stock Exchange or
any other recognized stock exchange. Under the Indenture, any payments with
respect to the New Notes made by the Issuers will be made without withholding or
deduction for UK taxes unless required by law or the interpretation or
administration thereof, in which case the Issuers will generally pay such
additional amounts as may be necessary so that the amount received by the
holders of the New Notes after such withholding or deduction will not be less
than the amount that would have been received in the absence of such withholding
or deduction. Therefore, failure to list the New Notes on the Luxembourg Stock
Exchange or any other stock exchange could result in additional amounts becoming
payable by the Issuers. See "Description of the New Notes -- Additional Amounts"
and "Certain Income Tax Considerations -- Certain UK Income Tax Considerations."
ABSENCE OF PUBLIC MARKET
The New Notes are a new issue of securities for which there is currently no
active trading market. If any of such New Notes is traded after its initial
issuance, it may trade at a discount from its initial offering price, depending
upon prevailing interest rates, the market for similar securities and other
factors, including general economic conditions and the financial condition,
performance and prospects of the Company.
FAILURE TO EXCHANGE
The New Notes will be issued in exchange for Old Notes only after timely receipt
by the Exchange Agent of such Old Notes or interests therein, a properly
completed and duly executed Letter of Transmittal and all other required
documents. Therefore, holders of Old Notes or an interest therein desiring to
tender such Old Notes or such interest therein in exchange for New Notes or an
interest therein should allow sufficient time to ensure timely delivery. None of
the Exchange Agent, the Special Luxembourg Exchange Agent and the Issuers are
under any duty to give notification of defects or irregularities with respect to
tenders of Old Notes for exchange. Old Notes that are not tendered or are
tendered but not accepted will, following consummation of the Exchange Offer,
continue to be subject to the existing restrictions upon transfer thereof. In
addition, any holder of Old Notes who tenders in the Exchange Offer for the
purpose of participating in a distribution of the New Notes will be required to
comply with the registration and prospectus delivery requirements of the
Securities Act in connection with any resale transaction. Each broker-dealer
that receives New Notes for its own account in exchange for Old Notes, where
such Old Notes were acquired by such broker-dealer as a result of market-making
activities or any other trading activities, must acknowledge that it will
deliver a prospectus in connection with any resale of such New Notes. See "The
Exchange Offer -- Resales of the New Notes" and "Plan of Distribution." To the
extent that Old Notes are tendered and accepted in the Exchange Offer, the
trading market for untendered and tendered but unaccepted Old Notes could be
materially adversely affected. See "The Exchange Offer."
15
<PAGE>
THE COMPANY
The Company is a corporation recently organized under the laws of England and
Wales by the Investor Group, to acquire certain portions of the fabricated
products operations of Alumax pursuant to the Acquisition. See "The
Transactions." Euramax is a leading international downstream producer of
aluminum and steel products with facilities in the U.S., the U.K., The
Netherlands and France. Euramax's products include painted sheet and coil,
siding, roofing, raincarrying systems, windows, doors and various fabricated
trim parts and components. The Company's products are sold primarily to
manufacturers of RV's and manufactured housing, rural building contractors,
distributors and home centers. The Company sold approximately 139.2 and 160.7
million pounds of aluminum and steel, respectively, in 1995. Euramax's
businesses, many of which have been operating for over 20 years, have developed
through internal growth and acquisition into companies with substantial market
shares and broad geographic coverage and manufacturing capabilities. Unless
otherwise stated in this Prospectus or unless the context otherwise requires,
references to "Euramax" or the "Company" are to Euramax International plc, its
subsidiaries and their predecessors, after giving effect to the Transactions.
The Company's principal business office and headquarters is located at 11 Brook
Business Centre, Cowley Mill Road, Uxbridge, Middlesex, England, telephone
number is 44 1895 257 882 and it has executive offices located at The Midori
Building, Suite 550, 5335 Triangle Parkway, Norcross, Georgia, telephone number
is 1 (770) 449-7066.
THE TRANSACTIONS
THE ACQUISITION
Pursuant to the Acquisition, the Company purchased through its wholly-owned
subsidiaries, (i) all of the issued and outstanding capital stock of Amerimax
Fabricated Products, Inc. ("AFP") and its wholly-owned subsidiaries, Amerimax
Specialty Products, Inc., Amerimax Building Products, Inc., Amerimax Coated
Products, Inc., Johnson Door Products, Inc., and Amerimax Home Products, Inc.
(Amerimax Specialty Products, Inc., Amerimax Building Products, Inc., Amerimax
Coated Products, Inc., Johnson Door Products, Inc., and Amerimax Home Products,
Inc., collectively the "US Operating Companies"); (ii) all of the issued and
outstanding capital stock of Euramax Holdings Limited ("Holdings U.K.") and its
wholly-owned subsidiaries, Ellbee Limited and Euramax Coated Products Limited
(Ellbee Limited and Euramax Coated Products Limited, collectively the "UK
Operating Companies"); (iii) all of the issued and outstanding capital stock of
Euramax Europe B.V. ("Europe B.V.") and its wholly-owned subsidiary, Euramax
Coated Products B.V.; and (iv) all of the issued and outstanding capital stock
of Euramax Industries S.A. and its wholly owned subsidiary, Euramax Coated
Products S.A. (Euramax Coated Products B.V. together with the UK Operating
Companies, Euramax Coated Products S.A. and Euramax Industries, S.A.,
collectively the "European Operating Companies"). The purchase price was
approximately $253.7 million, which includes estimated acquisition expenses of
approximately $3.9 million and is adjusted to give effect to certain items
including cash acquired and working capital. The purchase price is subject to
further adjustment upon determination of the final working capital, as defined
in the Acquisition Agreement.
The Acquisition Agreement contains other provisions customary for transactions
of this size and type, including representations and warranties with respect to
the condition and operations of the business, covenants with respect to the
conduct of the business prior to the consummation of the Acquisition and various
closing conditions, including the continued accuracy of representations and
warranties and the receipt of all material consents and approvals.
In order to finance the Acquisition, including the payment of related fees and
expenses: (a) the Investor Group, certain members of management of the Company
(the "Management Investors") and an affiliate of Banque Paribas contributed an
aggregate of $35.0 million to the Company (the "Equity Contribution") in
exchange for ordinary shares and preference shares issued by the Company; (b)
the Issuers consummated the Initial Offering; and (c) the Company and all of its
subsidiaries, other than Euramax S.A. (as defined) and its subsidiaries, and
Banque Paribas, as Agent ("Paribas"), entered into a credit agreement (the
"Credit Agreement") providing for borrowings of up to $125.0 million (of which
$100.0 million was borrowed on the Closing Date). The Acquisition and the
related financing transactions described above are referred to herein
collectively as the "Transactions."
16
<PAGE>
ORGANIZATIONAL STRUCTURE
Euramax is the parent holding company of four first tier holding companies:
Amerimax, Euramax U.K., Euramax B.V. and Euramax European Holdings, S.A.
("Euramax S.A."). The operations of Euramax are conducted through various
indirect operating subsidiaries of Amerimax, Euramax U.K., Euramax B.V. and
Euramax S.A. The Issuers of the Notes are Euramax, Euramax U.K. and Euramax B.V.
who are jointly and severally liable for all payments thereon. The New Notes
constitute senior subordinated obligations of the Issuers and, pursuant to the
Guarantee, are guaranteed on a senior subordinated basis by Amerimax. Neither
Euramax S.A. nor any of its subsidiaries will be an obligor under the Notes or
any of the indebtedness under the Credit Agreement. The indebtedness under the
Credit Agreement was incurred by the Borrowers (as defined) which include the
second tier holding companies in the U.S., the U.K. and The Netherlands. The
Issuers and the Guarantor have each guaranteed some or all of the indebtedness
incurred under the Credit Agreement. The Company and its subsidiaries (other
than Euramax S.A. and its subsidiaries), subject to certain exceptions, have
guaranteed and pledge their respective assets to secure indebtedness under the
Credit Agreement. The New Notes and the Guarantee will be subordinated to all
Senior Debt, including all obligations under the Credit Agreement. Each of the
Company's subsidiaries are wholly-owned. See "Description of Credit Agreement --
General."
SOURCES AND USES OF FUNDS
Concurrently with the Initial Offering, the Loan Parties (as defined) incurred
the obligations under the Credit Agreement, and the Investor Group, the
Management Investors and an affiliate of Paribas made the Equity Contribution.
Proceeds from the Initial Offering, the Equity Contribution and the borrowings
under the Credit Agreement were used to fund the purchase price of the
Acquisition, pay fees and expenses, and finance the on-going working capital
needs of the Loan Parties and their respective subsidiaries.
CREDIT AGREEMENT. The Credit Agreement provides for $40.0 million in term loans
(the "Term Loans") and a revolving credit facility of $85.0 million (the
"Revolving Credit Facility"), a portion of which will be available for letters
of credit and swing loans. On the Closing Date, the Borrowers borrowed
approximately $100.0 million under the Credit Agreement, consisting of $40.0
million under the Term Loans and $60.0 million under the Revolving Credit
Facility. The undrawn amount of $25.0 million under the Revolving Credit
Facility was available (subject to borrowing base limitations) for working
capital and general corporate purposes. As of the Closing Date, this amount was
fully available. The Company, each other Loan Party, each direct and indirect
U.S. subsidiary of the Company and, to the extent permitted by applicable law,
all other non-U.S. direct or indirect subsidiaries of the Company (other than
Euramax S.A. and its subsidiaries) have guaranteed the obligations of the Loan
Parties (other than, in the case of Euramax B.V., Euramax U.K. and their
respective subsidiaries, revolving credit obligations of AFP and certain other
limited obligations) under the Credit Agreement. See "Description of Credit
Agreement."
EQUITY CONTRIBUTION. The Equity Contribution was comprised of: (a) a
contribution of approximately $30.6 million from the Investor Group consisting
of (i) $29.808 million for 29,808,000 shares of the Company's 14% redeemable
cumulative preference shares (the "Preference Shares") and (ii) $792,000 for
792,000 shares of the Company's ordinary shares (the "Ordinary Shares"); (b) a
contribution of approximately $1.0 million from the Management Investors
consisting of (i) $880,000 for 880,000 Preference Shares and (ii) $120,000 for
120,000 Ordinary Shares; and (c) a contribution of approximately $3.4 million
from an affiliate of Paribas consisting of (i) $3.312 million for 3,312,000
Preference Shares and (ii) $88,000 for 88,000 Ordinary Shares. As of the
consummation of the Acquisition, (i) the Investor Group owns approximately 79.2%
of the issued and outstanding Ordinary Shares, (ii) the Management Investors own
approximately 12.0% of the issued and outstanding Ordinary Shares, and (iii) the
affiliate of Paribas owns approximately 8.8% of the issued and outstanding
Ordinary Shares. Dividends on the Preference Shares shall accrue at a rate of
14% per annum and shall accumulate and compound on a quarterly basis, with
certain exceptions, until its redemption or cancellation. The Preference Shares
are subject to mandatory redemption on December 31, 2007. See "Description of
Preference Shares."
17
<PAGE>
The sources and uses of funds in connection with the Transactions are set forth
below (dollars in millions):
<TABLE>
<S> <C>
SOURCES OF FUNDS:
Borrowings under the Credit Agreement:
Term Loans...................................................... $ 40.0
Revolving Credit Facility (1)................................... 60.0
Proceeds from sale of the Old Notes............................... 135.0
Proceeds from sale of Preference Shares........................... 34.0
Proceeds from sale of Ordinary Shares............................. 1.0
---------
Total sources................................................. $ 270.0
---------
---------
USES OF FUNDS:
Purchase price (2)................................................ $ 253.7
Deferred fees and expenses........................................ 9.9
Working Capital................................................... 6.4
---------
Total uses.................................................... $ 270.0
---------
---------
</TABLE>
- ------------------------
(1) The Credit Agreement provides for (i) a Revolving Credit Facility of $85.0
million and (ii) Term Loans of
$40.0 million. On an as adjusted basis, as of the Closing Date, the Company
had approximately
$25.0 million of additional availability under the Revolving Credit Facility
subject to borrowing base eligibility. As of the Closing Date, all of this
amount was available.
(2) Includes estimated acquisition expenses of approximately $3.9 million and
adjustments for certain items including cash acquired and working capital.
The purchase price is subject to further adjustment upon determination of
the final working capital, as defined in the Acquisition Agreement.
USE OF PROCEEDS
This Exchange Offer is intended to satisfy certain of the Issuers and the
Guarantor's obligations under the Registration Rights Agreement. The Issuers
will not receive any cash proceeds form the issuance of the New Notes offered
hereby. In consideration for issuing the New Notes as contemplated in this
Prospectus, the Issuers will receive in exchange an equal number of Old Notes,
the form and terms of which are the same as the form and terms of the New Notes,
except as otherwise described herein under "The Exchange Offer -- Terms of the
Exchange Offer." The Old Notes surrendered in exchange for New Notes will be
retired and cancelled and cannot be reissued.
The gross proceeds from the Initial Offering, together with the initial
borrowings under the Credit Agreement and the Equity Contribution, were used to
finance the purchase price paid in the Acquisition and to pay certain fees and
expenses related thereto. See "The Transactions."
18
<PAGE>
CAPITALIZATION
The following table sets forth the combined capitalization of the Company as of
September 25, 1996 as reported in the unaudited condensed combined financial
statements. The information in this table should be read in conjunction with
"Selected Historical Financial Data," "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and the Combined Financial
Statements and accompanying notes thereto appearing elsewhere in this
Prospectus.
<TABLE>
<CAPTION>
--------------
SEPTEMBER 25,
1996
DOLLARS IN THOUSANDS
<S> <C>
Debt (including current maturities):
Credit Agreement (1):
Revolving Credit Facility $ 60,000
Term Loans 40,000
The Notes 135,000
--------------
Total debt 235,000
Redeemable preference shares 34,000
Ordinary shares 1,000
--------------
Total capitalization $ 270,000
--------------
--------------
</TABLE>
- ------------------------
(1) The Credit Agreement provides for (i) a Revolving Credit Facility of $85.0
million and (ii) Term Loans of $40.0 million. As of September 25, 1996, the
Company had approximately $25.0 million of additional availability under the
Revolving Credit Facility subject to borrowing base eligibility. As of
September 25, 1996, these funds were fully available.
Other than as described in this Prospectus, there has been no material change in
the capitalization of the Issuers since September 25, 1996.
19
<PAGE>
SELECTED HISTORICAL AND PRO FORMA FINANCIAL DATA
Set forth below are selected historical and pro forma financial data of the
Company as of the dates and for the periods presented. For purposes of this
presentation, all historical financial data represents such data for the Company
when it was a division of Alumax. The selected historical financial data as of
and for each of the three years in the period ended December 31, 1995 were
derived from the audited Combined Financial Statements of the Company. The
selected historical financial data as of and for each of the two years in the
period ended December 31, 1992 and as of and for each of the nine month periods
ended September 29, 1995 and September 25, 1996 were derived from the unaudited
Combined Financial Statements of the Company for such periods which, in the
opinion of management of the Company, reflect all adjustments necessary to
present fairly the combined financial position and results of operations of the
unaudited periods. The information contained in this table should be read in
conjunction with "Pro Forma Condensed Combined Financial Data (Unaudited),"
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and the Combined Financial Statements and accompanying notes thereto
included elsewhere in this Prospectus.
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------
NINE MONTHS ENDED
YEAR ENDED DECEMBER 31, ----------------------------
------------------------------------------------------------------
PRO FORMA SEPTEMBER 29, SEPTEMBER 25,
1991 1992 1993 1994 1995 1995(1) 1995 1996
--------- --------- --------- --------- --------- ----------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
DOLLARS IN THOUSANDS
STATEMENT OF EARNINGS
DATA:
Net sales $ 361,242 $ 392,781 $ 385,487 $ 446,572 $ 483,462 $ 483,462 $ 372,524 $ 363,308
Costs and expenses:
Cost of goods sold 291,618 317,691 316,841 366,717 399,989 399,989 311,147 299,477
Selling and general 35,367 34,430 35,336 42,424 41,351 41,122 30,686 33,994
Depreciation and
amortization 7,157 8,088 7,645 7,672 7,980 9,692 6,141 6,995
--------- --------- --------- --------- --------- ----------- ------------- -------------
334,142 360,209 359,822 416,813 449,320 450,803 347,974 340,466
--------- --------- --------- --------- --------- ----------- ------------- -------------
Earnings from
operations 27,100 32,572 25,665 29,759 34,142 32,659 24,550 22,842
Interest expense (4,701) (1,689) (1,950) (1,155) (4,089) (24,702) (2,254) (930)
Interest income 1,208 1,311 800 900 1,100 1,100 1,257 308
Other income (expense) (48) (139) (348) (285) (96) (96) (35) (298)
--------- --------- --------- --------- --------- ----------- ------------- -------------
Earnings before
income taxes 23,559 32,055 24,167 29,219 31,057 8,961 23,518 21,922
Provision for income
taxes 9,811 15,135 8,708 12,038 11,399 3,224 8,640 8,342
--------- --------- --------- --------- --------- ----------- ------------- -------------
Net earnings $ 13,748 $ 16,920 $ 15,459 $ 17,181 $ 19,658 $ 5,737 $ 14,878 $ 13,580
--------- --------- --------- --------- --------- ----------- ------------- -------------
--------- --------- --------- --------- --------- ----------- ------------- -------------
OTHER DATA:
Capital expenditures $ 9,104 $ 8,879 $ 7,700 $ 9,595 $ 17,429 $ 17,429 $ 16,848 $ 11,518
Ratio of earnings to
fixed
charges (2) 5.04x 12.45x 8.76x 13.04x 6.83x 1.47x 8.37x 12.63x
BALANCE SHEET DATA
(END OF PERIOD):
Working capital $ 72,294 $ 79,611 $ 102,707 $ 126,659 $ 127,380 $ 146,168 $ 120,940
Total assets 242,669 170,372 196,541 236,771 236,649 266,401 335,765
Total long-term
debt, including
current maturities -- -- -- -- -- -- 235,000
Redeemable
preference shares -- -- -- -- -- -- 34,000
Total ordinary
shareholders'
equity 146,819 105,976 110,523 133,786 151,461 154,819 1,000
<CAPTION>
PRO FORMA
SEPTEMBER 25,
1996(1)
-------------
<S> <C>
DOLLARS IN THOUSANDS
STATEMENT OF EARNINGS
DATA:
Net sales $ 363,308
Costs and expenses:
Cost of goods sold 299,477
Selling and general 33,921
Depreciation and
amortization 8,279
-------------
341,677
-------------
Earnings from
operations 21,631
Interest expense (18,528)
Interest income 308
Other income (expense) (298)
-------------
Earnings before
income taxes 3,113
Provision for income
taxes 1,383
-------------
Net earnings $ 1,730
-------------
-------------
OTHER DATA:
Capital expenditures $ 11,518
Ratio of earnings to
fixed
charges (2) 1.16x
BALANCE SHEET DATA
(END OF PERIOD):
Working capital
Total assets
Total long-term
debt, including
current maturities
Redeemable
preference shares
Total ordinary
shareholders'
equity
</TABLE>
- ------------------------------
(1) Gives pro forma effect to the Transactions as if they had occurred on
January 1, 1995. See "Pro Forma Condensed Combined Financial Data
(Unaudited)." The pro forma adjustments give effect to purchase accounting,
the financing of the Transactions and the related income tax effects.
(2) Earnings used in computing the ratio of earnings to fixed charges consist of
earnings before income taxes plus fixed charges. Fixed charges consist of
interest expense, including amortization of debt issuance costs and the
estimated interest component of rent expense.
20
<PAGE>
PRO FORMA CONDENSED COMBINED FINANCIAL DATA
(UNAUDITED)
The following unaudited Pro Forma Condensed Combined Financial Data are based on
the Combined Financial Statements of the Company included elsewhere in this
Prospectus, adjusted to give effect to the Transactions.
The unaudited Pro Forma Condensed Combined Statements of Earnings are derived
from the Combined Statements of Earnings for the nine months ended September 25,
1996 and the year ended December 31, 1995 of the acquired business, Fabricated
Products, included elsewhere in this Prospectus, and assume that the
Transactions were consummated as of January 1, 1995. The unaudited Pro Forma
Condensed Combined Statements of Earnings do not include a separate column for
the acquiring entity, Euramax International plc, as such entity was formed to
effect the acquisition and had no operations, income or expenses for either of
the pro forma periods presented.
The unaudited Pro Forma Condensed Combined Financial Data do not purport to be
indicative of the results that would actually have been obtained if the
Transactions had occurred on the date indicated or of the results that may be
obtained in the future. The unaudited Pro Forma Condensed Combined Financial
Data are presented for comparative purposes only. The pro forma adjustments, as
described in the accompanying data, are based on available information and
certain assumptions that management believes are reasonable.
The unaudited pro forma information with respect to the Acquisition is based on
the historical Combined Financial Statements of the Company. The Acquisition was
accounted for under the purchase method of accounting. The initial purchase
price for the Acquisition, including the related fees and expenses, has been
allocated to the assets and liabilities of the Company based upon management's
preliminary estimates of their fair value, with the remainder allocated to
goodwill. Such initial purchase price is subject to adjustment based upon the
completion of an audit to determine the change in the Company's working capital
(as defined) from December 31, 1995 through September 25, 1996. Management has
estimated such change in connection with the preparation of the Consolidated
Balance Sheet as of September 25, 1996, included elsewhere in this Prospectus,
and does not expect further adjustments to the purchase price to be significant.
Additionally, the allocation of purchase price for the acquisition is subject to
revision when additional information concerning asset and liability valuation
becomes available. Such additional information will include the finalized
results of property appraisals and certain lease analyses. The pro forma
adjustments include adjustments to interest expense related to the financing,
changes in depreciation of property, plant and equipment and amortization of
goodwill relating to the allocation of the purchase price, and the related
income tax effects.
21
<PAGE>
PRO FORMA CONDENSED COMBINED STATEMENT OF EARNINGS
(UNAUDITED)
<TABLE>
<CAPTION>
---------------------------------------------------
YEAR ENDED DECEMBER 31, 1995
---------------------------------------------------
PRO FORMA
HISTORICAL ADJUSTMENTS PRO FORMA
------------- --------------- -------------
<S> <C> <C> <C>
DOLLARS IN THOUSANDS
Net sales $ 483,462 $ -- $ 483,462
------------- --------------- -------------
Costs and expenses:
Cost of goods sold 399,989 399,989
Selling and general 41,351 (229)(a) 41,122
Depreciation and amortization 7,980 1,712(b) 9,692
------------- --------------- -------------
449,320 1,483 450,803
------------- --------------- -------------
Earnings from operations 34,142 (1,483) 32,659
Interest expense (4,089) (20,613)(c) (24,702)
Interest income 1,100 -- 1,100
Other income (expense) (96) -- (96)
------------- --------------- -------------
Earnings before income taxes 31,057 (22,096) 8,961
Provision for income taxes 11,399 (8,175)(d) 3,224
------------- --------------- -------------
Net earnings 19,658 (13,921) 5,737
Cumulative dividends on redeemable preference shares -- (5,016)(e) 5,016
------------- --------------- -------------
Net earnings available to ordinary shareholders $ 19,658 $ (18,937) $ 721
------------- --------------- -------------
------------- --------------- -------------
</TABLE>
See Notes to Pro Forma Condensed Combined Statements of Earnings.
22
<PAGE>
PRO FORMA CONDENSED COMBINED STATEMENT OF EARNINGS
(UNAUDITED)
<TABLE>
<CAPTION>
---------------------------------------------------
NINE MONTHS ENDED SEPTEMBER 25, 1996
---------------------------------------------------
PRO FORMA
HISTORICAL ADJUSTMENTS PRO FORMA
------------- --------------- -------------
<S> <C> <C> <C>
DOLLARS IN THOUSANDS
Net sales $ 363,308 $ -- $ 363,308
------------- --------------- -------------
Costs and expenses:
Cost of goods sold 299,477 299,477
Selling and general 33,994 (73)(a) 33,921
Depreciation and amortization 6,995 1,284(b) 8,279
------------- --------------- -------------
340,466 1,211 341,677
------------- --------------- -------------
Earnings from operations 22,842 (1,211) 21,631
Interest expense (930) (17,598)(c) (18,528)
Interest income 308 -- 308
Other income (expense), net (298) -- (298)
------------- --------------- -------------
Earnings before income taxes 21,922 (18,809) 3,113
Provision for income taxes 8,342 (6,959)(d) 1,383
------------- --------------- -------------
Net earnings 13,580 (11,850) 1,730
Cumulative dividends on redeemable preference shares -- (3,696)(e) 3,696
------------- --------------- -------------
Net earnings available to ordinary shareholders $ 13,580 $ (15,546) $ (1,966)
------------- --------------- -------------
------------- --------------- -------------
</TABLE>
See Notes to Pro Forma Condensed Combined Statements of Earnings.
23
<PAGE>
NOTES TO PRO FORMA CONDENSED COMBINED STATEMENTS OF EARNINGS
(DOLLARS IN THOUSANDS)
The Pro Forma Condensed Combined Statements of Earnings (Unaudited) reflect the
Transactions as if they had occurred on January 1, 1995, as follows:
(a) The adjustment reflects the elimination of various non-recurring fees and
costs associated with the Acquisition.
(b) The adjustment includes the following:
<TABLE>
<CAPTION>
---------------------------
NINE MONTHS
YEAR ENDED ENDED
DECEMBER 31, SEPTEMBER 25,
1995 1996
------------ -------------
<S> <C> <C>
Increase in depreciation expense $637 $478
Goodwill amortization 1,075 806
------------ -------------
$1,712 $1,284
------------ -------------
------------ -------------
</TABLE>
The Company used the purchase method of accounting for the Acquisition. The
initial purchase price for the Acquisition, including the related fees and
expenses, has been allocated to the assets and liabilities of the Company
based upon management's preliminary estimates of their fair value, with the
remainder allocated to goodwill in the amount of $32,259. The adjustment
includes amortization of the goodwill over 30 years.
(c) Net increase in interest expense resulting from the pro forma capitalization
of the Company, as follows:
<TABLE>
<CAPTION>
-----------------------------
NINE MONTHS
YEAR ENDED ENDED
DECEMBER 31, SEPTEMBER 25,
1995 1996
------------- -------------
<S> <C> <C>
Credit Agreement:
Revolving Credit Facility at 7.988% $4,793 $3,595
Tranche B term loan -- $20,000 at 7.762% 1,763 1,322
Other term loans 1,342 1,007
Commitment fee on unused revolving credit 125 94
The Notes 15,187 11,390
------------- -------------
Cash interest expense 23,210 17,408
Amortization of deferred financing costs:
Credit Agreement -- $4,990 over 5 years 998 749
The Notes -- $4,940 over 10 years 494 371
------------- -------------
Pro forma interest expense 24,702 18,528
Elimination of historical interest expense (4,089) (930)
------------- -------------
$20,613 $17,598
------------- -------------
------------- -------------
</TABLE>
Interest rates used for the Credit Agreement loans are based upon the actual
LIBOR borrowing rate (plus the applicable margin) as of September 25, 1996.
See "Credit Agreement."
If interest rates increased by 0.25%, total interest expense would increase
by $250 for the year ended December 31, 1995, and $187 for the nine months
ended September 25, 1996.
Interest rates used for the Notes were based on the stated rate of 11.25%,
as adjusted for the effects of currency swaps on $75.0 million of the
principal amount of the Notes.
(d) Net decrease in provision for income taxes as a result of all above items at
an assumed tax rate of 37%.
(e) Redeemable preference shares pay a cumulative dividend of 14% per annum
compounded quarterly.
24
<PAGE>
THE EXCHANGE OFFER
ALL REFERENCES TO THE OLD NOTES AND THE NEW NOTES UNDER THIS HEADING SHALL
INCLUDE REFERENCES TO THE RESPECTIVE BOOK-ENTRY INTERESTS IN SUCH NOTES AND
OTHER BENEFICIAL INTERESTS THEREIN.
PURPOSE AND EFFECT OF THE EXCHANGE OFFER
The Old Notes were sold by the Issuers on September 25, 1996 (the "Issue Date"),
to the Initial Purchasers. The Initial Purchasers subsequently sold the Old
Notes to qualified institutional buyers in reliance on Rule 144A under the
Securities Act and to qualified buyers in reliance on Regulation S under the
Securities Act. As a condition to the purchase of the Old Notes by the Initial
Purchasers, the Issuers, the Guarantor and the Initial Purchasers entered into
the Registration Rights Agreement on September 25, 1996. Pursuant to the
Registration Rights Agreement, the Issuers and the Guarantor agreed to use their
reasonable best efforts to consummate the Exchange Offer within 150 days after
the Issue Date. A copy of the Registration Rights Agreement has been filed as an
exhibit to the Registration Statement of which this Prospectus is a part and the
description of the terms of the Registration Rights Agreement are qualified in
their entirety by reference thereto. The Registration Statement is intended to
satisfy the Issuers and the Guarantor obligations with respect to the Old Notes
under the Registration Rights Agreement. So long as the Old Notes and New Notes
are listed on the Luxembourg Stock Exchange and the rules of such Stock Exchange
shall require, notice of the Exchange Offer will be published in a newspaper
having a general circulation in Luxembourg (which is expected to be the
LUXEMBOURG WORT).
As a result of the consummation of the Exchange Offer, payment of certain
additional interest provided for in the Registration Rights Agreement will not
occur. Following the consummation of the Exchange Offer, with certain limited
exceptions, holders of New Notes will not have any further registration rights
and the Old Notes will continue to be subject to certain restrictions on
transfer. See "-- Termination of Certain Rights." Accordingly, the liquidity of
the market for the Old Notes could be adversely affected. See "Risk Factors --
Failure to Exchange."
TERMS OF THE EXCHANGE OFFER
The Issuers intend the following terms to provide for the conduct of the
Exchange Offer in accordance with the provisions of the Indenture, the
applicable requirements of the Exchange Act and the rules and regulations of the
Commission thereunder. Upon the terms and subject to the conditions set forth in
this Prospectus and in the Letter of Transmittal, the Issuers will accept any
and all Old Notes validly tendered and not withdrawn prior to the Expiration
Date. The Issuers will issue $1,000 principal amount (or fraction thereof) of
New Notes in exchange for each $1,000 principal amount (or fraction thereof) of
Old Notes or interests therein accepted in the Exchange Offer. Holders may
tender some or all of their Old Notes pursuant to the Exchange Offer.
The form and terms of the New Notes are the same as the form and terms of the
Old Notes except that (i) the New Notes will have been registered under the
Securities Act and thus will not bear restrictive legends restricting their
transfer pursuant to the Securities Act and (ii) holders of New Notes will not
be entitled to certain rights of holders of Old Notes under the Registration
Rights Agreement, which rights will terminate with respect to Old Notes eligible
for tender in the Exchange Offer upon consummation of the Exchange Offer. The
New Notes will evidence the same debt as the Old Notes (which they replace) and
will be issued under, and be entitled to the benefits of, the Indenture, which
also authorized the issuance of the Old Notes, such that both New Notes and Old
Notes will be treated as a single class of debt securities under the Indenture.
As of the date of this Prospectus, $135,000,000 principal amount of Old Notes
was outstanding. There will be no fixed record date for determining holders of
the Old Notes entitled to participate in the Exchange Offer.
The Issuers shall be deemed to have accepted validly tendered Old Notes when, as
and if the Issuers have given oral or written notice thereof (oral notice being
promptly confirmed in writing) to the Exchange Agent or the Special Luxembourg
Exchange Agent. The Exchange Agent and the Special Luxembourg Exchange Agent
will act as agent for the tending holders of the Old Notes for the purposes of
receiving the New Notes from the Issuers.
Holders who tender Old Notes in the Exchange Offer will not be required to pay
brokerage commissions or fees or, subject to the instructions in the Letter of
Transmittal, transfer taxes with respect to the exchange of Old Notes pursuant
to the Exchange Offer. The Issuers will pay all charges and expenses, other than
certain applicable taxes described below, in connection with the Exchange Offer.
See "-- Fees and Expenses."
25
<PAGE>
EXPIRATION DATE; EXTENSIONS; AMENDMENTS
The term "Expiration Date" shall mean 5:00 p.m., New York City time, on
, 1997, unless the Issuers, in their sole discretion, extend the
Exchange Offer, in which case the term "Expiration Date" shall mean the latest
date and time to which the Exchange Offer is extended.
In order to extend the Exchange Offer, the Issuers will notify the Exchange
Agent and the Special Luxembourg Exchange Agent of any extension by oral or
written notice (oral notice being promptly confirmed in writing) and will make a
public announcement thereof, each prior to 9:00 a.m., New York City time, on the
next business day after the previously scheduled Expiration Date.
The Issuers reserve the right, in their sole discretion, (i) to delay accepting
any Old Notes, (ii) to extend the Expiration Date, (iii) if any of the
conditions set forth below under "-- Conditions of the Exchange Offer" shall not
have been satisfied, to terminate the Exchange Offer or (iv) to amend the terms
of the Exchange Offer in any manner, by giving oral or written notice (oral
notice being promptly confirmed in writing) of such delay, extension,
termination or amendment to the Exchange Agent. Any such delay in acceptance,
extension, termination or amendment will be followed as promptly as practicable
by a public announcement thereof. If the Exchange Offer is amended in a manner
determined by the Issuers to constitute a material change, the Issuers will
promptly disclose such amendments by means of a prospectus supplement that will
be distributed to DTC, and the Issuers will extend the Exchange Offer for a
period of five to ten business days, depending upon the significance of the
amendment and the manner of disclosure to the registered holders, if the
Exchange Offer would otherwise expire during such five to ten business day
period.
Without limiting the manner in which the Issuers may choose to make a public
announcement of any delay, extension, termination or amendment of the Exchange
Offer, the Issuers shall not have an obligation to publish, advertise, or
otherwise communicate any such public announcement, other than by making a
timely release to an appropriate news agency, provided that (so long as the Old
Notes and New Notes are listed on the Luxembourg Stock Exchange and the rules of
such Stock Exchange shall so require) the issuers shall publish such notice of
extension in a newspaper having a general circulation in Luxembourg (which is
expected to be the LUXEMBOURG WORT).
PROCEDURES FOR TENDERING
The Old Notes were issued as Global Notes in bearer form without interest
coupons. Concurrently with the issuance thereof, the Global Notes were deposited
with The Chase Manhattan Bank, as Book-Entry Depositary, which issued a
Depositary Interest in each Global Note representing a 100% interest therein to
DTC. Book-Entry Interests representing beneficial interests in the Global Notes
held by or through participants in DTC through the Depositary Interests are
shown on, and transfers thereof are effected only through, records maintained in
book-entry form by DTC with respect to Participants.
Each holder of Book-Entry Interests wishing to accept the Exchange Offer must
(i) complete, sign and date the Letter of Transmittal, or a facsimile thereof,
(ii) have the signatures thereon guaranteed if required by the Letter of
Transmittal, (iii) mail or cause to be delivered such Letter of Transmittal,
together with any other required determination, to the Exchange Agent or the
Special Luxembourg Exchange Agent at their respective addresses set forth under
"-- Exchange Agent and Special Luxembourg Exchange Agent" on or prior to the
Expiration Date or pursuant to the guaranteed delivery procedures set forth
herein or (iv) transmit to the Exchange Agent a computer-generated message (a
"Participant Message") by means of DTC's Automated Tender Offer Program
("ATOP"), in which such holder acknowledges and agrees to be bound by the terms
of the Letter of Transmittal. The Participant Message transmitted via ATOP forms
a part of the Book-Entry Confirmation (as defined). In addition, on or prior to
the Expiration Date or pursuant to the guaranteed delivery procedures set forth
herein, each holder of Book-Entry Interests must deliver such Book-Entry
Interests by book-entry transfer, evidenced by a timely confirmation of such
book-entry (a "Book-Entry Confirmation"), into the account at DTC established by
the Exchange Agent for such purpose and in accordance with DTC's procedures for
such transfer.
The tender by a holder (not withdrawn prior to the Expiration Date) will
continue an agreement between such holder and the Issuers in accordance with the
terms and subject to the conditions set forth herein and in the Letter of
Transmittal.
DELIVERY OF BOOK-ENTRY INTERESTS MUST BE EFFECTED BY BOOK-ENTRY TRANSFER AS
DESCRIBED UNDER "-- BOOK-ENTRY TRANSFER." THE METHOD OF DELIVERY OF THE LETTER
OF TRANSMITTAL
26
<PAGE>
AND ALL OTHER REQUIRED DOCUMENTS TO THE EXCHANGE AGENT OR THE SPECIAL LUXEMBOURG
EXCHANGE AGENT IS AT THE ELECTION AND RISK OF THE HOLDER. INSTEAD OF DELIVERY BY
MAIL, IT IS RECOMMENDED THAT HOLDERS USE AN OVERNIGHT OR HAND DELIVERY SERVICE,
PROPERLY INSURED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE
DELIVERY TO THE EXCHANGE AGENT OR THE SPECIAL LUXEMBOURG EXCHANGE AGENT BEFORE
THE EXPIRATION DATE. NO LETTER OF TRANSMITTAL SHOULD BE SENT TO THE COMPANY.
HOLDERS MAY REQUEST THEIR RESPECTIVE BROKERS, DEALERS, COMMERCIAL BANKS, TRUST
COMPANIES OR NOMINEES TO EFFECT THE ABOVE TRANSACTIONS FOR SUCH HOLDERS.
Any beneficial owner of Book-Entry Interests whose Book-Entry Interests are
recorded in the name of a broker, dealer, commercial bank, trust company or
other nominee and who wishes to tender such Book-Entry Interests in the Exchange
Offer should contact such record holder promptly and instruct such holder to
tender on such beneficial owner's behalf.
Signatures on a Letter of Transmittal or a notice of withdrawal, as the case may
be, relating to Book-Entry Interests must be guaranteed by an Eligible
Institution (as defined) unless such Book-Entry Interests are tendered for the
account of an Eligible Institution. In the event that signatures on a Letter of
Transmittal or a notice of withdrawal, as the case may be, are required to be
guaranteed, such guarantee must be by a member firm of a registered national
securities exchange or of the National Association of Securities Dealers, Inc.,
a commercial bank or trust company having an office or correspondent in the
United States or an "eligible guarantor institution" within the meaning of Rule
17Ad-15 under the Exchange Act (each, an "Eligible Institution").
If the Letter of Transmittal is signed by a person other than in the name in
which such Book-Entry Interests are registered on a security position listing
maintained by DTC, then such Book-Entry Interests must be accompanied by a
properly completed bond power, signed exactly as the name of such holder appears
on a security position listing maintained by DTC. If the Letter of Transmittal
is signed by a trustee, executor, administrator, guardian, attorney-in-fact,
officer of corporation or another acting in a fiduciary or representative
capacity, such person should so indicate when signing, and evidence satisfactory
to the Issuers of their authority to so act must be submitted with the Letter of
Transmittal.
All questions as to the validity, form, eligibility (including time of receipt),
acceptance and withdrawal of tendered Old Notes will be determined by the
Issuers in their sole discretion, which determination will be final and binding.
The Issuers reserve the absolute right to reject any and all Old Notes not
properly tendered or any Old Notes the Issuers's acceptance of which would, in
the opinion of counsel for the Issuers, be unlawful. The Issuers also reserve
the right to waive any defects, irregularities or conditions of tender as to
particular Old Notes. The Issuers's interpretation of the terms and conditions
of the Exchange Offer (including the instructions in the Letter of Transmittal)
will be final and binding on all parties. Unless waived, any defects or
irregularities in connection with tenders of the Old Notes must be cured within
such time as the Issuers shall determine. Although the Issuers intend to notify
holders of defects or irregularities with respect to tenders of the Old Notes,
none of the Issuers, the Exchange Agent, the Special Luxembourg Exchange Agent
or any other person shall incur any liability for failure to give such
notification. Tenders of the Old Notes will not be deemed to have been made
until such defects or irregularities have been cured or waived.
While the Issuers have no present plan to acquire any Old Notes that are not
tendered in the Exchange Offer or to file a registration statement to permit
resales of any Old Notes that are not tendered pursuant to the Exchange Offer,
the Issuers reserve the right in their sole discretion to purchase or make
offers for any Old Notes that remain outstanding subsequent to the Expiration
Date, or as set forth below under "-- Conditions to the Exchange Offer and, to
the extent permitted by applicable law, purchase Old Notes in the open market,
in privately negotiated transactions or otherwise. The terms of any such
purchases or offers could differ from the terms of the Exchange Offer.
By executing the Letter of Transmittal and transmitting the Book-Entry Interests
in the Old Notes via DTC's ATOP system (the Book-Entry Confirmation for which
includes a Participant Message), each holder who tenders Book-Entry Interests
will represent to the Issuers that, among other things, (i) the New Notes to be
acquired by the holder and any beneficial owner(s) of such Old Notes
("Beneficial Owner(s)") in connection with the Exchange Offer are being acquired
by the holder and Beneficial Owner(s) in the ordinary course of business of the
holder and any Beneficial Owner(s), (ii) the holder and each Beneficial Owner
are not participating, do not intend to participate, and have no arrangement or
understanding with any person to participate, in the distribution of the New
Notes, (iii) the holder and each Beneficial Owner acknowledge and agree that any
person who is a broker-dealer registered under the Exchange
27
<PAGE>
Act or is participating in the Exchange Offer for the purpose of distributing
the New Notes must comply with the registration and prospectus delivery
requirements of the Securities Act in connection with a secondary resale
transaction of the New Notes acquired by such person and cannot rely on the
position of the staff of the Commission set forth in certain no-action letters,
(iv) the holder and each Beneficial Owner understands that a secondary resale
transaction described in clause (iii) above and any resales of New Notes
obtained by such holder in exchange for Old Notes originally acquired by such
holder directly from the Issuers should be covered by an effective registration
statement containing the selling security holder information required by Item
507 or Item 508, as applicable, of Registration S-K of the Commission and (v)
neither the holder nor any Beneficial Owner(s) is an "affiliate," as defined in
Rule 405 under the Securities Act, of the Issuers or the Guarantor. If the
holder is a broker-dealer that will receive New Notes for its own account in
exchange for Old Notes that were acquired as a result of market-making
activities or other trading activities, such holder is required to acknowledge
in the Letter of Transmittal that it will deliver a prospectus in connection
with any resale of such New Notes, however, by so acknowledging and by
delivering a prospectus, the holder will not be deemed to admit that is and
"underwriter" within the meaning of the Securities Act.
ACCEPTANCE OF THE OLD NOTES FOR EXCHANGE; DELIVERY OF NEW NOTES
Upon satisfaction or waiver of all of the conditions to the Exchange Offer, the
Issuers will accept, promptly after the Expiration Date, all Old Notes properly
tendered and will issue the New Notes promptly after acceptance of the Old
Notes. See "-- Condition of the Exchange Offer." For purposes of the Exchange
Offer, the Issuers shall be deemed to have accepted properly tendered Old Notes
for exchange when, as and if the Issuers have given oral or written notice
thereof (oral notice being promptly confirmed in writing) to the Exchange Agent
or the Special Luxembourg Exchange Agent.
IN ALL CASES, ISSUANCE OF NEW NOTES FOR OLD NOTES THAT ARE ACCEPTED FOR EXCHANGE
PURSUANT TO THE EXCHANGE OFFER WILL BE MADE ONLY AFTER TIMELY RECEIPT BY THE
EXCHANGE AGENT OR THE SPECIAL LUXEMBOURG EXCHANGE AGENT OF A BOOK-ENTRY
CONFIRMATION OF TRANSFER OF BOOK-ENTRY INTERESTS INTO THE EXCHANGE AGENT'S
ACCOUNT AT DTC BY MEANS OF DTC'S ATOP SYSTEM.
RETURN OF OLD NOTES
If any tendered Old Notes are not accepted for any reason set forth in the terms
and conditions of the Exchange Offer or if the Old Notes are withdrawn or are
submitted for a greater principal amount than the holders desire to exchange,
then such unaccepted, withdrawn or non-exchanged Old Notes will be returned
without expense to the tendering holder thereof. Under such circumstances,
Book-Entry Interests in the Old Notes will be credited to an account maintained
with DTC pursuant to instructions from the holder thereof as promptly as
practicable.
BOOK-ENTRY TRANSFER
The Exchange Agent has established an account with respect to the Old Notes and
Book-Entry Interests therein at DTC for purposes of the Exchange Offer. All
holders of Book-Entry Interests must tender such Book-Entry Interests via DTC's
ATOP system into the Exchange Agent's account at DTC in accordance with DTC's
procedures for transfer.
GUARANTEED DELIVERY PROCEDURES
Holders who wish to tender their Old Notes or Book-Entry Interests therein and
who cannot deliver the Letter of Transmittal or any other required documents to
the Exchange Agent or the Special Luxembourg Exchange Agent prior to the
Expiration Date, may effect a tender if:
(a) the tender is made through an Eligible Institution;
(b) prior to the Expiration Date, the Exchange Agent or the Special
Luxembourg Exchange Agent receives from such Eligible Institution a properly
completed and duly executed Notice of Guaranteed Delivery (by facsimile
transmission, mail or hand delivery) setting forth the name and address of
the holder and the principal amount of Old Notes being tendered, stating
that the tender is being made thereby and guaranteeing that, within five
business days and after the Expiration Date, the Letter of Transmittal (or
facsimile thereof) together with a Book-Entry Confirmation and any other
documents required by the Letter of Transmittal will be deposited by the
Eligible Institution with the Exchange Agent or the Special Luxembourg
Exchange Agent; and
28
<PAGE>
(c) such properly completed and executed Letter of Transmittal (or
facsimile thereof), as well as the Book-Entry Confirmation and all other
documents required by the Letter of Transmittal are received by the Exchange
Agent or the Special Luxembourg Exchange Agent within five business days
after the Expiration Date.
Upon request to the Exchange Agent, a Notice of Guaranteed Delivery will be sent
to holders who wish to tender their Old Notes according to the guaranteed
delivery procedures set forth above.
WITHDRAWAL OF TENDERS
Except as otherwise provided herein, tender of the Old Notes may be withdrawn
any time prior to the Expiration Date.
To withdraw a tender of Old Notes in the Exchange Offer, the person having
deposited the Old Notes or Book-Entry Interests therein to be withdrawn (the
"Depositor") must transmit and the Exchange Agent must receive prior to the
Expiration Date (i) the appropriate withdrawal instructions by means of DTC's
ATOP system in compliance with DTC's procedures therefor or (ii) a written
facsimile transmission notice of withdrawal that (a) specifies the name of the
Depositor, (b) identifies the relevant beneficial interest in the Old Notes to
be withdrawn (including the principal amount of Old Notes) and (c) is signed by
the holder in the same manner as the original signature on the Letter of
Transmittal by which such Old Notes were tendered (including any required
signature guarantees). All questions as to the validity, form and eligibility
(including time of receipt) of such notices will be determined by the Issuers in
their sole discretion, which determination shall be final and binding on all
parties. Any Old Notes so withdrawn will be deemed not to have been validly
tendered for purposes of the Exchange Offer and no New Notes will be issued with
respect thereto unless the Old Notes so withdrawn are validly retendered.
Properly withdrawn Old Notes may be retendered by following one of the
procedures described above under "Procedures for Tendering" at any time prior to
the Expiration Date.
CONDITIONS OF THE EXCHANGE OFFER
Notwithstanding any other term of the Exchange Offer, the Issuers shall not be
required to accept for exchange, or exchange New Notes for, any Old Notes, and
may terminate the Exchange Offer as provided herein before the acceptance of
such Old Notes, if:
(a) any action or proceeding is instituted or threatened in any court or
by or before any governmental agency with respect to the Exchange Offer
which, in the reasonable judgment of the Issuers, might materially impair
the ability of the Issuers to proceed with the Exchange Offer or materially
impair the contemplated benefits of the Exchange Offer to the Issuers, or
any material adverse development has occurred in any existing action or
proceeding with respect to the Issuers or any of its subsidiaries; or
(b) any change, or any development involving a prospective change, in
the business or financial affairs of the Issuers or any of its subsidiaries
has occurred which, in the reasonable judgment of the Issuers, might
materially impair the ability of the Issuers to proceed with the Exchange
Offer or materially impair the contemplated benefits of the Exchange Offer
to the Issuers; or
(c) any law, statute, rule or regulation is proposed, adopted or
enacted, which, in the reasonable judgment of the Issuers, might materially
impair the ability of the Issuers to proceed with the Exchange Offer or
materially impair the contemplated benefits of the Exchange Offer to the
Issuers; or
(d) any governmental approval has not been obtained, which approval the
Issuers shall, in its reasonable discretion, deem necessary for the
consummation of the Exchange Offer as contemplated hereby.
If the Issuers determine in their reasonable discretion that any of the
conditions are not satisfied, the Issuers may (i) refuse to accept any Old Notes
and return all tendered Old Notes to the tendering holders, (ii) extend the
Exchange Offer and retain all Old Notes tendered prior to the Expiration Date,
subject, however, to the rights of holders to withdraw such Old Notes (see "--
Withdrawal of Tenders") or (iii) waive such unsatisfied conditions with respect
to the Exchange Offer and accept all validly tendered Old Notes which have not
been withdrawn. If such waiver constitutes a material change to the Exchange
Offer, the Issuers will promptly disclose such waiver by means of a prospectus
supplement that will be distributed to the registered holders, and the Issuers
will extend the Exchange Offer for a period of five to ten business days,
depending upon the significance of the waiver and the manner of disclosure to
the registered holders, if the Exchange Offer would otherwise expire during such
five to ten business day period.
29
<PAGE>
TERMINATION OF CERTAIN RIGHTS
All rights under the Registration Rights Agreement (including registration
rights) of holders of the Old Notes eligible to participate in this Exchange
Offer will terminate upon consummation of the Exchange Offer except with respect
to the Issuers' continuing obligations (i) to indemnify the holders (including
any broker-dealers) and certain parties related to the holders against certain
liabilities (including liabilities under the Securities Act), (ii) to provide,
upon the request of any holder of a transfer-restricted Old Note, the
information required by Rule 144A(d)(4) under the Securities Act in order to
permit resales of such Old Notes pursuant to Rule 144A, (iii) to use their
reasonable best efforts to keep the Registration Statement effective to the
extent necessary to ensure that it is available for resale of
transfer-restricted New Notes by broker-dealers for a period of 180 days from
the date on which the Registration Statement is declared effective and (iv) to
provide copies of the latest version of the Prospectus to broker-dealers upon
their request for a period of 180 days from the date on which the Registration
Statement is declared effective.
EXCHANGE AGENT AND SPECIAL LUXEMBOURG EXCHANGE AGENT
The Chase Manhattan Bank has been appointed as Exchange Agent for the Exchange
Offer. Questions and requests for assistance, requests for additional copies of
this Prospectus or of the Letter Transmittal and requests for Notices of
Guaranteed Delivery should be directed to the Exchange Agent addressed as
follows:
BY REGISTERED OR CERTIFIED MAIL, BY OVERNIGHT COURIER OF BY HAND:
The Chase Manhattan Bank
450 W. 33rd Street
New York, New York 10001-2697
Attention: Corporate Trust Department
or
BY FACSIMILE:
The Chase Manhattan Bank
Attention: Corporate Trust Department
Facsimile Number: (212) 946-8158/8159
In addition, Letters of Transmittal and any other required documentation should
be sent to the Exchange Agent at the address set forth above. DELIVERY OF THE
LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE (UNLESS
DELIVERED TO THE SPECIAL LUXEMBOURG EXCHANGE AGENT AS DESCRIBED BELOW) OR
TRANSMISSION VIA FACSIMILE OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A
VALID DELIVERY. In addition, the Issuers have appointed Kredietbank S.A.
Luxembourgeoise as Special Luxembourg Exchange Agent. Executed Letters of
Transmittal may be delivered by hand or sent registered or certified mail for
next day delivery to the Special Luxembourg Exchange Agent at the following
address: Kredietbank S.A. Luxembourgeoise, 43 Boulevard Royal, L-2955
Luxembourg, Attention: Corporate Trust and Agencies. All attempted tenders to
the Special Luxembourg Exchange Agent must be confirmed by telephone by calling
(011) 352-4797-39135. DELIVERY OF THE LETTER OF TRANSMITTAL TO THE SPECIAL
LUXEMBOURG EXCHANGE AGENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE IN
CONFORMITY WITH THE PROCEDURES DESCRIBED WILL NOT CONSTITUTE A VALID DELIVERY.
IT IS STRONGLY RECOMMENDED THAT HOLDERS SEND THEIR LETTERS OF TRANSMITTAL AND
OTHER DOCUMENTS DIRECTLY TO THE EXCHANGE AGENT TO AVOID DELAYS THAT MAY ARISE
FROM TRANSMISSION OF SUCH DOCUMENTS TO LUXEMBOURG.
FEES AND EXPENSES
The expenses of soliciting exchanges of Old Notes for New Notes will be borne by
the Issuers. The principal solicitation is being made by mail; however,
additional solicitation may be made by telecopy, telephone or in person by
officers and regular employees of the Issuers and their affiliates.
30
<PAGE>
The Issuers have not retained any dealer-manager in connection with the Exchange
Offer and will not make any payments to brokers, dealers or others soliciting
acceptance of the Exchange Offer. The Issuers, however, will pay the Exchange
Agent and the Special Luxembourg Exchange Agent reasonable and customary fees
for their services and will reimburse their reasonable out-of-pocket expenses in
connection therewith.
The Issuers will pay all transfer taxes, if any, applicable to the exchange of
the Old Notes pursuant to the Exchange Offer. If however, a transfer tax is
imposed for any reason other than the exchange of the Old Notes pursuant to the
Exchange Offer, then the amount of any such transfer taxes (whether imposed on
the registered holder or any other persons) will be payable by the tendering
holder. If satisfactory evidence of payment of such taxes or exemption therefrom
is not submitted with the Letter of Transmittal, the amount of such transfer
taxes will be billed directly to the tendering holder.
CONSEQUENCES OF FAILURE TO EXCHANGE
The Old Notes that are not exchanged for New Notes pursuant to the Exchange
Offer will remain restricted securities within the meaning of Rule 144 of
Securities Act. Accordingly, such Old Notes may be resold only (i) to the
Issuers or any subsidiary thereof, (ii) so long as the Old Notes are eligible
for resale pursuant to Rule 144A, to a person whom the seller reasonably
believes is a qualified institutional buyer within the meaning of Rule 144A
under the Securities Act, purchasing for its own account or for the account of a
qualified institutional buyer to whom notice is given that the resale, pledge or
other transfer is being made in reliance on Rule 144A, (iii) outside the United
States to non-U.S. persons in an offshore transaction in compliance with Rule
904 under the Securities Act, (iv) pursuant to an exemption from registration in
accordance with Rule 144 (if available), (v) to an institutional "accredited
investor" that, prior to such transfer, furnishes to the Trustee a signed letter
containing certain representations and agreements relating to the registration
of transfer of the Old Notes and, if such transfer is in respect of a principal
amount of Old Notes at the time of transfer of less than $250,000, an opinion of
counsel acceptable to the Issuers that such transfer is in compliance with the
Securities Act and (vi) pursuant to an effective registration statement under
the Securities Act, in each case in accordance with any applicable securities
laws of any state of the United States and subject to certain requirements of
the Trustee being met. The liquidity of the Old Notes could be adversely
affected by the Exchange Offer. Following the consummation of the Exchange
Offer, holders of the Old Notes will have no further registration rights under
the Registration Rights Agreement except as described herein under "--
Termination of Certain Rights."
RESALES OF THE NEW NOTES
With respect to the New Notes, based upon an interpretation by the staff of the
Commission set forth in certain no-action letters issued to third parties, the
Issuers believe that a holder (other than (i) a broker-dealer who purchases such
New Notes directly from the Issuers to resell pursuant to Rule 144A or any other
available exemption under the Securities Act or (ii) any such holder that is an
"affiliate" of the Issuers within the meaning of Rule 405 under the Securities
Act) who exchanges the Old Notes for the New Notes in the ordinary course of
business and who is not participating, does not intend to participate, and has
no arrangement with any person to participate, in the distribution of the New
Notes, will be allowed to resell the New Notes to the public without further
registration under the Securities Act and without delivering to the purchasers
of the New Notes a prospectus that satisfies the requirements of Section 10 of
the Securities Act. However, if any holder acquires the New Notes in the
Exchange Offer for the purpose of distributing or participating in the
distribution of the New Notes or is a broker-dealer, such holder cannot rely on
the position of the staff of the Commission enumerated in such no-action letters
issued to third parties and must comply with the registration and prospectus
delivery requirements of the Securities Act in connection with any resale
transaction, unless an exemption from registration is otherwise available. Each
broker-dealer that receives New Notes for its own account in exchange for Old
Notes, where such Old Notes were acquired by such broker-dealer as a result of
market-making activities or other trading activities, must acknowledge that it
will deliver a prospectus in connection with any resale of such New Notes. The
Letter of Transmittal states that by so acknowledging and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act. This Prospectus, as it
may be amended or supplemented from time to time, may be used by a broker-dealer
in connection with resales of New Notes received in exchange for Old Notes where
such Old Notes were acquired by such broker-dealer as a result of market-making
or other trading activities. Pursuant to the Registration Rights Agreement, the
Issuers have agreed to make this Prospectus, as it may be amended or
supplemented from time to time, available to broker-dealers for use in
connection with any resale for a period of 180 days after the Expiration Date.
See "Plan of Distribution."
31
<PAGE>
ACCOUNTING TREATMENT
The New Notes will be recorded at the same carrying value as the Old Notes,
which is the principal amount as reflected in the Company's accounting records
on the date of the exchange. Accordingly, no gain or loss for accounting
purposes is expected to be recognized. The expenses of the Exchange Offer will
be capitalized for accounting purposes.
PROCEDURES FOR TENDERING DEFINITIVE REGISTERED NOTES
Subject to certain conditions, holders of Book-Entry Interests are entitled to
receive in exchange therefor Old Notes in registered form (each, a "Definitive
Registered Note") in equal principal amount; however, as of the date hereof, no
Definitive Registered Notes were issued and outstanding. If a holder of
Book-Entry Interests acquires Definitive Registered Notes prior to the
Expiration Date, such holder may participate in the Exchange Offer, PROVIDED
that such holder of Definitive Registered Notes follows all of the procedures
set forth above, subject to the following modifications:
(1) Tenders of Definitive Registered Notes will be accepted for exchange
only in denominations of $1,000 principal amount and integral multiples thereof.
(2) All of the procedures for use of DTC's ATOP system, including
transmission of a Book-Entry Confirmation and Participant Message, will not be
available to and shall not apply to holders of Definitive Registered Notes who
wish to tender.
(3) To tender, holders of Definitive Registered Notes must deliver the
Definitive Registered Notes in proper form for transfer, including the proper
endorsements and bond powers, to the Exchange Agent or the Special Luxembourg
Exchange Agent at their respective addresses provided above before the
Expiration Date. THE METHOD OF DELIVERY OF DEFINITIVE REGISTERED NOTES TO THE
EXCHANGE AGENT OR THE SPECIAL LUXEMBOURG EXCHANGE AGENT IS AT THE ELECTION AND
RISK OF THE HOLDER. INSTEAD OF DELIVERY BY MAIL, IT IS RECOMMENDED THAT HOLDERS
USE AN OVERNIGHT OR HAND DELIVERY SERVICE, PROPERLY INSURED AND SUFFICIENT TIME
SHOULD BE ALLOWED TO ASSURE DELIVERY TO THE EXCHANGE AGENT OR THE SPECIAL
LUXEMBOURG EXCHANGE AGENT BEFORE THE EXPIRATION DATE. NO DEFINITIVE REGISTERED
NOTES SHOULD BE SENT TO THE COMPANY.
(4) Signatures on a Letter of Transmittal or a notice of withdrawal, as the
case may be, relating to definitive Registered Notes must be guaranteed by an
Eligible Institution unless the Old Notes tendered or withdrawn pursuant thereto
are tendered or withdrawn (i) by a registered holder who has signed the Letter
of Transmittal, (ii) by a registered holder who has not completed the box
entitled "Special Delivery Instruction" on the Letter of Transmittal, or (iii)
for the account of an Eligible Institution.
(5) If the accompanying Letter of Transmittal is signed by a person other
than the registered holder of such Definitive Registered Notes, then such
Definitive Registered Notes must by endorsed or accompanied by a properly
completed bond power, signed by such registered holder as such registered
holder's name appears on such Definitive Registered Notes.
(6) Any beneficial owner of Definitive Registered Notes whose Definitive
Registered Notes are registered in the name of a broker, dealer, commercial
bank, trust company or other nominee and who wishes to tender such Definitive
Registered Notes in the Exchange Offer should contact such registered holder
promptly and instruct such holder to tender on such beneficial owner's behalf.
If any such beneficial owner of Definitive Registered Notes wishes to tender
such Definitive Registered Notes on behalf of such registered owner, such
beneficial owner must, prior to completing and executing the Letter of
Transmittal and delivering such Definitive Registered Notes, either, make
appropriate arrangements to register ownership of such Definitive Registered
Notes in such beneficial owner's name or obtain a properly completed bond power
from the registered holder thereof. The transfer of registered ownership may
take considerable time and may not be able to be completed prior to the
Expiration Date.
32
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the "Selected
Historical Financial Data" and the Combined Financial Statements of the Company
and the accompanying notes thereto included elsewhere in this Prospectus.
GENERAL
The Company is a leading international downstream producer of aluminum and steel
products with facilities in the U.S., the U.K., The Netherlands and France.
Euramax's products are produced primarily from light gauge aluminum and steel
coil and include painted sheet and coil, siding, roofing, raincarrying systems,
windows, doors and various trim parts and components. The Company's products are
sold primarily to manufacturers of RV's and manufactured housing, rural building
contractors, distributors and home centers. See "Business." The Company has been
recently formed by the Investor Group to acquire certain portions of Alumax's
fabricated products operations pursuant to the Acquisition. See "The
Transactions."
Approximately 65% of the Company's 1995 net sales were derived from sales of
aluminum products. Unlike other raw materials used by the Company, the cost of
aluminum is subject to a high degree of volatility caused by the relationship of
world aluminum supply to world aluminum demand. Historically, prices at which
the Company sells aluminum products tend to fluctuate with corresponding changes
in the prices paid to suppliers for aluminum raw materials. Supplier price
increases, of normal amount and frequency, can generally be passed to customers
within two to four months. Accordingly, the Company's reported net sales of
aluminum products may fluctuate with little or no change in the volume of
aluminum shipments.
Historically, the Company has not engaged in hedging activities intended to
manage risks relating to fluctuations in foreign currency exchange rates or
movements in market prices of steel and aluminum raw materials. See Note 2 to
the Condensed Combined Financial Statements included elsewhere herein for a
description of currency and interest rate swaps entered into by the Company upon
consummation of the Transactions.
See Note 1 to the Combined Financial Statements included elsewhere herein for a
description of the basis of presentation of financial information and the
Company's relationship with Alumax, its former parent. Alumax operated in a
decentralized manner; therefore, many corporate functions were performed
directly by the Company. However, Alumax provided the Company with certain
administrative services, including but not limited to tax compliance, treasury
services, human resource administration, legal services, and investor relations.
The financial statements included elsewhere herein, and other financial
information set forth herein, have been presented on a combined basis for
periods prior to the Transactions, giving effect to, among other items,
corporate expenses which anticipate requirements as a stand-alone company.
Net earnings for the year ended December 31, 1995 totaled $19.7 million as
compared to net earnings of
$17.2 million and $15.5 million for the years ended December 31, 1994 and 1993,
respectively. The 1995 results reflect favorable economic conditions in both the
U.S. and Europe, coupled with strength in many markets for the Company's
products. These economic and market conditions, the Company's emphasis on
improving market share, and the sale or closure of facilities no longer
considered economically viable have contributed to the significant improvement
in profitability during the past three years.
33
<PAGE>
RESULTS OF OPERATIONS
The following table sets forth the Company's Combined Statement of Earnings Data
expressed as a percentage of net sales:
<TABLE>
<CAPTION>
-----------------------------------------------------------------------
NINE MONTHS ENDED,
YEAR ENDED DECEMBER 31, --------------------------------
------------------------------------- SEPTEMBER 29, SEPTEMBER 25,
1993 1994 1995 1995 1996
----------- ----------- ----------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
COMBINED STATEMENT OF EARNINGS DATA:
Net sales 100.0% 100.0% 100.0% 100.0% 100.0%
----- ----- ----- ----- -----
Costs and expenses:
Cost of goods sold 82.2 82.1 82.7 83.5 82.4
Selling and general 9.1 9.5 8.5 8.2 9.4
Depreciation and amortization 2.0 1.7 1.7 1.6 1.9
----- ----- ----- ----- -----
Earnings from operations 6.7 6.7 7.1 6.7 6.3
Interest expense, net 0.3 0.1 0.7 0.3 0.2
Other expense, net 0.1 0.1 0.0 0.0 0.1
----- ----- ----- ----- -----
Earnings before income taxes 6.3 6.5 6.4 6.4 6.0
Provision for income taxes 2.3 2.7 2.3 2.3 2.3
----- ----- ----- ----- -----
Net earnings 4.0% 3.8% 4.1% 4.1% 3.7%
----- ----- ----- ----- -----
----- ----- ----- ----- -----
</TABLE>
NINE MONTH PERIOD ENDED SEPTEMBER 25, 1996 COMPARED TO THE NINE MONTH PERIOD
ENDED SEPTEMBER 29, 1995
NET SALES. Net sales decreased 2.5% to $363.3 million for the nine month period
ended September 25, 1996 from $372.5 million for the nine month period ended
September 29, 1995. This decrease is primarily attributable to (i) a decrease in
demand in Europe for RVs during the first four months of 1996 of approximately
$8.7 million, (ii) a decrease in aluminum selling prices of approximately $4.6
million precipitated by lower raw material costs and (iii) a weakening of the
Company's key foreign currencies totalling approximately $4.9 million
(particularly the Dutch Guilder) compared to the U.S. Dollar, partially offset
by (iv) an increase of approximately $9.8 million in net sales in the U.S.
caused by higher levels of production in the manufactured housing market. For
these reasons, net sales in the U.S. increased 1.7% to $225.5 million in the
first nine months of 1996 from $221.8 million in the same period 1995. Net sales
in Europe decreased 8.6% to $137.8 million in the first nine months of 1996 from
$150.8 million in the same period 1995.
COST OF GOODS SOLD. Cost of goods sold as a percentage of net sales decreased
from 83.5% for the nine month period ended September 29, 1995 to 82.4% for the
nine month period ended September 25, 1996. This entire decrease is primarily
attributable to lower average aluminum costs which declined more rapidly than
corresponding reductions in selling prices. Management believes that the 1996
percentage margin is more representative of the Company's expected results than
the 1995 percentage margin. The average cost of aluminum was 17.4% lower in the
nine month period ended September 25, 1996, than in the nine month period ended
September 25, 1995.
SELLING AND GENERAL. Selling and general expenses, as a percentage of net
sales, increased to 9.4% in the nine month period ended September 25, 1996 from
8.2% for the nine month period ended September 29, 1995. This increase was
primarily attributable to start-up costs incurred in connection with the
Company's opening of a coil coating facility in Helena, Arkansas and a
fiberglass lamination line in Bristol, Indiana.
DEPRECIATION AND AMORTIZATION. Depreciation and amortization increased by 13.9%
in the nine month period ended September 25, 1996 as compared to the nine month
period ended September 29, 1995. This increase of $.9 million was due primarily
to the Company's investment in a roll coating facility placed in service in the
U.S. in 1996. See "Liquidity and Capital Resources."
34
<PAGE>
EARNINGS FROM OPERATIONS. For reasons stated above, earnings from operations in
the U.S. increased 35.5% to $9.6 million for the first nine months of 1996 from
$7.1 million for the same period 1995. Earnings from operations in Europe
decreased 24.1% to $13.3 million for the first nine months of 1996 from $17.5
million for the same period 1995.
INTEREST EXPENSE, NET. From time to time and for certain specific intercompany
borrowings, interest was charged to the Company by Alumax. Interest expense, net
of incidental interest and finance charge income, decreased 37.6% to
approximately $622,000 from approximately $996,000 for the nine month periods
ended September 25, 1996 and September 29, 1995, respectively.
OTHER EXPENSE, NET. Other expense was not significant for the nine month
periods ended September 29, 1995 and September 25, 1996.
PROVISION FOR INCOME TAXES. The effective rate of the provision for income
taxes for the nine month period ended September 25, 1996 increased to 38.0% from
36.7% for the nine month period ended September 29, 1995. The increase in the
effective rate was primarily due to a higher proportion of earnings taxed in the
U.S. for the nine month period ended September 25, 1996 compared to such
earnings for the six month period ended September 29, 1995. Earnings in the U.S.
are subjected to slightly higher income tax rates than in the European
countries, and also are subject to state income taxes. See Note 4 to Combined
Financial Statements for a description of income taxes.
YEAR ENDED DECEMBER 31, 1995 COMPARED TO YEAR ENDED DECEMBER 31, 1994
NET SALES. Net sales increased 8.3% to $483.5 million for the year ended
December 31, 1995 from $446.6 million in 1994. The increase was attributable
primarily to (i) an increase of approximately $41.3 million due to higher
selling prices for aluminum products precipitated by a 36.6% increase in
aluminum costs from 1994 to 1995, (ii) an increase in steel shipments of
approximately $15.0 million to manufactured housing producers and (iii) a
strengthening of the Company's key foreign currencies of approximately $14.9
million (particularly the Dutch Guilder) compared to the U.S. Dollar. These
increases were partially offset by an approximate $20.0 million decline in
aluminum sales volume and approximately $14.3 million of other individually
insignificant occurrences. The Company's facilities in the U.S. and Europe both
experienced sales growth as prices increased due to declining world-wide
aluminum inventories brought on by an increase in demand. For these reasons, net
sales in the U.S. increased 0.3% to $287.8 million for the year ended December
31, 1995 from $286.8 million for the year ended December 31, 1994. Net sales in
Europe increased 22.4% to $195.7 million for the year ended December 31, 1995
from $159.8 million for the year ended December 31, 1994.
COST OF GOODS SOLD. Cost of goods sold, as a percentage of net sales, increased
to 82.7% in 1995 from 82.1% in 1994. This increase was due to higher average
aluminum costs which could not be immediately passed along to customers and
increased steel usage due to higher volumes sold. The average cost of aluminum
was approximately 36.6% higher in 1995 as compared to 1994. Aluminum costs
included non-recurring charges of approximately $1.9 million paid to the parent
company for the difference between intergroup transfer prices and prices paid
locally. Other non-recurring costs in 1995 included $.9 million to outsource
painting costs while upgrading painting facilities and approximately $.4 million
in plant closing costs.
SELLING AND GENERAL. Selling and general expenses, as a percentage of net
sales, decreased to 8.5% in 1995 from 9.5% in 1994. This decrease was due to (i)
approximately $.7 million of nonrecurring expenses incurred in 1994 related to
the closing of two facilities, (ii) a management information system conversion
which resulted in certain duplicate operating and maintenance costs during 1994
of approxmately $.6 million, and (iii) an increase in sales largely driven by
aluminum price increases.
DEPRECIATION AND AMORTIZATION. Depreciation and amortization was 1.7% of net
sales in both 1995 and 1994. However, the actual charge increased by
approximately $300,000 due to depreciation expense related to a new coil coating
facility in Lancaster, PA, and the expansion of a European facility to
accommodate the relocation of a sheeting department.
35
<PAGE>
EARNINGS FROM OPERATIONS. For reasons stated above, earnings from operations in
the U.S. decreased 32.8% to $11.2 million for the year ended December 31, 1995
from $16.7 million for the year ended December 31, 1994. Earnings from
operations in Europe increased 75.2% to $22.9 million for the year ended
December 31, 1995 from $13.1 million for the year ended December 31, 1994.
INTEREST EXPENSE, NET. Interest expense, net of incidental interest and finance
income, increased to $3.0 million in 1995 from approximately $300,000 in 1994.
This increase was due to discretionary charges of interest on net working
capital that were not charged in previous years by Alumax and its affiliates.
OTHER EXPENSE, NET. Other expense was not significant for the years ended
December 31, 1995 and 1994.
PROVISION FOR INCOME TAXES. The effective rate for the provision for income
taxes decreased from 41.2% in 1994 to 36.7% in 1995. This decrease was due to a
decline in the earnings of the U.S. operations in 1995 compared to 1994 levels,
partially offset by higher earnings attributable to the European operations.
Earnings in the U.S. are subjected to slightly higher income tax rates than in
the European countries, and are also subject to state income taxes.
YEAR ENDED DECEMBER 31, 1994 COMPARED TO YEAR ENDED DECEMBER 31, 1993
NET SALES. Net sales increased 15.8% in 1994 to $446.6 million from $385.5
million in 1993. This increase was due to (i) an increase in both sales volume
and sales price aggregating approximately $75.7 million and (ii) a slight
strengthening of the Company's key foreign currencies of approximately $3.0
million compared to the U.S. Dollar. These increases were offset by
approximately $17.6 million of other individually insignificant occurrences.
Both the U.S. and Europe had increased sales volume in 1994, with an overall
increase in aluminum shipments of 22.3% and an overall increase of 4.6% in steel
shipments. Worldwide aluminum prices began a sharp increase in late 1994 due to
increased demand. For these reasons, net sales in the U.S. increased 13.2% to
$286.8 million for the year ended December 31, 1994 from $253.3 million for the
year ended December 31, 1993. Net sales in Europe increased 20.9% to $159.8
million for the year ended December 31, 1994 from $132.2 million for the year
ended December 31, 1993.
COST OF GOODS SOLD. Cost of goods sold remained constant, as a percentage of
net sales in 1994 and 1993. An aluminum cost increase of approximately 20% was
offset by both increases in selling prices and manufacturing efficiencies
resulting from increased volume. Volumes increased on the strength of RV
production and market share gains in manufactured housing.
SELLING AND GENERAL. Selling and general expenses as a percentage of net sales
increased slightly to 9.5% of net sales in 1994 compared to 9.1% of net sales in
1993. Increased costs in 1994 due to facility closures of approximately $.7
million and a management information system conversion of approximately $.6
million were offset by the higher level of 1994 net sales.
DEPRECIATION AND AMORTIZATION. Depreciation and amortization expense increased
0.4%, or approximately $30,000, in 1994 compared to 1993 levels. However, as a
percent of sales, the depreciation and amortization expense decreased to 1.7% in
1994 from 2.0% in 1993. This decline resulted from a 15.8% reported increase in
year to year sales.
EARNINGS FROM OPERATIONS. For reasons stated above, earnings from operations in
the U.S. increased 100.2% to $16.7 million for the year ended December 31, 1994
from $8.3 million for the year ended December 31, 1994. Earnings from operations
in Europe decreased 24.5% to $13.1 million for the year ended December 31, 1994
from $17.3 million for the year ended December 31, 1993.
INTEREST EXPENSE, NET. Interest expense, net of incidental interest and finance
charge income, decreased to 0.1% of net sales in 1994 from 0.3% of net sales in
1993, primarily due to increased sales.
OTHER EXPENSE, NET. Other expense was not significant for the years ended
December 31, 1994 and 1993.
PROVISION FOR INCOME TAXES. The effective rate for provision for income taxes
increased to 41.2% in 1994 from 36.0% in 1993. The increase was primarily
attributable to a higher proportion of earnings taxed in the U.S. in 1994
compared to 1993.
LIQUIDITY AND CAPITAL RESOURCES
LIQUIDITY. The Company's primary liquidity needs arise from debt service on
indebtedness incurred in connection with the Transactions and the funding of
capital expenditures. As of September 25, 1996, the Company had outstanding
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indebtedness for borrowed money of $235.0 million, $34.0 million of Preference
Shares and ordinary shareholders' equity of $1.0 million. Included in such
indebtedness would be approximately $100.0 million under the Credit Agreement,
consisting of $40.0 million under the Term Loan and $60.0 million under the
Revolving Credit Facility. The undrawn amount of the Revolving Credit Facility
available immediately after closing was approximately $25.0 million which was
available for working capital and general corporate purposes, subject to
borrowing base limitations. As of the Closing Date, this amount was fully
available. The Company's leveraged financial position requires that a
substantial portion of the Company's cash flow from operations be used to pay
interest on the Notes, principal and interest under the Credit Agreement and
other indebtedness. Further, the Company's leveraged position may impede its
ability to obtain financing in the future for working capital, capital
expenditures and general corporate purposes. In addition, the Company's
leveraged position may make it more vulnerable to economic downturns and may
limit its ability to withstand competitive pressures. The Company believes that
cash generated from operations and, subject to borrowing base limitations,
borrowings under the Credit Agreement will be adequate to meet its needs for the
foreseeable future, although no assurance to that effect can be given. See "Risk
Factors -- Substantial Leverage."
Principal and interest payments under the Credit Agreement and interest payments
on the Notes represent significant liquidity requirements for the Company. With
respect to the $40.0 million of Term Loans, the Company must make scheduled
quarterly principal payments totaling $500,000 in 1996, $2.5 million in 1997,
$4.0 million in 1998, $4.0 million in 1999, $4.5 million in 2000, $7.875 million
in 2001, $9.5 million in 2002 and $7.125 million in 2003. Interest on the Term
Loans and the Revolving Credit Facility will bear interest at floating rates
based upon the interest option selected by the Company.
The Company's primary source of liquidity is funds generated from operations
which will be supplemented by borrowings under the Credit Agreement. Net cash
provided by operating activities decreased from $8.3 million in 1994 to $6.0
million in 1995, reflecting a decrease in accounts payable which was partially
offset by a decrease in foreign taxes paid. Net cash provided from operating
activities decreased from $19.7 million in 1993 to $8.3 million in 1994,
reflecting a one-time increase in inventory and accounts receivable which was
only partially offset by an increase in accounts payable. The 1995 decrease in
accounts payable was attributable to changes initiated by management in the
timing of payments for inventory and other services. The 1994 one-time increase
in inventories was attributable to the Company's termination of a steel
consignment and inventory program in the U.S. whereby title on certain steel
coil did not pass to the Company until the coil was opened and fabricated. The
Company believes that the termination of the consignment program, which was
initiated by the Company, has reduced the cost of obtaining and managing steel
inventory.
Historically, the Company has met its requirement for capital through Alumax's
centralized cash management system. Under this system, cash received from the
Company's operations was transferred to Alumax's centralized cash accounts and
cash disbursements were funded from centralized cash accounts rather than
directly from operating sources. Cash provided by (used in) financing
activities, net of certain dividends paid by European operations to Alumax and
its affiliates, were ($11.5 million), $5.6 million and $8.6 million in 1995,
1994 and 1993, respectively.
CAPITAL EXPENDITURES. The Company's capital expenditures were $17.4 million,
$9.6 million, and $7.4 million in 1995, 1994 and 1993, respectively. In 1995,
the Company completed construction of a coil coating facility in Helena,
Arkansas. Capital expenditures related to this project totaled $9.2 million and
$1.6 million in 1995 and 1994, respectively. The core operating equipment of the
Helena facility was obtained by the Company from its former affiliate Alumax
Mill Products, Inc. This equipment, originally located in Riverside, California,
was transferred to the Company at an approximate book value of $2.1 million. The
Company invested approximately $8.7 million in additional capital, net of
certain State of Arkansas inducements, to relocate transferred equipment,
construct the building and offices, acquire new equipment, and ready the
facility for use. The land on which the facility is located was granted by the
State of Arkansas with a three year option to purchase up to ten adjacent acres
at a cost estimated to be below market. This facility represents the single
largest capital investment made by the Company in the last five years and
provides the Company with a dedicated operation for painting steel and aluminum
coil for distribution to U.S. fabrication facilities. The Company believes that
distinct advantages in marketing and producing products are derived from having
the capabilities of the Helena facility.
Excluding the Helena coating line, capital expenditures totaled $8.2 million,
$8.0 million and $7.7 million in 1995, 1994 and 1993, respectively. These
included approximately $2.5 million to acquire a door fabrication facility in
Florida
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and to upgrade a coating facility in The Netherlands; $2.8 million to relocate
and upgrade a U.K. fabrication facility and to acquire a parcel of land in 1994
and approximately $600,000 for certain improvements of an embossing line. The
balance of capital expenditures in each year and in the nine months ended
September 25, 1996, primarily relate to purchases and upgrades of fabricating
equipment, transportation and material moving equipment, and information
systems. Capital expenditures in the nine months ended September 25, 1996 also
include $1.9 million for the construction of a fabrication plant adjacent to the
Helena coating facility. This facility is expected to be completed in mid-1997
at a cost of approximately $400,000.
WORKING CAPITAL MANAGEMENT. Working capital was $120.9 million as of September
25, 1996 compared to $127.4 million and $126.7 million as of December 31, 1995
and 1994, respectively. The Company believes that current levels of working
capital represent a liquid source of funds available for future cash flows. The
Company believes that reductions in inventory and accounts receivable can be
achieved upon completion of information systems implementations recently
undertaken in the U.S. The Company believes that these systems will offer
distinct advantages in monitoring credit, open receivables, and inventory
levels, while enabling centralized ordering and inventory management. However,
there can be no assurance that working capital reductions will be achieved.
INFLATION.
In recent years, inflation has not had a significant effect on the Company's
results of operations or financial condition.
RECENT ACCOUNTING PRONOUNCEMENTS.
In June 1996, the Financial Accounting Standards Board ("FASB") issued Statement
of Financial Accounting Standards No. 125 ("SFAS 125"), ACCOUNTING FOR TRANSFERS
AND SERVICING OF FINANCIAL ASSETS AND EXTINGUISHMENTS OF LIABILITIES. SFAS 125
provides accounting and reporting standards for transfers and servicing of
financial assets and extinguishments of liabilities. Those standards are based
on consistent application of a financial-components approach that focuses on
control. Under this approach, after a transfer of financial assets, an entity
recognizes the financial and servicing assets it controls and the liabilities it
has incurred, derecognizes financial assets when control has been surrendered,
and derecognizes liabilities when extinguished. Most provisions of SFAS 125 are
effective for transfers and servicing of financial assets and extinguishments of
liabilities occurring after December 31, 1996. The provisions of SFAS 125
related to collateral recognition provisions in secured borrowings and for the
provisions related to repurchase agreements, dollar rolls, securities lending,
and similar transactions, are effective for transactions occurring after
December 31, 1997. SFAS 125 is to be applied prospectively. Management is
currently reviewing the provisions of SFAS 125 and does not believe that the
Company's financial statements will be materially negatively impacted by the
adoption.
FASB issued SFAS 123, ACCOUNTING FOR STOCK-BASED COMPENSATION, in October 1995.
SFAS 123 prescribes accounting and reporting standards for all stock-based
compensation plans. The new standard allows companies to continue to follow
present accounting rules, which often result in no compensation expense being
recorded, or to adopt the SFAS 123 fair-value-based method. The fair-value-based
method will generally result in higher compensation expense based on the
estimated fair value of stock based awards on the grant date. Companies electing
to continue following present accounting rules will be required to provide pro
forma disclosures of net income and earnings per share as if the fair-
value-based method had been adopted. The Company intends to continue following
present accounting rules and to implement the new disclosure requirements in
1996 as required. The Company currently does not have stock-based compensation
plans, therefore, the adoption of SFAS 123 will not impact the financial
condition or results of operations of the Company.
In March 1995, FASB issued Statement of Financial Accounting Standards No. 121
("SFAS 121"), ACCOUNTING FOR THE IMPAIRMENT OF LONG-LIVED ASSETS AND FOR
LONG-LIVED ASSETS TO BE DISPOSED OF, which is effective for fiscal years
beginning after December 15, 1995. SFAS 121 prescribes accounting standards for
(i) the impairment of long-lived assets, certain identifiable intangibles and
goodwill related to those assets to be held and used and (ii) long-lived assets
and certain identifiable intangibles to be disposed of. This standard requires
that long-lived assets and certain identifiable intangibles to be held and used
by an entity be reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable. The adoption of SFAS 121 in 1996 has not had an impact on the
financial condition or results of operations of the Company.
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ENVIRONMENTAL MATTERS
The Company's U.S. and European facilities, like similar manufacturing
facilities, are subject to a range of federal, state, local and foreign
environmental laws and regulations ("Environmental Laws"), including those
relating to, air emissions, wastewater discharges, the handling and disposal of
solid and hazardous waste, and the remediation of contamination associated with
the current and historic use of hazardous substances or materials. If a release
of hazardous substances or materials occurs on or from the Company's properties
or any offsite disposal location used by the Company, or if contamination from
prior activities is discovered at any of the Company's properties, the Company
may be held liable for the costs of remediation including response costs,
natural resource damage and associated transaction costs. While the amount of
such liability could be material, the Company devotes resources to ensuring that
its operations are conducted in a manner that reduces such risks.
Based upon an environmental review conducted by outside consultants in
connection with the Acquisition and assuming compliance by Alumax with its
indemnification obligations under the Acquisition Agreement, the Company
believes that it is currently in compliance with, and not subject to liability
under, Environmental Laws except where such noncompliance or liability would not
reasonably be expected to have a material adverse effect on the consolidated
financial position or results of operations of the Company and its subsidiaries
taken as a whole. Pursuant to the terms of the Acquisition Agreement, Alumax has
agreed to correct and to bear substantially all costs with respect to certain
identified conditions of potential noncompliance and liability under
Environmental Laws, none of which costs are currently believed to be material.
Alumax's indemnification obligations under the Acquisition Agreement are not
subject to an aggregate dollar limitation with respect to specifically
identified environmental matters. However, with respect to all other
environmental matters, Alumax's obligations are limited to $125.0 million.
Liability with respect to hazardous substance or material releases in the U.S.
arises principally under the federal Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended "CERCLA" and similar state
laws, which impose strict, and under certain circumstances, retroactive, joint
and several liability upon statutorily defined classes of potentially
responsible parties ("PRP's"). The Company has been identified as a PRP at nine
National Priorities List ("NPL") sites under CERCLA, although two of these nine
sites may relate to disposal by divisions of Alumax that have never been and are
not now part of the Company. Pursuant to the terms of the Acquisition Agreement,
Alumax has agreed to indemnify the Company for all of the costs associated with
each of these nine NPL sites. In addition, Alumax has agreed to indemnify the
Company for all of the costs associated with eleven additional sites listed on
state hazardous site cleanup lists, with respect to which the Company has not
received any notice of potential responsibility.
The Company is currently engaged in environmental remediation or has reason to
believe that remediation may be required at three properties currently operated
by the Company. The Company's Mesa, Arizona facility is currently listed on the
federal Comprehensive Environmental Response, Compensation, and Liability
Information System ("CERCLA") list of sites under review by U.S. Environmental
Protection Agency for inclusion on the NPL. In addition, the Mesa facility is
located within a state-designated groundwater contamination area and the Company
may consequently be identified as a PRP with respect to such contamination.
Although the Company believes that it is unlikely that its Mesa facility itself
will be designated as an independent NPL site, there can be no assurance that
the costs associated with further investigation and any cleanup at the site and
the Company's share of cleanup costs for the regional groundwater contamination
cleanup will not be material. Alumax has agreed to indemnify the Company for all
costs of required remediation including any required response costs at the Mesa
facility that may be incurred by the Company in excess of $500,000 (when
aggregated with all other environmental claims).
At the Company's Montreuil-Bellay, France facility, the Company has been
discharging wastewater potentially containing solvents to the ground at the
site. In addition, a spill from the facility's anodizing line may have resulted
in contamination of soil and groundwater. Because no subsurface investigation
has been conducted at the site, there can be no assurance that the costs
associated with each of these issues will not be material. As with the Mesa,
Arizona facility, however, Alumax has agreed to indemnify the Company for any
costs of required remediation including any required response costs with respect
to each of these issues that may be incurred by the Company in excess of
$500,000 (when aggregated with all other environmental claims).
At the Company's Corby, England facility, the Company has undertaken a
remediation of chromium-contaminated groundwater onsite, which remediation may
continue for a number of years. Although some upgrades to the groundwater
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treatment system may be required within the next year to complete the
remediation, the costs associated with such an upgrade and with the completion
of remediation at the site are not expected to be material. Alumax Inc. has
agreed to indemnify the Company for all of the costs of required remediation at
this site in excess of $500,000 (when aggregated with all other environmental
claims).
The Company has made and will continue to make capital expenditures to comply
with Environmental Laws. The Company spent approximately $1.9 million in 1995 on
environmental capital projects. These expenditures were primarily related to
environmental controls associated with a paint line upgrade in Lancaster,
Pennsylvania and a new coil coating facility in Helena, Arkansas. The Company
estimates that its environmental capital expenditures will be approximately $1.5
million in 1996 and $800,000 in 1997.
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BUSINESS
GENERAL
Euramax is a leading international producer of aluminum and steel products with
facilities in the U.S., the U.K., The Netherlands and France. Euramax's products
include painted sheet and coil, siding, roofing, raincarrying systems, windows,
doors and various fabricated trim parts and components. The Company is a leading
supplier to several niche markets. The Company believes that in 1995 it sold at
least 40% and 65% of the aluminum sidewalls used by RV manufacturers in the U.S.
and Europe, respectively. In the same year, the Company sold aluminum and steel
gutters and downspouts to more than 30 of the largest 50 home centers in the
U.S. The Company believes that in 1995 it sold at least 70% of all metal
Do-It-Yourself raincarrying products sold to U.S. home centers. The Company also
believes that it sold at least 40% of the steel siding sold to producers of
manufactured housing in the U.S.. Net sales for 1995 in the U.S. and Europe were
$287.7 million and $195.8 million, respectively.
Euramax operates downstream of aluminum and steel coil and ingot producers which
supply it with aluminum and steel coil and aluminum extrusions. The Company sold
approximately 139.2 and 160.7 million pounds of aluminum and steel,
respectively, in 1995. To a lesser extent, the Company also distributes and
fabricates products manufactured from vinyl and fiberglass. The Company's
products are sold primarily to manufacturers of RV's and manuactured housing,
rural building contractors, distributors and home centers.
Euramax is the only national supplier in several of its key U.S. product lines
and the only national supplier with in-house coil coating capabilities to supply
steel siding to manufactured housing customers and aluminum sidewalls to RV
manufacturers. This gives the Company a significant competitive advantage over
regional suppliers who do not have in-house manufacturing capabilities or
national distribution networks. In addition, extensive in-house manufacturing
capabilities coupled with product offerings made from alternate raw materials
better enable Euramax to react to changing customer preferences.
Euramax is a holding company formed by the Investor Group to acquire certain
portions of the fabricated products operations of Alumax pursuant to the
Acquisition. See "The Transactions." The Company's operations are conducted
through subsidiaries in the U.S. and Europe.
BUSINESS STRATEGY
The Company's strategy is to expand its leadership position as a producer of
aluminum and steel products and to further broaden its current diversity of
products, customers and geographic regions in which it operates. To enhance the
Company's operations and profitability, the Company expects to pursue a strategy
of identifying and acquiring businesses and assets that would enable it to offer
complementary products or expand geographic coverage. The Company believes that
its strategy of expanding market share, broadening the diversity of its
businesses and continuing to provide customers with superior products through a
responsive, efficient and cost effective distribution system will be an
effective means of increasing profitability while preserving cash flow
stability.
MARKET LEADERSHIP AND DIVERSITY OF BUSINESS
The Company's position as a leading international downstream producer of
aluminum and steel products has enabled it to benefit from diversification
across economic and product cycles among different geographic regions and
customer groups. This diversification has historically enabled Euramax to
maintain stable margins even though demand for certain products may be affected
by changes in general and regional economic conditions such as trends in
disposable income.
LEADERSHIP IN SEVERAL MARKETS: The Company's leadership in a variety of niche
markets has enabled it to maintain consistent operating results. For example,
the Company is a leading supplier of steel and aluminium sidewalls and siding to
U.S. RV and manufactured housing producers. The Company believes that its 1995
sales of raincarrying systems represent a majority of such products sold to U.S.
home centers. Similar leading positions are enjoyed by the Company's roll formed
aluminum sheet and coil products sold to RV manufacturers in the U.S. and
Europe.
MANUFACTURING EXPERTISE AND DIVERSITY OF PRODUCTS: The Company's technological
expertise and its ability to fabricate from alternative materials has allowed it
to develop new products and applications and to respond to the changing
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product requirements of its customers. Over time, Euramax has increased its
ability to offer products manufactured from steel, vinyl and fiberglass,
allowing it to meet regional material preferences, to provide substitute
products for end-users and to retain customers in the event of demand shifts
between raw materials.
GEOGRAPHIC DIVERSITY: The Company's sales span both the continental U.S. and
Europe, with each representing approximately 60% and 40% of 1995 net sales,
respectively. The Company has manufacturing or distribution facilities
strategically located in the U.K., The Netherlands, France and all regions of
the continental U.S. The Company's geographic diversity of sales limits reliance
on any single regional economy in the U.S. or national economy in Europe.
CUSTOMER DIVERSITY. The Company is diversified by both size and type of
customer. Of the Company's more than 3,700 customers, no single customer
accounted for more than 4.5% of net sales in 1995. The top ten customers
accounted for approximately 19.5% of 1995 net sales and represented five
distinct end-use markets. These characteristics minimize the Company's reliance
on individual customers or end-use markets.
DISTRIBUTION CAPABILITY. The Company's manufacturing and distribution network
consists of 29 strategically located facilities, of which 24 are located in all
major regions of the United States, and five are located in Europe. Euramax's
network of facilities allows the Company to offer a more comprehensive service
than its regional competitors and to meet the increasing demands of its
customers for short delivery lead times.
MANUFACTURING PROCESSES
The Company's manufacturing processes employ a variety of equipment and several
types of facilities. Management believes that the Company's effective deployment
of equipment enables it to manufacture standard and custom products efficiently
and economically. The Company has the equipment necessary for manufacturing
substantially all of its products in-house and is able to avoid most forms of
outsourcing. This capability provides certain marketing and pricing advantages,
including the ability to control delivery time and to develop new and customer
specific products more expeditiously than competitors without this capability.
The Company's manufacturing process generally begins with painting aluminum or
steel coil through a process known as roll coating. Once coated, the aluminum or
steel is further fabricated through selected processes which include tension
leveling, embossing, slitting, rollforming, stamping, brake pressing, notching
and bending. These processes complete the appropriate steps to fabricate a
finished product.
The Company's coating and fabrication capabilities are described in more detail
as follows:
COATING (PAINTING): Roll coating is the process of applying a variety of liquid
coatings to bare aluminum or steel coil, providing a baked-on finish that is
both protective and decorative. Over 100 million pounds of aluminum and over 30
million pounds of steel are roll coated by the Company at its eight roll coating
operations annually. The Company has three such coating lines in the U.S. and
five in Europe. The Company's roll coating facility in Roermond, The Netherlands
is one of only two facilities in the world capable of coating coil up to 100
inches in width. The Roermond line services a variety of expanding markets in
which wide coated aluminum is becoming increasingly important. Wide coils
provide customers with the opportunity to produce products more economically by
reducing labor costs and requiring fewer joints and seams in their manufacturing
processes.
The Company also employs powder coating on a line recently installed to paint
aluminum and steel sheets in the U.K. This line is one of only a few in the
world with the ability to paint customized and exotic finishes, allowing unique
design possibilities on aluminum and steel sheets. These finishes include
textures, patterns and decorative styling which have many different
applications. The Company coats aluminum extrusions on its two European powder
spray coating lines, which are located in France and in the U.K. Two of the
Company's lines in the U.S. are used to spray paint steel entry doors. A
specialized roller painting operation for appliance parts provides flexibility
in specialty decorating parts for certain appliance manufacturers.
Anodizing is an electrochemical process which alters an aluminum surface through
a controlled and accelerated oxidation process which, if desired, may also color
the material. Anodizing provides a high quality architectural finish to aluminum
extrusions which is demanded by certain customers. Anodizing is a key
manufacturing process offered by the Company at two of its European facilities.
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FABRICATION: After coating, much of the Company's coil is processed through
slitting operations which cut coils into more narrow widths. The cut coils may
then undergo a variety of downstream production processes which further
fabricate the aluminum and steel sheet to form the desired product. Fabrication
equipment includes rollformers, punch and brake presses and expanding machinery
for a variety of applications.
The Company also utilizes specialized equipment to inject and laminate foam to
provide insulation and rigidity to metal doors and panels. Production machinery
also includes equipment to bend, notch and cut aluminum and vinyl extrusions
required, together with glass, for the assembly of windows and doors.
PRODUCTS AND CUSTOMERS
The Company's products are sold to a diverse group of customers operating in a
variety of industries. Customers include:
- OEMs, including RV, commercial panel and appliance manufacturers
- Home Centers
- Manufactured Housing
- Distributors
- Rural Contractors
- Home Improvement Contractors
The table below lists the Company's key products, materials used, customers and
end-users, and sales regions:
<TABLE>
<CAPTION>
------------------------------------------------------------
SALES
PRODUCTS MATERIALS CUSTOMERS AND END-USERS REGIONS
- ------------------------------- -------------- ------------------------------- -----------
<S> <C> <C> <C>
Specialty Coated Coils Aluminum, OEMs, RV Manufacturers, Various Europe
(painting aluminum and steel Steel Building Panel Manufacturers
coils)
Roofing & Siding Aluminum, OEMs, RV Manufacturers, U.S.,
Steel, Vinyl, Manufactured Housing, Rural Europe
Fiberglass Contractors, Distributors,
Home Improvement Contractors
Raincarrying Systems (gutters, Aluminum, Home Centers, Manufactured U.S.,
downspouts) Steel, Vinyl Housing, Rural Contractors, Canada
Home Improvement Contractors
Soffit (roof overhangs), Fascia Aluminum, Home Centers, Manufactured U.S.
(trims), Flashing (roofing Steel Housing, Rural Contractors,
valley material) Home Improvement Contractors
Entry Doors Aluminum, OEMs, RV Manufacturers, U.S.,
Steel, Distributors, Home Improvement Europe
Fiberglass Contractors
Windows Aluminum, OEMs, RV Manufacturers, Home U.S.,
Vinyl Improvement Contractors Europe
Appliance Trims Aluminum, OEMs, Appliance Manufacturers U.S.
Vinyl
</TABLE>
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ORIGINAL EQUIPMENT MANUFACTURERS ("OEMS") (51.3% OF 1995 NET SALES)
The Company supplies OEMs such as RV manufacturers, commercial panel and
appliance manufacturers. The Company's principal OEM customers are described
below.
RECREATIONAL VEHICLE MANUFACTURERS. The Company is a leading supplier of
various aluminum products to RV manufacturers in the U.S. and Europe. These
products primarily consist of painted aluminum sheet and fabricated painted
aluminum panels. The Company uses its decorative graphic coating lines to
produce aluminum panels with decorative detailing in a variety of colors. The
Company also supplies RV doors, windows and finished aluminum roofing panels. In
addition, the Company began supplying laminated aluminum and fiberglass panels
to RV manufacturers in 1995.
The Company believes its decorative coating capabilities in the U.S. and in
Europe provide a technological advantage not enjoyed by its competitors. These
capabilities enable the Company to paint a stripe or other decorative pattern
directly onto the aluminum sheet according to customer specifications.
Competitors do not have these abilities; instead, they offer a decorative tape
which must be applied to the aluminum sheet. The tape cannot be applied with the
tight tolerances achieved by the Company's painting process, and does not offer
the same graphics variety. In response to demand for laminated products in the
U.S. markets, the Company recently opened a lamination line which can laminate,
among other things, fiberglass and aluminum.
COMMERCIAL PANEL MANUFACTURERS: The Company sells painted aluminum coil to
customers who produce commercial building panels. These panels become part of a
total package of commercial building wall panels and facades. The Company also
produces a composite "sandwich" building panel comprised of two aluminum skins
with a polystyrene core, which insulates and abates noise. The panels are used
in both residential (e.g., room additions and patio enclosures) and commercial
applications (e.g., service stations and school buildings), as well as in the
construction of "cold rooms" used for the storage of perishable goods.
APPLIANCE MANUFACTURERS: The Company enjoys a leading position in the U.S.
niche market for decorated refrigerator trims. The Company provides door trims,
drawer fascias, shelf fronts, handles and freezer trims under contracts with the
five largest U.S. home appliance manufacturers. In 1993, the Company added vinyl
extruding capabilities in response to market changes and growing preference for
vinyl extruded parts. The Company intends to utilize its expertise to produce
and market its products in other applications including other appliances and
automobiles. In Europe, the Company provides coated coil to certain appliance
manufacturers for additional fabrication.
OTHER MANUFACTURERS: The Company also uses its decorative and coil coating
capabilities for products supplied to overhead door manufacturers and producers
of refrigerated transport containers. Door manufacturers produce the overhead
doors, adding the necessary hardware and accessory items to complete the
product. Transport container manufacturers represent a growing market for the
Company's products.
HOME CENTERS (19.5% OF 1995 NET SALES)
The Company's home center customers supply the well-established Do-It-Yourself
("DIY") market in the U.S., Canada, the United Kingdom and The Netherlands. The
Company sells building and construction products, such as residential rain
gutter systems, roof flashing products, soffits, fascias, doors, screen door
guards, shower, patio, steel roofing and siding, and residential doors. These
products, which are designed for ease of installation by DIY consumers, are
produced with aluminum, galvanized or painted steel, or occasionally with vinyl
depending on geographic preference. Home centers include small hardware stores,
large cooperative buying groups, lumberyards and major home center retailers.
The Company believes that it is the leading supplier of DIY metal raincarrying
systems in the U.S. Competitors are generally regional and thus do not have the
advantages of a nationwide service and distribution network such as those
enjoyed by the Company. In addition, the Company has invested in a product bar
coding system which can be used by the sophisticated inventory scanning systems
prevalent in home centers. The Company expects to exploit these strengths to
introduce additional DIY products that could be sold through this distribution
channel.
MANUFACTURED HOUSING (10.3% OF 1995 NET SALES)
The Company sells rollformed steel siding and trim parts to producers of
manufactured housing in the U.S. These products are used for exterior walls and
roofs. The Company is the only supplier of steel siding to the manufactured
housing industry that has metal coating capabilities. In addition to the raw
material cost benefit, the Company views itself as an innovator in the market
for colors and decorative coating. The Company can also meet the demands of the
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<PAGE>
industry's short lead time requirements and easily supply national accounts with
its large network of facilities. The Company has significantly increased its
market share in steel siding in the manufactured housing industry over the last
three years.
In addition to steel siding, the Company also fabricates and supplies a variety
of steel and aluminum trim components for manufactured home exteriors. To a
lesser degree, the Company also distributes vinyl siding to certain customers in
the manufactured housing industry.
DISTRIBUTORS (8.1% OF 1995 NET SALES)
The Company sells to distributors (and stockists) which perform as service
centers for the next tier of customers in both the U.S. and Europe. A
distributor will typically purchase coil which is later broken down or
fabricated prior to resale. The Company markets residential steel entry door
blanks through millwork distributors, which specialize in windows, doors and
associated building products. Other residential building products sold through
distributors include a wide range of metal roof flashing materials, painted
aluminum trim coil, rain gutter, fascia/soffit systems and drip edges.
RURAL CONTRACTORS (7.4% OF 1995 NET SALES)
The Company supplies aluminum and steel roofing and siding products to rural
contractors for use in agricultural and rural buildings such as sheds and animal
confinement buildings. The Company sells its products to traditional rural
contractors, including building supply dealers, building and agricultural
cooperatives, and animal confinement integrators. Building suppliers and
agricultural cooperatives typically purchase smaller quantities of product at
multiple locations whereas contractors and integrators generally purchase large
volumes for delivery to one site.
HOME IMPROVEMENT CONTRACTORS (3.4% OF 1995 NET SALES)
The Company sells a variety of products to home improvement contractors, the
most significant of which are vinyl replacement windows. Other products sold to
home improvement contractors include awnings, lattice systems, metal roofing,
shower doors, patio and entrance doors, and insulated roofing panels. In the
U.S., the Company offers a full complement of vinyl replacement windows. In the
U.K., the Company produces patio, entrance, and shower doors, marketed primarily
to home improvement contractors. The Company is also one of the largest
suppliers of lattice and painted aluminum awnings to residential contractors in
the western U.S. In addition, the Company manufactures painted aluminum and
steel panels for residential roofing, which are distributed primarily in the
Pacific Northwest. Although metal roofing costs more than traditional asphalt
shingles, it is becoming more popular due to its fire resistance, aesthetic
appeal, low cost maintenance and longer life span.
SALES AND MARKETING
The Company's sales and marketing effort is organized on a decentralized basis
in order to provide the required services to the broad customer and geographic
mix with which Euramax is involved. Each major operating unit in the Company has
a Sales/Marketing Manager (Director) with an appropriate amount of Company-paid
sales people and/or external sales representatives reporting to that function.
Further, in virtually all locations of the Company an inside sales correspondent
position exists to support the outside selling effort and serves as a liaison
with the Company's customers.
Company-paid sales people are compensated with a base salary and also receive a
performance-based incentive commission. Sales representatives who are not
Company employees are compensated on a commission schedule.
RAW MATERIALS
The Company's products are principally manufactured from aluminum coils and
extrusions and steel coils. During 1995, approximately 139.2 million pounds of
aluminum products and approximately 160.7 million pounds of steel were sold.
However, the proportion sold in 1995 by value is $316.3 million of aluminum and
$120.4 million of steel. Steel weighs approximately three times as much as the
same volume of aluminum. In addition, the Company sold $51.2 million of products
manufactured from materials other than aluminum and steel in 1995.
All the Company's raw material inputs are sourced from external suppliers. The
Company purchases its steel and aluminum sheet requirements from several foreign
and domestic aluminum and steel mills. Management believes there is sufficient
supply in the marketplace to competitively source all of its requirements
without reliance on any particular supplier. The Company's large volume of
aluminum and steel purchases afford it competitive market pricing.
45
<PAGE>
The steel coil used by the Company, light gauge galvanized steel sheet, has a
stable price history relative to aluminum and its price fluctuations have been
relatively easy to pass on to the Company's customers. The table below
illustrates the relative aluminum and steel prices paid by the Company during
the last 10 years.
[GRAPH]
Aluminum raw material cost increases and decreases can temporarily affect the
Company's margins. Supplier price increases, of normal frequency and amount, can
be passed on to customers usually within two to four months. Conversely, as
aluminum prices decline, corresponding price reductions are typically passed on
to customers.
The Company continually scrutinizes aluminum costs and adjusts its purchasing,
inventory and sales programs accordingly. At certain times, the Company adopts a
strategy of locking in margins on long-term, higher volume contracts by buying
aluminum at a fixed price in order to guarantee a margin on a specific customer
order. At times, high aluminum prices have led customers to use alternative
products, including steel, vinyl and fiberglass. The Company believes that its
ability to supply certain of its products manufactured from these alternatives
to aluminum provides it with a competitive advantage over competitors who do not
offer these choices.
COMPETITION
In the U.S., competition comes largely from privately held companies that are
generally much smaller than the Company. In Europe, competitors of the Company
include three to four integrated companies in the specialty coil-coating
business. Other smaller companies compete with the Company in the building and
construction, RV and transportation markets in Europe, both on a regional basis
and some on a pan-European basis.
LEGAL PROCEEDINGS
The Company and its subsidiaries are not currently parties to any pending legal
proceedings other than such proceedings incident to its business. Management
believes that such proceedings would not, individually or in the aggregate,
reasonably be expected to have a material adverse effect on the consolidated
financial position or results of operations of the Company and its subsidiaries
taken as a whole.
ENVIRONMENTAL, HEALTH AND SAFETY MATTERS
The Company's U.S. and European facilities, like similar manufacturing
facilities, are subject to a range of federal, state, local and foreign
environmental and occupational health and safety laws, including those laws
which relate to air emissions, wastewater discharges, the handling and disposal
of solid and hazardous waste, and the remediation of contamination associated
with the current and historic use of hazardous substances or materials. If a
release of hazardous substances or materials occurs on or from the Company's
properties or any offsite disposal location used by
46
<PAGE>
the Company, or if contamination from prior activities is discovered at any of
the Company's properties, The Company may be held liable for the costs of
remediation, (including any response costs), natural resource damages and
associated transaction costs. While the amount of such liability could be
material, the Company devotes resources to ensuring that its current operations
are conducted in a manner that reduces such risks.
Based upon an environmental review conducted by outside consultants in
connection with the Acquisition and assuming compliance by Alumax with its
indemnification obligations under the Acquisition Agreement, the Company
believes that it is currently in compliance with, and not subject to liability
under, Environmental Laws except where such noncompliance or liability would not
reasonably be expected to have a material adverse effect on the consolidated
financial position or results of operations of the Company and its subsidiaries
taken as a whole. Pursuant to the terms of the Acquisition Agreement, Alumax has
agreed to correct and to bear substantially all costs with respect to certain
identified conditions of potential noncompliance and liability under
Environmental Laws, none of which costs are currently believed to be material.
Alumax's indemnification obligations under the Acquisition Agreement are not
subject to an aggregate dollar limitation with respect to specifically
identified environmental matters. However, with respect to all other
environmental matters, Alumax's obligations are limited to $125.0 million. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operation -- Environmental Matters."
47
<PAGE>
PROPERTIES
The Company's principal business office and headquarters is located in Uxbridge,
England, with executive offices located in Norcross (Atlanta), Georgia. The
principal facilities of the Company are listed below:
<TABLE>
<CAPTION>
----------------------------------------
SQUARE
FACILITY FUNCTION FEET
- ------------------------------ ----------------------------- ---------
<S> <C> <C>
U.S.
Anaheim, CA Manufacturing (Leased) 15,000
Bedford Park, IL Manufacturing (Leased) 70,000
Bloomsburg, PA Manufacturing (Leased) 96,000
Bristol, IN Manufacturing (Owned) 110,115
Bristol, IN Office (Leased) 3,454
Carrollton, KY Manufacturing (Owned) 127,000
Dallas, TX Office (Leased) 12,230
Elkhart, IN Manufacturing (Leased) 60,000
Grand Prairie, TX Manufacturing (Leased) 45,281
Lancaster, PA Manufacturing (Owned) 220,000
Loveland, CO Manufacturing (Leased) 20,133
Mansfield, TX Manufacturing (Owned) 55,280
Marshfield, Wl Manufacturing (Owned) 28,200
McPherson, KS Manufacturing (Owned) 35,000
Mesa, AZ Manufacturing (Leased) 30,200
Moulton, AL Manufacturing (Owned) 39,152
Norcross, GA Executive Offices (Leased) 3,627
Ocala, FL Manufacturing (Leased) 85,190
Reidsville, NC Manufacturing (Leased) 62,575
Richmond, IN Office and Manufacturing 82,720
(Leased)
Romoland, CA Manufacturing (Owned) 65,500
Sacramento, CA Manufacturing (Leased) 40,800
Stayton, OR Manufacturing (Leased) 35,733
Tifton, GA Manufacturing (Leased) 55,600
Tucker, GA Manufacturing (Leased) 35,000
West Sacramento, CA Manufacturing (Leased) 70,000
West Helena, AR Manufacturing (Owned) 230,000
EUROPE
Corby, England Manufacturing (Owned) 171,000
Pudsey, England Manufacturing (Owned & 211,200
Leased)
Uxbridge, England Headquarters (Leased) 1,400
Andrezieux-Boutheon, France Manufacturing(Owned) 69,968
Montreuil-Bellay, France Manufacturing (Owned) 178,663
Roermond, The Netherlands Manufacturing (Owned) 208,216
</TABLE>
48
<PAGE>
EMPLOYEES
As of September 25, 1996, the Company employed 2,210 people of which 803 were
employed in Europe and 1,407 were employed in the United States. Of these 2,182
employees, 36% were salaried and 64% were hourly employees. The hourly employees
at the plants listed below are covered by collective bargaining agreements.
<TABLE>
<CAPTION>
----------------------------------------------------------
EXPIRATION NUMBER OF
PLANT DATE UNION EMPLOYEES
- -------------------- ----------- --------------------------------- ----------
<S> <C> <C> <C>
BUILDING PRODUCTS
Elkhart, IN 4/25/97 Clothing and Textiles Workers 80
Perris Valley, CA 4/30/97 Aluminum, Brick and Glass Local 50
#380
Reidsville, NC 10/1/97 Teamsters Local #391 35
Bristol, IN 5/5/98 Machinists and Aerospace Local 43
#1315
HOME PRODUCTS
Bedford Park, IL 1/14/99 Teamsters Local #781 28
DOOR PRODUCTS
Richmond, IN 2/21/98 Machinists and Aerospace Local 72
#2532
SPECIALTY PRODUCTS
Carrollton, KY 5/15/97 Aerospace Workers Local #1420 105
</TABLE>
The Company and its subsidiaries are not party to any pending labor proceedings
and believe that employee relations are satisfactory.
49
<PAGE>
GLOSSARY
ALUMINUM SHEET: A semi-fabricated aluminum product produced from ingot or
continuous cast aluminum at a rolling mill by reducing the gauge through a
series of pressure rolls (thickness varies from .006 inch to .25 inch).
ANODIZING: An electrochemical finishing process which creates a protective
and/or decorative aluminum oxide layer on aluminum.
BLANKS: Two galvanized steel skins with a core of polyurethane insulation.
BRAKE PRESS: A mechanical device which bends a metal sheet to a pre-specified
angle.
CARAVAN: European terminology for a recreational vehicle.
COATING: A process of applying a protective and/or decorative layer of paint to
metal.
COIL: A strip of material wound in a spiral fashion with slit edges.
COMPOSITE PANEL: A panel product comprised of two or more different materials.
EMBOSSING: Raising a design in relief against a surface.
EXTRUSION: A product formed by forcing material through a die, typically at an
elevated temperature. This process is referred to as an extrusion process.
FASCIA: A flat band used to cover exposed ends of roof rafters.
FLASHING: Sheet metal or weather stripping used to reinforce and waterproof the
joints and angles of a roof.
LAMINATING: A bonding technique used to permanently attach two different
materials.
LINEALS: An aluminum or vinyl extruded shape used in the building and
construction industry to make finished products such as windows and doors.
MANUFACTURED HOUSING: Homes primarily built in an enclosed factory and
subsequently relocated to the homesite.
MILL FINISH: The unpainted, unpolished appearance of rolled aluminum sheet
before it receives any finishing surface treatment.
NOTCH: A fabricating process that removes a small section of metal allowing a
final forming of the shape.
OEM: Original equipment/product manufacturer.
POWDER COATING: A process in which a material is coated with a dry, finely
divided thermoplastic resin which is subsequently thermally fused into a
continuous protective and/or decorative film.
ROLL FORMING: A process in which a metal strip or sheet is driven through a
series of rolling die pairs to progressively form a shape.
SOFFIT: The area at the eave line under roof rafters of a dwelling.
STOCKIST: European terminology for a distributor.
TENSION-LEVELING: A process in which a strip or coil of metal is placed in
tension to eliminate the crown and non-flat characteristics primarily across its
width.
50
<PAGE>
MANAGEMENT
DIRECTORS AND KEY OFFICERS
The following sets forth certain information with respect to the persons who are
members of the Board of Directors and key officers of the Company and its
subsidiaries.
<TABLE>
<CAPTION>
------------------------------------------------
NAME AGE POSITION
- --------------------------- --- ------------------------------------------
<S> <C> <C>
J. David Smith 47 Chief Executive Officer, President and
Director
Frank T. Geist 51 Executive Vice President
R. Scott Vansant 35 Vice President, Finance and Administration
Mitchell B. Lewis 34 President, General Manager -- Amerimax
Building Products, Inc.
Neil E. Bashore 47 President, General Manager -- Amerimax
Home Products, Inc.
Jo Cuypers 56 Managing Director -- Euramax Coated
Products B.V.
Roger A. Walters 55 Managing Director -- Euramax Coated
Products Limited
David C. Pugh 47 Managing Director --Ellbee Ltd.
Joseph M. Silvestri 35 Director
Richard M. Cashin 43 Director
William Ty Comfort 30 Director
Rolly van Rappard 35 Director
Paul E. Drack 69 Director
</TABLE>
J. DAVID SMITH has been President of AFP since 1990 and was appointed a Vice
President of Alumax in 1994. Mr. Smith's career in the fabricated products
industry spans twenty-five years, starting with various operational
responsibilities with Howmet Aluminum Corp. ("Howmet Aluminum"). In 1983, Mr.
Smith joined Alumax as General Manager of the Building Specialties Division and
became President of Alumax Home and Specialty Products Group in 1988.
FRANK T. GEIST has been Group Vice President of AFP since 1993. Prior to 1993,
Mr. Geist served as Vice President, General Manager of Amerimax Home Products,
Inc. Mr. Geist's career in the fabricated products industry began twenty-five
years ago with various operational responsibilities with Howmet Aluminum.
R. SCOTT VANSANT joined Alumax in 1991. From 1995 to 1996, Mr. Vansant served as
Director of Internal Audit for Alumax. Mr. Vansant also served in various
operational positions with Alumax Building Products, Inc., including serving as
Controller of the division from 1993 to 1995. Prior to 1991, Mr. Vansant worked
as a Certified Public Accountant for Ernst & Young L.L.P.
MITCHELL B. LEWIS has been General Manager of Amerimax Building Products, Inc.
from 1993 to 1996 and Assistant General Manager of Amerimax Building Products,
Inc. from 1991 to 1993. Prior to 1991, Mr. Lewis served as corporate counsel
with Alumax. Prior to joining Alumax, Mr. Lewis practiced law, specializing in
mergers and acquisitions.
NEIL E. BASHORE has been General Manager of Amerimax Home Products, Inc. from
1993 to 1996. From 1981 to 1993, Mr. Bashore served as Manufacturing Manager of
Amerimax Home Products, Inc. and has served in other management positions with
the since 1975.
51
<PAGE>
JO CUYPERS has been Managing Director of Euramax Coated Products B.V. since
1979. From 1970 to 1979, Mr. Cuypers served in various management positions with
Euramax Coated Products B.V. Prior to joining Euramax Coated Products B.V., Mr.
Cuypers held several positions with other companies in related industries, thus
bringing his total experience to nearly forty years.
ROGER A. WALTERS has been Managing Director of Euramax Coated Products Ltd.
since 1983. Prior to 1983, Mr. Walters held various technical and managerial
positions with Alcan, Inc. Mr. Walters has served on various trade associations
and is currently the Chairman of the Statistics Group for the European Coil
Coaters Association.
DAVID C. PUGH has been Managing Director of Euramax Ellbee Ltd. since 1996. Mr.
Pugh has held several positions with Alumax over the past twenty years,
including Sales Director and Production Director of Euramax Ellbee Ltd.
JOSEPH M. SILVESTRI has been a director of the Company since its inception. Mr.
Silvestri has been employed by Citicorp Venture Capital, Ltd. since 1990 and has
been a Vice President since 1995. Mr. Silvestri is a director of International
Media Group, Polyfibron Technologies, Frozen Specialties, Glenoit Mills and
Triumph Group.
RICHARD M. CASHIN became a director of the Company upon consummation of the
Transactions. Mr. Cashin has been employed by Citicorp Venture Capital, Ltd.
since 1980 and has been a Managing Director since 1991. Mr. Cashin is a director
of Levitz Furniture Incorporated, Lifestyle Furnishings International, and Titan
Wheel International Inc.
WILLIAM TY COMFORT became a director of the Company upon consummation of the
Transactions. Mr. Comfort has been employed by CVC Capital Partners, Ltd. since
1995. Mr. Comfort is currently an Assistant Director.
ROLLY VAN RAPPARD became a director of the Company upon consummation of the
Transactions. Mr. van Rappard has been employed by CVC Capital Partners B.V.
since 1988 and has been a Managing Director since 1993. Mr. van Rappard is
currently a director of, among other companies, Saybolt International B.V.,
Docdata B.V. and Hoogenbosch Retail Group B.V.
PAUL E. DRACK became a director of the Company in December 1996. Mr. Drack
retired from AMAX Inc. in December 1993 after serving as President and Chief
Operating Officer from 1991. From 1995 to 1991, Mr. Drack was employed in
various positions with Alumax Inc. serving as President and Chief Executive
Officer from 1986.
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth the aggregate cash compensation paid to, or
accrued by the Company for the Company's executive officers during the year
ended December 31, 1996.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
--------------------- ALL OTHER
NAME AND PRINCIPAL POSITION SALARY BONUS COMPENSATION (1)
- ------------------------------------------------------------------------- ---------- --------- -----------------
<S> <C> <C> <C>
J. David Smith, Chief
Executive Officer, President and Director............................... $ 174,855 $ 93,840 $ 6,696
Frank T. Geist, Executive Vice President................................. $ 137,436 $ 65,563 $ 5,756
</TABLE>
- ------------------------
(1) Other compensation consists entirely of Company matching contributions to
401(k) plans.
PENSION PLAN
The Company has adopted an unfunded supplemental executive retirement plan (the
"SERP") for Mr. Smith and Mr. Geist which is designed to supplement benefits
payable under other plans of the Company. The annual benefit, payable in the
form of a life annuity, is $110,00 for Mr. Smith and $45,000 for Mr. Geist upon
retirement at age 65. Annual benefits payable under the SERP are reduced for
participants retiring before age 65.
COMPENSATION OF DIRECTORS
Directors who are not executive officers of the Company are entitled to an
annual fee of $15,000. Directors are reimbursed for out-of-pocket expenses
incurred in connection with attending meetings.
52
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
There is currently no compensation committee of the Board of Directors. The
Board of Directors make compensation decisions for executive officers. In
general, the principal decisions respecting compensation of executive officers
are made by the Board of Directors. Mr. Smith is a Director but does not
participate in any vote regarding his own compensation.
EMPLOYMENT AGREEMENTS
Mr. Smith is party to an employment agreement with the Company which expires on
September 25, 1997. The agreement provides for a minimum annual salary of
$212,000 and bonuses based on the achievement of certain operating income and
return on asset targets established by the Board of Directors of the Company in
consultation with Mr. Smith. Subject to certain exceptions, in the event Mr.
Smith is terminated by the Company (other than for cause), Mr. Smith will be
entitled to receive his annual salary for a period of twenty-four months
following the date of such termination.
Mr. Geist is party to an employment agreement with the Company which expires on
September 25, 1997. The agreement provides for a minimum annual salary of
$165,000 and bonuses based on the achievement of certain operating income and
return on asset targets established by the Board of Directors of the Company in
consultation with Mr. Geist. Subject to certain exceptions, in the event Mr.
Geist is terminated by the Company (other than for cause), Mr. Geist will be
entitled to receive his annual salary for a period of twenty-four months
following the date of such termination.
Each of the Employment Agreements also require the Company to maintain benefits
for Mr. Smith and Geist equal to: (i) basis and supplemental life insurance in
total equal to 4-1/2 times base pay, (ii) accidental death and dimemberment
insurance equal to 4-1/2 times base pay, and (iii) long-term disability
insurance equal to 2/3 base pay plus target bonus.
MANAGEMENT EQUITY PARTICIPATION
In connection with the Acquisition, in order to provide financial incentives for
certain of its employees, the Company provided for certain rights with respect
to the Ordinary Shares and the Preference Shares purchased by the Management
Investors. On the Closing Date, the Management Investors purchased an aggregate
of approximately $1.0 million of Ordinary Shares and Preference Shares. The
Ordinary Shares and Preference Shares of the Management Investors are subject to
certain call provisions exercisable by the Company and/or the Investor Group in
the event of the termination of a Management Investor's employment with the
Company and its subsidiaries. See "The Transactions."
DESCRIPTION OF PREFERENCE SHARES
As part of the Equity Contribution, the Company issued 34,000,000 Preference
Shares for a purchase price of $34.0 million (the "Liquidation Value") to the
Investor Group, the Management Investors and an affiliate of Paribas. Dividends
shall accrue on the Preference Shares at a rate of 14% per annum and shall
accumulate and compound on a quarterly basis. Upon the Closing Date, the Company
had outstanding 1,000,000 Ordinary Shares and 34,000,000 Preference Shares. The
Preference Shares rank prior to the Ordinary Shares upon liquidation and in
respect of dividends and redemption. The vote of 66 2/3% of the holders of the
Preference Shares, voting as a separate class, is required to (i) cause the
Company to direct its subsidiaries to make distributions to the Company
sufficient to enable the Company to pay dividends on the Preference Shares and
(ii) cause the redemption of the Preference Shares upon the occurrence of
certain events. Except as described in the foregoing and as otherwise required
by law, the Preference Shares are not entitled to vote. The Preference Shares
are subject to mandatory redemption on December 31, 2007. Upon redemption, a
holder of Preference Shares is entitled to receive for each Preference Share
redeemed its per share Liquidation Value plus accrued and unpaid dividends.
53
<PAGE>
SECURITY OWNERSHIP
As of the date hereof, all of the Company's issued and outstanding equity
interests were owned by the Investor Group, the Management Investors and an
affiliate of Paribas. The following table sets forth certain information with
respect holders of 10% or more of the Ordinary Shares and the Preference Shares
following consummation of the Transactions.
<TABLE>
<CAPTION>
---------------------------
PERCENTAGE PERCENTAGE OF
OF ORDINARY PREFERENCE
NAME AND ADDRESS OF BENEFICIAL OWNER SHARES SHARES
- ------------------------------------------------------- ------------ -------------
<S> <C> <C>
ACP (1) 39.6% 43.835%
6099 Riverside Drive, Suite 201
Dublin, Ohio 43017
CVC Europe 39.6% 43.835%
P.O. Box 87
18 Grenville Street
St. Helier, Jersey
JE4 8PX, Channel Islands
Management Investors 12.0% 2.588%
</TABLE>
- ------------------------
(1) ACP is an affiliate of Citicorp Venture Capital, Ltd.
CERTAIN TRANSACTIONS
SHAREHOLDERS AGREEMENT AND ARTICLES OF ASSOCIATION
On the Closing Date, the Company, the Investor Group, the Management Investors
and an affiliate of Paribas entered into a shareholders agreement (the
"Shareholders Agreement") which contains certain agreements among such parties
with respect to the equity interests and corporate governance of the Company.
The Board of Directors of the Company is initially comprised of five members.
ACP and CVC Europe each have the right to appoint two directors. J. David Smith
is a director for as long as he is Chief Executive Officer of the Company.
Pursuant to the Shareholders Agreement and the Articles of Association of the
Company, the disposition of Ordinary Shares and Preference Shares is restricted.
The Shareholders Agreement and the Articles of Association also contain certain
participation rights, approval rights and rights of first refusal exercisable by
ACP and CVC Europe in the event of certain sales or proposed sales of equity
interests by the other.
REGISTRATION RIGHTS AGREEMENT
On the Closing Date, the Company entered into a registration rights agreement
(the "Registration Agreement") with certain of the Company's existing
shareholders. Pursuant to the terms of the Registration Agreement, such
shareholders have the right to require the Company, at the Company's sole cost
and expense and subject to certain limitations, to register under the Securities
Act or list on any internationally recognized stock exchange all or part of the
Ordinary Shares held by such shareholders (the "Registrable Securities"). All
such shareholders will be entitled to participate in all registrations by the
Company or other shareholders, subject to certain limitations. In connection
with all such registrations, the Company has agreed to indemnify all holders of
Registrable Securities against certain liabilities, including liabilities under
the Securities Act and other applicable state or foreign securities laws.
Registrations pursuant to the Registration Agreement will be made, if
applicable, on the appropriate registration form and may be underwritten
registrations.
DESCRIPTION OF CREDIT AGREEMENT
GENERAL. AFP, Euramax Europe Limited, Europe B.V., Holdings U.K. and Euramax
Netherlands B.V. (collectively, the "Borrowers"), the Company, Euramax U.K.,
Euramax B.V., Amerimax, the US Operating Companies, the UK Operating Companies
and Euramax Coated Products B.V. (each of the foregoing entities, including each
Borrower, being a "Loan Party") entered into the Credit Agreement with Paribas,
as agent, and certain other financial institutions (collectively
54
<PAGE>
with Paribas, the "Lenders"). The information relating to the Credit Agreement
is qualified in its entirety by reference to the complete text of the documents
entered into in connection therewith. The following is a description of the
general terms of the Credit Agreement.
The Credit Agreement provides for $40.0 million of Term Loans and a Revolving
Credit Facility of $85.0 million, a portion of which will be available for
letters of credit and swing loans. On the Closing Date, the Loan Parties
borrowed approximately $100.0 million under the Credit Agreement, consisting of
$40.0 million of Term Loans and $60.0 million under the Revolving Credit
Facility. The $25.0 million undrawn amount under the Revolving Credit Facility
is available for working capital and general corporate purposes subject to
borrowing base eligibility. As of the Closing Date, all of this amount was
available. The following chart illustrates the organizational structure of the
Company and its first and second tier subsidiaries, all of which are holding
companies.
[CHART]
Euramax expects to consolidate certain of its subsidiaries in order to simplify
its organizational structure and achieve certain tax consequences.
SECURITY. The obligations of the Loan Parties under the Credit Agreement are
unconditionally and irrevocably guaranteed by each Loan Party (as defined
above), except that the guarantees made by Euramax B.V., Euramax U.K., Euramax
Netherlands B.V. and Euramax Europe Limited and their subsidiaries exclude the
indebtedness incurred by AFP under the Revolving Credit Facility; and the
guarantees made by certain of the Loan Parties exclude, until certain conditions
are met, the indebtedness incurred by Holdings U.K. and Europe B.V. and their
subsidiaries to finance the Acquisition of such Loan Party's capital stock or to
pay related fees and expenses. In addition, the Credit Agreement and the
guarantees thereunder are secured by: (i) a first priority security interest in
all of the assets and properties (including, without limitation, accounts
receivable, cash, cash equivalents, inventory, real property, leases, bank
accounts, lockbox accounts, stock, stock equivalents, machinery, equipment,
contracts and contract rights, trademarks, copyrights, patents, license
agreements and general intangibles) of each Loan Party and each subsidiary of
each Loan Party (whether such subsidiary is now owned or hereafter acquired);
and (ii) a first priority perfected pledge of all capital stock and stock
equivalents and certain intercompany notes of all direct or indirect
subsidiaries of Euramax (whether such subsidiary is now owned or hereafter
acquired); provided that (a) none of the collateral pledged by Euramax B.V.,
Euramax U.K., Euramax Netherlands B.V., Euramax Europe Limited, Holdings U.K.
and Europe B.V. and their subsidiaries also secures AFP's indebtedness under the
Revolving Credit Facility and, in addition, no collateral pledged by Holdings
U.K. and Europe B.V. and their subsidiaries will secure, until certain
conditions are met, indebtedness under the Credit Agreement incurred to finance
the Acquisition of such Loan Party's capital stock or to
55
<PAGE>
pay related fees and expenses; (b) only 65% of the stock of Euramax B.V.,
Euramax S.A., and Euramax U.K. pledged by the Company secures AFP's indebtedness
under the Revolving Credit Facility; and (c) no stock of any subsidiary of
Euramax S.A. is collateral for any indebtedness under the Credit Agreement.
LOANS AND CURRENCIES. The Term Loans consist of three facilities in an
aggregate amount of $40.0 million. Two of the facilities, which aggregate to
$20.0 million, consist of (i) a Dutch Guilders facility available to Euramax
Netherlands B.V. and (ii) a Pound Sterling facility available to Euramax Europe
Limited. The third facility is a U.S. dollar facility in the amount of $20.0
million available to AFP, Euramax Netherlands B.V. and Euramax Europe Limited
(the "Tranche B Facility" and collectively, with all other term loan facilities,
the "Term Loan Facilities"). Loans made under the Revolving Credit Facility will
be made, at the election of the applicable Borrower, in U.S. Dollars, Dutch
Guilders and/or Pound Sterling. All loans made under the Term Loan Facilities
and the Revolving Credit Facility shall be repaid in the currency in which such
loan was made.
INTEREST. At the option of the applicable Borrower, the interest rate per annum
applicable to the loans under the Credit Agreement is based upon the (a) Base
Rate (as defined in the Credit Agreement) plus (i) 1.75% (in the case of the
Revolving Credit Facility and all Term Loans except the Tranche B Facility) or
(ii) 2.25% (in the case of the Tranche B Facility), or (b) Eurocurrency Rate (as
defined in the Credit Agreement) for one, two, three or six months, plus 2.75%
(in the case of the Revolving Credit Facility and all Term Loans except the
Tranche B Facility) or 3.25% (in the case of the Tranche B Facility); PROVIDED,
however, the interest rates are subject to being increased if an Event of
Default (as defined in the Credit Agreement) is continuing.
MATURITY. Outstanding loans under the Revolving Credit Facility and all Term
Loans except the Tranche B Facility must be repaid in September 2001; PROVIDED,
however, that subject to the consent of Paribas and any other Lender under the
Revolving Credit Facility, the Borrowers will have the option, exercisable on
the fourth year anniversary date of the Closing Date to extend the final
maturity date of the Revolving Credit Facility to September 2003. Outstanding
loans under all Term Loans except the Tranche B Facility amortize quarterly over
five years with amortization payments totaling $450,000 in the remainder of
1996, $2.3 million in 1997, $3.8 million in 1998, $3.8 million in 1999, $4.3
million in 2000 and $5.35 million in 2001. Outstanding loans under the Tranche B
Facility must be repaid in September 2003. The Tranche B Facility amortizes
quarterly over seven years with amortization payments totaling $50,000 in the
remainder of 1996, $200,000 per year in 1997 through 2000, $2.525 million in
2001, $9.5 million in 2002 and $7.125 million in 2003. Loans made pursuant to
the Revolving Credit Facility may be borrowed, repaid and reborrowed from time
to time until the fifth anniversary of the Closing Date (or, at the option of
the applicable Loan Party and with the consent of Paribas and any other Lender
under the Revolving Credit Facility, until the seventh anniversary of the
Closing Date), subject to the satisfaction of certain conditions on the date of
any such borrowing and except that no loans made under the Revolving Credit
Facility to Euramax Europe Limited or Euramax Netherlands B.V. will be made
after the Closing Date.
CONDITIONS TO EXTENSION OF CREDIT. The obligation of the Lenders to make loans
or extend letters of credit after the Closing Date will be subject to the
satisfaction of certain customary conditions including the absence of a default
or an event of default under the Credit Agreement.
COVENANTS. The Credit Agreement requires the Company to meet certain financial
tests, including minimum fixed charge coverage ratio, minimum interest coverage
ratio, maximum leverage ratio, minimum EBITDA requirements and maximum amounts
of capital expenditures. Minimum fixed charge coverage ratios of 1.00, 1.05 and
1.10 are required to be maintained as of each quarter end in the periods ended
September 30, 1998, 1999 and 2000, respectively. For quarters ending after
September 30, 2000, minimum fixed charge coverage required is 1.15. Minimum
interest coverage of 1.15 is required as of December 31, 1996 and increases
quarterly to 2.23 at September 30, 2003. Maximum leverage of 6.00 is allowed as
of December 31, 1996. This maximum declines quarterly to 3.5 at September 30,
2003. Minimum EBITDA of $39.0 million is required for the year ended December
31, 1997. This minimum requirement increases to $48.6 million for the twelve
month period ending September 30, 2003. Maximum amounts of capital expenditures
are $12.5 million and $12.0 million in 1997 and 1998, respectively. This maximum
declines to $10.0 million for years ending after December 31, 1998. The Credit
Agreement also contains covenants which, among other things, limit the
incurrence of additional indebtedness, the nature of the business of the Loan
Parties and their subsidiaries, investments, leases of assets, ownership of
subsidiaries, dividends, transactions with affiliates, asset sales,
acquisitions, mergers and consolidations, prepayments of other indebtedness
(including the Notes), liens and encumbrances and other matters customarily
restricted in such agreements.
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EVENTS OF DEFAULT. The Credit Agreement contains customary events of default,
including payment defaults, breach of representations and warranties, covenant
defaults, cross-default to certain other indebtedness, certain events of
bankruptcy and insolvency, ERISA violations, judgment defaults, failure of any
guaranty or security agreement supporting the Credit Agreement to be in full
force and effect and change of control of the Loan Parties.
DESCRIPTION OF THE NEW NOTES
As used below in this "Description of the New Notes" section, the "Company"
means Euramax International plc, but not any of its subsidiaries, "Issuers"
means the Company, Euramax U.K. and Euramax B.V., and "Guarantor" means
Amerimax. The New Notes are to be issued under an Indenture, dated as of
September 25, 1996 (the "Indenture"), among the Company, Euramax U.K., Euramax
B.V., Amerimax and The Chase Manhattan Bank, as Trustee (the "Trustee"). The
terms of the New Notes include those stated in the Indenture and those made part
of the Indenture by reference to the Trust Indenture Act of 1939, as amended
(the "Trust Indenture Act"). The New Notes are subject to all such terms, and
holders of the New Notes are referred to the Indenture and the Trust Indenture
Act for a statement thereof. A copy of the Indenture will be made available to
prospective investors upon request. The statements under this caption relating
to the New Notes, the Guarantee and the Indenture are summaries and do not
purport to be complete, and where reference is made to particular provisions of
the Indenture, such provisions, including the definitions of certain terms, are
qualified in their entirety by such reference. The obligations of the Issuers in
respect of the Notes are joint and several. The New Notes will be general
unsecured obligations of the Issuers, limited to $200,000,000 aggregate
principal amount (including the Old Notes) of which $135,000,000 aggregate
principal amount has been issued in the Initial Offering. Additional amounts may
be issued in one or more series from time to time subject to the limitations set
forth under "-- Covenants -- Limitations on Indebtedness" and the restrictions
contained in the Credit Agreement. The New Notes will be senior subordinated
obligations of the Issuers, subordinated in right of payment to all Obligations
under the Credit Agreement and to all other Senior Debt of the Issuers. The New
Notes will be issued only in bearer form, without coupons, in denominations of
$1,000 and any integral multiple thereof. See "-- Book-Entry; Delivery and
Form." No service charge will be made for any registration of transfer or
exchange of New Notes, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith.
Initially, the Trustee will act as paying agent and registrar for the New Notes.
Application has been made to list the Old Notes and New Notes on the Luxembourg
Stock Exchange;
PRINCIPAL, MATURITY AND INTEREST
The New Notes will mature on October 1, 2006 and will bear interest at the rate
per annum shown on the cover page hereof from September 25, 1996 or from the
most recent interest payment date to which interest has been paid or provided
for with respect to the Old Notes. Holders whose Old Notes are accepted upon
consummation of the Exchange Offer will be deemed to have waived their rights to
receive all accrued and unpaid interest on the Old Notes. Interest will be
payable semiannually on April 1 and October 1 of each year, commencing April 1,
1997, to the Person in whose name a New Note is registered at the close of
business on the preceding March 15 or September 15 (each, a "Record Date"), as
the case may be. Interest on the New Notes will be computed on the basis of a
360-day year of twelve 30-day months. Holders must surrender the New Notes to
the paying agent for the New Notes to collect principal payments. The Issuers
will pay principal and interest by check and may mail interest checks to a
holder's registered address. Under the limited circumstances where definitive
notes are issued (see -- Book-Entry; Delivery and Form -- Definitive Registered
Notes), the Issuers will appoint Kredietbank S.A. Luxembourgeoise, or such other
person located in Luxembourg and reasonably acceptable to the Trustee, as an
additional paying and transfer agent. Upon the issuance of definitive notes,
holders will be able to receive principal, interest, and Additional Amounts, if
any, on the Old Notes and New Notes and will be able to transfer definitive
notes at the Luxembourg office of such paying and transfer agent, subject to the
right of the Issuers to mail payments in accordance with the terms of the
Indenture. Upon the issuance of definitive notes, Holders will be able to
transfer and exchange definitive notes at the Luxembourg office of such paying
and transfer agent provided that all transfers and exchanges must be effected in
accordance with the terms of the Indenture and, among other things, be recorded
in the register maintained by the registrar.
OPTIONAL REDEMPTION
The Notes will be subject to redemption, at the option of the Company, in whole
or in part, at any time on or after October 1, 2001 and prior to maturity, upon
not less than 30 nor more than 60 days notice mailed to each holder of Notes to
be redeemed at his address appearing in the register for the Notes, in amounts
of $1,000 or an integral multiple
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of $1,000, at the following redemption prices (expressed as percentages of
principal amount) plus accrued interest to but excluding the date fixed for
redemption (subject to the right of holders of record on the relevant Record
Date to receive interest due on an interest payment date that is on or prior to
the date fixed for redemption), if redeemed during the 12-month period beginning
October 1 of the years indicated:
<TABLE>
<CAPTION>
YEAR PERCENTAGE
- -------------------- ----------
<S> <C>
2001 105.625%
2002 103.750
2003 101.875
2004 and thereafter 100.000
</TABLE>
So long as the Old Notes or New Notes are listed on the Luxembourg Stock
Exchange and the rules of such Stock Exchange shall so require, notice of such a
redemption shall also be published in a leading newspaper having a general
circulation in Luxembourg (which is expected to be the LUXEMBOURG WORT).
In addition, prior to October 1, 1999, the Company may redeem up to 40% of the
principal amount of the Notes with the net cash proceeds received by the Company
from one or more public offerings of Capital Stock of the Company (other than
Disqualified Stock), at a redemption price (expressed as a percentage of the
principal amount) of 111.25% of the principal amount thereof, plus accrued and
unpaid interest to the date fixed for redemption; provided, however, that at
least $75.0 million in aggregate principal amount of the Notes remains
outstanding immediately after any such redemption (excluding any Notes owned by
the Company or any of its Affiliates). Notice of redemption pursuant to this
paragraph must be mailed to holders of Notes not later than 60 days following
the consummation of such public offering.
Selection of Notes for any partial redemption shall be made by the Trustee, in
accordance with the rules of any national securities exchange on which the Notes
may be listed or, if the Notes are not so listed, PRO RATA or by lot or in such
other manner as the Trustee shall deem appropriate and fair. Notes in
denominations larger than $1,000 may be redeemed in part but only in integral
multiples of $1,000. Notice of redemption will be mailed before the date fixed
for redemption to each holder of Notes to be redeemed at his or her registered
address. On and after the date fixed for redemption, interest will cease to
accrue on Notes or portions thereof called for redemption.
The Notes will not have the benefit of any sinking fund.
TAXATION; REDEMPTION FOR TAXATION REASONS
All payments by the Issuers in respect of the Notes shall be made without
withholding or deduction for or on account of any present or future taxes,
duties, assessments or other governmental charges of whatsoever nature,
including penalties, interest and any other liabilities related thereto
("Taxes"), imposed or levied by or on behalf of the United Kingdom or the
Netherlands or any relevant jurisdiction or any political subdivision or
authority thereof or therein having power to tax, unless the Issuers are
compelled by law to deduct or withhold such taxes, duties, assessments or other
governmental charges. In such event, the Issuers shall pay such additional
amounts ("Additional Amounts") as may be necessary to ensure that the net
amounts received by the holders of the Notes after such withholding or deduction
shall equal the respective amounts of principal and interest that would have
been receivable in respect of the Notes in the absence of such withholding or
deduction, except that no such Additional Amounts shall be payable in respect of
any Note (i) presented for payment of principal more than 60 days after the
later of (x) the date on which such payment first became due and (y) if the full
amount payable has not been received in New York City by the Trustee on or prior
to such due date, the date on which, the full amount having been so received,
notice to that effect shall have been given to the Noteholders by the Trustee,
except to the extent that the Noteholder would have been entitled to such
Additional Amounts on presenting such Note for payment on the last day of the
applicable 60 day period, (ii) if any tax, assessment or the other governmental
charge is imposed or withheld by reason of the failure to comply by the
Noteholder or, if different, the beneficial owner of the interest payable on the
Note with a timely request of the Issuers addressed to such holder to provide
information, documents or other evidence concerning the nationality, residence,
identity or connection with the United Kingdom or The Netherlands or any
relevant jurisdiction of such holder or beneficial owner which is required or
imposed by a statute, treaty, regulation or administrative practice of the
United Kingdom or The Netherlands or any relevant jurisdiction as a precondition
to exemption from all or part of such tax, assessment or governmental charge,
(iii) held by or on behalf of a Noteholder who is liable for Taxes in respect of
such Note by reason of having some connection with the United Kingdom or The
Netherlands or any relevant jurisdiction (or any political subdivision or
authority thereof) other than the mere purchase, holding or disposition of any
Note, or the
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receipt of principal or interest in respect thereof, including, without
limitation, such Noteholder being or having been a citizen or resident thereof
or being or having been present or engaged in a trade or business therein or
having had a permanent establishment therein, (iv) if the Notes are held in
definitive registered form and such Definitive Registered Notes have been issued
at the request of the holder or any previous holder of such Notes (unless all
Notes are exchanged for Definitive Registered Notes), (v) to the extent that
such Additional Amounts exceed the Additional Amounts that would have been
payable had such Noteholder or beneficial owner of the interest not failed to be
a resident of the United States within the meaning of the income tax treaty
between the United States and the United Kingdom, the United States and The
Netherlands or the United States and any other relevant jurisdiction, (vi) to
the extent that such Additional Amounts exceed the Additional Amounts that would
have been payable had such Noteholder or beneficial owner of the interest (if
such person is a tax-exempt entity) not sold, or agreed to sell, such Note
within three months of the acquisition thereof, (vii) to the extent that such
Additional Amounts exceed the Additional Amounts that would have been payable
had such Noteholder or beneficial owner of the interest not been a corporation
described in Article 16(1) of the income tax treaty between United States and
the United Kingdom dated December 31, 1975, as amended (the "Tax Treaty") (as in
effect on the date of issuance of the Notes), unless such a Noteholder or
beneficial owner of the interest is or becomes such a corporation it is or will
be a corporation in Article 16(2) of the Tax Treaty, or (viii) on account of any
estate, inheritance, gift, sale, transfer, personal property or other similar
tax, assessment or other governmental charge; and any combination of (i), (ii),
(iii), (iv), (v), (vi), (vii) or (viii), nor shall Additional Amounts be paid
with respect to any payment of the principal of, or any interest on, any Note to
any Noteholder who is a fiduciary or partnership or other than the sole
beneficial owner of such payment to the extent that a beneficiary or settlor or
beneficial owner would not have been entitled to any Additional Amounts had such
beneficiary or settlor or beneficial owner been the Noteholder. The Issuers will
also (a) make such withholding or deduction compelled by applicable law and (b)
remit the full amount deducted or withheld to the relevant authority in
accordance with applicable law. The Issuers will furnish copies of such receipts
evidencing the payment of any Taxes so deducted or withheld in such form as
provided in the normal course by the taxing authority imposing such Taxes and as
is reasonably available to the Issuers to the Trustee within 60 days after the
date of receipt of such evidence. The Trustee will make such evidence available
to the holders of Notes upon request. If the Issuers have paid any Additional
Amounts to any Noteholder or, if different, the beneficial owner of the interest
and such person is entitled to a refund of the Tax to which such Additional
Amounts are attributable from any competent taxation authority or other
governmental body, then (a) such peron shall, as soon as practicable but in any
event within 30 days after receiving a written request thereof from the Issuers,
comply with any administrative procedure to obtain such refund and (b) upon
receipt of such refund promptly pay over such refund to the Issuers.
If Additional Amounts are paid to a Noteholder, or, if different, the beneficial
owner of the interest, and subsequently is determined that the Noteholder or
beneficial owner of the interest was not entitled to such Additional Amounts,
then such Noteholder or beneficial owner of the interest shall promptly refund
to the Issuers the amount of all such Additional Amounts previously made to the
Noteholder or beneficial owner of the interest.
All references herein and in the Indenture or the Notes to the principal of or
interest on a Note shall be deemed to include any Additional Amounts payable in
connection therewith.
The Issuers will pay any present or future stamp, court or documentary taxes or
any other excise or property taxes, charges or similar levies that arise in any
jurisdiction from the execution, delivery or registration of the Notes or any
other document or instrument referred to in the Indenture or Notes.
Notes may be redeemed, at the option of the Issuers, as a whole, but not in part
(limited to Notes with respect to which an Additional Amount (as described
below) is or may be required), at any time, upon giving notice to holders not
less than 30 days nor more than 60 days prior to the date fixed for redemption
(which notice shall be irrevocable), at a redemption price equal to the
principal amount thereof, together with interest accrued to the date fixed for
redemption and any Additional Amounts payable with respect thereto, if the
Issuers determine and certify to the Trustee immediately prior to the giving of
such notice that (i) they have or will become obligated to pay Additional
Amounts in respect of such Notes as a result of any change in or amendment to
the laws (or any regulations or rulings promulgated thereunder) of the United
Kingdom or The Netherlands or any relevant jurisdiction or any political
subdivision or taxing authority thereof or therein affecting taxation, or any
change in the official position regarding the application or interpretation of
such laws, regulations or rulings (including a holding by a court of competent
jurisdiction) which change, amendment, application or interpretation become
effective on or after the date of issuance of such Notes and (ii) such
obligation cannot be avoided by the Issuers taking reasonable measures available
to it, provided, that no such
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notice of redemption shall be given earlier than 60 days prior to the earliest
date on which the Issuers would be obligated to pay such Additional Amounts if a
payment in respect of such Notes was then due. Prior to the giving of any notice
of redemption described in this paragraph, the Issuers shall deliver to the
Trustee (a) a certificate signed by two directors of the Company stating that
the obligation to pay Additional Amounts cannot be avoided by the Issuers taking
reasonable measures available to them and (b) a written opinion of independent
legal counsel to the Issuers to the effect that the Issuers have become
obligated to pay Additional Amounts as a result of a change, amendment, official
interpretation or application described above and that the Issuers cannot avoid
payment of such Additional Amounts by taking reasonable measures available to
them.
RANKING
Each Issuer agrees, and, by accepting the Notes each holder of Notes will be
deemed to have agreed, that the payment of the principal of, premium, if any,
and interest of the Notes and all Obligations under the Indenture and the
payment of any claims are subordinated in right of payment, to the extent and in
the manner provided in the Indenture, to the prior payment in full of all Senior
Debt, and that the subordination is for the benefit of the holders of Senior
Debt and they and/or each of them may enforce such subordination. For the
purposes of this section, no Senior Debt shall be deemed to have been paid in
full unless the holders or owners thereof have received payment in full in cash;
a distribution may consist of cash, securities or other property, by set-off by
way of collateral or otherwise; any payment or distribution includes any payment
or distribution which may be payable or deliverable by reason of the payment of
any other Indebtedness of any Issuer or any Subsidiary thereof that is
subordinated to the Notes or Claims; and a payment or distribution on account or
any Obligations with respect to the Notes shall include any redemption, purchase
or other acquisition of the Notes, whether pursuant to an Offer to Purchase or
otherwise.
Upon any payment or distribution of assets or securities of an Issuer or any of
its Subsidiaries of any kind or character, whether in cash, property or
securities, upon any dissolution or winding up or total or partial liquidation
or reorganization of such Issuer or Subsidiary, whether voluntary or involuntary
or in bankruptcy, insolvency, receivership or other proceedings relating to any
Issuer or its Subsidiaries or their respective property or in an assignment for
the benefit of creditors, or an arrangement, adjustment, composition or relief
of any Issuer or any of its Subsidiaries or their respective debts or any
marshalling of the assets and liabilities of any Issuer or any of its
Subsidiaries, all amounts due or to become due with respect to Senior Debt
(including any interest accruing subsequent to the commencement of any such
proceeding at the rate specified in the applicable Senior Debt) shall first be
paid in full, or payment provided for, before the Holders of the Notes or the
Trustee on behalf of such Holders shall be entitled to receive any payment or
distribution on account of the principal of, premium, if any, or interest on the
Notes, or any payment to acquire any of the Notes for cash, property or
securities, or any distribution with respect to the Notes of any cash, property
or securities or payment of any Claims or of any other Obligations. Before any
payment may be made by, or on behalf of, an Issuer of the principal of, premium,
if any, or interest on the Notes upon any such dissolution or winding up or
liquidation or reorganization, any payment or distribution of assets or
securities of such Issuer of any kind or character, whether in cash, property or
securities, to which the Holders of the Notes or the Trustee on their behalf
would be entitled, but for the subordination provisions of the Indenture, shall
be made by such Issuer or by any receiver, trustee in bankruptcy, liquidating
trustee, agent or other person making such payment or distribution, directly to
the holders of Senior Debt of such Issuer (PRO RATA to such holders on the basis
of the respective amounts of Senior Debt held by such holders) or their
representatives or to the agent or the trustee or trustees under any indenture
pursuant to which any such Senior Debt may have been issued as their respective
interests may appear, to the extent necessary to pay all such Senior Debt in
full after giving effect to any concurrent payment, distribution or provision
therefor to or for the holders of such Senior Debt.
No direct or indirect payment or distribution by or on behalf of the Issuers or
their Subsidiaries of principal of, premium, if any, or interest on, or other
Obligations in respect of, the Notes, whether pursuant to the terms of the Notes
or upon acceleration or otherwise, or on account of any Claim will be made and
the Holders and Trustee shall not receive, directly or indirectly, any such
payment or distribution if, at the time of such payment, there exists a default
in the payment of all or any portion of the obligations on any Designated Senior
Debt, whether at maturity, on account of mandatory redemption or prepayment,
acceleration or otherwise (and the Trustee has received written notice thereof),
and such default shall not have been cured or waived or the benefits of this
sentence waived by or on behalf of the holders of such Designated Senior Debt.
In addition, during the continuance of any non-payment default or non-payment
event of default with respect to any Designated Senior Debt pursuant to which
the maturity thereof may be accelerated, and upon receipt by the Trustee of
notice (a "Payment Blockage Notice") from a holder or holders of such
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Designated Senior Debt or the trustee or agent acting on behalf of such
Designated Senior Debt, then, unless and until such default or event of default
has been cured or waived or has ceased to exist or such Designated Senior Debt
has been discharged or repaid in full, no direct or indirect payment or
distribution will be made by or on behalf of the Issuers or their Subsidiaries
on account of or with respect to the Notes or on account of any Claim or
Obligation, except from those funds held in trust for the benefit of the Holders
of any Notes to such Holders, during a period (a "Payment Blockage Period")
commencing on the date of receipt of such Payment Blockage Notice by the Trustee
and ending 179 days thereafter. Notwithstanding anything herein to the contrary,
(x) in no event will a Payment Blockage Period extend beyond 179 days from the
date of the Payment Blockage Notice in respect thereof was given and (y) there
must be 180 days in any 360 day period during which no Payment Blockage Period
is in effect. Not more than one Payment Blockage Period may be commenced with
respect to the Notes during any period of 360 consecutive days. No default or
event of default that existed or was continuing on the date of commencement of
any Payment Blockage Period with respect to the Designated Senior Debt
initiating such Payment Blockage Period may be, or be made, to the extent the
holders of such Designated Senior Debt had knowledge of the same, the basis for
the commencement of any other Payment Blockage Period by the holder or holders
of such Designated Senior Debt or the trustee or agent acting on behalf of such
Designated Senior Debt, whether or not within a period of 360 consecutive days,
unless such default or event of default has been cured or waived for a period of
not less than 90 consecutive days.
If a distribution is made to the Trustee, any Paying Agent or any Holder that
because of the provisions of this section should not have been made to it, the
Trustee, the Paying Agent or such Holder who receives the distribution will be
required to hold it in trust for the benefit of, and upon written request, pay
it over (in the same form as received, with any necessary endorsement) to, the
holders of Senior Debt as their interests may appear, or their agent,
representative or the trustee for application (in the case of cash) to, or as
collateral (in the case of non-cash property or securities) for the payment or
prepayment of all Obligations with respect to Senior Debt remaining unpaid to
the extent necessary to pay such Obligations in full in accordance with their
terms.
The failure to make any payment or distribution for or on account of the Notes
by reason of the provisions of the Indenture described under this section will
not be construed as preventing the occurrence of an Event of Default described
in clause (a), (b) or (c) of the first paragraph under "-- Events of Default."
By reason of the subordination provisions described above, in the event of
insolvency of an Issuer or any Subsidiary thereof, funds which would otherwise
be payable to Holders of the Notes will be paid to the holders of Senior Debt to
the extent necessary to repay such Senior Debt in full, and such Issuer may be
unable to fully meet its obligations with respect to the Notes. Subject to the
restrictions set forth in the Indenture, in the future the Issuers may incur
additional Senior Debt.
In addition, the Notes are obligations exclusively of the Issuers and the
Guarantor. Because the Issuers' and the Guarantor's operations are conducted
entirely through the Operating Subsidiaries, the cash flow and the consequent
ability of the Issuers and the Guarantor to service their debt, including the
Notes, is dependent upon the earnings of the Operating Subsidiaries and the
distribution of those earnings to the Issuers and the Guarantor. The Operating
Subsidiaries are separate and distinct legal entities and have no obligation,
contingent or otherwise, to pay any amounts due pursuant to the Notes or to make
funds available therefor, whether by dividends, loans or other payments. In
addition, the payment of dividends and the making of loans and advances to the
Issuers and the Guarantor by the Operating Subsidiaries may be subject to
statutory or contractual restrictions (including restrictions in the Credit
Agreement) and subject to various business considerations.
The Notes will be effectively subordinated to secured indebtedness of the
Issuers and the Guarantor and all liabilities of the Operating Subsidiaries,
including trade payables and the liquidation value of Preferred Stock, if any,
except to the extent that one or more of the Issuers are themselves recognized
as creditors of such subsidiary, in which case the claims of such Issuer or
Issuers would still be subordinate to any security interest in the assets of
such subsidiary, and indebtedness of such subsidiary senior to that held by such
Issuer or Issuers. At June 30, 1996, after giving pro forma effect to the
Transactions, $150.8 million of consolidated indebtedness and trade payables
would have been liabilities of Operating Subsidiaries or outstanding under the
Credit Agreement, all of which would be effectively senior to the Notes. Amounts
actually drawn under the Credit Agreement on the Closing Date were $100.0
million. At June 30, 1996, after giving pro forma effect to the Transactions
except giving effect to the amounts actually borrowed under the Credit Agreement
on the Closing Date, the aggregate amount of consolidated indebtedness and other
liabilities which the
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Notes or the Guarantee would have been effectively subordinated to would have
been approximately $164.1 million. In addition, the Company and its subsidiaries
could have incurred up to an additional $25.0 million of secured indebtedness
under the Credit Agreement which would have ranked effectively senior to the
Notes.
THE GUARANTEE
The Indenture provides that the Guarantor will unconditionally guarantee on a
senior subordinated basis all of the obligations of the Issuers under the Notes,
including their obligations to pay principal, premium, if any, and interest with
respect to the Notes. The obligations of the Guarantor are limited to the
maximum amount which, after giving effect to all other contingent and fixed
liabilities of the Guarantor, will result in the obligations of the Guarantor
under the Guarantee not constituting a fraudulent conveyance or fraudulent
transfer under federal or state law. Except as provided in "-- Covenants" below,
the Company is not restricted from selling or otherwise disposing of the
Guarantor.
The Indenture provides that if the Notes are defeased in accordance with the
terms of the Indenture, or if all or substantially all of the assets of the
Guarantor or all of the Capital Stock of the Guarantor is sold (including by
issuance or otherwise) by the Company or any of its Subsidiaries in a
transaction constituting an Asset Disposition, and if (x) the Net Available
Proceeds from such Asset Disposition are used in accordance with the covenant
described under "-- Covenants -- Limitation on Certain Asset Dispositions" or
(y) the Company delivers to the Trustee an Officers' Certificate to the effect
that the Net Available Proceeds from such Asset Disposition shall be used in
accordance with the covenant described under "-- Covenants -- Limitation on
Certain Asset Dispositions" and within the time limits specified by such
covenant, then the Guarantor (in the event of a sale or other disposition of all
of the Capital Stock of the Guarantor) or the corporation acquiring such assets
(in the event of a sale or other disposition of all or substantially all of the
assets of the Guarantor) shall be released and discharged of its Guarantee
obligations.
The obligations of the Guarantor under the Guarantee are subordinated to the
prior payment in full of all Senior Debt on the same basis as the obligations of
the Issuers on the Notes are subordinated to Senior Debt. The Guarantee will be
PARI PASSU in right of payment with any other senior subordinated indebtedness
of the Guarantor and senior to any future Subordinated Indebtedness of the
Guarantor.
REGISTRATION RIGHTS
There will be no registration rights with respect to the New Notes. Certain
brokers or dealers registered under the Exchange Act who may be deemed to be
"underwriters" with respect to the New Notes may be entitled to continuing
registration rights which the Company granted with respect to the Old Notes. See
"Plan of Distribution."
COVENANTS
The Indenture contains, among others, the following covenants:
LIMITATION ON INDEBTEDNESS
The Indenture provides that none of the Issuers nor any of their Restricted
Subsidiaries will, directly or indirectly, Incur any Indebtedness (including
Acquired Indebtedness), except: (i) Indebtedness (including Acquired
Indebtedness) of the Issuers or any of their Restricted Subsidiaries, if
immediately after giving effect to the Incurrence of such Indebtedness and the
receipt and application of the net proceeds thereof, the Consolidated Cash Flow
Ratio of the Company for the four full fiscal quarters for which quarterly or
annual financial statements are available next preceding the Incurrence of such
Indebtedness, calculated on a pro forma basis in accordance with Article 11 of
Regulation S-X under the Securities Act of 1933 or any successor provision as if
such Indebtedness had been Incurred on the first day of such four full fiscal
quarters, would be greater than 1.8 to 1.00 if such Indebtedness is Incurred on
or before December 31, 1998 and 2.2 to 1.00 if such Indebtedness is Incurred
after December 31, 1998; (ii) Indebtedness of the Company and its Restricted
Subsidiaries, Incurred under the Credit Agreement in an aggregate principal
amount outstanding at any one time not to exceed $125 million; (iii)
Indebtedness owed by the Company to any direct or indirect Wholly Owned
Subsidiary of the Company or Indebtedness owed by a direct or indirect
Restricted Subsidiary of the Company to the Company or a direct or indirect
Wholly Owned Subsidiary of the Company; provided, however, upon either (I) the
transfer or other disposition by such direct or indirect Wholly Owned Subsidiary
or the Company of any Indebtedness so permitted under this clause (iii) to a
Person other than the Company or another direct or indirect Wholly Owned
Subsidiary of the Company or (II) the issuance (other than directors' qualifying
shares), sale, transfer or other disposition of shares of Capital Stock or other
ownership interests (including by consolidation or merger) of such direct or
indirect Wholly Owned Subsidiary to a Person other than the Company or another
such Wholly Owned
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Subsidiary of the Company, the provisions of this clause (iii) shall no longer
be applicable to such Indebtedness and such Indebtedness shall be deemed to have
been Incurred at the time of any such issuance, sale, transfer or other
disposition, as the case may be; (iv) Indebtedness of any of the Issuers or any
Restricted Subsidiary under any interest rate or currency swap agreement to the
extent entered into to hedge any other Indebtedness permitted under the
Indenture (including the Notes); (v) Indebtedness Incurred to renew, extend,
refinance or refund (collectively for purposes of this clause (v) to "refund")
any Indebtedness outstanding on the Issue Date, any Indebtedness Incurred under
the prior clause (i) above or the Notes and the Guarantee; provided, however,
that (I) such Indebtedness does not exceed the principal amount (or accrual
amount, if less) of Indebtedness so refunded (plus unused commitments under
revolving credit facilities) plus the amount of any premium required to be paid
in connection with such refunding pursuant to the terms of the Indebtedness
refunded or the amount of any premium reasonably determined by the issuer of
such Indebtedness as necessary to accomplish such refunding by means of a tender
offer, exchange offer, or privately negotiated repurchase, plus the expenses of
such issuer reasonably incurred in connection therewith and (II) in the case of
any refunding of Indebtedness that is PARI PASSU with the Notes, (A) such
refunding Indebtedness is made pari passu with or subordinate in right of
payment to the Notes, and, in the case of any refunding of Indebtedness that is
subordinate in right of payment to the Notes, such refunding Indebtedness is
subordinate in right of payment to the Notes on terms no less favorable to the
holders of the Notes than those contained in the Indebtedness being refunded,
(B) the refunding Indebtedness by its terms, or by the terms of any agreement or
instrument pursuant to which such Indebtedness is issued, does not have an
Average Life that is less than the remaining Average Life of the Indebtedness
being refunded and does not permit redemption or other retirement (including
pursuant to any required offer to purchase to be made by the Company or a
Restricted Subsidiary of the Company) of such Indebtedness at the option of the
holder thereof prior to the final stated maturity of the Indebtedness being
refunded, other than a redemption or other retirement at the option of the
holder of such Indebtedness (including pursuant to a required offer to purchase
made by the Company or a Restricted Subsidiary of the Company) which is
conditioned upon a change of control of the Company pursuant to provisions
substantially similar to those contained in the Indenture described under "--
Change of Control" below and (C) any Indebtedness Incurred to refund any other
Indebtedness is Incurred by the obligor on the Indebtedness being refunded or by
an Issuer; (vi) Indebtedness of the Issuers or their Restricted Subsidiaries,
not otherwise permitted to be Incurred pursuant to clauses (i) through (v)
above, which, together with any other outstanding Indebtedness Incurred pursuant
to this clause (vi), has an aggregate principal amount not in excess of $10
million at any time outstanding, which Indebtedness may be incurred under the
Credit Agreement; (vii) commodity agreements of the Issuers or any of their
Restricted Subsidiaries to the extent entered into to protect the Company and
its Restricted Subsidiaries from fluctuations in the prices of raw materials
used in their businesses; (viii) Indebtedness of the Issuers under the Notes and
Indebtedness of the Guarantor under the Guarantee; (ix) Indebtedness outstanding
on the Issue Date; (x) Indebtedness (including Capitalized Lease Obligations)
incurred by the Company or any of its Restricted Subsidiaries to finance the
purchase, lease or improvement of property (real or personal) or equipment
(whether through the direct purchase of assets or the Capital Stock of any
Person owning such assets) in an aggregate principal amount outstanding not to
exceed 5% of Tangible Assets at any time (which amount may, but need not, be
incurred in whole or in part under the Credit Agreement) provided that the
principal amount of such Indebtedness does not exceed the fair market value of
such property or equipment; (xi) Indebtedness incurred by the Company or any of
its Restricted Subsidiaries constituting reimbursement obligations with respect
to letters of credit issued in the ordinary course of business, including,
without limitation, letters of credit in respect of workers' compensation claims
or self-insurance, or other Indebtedness with respect to reimbursement type
obligations regarding workers' compensation claims or self-insurance, and
obligations in respect of performance and surety bonds and completion guarantees
provided by the Company or any Restricted Subsidiary of the Company in the
ordinary course of business; and (xii) Guarantees by the Issuers or their
Restricted Subsidiaries of Indebtedness otherwise permitted to be incurred
hereunder.
LIMITATION ON RESTRICTED PAYMENTS
The Indenture provides that none of the Issuers nor any of their Restricted
Subsidiaries will, directly or indirectly, (i) declare or pay any dividend, or
make any distribution of any kind or character (whether in cash, property or
securities), in respect of any class of the Capital Stock of the Company or any
of its Restricted Subsidiaries or to the holders thereof, excluding any (x)
dividends or distributions payable solely in shares of Capital Stock of the
Company (other than Disqualified Stock) or in options, warrants or other rights
to acquire Capital Stock of the Company (other than Disqualified Stock), or (y)
in the case of any Issuer or any Restricted Subsidiary of the Company, dividends
or distributions payable to the Company (or to a director of a European
Restricted Subsidiary on account of his or her
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qualifying share), an Issuer or a Restricted Subsidiary of the Company, (ii)
purchase, redeem, or otherwise acquire or retire for value shares of Capital
Stock of the Company or any of its Restricted Subsidiaries, any options,
warrants or rights to purchase or acquire shares of Capital Stock of the Company
or any of its Restricted Subsidiaries or any securities convertible or
exchangeable into shares of Capital Stock of the Company or any of its
Restricted Subsidiaries, excluding any such shares of Capital Stock, options,
warrants, rights or securities which are owned by the Company or a Restricted
Subsidiary of the Company, (iii) make any Investment in (other than a Permitted
Investment), or payment on a guarantee of any obligation of, any Person, other
than the Company or a direct or indirect Wholly Owned Subsidiary of the Company
or, in the case of the Credit Agreement, any guarantee by a Restricted
Subsidiary of Obligations under the Credit Agreement, or (iv) redeem, defease,
repurchase, retire or otherwise acquire or retire for value, prior to any
scheduled maturity, repayment or sinking fund payment, Subordinated Indebtedness
(each of the transactions described in clauses (i) through (iv) (other than any
exception to any such clause) being a "Restricted Payment") if at the time
thereof: (1) an Event of Default, or an event that with the passing of time or
giving of notice, or both, would constitute an Event of Default, shall have
occurred and be continuing, or (2) upon giving effect to such Restricted
Payment, the Issuers could not Incur at least $1.00 of additional Indebtedness
pursuant to the terms of the Indenture described in clause (i) of "-- Limitation
on Indebtedness" above, or (3) upon giving effect to such Restricted Payment,
the aggregate of all Restricted Payments made on or after the Issue Date exceeds
the sum of: (a) 50% of cumulative Consolidated Net Income of the Company (or, in
the case cumulative Consolidated Net Income of the Company shall be negative,
less 100% of such deficit) since the end of the fiscal quarter in which the
Issue Date occurs through the last day of the fiscal quarter for which financial
statements are available; plus (b) 100% of the aggregate net proceeds received
after the Issue Date, including the fair market value of property other than
cash (determined in good faith by the Board of Directors of the Company as
evidenced by a resolution of such Board of Directors filed with the Trustee),
from the issuance of, or equity contribution with respect to, Capital Stock
(other than Disqualified Stock) of the Company and warrants, rights or options
on Capital Stock (other than Disqualified Stock) of the Company (other than in
respect of any such issuance to a Restricted Subsidiary of the Company) and the
principal amount of Indebtedness of the Company or any of its Restricted
Subsidiaries that has been converted into or exchanged for Capital Stock of the
Company which Indebtedness was Incurred after the Issue Date; plus (c) 100% of
the aggregate after-tax net proceeds, including the fair market value of
property other than cash (determined in good faith by the Board of Directors of
the Company as evidenced by a resolution of such Board of Directors filed with
the Trustee) of the sale or other disposition of any Investment constituting a
Restricted Payment made after the Issue Date; provided that any gain on the sale
or disposition included in such after tax net proceeds shall not be included in
determining Consolidated Net Income for purposes of clause (a) above.
The foregoing provision will not be violated by (i) any dividend on any class of
Capital Stock of the Company or any of its Restricted Subsidiaries paid within
60 days after the declaration thereof if, on the date when the dividend was
declared, the Company or such Restricted Subsidiary, as the case may be, could
have paid such dividend in accordance with the provisions of the Indenture, (ii)
the renewal, extension, refunding or refinancing of any Indebtedness otherwise
permitted pursuant to the terms of the Indenture described in clause (v) of "--
Limitation on Indebtedness" above, (iii) the exchange or conversion of any
Indebtedness of any of the Issuers or any of their Restricted Subsidiaries for
or into Capital Stock of the Company (other than Disqualified Stock), (iv) so
long as no Default or Event of Default has occurred and is continuing, any
Investment made with the proceeds of a substantially concurrent sale of Capital
Stock of the Company (other than Disqualified Stock); provided, however, that
the proceeds of such sale of Capital Stock shall not be (and have not been)
included in subclause (b) of clause (3) of the preceding paragraph, (v) the
redemption, repurchase, retirement or other acquisition of any Capital Stock of
the Company in exchange for or out of the net cash proceeds of the substantially
concurrent sale (other than to a Restricted Subsidiary of the Company) of
Capital Stock of the Company (other than Disqualified Stock); provided, however,
that the proceeds of such sale of Capital Stock shall not be (and have not been)
included in subclause (b) of clause (3) of the preceding paragraph, (vi) the
repurchase of Capital Stock at no more than its fair market value (determined in
good faith by the Board of Directors of the Company as evidenced by a resolution
of such Board of Directors filed with the Trustee) from present or former
Management Investors in an amount not in excess of $2 million in any one year or
$5 million in the aggregate, (vii) payments in lieu of fractional shares in an
amount not in excess of $100,000 in the aggregate, (viii) repurchases of Common
Stock which may be deemed to occur on stock for stock exercises of options, (ix)
Investments in Persons which engage in the Fabricated Products Business in an
amount not to exceed 7.5% of Tangible Assets of the Company and (x) distribution
for the payment of U.S. federal, state, local or non-U.S. taxes. Each Restricted
Payment described in clauses (i) (to the
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extent not already taken into account for purposes of computing the aggregate
amount of all Restricted Payments pursuant to clause 3 above), (vi), (vii) and
(ix) of the previous sentence shall be taken into account for purposes of
computing the aggregate amount of all Restricted Payments pursuant to clause (3)
of the preceding paragraph.
The Indenture provides that for purposes of this covenant, (i) an "Investment"
shall be deemed to have been made at the time any Restricted Subsidiary is
designated as an Unrestricted Subsidiary in an amount (proportionate to the
Company's equity interest in such Subsidiary) equal to the net worth of such
Restricted Subsidiary at the time that such Restricted Subsidiary is designated
as an Unrestricted Subsidiary; (ii) at any date the aggregate of all Restricted
Payments made as Investments since the Issue Date shall exclude and be reduced
by an amount (proportionate to the Company's equity interest in such Subsidiary)
equal to the net worth of an Unrestricted Subsidiary at the time that such
Unrestricted Subsidiary is designated a Restricted Subsidiary, not to exceed, in
the case of any such redesignation of an Unrestricted Subsidiary as a Restricted
Subsidiary, the amount of Investments previously made by the Company and the
Restricted Subsidiaries in such Unrestricted Subsidiary (in each case (i) and
(ii) "net worth" to be calculated based upon the fair market value of the assets
of such Subsidiary as of any such date of designation); and (iii) any property
transferred to or from an Unrestricted Subsidiary shall be valued at its fair
market value at the time of such transfer.
LIMITATIONS CONCERNING DISTRIBUTIONS AND TRANSFERS BY RESTRICTED SUBSIDIARIES
The Indenture provides that none of the Issuers nor any of their Restricted
Subsidiaries will, directly or indirectly, create or otherwise cause or suffer
to exist any consensual encumbrance or restriction on the ability of any
Restricted Subsidiary of the Company to (i) pay, directly or indirectly,
dividends or make any other distributions in respect of its Capital Stock or pay
any Indebtedness or other obligation owed to the Company or any Restricted
Subsidiary of the Company, (ii) make loans or advances to the Company or any
Restricted Subsidiary of the Company or (iii) transfer any of its property or
assets to the Company or any Restricted Subsidiary of the Company, except for
such encumbrances or restrictions existing under or by reason of (a) (x) the
Credit Agreement or (y) any other agreement evidencing Senior Debt in effect on
the Issue Date as any such other agreement is in effect on such date, (b) any
agreement relating to any Indebtedness Incurred by such Restricted Subsidiary
prior to the date on which such Restricted Subsidiary was acquired by the
Company and outstanding on such date and not Incurred in anticipation or
contemplation of becoming a Restricted Subsidiary and provided such encumbrance
or restriction shall not apply to any assets of the Company or its Restricted
Subsidiaries other than such Restricted Subsidiary, (c) customary provisions
contained in an agreement which has been entered into for the sale or
disposition of all or substantially all of the Capital Stock or assets of a
Restricted Subsidiary; provided, however, that such encumbrance or restriction
is applicable only to such Restricted Subsidiary or assets, (d) an agreement
effecting a renewal, exchange, refunding, amendment or extension of Indebtedness
Incurred pursuant to an agreement referred to in clause (a) or (b) above;
provided, however, that with respect to an agreement referred to in (a)(y) or
(b) the provisions contained in such renewal, exchange, refunding, amendment or
extension agreement relating to such encumbrance or restriction are no more
restrictive in any material respect than the provisions contained in the
agreement that is the subject thereof in the reasonable judgment of the Board of
Directors of the Company as evidenced by a resolution of such Board of Directors
filed with the Trustee, (e) the Indenture, (f) applicable law, (g) customary
provisions restricting subletting or assignment of any lease governing any
leasehold interest of any Restricted Subsidiary of the Company, (h) restrictions
contained in Indebtedness permitted to be incurred subsequent to the Issue Date
pursuant to the provisions of the covenant described under "-- Limitation on
Indebtedness"; provided that any such restrictions are ordinary and customary
with respect to the type of Indebtedness incurred, (i) purchase money and
similar obligations for property or equipment acquired in the ordinary course of
business that impose restrictions of the type referred to in clause (iii) of
this covenant or (j) restrictions of the type referred to in clause (iii) of
this covenant contained in security agreements securing Indebtedness of a
Restricted Subsidiary of the Company to the extent that such Liens were
otherwise incurred in accordance with "-- Limitation on Liens" below and
restrict the transfer of property subject to such agreements.
LIMITATION ON LIENS
The Indenture provides that none of the Issuers nor any of their Restricted
Subsidiaries will Incur any Lien on or with respect to any property or assets of
any Issuer or such Restricted Subsidiary owned on the Issue Date or thereafter
acquired or on the income or profits thereof to secure Indebtedness, without
making, or causing any such Restricted Subsidiary to make, effective provision
for securing the Notes (and, if any Issuer shall so determine, any other
Indebtedness of such Issuer or such Restricted Subsidiary, including
Subordinated Indebtedness; provided, however, that Liens securing the Notes and
any Indebtedness PARI PASSU with the Notes are senior to such Liens securing
such
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Subordinated Indebtedness) equally and ratably with such Indebtedness or, in the
event such Indebtedness is subordinate in right of payment to the Notes or the
Guarantee, prior to such Indebtedness, as to such property or assets for so long
as such Indebtedness shall be so secured. The foregoing restrictions shall not
apply to (i) Liens existing on the Issue Date securing Indebtedness existing on
the Issue Date; (ii) Liens securing Senior Debt (including Liens securing
Indebtedness outstanding under the Credit Agreement); (iii) Liens securing only
the Notes; (iv) Liens in favor of an Issuer or the Guarantor; (v) Liens to
secure Indebtedness Incurred for the purpose of financing all or any part of the
purchase price or the cost of construction or improvement of the property (or
any other capital expenditure financing) subject to such Liens; provided,
however, that (a) the aggregate principal amount of any Indebtedness secured by
such a Lien does not exceed 100% of such purchase price or cost, (b) such Lien
does not extend to or cover any other property other than such item of property
and any improvements on such item, (c) the Indebtedness secured by such Lien is
Incurred by an Issuer within 180 days of the acquisition, construction or
improvement of such property and (d) the Incurrence of such Indebtedness is
permitted by the provisions of the Indenture described under "-- Limitation on
Indebtedness" above; (vi) Liens on property existing immediately prior to the
time of acquisition thereof (and not created in anticipation or contemplation of
the financing of such acquisition); (vii) Liens on property of a Person existing
at the time such Person is merged with or into or consolidated with an Issuer or
any such Restricted Subsidiary (and not created in anticipation or contemplation
thereof); (viii) Liens on property of an Issuer in favor of any national, state
or local government, or any instrumentality thereof, to secure payments pursuant
to any contract or statute; (ix) Liens to secure Indebtedness Incurred to
extend, renew, refinance or refund (or successive extensions, renewals,
refinancings or refundings), in whole or in part, any Indebtedness secured by
Liens referred to in the foregoing clauses (i)-(viii) so long as such Liens do
not extend to any other property and the principal amount of Indebtedness so
secured is not increased except for the amount of any premium required to be
paid in connection with such renewal, refinancing or refunding pursuant to the
terms of the Indebtedness renewed, refinanced or refunded or the amount of any
premium reasonably determined by the Company as necessary to accomplish such
renewal, refinancing or refunding by means of a tender offer, exchange offer or
privately negotiated repurchase, plus the expenses of the issuer of such
Indebtedness reasonably incurred in connection with such renewal, refinancing or
refunding; (x) Liens in favor of the Trustee as provided for in the Indenture on
money or property held or collected by the Trustee in its capacity as Trustee;
(xi) Liens arising by operation of law in favor of materialmen, mechanics,
warehousemen, carriers, lessors or other similar Persons incurred by any Issuer
or any Restricted Subsidiary in the ordinary course of business which secure its
obligations to such Person; PROVIDED, that (i) such Issuer or Restricted
Subsidiary is not more than 10 days in default with respect to such payment
obligation to such Person, (ii) such Issuer or Restricted Subsidiary is in good
faith and by appropriate proceedings diligently contesting such obligation and
adequate provision is made for the payment thereof, or (iii) all such failures
by the Issuers and the Restricted Subsidiaries in the aggregate have not had a
material adverse effect on the Company and its Restricted Subsidiaries, taken as
a whole; (xii) Liens on assets (other than Capital Stock) incurred or pledges
and deposits made in the ordinary course of business in connection with workers'
compensation, unemployment insurance, old-age pensions and other social security
benefits; (xiii) Liens on assets (other than Capital Stock) securing the
performance of bids, tenders, leases, contracts (other than for the repayment of
borrowed money), statutory obligations, surety and appeal bonds and other
obligations of like nature, incurred as an incident to and in the ordinary
course of business, and judgment liens; provided, however, that such Liens do
not secure directly or indirectly judgments in excess of $1,000,000; (xiv) Liens
in favor of landlords securing operating leases; and (xv) Liens securing assets
not having a fair market value in excess of $250,000.
LIMITATION ON CERTAIN ASSET DISPOSITIONS
The Indenture provides that none of the Issuers nor any of their Restricted
Subsidiaries will, directly or indirectly, make one or more Asset Dispositions
unless: (i) such Issuer or such Restricted Subsidiary, as the case may be,
receives consideration for such Asset Disposition at least equal to the fair
market value of the assets sold or disposed of as determined by the Board of
Directors of the Company in good faith and evidenced by a resolution of such
Board of Directors filed with the Trustee; (ii) except in the case of a
Permitted Asset Swap, not less than 75% of the consideration for the disposition
consists of cash or readily marketable cash equivalents or the assumption of
Indebtedness (other than non-recourse Indebtedness or any Subordinated
Indebtedness) of such Issuer or such Restricted Subsidiary or other obligations
relating to such assets (and release of such Issuer or such Restricted
Subsidiary from all liability on the Indebtedness or other obligations assumed);
and (iii) all Net Available Proceeds, less any amounts invested within 360 days
of such Asset Disposition in assets related to the business of the Company
(including the Capital Stock of another Person (other than the Issuers or any
Person that is a Restricted Subsidiary of the Issuers immediately prior to such
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investment); provided, however, that immediately after giving effect to any such
investment (and not prior thereto) such Person shall be a Restricted Subsidiary
of the Company), are applied, on or prior to the 360th day after such Asset
Disposition, to the permanent reduction and prepayment of any Senior Debt then
outstanding (including a permanent reduction of commitments in respect thereof)
and, after all Senior Debt has been repaid in full or any required waivers
thereof have been obtained, to an Offer to Purchase. Any Net Available Proceeds
from any Asset Disposition which is subject to the immediately preceding
sentence that are not applied to repay Senior Debt shall be invested as provided
in clause (iii) of the immediately preceding sentence, or used to make an Offer
to Purchase outstanding Notes at a purchase price in cash equal to 100% of their
principal amount plus accrued interest to the Purchase Date. Notwithstanding the
foregoing, the Issuers may defer making any Offer to Purchase outstanding Notes
until there are aggregate unutilized Net Available Proceeds from Asset
Dispositions otherwise subject to the two immediately preceding sentences equal
to or in excess of $5 million (at which time, the entire unutilized Net
Available Proceeds from Asset Dispositions otherwise subject to the two
immediately preceding sentences, and not just the amount in excess of $5
million, shall be applied as required pursuant to this paragraph). Any remaining
Net Available Proceeds following the completion of the required Offer to
Purchase may be used by the Issuers for any other purpose (subject to the other
provisions of the Indenture) and the amount of Net Available Proceeds then
required to be otherwise applied in accordance with this covenant shall be reset
to zero, subject to any subsequent Asset Disposition. These provisions will not
apply to a transaction consummated in compliance with the provisions of the
Indenture described under "-- Mergers, Consolidations and Certain Sales of
Assets" below.
In the event that the Issuers make an Offer to Purchase the Notes, the Issuers
shall comply with any applicable securities laws and regulations, including any
applicable requirements of Section 14(e) of, and Rule 14e-1 under, the Exchange
Act.
LIMITATION ON ISSUANCE AND SALE OF CAPITAL STOCK OF RESTRICTED SUBSIDIARIES
The Indenture provides that none of the Issuers will, nor permit any of their
Restricted Subsidiaries to, (a) transfer, convey, sell or otherwise dispose of
any shares of Capital Stock of any Restricted Subsidiary of the Issuers (other
than to the Company or a Wholly Owned Subsidiary of the Company), except that
the Company and any such Restricted Subsidiary (other than an Issuer) may, in
any single transaction, sell all, but not less than all, of the issued and
outstanding Capital Stock of any such Restricted Subsidiary to any Person,
subject to complying with the provisions of the Indenture described under "--
Limitation on Certain Asset Dispositions" above and (b) issue shares of Capital
Stock of a Restricted Subsidiary of the Company (other than directors'
qualifying shares), or securities convertible into, or warrants, rights or
options to subscribe for or purchase shares of, Capital Stock of a Restricted
Subsidiary of the Company to any Person other than to the Company or a Wholly
Owned Subsidiary of the Company.
LIMITATION ON TRANSACTIONS WITH AFFILIATES AND RELATED PERSONS
The Indenture provides that none of the Issuers nor any of their Restricted
Subsidiaries will enter into directly or indirectly any transaction with any of
their respective Affiliates or Related Persons (other than the Issuers or a
Restricted Subsidiary of an Issuer), including, without limitation, the
purchase, sale, lease or exchange of property, the rendering of any service, or
the making of any guarantee, loan, advance or Investment, either directly or
indirectly, involving aggregate consideration in excess of $1,000,000 unless (i)
a majority of the disinterested directors of the Board of Directors of the
Company determines, in its good faith judgment evidenced by a resolution of such
Board of Directors filed with the Trustee, that the terms of such transactions
are at least as favorable as the terms that could be obtained by the Issuer or
such Restricted Subsidiary, as the case may be in a comparable transaction made
on an arms-length basis between unaffiliated parties; provided, however, that if
the aggregate consideration is in excess of $5 million the Company shall also
obtain, prior to the consummation of the transaction, the favorable opinion as
to the fairness of the transaction to such Issuer or Restricted Subsidiary, from
a financial point of view from an independent financial advisor; and (ii) such
transaction is, in the opinion of a majority of the disinterested directors of
the Board of Directors of the Company evidenced by a resolution of such Board of
Directors filed with the Trustee, on terms no less favorable to such Issuer or
such Restricted Subsidiary, as the case may be, than those that could be
obtained in a comparable arm's-length transaction with an entity that is not an
Affiliate or a Related Person. The provisions of this covenant shall not apply
to (i) transactions permitted by the provisions of the Indenture described above
under the caption "-- Limitation on Restricted Payments" above, (ii) reasonable
fees and compensation paid to, and indemnity provided on behalf of, officers,
directors and employees of the Company and its Subsidiaries as determined in
good faith by the Board of Directors of the Company, (iii) loans, payments or
advances to employees in the ordinary course of
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business which are approved in good faith by the Board of Directors of the
Company and (iv) the existence of, or the performance by the Company or any of
its Restricted Subsidiaries of its obligations under the terms of, any
stockholder agreement (including any registration rights agreement or purchase
agreement related thereto) to which it is a party as of the Issue Date and any
similar agreements which it may enter into thereafter.
CHANGE OF CONTROL
Within 30 days following the date of the consummation of a transaction resulting
in a Change of Control, the Issuers (or any of them) will commence an Offer to
Purchase all outstanding Notes at a purchase price in cash equal to 101% of
their principal amount plus accrued interest to the Purchase Date. The Indenture
will provide that, prior to the commencement of the Offer to Purchase, but in
any event within 30 days following any Change of Control, the Issuers covenant
to (i) repay in full and terminate all commitments under Indebtedness under the
Credit Agreement and all other Senior Debt the terms of which require repayment
upon a Change of Control or offer to repay in full and terminate all commitments
under all Indebtedness under the Credit Agreement and all other such Senior Debt
and to repay the Indebtedness owed to each lender which has accepted such offer
or (ii) obtain the requisite consents under the Credit Agreement and all such
other Senior Debt to permit the repurchase of the Notes. The Issuers shall first
comply with the covenant in the immediately preceding sentence before they shall
be required to repurchase Notes pursuant to the provisions described below. The
Issuers' failure to comply with the immediately preceding sentence shall
constitute an Event of Default. So long as the Old Notes or New Notes are listed
on the Luxembourg Stock Exchange and the rules of such Stock Exchange shall so
require, notice of such an Offer to Purchase shall be published in a leading
newspaper having a general circulation in Luxembourg (which is expected to be
the LUXEMBOURG WORT).
The Offer to Purchase will be consummated not earlier than 30 days and not later
than 60 days after the commencement thereof. Each holder shall be entitled to
tender all or any portion of the Notes owned by such holder pursuant to the
Offer to Purchase, subject to the requirement that any portion of a Note
tendered must bear an integral multiple of $1,000 principal amount. A "Change of
Control" will be deemed to have occurred in the event that (whether or not
otherwise permitted by the Indenture), after the Issue Date (a) any Person or
any Persons acting together that would constitute a group (for purposes of
Section 13(d) of the Exchange Act, or any successor provision thereto) (a
"Group"), together with any Affiliates or Related Persons thereof, other than
Permitted Holders, shall "beneficially own" (as defined in Rule 13d-3 under the
Exchange Act, or any successor provision thereto) at least 40% of the voting
power of the outstanding Voting Stock of the Company; (b) any sale, lease or
other transfer (in one transaction or a series of related transactions) is made
by the Company or its Restricted Subsidiaries of all or substantially all of the
consolidated assets of the Company and its Restricted Subsidiaries to any
Person; (c) the Company consolidates with or merges with or into another Person
or any Person consolidates with, or merges with or into, the Company, in any
such event pursuant to a transaction in which immediately after the consummation
thereof Persons owning a majority of the voting stock of the Company immediately
prior to such consummation shall cease to own a majority of the voting stock of
the Company or the surviving entity if other than the Company, (d) Continuing
Directors cease to constitute at least a majority of the Board of Directors of
the Company; or (e) the stockholders of the Company approve any plan or proposal
for the liquidation or dissolution of the Company.
In the event that the Issuers make an Offer to Purchase the Notes, the Issuers
shall comply with any applicable securities laws and regulations, including any
applicable requirements of Section 14(e) of, and Rule 14e-1 under, the Exchange
Act.
With respect to the sale of assets referred to in the definition of "Change of
Control," the phrase "all or substantially all" of the assets of the Company
will likely be interpreted under applicable law and will be dependent upon
particular facts and circumstances. As a result, there may be a degree of
uncertainty in ascertaining whether a sale or transfer of "all or substantially
all" of the assets of the Company has occurred. In addition, no assurances can
be given that the Issuers will be able to acquire Notes tendered upon the
occurrence of a Change of Control. The ability of the Issuers to pay cash to the
holders of Notes upon a Change of Control may be limited by their then existing
financial resources. The Credit Agreement will contain certain covenants
prohibiting, or requiring waiver or consent of the thereunder prior to, the
repurchase of the Notes upon a Change of Control and future debt agreements of
the Issuers may provide the same. If the Issuers do not obtain such waiver or
consent or repay such Indebtedness, the Issuers will remain prohibited from
repurchasing the Notes. In such event, the Issuers' failure to purchase tendered
Notes would constitute an Event of
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Default under the Indenture which would in turn constitute a default under the
Credit Agreement and possibly other Senior Debt. None of the provisions relating
to a repurchase upon a Change of Control are waivable by the Board of Directors
of the Company or the Trustee.
The foregoing provisions will not prevent the Issuers from entering into
transactions of the types described above with management or their affiliates.
In addition, such provisions may not necessarily afford the holders of the Notes
protection in the event of a highly leveraged transaction, including a
reorganization, restructuring, merger or similar transaction involving the
Issuers that may adversely affect the holders because such transactions may not
involve a shift in voting power or beneficial ownership, or even if they do, may
not involve a shift of the magnitude required under the definition of Change of
Control to trigger the provisions.
PROVISION OF FINANCIAL INFORMATION
Whether or not the Issuers are subject to Section 13(a) or 15(d) of the Exchange
Act, or any successor provision thereto, following effectiveness of the Exchange
Offer the Company shall file with the Commission the annual reports, quarterly
reports and other documents which the Company would have been required to file
with the Commission pursuant to such Section 13(a) or 15(d) or any successor
provision thereto if the Company were so required, such documents to be filed
with the Commission on or prior to the respective dates (the "Required Filing
Dates") by which the Company would have been required so to file such documents
if the Company were so required. The Company shall also in any event (a) within
15 days of each Required Filing Date (i) transmit by mail to all holders of
Notes, as their names and addresses appear in the Note Register, without cost to
such holders, and (ii) file with the Trustee, copies of the annual reports,
quarterly reports and other documents which the Company is required to file with
the Commission pursuant to the preceding sentence, and (b) if, notwithstanding
the preceding sentence, filing such documents by the Company with the Commission
is not permitted under the Exchange Act, promptly upon written request supply
copies of such documents to any prospective holder of Notes. The Indenture
requires that the financial statements and other financial information provided
in such reports or other documents be prepared and presented in accordance with
GAAP.
MERGERS, CONSOLIDATIONS AND CERTAIN SALES OF ASSETS
None of the Issuers will consolidate or merge with or into any Person, or sell,
assign, lease, convey or otherwise dispose of (or cause or permit any Restricted
Subsidiary of the Issuers to consolidate or merge with or into any Person or
sell, assign, lease, convey or otherwise dispose of) all or substantially all of
the Company's assets (determined on a consolidated basis for the Company and its
Restricted Subsidiaries), whether as an entirety or substantially an entirety in
one transaction or a series of related transactions, including by way of
liquidation or dissolution, to any Person unless, in each such case: (i) the
entity formed by or surviving any such consolidation or merger (if other than
such Issuer or such Restricted Subsidiary, as the case may be), or to which such
sale, assignment, lease, conveyance or other disposition shall have been made
(the "Surviving Entity"), is a corporation organized and existing under the laws
of the jurisdiction of incorporation of such Issuer or Restricted Subsidiary or
the United States, any state thereof or the District of Columbia; (ii) the
Surviving Entity assumes by supplemental indenture all of the obligations of
such Issuer or the Issuers, as the case may be, on the Notes and under the
Indenture; (iii) immediately after giving effect to such transaction and the use
of any net proceeds therefrom on a pro forma basis, the Company or the Surviving
Entity (in the case of any transaction involving an Issuer other than the
Company), as the case may be, could Incur at least $1.00 of Indebtedness
pursuant to clause (i) of the provisions of the Indenture described under "--
Limitation on Indebtedness" above; (iv) immediately before and after giving
effect to such transaction and treating any Indebtedness which becomes an
obligation of the Company or any of its Restricted Subsidiaries as a result of
such transaction as having been incurred by the Company or such Restricted
Subsidiary, as the case may be, at the time of the transaction, no Event of
Default or event that with the passing of time or the giving of notice, or both,
would constitute an Event of Default shall have occurred and be continuing; and
(v) if, as a result of any such transaction, property or assets of an Issuer or
a Restricted Subsidiary would become subject to a Lien not excepted from the
provisions of the Indenture described under "-- Limitation on Liens" above, such
Issuer, Restricted Subsidiary or the Surviving Entity, as the case may be, shall
have secured the Notes as required by said covenant. The provisions of this
paragraph shall not apply to any merger of a Restricted Subsidiary of the
Company with or into the Company or a Wholly Owned Subsidiary of the Company or
any transaction pursuant to which the Guarantee is to be released in accordance
with the terms of the Guarantee and the Indenture in connection with any
transaction complying with the provisions of the Indenture described under "--
Limitation on Certain Asset Dispositions" above.
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EVENTS OF DEFAULT
The following are Events of Default under the Indenture: (a) failure to pay
principal of (or premium, if any, on) any Note when due (whether or not
prohibited by the provisions of the Indenture described under "-- Ranking"
above); (b) failure to pay any interest on any Note when due, continued for 30
days (whether or not prohibited by the provisions of the Indenture described
under "-- Ranking" above); (c) default in the payment of principal of and
interest on Notes required to be purchased pursuant to an Offer to Purchase as
described under "-- Covenants -- Change of Control" and "-- Covenants --
Limitation on Certain Asset Dispositions" above when due and payable (whether or
not prohibited by the provisions of the Indenture described under "-- Ranking"
above); (d) failure to perform or comply with any of the provisions described
under "-- Covenants -- Mergers, Consolidations and Certain Sales of Assets"
above; (e) failure to perform any other covenant or agreement of the Issuers
under the Indenture or the Notes continued for 30 days after written notice to
any of the Issuers by the Trustee or holders of at least 25% in aggregate
principal amount of outstanding Notes; (f) default under the terms of one or
more instruments evidencing or securing Indebtedness of the Company or any of
its Subsidiaries having an outstanding principal amount of $10 million or more
individually or in the aggregate that has resulted in the acceleration of the
payment of such Indebtedness or failure to pay principal when due at the stated
maturity of any such Indebtedness; (g) the rendering of a final judgment or
judgments (not subject to appeal) against the Company or any of its Subsidiaries
in an amount of $10 million or more which remains undischarged or unstayed for a
period of 60 days after the date on which the right to appeal has expired; (h)
certain events of bankruptcy, insolvency or reorganization affecting the Company
or any of its Significant Subsidiaries; and (i) the Guarantee of US Holdco
ceases to be in full force and effect or is declared null and void and
unenforceable or found to be invalid or US Holdco denies its liability under the
Guarantee (other than by reason of a release of US Holdco from the Guarantee in
accordance with the terms of the Indenture and the Guarantee).
If an Event of Default (other than an Event of Default with respect to an Issuer
described in clause (h) of the preceding paragraph) shall occur and be
continuing, either the Trustee or the holders of at least 25% in aggregate
principal amount of the outstanding Notes may accelerate the maturity of all
Notes effective five days after receipt of notice thereof by the agent under the
Credit Agreement; provided, however, that after such acceleration, but before a
judgment or decree based on acceleration, the holders of a majority in aggregate
principal amount of outstanding Notes may, under certain circumstances, rescind
and annul such acceleration if all Events of Default, other than the non-payment
of accelerated principal, have been cured or waived as provided in the
Indenture. If an Event of Default specified in clause (h) of the preceding
paragraph with respect to an Issuer occurs, the outstanding Notes will ipso
facto become immediately due and payable without any declaration or other act on
the part of the Trustee or any holder. For information as to waiver of defaults,
see "-- Modification and Waiver."
The Indenture provides that the Trustee shall, within 30 days after the
occurrence of any Default or Event of Default with respect to the Notes, give
the holders thereof notice of all uncured Defaults or Events of Default known to
it; provided, however, that, except in the case of an Event of Default or a
Default in payment with respect to the Notes or a Default or Event of Default in
complying with "-- Covenants -- Mergers, Consolidations and Certain Sales of
Assets," the Trustee shall be protected in withholding such notice if and so
long as the Board of Directors or responsible officers of the Trustee in good
faith determine that the withholding of such notice is in the interest of the
holders of the Notes.
No holder of any Note will have any right to institute any proceeding with
respect to the Indenture or for any remedy thereunder, unless such holder shall
have previously given to the Trustee written notice of a continuing Event of
Default and unless the holders of at least 25% in aggregate principal amount of
the outstanding Notes shall have made written request, and offered reasonable
indemnity, to the Trustee to institute such proceeding as Trustee, and the
Trustee shall not have received from the holders of a majority in aggregate
principal amount of the outstanding Notes a direction inconsistent with such
request and shall have failed to institute such proceeding within 60 days.
However, such limitations do not apply to a suit instituted by a holder of a
Note for enforcement of payment of the principal of and premium, if any, or
interest on such Note on or after the respective due dates expressed in such
Note.
The Issuers are required to furnish to the Trustee annually a statement as to
their performance of certain of their obligations under the Indenture and as to
any default in such performance.
SATISFACTION AND DISCHARGE OF INDENTURE; DEFEASANCE
The Company may terminate its substantive obligations and the substantive
obligations of the other Issuers and the Guarantor in respect of the Notes by
delivering all outstanding Notes to the Trustee for cancellation and paying all
sums
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payable by the Issuers on account of principal of, premium, if any, and interest
on all Notes or otherwise. In addition to the foregoing, the Company may,
provided that no Default or Event of Default has occurred and is continuing or
would arise therefrom (or, with respect to a Default or Event of Default
specified in clause (h) of "-- Events of Default" above, any time on or prior to
the 95th calendar day after the date of such deposit (it being understood that
this condition shall not be deemed satisfied until after such 95th day)) and
provided that no default under any Senior Debt would result therefrom, terminate
its substantive obligations and the substantive obligations of the other Issuers
and the Guarantor in respect of the Notes (except for the Issuers' obligations
to pay the principal of (and premium, if any, on) and the interest on the Notes
and the Guarantor's guarantee thereof) by (i) depositing with the Trustee, under
the terms of an irrevocable trust agreement, money or United States Government
Obligations sufficient (without reinvestment) to pay all remaining indebtedness
on the Notes, (ii) delivering to the Trustee either an Opinion of Counsel or a
ruling directed to the Trustee from the Internal Revenue Service to the effect
that the holders of the Notes will not recognize income, gain or loss for
federal income tax purposes as a result of such deposit and termination of
obligations, (iii) delivering to the Trustee an Opinion of Counsel to the effect
that the Company's exercise of its option under this paragraph will not result
in any of the Issuers, the Trustee or the trust created by the Company's deposit
of funds pursuant to this provision becoming or being deemed to be an
"investment company" under the Investment Company Act of 1940, as amended, and
(iv) complying with certain other requirements set forth in the Indenture. In
addition, the Company may, provided that no Default or Event of Default has
occurred, and is continuing or would arise therefrom (or, with respect to a
Default or Event of Default specified in clause (h) of "-- Events of Default"
above, any time on or prior to the 95th calendar day after the date of such
deposit (it being understood that this condition shall not be deemed satisfied
until after such 95th day) and provided that no default under any Senior Debt
would result therefrom, terminate all of its substantive obligations and all of
the substantive obligations of the other Issuers and the Guarantor in respect of
the Notes (including the Issuers' obligations to pay the principal of (and
premium, if any, on) and interest on the Notes and the Guarantor's guarantee
thereof) by (i) depositing with the Trustee, under the terms of an irrevocable
trust agreement, money or United States Government Obligations sufficient
(without reinvestment) to pay all remaining indebtedness on the Notes, (ii)
delivering to the Trustee either a ruling directed to the Trustee from the
Internal Revenue Service to the effect that the holders of the Notes will not
recognize income, gain or loss for federal income tax purposes as a result of
such deposit and termination of obligations or an Opinion of Counsel based upon
such a ruling addressed to the Trustee or a change in the applicable Federal tax
law since the date of the Indenture, to such effect, (iii) delivering to the
Trustee an Opinion of Counsel to the effect that the Company's exercise of its
option under this paragraph will not result in any of the Issuers, the Trustee
or the trust created by the Issuers' deposit of funds pursuant to this provision
becoming or being deemed to be an "investment company" under the Investment
Company Act of 1940, as amended, and (iv) complying with certain other
requirements set forth in the Indenture.
The Issuers may make an irrevocable deposit pursuant to this provision only if
at such time they are not prohibited from doing so under the subordination
provisions of the Indenture or certain covenants in the instruments governing
Senior Debt and the Company has delivered to the Trustee and any Paying Agent an
Officers' Certificate to that effect.
GOVERNING LAW
The Indenture, the Notes and the Guarantee are governed by the laws of the State
of New York without regard to principles of conflicts of laws.
MODIFICATION AND WAIVER
Modifications and amendments of the Indenture may be made by the Issuers and the
Trustee with the consent of the holders of a majority in aggregate principal
amount of the outstanding Notes; provided, however, that no such modification or
amendment may, without the consent of the holder of each Note affected thereby,
(a) change the Stated Maturity of the principal of or any installment of
interest on any Note or alter the optional redemption or repurchase provisions
of any Note or the Indenture in a manner adverse to the holders of the Notes,
(b) reduce the principal amount (or the premium) of any Note, (c) reduce the
rate of or extend the time for payment of interest on any Note, (d) change the
place or currency of payment of principal of (or premium) or interest on any
Note, (e) modify any provisions of the Indenture relating to the waiver of past
defaults (other than to add sections of the Indenture subject thereto) or the
right of the holders to institute suit for the enforcement of any payment on or
with respect to any Note or the Guarantee or the modification and amendment of
the Indenture and the Notes (other than to add sections of the Indenture or the
Notes which may not be amended, supplemented or waived without the consent of
each holder affected), (f) reduce the percentage of the principal amount of
outstanding Notes necessary for amendment to or waiver of compliance with any
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provision of the Indenture or the Notes or for waiver of any Default, (g) waive
a default in the payment of principal of, interest on, or redemption payment
with respect to, any Note (except a recision of acceleration of the Notes by the
holders as provided in the Indenture and a waiver of the payment default that
resulted from such acceleration), (h) modify the ranking or priority of the
Notes or the Guarantee or modify the definition of Senior Debt or Designated
Senior Debt or amend or modify the subordination provisions of the Indenture in
any manner adverse to the holders of the Notes, holders of Senior Debt under the
Credit Agreement or the Agent thereunder, (i) release the Guarantor from any of
its obligations under the Guarantee or the Indenture otherwise than in
accordance with the Indenture, or (j) modify the provisions relating to any
Offer to Purchase required under the covenants described under "-- Covenants --
Limitation on Certain Asset Dispositions" or "-- Covenants -- Change of Control"
in a manner materially adverse to the holders of Notes with respect to any Asset
Disposition that has been consummated or Change of Control that has occurred.
The holders of a majority in aggregate principal amount of the outstanding
Notes, on behalf of all holders of Notes, may waive compliance by the Issuers
with certain restrictive provisions of the Indenture. Subject to certain rights
of the Trustee, as provided in the Indenture, the holders of a majority in
aggregate principal amount of the outstanding Notes, on behalf of all holders of
Notes, may waive any past default under the Indenture, except a default in the
payment of principal, premium or interest or a default arising from failure to
purchase any Note tendered pursuant to an Offer to Purchase, or a default in
respect of a provision that under the Indenture cannot be modified or amended
without the consent of the holder of each outstanding Note affected.
THE TRUSTEE
The Indenture provides that, except during the continuance of a Default, the
Trustee will perform only such duties as are specifically set forth in the
Indenture. During the existence of a Default, the Trustee will exercise such
rights and powers vested in it under the Indenture and use the same degree of
care and skill in their exercise as a prudent person would exercise under the
circumstances in the conduct of such person's own affairs. The Indenture and
provisions of the Trust Indenture Act incorporated by reference therein contain
limitations on the rights of the Trustee, should it become a creditor of an
Issuer, the Guarantor or any other obligor upon the Notes, to obtain payment of
claims in certain cases or to realize on certain property received by it in
respect of any such claim as security or otherwise. The Trustee is permitted to
engage in other transactions with the Issuers or an Affiliate of any of the
Issuers; provided, however, that if it acquires any conflicting interest (as
defined in the Indenture or in the Trust Indenture Act), it must eliminate such
conflict or resign.
BOOK-ENTRY; DELIVERY AND FORM
GENERAL The New Notes will initially be represented by a global note in bearer
form without interest coupons (the "Global Note") which will be issued in
denominations equal to the outstanding principal amount at maturity of the New
Notes represented thereby. The Global Note will be deposited with the Book-Entry
Depositary pursuant to the terms of a Deposit Agreement, dated as of September
25, 1996 (the "Deposit Agreement"), between the Issuers, for the limited
purposes set forth therein, and The Chase Manhattan Bank as book-entry
depositary (the "Book-Entry Depositary").
The Book-Entry Depositary will issue a certificateless interest for the Global
Note representing a 100% interest in the Global Note, to DTC by recording such
interest in the Book-Entry Depositary's books and records in the name of Cede &
Co., as nominee of DTC. Beneficial interests in the Global Note will be shown
on, and transfers thereof will be effected only through, records maintained in
book-entry form by DTC (with respect to its participants) and its participants.
See "-- Description of Book-Entry System." Such beneficial interests in the
Global Note are referred to herein as "Book-Entry Interests."
Except in limited circumstances described below, owners of Book-Entry Interests
in the Global Note will not be entitled to receive physical delivery of
Definitive Registered Notes (as defined below).
DEFINITIVE REGISTERED NOTES Under the terms of the Deposit Agreement, owners of
Book-Entry Interests in the Global Note will receive definitive, certificated
Notes in registered form ("Definitive Registered Notes") (i) if DTC notified the
Book-Entry Depositary that it is unwilling or unable to continue to act as
depository or ceases to be a clearing agency registered under the Securities
Exchange Act of 1934, as amended, and, in either case, a successor depository is
not appointed by the Book-Entry Depositary at the request of the Issuers within
120 days, (ii) if an Event of Default under the Indenture occurs, upon the
request delivered in writing to DTC of the owner of a Book-Entry Interest, (iii)
at any
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time if the Issuers in their sole discretion determine that the Global Notes (in
whole but not in part) would be exchanged for registered Notes or (iv) if the
Book-Entry Depositary is at any time unwilling or unable to continue as
Book-Entry Depositary and a successor Book-Entry Depositary is not able to be
appointed by the Issuers within 120 days.
In no event will definitive Notes in bearer form be issued. Any Definitive
Registered Notes will be issued in registered form in denominations of $1,000
principal amount at maturity and integral multiples thereof. Any Definitive
Registered Notes will be registered in such name or names as DTC shall instruct
the Trustee, through the Book-Entry Depositary. It is expected that DTC's
instructions will be based upon directions received by DTC from its participants
(including Euroclear and Cedel) reflecting the beneficial ownership of
Book-Entry Interests. To the extent permitted by law, the Issuers, the Trustee
and any paying agent shall be entitled to treat the person in whose name any
Definitive Registered Note is registered as the absolute owner thereof. While
the Global Note is outstanding, holders of Definitive Registered Notes may
exchange their Definitive Registered Notes for a corresponding Book-Entry
Interest in the Global Note by surrendering their Definitive Registered Notes.
The Indenture governing the Notes contains provisions relating to the
maintenance by a registrar of a register reflecting ownership of Definitive
Registered Notes, if any, and other provisions customary for a registered debt
security. Payment of principal and interest on each Definitive Registered Note
will be made to the holder appearing on the register at the close of business on
the record date at his address shown on the register on the record date.
HOLDERS SHOULD BE AWARE THAT, UNDER CURRENT U.K. LAW, UPON THE ISSUANCE TO A
HOLDER OF CERTIFICATED NOTES SUCH HOLDER WILL BECOME SUBJECT TO U.K. INCOME TAX
(CURRENTLY 20%) TO BE WITHHELD ON ANY PAYMENTS OF INTEREST ON THE DEFINITIVE
REGISTERED NOTES AS SET FORTH UNDER "CERTAIN INCOME TAX CONSIDERATIONS --
CERTAIN NON-U.S. INCOME TAX CONSIDERATIONS -- UNITED KINGDOM." A U.S. HOLDER OF
DEFINITIVE REGISTERED NOTES WILL, TO THE EXTENT DESCRIBED BELOW UNDER
"DESCRIPTION OF THE NEW NOTES -- TAXATION; REDEMPTION FOR TAXATION REASONS," BE
ENTITLED TO RECEIVE ADDITIONAL AMOUNTS WITH RESPECT TO SUCH DEFINITIVE
REGISTERED NOTES. ADDITIONAL AMOUNTS WILL NOT BE PAYABLE IF SUCH CERTIFICATED
NOTES WERE ISSUED AT THE REQUEST OF A HOLDER (INCLUDING FOLLOWING AN EVENT OF
DEFAULT) OR IF AT THE TIME OF THE PAYMENT IN QUESTION CERTIFICATED NOTES HAVE
NOT BEEN ISSUED IN EXCHANGE FOR THE ENTIRE PRINCIPAL AMOUNT AT MATURITY OF
NOTES. HOWEVER, A U.S. HOLDER OF DEFINITIVE REGISTERED NOTES MAY BE ENTITLED TO
RECEIVE A REFUND OF WITHHELD AMOUNTS FROM THE INLAND REVENUE IN CERTAIN
CIRCUMSTANCES. SEE "CERTAIN INCOME TAX CONSIDERATIONS -- CERTAIN NON-U.S. INCOME
TAX CONSIDERATIONS -- UNITED KINGDOM."
DESCRIPTION OF BOOK-ENTRY SYSTEM
GENERAL Upon receipt of the Global Note, the Book-Entry Depositary will issue a
certificateless interest, representing a 100% interest in the Global Note, to
DTC by recording such interest in the Book-Entry Depositary's books and records
in the name of Cede & Co., as nominee of DTC. Ownership of Book-Entry Interests
will be limited to persons who have accounts with DTC, including Euroclear and
Cedel ("participants"), or persons who have accounts through participants
("indirect participants"). Upon such issuance of interests in the Global Note to
DTC, DTC will credit, on its internal book-entry registration and transfer
system, its participants' accounts with the respective interests owned by such
participants. Such accounts initially will be designated by or on behalf of the
Initial Purchasers. Ownership of Book-Entry Interests and the transfer of such
ownership will be effected only through, records maintained by DTC or its
nominee (with respect to interests of participants) and the records of
participants (with respect to interests of indirect participants).
The laws of some countries and some states in the United States may require that
certain purchasers of securities take physical delivery of such securities in
definitive form. Such limits and such laws may impair the ability to own,
transfer or pledge the Book-Entry Interests in the Global Note.
So long as the Book-Entry Depositary is the holder of the Global Note, the
Book-Entry Depositary will be considered the sole holder of such Global Note for
all purposes under the Indenture and the New Notes. Except as set forth above
under "-- Book-Entry; Delivery and Form," participants or indirect participants
will not be entitled to have New Notes or Book-Entry Interests registered in
their names, will not receive or be entitled to receive physical delivery of New
Notes or Book-Entry Interests in definitive bearer or registered form and will
not be considered the owners or holders thereof under the Indenture.
Accordingly, each person owning a Book-Entry Interest must rely on the procedure
of the Book-
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Entry Depositary and DTC, Euroclear and Cedel and, if such person is an indirect
participant in DTC, on the procedures of the participant in DTC through which
such person owns its interest, to exercise any rights and remedies of a holder
under the Indenture. See "-- Action by Owners of Book-Entry Interests." If any
definitive New Notes are issued to participants or indirect participants, they
will be issued in registered form, as described under "-- Book-Entry; Delivery
and Form." Unless and until Book-Entry Interests are exchanged for Definitive
Registered Notes, the certificateless interest held by DTC may not be
transferred except as a whole between DTC and a nominee of DTC, between nominees
of DTC, or by DTC or any such nominee to a successor of DTC or a successor of
such nominee.
PAYMENTS ON THE GLOBAL NOTE Payments of any amounts owing in respect of the
Global Note will be made through one or more paying agents appointed under the
Indenture to the Book-Entry Depositary as the holder of the Global Notes. All
such amounts will be payable in U.S. dollars with respect to the New Notes. Upon
receipt of any such amounts in respect of the Global Note, the Book-Entry
Depositary will pay such amounts to DTC in proportion to their respective
interests as shown on the Book-Entry Depositary's records.
The Company expects that DTC or its nominee, upon receipt of any payment made in
respect of the Global Note will credit its participants' accounts with such
payments in amounts proportionate to their respective interest in the principal
amount of such Global Note as shown on the records of DTC or its nominee. The
Company expects that payments by participants to owners of Book-Entry Interests,
held through such participants will be governed by standing customer
instructions and customary practices, as is now the case with the securities
held for the account of customers in bearer form or registered in "street name,"
and will be the responsibility of such participants. Distribution with respect
to ownership of Book-Entry Interests held through Euroclear of Cedel will be
credited to the cash accounts of Euroclear participants or Cedel participants in
accordance with the relevant system's rules and procedures, to the extent
received by its depository.
Payments of all such amounts made with respect to the New Notes will be made
without deduction or withholding for or on account of any present or future
Taxes of whatever nature except as may be required by law, and if any such
deduction or withholding is required to be made by any law or regulation of the
U.K. or of any other jurisdiction in which the Issuers are engaged in business
for tax purposes then, to the extent described under "Description of the New
Notes -- Taxation, Redemption for Taxation Reasons," the Issuers have agreed
pursuant to the Indenture that such Additional Amounts will be paid as may be
necessary in order that the net amounts received by any holder of the Global
Note or owner of a Book-Entry Interest after such deduction or withholding will
equal the net amounts that such holder or owner would have otherwise received in
respect of the Global Note or Book Entry Interests in the Global Note, as the
case may be, absent such withholding or deduction.
None of the Issuers, the Book-Entry Depositary or any Paying Agent will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of Book-Entry Interests.
REDEMPTION OF GLOBAL NOTE In the event the Global Note (or any portion thereof)
is redeemed, the Book-Entry Depositary will, through DTC redeem an equal amount
of the Book-Entry Interest in the Global Note from the amount received by it in
respect of the redemption of such Global Note. The redemption price payable in
connection with the redemption of such Book-Entry Interests will be equal to the
amount received by the Book-Entry Depositary in connection with the redemption
of the Global Note (or any portion thereof). The Issuers understand that under
existing DTC practices, if fewer than all of the Notes are to be redeemed at any
time, DTC will credit its participants' accounts on a proportionate basis (with
adjustments to prevent fractions) or by lot or on such other basis as DTC deems
fair and appropriate; provided that no beneficial interests of less than $1,000
principal amount at maturity may be redeemed in part.
TRANSFERS Pursuant to the Deposit Agreement, the Global Note may be transferred
only to a successor to the Book-Entry Depositary.
All transfers of Book-Entry Interests between participants in DTC will be
effected by DTC pursuant to customary procedures established by DTC and its
participants. Transfers between participants in Euroclear and Cedel will be
effected in the ordinary way in accordance with their respective rules and
operating procedures.
Investors may under certain circumstances have the option to obtain Definitive
Registered Notes as set forth under "-- Book Entry; Delivery and Form --
Definitive Registered Notes" above.
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ACTION BY OWNERS OF BOOK-ENTRY INTERESTS As soon as practicable after receipt
by the Book-Entry Depositary of notice of any solicitation of consents or
request for a waiver or other action by the holders of Notes, or of any offer to
purchase, the Book-Entry Depositary will mail to DTC, a notice containing (a)
such information as is contained in the notice received by the Book-Entry
Depositary, (b) a statement that at the close of business on a specified record
date DTC will be entitled to instruct the Book-Entry Depositary as to the
consent, waiver or other action, if any, pertaining to such Notes and (c) a
statement as to the manner in which such instructions may be given. In addition,
the Book-Entry Depositary will forward to DTC all materials pertaining to such
solicitation, request, offer or other action. Upon the written request of DTC,
the Book-Entry Depositary shall endeavor insofar as practicable to take such
action regarding the requested consent, waiver, offer or other action in respect
of such Notes in accordance with any instructions set forth in such request. DTC
may grant proxies or otherwise authorize DTC participants or indirect
participants to provide such instruction to the Book-Entry Depositary so that it
may exercise any rights of a holder or take any other actions which a holder is
entitled to take under the Indenture. Under its usual procedures, DTC would mail
an omnibus proxy to the Issuer and the Book-Entry Depositary assigning
Euroclear's and Cedel's consenting or voting rights to those DTC participants to
whose accounts such Book-Entry Interests are credited on a record date as soon
as possible after such record date. Euroclear or Cedel, as the case may be, will
take any action permitted to be taken by a holder under the Indenture on behalf
of a Euroclear participant or Cedel participant only in accordance with its
relevant rules and procedures and subject to its depositary's ability to effect
such actions on its behalf through DTC. The Book-Entry Depositary will not
exercise any discretion in the granting of consents or waivers of the taking of
any other action relating to the Indenture.
DTC has advised the Issuers that it will take any action permitted to be taken
by a holer of Notes (including the presentation of Notes for exchange as
described above) only at the direction of one or more participants to whose
account the DTC interests in the Global Note are credited and only in respect of
such portion of the aggregate principal amount of Notes as to which such
participant or participants has or have given such direction.
REPORTS The Book-Entry Depositary will immediately send to DTC a copy of any
notices, reports and other communications received relating to the Issuers, the
Notes or the Book-Entry Interests.
ACTION BY BOOK-ENTRY DEPOSITARY Upon the occurrence of a Default with respect
to the Notes, or in connection with any other right of the holder of the Global
Note under the Indenture, if requested in writing by DTC, the Book-Entry
Depositary will take any such action as shall be requested in such notice;
provided that the Book-Entry Depositary has been offered reasonable security or
indemnity against the costs, expenses and liabilities that might be incurred by
it in compliance with such request by the owners of Book-Entry Interests.
RESIGNATION OF BOOK-ENTRY DEPOSITARY OR DTC The Book-Entry Depositary may at
any time resign as Book-Entry Depositary by written notice to the Issuers, the
Trustee and DTC, such resignation to become effective upon the appointment of a
successor book-entry depositary, in which case the Global Note shall be
delivered to such successor. If no successor has been so appointed by the
Issuers within 120 days, the Book-Entry Depository may request that the Company
issue Definitive Registered Notes in exchange therefor as described above.
If at any time DTC is unwilling or unable to continue as a depository for the
Global Note and a successor depository is not appointed by the Issuers within
120 days, DTC may request that the Issuers issue Definitive Registered Notes, in
exchange therefor.
AMENDMENT AND TERMINATION OF THE DEPOSIT AGREEMENT The Deposit Agreement may be
amended by the Issuers and the Book-Entry Depositary without notice to or
consent of DTC or any owner of Book-Entry Interests (a) to cure any ambiguity,
defect or inconsistency, provided that such amendment or supplement does not
adversely affect the rights of DTC or any holder of Book-Entry Interests, (b) to
evidence the succession of another person to an Issuer (when a similar amendment
with respect to the Indenture is being executed) and the assumption by any such
successor of the covenants of the Issuers herein, (c) to evidence or provide for
a successor Book-Entry Depositary, (d) to take any amendment, change or
supplement that does not adversely affect DTC or any owner of Book-Entry
Interests, (e) to add to the covenants of the Issuers or the Book-Entry
Depositary, or (f) to comply with the United States federal and English
securities laws. No amendments that adversely affects DTC may be made to the
Deposit Agreement without the consent of DTC. Upon issuance of the Definitive
Registered Notes in exchange for Book-Entry Interests constituting the entire
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principal amount at maturity of the Notes, the Deposit Agreement will terminate.
The Deposit Agreement may be terminated upon the resignation of the Book-Entry
Depositary if no successor has been appointed within 120 days as set forth under
"-- Resignation of Book-Entry Depositary or DTC."
INFORMATION CONCERNING DTC, EUROCLEAR AND CEDEL The Company understands as
follows with respect to DTC, Euroclear and Cedel:
DTC is a limited purpose trust company organized under the New York Banking Law,
a "banking organization" within the meaning of the New York Banking Law, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Securities Exchange
Act of 1934, as amended. DTC was created to hold securities of its participants
and to facilitate the clearance and settlement of transactions among its
participants in such securities through electronic book-entry changes in
accounts of the participants, thereby eliminating the need for physical movement
of securities certificates. DTC participants include securities brokers and
dealers (including the Initial Purchasers), banks, brokers, dealers and trust
companies, clearing corporations and certain other organizations, some of whom
(and/or their representatives) own DTC. Access to the DTC book-entry system is
also available to others, such as banks, brokers, dealears that clear through or
maintain a custodial relationship with a participant, either directly or
indirectly.
Euroclear and Cedel hold securities for participating organizations and
facilitate the clearance and settlement of securities transactions between their
respective participants through electronic book-entry changes in accounts of
such participants. Euroclear and Cedel provide to their participants, among
other things, services for safekeeping, administration, clearance and settlement
of internationally traded securities and securities lending and borrowing.
Euroclear and Cedel interface with domestic securities markets. Euroclear and
Cedel participants are financial institutions such as underwriters, securities
brokers and dealers, banks, trust companies and certain other organizations.
Indirect access to Euroclear and Cedel is also available to others such as
banks, brokers, dealers and trust companies that clear through or maintain a
custodian relationship with a Euroclear or Cedel participant, either directly or
indirectly.
GLOBAL CLEARANCE, SETTLEMENT AND TRADING UNDER BOOK-ENTRY SYSTEM Investors
electing to own their Book-Entry Interest through DTC (other than through
accounts as Euroclear or Cedel) will follow the settlement practices applicable
to U.S. corporate debt obligations. The securities custody accounts of investors
will be created with their holdings against payment in same day funds on the
settlement date.
Investors electing to own their Book-Entry Interests through Euroclear or Cedel
accounts will follow the settlement procedures applicable to conventional
eurobonds in registered form. Book-Entry Interests will be credited to the
securities custody accounts of Euroclear and Cedel holders on the business day
following the settlement date against payment for value on the settlement date.
The Book-Entry Interests will trade in DTC's Same-Day Funds Settlement Systems,
and secondary market trading activity in such Book-Entry Interests will
therefore settle in same-day funds.
Since the purchaser determines the place of delivery, it is important to
establish at the time of trading of any Book-Entry Interests where both the
purchaser's and seller's accounts are located to ensure that settlement can be
made on the desired value date.
Secondary market trading between Euroclear participants or Cedel participants
will be settled using the procedures applicable to conventional eurobonds in
same-day funds.
NOTICES
So long as the Old Notes or New Notes are listed on the Luxembourg Stock
Exchange and the rules of such Stock Exchange shall so require, notices
regarding the Old Notes and the New Notes will be published in a newspaper
having a general circulation in Luxembourg (which is expected to be the
LUXEMBOURG WORT).
CERTAIN DEFINITIONS
Set forth below is a summary of certain of the defined terms used in the
Indenture or the Registration Rights Agreement. Reference is made to the
Indenture or the Registration Rights Agreement for the full definition of all
such terms, as well as any other terms used herein for which no definition is
provided.
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"ACQUIRED INDEBTEDNESS" means, with respect to any Person, Indebtedness of such
Person (i) existing at the time such Person becomes a Restricted Subsidiary or
(ii) assumed in connection with the acquisition of assets from another Person,
including Indebtedness Incurred in connection with, or in contemplation of, such
Person becoming a Restricted Subsidiary or such acquisition, as the case may be.
"AFFILIATE" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with any specified Person. For purposes of this definition, "control"
when used with respect to any Person means the power to direct the management
and policies of such Person, directly or indirectly, whether through the
ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing. For
purposes of the Indenture, Paribas shall not be deemed an Affiliate of the
Company or any of its Subsidiaries.
"ASSET DISPOSITION" means any sale, transfer or other disposition (including,
without limitation, by merger, consolidation or sale-and-leaseback transaction)
of (i) shares of Capital Stock of a Subsidiary of the Company (other than
directors' qualifying shares) or (ii) property or assets of the Company or any
Subsidiary of the Company; provided, however, that an Asset Disposition shall
not include (a) any sale, transfer, pledge or other disposition of shares of
Capital Stock, property or assets by a Restricted Subsidiary of the Company to
the Company or to any Wholly Owned Subsidiary of the Company, (b) any sale,
transfer or other disposition of defaulted receivables for collection or any
sale, transfer or other disposition of property or assets in the ordinary course
of business, (c) any isolated sale, transfer or other disposition that does not
involve aggregate consideration in excess of $250,000 individually, (d) the
grant in the ordinary course of business of any non-exclusive license of
patents, trademarks, registrations therefor and other similar intellectual
property, (e) any Lien (or foreclosure thereon) securing Indebtedness to the
extent that such Lien is granted in compliance with "-- Covenants -- Limitation
on Liens" above, (f) any Restricted Payment permitted by "-- Covenants --
Limitation on Restricted Payments" above, (g) any disposition of assets or
property in the ordinary course of business to the extent such property or
assets are obsolete, worn-out or no longer useful in the Company's or any of its
Restricted Subsidiaries' business, (h) the sale, lease,conveyance or disposition
or other transfer of all or substantially all of the assets of the Issuers as
permitted under "Mergers, Consolidations and Certain Sales of Assets" above;
provided, that the assets not so sold, leased, conveyed, disposed of or
otherwise transferred shall be deemed an Asset Disposition or (i) any
disposition that constitutes a Change of Control.
"AVERAGE LIFE" means, as of the date of determination, with respect to any
Indebtedness for borrowed money or Preferred Stock, the quotient obtained by
dividing (i) the sum of the products of the number of years from the date of
determination to the dates of each successive scheduled principal or liquidation
value payments of such Indebtedness or Preferred Stock, respectively, and the
amount of such principal or liquidation value payments, by (ii) the sum of all
such principal or liquidation value payments.
"CAPITAL LEASE OBLIGATIONS" of any Person means the obligations to pay rent or
other amounts under a lease of (or other Indebtedness arrangements conveying the
right to use) real or personal property of such Person which are required to be
classified and accounted for as a capital lease or liability on the face of a
balance sheet of such Person in accordance with GAAP. The amount of such
obligations shall be the capitalized amount thereof in accordance with GAAP and
the stated maturity thereof shall be the date of the last payment of rent or any
other amount due under such lease prior to the first date upon which such lease
may be terminated by the lessee without payment of a penalty.
"CAPITAL STOCK" of any Person means any and all shares, interests,
participations or other equivalents (however designated) of corporate stock of
such Person (including any Preferred Stock outstanding on the Issue Date).
"CLAIM" means any claim arising from the rescission of the purchase of the
Notes, for damage arising from the purchase of the Notes or for reimbursement or
contribution on account of such a claim.
"COMMON STOCK" of any Person means Capital Stock of such Person that does not
rank prior, as to the payment of dividends or as to the distribution of assets
upon any voluntary or involuntary liquidation, dissolution or winding up of such
Person, to shares of Capital Stock of any other class of such Person.
"CONSOLIDATED CASH FLOW AVAILABLE FOR FIXED CHARGES" of any Person means for any
period the Consolidated Net Income of such Person for such period increased (to
the extent Consolidated Net Income for such period has been reduced thereby) by
the sum of (without duplication) (i) Consolidated Interest Expense of such
Person for such period, plus (ii) Consolidated Income Tax Expense of such Person
for such period, plus (iii) the consolidated depreciation and
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amortization expense included in the income statement of such Person prepared in
accordance with GAAP for such period, plus (iv) any other non-cash charges to
the extent deducted from or reflected in Consolidated Net Income except for any
non-cash charges that represent accruals of, or reserves for, cash disbursements
to be made in any future accounting period.
"CONSOLIDATED CASH FLOW RATIO" of any Person means for any period the ratio of
(i) Consolidated Cash Flow Available for Fixed Charges of such Person for such
period to (ii) the sum of (A) Consolidated Interest Expense of such Person for
such period, plus (B) the annual interest expense with respect to any
Indebtedness proposed to be Incurred by such Person or its Restricted
Subsidiaries, minus (C) Consolidated Interest Expense of such Person to the
extent included in clause (ii)(A) with respect to any Indebtedness that will no
longer be outstanding as a result of the Incurrence of the Indebtedness proposed
to be Incurred, plus (D) the annual interest expense with respect to any other
Indebtedness Incurred by such Person or its Restricted Subsidiaries since the
end of such period to the extent not included in clause (ii)(A), minus (E)
Consolidated Interest Expense of such Person to the extent included in clause
(ii)(A) with respect to any Indebtedness that no longer is outstanding as a
result of the Incurrence of the Indebtedness referred to in clause (ii)(D);
provided, however, that in making such computation, the Consolidated Interest
Expense of such Person attributable to interest on any Indebtedness bearing a
floating interest rate shall be computed on a pro forma basis as if the rate in
effect on the date of computation (after giving effect to any hedge in respect
of such Indebtedness that will, by its terms, remain in effect until the earlier
of the maturity of such Indebtedness or the date one year after the date of such
determination) had been the applicable rate for the entire period; provided,
further, however, that, in the event such Person or any of its Restricted
Subsidiaries has made any Asset Dispositions or acquisitions of assets not in
the ordinary course of business (including acquisitions of other Persons by
merger, consolidation or purchase of Capital Stock) during or after such period
and on or prior to the date of measurement, such computation shall be made on a
pro forma basis as if the Asset Dispositions or acquisitions had taken place on
the first day of such period. Calculations of pro forma amounts in accordance
with this definition shall be done in accordance with Article 11 of Regulation
S-X under the Securities Act of 1933 or any successor provision and may include
reasonably ascertainable cost savings.
"CONSOLIDATED INCOME TAX EXPENSE" of any Person means for any period the
consolidated provision for income taxes of such Person and its Restricted
Subsidiaries for such period calculated on a consolidated basis in accordance
with GAAP.
"CONSOLIDATED INTEREST EXPENSE" for any Person means for any period, without
duplication, (a) the consolidated interest expense included in a consolidated
income statement (without deduction of interest or finance charge income) of
such Person and its Restricted Subsidiaries for such period calculated on a
consolidated basis in accordance with GAAP and (b) dividend requirements of such
Person and its Restricted Subsidiaries with respect to Disqualified Stock (other
than, in the case of the Company, the Preferred Stock of the Company outstanding
on the Issue Date) and with respect to all other Preferred Stock of Restricted
Subsidiaries of such Person (in each case whether in cash or otherwise (except
dividends payable solely in shares of Capital Stock of such Person or such
Restricted Subsidiary)) paid, declared, accrued or accumulated during such
period times a fraction the numerator of which is one and the denominator of
which is one minus the then effective consolidated non-United States national,
state and local tax rate of such Person, expressed as a decimal.
"CONSOLIDATED NET INCOME" of any Person means for any period the consolidated
net income (or loss) of such Person and its Restricted Subsidiaries for such
period determined on a consolidated basis in accordance with GAAP; provided,
however, that there shall be excluded therefrom (a) the net income (or loss) of
any Person acquired by such Person or a Restricted Subsidiary of such Person in
a pooling-of-interests transaction for any period prior to the date of such
transaction, (b) the net income (but not net loss) of any Restricted Subsidiary
of such Person which is subject to restrictions which prevent or limit the
payment of dividends or the making of distributions to such Person to the extent
of such restrictions (regardless of any waiver thereof), (c) non-cash gains and
losses due solely to fluctuations in currency values, (d) the net income of any
Person that is not a Restricted Subsidiary of such Person, except to the extent
of the amount of dividends or other distributions representing such Person's
proportionate share of such other Person's net income for such period actually
paid in cash to such Person by such other Person during such period, (e) gains
but not losses on Asset Dispositions by such Person or its Restricted
Subsidiaries, (f) all gains and losses classified as extraordinary, unusual or
nonrecurring in accordance with GAAP and (g) in the case of a successor to the
referent Person by consolidation or merger or as a transferee of the referent
Person's assets, any earnings (or losses) of the successor corporation prior to
such consolidation, merger or transfer of assets.
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"CONTINUING DIRECTOR" means a director who either was a member of the Board of
Directors of the Company on the Issue Date or who became a director of the
Company subsequent to the Issue Date and whose election, or nomination for
election by the Company's stockholders, was duly approved by a majority of the
Continuing Directors then on the Board of Directors of the Company, either by a
specific vote or by approval of the proxy statement issued by the Company on
behalf of the entire Board of Directors of the Company in which such individual
is named as nominee for director.
"CREDIT AGREEMENT" means the Credit Agreement, dated as of the Issue Date among
AFP, Europe B.V., Holdings U.K., Euramax Europe Limited and Euramax Netherlands
B.V., as borrowers and the guarantors thereunder, Euramax, Amerimax, Euramax
U.K., Euramax B.V., the U.S. Operating Companies, the UK Operating Companies and
Euramax Coated Products B.V., as additional guarantors thereunder, the financial
institutions party thereto from time to time, as lenders, the issuer of the
Letters of Credit referred to therein, and Banque Paribas and its successors and
assigns, as agent (the "Agent") on behalf of itself, such issuer and such
lenders party thereto from time to time, including any deferrals, renewals,
extensions, replacements, refinancings or refundings thereof from time to time,
or amendments, modifications or supplements thereto (including, without
limitation, any amendment increasing the amount borrowed thereunder), any
agreement or agreements providing therefor or any part thereof whether by or
with the same or any other lender, creditors, group of lenders or group of
creditors and including related notes, guarantee agreements, collateral
documents, and other instruments and agreements executed in connection therewith
and any currency swap agreement entered into by the Company or any of its
Subsidiaries and the Agent or any such lenders as the same may be deferred,
renewed, extended, replaced, refinanced, refunded, amended, modified or
supplemented from time to time.
"DEFAULT" means any event that is, or after notice or lapse of time or both
would become, an Event of Default.
"DESIGNATED SENIOR DEBT" means (i) so long as the Credit Agreement is in effect,
the Senior Debt incurred thereunder and (ii) thereafter, any other Senior Debt
which has at the time of initial issuance an aggregate outstanding principal
amount in excess of $25 million which has been so designated as Designated
Senior Debt by the Board of Directors of the Company at the time of initial
issuance in a resolution delivered to the Trustee.
"DISQUALIFIED STOCK" of any Person means any Capital Stock of such Person which,
by its terms (or by the terms of any security into which it is convertible or
for which it is exchangeable), or upon the happening of any event, matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
is redeemable at the option of the holder thereof, in whole or in part, on or
prior to the final maturity of the Notes.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended and the
rules and regulations promulgated by the Commission thereunder.
"FABRICATED PRODUCTS BUSINESS" means a business, the majority of whose revenues
are derived from lines of business carried on by the Company and its Restricted
Subsidiaries on the Issue Date, other fabricated products or fabricated
products-related businesses and businesses or activities in each case
representing a reasonable extension, development or expansion thereof or
ancillary thereto.
"GAAP" means generally accepted accounting principles, consistently applied, as
in effect on the Issue Date in the United States of America, as set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as is approved by a significant segment of the accounting
profession in the United States.
"INCUR" means, with respect to any Indebtedness or other obligation of any
Person, to create, issue, incur (including by conversion, exchange or
otherwise), assume, guarantee or otherwise become liable in respect of such
Indebtedness or other obligation or the recording, as required pursuant to GAAP
or otherwise, of any such Indebtedness or other obligation on the balance sheet
of such Person (and "Incurrence," "Incurred" and "Incurring" shall have meanings
correlative to the foregoing). Indebtedness of any Person or any of its
Restricted Subsidiaries existing at the time such Person becomes a Restricted
Subsidiary of the Company (or is merged into or consolidates with the Company or
any of its Restricted Subsidiaries), whether or not such Indebtedness was
incurred in connection with, or in contemplation of, such Person becoming a
Restricted Subsidiary of the Company (or being merged into or consolidated with
the Company or any of its Restricted Subsidiaries), shall be deemed Incurred at
the time any such Person becomes a Restricted Subsidiary of the Company or
merges into or consolidates with the Company or any of its Restricted
Subsidiaries.
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"INDEBTEDNESS" means (without duplication), with respect to any Person, whether
recourse is to all or a portion of the assets of such Person and whether or not
contingent, (i) every obligation of such Person for money borrowed, (ii) every
obligation of such Person evidenced by bonds, debentures, notes or other similar
instruments, including obligations incurred in connection with the acquisition
of property, assets or businesses, (iii) every reimbursement obligation of such
Person with respect to letters of credit, bankers' acceptances or similar
facilities issued for the account of such Person, (iv) every obligation of such
Person issued or assumed as the deferred purchase price of property or services
(but excluding trade accounts payable or accrued liabilities arising in the
ordinary course of business which are not overdue or which are being contested
in good faith), (v) every Capital Lease Obligation of such Person, (vi) every
net obligation under interest rate swap or similar agreements or foreign
currency hedge, exchange or similar agreements of such Person and (vii) every
obligation of the type referred to in clauses (i) through (vi) of another Person
and all dividends of another Person the payment of which, in either case, such
Person has guaranteed or is responsible or liable for, directly or indirectly,
as obligor, guarantor or otherwise. Indebtedness shall include the liquidation
preference and any mandatory redemption payment obligations in respect of any
Disqualified Stock of the Company, and any Preferred Stock of a Subsidiary of
the Company. Indebtedness shall never be calculated taking into account any cash
and cash equivalents held by such Person. Indebtedness shall not include
obligations arising from agreements of the Company or a Restricted Subsidiary of
the Company to provide for indemnification, adjustment of purchase price,
earn-out, or other similar obligations, in each case, incurred or assumed in
connection with the disposition of any business or assets of a Restricted
Subsidiary of the Company.
"INVESTMENT" by any Person means any direct or indirect loan, advance, guarantee
or other extension of credit or capital contribution to (by means of transfers
of cash or other property to others or payments for property or services for the
account or use of others, or otherwise), or purchase or acquisition of Capital
Stock, bonds, notes, debentures or other securities or evidence of Indebtedness
issued by any other Person.
"ISSUE DATE" means the original issue date of the Old Notes.
"LIEN" means, with respect to any property or assets, any mortgage or deed of
trust, pledge, hypothecation, assignment, security interest, lien, charge,
easement (other than any easement (or other restrictions on the use of real
property) not materially impairing usefulness or marketability), encumbrance,
preference, priority or other security agreement with respect to such property
or assets (including, without limitation, any conditional sale or other title
retention agreement having substantially the same economic effect as any of the
foregoing).
"MANAGEMENT INVESTORS" means full time officers and employees of the Company or
a Subsidiary of the Company who acquire Capital Stock of the Company on or after
the Issue Date and any of their Permitted Transferees.
"NET AVAILABLE PROCEEDS" from any Asset Disposition by any Person means cash or
readily marketable cash equivalents received (including by way of sale or
discounting of a note, installment receivable or other receivable, but excluding
any other consideration received in the form of assumption by the acquiror of
Indebtedness or other obligations relating to such properties or assets)
therefrom by such Person, including any cash received by way of deferred payment
or upon the monetization or other disposition of any non-cash consideration
(including notes or other securities) received in connection with such Asset
Disposition, net of (i) all legal, title and recording tax expenses, commissions
and other fees and expenses incurred and all federal, state, foreign and local
taxes required to be accrued as a liability as a consequence of such Asset
Disposition, (ii) all payments made by such Person or its Restricted
Subsidiaries on any Indebtedness which is secured by such assets in accordance
with the terms of any Lien upon or with respect to such assets or which must by
the terms of such Lien, or in order to obtain a necessary consent to such Asset
Disposition or by applicable law, be repaid out of the proceeds from such Asset
Disposition, (iii) all payments made with respect to liabilities associated with
the assets which are the subject of the Asset Disposition, including, without
limitation, trade payables and other accrued liabilities, (iv) appropriate
amounts to be provided by such Person or any Restricted Subsidiary thereof, as
the case may be, as a reserve in accordance with GAAP against any liabilities
associated with such assets and retained by such Person or any Restricted
Subsidiary thereof, as the case may be, after such Asset Disposition, including,
without limitation, liabilities under any indemnification obligations and
severance and other employee termination costs associated with such Asset
Disposition, until such time as such amounts are no longer reserved or such
reserve is no longer necessary (at which time any remaining amounts will become
Net Available Proceeds to be allocated in accordance with the provisions of
clause (iii) of the covenant of the Indenture described
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under "-- Covenants -- Limitation on Certain Asset Dispositions") and (v) all
distributions and other payments made to minority interest holders in Restricted
Subsidiaries of such Person or joint ventures as a result of such Asset
Disposition.
"OBLIGATIONS" means, with respect to any Indebtedness, any principal, interest,
penalties, fees, indemnifications, reimbursements, and other liabilities payable
under the documentation governing such Indebtedness.
"OFFER TO PURCHASE" means a written offer (the "Offer") sent by the Company by
first class mail, postage prepaid, in the case of the Global Security, to DTC
and in the case of Registered Securities, to each holder at his address
appearing in the register for the Notes, in each case, on the date of the Offer
offering to purchase up to the principal amount of Notes specified in such Offer
at the purchase price specified in such Offer (as determined pursuant to the
Indenture). Unless otherwise required by applicable law, the Offer shall specify
an expiration date (the "Expiration Date") of the Offer to Purchase which shall
be not less than 30 days nor more than 60 days after the date of such Offer and
a settlement date (the "Purchase Date") for purchase of Notes within five
Business Days after the Expiration Date. The Company shall notify the Trustee at
least 15 Business Days (or such shorter period as is acceptable to the Trustee)
prior to the mailing of the Offer of the Company's obligation to make an Offer
to Purchase, and the Offer shall be mailed by the Company or, at the Company's
request, by the Trustee in the name and at the expense of the Company. The Offer
shall contain all the information required by applicable law to be included
therein. The Offer shall contain all instructions and materials necessary to
enable such holders to tender Notes pursuant to the Offer to Purchase. The Offer
shall also state:
(1) the Section of the Indenture pursuant to which the Offer to Purchase is
being made;
(2) the Expiration Date and the Purchase Date;
(3) the aggregate principal amount of the outstanding Notes offered to be
purchased by the Company pursuant to the Offer to Purchase (including, if less
than 100%, the manner by which such amount has been determined pursuant to the
Section of the Indenture requiring the Offer to Purchase) (the "Purchase
Amount");
(4) the purchase price to be paid by the Company for each $1,000 aggregate
principal amount of Notes accepted for payment (as specified pursuant to the
Indenture) (the "Purchase Price");
(5) that the holder may tender all or any portion of such holders Notes and
that any portion of a Note tendered must be tendered in an integral multiple of
$1,000 principal amount;
(6) the place or places where Notes are to be surrendered for tender
pursuant to the Offer to Purchase;
(7) that interest on any Note not tendered or tendered but not purchased by
the Company pursuant to the Offer to Purchase will continue to accrue;
(8) that on the Purchase Date the Purchase Price will become due and payable
upon each Note being accepted for payment pursuant to the Offer to Purchase and
that interest thereon shall cease to accrue on and after the Purchase Date;
(9) that each holder electing to tender all or any portion of a Note
pursuant to the Offer to Purchase will be required to surrender such Note at the
place or places specified in the Offer prior to the close of business on the
Expiration Date (such Note being, if the Company or the Trustee so requires,
duly endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the holder thereof
or his attorney duly authorized in writing);
(10) that holders will be entitled to withdraw all or any portion of Notes
tendered if the Company (or its Paying Agent) receives, not later than the close
of business on the fifth Business Day next preceding the Expiration Date, a
telegram, telex, facsimile transmission or letter setting forth the name of the
holder, the principal amount of the Note the holder tendered, the certificate
number of the Note the holder tendered and a statement that such holder is
withdrawing all or a portion of his tender;
(11) that (a) if Notes in an aggregate principal amount less than or equal
to the Purchase Amount are duly tendered and not withdrawn pursuant to the Offer
to Purchase, the Company shall purchase all such Notes and (b) if Notes in an
aggregate principal amount in excess of the Purchase Amount are tendered and not
withdrawn pursuant to
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the Offer to Purchase, the Company shall purchase Notes having an aggregate
principal amount equal to the Purchase Amount on a PRO RATA basis (with such
adjustments as may be deemed appropriate so that only Notes in denominations of
$1,000 or integral multiples thereof shall be purchased); and
(12) that in the case of any holder whose Note is purchased only in part,
the Issuers shall execute and the Trustee shall authenticate and deliver to the
holder of such Note without service charge, a new Note or Notes, of any
authorized denomination as requested by such holder, in an aggregate principal
amount equal to and in exchange for the unpurchased portion of the Note so
tendered.
An Offer to Purchase shall be governed by and effected in accordance with the
provisions above pertaining to any Offer.
"PERMITTED ASSET SWAP" means any one or more transactions in which the Company
or any of its Restricted Subsidiaries exchanges assets for consideration
consisting of cash and/or assets used or useful in the Fabricated Products
Business or other assets in an amount less than 15% of the fair market value of
such transaction or transactions.
"PERMITTED HOLDER" means any of (i) the Principals and their Related Persons and
Affiliates and (ii) the Management Investors.
"PERMITTED INVESTMENTS" means (i) Investments in marketable, direct obligations
issued or guaranteed by the United States of America, or any governmental entity
or agency or political subdivision thereof (provided, that the good faith and
credit of the United States of America is pledged in support thereof), maturing
within one year of the date of purchase; (ii) Investments in commercial paper
issued by corporations or financial institutions maturing within 180 days from
the date of the original issue thereof, and rated "P-1" or better by Moody's
Investors Service or "A-1" or better by Standard & Poor's Corporation or an
equivalent rating or better by any other nationally recognized securities rating
agency; (iii) Investments in certificates of deposit issued or acceptances
accepted by or guaranteed by any bank or trust company organized under the laws
of the United States of America or any state thereof or the District of
Columbia, in each case having capital, surplus and undivided profits totalling
more than $500,000,000, maturing within one year of the date of purchase; (iv)
Investments representing Capital Stock or obligations issued to the Company or
any of its Restricted Subsidiaries in the course of the good faith settlement of
claims against any other Person or by reason of a composition or readjustment of
debt or a reorganization of any debtor of the Company or any of its Restricted
Subsidiaries; (v) deposits, including interest-bearing deposits, maintained in
the ordinary course of business in banks; (vi) any acquisition of the Capital
Stock of any Person; provided, however, that after giving effect to any such
acquisition such Person shall become a Restricted Subsidiary of the Company;
(vii) trade receivables and prepaid expenses, in each case arising in the
ordinary course of business; provided, however, that such receivables and
prepaid expenses would be recorded as assets of such Person in accordance with
GAAP; (viii) endorsements for collection or deposit in the ordinary course of
business by such Person of bank drafts and similar negotiable instruments of
such other Person received as payment for ordinary course of business trade
receivables; (ix) any interest swap or hedging obligation with an unaffiliated
Person otherwise permitted by the Indenture; (x) Investments received as
consideration for an Asset Disposition in compliance with the provisions of the
Indenture described under "-- Covenants -- Limitation on Certain Asset
Dispositions" above; (xi) Investments in Restricted Subsidiaries; (xii) loans
and advances to employees made in the ordinary course of business; (xiii)
Investments outstanding on the Issue Date and; (xiv) Investments the sole
consideration for which consists of Capital Stock of the Company.
"PERMITTED TRANSFEREE" means, with respect to any Management Investor (i) any
spouse or lineal descendant (including by adoption and stepchildren) of such
Management Investor and (ii) any trust, corporation or partnership, the
beneficiaries, stockholders or partners of which consist entirely of one or more
Management Investors or individuals described in clause (i) above.
"PERSON" means any individual, corporation, limited or general partnership,
limited liability company, joint venture, association, joint stock company,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
"PREFERRED STOCK", as applied to the Capital Stock of any Person, means Capital
Stock of such Person of any class or classes (however designated) that ranks
prior, as to the payment of dividends or as to the distribution of assets upon
any voluntary or involuntary liquidation, dissolution or winding up of such
Person, to shares of Capital Stock of any other class of such Person.
"PRINCIPALS" means ACP and CVC Europe.
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"PURCHASE DATE" has the meaning set forth in the definition of "Offer to
Purchase" above.
"RELATED PERSON" of any Person means any other Person directly or indirectly
owning (a) 5% or more of the outstanding Common Stock of such Person (or, in the
case of a Person that is not a corporation, 5% or more of the equity interest in
such Person) or (b) 5% or more of the combined voting power of the Voting Stock
of such Person.
"RESTRICTED SUBSIDIARY" means (i) any Subsidiary of the Company other than an
Unrestricted Subsidiary, (ii) any Subsidiary of the Company on the Issue Date
and (iii) any successor to a substantial portion of the assets of any Subsidiary
referred to in clauses (i) or (ii) of this definition.
"SENIOR DEBT" means, with respect to any Person at any date, (i) in the case of
an Issuer or the Guarantor, all Indebtedness under the Credit Agreement,
including principal, premium, if any, and interest on such Indebtedness and all
other amounts due on or in connection with such Indebtedness including all
charges, fees and expenses and other Obligations thereunder of the Issuers and
their Subsidiaries party thereto, (ii) all other Indebtedness of such Person for
borrowed money, including principal, premium, if any, and interest on such
Indebtedness, unless the instrument under which such Indebtedness for money
borrowed is created, incurred, assumed or guaranteed expressly provides that
such Indebtedness for money borrowed is not senior or superior in right of
payment to the Notes, and all renewals, extensions, modifications, amendments or
refinancing thereof and (iii) all interest at the rate therein specified on any
Indebtedness referred to in clauses (i) and (ii) accruing during the pendency of
any bankruptcy or insolvency proceeding, whether or not allowed thereunder.
Notwithstanding the foregoing, Senior Debt shall not include (a) Indebtedness
which is pursuant to its terms or any agreement relating thereto or by operation
of law subordinated or junior in right of payment or otherwise to any other
Indebtedness of such Person; provided, however, that no Indebtedness shall be
deemed to be subordinate or junior in right of payment or otherwise to any other
Indebtedness of a Person solely by reason of such other Indebtedness being
secured and such Indebtedness not being secured, (b) the Notes, (c) any
Indebtedness of such Person to any of their Subsidiaries, and (d) any
Indebtedness which, when incurred and without respect to any election under
Section 1111(b) of the Bankruptcy Code, is without recourse to the Company.
"SIGNIFICANT SUBSIDIARY" means, as of any date of determination, for any Person,
each Restricted Subsidiary of such Person which (i) for the most recent fiscal
year of such Person (on or prior to the fiscal period beginning on the Issue
Date and ending on the most recently completed fiscal quarter of such Person)
accounted for more than 5% of consolidated revenues or consolidated net income
of such Person or (ii) as at the end of such fiscal year (on or prior to the
fiscal period beginning on the Issue Date and ending on the most recently
completed fiscal quarter of such Person), was the owner of more than 5% of the
consolidated assets of such Person.
"SUBORDINATED INDEBTEDNESS" means any Indebtedness (whether outstanding on the
date hereof or hereafter incurred) which is by its terms expressly subordinate
or junior in right of payment to the Notes.
"SUBSIDIARY" of any Person means (i) a corporation more than 50% of the
outstanding Voting Stock of which is owned, directly or indirectly, by such
Person or by one or more other Subsidiaries of such Person or by such Person and
one or more other Subsidiaries thereof or (ii) any other Person (other than a
corporation) in which such Person, or one or more other Subsidiaries of such
Person or such Person and one or more other Subsidiaries thereof, directly or
indirectly, has at least a majority ownership and voting power relating to the
policies, management and affairs thereof.
"TANGIBLE ASSETS" means the total amount of assets of the Company and the
Restricted Subsidiaries after deducting therefrom all good will, trade names,
trademarks, patents, unamortized debt discount and expense and other like
intangible assets, all as set forth on the most recent balance sheet of the
Company and its Subsidiaries and computed in accordance with GAAP.
"UNRESTRICTED SUBSIDIARY" means (i) any Subsidiary of the Company formed or
acquired after the Issue Date that at the time of determination is designated an
Unrestricted Subsidiary by the Board of Directors in the manner provided below
and (ii) any Subsidiary of an Unrestricted Subsidiary. Any such designation by
the Board of Directors will be evidenced to the Trustee by promptly filing with
the Trustee a copy of the board resolution giving effect to such designation and
an officers' certificate certifying that such designation complied with the
foregoing provisions. The Indenture will provide that, the Board of Directors of
the Company may not designate any Subsidiary of the Company to be an
Unrestricted Subsidiary if, after such designation, (a) the Company or any other
Restricted Subsidiary (i) provides credit support for, or a guarantee of, any
Indebtedness of such Subsidiary (including any undertaking, agreement or
instrument evidencing such Indebtedness) or (ii) is directly or indirectly
liable for any Indebtedness of such Subsidiary, (b) a default with
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respect to any Indebtedness of such Subsidiary (including any right which the
holders thereof may have to take enforcement action against such Subsidiary)
would permit (upon notice, lapse of time or both) any holder of any other
Indebtedness of the Company or any Restricted Subsidiary to declare a default on
such other Indebtedness or cause the payment thereof to be accelerated or
payable prior to its final scheduled maturity or (c) such Subsidiary owns any
Capital Stock of, or owns or holds any Lien on any property of, any Restricted
Subsidiary which is not a Subsidiary of the Subsidiary to be so designated.
"VOTING STOCK" of any Person means the Capital Stock of such Person which
ordinarily has voting power for the election of directors (or persons performing
similar functions) of such Person, whether at all times or only so long as no
senior class of securities has such voting power by reason of any contingency.
"WHOLLY OWNED SUBSIDIARY" of any Person means a Restricted Subsidiary of such
Person all of the outstanding Capital Stock or other ownership interests of
which (other than directors' qualifying shares) shall at the time be owned by
such Person or by one or more Wholly Owned Subsidiaries of such Person or by
such Person and one or more Wholly Owned Subsidiaries of such Person.
CERTAIN TAX CONSEQUENCES OF THE EXCHANGE OFFER
The Issuers believe that the exchange of Old Notes for New Notes should be
treated as a "non-event" for federal income tax purposes because the New Notes
should not be considered to differ materially in kind or extent from the Old
Notes. As a result, the Issuers do not expect any material federal income tax
consequences to result from holders exchanging Old Notes for New Notes.
The foregoing is based upon current provisions of the Internal Revenue Code of
1986, as amended (the "Code"), applicable Treasury regulations, judicial
authority and administrative rulings and practice. There can be no assurance
that the Internal Revenue Service (the "Service") will not take a contrary view,
and no ruling from the Service has been or will be sought. Legislative, judicial
or administrative changes or interpretations may be forthcoming that could alter
or modify these conclusions set forth herein. Any such changes or
interpretations may or may not be retroactive and could affect the tax
consequences to holders. Certain holders (including insurance companies,
tax-exempt organizations, financial institutions, broker-dealers, foreign
corporations and persons who are not citizens or residents of the United States)
may be subject to special rules not discussed herein. EACH HOLDER OF OLD NOTES
SHOULD CONSULT HIS OR HER OWN TAX ADVISOR AS TO THE PARTICULAR TAX CONSEQUENCES
OF EXCHANGING HIS OR HER OLD NOTES FOR NEW NOTES, INCLUDING THE APPLICABILITY
AND EFFECT OF ANY STATE, LOCAL OR NON-U.S. TAX LAWS.
CERTAIN INCOME TAX CONSIDERATIONS
CERTAIN NON-U.S. INCOME TAX CONSIDERATIONS
The following summary describes certain tax consequences of the ownership of
Notes by United States persons. The summary is of a general nature and is
included herein solely for informational purposes for United States persons. It
is not intended to be, nor should it be construed to be, legal or tax advice. No
representation with respect to the consequences to any particular holder of the
Notes is made. Prospective purchasers should consult their own tax advisors with
respect to their particular circumstances and the effects of local, state,
federal and foreign (including U.K. and Dutch) tax laws to which they may be
subject. Non-United States holders should consult their own tax advisors with
respect to both their local tax considerations and non-local tax considerations.
UNITED KINGDOM
The following summary describes certain U.K. tax matters with respect to
payments made by Euramax U.K. and Euramax in respect of the Notes. The
statements regarding U.S. and U.K. tax laws and practices (including those of
the Inland Revenue) set forth below, including the statements regarding the
U.S./U.K. double taxation convention relating to income and capital gains (the
"U.K. Treaty"), (i) are subject to the same conditions as those set forth under
"Certain U.S. Income Tax Considerations", (ii) are based on the laws as in force
and as applied in practice on the date of this Prospectus and are subject to
changes to those laws and practices, and any relevant judicial decision,
subsequent to the date of this Prospectus, (iii) assume that the Notes will only
be held as capital assets, and (iv) assume that the Notes will be issued and
transfers thereof and payments thereon will be made in accordance with the
Indenture.
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PAYMENTS ON THE NOTES. For U.K. tax purposes, the Company will not be required
to deduct or withhold on account of U.K. income tax from payments by Euramax
U.K. and Euramax of principal or, during the period that the Notes remain in
bearer form and are listed on a stock exchange recognized by the Inland Revenue,
from payments of interest where:
(a) the payment of interest is made by or through a person outside the U.K.;
or
(b) the payment of interest is made by or through a person who is in the
U.K. but either:
(i) a person who is not resident in the U.K. and is the beneficial
owner of the Note is beneficially entitled to the interest; or
(ii) the Note is held in a "recognized clearing system"; Euroclear and
Cedel have each been designated as a "recognized clearing system"
for this purpose.
In order for the exceptions described in (i) and (ii) above to apply, the person
by or through whom the payment of interest is made must receive a declaration
confirming that one of the conditions in (i) and (ii) above is satisfied or a
notice must have been issued by the Commissioners of the Inland Revenue stating
that they consider one or both of the relevant conditions to be satisfied. The
Company currently intends to apply for listing of the Notes on an exchange
recognized by the Inland Revenue prior to the first scheduled interest payment
date. However, there can be no assurance that such listing will be made, or if
made that such listing will be approved or maintained.
In other cases, and in particular where paid in respect of certificated notes,
interest will be paid after deduction of U.K. income tax at the lower rate
(currently 20%). A United States holder of a Note who is entitled to the benefit
of the U.K. Treaty will normally be eligible to recover in full any U.K. tax
withheld from payments of interest to which such United States Holder is
beneficially entitled by making a claim under the U.K. Treaty on the appropriate
form. Alternatively, a claim may be made by a United States Holder in advance of
a payment of interest. If the claim is accepted by the Inland Revenue, they will
authorize the making of subsequent payments to that United States Holder without
U.K. withholding. Claims for repayment must be made within six years of the end
of U.K. year of assessment (generally April 5 in each year) to which the
interest relates and must be accompanied by the original statement provided by
the Company and/or Euramax U.K. when the interest payment was made showing the
amount of income tax deducted. Because a claim is not considered until U.K. tax
authorities receive the appropriate form from the Internal Revenue Service,
forms should be sent to the Internal Revenue Service, in the case of an advance
claim, well before the relevant interest payment date or, in the case of a claim
for repayment of the tax, well before the end of the appropriate limitation
period.
A collecting agent in the U.K. who in the course of a trade or profession,
secures payment of interest on behalf of a holder of a Note or acts as custodian
of the Notes and receives payment of interest on behalf of a holder of a Note or
directs that interest on the Notes is paid to another person or consents to such
payment, may be required to withhold U.K. income tax from such interest unless:
(a) the Notes are held in a recognized clearing system (as described above)
and the collecting agent pays or accounts for the interest directly or
indirectly to the recognised clearing system; or
(b) the person beneficially entitled to the interest is not resident in the
U.K. and beneficially owns the Note.
In the case of each of the exceptions described in (a) and (b) above, the Inland
Revenue have introduced regulations requiring the receipt of a declaration in
the prescribed form that the relevant requirements have been satisfied, in order
for the relevant exception to apply. Other exceptions are available for certain
types of holders of the Notes (e.g. pension funds, charities and non-resident
trusts).
Holders of certificated notes will not be entitled to the payment of any
Additional Amounts payable as a result of an optional redemption or change in
control in respect of the tax withheld, except as set forth under "Description
of the New Notes -- Taxation; Redemption for Taxation Reasons."
Interest on the Notes received without deduction or withholding on account of
U.K. tax will not be chargeable to U.K. tax by direct assessment in the hands of
a holder of a Note who is not resident for tax purposes in the U.K., except
where that person carries on a trade, profession or vocation in the U.K. through
a U.K. branch or agency in connection with which the interest is received or to
which the Note is attributable. There are exemptions for interest received by
certain categories of agent (e.g. some brokers and investment managers).
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ACCRUED INCOME SCHEME. The provisions of the accrued income scheme contained in
Chapter II of Part XVII ICTA 1988 may apply on the transfer of a Note to
individuals who are residents of the U.K.
U.K. STAMP DUTY AND STAMP DUTY RESERVE TAX. No U.K. Stamp Duty or Stamp Duty
Reserve Tax is payable on the issue or transfer by delivery of a Note, or on its
redemption.
SALE OR DISPOSITION (INCLUDING REDEMPTION). For U.K. tax purposes, a disposal,
including redemption, of a Note will generally not be subject to U.K. tax unless
the holder (i) is resident or (if an individual) ordinarily resident for tax
purposes in the U.K. or (ii) carries on a trade, profession or vocation in the
U.K. through a branch or agency to which the Note is attributable.
U.K. INHERITANCE TAX. Notes represented by the Global Note that are not treated
as situated in the U.K. and are beneficially owned by an individual domiciled
outside the U.K. will not be subject to U.K. inheritance tax. If a Note is
subject to U.K. inheritance tax and U.S. federal estate tax, the U.S./U.K.
double taxation convention relating to estate and gift taxes may entitle a
United States Holder to credit or relief in respect of the U.K. tax.
THE NETHERLANDS
The following summary describes certain Dutch tax matters with respect to
payments made by Euramax B.V. in respect of the Notes. The statements regarding
Dutch tax laws and practices set forth below, (i) are based on the laws as in
force and as applied in practice on the date of this Prospectus and are subject
to changes to those laws and practices, and any relevant judicial decision,
subsequent to the date of this Prospectus, and (ii) assume that the Notes will
be issued and transfers thereof and payments thereon will be made in accordance
with the Indenture.
All payments under the Notes can be made free of withholding or deduction, for
or on account of any taxes of whatsoever nature imposed, levied, withheld or
assessed by The Netherlands or any political subdivision or taxing authority
thereof of therein.
A holder of a Note will not be subject to Dutch taxes on income or capital gains
in respect of any payment under the Notes or in respect of any gains realized on
the disposal of the Notes, provided that:
(i) such holder is not a resident or deemed resident of The Netherlands;
and
(ii) such holder does not have an enterprise, or an interest in an
enterprise, which in its entirety or in part is carried on through a
permanent establishment or a permanent representative in The
Netherlands and to which enterprise or to which part of an enterprise
the Notes are attributable, and
(iii) such holder does not carry out and has not carried out employment
activities with which the holding of the Notes is connected; and
(iv) such holder does not have a substantial interest or a deemed
substantial interest in the share capital of Euramax B.V., or, in the
event that he does have such an interest, it forms part of the assets
of an enterprise.
A holder of a Note will not become subject to taxation in The Netherlands by
reason of performance by Euramax BV of its obligations under the Notes. A holder
of a Note will not be subject to Dutch net wealth tax in respect of such Note,
provided that such holder is not an individual or, if he is an individual,
provided that the conditions mentioned in clauses (i) and (ii) above are met.
No gift, estate or inheritance taxes will arise in The Netherlands on the
transfer of a Note by way of gift by, or on the death of, an individual holder
who is neither a resident nor a deemed resident of The Netherlands, provided
that:
(i) such transfer is not construed as a gift made by or on behalf of a
person who is a resident or a deemed resident of The Netherlands; and
(ii) such Note is not attributable to an enterprise which in its entirety or
in part is carried on through a permanent establishment or permanent
representative in The Netherlands and which enterprise the donor or
deceased owned or in which enterprise the donor or the deceased owned
an interest; and
(iii) such individual holder does not die within 180 days after the date of
the gift while being a resident or a deemed resident of The
Netherlands.
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No Dutch registration tax, customs duty, capital duty, stamp duty or any other
similar tax or duty, other than court fees is payable in The Netherlands in
respect of or in connection with the signing, delivery and enforcement by legal
proceedings (including the enforcement of any foreign judgment in the courts of
The Netherlands) of the Issue Documents or the performance of the obligations of
Euramax B.V. under the Notes. Neither the Issuers, nor a holder of a Note, shall
be obligated to withhold Dutch turnover tax with respect to the issuance of the
Notes as such, the payment of interest and any redemption amounts under the
Notes or on the transfer of the Notes.
CERTAIN U.S. INCOME TAX CONSIDERATIONS
The following summary describes the principal United States Federal income tax
consequences to holders resulting from the ownership and disposition of the
Notes. This summary is based on the Code, Treasury regulations (including
proposed and temporary regulations) promulgated thereunder, rulings, official
pronouncements and judicial decisions, all as in effect on the date hereof and
all of which are subject to change, possibly with retroactive or different
interpretations. This summary addresses only the Notes that are held as capital
assets. Moreover, it does not discuss all of the tax consequences that may be
relevant to the particular circumstances of a holder or to holders subject to
special rules, such as certain financial institutions, insurance companies,
dealers in securities and tax-exempt organizations. Prospective purchasers of
the Notes should consult their tax advisors with regard to the application of
the United States Federal income tax laws to their particular situations as well
as any tax consequences arising under the laws of any state, local or foreign
taxing jurisdiction or any estate or gift tax considerations.
As used herein, the term "United States Holder" means a holder of a Note that
is, for United States Federal income tax purposes, (a) a citizen or resident of
the United States, (b) a corporation, partnership or other entity created under
the laws of the United States or of any political subdivision thereof or (c) an
estate or trust the income of which is subject to United States Federal income
taxation regardless of source. The term "Foreign Holder" means a holder of a
Note that is not a United States Holder.
UNITED STATES HOLDERS
Interest paid on a Note will generally be taxable to a United States Holder as
ordinary interest income in accordance with such holder's method of accounting
for United States Federal income tax purposes.
If a purchaser purchases a Note for an amount that is less than the stated
redemption price at maturity of such Note when originally issued, the amount of
the difference will be treated as market discount for U.S. federal income tax
purposes, unless such difference is less than a specified de minimis amount.
Under the market discount rules, a holder will be required to treat any
principal payment on, or any amount received on the sale, exchange, retirement
or other disposition of, a Note as ordinary income to the extent of any market
discount which has not previously been included in income and is treated as
having accrued on such Note by the time of such payment or disposition. If a
subsequent holder makes a gift of a Note, accrued market discount, if any, will
be recognized as if such holder had sold such Note for a price equal to its fair
market value. In addition, the holder may be required to defer, until the
maturity of the Note or its earlier disposition in a taxable transaction, the
deduction of a portion of the interest expense on any indebtedness incurred or
continued to purchase or carry such Note.
Any market discount will be considered to accrue on a straight-line basis during
the period from the date of acquisition to the maturity date of the Notes,
unless the holder elects to accrue market discount under a constant interest
method. A holder of Notes may elect to include market discount in income
currently as it accrues (under either a straight-line or constant interest
method), in which case, the rules described above regarding the recognition of
ordinary income on disposition and the deferral of interest deductions will not
apply. This election to include market discount in income currently, once made,
applies to all market discount obligations acquired on or after the first day of
the first taxable year to which the election applies and may not be revoked
without the consent of the Internal Revenue Service.
A purchaser that purchases Notes for an amount that is greater than the stated
redemption price at maturity of such Notes will be considered to have purchased
such Notes with "amortizable bond premium." Under the amortizable bond premium
rules, the amount of interest income, which such holder must include in its
gross income with respect to such Notes for any taxable year will be reduced by
the portion of such premium properly allocable to such year.
Upon the sale, exchange or retirement of a Note, a United States Holder will
generally recognize taxable gain or loss equal to the difference between the
amount realized on the sale, exchange or retirement (except to the extent such
amount is attributable to accrued but previously unrecognized interest, which is
taxable as ordinary interest income)
87
<PAGE>
and such holder's adjusted tax basis in such Note. Such gain or loss will be
capital gain or loss and will be long-term capital gain or loss if the United
States Holder's holding period in the Note is more than one year at the time of
disposition.
FOREIGN HOLDERS
Payments of principal, retirement premium, if any, interest received or discount
accrued by a Foreign Holder who is not engaged in a trade or business within the
United States will not be subject to United States Federal income or withholding
tax, provided that in the case of interest (a)(i) the Foreign Holder does not
actually or constructively own 10% or more of the total combined voting power of
all classes of stock of the Company entitled to vote, (ii) the Foreign Holder is
not a controlled foreign corporation for United States tax purposes that is
related to the Company through stock ownership, and (iii) such interest is not
received by a bank on an extension of credit made pursuant to a loan agreement
entered into in the ordinary course of business and (b) either (i) the
beneficial owner of the Note, under penalties of perjury, provides the Company
or its agent with its name and address and certifies that it is not a United
States Holder or (ii) a securities clearing organization, bank, or other
financial institution that holds customers' securities in the ordinary course of
its trade or business (a "financial institution") certifies to the Company or
its agent, under penalties of perjury, that such a statement has been received
from the beneficial owner by it or another financial institution and furnishes
the payor a copy thereof. A Foreign Holder, however, may be subject to United
States Federal income tax at the normal graduated rates on its net interest
income if such interest is effectively connected with the conduct of a U.S.
trade or business of such holder.
A Foreign Holder will not be subject to United States Federal income or
withholding tax on any gain realized on the sale or exchange of a Note, unless
(a) the gain is effectively connected, or treated as effectively connected, with
a United States trade or business of the holder or (b) in the case of a Foreign
Holder who is an individual, such Foreign Holder is present in the United States
for a period or periods aggregating 183 days or more during the taxable year of
the sale or exchange and either (i) the Foreign Holder has a "tax home," as
defined in section 911(d)(3) of the Code, in the United States or (ii) the gain
is attributable to an office or other fixed place of business maintained by the
Foreign Holder in the United States. In the event that clause (a) applies, the
Foreign Holder will be treated like a United States Holder with respect to such
gain, and such gain may, in addition, be subject to a 30% branch profits tax. In
the event that clause (b) applies, such gain will generally be subject to a 30%
tax.
BACKUP WITHHOLDING AND INFORMATION REPORTING ON NOTES
Certain noncorporate United States Holders generally will be subject to
information reporting and may be subject to backup withholding at a rate of 31%
on payments of principal, premium, if any, and interest (including market
discount) on, and the proceeds of disposition of, a Note. Backup withholding
will apply only if the United States Holder (a) fails to furnish its Taxpayer
Identification Number ("TIN"), which for an individual would be the holder's
Social Security number, (b) furnishes an incorrect TIN, (c) is notified by the
Internal Revenue Service that it has failed to properly report payments of
interest or dividends or (d) under certain circumstances, fails to certify,
under penalty of perjury, that it has furnished a correct TIN and has not been
notified by the Internal Revenue Service that it is subject to backup
withholding for failure to report interest or dividend payments. Holders should
consult their own tax advisors regarding their qualification for exemption from
backup withholding and the procedure for obtaining such an exemption if
applicable.
Similar rules requiring reporting and withholding with respect to gross sale
proceeds will apply to a Foreign Holder who sells the Notes to or through a U.S.
office of a broker, and information reporting (but not "backup" withholding)
will apply to a Foreign Holder who sells the Notes through (a) a non-U.S. branch
of a U.S. broker or (b) a non-U.S. office of a broker that is a controlled
foreign corporation for U.S. tax purposes or 50% or more of whose income is
effectively connected with a U.S. trade or business for a specified three-year
period, in either case unless the Foreign Holder provides certification of
non-U.S. status or otherwise establishes an exemption.
Information reporting and backup withholding will not apply to payments of
principal, premium, if any, and interest made by the Company or a paying agent
to a Foreign Holder of a Note if the certification described in clause (b) of
the first paragraph under "Foreign Holders" above (including, in addition, the
Foreign Holder's TIN) is received, provided that the payor does not have actual
knowledge that the holder is a United States person.
88
<PAGE>
The amount of any backup withholding from a payment to a holder will be allowed
as a credit against such holder's United States Federal income tax liability and
may entitle such holder to a refund, provided that the required information is
furnished to the Internal Revenue Service.
PLAN OF DISTRIBUTION
Each broker-dealer that receives New Notes for its own account pursuant to the
Exchange Offer must acknowledge that it will deliver a prospectus in connection
with any resale of such New Notes. This Prospectus, as it may be amended from
time to time, may be used by a broker-dealer in connection with the resales of
New Notes received in exchange for Old Notes where such Old Notes were acquired
as a result of market-making activities or other trading activities. The Issuers
and the Guarantor have agreed that for a period of 180 days after the date on
which the Registration Statement is declared effective, it will make this
Prospectus, as amended or supplemented, available to any broker-dealer that
requests such documents in the Letter of Transmittal for use in connection with
any such resale.
The Issuers will not receive any proceeds from any sale of New Notes by
broker-dealers or any other persons. New Notes received by broker-dealers for
their own account pursuant to the Exchange Offer may be sold from time to time
in one or more transactions in the over-the-counter market, in negotiated
transactions, through the writing of options on the New Notes or a combination
of such methods of resale, at market prices prevailing at the time of sale, at
prices related to such prevailing market prices or negotiated prices. Any such
resale may be made directly to purchasers or to or through brokers or dealers
who may receive compensation in the form of commissions or concessions from any
such broker-dealer and/or the purchasers of any such New Notes. Any
broker-dealer that resells New Notes that were received by it for its own
account pursuant to the Exchange Offer and any broker or dealer that
participates in a distribution of such New Notes may be deemed to be an
"underwriter" within the meaning of the Securities Act and any profit on any
such resale of New Notes and any commissions or concessions received by any such
persons may be deemed to be underwriting compensation under the Securities Act.
The Letter of Transmittal states that by acknowledging that it will deliver an
by delivering a prospectus, a broker-dealer will not be deemed to admit that it
is an "underwriter" within the meaning of the Securities Act.
The Issuers and the Guarantor have agreed to pay all expenses incident to their
performance of, or compliance with, the Registration Rights Agreement.
LEGAL MATTERS
The validity of the New Notes offered hereby will be passed upon for the Issuers
by Dibb Lupton Alsop, London, England, Nauta Dutilh, Amsterdam, The Netherlands
and Kirkland & Ellis (a partnership including professional corporations), New
York, New York.
EXPERTS
The combined financial statements of the Company as of December 31, 1995 and
1994 and for each of the three years in the period ended December 31, 1995, and
the consolidated balance sheet of Euramax International plc as of September 24,
1996 included in this Prospectus, have been audited by Coopers & Lybrand L.L.P.,
independent public accountants, as stated in their reports appearing herein and
have been so included in reliance upon the reports of such firm given upon their
authority as experts in accounting and auditing.
LISTING AND GENERAL INFORMATION
1. Application has been made to list the Old Notes and New Notes on the
Luxembourg Stock Exchange. Prior to the listing, a legal notice relating to the
issue of the Old Notes and New Notes and Memorandum and Articles of Association
of the Issuers and equivalent documents for the Guarantor will be deposited with
the GREFFIER EN CHEF DU TRIBUNAL D'ARRONDISSEMENT DE ET A LUXEMBOURG, where such
documents may be examined or copies obtained.
2. So long as the Old Notes and New Notes are listed on the Luxembourg
Stock Exchange and the rules of such Stock Exchange shall so require, copies of
the Memorandum and Articles of Association of the Issuers and equivalent
89
<PAGE>
documents for the Guarantor, the Indenture (including the terms of the
Guarantee) and the Depositary Agreement will be available for inspection at the
office of Kredietbank S.A. Luxembourgeoise, 43 Boulevard Royal, Luxembourg. So
long as the Old Notes and New Notes are listed on the Luxembourg Stock Exchange
and the rules of such Stock Exchange shall so require, copies of any and all
statutory accounts of the Issuers and the Guarantor for the years ended December
31, 199[6] and subsequent years as well as any and all future statutory accounts
of the Issuers and the Guarantor and any and all future statutory accounts of
the Issuers and the Guarantor and any and all annual and quarterly reports of
the Issuers and the Guarantor will be available during normal business hours on
any weekday at the office of Kredietbank S.A. Luxembourgeoise, 43 Boulevard
Royal, Luxembourg.
3. Euramax International plc, Euramax European Holdings plc, Euramax
European Holdings, B.V. and Amerimax Holdings, Inc. were incorporated on
February 22, 1996, March 12, 1996, May 6, 1977 and August 28, 1996,
respectively. The creation and issuance of the Old Notes and New Notes was
authorized on behalf of the Issuers by resolutions adopted by the Board of
Directors of the Issuers on September 25, 1996 and October 25, 1996. The
creation and issuance of the Guarantee was authorized on behalf of the Guarantor
by resolutions adopted by the Board of Directors of the Guarantor on September
25, 1996 and October 25, 1996.
4. The Issuers accept responsibility for the information contained in this
Prospectus. To the best knowledge of the Issuers, the information contained in
this Prospectus is in accordance with the facts and does not omit anything
likely to affect the import of this Prospectus.
5. There has been no material adverse change in the financial position of
the Issuers or the Guarantor since September 25, 1996, except as disclosed
herein.
6. None of the Issuers nor any of their subsidiaries is a party to any
litigation that, in the judgment of the Issuers, is material in the context of
this issue of the New Notes, except as disclosed herein.
7. The Auditors of the Issuers and the Guarantor are Coopers & Lybrand
L.L.P., Atlanta, who have audited the Issuers' Consolidated Financial Statements
for the years ended December 31, 1993, December 31, 1994 and December 31, 1995.
8. The Issuers will not appoint a paying and transfer agent in Luxembourg
until such time, if any, as any definitive Old Notes or New Notes are issued.
The Issuers has appointed Kredietbank S.A. Luxembourgeoise as its special agent
in Luxembourg until such time as the Issuers are required to appoint a transfer
and paying agent located in Luxembourg as provided in this Prospectus. The
Issuers reserve the right to vary such appointment.
9. The New Notes have been accepted for clearance through the Euroclear
Operator and Cedel under the following Common Code:
. The New Notes have been assigned the
following CUSIP number: .
90
<PAGE>
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<S> <C>
Euramax International plc:
Report of Independent Accountants F-2
Consolidated Balance Sheet as of September 24, 1996 F-3
Notes to Consolidated Balance Sheet F-4
Fabricated Products (a Division of Alumax Inc.):
Report of Independent Accountants F-7
Combined Statements of Earnings for the years ended December 31,
1993, 1994 and 1995 F-8
Combined Balance Sheets as of December 31, 1994 and 1995 F-9
Combined Statements of Changes in Equity for the years ended
December 31, 1993, 1994 and 1995 F-10
Combined Statements of Cash Flows for the years ended December 31,
1993, 1994 and 1995 F-11
Notes to Combined Financial Statements F-12
Fabricated Products (a Division of Alumax) (Predecessor) and Euramax
International plc and Subsidiaries (Successor):
Condensed Consolidated Statements of Earnings for the nine months
ended September 29, 1995 and September 25, 1996 F-26
Condensed Consolidated Balance Sheet as of September 25, 1996 F-27
Condensed Consolidated Statements of Cash Flows for the nine months
ended September 29, 1995 and September 25, 1996 F-28
Notes to Condensed Consolidated Financial Statements F-29
</TABLE>
F-1
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Stockholders and Directors of Euramax International plc:
We have audited the accompanying consolidated balance sheet of Euramax
International plc (the "Company") as of September 24, 1996. The consolidated
balance sheet is the responsibility of the Company's management. Our
responsibility is to express an opinion on the consolidated balance sheet based
on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and the significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statement referred to above presents fairly, in
all material respects, the consolidated financial position of Euramax
International plc as of September 24, 1996, in conformity with generally
accepted accounting principles.
COOPERS & LYBRAND L.L.P.
Atlanta, Georgia
December 18, 1996
F-2
<PAGE>
EURAMAX INTERNATIONAL PLC
CONSOLIDATED BALANCE SHEET
SEPTEMBER 24, 1996
<TABLE>
<S> <C>
ASSETS
THOUSANDS OF U.S. DOLLARS, EXCEPT SHARE DATA
Cash $ 35,000
---------
---------
REDEEMABLE PREFERENCE SHARES
AND ORDINARY SHAREHOLDERS' EQUITY
Redeemable preference shares:
Preference shares -- 14% cumulative preferred -- no par value; 33,925,000 shares
authorized, issued and outstanding $ 33,925
Sterling preference shares -- 14% cumulative preferred -- no par value; 50,000
shares, at 1 British Pound Sterling, authorized, issued and outstanding 75
---------
Total redeemable preference shares 34,000
---------
Ordinary shareholders' equity:
Ordinary shares -- no par value; 911,520 shares authorized, issued and
outstanding 912
Non-voting ordinary shares -- no par value; 88,480 shares authorized, issued and
outstanding 88
Sterling ordinary shares -- no par value; 50,000 shares, at 1 British Pound
Sterling, authorized; no shares issued and outstanding
---------
Total ordinary shareholders' equity 1,000
---------
$ 35,000
---------
---------
</TABLE>
The accompanying notes are an integral part of this consolidated financial
statement.
F-3
<PAGE>
EURAMAX INTERNATIONAL PLC
NOTES TO CONSOLIDATED BALANCE SHEET
(THOUSANDS OF DOLLARS)
1. ORGANIZATION
Euramax International plc, a corporation formed under the laws of England
and Wales ("Euramax" or the "Company"), is the parent holding company of four
first tier holding companies: Amerimax Holdings, Inc., a Delaware corporation
("Amerimax"); Euramax European Holdings plc, a corporation formed under the laws
of England and Wales ("Euramax U.K."); Euramax European Holdings, B.V., a
corporation formed under the laws of The Netherlands ("Euramax B.V."); and
Euramax European Holdings, S.A., a corporation formed under the laws of France
("Euramax S.A."). The Company is a holding company organized by an Investor
Group to acquire certain portions of the fabricated products operations of
Alumax Inc. ("Alumax") (See Note 3). Euramax was formed to complete the
acquisition discussed in Note 3 and had no operations, income or expenses prior
to the transaction. Accordingly, no separate statements of earnings or cash
flows have been presented.
2. PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of the Company,
Amerimax, Euramax U.K., Euramax B.V., and Euramax S.A. All significant
intercompany accounts and transactions have been eliminated.
3. SUBSEQUENT EVENT
Pursuant to a purchase agreement dated June 24, 1996 between the Company and
Alumax Inc. ("Alumax"), on September 25, 1996 (the "Closing Date"), the Company
purchased, through its wholly-owned subsidiaries, all of the issued and
outstanding capital stock of the following Alumax subsidiaries which operate
certain portions of Alumax's fabricated products operations: (i) Amerimax
Fabricated Products, Inc. and its wholly owned subsidiaries, Amerimax Specialty
Products, Inc., Amerimax Building Products, Inc., Amerimax Coated Products,
Inc., Johnson Door Products, Inc., and Amerimax Home Products, Inc.; (ii)
Euramax Holdings Limited and its wholly owned subsidiaries, Ellbee Limited and
Euramax Coated Products Limited; (iii) Euramax Europe B.V. and its wholly owned
subsidiary, Euramax Coated Products B.V.; and (iv) Euramax Industries S.A. and
its wholly owned subsidiary Euramax Coated Products S.A.
The purchase price for the Acquisition was approximately $253.7 million, which
includes estimated acquisition expenses of approximately $3.9 million, is
adjusted to give effect to certain items including cash acquired and working
capital, and was allocated to the assets and liabilities of the Company based
upon their estimated fair market value at the date of Acquisition under the
purchase method of accounting. Such initial purchase price is subject to
adjustment based upon the completion of an audit to determine the change in the
Company's working capital (as defined) from December 31, 1995 through September
25, 1996. Management has estimated such change in connection with the
preparation of the Consolidated Balance Sheet as of September 25, 1996, and does
not expect further adjustments to the purchase price to be significant.
Additionally, the allocation of the purchase price was, in certain instances,
based on preliminary information and is, therefore, subject to revision when
additional asset and liability valuations are obtained. In the opinion of the
Company's management, the asset and liability valuations for the Acquisition
will not be materially different than initially recorded.
The financing for the Acquisition was provided by: (a) $35.0 million of
preference and ordinary share capital; (b) $135.0 million of Senior Subordinated
Notes; and (c) $100.0 million under a Credit Agreement aggregating $125.0
million.
On September 25, 1996, the Company issued $135.0 million in 11.25% Senior
Subordinated Notes pursuant to an offering (the "Offering"). The proceeds of the
offering were used in the financing of the Acquisition.
The following unaudited pro forma data presents the results of operations for
the nine months ended September 29, 1995, and September 25, 1996, respectively,
as though the Acquisition and the Offering had been completed January 1, 1995,
and January 1, 1996, respectively, and assume that there are no other changes in
the operations of the Company. Such pro forma information includes adjustments
to interest expense; changes in depreciation of property, plant and equipment
and amortization of goodwill relating to the allocation of the purchase price;
and the income tax effect
F-4
<PAGE>
EURAMAX INTERNATIONAL PLC
NOTES TO CONSOLIDATED BALANCE SHEET (CONTINUED)
(THOUSANDS OF DOLLARS)
3. SUBSEQUENT EVENT (CONTINUED)
related to these items. The pro forma results are not necessarily indicative of
the financial results that might have occurred had the Acquisition and the
Offering actually taken place on the above-mentioned dates, or of the future
results of operations (in thousands):
<TABLE>
<CAPTION>
NINE MONTHS ENDED
--------------------------
SEPTEMBER SEPTEMBER
29, 1995 25, 1996
------------ ------------
<S> <C> <C>
Net sales $ 372,524 $ 363,308
Earnings before income taxes 4,709 3,113
Net earnings 3,028 1,730
</TABLE>
The operations of Euramax are conducted through various indirect operating
subsidiaries of Amerimax, Euramax U.K., Euramax B.V. and Euramax S.A. Euramax is
a leading international downstream producer of aluminum and steel products with
facilities in the U.S., the U.K., The Netherlands and France. Euramax's products
include painted sheet and coil, siding, roofing, raincarrying systems, windows,
doors and various fabricated trim parts and components. The Company's products
are sold primarily to manufacturers of recreational vehicles and manufactured
housing, rural building contractors, distributors and home centers.
4. REDEEMABLE PREFERENCE SHARES
In anticipation of the Transactions described in Note 3, the Company issued
34,000,000 shares of redeemable preference shares as follows: 33,925,000
preference shares with a stated value of $1 per share, and 50,000 sterling
preference shares with a stated value of 1 British Pound Sterling per share. The
preference shares accrue fixed, cumulative dividends of 14% per annum compounded
quarterly on March 31, June 30, September 30, and December 31 in each year,
beginning on December 31, 1996, and are paid as declared by the Company's Board
of Directors. The Company is prohibited from paying dividends on ordinary shares
unless all required preferred dividends have been paid.
In the event of liquidation, dissolution, winding-up or otherwise, the assets of
the Company available for distribution among the shareholders shall be applied
first to pay the preference shareholders before payment to the holders of any
other class of shares.
With the consent of 66.67% of the preference shareholders, the Company may, at
any time, redeem all or multiples in the aggregate amount of $500,000 of the
preference shares. Subject to certain provisions of the senior secured credit
facilities noted in Note 3, the holders of 66.67% of the preference shares are
entitled to require redemption of some or all of the preference shares if any of
the following events occur: i) the preference dividend due is not paid in full
on a due date, whether or not the Company has enough profits available for
distribution to pay it; or ii) when preference shares are due for redemption,
the Company does not pay all the redemption money then payable to the preference
shareholders, whether or not the Company has enough profits available for
distribution or other requisite funds to pay the redemption money. Also subject
to certain provisions of the senior secured credit facilities noted in Note 3,
the holders of 66.67% of the preference shares are entitled to require
redemption of all of the preference shares in the event of the following: i) the
sale of 66.67% or more of the ordinary shares; or ii) the listing of the
Company's shares on an internationally recognized stock exchange. On any
redemption date, the Company shall pay to the preference shareholders the
nominal amounts and premiums paid on the shares and a sum equal to any accrued
and/or unpaid preference dividends. To the extent that any preference shares
remain outstanding, the Company shall redeem the preference shares on December
31, 2007. Sterling preference shares may not be redeemed if doing so would put
the Company in breach of the Companies Act 1985.
F-5
<PAGE>
EURAMAX INTERNATIONAL PLC
NOTES TO CONSOLIDATED BALANCE SHEET (CONTINUED)
(THOUSANDS OF DOLLARS)
5. NON-VOTING ORDINARY SHARES
Holders of a majority of the outstanding non-voting ordinary shares held by
certain investors, as described in the Company's Articles of Association, shall
be entitled at any time to convert any or all of their non-voting ordinary
shares into the same number of ordinary shares of an equivalent value.
F-6
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Management of
Fabricated Products, a division of Alumax Inc.
We have audited the accompanying combined balance sheets of Fabricated Products,
a division of Alumax Inc., (the "Company" and see Note 1) as of December 31,
1994 and 1995, and the related combined statements of earnings and cash flows
for each of three years in the period ended December 31, 1995. These combined
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the combined financial statements referred to above present
fairly, in all material respects, the combined financial position of Fabricated
Products, a division of Alumax Inc., as of December 31, 1994 and 1995, and the
results of their operations and their cash flows for each of the three years in
the period ended December 31, 1995, in conformity with generally accepted
accounting principles.
COOPERS & LYBRAND L.L.P.
Atlanta, Georgia
August 1, 1996
F-7
<PAGE>
FABRICATED PRODUCTS (A DIVISION OF ALUMAX INC.)
COMBINED STATEMENTS OF EARNINGS
<TABLE>
<CAPTION>
-----------------------------------------------
FOR THE YEAR ENDED DECEMBER 31
-----------------------------------------------
THOUSANDS OF U.S. DOLLARS 1993 1994 1995
------------- ------------- -------------
<S> <C> <C> <C>
Net sales $ 385,487.0 $ 446,571.8 $ 483,461.9
Cost and expenses:
Cost of goods sold 316,840.9 366,716.8 399,989.0
Selling and general 35,335.6 42,424.3 41,350.7
Depreciation and amortization 7,645.3 7,672.2 7,980.2
------------- ------------- -------------
Earnings from operations 25,665.2 29,758.5 34,142.0
Interest income (expense), net (1,149.9) (255.2) (2,988.4)
Other income (expense), net (347.8) (284.2) (96.2)
------------- ------------- -------------
Earnings before income taxes 24,167.5 29,219.1 31,057.4
Provision for income taxes 8,708.3 12,037.8 11,399.1
------------- ------------- -------------
Net earnings $ 15,459.2 $ 17,181.3 $ 19,658.3
------------- ------------- -------------
------------- ------------- -------------
</TABLE>
The accompanying notes are an integral part of these combined financial
statements.
F-8
<PAGE>
FABRICATED PRODUCTS (A DIVISION OF ALUMAX INC.)
COMBINED BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
------------------------------
DECEMBER 31
------------------------------
THOUSANDS OF U.S. DOLLARS 1994 1995
------------- -------------
<S> <C> <C>
Current assets:
Cash and equivalents $ 35,119.0 $ 12,586.9
Accounts receivable, less allowance for doubtful accounts
(1994 -- $3,940.6; 1995 -- $2,582.0) 58,332.2 60,006.4
Inventories 92,246.2 101,454.5
Other current assets 2,254.2 1,340.3
------------- -------------
Total current assets 187,951.6 175,388.1
------------- -------------
Noncurrent assets:
Property, plant and equipment, net 48,584.9 60,024.6
Other assets 234.1 1,236.1
------------- -------------
Total noncurrent assets 48,819.0 61,260.7
------------- -------------
$ 236,770.6 $ 236,648.8
------------- -------------
------------- -------------
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable $ 45,165.6 $ 28,409.1
Accrued liabilities 19,456.3 16,917.8
Taxes payable -- foreign (3,329.3) 2,681.5
------------- -------------
Total current liabilities 61,292.6 48,008.4
------------- -------------
Noncurrent liabilities:
Deferred income taxes -- foreign 1,751.0 1,225.0
Due to Alumax 39,264.2 33,562.4
Other noncurrent liabilities 676.7 2,392.2
------------- -------------
Total noncurrent liabilities 41,691.9 37,179.6
------------- -------------
Commitments and contingencies
Equity:
Common stock and paid-in capital 41,450.2 41,450.2
Retained earnings 96,794.0 112,415.0
Cumulative foreign translation adjustment (4,458.1) (2,404.4)
------------- -------------
Total equity 133,786.1 151,460.8
------------- -------------
$ 236,770.6 $ 236,648.8
------------- -------------
------------- -------------
</TABLE>
The accompanying notes are an integral part of these combined financial
statements.
F-9
<PAGE>
FABRICATED PRODUCTS (A DIVISION OF ALUMAX INC.)
COMBINED STATEMENTS OF CHANGES IN EQUITY
<TABLE>
<CAPTION>
----------------------------------------------------------------
COMMON STOCK
AND
PAID-IN RETAINED TRANSLATION
THOUSANDS OF U.S. DOLLARS CAPITAL EARNINGS ADJUSTMENT TOTAL
-------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Balance, December 31, 1992 $41,450.2 $ 68,193.4 $ (2,460.2) $ 107,183.4
Net earnings for 1993 -- 15,459.2 -- 15,459.2
Dividends declared/paid -- (3,928.7) -- (3,928.7)
Foreign currency adjustment -- -- (7,545.6) (7,545.6)
-------------- ------------- ------------- -------------
Balance, December 31, 1993 41,450.2 79,723.9 (10,005.8) 111,168.3
Net earnings for 1994 -- 17,181.3 -- 17,181.3
Dividends declared/paid -- (111.2) -- (111.2)
Foreign currency adjustment -- -- 5,547.7 5,547.7
-------------- ------------- ------------- -------------
Balance, December 31, 1994 41,450.2 96,794.0 (4,458.1) 133,786.1
Net earnings for 1995 -- 19,658.3 -- 19,658.3
Dividends declared/paid -- (4,037.3) -- (4,037.3)
Foreign currency adjustment -- -- 2,053.7 2,053.7
-------------- ------------- ------------- -------------
Balance, December 31, 1995 $41,450.2 $ 112,415.0 $ (2,404.4) $ 151,460.8
-------------- ------------- ------------- -------------
-------------- ------------- ------------- -------------
</TABLE>
The accompanying notes are an integral part of these combined financial
statements.
F-10
<PAGE>
FABRICATED PRODUCTS (A DIVISION OF ALUMAX INC.)
COMBINED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
-------------------------------
FOR THE YEAR ENDED DECEMBER 31
-------------------------------
THOUSANDS OF U.S DOLLARS 1993 1994 1995
--------- --------- ---------
<S> <C> <C> <C>
Cash flows from operating activities:
Net earnings $15,459.2 $17,181.3 $19,658.3
Reconciliation of net earnings to net cash provided by
operating activities:
Depreciation and amortization 7,645.3 7,672.2 7,980.2
Provision for doubtful accounts 1,090.5 1,451.4 388.2
(Gain) loss on sales of assets (43.9) 142.6 146.7
Deferred income taxes 2.6 603.7 (526.0)
Changes in operating assets and liabilities:
Accounts receivable (3,055.5) (9,574.3) (2,019.3)
Inventories (3,982.8) (24,855.0) (9,196.5)
Other current assets (2,154.8) 722.6 929.9
Accounts payable and accrued liabilities 6,062.3 19,712.8 (17,727.7)
Taxes payable -- foreign (1,325.6) (4,607.9) 6,073.7
Net change in other noncurrent assets and liabilities (45.7) (127.8) 258.6
--------- --------- ---------
Net cash provided by operating activities 19,651.6 8,321.6 5,966.1
--------- --------- ---------
Cash flows from investing activities:
Proceeds from sales of assets 260.3 1,465.3 177.0
Capital expenditures (7,700.2) (9,594.5) (17,429.4)
--------- --------- ---------
Net cash used in investing activities (7,439.9) (8,129.2) (17,252.4)
--------- --------- ---------
Cash flows from financing activities:
Net change in due to Alumax 12,502.5 5,698.6 (7,486.1)
Dividends paid (3,928.7) (111.2) (4,037.3)
--------- --------- ---------
Net cash provided by (used in) financing activities 8,573.8 5,587.4 (11,523.4)
--------- --------- ---------
Effect of exchange rate changes on cash 1,189.2 (1,580.2) 277.6
--------- --------- ---------
Net increase (decrease) in cash and equivalents 21,974.7 4,199.6 (22,532.1)
Cash and equivalents at beginning of year 8,944.7 30,919.4 35,119.0
--------- --------- ---------
Cash and equivalents at end of year $30,919.4 $35,119.0 $12,586.9
--------- --------- ---------
--------- --------- ---------
Supplemental cash flow information:
Foreign income taxes paid, net $ 6,389.3 $ 7,217.0 $ 2,273.7
--------- --------- ---------
--------- --------- ---------
</TABLE>
The accompanying notes are an integral part of these combined financial
statements.
F-11
<PAGE>
FABRICATED PRODUCTS (A DIVISION OF ALUMAX INC.)
NOTES TO COMBINED FINANCIAL STATEMENTS
(THOUSANDS OF DOLLARS)
1. ORGANIZATION AND BASIS OF PRESENTATION:
On June 27, 1996, Alumax Inc. ("Alumax"), the sole stockholder, entered into
a purchase agreement with Euramax International PLC ("Euramax") to sell the
Fabricated Products division of Alumax ("Fabricated Products" or the "Company")
prior to the end of September 1996. The entities to be included in the sale and
combined herein are as follows: Alumax Appliance and Specialty Products, Inc.;
Alumax Building Products, Inc.; Alumax Coated Products, Inc.; Alumax Door
Products, Inc.; Home Products, Inc.; Alumax Coated Products B.V.; Alumax Coated
Products S.A.; Alumax Coated Products U.K. Limited; Alumax Ellbee Limited;
Alumax Industries S.A.; Alumax Holdings Limited and Alumax Europe B.V.
The accompanying combined financial statements have been prepared as if the
Company's businesses had operated as an independent stand-alone entity for all
periods presented. Certain obligations were originally recorded by Alumax on
behalf of the Company such as post-retirement and post-employment benefit
obligations, income taxes, legal and other corporate expenses. These obligations
have been allocated to the Company's financial statements using several factors
including revenues or number of employees or other reasonable methods. Corporate
expenses of Alumax have been allocated to the Company on a basis management
believes is reasonable and represents the expenses as if the Company was a stand
alone operation.
See Note 13 for a description of transactions with Alumax.
Historical earnings per share have not been presented because they would not be
meaningful. The common stock of the Company, as presented in common stock and
paid-in capital, consists of the common stock of the combined companies as
listed above.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
PRINCIPLES OF COMBINATION
The financial statements include the combined accounts of the entities referred
to as the Fabricated Products division of Alumax. All significant intercompany
accounts and transactions have been eliminated.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
may affect the reported amounts of certain assets and liabilities and disclosure
of contingencies at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates.
PENDING ACCOUNTING POLICY CHANGES
The Financial Accounting Standards Board issued Statement of Financial
Accounting Standard ("SFAS") No. 121, ACCOUNTING FOR THE IMPAIRMENT OF
LONG-LIVED ASSETS AND FOR LONG-LIVED ASSETS TO BE DISPOSED OF which becomes
effective for fiscal years beginning after December 15, 1995. The Company will
adopt these statements effective January 1, 1996. The adoption of SFAS No. 121
is not expected to have a material effect on the Company's financial position.
INVENTORIES
Inventories are stated at the lower of cost or market, with cost determined
under the first-in, first-out (FIFO) method.
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment is recorded at cost. Depreciation and amortization
of property, plant and equipment is computed principally on the straight-line
method over the estimated useful lives of the assets ranging from 5 to 10 years
for equipment and 25 years for buildings. Gains or losses related to the
disposition of property, plant and equipment are charged to other income or
expense when incurred.
REVENUE RECOGNITION
The Company recognizes revenue when title passes to the customer.
F-12
<PAGE>
FABRICATED PRODUCTS (A DIVISION OF ALUMAX INC.)
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
(THOUSANDS OF DOLLARS)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (CONTINUED)
TRANSLATION OF FOREIGN CURRENCIES
Assets and liabilities of subsidiaries are translated, in accordance with SFAS
No. 52, FOREIGN CURRENCY TRANSLATION, at the rate of exchange in effect on the
balance sheet date; income and expenses are translated at the average rates of
exchange prevailing during the year. Foreign currency gains and losses resulting
from transactions are included in results of operations. The foreign currency
transaction gains (losses) recorded in selling and general expenses for 1993,
1994 and 1995 were $2,292.6, $(9.9), and $275.3, respectively.
3. INVENTORIES:
Inventories, at December 31, were comprised of:
<TABLE>
<CAPTION>
-----------------------------
1994 1995
------------- -------------
<S> <C> <C>
Raw materials $ 60,783.8 $ 66,976.3
Work in process 18,362.5 24,121.3
Finished products 13,099.9 10,356.9
------------- -------------
$ 92,246.2 $ 101,454.5
------------- -------------
------------- -------------
</TABLE>
4. INCOME TAXES:
The Company does not have a formal tax sharing agreement with Alumax. Alumax
has paid the allocable share of Federal and state taxes on behalf of the U.S.
entities. Domestic current and deferred Federal and state taxes have been
classified within Due to Alumax. The foreign entities calculate their income
taxes on a stand-alone basis and the related amounts are included in Taxes
payable--foreign and Deferred income taxes--foreign. The income tax provision
(benefit) was based on amounts the Company would have paid on a combined basis
as if separate returns were filed.
The provisions for income taxes are comprised of the following:
<TABLE>
<CAPTION>
---------------------------------------------
1993 1994 1995
------------- ------------- -------------
<S> <C> <C> <C>
Current:
Federal $ 3,777.4 $ 6,097.5 $ 2,399.8
Foreign 5,067.7 3,978.6 8,347.4
State 1,203.8 2,151.6 800.8
------------- ------------- -------------
10,048.9 12,227.7 11,548.0
------------- ------------- -------------
Deferred:
Federal (1,013.0) (582.1) 308.6
Foreign 2.6 603.7 (523.0)
State (330.2) (211.5) 65.5
------------- ------------- -------------
(1,340.6) (189.9) (148.9)
------------- ------------- -------------
$ 8,708.3 $ 12,037.8 $ 11,399.1
------------- ------------- -------------
------------- ------------- -------------
</TABLE>
The domestic and foreign components of earnings before income taxes are as
follows:
<TABLE>
<CAPTION>
---------------------------------------------
1993 1994 1995
------------- ------------- -------------
<S> <C> <C> <C>
Domestic $ 8,075.9 $ 16,658.3 $ 8,758.3
Foreign 16,091.6 12,560.8 22,299.1
------------- ------------- -------------
$ 24,167.5 $ 29,219.1 $ 31,057.4
------------- ------------- -------------
------------- ------------- -------------
</TABLE>
F-13
<PAGE>
FABRICATED PRODUCTS (A DIVISION OF ALUMAX INC.)
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
(THOUSANDS OF DOLLARS)
4. INCOME TAXES: (CONTINUED)
Reconciliation of the differences between income taxes computed at Federal
statutory tax rates and the Company's combined income tax provision (benefit)
follows:
<TABLE>
<CAPTION>
-------------------------------
1993 1994 1995
--------- --------- ---------
<S> <C> <C> <C>
Tax at Federal statutory rate $ 8,458.6 $10,226.7 $10,870.1
State income taxes, net of Federal
income tax benefit 512.6 1,600.1 569.3
Foreign taxes, net (566.0) 186.0 16.7
Other, net 303.1 25.0 (57.0)
--------- --------- ---------
$ 8,708.3 $12,037.8 $11,399.1
--------- --------- ---------
--------- --------- ---------
</TABLE>
The approximate tax effects of U.S. cumulative temporary differences are
recorded as components of the amounts due to Alumax while the tax effects of
foreign cumulative temporary differences are presented in deferred income taxes
- -foreign. As of December 31, the combined tax-effected temporary differences are
as follows:
<TABLE>
<CAPTION>
--------------------
ASSET (LIABILITY)
--------------------
1994 1995
--------- ---------
<S> <C> <C>
Accrued expenses $ 2,780.9 $ 2,001.9
Allowance for doubtful accounts 1,418.6 929.5
--------- ---------
Current, net 4,199.5 2,931.4
--------- ---------
Book versus tax basis of depreciable
assets (2,674.0) (3,529.6)
Postretirement health care accrual 2,582.3 2,549.7
Other 175.2 1,354.0
--------- ---------
Noncurrent, net 83.5 374.1
--------- ---------
Total, net $ 4,283.0 $ 3,305.5
--------- ---------
--------- ---------
</TABLE>
The Company has not provided for domestic income or foreign withholding taxes on
foreign subsidiaries' undistributed earnings in accordance with current
accounting standards, because such earnings are expected to be reinvested
indefinitely.
5. PROPERTY, PLANT AND EQUIPMENT:
Components of property, plant and equipment at December 31 are as follows:
<TABLE>
<CAPTION>
--------------------
1994 1995
--------- ---------
<S> <C> <C>
Land and improvements $ 4,810.3 $ 5,631.8
Buildings 22,589.8 27,637.9
Machinery and equipment 86,882.7 98,799.0
--------- ---------
114,282.8 132,068.7
Less accumulated depreciation (69,623.2) (81,179.6)
--------- ---------
44,659.6 50,889.1
Construction in progress 3,925.3 9,135.5
--------- ---------
$48,584.9 $60,024.6
--------- ---------
--------- ---------
</TABLE>
Alumax transferred equipment to Fabricated Products with a cost of $7,804.5 and
accumulated depreciation of $5,678.3 in 1995.
F-14
<PAGE>
FABRICATED PRODUCTS (A DIVISION OF ALUMAX INC.)
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
(THOUSANDS OF DOLLARS)
6. EMPLOYEE PENSION AND THRIFT PLANS:
U.S. PLANS:
PENSION:
Substantially all employees of the U.S. based Fabricated Products entities are
covered by non-contributory defined benefit pension plans administered by
Alumax. The costs of these plans are allocated to the Company based on base
salary expenses and are generally non-contributory. The Company's allocated
share of the projected benefit obligation of the plans at December 31, 1994 and
1995 is $15,791.8 and $18,371.6. In relation to these plans, the Company was
charged $1,090.6, $1,254.8, and $1,235.7 by Alumax in 1993, 1994 and 1995,
respectively, for its allocated share of net periodic pension costs of these
Plans.
THRIFT:
The majority of the employees of the U.S. based Fabricated Products entities are
eligible to participate in a thrift plan sponsored by Alumax. The plan allows
the employees to contribute a percentage of their pre-tax and/or after-tax
income in accordance with specified guidelines. Alumax matched a certain
percentage of employee contributions up to certain limits. The Company's expense
related to the Alumax Thrift plan was $426.9, $414.5, and $413.5 for the years
ended December 31, 1993, 1994 and 1995 respectively.
INTERNATIONAL PLANS:
In addition to the above, the employees of Euramax Coated Products Limited and
Ellbee Limited participate in a single employer pension plan (the "U.K. Plan").
Net periodic pension cost for the U.K. Plan includes the following components:
<TABLE>
<CAPTION>
-------------------------------
1993 1994 1995
--------- --------- ---------
<S> <C> <C> <C>
Service cost -- benefits earned during the period $ 300.5 $ 355.5 $ 526.9
Interest cost on projected benefit obligations 371.1 442.8 642.4
Actual return on assets (1,204.9) 319.7 (1,248.4)
Net amortization and deferral 811.3 (876.3) 797.5
--------- --------- ---------
Net periodic pension cost $ 278.0 $ 241.7 $ 718.4
--------- --------- ---------
--------- --------- ---------
</TABLE>
The following table sets forth the funded status of the U.K. Plan and amounts
recognized in the Company's combined balance sheets at December 31 for its
pension plans:
<TABLE>
<CAPTION>
--------------------
1994 1995
--------- ---------
<S> <C> <C>
Actuarial present value of benefit obligations:
Vested benefit obligation $ 5,499.2 $ 7,008.8
--------- ---------
--------- ---------
Accumulated benefit obligation $ 5,629.1 $ 7,544.4
--------- ---------
--------- ---------
Projected benefit obligation $ 6,158.1 $ 8,206.5
Plan net assets at fair value 5,774.7 7,229.5
--------- ---------
Plan net assets less than projected benefit obligation (383.4) (977.0)
Unrecognized net loss 186.2 572.6
Unrecognized prior service cost 230.1 211.4
Unrecognized transition amounts (347.4) (313.3)
--------- ---------
Accrued pension costs $ (314.5) $ (506.3)
--------- ---------
--------- ---------
</TABLE>
U.K. Plan assets consist of approximately 82 percent equities, 12.1 percent
fixed income and 5.9 percent cash and cash equivalents at December 31, 1995.
F-15
<PAGE>
FABRICATED PRODUCTS (A DIVISION OF ALUMAX INC.)
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
(THOUSANDS OF DOLLARS)
6. EMPLOYEE PENSION AND THRIFT PLANS: (CONTINUED)
Key economic assumptions used in the above calculations for the foreign plan at
December 31, were:
<TABLE>
<CAPTION>
----------------------------------
1993 1994 1995
---------- ---------- ----------
<S> <C> <C> <C>
Settlement discount rate 9.0% 8.5% 8.5%
Rate of compensation increases 7.0% 6.5% 6.5%
Expected long-term rate of return 9.0% 8.5% 9.0%
</TABLE>
7. POSTRETIREMENT HEALTH CARE AND LIFE INSURANCE BENEFITS:
In addition to providing pension benefits, the Company participates in a
plan for certain health care and life insurance benefits for retired employees
administered by Alumax. A majority of the Company's domestic employees may
become eligible for such benefits if they reach normal or, in certain cases,
early retirement age while working for the Company. Costs related to this
unfunded plan charged by Alumax were $301.0, $146.0, and $100.0 for the years
ended December 31, 1993, 1994, and 1995, respectively.
8. POSTEMPLOYMENT BENEFITS:
In addition to providing postretirement benefits to eligible retired
employees, the Company provides specified postemployment benefits to certain
former or inactive employees. Substantially all domestic employees may become
eligible to receive these benefits, which are either self-insured or provided
through the Company's insurance carriers.
9. COMMITMENTS AND CONTINGENCIES:
Minimum commitments under long-term noncancelable operating leases,
principally for operating and office facilities, totaled $10,374.7 at December
31, 1995. Lease commitments for future periods are as follows:
<TABLE>
<S> <C>
1996 $ 3,442.6
1997 2,771.8
1998 1,696.9
1999 1,280.4
2000 677.3
2001 to 2012 505.7
</TABLE>
Rent expense amounted to $3,526.4, $3,851.2 and $3,760.0 in 1993, 1994 and 1995,
respectively.
The Company has entered into several noncancelable long-term contracts for the
purchase of aluminum at market values. The aluminum contracts expire in various
years through 1999. Contracted amounts of aluminum are less than the Company's
anticipated requirements.
The Company has been named as a defendant in lawsuits in various matters
relating to both current and former operations. In addition, the Company has
been named as a defendant in lawsuits or as a potentially responsible party in
state and Federal administrative and judicial proceedings seeking contribution
for costs associated with the investigation, analysis, correction and
remediation of environmental conditions at various hazardous waste disposal
sites. The Company continues to monitor these actions and proceedings and to
vigorously defend both its own interests as well as the interests of its
affiliates. The Company's ultimate liability in connection with present and
future environmental claims will depend on many factors, including its
volumetric share of the waste at a given site, the remedial action required, the
total cost of remediation, and the financial viability and participation of the
other entities that also sent waste to the site. Once it becomes probable that
the Company will incur costs in connection with remediation of a site and such
costs can be reasonably estimated, the Company establishes or adjusts its
reserve for its projected share of these costs. Based upon current law and
information known to the Company concerning the size of the sites known to it,
anticipated costs, their years of operations and the number of other potentially
responsible parties, Management believes that it has adequate reserves for the
Company's potential share of the estimated aggregate liability for the costs of
remedial actions and related costs and expenses. In addition, the Company
establishes reserves for remedial
F-16
<PAGE>
FABRICATED PRODUCTS (A DIVISION OF ALUMAX INC.)
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
(THOUSANDS OF DOLLARS)
9. COMMITMENTS AND CONTINGENCIES: (CONTINUED)
measures required from time to time at its own facilities. Management believes
that the reasonably probable outcomes of these matters will not materially
exceed established reserves and will not have a material impact on the future
financial position, net earnings or cash flows of the Company. The Company's
reserves, expenditures and expenses for all environmental exposures were not
significant for any of the dates or periods presented.
In connection with the purchase agreement referred to in Note 1, the Company
will be indemnified by Alumax for substantially all of its costs if any, related
to environmental matters for occurrences arising prior to the closing date of
the acquisition during the period of time it was owned directly or indirectly by
Alumax. Such indemnification includes costs that were to ultimately be incurred
to contribute to the remediation of certain specified existing National
Priorities List (NPL) sites for which the Company had been named a potentially
responsible party under the federal Comprehensive Environmental Response,
Compensation, and Liability Information System (CERCLA) as of the closing date
of the Acquisition, as well as certain potential costs for sites listed on state
hazardous cleanup lists. With respect to all other environmental matters,
Alumax's obligations are limited to $125.0 million. However, notwithstanding the
indemnity, the Company does not believe that it has any significant probable
liability for environmental claims. Further, the Company believes it to be
unlikely that it would be required to bear environmental costs in excess of its
pro rata share of such costs as a potentially responsible party under CERCLA.
10. TRANSACTIONS WITH ALUMAX:
The Company participates in Alumax's centralized cash management system.
Under this system, cash received from the Company's operations is transferred to
Alumax's centralized cash accounts and cash disbursements are funded from the
centralized cash accounts.
The following is a summary of transactions between the Company and Alumax:
<TABLE>
<CAPTION>
-------------------------------
1993 1994 1995
--------- --------- ---------
<S> <C> <C> <C>
Purchases of product from Alumax $77,915.3 $56,255.1 $27,569.7
</TABLE>
Transactions between the Company and Alumax are generally at the market value of
the products and services involved.
The following is a summary of the components of the Due to Alumax account:
<TABLE>
<CAPTION>
--------------------
1994 1995
--------- ---------
<S> <C> <C>
Allocation of accrued pension liability $ 1,825.4 $ 1,797.7
Allocation of other post-retirement benefits 7,378.0 7,285.0
Net U.S. current and deferred income taxes 26,822.1 25,081.7
Net of other operating cash flows 3,238.7 (602.0)
--------- ---------
Total due to Alumax $39,264.2 $33,562.4
--------- ---------
--------- ---------
</TABLE>
The due to Alumax account represents the cumulative net effect of the Company's
activity in Alumax's cash management system and other transactions between the
Company and Alumax. Alumax periodically charges the Company interest expense
related to a portion of this balance at a rate which approximates the prime
rate.
11. OPERATIONS AND GEOGRAPHIC DATA:
Fabricated Products operates 35 plants and service centers throughout the
United States. Products produced and marketed by these operations include rain
carrying systems, roofing and roofing accessories, siding, appliance trims,
steel entry doors, vinyl windows and numerous recreational vehicle components.
Fabricated Products serves the recreational vehicle, manufactured housing, home
center, home improvement, residential construction, agricultural and utility
building markets in the United States.
F-17
<PAGE>
FABRICATED PRODUCTS (A DIVISION OF ALUMAX INC.)
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
(THOUSANDS OF DOLLARS)
11. OPERATIONS AND GEOGRAPHIC DATA: (CONTINUED)
Fabricated Products also operates a group of five companies in Western Europe
which focuses on coil coating and fabricating aluminum and steel. Other products
include steel and aluminum entry doors, recreational vehicle components,
composite panels, vehicle components such as seat rails and sunroof frames,
windows for modular construction. These European companies, which serve the
recreational vehicle, home center, home improvement, residential construction,
and various original equipment manufacturer markets, operate two plants in the
United Kingdom, two in France and one in the Netherlands.
<TABLE>
<CAPTION>
---------------------------------------------
Geographic data: 1993 1994 1995
------------- ------------- -------------
<S> <C> <C> <C>
Net sales:
United States $ 253,305.6 $ 286,756.0 $ 287,772.2
Europe and other international 132,181.4 159,815.8 195,689.7
------------- ------------- -------------
$ 385,487.0 $ 446,571.8 $ 483,461.9
------------- ------------- -------------
------------- ------------- -------------
Earnings from operations:
United States $ 8,319.9 $ 16,658.3 $ 11,195.3
Europe and other international 17,345.3 13,100.2 22,946.7
------------- ------------- -------------
$ 25,665.2 $ 29,758.5 $ 34,142.0
------------- ------------- -------------
------------- ------------- -------------
Identifiable assets:
United States $ 100,141.7 $ 119,848.5
Europe and other international 136,628.9 116,800.3
------------- -------------
$ 236,770.6 $ 236,648.8
------------- -------------
------------- -------------
</TABLE>
A significant portion of the Company's sales are to the retail and automotive
markets. Concentrations of credit risk with respect to the trade receivables,
relating to sales into these as well as other markets, are limited due to the
large number of customers and the widely dispersed geographic areas in which the
Company's businesses operate.
12. SUPPLEMENTAL CONDENSED COMBINING FINANCIAL STATEMENTS:
As described in Note 1, on June 27, 1996, Euramax signed an agreement to
purchase the Company from Alumax Inc. The pending acquisition is expected to be
financed, in part, through Senior Subordinated Notes due 2006. The Company plans
to issue new notes pursuant to an exchange offer whereby holders of the original
notes will have the opportunity to receive new notes which will be registered
under the Securities Act of 1933, as amended, but are otherwise identical to the
original notes. The original notes and the new notes are herein referred to as
"the Notes". The Notes would be primary obligations of Euramax (the "Parent").
The newly-formed United Kingdom and Netherlands holding company subsidiaries of
Euramax are expected to be co-obligors under the Notes (the "Co-obligors"). The
newly-formed United States holding company subsidiary of Euramax is expected to
provide a full and unconditional guarantee of the Notes (the "Guarantor"). The
following supplemental condensed combining financial statements reflect the
combined historical financial position, results of operations and cash flows of
the entities that will be the Parent, the Co-obligors and the Guarantor
(collectively, the "Anticipated Parent, Co-obligors and Guarantor"), and such
combined information of the non-guarantor entities, consisting principally of
the operating companies to be acquired (collectively, the "Non-guarantor
Subsidiaries"). The Co-obligors and the Guarantor are wholly-owned subsidiaries
of Euramax and will be each jointly, severally, fully, and unconditionally
liable under the Notes. Separate
F-18
<PAGE>
FABRICATED PRODUCTS (A DIVISION OF ALUMAX INC.)
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
(THOUSANDS OF DOLLARS)
12. SUPPLEMENTAL CONDENSED COMBINING FINANCIAL STATEMENTS: (CONTINUED)
complete financial statements of each Co-obligor and of the Guarantor are not
presented because management has determined that they are not material to
investors. There were no significant intercompany balances or transactions
between the Anticipated Parent, Co-obligors and Guarantor entities combined and
the Non-guarantor Subsidiaries.
<TABLE>
<CAPTION>
-----------------------------------
FOR THE YEAR ENDED DECEMBER 31,
1993
-----------------------------------
ANTICIPATED
PARENT,
CO-OBLIGORS
AND NON-GUARANTOR COMBINED
THOUSANDS OF U.S. DOLLARS GUARANTOR SUBSIDIARIES TOTALS
----------- ----------- ---------
<S> <C> <C> <C>
Net sales $ -- $385,487.0 $385,487.0
Cost and expenses:
Cost of goods sold -- 316,840.9 316,840.9
Selling and general -- 35,335.6 35,335.6
Depreciation and amortization -- 7,645.3 7,645.3
----------- ----------- ---------
Earnings (loss) from operations -- 25,665.2 25,665.2
Interest income (expense), net -- (1,149.9) (1,149.9)
Other expense, net -- (347.8) (347.8)
----------- ----------- ---------
Earnings (loss) before income taxes -- 24,167.5 24,167.5
Provision for income taxes -- 8,708.3 8,708.3
----------- ----------- ---------
Net earnings (loss) $ -- $15,459.2 $15,459.2
----------- ----------- ---------
----------- ----------- ---------
</TABLE>
<TABLE>
<CAPTION>
-----------------------------------
FOR THE YEAR ENDED DECEMBER 31,
1994
-----------------------------------
ANTICIPATED
PARENT,
CO-OBLIGORS
AND NON-GUARANTOR COMBINED
THOUSANDS OF U.S. DOLLARS GUARANTOR SUBSIDIARIES TOTALS
----------- ----------- ---------
<S> <C> <C> <C>
Net sales $ -- $446,571.8 $446,571.8
Cost and expenses:
Cost of goods sold -- 366,716.8 366,716.8
Selling and general -- 42,424.3 42,424.3
Depreciation and amortization -- 7,672.2 7,672.2
----------- ----------- ---------
Earnings from operations -- 29,758.5 29,758.5
Interest income (expense), net -- (255.2) (255.2)
Other expense, net -- (284.2) (284.2)
----------- ----------- ---------
Earnings (loss) before income taxes -- 29,219.1 29,219.1
Provision for income taxes -- 12,037.8 12,037.8
----------- ----------- ---------
Net earnings (loss) $ -- $17,181.3 $17,181.3
----------- ----------- ---------
----------- ----------- ---------
</TABLE>
Note:Separate columns for the Anticipated Parent, the Co-obligors and the
Guarantor are not presented as there were
no amounts for such entities for the periods shown.
F-19
<PAGE>
FABRICATED PRODUCTS (A DIVISION OF ALUMAX INC.)
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
(THOUSANDS OF DOLLARS)
12. SUPPLEMENTAL CONDENSED COMBINING FINANCIAL STATEMENTS: (CONTINUED)
<TABLE>
<CAPTION>
-----------------------------------
FOR THE YEAR ENDED DECEMBER 31,
1995
-----------------------------------
ANTICIPATED
PARENT,
CO-OBLIGORS
AND NON-GUARANTOR COMBINED
THOUSANDS OF U.S. DOLLARS GUARANTOR SUBSIDIARIES TOTALS
----------- ----------- ---------
<S> <C> <C> <C>
Net sales $ -- $483,461.9 $483,461.9
Cost and expenses:
Cost of goods sold -- 399,989.0 399,989.0
Selling and general -- 41,350.7 41,350.7
Depreciation and amortization -- 7,980.2 7,980.2
----------- ----------- ---------
Earnings from operations -- 34,142.0 34,142.0
Interest income (expense), net -- (2,988.4) (2,988.4)
Other expense, net -- (96.2) (96.2)
----------- ----------- ---------
Earnings before income taxes -- 31,057.4 31,057.4
Provision for income taxes -- 11,399.1 11,399.1
----------- ----------- ---------
Net earnings $ -- $19,658.3 $19,658.3
----------- ----------- ---------
----------- ----------- ---------
</TABLE>
Note:Separate columns for the Anticipated Parent, the Co-obligors and the
Guarantor are not presented as there were
no amounts for such entities for the periods shown.
F-20
<PAGE>
FABRICATED PRODUCTS (A DIVISION OF ALUMAX INC.)
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
(THOUSANDS OF DOLLARS)
12. SUPPLEMENTAL CONDENSED COMBINING FINANCIAL STATEMENTS: (CONTINUED)
<TABLE>
<CAPTION>
-----------------------------------
DECEMBER 31, 1994
-----------------------------------
ANTICIPATED
PARENT,
CO-OBLIGORS
AND NON-GUARANTOR COMBINED
THOUSANDS OF U.S. DOLLARS GUARANTOR SUBSIDIARIES TOTALS
----------- ----------- ---------
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and equivalents $ -- $35,119.0 $35,119.0
Accounts receivable, net -- 58,332.2 58,332.2
Inventories -- 92,246.2 92,246.2
Other current assets -- 2,254.2 2,254.2
----------- ----------- ---------
Total current assets -- 187,951.6 187,951.6
----------- ----------- ---------
Noncurrent assets:
Property, plant and equipment, net -- 48,584.9 48,584.9
Other assets -- 234.1 234.1
----------- ----------- ---------
Total noncurrent assets -- 48,819.0 48,819.0
----------- ----------- ---------
$ -- $236,770.6 $236,770.6
----------- ----------- ---------
----------- ----------- ---------
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable $ -- $45,165.6 $45,165.6
Accrued liabilities -- 19,456.3 19,456.3
Taxes payable -- foreign -- (3,329.3) (3,329.3)
----------- ----------- ---------
Total current liabilities -- 61,292.6 61,292.6
----------- ----------- ---------
Noncurrent liabilities:
Deferred income taxes -- foreign -- 1,751.0 1,751.0
Due to Alumax -- 39,264.2 39,264.2
Other noncurrent liabilities -- 676.7 676.7
----------- ----------- ---------
Total noncurrent liabilities -- 41,691.9 41,691.9
----------- ----------- ---------
Commitments and contingencies
Total equity -- 133,786.1 133,786.1
----------- ----------- ---------
$ -- $236,770.6 $236,770.6
----------- ----------- ---------
----------- ----------- ---------
</TABLE>
Note:Separate columns for the Anticipated Parent, the Co-obligors and the
Guarantor are not presented as there were
no amounts for such entities for the periods shown.
F-21
<PAGE>
FABRICATED PRODUCTS (A DIVISION OF ALUMAX INC.)
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
(THOUSANDS OF DOLLARS)
12. SUPPLEMENTAL CONDENSED COMBINING FINANCIAL STATEMENTS: (CONTINUED)
<TABLE>
<CAPTION>
-----------------------------------
DECEMBER 31, 1995
-----------------------------------
ANTICIPATED
PARENT,
CO-OBLIGORS
AND NON-GUARANTOR COMBINED
THOUSANDS OF U.S. DOLLARS GUARANTOR SUBSIDIARIES TOTALS
----------- ----------- ---------
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and equivalents $ -- $12,586.9 $12,586.9
Accounts receivable, net -- 60,006.4 60,006.4
Inventories -- 101,454.5 101,454.5
Other current assets -- 1,340.3 1,340.3
----------- ----------- ---------
Total current assets -- 175,388.1 175,388.1
----------- ----------- ---------
Noncurrent assets:
Property, plant and equipment, net -- 60,024.6 60,024.6
Other assets -- 1,236.1 1,236.1
----------- ----------- ---------
Total noncurrent assets -- 61,260.7 61,260.7
----------- ----------- ---------
$ -- $236,648.8 $236,648.8
----------- ----------- ---------
----------- ----------- ---------
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable $ -- $28,409.1 $28,409.1
Accrued liabilities -- 16,917.8 16,917.8
Taxes payable -- foreign -- 2,681.5 2,681.5
----------- ----------- ---------
Total current liabilities -- 48,008.4 48,008.4
----------- ----------- ---------
Noncurrent liabilities:
Deferred income taxes -- foreign -- 1,225.0 1,225.0
Due to Alumax -- 33,562.4 33,562.4
Other noncurrent liabilities -- 2,392.2 2,392.2
----------- ----------- ---------
Total noncurrent liabilities -- 37,179.6 37,179.6
----------- ----------- ---------
Commitments and contingencies
Total equity -- 151,460.8 151,460.8
----------- ----------- ---------
$ -- $236,648.8 $236,648.8
----------- ----------- ---------
----------- ----------- ---------
</TABLE>
Note:Separate columns for the Anticipated Parent, the Co-obligors and the
Guarantor are not presented as there were
no amounts for such entities for the periods shown.
F-22
<PAGE>
FABRICATED PRODUCTS (A DIVISION OF ALUMAX INC.)
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
(THOUSANDS OF DOLLARS)
12. SUPPLEMENTAL CONDENSED COMBINING FINANCIAL STATEMENTS: (CONTINUED)
<TABLE>
<CAPTION>
-----------------------------------
FOR THE YEAR ENDED DECEMBER 31,
1993
-----------------------------------
ANTICIPATED
PARENT,
CO-OBLIGORS
AND NON-GUARANTOR COMBINED
THOUSANDS OF U.S. DOLLARS GUARANTOR SUBSIDIARIES TOTALS
----------- ----------- ---------
<S> <C> <C> <C>
Cash flows from operating activities:
Net earnings (loss) $ -- $15,459.2 $15,459.2
Reconciliation of net earnings to net cash
provided by operating activities:
Depreciation and amortization -- 7,645.3 7,645.3
Provision for doubtful accounts -- 1,090.5 1,090.5
Loss on sales of assets -- (43.9) (43.9)
Deferred income taxes -- 2.6 2.6
Changes in operating assets and liabilities -- (4,502.1) (4,502.1)
----------- ----------- ---------
Net cash provided by operating activities -- 19,651.6 19,651.6
----------- ----------- ---------
Cash flows from investing activities:
Proceeds from sales of assets -- 260.3 260.3
Capital expenditures -- (7,700.2) (7,700.2)
----------- ----------- ---------
Net cash used in investing activities -- (7,439.9) (7,439.9)
----------- ----------- ---------
Cash flows from financing activities:
Net change in due to Alumax -- 12,502.5 12,502.5
Dividends paid -- (3,928.7) (3,928.7)
----------- ----------- ---------
Net cash provided by financing activities -- 8,573.8 8,573.8
----------- ----------- ---------
Effect of exchange rate changes on cash -- 1,189.2 1,189.2
----------- ----------- ---------
Net increase in cash and equivalents -- 21,974.7 21,974.7
Cash and equivalents at beginning of year -- 8,944.7 8,944.7
----------- ----------- ---------
Cash and equivalents at end of year $ -- $30,919.4 $30,919.4
----------- ----------- ---------
----------- ----------- ---------
</TABLE>
Note:Separate columns for the Anticipated Parent, the Co-obligors and the
Guarantor are not presented as there were
no amounts for such entities for the periods shown.
F-23
<PAGE>
FABRICATED PRODUCTS (A DIVISION OF ALUMAX INC.)
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
(THOUSANDS OF DOLLARS)
12. SUPPLEMENTAL CONDENSED COMBINING FINANCIAL STATEMENTS: (CONTINUED)
<TABLE>
<CAPTION>
-----------------------------------
FOR THE YEAR ENDED DECEMBER 31,
1994
-----------------------------------
ANTICIPATED
PARENT,
CO-OBLIGORS
AND NON-GUARANTOR COMBINED
THOUSANDS OF U.S. DOLLARS GUARANTOR SUBSIDIARIES TOTALS
----------- ----------- ---------
<S> <C> <C> <C>
Cash flows from operating activities:
Net earnings (loss) $ -- $17,181.3 $17,181.3
Reconciliation of net earnings to net cash
provided by operating activities:
Depreciation and amortization -- 7,672.2 7,672.2
Provision for doubtful accounts -- 1,451.4 1,451.4
(Gain) loss on sales of assets -- 142.6 142.6
Deferred income taxes -- 603.7 603.7
Changes in operating assets and liabilities -- (18,729.6) (18,729.6)
----------- ----------- ---------
Net cash provided by (used in) operating
activities -- 8,321.6 8,321.6
----------- ----------- ---------
Cash flows from investing activities:
Proceeds from sales of assets -- 1,465.3 1,465.3
Capital expenditures -- (9,594.5) (9,594.5)
----------- ----------- ---------
Net cash used in investing activities -- (8,129.2) (8,129.2)
----------- ----------- ---------
Cash flows from financing activities:
Net change in due to Alumax -- 5,698.6 5,698.6
Dividends paid -- (111.2) (111.2)
----------- ----------- ---------
Net cash provided by financing activities -- 5,587.4 5,587.4
----------- ----------- ---------
Effect of exchange rate changes on cash -- (1,580.2) (1,580.2)
----------- ----------- ---------
Net increase in cash and equivalents -- 4,199.6 4,199.6
Cash and equivalents at beginning of year -- 30,919.4 30,919.4
----------- ----------- ---------
Cash and equivalents at end of year $ -- $35,119.0 $35,119.0
----------- ----------- ---------
----------- ----------- ---------
</TABLE>
Note:Separate columns for the Anticipated Parent, the Co-obligors and the
Guarantor are not presented as there were
no amounts for such entities for the periods shown.
F-24
<PAGE>
FABRICATED PRODUCTS (A DIVISION OF ALUMAX INC.)
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
(THOUSANDS OF DOLLARS)
12. SUPPLEMENTAL CONDENSED COMBINING FINANCIAL STATEMENTS: (CONTINUED)
<TABLE>
<CAPTION>
-----------------------------------
FOR THE YEAR ENDED DECEMBER 31,
1995
-----------------------------------
ANTICIPATED
PARENT,
CO-OBLIGORS
AND NON-GUARANTOR COMBINED
THOUSANDS OF U.S. DOLLARS GUARANTOR SUBSIDIARIES TOTALS
----------- ----------- ---------
<S> <C> <C> <C>
Cash flows from operating activities:
Net earnings $ -- $19,658.3 $19,658.3
Reconciliation of net earnings to net cash
provided by operating activities:
Depreciation and amortization -- 7,980.2 7,980.2
Provision for doubtful accounts -- 388.2 388.2
Loss on sales of assets -- 146.7 146.7
Deferred income taxes -- (526.0) (526.0)
Changes in operating assets and liabilities -- (21,681.3) (21,681.3)
----------- ----------- ---------
Net cash provided by operating activities -- 5,966.1 5,966.1
----------- ----------- ---------
Cash flows from investing activities:
Proceeds from sales of assets -- 177.0 177.0
Capital expenditures -- (17,429.4) (17,429.4)
----------- ----------- ---------
Net cash used in investing activities -- (17,252.4) (17,252.4)
----------- ----------- ---------
Cash flows from financing activities:
Net change in due to Alumax -- (7,486.1) (7,486.1)
Dividends paid -- (4,037.3) (4,037.3)
----------- ----------- ---------
Net cash used in financing activities -- (11,523.4) (11,523.4)
----------- ----------- ---------
Effect of exchange rate changes on cash -- 277.6 277.6
----------- ----------- ---------
Net decrease in cash and equivalents -- (22,532.1) (22,532.1)
Cash and equivalents at beginning of year -- 35,119.0 35,119.0
----------- ----------- ---------
Cash and equivalents at end of year $ -- $12,586.9 $12,586.9
----------- ----------- ---------
----------- ----------- ---------
</TABLE>
Note:Separate columns for the Anticipated Parent, the Co-obligors and the
Guarantor are not presented as there were
no amounts for such entities for the periods shown.
F-25
<PAGE>
FABRICATED PRODUCTS (A DIVISION OF ALUMAX INC.) (PREDECESSOR)
EURAMAX INTERNATIONAL PLC AND SUBSIDIARIES (SUCCESSOR)
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
<TABLE>
<CAPTION>
------------------------------
PREDECESSOR
FOR THE
NINE MONTHS ENDED
------------------------------
SEPTEMBER 29, SEPTEMBER 25,
1995 1996
-------------- --------------
UNAUDITED
<S> <C> <C>
THOUSANDS OF U.S. DOLLARS
Net sales $372,523.5 $363,307.6
Cost and expenses:
Cost of goods sold 311,146.7 299,477.3
Selling and general 30,686.1 33,993.6
Depreciation and amortization 6,141.2 6,995.0
-------------- --------------
Earnings from operations 24,549.5 22,841.7
Interest income (expense), net (996.7) (621.8)
Other income (expense), net (34.6) (297.7)
-------------- --------------
Earnings before income taxes 23,518.2 21,922.2
Provision for income taxes 8,640.0 8,342.3
-------------- --------------
Net earnings $ 14,878.2 $ 13,579.9
-------------- --------------
-------------- --------------
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
F-26
<PAGE>
EURAMAX INTERNATIONAL PLC AND SUBSIDIARIES (SUCCESSOR)
FABRICATED PRODUCTS (A DIVISION OF ALUMAX INC.) (PREDECESSOR)
CONDENSED CONSOLIDATED BALANCE SHEET
SEPTEMBER 25, 1996
(UNAUDITED)
ASSETS
<TABLE>
<CAPTION>
THOUSANDS OF U.S. DOLLARS SUCCESSOR
-------------
<S> <C>
Current assets:
Cash and equivalents $ 7,194.8
Accounts receivable, less allowance for doubtful accounts of $3,062 68,881.2
Inventories 101,151.5
Other current assets 1,177.0
-------------
Total current assets 178,404.5
-------------
Noncurrent assets:
Property, plant and equipment, net 108,986.9
Goodwill 32,259.2
Other assets 16,115.2
-------------
Total noncurrent assets 157,361.3
-------------
$ 335,765.8
-------------
-------------
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable $ 34,642.8
Accrued liabilities 20,821.6
Current maturities of long-term debt 2,000.0
-------------
Total current liabilities 57,464.4
-------------
Long-term debt, less current maturities 233,000.0
Other liabilities 2,469.4
Deferred income taxes 7,832.0
-------------
Total liabilities 300,765.8
-------------
-------------
Commitments and contingencies
Redeemable preference shares 34,000.0
-------------
Ordinary shareholders' equity:
Ordinary shares 1,000.0
-------------
Total ordinary shareholders' equity 1,000.0
-------------
$ 335,765.8
-------------
-------------
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
F-27
<PAGE>
FABRICATED PRODUCTS (A DIVISION OF ALUMAX INC.)(PREDECESSOR)
EURAMAX INTERNATIONAL PLC AND SUBSIDIARIES (SUCCESSOR)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
PREDECESSOR
------------------------------
SUCCESSOR
FOR THE --------------
NINE MONTHS ENDED TRANSACTIONS
------------------------------ ON
SEPTEMBER 29, SEPTEMBER 25, SEPTEMBER 25,
1995 1996 1996
-------------- -------------- --------------
UNAUDITED
<S> <C> <C> <C>
THOUSANDS OF U.S DOLLARS
Cash flows from operating activities
Net earnings $ 14,878.2 $ 13,579.9 $ --
Reconciliation of net earnings to net cash
provided by (used in) operating activities:
Depreciation and amortization 6,141.2 6,995.0 --
Provision for doubtful accounts 516.5 827.2 --
(Gain) loss on sales of assets 69.5 (168.3) --
Deferred income taxes 1,236.8 (338.7) --
Changes in operating assets and liabilities (39,268.3) (654.3) --
-------------- -------------- --------------
Net cash provided by (used in) operating
activities (16,426.1) 20,240.8 --
-------------- -------------- --------------
Cash flows from investing activities:
Purchase of Fabricated Products -- -- (251,213.0)
Capital expenditures (16,846.7) (11,517.5) --
-------------- -------------- --------------
Net cash used in investing activities (16,846.7) (11,517.5) (251,213.0)
-------------- -------------- --------------
Cash flows from financing activities:
Proceeds from long-term debt -- -- 235,000.0
Proceeds from issuance of preference shares -- -- 34,000.0
Proceeds from issuance of ordinary shares -- -- 1,000.0
Deferred financing fees -- -- (9,930.0)
Other -- -- (1,555.0)
Proceeds from sale of assets 204.0 233.0 --
Net change in due to Alumax 18,944.7 (20,973.0) --
-------------- -------------- --------------
Net cash provided by (used in) financing
activities 19,148.7 (20,740.0) 258,515.0
-------------- -------------- --------------
Effect of exchange rate changes on cash (2,611.4) (677.4) --
-------------- -------------- --------------
Net increase (decrease) in cash and equivalents (16,735.5) (12,694.1) 7,302.0
Cash and equivalents at beginning of period 35,119.0 12,586.9 (107.2)
-------------- -------------- --------------
Cash and equivalents at end of period $ 18,383.5 $ (107.2) $ 7,194.8
-------------- -------------- --------------
-------------- -------------- --------------
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
F-28
<PAGE>
FABRICATED PRODUCTS (A DIVISION OF ALUMAX INC.) (PREDECESSOR)
EURAMAX INTERNATIONAL PLC AND SUBSIDIARIES (SUCCESSOR)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(THOUSANDS OF DOLLARS)
1. INTERIM PRESENTATION:
The interim financial statements have been prepared by the Company in accordance
with the accounting policies stated in the December 31, 1995 financial
statements and should be read in conjunction with the audited financial
statements for the year ended December 31, 1995. The unaudited interim condensed
financial statements reflect all adjustments which are, in the opinion of
Management, necessary for a fair statement of the results for the interim
periods presented.
Effective January 1, 1996, the Company adopted SFAS No. 121, ACCOUNTING FOR THE
IMPAIRMENT OF LONG-LIVED ASSETS AND FOR LONG-LIVED ASSETS TO BE DISPOSED OF,
which had no material effect on the Company's financial position or results of
operations.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
For information regarding additional summary of significant accounting policies,
see Note 2 to the Combined Financial Statements of the Company for the year
ended December 31, 1995.
GOODWILL
The Company used the purchase method of accounting for the acquisition of
Fabricated Products (See Note 3). Goodwill resulting from the acquisition is
being amortized on a straight-line basis over 30 years.
FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK
The Company enters into currency swaps with major banking institutions to reduce
the impact of interest rate and exchange rate fluctuations with respect to debt
payments made in foreign currency denominations. Currency swaps involve
exchanges of interest payments in differing currencies, but provide for the
exchange of principal amounts at maturity. Realized and unrealized gains and
losses are recognized in other income and expense. The Company is exposed to
risk if the counterparties default.
3. THE ACQUISITION
Pursuant to a purchase agreement dated June 24, 1996 between the Company and
Alumax Inc. ("Alumax"), on September 25, 1996 (the "Closing Date"), the Company
purchased, through its wholly-owned subsidiaries, all of the issued and
outstanding capital stock of the following Alumax subsidiaries which operate
certain portions of Alumax's fabricated products operations: (i) Amerimax
Fabricated Products, Inc. and its wholly owned subsidiaries, Amerimax Specialty
Product, Inc., Amerimax Building Products, Inc., Amerimax Coated Products, Inc.,
Johnson Door Products, Inc., and Amerimax Home Products, Inc.; (ii) Euramax
Holdings Limited and its wholly owned subsidiaries, Ellbee Limited and Euramax
Coated Products Limited; (iii) Euramax Europe B.V. and its wholly owned
subsidiary, Euramax Coated Products B.V.; and (iv) Euramax Industries S.A. and
its wholly owned subsidiary Euramax Coated Products S.A. For purposes of
identification and description, the acquired business is referred to as
"Fabricated Products" or the "Predecessor" for the periods prior to the
Acquisition, "Euramax" or the "Successor" for the period subsequent to the
Acquisition, and the "Company" for both periods. The financial statements of the
Predecessor include the combined accounts of the entities referred to as
Fabricated Products. The financial statements of the Successor include the
consolidated accounts of the entities referred to as Euramax. All significant
intercompany accounts and transactions have been eliminated.
The purchase price for the Acquisition was approximately $253.7 million, which
includes estimated acquisition expenses of approximately $3.9 million, is
adjusted to give effect to certain items including cash acquired and working
capital, and was allocated to the assets and liabilities of the Company based
upon their estimated fair market value at the date of Acquisition under the
purchase method of accounting. Such initial purchase price is subject to
adjustment based upon the completion of a special audit to determine the change
in the Company's working capital (as defined) from December 31, 1995 through
September 25, 1996. Management has estimated such change in connection with the
preparation of the Consolidated Balance Sheet as of September 25, 1996, included
elsewhere in this Prospectus, and does not expect further adjustments to the
purchase price to be significant. Additionally, the allocation of the purchase
F-29
<PAGE>
FABRICATED PRODUCTS (A DIVISION OF ALUMAX INC.) (PREDECESSOR)
EURAMAX INTERNATIONAL PLC AND SUBSIDIARIES (SUCCESSOR)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(THOUSANDS OF DOLLARS)
3. THE ACQUISITION (CONTINUED):
price was, in certain instances, based on preliminary information and is,
therefore, subject to revision when additional asset and liability valuations
are obtained. In the opinion of the Company's management, the asset and
liability valuations for the Acquisition will not be materially different than
initially recorded.
The financing for the Acquisition was provided by: (a) $35.0 million of
preference and ordinary share capital; (b) $135.0 million of Senior Subordinated
Notes; and (c) $100.0 million under a Credit Agreement aggregating $125.0
million.
On September 25, 1996, the Company issued $135.0 million in 11.25% Senior
Subordinated Notes pursuant to an offering (the "Offering") (See Note 6). The
proceeds of the offering were used in the financing of the Acquisition.
The following unaudited pro forma data presents the results of operations for
the nine months ended September 29, 1995, and September 25, 1996, respectively,
as though the Acquisition and the Offering had been completed January 1, 1995,
and January 1, 1996, respectively, and assume that there are no other changes in
the operations of the Company. Such pro forma information includes adjustments
to interest expense; changes in depreciation of property, plant and equipment
and amortization of goodwill relating to the allocation of the purchase price;
and the income tax effect related to these items. The pro forma results are not
necessarily indicative of the financial results that might have occurred had the
Acquisition and the Offering actually taken place on the above-mentioned dates,
or of the future results of operations (in thousands):
<TABLE>
<CAPTION>
--------------------
NINE MONTHS ENDED,
--------------------
SEPTEMBER SEPTEMBER
29, 25,
1995 1996
--------- ---------
<S> <C> <C>
Net sales $ 372,524 $ 363,308
Earnings before income taxes 4,709 3,113
Net earnings 3,028 1,730
</TABLE>
4. INVENTORIES:
Components of inventories are as follows:
<TABLE>
<CAPTION>
--------------
SUCCESSOR
SEPTEMBER 25,
1996
--------------
<S> <C>
Raw materials $ 81,811
Work in process 3,523
Finished products 15,818
--------------
$ 101,152
--------------
--------------
</TABLE>
5. COMMITMENTS AND CONTINGENCIES:
The Company has been named as a defendant in lawsuits in various matters
relating to both current and former operations. In addition, the Company has
been named as a defendant in lawsuits or as a potentially responsible party in
state and Federal administrative and judicial proceedings seeking contribution
for costs associated with the investigation, analysis, correction and
remediation of environmental conditions at various hazardous waste disposal
sites. The Company continues to monitor these actions and proceedings and to
vigorously defend both its own interests as well as the interests of its
affiliates. The Company's ultimate liability in connection with present and
future environmental claims will depend on many factors, including its
volumetric share of the waste at a given site, the remedial action required, the
total cost of remediation, and the financial viability and participation of the
other entities that also sent waste to the site. Once it becomes probable that
the Company will incur costs in connection with remediation of a site
F-30
<PAGE>
FABRICATED PRODUCTS (A DIVISION OF ALUMAX INC.) (PREDECESSOR)
EURAMAX INTERNATIONAL PLC AND SUBSIDIARIES (SUCCESSOR)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(THOUSANDS OF DOLLARS)
5. COMMITMENTS AND CONTINGENCIES: (CONTINUED):
and such costs can be reasonably estimated, the Company establishes or adjusts
its reserve for its projected share of these costs. Based upon current law and
information known to the Company concerning the size of the sites known to it,
anticipated costs, their years of operations and the number of other potentially
responsible parties, Management believes that it has adequate reserves for the
Company's potential share of the estimated aggregate liability for the costs of
remedial actions and related costs and expenses. In addition, the Company
establishes reserves for remedial measures required from time to time at its own
facilities. Management believes that the reasonably probable outcomes of these
matters will not materially exceed established reserves and will not have a
material impact on the future financial position, net earnings or cash flows of
the Company. The Company's reserves, expenditures and expenses for all
environmental exposures were not significant for any of the dates or periods
presented.
In connection with the purchase agreement referred to in Note 3, the Company
will be indemnified by Alumax for substantially all of its costs, if any,
related to environmental matters for occurrences arising prior to the closing
date of the acquisition during the period of time it was owned directly or
indirectly by Alumax. Such indemnification includes costs that were to
ultimately be incurred to contribute to the remediation of certain specified
existing National Priorities List (NPL) sites for which the Company had been
named a potentially responsible party under the federal Comprehensive
Environmental Response, Compensation, and Liability Information System (CERCLA)
as of the closing date of the Acquisition, as well as certain potential costs
for sites listed on state hazardous cleanup lists. With respect to all other
environmental matters, Alumax's obligations are limited to $125.0 million.
However, notwithstanding the indemnity, the Company does not believe that it has
any significant probable liability for environmental claims. Further, the
Company believes it to be unlikely that the Company would be required to bear
environmental costs in excess of its pro rata share of such costs as a
potentially responsible party under CERCLA.
6. LONG-TERM OBLIGATIONS
Long-term obligations consist of the following (in thousands):
<TABLE>
<CAPTION>
---------------
SUCCESSOR
SEPTEMBER 25,
1996
---------------
<S> <C>
Revolving Credit Facility $ 60,000
Term Loans 40,000
11.25% Senior Subordinated Notes due 2006 135,000
---------------
235,000
Less: current portion (2,000)
---------------
$ 233,000
---------------
---------------
</TABLE>
In connection with the Acquisition, the Company entered into a Credit Agreement
which provides for $40.0 million in term loans (the "Term Loans") and a
revolving credit facility of $85.0 million (the "Revolving Credit Facility"), a
portion of which will be available for letters of credit and swing loans. The
Term Loans consist of three facilities in the aggregate amount of $40.0 million.
Two of the facilities, which aggregate to $20.0 million, consist of a Dutch
Guilders facility and a Pound Sterling facility. The third facility is a U.S.
Dollar facility in the amount of $20.0 million (the "Tranche B Facility"). Loans
made under the Revolving Credit Facility will be made, at the election of the
Company, in U.S. Dollars, Dutch Guilders and/or Pound Sterling. All loans made
under the Term Loans and the Revolving Credit Facility will be repaid in the
currency in which the loan is made.
Outstanding loans under the Revolving Credit Facility and the Term Loans, except
the Tranche B Facility, must be repaid in September 2001; provided, however,
that subject to the consent of the lender under the Revolving Credit
F-31
<PAGE>
FABRICATED PRODUCTS (A DIVISION OF ALUMAX INC.) (PREDECESSOR)
EURAMAX INTERNATIONAL PLC AND SUBSIDIARIES (SUCCESSOR)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(THOUSANDS OF DOLLARS)
6. LONG-TERM OBLIGATIONS (CONTINUED):
Facility, the Company will have the option, exercisable on the fourth year
anniversary date of the Closing Date, to extend the final maturity date on the
Revolving Credit Facility to September 2003. Outstanding loans under the Tranche
B Facility must be repaid in September 2003.
At the option of the Company, the interest rate applicable to the loans under
the Credit Agreement is based upon a Base Rate or a Eurocurrency Rate (both as
defined), plus margins as follows: (a) Base Rate plus 1.75% in the case of the
Revolving Credit Facility and all Term Loans except the Tranche B Facility, or
2.25% in the case of the Tranche B Facility; or (b) Eurocurrency Rate for one,
two, three or six months, plus 2.75% in the case of the Revolving Credit
Facility and all Term Loans except the Tranche B Facility, or 3.25% in the case
of the Tranche B Facility. At September 25, 1996, the interest rate on the
Revolving Credit Facility was 7.988%, the interest rate on the Tranche B
Facility was 7.762%, and the interest rate on the other term loan facilities was
6.711%.
On September 25, 1996, the Company borrowed approximately $100.0 million under
the Credit Agreement, consisting of $40.0 million under the Term Loans and $60.0
million under the Revolving Credit Facility. The undrawn amount of $25.0 million
under the Revolving Credit Facility is available (subject to borrowing base
limitations) for working capital and general corporate purposes. As of September
25, 1996, this amount was fully available.
The Credit Agreement contains certain covenants and restrictions on actions by
the Company and its subsidiaries. In addition, the Credit Agreement requires the
Company to meet certain financial tests, including minimum fixed charge coverage
ratio, minimum interest coverage ratio, maximum leverage ratio, minimum EBITDA
(earnings before income taxes plus net interest expense and depreciation and
amortization) requirements and maximum amounts of capital expenditures.
On September 18, 1996, the Company issued $135.0 million in 11.25% Senior
Subordinated Notes due 2006 pursuant to a private offering. The Company plans to
issue new 11.25% Senior Subordinated Notes due 2006 pursuant to an exchange
offer whereby holders of the notes will have the opportunity to receive new
notes which will be registered under the Securities Act of 1933, as amended, but
are otherwise identical to the notes. The original notes and the new notes are
herein referred to as "the Notes". The Notes mature on October 1, 2006 and bear
interest at the rate of 11.25% per annum from September 25, 1996 payable
semiannually in arrears on April 1 and October 1 of each year, commencing on
April 1, 1997. The Notes may be redeemed at the option of the Company, in whole
or in part, at any time on or after October 1, 2001, under the conditions and at
the redemption price as specified in the note indenture dated as of September
25, 1996, under which the Notes were issued (the "Note Indenture"). The Notes
are unsecured obligations subordinated to all existing and future Senior Debt
(as defined) of the Company, including all of the obligations under the Credit
Agreement, and will be effectively subordinated to all obligations of any
subsidiaries of the Company.
Future maturities of long-term obligations as of September 25, 1996 are as
follows (in thousands):
<TABLE>
<CAPTION>
---------
<S> <C>
1996 (three months) $ 500
1997 2,500
1998 4,000
1999 4,000
2000 4,500
Thereafter 219,500
---------
$ 235,000
---------
---------
</TABLE>
The senior subordinated notes are guaranteed on a senior subordinated basis by
Amerimax, and the senior secured credit facilities are guaranteed by the Company
and all of its subsidiaries, other than Euramax S.A. and its subsidiaries.
F-32
<PAGE>
FABRICATED PRODUCTS (A DIVISION OF ALUMAX INC.) (PREDECESSOR)
EURAMAX INTERNATIONAL PLC AND SUBSIDIARIES (SUCCESSOR)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(THOUSANDS OF DOLLARS)
6. LONG-TERM OBLIGATIONS (CONTINUED):
In connection with the Senior Subordinated Notes, on September 25, 1996, the
Company entered into two currency swap agreements with a major banking
institution. The agreements provide for exchanges of interest payments in Dutch
Guilders and Pound Sterling for U.S. Dollars on April 1, and October 1 of each
year commencing April 1, 1997, and provide for exchanges of principal amounts at
maturity on October 1, 2003. The currency swaps effectively convert the interest
rate on $75.0 million of the Senior Subordinated Notes from 11.25% payable in
U.S. Dollars to 10.36% payable in Dutch Guilders and 12.72% payable in Pound
Sterling. Under the agreements, the Company is required to exchange 85.1 million
Dutch Guilders for $50 million and 16.0 million Pound Sterling for $25.0 million
at maturity.
7. SUPPLEMENTAL CONDENSED COMBINING FINANCIAL STATEMENTS:
As described in Note 3, on September 25, 1996, Euramax acquired the Company from
Alumax Inc. The acquisition was financed, in part, through the Notes (See Note
6). The Notes are primary obligations of Euramax (the "Parent"). The
newly-formed United Kingdom and Netherlands holding company subsidiaries of
Euramax are co-obligors under the Notes (the "Co-obligors") . The newly-formed
United States holding company subsidiary of Euramax has provided a full and
unconditional guarantee of the Notes (the "Guarantor"). The following
supplemental condensed combining financial statements for periods prior to the
Acquisition reflect the combined results of operations and cash flows of the
entities that are the Parent, the Co-obligors and the Guarantor (collectively,
the "Anticipated Parent, Co-obligors and Guarantor"), and such combined
information of non-guarantor entities, consisting principally of the operating
companies to be acquired (collectively, the "Non-guarantor Subsidiaries"). The
following supplemental condensed combining financial statements as of September
25, 1996 (the date of the Acquisition) reflect the financial position and cash
flows for the Acquisition of each of the Parent, the Co-obligors and the
Guarantor entities, and such combined information of the Non-Guarantor
Subsidiaries. The Co-obligors and the Guarantor are wholly-owned subsidiaries of
Euramax and are each jointly, severally, fully and unconditionally liable under
the Notes. Separate complete financial statements of each Co-obligor and of the
Guarantor are not presented because management has determined that they are not
material to investors. For periods prior to the Acquisition, there were no
significant intercompany balances or transactions between the Parent,
Co-obligors and Guarantor entities combined and the Non-guarantor Subsidiaries.
F-33
<PAGE>
FABRICATED PRODUCTS (A DIVISION OF ALUMAX INC.) (PREDECESSOR)
EURAMAX INTERNATIONAL PLC AND SUBSIDIARIES (SUCCESSOR)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(THOUSANDS OF DOLLARS)
7. SUPPLEMENTAL CONDENSED COMBINING FINANCIAL STATEMENTS: (CONTINUED):
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------
SUCCESSOR AS OF SEPTEMBER 25, 1996
-----------------------------------------------------------------------------------------
CO-OBLIGORS AND GUARANTOR
SUBSIDIARIES
-------------------------------------
EURAMAX EURAMAX
EURAMAX AMERIMAX EUROPEAN EUROPEAN
INTERNATIONAL HOLDINGS, HOLDINGS HOLDINGS,
PLC INC. PLC B.V. NON-GUARANTOR CONSOLIDATED
(PARENT) (GUARANTOR) (CO-OBLIGOR) (CO-OBLIGOR) SUBSIDIARIES ELIMINATIONS TOTALS
----------- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
THOUSANDS OF DOLLARS
Current assets:
Cash and cash equivalents....... $ -- $ -- $ -- $ -- $ 7,194.8 $ -- $ 7,194.8
Accounts receivable, net........ -- -- -- -- 68,881.2 -- 68,881.2
Inventories..................... -- -- -- -- 101,151.5 -- 101,151.5
Other current assets............ -- -- -- -- 1,177.0 -- 1,177.0
----------- ----------- ----------- ----------- ----------- ----------- -----------
Total current assets.......... -- -- -- -- 178,404.5 -- 178,404.5
Property, plant and equipment,
net.............................. -- -- -- -- 108,986.9 -- 108,986.9
Goodwill.......................... -- -- -- -- 32,259.2 -- 32,259.2
Amounts due from
parent/affiliates................ 72,565.3 -- -- 3,369.3 14,630.0 (90,564.6) --
Investment in consolidated
subsidiaries..................... 35,000.0 141,200.0 30,900.0 35,500.0 -- (242,600.0) --
Other assets...................... 7,634.7 3,659.3 874.6 1,130.7 2,815.9 -- 16,115.2
----------- ----------- ----------- ----------- ----------- ----------- -----------
$115,200.0 $144,859.3 $ 31,774.6 $ 40,000.0 $337,096.5 $(333,164.6) $335,765.8
----------- ----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- ----------- -----------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable................ $ -- $ -- $ -- $ -- $ 34,642.8 $ -- $ 34,642.8
Accured expenses................ -- -- -- -- 20,821.6 -- 20,821.6
Income taxes payable............ -- -- -- -- -- -- --
Current maturities of long-term
debt........................... -- -- -- -- 2,000.0 -- 2,000.0
----------- ----------- ----------- ----------- ----------- ----------- -----------
Total current liabilities..... -- -- -- -- 57,464.4 -- 57.464.4
Long-term debt, less curent
maturities....................... 80,200.0 44,000.0 23,900.0 30,900.0 54,000.0 -- 233,000.0
Amounts due to
parent/affiliates................ -- 83,859.3 874.6 -- 5,830.7 (90,564.6) --
Other liabilities................. -- -- -- -- 2,469.4 -- 2,469.4
Deferred income taxes............. -- -- -- -- 7,832.0 -- 7,832.0
----------- ----------- ----------- ----------- ----------- ----------- -----------
Total liabilities............. 80,200.0 127,859.3 24,774.6 30,900.0 127,596.5 (90,564.6) 300,765.8
----------- ----------- ----------- ----------- ----------- ----------- -----------
Redeemable preference shares...... 34,000.0 -- -- -- -- -- 34,000.0
----------- ----------- ----------- ----------- ----------- ----------- -----------
Ordinary shareholders' equity:
Ordinary shares................. 1,000.0 .1 78.2 117.0 5,271.0 (5,466.3) 1,000.0
Additional paid-in-capital...... -- 16,999.9 6,921.8 8,983.0 204,229.0 (237,133.7) --
----------- ----------- ----------- ----------- ----------- ----------- -----------
Total ordinary shareholders'
equity....................... 1,000.0 17,000.0 7,000.0 9,100.0 209,500.0 (242,600.0) 1,000.0
----------- ----------- ----------- ----------- ----------- ----------- -----------
$115,200.0 $144,859.3 $ 31,774.6 $ 40,000.0 $337,096.5 $(333,164.6) $335,765.8
----------- ----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- ----------- -----------
</TABLE>
F-34
<PAGE>
FABRICATED PRODUCTS (A DIVISION OF ALUMAX INC.) (PREDECESSOR)
EURAMAX INTERNATIONAL PLC AND SUBSIDIARIES (SUCCESSOR)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(THOUSANDS OF DOLLARS)
7. SUPPLEMENTAL CONDENSED COMBINING FINANCIAL STATEMENTS: (CONTINUED):
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------
SUCCESSOR ON SEPTEMBER 25, 1996
-----------------------------------------------------------------------------------------
CO-OBLIGORS AND GUARANTOR
SUBSIDIARIES
-------------------------------------
EURAMAX EURAMAX
EURAMAX AMERIMAX EUROPEAN EUROPEAN
INTERNATIONAL HOLDINGS, HOLDINGS HOLDINGS,
PLC INC. PLC B.V. NON-GUARANTOR CONSOLIDATED
(PARENT) (GUARANTOR) (CO-OBLIGOR) (CO-OBLIGOR) SUBSIDIARIES ELIMINATIONS TOTALS
----------- ----------- ----------- ----------- ----------- ----------- -----------
THOUSANDS OF U.S. DOLLARS
<S> <C> <C> <C> <C> <C> <C> <C>
Cash flows from investing
activities:
Purchase of Fabricated
Products $(35,000.0) $(141,200.0) $(30,900.0) $(35,500.0) $(41,713.0) $ 33,100.0 $(251,213.0)
----------- ----------- ----------- ----------- ----------- ----------- -----------
Net cash used in
investing activities (35,000.0) (141,200.0) (30,900.0) (35,500.0) (41,713.0) 33,100.0 (251,213.0)
----------- ----------- ----------- ----------- ----------- ----------- -----------
Cash flows from financing
activities:
Proceeds from long-term
debt 80,200.0 44,000.0 23,900.0 30,900.0 56,000.0 -- 235,000.0
Proceeds from issuance
of preference shares 34,000.0 -- -- -- -- -- 34,000.0
Proceeds from issuance
of ordinary shares 1,000.0 17,000.0 7,000.0 9,100.0 (33,100.0) 1,000.0
Deferred financing fees (2,934.7) (3,659.3) (874.6) (1,130.7) (1,330.7) -- (9,930.0)
Other -- -- -- -- (1,555.0) -- (1,555.0)
Due to/from parent or
affiliate (77,265.3) 83,859.3 874.6 (3,369.3) (4,099.3) -- --
----------- ----------- ----------- ----------- ----------- ----------- -----------
Net cash provided by
(used in) financing
activities 35,000.0 141,200.0 30,900.0 35,500.0 49,015.0 (33,100.0) 258,515.0
----------- ----------- ----------- ----------- ----------- ----------- -----------
Net increase in cash and
equivalents -- -- -- -- 7,302.0 -- 7,302.0
Cash and equivalents at
beginning of period -- -- -- -- (107.2) -- (107.2)
----------- ----------- ----------- ----------- ----------- ----------- -----------
Cash and equivalents at
end
of period $ -- $ -- $ -- $ -- $ 7,194.8 $ -- $ 7,194.8
----------- ----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- ----------- -----------
</TABLE>
F-35
<PAGE>
FABRICATED PRODUCTS (A DIVISION OF ALUMAX INC.) (PREDECESSOR)
EURAMAX INTERNATIONAL PLC AND SUBSIDIARIES (SUCCESSOR)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(THOUSANDS OF DOLLARS)
7. SUPPLEMENTAL CONDENSED COMBINING FINANCIAL STATEMENTS: (CONTINUED):
<TABLE>
<CAPTION>
---------------------------------------------
PREDECESSOR FOR THE NINE MONTHS ENDED
SEPTEMBER 29, 1995
---------------------------------------------
ANTICIPATED
PARENT,
CO-OBLIGORS NON-GUARANTOR COMBINED
AND GUARANTOR SUBSIDIARIES TOTALS
------------- ------------- -------------
<S> <C> <C> <C>
THOUSANDS OF U.S. DOLLARS
Net sales $ -- $ 372,523.5 $ 372,523.5
Cost and expenses:
Cost of goods sold -- 311,146.7 311,146.7
Selling and general -- 30,686.1 30,686.1
Depreciation and amortization -- 6,141.2 6,141.2
------------- ------------- -------------
Earnings from operations -- 24,549.5 24,549.5
Interest income (expense), net -- (996.7) (996.7)
Other income (expense), net -- (34.6) (34.6)
------------- ------------- -------------
Earnings before income taxes -- 23,518.2 23,518.2
Provision for income taxes -- 8,640.0 8,640.0
------------- ------------- -------------
Net earnings $ -- $ 14,878.2 $ 14,878.2
------------- ------------- -------------
------------- ------------- -------------
</TABLE>
<TABLE>
<CAPTION>
---------------------------------
PREDECESSOR FOR THE NINE MONTHS
ENDED SEPTEMBER 25, 1996
---------------------------------
ANTICIPATED
PARENT,
CO-
OBLIGORS
AND NON-GUARANTOR COMBINED
GUARANTOR SUBSIDIARIES TOTALS
--------- ----------- ---------
<S> <C> <C> <C>
THOUSANDS OF U.S. DOLLARS
Net sales $ -- $363,307.6 $363,307.6
Cost and expenses:
Cost of goods sold -- 299,477.3 299,477.3
Selling and general -- 33,993.6 33,993.6
Depreciation and amortization -- 6,995.0 6,995.0
--------- ----------- ---------
Earnings from operations -- 22,841.7 22,841.7
Interest income (expense), net -- (621.8) (621.8)
Other income (expense), net -- (297.7) (297.7)
--------- ----------- ---------
Earnings before income taxes -- 21,922.2 21,922.2
Provision for income taxes -- 8,342.3 8,342.3
--------- ----------- ---------
Net earnings $ -- $13,579.9 $13,579.9
--------- ----------- ---------
--------- ----------- ---------
</TABLE>
Note: Separate columns for the Anticipated Parent, the Co-obligors and the
Guarantor are not presented as there were no amounts for such entities for the
periods shown.
F-36
<PAGE>
FABRICATED PRODUCTS (A DIVISION OF ALUMAX INC.) (PREDECESSOR)
EURAMAX INTERNATIONAL PLC AND SUBSIDIARIES (SUCCESSOR)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(THOUSANDS OF DOLLARS)
7. SUPPLEMENTAL CONDENSED COMBINING FINANCIAL STATEMENTS: (CONTINUED):
<TABLE>
<CAPTION>
---------------------------------------------
PREDECESSOR FOR THE NINE MONTHS ENDED
SEPTEMBER 29, 1995
---------------------------------------------
ANTICIPATED
PARENT,
CO-OBLIGORS
AND NON-GUARANTOR COMBINED
GUARANTOR SUBSIDIARIES TOTALS
------------- ------------- -------------
THOUSANDS OF U.S. DOLLARS
<S> <C> <C> <C>
Cash flows from operating activities:
Net earnings $ -- $ 14,878.2 $ 14,878.2
Reconciliation of net earnings to net cash provided by
operating activities:
Depreciation and amortization -- 6,141.2 6,141.2
Provision for doubtful accounts -- 516.5 516.5
Loss on sales of assets -- 69.5 69.5
Deferred income taxes -- 1,236.8 1,236.8
Changes in operating assets and liabilities -- (39,268.3) (39,268.3)
------------- ------------- -------------
Net cash provided by (used in) operating activities -- (16,426.1) (16,426.1)
------------- ------------- -------------
Cash flows from investing activities:
Capital expenditures -- (16,846.7) (16,846.7)
------------- ------------- -------------
Net cash used in investing activities -- (16,846.7) (16,846.7)
------------- ------------- -------------
Cash flows from financing activities:
Proceeds from sale of assets -- 204.0 204.0
Net change in due to Alumax -- 18,944.7 18,944.7
------------- ------------- -------------
Net cash provided by (used in) financing activities -- 19,148.7 19,148.7
------------- ------------- -------------
Effects of exchange rates on cash (2,611.4) (2,611.4)
------------- ------------- -------------
Net decrease in cash and equivalents -- (16,735.5) (16,735.5)
Cash and equivalents at beginning of period -- 35,119.0 35,119.0
------------- ------------- -------------
Cash and equivalents at end of period $ -- $ 18,383.5 $ 18,383.5
------------- ------------- -------------
------------- ------------- -------------
</TABLE>
Note: Separate columns for the Anticipated Parent, the Co-Obligors and the
Guarantor are not presented as there were no amounts for such entities for the
periods shown.
F-37
<PAGE>
FABRICATED PRODUCTS (A DIVISION OF ALUMAX INC.) (PREDECESSOR)
EURAMAX INTERNATIONAL PLC AND SUBSIDIARIES (SUCCESSOR)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(THOUSANDS OF DOLLARS)
7. SUPPLEMENTAL CONDENSED COMBINING FINANCIAL STATEMENTS: (CONTINUED):
<TABLE>
<CAPTION>
---------------------------------------------
PREDECESSOR FOR THE NINE MONTHS ENDED
SEPTEMBER 25, 1996
---------------------------------------------
ANTICIPATED
PARENT
CO-OBLIGORS
AND NON-GUARANTOR COMBINED
GUARANTOR SUBSIDIARIES TOTALS
------------- ------------- -------------
THOUSANDS OF U.S. DOLLARS
<S> <C> <C> <C>
Cash flows from operating activities:
Net earnings $ -- $ 13,579.9 $ 13,579.9
Reconciliation of net earnings to net cash provided by
(used in) Operating activities:
Depreciation and amortization -- 6,995.0 6,995.0
Provision for doubtful accounts -- 827.2 827.2
(Gain) loss on sales of assets -- (168.3) (168.3)
Deferred income taxes -- (338.7) (338.7)
Changes in operating assets and liabilities -- (39,268.3) (654.3)
------------- ------------- -------------
Net cash provided by (used in) operating
activities -- 20,240.8 20,240.8
------------- ------------- -------------
Cash flows from investing activities:
Capital expenditures -- (11,517.5) (11,517.5)
------------- ------------- -------------
Net cash used in investing activities -- (11,517.5) (11,517.5)
------------- ------------- -------------
Cash flows from financing activities:
Proceeds from sale of assets -- 233.0 233.0
Net change in due to Alumax -- (20.973.0) (20.973.0)
------------- ------------- -------------
Net cash provided by (used in) financing
activities -- (20,740.0) (20,740.0)
------------- ------------- -------------
Effects of exchange rate changes on cash -- (677.4) (677.4)
Net decrease in cash and equivalents -- (12,694.1) (12,694.1)
Cash and equivalents at beginning of period -- 12,586.9 12,586.9
------------- ------------- -------------
Cash and equivalents at end of period $ -- $ (107.2) $ (107.2)
------------- ------------- -------------
------------- ------------- -------------
</TABLE>
Note: Separate columns for the Anticipated Parent, the Co-obligors and the
Guarantor are not presented as there were no amounts for such entities for the
periods shown.
F-38
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article 14 of the Articles of Association of Euramax International plc provides:
"14.11.1. Subject to the provisions of the Act, but without prejudice to any
indemnity to which he may otherwise be entitled, every director, alternate
director or secretary of the Company shall be entitled to be indemnified out of
the assets of the Company against all costs, charges, losses and liabilities
incurred by him in the proper execution of his duties or the proper exercise of
his powers, authorities and discretions including, without limitation, a
liability incurred defending proceedings (whether civil or criminal) in which
judgement is given in his favour or in which he is acquitted, or which are
otherwise disposed of without a finding or admission of material breach of duty
on his part, or in connection with any application in which relief is granted to
him by the court from liability for negligence, default, breach of duty or
breach of trust in relation to the affairs of the Company."
"14.11.2. The directors may exercise all the powers of the Company to purchase
and maintain for the benefit of a person who is a director, alternate director,
secretary or auditor, or former director, alternate director, secretary or
auditor, of the Company or in which the Company has an interest (whether direct
or indirect), or who is or was trustee of a retirements benefit scheme or
another trust in which a director, alternate director or secretary is or has
been interested, indemnifying him against liability for negligence, default,
breach of duty or breach of trust or any other liability which may lawfully be
insured against by the Company.
Articles 135 and 136 of the Articles of Association of Euramax European Holdings
plc provide:
"135. INDEMNITY. Subject to the provisions of the Acts, but without prejudice
to any indemnity to which he may otherwise be entitled, every director,
alternate director, secretary, auditor, other officer, agent or employee for the
time being of the Company shall be entitled to be indemnified out of the assets
of the Company against all costs, charges, expenses, losses, damages and
liabilities incurred by him in or about the execution of his duties or the
exercise of his powers or otherwise in relation to them including (without
prejudice to the generality of the foregoing) any liability incurred in
defending any proceedings, whether civil or criminal, which relate to anything
done or omitted or alleged to have been done or omitted by him as an officer or
employee of the Company in which judgement is given in his favour or in which he
is acquitted, or which are otherwise disposed of without a finding or admission
of material breach of duty on his part or in connection with an application in
which relief is granted to him by the court from liability for negligence,
default, breach of duty or breach of trust in relation to the affairs of the
Company."
"136. INSURANCE. The board may exercise all the powers of the Company to
purchase and maintain for any director or officer (including former directors
and other officers) insurance against any liability for negligence, default,
breach of duty or breach of trust or any other liability which may lawfully be
insured against in relation to the affairs of the Company.
Section 310 of the Companies Act, 1985, provides:
"(1) This section applies to any provision, whether contained in a company's
articles or in any contract with the company or otherwise, for exempting any
officer of the company or any person (whether as officer or not) employed by the
company as auditor from, or indemnifying him against, any liability which by
virtue of any rule of law would otherwise attach to him in respect of any
negligence, default, breach of duty or breach of trust of which he may be guilty
in relation to the company.
(2) Except as provided by the following subsection, any such provision is
void.
(3) This section does not prevent a company--
(a) from purchasing and maintaining for any such officer or auditor
insurance against any such liability, or
(b) from indemnifying any such officer or auditor against any liability
incurred by him--
(i) in defending any proceedings (whether civil or criminal) in
which judgment is given in his favour or he is acquitted, or
II-1
<PAGE>
(ii) in connection with any application under section 144(3) or (4)
(acquisition of shares by innocent nominee) or section 727 (general power
to grant relief in case of honest and reasonable conduct) in which relief
is granted to him by the court."
Section 727 of the Companies Act, 1985, provides:
"(1) If in any proceedings for negligence, default, breach of duty or breach
of trust against an officer of a company or a person employed by a company as
auditor (whether he is or is not an officer of the company) it appears to the
court hearing the case that that officer or person is or may be liable in
respect of the negligence, default, breach of duty or breach of trust, but that
he has acted honestly and reasonably, and that having regard to all the
circumstances of the case (including those connected with his appointment) he
ought fairly to be excused for the negligence, default, breach of duty or breach
of trust, that court may relieve him, either wholly or partly, from his
liability on such terms as it thinks fit.
(2) If any such officer or person as above-mentioned has reason to apprehend
that any claim will or might be made against him in respect of any negligence,
default, breach of duty or breach of trust, he may apply to the court for
relief; and the court on the application has the same power to relieve him as
under this section it would have had if it had been a court before which
proceedings against that person for negligence, default, breach of duty or
breach of trust had been brought.
(3) Where a case to which subsection (1) applies is being tried by a judge
with a jury, the judge, after hearing the evidence, may, if he is satisfied that
the defendant or defender ought in pursuance of that subsection to be relieved
either in whole or in part from the liability sought to be enforced against him,
withdraw the case in whole or in part from the jury and forthwith direct
judgment to be entered for the defendant or defender on such terms as to costs
or otherwise as the judge may think proper."
To the extent permitted by English law, Euramax European Holdings plc will
indemnify and hold harmless each director and each officer or representative of
the Company who signs the Registration Statement from and against certain civil
liabilities based on information supplied by Euramax European Holdings plc for
use herein.
The Articles of Association of Euramax European Holdings B.V. contain no
provisions under which any member of its board of management or its officers is
indemnified in any manner against any liability which he may incur in his
capacity as such. Under the laws of the Netherlands, members of the board may be
liable to the company for improper or negligent acts. For example, Article 2:248
of The Netherlands Civil Code provides that members of the board are jointly and
severally liable to the estate of a company limited by shares, such as Euramax
European Holdings B.V., which suffers an involuntary liquidation when management
has manifestly performed its duties improperly and such is an important cause of
the involuntary liquidation. The members of the board may be discharged from
liability to the company pursuant to Article 11, Section 5 of the Articles of
Association of Euramax European Holdings B.V., which provides: "Unconditional
confirmation by the general meeting of shareholders of the annual account
submitted to it will constitute discharge from liability to the board of
management for the management conducted by it during the past financial year."
However, under the laws of The Netherlands, such a discharge is not absolute and
would not be effective as to third parties. Members of the management board may
be held personally liable for improper or negligent managerial acts which affect
third parties.
Amerimax Holdings, Inc. is incorporated under the laws of the State of Delaware.
Section 145 of the General Corporation Law of the State of Delaware, INTER ALIA,
("Section 145") provides that a Delaware corporation may indemnify any persons
who were, are or are threatened to be made, parties to any threatened, pending
or completed action, suit or proceeding, whether civil, criminal, administrative
or investigative (other than an action by or in the right of such corporation),
by reason of the fact that such person is or was an officer, director, employee
or agent of such corporation, or is or was serving at the request of such
corporation as a director, officer employee or agent of another corporation or
enterprise. The indemnity may include expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by such person in connection with such action, suit or proceeding, provided such
person acted in good faith and in a manner he reasonably believed to be in or
not opposed to the corporation's best interests and, with respect to any
criminal action or proceeding, had no reasonable cause to believe that his
conduct was illegal. A Delaware corporation may indemnify any persons who are,
were or are threatened to be made, a party to any threatened, pending or
completed action or suit by or in the right of the corporation by reason
II-2
<PAGE>
of the fact that such person was a director, officer, employee or agent of such
corporation, or is or was serving at the request of such corporation as a
director, officer, employee or agent of another corporation or enterprise. The
indemnity may include expenses (including attorneys' fees) actually and
reasonably incurred by such person in connection with the defense or settlement
of such action or suit, provided such person acted in good faith and in a manner
he reasonably believed to be in or not opposed to the corporation's best
interests, provided that no indemnification is permitted without judicial
approval if the officer, director, employee or agent is adjudged to be liable to
the corporation. Where an officer, director, employee or agent is successful on
the merits or otherwise in the defense of any action referred to above, the
corporation must indemnify him against the expenses which such officer or
director has actually and reasonably incurred.
The Certificate of Incorporation of Amerimax Holdings, Inc. provides for the
indemnification of directors and officers of Amerimax Holdings, Inc. to the
fullest extent permitted by the General Corporation Law of the State of
Delaware, as it currently exists or may hereafter be amended.
Section 145 further authorizes a corporation to purchase and maintain insurance
on behalf of any person who is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation or enterprise,
against any liability asserted against him and incurred by him in any such
capacity, arising out of his status as such, whether or not the corporation
would otherwise have the power to indemnify him under Section 145.
Amerimax Holdings, Inc. maintains and has in effect insurance policies covering
all of its directors and officers against certain liabilities for actions taken
in such capacities, including liabilities under the Securities Act of 1933.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENTS SCHEDULES
(a) Exhibits
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- ------------------------------------------------------------------------------------------------------
<C> <S>
*3.1 Articles of Association of Euramax International plc
*3.2 Memorandum and Articles of Association of Euramax European Holdings plc
*3.3 Articles of Association of Euramax International B.V.
*3.4 Articles of Incorporation of Amerimax Holdings, Inc.
*3.5 Bylaws of Amerimax Holdings, Inc.
*4.1 Form of 11 1/4% Senior Subordinated Note in global bearer form
*4.2 Form of 11 1/4% Senior Subordinated Note in definitive registered form
*4.3 Indenture, dated as of September 25, 1996, by and among Euramax International plc, Euramax European
Holdings plc, Euramax European Holdings B.V., Amerimax Holdings, Inc. and the Chase Manhattan Bank,
as Trustee.
*4.4 Deposit Agreement, dated as of September 25, 1996, by and among Euramax International plc, Euramax
European Holdings plc, Euramax European Holdings B.V., and The Chase Manhattan Bank, as book-entry
depositary
*4.5 Registration Rights Agreement, dated as of September 25, 1996, by and among Euramax International plc,
Euramax European Holdings plc, Euramax European Holdings B.V., Amerimax Holdings, Inc. and J.P.
Morgan Securities Inc. and Goldman Sachs & Co.
*4.6 Purchase Agreement dated as of September 18, 1996, by and among Euramax International Ltd., Euramax
European Holdings Ltd., Euramax European Holdings B.V., Amerimax Holdings, Inc. and J.P. Morgan
Securities Inc. and Goldman Sachs & Co.
*5.1 Opinion of Dibb Lupton Alsop regarding the legality of the securities being issued
*5.2 Opinion of Nauta Dutilh regarding the legality of the securities being issued
5.3 Opinion of Kirkland & Ellis regarding legality of the securities being issued
*10.1 Purchase Agreement, dated as of June 24, 1996, by and between Euramax International Ltd. and Alumax
Inc.
</TABLE>
II-3
<PAGE>
<TABLE>
<C> <S>
*10.2 Executive Employment Agreement, dated as of September 25, 1996, by and between J. David Smith and
Euramax International plc
*10.3 Executive Employment Agreement, dated as of September 25, 1996, by and between Frank T. Geist and
Euramax International plc
*10.4 Credit Agreement, dated as of September 25, 1996, by and among Amerimax Fabricated Products, Euramax
Holdings Limited, Euramax Europe B.V., Euramax Netherlands B.V., as Borrowers; Euramax International
plc, Amerimax Holdings, Inc., Euramax European Holdings plc, Euramax European Holdings B.V., Euramax
Europe Limited and certain of their operating subsidiaries, as other Loan Parties; Banque Paribas, as
Agent, as a Lender and as the Issuer; and the other lenders named therein.
*10.5 Domestic Security Agreement, dated as of September 25, 1996, by Amerimax Holdings, Inc. in favor of
Banque Paribas, as agent
*10.6 Domestic Security Agreement, dated as of September 25, 1996, by Amerimax Fabricated Products, Inc. in
favor of Banque Paribas, as agent
*10.7 Domestic Security Agreement, dated as of September 25, 1996, by Amerimax Home Products, Inc. in favor
of Banque Paribas, as agent
*10.8 Domestic Security Agreement, dated as of September 25, 1996, by Amerimax Building Products, Inc. in
favor of Banque Paribas, as agent
*10.9 Domestic Security Agreement, dated as of September 25, 1996, by Amerimax Coated Products, Inc. in
favor of Banque Paribas, as agent
*10.10 Domestic Security Agreement, dated as of September 25, 1996, by Johnson Door Products, Inc. in favor
of Banque Paribas, as agent
*10.11 Domestic Security Agreement, dated as of September 25, 1996, by Amerimax Specialty Products, Inc. in
favor of Banque Paribas, as agent
*10.12 Domestic Subsidiary Guaranty, dated as of September 25, 1996, by each of Amerimax Home Products, Inc.,
Amerimax Specialty Products, Inc., Amerimax Building Products, Inc., Amerimax Coated Products and
Johnson Door Products, Inc. in favor of the Guarantied Parties referred to therein
*10.13 U.S. Holdings Guaranty, dated as of September 25, 1996, by Amerimax Holdings, Inc. in favor of the
Guaranteed Parties referred to therein
*10.14 U.S. Holdings Pledge Agreement, dated as of September 25, 1996, by Amerimax Holdings, Inc., to Banque
Paribas, as Agent
*10.15 U.S. Operating Co. Guaranty, dated as of September 25, 1996, by Amerimax Fabricated Products, Inc. in
favor of the Guarantied Parties referred to therein
*10.16 U.S. Operating Co. Pledge Agreement dated as of September 25, 1996, by Amerimax Fabricated Products,
Inc. to Banque Paribas, as Agent
*10.17 Euramax Assignment Agreement, dated as of September 25, 1996, by Euramax International plc in favor of
Banque Paribas, as Agent
*10.18 Euramax Pledge Agreement, dated as of September 25, 1996, by Euramax International plc to Banque
Paribas, as Agent
*10.19 Building Products Pledge Agreement, dated as of September 25, 1996, by Amerimax Building Products,
Inc. to Banque Paribas, as Agent
*10.20 Dutch Holdings Guaranty, dated as of September 25, 1996, by Euramax European Holdings B.V. in favor of
the Guarantied Parties referred to therein
*10.21 Dutch Company Guaranty, dated as of September 25, 1996, by Euramax Netherlands B.V., in favor of the
Guarantied Parties referred to therein
*10.22 Dutch Operating Co. Guaranty, dated as of September 25, 1996, by Euramax Europe B.V., in favor of the
Guarantied Parties referred to therein
*10.23 Dutch Subsidiary Guaranty, dated as of September 25, 1996, by Euramax Coated Products B.V., in favor
of the Guarantied Parties referred to therein
*12.1 Statement regarding computation of ratio of earnings to fixed charges
</TABLE>
II-4
<PAGE>
<TABLE>
<C> <S>
*21.1 Subsidiaries of Euramax International plc, Euramax European Holdings plc, Euramax European Holdings
B.V. and Amerimax Holdings, Inc.
23.1 Consent of Coopers & Lybrand, L.L.P.
23.2 Consent of Coopers & Lybrand, L.L.P.
23.3 Consent of Dibb Lupton Alsop (included in Exhibit 5.1)
23.4 Consent of Nauta Dutilh (included in Exhibit 5.2)
23.5 Consent of Kirkland & Ellis (included in Exhibit 5.3)
*24.1 Power of Attorney (included on the signature page to this Registration Statement on Form F-4)
*25.1 Statement of Eligibility of Trustee, dated as of October 28, 1996, by The Chase Manhattan Bank
*99.1 Letter of Transmittal
*99.2 Notice of Guaranteed Delivery
*99.3 Letter to Registered Holders and DTC Participants
*99.4 Letter to Clients
*99.5 Instructions to Registered Holder or DTC Participant from Beneficial Holder
</TABLE>
- ------------------------
* Filed previously
(b) Financial Statement Schedule
Report of Independant Accountants S-1
Schedule II--Euramax International plc--Valuation and Qualifying
Accounts. S-2
ITEM 22. UNDERTAKINGS
The undersigned registrants hereby undertake:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement;
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in
the registration statement. Notwithstanding the foregoing, any increase
or decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering
range may be reflected in the form of a prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in
volume and price represent no mare than 20 percent change in the maximum
aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement.
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to
be the initial BONA FIDE offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(4) That prior to any public reoffering of the securities registered
hereunder through use of a prospectus which is a part of this registration
statement, by any person or party who is deemed to be an underwriter within
the
II-5
<PAGE>
meaning of Rule 145(c), the registrants undertake that such reoffering
prospectus will contain the information called for by the applicable
registration form with respect to reofferings by persons who may be deemed
underwriters, in addition to the information called for by the other items
of the applicable form.
(5) The registrants undertake that every prospectus: (i) that is filed
pursuant to paragraph (1) immediately preceding, or (ii) that purports to
meet the requirements of Section 10(a)(3) of the Act and is used in
connection with an offering of securities subject to Rule 415, will be filed
as a part of an amendment to the registration statement and will not be used
until such amendment is effective, and that, for purposes of determining any
liability under the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial BONA FIDE offering thereof.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing provisions,
or otherwise, the registrants have been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than
the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrants in the successful defense
of any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrants will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
(6) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430(A) and contained in
a form of prospectus filed by the registrants pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(7) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial BONA FIDE offering thereof.
(8) The undersigned registrants hereby undertake to respond to requests
for information that is incorporated by reference into the prospectus
pursuant to Item 4, 10(b), 11, or 13 of this form, within one business day
of receipt of such request, and to send the incorporated documents by first
class mail or other equally prompt means. This includes information
contained in documents filed subsequent to the effective date of the
registration statement through the date of responding to the request.
(9) The undersigned registrants hereby undertake to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
II-6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this Amendment No. 2 to Registration Statement to be signed on its behalf
by the undersigned, thereunto duly authorized, in the City of Norcross, Georgia,
on February 5, 1997.
EURAMAX INTERNATIONAL PLC
By: J. DAVID SMITH
--------------------------------------
Name: J. David Smith
Title: Director
Pursuant to the requirements of the Securities Act, this Amendment No. 2 to
Registration Statement has been signed by the following persons in the
capacities indicated as of February 5, 1997.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ----------------------------------------------------- ---------------------------------------------------------
<C> <S>
J. DAVID SMITH
------------------------------------------ Director (Principal Executive, Financial and Accounting
J. David Smith Officer)
*
------------------------------------------
Richard M. Cashin Director
*
------------------------------------------
William T. Comfort, Jr. Director
*
------------------------------------------
Rolly Van Rappard Director
*
------------------------------------------
Joseph M. Silvestri Director
------------------------------------------
Paul E. Drack Director
*By J. DAVID SMITH
-------------------------------------
Attorney-In-Fact
J. David Smith
</TABLE>
II-7
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this Amendment No. 2 to Registration Statement to be signed on its behalf
by the undersigned, thereunto duly authorized, in the City of Norcross, Georgia,
on February 5, 1997.
EURAMAX EUROPEAN HOLDINGS PLC
By: J. DAVID SMITH
--------------------------------------
Name: J. David Smith
Title: Director
Pursuant to the requirements of the Securities Act, this Amendment No. 2 to
Registration Statement has been signed by the following persons in the
capacities indicated as of February 5, 1997.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ----------------------------------------------------- ---------------------------------------------------------
<C> <S>
J. DAVID SMITH
------------------------------------------ Director (Principal Executive, Financial and Accounting
J. David Smith Officer)
*
------------------------------------------
Richard M. Cashin Director
*
------------------------------------------
William T. Comfort, Jr. Director
*
------------------------------------------
Rolly Van Rappard Director
*
------------------------------------------
Joseph M. Silvestri Director
*By J. DAVID SMITH
-------------------------------------
Attorney-In-Fact
J. David Smith
</TABLE>
II-8
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this Amendment No. 2 to Registration Statement to be signed on its behalf
by the undersigned, thereunto duly authorized, in the City of Norcross, Georgia,
on February 5, 1997.
EURAMAX EUROPEAN HOLDINGS, B.V.
By: J. DAVID SMITH
--------------------------------------
Name: J. David Smith
Title: Director
Pursuant to the requirements of the Securities Act, this Amendment No. 2 to
Registration Statement has been signed by the following persons in the
capacities indicated as of February 5, 1997.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ----------------------------------------------------- ---------------------------------------------------------
<C> <S>
J. DAVID SMITH
------------------------------------------ Director (Principal Executive, Financial and Accounting
J. David Smith Officer)
*
------------------------------------------
Richard M. Cashin Director
*
------------------------------------------
William T. Comfort, Jr. Director
*
------------------------------------------
Rolly Van Rappard Director
*
------------------------------------------
Joseph M. Silvestri Director
*By J. DAVID SMITH
-------------------------------------
Attorney-In-Fact
J. David Smith
</TABLE>
II-9
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this Amendment No. 2 Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Norcross, Georgia, on
February 5, 1997.
AMERIMAX HOLDINGS, INC.
By: J. DAVID SMITH
--------------------------------------
Name: J. David Smith
Title: President
Pursuant to the requirements of the Securities Act, this Amendment No. 2 to
Registration Statement has been signed by the following persons in the
capacities indicated as of February 5, 1997.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ----------------------------------------------------- ---------------------------------------------------------
<C> <S>
J. DAVID SMITH
------------------------------------------ President and Director (Principal Executive, Financial
J. David Smith and Accounting Officer)
*
------------------------------------------
Richard M. Cashin Director
*
------------------------------------------
William T. Comfort, Jr. Director
*
------------------------------------------
Rolly Van Rappard Director
*
------------------------------------------
Joseph M. Silvestri Director
*By J. DAVID SMITH
-------------------------------------
Attorney-In-Fact
J. David Smith
</TABLE>
II-10
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Management of the
Fabricated Division of Alumax, Inc.
In connection with our audits of the combined financial statements of Fabricated
Products, a division of Alumax Inc., as of December 31, 1994 and 1995, and for
each of the three years in the period ended December 31, 1995, which financial
statements are included in the Prospectus, we have also audited the financial
statement schedule listed in Item 21(b) herein.
In our opinion, this financial statement schedule, when considered in relation
to the basic financial statements taken as a whole, presents fairly, in all
material respects, the information required to be included therein.
COOPERS & LYBRAND L.L.P.
Atlanta, Georgia
August 1, 1996
S-1
<PAGE>
EURAMAX INTERNATIONAL PLC
FINANCIAL STATEMENT SCHEDULE NO. II
VALUATION AND QUALIFYING ACCOUNTS
(THOUSANDS OF U.S. DOLLARS)
<TABLE>
<CAPTION>
------------------------------------------------------------------------
BALANCE AT CHARGED TO CHARGED TO BALANCE AT
JANUARY 1, COSTS AND OTHER DEDUCTIONS -- DECEMBER 31,
DESCRIPTION 1994 EXPENSES ACCOUNTS CHARGE-OFFS 1994
- ---------------------- ------------ ------------ ------------- ------------- --------------
<S> <C> <C> <C> <C> <C>
Accounts Receivable --
Allowance for
Doubtful Accounts $ (3,254.4) $ (1,451.4) $ 765.2 $ (3,940.6)
</TABLE>
<TABLE>
<CAPTION>
-----------------------------------------------------------------------
BALANCE AT CHARGED TO CHARGED TO DEDUCTIONS BALANCE AT
JANUARY 1, COSTS AND OTHER -- DECEMBER 31,
DESCRIPTION 1995 EXPENSES ACCOUNTS CHARGE-OFFS 1995
- ---------------------- ------------ ------------- ------------- ----------- --------------
<S> <C> <C> <C> <C> <C>
Accounts Receivable --
Allowance for
Doubtful Accounts ($ 3,940.6) ($ 388.2) $ 1,746.8 ($ 2,582.0)
</TABLE>
S-2
<PAGE>
EURAMAX INTERNATIONAL PLC
EURAMAX EUROPEAN HOLDINGS PLC
EURAMAX EUROPEAN HOLDINGS, B.V.
AMERIMAX HOLDINGS, INC.
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION PAGE NO.
- ----------- ------------------------------------------------------------------------------------------- -------------
<C> <S> <C>
*3.1 Articles of Association of Euramax International plc
*3.2 Memorandum and Articles of Association of Euramax European Holdings plc
*3.3 Articles of Association of Euramax International B.V.
*3.4 Articles of Incorporation of Amerimax Holdings, Inc.
*3.5 Bylaws of Amerimax Holdings, Inc.
*4.1 Form of 11 1/4% Senior Subordinated Note in global bearer form
*4.2 Form of 11 1/4% Senior Subordinated Note in definitive registered form
*4.3 Indenture, dated as of September 25, 1996, by and among Euramax International plc, Euramax
European Holdings plc, Euramax European Holdings B.V., Amerimax Holdings, Inc. and the
Chase Manhattan Bank, as Trustee.
*4.4 Deposit Agreement, dated as of September 25, 1996, by and among Euramax International plc,
Euramax European Holdings plc, Euramax European Holdings B.V., and The Chase Manhattan
Bank, as book-entry depositary
*4.5 Registration Rights Agreement, dated as of September 25, 1996, by and among Euramax
International plc, Euramax European Holdings plc, Euramax European Holdings B.V., Amerimax
Holdings, Inc. and J.P. Morgan Securities Inc. and Goldman Sachs & Co.
*4.6 Purchase Agreement dated as of September 18, 1996, by and among Euramax International Ltd.,
Euramax European Holdings Ltd., Euramax European Holdings B.V., Amerimax Holdings, Inc.
and J.P. Morgan Securities Inc. and Goldman Sachs & Co.
*5.1 Opinion of Dibb Lupton Alsop regarding the legality of the securities being issued
*5.2 Opinion of Nauta Dutilh regarding the legality of the securities being issued
5.3 Opinion of Kirkland & Ellis regarding legality of securities being issued
*10.1 Purchase Agreement, dated as of June 24, 1996, by and between Euramax International Ltd.
and Alumax Inc.
*10.2 Executive Employment Agreement, dated as of September 25, 1996, by and between J. David
Smith and Euramax International plc
*10.3 Executive Employment Agreement, dated as of September 25, 1996, by and between Frank T.
Geist and Euramax International plc
*10.4 Credit Agreement, dated as of September 25, 1996, by and among Amerimax Fabricated
Products, Euramax Holdings Limited, Euramax Europe B.V., Euramax Netherlands B.V., as
Borrowers; Euramax International plc, Amerimax Holdings, Inc., Euramax European Holdings
plc, Euramax European Holdings B.V., Euramax Europe Limited and certain of their operating
subsidiaries, as other Loan Parties; Banque Paribas, as Agent, as a Lender and as the
Issuer; and the other lenders named therein.
*10.5 Domestic Security Agreement, dated as of September 25, 1996, by Amerimax Holdings, Inc. in
favor of Banque Paribas, as agent
*10.6 Domestic Security Agreement, dated as of September 25, 1996, by Amerimax Fabricated
Products, Inc. in favor of Banque Paribas, as agent
*10.7 Domestic Security Agreement, dated as of September 25, 1996, by Amerimax Home Products,
Inc. in favor of Banque Paribas, as agent
*10.8 Domestic Security Agreement, dated as of September 25, 1996, by Amerimax Building Products,
Inc. in favor of Banque Paribas, as agent
</TABLE>
<PAGE>
<TABLE>
<C> <S> <C>
*10.9 Domestic Security Agreement, dated as of September 25, 1996, by Amerimax Coated Products,
Inc. in favor of Banque Paribas, as agent
*10.10 Domestic Security Agreement, dated as of September 25, 1996, by Johnson Door Products, Inc.
in favor of Banque Paribas, as agent
*10.11 Domestic Security Agreement, dated as of September 25, 1996, by Amerimax Specialty
Products, Inc. in favor of Banque Paribas, as agent
*10.12 Domestic Subsidiary Guaranty, dated as of September 25, 1996, by each of Amerimax Home
Products, Inc., Amerimax Specialty Products, Inc., Amerimax Building Products, Inc.,
Amerimax Coated Products and Johnson Door Products, Inc. in favor of the Guarantied
Parties referred to therein
*10.13 U.S. Holdings Guaranty, dated as of September 25, 1996, by Amerimax Holdings, Inc. in favor
of the Guaranteed Parties referred to therein
*10.14 U.S. Holdings Pledge Agreement, dated as of September 25, 1996, by Amerimax Holdings, Inc.,
to Banque Paribas, as Agent
*10.15 U.S. Operating Co. Guaranty, dated as of September 25, 1996, by Amerimax Fabricated
Products, Inc. in favor of the Guarantied Parties referred to therein
*10.16 U.S. Operating Co. Pledge Agreement dated as of September 25, 1996, by Amerimax Fabricated
Products, Inc. to Banque Paribas, as Agent
*10.17 Euramax Assignment Agreement, dated as of September 25, 1996, by Euramax International plc
in favor of Banque Paribas, as Agent
*10.18 Euramax Pledge Agreement, dated as of September 25, 1996, by Euramax International plc to
Banque Paribas, as Agent
*10.19 Building Products Pledge Agreement, dated as of September 25, 1996, by Amerimax Building
Products, Inc. to Banque Paribas, as Agent
*10.20 Dutch Holdings Guaranty, dated as of September 25, 1996, by Euramax European Holdings B.V.
in favor of the Guarantied Parties referred to therein
*10.21 Dutch Company Guaranty, dated as of September 25, 1996, by Euramax Netherlands B.V., in
favor of the Guarantied Parties referred to therein
*10.22 Dutch Operating Co. Guaranty, dated as of September 25, 1996, by Euramax Europe B.V., in
favor of the Guarantied Parties referred to therein
*10.23 Dutch Subsidiary Guaranty, dated as of September 25, 1996, by Euramax Coated Products B.V.,
in favor of the Guarantied Parties referred to therein
*12.1 Statement regarding computation of ratio of earnings to fixed charges
*21.1 Subsidiaries of Euramax International plc, Euramax European Holdings plc, Euramax European
Holdings B.V. and Amerimax Holdings, Inc.
23.1 Consent of Coopers & Lybrand, L.L.P.
23.2 Consent of Coopers & Lybrand, L.L.P.
23.3 Consent of Dibb Lupton Alsop (included in Exhibit 5.1)
23.4 Consent of Nauta Dutilh (included in Exhibit 5.2)
23.5 Consent of Kirkland & Ellis (included in Exhibit 5.3)
*24.1 Power of Attorney (included on the signature page to this Registration Statement on Form
F-4)
*25.1 Statement of Eligibility of Trustee, dated as of October 28, 1996, by The Chase Manhattan
Bank
*99.1 Letter of Transmittal
*99.2 Notice of Guaranteed Delivery
*99.3 Letter to Registered Holders and DTC Participants
*99.4 Letter to Clients
*99.5 Instructions to Registered Holders and DTC Participants from Beneficial Holder
</TABLE>
- ------------------------
* Filed previously
<PAGE>
Exhibit 5.3
Kirkland & Ellis
Citicorp Center
153 East 53rd Street
New York, New York 10022-4675
To Call Writer Direct:
212 446-4800
February 4, 1997
Euramax International plc
Euramax Holdings plc
Euramax Holdings, B.V
Amerimax Holdings, Inc.
5535 Triangle Parkway
Norcross, Georgia 30092
Re: Registration Statement on Form S-4
Euramax International plc
Euramax Holdings plc
Euramax Holdings, B.V
Amerimax Holdings, Inc.
File No. 333-5878
----------------------------------------------------
Gentlemen:
We have acted as special United States counsel to Euramax
International plc, a corporation formed under the laws of England and Wales (the
"COMPANY"), Euramax European Holdings plc, a corporation formed under the laws
of England & Wales ("EURAMAX U.K."), Euramax European Holdings, B.V. a
corporation formed under the laws of The Netherlands ("EURAMAX B.V." and,
together with the Company and Euramax UK., the "ISSUERS"), and Amerimax
Holdings, Inc., a Delaware corporation (the "GUARANTOR"), in connection with the
proposed registration under the Securities Act of 1933, as amended (the
"SECURITIES ACT"), of $135,000,000 principal amount of 11 1/4% Senior
Subordinated Notes due 2006 (the "NEW NOTES") for the purpose of effecting an
exchange offer (the "EXCHANGE OFFER") for the Issuers' 11 1/4% Senior
Subordinated Notes due 2006 which have not been registered under the Securities
Act (the "OLD NOTES"). The New Notes will be issued pursuant to a Senior
Subordinated Indenture, dated as of September 25, 1996, by and among the
Issuers, the Guarantor and The Chase Manhattan Bank, as Trustee (the
"INDENTURE"). Capitalized terms used herein but not defined herein have the
meaning set forth in the Preliminary Prospectus of the Issuers dated as of the
date hereof.
<PAGE>
Page 2
In connection therewith, we have examined and relied upon the
assumptions set forth in SCHEDULE A to this letter and upon the original, or
copies certified or otherwise identified to our satisfaction, of (i) corporate
organizational documents of the Issuers and the Guarantor; (ii) minutes and
records of the corporate proceedings of the Issuers and the Guarantor with
respect to the issuance and sale of the New Notes and the Guarantee; (iii) the
Registration Statement and exhibits thereto; (iv) the Indenture; (v) the
Deposit Agreement; and (vi) such other documents, corporate records and other
instruments as we have deemed necessary for the expression of the opinions
contained herein. We have assumed without investigation that there has been no
relevant change or development between the dates as of which the information
cited in the preceding sentence was given and the date of this letter and that
the information upon which we have relied is accurate and does not omit
disclosures necessary to prevent such information from being misleading.
For purposes of this opinion, we have assumed the authenticity of all
documents submitted to us as originals, the conformity to the originals of all
documents submitted to us as copies, and the authenticity of the originals of
all documents submitted to us as copies. We have also assumed the genuineness
of the signatures of persons signing all documents in connection with which this
opinion is rendered, the authority of such persons signing on behalf of the
parties thereto other than the Guarantor, and the due authorization, execution
and delivery of all documents by the parties thereto other than the Guarantor.
We have also assumed that none of the Issuers or the Guarantor are subject to
any law or regulation limiting the enforceability of the Indenture, the Deposit
Agreement, the Notes or the Guarantee other than the laws of the State of New
York and the General Corporation Law of the State of Delaware.
With respect to the Company and Euramax U.K., based solely upon our
review of the letter from Dibb Lupton Alsop, dated January 16, 1997 and set
forth as Exhibit 5.1 to the Registration Statement and with respect to
Euramax B.V. (collectively with the Company and Euramax U.K., the "Foreign
Issuers"), based solely upon our review of the letter from Nauta Dutilh,
dated January 14, 1997 and set forth as Exhibit 5.2 to the Registration
Statement, all of the opinions contained in this letter with respect to each
of the Foreign Issuers are subject to the assumptions that, under the laws
their jurisdictions of incorporation, each of the Foreign Issuers: (i) is
duly organized, validly existing and in good standing, (ii) has full
corporation or organization power and authority to execute, deliver and
perform its obligations under the Indenture, the Deposit Agreement and the
Notes, (iii) has duly authorized by all necessary corporate action the
execution, delivery and performance of the Indenture, the Deposit Agreement
and the Notes, (iv) has duly executed and delivered the Indenture, the
Deposit Agreement and the Notes and (v) is not subject to any law or
regulation limiting the enforceability of the Indenture, the Deposit
Agreement or the Notes against it.
<PAGE>
Page 3
Subject to the further assumptions, qualifications, exclusions and
other limitations which are identified in this letter and in the schedules
attached to this letter, we advise you that:
(1) The Guarantor is validly existing and in good standing under the
laws of the State of Delaware.
(2) The Guarantee has been validly authorized by the Guarantor.
(3) When, as and if (i) the Registration Statement shall have become
effective pursuant to the provisions of the Securities Act, (ii) the Indenture
shall have been qualified pursuant to the provisions of the Trust Indenture Act
of 1939, as amended, (iii) the Old Notes shall have been validly tendered to the
Issuers and (iv) the New Notes shall have been issued in the form and containing
the terms described in the Registration Statement, the Indenture, the
resolutions of each of the Issuers' and the Guarantor's Board of Directors
authorizing the foregoing and any legally required consents, approvals,
authorizations and other order of the Commission and any other regulatory
authorities to be obtained, the New Notes when issued pursuant to the Exchange
Offer will be legally issued, fully paid and nonassessable and will constitute
valid and binding obligations of the Issuers and the Guarantee will constitute
the valid and binding obligation of the Guarantor.
Our advice on every legal issue addressed in this letter is subject to
the General Qualifications that are recited in SCHEDULE B to this Letter.
We express no opinion as to, or the effect or applicability of, any
laws other than the laws of the State of New York and the General Corporation
Law of the State of Delaware. Our advice on every legal issue addressed in
this letter is based exclusively on such laws. We express no opinion with
respect to the applicability thereto, or the effect thereon, of the laws of
any other jurisdiction or as to any matters of municipal law or the laws of
any other local agencies within the state, and we express no opinion as to
whether any relevant differences exist between the laws upon which our
opinions are based and any such other laws which may be applicable. Our
opinions do not cover or otherwise address any provision in the Indenture,
the Deposit Agreement, the Notes or the Guarantee of a kind identified in
SCHEDULE C. Provisions in the Indenture which are not excluded by SCHEDULE
C or any other part of this letter or its attachments are called the
"RELEVANT AGREEMENT TERMS."
Our advice on each legal issue addressed in this letter represents our
opinion as to how that issue would be resolved were it to be considered by the
highest court of the jurisdiction
<PAGE>
Page 4
upon whose law our opinion on that issue is based. The manner in which any
particular issue would be treated in any actual court case would depend in part
on facts and circumstances particular to the case, and this letter is not
intended to guarantee the outcome of any legal dispute which may arise in the
future. It is possible that some Relevant Agreement Terms may not prove
enforceable for reasons other than those cited in this letter should an actual
enforcement action be brought, but (subject to all the exceptions,
qualifications, exclusions and other limitations contained in this letter) such
unenforceability would not in our opinion prevent you from realizing the
principal benefits purported to be provided by the Relevant Agreement Terms.
This letter speaks as of the time of its delivery on the date it
bears. We do not assume any obligation to provide you with any subsequent
opinion or advice by reason of any fact of which the lawyers in our firm who
have had significant involvement with the negotiation and preparation of the
Indenture (to wit, Lance C. Balk, Steven G. Martin and J. Scott Schlossel,
herein called the "DESIGNATED TRANSACTION LAWYERS") did not have actual
knowledge as of the date hereof, by reason of any change subsequent to the date
hereof in any law covered by any of our opinions, or for any other reason. The
attached schedules are an integral part of this letter, references herein or
therein to this letter include such schedules, and any term defined in this
letter or any schedule has that defined meaning wherever it is used in this
letter or in any schedule to this letter.
While we have not conducted any independent investigation to determine
facts upon which our opinions are based or to obtain information about which
this letter advises you, we confirm that we do not have any actual knowledge
which has caused us to conclude that our reliance and assumptions cited in the
preceding paragraph are unwarranted. The term "actual knowledge" whenever it is
used in this letter with respect to our firm means conscious awareness at the
time this letter is delivered on the date it bears by the Designated Transaction
Lawyers.
<PAGE>
Page 5
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to this firm under the caption
titled "Legal Matters" in the Prospectus which is part of the Registration
Statement.
We do not find it necessary for purposes of this opinion, and
accordingly do not purport to cover herein, the application of the securities or
"Blue Sky" laws of the various states to issuance of the New Notes.
This opinion is furnished to you in connection with the filing of the
Registration Statement, and is not to be used, circulated, quoted or otherwise
relied upon for any other purposes.
Yours very truly,
KIRKLAND & ELLIS
<PAGE>
SCHEDULE A
ASSUMPTIONS
For purposes of the letter to which this Schedule is attached ("OUR
LETTER"), we have relied, without investigation, upon each of the following
assumptions:
(a) Each document submitted to us for review is accurate and complete, each
such document that is an original is authentic, each such document that is
a copy conforms to an authentic original, and all signatures on each such
document are genuine.
(b) There has not been any mutual mistake of fact or misunderstanding, fraud,
duress or undue influence.
(c) The constitutionality or validity of a relevant statute, rule, regulation
or agency action is not in issue.
(d) None of the Issuers or the Guarantor are subject to any law or regulation,
other than laws of the State of New York or the General Corporate Law of
the State of Delaware limiting the enforceability of the Indenture, the
Deposit Agreement, the Notes or the Guarantee against the Issuers or the
Guarantor.
<PAGE>
SCHEDULE B
GENERAL QUALIFICATIONS
The term "General Qualifications" as used in the letter to which this
Schedule is attached ("our letter") means the Bankruptcy and Insolvency
Exception, the Equitable Principles Limitation and the Other Common
Qualifications set forth in this Schedule.
BANKRUPTCY AND INSOLVENCY EXCEPTION. Each of the opinions ("our opinions")
in our letter is subject to the effect of bankruptcy, insolvency,
reorganization, receivership, moratorium and other laws of general
applicability relating to or affecting the enforcement of creditors' rights
from time to time in effect and to general principles of equity (regardless
of whether enforcement is considered in proceedings at law or in equity).
This exception includes:
(a) the Federal Bankruptcy Code and thus comprehends, among others,
matters of turn-over, automatic stay, avoiding powers, fraudulent
transfer, preference, discharge, conversion of a non-recourse
obligation into a recourse claim, limitations on IPSO FACTO and anti-
assignment clauses and the coverage of pre-petition security
agreements applicable to property acquired after a petition is filed;
(b) all other Federal and state bankruptcy, insolvency, reorganization,
receivership, moratorium, arrangement and assignment for the benefit
of creditors laws that affect the rights of creditors generally or
that have reference to or affect only creditors of specific types of
debtors;
(c) state fraudulent transfer and conveyance laws; and
(d) judicially developed doctrines relevant to any of the foregoing laws,
such as substantive consolidation of entities.
EQUITABLE PRINCIPLES LIMITATION. Each of our opinions is subject to the
effect of general principles of equity, whether applied by a court of law
or equity. This limitation includes principles:
(a) governing the availability of specific performance, injunctive relief
or other equitable remedies, which generally place the award of such
remedies, subject to certain guidelines, in the discretion of the
court to which application for such relief is made;
(b) imposing duties and standard of conduct upon creditors;
(c) affording equitable defenses (e.g., waiver, laches and estoppel)
against a party seeking enforcement;
<PAGE>
(d) requiring good faith and fair dealing in the performance and
enforcement of a contract by the party seeking its enforcement;
(e) requiring reasonableness in the performance and enforcement of an
agreement by the party seeking enforcement of the contract;
(f) requiring consideration of the materiality of (i) a breach and (ii)
the consequences of the breach to the party seeking enforcement;
(g) requiring consideration of the impracticability or impossibility of
performance at the time of attempted enforcement; and
(h) affording defenses based upon the unconscionability of the enforcing
party's conduct after the parties have entered into the contract.
COMMON QUALIFICATIONS. Each of our opinions is subject to the effect of
rules of law that:
(a) limit or affect the enforcement of provisions of a contract that
purport to waive, or to require waiver of, the obligations of good
faith, fair dealing, diligence and reasonableness;
(b) provide that forum selection clauses in contracts are not necessarily
binding on the court(s) in the forum selected;
(c) limit the availability of a remedy under certain circumstances where
another remedy has been elected;
(d) provide a time limitation after which a remedy may not be enforced;
(e) limit the right of a creditor to use force or cause a breach of the
peace in enforcing rights;
(f) limit or affect the enforceability of provisions releasing,
exculpating or exempting a party from, or requiring indemnification of
a party for, liability for its own action or inaction, to the extent
the action or inaction involves gross negligence, recklessness,
willful misconduct, unlawful conduct, violation of public policy or
litigation against another party determined adversely to such party;
(g) may, where less than all of a contract may be unenforceable, limit the
enforceability of the balance of the contract to circumstances in
which the unenforceable portion is not an essential part of the agreed
exchange;
<PAGE>
(h) govern and afford judicial discretion regarding the determination of
damages and entitlement to attorneys' fees and other costs;
(i) may permit a party that has materially failed to render or offer
performance required by the contract to cure that failure unless (i)
permitting a cure would unreasonably hinder the aggrieved party from
making substitute arrangements for performance, or (ii) it was
important in the circumstances to the aggrieved party that performance
occur by the date stated in the contract.
(j) limit or affect the enforceability of provisions in the Indenture and
the New Notes deemed to impose the payment of interest;
(k) limit or affect the enforceability of requirements in the Indenture
and the New Notes specifying that the provisions thereof may only be
waived in writing to the extent that an oral or implied agreement by
trade practice or course of conduct has been created modifying any
provision of such documents;
(l) limit or affect the enforceability of indemnification or contribution
obligations which contravene public policy, including, without
limitation, indemnification or contribution obligations which arise
out of failure to comply with applicable state or federal securities
law;
(m) limit or affect the enforceability of cumulative remedies to the
extent such cumulative remedies purport to or would have the effect of
compensating the party entitled to the benefits thereof in excess of
the actual loss suffered by such party;
(n) limit the recovery of legal fees and legal expenses by an indemnified
person to reasonable attorneys' fees and legal expenses;
OTHER QUALIFICATIONS. Each of our opinions is subject to the following
other qualifications:
(a) our opinion as to the binding effect of the Indenture and the
Guarantee with respect to the Guarantor is subject to the effect of
laws and judicial decisions which have imposed duties and standards of
conduct upon creditors;
(b) provisions of any document or agreement which permit a party to take
any action, to make any determination, or to benefit from indemnities
and similar undertakings may be subject to a requirement that such
action be taken or such determination be made or that any action or
inaction by any party that may give rise to a request for payment
under an such undertaking be taken or not taken, as the case may be,
on a reasonable basis and in good faith;
<PAGE>
(c) a substantial body of case law treats guarantors as "debtors" under
the Uniform Commercial Code (as enacted in the State of New York) (the
"Code") thereby according guarantor the rights and remedies of debtors
established by the Code;
(d) we express no opinion as to the binding effect of the indemnification
or contribution provisions of any document or agreement, insofar as
said provisions might require indemnification or contribution with
respect to any litigation by any indemnified person under an agreement
against the Issuers or the Guarantor determined adversely to such
indemnified person under such agreement or with respect to any loss,
cost or expense arising out of an indemnified person's negligence or
willful misconduct or an violation by such indemnified person of any
statutory duties, general principles of equity or public policy;
(e) waivers of equitable rights and defenses may not be valid, binding and
enforceable under New York law;
(f) we express no opinion with respect to the waivers set forth in any
document or agreement insofar as they might not be broad enough to
cover all situations which might arise for which a waiver could be
found desirable; and
(g) certain rights, remedies and waivers contained in the Indenture may be
rendered ineffective, or limited by, applicable laws or judicial
decisions (other than those reflected in the foregoing qualifications
and assumptions) governing such provisions, but such laws and judicial
decisions do not, in our opinion, make the Indenture inadequate for
the practical realization of the security provided by the Guarantee;
<PAGE>
SCHEDULE C
EXCLUDED PROVISIONS
None of the opinions in the letter to which this Schedule is attached
covers or otherwise addresses any of the following kinds of provisions which may
be contained in the Indenture, the Deposit Agreement, the Notes or the Guarantee
(Section references are to sections contained in the Indenture):
1. Provisions constituting penalties, or for liquidated damages, acceleration
of future amounts due (other than principal) without appropriate discount
to present value, late charges, prepayment charges or increased interest
rates upon default. (Definition of 'Additional Interest'; Section 2.15).
2. Provisions that contain a waiver of (i) broadly or vaguely stated rights,
(ii) the benefits of statutory, regulatory, or constitutional rights,
unless and to the extent the statute, regulation, or constitution
explicitly allows waiver, (iii) unknown future defenses, (iv) rights to
damages, (v) statutes of limitations, and (vi) other benefits to the extent
they cannot be waived under applicable law. (Section 4.13).
3. Provisions which purport to award attorneys' fees solely to one party.
(Section 6.11).
4. Indemnification provisions of the Indenture insofar as said provisions
contravene public policy or might require indemnification of, or payments
to, any party with respect to any litigation by such party against any of
the Issuers or the Guarantor determined adversely to
C-1
<PAGE>
such party, of any loss, cost or expense arising of any violation by such
party of statutory duties, general principles of equity or public policy.
(Section 7.07).
5. Provisions purporting to limit rights of third parties who have not
consented thereto or purporting to grant rights to third parties. (Section
10.01).
6. Provisions providing for forfeitures or the recovery of amounts deemed to
constitute penalties. (Section 2.15).
7. Provisions, if any, which are contrary to the public policy of any
jurisdiction to any extent that they are also contrary to the public policy
of the State of New York. (Section 4.13).
8. Waivers of the right to trial by jury, agreements to submit to the
jurisdiction of any particular court or other governmental authority,
waivers of the right to assert forum nonconveniens, and other such waivers.
(Section 13.14).
9. Provisions in the Indenture providing that any or all of the obligations
thereunder are valid notwithstanding the invalidity of any other provisions
in that agreement or in any other Transaction Agreement. (Section 11.02;
Section 13.11).
10. Provisions that provide for the appointment of a receiver, provisions
appointing one party as an attorney-in-fact for an adverse party,
provisions which provide a time limitation after which a remedy may not be
enforced, and forum selection clauses and consent to jurisdiction clauses
(both as to personal jurisdiction and subject matter jurisdiction).
(Section 13.14).
11. Choice-of-law provisions, except to the extent a party brings an action to
enforce the Indenture, the Deposit Agreement, the Guarantee or the Notes in
a New York state court. (Section 13.14).
C-2
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the inclusion in this registration statement on Form S-4 (File No.
333-5978) of our report dated August 1, 1996, on our audits of the financial
statements and financial statement schedule of Fabricated Products (a Division
of Alumax Inc) as of December 31, 1995 and 1994 and for each of the three years
in the period ended December 31, 1995. We also consent to the reference to our
firm under the caption "Experts."
COOPERS & LYBRAND L.L.P.
Atlanta, Georgia
February 4, 1997
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the inclusion in this registration statement on Form S-4 (File No.
333-5978) of our report dated December 18, 1996, on our audit of the balance
sheet of Euramax International plc as of September 24, 1996. We also consent to
the reference to our firm under the caption "Experts."
COOPERS & LYBRAND L.L.P.
Atlanta, Georgia
February 4, 1997
