<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 6, 1997
REGISTRATION NO. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
OXFORD AUTOMOTIVE, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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MICHIGAN 3465 38-3262809
(STATE OR OTHER JURISDICTION (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
OF CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
INCORPORATION OR
ORGANIZATION)
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2365 FRANKLIN ROAD
BLOOMFIELD HILLS, MICHIGAN 48203
(248) 745-9600
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
REX E. SCHLAYBAUGH, JR.
OXFORD AUTOMOTIVE, INC.
2365 FRANKLIN ROAD
BLOOMFIELD HILLS, MICHIGAN 48203
(248) 745-9600
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
------------------------
COPIES TO:
GERALD T. LIEVOIS
DYKEMA GOSSETT PLLC
1577 NORTH WOODWARD AVENUE, SUITE 300
BLOOMFIELD HILLS, MI 48304-2820
(248) 203-0866
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF THE PROPOSED SALE OF THE SECURITIES TO
THE PUBLIC: As soon as practicable after the effective date of this Registration
Statement.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
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CALCULATION OF REGISTRATION FEE
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PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO OFFERING PRICE AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED BE REGISTERED PER UNIT(1) OFFERING PRICE(1) REGISTRATION FEE
<S> <C> <C> <C> <C>
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10 1/8% Senior Subordinated
Notes Due 2007................ $125,000,000 100% $125,000,000 $37,878.78
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Guarantees of 10 1/8% Senior
Subordinated Notes Due 2007... (2) (2) (2) (2)
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(1) Estimated pursuant to Rule 457(f) solely for the purposes of calculating the
registration fee.
(2) Pursuant to Rule 457(n), no registration fee is required with respect to the
Guarantees of the Senior Subordinated Notes registered hereby.
------------------------
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATES AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
TABLE OF ADDITIONAL REGISTRANTS
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======================================================================================================================
PRIMARY STANDARD
EXACT NAME OF GUARANTOR REGISTRANT JURISDICTION OF IRS EMPLOYER INDUSTRIAL CLASSIFICATION
AS SPECIFIED IN ITS CHARTER INCORPORATION IDENTIFICATION NO. CODE NUMBER
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Lobdell Emery Corporation................. Michigan 38-0768460 3465
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BMG North America Limited................. Ontario 98-0113060 3465
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BMG Holdings, Inc......................... Ontario 00-0000000 3465
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Winchester Fabrication Corporation........ Michigan 38-3209840 3465
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Creative Fabrication Corporation.......... Tennessee 62-1613148 3465
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Parallel Group International, Inc......... Indiana 35-1971190 3465
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Laserweld International, L.L.C. .......... Indiana 35-1969204 3465
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Concept Management Corporation............ Michigan 38-3209841 3465
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Lewis Emery Capital Corporation........... Michigan 38-6602578 3465
- ----------------------------------------------------------------------------------------------------------------------
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CROSS-REFERENCE SHEET
FOR REGISTRATION STATEMENT ON FORM S-4 AND PROSPECTUS
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S-4 ITEM LOCATION IN PROSPECTUS
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A. INFORMATION ABOUT THE TRANSACTION
1. Forepart of Registration Statement and
Outside Front Cover Page of Prospectus.... Facing Page of Registration Statement; Cross-Reference
Sheet; Cover Page
2. Inside Front and Outside Back Cover Pages
of Prospectus............................. Inside Front Cover Page of Prospectus; Table of Contents
3. Risk Factors, Ratio of Earnings to Fixed
Charges and Other Information............. Summary; Risk Factors, Summary Consolidated Historical
and Pro Forma Financial Data
4. Terms of the Transaction.................. Summary; The Exchange Offer; Description of the Notes;
Plan of Distribution
5. Pro Forma Financial Information........... Not Applicable
6. Material Contacts with the Company Being
Acquired.................................. Not Applicable
7. Additional Information Required for
Reoffering by Persons and Parties Deemed
to be Underwriters........................ Not Applicable
8. Interests of Named Experts and Counsel.... Legal Matters; Experts
9. Disclosure of Commission Position on
Indemnification for Securities Act
Liabilities............................... Not Applicable
B. INFORMATION ABOUT THE REGISTRANT
10. Information with Respect to S-3
Registrants............................... Not Applicable
11. Incorporation of Certain Information by
Reference................................. Not Applicable
12. Information with Respect to S-2 or S-3
Registrants............................... Not Applicable
13. Incorporation of Certain Information by
Reference................................. Not Applicable
14. Information with Respect to Registrants
Other Than S-3 or S-2 Registrants......... Summary; Risk Factors; Capitalization; Pro Forma Combined
Financial Data; Selected Consolidated Historical
Financial Data; Management's Discussion and Analysis of
Financial Condition and Results of Operations; Business,
Management; Description of Certain Indebtedness and
Preferred Stock; Certain Transactions; Financial
Statements
C. INFORMATION ABOUT THE COMPANY BEING ACQUIRED
15. Information with Respect to S-3
Companies................................. Not Applicable
16. Information with Respect to S-3 or S-2
Companies................................. Not Applicable
17. Information with Respect to Companies
Other Than S-3 or S-2 Companies........... Not Applicable
D. VOTING AND MANAGEMENT INFORMATION
18. Information if Proxies, Consents or
Authorizations are to be Solicited........ Not Applicable
19. Information if Proxies, Consents or
Authorizations are not to be Solicited, or
in an Exchange Offer...................... The Exchange Offer; Management; Principal Shareholders,
Certain Transactions; Description of Certain Indebtedness
and Preferred Stock; Description of the Notes
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ii
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INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED , 1997
PROSPECTUS
OFFER FOR ALL OUTSTANDING 10 1/8% SENIOR SUBORDINATED NOTES DUE 2007
IN EXCHANGE FOR 10 1/8% SENIOR SUBORDINATED
NOTES DUE 2007 OF
OXFORD AUTOMOTIVE, INC. OXFORD AUTOMOTIVE, INC. LOGO
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME ON , 1997, UNLESS EXTENDED
Oxford Automotive, Inc. (the "Company"), hereby offers to exchange an
aggregate principal amount of up to $125,000,000 of its 10 1/8% Senior
Subordinated Notes Due 2007 (the "New Notes") for a like principal amount of its
10 1/8% Senior Subordinated Notes Due 2007 (the "Old Notes") outstanding on the
date hereof upon the terms and subject to the conditions set forth in this
Prospectus and in the accompanying Letter of Transmittal (which together
constitute the "Exchange Offer"). The New Notes and the Old Notes are
collectively hereinafter referred to as the "Notes." The terms of the New Notes
are identical in all material respects to those of the Old Notes, except for
certain transfer restrictions, registration rights and certain interest rate
step-up provisions relating to the Old Notes. The New Notes will be issued
pursuant to, and entitled to the benefits of, the Indenture (as defined herein)
governing the Old Notes. The New Notes will mature on June 15, 2007. The New
Notes will bear interest from and including the date of consummation of the
Exchange Offer. Interest on the New Notes will be payable semi-annually on June
15 and December 15 of each year, commencing December 15, 1997. Additionally,
interest on the New Notes will accrue from the last interest payment date on
which interest was paid on the Old Notes surrendered in exchange therefor or, if
no interest has been paid on the Old Notes, from the date of original issue of
the Old Notes. The New Notes will be redeemable at the option of the Company, in
whole or in part, at any time on or after June 15, 2002, at the redemption
prices set forth herein, plus accrued and unpaid interest, if any, to the date
of redemption. In addition, at any time and from time to time prior to June 15,
2000, the Company may redeem in the aggregate up to 35% of the original
principal amount of the Notes with the net proceeds of one or more Public Equity
Offerings (as defined) following which there is a Public Market (as defined), at
a redemption price of 110.125% of the principal amount to be redeemed, plus
accrued and unpaid interest, if any, to the redemption date, provided that at
least 65% of the original principal amount of the Notes remains outstanding
after each such redemption. Upon a Change of Control (as defined), each holder
of Notes ("Holder") will have the right to require the Company to repurchase all
or a portion of such Holder's Notes at a purchase price equal to 101% of the
principal amount thereof, plus accrued and unpaid interest, if any, to the date
of repurchase. See "Description of the Notes -- Change of Control."
The New Notes will be general unsecured obligations of the Company,
subordinated in right of payment to all existing and future Senior Indebtedness
(as defined) of the Company. The New Notes will rank pari passu with or senior
to all subordinated indebtedness of the Company. The Company is a holding
company that will derive all of its operating income and cash flow from its
subsidiaries. The New Notes will be fully and unconditionally guaranteed
(collectively, the "Subsidiary Guaranties") on an unsecured, senior subordinated
basis by certain Restricted Subsidiaries (as defined) (collectively, the
"Subsidiary Guarantors") of the Company. See "Description of the Notes --
Subsidiary Guaranties."
As of March 31, 1997, on a pro forma basis after giving effect to the
offering of the Old Notes (the "Offering"), the Exchange Offer and the
application of the net proceeds thereof, the Company would have had no
outstanding Senior Indebtedness and the Subsidiary Guarantors' outstanding
Senior Indebtedness would have been approximately $16.7 million. See
"Description of the Notes -- Subordination." In addition, the Company would have
had available approximately $101.0 million of undrawn borrowings under its
Senior Credit Facility. The Indenture governing the Notes (the "Indenture")
permits the Company and the Subsidiary Guarantors to incur additional
indebtedness, including Senior Indebtedness and indebtedness that will rank pari
passu with the New Notes.
The New Notes are being offered hereunder in order to satisfy certain
obligations of the Company and the Subsidiary Guarantors contained in the
Registration Agreement dated June 24, 1997 (the "Registration Agreement"), among
the Company, the Subsidiary Guarantors and Salomon Brothers Inc., Merrill Lynch,
Pierce, Fenner & Smith Incorporated, McDonald & Company Securities, Inc., First
Chicago Capital Markets, Inc., and Schroder Wertheim & Co. Incorporated (the
last five named entities collectively referred to herein as the "Initial
Purchasers"), with respect to the initial sale of the Old Notes.
The Company will not receive any proceeds from the Exchange Offer. The
Company will pay all the expenses incident to the Exchange Offer. Tenders of Old
Notes pursuant to the Exchange Offer may be withdrawn at any time prior to the
Expiration Date (as defined) for the Exchange Offer. In the event the Company
terminates the Exchange Offer and does not accept for exchange any Old Notes
with respect to the Exchange Offer, the Company will promptly return such Old
Notes to the holders thereof. See "The Exchange Offer."
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 of 1933, as amended (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 activities or other trading activities. Each of the Company and
the Subsidiary Guarantors has agreed that, starting on the Expiration Date, and
ending on the close of business on the first anniversary of the Expiration Date,
it will make this Prospectus available to any broker-dealer for use in
connection with any such resale. See "Plan of Distribution."
Prior to the Exchange Offer, there has been no public market for the Old
Notes. If a market for the New Notes should develop, such New Notes could trade
at a discount from their principal amount. The Company currently does not intend
to list the New Notes on any securities exchange or to seek approval for
quotation through any automated quotation system and no active public market for
the New Notes is currently anticipated. There can be no assurance that an active
public market for the New Notes will develop.
The Exchange Offer is not conditioned upon any minimum principal amount of
Old Notes being tendered for exchange pursuant to the Exchange Offer.
SEE "RISK FACTORS" BEGINNING ON PAGE , FOR A DISCUSSION OF CERTAIN
FACTORS THAT SHOULD BE CONSIDERED BY HOLDERS OF THE NOTES IN CONNECTION WITH THE
EXCHANGE OFFER.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
------------------------
The date of this Prospectus is , 1997.
<PAGE> 4
AVAILABLE INFORMATION
The Company and the Subsidiary Guarantors have filed with the Securities
and Exchange Commission (the "Commission") a Registration Statement on Form S-4
(the "Exchange Offer Registration Statement," which term shall encompass all
amendments, exhibits, annexes and schedules thereto) pursuant to the Securities
Act, and the rules and regulations promulgated thereunder, covering the New
Notes being offered hereby. This Prospectus does not contain all the information
set forth in the Exchange Offer Registration Statement. For further information
with respect to the Company, the Subsidiary Guarantors and the Exchange Offer,
reference is made to the Exchange Offer Registration Statement. Statements made
in this Prospectus as to the contents of any contract, agreement or other
document referred to accurately describe the material terms so referred to, but
are not necessarily a complete description of the contents of any such contract,
agreement or other document. With respect to each such contract, agreement or
other document filed as an exhibit to the Exchange Offer Registration Statement,
reference is made to the exhibit for a more complete description of the document
or matter involved, and each such statement shall be deemed qualified in its
entirety by such reference. The Exchange Offer Registration Statement, including
the exhibits thereto, 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 at the Regional Offices of the Commission at Seven
World Trade Center, Suite 1300, New York, New York 10048 and at Northwestern
Atrium Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661.
Copies of such materials can be obtained from the Public Reference Section of
the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed
rates. In addition, the Commission maintains a Web site that contains reports,
proxy and information statements and other information regarding registrants
that file electronically with the Commission. The address of such Web site is:
http://www.sec.gov.
As a result of the Exchange Offer, 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. In the event the
Company ceases to be subject to the informational requirements of the Exchange
Act, the Company will be required under the Indenture to continue to file with
the Commission the annual and quarterly reports, information, documents or other
reports, including, without limitation, reports on Forms 10-K, 10-Q and 8-K,
which would be required pursuant to the informational requirements of the
Exchange Act. The Company will also furnish such other reports as may be
required by law. In addition, for so long as any of the Notes are restricted
securities within the meaning of Rule 144(a)(3) under the Securities Act, the
Company has agreed to make available to any prospective purchaser of the Notes
or beneficial owner of the Notes, in connection with any sale thereof, the
information required by Rule 144A(d)(4) under the Securities Act.
2
<PAGE> 5
SUMMARY
The following summary is qualified in its entirety by the more detailed
information and financial statements and notes thereto appearing elsewhere in
this Prospectus. For purposes of this Prospectus, the "Company" shall refer to
Oxford Automotive, Inc. ("Oxford Automotive") and all of its consolidated
subsidiaries, unless the context otherwise requires.
THE COMPANY
GENERAL
The Company is a leading Tier 1 designer and producer of high-quality,
engineered metal components, assemblies and modules used by original equipment
automotive manufacturers ("OEMs"). The Company's core products are complex, high
value-added products, primarily assemblies containing multiple stamped parts and
various welded, hemmed or fastened components. These products which range from
large structural stampings and assemblies, including exposed ("Class A")
surfaces, to smaller complex welded assemblies, are used in manufacturing a
variety of sport utility vehicles ("SUVs"), light and medium trucks, mini-vans,
vans and passenger cars. The Company is the sole source supplier of these
products to its customers. On a pro forma basis, assuming the acquisition of
Lobdell Emery Corporation ("Lobdell") (described below) had occurred on April 1,
1996, the Company would have had net sales of $330.2 million and Adjusted EBITDA
(as defined herein) of $28.2 million for the fiscal year ended March 31, 1997.
On a pro forma basis for the fiscal year ended March 31, 1997, assuming the
acquisitions of Lobdell and Howell Industries, Inc., a Michigan corporation
("Howell") (described below) had occurred on April 1, 1996, net sales and
Adjusted EBITDA for the Company would have been $421.7 million and $31.7
million, respectively. Based on pro forma net sales of $330.2 million,
management believes the Company is one of the ten largest suppliers of stampings
to the North American automotive market.
The Company's four largest customers, General Motors Corporation ("GM"),
Ford Motor Company ("Ford"), CAMI (a joint venture of GM and Suzuki Motor
Corporation ("Suzuki")) and The Saturn Corporation ("Saturn"), accounted for
approximately 56.0%, 33.0%, 3.0%, and 2.8%, respectively of the Company's net
sales for the fiscal year ended March 31, 1997, on a pro forma basis for the
Lobdell acquisition. The Company has been providing products directly to GM and
Ford for more than 50 years and has earned outstanding commercial ratings for
its high-quality standards, including GM's Supplier of the Year and Mark of
Excellence Awards, Ford's Q1 Award and CAMI's President's Award. The Company
also sells its products to other Tier 1 suppliers. For the fiscal year ended
March 31, 1997, approximately 72.0% of the Company's net sales, on a pro forma
basis assuming the acquisition of Lobdell occurred on April 1, 1996, were
derived from sales of its products manufactured for SUVs, mini-vans, vans and
light trucks. In recent years, SUVs, mini-vans, vans and light trucks have
experienced stronger growth in vehicle production as compared to the passenger
car sector, with a compound annual growth rate ("CAGR") from 1991 to 1996 of
approximately 8.7% as compared to (0.1%) for the passenger car sector. This
sector includes those platforms and models which have strong consumer demand,
such as GM's popular C/K platform (full-size pickups and the
Yukon/Tahoe/Suburban models) and the Ford Ranger, Explorer and Windstar.
The Company conducts its business through two principal operations, BMG
North America Limited ("BMG") and Lobdell. Since acquiring BMG in October 1995,
management of the Company has implemented significant cost reductions and
achieved manufacturing efficiencies, including manpower reductions consisting of
49 salaried positions (121 to 72) and 78 hourly employees (570 to 492) and
improved materials cost management, which includes purchasing cost savings,
reduction of scrap and inventory costs, and improved scheduling of production.
These actions resulted in a $4.6 million improvement in Adjusted EBITDA from the
fiscal year ended March 31, 1996 to the fiscal year ended March 31, 1997. The
same strategy utilized at BMG was implemented at Lobdell immediately following
its acquisition in January 1997. Since its acquisition of Lobdell, the Company
has achieved cost reductions totaling $13.6 million on an annual basis. In
addition to the cost reductions, the Company has been able to implement a number
of manufacturing policies that have improved productivity and quality,
notwithstanding overall staff reductions.
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The strategic combination of BMG and Lobdell significantly strengthens the
Company's position as a leading Tier 1 supplier of assemblies and modules to the
OEMs. This combination provides the Company with the critical mass and
capabilities in the areas of design and engineering, sales and marketing, and
product expertise which provide the basis for the Company's strategy of becoming
a fully-integrated, global systems supplier. The Company has already implemented
a successful, focused sales and marketing initiative, which commenced
concurrently with the operational improvements at BMG. As a result, the Company
has been awarded the door assemblies and the side panel package for the new
Saturn Innovate Program (the "Innovate Program"), the new vehicle which Saturn
is launching in 1999 based upon the current Opel Vectra. Management believes
these awards from Saturn will generate approximately $60.0 million of annual net
sales beginning with the 1999 model year.
The Company currently operates eight manufacturing facilities which offer
the latest technologies in metal stamping, welding and assembly production
equipment, including fully-automated hydraulic and wide-bed press lines (up to
180 inches), robotic welding cells, robotic hemming and autophoretic corrosion
resistant coating. Since 1992, the Company has invested in excess of $93.0
million in capital investments to support sales growth, expand production
capabilities and improve efficiency and flexibility. The Company's diverse line
of over 200 presses that range up to 2,500 tons and state-of-the-art robotic
weld assembly and hemming equipment are capable of manufacturing a broad
assortment of parts and assemblies ranging from simple stampings to full-size,
Class A door and closure panels. The Company is one of a few independent
suppliers that has the ability to produce large, complex stampings, as well as
the technical expertise and automated assembly capabilities that provide high
value-added modules such as door apertures and assemblies, A-pillars, Class A
surface products and control arms.
The principal executive offices of the Company are located at 2365 Franklin
Road, Bloomfield Hills, Michigan 48203, and its telephone number is (248)
745-9600.
BUSINESS STRATEGY
The principal objective of the Company is to be a leading, full-service,
global Tier 1 supplier of integrated systems based on metal forming and related
manufacturing technologies. Management believes that the Company is well
positioned to benefit from two significant trends in the stamping and metal
forming segments of the automotive industry: outsourcing and consolidation.
Outsourcing of metal stamping has increased in response to competitive pressures
on OEMs to improve quality and reduce capital requirements, labor costs,
overhead and inventory. Consolidation among automotive industry suppliers has
occurred as OEMs have more frequently awarded long-term sole source contracts to
the most capable global suppliers. In addition, OEMs are increasingly seeking
systems suppliers who can provide a complete package of design, engineering,
manufacturing and project management support for an integrated system (such as a
front-end system). The Company intends to capitalize on these trends through
internal development and strategic acquisitions. The key elements of the
Company's strategy include the following:
Provide Full-Service Program Capability. The Company is focused on
developing full-service program capabilities. The Company works with OEMs
throughout the product development process from concept and prototype
development through the design and implementation of manufacturing processes.
The Company's ability to provide the package of design, engineering,
prototyping, tooling, blanking, stamping, assembly, corrosion resistant coating
and custom shipping rack fabrication to its customers creates a unique
capability present in only a limited number of suppliers. The Company believes
this capability will enable it to manage large programs, assist it in reducing
customer program launch time, lower customer costs and increase its margins.
Supply Complex, High Value-Added Systems. As a result of the Company's
technical design and engineering capabilities and its reputation for
highly-efficient manufacturing operations, the Company is able to secure supply
relationships for complex, high value-added products, primarily assemblies and
modules that contain multiple stamped parts and various welded, hemmed or
fastened components. For example, the Company produces the rear door for GM's
Yukon/Tahoe/Suburban vehicles, the lower control arm for GM's four wheel drive
C/K vehicles, the radiator support assembly for GM's W-car (Grand Prix, Century,
Lumina,
4
<PAGE> 7
Monte Carlo and Intrigue) and complex A-pillar assemblies for the Ford Mustang
and the Ford Ranger pickup. These complex products typically generate higher
dollar content per vehicle, as well as higher margins for the Company as
compared to simple, individual stampings. The Company plans to capitalize on its
ability to develop and provide integrated modules and assemblies to deliver to
the OEMs an integrated product, such as a complete door or front-end system. In
addition to doors, radiator supports, and Class A surface components, the
Company has unique expertise with respect to control arms, which will be further
developed as a component part of the entire drive control system.
Focus on High Growth Vehicle Categories. The Company's sales and marketing
efforts have been, and will continue to be, directed toward sectors of the
automotive market that have experienced strong consumer demand. For the fiscal
year ended March 31, 1997, approximately 72.0% of the Company's net sales on a
pro forma basis for the acquisition of Lobdell were derived from sales of
products manufactured for SUVs, mini-vans, vans and light trucks. The SUV market
alone has been the fastest growing segment in the North American new automotive
sales market with 1991 to 1996 vehicle production growth at a CAGR of
approximately 18.3%. Similarly, the Company's sales to the passenger car market
have been, and will continue to be, directed to the segments with stronger sales
growth, including Saturn cars. For example, the growth in vehicle production in
the passenger car sector has been flat during the past five years while
production of Saturn cars grew from 1992 to 1996 at a CAGR of approximately
9.2%.
Establish a Global Presence. The Company is actively pursuing strategic
acquisitions and joint-venture opportunities in Europe and intends to pursue
opportunities which will allow the Company to establish a presence in South
America, Asia and other markets in order to serve its customers on a global
basis. Several OEMs have announced certain models designed for the world
automobile market ("World Car"). As a result, the OEMs have encouraged their
existing suppliers to establish foreign production support for World Car
programs. This globalization provides access to new customers and technology, as
well as economic cycle diversification. At the request of GM de Mexico, the
Company is in the process of establishing a presence in Mexico. In 1997, the
Company will begin manufacturing and assembling components for business recently
awarded by GM de Mexico.
Pursue Strategic Acquisitions. In response to the trend in the OEM market
toward "systems suppliers," the Company is focused on making strategic
acquisitions that will enhance the Company's ability to provide integrated
systems (such as a door or front end system) or otherwise leverage its existing
business by providing additional product, manufacturing and service
capabilities. The Company also intends to pursue acquisitions which will expand
its customer base by providing an entree to new customers, including the North
American operations of Asian and European based OEMs. Consistent with this
strategy, the pending acquisition of Howell (as described below) provides an
entree to Chrysler Corporation ("Chrysler"). The Company believes that the
continuing supplier consolidation in the stamping and metal forming segments may
also provide attractive opportunities to acquire high-quality companies at
favorable prices, including businesses which can be improved financially through
overhead elimination, organizational restructuring, plant reconfiguration, labor
contract negotiations and management changes. The Company will also pursue
acquisitions that enable it to achieve a global presence.
RECENT DEVELOPMENTS
On May 21, 1997, the Company signed a definitive Agreement and Plan of
Merger (the "Merger Agreement") pursuant to which it will acquire Howell (the
"Merger"). Howell is a Tier 1 manufacturer of high-quality welded subassemblies
and detailed stampings used primarily in suspension system applications in the
production of SUVs, light trucks, mini-vans, vans and passenger cars. Pursuant
to the Merger Agreement, the shareholders of Howell will receive approximately
$23.4 million in cash. The Company also executed a shareholder agreement
pursuant to which it has received from the principal shareholder an option to
purchase its shares (the "Shares"), which constitute approximately 32.6% of the
issued and outstanding shares of common stock of Howell, at any time prior to
December 31, 1997, together with such shareholder's agreement to vote all such
Shares in favor of the Merger.
5
<PAGE> 8
For the nine months ended April 30, 1997, Howell had net sales of $72.4
million and Adjusted EBITDA of $4.2 million. Howell's net sales have grown from
$39.4 million for the fiscal year ended July 31, 1992 to $79.2 million for the
fiscal year ended July 31, 1996. On a pro forma basis for the fiscal year ended
March 31, 1997, assuming the acquisitions of Lobdell and Howell had occurred on
April 1, 1996, net sales and Adjusted EBITDA for the Company would have been
$421.7 million and $31.7 million, respectively.
The acquisition of Howell is consistent with the strategic objectives of
the Company. Howell has a significant relationship with Chrysler and has
developed a niche in designing, engineering and manufacturing suspension control
arms in a variety of configurations and variations depending on drive-train and
suspension application. Approximately 54.0% of Howell's net sales for the nine
months ended April 30, 1997, were derived from products used in the control arm
suspension applications. On a pro forma basis, assuming the acquisitions of
Lobdell and Howell had occurred on April 1, 1996, the Company would have derived
approximately 23.0% of its net sales from control arm applications for fiscal
1997.
Howell's expertise in this area is complementary to the Company's and will
enhance its ability to develop key suspension system components. Further,
Howell's sales are principally in the high-growth vehicle categories of SUVs,
light trucks, mini-vans and vans, the same market targeted by the Company. The
acquisition of Howell also provides the Company with an entree to Chrysler and
will strengthen the Company's existing relationship with Ford. Sales to Chrysler
and Ford represented 47.0% and 53.0%, respectively, of Howell's net sales for
the nine months ended April 30, 1997. On a pro forma basis for fiscal 1997,
assuming the acquisitions of Lobdell and Howell had occurred on April 1, 1996,
(i) the SUV, mini-van, van and light truck segment represented approximately
75.0% of net sales and (ii) the Company's net sales by major customers would
have been approximately as follows: GM 44.0%; Ford 37.0%; Chrysler 11.0%; CAMI
2.0%, and Saturn 2.0%.
Howell's two manufacturing facilities, located in Masury, Ohio and Lapeer,
Michigan, have received Chrysler's Gold Pentastar Award for the 1996 model year
and Ford's Q1 rating. In addition, Howell has achieved certification as a
registrant under the QS-9000 program at its Lapeer facility and its
headquarters.
The Company expects that the transaction with Howell will be consummated in
the second quarter of fiscal 1998, subject to the satisfaction of standard
closing conditions.
6
<PAGE> 9
THE EXCHANGE OFFER
Securities Offered............ Up to $125,000,000 aggregate principal amount
of 10 1/8% Senior Subordinated Notes Due 2007
(the "New Notes"). The terms of the New Notes
and Old Notes (collectively, the "Notes") are
identical in all material respects, except for
certain transfer restrictions, registration
rights and certain interest rate step-up
provisions relating to the Old Notes.
The Exchange Offer............ The New Notes are being offered in exchange for
a like principal amount of Old Notes. Old Notes
may be exchanged only in integral multiples of
$1,000. The issuance of the New Notes is
intended to satisfy obligations of the Company
and the Subsidiary Guarantors contained in the
Registration Agreement.
Expiration Date; Withdrawal
of Tender................... The Exchange Offer will expire at 5:00 p.m. New
York City time, on , 1997, or such
later date and time to which it may be extended
by the Company. The tender of Old Notes
pursuant to the Exchange Offer may be withdrawn
at any time prior to the Expiration Date. Any
Old Notes not accepted for exchange for any
reason will be returned without expense to the
tendering holder thereof as promptly as
practicable after the expiration or termination
of the Exchange Offer. See "The Exchange
Offer -- Terms of the Exchange Offer; Period
for Tendering Old Notes" and "-- Withdrawal
Rights."
Certain Conditions to the
Exchange Offer................ The Company's obligation to accept for
exchange, or to issue New Notes in exchange
for, any Old Notes is subject to certain
customary conditions relating to compliance
with any applicable law, or order of any
governmental agency or any applicable
interpretation by the Staff of the Commission,
which may be waived by the Company in its
reasonable discretion. The Company currently
expects that each of the conditions will be
satisfied and that no waivers will be
necessary. See "The Exchange Offer -- Certain
Conditions to the Exchange Offer."
Procedures for Tendering Old
Notes......................... Each holder of Old Notes wishing to accept the
Exchange Offer must complete, sign and date the
Letter of Transmittal, or a facsimile thereof,
in accordance with the instructions contained
herein and therein, and mail or otherwise
deliver such Letter of Transmittal, or such
facsimile, together with such Old Notes and any
other required documentation, to the Exchange
Agent (as defined) at the address set forth
herein. See "The Exchange Offer -- Procedures
for Tendering Old Notes."
Special Procedures for
Beneficial Owners............. Any beneficial owner whose Old Notes are
registered in the name of a broker, dealer,
commercial bank, trust company or other nominee
and who wishes to tender such Old Notes in the
Exchange Offer should contact such registered
holder promptly and instruct such registered
holder to tender on such beneficial owner's
behalf. If such beneficial owner wishes to
tender on such owner's own behalf, such owner
must, prior to completing and executing the
Letter of Transmittal and delivering his or her
Old Notes,
7
<PAGE> 10
either make appropriate arrangements to
register ownership of the Old Notes in such
owner's name or obtain a properly completed
bond power from the registered holder. The
transfer of registered ownership may take
considerable time and may not be completed
prior to the Expiration Date.
Guaranteed Delivery
Procedures.................... Holders of Old Notes who wish to tender their
Old Notes and whose Old Notes are not
immediately available or who cannot deliver
their Old Notes, the Letter of Transmittal or
any other documents required by the Letter of
Transmittal to the Exchange Agent, prior to the
Expiration Date, must tender their Notes
according to the guaranteed delivery procedures
set forth in "The Exchange Offer -- Guaranteed
Delivery Procedures."
Use of Proceeds............... There will be no proceeds to the Company from
the exchange of Notes pursuant to the Exchange
Offer.
Exchange Agent................ First Trust National Association, is serving as
the Exchange Agent in connection with the
Exchange Offer.
Federal Income Tax
Consequences.................. The exchange of Notes pursuant to the Exchange
Offer should not be a taxable event for federal
income tax purposes. See "Certain Federal
Income Tax Considerations."
8
<PAGE> 11
CONSEQUENCES OF EXCHANGING OLD NOTES PURSUANT TO THE EXCHANGE OFFER
Based on certain interpretive letters issued by the staff of the Commission
to third parties in unrelated transactions, the Company is of the view that
holders of Old Notes (other than any holder who is an "affiliate" of the Company
within the meaning of Rule 405 under the Securities Act) who exchange their Old
Notes for New Notes pursuant to the Exchange Offer generally may offer such New
Notes for resale, resell such New Notes, and otherwise transfer such New Notes
without compliance with the registration and prospectus delivery provisions of
the Securities Act, provided such New Notes are acquired in the ordinary course
of the holders' business and such holders have no arrangement with any person to
participate in a distribution of such New Notes. Any holder who tenders in the
Exchange Offer with the intention or for the purpose of participating in a
distribution of the New Notes cannot rely on such interpretation by the Staff of
the Commission and must comply with the registration and prospectus delivery
requirements of the Securities Act in connection with a secondary resale
transaction. Unless an exemption from registration is otherwise available, any
such resale transaction should be covered by an effective registration statement
containing the information required by the Securities Act. This Prospectus may
be used for an offer to resell, resale or other retransfer of New Notes only as
specifically set forth herein. 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, must acknowledge
that it will deliver a prospectus in connection with any resale of such New
Notes. See "Plan of Distribution." In addition, to comply with the securities
laws of certain jurisdictions, if applicable, the New Notes may not be offered
or sold unless they have been registered or qualified for sale in such
jurisdiction or in compliance with an available exemption from registration or
qualification. The Company has agreed, pursuant to the Registration Agreement
and subject to certain specified limitations therein, to register or qualify the
New Notes for offer or sale under the securities or blue sky laws of such
jurisdictions as any holder of the Notes reasonably requests in writing. If a
holder of Old Notes does not exchange such Old Notes for New Notes pursuant to
the Exchange Offer, such Old Notes will continue to be subject to the
restrictions on transfer contained in the legend thereon. In general, the Old
Notes may not be offered or sold, unless registered under the Securities Act,
except pursuant to an exemption from, or in a transaction not subject to, the
Securities Act and applicable state securities laws. See "The Exchange
Offer -- Consequences of Failure to Exchange; Resales of New Notes."
The Old Notes are currently eligible for trading in the Private Offerings,
Resales and Trading through Automated Linkages ("PORTAL") market. Following
commencement of the Exchange Offer but prior to its consummation, the Old Notes
may continue to be traded in the PORTAL market. Following consummation of the
Exchange Offer, the New Notes will not be eligible for PORTAL trading.
THE NEW NOTES
The terms of the New Notes are identical in all material respects to the
Old Notes, except for certain transfer restrictions registration rights and
certain interest rate step-up provisions relating to the Old Notes.
Issuer........................ Oxford Automotive, Inc.
Notes......................... $125.0 million in aggregate principal amount of
10 1/8% Senior Subordinated Notes Due 2007.
Maturity...................... June 15, 2007.
Interest Payment Dates........ Each June 15 and December 15, commencing
December 15, 1997.
Subsidiary Guaranties......... Like the Old Notes, the New Notes will be
guaranteed on a senior subordinated basis by
each Restricted Subsidiary of the Company
(other than certain foreign subsidiaries) that
is an obligor or guarantor of any Bank Credit
Agreement (the "Subsidiary Guaranties"). See
"Description of the Notes -- Subsidiary
Guaranties.".
9
<PAGE> 12
Subordination of Notes and
Subsidiary Guaranties......... Like the Old Notes, the New Notes and the
Subsidiary Guaranties will be general unsecured
senior subordinated obligations of the Company
and the Subsidiary Guarantors, as applicable.
The New Notes and the Subsidiary Guaranties
will be subordinated in right of payment to the
prior payment in full of all existing and
future Senior Indebtedness (as defined) and
will rank pari passu with or senior to all
present and future subordinated indebtedness of
the Company or the relevant Subsidiary
Guarantors, as applicable. As of March 31,
1997, on a pro forma basis after giving effect
to the Offering and the Exchange Offer and the
application of the net proceeds thereof, the
Company would have had no outstanding Senior
Indebtedness and the Subsidiary Guarantors'
outstanding Senior Indebtedness would have been
approximately $16.7 million. See "Description
of the Notes -- Subordination."
Sinking Fund.................. None.
Optional Redemption........... Like the Old Notes, the New Notes will be
redeemable at the option of the Company, in
whole or in part at any time on or after June
15, 2002, at the redemption prices set forth
herein plus accrued and unpaid interest, if
any, to the redemption date. In addition, at
any time prior to June 15, 2000, the Company
may redeem, at its option, up to an aggregate
amount of 35% of the original principal amount
of the Notes with the proceeds of one or more
Public Equity Offerings following which there
is a Public Market at a redemption price of
110.125% of the principal amount thereof plus
accrued and unpaid interest, if any, to the
redemption date, provided that at least 65% of
the original aggregate principal amount of the
Notes remains outstanding after each such
redemption. See "Description of the Notes --
Optional Redemption."
Change of Control............. Upon the occurrence of a Change of Control,
each Holder of Notes will have the right to
require the Company to purchase all or a
portion of such Holder's Notes at a price in
cash equal to 101% of the aggregate principal
amount thereof plus accrued and unpaid
interest, if any, to the date of purchase. In
the event of a Change of Control, there can be
no assurance that the Company will have the
financial resources or be permitted under the
terms of its other indebtedness to repurchase
or redeem the Notes. See "Description of the
Notes -- Change of Control."
Certain Covenants............. The Indenture contains certain covenants that,
among other things, limit the ability of the
Company and its Restricted Subsidiaries to (i)
incur additional indebtedness, (ii) pay
dividends or make other distributions with
respect to Capital Stock (as defined) of the
Company and its Restricted Subsidiaries, (iii)
create certain liens, (iv) sell material assets
of the Company or its Restricted Subsidiaries,
(v) enter into certain mergers and
consolidations and (vi) make capital
expenditures. See "Description of the Notes --
Certain Covenants."
Risk Factors.................. See "Risk Factors" for a discussion of certain
factors that should be considered in connection
with the Exchange Offer.
10
<PAGE> 13
SENIOR CREDIT FACILITY
On June 24, 1997, concurrently with the Offering, the Company entered into
a credit agreement with NBD Bank, on behalf of itself and as agent for a
syndicate of other lenders, pursuant to which availability under such facility
is $110.0 million (such credit facility being referred to herein as the "Senior
Credit Facility"). The facility is in the form of a revolving credit line.
Availability under the revolver at March 31, 1997 would have been approximately
$101.0 million, reduced for the effect of a Letter of Credit issued for the IRBs
(as defined). The obligations under the Senior Credit Facility are secured by
substantially all the assets of the Subsidiary Guarantors and the Company.
As of March 31, 1997, on a pro forma basis after giving effect to the
Offering, there would have been no borrowings under the Senior Credit Facility.
See "Capitalization" and "Description of Certain Indebtedness and Preferred
Stock."
11
<PAGE> 14
SUMMARY CONSOLIDATED HISTORICAL AND PRO FORMA FINANCIAL DATA
The following table sets forth (i) summary historical financial data of BMG
(the "Predecessor") for the year ended March 31, 1995 and the period from April
1, 1995 through October 27, 1995, (ii) summary historical financial data of the
Company from October 28, 1995 through March 31, 1996 and for the year ended
March 31, 1997, and (iii) summary pro forma financial data for the year ended
March 31, 1997. The summary historical financial data for the year ended March
31, 1995, the period April 1, 1995 through October 27, 1995 and the period
October 28, 1995 through March 31, 1996 was derived from the audited
consolidated financial statements of the Predecessor and the Company, which are
included elsewhere in this Prospectus, together with the report of Deloitte &
Touche, independent accountants. The summary historical financial data for the
year ended March 31, 1997 was derived from the audited consolidated financial
statements of the Company, which are included elsewhere in this Prospectus,
together with the report of Price Waterhouse LLP, independent accountants. The
summary pro forma statement of operations data and other financial data for the
fiscal year ended March 31, 1997 were prepared to illustrate the effect of the
Offering, the acquisitions of Lobdell and Howell and the Exchange Offer, as if
each had occurred on April 1, 1996. The summary pro forma balance sheet data at
March 31, 1997 was prepared to illustrate the effect of the Offering, the
acquisition of Howell and the Exchange Offer as if each had occurred on March
31, 1997. The pro forma data does not purport to be indicative of the results of
operations or the financial position of the Company that would have been
obtained if the acquisitions, the Offering and the Exchange Offer had in fact
been completed as of such dates or to project the results of operations or the
financial position of the Company for any future date or period. The following
table should be read in conjunction with the "Selected Consolidated Historical
Financial Data," "Management's Discussion and Analysis of Financial Condition
and Results of Operations," "Pro Forma Combined Financial Data," and the
Consolidated Financial Statements of the Company and the related notes and other
financial information presented elsewhere in this Prospectus.
<TABLE>
<CAPTION>
HISTORICAL PRO FORMA
----------------------------------------------------------------- -----------
PREDECESSOR COMPANY
----------------------------- -----------------------------------------------
FISCAL YEAR PERIOD PERIOD FISCAL YEAR FISCAL YEAR
ENDED APRIL 1, 1995- OCTOBER 28, 1995- ENDED ENDED
MARCH 31, OCTOBER 27, MARCH 31, MARCH 31, MARCH 31,
1995 1995 1996 1997 1997
----------- -------------- ----------------- ----------- -----------
AUDITED AUDITED AUDITED AUDITED (UNAUDITED)
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Statement of Operations Data:
Net sales............................. $75,097 $49,043 $35,572 $136,861 $421,707
Gross profit.......................... 4,206 2,148 3,948 11,773 30,269
Equipment impairment and non-recurring
charges(a).......................... -- -- -- 287 5,247
Operating income (loss)............... (348) (1,774) 1,713 3,801 3,591
Interest expense...................... 1,267 1,048 1,096 3,388 13,758
Other income (expense)................ -- -- -- 2,201 3,274
Income (loss) before income taxes..... (1,615) (2,822) 617 2,614 (6,893)
Provision (benefit) for income
taxes............................... (349) (938) 202 1,065 (2,437)
Net income (loss)..................... $(1,266) $(1,884) $ 415 $ 1,549 $ (4,456)
Balance Sheet Data (end of period):
Cash and cash equivalents............. -- -- -- $ 9,671 $ 24,370
Trade accounts receivable, net........ $ 9,835 $13,312 $ 8,338 47,626 61,841
Inventories........................... 4,170 4,429 3,719 13,411 20,681
Total assets.......................... 41,523 59,770 49,200 246,461 309,118
Total debt............................ 12,907 23,233 26,758 99,829 141,524
Redeemable preferred stock............ -- -- -- 39,300 39,300
Total shareholders' equity............ 10,833 9,329 935(b) 2,341 2,341
Financial Ratios and Other Data:
Depreciation and amortization......... $ 1,413 $ 919 $ 687 $ 5,041 $ 19,563
Capital expenditures.................. 4,384 5,111 3,466 3,326 19,674
Adjusted EBITDA(c).................... 1,065 (855) 2,400 11,330 31,675
Gross margin(d)....................... 5.60% 4.38% 11.10% 8.60% 7.18%
Adjusted EBITDA margin(e)............. 1.42 NM 6.75 8.28 7.51
Ratio of Adjusted EBITDA to interest
expense(f).......................... 2.3x
Ratio of net debt to Adjusted
EBITDA(g)........................... 3.6
</TABLE>
See Notes to Summary Consolidated Historical and Pro Forma Financial Data on the
following page.
12
<PAGE> 15
- -------------------------
(a) The provision for equipment impairment and non-recurring charges includes:
(i) on a pro forma basis, for the year ended March 31, 1997, a $3.0 million
impairment reserve against certain long-lived assets of Laserweld
International L.L.C. ("Laserweld") a wholly owned indirect subsidiary of the
Company, a $0.5 million provision for liability under the WARN Act, $0.5
million of excess legal and professional fees associated with the marketing
and sale of Lobdell and $1.2 million related to the loss before income taxes
for the discontinuance of the Laserweld and Parallel Group International
("Parallel") operations and (ii) for the year ended March 31, 1997, the loss
before income taxes for the discontinuance of the Laserweld and Parallel
operations of $0.3 million. Management does not anticipate that these costs
will be a part of future operations.
(b) The reduction in equity of $8.4 million from the period ended October 27,
1995 to the period ended March 31, 1996 is primarily a result of the
elimination of Predecessor equity as a part of the purchase accounting
adjustments made upon the acquisition of the Predecessor.
(c) Adjusted EBITDA is defined as income (loss) before interest, income taxes,
depreciation and amortization and equipment impairment and non-recurring
charges. For the fiscal year ended March 31, 1997, equipment impairment and
non-recurring charges aggregated $0.3 million and on a pro forma basis, for
the fiscal year ended March 31, 1997, equipment impairment and non-recurring
charges aggregated $5.2 million, as described in Note (a) above. Adjusted
EBITDA should not be construed as a substitute for income from operations,
net income or cash flow from operating activities for the purpose of
analyzing the Company's operating performance, financial position and cash
flows.
(d) Gross margin is defined as gross profit as a percent of net sales for each
of the applicable periods.
(e) Adjusted EBITDA margin is defined as Adjusted EBITDA as a percent of net
sales for each of the applicable periods.
(f) Defined as the ratio of Adjusted EBITDA to total interest expense.
(g) Defined as the ratio of net debt to Adjusted EBITDA with net debt consisting
of total debt less cash and cash equivalents and unexpended bond proceeds.
13
<PAGE> 16
RISK FACTORS
This Prospectus contains forward-looking statements within the meaning of
Section 27A of the Securities Act, as amended. Discussions containing such
forward-looking statements may be found in the material set forth under
"Summary," "Management's Discussion and Analysis of Financial Condition and
Results of Operations" and "Business," as well as within the Prospectus
generally. Actual results could differ materially from those projected in the
forward-looking statements as a result of the risk factors set forth below and
the matters set forth in the Prospectus generally. The Company cautions the
reader, however, that this list of factors may not be exhaustive. In evaluating
the Exchange Offer, Holders of the Old Notes should carefully consider the
following risk factors, as well as the other information set forth elsewhere in
this Prospectus. The risk factors set forth below are generally applicable to
the Old Notes as well as the New Notes.
SUBSTANTIAL LEVERAGE AND DEBT SERVICE OBLIGATIONS
The Company has, and upon consummation of the Exchange Offer will have,
indebtedness which is substantial in relation to the shareholders' equity, as
well as interest and debt service requirements which are significant compared to
its cash flow from operations. After adjusting for the Offering, the Senior
Credit Facility and the application of the net proceeds therefrom and the
Exchange Offer, at March 31, 1997, the Company's total indebtedness would have
been $141.5 million (exclusive of unused commitments under the Senior Credit
Facility of approximately $101.0 million) and the Company would have had $39.3
million of preferred stock and $2.3 million of common shareholders' equity. The
degree to which the Company is leveraged could have important consequences to
Holders of the Notes, including the following: (i) the Company's ability to
obtain additional financing for working capital, capital expenditures,
acquisitions or general corporate purposes may be impaired; (ii) a substantial
portion of the Company's cash flow from operations must be dedicated to the
payment of interest on the Notes and its other existing indebtedness, thereby
reducing the funds available to the Company for other purposes; (iii) the
agreements governing the Company's long-term indebtedness contain certain
restrictive financial and operating covenants; (iv) certain indebtedness under
the Senior Credit Facility will be at variable rates of interest, which will
cause the Company to be vulnerable to increases in interest rates; (v) all of
the indebtedness outstanding under the Senior Credit Facility is secured by
substantially all the assets of the Subsidiary Guarantors and the Company and
will become due prior to the time the principal on the Notes will become due;
(vi) the Company may be hindered in its ability to adjust rapidly to changing
market conditions; and (vii) the Company's substantial degree of leverage could
make it more vulnerable in the event of a downturn in general economic
conditions or in its business. The Indenture permits the Company and the
Subsidiary Guarantors to incur additional indebtedness, including Senior
Indebtedness and indebtedness that will rank pari passu with the Notes.
The Company's ability to pay interest on the Notes and to satisfy its other
obligations will depend upon its future operating performance, which will be
affected by prevailing economic conditions and financial, business and other
factors, many of which are beyond its control. The Company anticipates that its
operating cash flow, together with available borrowings under the Senior Credit
Facility, will be sufficient to meet its operating expenses, to service interest
requirements on its debt obligations as they become due and to implement its
business strategy. There can be no assurance, however, that the Company's
business will generate sufficient cash flow from operations or that future
borrowings will be available in an amount sufficient to enable the Company to
service its indebtedness, including the Notes, to make anticipated capital
expenditures or to implement its business strategy. Further, the Company is
required to redeem the Lobdell Preferred Stock (as defined) prior to the time
the principal on the Notes will become due. For fiscal 1995, the Company's
earnings were insufficient to cover fixed charges by $1.6 million. For the
period April 1, 1995 to October 27, 1995, the Company's earnings were
insufficient to cover fixed charges by $2.8 million. For fiscal 1997, the
Company's earnings exceeded fixed charges by $2.6 million; however, on a pro
forma basis for fiscal 1997, earnings were insufficient to cover fixed charges
by $4.9 million. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations -- Liquidity, Capital Resources and
Financial Condition" and "Description of Certain Indebtedness and Preferred
Stock."
The Senior Credit Facility contains certain customary covenants, including
without limitation, reporting and other affirmative covenants; financial
covenants, including ratio of total debt to EBITDA, net worth, fixed
14
<PAGE> 17
charge coverage ratio, interest coverage ratio (each as defined in and
calculated pursuant to the Senior Credit Facility); and negative covenants,
including restrictions on incurrence of other indebtedness, payment of cash
dividends and other distributions to shareholders, liens in favor of parties
other than the lenders under the Senior Credit Facility, certain guaranties of
obligations of or advances to others, sales of material assets not in the
ordinary course of business, restrictions on mergers and acquisitions, and
capital expenditures. There can be no assurance that these requirements will be
met in the future. If they are not, the holders of the indebtedness under the
Senior Credit Facility would be entitled to declare such indebtedness
immediately due and payable or, if the Company were unable to repay such
indebtedness, the holders thereunder could proceed against the collateral
securing the Senior Credit Facility, which consists of substantially all of the
assets of the Company and the Subsidiary Guarantors. See "Description of Certain
Indebtedness and Preferred Stock -- Senior Credit Facility."
SUBORDINATION OF NOTES AND THE SUBSIDIARY GUARANTIES; ASSET ENCUMBRANCES;
HOLDING COMPANY STRUCTURE
Like the Old Notes, the New Notes will be subordinated in right of payment
to all present and future Senior Indebtedness of the Company and the Subsidiary
Guarantors, including the principal, premium (if any) and interest with respect
to the obligations outstanding under the Senior Credit Facility. In addition,
the Subsidiary Guaranties will be subordinated in right of payment to all
existing and future Senior Indebtedness of the Subsidiary Guarantors. As of
March 31, 1997, on a pro forma basis, after adjusting for the Offering
(including the application of net proceeds therefrom) and the Exchange Offer,
the Company would not have had any Senior Indebtedness outstanding (excluding
unused commitments under the Senior Credit Facility) and the Subsidiary
Guarantors would have had approximately $16.7 million of Senior Indebtedness
outstanding. Consequently, in the event of a bankruptcy, liquidation,
dissolution, reorganization or similar proceeding with respect to the Company or
any Subsidiary Guarantor, assets of the Company or such Subsidiary Guarantor
will be available to pay obligations of the Notes only after all Senior
Indebtedness of the Company or such Subsidiary Guarantor has been paid in full,
and there can be no assurance that there will be sufficient assets to pay
amounts due on all or any of the Notes. See "Description of the Notes --
Subordination."
Like the Old Notes, the New Notes are unsecured and will be effectively
subordinated to any secured indebtedness of the Company or any Subsidiary
Guarantor. The indebtedness outstanding under the Senior Credit Facility will be
secured by liens on substantially all of the assets of the Subsidiary Guarantors
and the Company. The ability of the Company to comply with the provisions of the
Senior Credit Facility may be affected by events beyond the Company's control.
The breach of any such provisions could result in a default under the Senior
Credit Facility, in which case, depending upon the actions taken by the lenders
thereunder or their successors or assignees, such lenders could elect to declare
all amounts borrowed under the Senior Credit Facility, together with accrued
interest, to be due and payable, and the Company could be prohibited from making
payments of interest and principal on the Notes until the default is cured or
all Senior Indebtedness is paid or satisfied in full. If the Company were unable
to repay such borrowings, such lenders could proceed against the collateral. If
the indebtedness under the Senior Credit Facility were accelerated, there can be
no assurance that the assets of the Company and the Subsidiary Guarantors would
be sufficient to repay in full such indebtedness and the other indebtedness of
the Company, including the Notes. See "Description of Certain Indebtedness and
Preferred Stock -- Senior Credit Facility" and "Description of the Notes --
Subordination."
The Company is a holding company which derives all of its operating income
from its subsidiaries. The Holders of the Notes will have no direct claim
against such subsidiaries other than the claim created by the Subsidiary
Guaranties, which may be subject to legal challenge in the event of the
bankruptcy of a subsidiary. See "Risk Factors -- Fraudulent Conveyance." If such
a challenge were upheld with respect to any such Subsidiary Guarantee, such
Subsidiary Guarantee would be invalidated and unenforceable. To the extent that
the Subsidiary Guarantee is not enforceable, the rights of Holders of the Notes
to participate in any distribution of assets of the Subsidiary Guarantor upon
liquidation, bankruptcy, reorganization or otherwise may, as is the case with
other unsecured creditors of the Company, be subject to prior claims of
creditors of
15
<PAGE> 18
that Subsidiary Guarantor. The Company must rely on dividends and other payments
from its subsidiaries to generate the funds necessary to meet its obligations,
including the payment of principal and interest on the Notes. The Indenture
contains covenants that restrict the ability of the Company's subsidiaries to
enter into any agreement limiting distributions and transfers, including
dividends to the Company. Further, the ability of the Company's subsidiaries to
pay dividends and make other payments are, and may in the future be, subject to
certain statutory, contractual and other restrictions. See "Description of
Certain Indebtedness and Preferred Stock."
CYCLICALITY; THE OEM SUPPLIER INDUSTRY
The OEM supplier industry is highly cyclical and, in large part, impacted
by the strength of the economy generally, by prevailing interest rates and by
other factors which may have an effect on the level of sales of automotive
vehicles. There can be no assurance that the automotive industry for which the
Company supplies components will not experience downturns in the future. An
economic recession may impact substantially leveraged companies, such as the
Company, more than similarly situated companies with less leverage. A decrease
in overall consumer demand for SUVs, light trucks, mini-vans, vans or passenger
cars could have a material adverse effect on the Company's financial condition
and results of operations.
The automotive industry is characterized by a small number of OEMs that are
able to exert considerable pressure on component and system suppliers to reduce
costs, improve quality and provide additional design and engineering
capabilities. In the past, OEMs have generally demanded and received price
reductions and measurable increases in quality by implementing competitive
selection processes, rating programs and various other arrangements. Also,
through increased partnering on platform work, OEMs have generally required
component and system suppliers to provide more design engineering input at
earlier stages of the product development process, the costs of which have, in
some cases, been absorbed by the suppliers. Although the Company, historically,
has regained the loss caused by price reductions to the OEMs through cost
reduction initiatives and assistance from the OEMs, there can be no assurance
that future price reductions, increased quality standards or additional
engineering capabilities required by OEMs will not have a material adverse
effect on the financial condition or results of operations of the Company.
Further, although the general trend of the OEMs is to outsource component
manufacturing, the OEMs have, from time to time, brought their stamping work
back in-house. There can be no assurance that the OEMs may not in-source some of
the jobs currently performed by the Company.
Many OEMs and their Tier 1 suppliers are unionized. Work stoppages and
slowdowns experienced by OEMs and their Tier 1 suppliers, as a result of labor
disputes, could have a material adverse effect on the Company's financial
condition or results of operations.
DEPENDENCE ON PRINCIPAL CUSTOMERS
Substantially all of the Company's sales for fiscal 1997 were to GM and
Ford. Although the Company has ongoing supply relationships with its principal
customers and is a long-term supplier to GM and Ford, there can be no assurance
that sales to GM and Ford will continue at the same level. Furthermore,
continuation of these relationships is dependent upon the customers'
satisfaction with the price, quality and delivery of the Company's products. In
addition, the Company's agreements to produce parts are assigned to specific
models or product lines of its customers. Accordingly, the Company's business,
and estimates for future business, are dependent upon consumer demand for the
specific models and product lines that incorporate the Company's parts. The
Company's arrangements with the OEMs are typically in the form of purchase
orders that may be canceled by the OEMs. However, the Company believes that
cancellation of purchase orders is rare, due, in part, to the OEM production
interruptions likely to be caused by changing suppliers. A significant decrease
in sales of vehicles using the Company's products or the loss by the Company of
the right to supply any of such products to its customers would have a material
adverse effect on the Company's financial condition and results of operations.
The loss of either GM or Ford as a customer would have a material adverse effect
on the Company. In addition, the delay or cancellation of material orders from,
or design, development, delivery or product projects at, GM or Ford could have a
material adverse effect on the Company.
16
<PAGE> 19
UNIONIZED WORKFORCE
Substantially all employees of the Company are covered by collective
bargaining agreements with either the International Union, United Automobile,
Aerospace and Agricultural Implement Workers of America ("UAW") or the National
Automobile Aerospace, Transportation and General Workers Union of Canada
("CAW"). The Company has not experienced any work stoppages in the last ten
years and considers its relationship with its employees to be good. Strikes or
work stoppages and the resultant adverse impact on its relationship with the
OEMs could have a material adverse effect on the Company's business, financial
condition and results of operations. The Company's agreement with the CAW at the
Cambridge, Ontario facility will expire on September 30, 1997 and the Company's
agreement with the UAW at the Argos, Indiana facility will expire on March 31,
1998. While the outcome, including the terms of the new contracts and their
impact on the future results of the Company's operations cannot be predicted,
management does not believe that the financial terms of the new contracts will
have a material adverse effect on the Company. However, there can be no
assurance that the Company will be successful in its contract negotiations.
FRAUDULENT CONVEYANCE
If a court in a lawsuit brought by an unpaid creditor or representative of
creditors, such as a trustee in bankruptcy or the Company as a
debtor-in-possession, were to find under relevant federal or state fraudulent
conveyance statutes that the Company did not receive fair consideration or
reasonably equivalent value for incurring the indebtedness, including the Notes,
and that, at the time of such incurrence, the Company (i) was insolvent, (ii)
was rendered insolvent by reason of such incurrence or grant, (iii) was engaged
in a business or transaction for which the assets remaining with the Company
constituted unreasonably small capital or (iv) intended to incur, or believed
that it would incur, debts beyond its ability to pay such debts as they matured,
then such court, subject to applicable statutes of limitation, could void the
Company's obligations under the Notes, recover payments made under the Notes,
subordinate the Notes to other indebtedness of the Company or take other action
detrimental to the Holders of the Notes.
The measure of insolvency for these purposes will depend upon the governing
law of the relevant jurisdiction. Generally, however, a company will be
considered insolvent for these purposes if the sum of that company's debts is
greater than the fair value of all of that company's property or if the present
fair salable value of that company's assets is less than the amount that will be
required to pay its probable liability on its existing debts as they become
absolute and matured or if the Company is not able to pay its debts as they
become due. Moreover, regardless of solvency, a court could void an incurrence
of indebtedness, including the Notes, if it determined that such transaction was
made with the intent to hinder, delay or defraud creditors. In addition, a court
could subordinate the indebtedness, including the Notes, to the claims of all
existing and future creditors on similar grounds. The Company believes that,
after giving effect to the Offering, the Company (i) has not been rendered
insolvent by the incurrence of indebtedness in connection with the Offering,
(ii) is in possession of sufficient capital to run its business effectively and
(iii) is incurring debts within its ability to pay as the same mature or become
due.
There can be no assurance as to what standard a court would apply in order
to determine whether the Company was "insolvent" upon the sale of the Old Notes
or that, regardless of the method of valuation, a court would not determine that
the Company was insolvent upon consummation of the sale of the Old Notes.
In addition, the Subsidiary Guaranties may be subject to review under
relevant federal and state fraudulent conveyance and similar statutes in a
bankruptcy or reorganization case or a lawsuit brought by or on behalf of
creditors of any of the Subsidiary Guarantors. In such a case, the analysis set
forth above would generally apply, except that the Subsidiary Guaranties could
also be subject to the claim that, since the Subsidiary Guaranties were incurred
for the benefit of the Company (and only indirectly for the benefit of the
Subsidiary Guarantors), the obligations of the Subsidiary Guarantors thereunder
were incurred for less than reasonably equivalent value or fair consideration. A
court could void the Subsidiary Guarantors' obligation under the Subsidiary
Guaranties, recover payments made under the Subsidiary Guaranties, subordinate
the Subsidiary Guaranties to other indebtedness of a Subsidiary Guarantor or
take other action detrimental to the Holders of the Notes.
17
<PAGE> 20
CONTROL BY PRINCIPAL SHAREHOLDER
Selwyn Isakow (the "Principal Shareholder") beneficially owns 48.9% of the
Company's outstanding shares and exercises voting control over those shares not
owned by him, including shares held by the directors and officers of the
Company. Circumstances may occur in which the interests of the Principal
Shareholder could be in conflict with the interests of the Holders of the Notes.
For example, if the Company encounters financial difficulties or is unable to
pay certain of its debts as they mature, the interests of the Principal
Shareholder might conflict with those of the Holders of the Notes. In addition,
the Principal Shareholder may have an interest in pursuing acquisitions,
divestitures or other transactions that, in his judgment, could enhance his
equity investment, even though such transactions might involve risks to the
Holders of the Notes. See "Principal Shareholders."
RISK RELATING TO ACQUISITIONS
To expand its markets and take advantage of the consolidation trend in the
automotive parts industry, the Company's business strategy includes growth
through acquisitions. The ability of the Company to successfully implement its
acquisition strategy depends upon a number of factors. There can be no assurance
that the Company will be able to consummate acquisitions in the future on terms
acceptable to the Company or to integrate any new acquisitions (including
Howell) successfully into its operations and achieve cost savings from such
integration. In addition, the Company is pursuing acquisitions and strategic
alliances in Europe and intends to pursue such acquisitions and alliances in
South America, Asia and other markets. The Company is also continually
investigating opportunities for domestic acquisitions of other OEM suppliers.
There can be no assurance that these acquisitions or strategic alliances will be
successful. See "Risk Factors -- Substantial Leverage and Debt Service
Obligations," and "Business -- Business Strategy."
COMPETITION
The motor vehicle parts industry in which the Company operates is
fragmented and competitive. The Company's competitors include divisions or
subsidiaries of companies that are larger and have substantially greater
resources than the Company as well as divisions of OEMs with internal stamping
and assembly operations. There can be no assurance that the Company's products
will be able to compete successfully with those of its competitors. See
"Business -- Competition."
ENVIRONMENTAL RISKS
The Company's operations and properties are subject to federal, state,
local and foreign laws, regulations and ordinances relating to the use, storage,
handling, generation, treatment, emission, release, discharge and disposal of
certain materials, substances and wastes. In many jurisdictions these laws are
complex and change frequently. Such laws, including but not limited to the
Comprehensive Environmental Response, Compensation & Liability Act ("CERCLA" or
"Superfund") may impose joint and several liability and apply to remediation of
contamination at properties presently or formerly owned or operated by an entity
or its predecessors, as well as to conditions at properties at which wastes or
other contamination attributable to an entity or its predecessors have been sent
or otherwise come to be located. The nature of the Company's operations exposes
it to the risk of liabilities or claims with respect to environmental matters,
including off-site disposal matters, and there can be no assurance that material
costs will not be incurred in connection with such liabilities or claims.
Based upon the Company's experience to date, the Company believes that the
future cost of compliance with existing environmental laws, regulations and
ordinances (or liability for known environmental claims) will not have a
material adverse effect on the Company's business, financial condition and
results of operations. However, future events, such as changes in existing laws
and regulations or their interpretation, may give rise to additional compliance
costs or liabilities that could have a material adverse effect on the Company's
business, financial condition and results of operations. Compliance with more
stringent laws or regulations, as well as more vigorous enforcement policies of
regulatory agencies or stricter or different
18
<PAGE> 21
interpretations of existing laws, may require additional expenditures by the
Company that may be material. See "Business -- Regulatory Matters."
CHANGE OF CONTROL
Upon a Change of Control, each Holder of the Notes will have the right to
require the Company to repurchase all or any part of such Notes at a price equal
to 101% of the principal amount thereof, plus accrued and unpaid interest, if
any, to the date of repurchase. The occurrence of a Change of Control may
constitute a default under the Senior Credit Facility. In addition, the Senior
Credit Facility will prohibit the purchase of the Notes by the Company in the
event of a default thereunder, unless and until such time as the indebtedness
under the Senior Credit Facility is repaid in full. The Company's failure to
purchase the Notes would result in a default under the Indenture. The inability
to repay the indebtedness under the Senior Credit Facility, if accelerated,
would also constitute an event of default under the Indenture, which could have
adverse consequences for the Company and the Holders of the Notes. In the event
of a Change of Control, there can be no assurance the Company would have
sufficient financial resources available to satisfy all of its obligations under
the Senior Credit Facility and the Notes. See "Description of Certain
Indebtedness and Preferred Stock -- Senior Credit Facility."
CONSEQUENCES OF FAILURE TO EXCHANGE
Holders of Old Notes who do not exchange their Old Notes for New Notes
pursuant to the Exchange Offer will continue to be subject to the restrictions
on transfer of such Old Notes as set forth in the legend thereon as a
consequence of the issuance of the Old Notes pursuant to exemption from, or in
transactions not subject to, the registration requirements of, the Securities
Act and applicable state laws, or pursuant to an exemption therefrom. Subject to
the obligation by the Company to file a shelf registration statement covering
resales of Old Notes in certain limited circumstances, the Company does not
intend to register the Old Notes under the Securities Act and, after
consummation of the Exchange Offer, will not be obligated to do so. 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 may be deemed to have received
restricted securities and, if so, will be required to comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with any resale transaction. Additionally, as a result of the
Exchange Offer, it is expected that a substantial decrease in the aggregate
principal amount of Old Notes outstanding will occur. As a result, it is
unlikely that a liquid trading market will exist for the Old Notes at any time.
This lack of liquidity will make transactions more difficult and may reduce the
trading price of the Old Notes. See "The Exchange Offer."
ABSENCE OF PUBLIC MARKET FOR THE NEW NOTES
The New Notes are new securities and there is currently no established
market for the New Notes. Accordingly, there can be no assurance as to the
liquidity of any markets that may develop for the New Notes, the ability of
holders to sell the New Notes or the price at which holders would be able to
sell the New Notes. Future trading prices of the New Notes will depend on many
factors, including, among other things, prevailing interest rates, the Company's
operating results and the market for similar securities. Historically, the
market for securities similar to the New Notes, including non-investment grade
debt, has been subject to disruptions that have caused substantial volatility in
the prices of such securities. There can be no assurance that any market for the
New Notes, if such market develops, will not be subject to similar disruptions.
The Initial Purchasers have advised the Company that they currently intend to
make a market in the New Notes offered hereby. However, the Initial Purchasers
are not obligated to do so and any market making may be discontinued at any time
without notice. The Old Notes currently are eligible for trading by qualified
buyers in the Private Offerings, Resale and Trading through Automated Linkages
(PORTAL) Market. The Company and the Subsidiary Guarantors do not intend to
apply for listing of the New Notes on any national securities exchange or for
their quotation through the National Association of Securities Dealers Automated
Quotation System.
19
<PAGE> 22
USE OF PROCEEDS
The Exchange Offer is intended to satisfy certain of the Company's and the
Subsidiary Guarantors' obligations under the Registration Agreement. The Company
will not receive any cash proceeds from the issuance of the New Notes in the
Exchange Offer. In consideration for issuing the New Notes as contemplated in
this Prospectus, the Company will receive Old Notes in like principal amount.
The form and terms of the New Notes are identical in all material respects to
the form and terms of the Old Notes, except for certain transfer restrictions
and registration rights relating to the Old Notes and except for certain
provisions providing for an increase in the interest rate on the Old Notes under
certain circumstances relating to the timing of the Exchange Offer. The Old
Notes surrendered in exchange for the New Notes will be retired and canceled and
cannot be reissued. Accordingly, issuance of the New Notes will not result in
any increase in the outstanding debt of the Company. The net proceeds to the
Company from the sale of the Old Notes were approximately $120.7 million (after
the deduction of the discount to the Initial Purchasers and estimated expenses
incurred in connection with the Offering and related transactions of
approximately $4.1 million). The Company used approximately $83.1 million of the
net proceeds to refinance existing indebtedness and approximately $22.9 million
in connection with the acquisition of Howell with the remaining $14.7 million
for working capital and general corporate purposes, which may include other
acquisitions. See "Management's Discussion and Analysis of Financial Condition
and Results of Operations -- Liquidity, Capital Resources and Financial
Condition."
20
<PAGE> 23
CAPITALIZATION
The following table sets forth the capitalization of the Company as of
March 31, 1997 and as adjusted to give effect to the Offering and the
application of the net proceeds thereof, including payments made in connection
with the pending acquisition of Howell and the Exchange Offer. This table should
be read in conjunction with the unaudited "Pro Forma Combined Consolidated
Financial Data," "Selected Consolidated Historical Financial Data,"
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and the Consolidated Financial Statements and related notes thereto
included elsewhere in this Prospectus. See also "Description of Certain
Indebtedness and Preferred Stock."
<TABLE>
<CAPTION>
MARCH 31, 1997
----------------------
ACTUAL AS ADJUSTED
------ -----------
(IN THOUSANDS)
<S> <C> <C>
Cash and cash equivalents................................ $ 9,671 $ 24,370
======== ========
Long-term debt (including current portion):
Existing senior bank credit facilities(a).............. $ 78,823 $ --
Senior Credit Facility(b).............................. -- --
Lewis Emery............................................ 2,833 2,833
Industrial Revenue Bonds............................... 8,300 8,300
Nations Bank -- Tooling................................ 1,380 --
EDC Tooling............................................ 5,110 5,110
Mortgage BMG........................................... 2,475 --
IRDP Loan.............................................. 467 467
Series A Promissory Note............................... 441 --
10 1/8% Senior Subordinated Notes Due 2007............. -- 124,814
-------- --------
Total debt.......................................... 99,829 141,524
-------- --------
Redeemable preferred stock(c)
Series A............................................... 36,012 36,012
Series B............................................... 3,288 3,288
-------- --------
Total redeemable preferred stock.................... 39,300 39,300
-------- --------
Shareholders' equity:
Common stock (400,000 shares authorized; 309,750 issued
and outstanding).................................... 1,050 1,050
Foreign currency translation adjustment................ (28) (28)
Reduction in equity for minimum pension liability...... (253) (253)
Retained earnings...................................... 1,572 1,572
-------- --------
Total shareholders' equity.......................... 2,341 2,341
-------- --------
Total capitalization..................................... $141,470 $183,165
======== ========
</TABLE>
- -------------------------
(a) Concurrently with the issuance of the Old Notes, the Company repaid all
outstanding indebtedness under the existing senior bank credit facilities.
(b) Concurrently with the issuance of the Old Notes, the Company entered into
the Senior Credit Facility pursuant to which up to $110.0 million is
available. On a pro forma basis at March 31, 1997, the Company would have
had no borrowings under the Senior Credit Facility and availability on a pro
forma basis at March 31, 1997 would have been approximately $101.0 million.
See "Description of Certain Indebtedness and Preferred Stock."
(c) In connection with the acquisition of Lobdell, redeemable preferred stock
was issued with a face value of $50.7 million, of which $10.0 million was
placed in escrow pending final determination of the purchase price. The
Company and the preferred shareholders of Lobdell have settled certain
claims relating to the acquisition which has resulted in the cancellation of
60,000 shares of Lobdell Series A Preferred Stock and will also entail the
cancellation of up to an additional 40,000 shares of Lobdell Series A
Preferred Stock or, at the election of the preferred shareholders of
Lobdell, 49,938 shares of Lobdell Series B Preferred Stock. See Note 3 of
the "Notes to the Consolidated Financial Statements" for further discussion
regarding the carrying value of the redeemable preferred stock and
additional terms and conditions.
21
<PAGE> 24
PRO FORMA COMBINED FINANCIAL DATA
(UNAUDITED)
(DOLLARS IN THOUSANDS)
The unaudited pro forma combined balance sheet as of March 31, 1997 (the
"Unaudited Pro Forma Balance Sheet") gives pro forma effect to the Offering and
the acquisition of Howell as if they had occurred on March 31, 1997. The
acquisition of Howell will be accounted for by the purchase method of accounting
pursuant to which the purchase price is allocated among the acquired tangible
and intangible assets and assumed liabilities in accordance with estimates of
their fair values on the date of acquisition. The pro forma adjustments
represent management's preliminary determination of purchase accounting
adjustments and are based upon available information and certain assumptions
that the Company believes to be reasonable under the circumstances.
Consequently, the amounts reflected in the Unaudited Pro Forma Balance Sheet are
subject to change and the final values may differ substantially from these
amounts. Management does not expect that differences between the preliminary and
final purchase price allocation will have a material impact on the Company's
financial position. The Unaudited Pro Forma Balance Sheet does not purport to be
indicative of the financial position of the Company had such transactions
actually been completed as of the assumed dates and for the periods presented,
or which may be obtained in the future.
The unaudited pro forma combined statement of operations for the year ended
March 31, 1997 (the "Unaudited Pro Forma Statement of Operations") gives pro
forma effect to the Offering and the acquisitions of Lobdell and Howell as if
they had occurred on April 1, 1996 and includes the effect of the following
adjustments as if they were realized during the applicable period: (i)
reductions in cost of sales through labor and fringe benefit reductions, (ii)
reductions in selling, general and administrative labor, professional fees and
other non-recurring items achieved as a direct result of the acquisition of
Lobdell and (iii) net increase in interest expense to reflect the issuance of
the Old Notes. As the acquisition of Howell has not yet been completed, the
Unaudited Pro Forma Statement of Operations does not include any amount for
anticipated savings as a result of cost reductions expected to be implemented by
the Company upon its acquisition of Howell. The Unaudited Pro Forma Statement of
Operations does not purport to be indicative of the results of operations of the
Company had such transactions actually been completed as of the assumed dates
and for the periods presented, or which may be obtained in the future.
UNAUDITED PRO FORMA COMBINED BALANCE SHEET AS OF THE PERIOD ENDED
<TABLE>
<CAPTION>
MARCH 31, 1997 APRIL 30, 1997 PRO FORMA PRO FORMA
COMPANY HOWELL(a) ADJUSTMENTS COMBINED
-------------- -------------- ----------- ---------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
Cash and cash equivalents.................................. $ 9,671 $ 1,182 $ 13,517(b)(c) $ 24,370
Trade accounts receivable, net............................. 47,626 14,215 -- 61,841
Inventories................................................ 13,411 7,270 -- 20,681
Reimbursable tooling....................................... 4,968 1,678 -- 6,646
Refundable income taxes.................................... 1,641 -- -- 1,641
Prepaid expenses and other current assets.................. 1,354 1,203 (185)(c) 2,372
Deferred income taxes...................................... 4,633 59 875(c) 5,567
-------- ------- -------- --------
Total current assets................................... 83,304 25,607 14,207 123,118
Unexpended bond proceeds................................... 3,937 -- -- 3,937
Deferred income taxes...................................... 5,087 -- -- 5,087
Property, plant and equipment, net......................... 149,545 9,461 6,425(c) 165,431
Goodwill................................................... -- 2,013(c) 2,013
Other noncurrent assets.................................... 4,588 -- 4,944(b)(c) 9,532
-------- ------- -------- --------
Total assets........................................... $246,461 $35,068 $ 27,589 $309,118
======== ======= ======== ========
Trade accounts payable..................................... $ 31,421 $ 9,285 -- $ 40,706
Accrued expenses and other liabilities..................... 14,026 4,631 $ (156)(c) 18,501
Restructuring reserve...................................... 7,050 47 3,519(c) 10,616
Current portion of long-term debt.......................... 24,274 -- (19,875)(b)(d) 4,399
-------- ------- -------- --------
Total current liabilities.............................. 76,771 13,963 (16,512) 74,222
Deferred income taxes...................................... 10,442 124 2,570(c) 13,136
Pension liability.......................................... 3,631 -- 425(c) 4,056
Postretirement medical benefits............................ 33,467 -- -- 33,467
Restructuring reserve...................................... 2,767 120 -- 2,887
Other noncurrent liabilities............................... 2,187 397 -- 2,584
Long-term debt............................................. 75,555 -- 61,570(b)(d) 137,125
-------- ------- -------- --------
Total liabilities...................................... 204,820 14,604 48,053 267,477
Redeemable Series A preferred stock........................ 36,012 -- -- 36,012
Redeemable Series B preferred stock........................ 3,288 -- -- 3,288
-------- ------- -------- --------
Total shareholders' equity............................. 2,341 20,464 (20,464)(c) 2,341
-------- ------- -------- --------
Total liabilities and shareholders' equity............. $246,461 $35,068 $ 27,589 $309,118
======== ======= ======== ========
</TABLE>
See accompanying Notes to Unaudited Pro Forma Combined Balance Sheet.
22
<PAGE> 25
NOTES TO UNAUDITED PRO FORMA COMBINED BALANCE SHEET
(DOLLARS IN THOUSANDS)
(a) Represents the adjustments for the Howell acquisition as if it had occurred
on March 31, 1997. For purposes of the Unaudited Pro Forma Balance Sheet, it
has been assumed that the financial condition of Howell as of April 30, 1997
would have been comparable to that as of March 31, 1997. The April 30, 1997
balance sheet for Howell was derived from Howell's filings with the
Commission under the Exchange Act.
(b) Reflects the estimated sources and uses of funds for the Offering and the
acquisition of Howell as if the acquisition had occurred on March 31, 1997:
<TABLE>
<S> <C>
Sources of Funds:
Senior Subordinated Notes Due 2007........................ $124,814
========
Use of Funds:
Acquisition of Howell..................................... $ 22,902
Retirement of existing senior bank credit facilities and
other debt (current portion -- $19,875)................ 83,119
Cash...................................................... 14,699
Discount and estimated expenses........................... 4,094
--------
Total Uses............................................. $124,814
========
</TABLE>
(c) The acquisition of Howell will be accounted for by the purchase method of
accounting, pursuant to which the purchase price is allocated among the
acquired tangible and intangible assets and assumed liabilities in
accordance with their estimated fair market values on the date of
acquisition. The estimated purchase price and preliminary adjustments to
historical book value of Howell as a result of the transaction are as
follows:
<TABLE>
<S> <C>
Decrease in cash for payments made at closing............... $ (1,182)
Write off of prepaid assets................................. (185)
Increase in deferred tax asset for restructuring and pension
reserves.................................................. 875
Increase in property plant and equipment to estimated fair
value..................................................... 6,425
Estimated goodwill.......................................... 2,013
Provision for acquisition fees and expenses................. 850
--------
Net increase in assets...................................... $ 8,796
========
Decrease in accrued liabilities............................. $ (156)
Reserve for plant restructuring............................. 3,519
Increase in deferred tax liability.......................... 2,570
Increase in pension reserve................................. 425
Proceeds from Offering used to finance acquisition.......... 22,902
Elimination of retained earnings as a result of purchase
accounting................................................ (20,464)
--------
Net increase in liabilities and shareholders' equity... $ 8,796
========
</TABLE>
(d) Pro forma long-term debt (including current portion) is derived by adjusting
actual long-term debt of $99,829 for the addition of $124,814 resulting from
the Offering and the reduction of $83,119 for retirement of existing debt.
23
<PAGE> 26
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
ADJUSTMENTS FOR LOBDELL ACQUISITION
-------------------------------------------------------------------
PRO FORMA COMPANY
COMPANY(a) LOBDELL(b) ADJUSTMENTS PRO FORMA
-------------- ---------------- -------------- --------------
PERIOD
APRIL 1, 1996
YEAR ENDED THROUGH YEAR ENDED YEAR ENDED
MARCH 31, 1997 JANUARY 10, 1997 MARCH 31, 1997 MARCH 31, 1997
-------------- ---------------- -------------- --------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
Net sales............................... $136,861 $193,303 -- $330,164
Cost of sales........................... 125,088 186,707 $(6,152)(e) 305,643
-------- -------- ------- --------
Gross profit............................ 11,773 6,596 6,152 24,521
Selling, general and administrative..... 7,685 12,398 (3,290)(g) 16,793
Equipment impairment and non-recurring
charges............................... 287 4,960 -- 5,247(i)
-------- -------- ------- --------
Operating Income (loss)................. 3,801 (10,762) 9,442 2,481
Interest expense........................ 3,388 2,729 5,286(j) 11,403
Other Income (expense).................. 2,201 674 -- 2,875
-------- -------- ------- --------
Income (loss) before income taxes....... 2,614 (12,817) 4,156 (6,047)
Provision (benefit) for income taxes.... 1,065 (4,728) 1,663(l) (2,000)
-------- -------- ------- --------
Net income (loss)....................... $ 1,549 $ (8,089) $ 2,493 $ (4,047)
Financial Ratios and Other Data:
Depreciation and amortization........... $ 5,041 $ 11,635 $ 913 $ 17,589
Capital expenditures.................... 3,326 12,862 -- 16,188
Adjusted EBITDA(n)...................... 11,330 6,507 10,355 28,192
Ratio of Adjusted EBITDA to interest
expense(o)............................ 2.5x
Ratio of net debt to Adjusted
EBITDA(p)............................. 3.2
<CAPTION>
ADJUSTMENTS FOR HOWELL ACQUISITION
-----------------------------------------------------------------
PRO FORMA HOWELL PRO FORMA
HOWELL(c) ADJUSTMENTS PRO FORMA(d) COMBINED
-------------- -------------- -------------- --------------
PERIOD
MAY 1, 1996
THROUGH YEAR ENDED YEAR ENDED YEAR ENDED
APRIL 30, 1997 MARCH 31, 1997 MARCH 31, 1997 MARCH 31, 1997
-------------- -------------- -------------- --------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
Net sales............................... $91,543 -- $91,543 $421,707
Cost of sales........................... 85,477 $ 318(f) 85,795 391,438
------- ------- ------- --------
Gross profit............................ 6,066 (318) 5,748 30,269
Selling, general and administrative..... 4,440 198(h) 4,638 21,431
Equipment impairment and non-recurring
charges............................... -- -- -- 5,247
------- ------- ------- --------
Operating Income (loss)................. 1,626 (516) 1,110 3,591
Interest expense........................ 5 2,319(k) 2,324 13,727
Other Income (expense).................. 399 -- 399 3,274
------- ------- ------- --------
Income (loss) before income taxes....... 2,020 (2,835) (815) (6,862)
Provision (benefit) for income taxes.... 710 (1,134)(m) (424) (2,424)
------- ------- ------- --------
Net income (loss)....................... $ 1,310 $(1,701) $ (391) $ (4,438)
Financial Ratios and Other Data:
Depreciation and amortization........... $ 1,458 $ 516 $ 1,974 $ 19,563
Capital expenditures.................... 3,486 -- 3,486 19,674
Adjusted EBITDA(n)...................... 3,483 -- 3,483 31,675
Ratio of Adjusted EBITDA to interest
expense(o)............................ 2.3x
Ratio of net debt to Adjusted
EBITDA(p)............................. 3.6
</TABLE>
See accompanying Notes to Unaudited Pro Forma Combined Statement of Operations.
24
<PAGE> 27
NOTES TO UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
(DOLLARS IN THOUSANDS)
(a) Statement of Operations Data for the Company for the year ended March 31,
1997 includes operating data for Lobdell for the period subsequent to
acquisition (January 11, 1997 to March 31, 1997).
(b) Statement of Operations Data for Lobdell for the period prior to acquisition
(April 1, 1996 to January 10, 1997).
(c) Represents the adjustments for the Howell acquisition as if it had occurred
on April 1, 1996. For purposes of the Unaudited Pro Forma Statement of
Operations, it has been assumed that the results of operations of Howell for
the twelve months ended April 30, 1997 would have been comparable to the
twelve months ended March 31, 1997. The Statement of Operations Data for the
twelve months ended April 30, 1997 was derived from Howell's filings with
the SEC under the Exchange Act.
(d) As the acquisition of Howell has not been completed, the Unaudited Pro Forma
Statement of Operations does not include any amount of anticipated cost
reductions expected to be implemented by the Company upon the acquisition of
Howell.
(e) Represents the following cost changes as they relate to cost of sales:
<TABLE>
<S> <C>
Cost savings the Company would have realized from the
reduction in direct and indirect hourly and salaried
employees in connection with the acquisition of Lobdell.
Prior to the acquisition of Lobdell, the Company and Lobdell
formulated a plan to reduce the number of employees (the
"Workforce Reduction Plan") at Lobdell. Such plan was
initially implemented by Lobdell in October 1996 and was
continued by the Company subsequent to the acquisition of
Lobdell. The Workforce Reduction Plan was a substantive
factor in the Company's ultimate decision to acquire Lobdell
in addition to its determination of the purchase price. The
Company believes the cost savings it has achieved as a
result of the Workforce Reduction Plan have been achieved
without otherwise effecting or impairing its net sales and
believes such cost savings are permanent in nature. This was
accomplished by creating more efficient manufacturing and
production processes as well as eliminating employees
performing duplicate functions. As of the date of
acquisition (January 10, 1997), approximately 60% of the
employees covered by the Workforce Reduction Plan had been
terminated and approximately 90% of the employees covered by
the Workforce Reduction Plan had been terminated by January
31, 1997.................................................... $(6,501)
In accordance with the purchase method of accounting, the
Company recognized Lobdell's unfunded Accumulated
Postretirement Benefit Obligation ("APBO"), which included
Lobdell's unrecognized transition obligation of
approximately $11,500, at January 10, 1997. Accordingly,
this adjustment reflects the decrease in net periodic
postretirement benefit cost, from April 1, 1996 through
January 10, 1997, had Lobdell's unfunded APBO been
recognized at the beginning of the fiscal year.............. (564)
Increased depreciation expense as a result of the write up
of property, plant and equipment to fair market value as a
part of the acquisition of Lobdell.......................... 913
-------
$(6,152)
=======
</TABLE>
(f) Represents increased depreciation expense as a result of the write up of
property, plant and equipment to fair market value as a part of the purchase
accounting adjustments relating to the pending acquisition of Howell.
25
<PAGE> 28
(g) Represents the following changes as they relate to selling, general and
administrative expenses:
<TABLE>
<S> <C>
Cost savings the Company would have realized from the
reduction in selling and administrative staff as a result of
the acquisition and the Workforce Reduction Plan. See Note
(e)......................................................... $(2,920)
Elimination of commissions paid by Lobdell to Grace Emery
Sales Corporation ("GESC"), a related Domestic International
Sales Corporation. These amounts ultimately represented
dividends paid to the prior shareholders of Lobdell. On a
pro forma basis, assuming the acquisition of Lobdell on
April 1, 1996, GESC was dissolved thereby eliminating the
commission payment.......................................... (370)
-------
$(3,290)
=======
</TABLE>
(h) Represents amortization of acquisition expenses and goodwill generated by
the acquisition.
(i) The provision for equipment impairment and non-recurring charges includes:
(i) on a pro forma basis, for the year ended March 31, 1997, a $3,000
impairment reserve against certain long-lived assets of Laserweld, a $540
provision for liability under the WARN Act, $500 of excess legal and
professional fees associated with the marketing and sale of Lobdell and
$1,207 related to the loss before income tax for the discontinuance of the
Laserweld and Parallel operations and (ii) for the year ended March 31,
1997, the loss before income tax for the discontinuance of the Laserweld and
Parallel operations of $287. Management does not anticipate that these costs
will be a part of future operations.
(j) Represents the net effect on interest expense as a result of (1) the
elimination of historical interest expense after the repayment of the
existing senior bank credit facilities and other outstanding debt, using
proceeds from the Offering and (2) the Offering, using an interest rate of
10.125% per annum. This amount excludes interest on the portion of the
proceeds of the Offering used for the Howell acquisition. See Note (k).
(k) Represents the net effect on interest expense as a result of the use of
proceeds from the Offering for the acquisition of Howell of $22,902.
Interest expense is calculated using an interest rate of 10.125% per annum.
See Note (j).
(l) Represents the estimated income tax effect of the Company's pro forma
adjustments using an effective tax rate of 40%.
(m) Represents the estimated income tax effect of the Howell pro forma
adjustment using an effective rate of 40%.
(n) Adjusted EBITDA is defined as income (loss) before interest, income taxes,
depreciation and amortization and equipment impairment and non-recurring
charges. For the fiscal year ended March 31, 1997, equipment impairment and
non-recurring charges aggregated $287 and on a pro forma basis, for the
fiscal year ended March 31, 1997, equipment impairment and nonrecurring
charges aggregated $5,247, as described in Note (i) above. Adjusted EBITDA
should not be construed as a substitute for income from operations, net
income or cash flow from operating activities for the purpose of analyzing
the Company's operating performance, financial position and cash flows.
(o) Defined as the ratio of Adjusted EBITDA to total interest expense.
(p) Ratio of net debt to Adjusted EBITDA with net debt consisting of total debt
less cash and cash equivalents and unexpended bond proceeds.
26
<PAGE> 29
SELECTED CONSOLIDATED HISTORICAL FINANCIAL DATA
The following table sets forth (i) the selected consolidated historical
financial data of the Predecessor for the years ended March 31, 1993 and 1994
which were derived from the audited consolidated financial statements of the
Predecessor, (ii) selected consolidated historical financial data of the
Predecessor for the year ended March 31, 1995 and the period from April 1, 1995
through October 27, 1995, (iii) selected consolidated historical financial data
of the Company from October 28, 1995 through March 31, 1996 and the year ended
March 31, 1997. The selected consolidated historical financial data for the year
ended March 31, 1995; the period April 1, 1995 through October 27, 1995; and the
period October 28, 1995 through March 31, 1996 was derived from the audited
consolidated financial statements of the Predecessor and the Company, which are
included elsewhere in this Prospectus, together with the report of Deloitte &
Touche, independent accountants. The selected consolidated historical financial
data for the year ended March 31, 1997 was derived from the audited consolidated
financial statements of the Company, which are included elsewhere in this
Prospectus, together with the report of Price Waterhouse LLP, independent
accountants. The following table should be read in conjunction with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," "Pro Forma Combined Financial Data," and the Consolidated Financial
Statements of the Company and the related notes and other financial information
presented elsewhere in this Prospectus.
<TABLE>
<CAPTION>
HISTORICAL
------------------------------------------------------------------------------------
PREDECESSOR COMPANY
--------------------------------------------------- ------------------------------
APRIL 1, 1995 - OCTOBER 28, 1995 -
MARCH 31, MARCH 31, MARCH 31, OCTOBER 27, MARCH 31, MARCH 31,
1993(a) 1994(a) 1995 1995 1996 1997
--------- --------- --------- --------------- ------------------ ---------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Net sales............................ $65,169 $65,182 $75,097 $49,043 $35,572 $136,861
Gross profit......................... 5,970 5,955 4,206 2,148 3,948 11,773
Selling, general and
administrative..................... 1,889 2,164 4,554 3,922 2,235 7,685
Equipment impairment and nonrecurring
charges(b)......................... -- -- -- -- -- 287
------- ------- ------- ------- -------- --------
Operating income (loss).............. 4,081 3,791 (348) (1,774) 1,713 3,801
Interest expense..................... 1,904 1,658 1,267 1,048 1,096 3,388
Other income (expense)............... -- -- -- -- -- 2,201
Income (loss) before income taxes.... 2,177 2,133 (1,615) (2,822) 617 2,614
Provision (benefit) for income
taxes.............................. 56 706 (349) (938) 202 1,065
------- ------- ------- ------- -------- --------
Net income (loss).................... $ 2,121 $ 1,427 $(1,266) $(1,884) $ 415 $ 1,549
======= ======= ======= ======= ======== ========
BALANCE SHEET DATA (END OF PERIOD):
Cash and cash equivalents............ $ 1,683 $ 4,261 -- -- -- $ 9,671
Accounts receivable.................. 10,256 7,936 $ 9,835 $13,312 $ 8,338 47,626
Inventories.......................... 3,205 3,542 4,170 4,429 3,719 13,411
Total assets......................... 39,727 36,127 41,523 59,770 49,200 246,461
Total debt........................... 15,595 13,396 12,907 23,233 26,758 99,829
Redeemable preferred stock........... -- -- -- -- -- 39,300
Total shareholders equity............ 12,590 12,406 10,833 9,329 935(c) 2,341
OTHER DATA:
Depreciation and amortization........ $ 1,825 $ 1,747 $ 1,413 $ 919 $ 687 $ 5,041
Capital expenditures................. 870 920 4,384 5,111 3,466 3,326
Adjusted EBITDA(d)................... 5,906 5,538 1,065 (855) 2,400 11,330
Gross margin(e)...................... 9.16% 9.14% 5.60% 4.38% 11.10% 8.60%
Adjusted EBITDA margin(f)............ 9.06 8.50 1.42 NM 6.75 8.28
Ratio of earnings to fixed
charges(g)......................... 2.1 2.2 -- -- 1.5 1.7
</TABLE>
See Notes to Selected Consolidated Historical Financial Data.
- -------------------------
(a) Reflects the audited financial statements of the Predecessor prepared in
accordance with Canadian generally accepted accounting principals, with
Canadian dollars being converted to a U.S. dollar equivalent using average
Canadian to U.S. foreign currency exchange rates of 1.2326 and 1.3810,
respectively, for the periods ended March 31, 1993 and March 31, 1994.
(b) This provision includes income before taxes for the discontinuance of
Laserweld and Parallel. Management does not anticipate that these costs will
be a part of future operations.
(c) The reduction in equity of $8.4 million from the period ended October 27,
1995 to March 31, 1996, is primarily a result of the elimination of the
Predecessor's equity as a part of the purchase accounting adjustments made
upon the acquisition of the Predecessor on October 27, 1995.
(d) Adjusted EBITDA is defined as income (loss) before interest, income taxes,
depreciation and amortization and equipment impairment and non-recurring
charges. For the fiscal year ended March 31, 1997, equipment impairment and
non-recurring charges aggregated $0.3 million. Adjusted EBITDA should not be
construed as a substitute for income from operations, net income or cash
flow from operating activities for the purpose of analyzing the Company's
operating performance, financial position and cash flows.
(e) Gross margin is defined as gross profit as a percent of net sales for each
of the applicable periods.
(f) Adjusted EBITDA margin is defined as Adjusted EBITDA as a percent of net
sales for each of the applicable periods.
(g) For purposes of this computation, earnings consist of income (loss) before
income taxes plus fixed charges. Fixed charges consist of interest on
indebtedness plus that portion of rental expense representative of the
interest factor. For fiscal 1995, the Company's earnings were insufficient
to cover fixed charges by $1.6 million. For the period April 1, 1995 to
October 27, 1995, the Company's earnings were insufficient to cover fixed
charges by $2.8 million.
27
<PAGE> 30
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
The following management's discussion and analysis of financial condition
and results of operations should be read in conjunction with the "Pro Forma
Combined Financial Data" and the Consolidated Financial Statements of the
Company and notes thereto included elsewhere in this Prospectus. The historical
information for the fiscal year ended March 31, 1997 includes the Lobdell
results of operations for the period subsequent to its acquisition. For
comparative purposes, the financial information for the fiscal year ended March
31, 1996 represents the combination of the results of operations for the
Predecessor for the period from April 1, 1995 to October 27, 1995 together with
the results of operations of the Company from October 28, 1995 through March 31,
1996 (the period subsequent to the acquisition of the Predecessor by the
Company). The financial statements of the Predecessor and the Company in the two
combined periods are not comparable in certain respects due to differences
between the cost basis of certain assets held by the Company versus that of the
Predecessor, resulting in reduced depreciation and amortization charges
subsequent to October 27, 1995, changes in accounting policies and the recording
of certain liabilities at the date of acquisition in connection with the
purchase of the Predecessor by the Company. Accordingly, the combination of
these two periods does not purport to represent what the results of operations
of the Company would have been on a pro forma basis had it acquired the
Predecessor on April 1, 1995.
Fiscal Year Ended March 31, 1997 Compared to Fiscal Year Ended March 31, 1996
Net Sales -- Net sales for the year ended March 31, 1997 were $136.9
million, including the net sales of Lobdell from January 10, 1997 (the
"Acquisition Date") through March 31, 1997. This was an increase of $52.3
million or 61.8% as compared to net sales for the fiscal year ended March 31,
1996 of $84.6 million. The increase was due principally to the acquisition of
Lobdell and was partially offset by lower sales volume due to model changeovers.
On a pro forma basis, if Lobdell net sales were included with that of the
Company for the entire fiscal year ended March 31, 1997, net sales would have
been $330.2 million, an increase of $245.6 million as compared to the prior
year.
Gross Profit -- Gross profit was $11.8 million or 8.6% of net sales for the
year ended March 31, 1997 as compared to $6.1 million or 7.2% of net sales for
the year ended March 31, 1996. This represents an increase of $5.7 million, or
93.4% as compared to the prior year. The increase was primarily a result of
higher margins on Lobdell sales for the eighty day period from the Acquisition
Date through March 31, 1997. Gross profit also increased due to (i) workforce
reductions, (ii) improved materials cost management which resulted in lower raw
material costs and (iii) strong sales in the light truck and SUV markets, the
Company's largest sales segments and those which produce its highest margins.
The increased gross profit was partially offset by costs associated with the
production launch of the Saturn Coupe stampings.
On a pro forma basis with Lobdell included for the entire fiscal year,
gross profit for the fiscal year ended March 31, 1997 would have been $24.5
million or 7.4% on net sales of $330.2 million. On a pro forma basis, the
Company's gross margin was lower due to operational inefficiencies existing at
Lobdell prior to acquisition. Subsequent to the acquisition, actions taken to
correct those inefficiencies improved the Company's gross margin as reflected in
the historical results for the year ended March 31, 1997 where the acquisition
of Lobdell is included only for the period subsequent to the Acquisition Date.
Selling, General and Administrative Expenses ("SG&A") -- SG&A expenses were
$7.7 million or 5.6% of net sales for the year ended March 31, 1997 as compared
to $6.2 million or 7.3% of net sales for the year ended March 31, 1996. The
decrease as a percentage of net sales was a result of efficiencies and cost
reduction programs undertaken by Company management. Specifically, the reduction
in SG&A expenses as a percentage of net sales resulted from a restructuring of
the sales and product engineering functions into customer focused business
units.
Operating Income -- Income from operations was $3.8 million or 2.8% of net
sales for the year ended March 31, 1997 as compared to a deficit of $0.1 million
for the year ended March 31, 1996. The improvement
28
<PAGE> 31
of $3.9 million was a result of improved gross profit of $5.7 million, partially
offset by increased SG&A expenses of $1.5 million.
Other Income -- Other income for the year ended March 31, 1997 was $2.2
million or 1.6% of net sales due primarily to foreign currency exchange
transactions. No significant other income was earned for the year ended March
31, 1996.
Interest Expense -- Interest expense for the year ended March 31, 1997 was
$3.4 million or 2.5% of net sales, an increase of $1.3 million over the interest
expense for the year ended March 31, 1996. While interest expense for both
periods remained constant at 2.5% of net sales, the increase of $1.3 million was
a result of variations in base lending rates and additional borrowings resulting
from the acquisition of Lobdell.
Income Tax -- Income tax expense was $1.1 million or 0.8% of net sales for
the period ended March 31, 1997 as compared to a benefit of $0.7 million or 0.8%
of net sales for the year ended March 31, 1996. The increased income tax expense
of $1.8 million is a result of the $4.8 million increase in income before taxes
for the year ended March 31, 1997 as compared to the previous year.
Net Income -- Net income was $1.5 million or 1.1% of net sales for the year
ended March 31, 1997 as compared to a loss of $1.5 million or 1.8% of net sales
for the year ended March 31, 1996. The improvement of $3.0 million was a result
of improved operating income of $3.9 million and increased other income of $2.2
million. The increase in net income was partially offset by increased interest
expense and income taxes of $1.3 million and $1.8 million, respectively.
Adjusted EBITDA -- Adjusted EBITDA was $11.3 million or 8.3% of net sales
for the year ended March 31, 1997. This represented an increase of $9.8 million
over Adjusted EBITDA of $1.5 million or 1.8% of net sales for the year ended
March 31, 1996. The increase was a result of: (i) a $5.7 million improvement in
gross profit, (ii) an increase in other income of $2.2 million and (iii) $3.4
million in additional depreciation. This increase was partially offset by a $1.5
million increase in SG&A expenses. On a pro forma basis with Lobdell included
for the entire fiscal year, Adjusted EBITDA for the year ended March 31, 1997
was $28.2 million or 8.5% of net sales, an increase of $26.7 million as compared
to the prior year.
Fiscal Year Ended March 31, 1996 Compared to Fiscal Year Ended March 31, 1995
Net Sales -- Net sales for the year ended March 31, 1996 were $84.6
million, an increase of $9.5 million or 12.6% from $75.1 million in the year
ended March 31, 1995. The increase was due principally to the continued growth
of the light truck and SUV market segments, specifically the production launch
of the K-truck control arm for GM's full size, four wheel drive light trucks and
SUVs.
Gross Profit -- Gross profit was $6.1 million, or 7.2% of net sales, for
the year ended March 31, 1996 as compared to $4.2 million, or 5.6% of net sales,
for the year ended March 31, 1995. This represented an increase of $1.9 million,
or 45.2% as compared to the prior year. The increase in gross profit was a
result of actions taken by management subsequent to the acquisition of the
Predecessor pursuant to which certain manufacturing processes were implemented
to improve efficiency in the production of the GM light truck and SUV control
arms. The improvement in manufacturing was combined with a reduction in the
salary and hourly workforce based upon the implementation of a comprehensive
business plan designed to reduce costs.
Selling, General and Administrative Expenses -- SG&A expenses were $6.2
million or 7.3% of net sales for the year ended March 31, 1996 as compared to
$4.6 million, or 6.1% of net sales, for the year ended March 31, 1995. The
increase was a result of the creation of an in-house sales and engineering team
dedicated to the development of new business. The Predecessor's sales were
primarily handled by a manufacturer's representative firm.
Operating Income -- Income from operations was a deficit of $0.1 million
for the year ended March 31, 1996 as compared to a deficit of $0.3 million for
the year ended March 31, 1995. The improvement of $0.2 million was a result of
increased gross profit and continued strong sales of light trucks and SUVs. The
increase was partially offset by increased SG&A expenses related to the creation
of an in-house sales and engineering group.
29
<PAGE> 32
Interest Expense -- Interest expense was $2.1 million or 2.5% of net sales
for the year ended March 31, 1996 as compared to $1.3 million or 1.7% of net
sales for the year ended March 31, 1995. The increase of $0.8 million was a
result of increased debt related to the acquisition of the Predecessor by the
Company.
Income Tax -- Income tax was a benefit of $0.7 million or 0.8% of net sales
for the period ended March 31, 1996 as compared to a benefit of $0.3 million or
0.4% of net sales for the year ended March 31, 1995. The increased benefit of
$0.4 million was primarily the result of the increased loss before taxes for the
year ended March 31, 1996 and changes in the effective tax rate.
Net Income -- The Company had a net loss of $1.5 million or 1.8% of net
sales for the period ended March 31, 1996 as compared to a net loss of $1.3
million or 1.7% of net sales for the year ended March 31, 1995. The increased
loss of $0.2 million was a result of increased SG&A and interest expense of $1.6
million and $0.8 million, respectively, and was partially offset by improved
gross profit.
Adjusted EBITDA -- Adjusted EBITDA was $1.5 million or 1.8% of net sales
for the year ended March 31, 1996 as compared to $1.1 million, or 1.5% of net
sales for the year ended March 31, 1995. The increase of $0.4 million as
compared to the prior year was primarily a result of improved gross profit of
$1.9 million and $0.2 million in additional depreciation. The increase was
partially offset by increased SG&A expenses of $1.6 million.
LIQUIDITY, CAPITAL RESOURCES AND FINANCIAL CONDITION
Net income adjusted for non-cash charges generated approximately $8.5
million of cash for the year ended March 31, 1997. Offsetting this increase in
cash was a net increase in accounts receivable, customer tooling and other
noncurrent assets of $7.0 million, a decrease in accrued employee compensation
of $6.0 million and other working capital requirements of $3.3 million,
resulting in a use of cash from operating activities of $7.8 million for the
year ended March 31, 1997. During fiscal 1997, the Company used approximately
$12.3 million for investing activities including transaction related expenses
incurred in connection with the acquisition of Lobdell and the purchase of
property and equipment. These cash requirements were funded by approximately
$29.8 million in borrowings.
Capital expenditures were $3.3 million, or 2.4% of net sales for the year
ending March 31, 1997 as compared to $8.6 million, or 10.2% of net sales for the
year ending March 31, 1996. The decrease of $5.3 million or 61.6%, was due
primarily to the timing of capital expenditures relating to major production
launches, specifically the production launch of the Saturn Coupe stampings in
fiscal 1996. On a pro forma basis including Lobdell for the full year, capital
expenditures were $16.2 million or 4.9% of net sales for fiscal 1997 and
principally consisted of investments to support new business (primarily the
press line for the Saturn Coupe and expansion of K-truck control arm capacity),
laser welding equipment, press equipment, safety and maintenance equipment,
robotic automation and other productivity improvement expenditures, and other
items including computers, welding equipment, vehicles and paint equipment. In
addition, on a pro forma basis for Lobdell and the acquisition of Howell the
Company would have had capital expenditures of $19.6 million or 4.6% of net
sales for fiscal 1997.
For fiscal 1998 (excluding Howell), the Company's capital expenditures are
expected to be $15.9 million; consisting of a $7.4 million investment to support
new business (primarily the Innovate Program); $1.3 million related to the start
up of the Mexican operations; $2.0 million for the purchase of scrap handling
systems; $0.7 million for robotic automation upgrades; $1.2 million for press
rebuilds; $1.8 million in productivity automation equipment; and $1.5 million in
other expenditures including health and maintenance items, welders and water
pre-treatment system. Assuming the acquisition of Howell is consummated, the
Company plans to spend an additional $4.2 million on capital expenditures in
fiscal 1998.
The Company has available net operating loss carry forwards at March 31,
1997 for Canadian income taxes. These net operating loss carry forwards have
future Canadian tax benefits of approximately $2.9 million. The Canadian net
operating losses can be carried forward indefinitely. The Company also has
Alternative Minimum Tax Credit carry forwards at March 31, 1997 applicable to
U.S. taxes for $3.0 million, which can be carried forward indefinitely.
30
<PAGE> 33
The Company believes that cash generated from operations, together with
amounts available under the Senior Credit Facility and unused portions of the
proceeds from the Offering, will be adequate to meet its debt service
requirements, capital expenditures and working capital needs for the foreseeable
future, although no assurance can be given in this regard. The Company's future
operating performance and ability to service or refinance the Notes and to
extend or refinance its other indebtedness will be subject to future economic
conditions and to financial, business and other factors that are beyond the
Company's control.
31
<PAGE> 34
THE EXCHANGE OFFER
Pursuant to the Registration Agreement, the Company agreed (i) to file a
registration statement with respect to a registered offer to exchange the Old
Notes for the New Notes, which will have terms substantially identical in all
material respects to the Old Notes (except that the New Notes will not contain
terms with respect to transfer restrictions, registration rights and certain
interest rate step-up provisions) within 45 days after the date of original
issuance of the Old Notes, and (ii) to use reasonable best efforts to cause such
registration statement to become effective under the Securities Act at the
earliest possible time but in any event no later than 120 days after issuance of
the Old Notes. In the event that applicable law or interpretations of the Staff
of the Commission do not permit the Company to file the registration statement
containing this Prospectus or to effect the Exchange Offer, or if certain
holders of the Old Notes notify the Company that they are prohibited by law or
Commission policy from participating in the Exchange Offer, or subject to other
restrictions, the Company will use its reasonable best efforts to cause to
become effective the shelf registration statement with respect to the resale of
the Old Notes and to keep the shelf registration statement effective until the
earlier of three years following the date the shelf registration statement is
declared effective by the Commission and such time as all the Notes have been
sold thereunder. Holders of Old Notes do not have any appraisal or dissenters'
rights in connection with the Exchange Offer.
TERMS OF THE EXCHANGE OFFER; PERIOD FOR TENDERING OLD NOTES
Upon the terms and subject to the conditions set forth in this Prospectus
and in the accompanying Letter of Transmittal (which together constitute the
Exchange Offer), the Company will accept for exchange Old Notes which are
properly tendered on or prior to the Expiration Date and not withdrawn as
permitted below. As used herein, the term "Expiration Date" means 5:00 p.m., New
York City time, on , 1997; provided, however, that if the
Company has extended the period of time for which the Exchange Offer is open,
the term "Expiration Date" means the latest time and date to which the Exchange
Offer is extended.
As of the date of this Prospectus, $125.0 million aggregate principal
amount of the Old Notes are outstanding. This Prospectus, together with the
Letter of Transmittal, is first being sent on or about ,
1997 to all holders of Old Notes known to the Company. The Company's obligation
to accept Old Notes for exchange pursuant to the Exchange Offer is subject to
certain conditions as set forth under "-- Certain Conditions to the Exchange
Offer" below.
The Company expressly reserves the right, at any time or from time to time,
to extend the period of time during which the Exchange Offer is open, and
thereby delay acceptance for any exchange of any Old Notes, by giving notice of
such extension to the holders thereof. During any such extension, all Old Notes
previously tendered will remain subject to the Exchange Offer and may be
accepted for exchange by the Company. Any Old Notes not accepted for exchange
for any reason will be returned without expense to the tendering holder thereof
as promptly as practicable after the expiration or termination of the Exchange
Offer.
The Company expressly reserves the right to amend or terminate the Exchange
Offer, and not to accept for exchange any Old Notes not theretofore accepted for
exchange, upon the occurrence of any of the conditions of the Exchange Offer
specified below under "-- Certain Conditions to the Exchange Offer." The Company
will give notice of any extension, amendment, non-acceptance or termination to
the holders of the Old Notes as promptly as practicable, such notice in the case
of any extension to be issued no later than 9:00 a.m., New York City time, on
the next business day after the previously scheduled Expiration Date.
PROCEDURES FOR TENDERING OLD NOTES
The tender to the Company of Old Notes by a holder thereof as set forth
below and the acceptance thereof by the Company will constitute a binding
agreement between the tendering holder and the Company upon the terms and
subject to the conditions set forth in this Prospectus and in the accompanying
Letter of Transmittal. Except as set forth below, a holder who wishes to tender
Old Notes for exchange pursuant to the Exchange Offer must transmit a properly
completed and duly executed Letter of Transmittal, including all other documents
required by such Letter of Transmittal, to First Trust National Association,
(the "Exchange Agent") at one of the addresses set forth below under "Exchange
Agent" on or prior to the Expiration Date.
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<PAGE> 35
In addition, either (i) certificates for such Old Notes must be received by the
Exchange Agent along with the Letter of Transmittal, or (ii) a timely
confirmation of a book-entry transfer (a "Book-Entry Confirmation") of such Old
Notes, if such procedure is available, into the Exchange Agent's account at The
Depository Trust Company (the "Book-Entry Transfer Facility") pursuant to the
procedure for book-entry transfer described below, must be received by the
Exchange Agent prior to the Expiration Date, or (iii) the holder must comply
with the guaranteed delivery procedures described below. THE METHOD OF DELIVERY
OF OLD NOTES, THE LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS IS AT
THE ELECTION AND RISK OF THE HOLDER. IF SUCH DELIVERY IS BY MAIL, IT IS
RECOMMENDED THAT REGISTERED MAIL, PROPERLY INSURED, WITH RETURN RECEIPT
REQUESTED, BE USED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE
TIMELY DELIVERY. NO LETTERS OF TRANSMITTAL OR OLD NOTES SHOULD BE SENT TO THE
COMPANY.
Any beneficial owner whose Old Notes are registered in the name of a
broker, dealer, commercial bank, trust company or other nominee and who wishes
to tender should contact the registered holder promptly and instruct such
registered holder of Old Notes to tender on such beneficial owner's behalf. If
such beneficial owner wishes to tender on such owner's own behalf, such owner
must, prior to completing and executing the Letter of Transmittal and delivering
such owner's Old Notes, either make appropriate arrangements to register
ownership of the Old Notes in such owner's name or obtain a properly completed
bond power from the registered holder of Old Notes. The transfer of registered
ownership may take considerable time and may not be able to be completed prior
to the Expiration Date.
Signatures on a Letter of Transmittal or a notice of withdrawal, as the
case may be, must be guaranteed unless the Old Notes surrendered for exchange
pursuant thereto are tendered (i) by a registered holder of the Old Notes who
has not completed the box entitled "Special Issuance Instruction" or "Special
Delivery Instructions" on the Letter of Transmittal, or (ii) for the account of
an Eligible Institution (as defined below). 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 guarantees must be by a firm which is a member
of a registered national securities exchange or a member of the National
Association of Securities Dealers, Inc. or by 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 which is a
member of one of the recognized signature guarantee programs identified in the
Letter of Transmittal (collectively, "Eligible Institutions"). If Old Notes are
registered in the name of a person other than a signer of the Letter of
Transmittal, the Old Notes surrendered for exchange must be endorsed by, or be
accompanied by a written instrument or instruments of transfer or exchange, in
satisfactory form as determined by the Company in its sole discretion, duly
executed by, the registered holder with the signature thereon guaranteed by an
Eligible Institution. If the Letter of Transmittal or any Old Notes or powers of
attorney are signed by trustees, executors, administrators, guardians,
attorneys-in-fact, officers of corporations or others acting in a fiduciary or
representative capacity, such persons should so indicate when signing, and,
unless waived by the Company, proper evidence satisfactory to the Company of
their authority to so act must be submitted.
All questions as to the validity, form, eligibility (including time of
receipt) and acceptance of Old Notes tendered for exchange will be determined by
the Company in its sole discretion, which determination shall be final and
binding. The Company reserves the absolute right to reject any and all tenders
of any particular Old Notes not properly tendered or to not accept any
particular Old Notes which acceptance might, in the judgment of the Company or
its counsel, be unlawful. The Company also reserves the absolute right to waive
any defects or irregularities or conditions of the Exchange Offer as to any
particular Old Notes either before or after the Expiration Date (including the
right to waive the ineligibility of any holder who seeks to tender Old Notes in
the Exchange Offer). The interpretation of the terms and conditions of the
Exchange Offer as to any particular Old Notes either before or after the
Expiration Date (including the Letter of Transmittal and the instructions
thereto) by the Company shall be final and binding on all parties. Unless
waived, any defects or irregularities in connection with tenders of Old Notes
for exchange must be cured within such reasonable period of time as the Company
shall determine. Neither the Company, the Exchange Agent nor any other
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<PAGE> 36
person shall be under any duty to give notification of any defect or
irregularity with respect to any tender of Old Notes for exchange, nor shall any
of them incur any liability for failure to give such notification.
By tendering, each broker-dealer holder will represent to the Company that,
among other things, the New Notes acquired pursuant to the Exchange Offer are
being obtained in the ordinary course of business of the holder and any
beneficial holder, that neither the holder nor any such beneficial holder has an
arrangement or understanding with any person to participate in the distribution
of such New Notes and that neither the holder nor any such other person is an
"affiliate," as defined under Rule 405 of the Securities Act, of the Company. If
the holder is not a broker-dealer, the holder must represent that it is not
engaged in nor does it intend to engage in a distribution of the New Notes.
ACCEPTANCE OF OLD NOTES FOR EXCHANGE; DELIVERY OF NEW NOTES
For each Old Note accepted for exchange, the holder of such Old Note will
receive a New Note having a principal amount equal to that of the surrendered
Old Note. For purposes of the Exchange Offer, the Company shall be deemed to
have accepted properly tendered Old Notes for exchange when, as and if the
Company has given oral and written notice thereof to the 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 of certificates for such Old Notes or a timely Book-Entry
Confirmation of such Old Notes into the Exchange Agent's account at the
Book-Entry Transfer Facility, a properly completed and duly executed Letter of
Transmittal and all other required documents. If any tendered Old Notes are not
accepted for any reason set forth in the terms and conditions of the Exchange
Offer or if Old Notes are submitted for a greater principal amount than the
holder desires to exchange, such unaccepted or non-exchanged Old Notes will be
returned without expense to the tendering holder thereof (or, in the case of Old
Notes tendered by book-entry transfer into the Exchange Agent's account at the
Book-Entry Transfer Facility pursuant to the book-entry transfer procedures
described below, such non-exchanged Old Notes will be credited to an account
maintained with such Book-Entry Transfer Facility) as promptly as practicable
after the expiration of the Exchange Offer.
BOOK-ENTRY TRANSFER
Any financial institution that is a participant in the Book-Entry Transfer
Facility's systems may make book-entry delivery of Old Notes by causing the
Book-Entry Transfer Facility to transfer such Old Notes into the Exchange
Agent's account at the Book-Entry Transfer Facility in accordance with such
Book-Entry Transfer Facility's procedures for transfer. However, although
delivery of Old Notes may be effected through book-entry transfer at the
Book-Entry Transfer Facility, the Letter of Transmittal or facsimile thereof
with any required signature guarantees and any other required documents must, in
any case, be transmitted to and received by the Exchange Agent at one of the
addresses set forth below under "Exchange Agent" on or prior to the Expiration
Date or the guaranteed delivery procedures described below must be complied
with.
GUARANTEED DELIVERY PROCEDURES
If a registered holder of the Old Notes desires to tender such Old Notes
and the Old Notes are not immediately available, or time will not permit such
holder's Old Notes or other required documents to reach the Exchange Agent
before the Expiration Date, or the procedure for book-entry transfer cannot be
completed on a timely basis, a tender may be effected if (i) the tender is made
through an Eligible Institution, and (ii) prior to the Expiration Date, the
Exchange Agent received from such Eligible Institution a properly competed and
duly executed Notice of Guaranteed Delivery, substantially in the form provided
by the Company (by telegram, telex, facsimile, mail or hand delivery), setting
forth the name and address of the holder of Old Notes and the amount of Old
Notes tendered, stating that the tender is being made thereby and guaranteeing
that within three New York Stock Exchange ("NYSE") trading days after the
Expiration Date, the certificates for all physically tendered Old Notes, in
proper form for transfer, or a confirmation of book-entry transfer of such Old
Notes into the Exchange Agent's account at the Book-Entry Transfer Facility (a
"Book-Entry Confirmation"), as the case may be, a properly completed and duly
executed Letter of
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<PAGE> 37
Transmittal and any other documents required by the Letter of Transmittal will
be deposited by the Eligible Institution with the Exchange Agent.
WITHDRAWAL RIGHTS
Tenders of Old Notes may be withdrawn at any time prior to 5:00 p.m., New
York City time, on the business day prior to the Expiration Date. For a
withdrawal to be effective, a written notice of withdrawal must be received by
the Exchange Agent at one of the addresses set forth below under "Exchange
Agent." Any such notice of withdrawal must specify the name of the person having
tendered the Old Notes to be withdrawn, identify the Old Notes to be withdrawn
(including the principal amount of such Old Notes), and (where certificates for
Old Notes have been transmitted) specify the name in which such Old Notes are
registered, if different from that of the withdrawing holder. If certificates
for Old Notes have been delivered or otherwise identified to the Exchange Agent,
then, prior to the release of such certificates, the withdrawing holder must
also submit the serial numbers of the particular certificates to be withdrawn
and a signed notice of withdrawal with signatures guaranteed by an Eligible
Institution unless such holder is an Eligible Institution. If Old Notes have
been tendered pursuant to the procedure for book-entry transfer described above,
any notice of withdrawal must specify the name and number of the account at the
Book-Entry Transfer Facility to be credited with the withdrawn Old Notes and
otherwise comply with the procedures of such facility. All questions as to the
validity, form and eligibility (including time of receipt) of such notices will
be determined by the Company, whose determination shall be final and binding on
all parties. Any Old Notes so withdrawn will be deemed not to have been validly
tendered for exchange for purposes of the Exchange Offer. Any Old Notes which
have been tendered for exchange but which are not exchanged for any reason will
be returned to the holder thereof without cost to such holder (or, in the case
of Old Notes tendered by book-entry transfer into the Exchange Agent's account
at the Book-Entry Transfer Facility pursuant to the book entry transfer
described above, such Old Notes will be credited to an account maintained with
such Book-Entry Transfer Facility for the Old Notes) as soon as practicable
after withdrawal, rejection of tender or termination of the Exchange Offer.
Properly withdrawn Old Notes may be retendered by following one of the
procedures described under "-- Procedures for Tendering Old Notes" above at any
time on or prior to the Expiration Date.
CERTAIN CONDITIONS TO THE EXCHANGE OFFER
Notwithstanding any other provision of the Exchange Offer, the Company
shall not be required to accept for exchange, or to issue New Notes in exchange
for, any Old Notes and may terminate or amend the Exchange Offer if, at any time
before the acceptance of such Old Notes for exchange or the exchange of New
Notes for such Old Notes, the Company determines that the Exchange Offer
violates applicable law, any applicable interpretation of the Staff of the
Commission or any order of any governmental agency or court of competent
jurisdiction.
The foregoing conditions are for the sole benefit of the Company and may be
asserted by the Company regardless of the circumstances giving rise to any such
condition or may be waived by the Company in whole or in part at any time and
from time to time in its reasonable discretion. The failure by the Company at
any time to exercise any of the foregoing rights shall not be deemed a waiver of
such right and each such right shall be deemed an ongoing right which may be
asserted at any time and from time to time.
In addition, the Company will not accept for exchange any Old Notes
tendered, and no New Notes will be issued in exchange for any such Old Notes, if
at such time any stop order shall be threatened or in effect with respect to the
Registration Statement of which this Prospectus constitutes a part or the
qualification of the Indenture under the Trust Indenture Act of 1939, as amended
(the "TIA"). In any such event the Company is required to use every reasonable
effort to obtain the withdrawal of any stop order at the earliest possible time.
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EXCHANGE AGENT
First Trust National Association, has been appointed as the Exchange Agent
for the Exchange Offer. All executed Letters of Transmittal should be directed
to the Exchange Agent at one of the addresses set forth below. Questions and
requests for assistance, requests for additional copies of this Prospectus or of
the Letter of Transmittal and requests for Notices of Guaranteed Delivery should
be directed to the Exchange Agent addressed as follows.
<TABLE>
<CAPTION>
By Hand By Registered Certified or
(New York depository only) By Hand (all others) Overnight Mail:
-------------------------- -------------------- --------------------------
<S> <C> <C>
First Trust of New York First Trust National First Trust National
100 Wall Street, 20th Floor Association Association
New York, NY 10005 Fourth Floor -- Bond Drop Attn.: Specialized Finance
Attention: Cathy Donohue Window 180 East Fifth Street
180 East Fifth Street St. Paul, MN 55101
St. Paul, MN 55101
</TABLE>
<TABLE>
<CAPTION>
By First Class Mail: By Facsimile: By Telephone:
-------------------- ------------- -------------
<S> <C> <C>
First Trust National (612) 244-1537 (800) 934-6802
Association (For Eligible Institutions Bondholder Services
P.O. Box 64485 Only)
St. Paul, MN 55101
</TABLE>
DELIVERY OTHER THAN AS SET FORTH ABOVE
WILL NOT CONSTITUTE A VALID DELIVERY.
FEES AND EXPENSES
The Company will not make any payments to brokers, dealers or others
soliciting acceptances of the Exchange Offer. The principal solicitation is
being made by mail; however, additional solicitations may be made in person or
by telephone by officers and employees of the Company.
The expenses to be incurred in connection with the Exchange Offer will be
paid by the Company. Such expenses include fees and expenses of the Exchange
Agent and Trustee, accounting and legal fees and printing costs, among others.
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 will be recognized. The expenses of the Exchange Offer will be
capitalized for accounting purposes.
TRANSFER TAXES
Holders who tender their Old Notes for exchange will not be obligated to
pay any transfer taxes in connection therewith, except that holders who instruct
the Company to register New Notes in the name of, or request that Old Notes not
tendered or not accepted in the Exchange Offer be returned to, a person other
than the registered tendering holder will be responsible for the payment of any
applicable transfer tax thereon.
CONSEQUENCES OF FAILURE TO EXCHANGE; RESALES OF NEW NOTES
Holders of Old Notes who do not exchange their Old Notes for New Notes
pursuant to the Exchange Offer will continue to be subject to the restrictions
on transfer of such Old Notes as set forth in the legend thereon as a
consequence of the issuance of the Old Notes pursuant to the exemptions from, or
in transactions not subject to, the registration requirements of, the Securities
Act and applicable state securities law. Old Notes not exchanged pursuant to the
Exchange Offer will continue to accrue interest at 10 1/8% per annum and will
otherwise remain outstanding in accordance with their terms. In general, the Old
Notes may not be
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<PAGE> 39
offered or sold unless registered under the Securities Act, except pursuant to
an exemption from, or in a transaction not subject to, the Securities Act and
applicable state securities laws. The Company does not currently anticipate that
it will register the Old Notes under the Securities Act. However if (i) the
Initial Purchasers so request with respect to Old Notes held by them following
consummation of the Exchange Offer, or (ii) any holder of Old Notes is not
eligible to participate in the Exchange Offer, or (iii) any holder of Old Notes
that participates in the Exchange Offer does not receive freely tradable New
Notes in exchange for Old Notes, the Company is obligated to file a shelf
registration statement on the appropriate form under the Securities Act relating
to the Old Notes held by such persons.
Based on certain interpretive letters issued by the staff of the Commission
to third parties in unrelated transactions, the Company is of the view that New
Notes issued pursuant to the Exchange Offer may be offered for resale, resold or
otherwise transferred by holders thereof (other than (i) any such holder which
is an "affiliate" of the Company within the meaning of Rule 405 under the
Securities Act, or (ii) any broker-dealer that purchases Notes from the Company
to resell pursuant to Rule 144A or any other available exemption) without
compliance with the registration and prospectus delivery provisions of the
Securities Act, provided that such New Notes are acquired in the ordinary course
of such holders' business and such holders have no arrangement or understanding
with any person to participate in the distribution of such New Notes. If any
holder has any arrangement or understanding with respect to the distribution of
the New Notes to be acquired pursuant to the Exchange Offer, such holder (i)
could not rely on the applicable interpretations of the staff of the Commission,
and (ii) must comply with the registration and prospectus delivery requirements
of the Securities Act in connection with a secondary resale transaction. A
broker-dealer who holds Old Notes that were acquired for its own account as a
result of market-making or other trading activities may be deemed to be an
"underwriter" within the meaning of the Securities Act and must, therefore,
deliver a prospectus meeting the requirements of the Securities Act in
connection with any resale of New Notes. Each such 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 in the Letter of Transmittal that it
will deliver a prospectus in connection with any resale of such New Notes. See
"Plan of Distribution."
In addition, to comply with the securities laws of certain jurisdictions,
if applicable, the New Notes may not be offered or sold unless they have been
registered or qualified for sale in such jurisdiction or an exemption from
registration or qualification is available and is complied with. The Company has
agreed, pursuant to the Registration Agreement and subject to certain specified
limitations therein, to register or qualify the New Notes for offer or sale
under the securities or blue sky laws of such jurisdictions as any holder of the
Notes reasonably requests in writing.
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<PAGE> 40
BUSINESS
GENERAL
The Company is a leading Tier 1 designer and producer of high-quality,
engineered metal components, assemblies and modules used by OEMs. The Company's
core products are complex, high value-added products, primarily assemblies
containing multiple stamped parts and various welded, hemmed or fastened
components. These products which range from large structural stampings and
assemblies, including exposed Class A surfaces, to smaller complex welded
assemblies, are used in manufacturing of a variety of SUVs, light and medium
trucks, mini-vans, vans and passenger cars. The Company is the sole source
supplier of these products to its customers. On a pro forma basis, assuming the
acquisition of Lobdell had occurred on April 1, 1996, the Company would have had
net sales of $330.2 million and Adjusted EBITDA of $28.2 million (adjusted for
non-recurring items) for the fiscal year ended March 31, 1997. On a pro forma
basis for the fiscal year ended March 31, 1997, assuming the acquisitions of
Lobdell and Howell had occurred on April 1, 1996, net sales and Adjusted EBITDA
for the Company would have been $421.7 million and $31.7 million, respectively.
Based on pro forma net sales of $330.2 million, management believes the Company
is one of the ten largest suppliers of stampings to the North American
automotive market.
The Company's four largest customers, GM, Ford, CAMI and Saturn, accounted
for approximately 56.0%, 33.0%, 3.0%, and 2.8%, respectively, of the Company's
net sales for the fiscal year ended March 31, 1997, on a pro forma basis for the
Lobdell acquisition. The Company has been providing products directly to GM and
Ford for more than 50 years and has earned outstanding commercial ratings for
its high-quality standards, including GM's Supplier of the Year and Mark of
Excellence Awards, Ford's Q1 Award, and CAMI's President's Award. The Company
also sells its products to other Tier 1 suppliers. For the fiscal year ended
March 31, 1997, approximately 72.0% of the Company's net sales, on a pro forma
basis, were derived from sales of its products manufactured for SUVs, mini-vans,
vans and light trucks. In recent years, SUVs, mini-vans, vans and light trucks
have experienced stronger growth in vehicle production as compared to the
passenger car sector, with a CAGR from 1991 to 1996 of approximately 8.7% as
compared to (0.1%) for the passenger car sector. This sector includes those
platforms and models which have strong consumer demand, such as GM's popular C/K
platform (full-size pickups and the Yukon/Tahoe/Suburban models) and the Ford
Ranger, Explorer and Windstar.
The Company conducts its business through two principal operations, BMG and
Lobdell. Since acquiring BMG in October 1995, management of the Company has
implemented significant cost reductions and achieved manufacturing efficiencies,
including manpower reductions consisting of 49 salaried positions (121 to 72)
and 78 hourly employees (570 to 492) and improved materials cost management,
which includes purchasing cost savings, reduction of scrap and inventory costs,
and improved scheduling of production. These actions resulted in a $4.6 million
improvement in Adjusted EBITDA from the fiscal year ended March 31, 1996 to the
fiscal year ended March 31, 1997. The same strategy utilized at BMG was
implemented at Lobdell immediately following its acquisition in January 1997.
Since its acquisition of Lobdell, the Company has achieved cost reductions
totaling $13.6 million on an annual basis. In addition to the cost reductions,
the Company has been able to implement a number of manufacturing policies that
have improved productivity and quality, notwithstanding overall staff
reductions.
The strategic combination of BMG and Lobdell significantly strengthens the
Company's position as a leading Tier 1 supplier of assemblies and modules to the
OEMs. This combination provides the Company with the critical mass and
capabilities in the areas of design and engineering, sales and marketing, and
product expertise which provide the basis for the Company's strategy of becoming
a fully-integrated, global systems supplier. The Company has already implemented
a successful, focused sales and marketing initiative, which commenced
concurrently with the operational improvements at BMG. As a result, the Company
has been awarded the door assemblies and the side panel package for the Innovate
Program. Management believes these awards from Saturn will generate
approximately $60.0 million of annual net sales beginning with the 1999 model
year.
The Company currently operates eight manufacturing facilities which offer
the latest technologies in metal stamping, welding and assembly production
equipment, including fully-automated hydraulic and
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<PAGE> 41
wide-bed press lines (up to 180 inches), robotic welding cells, robotic hemming
and autophoretic corrosion resistant coating. Since 1992, the Company has
invested in excess of $93.0 million in capital investments to support sales
growth, expand production capabilities and improve efficiency and flexibility.
The Company's diverse line of over 200 presses that range up to 2,500 tons and
state-of-the-art robotic weld assembly and hemming equipment are capable of
manufacturing a broad assortment of parts and assemblies ranging from simple
stampings to full-size, Class A door and closure panels. The Company is one of a
few independent suppliers that has the ability to produce large, complex
stampings, as well as the technical expertise and automated assembly
capabilities that provide high value-added modules such as door apertures and
assemblies, A-pillars, Class A surface products and control arms.
BUSINESS STRATEGY
The principal objective of the Company is to be a leading, full-service,
global Tier 1 supplier of integrated systems based on metal forming and related
manufacturing technologies. Management believes that the Company is well
positioned to benefit from two significant trends in the stamping and metal
forming segments of the automotive industry: outsourcing and consolidation.
Outsourcing of metal stamping has increased in response to competitive pressures
on OEMs to improve quality and reduce capital requirements, labor costs,
overhead and inventory. Consolidation among automotive industry suppliers has
occurred as OEMs have more frequently awarded long-term sole source contracts to
the most capable global suppliers. In addition, OEMs are increasingly seeking
systems suppliers who can provide a complete package of design, engineering,
manufacturing and project management support for an integrated system (such as a
front-end system). The Company intends to capitalize on these trends through
internal development and strategic acquisitions. The key elements of the
Company's strategy include the following:
Provide Full-Service Program Capability. The Company is focused on
developing full-service program capabilities. The Company works with OEMs
throughout the product development process from concept and prototype
development through the design and implementation of manufacturing processes.
The Company's ability to provide the package of design, engineering,
prototyping, tooling, blanking, stamping, assembly, corrosion resistant coating
and custom shipping rack fabrication to its customers creates a unique
capability present in only a limited number of suppliers. The Company believes
this capability will enable it to manage large programs, assist it in reducing
customer program launch time, lower customer costs and increase its margins.
Supply Complex, High Value-Added Systems. As a result of the Company's
technical design and engineering capabilities and its reputation for
highly-efficient manufacturing operations, the Company is able to secure supply
relationships for complex, high value-added products, primarily assemblies and
modules that contain multiple stamped parts and various welded, hemmed or
fastened components. For example, the Company produces the rear door for GM's
Yukon/Tahoe/Suburban vehicles, the lower control arm for GM's four wheel drive
C/K vehicles, the radiator support assembly for GM's W-car (Grand Prix, Century,
Lumina, Monte Carlo and Intrigue), and complex A-pillar assemblies for the Ford
Mustang and the Ford Ranger pickup. These complex products typically generate
higher dollar content per vehicle as well as higher margins for the Company as
compared to simple, individual stampings. The Company plans to capitalize on its
ability to develop and provide integrated modules and assemblies to deliver to
the OEMs an integrated product such as a complete door or front-end system. In
addition to doors, radiator supports and Class A surface components, the Company
has unique expertise with respect to control arms, which will be further
developed as a component part of the entire drive control system.
Focus on High Growth Vehicle Categories. The Company's sales and marketing
efforts have been, and will continue to be, directed toward sectors of the
automotive market that have experienced strong consumer demand. For the fiscal
year ended March 31, 1997, approximately 72.0% of the Company's net sales on a
pro forma basis for the acquisition of Lobdell were derived from sales of
products manufactured for SUVs, mini-vans, vans and light trucks. The SUV market
alone has been the fastest growing segment in the North American new automotive
sales market with 1991 to 1996 vehicle production growth at a CAGR of
approximately 18.3%. Similarly, the Company's sales to the passenger car market
have been, and will continue to be, directed to the segments with stronger sales
growth, including Saturn cars. For example, the growth in
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<PAGE> 42
vehicle production in the passenger car sector has been flat during the past
five years while production of Saturn cars grew from 1992 to 1996 at a CAGR of
approximately 9.2%.
Establish a Global Presence. The Company is actively pursuing strategic
acquisitions and joint-venture opportunities in Europe and intends to pursue
opportunities which will allow the Company to establish a presence in South
America, Asia and other markets in order to serve its customers on a global
basis. Several OEMs have announced certain models designed for the World Car. As
a result, the OEMs have encouraged their existing suppliers to establish foreign
production support for World Car programs. This globalization provides access to
new customers and technology, as well as economic cycle diversification. At the
request of GM de Mexico, the Company is in the process of establishing a
presence in Mexico. In 1997, the Company will begin manufacturing and assembling
components for business recently awarded by GM de Mexico.
Pursue Strategic Acquisitions. In response to the trend in the OEM market
toward "systems suppliers," the Company is focused on making strategic
acquisitions that will enhance the Company's ability to provide integrated
systems (such as a door or front end systems) or otherwise leverage its existing
business by providing additional product, manufacturing and service
capabilities. The Company also intends to pursue acquisitions which will expand
its customer base by providing an entree to new customers, including the North
American operations of Asian and European based OEMs. Consistent with this
strategy, the pending acquisition of Howell provides an entree to Chrysler. The
Company believes that the continuing supplier consolidation in the stamping and
metal forming segments may also provide attractive opportunities to acquire
high-quality companies at favorable prices, including businesses which can be
improved financially through overhead elimination, organizational restructuring,
plant reconfiguration, labor contract negotiations and management changes. The
Company will also pursue acquisitions that enable it to achieve a global
presence.
RECENT DEVELOPMENTS
On May 21, 1997, the Company signed the Merger Agreement pursuant to which
it will consummate the Merger with Howell. Howell is a Tier 1 manufacturer of
high-quality welded subassemblies and detailed stampings used primarily in
suspension system applications in the production of SUVs, light trucks,
mini-vans, vans and passenger cars. Pursuant to the Merger Agreement, the
shareholders of Howell will receive approximately $23.4 million in cash. The
Company also executed a shareholder agreement pursuant to which it has received
from the principal shareholder an option to purchase its Shares, which
constitute approximately 32.6% of the issued and outstanding shares of common
stock of Howell, at any time prior to December 31, 1997, together with such
shareholder's agreement to vote all such Shares in favor of the Merger.
For the nine months ended April 30, 1997, Howell had net sales of $72.4
million and Adjusted EBITDA of $4.2 million. Howell's net sales have grown from
$39.4 million for the fiscal year ended July 31, 1992 to $79.2 million for the
fiscal year ended July 31, 1996. On a pro forma basis for fiscal 1997, assuming
the acquisitions of Lobdell and Howell had occurred on April 1, 1996, net sales
and Adjusted EBITDA for the Company would have been $421.7 million and $31.7
million, respectively.
The acquisition of Howell is consistent with the strategic objectives of
the Company. Howell has a significant relationship with Chrysler and has
developed a niche in designing, engineering and manufacturing suspension control
arms in a variety of configurations and variations depending on drive-train and
suspension application. Approximately 54.0% of Howell's net sales for the nine
months ended April 30, 1997, were derived from acquisitions products used in the
control arm suspension applications. On a pro forma basis assuming the
acquisitions of Lobdell and Howell had occurred on April 1, 1996, the Company
would have derived approximately 23.0% of its net sales from suspension
applications for fiscal 1997.
Howell's expertise in this area is complementary to the Company's and will
enhance its ability to develop key suspension system components. Further,
Howell's sales are principally in the high-growth vehicle categories of SUVs,
light trucks, mini-vans and vans, the same market targeted by the Company. The
acquisition of Howell also provides the Company an entree to Chrysler and will
strengthen the Company's existing relationship with Ford. Sales to Chrysler and
Ford represented 47.0% and 53.0%, respectively, of Howell's net sales for the
nine months ended April 30, 1997. On a pro forma basis for fiscal 1997,
including the full year effect of Lobdell and Howell, (i) the SUV, mini-van, van
and light truck segment represented
40
<PAGE> 43
approximately 75.0% of net sales and (ii) the Company's net sales by major
customers would have been approximately as follows: GM 44.0%; Ford 37.0%;
Chrysler 11.0%; CAMI 2.0%, and Saturn 2.0%.
Howell's two manufacturing facilities, located in Masury, Ohio and Lapeer,
Michigan, have received Chrysler's Gold Pentastar Award for the 1996 model year
and Ford's Q1 rating. In addition, Howell has achieved certification as a
registrant under the QS-9000 program at its Lapeer facility and its
headquarters.
The Company expects that the transaction with Howell will be consummated in
the second quarter of fiscal 1998, subject to the satisfaction of standard
closing conditions.
INDUSTRY TRENDS
The OEM market to which the Company sells its products consists of the
design, engineering, development, production and sale of parts, components,
assemblies and modules or systems (several components assembled together) for
use in the manufacture of new motor vehicles. The Company's performance, growth
and strategic plan are directly related to certain trends within the OEM market.
Since the 1980s, Chrysler, Ford and GM have each been substantially reducing the
number of suppliers that may bid for awards and outsourcing an increasing
percentage of their production requirements. As a result of these trends, the
OEMs are focusing on the development of long-term, sole source relationships
with suppliers who can provide more complex parts, as well as complete
subassemblies and modules on a just-in-time basis while at the same time meeting
strict quality requirements. These requirements are accelerating the trend
toward consolidation of the OEMs supplier base as those suppliers who lack the
capital and production expertise to meet the OEMs needs, either cease to operate
or are merged with larger suppliers. OEMs benefit from outsourcing because
outside suppliers generally have significantly lower cost structures and, as
described below, suppliers can assist in shortening development periods for new
products.
In addition to consolidation and outsourcing, suppliers are participating
earlier in the design and engineering process, providing research, as well as
product development, product testing/validation, prototyping and tooling. OEMs
generally expect Tier 1 suppliers to (i) participate in the design and
engineering of complex assemblies, (ii) develop the required manufacturing
process to deliver these assemblies on a just-in-time basis, and (iii) assume
responsibility for quality control. This results in shorter development times
for new products, as well as higher quality and lower parts costs.
While the focus today by the OEMs is on quality, cost and service, the
Company believes that the focus for the future will be on global capabilities,
innovation and ability to provide value-added products and systems. The OEMs
have been very successful in making high-quality and low cost a minimum
requirement to remain in the industry, as opposed to a competitive advantage for
certain suppliers.
These evolving requirements can best be addressed by suppliers with
sufficient resources to meet such demands. For full-service suppliers such as
the Company, this environment provides an opportunity to grow by obtaining
business previously provided by other suppliers who can no longer meet the
current or future requirements and expectations of the OEMs and by acquisitions
that further enhance product manufacturing and service capabilities. Although
the requirements of the OEMs have already resulted in significant consolidation
of component suppliers in many product segments, the Company believes that many
opportunities exist for further consolidation within the Company's stamping and
metal forming segment.
PRODUCTS
The Company generates the majority of its net sales from large, complex,
high value-added products, primarily assemblies that generally consist of
multiple parts, which the Company stamps and combines with various welded or
fastened components. The Company is the sole source supplier of these complex
modules and assemblies. These products include unexposed components and
assemblies that are intrinsic to the structural integrity of the vehicle such as
A-pillars, radiator supports, floor pans, toe-to-dash panels, frame and
suspension components and reinforcements. In addition to unexposed components
and assemblies, the Company has the capability and expertise to produce Class A
surfaces such as door assemblies, door apertures, rocker panels, fuel filler
doors, and box side outers, which require virtually flawless finishes and
41
<PAGE> 44
more stringent customer requirements than unexposed assemblies. These products
require superior engineering and automated manufacturing and assembly
capabilities due to their complexity and high volume requirements.
While the Company has the capability to produce small stampings, such as
brackets and braces, it focuses on more complex and larger components and
assemblies which typically generate higher dollar content per vehicle as well as
higher margins for the Company. These assemblies, such as the A, B and C
pillars, control arms, door assemblies, door apertures, deck lids and radiator
supports require larger, high tonnage, wide-bed, fully-automated press
capabilities, complex automated weld and hemming assembly, autophoretic
corrosion resistant coating, machining, and automated assembly of purchased
components. The Company was recently awarded the door assembly and side panel
packages for the Innovate Program that are expected to generate approximately
$60.0 million per annum in net sales over a four to five year model life cycle
beginning in 1999. In addition, the Company has been awarded approximately $3.4
million in new business from GM de Mexico providing blanks and assembling floor
assemblies. It is expected that these programs will start in the third and
fourth quarters of fiscal 1998.
In addition to these products and services, the Company designs,
fabricates, paints and assembles custom shipping containers and racks for the
automotive industry. These custom racks and containers are typically designed
for specific components and assemblies and are sold both to OEMs as well as Tier
1 and Tier 2 suppliers. Rack sales for fiscal 1997 were approximately $7.8
million on a pro forma basis for the acquisition of Lobdell.
The chart below details by major customer the Company's major products, the
type of vehicle and the model/platform for which they are produced:
<TABLE>
<CAPTION>
CUSTOMER COMPONENT TYPE MODEL/PLATFORM
- -------- --------- ---- --------------
<S> <C> <C> <C>
General Motors....... Door Assemblies Sport Utility Suburban/Yukon/Tahoe
Door Apertures Suburban/Yukon/Tahoe
Rocker Panels Suburban/Yukon/Tahoe
Lower Control Arms Suburban/Yukon/Tahoe
Door Apertures Light Trucks C/K Full Size Crewcab Pickup
Lower Control Arms C/K Full Size Four Wheel Drive
Rocker Panels C/K Full Size Crewcab Pickup
A-Pillar Inners Mini-Vans Safari/Astro
Struts Safari/Astro
Lower Control Arms Safari/Astro
Toe-to-Dash Panel Medium Duty Commercial Chassis
Floor Assembly Kodiak
Fuel Straps Kodiak
Raised Roof Panel Kodiak
Radiator Supports Passenger Grand Prix, Regal, Intrigue,
Monte Carlo, Lumina
Floor Panels Corvette/EVI
Wheel Houses EVI
Door Beams Grand Am, Achieva
Sun Roof Assembly Malibu, Cutlass
Saturn............... Deck Lid Passenger Sport Coupe
Pillar Reinforcement Sport Coupe
Inner Door Panel Sport Coupe
Window Frame Reinforcement Sport Coupe
Body Side Inners Innovate (1999 Launch)
Door Assemblies Innovate (1999 Launch)
Shelf Panel Innovate (1999 Launch)
Wheel House Inner Innovate (1999 Launch)
</TABLE>
42
<PAGE> 45
<TABLE>
<CAPTION>
CUSTOMER COMPONENT TYPE MODEL/PLATFORM
- -------- --------- ---- --------------
<S> <C> <C> <C>
Ford................. Rear Floor Reinforcement Sport Utility Explorer/Mountaineer
Reinforced Center Body Pillar Explorer/Mountaineer
Rear Seat Back/Floor Assembly Explorer/Mountaineer
B-Pillar Assembly Explorer/Mountaineer
A-Pillar Assemblies Light Trucks Ranger/Mazda
Upper/Lower Back Panels Ranger/Mazda
Back Panel Inside Upper Ranger/Mazda
Roof Panel Assembly Ranger/Mazda
Windshield Header Ranger/Mazda
Box Side Outers Mazda
Load Floors F-Series (250/350 Supercab)
Rear Floor Cargo Assemblies Vans/Mini-Vans Windstar
Dash Panels Windstar
Rear Crossmembers Econoline
Cowl Side Windstar/Econoline/Aerostar
Radiator Supports Windstar (1999 Model)
Roof Rails Econoline
A-Pillar Inners Econoline
Floor Pans Econoline/Windstar
Shock Towers Econoline
Fuel Filler Doors Econoline
Ford................. Control Arms-Front & Rear Passenger Cars Contour/Mystique/Mondeo
(Europe)
Rear Suspension Bar Assembly Contour/Mystique/Mondeo
(Europe)
A-Pillar Assemblies Mustang/Thunderbird/Cougar/
Mark VIII
Pillar Inners Town Car
Frame Rails Mustang
CAMI................. Rear Bumper Sport Utility Geo Tracker/Suzuki Sidekick
Side Frame Member Geo Tracker/Suzuki Sidekick
(Front/Rear)
Door Inner Reinforcement Geo Tracker/Suzuki Sidekick
Floor Bar Geo Tracker/Suzuki Sidekick
Various Underbody Components Geo Tracker/Suzuki Sidekick
Rear Cross Members Passenger Cars Geo Metro/Suzuki Swift
Side Sill Geo Metro/Suzuki Swift
Dash Panel Geo Metro/Suzuki Swift
</TABLE>
DESIGN AND ADVANCED ENGINEERING
The Company strives to maintain a technological advantage through
investment in product development and advanced engineering capabilities that
utilize structured program management techniques in an effort to exceed the
customer's expectations for value and service. The Company's engineering staff
encompasses such disciplines as program management, computer aided design
("CAD"), advanced engineering, manufacturing feasibility, and tooling and
process development. Responsibilities of the Company's engineers include (i)
design, (ii) initial prototype development, (iii) design and implementation of
manufacturing processes, (iv) production feasibility and improvement, and (v)
data management.
As the Company's customers continue to outsource larger assembled systems
which must be designed at earlier stages of vehicle development rather than the
smaller parts which are attached to them, the Company is increasingly required
to utilize advanced engineering resources early in the planning process.
Advanced
43
<PAGE> 46
engineering resources create improved engineering design, CAD feasibility
studies, working prototypes and testing programs to meet customer
specifications. Given this increased demand for early involvement in the design
and engineering aspects of production development, the Company established a new
technical center which houses its engineering and design group. The Company
utilizes structured program management based on the Automotive Industry Action
Group sanctioned Advanced Part Quality Planning principles to ensure part
quality in all phases of design and manufacturing. The Company has established a
data management and CAD department which is able to support all major customer
systems. The Company provides "gray box" engineering capabilities in which the
customer has principal design responsibility while the Company's engineers work
closely with the customer in designing the specifications of the product
material, the part to be produced and the tooling required to produce the
finished product. The Company is also on-line with all major customers which
accelerates the process of design changes.
The Company's design and advanced engineering expertise is an important
differentiating factor in maintaining its relationships with and obtaining new
business from Ford and GM and, in management's judgment, was an essential factor
in winning the Innovate Program business.
CUSTOMERS AND MARKETING
The Company supplies its products on a long-term preferred and sole source
basis, primarily to GM (56.0%), Ford (33.0%), CAMI (3.0%), and Saturn (2.8%)
(percentages are approximates of net sales for the fiscal year ended as of March
31, 1997 on a pro forma basis for the Lobdell acquisition) with the remaining
net sales comprised of sales primarily to other automotive suppliers. The
Company has been providing products directly to GM and Ford for more than 50
years. The Company has been shipping products to GM de Mexico from its
operations in the United States for several years, and during 1997, at the
request of GM de Mexico, the Company will begin manufacturing and assembling
components for GM de Mexico from facilities to be established in Mexico. The
Company believes its presence in Mexico is strategically important and may lead
to several significant new opportunities with GM de Mexico and other OEMs doing
business in Mexico. The Company maintains very strong relationships with its
customers and continually strives to exceed customer expectations and anticipate
customer needs. This approach has enabled the Company to maintain its status as
a long-term supplier with each of its major customers and as part of a limited
group of preferred suppliers invited to bid for platform work.
With the efforts by the OEMs to reduce the product development cycle time,
top suppliers are increasingly included in the early design and development
stages. For example, the Company obtains many of its new orders through a
presourcing process by which the customer invites one or a few preferred
suppliers to manufacture and design a component, assembly or module that meets
certain price, timing and functional parameters. Upon selection at the
development stage, the Company and the customer typically agree to cooperate in
developing the product to meet the specified parameters. Upon completion of the
development stage and the award of the manufacturing business, the Company
receives a blanket purchase order for those components, assemblies or modules
for the life of a vehicle model or platform, which typically range from five to
seven years. Consequently, the key success factors for OEM suppliers now include
total program management that encompasses state-of-the-art design, manufacture
and delivery of high quality products at competitive prices.
The advanced engineering and sales organization at the Company's technical
center offers services few other suppliers have available for their customers.
The group's primary activities are: (i) Quoting/Cost Estimating; (ii)
Assembly/Automation; (iii) CAD Design and Data Control; (iv) Tool
Process/Design; and (v) Program Management. The sales group is divided into
customer oriented business units, each with a business unit manager responsible
for all facets of customer needs, as well as strategies for growing their
particular customer base. The entire group is dedicated to advanced technical
development and servicing a multitude of customers' needs as one team.
44
<PAGE> 47
MANUFACTURING AND FACILITIES
The Company's corporate headquarters, engineering, technical center and
sales offices are currently located in Bloomfield Hills, a suburb of Detroit,
Michigan, close to its core of automotive customers. The Company's eight
manufacturing plants are strategically located in Indiana, Tennessee, Michigan,
and Ontario, Canada near OEM manufacturing sites. These manufacturing plants
aggregate approximately 1.9 million square feet in size and are all
Company-owned. In addition, the Company intends to lease manufacturing and
assembly facilities in Mexico in connection with the recent award of business
from GM de Mexico.
The Company operates over 200 presses ranging from under 100 ton to 2,500
ton capabilities. The Company is capable of producing components and assemblies
from the smallest brackets to full-size, Class A door and closure panels with
its unique wide-bed (180 inch), automated press lines. Production systems
include oil feeders, welding robots, pick and place robots and other
state-of-the-art automation, as well as autophoretic corrosion resistant coating
systems.
As OEMs have increased quality standards and implemented just-in-time and
sequenced delivery/inventory management methods, the consistency of quality, as
well as the timeliness and reliability of shipments by OEM suppliers, have
become crucial in meeting logistical demands of the OEMs and reducing operating
costs of the supplier. The Company has responded by developing and adopting
manufacturing practices that seek to maximize quality and eliminate waste and
inefficiency in its own operations and in those of its customers. The Company's
manufacturing and engineering capabilities enable it to design and build
high-quality, efficient manufacturing systems, processes and equipment. The
Company has invested heavily in its commitment to quality through education of
employees and implementation of cost management and control systems from the
plant floor up.
All suppliers are required to meet numerous quality standards in order to
qualify as a preferred and long-term supplier to the OEMs. The QS-9000 standards
were developed by international and domestic automobile and truck manufacturers
to ensure that their suppliers meet consistent quality standards that can be
independently audited. Ford and GM require that all suppliers be certified
QS-9000 by the end of 1997 and the Company is scheduled to meet that
requirement. The Company has the Q1 rating from Ford at 4 of the 5 plants which
have Ford as a customer. Since the acquisition of Lobdell, the Company has
initiated steps necessary to obtain the Q1 rating at the fifth plant which
management expects to obtain by August 1997.
As part of its full-service supplier development program, the Company is
also undergoing the process of becoming certified by Ford as a Full-Service
Supplier. This certification process, conducted by Ford, ensures that a
Full-Service Supplier meets various Ford requirements relating to quality
standards. The Company expects to be certified by Ford during 1997.
A summary of the Company's major facilities is set forth below:
<TABLE>
<CAPTION>
SIZE PRIMARY
FACILITY (SQ. FT.) EXPERTISE PRODUCTS
-------- --------- --------- --------
<S> <C> <C> <C>
Alma, Michigan.............. 389,000 Class A surfaces, large Radiator Supports, A-Pillars,
stampings and complex Floor Pans, Frame Rails, Deck
stampings and assemblies Lids
Argos, Indiana.............. 386,000 Class A surfaces, large Door Assemblies, Apertures,
panels, complex stampings Floor Panels, Roofs, A-Pillars
and assemblies
Corydon, Indiana............ 200,000 Difficult draw forming and Radiator Supports, A-Pillars,
complex stampings and Cowl Sides
assemblies
Greencastle, Indiana........ 214,000 Large stampings, complex Radiator Supports, A-Pillars,
stampings and assemblies, Seat Backs, Control Arms
autophoretic corrosion
resistant coating
</TABLE>
45
<PAGE> 48
<TABLE>
<CAPTION>
SIZE PRIMARY
FACILITY (SQ. FT.) EXPERTISE PRODUCTS
-------- --------- --------- --------
<S> <C> <C> <C>
Winchester, Indiana......... 185,000 High strength, low-alloy Rocker Panels, various
material, deep draw forming structural components
and complex stampings and
assemblies
Cambridge, Ontario.......... 290,000 Complex assemblies and Radiator Supports, Control
large stampings Arms, Door Inners, A-Pillars
Delhi, Ontario.............. 115,000 High strength, low-alloy Rocker Panels, Control Arms,
material, complex stampings Cross Members
and assemblies
Athens, Tennessee........... 100,000 Welding, painting and Structural steel shipping
assembly racks and containers
Bloomfield Hills,
Michigan(1)............... Executive Offices, Sales,
Marketing and Advanced
Engineering
</TABLE>
- -------------------------
(1) All properties above are owned, with the exception of the Bloomfield Hills
office. This office is leased for a five-year term ending July 31, 2000 and
requires a monthly rent of $8,580. The Company expects to relocate its
Executive, Sales, Marketing and Engineering Staffs within the metropolitan
Detroit area during 1997.
RAW MATERIALS
The cost of raw materials represented approximately 53.0% of net sales of the
Company for the fiscal year ended March 31, 1997 on a pro forma basis for the
Lobdell acquisition. On an annual basis, steel represents approximately 77.0% of
total raw materials purchases. The Company expects to purchase nearly 260,000
tons of steel in fiscal 1998 for use in its production. The remaining 23.0% of
raw materials purchases is represented by various purchased parts such as
forgings, bushings, ball joints, isolators, corrosion resistant coating, and
various fasteners.
The Company participates in steel purchase programs through Ford and GM
wherein the steel is purchased by the OEM from the steel mill and sold to the
Company at a negotiated price. These purchase programs effectively neutralize
the exposure to steel price increases, as any price increases from the steel
mills are either absorbed by the OEM prior to the Company's purchase of the
steel or such increases are reflected in the Company's purchase of the steel and
passed back to the OEM in the product pricing. The Company currently
participates in such a steel purchase program with Ford for substantially all of
its Ford steel requirements and its Canadian operations participate in such a
program with GM. The Company expects that substantially all of its GM steel
requirements will be covered by the GM steel purchase program by December 1997.
COMPETITION
The market for the Company's products is characterized by strong
competition from both captive OEM suppliers and external, non-captive suppliers.
The Company competes with a limited number of competitors that have the physical
assets and technical resources to produce large bed stampings, complex parts and
subassemblies of multiple parts. The Company's largest competitors include The
Budd Company, a subsidiary of Thyssen AG; Magna International Inc.; Tower
Automotive, Inc.; Aetna Industries, Inc.; Ogihara America Corp., a subsidiary of
Marubeni Corp.; Midway Products Corporation; Active Tool & Manufacturing Co.,
Inc.; A.G. Simpson Automotive, Inc.; Mayflower Vehicle Systems Inc.; L&W
Engineering; National Automotive Radiator Manufacturing Company; and divisions
of OEMs with internal stamping and assembly operations.
46
<PAGE> 49
The Company competes for business at the beginning of the development for
new model platforms, as well as the redesign of current models. This process can
begin from two to five years prior to the introduction of the new model. After
the customer awards a program, that supplier is generally designated as the sole
source supplier for the life of that program, which typically lasts 4 to 5 years
for passenger cars and up to 10 years for trucks (particularly for unexposed
structural components and assemblies).
EMPLOYEES
At March 31, 1997, the Company employed approximately 2,100 persons in the
United States and Canada, approximately 470 of whom are employed on a salaried
basis and the balance of whom are hourly employees. Substantially all of the
hourly employees are represented by unions. In the United States, substantially
all of the Company's hourly workers are represented by the UAW through
collective bargaining agreements with six local unions. These individual
agreements which are from three to five years in length expire over the period
March 1998 through January 2000. The agreement with the UAW for the Argos,
Indiana facility is currently scheduled to expire on March 31, 1998 and the
Company expects to enter into early negotiations regarding the UAW contract at
the Argos plant. As of March 31, 1997, substantially all of the Company's hourly
Canadian employees were represented by the CAW. The agreement with the CAW for
the Cambridge, Ontario facility is currently scheduled to expire on September
30, 1997. The Company and the CAW have entered into early negotiations regarding
the CAW contract at the Cambridge plant.
The Company has not experienced any organized work stoppages at any time
during the past ten years. At the present time, the Company believes that its
relations with its employees are good.
REGULATORY MATTERS
The Company's facilities and operations are subject to a wide variety of
federal, state, local, and foreign environmental laws, regulations, and
ordinances, including those related to air emissions, wastewater discharges, and
chemical and hazardous waste management and disposal ("Environmental Laws"). The
Company's operations also are governed by laws relating to workplace safety and
worker health, primarily the Occupational Safety and Health Act, and foreign
counterparts to such laws. In many jurisdictions, these laws are complex and
change frequently. The nature of the Company's operations exposes it to risks of
liabilities or claims with respect to environmental and worker health and safety
matters. There can be no assurance that material costs will not be incurred in
connection with such liabilities or claims.
Based on the Company's experience to date, the Company believes that the
future cost of compliance with existing Environmental Laws (or liability for
known environmental claims) will not have a material adverse effect on the
Company's business, financial condition or results of operations. However,
future events, such as changes in existing Environmental Laws or their
interpretation, may give rise to additional compliance costs or liabilities that
could have a material adverse effect on the Company's business, financial
condition or results of operations. Compliance with more stringent Environmental
Laws, as well as more vigorous enforcement policies of regulatory agencies or
stricter or different interpretations of existing Environmental Laws, may
require additional expenditures by the Company that may be material.
Certain Environmental Laws hold current owners or operators of land or
businesses liable for their own and for previous owners' or operators' releases
of hazardous or toxic substances, materials or wastes, pollutants or
contaminants, including petroleum and petroleum products ("Hazardous
Substances"). Certain laws, including but not limited to CERCLA, may impose
joint and several liability on responsible parties. Because of the Company's
operations, the long history of industrial uses at some of its facilities, the
operations of predecessor owners or operators of certain of the businesses, and
the use, production, and releases of Hazardous Substances at these sites, the
Company is affected by such liability provisions of the Environmental Laws.
Several of the Company's facilities have experienced some level of regulatory
scrutiny in the past and are or may be subject to further regulatory
inspections, future requests for investigation or liability for past disposal
practices.
The Company's Alma, Michigan plant is listed on the Michigan Department of
Environmental Quality ("MDEQ") list of Michigan Sites of Environmental
Contamination. Based on filings with the MDEQ by the
47
<PAGE> 50
current owner of the petroleum refinery which adjoins the Alma Plant property,
the refinery has been determined by the MDEQ to be the source of certain
contamination existing in the eastern area of the Alma plant property. While the
Company is currently conducting certain remedial activity at its Alma plant in
connection with this contamination, the Company may have claims against the
refinery owner relating to this contamination. While the Company does not expect
to incur significant future costs in connection with this matter, the Company
cannot guarantee that such future costs will not be material.
The Resource Conservation and Recovery Act and the regulations thereunder
("RCRA") regulates the generation, treatment and disposal of hazardous wastes.
In the mid-1980s, the Company, through Lobdell, entered into a Consent Agreement
and Final Order with the United States Environmental Protection Agency (the
"EPA") relating to the final closure of a surface water impoundment area at the
Alma plant under RCRA. The Company has remediated the impoundment soils and
sediments and is now implementing a groundwater monitoring program with EPA
approval under RCRA. In addition, the Company is conducting groundwater
monitoring in a separate section of the Alma plant at which contaminants have
been detected by the Company's consultants. Both of these programs may be
affected by the suspected contamination from the petroleum refinery described
above. While future groundwater remediation costs, if any, are not expected to
be material, the Company cannot predict such costs with certainty and no
guarantee can be made that these costs will not be material.
The Company has been named as a potentially responsible party, along with
several other companies, in connection with a former disposal facility located
in the St. Louis, Michigan area. The Company and certain other named parties, in
cooperation with the State of Michigan, currently are undertaking a remedy for
which they are sharing costs. Groundwater at the site is currently being
monitored and while the costs of groundwater remediation, if any, are not
expected to be material, the Company cannot accurately estimate such costs at
this time. See "Risk Factors -- Environmental Risks."
LEGAL PROCEEDINGS
The Company is subject to various claims, lawsuits and administrative
proceedings related to matters arising in the normal course of business. In the
opinion of management, after reviewing the information which is currently
available with respect to such matters and consulting with legal counsel, any
liability which may ultimately be incurred with respect to these matters will
not materially affect the financial position of the Company.
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<PAGE> 51
MANAGEMENT
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth the name, age and position of each of the
directors and executive officers of Oxford Automotive. Each director of Oxford
Automotive will hold office until the next annual meeting of shareholders or
until his successor has been elected and qualified. Officers of Oxford
Automotive serve at the discretion of the Board of Directors.
<TABLE>
<CAPTION>
NAME AGE POSITIONS
---- --- ---------
<S> <C> <C>
Selwyn Isakow............................. 45 Chairman of the Board of Directors
Rex E. Schlaybaugh, Jr. .................. 48 Vice Chairman of the Board of
Directors and Secretary
Steven M. Abelman......................... 46 Director, President and Chief
Executive Officer
Manfred J. Walt........................... 44 Director
Donald C. Campion......................... 48 Senior Vice President-Chief
Financial Officer
Lawrence C. Cornwall...................... 50 Senior Vice President-Sales and
Engineering
John H. Ferguson.......................... 49 Vice President-Financial Operations
and Assistant Secretary
</TABLE>
Selwyn Isakow, Chairman of the Board of Directors. Mr. Isakow has been the
President and a director of Oxford Automotive since its inception in 1995 and
was appointed Chairman of the Board in May 1997. Since 1985, Mr. Isakow has been
the President of The Oxford Investment Group, Inc. ("Oxford Investment"), a
private investment and corporate development company that acquires majority
equity positions on behalf of its principals in industrial products
manufacturing, financial services, niche distribution and other selected
companies. Mr. Isakow generally serves as Chairman of the Board and a director
of all such portfolio companies. Mr. Isakow is also a director of Champion
Enterprises, Inc. and Ramco Gershenson Properties Trust, and serves on the
boards of numerous community organizations. From 1982 to 1985, Mr. Isakow was
the Executive Vice President of Comerica Incorporated, a regional bank holding
company, and from 1978 to 1982, was a principal at Booz, Allen and Hamilton,
management consultants.
Rex E. Schlaybaugh, Jr., Vice Chairman of the Board of Directors and
Secretary. r. Schlaybaugh has been the Secretary and a director of Oxford
Automotive since its inception in 1995 and was appointed Vice Chairman of the
Board in May 1997. Mr. Schlaybaugh was appointed the Vice Chairman of Oxford
Investment in May 1997. Mr. Schlaybaugh has been a member of the firm of Dykema
Gossett PLLC since 1985. Mr. Schlaybaugh is also a director of certain other
portfolio companies of Oxford Investment. Mr. Schlaybaugh is currently the
Chairman of the Board of Trustees of Oakland University.
Steven M. Abelman, Director, President and Chief Executive Officer. Mr.
Abelman was appointed President and Chief Executive Officer of Oxford Automotive
in May 1997. Prior to joining Oxford Automotive, Mr. Abelman was Deputy Chief
Executive Officer of Bundy North America ("Bundy"), an automotive supplier of
brake and fuel delivery systems, from February 1996 until May 1997 and prior to
that he was President of Bundy from September 1995 until February 1996. From
December 1991 to September 1995, Mr. Abelman was Vice President and General
Manager of Augat Wiring Systems, a manufacturer of automotive wiring systems and
components.
Manfred J. Walt, Director. Mr. Walt has been a director of Oxford
Automotive since May 1997. Mr. Walt has been the Managing Partner-Financial
Services of the Edper Group Limited ("Edper"), a diversified Canadian Merchant
Bank with operations in natural resources, power generating, financial services
and real estate, since 1989. From 1980 to 1989, Mr. Walt served in various
capacities with Edper. Mr. Walt is
49
<PAGE> 52
the Chairman of Consolidated Canadian Express Limited and Consolidated Enfield
Limited, merchant banking affiliates of Edper.
Donald C. Campion, Senior Vice President-Chief Financial Officer. Mr.
Campion was appointed Senior Vice President-Chief Financial Officer of Oxford
Automotive in July 1997. From June 1996 to March 1997, Mr. Campion was the
Senior Vice President and Chief Financial Officer at Delco Electronics
Corporation. From November 1993 to May 1996, Mr. Campion was the Chief Financial
Officer for the services parts division of GM, and from August 1992 to October
1993 was the Financial Director of Performance Analysis for the North American
Operations of GM.
Lawrence C. Cornwall, Senior Vice President-Sales and Engineering. Mr.
Cornwall was appointed Vice President-Sales and Engineering of Oxford Automotive
in May 1997. From October 1995 to May 1997, Mr. Cornwall was the Senior Vice
President-Sales and Engineering at BMG. From 1991 to 1995, Mr. Cornwall was Vice
President of Sales and Engineering at Veltri International, an automotive
stamper.
John H. Ferguson, Vice President-Financial Operations and Assistant
Secretary. Mr. Ferguson was appointed as a Vice President-Financial Operations
and Assistant Secretary of Oxford Automotive in May 1997. Mr. Ferguson is also
the Chief Financial Officer of BMG, a position he has held since April 1996.
Prior to that time, Mr. Ferguson was with Bundy, where he acted as Group Plant
Manager from 1994 to 1996 and as Corporate Controller from 1992 to 1994. From
1984 to 1992, Mr. Ferguson held several positions with GenCorp. Inc., an
automotive tire supplier, including Controller of the Automotive Products Group.
Certain of the officers and directors of Oxford Automotive are also
directors or officers of Oxford Automotive subsidiaries.
DIRECTOR COMPENSATION AND ARRANGEMENTS
Directors do not currently receive compensation for their services as
directors. However, the Company intends to pay fees to its non-employee
directors and to reimburse the out-of-pocket expenses related to directors'
attendance at each Board and committee meeting. In addition, the Company may
elect to adopt a non-employee director option plan or other similar plan to
provide for grants of stock options or other benefits as a means of attracting
and retaining highly qualified independent directors for the Company. Members of
the Board of Directors are elected pursuant to certain shareholder agreements by
and among the Company and certain of its shareholders. See "Principal
Shareholders -- Shareholder Agreements."
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Company does not have a Compensation Committee. All determinations with
respect to executive compensation are made by the Board of Directors. During the
last completed fiscal year, Messrs. Isakow and Schlaybaugh participated in
deliberations of the Company's Board of Directors concerning executive officers
compensation. See "Certain Transactions."
50
<PAGE> 53
EXECUTIVE COMPENSATION
The following table sets forth certain information as to the compensation
earned by the Company's Chief Executive Officer and the Company's four other
most highly paid officers (the "Named Executive Officers") for the last three
fiscal years.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION(1)
---------------------------------------------------
OTHER ANNUAL ALL OTHER
NAME AND TITLE YEAR SALARY BONUS COMPENSATION COMPENSATION
-------------- ---- ------ ----- ------------ ------------
<S> <C> <C> <C> <C> <C>
Selwyn Isakow,............................. 1997 $ -- $ -- $-- $--
Chairman(2)
Donald C. Campion,......................... 1997 -- -- -- --
Senior Vice President --
Chief Financial Officer(3)
Lawrence C. Cornwall,...................... 1997 124,196 -- -- --
Senior Vice President -- 1996 31,504 24,200 -- --
Sales and Engineering(4)
John H. Ferguson,.......................... 1997 101,250 -- -- --
Vice President --
Financial Operations and Assistant
Secretary(5)
</TABLE>
- -------------------------
(1) The Company was formed in October 1995 and, other than as disclosed in the
table above, executive officers of the Company have not received any
compensation.
(2) Mr. Isakow was the President of the Company from its inception until May
1997, during which time he did not receive any compensation from the
Company. Steven M. Abelman was appointed President and Chief Executive
Officer in May 1997. See "-- Employment Agreements."
(3) Mr. Campion was appointed Senior Vice President-Chief Financial Officer of
Oxford Automotive in July 1997. See "-- Employment Agreements."
(4) Mr. Cornwall joined the Company in October 1995 and received compensation
from the Company for a full fiscal year only in 1997.
(5) Mr. Ferguson joined the Company in April 1996 and thus did not receive
compensation from the Company for the full 1997 fiscal year.
EMPLOYMENT AGREEMENTS
As of May 1, 1997, Oxford Automotive and Steven M. Abelman entered into an
Employment and Noncompetition Agreement. The agreement provides that Mr. Abelman
will serve as President and Chief Executive Officer of Oxford Automotive on an
"at-will" basis. The agreement provides that Mr. Abelman will receive an annual
salary of $250,000, will be eligible to receive a bonus of up to 60% of his
salary as determined by the Board of Directors of Oxford Automotive, and will be
entitled to certain fringe benefits. Mr. Abelman has also agreed not to compete
with the Company during the period of his employment and for two years following
the termination of his employment. Upon the termination of his employment
without cause, Mr. Abelman is entitled to severance payments equal to (a) his
annual base salary, if such termination is prior to May 1, 1999 or (b) 1.5 times
his annual base salary, if such termination is after May 1, 1999.
On November 24, 1995, BMG and Larry C. Cornwall entered into an Employment
Agreement. The agreement provides that Mr. Cornwall will serve as Senior Vice
President-Sales and Marketing of BMG on an "at-will" basis. Mr. Cornwall has
subsequently been appointed as Senior Vice President-Sales and Engineering of
Oxford Automotive. The agreement provides that Mr. Cornwall will receive an
annual salary of $120,000, will be eligible to receive a bonus of up to 50% of
his salary as determined by the Board of Directors
51
<PAGE> 54
of BMG, will be eligible to participate in the Company's profit sharing plan,
and will be entitled to certain fringe benefits. Upon the termination of the
agreement, Mr. Cornwall will be entitled to continue to receive his base salary
for the longer of three months or the Canadian statutory requirement.
As of July 21, 1997, Oxford Automotive and Donald C. Campion entered into
an Employment and Noncompetition Agreement. The agreement provides that Mr.
Campion will serve as Senior Vice President -- Chief Financial Officer of Oxford
Automotive on an "at-will" basis. The agreement provides that Mr. Campion will
receive an annual salary of $210,000, will be eligible to receive a bonus of up
to 50% of his salary as determined by the Board of Directors of Oxford
Automotive, and will be entitled to certain fringe benefits. Mr. Campion has
also agreed not to compete with the Company during the period of his employment
and for two years following the termination of his employment. Upon termination
of his employment without cause, Mr. Campion is entitled to a severance payment
of 50% of his annual base salary, payable over six months, plus the continuation
of certain benefits during this six-month period.
See also "Certain Transactions -- Management Agreements."
52
<PAGE> 55
PRINCIPAL SHAREHOLDERS
As of July 21, 1997, there were 309,750 issued and outstanding shares of
the Common Stock, without par value, of the Company (the "Common Stock"). The
following table sets forth information as of July 21, 1997 with respect to the
Common Stock beneficially owned by each director of the Company, the Named
Executive Officers, all directors and executive officers of the Company as a
group, and by other holders known to the Company as having beneficial ownership
of more than 5% of the Common Stock. Selwyn Isakow and the Company's other
shareholders have entered into certain agreements, each of which contain
substantially identical terms, the result of which gives Mr. Isakow voting
control of 100% of the Company's Common Stock, except under certain
circumstances. See "-- Shareholder Agreements." Unless otherwise specified, the
address for each person is 2000 North Woodward Avenue, Suite 130, Bloomfield
Hills, Michigan 48304.
<TABLE>
<CAPTION>
NUMBER OF PERCENT OF
NAME AND ADDRESS OF BENEFICIAL OWNER SHARES CLASS
------------------------------------ --------- ----------
<S> <C> <C>
Selwyn Isakow (1)......................................... 151,474 48.9%
Robert H. Orley........................................... 23,180 7.5%
Rex E. Schlaybaugh, Jr.................................... 12,900 4.2%
Steven M. Abelman (2)..................................... 12,326 4.0%
2365 Franklin Road
Bloomfield Hills, MI 48203
Manfred J. Walt........................................... 1,500 *
Suite 4440 BCE Place
181 Bay Street
Toronto, Ontario, Canada M5J 2T3
Donald C. Campion (2)..................................... 4,000 1.3%
2365 Franklin Road
Bloomfield Hills, MI 48203
John H. Ferguson.......................................... 6,180 2.0%
2365 Franklin Road
Bloomfield Hills, MI 48203
Larry C. Cornwall......................................... 7,000 2.3%
2365 Franklin Road
Bloomfield Hills, MI 48203
Gregg L. Orley............................................ 21,840 7.1%
All directors and officers as a group (7 persons)
(1)(2).................................................. 195,380 63.1%
</TABLE>
- -------------------------
* Less than 1.0%
(1) Includes 135,874 shares owned by Hilsel Investment Company Limited
Partnership, of which Tridec Management, Inc. is General Partner. Mr. Isakow
is the President and a shareholder of Tridec Management, Inc. In addition,
Mr. Isakow may be deemed to be the beneficial owner of all of the
outstanding shares of Common Stock as a result of certain voting power over
such shares pursuant to the shareholder agreements described below and
certain purchase options that may be exercised by Mr. Isakow with respect to
60,470 outstanding shares of Common Stock.
(2) Each of Mr. Abelman's and Mr. Campion's Employment and Noncompetition
Agreement with Oxford Automotive provides Oxford Automotive with the right
to repurchase their respective shares of Common Stock if their employment is
terminated for any reason.
SHAREHOLDER AGREEMENTS
Each holder of Common Stock is a party to a shareholder agreement which
provides for certain restrictions on transfer by shareholders and grants certain
other shareholders the option to purchase the shares
53
<PAGE> 56
of a shareholder upon his death. The agreements also provide that each
shareholder will grant a proxy to Mr. Isakow to vote all of the shareholder's
shares at any meeting of the Company; provided, however, that if holders of
shares having a majority in interest of the shares of Common Stock determine
that it is in the best interest of all of the shareholders to sell all or
substantially all of the assets of the Company or to cause the Company to merge
or consolidate with or into another corporation, Mr. Isakow shall exercise the
proxies provided to him consistent with that decision. As a result, except as
described above, Mr. Isakow has voting control of 100% of the Company's Common
Stock.
CERTAIN TRANSACTIONS
MANAGEMENT AGREEMENTS
Oxford Investment is a private investment and corporate development company
which is controlled by Mr. Isakow. At the time the Company acquired Lobdell,
Oxford Investment and Lobdell entered into an agreement (the "Lobdell
Agreement") whereby Oxford Investment agreed to perform various consulting,
management, and advisory services on behalf of Lobdell with respect to all
matters relating to or affecting Lobdell's business. Lobdell paid Oxford
Investment an investment banking fee of $300,000 on the date the Company
acquired Lobdell and paid Oxford Investment a management fee of $300,000 per
year. This agreement was terminated upon completion of the Offering. At the time
the Company acquired BMG, Oxford Investment and BMG entered into an agreement
(the "BMG Agreement") whereby Oxford Investment agreed to perform certain
management services for BMG. BMG paid Oxford Investment an investment banking
fee of $200,000 on the date the Company acquired BMG and paid Oxford Investment
a management fee of $200,000 per year. This agreement was also terminated upon
completion of the Offering. Mr. Schlaybaugh is the Vice Chairman of Oxford
Investment.
The Company entered into a new management agreement with Oxford Investment
upon the termination of the Lobdell Agreement and the BMG Agreement. Pursuant to
the terms of this management agreement, Oxford Investment will perform various
consulting, management and financial advisory services on behalf of the Company.
The Company will pay Oxford Investment a monthly management fee of $83,334 and
will pay an investment banking fee, for acquisitions of $2.5 million or more, of
1.0% or 1.25% (for acquisitions outside of North America) of the aggregate
acquisition cost for advice and assistance in connection with such acquisition,
with a minimum fee of $200,000. No investment banking fee will be paid to Oxford
Investment in connection with acquisitions for aggregate consideration of less
than $2.5 million. The initial term of the agreement will end on December 31,
2001, but will automatically extend for additional one-year periods thereafter
unless either party terminates the agreement. In addition, pursuant to the
management agreement, Oxford Investment will license to the Company the name
"Oxford Automotive" which is owned by Oxford Investment.
OTHER TRANSACTIONS
As of March 31, 1997, Mr. Abelman issued a note to the Company in
connection with his acquisition of shares of the Company's Common Stock. The
principal amount of the note was $130,000 and the note bears interest at the
prime rate plus 1.0%, which rate is adjusted on March 31 of each year to reflect
the then current prime rate. Principal and interest on the note is payable in
equal annual installments with interest on the unpaid principal, with the final
payment due May 31, 2002.
As of March 31, 1997, the Company issued a subordinated demand note to Mr.
Robert H. Orley in connection with the redemption of certain shares of the
Company's Common Stock. The principal amount of the note was $108,203 and was
paid in full subsequent to March 31, 1997.
RPI, Inc. ("RPI"), a Michigan corporation controlled by the principal
shareholder of the Company, issued demand notes to Lobdell in the principal
amounts of $250,000, $100,000, $150,000, $200,000, and $300,000, respectively,
on May 2, 1997, May 21, 1997, June 6, 1997, June 30, 1997, and July 11, 1997,
each bearing interest at the prime rate plus 1.0% per annum. The Company has
agreed to extend credit to RPI up to a maximum of $1.7 million.
54
<PAGE> 57
LEGAL
Rex E. Schlaybaugh, Jr. is a shareholder, the Vice Chairman of the Board
and a director of the Company. Dykema Gossett PLLC, of which Mr. Schlaybaugh is
a member, has performed legal services for the Company since its inception,
including services performed in connection with this Offering. The Company
expects to continue to retain the firm as general counsel after the Exchange
Offer.
DESCRIPTION OF CERTAIN
INDEBTEDNESS AND PREFERRED STOCK
SENIOR CREDIT FACILITY
General. In connection with the Offering, on June 24, 1997, the Company
entered into a credit agreement with NBD Bank, on behalf of itself and as agent
for a syndicate of other lenders, providing for up to $110.0 million (the
"Commitment Amount") of revolving credit availability including the issuance of
letters of credit (the "Senior Credit Facility"). The Company and each principal
operating subsidiary (the "Senior Credit Obligors") are parties to or guarantors
of the Senior Credit Facility. The obligations under the Senior Credit Facility
(the "Obligations") are secured by a first lien on substantially all the assets
of the Senior Credit Obligors. The Obligations and guaranties of the Senior
Credit Obligors (the "Senior Credit Guaranties") will rank senior to all other
indebtedness of the Company, including the Notes. Availability under the
revolver at March 31, 1997 would have been approximately $101.0 million, reduced
for the effect of a Letter of Credit issued for the IRB's (as defined). Funds
under the Senior Credit Facility are available for general corporate purposes
(including acquisitions) and letters of credit.
Interest Rates. Interest on outstanding borrowings under the Senior Credit
Facility is payable monthly and accrues at an annual rate equal to (a) the
Applicable Margin (as defined in the Senior Credit Facility) plus either (i) the
higher of the Prime Rate (as defined in the Senior Credit Facility) or 0.5% over
the Federal Funds Rate or (ii) with respect to Canadian based borrowings, the
higher of the prime rate of First Chicago NBD Bank, Canada or 0.5% over the BA
Rate (the one month bankers' acceptance rates, as further defined in the Senior
Credit Facility), or (b) the London Interbank Offered Rate plus the Applicable
Margin (a "LIBOR-based Rate") or, with respect to Canadian based borrowings, the
BA Rate. The Applicable Margin will be based upon the Company's trailing four
quarter Ratio of Total Debt to EBITDA (as defined in the Senior Credit Facility)
as follows:
<TABLE>
<CAPTION>
RATIO OF
TOTAL FUNDED DEBT APPLICABLE MARGIN
TO EBITDA PRIME/LIBOR
- ----------------- -----------------
<S> <C>
>5.00 .75%/2.25%
4.51--5.00 .50%/2.00%
3.76--4.50 .25%/1.75%
3.01--3.75 0%/1.50%
<=3.00 0%/1.25%
</TABLE>
Maturity and Optional Prepayments. All borrowings under the Senior Credit
Facility mature in June 2003, and the aggregate principal amount outstanding may
not exceed the Commitment Amount at any time. Borrowings under the Senior Credit
Facility may be prepaid at any time without premium or penalty, except that any
prepayment of a LIBOR-based Rate loan that is made prior to the end of the
applicable interest period shall be subject to reimbursement of breakage costs.
Covenants. The Senior Credit Facility contains certain customary covenants,
including without limitation, reporting and other affirmative covenants;
financial covenants, including ratio of total debt to EBITDA, net worth, fixed
charge coverage ratio, interest coverage ratio (each as defined in and
calculated pursuant to the Senior Credit Facility); and negative covenants,
including restrictions on incurrence of other indebtedness, payment of cash
dividends and other distributions to shareholders, liens in favor of parties
other than the lenders under the Senior Credit Facility, certain guaranties of
obligations of or advances to others, sales of
55
<PAGE> 58
material assets not in the ordinary course of business, restrictions on mergers
and acquisitions, and capital expenditures.
Events of Default. The Senior Credit Facility contains customary events of
default including non-payment of principal, interest or fees; violation of
covenants; inaccuracy of representations or warranties; cross-defaults to
certain other indebtedness and bankruptcy.
Fees. The Company will pay, on a quarterly basis, a per annum fee on the
unused Commitment Amount ranging from 0.25% to 0.50% and letter of credit fees
ranging from 1.25% to 2.25%, in each case based on certain financial ratios of
the Company.
BMG INDEBTEDNESS
The Canadian Department of Regional Industrial Expansion has provided a
term loan (the "IRDP Loan") to BMG, bearing interest at 6% with a final maturity
date of September 1, 2002. The IRDP Loan is unsecured. As of March 31, 1997,
$467,000 was outstanding with respect to the IRDP Loan.
The Export Development Corporation of Canada ("EDC") has provided a tooling
line facility to BMG (the "EDC Facility"), bearing interest at a fixed rate of
7.36%. The EDC Facility is secured by tooling at BMG relating to specific Saturn
contracts and has a final maturity of September 30, 1999. As of March 31, 1997,
$5.1 million was outstanding with respect to the EDC Facility.
LOBDELL INDEBTEDNESS
Lobdell, through Lewis Emery Capital Corporation, its wholly-owned
subsidiary, has been provided with a term loan facility from NBD Bank (the "LE
Loan"), bearing interest at 0.625% over 90-day LIBOR with a final maturity date
of October 1, 1998. This loan is collateralized by a purchase order from Ford,
which allows for recovery of the term-debt principal and interest,
administrative costs and a predetermined markup. As of March 31, 1997, $2.83
million was outstanding with respect to the LE Loan.
Lobdell, through its subsidiary Creative Fabrication Corporation
("Creative"), is financially obligated to the County of McMinn, Tennessee
pursuant to certain revenue bonds issued on behalf of Creative. On September 27,
1995, the Industrial Development Board of the County of McMinn issued $8.5
million of its Industrial Development Revenue Bonds ("IRBs") for the purpose of
lending the proceeds from the sale of the IRBs to Creative. The IRBs bear
interest at a variable rate which was 3.6% at March 31, 1997. The IRBs are
collateralized by a letter of credit issued by NBD Bank for the benefit of the
trustee under the indenture relating to the IRBs and by a mortgage on the
Creative facilities located in Tennessee and are guaranteed by Lobdell. Creative
is prohibited from paying, declaring or authorizing any dividend if there is an
event of default under the IRB documents. The IRBs mature in September 2010. As
of March 31, 1997, $8.3 million principal amount of IRBs were outstanding.
PREFERRED STOCK OF LOBDELL
In connection with the Company's acquisition of Lobdell, Lobdell issued
457,541 shares of its Series A $3.00 Cumulative Preferred Stock ( the "Series A
Preferred Stock") and 49,938 shares of its Series B Preferred Stock (the "Series
B Preferred Stock" and together with the Series A Preferred Stock the "Lobdell
Preferred Stock"), each having a stated value of $100 per share, and all of
which are outstanding. Generally, except as required by law, the holders of
Lobdell Preferred Stock have no voting rights. However, the holders of Series A
Preferred Stock, voting as a separate class, are entitled to elect (i) one
director of Lobdell, and (ii) if Lobdell fails to pay three consecutive
semi-annual dividend payments to the holders of Series A Preferred Stock, one
additional director until the payment default is cured. Dividends on the Series
A Preferred Stock accrue annually at the rate of $3.00 per share and are
cumulative, whether or not earned or declared. Lobdell may not declare or pay
any dividend or other distribution, other than in Lobdell Common Stock or other
stock junior to the Lobdell Preferred Stock ("Junior Stock"), with respect to
any Junior Stock unless all accrued, unpaid and current dividends with respect
to the Series A Preferred Stock have either been paid or sufficient funds have
been set apart for such payment. The Series B Preferred Stock is not entitled to
56
<PAGE> 59
receive any dividends. The Lobdell Preferred Stock has certain liquidation
preferences and the Series A Preferred Stock and Series B Preferred Stock rank
on a parity as to the receipt of such liquidation payments.
The Lobdell Preferred Stock is mandatorily redeemable by Lobdell on
December 31, 2006 at a price per share of $100, plus, with respect to the Series
A Preferred Stock, accrued and unpaid dividends to the date of redemption.
However, if the Company does not commence a public offering of its common stock
pursuant to a firm commitment underwritten offering prior to June 30, 2006, the
payment for the shares of Series A Preferred Stock to be redeemed will be $103
per share, plus accrued and unpaid dividends to the date of redemption. In
addition, at the option of the holders of Series A Preferred Stock, if the
Company does not commence such a public offering of its common stock on or
before December 31, 2001, Lobdell must redeem on December 31 of each year
commencing with 2002 up to 20% of the aggregate number of shares of Series A
Preferred Stock held by any such holder immediately prior to December 31, 2002.
In connection with the acquisition of Lobdell by the Company, the Company
has agreed to exchange its common stock for the shares of Series A Preferred
Stock upon the initial public offering ("Initial Public Offering") of its common
stock to the public which is exclusively for cash, subject to an effective
registration statement and underwritten on a firm commitment basis by one or
more underwriters. The holders of Series A Preferred Stock have the right to
exchange up to 50% or some lesser portion of their shares of Series A Preferred
Stock (the "Election Amount") for a number of shares of Company common stock
equal to (i) the Election Amount, multiplied by (ii) the Exchange Ratio (the
number equal to the redemption value of a share of Series A Preferred Stock,
divided by the price per share to the public of Company common stock in the
Initial Public Offering); provided, however, that, in the aggregate, holders of
Series A Preferred Stock may not receive more than 25% of the number of shares
of Company common stock registered pursuant to the Initial Public Offering.
Pursuant to the acquisition of Lobdell, the Company obtained various
indemnities for certain purchase price adjustments arising out of a closing
balance sheet and for claims relating to representations and warranties made by
the former common shareholders of Lobdell in connection with the acquisition. At
the closing of such acquisition, 100,000 shares of Series A Preferred Stock were
placed with an escrow agent to fund indemnification claims of the Company. The
Company and the preferred shareholders of Lobdell have settled certain
indemnification claims which has resulted in the cancellation of 60,000 shares
of Series A Preferred Stock and will also entail the cancellation of up to an
additional 40,000 shares of Series A Preferred Stock or, at the election of the
preferred shareholders of Lobdell (which must be made by August 31, 1997),
49,938 shares of Series B Preferred Stock.
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<PAGE> 60
DESCRIPTION OF THE NOTES
GENERAL
The Old Notes were issued under an Indenture (the "Indenture") dated as of
June 15, 1997, among the Company, the Subsidiary Guarantors and First Trust
National Association, as Trustee (the "Trustee"). The terms of the Indenture
apply to the Old Notes and to the New Notes to be issued in exchange therefor
pursuant to the Exchange Offer (all such Notes are referred to herein
collectively as the "Notes").
The following is a summary of certain provisions of the Indenture and the
Notes, a copy of which Indenture and the form of Notes is available upon request
to the Company. The following summary of certain provisions of the Indenture
does not purport to be complete and is subject to, and is qualified in its
entirety by reference to, all the provisions of the Indenture, including the
definitions of certain terms therein and those terms made a part thereof by the
Trust Indenture Act of 1939, as amended. Capitalized terms used herein and not
otherwise defined have the meanings set forth in the section "-- Certain
Definitions." As used in this section, the term "Company" refers to Oxford
Automotive, Inc.
Principal of, premium, if any, and interest on the Notes will be payable,
and the Notes may be exchanged or transferred, at the office or agency of the
Company, which, unless otherwise provided by the Company, will be the offices of
the Trustee. At the option of the Company, payment of interest may be made by
check mailed to the addresses of the Holders as such addresses appear in the
Note register.
The Notes are issued only in fully registered form, without coupons, in
denominations of $1,000 and any integral multiple of $1,000. No service charge
will be made for any registration of transfer or exchange of Notes, but the
Company may require payment of a sum sufficient to cover any transfer tax or
other similar governmental charge payable in connection therewith.
TERMS OF THE NOTES
The Notes are unsecured senior subordinated obligations of the Company,
limited to $160.0 million aggregate principal amount (of which $125.0 million
were issued in the Offering), and will mature on June 15, 2007. The Notes bear
interest at the rate per annum shown on the cover page hereof from June 24,
1997, or from the most recent date to which interest has been paid or provided
for, payable semi-annually to Holders of record at the close of business on the
June 1 or December 1 immediately preceding the interest payment date on June 15
and December 15 of each year, commencing December 15, 1997. The Company will pay
interest on overdue principal at 1% per annum in excess of such rate, and it
will pay interest on overdue installments of interest at such higher rate to the
extent lawful.
OPTIONAL REDEMPTION
Except as set forth in the following paragraph, the Notes are not
redeemable at the option of the Company prior to June 15, 2002. Thereafter, the
Notes are redeemable, at the Company's option, in whole or in part, at any time
or from time to time, upon not less than 30 nor more than 60 days' prior notice
mailed by first-class mail to each Holder's registered address, at the following
redemption prices (expressed in percentages of principal amount), plus accrued
and unpaid interest to the redemption date (subject to the right of Holders of
record on the relevant record date to receive interest due on the relevant
interest payment date), if redeemed during the 12-month period commencing on
June 15 of the years set forth below:
<TABLE>
<CAPTION>
REDEMPTION
PERIOD PRICE
------ ----------
<S> <C>
2002............................. 105.063%
2003............................. 103.375
2004............................. 101.688
2005 and thereafter.............. 100.000
</TABLE>
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<PAGE> 61
In addition, at any time and from time to time prior to June 15, 2000, the
Company may redeem in the aggregate up to 35% of the original principal amount
of the Notes with the proceeds of one or more Public Equity Offerings following
which there is a Public Market, at a redemption price (expressed as a percentage
of principal amount) of 110.125% plus accrued and unpaid interest, if any, to
the redemption date (subject to the right of Holders of record on the relevant
record date to receive interest due on the relevant interest payment date);
provided, however, that at least 65% of the original aggregate principal amount
of the Notes must remain outstanding after each such redemption.
SELECTION
In the case of any partial redemption, selection of the Notes for
redemption will be made by the Trustee on a pro rata basis, by lot or by such
other method as the Trustee in its sole discretion shall deem to be fair and
appropriate, although no Note of $1,000 in original principal amount or less
will be redeemed in part. If any Note is to be redeemed in part only, the notice
of redemption relating to such Note shall state the portion of the principal
amount thereof to be redeemed. A new Note in principal amount equal to the
unredeemed portion thereof will be issued in the name of the Holder thereof upon
cancellation of the original Note.
SUBSIDIARY GUARANTIES
Each of BMG, BMG Holdings, Inc., an Ontario corporation, Lobdell,
Winchester Fabrication Corporation, a Michigan corporation, Creative Fabrication
Corporation, a Tennessee corporation, Parallel Group International, Inc., an
Indiana corporation, Laserweld International, L.L.C., an Indiana limited
liability company, Concept Management Corporation, a Michigan corporation, and
Lewis Emery Capital Corporation, a Michigan corporation (each a "Subsidiary
Guarantor"), irrevocably and unconditionally Guarantee, as primary obligors and
not merely as sureties, on an unsecured senior subordinated basis the
performance and punctual payment when due, whether at Stated Maturity, by
acceleration or otherwise, of all obligations of the Company under the Indenture
and the Notes, whether for payment of principal of or interest on the Notes,
expenses, indemnification or otherwise (all such obligations guaranteed by the
Subsidiary Guarantors being herein called the "Guaranteed Obligations"). The
Subsidiary Guarantors agree to pay, in addition to the amount stated above, any
and all expenses (including reasonable counsel fees and expenses) incurred by
the Trustee or the Holders in enforcing any rights under the Subsidiary
Guaranties. Each Subsidiary Guaranty will be limited in amount to an amount not
to exceed the maximum amount that can be guaranteed by the applicable Subsidiary
Guarantor without rendering such Subsidiary Guaranty voidable under applicable
law relating to fraudulent conveyance or fraudulent transfer or similar laws
affecting the rights of creditors generally. After the Issue Date, the Company
will cause each Restricted Subsidiary that becomes an obligor or guarantor with
respect to any of the obligations under one or more of the Bank Credit
Agreements to execute and deliver to the Trustee a supplemental indenture
pursuant to which such Restricted Subsidiary will Guarantee payment of the
Notes. See "Certain Covenants -- Future Subsidiary Guarantors" below.
Each Subsidiary Guaranty is a continuing guarantee and shall (a) remain in
full force and effect until payment in full of all the Guaranteed Obligations,
(b) be binding upon each Subsidiary Guarantor and (c) inure to the benefit of
and be enforceable by the Trustee, the Holders and their successors, transferees
and assigns. A Subsidiary Guaranty will be released upon the sale of all the
capital stock, or all or substantially all of the assets, of the applicable
Subsidiary Guarantor if such sale is made in compliance with the Indenture.
SUBORDINATION
The indebtedness evidenced by the Notes and the Subsidiary Guaranties
represents senior subordinated obligations of the Company and the Subsidiary
Guarantors, as the case may be. The payment of the principal of, premium (if
any) and interest on the Notes, the payment of any Subsidiary Guaranty and all
other Obligations under or in connection with the Notes, the Subsidiary
Guaranties, the Indenture and/or any related agreements, documents or
instruments are subordinate in right of payment, as set forth in the Indenture,
to the prior payment in full of all Senior Indebtedness of the Company or the
relevant Subsidiary Guarantor, as the case may be, whether outstanding on the
Issue Date or thereafter incurred, including all Obligations of the Company and
such Subsidiary Guarantor under the Senior Credit Facility. The Notes and
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<PAGE> 62
the Subsidiary Guaranties are also effectively subordinated to any Secured
Indebtedness of the Company and the Subsidiary Guarantors to the extent of the
value of the assets securing such Indebtedness and to any liabilities of
Subsidiaries other than the Subsidiary Guarantors.
As of March 31, 1997, after giving pro forma effect to the Offering and the
Senior Credit Facility, (i) the Company would have had no outstanding Senior
Indebtedness (excluding unused commitments under the Senior Credit Facility) and
(ii) Senior Indebtedness of the Subsidiary Guarantors would have been
approximately $16.7 million. Although the Indenture contains limitations on the
amount of additional Indebtedness that the Company and its Restricted
Subsidiaries may incur, under certain circumstances the amount of such
Indebtedness could be substantial and, in any case, such Indebtedness may be
Senior Indebtedness. See "Certain Covenants -- Limitation on Indebtedness."
Only Indebtedness of the Company or a Subsidiary Guarantor that is Senior
Indebtedness will rank senior to the Notes and the relevant Subsidiary Guaranty
in accordance with the provisions of the Indenture. The Notes and each
Subsidiary Guaranty will in all respects rank pari passu with all other senior
subordinated Indebtedness of the Company and the relevant Subsidiary Guarantor,
respectively. The Company and each Subsidiary Guarantor has agreed in the
Indenture that it will not Incur, directly or indirectly, any Indebtedness that
is subordinate or junior in ranking in right of payment to its Senior
Indebtedness unless such Indebtedness is pari passu with or is expressly
subordinated in right of payment to the Notes. Unsecured Indebtedness is not
deemed to be subordinated or junior merely because it is unsecured.
The Company may not pay, directly or indirectly, principal of, premium (if
any) or interest on, the Notes or any other Obligations under or in connection
with the Notes, the Indenture and/or any related agreements, documents or
instruments or make any deposit pursuant to the provisions described under "--
Defeasance" below and may not repurchase, redeem or otherwise retire any Notes
(collectively, "pay the Subordinated Debt") if (i) any Senior Indebtedness is
not paid when due or (ii) any other default on any such Senior Indebtedness
occurs and the maturity of such Senior Indebtedness is accelerated in accordance
with its terms unless, in either case, the default has been cured or waived and
any such acceleration has been rescinded or such Senior Indebtedness has been
paid in full in cash. However, the Company may pay the Subordinated Debt without
regard to the foregoing if the Company and the Trustee receive written notice
approving such payment from the Representative of the Senior Indebtedness with
respect to which either of the events set forth in clause (i) or (ii) of the
immediately preceding sentence has occurred and is continuing. During the
continuance of any default (other than a default described in clauses (i) and
(ii) of the second preceding sentence) with respect to any Senior Indebtedness
pursuant to which the maturity thereof may be accelerated immediately without
further notice (except such notice as may be required to effect such
acceleration) or the expiration of any applicable grace periods, the Company may
not pay the Subordinated Debt for a period (a "Payment Blockage Period")
commencing upon the receipt by the Trustee (with a copy to the Company) of
written notice (a "Blockage Notice") of such default from the Representative of
the holders of such Designated Senior Indebtedness specifying an election to
effect a Payment Blockage Period and ending 180 days thereafter (or earlier if
such Payment Blockage Period is terminated (i) by written notice to the Trustee
and the Company from the Person or Persons who gave such Blockage Notice, (ii)
because the default giving rise to such Blockage Notice has been waived in
writing or (iii) because such Designated Senior Indebtedness has been repaid in
full in cash). Notwithstanding the provisions described in the immediately
preceding sentence, unless the holders of such Designated Senior Indebtedness or
the Representative of such holders has accelerated the maturity of such
Designated Senior Indebtedness, the Company may resume payments on the Notes
after the end of such Payment Blockage Period. The Notes shall not be subject to
more than one Payment Blockage Period in any consecutive 360-day period,
irrespective of the number of such nonpayment defaults with respect to
Designated Senior Indebtedness during such period.
Upon any payment or distribution of the assets of the Company of any kind
or character, whether in cash, property or securities, to creditors upon a total
or partial liquidation or dissolution or reorganization of or similar proceeding
relating to the Company or its property or in a bankruptcy, reorganization,
insolvency, receivership or similar proceeding, the holders of Senior
Indebtedness will be entitled to receive payment in full in cash of such Senior
Indebtedness before the Noteholders are entitled to receive any payment, and,
until the Senior Indebtedness is paid in full in cash, any payment or
distribution to which Noteholders would be
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entitled but for the subordination provisions of the Indenture will be made to
holders of such Senior Indebtedness as their interests may appear. If a payment
or distribution is made to Noteholders that, due to the subordination
provisions, should not have been made to them, such Noteholders are required to
hold it in trust for the holders of Senior Indebtedness and pay it over to them
as their interests may appear.
The obligations of a Subsidiary Guarantor under its Subsidiary Guaranty are
senior subordinated obligations. As such, the rights of Noteholders to receive
payment by a Subsidiary Guarantor pursuant to its Subsidiary Guaranty will be
subordinated in right of payment to the rights of holders of Senior Indebtedness
of such Subsidiary Guarantor. The terms of the subordination provisions
described above with respect to the Company's obligations under the Notes apply
equally to a Subsidiary Guarantor and the obligations of such Subsidiary
Guarantor under its Subsidiary Guaranty.
By reason of the subordination provisions contained in the Indenture, in
the event of insolvency, creditors of the Company or a Subsidiary Guarantor who
are holders of Senior Indebtedness of the Company or a Subsidiary Guarantor, as
the case may be, may recover more, ratably, than the Noteholders, and creditors
of the Company who are not holders of Senior Indebtedness may recover less,
ratably, than holders of Senior Indebtedness and may recover more, ratably, than
the Noteholders.
The terms of the subordination provisions described above will not apply to
payments from money or the proceeds of U.S. Government Obligations held in trust
by the Trustee for the payment of principal of and interest on the Notes
pursuant to and in accordance with the provisions described under "--
Defeasance."
CHANGE OF CONTROL
Upon the occurrence of a Change of Control, each Holder shall have the
right to require that the Company repurchase all or a portion of such Holder's
Notes at a purchase price in cash equal to 101% of the principal amount thereof
plus accrued and unpaid interest, if any, to the date of repurchase (subject to
the right of Holders of record on the relevant record date to receive interest
due on the relevant interest payment date), in accordance with the provisions of
the next paragraph.
Within 30 days following any Change of Control, the Company shall mail a
notice to each Holder with a copy to the Trustee stating: (1) that a Change of
Control has occurred and that such Holder has the right to require the Company
to purchase such Holder's Notes at a purchase price in cash equal to 101% of the
principal amount outstanding at the repurchase date plus accrued and unpaid
interest, if any, to the date of repurchase (subject to the right of Holders of
record on the relevant record date to receive interest on the relevant interest
payment date); (2) the circumstances and relevant facts and relevant financial
information regarding such Change of Control; (3) the repurchase date (which
shall be no earlier than 30 days nor later than 60 days from the date such
notice is mailed); and (4) the instructions determined by the Company,
consistent with the covenant described hereunder, that a Holder must follow in
order to have its Notes repurchased.
The Company shall comply, to the extent applicable, with the requirements
of Section 14(e) of the Exchange Act and any other securities laws or
regulations in connection with the repurchase of Notes pursuant to the covenant
described hereunder. To the extent that the provisions of any securities laws or
regulations conflict with the provisions of the covenant described hereunder,
the Company shall comply with the applicable securities laws and regulations and
shall not be deemed to have breached its obligations under the covenant
described hereunder by virtue thereof.
The occurrence of certain of the events which would constitute a Change of
Control would constitute a default under the Senior Credit Facility. Future
Senior Indebtedness of the Company may contain prohibitions of certain events
which would constitute a Change of Control or require such Senior Indebtedness
to be repurchased upon a Change of Control. Moreover, the exercise by the
Holders of their right to require the Company to repurchase the Notes could
cause a default under such Senior Indebtedness, even if the Change of Control
itself does not, due to the financial effect of such repurchase on the Company.
Finally, the Company's ability to pay cash to the Holders upon a repurchase may
be limited by the Company's then existing financial resources. There can be no
assurance that sufficient funds will be available when necessary to
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make any repurchases required in connection with a Change of Control. The
Company's failure to purchase the Notes in connection with a Change in Control
would result in a default under the Indenture which would, in turn, constitute a
default under the Senior Credit Facility. In such circumstances, the
subordination provisions in the Indenture would likely restrict payment to the
Holders of the Notes.
BOOK-ENTRY, DELIVERY AND FORM
Except as set forth below, the Old Notes have been issued and the New Notes
will initially be issued in the form of a Global Note. The Global Note will be
deposited with, or on behalf of, the Depository and registered in the name of
the Depository or its nominee. Except as set forth below, the Global Note may be
transferred, in whole and not in part, only to the Depository or another nominee
of the Depository. Investors may hold their beneficial interests in the Global
Note directly through the Depository if they have an account with the Depository
or indirectly through organizations which have accounts with the Depository.
New Notes issued in exchange for Old Notes that were (i) originally issued
to institutional "accredited investors" (as defined in Rule 501(a)(1), (2), (3)
or (7) under the Securities Act) who are not qualified institutional buyers
("QIBs") or (ii) issued as described below under "-- Certificated Notes" will be
issued in definitive form. Upon the transfer of a Note in definitive form, such
Note will, unless the Global Note has previously been exchanged for Notes in
definitive form, be exchanged for an interest in the Global Note representing
the principal amount of Notes being, transferred.
The Depository has advised the Company as follows: The Depository is a
limited-purpose trust company and organized under the laws of the State of New
York, 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 (the "Exchange Act"). The Depository was created to hold securities
of institutions that have accounts with the Depository ("participants") and to
facilitate the clearance and settlement of securities 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. The Depository's participants include securities
brokers and dealers (which may include the Initial Purchasers), banks, trust
companies, clearing corporations and certain other organizations. Access to the
Depository's book-entry system is also available to others such as banks,
brokers, dealers and trust companies that clear through or maintain a custodial
relationship with a participant, whether directly or indirectly.
Upon the issuance of a Global Note, the Depository will credit, on its
book-entry registration and transfer system, the principal amount of the Notes
represented by such Global Note to the accounts of participants. The accounts to
be credited shall be designated by the Initial Purchasers of such Notes.
Ownership of beneficial interests in the Global Note will be limited to
participants or persons that may hold interests through participants. Ownership
of beneficial interests in the Global Note will be shown on, and the transfer of
those ownership interests will be effected only through, records maintained by
the Depository (with respect to participants' interest) and such participants
(with respect to the owners of beneficial interests in the Global Note other
than participants). The laws of some jurisdictions may require that certain
purchasers of securities take physical delivery of such securities in definitive
form. Such limits and laws may impair the ability to transfer or pledge
beneficial interests in a Global Note.
So long as the Depository, or its nominee, is the registered holder and
owner of such Global Note, the Depository or such nominee, as the case may be,
will be considered the sole legal owner and holder of the related Notes for all
purposes of such Notes and the Indenture. Except as set forth below, owners of
beneficial interests in a Global Note will not be entitled to have the Notes
represented by such Global Note registered in their names, will not receive or
be entitled to receive physical delivery of certificated Notes in definitive
form and will not be considered to be the owners or holders of any Notes under
such Global Note. The Company understands that under existing industry practice,
in the event an owner of a beneficial interest in a Global Note desires to take
any action that the Depository, as the holder of a Global Note, is entitled to
take, the Depository would authorize the participants to take such action, and
that the participants would authorize
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beneficial owners owning through such participants to take such action or would
otherwise act upon the instructions of beneficial owners owning through them.
Payment of principal of and interest on Notes represented by a Global Note
registered in the name of and held by the Depository or its nominee will be made
to the Depository or its nominee, as the case may be, as the registered owner
and holder of such Global Note.
The Company expects that the Depository or its nominee, upon receipt of any
payment of principal of or interest on a Global Note, will credit participants'
accounts with payments in amounts proportionate to their respective beneficial
interests in the principal amount of such Global Note as shown on the records of
the Depository or its nominee. The Company also expects that payments by
participants to owners of beneficial interests in a Global Note held through
such participants will be governed by standing instructions and customary
practices and will be the responsibility of such participants. The Company will
not have any responsibility or liability for any aspect of the records relating
to, or payments made on account of, beneficial ownership interests in a Global
Note for any Note or for maintaining, supervising or reviewing any records
relating to such beneficial ownership interests or for any other aspect of the
relationship between the Depository and its participants or the relationship
between such participants and the owners of beneficial interests in such Global
Note owned through such participants.
Unless and until it is exchanged in whole or in part for certificated Notes
in definitive form, a Global Note may not be transferred except as a whole by
the Depository to a nominee of such Depository or by a nominee of such
Depository to such Depository or another nominee of such Depository.
Although the Depository has agreed to the foregoing procedures in order to
facilitate transfers of interests in a Global Note among participants of the
Depository, it is under no obligation to perform or continue to perform such
procedures, and such procedures may be discontinued at any time. Neither the
Trustee nor the Company will have any responsibility for the performance by the
Depository or its participants or indirect participants of their respective
obligations under the rules and procedures governing their operations.
CERTIFICATED NOTES
The Notes represented by a Global Note are exchangeable for certificated
Notes in definitive form of like tenor as such Notes in denominations of
U.S.$1,000 and integral multiples thereof if (i) the Depository notifies the
Company that it is unwilling or unable to continue as Depository for such Global
Note or if at any time the Depository ceases to be a clearing agency registered
under the Exchange Act, (ii) the Company in its discretion at any time
determines not to have all of the Notes represented by a Global Note or (iii) a
default entitling the holders of the Notes to accelerate the maturity thereof
has occurred and is continuing. Any Note that is exchangeable pursuant to the
preceding sentence is exchangeable for certificated Notes issuable in authorized
denominations and registered in such names as the Depository shall direct.
Subject to the foregoing, a Global Note is not exchangeable, except for a Global
Note of the same aggregate denomination to be registered in the name of the
Depository or its nominee.
CERTAIN COVENANTS
The Indenture contains covenants including, among others, the following:
Limitation on Indebtedness. (a) The Company shall not, and shall not permit
any Restricted Subsidiary to, Incur, directly or indirectly, any Indebtedness
unless, immediately after giving effect to such Incurrence, the Consolidated
Coverage Ratio exceeds 2.00 to 1 if such Indebtedness is Incurred prior to June
15, 1999 or 2.25 to 1 if such Indebtedness is Incurred thereafter.
(b) Notwithstanding the foregoing paragraph (a), the Company and its
Restricted Subsidiaries may Incur any or all of the following Indebtedness: (1)
Indebtedness and other Obligations Incurred pursuant to the Bank Credit
Agreements; provided, however, that, after giving effect to any such Incurrence,
the aggregate principal amount of such Indebtedness and other Obligations then
outstanding does not exceed the greater of (i) $110 million and (ii) the sum of
(x) 60% of the net book value of the inventory of the Company and its Restricted
Subsidiaries, and (y) 90% of the net book value of the accounts receivable of
the Company and its
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Restricted Subsidiaries, in each case determined in accordance with GAAP, and
(z) $70 million; (2) Indebtedness represented by the Notes issued in the
Offering (and the New Notes); (3) Indebtedness outstanding on the Issue Date
(other than Indebtedness described in clause (1) of this paragraph), including,
without limitation, the Existing Preferred Stock; (4) Indebtedness of the
Company owed to and held by any Wholly Owned Subsidiary or Indebtedness of a
Restricted Subsidiary owed to and held by the Company or a Wholly Owned
Subsidiary; provided, however, that any subsequent issuance or transfer of any
Capital Stock which results in any such Wholly Owned Subsidiary ceasing to be a
Wholly Owned Subsidiary or any subsequent transfer of such Indebtedness (other
than to the Company or a Wholly Owned Subsidiary) shall be deemed, in each case,
to constitute the Incurrence of such Indebtedness by the issuer thereof; (5)
Refinancing Indebtedness in respect of Indebtedness Incurred pursuant to
paragraph (a) or pursuant to clause (1), (2), (3) or this clause (5); (6)
Indebtedness in respect of performance bonds, bankers' acceptances, letters of
credit and surety or appeal bonds entered into by the Company and the Restricted
Subsidiaries in the ordinary course of their business; (7) Hedging Obligations
consisting of Interest Rate Agreements and Currency Agreements entered into in
the ordinary course of business and not for the purpose of speculation;
provided, however, that, in the case of Currency Agreements and Interest Rate
Agreements, such Currency Agreements and Interest Rate Agreements do not
increase the Indebtedness of the Company outstanding at any time other than as a
result of fluctuations in foreign currency exchange rates or interest rates or
by reason of fees, indemnities and compensation payable thereunder; (8) Purchase
Money Indebtedness and Capital Lease Obligations Incurred to finance the
acquisition or improvement by the Company or a Restricted Subsidiary of any
assets in the ordinary course of business and which do not exceed $15 million in
the aggregate at any time outstanding; (9) Indebtedness and other Obligations
represented by the Subsidiary Guaranties and Guarantees of Indebtedness Incurred
pursuant to the Bank Credit Agreements; (10) Indebtedness arising from the
honoring by a bank or other financial institution of a check, draft or similar
instrument inadvertently (except in the case of daylight overdrafts) drawn
against insufficient funds in the ordinary course of business, provided that
such Indebtedness is extinguished within five business days of Incurrence; (11)
Indebtedness of the Company and its Restricted Subsidiaries arising from
agreements providing for indemnification, adjustment of purchase price or
similar obligations, in any case Incurred in connection with the disposition of
any assets of the Company or any Restricted Subsidiary (other than Guarantees of
Indebtedness Incurred by any Person acquiring all or any portion of such assets
for the purpose of financing such acquisition), in a principal amount not to
exceed the gross proceeds actually received by the Company or any Restricted
Subsidiary in connection with such disposition; (12) Tooling Indebtedness; and
(13) Indebtedness in an aggregate principal amount which, together with all
other Indebtedness of the Company and its Restricted Subsidiaries outstanding on
the date of such Incurrence (other than Indebtedness permitted by clauses (1)
through (12) above or paragraph (a)), does not exceed $20 million.
(c) Notwithstanding the foregoing, the Company shall not, and shall not
permit any Restricted Subsidiary to, Incur any Indebtedness pursuant to the
foregoing paragraph (b) if the proceeds thereof are used, directly or
indirectly, to Refinance (i) any Subordinated Obligations unless such
Indebtedness shall be subordinated to the Notes and the Subsidiary Guaranties,
as applicable, to at least the same extent as such Subordinated Obligations or
(ii) any Senior Subordinated Indebtedness unless such Indebtedness shall be
Senior Subordinated Indebtedness or shall be subordinated to the Notes and the
Subsidiary Guaranties, as applicable.
(d) For purposes of determining compliance with the foregoing covenant, (i)
in the event that an item of Indebtedness meets the criteria of more than one of
the types of Indebtedness described above, the Company, in its sole discretion,
will classify such item of Indebtedness and only be required to include the
amount and type of such Indebtedness in one of the above clauses and (ii) an
item of Indebtedness may be divided and classified in more than one of the types
of Indebtedness described above.
(e) Notwithstanding paragraphs (a) and (b) above, the Company shall not,
and shall not permit any Subsidiary Guarantor to, Incur (i) any Indebtedness if
such Indebtedness is subordinate or junior in ranking in any respect to any
Senior Indebtedness of the Company or such Subsidiary Guarantor, as applicable,
unless such Indebtedness is Senior Subordinated Indebtedness or is expressly
subordinated in right of payment to Senior Subordinated Indebtedness or (ii) any
Secured Indebtedness that is not Senior Indebtedness of the
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Company or such Subsidiary Guarantor, as applicable, unless contemporaneously
therewith effective provision is made to secure the Notes or the Subsidiary
Guaranty, as applicable, equally and ratably with such Secured Indebtedness for
so long as such Secured Indebtedness is secured by a Lien.
Limitation on Restricted Payments. (a) The Company shall not, and shall not
permit any Restricted Subsidiary, directly or indirectly, to make a Restricted
Payment if at the time the Company or such Restricted Subsidiary makes such
Restricted Payment: (1) a Default shall have occurred and be continuing (or
would result therefrom); (2) the Company is not able to Incur an additional
$1.00 of Indebtedness pursuant to paragraph (a) of the covenant described under
"-- Limitation on Indebtedness"; or (3) the aggregate amount of such Restricted
Payment together with all other Restricted Payments (the amount of any payments
made in property other than cash to be valued at the fair market value of such
property, as determined in good faith by the Board of Directors) declared or
made since the Issue Date would exceed the sum of: (A) 50% of the Consolidated
Net Income accrued during the period (treated as one accounting period) from the
beginning of the fiscal quarter immediately following the fiscal quarter during
which the Notes are originally issued to the end of the most recent fiscal
quarter prior to the date of such Restricted Payment for which financial
statements are available (or, in case such Consolidated Net Income accrued
during such period (treated as one accounting period) shall be a deficit, minus
100% of such deficit); (B) the aggregate Net Cash Proceeds received by the
Company from the issuance or sale of its Capital Stock (other than Disqualified
Stock) subsequent to the Issue Date (other than an issuance or sale to a
Subsidiary of the Company); (C) the amount by which Indebtedness of the Company
or its Restricted Subsidiaries is reduced on the Company's balance sheet upon
the conversion or exchange (other than by a Subsidiary of the Company)
subsequent to the Issue Date, of any Indebtedness of the Company or its
Restricted Subsidiaries convertible or exchangeable for Capital Stock (other
than Disqualified Stock) of the Company (less the amount of any cash, or the
fair value of any other property, distributed by the Company or any Restricted
Subsidiary upon such conversion or exchange); (D) an amount equal to the sum of
(i) the net reduction in Investments in Unrestricted Subsidiaries resulting from
dividends, repayments of loans or advances or other transfers of assets
subsequent to the Issue Date, in each case to the Company or any Restricted
Subsidiary from Unrestricted Subsidiaries, and (ii) the portion (proportionate
to the Company's equity interest in such Subsidiary) of the fair market value of
the net assets of an Unrestricted Subsidiary at the time such Unrestricted
Subsidiary is designated a Restricted Subsidiary; provided, however, that the
foregoing sum shall not exceed, in the case of any Unrestricted Subsidiary, the
amount of Investments previously made (and treated as a Restricted Payment) by
the Company or any Restricted Subsidiary in such Unrestricted Subsidiary; and
(E) $5 million.
(b) The provisions of the foregoing paragraph (a) shall not prohibit: (i)
any purchase or redemption of Capital Stock or Subordinated Obligations of the
Company or any Restricted Subsidiary made in exchange for, or out of the
proceeds of the substantially concurrent sale of, Capital Stock of the Company
(other than Disqualified Stock and other than Capital Stock issued or sold to a
Subsidiary of the Company); provided, however, that (A) such purchase or
redemption shall be excluded from the calculation of the amount of Restricted
Payments and (B) the Net Cash Proceeds from such sale shall be excluded from the
calculation of amounts under clause (3)(B) of paragraph (a) above; (ii) any
purchase or redemption of (A) Subordinated Obligations of the Company made in
exchange for, or out of the proceeds of the substantially concurrent sale of,
Indebtedness of the Company which is permitted to be Incurred pursuant to
paragraphs (b) and (c) of the covenant described under "-- Limitation on
Indebtedness" or (B) Subordinated Obligations of a Restricted Subsidiary made in
exchange for, or out of the proceeds of the substantially concurrent sale of,
Indebtedness of such Restricted Subsidiary or the Company which is permitted to
be Incurred pursuant to paragraphs (b) and (c) of the covenant described under
"-- Limitation on Indebtedness"; provided, however, that such purchase or
redemption shall be excluded from the calculation of the amount of Restricted
Payments; (iii) any purchase or redemption of (A) Disqualified Stock of the
Company made in exchange for, or out of the proceeds of the substantially
concurrent sale of, Disqualified Stock of the Company or (B) Disqualified Stock
of a Restricted Subsidiary made in exchange for, or out of the proceeds of the
substantially concurrent sale of, Disqualified Stock of such Restricted
Subsidiary or the Company; provided, however, that (1) at the time of such
exchange, no Default or Event of Default shall have occurred and be continuing
or would result therefrom and (2) such purchase or redemption will be excluded
from the calculation of the amount of Restricted Payments; (iv) dividends paid
within 60 days after the date of declaration thereof if at such date of
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declaration such dividend would have complied with this covenant; provided,
however, that at the time of payment of such dividend, no other Default shall
have occurred and be continuing (or would result therefrom); provided, further,
however, that such dividend shall be included in the calculation of the amount
of Restricted Payments; (v) the repurchase of shares of, or options to purchase
shares of, Capital Stock of the Company or any of its Subsidiaries from
officers, former officers employees, former employees, directors or former
directors of the Company or any of its Subsidiaries (or permitted transferees of
such employees, former employees, directors or former directors), pursuant to
the terms of the agreements (including employment agreements) or plans (or
amendments thereto) approved by the Board of Directors under which such
individuals purchase or sell, or are granted the option to purchase or sell,
shares of such common stock; provided, however, that the aggregate amount of
such repurchases shall not exceed $2.5 million in any one year and $5.0 million
in the aggregate; provided, further, however, that (1) at the time of such
repurchase, no Default or Event of Default shall have occurred and be continuing
or would result therefrom and (2) all such repurchases shall be included in the
calculation of the amount of Restricted Payments; or (vi) dividends and
redemptions required to be made with respect to the Existing Preferred Stock;
provided, however, that (1) at the time of any such dividend or redemption, no
Default or Event of Default shall have occurred and be continuing or would
result therefrom and (2) all such dividends and redemptions shall be included in
the calculation of the amount of Restricted Payments.
Limitation on Restrictions on Distributions from Restricted
Subsidiaries. The Company shall not, and shall not permit any Restricted
Subsidiary to, create or otherwise cause or permit to exist or become effective
any consensual encumbrance or consensual restriction on the ability of any
Restricted Subsidiary (a) to pay dividends or make any other distributions on
its Capital Stock to the Company or a Restricted Subsidiary or pay any
Indebtedness owed to the Company, (b) to make any loans or advances to the
Company or (c) transfer any of its property or assets to the Company, except:
(i) any encumbrance or restriction pursuant to an agreement in effect at or
entered into on the Issue Date; (ii) any encumbrance or restriction with respect
to a Restricted Subsidiary pursuant to an agreement relating to any Indebtedness
Incurred by such Restricted Subsidiary which was entered into on or prior to the
date on which such Restricted Subsidiary was acquired by the Company (other than
as consideration in, or to provide all or any portion of the funds or credit
support utilized to consummate, the transaction or series of related
transactions pursuant to which such Restricted Subsidiary became a Restricted
Subsidiary or was acquired by the Company) and outstanding on such date; (iii)
any encumbrance or restriction pursuant to an agreement effecting a Refinancing
of Indebtedness Incurred pursuant to an agreement referred to in clause (i) or
(ii) of this covenant (or effecting a Refinancing of such Refinancing
Indebtedness pursuant to this clause (iii)) or contained in any amendment to an
agreement referred to in clause (i) or (ii) of this covenant or this clause
(iii); provided, however, that the encumbrances and restrictions with respect to
such Restricted Subsidiary contained in any such refinancing agreement or
amendment are no more restrictive in any material respect than the encumbrances
and restrictions with respect to such Restricted Subsidiary contained in such
agreements; (iv) any such encumbrance or restriction consisting of customary
non-assignment provisions in leases governing leasehold interests to the extent
such provisions restrict the transfer of the lease or the property leased
thereunder; (v) in the case of clause (c) above, restrictions contained in
security agreements or mortgages securing Indebtedness (other than Tooling
Indebtedness) of a Restricted Subsidiary to the extent such restrictions
restrict the transfer of the property subject to such security agreements or
mortgages; (vi) any restriction with respect to a Restricted Subsidiary imposed
pursuant to an agreement entered into for the sale or disposition of all or
substantially all the Capital Stock or assets of such Restricted Subsidiary
pending the closing of such sale or disposition; and (vii) any restriction
imposed by applicable law.
Limitation on Sales of Assets and Subsidiary Stock. The Company shall not,
and shall not permit any Restricted Subsidiary to, consummate any Asset
Disposition unless the Company or such Restricted Subsidiary receives
consideration at the time of such Asset Disposition at least equal to the fair
market value (including as to the value of all non-cash consideration), as
determined in good faith by the Board of Directors, of the shares and assets
subject to such Asset Disposition and at least 75% of the consideration therefor
received by the Company or such Restricted Subsidiary is in the form of cash or
cash equivalents. For the purposes of this covenant, the following are deemed to
be cash and cash equivalents: (x) the assumption of Indebtedness of the Company
or any Restricted Subsidiary and the release of the Company or such Restricted
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Subsidiary from all liability on such Indebtedness in connection with such Asset
Disposition and (y) securities received by the Company or any Restricted
Subsidiary from the transferee that are immediately converted by the Company or
such Restricted Subsidiary into cash.
With respect to any Asset Disposition occurring on or after the Issue Date
from which the Company or any Restricted Subsidiary receives Net Available Cash,
the Company or such Restricted Subsidiary shall (i) within 360 days after the
date such Net Available Cash is received and to the extent the Company or such
Restricted Subsidiary elects (or is required by the terms of any Senior
Indebtedness) to (A) apply an amount equal to such Net Available Cash to prepay,
repay or purchase Senior Indebtedness of the Company or such Restricted
Subsidiary, in each case owing to a Person other than the Company or any
Affiliate of the Company, or (B) invest an equal amount, or the amount not so
applied pursuant to clause (A), in Additional Assets (including by means of an
Investment in Additional Assets by a Restricted Subsidiary with Net Available
Cash received by the Company or another Restricted Subsidiary) and (ii) apply
such excess Net Available Cash (to the extent not applied pursuant to clause
(i)) as provided in the following paragraphs of the covenant described
hereunder; provided, however, that in connection with any prepayment, repayment
or purchase of Senior Indebtedness pursuant to clause (A) above, the Company or
such Restricted Subsidiary shall retire such Senior Indebtedness and shall cause
the related loan commitment (if any) to be permanently reduced in an amount
equal to the principal amount so prepaid, repaid or purchased. The amount of Net
Available Cash required to be applied pursuant to clause (ii) above and not
theretofore so applied shall constitute "Excess Proceeds." Pending application
of Net Available Cash pursuant to this provision, such Net Available Cash shall
be invested in Temporary Cash Investments.
If at any time the aggregate amount of Excess Proceeds not theretofore
subject to an Excess Proceeds Offer (as defined below) totals at least $5
million, the Company shall, not later than 30 days after the end of the period
during which the Company is required to apply such Excess Proceeds pursuant to
clause (i) of the immediately preceding paragraph (or, if the Company so elects,
at any time within such period), make an offer (an "Excess Proceeds Offer") to
purchase from the Holders on a pro rata basis an aggregate principal amount of
Notes equal to the Excess Proceeds (rounded down to the nearest multiple of
$1,000) on such date, at a purchase price equal to 100% of the principal amount
of such Notes, plus, in each case, accrued interest (if any) to the date of
purchase (the "Excess Proceeds Payment"). Upon completion of an Excess Proceeds
Offer the amount of Excess Proceeds remaining after application pursuant to such
Excess Proceeds Offer, (including payment of the purchase price for Notes duly
tendered) may be used by the Company for any corporate purpose (to the extent
not otherwise prohibited by the Indenture).
The Company shall comply, to the extent applicable, with the requirements
of Section 14(e) of the Exchange Act and any other securities laws or
regulations thereunder in the event that such Excess Proceeds are received by
the Company under the covenant described hereunder and the Company is required
to repurchase Notes as described above. To the extent that the provisions of any
securities laws or regulations conflict with the provisions of the covenant
described hereunder, the Company shall comply with the applicable securities
laws and regulations and shall not be deemed to have breached its obligations
under the covenant described hereunder by virtue thereof.
Limitation on Affiliate Transactions. (a) The Company shall not, and shall
not permit any Restricted Subsidiary to, enter into or permit to exist any
transaction or series of related transactions (including the purchase, sale,
lease or exchange of any property, employee compensation arrangements or the
rendering of any service) with any Affiliate of the Company (an "Affiliate
Transaction") unless the terms thereof (1) are no less favorable to the Company
or such Restricted Subsidiary than those that could be obtained at the time of
such transaction in arm's-length dealings with a Person who is not such an
Affiliate, (2) if such Affiliate Transaction (or series of related Affiliate
Transactions) involve aggregate payments in an amount in excess of $1 million in
any one year, (i) are set forth in writing, (ii) comply with clause (1) and
(iii) have been approved by a majority of the disinterested members of the Board
of Directors and (3) if such Affiliate Transaction (or series of related
Affiliate Transactions) involve aggregate payments in an amount in excess of $5
million in any one year, (i) comply with clause (2) and (ii) have been
determined by a nationally recognized investment banking firm to be fair, from a
financial standpoint, to the Company and its Restricted Subsidiaries.
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(b) The provisions of the foregoing paragraph (a) shall not prohibit (i)
any Restricted Payment permitted to be paid pursuant to the covenant described
under "-- Limitation on Restricted Payments," (ii) any issuance of securities,
or other payments, awards or grants in cash, securities or otherwise, pursuant
to, or the funding of, employment arrangements, stock options and stock
ownership plans in the ordinary course of business and approved by the Board of
Directors, (iii) the grant of stock options or similar rights to employees and
directors of the Company in the ordinary course of business and pursuant to
plans approved by the Board of Directors, (iv) loans or advances to employees in
the ordinary course of business of the Company or its Restricted Subsidiaries,
(v) fees, compensation or employee benefit arrangements paid to and indemnity
provided for the benefit of directors, officers or employees of the Company or
any Subsidiary in the ordinary course of business, (vi) payments made to The
Oxford Investment Group, Inc. for (x) management and consulting services in an
aggregate amount not to exceed $1,000,000 in any one year and (y) investment
banking services in connection with acquisition of assets or businesses, by the
Company or any Subsidiary not to exceed the greater of (A) 1.25% of the purchase
price paid by the Company or such Subsidiary for the assets or business acquired
(including Indebtedness assumed by the Company or such Subsidiary as part of
such acquisition) and (B) $200,000; or (vii) any Affiliate Transaction between
the Company and a Restricted Subsidiary or between Restricted Subsidiaries in
the ordinary course of business (so long as the other stockholders of any
participating Restricted Subsidiaries which are not Wholly Owned Restricted
Subsidiaries are not themselves Affiliates of the Company).
Limitation on the Issuance or Sale of Capital Stock of Restricted
Subsidiaries. The Company shall not (i) sell, pledge, hypothecate or otherwise
dispose of any shares of Capital Stock of a Restricted Subsidiary (other than
pledges of Capital Stock securing Senior Indebtedness) or (ii) permit any
Restricted Subsidiary, directly or indirectly, to issue or sell or otherwise
dispose of any shares of its Capital Stock other than (A) to the Company or a
Wholly Owned Subsidiary, (B) directors' qualifying shares, (C) if, immediately
after giving effect to such issuance or sale, such Restricted Subsidiary would
no longer constitute a Restricted Subsidiary or (D) the issuance of Preferred
Stock by any Subsidiary Guarantor as partial payment for the acquisition by such
Subsidiary Guarantor of Additional Assets. Notwithstanding the foregoing, the
Company may sell, and may permit a Restricted Subsidiary to issue and sell, up
to 20% of the outstanding Common Stock of a Restricted Subsidiary to officers
and employees of such Restricted Subsidiary. The proceeds of any sale of such
Capital Stock permitted hereby will be treated as Net Available Cash from an
Asset Disposition and must be applied in accordance with the terms of the
covenant described under "-- Limitation on Sales of Assets and Subsidiary
Stock."
Limitation on Liens. The Company shall not, and shall not permit any
Restricted Subsidiary to, directly or indirectly, Incur or permit to exist any
Lien of any nature whatsoever on any property of the Company or any Restricted
Subsidiary (including Capital Stock of a Restricted Subsidiary), whether owned
at the Issue Date or thereafter acquired, which secures Indebtedness that ranks
pari passu with or is subordinated to the Notes or the Subsidiary Guaranties
unless (i) if such Lien secures Indebtedness that ranks pari passu with the
Notes and the Subsidiary Guaranties, the Notes are secured on an equal and
ratable basis with the obligation so secured until such time as such obligation
is no longer secured by a Lien or (ii) if such Lien secures Indebtedness that is
subordinated to the Notes and the Subsidiary Guaranties, such Lien shall be
subordinated to a Lien granted to the Holders on the same collateral as that
securing such Lien to the same extent as such subordinated Indebtedness is
subordinated to the Note and the Subsidiary Guaranties.
Merger and Consolidation. The Company shall not consolidate with or merge
with or into, or convey, transfer or lease, in one transaction or a series of
related transactions, all or substantially all its assets to, any Person,
unless: (i) the resulting, surviving or transferee Person (the "Successor
Company") shall be a Person organized and existing under the laws of the United
States of America, any State thereof or the District of Columbia and the
Successor Company (if not the Company) shall expressly assume, by an indenture
supplemental thereto, executed and delivered to the Trustee, in form
satisfactory to the Trustee, all the obligations of the Company under the Notes
and the Indenture; (ii) immediately after giving effect to such transaction on a
pro forma basis (and treating any Indebtedness which becomes an obligation of
the Successor Company or any Subsidiary as a result of such transaction as
having been Incurred by such Successor Company or such Subsidiary at the time of
such transaction), no Default shall have occurred and be
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continuing; (iii) except in the case of a merger the sole purpose of which is to
change the Company's jurisdiction of incorporation, immediately after giving
effect to such transaction on a pro forma basis, the Successor Company would be
able to Incur an additional $1.00 of Indebtedness pursuant to paragraph (a) of
the covenant described under "-- Limitation on Indebtedness"; (iv) immediately
after giving effect to such transaction on a pro forma basis, the Successor
Company shall have Consolidated Net Worth in an amount that is not less than the
Consolidated Net Worth of the Company immediately prior to such transaction; and
(v) the Company shall have delivered to the Trustee an Officers' Certificate and
an Opinion of Counsel, each stating that such consolidation, merger or transfer
and such supplemental indenture (if any) comply with the Indenture.
Notwithstanding the foregoing clauses (ii), (iii) and (iv), any Restricted
Subsidiary may consolidate with, merge into or transfer all or part of its
properties and assets to the Company.
The Successor Company shall be the successor to the Company and shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company under the Indenture, but the predecessor Company in the case of a
conveyance, transfer or lease shall not be released from the obligation to pay
the principal of and interest on the Notes.
The Company shall not permit any Subsidiary Guarantor to consolidate with
or merge with or into, or convey, transfer or lease, in one transaction or a
series of transactions, all or substantially all its assets to, any Person,
unless: (i) the resulting, surviving or transferee Person (if not such
Subsidiary) shall be a Person organized and existing under the laws of the
United States of America, any State thereof or the District of Columbia and the
Successor Company (if not such Subsidiary) shall expressly assume, by a Guaranty
Agreement, in form satisfactory to the Trustee, all the obligations of such
Subsidiary under its Subsidiary Guaranty; (ii) immediately after giving effect
to such transaction on a pro forma basis (and treating any Indebtedness which
becomes an obligation of the resulting, surviving or transferee Person as a
result of such transaction as having been Incurred by such Person at the time of
such transaction), no Default shall have occurred and be continuing; and (iii)
the Company shall have delivered to the Trustee an Officers' Certificate and an
Opinion of Counsel, each stating that such consolidation, merger or transfer and
such Guaranty Agreement comply with the Indenture. The provisions of clauses (i)
and (iii) above shall not apply to any transactions which constitute an Asset
Disposition if the Company has complied with the applicable provisions of the
covenant described under "-- Limitation on Sales of Assets and Subsidiary Stock"
above.
Future Guarantors. The Company shall cause each Restricted Subsidiary that
at any time becomes an obligor or guarantor with respect to any obligations
under one or more Bank Credit Agreements to execute and deliver to the Trustee a
supplemental indenture pursuant to which such Restricted Subsidiary will
Guarantee payment of the Notes on the same terms and conditions as those set
forth in the Indenture. Each Subsidiary Guaranty will be limited in amount to an
amount not to exceed the maximum amount that can be Guaranteed by the applicable
Subsidiary Guarantor without rendering such Subsidiary Guaranty voidable under
applicable law relating to fraudulent conveyance or fraudulent transfer or
similar laws affecting the rights of creditors generally.
SEC Reports. Until such time as the Company shall become subject to the
reporting requirements of Section 13 or 15(d) of the Exchange Act, the Company
shall provide the Trustee, the Initial Purchasers, the Noteholders and
prospective Noteholders (upon request) with such annual reports and such
information, documents and other reports as are specified in Sections 13 and
15(d) of the Exchange Act and applicable to a U.S. corporation subject to such
Sections, such information, documents and other reports to be so provided at the
times specified for the filing of such information, documents and reports under
such Sections. Thereafter, notwithstanding that the Company may not be required
to remain subject to the reporting requirements of Section 13 or 15(d) of the
Exchange Act, the Company shall file with the SEC and provide the Trustee and
Noteholders and prospective Noteholders (upon request) with such annual reports
and such information, documents and other reports as are specified in such
Sections and applicable to a U.S. corporation subject to such Sections, such
information, documents and other reports to be so filed and provided at the
times specified for the filing of such information, documents and reports under
such Sections; provided, however, that the Company shall not be required to file
any report, document or other information with the SEC if the SEC does not
permit such filing.
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DEFAULTS
An Event of Default is defined in the Indenture as (i) a default in the
payment of interest on the Notes when due (whether or not such payment is
prohibited by the provisions described under "Subordination" above), continued
for 30 days, (ii) a default in the payment of principal of any Note when due at
its Stated Maturity, upon optional redemption, upon required repurchase, upon
declaration or otherwise (whether or not such payment is prohibited by the
provisions described under "Subordination" above), (iii) the failure by the
Company, to comply for 30 days after notice with any of its obligations under
the covenants described under "-- Limitation on Indebtedness," "-- Limitation on
Restricted Payments," "Limitation on Sales of Assets and Subsidiary Stock," and
"Merger, Consolidation and Sale of Assets", (iv) the failure by the Company to
comply for 60 days after notice with its other agreements contained in the
Indenture, (v) Indebtedness of the Company or any Restricted Subsidiary is not
paid within any applicable grace period after final maturity or is accelerated
by the holders thereof because of a default and the total amount of such
Indebtedness unpaid or accelerated exceeds $5 million (the "cross-acceleration
provision"), (vi) certain events of bankruptcy, insolvency or reorganization of
the Company or a Significant Subsidiary (the "bankruptcy provisions"), (vii) any
judgment or decree for the payment of money in excess of $5 million is rendered
against the Company or a Restricted Subsidiary, remains outstanding following
such judgment and is not discharged, waived or stayed within 60 days after entry
of such judgment or decree (the "judgment default provision"), or (viii) a
Subsidiary Guaranty ceases to be in full force and effect (other than in
accordance with the terms of such Subsidiary Guaranty) or a Subsidiary Guarantor
denies or disaffirms its obligations under its Subsidiary Guaranty. However, a
default under clause (iii) or (iv) will not constitute an Event of Default until
the Trustee or the Holders of 25% in principal amount of the outstanding Notes
notify the Company of the default and the Company does not cure such default
within the time specified in clauses (iii) and (iv) hereof after receipt of such
notice.
If an Event of Default occurs and is continuing, the Trustee or the Holders
of at least 25% in principal amount of the outstanding Notes may declare the
principal of and accrued but unpaid interest on all the Notes to be due and
payable. Upon such a declaration, such principal and interest shall be due and
payable immediately. If an Event of Default relating to certain events of
bankruptcy, insolvency or reorganization of the Company occurs and is
continuing, the principal of and interest on all the Notes will ipso facto
become and be immediately due and payable without any declaration or other act
on the part of the Trustee or any Holders of the Notes. Under certain
circumstances, the Holders of a majority in principal amount of the outstanding
Notes may rescind any such acceleration with respect to the Notes and its
consequences.
Subject to the provisions of the Indenture relating to the duties of the
Trustee, in case an Event of Default occurs and is continuing, the Trustee will
be under no obligation to exercise any of the rights or powers under the
Indenture at the request or direction of any of the Holders unless such Holders
have offered to the Trustee reasonable indemnity or security against any loss,
liability or expense. Except to enforce the right to receive payment of
principal, premium (if any) or interest when due, no Holder may pursue any
remedy with respect to the Indenture or the Notes unless (i) such Holder has
previously given the Trustee notice that an Event of Default is continuing, (ii)
Holders of at least 25% in principal amount of the outstanding Notes have
requested the Trustee to pursue the remedy, (iii) such Holders have offered the
Trustee reasonable security or indemnity against any loss, liability or expense,
(iv) the Trustee has not complied with such request within 60 days after the
receipt thereof and the offer of security or indemnity and (v) the Holders of a
majority in principal amount of the outstanding Notes have not given the Trustee
a direction inconsistent with such request within such 60-day period. Subject to
certain restrictions, the Holders of a majority in principal amount of the
outstanding Notes are given the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or of
exercising any trust or power conferred on the Trustee. The Trustee, however,
may refuse to follow any direction that conflicts with law or the Indenture or
that the Trustee determines is unduly prejudicial to the rights of any other
Holder or that would involve the Trustee in personal liability.
The Indenture provides that if a Default occurs and is continuing and is
known to the Trustee, the Trustee must mail to each Holder notice of the Default
within 90 days after it occurs. Except in the case of a Default in the payment
of principal of or interest on any Note, the Trustee may withhold notice if and
so long
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as a committee of its trust officers determines that withholding notice is not
opposed to the interest of the Holders. In addition, the Company is required to
deliver to the Trustee, within 120 days after the end of each fiscal year, a
certificate indicating whether the signers thereof know of any Default that
occurred during the previous year. The Company also is required to deliver to
the Trustee, within 30 days after the occurrence thereof, written notice of any
event which would constitute certain Defaults, their status and what action the
Company is taking or proposes to take in respect thereof.
AMENDMENTS AND WAIVERS
Subject to certain exceptions, the Indenture may be amended with the
consent of the Holders of a majority in principal amount of the Notes then
outstanding (including consents obtained in connection with a tender offer or
exchange for the Notes) and any past default or compliance with any provisions
may also be waived with the consent of the Holders of a majority in principal
amount of the Notes then outstanding. However, without the consent of each
Holder of an outstanding Note affected thereby, no amendment may, among other
things, (i) reduce the amount of Notes whose Holders must consent to an
amendment, (ii) reduce the rate of or extend the time for payment of interest on
any Note, (iii) reduce the principal of or extend the Stated Maturity of any
Note, (iv) reduce the premium payable upon the redemption of any Note or change
the time at which any Note may be redeemed as described under "-- Optional
Redemption" above, (v) make any Note payable in money other than that stated in
the Note, (vi) impair the right of any Holder to institute suit for the
enforcement of any payment on or with respect to such Holder's Notes or any
Subsidiary Guaranty, (vii) make any change in the amendment provisions which
require each Holder's consent or in the waiver provisions or (viii) make any
change to the subordination provisions of the Indenture that would adversely
affect the Noteholders.
Without the consent of any Holder, the Company and Trustee may amend the
Indenture to cure any ambiguity, omission, defect or inconsistency, to provide
for the assumption by a successor corporation of the obligations of the Company
under the Indenture, to provide for uncertificated Notes in addition to or in
place of certificated Notes (provided that the uncertificated Notes are issued
in registered form for purposes of Section 163(f) of the Code, or in a manner
such that the uncertificated Notes are described in Section 163(f)(2)(B) of the
Code), to add guarantees with respect to the Notes, to release Subsidiary
Guarantors when permitted by the Indenture, to secure the Notes, to add to the
covenants of the Company for the benefit of the Holders or to surrender any
right or power conferred upon the Company, to make any change that does not
adversely affect the rights of any Holder or to comply with any requirement of
the SEC in connection with the qualification of the Indenture under the Trust
Indenture Act. However, no amendment may be made to the subordination provisions
of the Indenture that adversely affects the rights of any holder of Senior
Indebtedness then outstanding unless the holders of such Senior Indebtedness (or
their Representative) consents to such change.
The consent of the Holders is not necessary under the Indenture to approve
the particular form of any proposed amendment. It is sufficient if such consent
approves the substance of the proposed amendment.
After an amendment under the Indenture becomes effective, the Company is
required to mail to Holders a notice briefly describing such amendment. However,
the failure to give such notice to all Holders, or any defect therein, will not
impair or affect the validity of the amendment.
TRANSFER
Certificated Notes will be issued in registered form and will be
transferable only upon the surrender of the Notes being transferred for
registration of transfer. The Company may require payment of a sum sufficient to
cover any tax, assessment or other governmental charge payable in connection
with certain transfers and exchanges.
DEFEASANCE
The Company at any time may terminate all its obligations under the Notes
and the Indenture ("legal defeasance"), except for certain obligations,
including those respecting the defeasance trust and obligations to
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register the transfer or exchange of the Notes, to replace mutilated, destroyed,
lost or stolen Notes and to maintain a registrar and paying agent in respect of
the Notes. The Company at any time may terminate its obligations under "--
Change of Control" and under the covenants described under "-- Certain
Covenants" (other than the covenant described under "-- Merger and
Consolidation"), the operation of the cross-acceleration provision, the
bankruptcy provisions with respect to Significant Subsidiaries and the
judgment default provision described under "-- Defaults" above and the
limitations contained in clauses (iii) and (iv) under "Certain Covenants --
Merger and Consolidation" above ("covenant defeasance").
The Company may exercise its legal defeasance option notwithstanding its
prior exercise of its covenant defeasance option. If the Company exercises its
legal defeasance option, payment of the Notes may not be accelerated because of
an Event of Default with respect thereto. If the Company exercises its covenant
defeasance option, payment of the Notes may not be accelerated because of an
Event of Default specified in clause (iii) (but only with respect to clauses
(iii) or (iv) under "Certain Covenants -- Merger and Consolidation as it relates
to the failure to comply with such covenants), (iv), (v), (vi) or (vii) under
"-- Defaults" above or because of the failure of the Company to comply with
clause (iii) or (iv) under "Certain Covenants -- Merger and Consolidation"
above. If the Company exercises its legal defeasance option or its covenant
defeasance option, each Subsidiary Guarantor will be released from all of its
obligations with respect to its Subsidiary Guaranty.
In order to exercise either defeasance option, (a) such defeasance must not
result in a breach of, or otherwise constitute a default under any agreement or
investment with respect to any Senior Indebtedness, and no default may exist
under any Indebtedness and (b) the Company must irrevocably deposit in trust
(the "defeasance trust") with the Trustee money or U.S. Government Obligations
for the payment of principal and interest on the Notes to redemption or
maturity, as the case may be, and must comply with certain other conditions,
including delivery to the Trustee of an Opinion of Counsel to the effect that
holders of the Notes will not recognize income, gain or loss for Federal income
tax purposes as a result of such deposit and defeasance and will be subject to
Federal income tax on the same amount and in the same manner and at the same
times as would have been the case if such deposit and defeasance had not
occurred.
CONCERNING THE TRUSTEE
First Trust National Association is the Trustee under the Indenture and has
been appointed by the Company as Registrar and Paying Agent with regard to the
Notes.
The Holders of a majority in principal amount of the outstanding Notes will
have the right to direct the time, method and place of conducting any proceeding
for exercising any remedy available to the Trustee, subject to certain
exceptions. The Indenture provides that if an Event of Default occurs (and is
not cured), the Trustee will be required, in the exercise of its power, to use
the degree of care of a prudent man in the conduct of his own affairs. Subject
to such provisions, the Trustee will be under no obligation to exercise any of
its rights or powers under the Indenture at the request of any Holder of Notes,
unless such Holder shall have offered to the Trustee security and indemnity
satisfactory to it against any loss, liability or expense and then only to the
extent required by the terms of the Indenture.
GOVERNING LAW
The Indenture provides that it and the Notes are governed by, and construed
in accordance with, the laws of the State of New York without giving effect to
applicable principles of conflicts of law to the extent that the application of
the law of another jurisdiction would be required thereby.
CERTAIN DEFINITIONS
"Additional Assets" means (i) any property or assets (other than
Indebtedness and Capital Stock) in a Related Business; or (ii) the Capital Stock
of a Person that becomes a Restricted Subsidiary as a result of the acquisition
of such Capital Stock by the Company or another Restricted Subsidiary; provided,
however, that any such Restricted Subsidiary is primarily engaged in a Related
Business.
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"Affiliate" of any specified Person means any other Person, directly or
indirectly, controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any 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 provisions described under "Certain Covenants -- Limitation on
Restricted Payments," "Certain Covenants -- Limitation on Affiliate
Transactions" and "Certain Covenants -- Limitations on Sales of Assets and
Subsidiary Stock" only, "Affiliate" shall also mean any beneficial owner of
Capital Stock representing 10% or more of the total voting power of the Voting
Stock (on a fully diluted basis) of the Company or of rights or warrants to
purchase such Capital Stock (whether or not currently exercisable) and any
Person who would be an Affiliate of any such beneficial owner pursuant to the
first sentence hereof.
"Asset Disposition" means any sale, lease, transfer or other disposition
(or series of related sales, leases, transfers or dispositions) by the Company
or any Restricted Subsidiary, including any disposition by means of a merger,
consolidation or similar transaction (each referred to for the purposes of this
definition as a "disposition"), of (i) any shares of Capital Stock of a
Restricted Subsidiary (other than directors' qualifying shares and, to the
extent required by local ownership laws in foreign countries, shares owned by
foreign shareholders), (ii) all or substantially all the assets of any division,
business segment or comparable line of business of the Company or any Restricted
Subsidiary or (iii) any other assets of the Company or any Restricted Subsidiary
outside of the ordinary course of business of the Company or such Restricted
Subsidiary. Notwithstanding the foregoing, the term "Asset Disposition" shall
not include (x) a disposition by a Restricted Subsidiary to the Company or by
the Company or a Restricted Subsidiary to a Wholly Owned Subsidiary, (y) for
purposes of the covenant described under "Certain Covenants -- Limitation on
Sales of Assets and Subsidiary Stock", a disposition that constitutes a
Permitted Investment or a Restricted Payment permitted by the covenant described
under "Certain Covenants -- Limitation on Restricted Payments", and (z) a
disposition of assets having a fair market value of less than $1 million.
"Attributable Debt" in respect of a Sale/Leaseback Transaction means, as at
the time of determination, the present value (discounted at the interest rate
borne by the Notes, compounded annually) of the total obligations of the lessee
for rental payments during the remaining term of the lease included in such
Sale/Leaseback Transaction (including any period for which such lease has been
extended).
"Average Life" means, as of the date of determination, with respect to any
Indebtedness or Preferred Stock, the quotient obtained by dividing (i) the sum
of the products of numbers of years from the date of determination to the dates
of each successive scheduled principal payment of such Indebtedness or
redemption or similar payment with respect to such Preferred Stock multiplied by
the amount of such payment by (ii) the sum of all such payments.
"Bank Credit Agreements" means the Senior Credit Facility and any other
bank credit agreement or similar facility entered into in the future by the
Company or any Restricted Subsidiary as any of the same may be amended, waived,
modified, Refinanced or replaced from time to time (except to the extent that
any such amendment, waiver, modification, replacement or Refinancing would be
prohibited by the terms of the Indenture).
"Bank Indebtedness" means any and all present and future amounts payable
under or in respect of the Bank Credit Agreements, including principal, premium
(if any), interest (including interest accruing on or after the filing of any
petition in bankruptcy or for reorganization, whether or not a claim for
post-filing interest is allowed in such proceedings), fees, charges, expenses,
reimbursement obligations, Guarantees and all other amounts and other
Obligations payable thereunder or in respect thereof at any time.
"Board of Directors" means the Board of Directors of the Company or any
committee thereof duly authorized to act on behalf of such Board.
"Business Day" means each day which is not a Legal Holiday.
"Capital Lease Obligations" means an obligation that is required to be
classified and accounted for as a capital lease for financial reporting purposes
in accordance with GAAP, and the amount of Indebtedness
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represented by such obligation shall be the capitalized amount of such
obligation determined 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, rights
to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) equity of such Person, including any Preferred
Stock, but excluding any debt securities convertible into such equity.
"Change of Control" means the occurrence of any of the following events:
(i) any "person" or "group" (as such terms are used in Sections 13(d)
and 14(d) of the Exchange Act), other than one or more Permitted Holders,
is or becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5
under the Exchange Act, except that for purposes of this clause such person
or group shall be deemed to have "beneficial ownership" of all shares that
any such person or group has the right to acquire, whether such right is
exercisable immediately or only after the passage of time), directly or
indirectly, of more than 40% of the total voting power of the Voting Stock
of the Company; provided, however, that such event shall not be deemed to
be a Change of Control so long as the Permitted Holders beneficially own,
directly or indirectly, in the aggregate a greater percentage of the total
voting power of the Voting Stock of the Company than such other person or
group;
(ii) after the first public offering of common stock of the Company,
during any period of two consecutive years, individuals who at the
beginning of such period constituted the Board of Directors (together with
any new directors whose election by such Board of Directors or whose
nomination for election by the shareholders of the Company was approved by
a majority vote of the directors of the Company then still in office who
were either directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any reason to
constitute a majority of the Board of Directors then in office; or
(iii) the merger or consolidation of the Company with or into another
Person or the merger of another Person with or into the Company, or the
sale of all or substantially all the assets of the Company to another
Person (other than a Person that is controlled by the Permitted Holders),
and, in the case of any such merger or consolidation, the securities of the
Company that are outstanding immediately prior to such transaction and
which represent 100% of the aggregate voting power of the Voting Stock of
the Company are changed into or exchanged for cash, securities or property,
unless pursuant to such transaction such securities are changed into or
exchanged for, in addition to any other consideration, securities of the
surviving corporation that represent immediately after such transaction, at
least a majority of the aggregate voting power of the Voting Stock of the
surviving corporation.
"Code" means the Internal Revenue Code of 1986, as amended.
"Consolidated Coverage Ratio" as of any date of determination means the
ratio of (i) the aggregate amount of EBITDA for the period of the most recent
four consecutive fiscal quarters ending at least 45 days (or, if less, the
number of days after the end of such fiscal quarter as the consolidated
financial statements of the Company shall be available) prior to the date of
such determination (determined, for the first three fiscal quarters ending
subsequent to the Issue Date, by annualizing such quarters to the extent
completed) to (ii) Consolidated Interest Expense for such four fiscal quarters;
provided, however, that (1) if the Company or any Restricted Subsidiary has
Incurred any Indebtedness since the beginning of such period that remains
outstanding on such date of determination or if the transaction giving rise to
the need to calculate the Consolidated Coverage Ratio is an Incurrence of
Indebtedness, or both, EBITDA and Consolidated Interest Expense for such period
shall be calculated after giving effect on a pro forma basis to such
Indebtedness as if such Indebtedness had been Incurred on the first day of such
period and the discharge of any other Indebtedness repaid, repurchased, defeased
or otherwise discharged with the proceeds of such new Indebtedness as if such
discharge had occurred on the first day of such period (except that, in the case
of Indebtedness used to finance working capital needs incurred under a revolving
credit or similar arrangement, the amount thereof shall be deemed to be the
average daily balance of such Indebtedness during such four-fiscal-quarter
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period), (2) if since the beginning of such period the Company or any Restricted
Subsidiary shall have made any Asset Disposition, the EBITDA for such period
shall be reduced by an amount equal to the EBITDA (if positive) directly
attributable to the assets which are the subject of such Asset Disposition for
such period, or increased by an amount equal to the EBITDA (if negative)
directly attributable thereto for such period, and Consolidated Interest Expense
for such period shall be reduced by an amount equal to the Consolidated Interest
Expense directly attributable to any Indebtedness of the Company or any
Restricted Subsidiary repaid, repurchased, defeased, assumed by a third person
(to the extent the Company and its Restricted Subsidiaries are no longer liable
for such Indebtedness) or otherwise discharged with respect to the Company and
its continuing Restricted Subsidiaries in connection with such Asset Disposition
for such period (or, if the Capital Stock of any Restricted Subsidiary is sold,
the Consolidated Interest Expense for such period directly attributable to the
Indebtedness of such Restricted Subsidiary to the extent the Company and its
continuing Restricted Subsidiaries are no longer liable for such Indebtedness
after such sale), (3) if since the beginning of such period the Company shall
have consummated a Public Equity Offering following which there is a Public
Market, Consolidated Interest Expense for such period shall be reduced by an
amount equal to the Consolidated Interest Expense directly attributable to any
Indebtedness of the Company or any Restricted Subsidiary repaid, repurchased,
defeased or otherwise discharged with respect to the Company and its Restricted
Subsidiaries in connection with such Public Equity Offering for such period, (4)
if since the beginning of such period the Company or any Restricted Subsidiary
(by merger or otherwise) shall have made an Investment in any Restricted
Subsidiary (or any Person which becomes a Restricted Subsidiary) or an
acquisition of assets, which acquisition constitutes all or substantially all of
an operating unit of a business, including any such Investment or acquisition
occurring in connection with a transaction requiring a calculation to be made
hereunder, EBITDA and Consolidated Interest Expense for such period shall be
calculated after giving pro forma effect thereto (including the Incurrence of
any Indebtedness) as if such Investment or acquisition occurred on the first day
of such period and (5) if since the beginning of such period any Person (that
subsequently became a Restricted Subsidiary or was merged with or into the
Company or any Restricted Subsidiary since the beginning of such period) shall
have made any Asset Disposition, any Investment or acquisition of assets that
would have required an adjustment pursuant to clause (3) or (4) above if made by
the Company or a Restricted Subsidiary during such period, EBITDA and
Consolidated Interest Expense for such period shall be calculated after giving
pro forma effect thereto as if such Asset Disposition, Investment or acquisition
occurred on the first day of such period. For purposes of this definition,
whenever pro forma effect is to be given to an acquisition of assets, the amount
of income, earnings or expense relating thereto and the amount of Consolidated
Interest Expense associated with any Indebtedness Incurred in connection
therewith, the pro forma calculations shall be prepared in accordance with
Article 11 of Regulation S-X promulgated by the Commission as determined in good
faith by a responsible financial or accounting Officer of the Company. If any
Indebtedness bears a floating rate of interest and is being given pro forma
effect, the interest of such Indebtedness shall be calculated as if the rate in
effect on the date of determination had been the applicable rate for the entire
period (taking into account any Interest Rate Agreement applicable to such
Indebtedness if such Interest Rate Agreement has a remaining term in excess of
12 months).
"Consolidated Interest Expense" means, for any period, the total interest
expense of the Company and its consolidated Restricted Subsidiaries, plus, to
the extent not included in such total interest expense, and to the extent
incurred by the Company or its Restricted Subsidiaries, (i) interest expense
attributable to Capital Lease Obligations, (ii) amortization of debt discount,
(iii) capitalized interest, (iv) non-cash interest expenses, (v) commissions,
discounts and other fees and charges owed with respect to letters of credit and
bankers' acceptance financing, (vi) net costs associated with Hedging
Obligations (including amortization of fees), (vii) Preferred Stock dividends in
respect of all Preferred Stock held by Persons other than the Company or a
Wholly Owned Subsidiary, and (viii) interest actually paid on any Indebtedness
of any other Person that is Guaranteed by the Company or any Restricted
Subsidiary. Notwithstanding the foregoing, net interest expense attributable to
Tooling Indebtedness shall not be included in Consolidated Interest Expense
except to the extent such expense would be included in interest expense in
accordance with GAAP.
"Consolidated Net Income" means, for any period, the net income of the
Company and its consolidated Subsidiaries; provided, however, that there shall
not be included in such Consolidated Net Income: (i) any net income (or loss) of
any Person if such Person is not a Restricted Subsidiary, except that subject to
the
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exclusion contained in clause (iv) below, the Company's equity in the net income
of any such Person for such period shall be included in such Consolidated Net
Income up to the aggregate amount of cash actually distributed by such Person
during such period to the Company or a Restricted Subsidiary as a dividend or
other distribution (subject, in the case of a dividend or other distribution
paid to a Restricted Subsidiary, to the limitations contained in clause (iii)
below); (ii) for purposes of subclause (a)(3)(A) of the covenant described under
"Certain Covenants -- Limitation on Restricted Payments" only, any net income
(or loss) of any Person acquired by the Company or a Subsidiary in a pooling of
interests transaction for any period prior to the date of such acquisition;
(iii) any net income of any Restricted Subsidiary if such Restricted Subsidiary
is subject to restrictions, directly or indirectly, on the payment of dividends
or the making of distributions by such Restricted Subsidiary, directly or
indirectly, to the Company, except that (A) subject to the exclusion contained
in clause (iv) below, the Company's equity in the net income of any such
Restricted Subsidiary for such period shall be included in such Consolidated Net
Income up to the aggregate amount of cash that could have been distributed by
such Restricted Subsidiary consistent with such restriction during such period
to the Company or another Restricted Subsidiary as a dividend or other
distribution (subject, in the case of a dividend or other distribution paid to
another Restricted Subsidiary, to the limitation contained in this clause) and
(B) the Company's equity in a net loss of any such Restricted Subsidiary for
such period shall be included in determining such Consolidated Net Income; (iv)
any gain (or loss) realized upon the sale or other disposition of any assets of
the Company or its consolidated Subsidiaries (including pursuant to any
sale-and-leaseback arrangement) which is not sold or otherwise disposed of in
the ordinary course of business and any gain (or loss) realized upon the sale or
other disposition of any Capital Stock of any Person; (v) extraordinary gains or
losses; and (vi) the cumulative effect of a change in accounting principles.
Notwithstanding the foregoing, for the purposes of the covenant described under
"Certain Covenants -- Limitation on Restricted Payments" only, there shall be
excluded from Consolidated Net Income any dividends, repayments of loans or
advances or other transfers of assets from Unrestricted Subsidiaries to the
Company or a Restricted Subsidiary to the extent such dividends, repayments or
transfers increase the amount of Restricted Payments permitted under such
covenant pursuant to clause (a)(3)(D) thereof.
"Consolidated Net Worth" means the total of the amounts shown on the
balance sheet of the Company and its consolidated Subsidiaries, determined on a
consolidated basis in accordance with GAAP, as of the end of the most recent
fiscal quarter of the Company ending at least 45 days prior to the taking of any
action for the purpose of which the determination is being made, as (i) the par
or stated value of all outstanding Capital Stock of the Company plus (ii)
paid-in capital or capital surplus relating to such Capital Stock plus (iii) any
retained earnings or earned surplus less (A) any accumulated deficit and (B) any
amounts attributable to Disqualified Stock.
"Currency Agreement" means, with respect to any Person, any foreign
exchange contract, currency swap agreement or other similar agreement to which
such Person is a party or a beneficiary.
"Default" means any event which is, or after notice or passage of time or
both would be, an Event of Default.
"Designated Senior Indebtedness" means (i) the Bank Indebtedness and (ii)
any other Senior Indebtedness of the Company which, at the date of
determination, has an aggregate principal amount outstanding of, or under which,
at the date of determination, the holders thereof are committed to lend up to,
at least $10 million and is specifically designated by the Company in the
instrument evidencing or governing such Senior Indebtedness as "Designated
Senior Indebtedness" for purposes of the Indenture.
"Disqualified Stock" means, with respect to any Person, any Capital Stock
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 (i) matures
or is mandatorily redeemable pursuant to a sinking fund obligation or otherwise,
(ii) is convertible or exchangeable, at the option of the holder thereof, for
Indebtedness or Disqualified Stock or (iii) is redeemable at the option of the
holder thereof, in whole or in part, in each case on or prior to the first
anniversary of the Stated Maturity of the Notes.
"EBITDA" for any period means the sum of Consolidated Net Income plus
Consolidated Interest Expense plus, without duplication, the following to the
extent deducted in calculating such Consolidated Net
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Income: (i) income tax expense (including Michigan Single Business Tax expense),
(ii) depreciation expense, (iii) amortization expense and (iv) all other
non-cash items reducing Consolidated Net Income (other than items that will
require cash payments and for which an accrual or reserve is, or is required by
GAAP to be, made), less all non-cash items increasing Consolidated Net Income,
in each case for such period. Notwithstanding the foregoing, the provision for
taxes based on the income or profits of, and the depreciation and amortization
of, a Subsidiary of the Company shall be added to Consolidated Net Income to
compute EBITDA only to the extent (and in the same proportion) that the net
income of such Subsidiary was included in calculating Consolidated Net Income.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Existing Preferred Stock" means the Series A $3.00 cumulative Preferred
Stock issued by Lobdell and the Series B Preferred Stock issued by Lobdell in
the aggregate amount of $50.7 million, less any shares of such preferred stock
repurchased, redeemed or canceled subsequent to the Issue Date, as the terms of
such preferred stock shall exist as of the Issue Date.
"GAAP" means generally accepted accounting principles in the United States
of America as in effect as of the Issue Date, including those set forth in (i)
the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants, (ii) statements and
pronouncements of the Financial Accounting Standards Board and (iii) such other
statements by such other entity as approved by a significant segment of the
accounting profession.
"Guarantee" means any obligation, contingent or otherwise, of any Person
directly or indirectly guaranteeing any Indebtedness or other obligation of any
Person and any obligation, direct or indirect, contingent or otherwise, of such
Person (i) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Indebtedness or other obligation of such Person (whether
arising by virtue of partnership arrangements, or by agreements to keep-well, to
purchase assets, goods, securities or services, to take-or-pay or to maintain
financial statement conditions or otherwise) or (ii) entered into for the
purpose of assuring in any other manner the obligee of such Indebtedness or
other obligation of the payment thereof or to protect such obligee against loss
in respect thereof (in whole or in part); provided, however, that the term
"Guarantee" shall not include endorsements for collection or deposit in the
ordinary course of business. The term "Guarantee" used as a verb has a
corresponding meaning. The term "Guarantor" shall mean any Person Guaranteeing
any obligation.
"Hedging Obligations" of any Person means the obligations of such Person
pursuant to any Interest Rate Agreement or Currency Agreement.
"Holder" or "Noteholder" means the Person in whose name a Note is
registered on the Registrar's books.
"Incur" means issue, assume, Guarantee, incur or otherwise become liable
for; provided, however, that any Indebtedness or Capital Stock of a Person
existing at the time such Person becomes a Subsidiary (whether by merger,
consolidation, acquisition or otherwise) shall be deemed to be Incurred by such
Subsidiary at the time it becomes a Subsidiary; provided, further, however, that
in the case of a discount security, neither the accrual of interest nor the
accretion of original issue discount shall be considered an Incurrence of
Indebtedness, but the entire face amount of such security shall be deemed
Incurred upon the issuance of such security. The term "Incurrence" when used as
a noun shall have a correlative meaning.
"Indebtedness" means, with respect to any Person on any date of
determination (without duplication), (i) the principal of and premium (if any)
in respect of (A) indebtedness of such Person for money borrowed and (B)
indebtedness evidenced by notes, debentures, bonds or other similar instruments
for the payment of which such Person is responsible or liable; (ii) all Capital
Lease Obligations of such Person and all Attributable Debt in respect of
Sale/Leaseback Transactions entered into by such Person; (iii) all obligations
of such Person issued or assumed as the deferred purchase price of property or
services, all conditional sale obligations of such Person and all obligations of
such Person under any title retention agreement (but excluding trade accounts
payables arising in the ordinary course of business and which are not more than
90 days past due and not in dispute), which purchase price or obligation is due
more than six months after the date of placing such property in service or
taking delivery and title thereto or the completion of such services
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(provided that, in the case of obligations of an acquired Person assumed in
connection with an acquisition of such Person, such obligations would constitute
Indebtedness of such Person); (iv) all obligations of such Person for the
reimbursement of any obligor on any letter of credit, banker's acceptance or
similar credit transaction (other than obligations with respect to letters of
credit securing obligations (other than obligations described in (i) through
(iii) above) entered into in the ordinary course of business of such Person to
the extent such letters of credit are not drawn upon or, if and to the extent
drawn upon, such drawing is reimbursed no later than the tenth Business Day
following receipt by such Person of a demand for reimbursement following payment
on the letter of credit); (v) the amount of all obligations of such Person with
respect to the redemption, repayment or other repurchase of any Disqualified
Stock or, with respect to any Subsidiary of such Person, any Preferred Stock
(but excluding, in each case, any accrued dividends); (vi) all obligations of
the type referred to in clauses (i) through (v) of other Persons and all
dividends of other Persons for the payment of which, in either case, such Person
is responsible or liable, directly or indirectly, as obligor, guarantor or
otherwise, including by means of any Guarantee; (vii) all obligations of the
type referred to in clauses (i) through (vi) of other Persons secured by any
Lien on any property or asset of such Person (whether or not such obligation is
assumed by such Person), the amount of such obligation being deemed to be the
lesser of the value of such property or assets or the amount of the obligation
so secured; and (viii) to the extent not otherwise included in this definition,
Hedging Obligations of such Person. The amount of Indebtedness of any Person at
any date shall be the outstanding balance at such date of all unconditional
obligations as described above and the maximum liability, upon the occurrence of
the contingency giving rise to the obligation, of any contingent obligations as
described above at such date; provided, however, that the amount outstanding at
any time of any Indebtedness issued with original issue discount shall be deemed
to be the face amount of such Indebtedness less the remaining unamortized
portion of the original issue discount of such Indebtedness at such time as
determined in conformity with GAAP.
"Interest Rate Agreement" means any interest rate swap agreement, interest
rate cap agreement or other financial agreement or arrangement designed to
protect the Company or any Restricted Subsidiary against fluctuations in
interest rates.
"Investment" in any Person means any direct or indirect advance, loan
(other than advances to customers in the ordinary course of business that are
recorded as accounts receivable on the balance sheet of such Person) or other
extensions of credit (including by way of Guarantee or similar arrangement) or
capital contribution to (by means of any transfer of cash or other property to
others or any payment for property or services for the account or use of
others), or any purchase or acquisition of Capital Stock, Indebtedness or other
similar instruments issued by such Person. For purposes of the definition of
"Unrestricted Subsidiary," the definition of "Restricted Payment" and the
covenant described under "Certain Covenants -- Limitation on Restricted
Payments," (i) "Investment" shall include the portion (proportionate to the
Company's equity interest in such Subsidiary) of the fair market value of the
net assets of any Subsidiary of the Company at the time that such Subsidiary is
designated an Unrestricted Subsidiary; provided, however, that upon a
redesignation of such Subsidiary as a Restricted Subsidiary, the Company shall
be deemed to continue to have a permanent "Investment" in an Unrestricted
Subsidiary equal to an amount (if positive) equal to (x) the Company's
"Investment" in such Subsidiary at the time of such redesignation less (y) the
portion (proportionate to the Company's equity interest in such Subsidiary) of
the fair market value of the net assets of such Subsidiary at the time of such
redesignation; and (ii) any property transferred to or from an Unrestricted
Subsidiary shall be valued at its fair market value at the time of such
transfer, in each case as determined in good faith by the Board of Directors.
"Issue Date" means the date on which the Notes are originally issued.
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions are not required to be open in the State of New York.
"Lien" means any mortgage, pledge, security interest, encumbrance, lien or
charge of any kind (including any conditional sale or other title retention
agreement or lease in the nature thereof).
"Net Available Cash" from an Asset Disposition means cash payments received
by the Company or any of its Subsidiaries therefrom (including any cash payments
received by way of deferred payment of principal
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pursuant to a note or installment receivable or otherwise, but only as and when
received, but excluding any other consideration received in the form of
assumption by the acquiring Person of Indebtedness or other obligations relating
to such properties or assets or received in any other noncash form) in each case
net of (i) all legal, title and recording tax expenses, commissions and other
fees and expenses incurred, and all Federal, state, provincial, foreign and
local taxes required to be paid or accrued as a liability under GAAP, as a
consequence of such Asset Disposition, (ii) all payments made on any
Indebtedness which is secured by any assets subject to such Asset Disposition,
in accordance with the terms of any Lien upon or other security agreement of any
kind with respect to such assets, or which must by its terms, 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 distributions
and other payments required to be made to minority interest holders in
Subsidiaries or Joint Ventures as a result of such Asset Disposition and (iv)
the deduction of appropriate amounts provided by the seller as a reserve, in
accordance with GAAP, against any liabilities associated with the property or
other assets disposed in such Asset Disposition and retained by the Company or
any Restricted Subsidiary after such Asset Disposition, including without
limitation liabilities under any indemnification obligations associated with
such Asset Disposition.
"Net Cash Proceeds," with respect to any issuance or sale of Capital Stock,
means the cash proceeds of such issuance or sale net of attorneys fees,
accountants fees, underwriters' or placement agents' fees, discounts or
commissions and brokerage, consultant and other fees actually incurred in
connection with such issuance or sale and net of taxes paid or payable as a
result thereof.
"Obligations" means all present and future obligations for principal,
premium, interest (including, without limitation, any interest accruing
subsequent to the filing of a petition of bankruptcy at the rate provided for in
the documentation with respect thereto, whether or not such interest is an
allowed claim under applicable law), penalties, fees, indemnifications,
reimbursements (including, without limitation, all reimbursement and other
obligation pursuant to any letters of credit, bankers acceptances or similar
instruments or documents), damages and other liabilities payable under the
documentation at any time governing any indebtedness.
"Permitted Holders" means (i) any of Selwyn Isakow, his spouse and any of
his lineal descendants and their respective spouses (collectively, the "Isakow
Family") whether acting in their own name or as one or as a majority of persons
having the power to exercise the voting rights attached to, or having investment
power over, shares held by others, (ii) any controlled Affiliate of any member
of the Isakow Family, and (iii) any trust solely for the benefit of one or more
members of the Isakow Family (whether or not any member of the Isakow Family is
a trustee of such trust).
"Permitted Investment" means an Investment by the Company or any Restricted
Subsidiary in (i) the Company, (ii) a Restricted Subsidiary or a Person that
will, upon the making of such Investment, become a Restricted Subsidiary;
provided, however, that the primary business of such Restricted Subsidiary is a
Related Business; (iii) another Person if as a result of such Investment such
other Person is merged or consolidated with or into, or transfers or conveys all
or substantially all its assets to, the Company or a Restricted Subsidiary;
provided, however, that such Person's primary business is a Related Business;
(iv) Temporary Cash Investments; (v) receivables owing to the Company or any
Restricted Subsidiary if created or acquired in the ordinary course of business
and payable or dischargeable in accordance with customary trade terms; provided,
however, that such trade terms may include such concessionary trade terms as the
Company or any such Restricted Subsidiary deems reasonable under the
circumstances; (vi) payroll, travel and similar advances to cover matters that
are expected at the time of such advances ultimately to be treated as expenses
for accounting purposes and that are made in the ordinary course of business;
(vii) loans or advances to employees made in the ordinary course of business
consistent with past practices of the Company or such Restricted Subsidiary;
(viii) stock, obligations or securities received in settlement of debts created
in the ordinary course of business and owing to the Company or any Restricted
Subsidiary or in satisfaction of judgments; (ix) Persons other than Restricted
Subsidiaries that are primarily engaged in a Related Business, in an aggregate
amount not to exceed $15 million (to the extent utilized for an Investment, such
amount will be reinstated to the extent that the Company or any Restricted
Subsidiary receives dividends, repayments of loans or other transfers of assets
as a return of such Investment); (x) any Person to the extent such
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Investment is received in exchange for the transfer to such Person of the assets
owned as of the Issue Date by Laserweld International L.L.C.; and (xi) any
Person to the extent such Investment represents the non-cash portion of the
consideration received for an Asset Disposition as permitted pursuant to the
covenant described under "Certain Covenants -- Limitation on Sales of Assets and
Subsidiary Stock."
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization, government
or any agency or political subdivision thereof or any other entity.
"Preferred Stock," as applied to the Capital Stock of any corporation,
means Capital Stock of any class or classes (however designated) which is
preferred as to the payment of dividends, or as to the distribution of assets
upon any voluntary or involuntary liquidation or dissolution of such
corporation, over shares of Capital Stock of any other class of such
corporation.
"principal" of a Note means the principal of the Note plus the premium, if
any, payable on the Note which is due or overdue or is to become due at the
relevant time.
"Public Equity Offering" means an underwritten primary public offering of
common stock of the Company pursuant to an effective registration statement
under the Securities Act.
"Public Market" means any time after (i) a Public Equity Offering has been
consummated and (ii) at least 10% of the total issued and outstanding common
stock of the Company has been distributed by means of an effective registration
statement under the Securities Act or sales pursuant to Rule 144 under the
Securities Act.
"Purchase Money Indebtedness" mean Indebtedness (i) consisting of the
deferred purchase price of property, conditional sale obligations, obligations
under any title retention agreement, other purchase money obligations and
obligations in respect of industrial revenue bonds or similar Indebtedness, in
each case where the maturity of such Indebtedness does not exceed the
anticipated useful life of the asset being financed, and (ii) incurred to
finance the acquisition by the Company or a Restricted Subsidiary of such asset,
including additions and improvements; provided, however, that any Lien arising
in connection with any such Indebtedness shall be limited to the specified asset
being financed or, in the case of real property or fixtures, including additions
and improvements, the real property on which such asset is attached; and
provided, further, however, that such Indebtedness is Incurred within 90 days
after such acquisition of such asset by the Company or Restricted Subsidiary.
"Refinance" means, in respect of any Indebtedness, to refinance, extend,
renew, refund, repay, prepay, redeem, defease or retire, or to issue other
Indebtedness in exchange or replacement for, such Indebtedness. "Refinanced" and
"Refinancing" shall have correlative meanings.
"Refinancing Indebtedness" means Indebtedness that Refinances any
Indebtedness of the Company or any Restricted Subsidiary existing on the Issue
Date or Incurred in compliance with the Indenture; provided, however, that (i)
such Refinancing Indebtedness has a Stated Maturity no earlier than the Stated
Maturity of the Indebtedness being Refinanced, (ii) such Refinancing
Indebtedness has an Average Life at the time such Refinancing Indebtedness is
Incurred that is equal to or greater than the Average Life of the Indebtedness
being Refinanced and (iii) such Refinancing Indebtedness has an aggregate
principal amount (or if Incurred with original issue discount, an aggregate
issue price) that is equal to or less than the aggregate principal amount (or if
Incurred with original issue discount, the aggregate accreted value) then
outstanding or committed (plus fees and expenses, including any premium and
defeasance costs) under the Indebtedness being Refinanced; provided further,
however, that Refinancing Indebtedness shall not include (x) Indebtedness of a
Subsidiary that Refinances Indebtedness of the Company or (y) Indebtedness of
the Company or a Restricted Subsidiary that Refinances Indebtedness of an
Unrestricted Subsidiary.
"Related Business" means any business related, ancillary or complementary
(as determined in good faith by the Board of Directors) to the businesses of the
Company and the Restricted Subsidiaries on the Issue Date.
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"Representative" means any trustee, agent or representative (if any) for an
issue of Senior Indebtedness of the Company.
"Restricted Payment" means, with respect to any Person, (i) the declaration
or payment of any dividends or any other distributions on or in respect of its
Capital Stock (including any payment in connection with any merger or
consolidation involving such Person) or similar payment to the holders of its
Capital Stock, except dividends or distributions payable solely in its Capital
Stock (other than Disqualified Stock) and except dividends or distributions
payable solely to the Company or a Restricted Subsidiary (and, if such
Restricted Subsidiary is not wholly owned, to its other shareholders on a pro
rata basis or on a basis that results in the receipt by the Company or a
Restricted Subsidiary of dividends or distributions of greater value than it
would receive on a pro rata basis), (ii) the purchase, redemption or other
acquisition or retirement for value of any Capital Stock of the Company held by
any Person or of any Capital Stock of a Restricted Subsidiary held by any
Affiliate of the Company (other than a Restricted Subsidiary), including the
exercise of any option to exchange any Capital Stock (other than into Capital
Stock of the Company that is not Disqualified Stock), (iii) the purchase,
repurchase, redemption, defeasance or other acquisition or retirement for value,
prior to scheduled maturity, scheduled repayment or scheduled sinking fund
payment of any Subordinated Obligations (other than the purchase, repurchase or
other acquisition of Subordinated Obligations purchased in anticipation of
satisfying a sinking fund obligation, principal installment or final maturity,
in each case due within one year of the date of acquisition) or (iv) the making
of any Investment in any Person (other than a Permitted Investment).
"Restricted Subsidiary" means any Subsidiary of the Company that is not an
Unrestricted Subsidiary. As of the Issue Date, the following Subsidiaries of the
Company were Restricted Subsidiaries: Lobdell Emery Corporation, BMG North
America Limited, Winchester Fabrication Corporation, Creative Fabrication
Corporation, Parallel Group International, Inc., Laserweld International,
L.L.C., Concept Management Corporation, Lewis Emery Capital Corporation and BMG
Holdings, Inc.
"Sale/Leaseback Transaction" means an arrangement relating to property now
owned or hereafter acquired whereby the Company or a Restricted Subsidiary
transfers such property to a Person and the Company or a Restricted Subsidiary
leases it from such Person.
"SEC" means the Securities and Exchange Commission.
"Secured Indebtedness" means any Indebtedness of the Company secured by a
Lien. "Secured Indebtedness" of any Subsidiary Guarantor has a correlative
meaning.
"Senior Credit Facility" means the credit agreement dated as of the Issue
Date, between the Company, the lenders and other persons party thereto and NBD
Bank, as Agent, together with the related documents thereto executed at any time
(including, without limitation, any guarantee agreements, security agreements
and other collateral documents) and the credit facilities thereunder, in each
case as such documents may be amended (including, without limitation, any
amendment and restatement thereof), supplemented or otherwise modified from time
to time, including any agreement extending the maturity of, refinancing,
replacing or otherwise restructuring (including, without limitation, increasing
the amount of available borrowings thereunder (provided that such increase in
borrowings is permitted by the covenant described under "Certain Covenants --
Limitation on Indebtedness") or adding subsidiaries as additional borrowers or
guarantors thereunder).
"Senior Indebtedness" of the Company means (i) all Bank Indebtedness of the
Company, whether outstanding on the Issue Date or thereafter Incurred, including
the Guarantees by the Company of all Bank Indebtedness, and (ii) accrued and
unpaid interest (including interest accruing on or after the filing of any
petition in bankruptcy or for reorganization relating to the Company whether or
not a claim for post-filing interest is allowed in such proceeding) in respect
of (A) indebtedness of the Company for money borrowed and (B) indebtedness
evidenced by notes, debentures, bonds or other similar instruments for the
payment of which the Company is responsible or liable unless, in the instrument
creating or evidencing the same or pursuant to which the same is outstanding, it
is provided that such obligations are subordinate in right of payment to the
Notes; provided, however, that Senior Indebtedness shall not include (1) any
obligation of the
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Company to any Subsidiary, (2) any liability for Federal, state, local or other
taxes owed or owing by the Company, (3) any accounts payable or other liability
to trade creditors arising in the ordinary course of business (including
guarantees thereof or instruments evidencing such liabilities), (4) any
Indebtedness of the Company (and any accrued and unpaid interest in respect
thereof) which is subordinate or junior in any respect (other than as a result
of the Indebtedness being unsecured) to any other Indebtedness or other
obligation of the Company, including any Senior Subordinated Indebtedness and
any Subordinated Obligations, (5) any obligations with respect to any Capital
Stock or (6) that portion of any Indebtedness which at the time of Incurrence is
Incurred in violation of the Indenture. "Senior Indebtedness" of any Subsidiary
Guarantor has a correlative meaning.
"Senior Subordinated Indebtedness" of the Company means the Notes and any
other Obligations under or in connection with the Notes, the Indenture and/or
any related agreements, documents or instruments, whether now owing or hereafter
incurred or owing and any other Indebtedness of the Company that specifically
provides that such Indebtedness is to rank pari passu with the Notes in right of
payment and is not subordinated by its terms in right of payment to any
Indebtedness or other obligation of the Company which is not Senior
Indebtedness. "Senior Subordinated Indebtedness" of any Subsidiary Guarantor has
a correlative meaning.
"Significant Subsidiary" means any Restricted Subsidiary that would be a
"Significant Subsidiary" of the Company within the meaning of Rule 1-02 under
Regulation S-X promulgated by the SEC.
"Stated Maturity" means, with respect to any security, the date specified
in such security as the fixed date on which the final payment of principal of
such security is due and payable, including pursuant to any mandatory redemption
provision (but excluding any provision providing for the repurchase of such
security at the option of the holder thereof upon the happening of any
contingency unless such contingency has occurred).
"Subordinated Obligation" means any Indebtedness of the Company (whether
outstanding on the Issue Date or thereafter Incurred) which is subordinate or
junior in right of payment to the Notes pursuant to a written agreement to that
effect. "Subordinated Obligation" of any Subsidiary Guarantor has a correlative
meaning.
"Subsidiary" means, in respect of any Person, any corporation, association,
partnership or other business entity of which more than 50% of the total voting
power of shares of Capital Stock or other interests (including partnership
interests) entitled (without regard to the occurrence of any contingency) to
vote in the election of directors, managers or trustees thereof is at the time
owned or controlled, directly or indirectly, by (i) such Person, (ii) such
Person and one or more Subsidiaries of such Person or (iii) one or more
Subsidiaries of such Person.
"Subsidiary Guaranty" means the Guarantee by a Subsidiary Guarantor of the
Company's obligations with respect to the Notes.
"Subsidiary Guarantor" means each Subsidiary designated as such on the
signature pages of the Indenture and any other Subsidiary that has issued a
Subsidiary Guaranty.
"Temporary Cash Investments" means any of the following: (i) any investment
in direct obligations of the United States of America or any agency thereof or
obligations guaranteed by the United States of America or any agency thereof,
(ii) investments in time deposit accounts, certificates of deposit and money
market deposits maturing within 180 days of the date of acquisition thereof
issued by a bank or trust company which is organized under the laws of the
United States of America, any state thereof or any foreign country recognized by
the United States, and which bank or trust company has capital, surplus and
undivided profits aggregating in excess of $50,000,000 (or the foreign currency
equivalent thereof) and has outstanding debt which is rated "A" (or such similar
equivalent rating) or higher by at least one nationally recognized statistical
rating organization (as defined in Rule 436 under the Securities Act) or any
money-market fund sponsored by an registered broker dealer or mutual fund
distributor, (iii) repurchase obligations with a term of not more than 30 days
for underlying securities of the types described in clause (i) above entered
into with a bank meeting the qualifications described in clause (ii) above, (iv)
investments in commercial paper, maturing not more
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than 90 days after the date of acquisition, issued by a corporation (other than
an Affiliate of the Company) organized and in existence under the laws of the
United States of America, any State thereof or the District of Columbia or any
foreign country recognized by the United States of America with a rating at the
time as of which any investment therein is made of "P-1" (or higher) according
to Moody's Investors Service, Inc. or "A-1" (or higher) according to Standard
and Poor's Ratings Group, and (v) investments in securities with maturities of
six months or less from the date of acquisition issued or fully guaranteed by
any state, commonwealth or territory of the United States of America, or by any
political subdivision or taxing authority thereof, and rated at least "A" by
Standard & Poor's Ratings Group or "A" by Moody's Investors Service, Inc.
"Tooling Indebtedness" means all present and future Indebtedness of the
Company or any Restricted Subsidiary the proceeds of which are utilized to
finance dies, molds, tooling and similar items (collectively "Tooling") for
which the sales of such Tooling is covered under specific written purchase
orders or agreements between the Company or any Restricted Subsidiary and the
purchaser of such Tooling.
"Unrestricted Subsidiary" means (i) any Subsidiary of the Company that at
the time of determination shall be designated an Unrestricted Subsidiary by the
Board of Directors in the manner provided below and (ii) any Subsidiary of an
Unrestricted Subsidiary. The Board of Directors may designate any Subsidiary of
the Company (including any newly acquired or newly formed Subsidiary) to be an
Unrestricted Subsidiary unless such Subsidiary or any of its Subsidiaries owns
any Capital Stock or Indebtedness of, or holds any Lien on any property of, the
Company or any other Subsidiary of the Company that is not a Subsidiary of the
Subsidiary to be so designated; provided, however, that either (A) the
Subsidiary to be so designated has total assets of $1,000 or less or (B) if such
Subsidiary has assets greater than $1,000, such designation would be permitted
under the covenant described under "Certain Covenants -- Limitation on
Restricted Payments." The Board of Directors may designate any Unrestricted
Subsidiary to be a Restricted Subsidiary; provided, however, that immediately
after giving effect to such designation (x) the Company could Incur $1.00 of
additional Indebtedness under paragraph (a) of the covenant described under
"Certain Covenants -- Limitation on Indebtedness" and (y) no Default shall have
occurred and be continuing. Any such designation by the Board of Directors shall
be notified by the Company 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.
"U.S. Government Obligations" means direct obligations (or certificates
representing an ownership interest in such obligations) of the United States of
America (including any agency or instrumentality thereof) for the payment of
which the full faith and credit of the United States of America is pledged and
which are not callable at the issuer's option.
"Voting Stock" of a Person means all classes of Capital Stock or other
interests (including partnership interests) of such Person then outstanding and
normally entitled (without regard to the occurrence of any contingency) to vote
in the election of directors, managers or trustees thereof.
"Wholly Owned Subsidiary" means a Restricted Subsidiary all the Capital
Stock of which (other than directors' qualifying shares) is owned by the Company
and/or one or more Wholly Owned Subsidiaries.
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CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
The following discussion summarizes the certain United States federal
income tax consequences of the Exchange Offer to a holder of Old Notes that is
an individual citizen or resident of the United States or a United States
corporation that purchased the Old Notes pursuant to their original issue (a
"U.S. Holder"). It is based on the Internal Revenue Code of 1986, as amended to
the date hereof (the "Code"), existing and proposed Treasury regulations, and
judicial and administrative determinations, all of which are subject to change
at any time, possibly on a retroactive basis. The following relates only to the
Old Notes, and the New Notes received therefor, that are held as "capital
assets" within the meaning of Section 1221 of the Code by U.S. Holders. It does
not discuss state, local, or foreign tax consequences, nor does it discuss tax
consequences to categories of holders that are subject to special rules, such as
foreign persons, tax-exempt organizations, insurance companies, banks, and
dealers in stocks and securities. Tax consequences may vary depending on the
particular status of an investor. No rulings will be sought from the Internal
Revenue Service with respect to the federal income tax consequences of the
Exchange Offer.
THIS SECTION DOES NOT PURPORT TO DEAL WITH ALL ASPECTS OF FEDERAL INCOME
TAXATION THAT MAY BE RELEVANT TO AN INVESTOR'S DECISION TO EXCHANGE OLD NOTES
FOR NEW NOTES. EACH INVESTOR SHOULD CONSULT WITH ITS OWN TAX ADVISOR CONCERNING
THE APPLICATION OF THE FEDERAL INCOME TAX LAWS AND OTHER TAX LAWS TO ITS
PARTICULAR SITUATION BEFORE DETERMINING WHETHER TO EXCHANGE OLD NOTES FOR NEW
NOTES.
MARKET DISCOUNT
A U.S. Holder of a Note, other than an initial Holder, will be treated
as holding the Note at a market discount (a "Market Discount Note") if the
amount for which such U.S. Holder purchased the Note is less than the Note's
principal amount, subject to a de minimis rule.
In general, any partial payment of principal on, or gain recognized on
the maturity or disposition of, a Market Discount Note will be treated as
ordinary income to the extent that such gain does not exceed the accrued market
discount on such Note. Alternatively, a U.S. Holder of a Market Discount Note
may elect to include market discount in income currently over the life of the
Market Discount Note. Such an election applies to all debt instruments with
market discount acquired by the electing U.S. Holder 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.
Market discount accrues on a straight-line basis, unless the U.S.
Holder elects to accrue such discount on a constant yield to a maturity basis.
Such an election is applicable only to the Note with respect to which is made
and is irrevocable. A U.S. Holder of a Market Discount Note that does not elect
to include market discount in income currently, generally will be required to
defer deductions for interest on borrowings allocable to such Note, in an
amount not exceeding the accrued market discount on such Note, until the
maturity or disposition of such Note.
THE EXCHANGE OFFER
The exchange of Old Notes pursuant to the Exchange Offer should be treated
as a continuation of the corresponding Old Notes because the terms of the New
Notes are not materially different from the terms of the Old Notes. Accordingly,
such exchange should not constitute a taxable event to U.S. Holders and,
therefore, (i) no gain or loss should be realized by a U.S. Holder upon receipt
of a New Note, (ii) the holding period of the New Note should include the
holding period of the Old Note exchanged therefor and (iii) the adjusted tax
basis of the New Note should be the same as the adjusted tax basis of the Old
Note exchanged therefor immediately before the exchange.
STATED INTEREST
Stated interest on a Note will be taxable to a U.S. Holder as ordinary
interest income at the time that such interest accrues or is received, in
accordance with the U.S. Holder's regular method of accounting for federal
income tax purposes. The Notes are not considered to have been issued with
original issue discount for federal income tax purposes.
SALE, EXCHANGE OR RETIREMENT OF THE NOTES
A U.S. Holder's tax basis in a Note generally will be its cost. A U.S.
Holder generally will recognize gain or loss on the sale, exchange or retirement
of a Note in an amount equal to the difference between the amount realized on
the sale, exchange or retirement and the tax basis of the Note. Gain or loss
recognized on the sale, exchange or retirement of a Note (excluding amounts
received in respect of accrued interest, which will be taxable as ordinary
interest income) generally will be capital gain or loss and will be long-term
capital gain or loss if the Note was held for more than one year.
BACKUP WITHHOLDING
Under certain circumstances, a U.S. Holder of a Note may be subject to
"backup withholding" at a 31% rate with respect to payments of interest thereon
or the gross proceeds from the disposition thereof. This withholding generally
applies if the U.S. Holder fails to furnish his or her social security number or
other taxpayer identification number in the specified manner and in certain
other circumstances. Any amount withheld from a payment to a U.S. Holder under
the backup withholding rules is allowable as a credit against such U.S. Holder's
federal income tax liability, provided that the required information is
furnished to the IRS.
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Corporations and certain other entities described in the Code and Treasury
regulations are exempt from backup withholding if their exempt status is
properly established.
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 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 as a result of market-making activities or other
trading activities. Each of the Company and the Subsidiary Guarantors has agreed
that, starting on the Expiration Date and ending on the close of business on the
first anniversary of the Expiration Date, it will make this Prospectus, as
amended or supplemented, available to any broker-dealer for use in connection
with any such resale. In addition, until , 1997 (90 days
after the date of this Prospectus), all dealers effecting transactions in the
New Notes may be required to deliver a prospectus.
Neither the Company nor any of the Subsidiary Guarantors will receive any
proceeds from any sale of New Notes by broker-dealers. 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 resale, 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 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 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.
For a period of one year after the Expiration Date, the Company will
promptly send additional copies of this Prospectus and any amendment or
supplement to this Prospectus to any broker-dealer that requests such documents
in the Letter of Transmittal. The Company and each of the Subsidiary Guarantors
have agreed to pay all expenses incident to the Exchange Offer (including the
expenses of one counsel for the holders of the Old Notes) other than commissions
or concessions of any brokers or dealers and will indemnify the holders of the
Old Notes (including any broker-dealers) against certain liabilities, including
liabilities under the Securities Act.
LEGAL MATTERS
The validity of the New Notes offered hereby will be passed upon for the
Company by Dykema Gossett PLLC, Bloomfield Hills, Michigan. Rex E. Schlaybaugh,
Jr. is a shareholder, the Vice Chairman of the Board and a director of the
Company. Mr. Schlaybaugh is a member of Dykema Gossett PLLC. Certain matters
relating to the Subsidiary Guaranties and the application of Ontario law to them
will be passed upon for the Company by Fasken Campbell Godfrey, Toronto,
Ontario.
EXPERTS
The consolidated financial statements of the Company as of and for the year
ended March 31, 1997 included in this Prospectus have been so included in
reliance on the report of Price Waterhouse LLP, independent auditors, given on
the authority of said firm as experts in auditing and accounting.
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The consolidated financial statements of the Company as of March 31, 1996
and for the period from October 28, 1995 through March 31, 1996 appearing in
this Prospectus and the related financial statement schedule included in the
Exchange Offer Registration Statement have been audited by Deloitte & Touche,
independent auditors, as stated in their report appearing herein, and are
included in reliance upon the report of such firm given upon their authority as
experts in accounting and auditing.
The consolidated financial statements of BMG North America Limited
(Predecessor) for the period from April 1, 1995 through October 27, 1995 and for
the year ended March 31, 1995 appearing in this Prospectus and the related
financial statement schedule included in the Exchange Offer Registration
Statement have been audited by Deloitte & Touche, independent auditors, as
stated in their report appearing herein, and are included in reliance upon the
report of such firm given upon their authority as experts in accounting and
auditing.
The consolidated financial statements of Lobdell Emery Corporation as
of December 31, 1996 and 1995 and for each year in the three-year period ended
December 31, 1996 included in this Prospectus have been so included in reliance
on the report of Price Waterhouse LLP, independent accountants, given on the
authority of said firm as experts in auditing and accounting.
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INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
OXFORD AUTOMOTIVE, INC.
Report of Independent Accountants........................... F-2
Independent Auditors' Report................................ F-3
Consolidated Balance Sheets as of March 31, 1997 and 1996... F-4
Consolidated Statements of Operations for the year ended
March 31, 1997 and the period from October 28, 1995
through March 31, 1996 for the Company; and for the period
from April 1, 1995 through October 27, 1995 and for the
year ended March 31, 1995 for the Predecessor............. F-5
Consolidated Statement of Changes in Shareholders' Equity
for the year ended March 31, 1997 and the period from
October 28, 1995 through March 31, 1996 for the Company;
and for the period from April 1, 1995 through October 27,
1995 and the year ended March 31, 1995 for the
Predecessor............................................... F-6
Consolidated Statements of Cash Flows for the year ended
March 31, 1997 and the period from October 28, 1995
through March 31, 1996 for the Company; and for the period
from April 1, 1995 through October 27, 1995 and for the
year ended March 31, 1995 for the Predecessor............. F-7
Notes to Consolidated Financial Statements.................. F-8
LOBDELL EMERY CORPORATION
Report of Independent Accountants........................... F-24
Consolidated Balance Sheets as of December 31, 1996 and
1995...................................................... F-25
Consolidated Statements of Operations for the years ended
December 31, 1996, 1995 and 1994.......................... F-26
Consolidated Statement of Changes in Shareholders' Equity
for the years ended December 31, 1996, 1995 and 1994...... F-27
Consolidated Statements of Cash Flows for the years ended
December 31, 1996, 1995 and 1994.......................... F-28
Notes to Consolidated Financial Statements.................. F-29
</TABLE>
F-1
<PAGE> 90
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors
and Shareholders of
Oxford Automotive, Inc.
In our opinion, the accompanying consolidated balance sheet and the related
consolidated statements of operations, of changes in shareholders' equity and of
cash flows present fairly, in all material respects, the financial position of
Oxford Automotive, Inc. and its subsidiaries (the Company) at March 31, 1997 and
the result of their operations and their cash flows for the year ended March 31,
1997 in conformity with generally accepted accounting principles. These
financial statements are the responsibility of the Company's management; our
responsibility is to express an opinion on these financial statements based on
our audit. We conducted our audit of these statements in accordance with
generally accepted auditing standards which 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,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audit provides a reasonable basis for the opinion expressed
above.
The financial statements of the Company as of March 31, 1996 and for the
period from October 28, 1995 through March 31, 1996 and the financial statements
of BMG North America Limited (the Predecessor) for the period from April 1, 1995
through October 27, 1995 and for the year ended March 31, 1995 were audited by
other independent accountants whose report dated May 21, 1996 expressed an
unqualified opinion on those statements.
PRICE WATERHOUSE LLP
Detroit, Michigan
May 19, 1997, except as to Notes 3 and 12
which are as of July 15, 1997
F-2
<PAGE> 91
INDEPENDENT AUDITORS' REPORT
To the Directors of
Oxford Automotive, Inc. and BMG North America Limited
We have audited the consolidated balance sheet of Oxford Automotive, Inc.
as at March 31, 1996 and the consolidated statements of operations, changes in
shareholders' equity and cash flows for the period from October 28, 1995 to
March 31, 1996 for Oxford Automotive, Inc. and the consolidated statements of
operations, changes in shareholders' equity and cash flows for the period from
April 1, 1995 to October 27, 1995 and for the year ended March 31, 1995 for BMG
North America Limited. These financial statements are the responsibility of the
management of Oxford Automotive Inc. and BMG North America Limited. 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 an audit to obtain
reasonable assurance 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, these consolidated financial statements present fairly, in
all material respects, the financial position of Oxford Automotive, Inc., as at
March 30, 1996 and the results of its operations and its cash flows for the
period from October 28, 1995 to March 31, 1996 and the results of BMG North
America Limited's operations and its cash flows for the period from April 1,
1995 to October 27, 1995 and for the year ended March 31, 1995 in accordance
with U.S. generally accepted accounting principles.
Deloitte & Touche
Chartered Accountants
Kitchener, Ontario
May 21, 1996
F-3
<PAGE> 92
OXFORD AUTOMOTIVE, INC.
CONSOLIDATED BALANCE SHEETS
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE-RELATED DATA)
<TABLE>
<CAPTION>
MARCH 31,
-------------------
1997 1996
---- ----
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents................................. $ 9,671 $ --
Trade receivables -- less allowance of $1,272 and $39,
respectively........................................... 47,626 8,338
Inventories............................................... 13,411 3,719
Refundable income taxes................................... 1,641
Reimbursable tooling...................................... 4,968 3,298
Deferred income taxes..................................... 4,633
Prepaid expenses and other current assets................. 1,354 1,181
-------- -------
Total current assets................................... 83,304 16,536
Unexpended bond proceeds.................................... 3,937
Other noncurrent assets..................................... 4,588 6,734
Deferred income taxes....................................... 5,087 6,139
Property, plant and equipment, net.......................... 149,545 19,791
-------- -------
TOTAL ASSETS........................................... $246,461 $49,200
======== =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Trade accounts payable.................................... $ 31,421 $14,570
Employee compensation..................................... 4,986 1,883
Restructuring reserve..................................... 7,050 608
Accrued expenses and other current liabilities............ 9,040 3,299
Current portion of borrowings............................. 24,274 11,258
-------- -------
Total current liabilities.............................. 76,771 31,618
Pension liability........................................... 3,631 1,080
Postretirement medical benefits liability................... 33,467
Deferred income taxes....................................... 10,442
Restructuring reserve....................................... 2,767
Other noncurrent liabilities................................ 2,187 67
Long-term borrowings -- less current portion................ 75,555 15,500
-------- -------
Total liabilities...................................... 204,820 48,265
-------- -------
Commitments and contingent liabilities (Note 14)
Redeemable Series A $3.00 Cumulative Preferred Stock, $100
stated value -- 457,541 shares authorized, issued and
outstanding (Notes 3 and 12).............................. 36,012
-------- -------
Redeemable Series B Preferred Stock, $100 stated value --
49,938 shares authorized, issued and outstanding (Notes 3
and 12)................................................... 3,288
-------- -------
Shareholders' equity
Common stock, 400,000 shares authorized; 309,750 and
75,000, respectively, issued and outstanding........... 1,050 750
Foreign currency translation adjustment................... (28) 5
Retained earnings......................................... 1,572 415
Equity adjustment for minimum pension liability........... (253) (235)
-------- -------
2,341 935
-------- -------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY............. $246,461 $49,200
======== =======
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-4
<PAGE> 93
OXFORD AUTOMOTIVE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE-RELATED DATA)
<TABLE>
<CAPTION>
COMPANY PREDECESSOR
---------------------------------- ----------------------------------
PERIOD FROM PERIOD FROM
OCTOBER 28, 1995 APRIL 1, 1995
YEAR ENDED THROUGH THROUGH YEAR ENDED
MARCH 31, 1997 MARCH 31, 1996 OCTOBER 27, 1995 MARCH 31, 1995
-------------- ---------------- ---------------- --------------
<S> <C> <C> <C> <C>
Net sales............................ $136,861 $35,572 $49,043 $75,097
Cost of sales........................ 125,375 31,624 46,895 70,891
-------- ------- ------- -------
Gross profit....................... 11,486 3,948 2,148 4,206
Selling, general and
administrative..................... 7,685 2,235 3,922 4,554
-------- ------- ------- -------
Operating income (loss)............ 3,801 1,713 (1,774) (348)
Other income (expense)
Interest expense................... (3,388) (1,096) (1,048) (1,267)
Other income....................... 2,201
-------- ------- ------- -------
Income (loss) before (provision)
benefit for income taxes........... 2,614 617 (2,822) (1,615)
(Provision) benefit for income
taxes.............................. (1,065) (202) 938 349
-------- ------- ------- -------
Net income (loss).................... 1,549 415 $(1,884) $(1,266)
======= =======
Accrued dividends and accretion on
redeemable preferred stock......... 300 --
-------- -------
Net income applicable to common
stock.............................. $ 1,249 $ 415
======== =======
Net income per share................. $ 9.37 $ 9.10
======== =======
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-5
<PAGE> 94
OXFORD AUTOMOTIVE, INC.
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE RELATED DATA)
<TABLE>
<CAPTION>
PREDECESSOR
-----------------------------------------------------------------
FOREIGN EQUITY
CURRENCY RETAINED ADJUSTMENT FOR
COMMON TRANSLATION EARNINGS MINIMUM PENSION
STOCK ADJUSTMENT (DEFICIT) LIABILITY TOTAL
------ ----------- --------- --------------- -----
<S> <C> <C> <C> <C> <C>
Balances at April 1, 1994............... $14,609 $ -- $(2,203) $ -- $12,406
Net (loss).............................. (1,266) (1,266)
Foreign currency translation
adjustments........................... (186) 40 (146)
Issuance of common stock, net of
redemptions........................... (161) (161)
------- ----- ------- ----- -------
Balances at March 31, 1995.............. 14,262 40 (3,469) -- 10,833
Net (loss).............................. (1,884) (1,884)
Foreign currency translation
adjustments........................... 575 (155) 420
Issuance of common stock, net of
redemptions........................... (40) (40)
------- ----- ------- ----- -------
Balances at October 27, 1995............ $14,797 $(115) $(5,353) $ -- $ 9,329
======= ===== ======= ===== =======
<CAPTION>
COMPANY
-----------------------------------------------------------------
FOREIGN EQUITY
CURRENCY RETAINED ADJUSTMENT FOR
COMMON TRANSLATION EARNINGS MINIMUM PENSION
STOCK ADJUSTMENT (DEFICIT) LIABILITY TOTAL
------- ----------- --------- --------------- -------
<S> <C> <C> <C> <C> <C>
Balances at October 28, 1995............ $ 750 $ -- $ -- $ -- $ 750
Net income............................ 415 415
Foreign currency translation
adjustments........................ 5 5
Equity adjustment for minimum pension
liability.......................... (235) (235)
------- ----- ------- ----- -------
Balances at March 31, 1996.............. 750 5 415 (235) 935
Net income............................ 1,549 1,549
Foreign currency translation
adjustments........................ (33) (33)
Equity adjustment for minimum pension
liability.......................... (18) (18)
Accrued dividends and accretion of
redeemable preferred stock......... (300) (300)
Issuance of common stock, net of
redemptions........................ 300 (92) 208
------- ----- ------- ----- -------
Balances at March 31, 1997.............. $ 1,050 $ (28) $ 1,572 $(253) $ 2,341
======= ===== ======= ===== =======
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-6
<PAGE> 95
OXFORD AUTOMOTIVE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS AMOUNTS IN THOUSANDS, EXCEPT SHARE RELATED DATA)
<TABLE>
<CAPTION>
COMPANY PREDECESSOR
---------------------------------- ----------------------------------
PERIOD FROM PERIOD FROM
OCTOBER 28, 1995 APRIL 1, 1995
YEAR ENDED THROUGH THROUGH YEAR ENDED
MARCH 31, 1997 MARCH 31, 1996 OCTOBER 27, 1995 MARCH 31, 1995
-------------- ---------------- ---------------- --------------
<S> <C> <C> <C> <C>
OPERATING ACTIVITIES
Net income (loss)........................ $ 1,549 $ 415 $ (1,884) $(1,266)
Adjustments to reconcile net income
(loss) to net cash provided by (used
in) operating activities
Depreciation and amortization.......... 5,041 687 919 1,413
Deferred income taxes.................. 2,136 230 (1,036) (385)
Gain on sale of equipment.............. (195) (2) (14)
Changes in operating assets and
liabilities affecting cash
Trade receivables.................... (8,953) 6,617 (3,311) (2,286)
Inventories.......................... (299) (277) (259) (635)
Reimbursable tooling................. (1,601) 1,824 (760) (3,170)
Prepaid expenses and other assets.... 129 1,592 (1,768) (553)
Other noncurrent assets.............. 3,544
Trade accounts payable............... (605) (6,501) 6,417 7,314
Employee compensation................ (6,072) 309 (493) (25)
Restructuring reserve................ (398)
Accrued expenses and other
liabilities........................ (1,885) (1,716) 3,504 110
Income taxes payable/refundable...... (199)
Other noncurrent liabilities......... (39)
-------- -------- -------- -------
NET CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES............ (7,847) 3,178 1,329 503
-------- -------- -------- -------
INVESTING ACTIVITIES
Purchase of business, net of cash
acquired............................... (9,309) (1,983)
Purchase of property, plant and
equipment.............................. (3,326) (3,466) (5,111) (4,384)
Proceeds from sale of equipment.......... 341 33 11 26
-------- -------- -------- -------
NET CASH USED IN INVESTING
ACTIVITIES...................... (12,294) (5,416) (5,100) (4,358)
-------- -------- -------- -------
FINANCING ACTIVITIES
Issuance of share capital................ 300 750
Proceeds from borrowing arrangements..... 78,823 23,814 921
Principal payments on borrowing
arrangements........................... (49,186) (16,482) (7,477) (1,182)
Redemption and retirement of common
stock.................................. (92) (40) (161)
Obligation under capital lease -- net.... (6) (3) 76
-------- -------- -------- -------
NET CASH PROVIDED BY (USED IN)
FINANCING ACTIVITIES............ 29,845 8,076 (6,599) (1,267)
-------- -------- -------- -------
Effect of exchange rate changes on
cash................................... (33)
-------- -------- -------- -------
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS............................ 9,671 5,838 (10,370) (5,122)
Cash and cash equivalents at beginning of
period................................. (11,238) (868) 4,254
-------- -------- -------- -------
Cash and cash equivalents at end of
period................................. $ 9,671 $ (5,400) $(11,238) $ (868)
======== ======== ======== =======
Cash paid for interest................... $ 3,033 $ 1,096 $ 1,048 $ 1,267
======== ======== ======== =======
Cash paid for income taxes............... $ -- $ 42 $ 79 $ 113
======== ======== ======== =======
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-7
<PAGE> 96
OXFORD AUTOMOTIVE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE RELATED DATA)
NOTE 1. NATURE OF OPERATIONS
Oxford Automotive, Inc. (the Company) is a full-service supplier of metal
stampings and welded assemblies used as original equipment components primarily
by North American original equipment automotive manufacturers. The Company's
products are used in a wide variety of sport utility vehicles, light and medium
trucks, vans and passenger cars. The Company primarily operates from seven
plants located in the United States and Canada. The Company's hourly workforce
is represented by various locals of the United Auto Workers.
Net sales to the Company's two primary customers as a percentage of total
sales are as follows:
<TABLE>
<CAPTION>
COMPANY PREDECESSOR
---------------------------------- ----------------------------------
PERIOD FROM PERIOD FROM
OCTOBER 28, 1995 APRIL 1, 1995
YEAR ENDED THROUGH THROUGH YEAR ENDED
MARCH 31, 1997 MARCH 31, 1996 OCTOBER 27, 1995 MARCH 31, 1995
-------------- ---------------- ---------------- --------------
<S> <C> <C> <C> <C>
Ford Motor Company................. 17% -- -- --
General Motors Corporation......... 62% 67% 69% 70%
</TABLE>
Accounts receivable from Ford Motor Company and General Motors Corporation
represent approximately 30% and 60%, respectively, of the March 31, 1997
accounts receivable balance.
Although the Company is directly affected by the economic well being of the
automotive industry and customers referred to above, management does not believe
significant credit risk exists at March 31, 1997. The Company does not require
collateral to reduce such risk and historically has not experienced significant
losses related to receivables from individual customers or groups of customers
in the automotive industry.
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The financial statements for the period from April 1, 1995 through October
27, 1995 and for the year ended March 31, 1995 are those of BMG North America
Limited (the Predecessor), which was acquired by Oxford Automotive, Inc.
(formerly BMG-MI, Inc.) on October 28, 1995, as discussed further in Note 3.
The consolidated financial statements as of March 31, 1997 and 1996 and for
the year ended March 31, 1997 and for the period from October 28, 1995 through
March 31, 1996 are those of the Company and its subsidiaries. The financial
statements of the Company and Predecessor are not comparable in certain respects
due to differences between the cost bases of certain assets held by the Company
versus that of the Predecessor, resulting in reduced depreciation and
amortization charges subsequent to October 27, 1995, changes in accounting
policies and the recording of certain liabilities at the date of acquisition in
connection with the purchase of the Predecessor by the Company, as well as the
Company's acquisition of Lobdell Emery Corporation and its wholly-owned
subsidiaries on January 10, 1997, as discussed further in Note 3.
Principles of Consolidation
The consolidated financial statements of the Company include the accounts
of Oxford Automotive, Inc. and its wholly-owned subsidiaries, BMG Holdings, Inc.
and Lobdell Emery Corporation. The accounts of BMG Holdings, Inc. (BMGH) consist
of BMGH and its wholly-owned subsidiaries, BMG North America Limited (BMGNA) and
BMGNA's two wholly-owned subsidiaries, 829500 Ontario Limited and 976459 Ontario
Limited. The accounts of Lobdell Emery Corporation (Lobdell) consist of Lobdell
and its wholly-owned subsidiaries, Lewis Emery Capital Corporation (Lewis),
Concept Management Corporation and subsidiaries (Concept), Laserweld
International (Laserweld) and Parallel Group International (Parallel). Concept
F-8
<PAGE> 97
OXFORD AUTOMOTIVE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES -- (CONTINUED)
Management Corporation also includes the accounts of its wholly-owned
subsidiaries, Winchester Fabrication Corporation (Winchester) and Creative
Fabrication Corporation (Creative). 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 affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities 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.
Revenue Recognition
Revenue is recognized by the Company upon shipment of product to the
customer.
Financial Instruments
At March 31, 1997 and 1996, the carrying amount of financial instruments
such as cash and cash equivalents, trade receivables and payables and unexpended
bond proceeds, approximated their fair values. The carrying amount of the
long-term customer receivables and borrowings at March 31, 1997 and 1996,
approximated their fair values based on the variable interest rates available to
the Company for similar arrangements.
Cash Equivalents
The Company considers all highly-liquid investments with maturity of three
months or less when purchased to be cash equivalents.
Inventories
Inventories are stated at the lower of cost or market. Cost is principally
determined by the last-in, first-out (LIFO) method for the Company's United
States operations and by the first-in first-out (FIFO) method for the Company's
Canadian operations.
Reimbursable Tooling
Reimbursable tooling represents net costs incurred on tooling projects for
which the Company expects to be reimbursed by customers. Ongoing estimates of
total costs to be incurred on each tooling project are made by management and
losses, if any, are recorded when known. Generally, tooling revenue is
recognized upon acceptance of the tooling by the customer. Certain of the
Company's tooling costs are financed through lending institutions and are
reimbursed by vendors on a piece price basis. These tooling assets are
classified as either accounts receivable ($3,695 and $1,809 at March 31, 1997
and 1996, respectively), other noncurrent assets ($3,800 and $6,734 at March 31,
1997 and 1996, respectively) or equipment depending upon the ultimate title
holder of the tooling assets.
Unexpended Bond Proceeds
Unexpended bond proceeds in the accompanying consolidated balance sheet
represent unexpended proceeds from the issuance of industrial development
revenue bonds by Creative as discussed in Note 7, and are invested in allowable
money market accounts and commercial paper with a maturity of 30 days or less.
F-9
<PAGE> 98
OXFORD AUTOMOTIVE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES -- (CONTINUED)
Property, Plant and Equipment
Property, plant and equipment are stated on the basis of cost and include
expenditures for improvements which materially increase the useful lives of
existing assets. Expenditures for normal repair and maintenance are charged to
operations as incurred. For federal income tax purposes, depreciation is
computed using accelerated and straight-line methods. For financial reporting
purposes, depreciation is computed principally using the straight-line method
over the following estimated useful lives:
<TABLE>
<CAPTION>
YEARS
-----
<S> <C>
Land improvements........................................... 15
Buildings................................................... 30-40
Machinery and equipment..................................... 3-20
</TABLE>
Impairment of Long-Lived Assets
The Company accounts for long-lived assets in accordance with Statement of
Financial Accounting Standards No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of". This Statement
requires that long-lived assets and certain identifiable intangibles to be held
and used by the Company be reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be fully
recoverable. The Company measures the impairment of long-lived assets by
comparing the undiscounted future cash flows to be generated by the assets to
their carrying value.
Environmental Compliance and Remediation
Environmental expenditures that relate to current operations are expensed
or capitalized as appropriate. Expenditures that relate to an existing condition
caused by past operations which do not contribute to current or future revenue
generation are expensed. Liabilities are recorded when environmental assessments
and/or remedial efforts are probable and the costs can be reasonably estimated.
Estimated costs are based upon enacted laws and regulations, existing technology
and the most probable method of remediation. The costs determined are not
discounted and exclude the effects of inflation and other social and economic
factors.
Income Taxes
Deferred taxes are provided to give recognition to the effect of expected
future tax consequences of temporary differences between the carrying amounts
for financial reporting purposes and the tax bases for income tax purposes of
assets and liabilities.
Foreign Exchange Contracts
Gains and losses of foreign currency firm commitment hedges are deferred
and included in the basis of the transactions underlying the commitments. During
fiscal 1997, the Company recognized a gain of approximately $2,000 related to
certain foreign currency exchange transactions terminated during the year. The
gain is included as a component of other income in the accompanying March 31,
1997 statement of operations. Had the foreign currency exchange transactions not
been terminated, the recognized gain would normally have been recorded as a
component of sales.
Foreign Currency Translation
The foreign currency financial statements of BMGH, where the local currency
is the functional currency, are translated using exchange rates in effect at
period end for assets and liabilities and at weighted average
F-10
<PAGE> 99
OXFORD AUTOMOTIVE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES -- (CONTINUED)
exchange rates during the period for operating statement accounts. The resulting
foreign currency translation adjustments are recorded as a separate component of
shareholders' equity. Exchange gains and losses resulting from foreign currency
transactions are included in operating results during the period in which they
occur.
Per Share Amounts
Predecessor period per share amounts have not been presented as the
Company's capital structure is not comparable to that of the Predecessor.
Reclassifications
Certain amounts from the prior year have been reclassified to conform with
the current year presentation.
NOTE 3. ACQUISITIONS
On October 28, 1995, the Company acquired all of the outstanding common
stock of the Predecessor. The acquisition was financed through a $750 Series A
promissory note. The acquisition has been recorded in accordance with the
purchase method of accounting. Accordingly, the purchase price plus direct cost
of the acquisition have been allocated to the assets acquired and liabilities
assumed based on their estimated fair values at the date of acquisition.
On January 10, 1997, pursuant to an Agreement and Plan of Merger among
Lobdell Emery Corporation, certain shareholders of Lobdell Emery Corporation,
BMG-MI, Inc. and L-E Acquisition, Inc. as amended (the Agreement), certain
Lobdell Emery Corporation shareholders and option holders had their respective
shares and options redeemed for cash of approximately $8,500 and all outstanding
shares of common stock of Lobdell Emery Corporation (Oldco) were exchanged for
shares of preferred stock of L-E Acquisition, Inc. with a face value of
approximately $40,700. In addition, approximately $3,500 of expenses incurred by
Oldco were reimbursed by L-E Acquisition, Inc. Subsequent to the exchange of
Oldco's common stock for preferred stock, L-E Acquisition, Inc. was merged with
and into Lobdell Emery Corporation (Newco).
The acquisition was financed through the issuance of preferred stock
described in Note 12 and the term loan described in Note 7. The acquisition has
been recorded in accordance with the purchase method of accounting. Accordingly,
the purchase price plus direct cost of the acquisition have been allocated to
the assets acquired and liabilities assumed based on their estimated fair values
at the date of acquisition. In accordance with the purchase method of
accounting, Lobdell's operating results have been included with those of the
Company since the date of acquisition.
The Agreement provides for a purchase price adjustment, depending on net
worth on January 10, 1997, to the face value of Series A Preferred Stock, not to
exceed $10,000, issued by the Company to the former shareholders of Lobdell in
connection with the acquisition. The Company and former shareholders of Lobdell
are currently in negotiations as to the purchase price adjustment related to net
worth with 100,000 shares of issued Series A Preferred Stock held in escrow. The
Company expects the entire 100,000 shares ($10,000) will be returned to the
Company and canceled in accordance with the Agreement. Any adjustment to the
purchase price resulting from the aforementioned negotiations will be allocated
to the assets acquired or goodwill.
On July 15, 1997 the Company entered into a Settlement Agreement and Mutual
Release with the preferred shareholders of Lobdell (the Settlement Agreement).
The terms of the Settlement Agreement provide for the cancellation of 60,000
shares of Series A Preferred Stock held in escrow and the cancellation of either
the remaining 40,000 shares of Series A Preferred Stock held in escrow or, at
the election of the preferred shareholders, 49,938 shares of Series B Preferred
Stock. The cancellation of Series A Preferred
F-11
<PAGE> 100
OXFORD AUTOMOTIVE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
NOTE 3. ACQUISITIONS -- (CONTINUED)
Stock shares will have no effect on the book value of the assets acquired.
However, the cancellation of Series B Preferred Stock shares will increase both
redeemable preferred stock and the book value of the assets acquired.
The following unaudited pro forma consolidated results of operations have
been prepared as if the acquisition of Lobdell had occurred at the beginning of
fiscal 1997 and 1996.
<TABLE>
<CAPTION>
PERIOD FROM
OCTOBER 28, 1995
YEAR ENDED THROUGH
MARCH 31, 1997 MARCH 31, 1996
-------------- ----------------
<S> <C> <C>
Net sales................................................... $ 330,164 $ 150,776
Net loss.................................................... $ (7,090) $ (938)
Net loss applicable to common stock......................... $ (8,460) $ (2,308)
Net loss per share from continuing operations............... $ (27.32) $ (7.45)
</TABLE>
The pro forma information is not intended to be a projection of future
results.
The pro forma information included above includes adjustments for increased
depreciation expense, net of the related tax benefit of $550 and $290 for the
year ended March 31, 1997 and for the period from October 28, 1995 through March
31, 1996, respectively.
NOTE 4. INVENTORIES
Inventories are comprised of the following at March 31:
<TABLE>
<CAPTION>
1997 1996
---- ----
<S> <C> <C>
Raw materials............................................... $ 1,604 $1,557
Finished goods and work-in-process.......................... 11,861 2,162
------- ------
13,465 3,719
LIFO reserve................................................ (54)
------- ------
$13,411 $3,719
======= ======
</TABLE>
The Company does not separately identify finished goods from
work-in-process.
NOTE 5. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are comprised of the following at March 31:
<TABLE>
<CAPTION>
1997 1996
---- ----
<S> <C> <C>
Land and land improvements.................................. $ 5,073 $ 779
Buildings................................................... 26,124 3,171
Machinery and equipment..................................... 118,875 7,394
Construction-in-process..................................... 4,393 8,914
-------- -------
154,465 20,258
Less -- accumulated depreciation............................ (4,920) (467)
-------- -------
$149,545 $19,791
======== =======
</TABLE>
F-12
<PAGE> 101
OXFORD AUTOMOTIVE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
NOTE 6. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
Accrued expenses and other current liabilities are comprised of the
following at March 31:
<TABLE>
<CAPTION>
1997 1996
---- ----
<S> <C> <C>
Accrued workers' compensation............................... $3,071 $ 544
Accrued property taxes...................................... 2,350
Accrued medical benefits.................................... 1,827
Foreign exchange gain....................................... 1,975
Other....................................................... 1,792 780
------ ------
$9,040 $3,299
====== ======
</TABLE>
NOTE 7. BORROWING ARRANGEMENTS
Borrowings consist of the following at March 31:
<TABLE>
<CAPTION>
1997 1996
---- ----
<S> <C> <C>
BANK SYNDICATE -- TERM LOAN, LOBDELL EMERY CORPORATION
Interest at variable spread over prime (7.44% at March 31,
1997). Quarterly principal payments ranging from
$1,250-$2,750 plus interest, with $13,750 due December 31,
2001...................................................... $ 52,750 $ --
BANK SYNDICATE -- REVOLVING CREDIT LINE, LOBDELL EMERY
CORPORATION
Interest at variable spread over prime (9% at March 31,
1997), matures January 10, 2002........................... 1,250
INDUSTRIAL DEVELOPMENT REVENUE BONDS, CREATIVE
$8,500 issued September 27, 1995, floating rate interest
(3.6% at March 31, 1997). Quarterly principal payments
based on graduated maturity schedule. Backed by NBD Bank
letter of credit.......................................... 8,300
BANK SYNDICATE -- TERM LOAN, BMGNA
Interest at prime rate plus 1.25% (6% at March 31, 1997).
Quarterly payments of $755 plus interest, matures February
28, 2002.................................................. 14,447
REVOLVING CREDIT LINE, BMGNA
Interest at prime rate plus 1.25% (6% at March 31, 1997),
matures February 28, 2002................................. 10,376
BANK -- TERM LOAN, LEWIS
Interest at .625% over 90-day LIBOR (6.19% at March 31,
1997). Quarterly principal payments of approximately $400,
matures October 1, 1998................................... 2,833
NATIONS BANK -- SATURN TOOLING, BMGNA
Interest at a variable spread over prime (8.71% at March 31,
1997). Payments based on parts shipped, matures November
30, 1998.................................................. 1,380 7,047
EDC TOOLING LOAN, BMGNA
Interest at a fixed rate of 7.36%. Payments based on parts
shipped, matures September 30, 1999....................... 5,110
CCFL LOAN, BMGNA
Interest at 11.11%. Monthly principal payments of $21,
matures October 31, 2000.................................. 2,475 2,768
</TABLE>
F-13
<PAGE> 102
OXFORD AUTOMOTIVE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
NOTE 7. BORROWING ARRANGEMENTS -- (CONTINUED)
<TABLE>
<CAPTION>
1997 1996
-------- --------
<S> <C> <C>
IRDP LOAN, BMGNA
Interest at 6%. Monthly principal payments of $7 to October
31, 2000 and $11 thereafter, matures September 1, 2002.... 467 534
TERM LOAN, BMGNA
Interest at Canadian Index Rate plus 3% or Canadian Banker's
Acceptance Rate plus 3.95%. Quarterly principal payments
based on graduated schedule, repaid in full during fiscal
1997...................................................... 7,765
REVOLVING CREDIT LINE, BMGNA
Interest at Canadian Banker's Acceptance Rate plus 3.7%,
repaid in full during fiscal 1997......................... 2,803
BANK LOAN, BMGNA
Interest at either the Canadian Index Rate plus 2.5% or BA
rate plus 3.45%, repaid in full during fiscal 1997........ 2,650
TOOLING LINE, BMGNA
Interest at the Canadian Index Rate plus 3% or the Canadian
Banker's Acceptance Rate plus 3.95%, repaid in full during
fiscal 1997............................................... 2,750
SERIES A PROMISSORY NOTE, BMGH
Interest at 7%, matures October 26, 2001.................... 441 441
-------- --------
Total.................................................. 99,829 26,758
Less -- current portion of long-term borrowings............. (24,274) (11,258)
-------- --------
Long-term borrowings -- less current portion................ $ 75,555 $ 15,500
======== ========
</TABLE>
On January 10, 1997, Lobdell entered into a credit agreement with a
syndicate of banks (the Lobdell Credit Agreement), under which Lobdell may
borrow up to $110,000, including a term loan of $54,000, a revolving credit line
of $38,000, a capital expenditure note of $18,000 and a swingline note of
$3,000. At March 31, 1997, no borrowings were outstanding under the capital
expenditure note or swingline note.
The terms of the Lobdell Credit Agreement contain, among other provisions,
requirements for maintaining defined levels of tangible net worth, funded debt
to cash flows and cash flow coverage. The Lobdell Credit Agreement also contains
certain restrictions on the payment of dividends. Quarterly commitment fees
ranging from .25% to .40% are required to be paid on the unused amounts of the
revolving credit line and the capital expenditure note. Borrowings are secured
by substantially all assets of Lobdell. At March 31, 1997, borrowings supported
by the combined lines of credit totaled $1,250, leaving $54,750 unused and
available.
The proceeds of the industrial development revenue bonds were used to
finance the real and personal property of Creative. These bonds are backed by an
NBD letter of credit, which carries a rate of 1.50% and is collateralized by
substantially all assets of Creative. The letter of credit reimbursement
agreement includes covenants requiring minimum tangible capital, debt service
coverage and limitations on other indebtedness.
On February 11, 1997, BMGNA entered into a credit agreement with a
syndicate of banks (the BMGNA Credit Agreement) under which BMGNA may borrow up
to $46,000, including a term loan of $20,000, a revolving credit line of
$23,000, a capital expenditure note of $3,000 and a swingline note of $3,000. At
March 31, 1997, no borrowings were outstanding under the revolving credit line,
capital expenditure note or swingline note.
F-14
<PAGE> 103
OXFORD AUTOMOTIVE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
NOTE 7. BORROWING ARRANGEMENTS -- (CONTINUED)
The terms of the BMGNA Credit Agreement contain, among other provisions,
requirements for maintaining defined levels of tangible net worth, funded debt
to cash flows and cash flow coverage. The BMGNA Credit Agreement also contains
certain restrictions on the payment of dividends. Quarterly commitment fees
ranging from .35% to .50% are required to be paid on the unused amounts of the
revolving credit line and the capital expenditure note. Borrowings are secured
by substantially all assets of BMGNA.
The Bank -- term loan, Lewis, Nations Bank -- Saturn tooling, BMGNA and EDC
tooling loan, BMGNA are used to finance customer tooling. These loans are
collateralized by either a customer purchase order or the tooling assets.
The CCFL loan represents a term loan payable through October 31, 2000 which
is secured by substantially all the assets of BMGNA.
Aggregate maturities of long-term borrowings at March 31, 1997 are as
follows:
<TABLE>
<S> <C>
1998........................................................ $24,274
1999........................................................ 14,886
2000........................................................ 13,687
2001........................................................ 16,975
2002........................................................ 27,206
Thereafter.................................................. 2,801
-------
$99,829
=======
</TABLE>
NOTE 8. INCOME TAXES
The Company's income tax provision (benefit) consists of the following:
<TABLE>
<CAPTION>
COMPANY PREDECESSOR
--------------------------------- ---------------------------------
PERIOD FROM PERIOD FROM
OCTOBER 28, 1995 APRIL 1, 1995
YEAR ENDED THROUGH THROUGH YEAR ENDED
MARCH 31, 1997 MARCH 31, 1996 OCTOBER 27, 1995 MARCH 31, 1995
-------------- ---------------- ---------------- --------------
<S> <C> <C> <C> <C>
Current
Federal.......................... $ (821) $ -- $ -- $ --
State............................ (124)
Foreign.......................... 34 46 49
------ ------ ------- -----
(945) 34 46 49
------ ------ ------- -----
Deferred
Federal.......................... 899
State............................ 137
Foreign.......................... 974 168 (984) (398)
------ ------ ------- -----
2,010 168 (984) (398)
------ ------ ------- -----
$1,065 $202 $(938) $(349)
====== ====== ======= =====
</TABLE>
F-15
<PAGE> 104
OXFORD AUTOMOTIVE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
NOTE 8. INCOME TAXES -- (CONTINUED)
The difference between the statutory rate and the Company's effective rate
was as follows:
<TABLE>
<CAPTION>
COMPANY PREDECESSOR
---------------------------------- ----------------------------------
PERIOD FROM PERIOD FROM
OCTOBER 28, 1995 APRIL 1, 1995
YEAR ENDED THROUGH THROUGH YEAR ENDED
MARCH 31, 1997 MARCH 31, 1996 OCTOBER 27, 1995 MARCH 31, 1995
-------------- ---------------- ---------------- --------------
<S> <C> <C> <C> <C>
Statutory rate....................... 34.0% 36.0% 36.0% 36.0%
Foreign rates varying from 34%....... 1.8
Large corporation tax................ (2.8) (1.6) (3.1)
State taxes, net of federal
benefit............................ .3
Nondeductible items.................. 4.1 (.5) (1.2) (11.3)
Other................................ .5
---- ----- ----- -----
Effective income tax rate............ 40.7% 32.7% 33.2% 21.6%
==== ===== ===== =====
</TABLE>
Significant components of the Company's deferred tax assets and
(liabilities) are as follows at March 31:
<TABLE>
<CAPTION>
1997 1996
---- ----
<S> <C> <C>
Deferred tax liabilities
Tax depreciation in excess of book........................ $(30,065) $ --
Inventory reserve......................................... (1,292)
-------- ------
Gross deferred tax liabilities.............................. (31,357)
-------- ------
Deferred tax assets
Postretirement medical benefits........................... 13,387
Impairment reserve........................................ 1,200
Workers' compensation..................................... 1,089
Medical benefits accrual.................................. 702
Allowance for bad debts................................... 502
AMT credit carryforward................................... 3,000
Pension benefits.......................................... 1,606 498
Net operating loss carryforwards.......................... 2,905 3,066
Book depreciation in excess of tax........................ 989
Restructuring reserve..................................... 3,927 311
Foreign exchange.......................................... 46 696
Other..................................................... 2,471 579
-------- ------
Gross deferred tax assets................................. 30,835 6,139
-------- ------
Valuation allowance......................................... (200)
-------- ------
Net deferred tax asset (liability).......................... $ (722) $6,139
======== ======
</TABLE>
A valuation allowance is provided on the tax benefits otherwise associated
with certain tax attributes unless it is considered more likely than not that
the benefit will be realized.
The Company has net operating loss carryforwards for Canadian income tax
purposes with potential future tax benefits of approximately $2,900 at March 31,
1997. The Canadian net operating losses have the ability to be carried forward
indefinitely. In addition, the Company has Alternative Minimum Tax credit
carryforwards aggregating $3,000 at March 31, 1997, which can be carried forward
indefinitely.
F-16
<PAGE> 105
OXFORD AUTOMOTIVE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
NOTE 8. INCOME TAXES -- (CONTINUED)
The Company has net operating loss carryforwards with a potential future
tax benefit of approximately $150 for state income tax purposes and Tennessee
Jobs Tax Credit carryforwards of approximately $200 at March 31, 1997, both of
which expire during the years 2010 and 2011.
NOTE 9. RESTRUCTURING RESERVES
In connection with the acquisition of Lobdell described in Note 3,
management began to formulate and assess a plan to exit certain activities of
Lobdell and accordingly established certain restructuring reserves aggregating
$9,817 in Lobdell's opening balance sheet. Currently, management's restructuring
plan includes the sale of certain subsidiaries, closure of a Lobdell owned
manufacturing facility and sale of the current Lobdell owned corporate offices.
Included in the restructuring reserves at March 31, 1997 are the following
costs: severance and benefits for employees to be relocated and terminated
($5,052), net of writedown of facilities and certain equipment to fair market
value, less disposal costs ($2,767), and other restructuring related costs
($1,998). The effect of these initiatives is currently expected to result in the
termination of approximately 250 employee positions.
Management continues to assess the future manufacturing capacity and
corporate office requirements of the Company and expects to complete its
assessment and finalization of the restructuring plan within one year of the
acquisition date of Lobdell.
As noted above, in connection with the Company's restructuring activities,
certain employees of Lobdell were terminated. The termination of certain of
these employees resulted in a postretirement medical benefit curtailment gain of
$957 which, in accordance with the purchase method of accounting, was treated as
a reduction in liabilities assumed at the acquisition date. Accordingly, no
postemployment medical benefit curtailment gain has been recognized in the
Company's statement of operations for the year ended March 31, 1997.
NOTE 10. BENEFIT PLANS
The Company sponsors eight noncontributory plans and one contributory
defined benefit pension plan covering substantially all employees meeting the
age and length of service requirements as specified in the plans. The plan
covering salaried employees provides pension benefits that are based on a
percentage of the employee's average monthly compensation during the five
highest consecutive years out of their last ten years, and their years of
credited service up to a maximum of 30 years. The hourly plans do not provide
for increases in future compensation levels. The Company's funding policy for
this plan is to make contributions in amounts sufficient to annually fund the
plan's current service cost and the initial past service cost, plus interest,
over a period of 30 years. Plans covering hourly employees generally provide
benefits of stated amounts based on their unique labor agreements for each year
of service. The Company's funding policy for these plans is to make at least the
minimum annual contributions required by applicable regulations.
F-17
<PAGE> 106
OXFORD AUTOMOTIVE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
NOTE 10. BENEFIT PLANS -- (CONTINUED)
The following table sets forth the plans' funded status and amounts
recognized on the Company's balance sheets at March 31:
<TABLE>
<CAPTION>
OVERFUNDED PLANS UNDERFUNDED PLANS
------------------- --------------------
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Actuarial present value of benefit obligation
Vested benefits.................................... $ 17,573 $ 2,376 $ 34,106 $ 11,539
Nonvested benefits................................. 1,170 74 1,853 356
-------- ------- -------- --------
18,743 2,450 35,959 11,895
Effect of projected future compensation levels....... 4,060 1,285
-------- ------- -------- --------
Projected benefit obligation for service rendered.... 22,803 3,735 35,959 11,895
Plan assets at fair value (primarily U.S. government
securities, bonds and notes and mutual funds)...... (22,854) (4,155) (32,280) (10,525)
-------- ------- -------- --------
Plan assets less (greater) than projected benefit
obligation......................................... (51) (420) 3,679 1,370
Unrecognized net loss, including asset gains/losses
not yet reflected in market values................. 10 (21)
Unrecognized prior service cost...................... (20)
Unrecognized net obligation being recognized over
15-20 years........................................ 15
Experience gains (losses)............................ (61) 125 (392) (363)
Adjustment required to recognize minimum liability... 472 368
-------- ------- -------- --------
(Prepaid) accrued pension cost....................... $ (87) $ (295) $ 3,718 $ 1,375
======== ======= ======== ========
</TABLE>
The minimum pension liability in excess of the allowable intangible asset
has been recorded as a separate component of equity, net of tax.
F-18
<PAGE> 107
OXFORD AUTOMOTIVE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
NOTE 10. BENEFIT PLANS -- (CONTINUED)
Net periodic pension cost for each year and the actuarial assumptions used
in determining the projected benefit obligation were as follows:
<TABLE>
<CAPTION>
COMPANY PREDECESSOR
---------------------------------- ----------------------------------
PERIOD FROM PERIOD FROM
OCTOBER 28, 1995 APRIL 1, 1995
YEAR ENDED THROUGH THROUGH YEAR ENDED
MARCH 31, 1997 MARCH 31, 1996 OCTOBER 27, 1995 MARCH 31, 1995
-------------- ---------------- ---------------- --------------
<S> <C> <C> <C> <C>
Service cost......................... $ 1,074 $ 266 $ 344 $ 519
Interest cost........................ 2,127 530 697 1,005
Expected return on assets............ (2,138) (425) (533) (847)
Net amortization and deferral........ 15 60 36
------- ------- ------- ------
Net periodic pension cost............ $ 1,078 $ 371 $ 568 $ 713
======= ======= ======= ======
Discount rate
Lobdell............................ 7.75% -- -- --
BMGH............................... 8.00% 8.50% 8.75% 9.50%
Expected return on assets
Lobdell............................ 9.00% -- -- --
BMGH............................... 8.50% 8.50% 7.50% 7.50%
Salary progression
Lobdell............................ 4.50% -- -- --
BMGH............................... 5.50% 5.50% 5.50% 5.50%
</TABLE>
The Company sponsors five defined contribution 401(k) plans. The Salaried
Employees' Retirement Savings Plan covers all salaried employees of Lobdell and
Winchester. The Alma Hourly Employees' Retirement Savings Plan, the Argos Hourly
Employees' Retirement Savings Plan, the Creative Fabrication Corporation and the
Greencastle Hourly Employees' Plan cover all eligible hourly employees at the
respective locations. The Company generally contributes 25% of the first 6% of
the base compensation that a participant contributes to the plans.
NOTE 11. POSTRETIREMENT MEDICAL BENEFITS
In addition to the Company's defined benefit pension plans, Lobdell
sponsors unfunded defined benefit medical plans that provide postretirement
medical benefits to certain full-time employees meeting the age, length of
service and contractual requirements as specified in the plans. The plan
covering salaried employees is a contributory plan providing medical benefits to
those hired before July 1, 1993. The percentage of cost paid by the retiree
currently ranges from 10% for 30 or more years of service at retirement to 55%
for 15 years of service at retirement, with Company contributions commencing
upon attainment of age 62. Those retiring with less than 15 years of service and
those hired after June 30, 1993 may participate in the plan at their own cost.
The plan is currently noncontributory for those employees who retired prior to
July 1, 1993. The plans covering hourly employees provide medical benefit plan
options that are similar to those offered to active hourly employees, with
Lobdell contributions limited either to that available under traditional
coverage for Alma hourly retirees or to 87% of the total applicable premium for
Greencastle retirees.
F-19
<PAGE> 108
OXFORD AUTOMOTIVE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
NOTE 11. POSTRETIREMENT MEDICAL BENEFITS -- (CONTINUED)
The following table presents the plan's funded status reconciled with
amounts recognized in the Company's balance sheet.
<TABLE>
<CAPTION>
MARCH 31,
1997
---------
<S> <C>
Accumulated postretirement benefit obligation
Retirees.................................................. $14,479
Full eligible active plan participants.................... 4,287
Other active plan participants............................ 13,510
-------
Total unfunded obligation................................. 32,276
Unrecognized gain........................................... 1,191
-------
Postretirement medical benefits liability................... $33,467
=======
</TABLE>
Net periodic postretirement benefit cost for the period from January 10,
1997 to March 31, 1997 included the following components:
<TABLE>
<S> <C>
Service cost -- benefits earned during the period........... $272
Interest cost on the accumulated postretirement benefit
obligation................................................ 623
----
Net periodic postretirement benefit cost.................... $895
====
</TABLE>
The weighted average discount rate used in determining the accumulated
postretirement benefit obligation was 7.75%. The weighted average annual assumed
rate of increase in the per capita cost of covered benefits (i.e., healthcare
cost trend rate) is 8.8% in 1997 trending to 6.5% in 2008 and thereafter for
retirees less than 65 years of age. For retirees 65 years of age and over, the
rate is 8.5% in 1997 trending to 6.5% in 2008 and thereafter. The healthcare
cost trend rate assumption has a significant effect on the amounts reported. For
example, increasing the assumed healthcare cost trend rates by one percentage
point in each year would increase the accumulated postretirement benefit
obligation as of March 31, 1997 by approximately $4,624 and net periodic
postretirement benefit cost for the period from January 10, 1997 to March 31,
1997 by approximately $140.
NOTE 12. REDEEMABLE PREFERRED STOCK
In connection with the acquisition of Lobdell described in Note 3,
redeemable preferred stock with a face value of $50,748 was issued. Redeemable
preferred stock with a face value of $40,748 was delivered to the former
shareholders of Lobdell on January 10, 1997. The remaining redeemable preferred
stock with a face value of $10,000 was placed in escrow pending final
determination of the purchase price. See Note 3 for a discussion of the
settlement reached with the preferred shareholders of Lobdell and the subsequent
cancellation of certain shares of redeemable preferred stock. The preferred
stock issuance consisted of 457,541 shares of Series A $3.00 Cumulative
Preferred Stock (Series A Preferred) and 49,938 shares of Series B Preferred
Stock (Series B Preferred). The annual dividend on the Series A Preferred is
$3.00 per share, payable semi-annually. Dividends on the Series A Preferred are
cumulative, but do not bear interest. The Series B Preferred does not provide
for dividends or interest.
Under the terms of the issuance of the Series A Preferred and the Series B
Preferred (Stock Agreement), the holders of the Series A Preferred and Series B
Preferred maintain limited voting rights. Holders are entitled to vote on any
provisions that would adversely affect the rights or privileges of the Series A
Preferred or Series B Preferred holders or management's plans to issue any
equity securities that would rank prior to the Series A Preferred. Holders of
the Series A Preferred are entitled to elect at least one director of Lobdell,
which, under certain provisions of the Stock Agreement, may increase to two.
F-20
<PAGE> 109
OXFORD AUTOMOTIVE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
NOTE 12. REDEEMABLE PREFERRED STOCK -- (CONTINUED)
Lobdell is required to redeem all shares of Series A Preferred and Series B
Preferred on December 31, 2006 at a price of $100 per share, plus all declared
or accumulated but unpaid dividends on the Series A Preferred. If Oxford does
not commence an initial public offering of common stock (IPO) prior to June 30,
2006, then the redemption price of the Series A Preferred is $103 per share. If
an IPO does not occur by December 31, 2001, each holder of Series A Preferred
has the option to redeem annually a maximum of 20 percent of the shares held at
a price of $100 per share on each December 31, beginning in 2002.
Series A Preferred and Series B Preferred holders are not allowed to
transfer, sell or assign the shares prior to February 1, 1999. Subsequent to
that date, Lobdell has the right of first refusal to purchase any of the shares
transferred, sold or assigned by a holder of Series A Preferred or Series B
Preferred.
Holders of Series A Preferred are entitled to convert their shares to
Oxford common stock issued in connection with an IPO. Individual Series A
Preferred holders may convert a maximum of 50% of their shares, but the total of
all Series A Preferred shares converted may not exceed 25% of the total Series A
Preferred shares outstanding.
The Series B Preferred shares have been discounted, as the redemption price
of $100 per share was greater than the fair value of the shares at issuance. The
recorded value will be accreted to the redemption value at the time redemption
first becomes available.
The Series A Preferred and Series B Preferred have been included in the
accompanying consolidated balance sheet at their respective fair values at the
date of issuance of $35,754 and $3,246, respectively, and have been adjusted for
accrued dividends and accretion of $258 and $42 respectively.
NOTE 13. RELATED PARTY TRANSACTIONS
The Company is charged a fee by a related party, The Oxford Investment
Group, Inc., for consulting, finance and management services. Fees charged to
the Company by The Oxford Investment Group, Inc. approximated $275 for the year
ended March 31, 1997. In connection with the acquisitions of BMGNA and Lobdell,
investment banking fees of $200 and $300, respectively, were paid to The Oxford
Investment Group, Inc.
NOTE 14. COMMITMENTS AND CONTINGENCIES
Operating Leases
As of March 31, 1997, the Company had long-term operating leases covering
certain machinery and equipment. The minimum rental commitments under
noncancellable operating leases with lease terms in excess of one year are as
follows as of March 31, 1997:
<TABLE>
<S> <C>
1998........................................................ $ 4,695
1999........................................................ 2,813
2000........................................................ 3,159
2001........................................................ 1,140
2002........................................................ 3,088
-------
$14,895
=======
</TABLE>
Environmental Matters
The Company is subject to federal, state and local laws and regulations
which govern environmental matters. These laws regulate the discharge of
materials into the environment and may require the Company to remove or mitigate
the environmental effects of the disposal or release of petroleum or chemical
substances.
F-21
<PAGE> 110
OXFORD AUTOMOTIVE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
NOTE 14. COMMITMENTS AND CONTINGENCIES -- (CONTINUED)
The Company has identified several environmental matters resulting from prior
operations. Due to the relatively early stage of investigation of certain of
these identified matters as well as potential indemnification by other
potentially responsible parties, management is unable to reasonably estimate the
ultimate cost of remediating certain of these identified environmental matters.
At March 31, 1997, the Company has a liability of approximately $880 recorded
for estimated costs of known environmental matters.
General
The Company is subject to various claims, lawsuits and administrative
proceedings related to matters arising out of the normal course of business. In
the opinion of management, after reviewing the information which is currently
available with respect to such matters and consulting with legal counsel, any
liability which may ultimately be incurred with respect to these matters will
not materially affect the financial position, results of operations or cash
flows of the Company.
NOTE 15. SUBSEQUENT EVENT
On May 21, 1997, the Company signed a definitive Agreement and Plan of
Merger (the Merger Agreement) pursuant to which it will acquire (the Merger)
Howell Industries, Inc., a Michigan corporation (Howell).
Howell is a manufacturer of high-quality welded subassemblies and detailed
stampings used as OEM components, primarily in suspension system applications,
in the production of light trucks, SUVs, mini-vans, vans and passenger cars.
Pursuant to the Merger Agreement, the shareholders of Howell will receive
approximately $23,400 in cash. The Company also executed a Shareholder Agreement
pursuant to which it has received from the principal shareholder an option to
purchase its shares, which constitute approximately 32.6% of the issued and
outstanding shares of common stock of Howell (the Shares), at any time prior to
December 31, 1997, together with its agreement to vote all such Shares in favor
of the Merger.
The acquisition will be accounted for by the purchase method. Accordingly,
the results of operations of the acquired company will be included with those of
the Company for periods subsequent to the date of acquisition. Howell had net
sales of $79,211 and net income of $475 for the year ended July 31, 1996.
The unaudited pro forma combined condensed balance sheet of the Company and
Howell as of March 31, 1997 after giving effect to certain pro forma adjustments
is as follows:
<TABLE>
<S> <C>
ASSETS
Current assets.............................................. $108,419
Property and equipment, net................................. 165,431
Other assets................................................ 14,462
Goodwill.................................................... 2,013
--------
$290,325
========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities......................................... $ 94,097
Other liabilities........................................... 154,587
Redeemable preferred stock.................................. 39,300
Shareholders' equity........................................ 2,341
--------
$290,325
========
</TABLE>
F-22
<PAGE> 111
OXFORD AUTOMOTIVE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The unaudited pro forma combined results of operations of the Company
(including Lobdell from January 11, 1997 through March 31, 1997) and Howell for
the year ended March 31, 1997 after giving effect to certain pro forma
adjustments are as follows:
<TABLE>
<S> <C>
Net sales................................................... $228,404
========
Net income.................................................. $ 1,158
========
Net income applicable to common shares...................... $ 858
========
Net income per common share................................. $ 6.44
========
</TABLE>
The foregoing unaudited pro forma results of operations reflect adjustments
for additional interest expense related to the financing of the acquisition and
the additional depreciation expense, as a result of the write-up of property,
plant and equipment, net of the related tax benefit.
F-23
<PAGE> 112
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors
and Shareholders of
Lobdell Emery Corporation
In our opinion, the accompanying consolidated balance sheets and the
related consolidated statements of operations, of changes in shareholders'
equity and of cash flows after the restatement discussed in Note 16 present
fairly, in all material respects, the financial position of Lobdell Emery
Corporation and its subsidiaries (the Corporation) at December 31, 1996 and
1995, and the results of their operations and their cash flows for each of the
three years in the period ended December 31, 1996, in conformity with generally
accepted accounting principles. These financial statements are the
responsibility of the Corporation's management; our responsibility is to express
an opinion on these financial statements based on our audits. We conducted our
audits of these statements in accordance with generally accepted auditing
standards which 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, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.
As described in Note 15, on January 10, 1997 all of the outstanding shares
of common stock of the Corporation were sold to L-E Acquisition, Inc.
Price Waterhouse LLP
Detroit, Michigan
May 19, 1997
F-24
<PAGE> 113
LOBDELL EMERY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE-RELATED DATA)
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------
1996 1995
---- ----
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents................................. $ 278 $ 716
Trade receivables -- less allowance of $1,254 and $500,
respectively........................................... 28,769 32,514
Inventories............................................... 6,083 10,212
Income taxes receivable................................... 1,282
Reimbursable tooling...................................... 47 407
Deferred income taxes..................................... 3,081 3,038
Prepaid expenses and other current assets................. 191 827
-------- --------
Total current assets................................. 39,731 47,714
-------- --------
Advance under shareholders' redemption agreement............ 1,542
Unexpended bond proceeds.................................... 3,886 4,508
Intangible pension asset.................................... 3,216 2,113
Other noncurrent assets..................................... 2,483 3,825
Deferred income taxes....................................... 2,531
Property, plant and equipment, net.......................... 72,804 72,503
-------- --------
TOTAL ASSETS......................................... $126,193 $130,663
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Trade accounts payable.................................... $ 15,114 $ 11,627
Employee compensation..................................... 5,156 4,614
Accrued expenses and other current liabilities............ 6,511 6,516
Current portion of long-term borrowings................... 2,200 7,169
-------- --------
Total current liabilities............................ 28,981 29,926
-------- --------
Pension liability........................................... 1,855 1,627
Postretirement medical benefits liability................... 19,639 16,889
Deferred income taxes....................................... 1,180
Other noncurrent liabilities................................ 1,950 1,739
-------- --------
23,444 21,435
-------- --------
Long-term borrowings -- less current portion................ 41,134 39,097
-------- --------
Total liabilities.................................... 93,559 90,458
-------- --------
Commitments and contingent liabilities (Note 13)
Redeemable Common stock, Class B nonvoting, $1 par value,
outstanding 137,112 shares (Note 11)...................... 1,800 1,297
-------- --------
Shareholders' equity
Common stock, Class A voting, $1 par value, authorized
540,000 shares, outstanding 478,255 shares............. 478 478
Common stock, Class B nonvoting, $1 par value authorized
5,400,000 shares; outstanding 3,430,623 shares......... 3,431 3,431
Retained earnings......................................... 27,376 35,730
Equity adjustment for minimum pension liability........... (451) (731)
-------- --------
30,834 38,908
-------- --------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY.................. $126,193 $130,663
======== ========
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-25
<PAGE> 114
LOBDELL EMERY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE RELATED DATA)
<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31,
--------------------------------
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Net sales................................................... $253,997 $269,260 $270,062
Cost of sales............................................... 244,129 252,671 252,275
-------- -------- --------
Gross profit................................................ 9,868 16,589 17,787
Selling, general and administrative......................... 16,395 14,949 14,438
Equipment impairment........................................ 3,000
-------- -------- --------
Operating income (loss)................................... (9,527) 1,640 3,349
Other income (expense)
Interest expense.......................................... (3,557) (3,448) (2,799)
Other income.............................................. 664 744 366
-------- -------- --------
Income (loss) before benefit (provision) for income taxes... (12,420) (1,064) 916
Benefit (provision) for income taxes........................ 4,569 264 (442)
-------- -------- --------
Income (loss) before cumulative effect of accounting
change.................................................... (7,851) (800) 474
Cumulative effect of accounting change -- post-employment
benefits, net of income tax benefit ($.12 per share)...... (510)
-------- -------- --------
Net loss.................................................... $ (7,851) $ (800) $ (36)
======== ======== ========
Net loss per share.......................................... $ (1.94) $ (.19) $ (.01)
======== ======== ========
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-26
<PAGE> 115
LOBDELL EMERY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE RELATED DATA)
<TABLE>
<CAPTION>
EQUITY
ADJUSTMENT
CLASS A CLASS B RETAINED FOR MINIMUM
VOTING NONVOTING EARNINGS PENSION LIABILITY TOTAL
------- --------- -------- ----------------- -----
<S> <C> <C> <C> <C> <C>
Balances at January 1, 1994................ $478 $3,427 $36,715 $ -- $40,620
Net loss for 1994........................ (36) (36)
Stock option activity.................... 4 70 74
Dividends ($.06 per share)............... (257) (257)
Accretion of redeemable common stock..... (63) (63)
Minimum pension liability adjustment..... (492) (492)
---- ------ ------- ------- -------
Balances at December 31, 1994.............. 478 3,431 36,429 (492) 39,846
Net loss for 1995........................ (800) (800)
Stock option activity.................... 213 213
Dividends ($.03 per share)............... (124) (124)
Accretion of redeemable common stock..... 12 12
Minimum pension liability adjustment..... (239) (239)
---- ------ ------- ------- -------
Balances at December 31, 1995.............. 478 3,431 35,730 (731) 38,908
Net loss for 1996........................ (7,851) (7,851)
Accretion of redeemable common stock..... (503) (503)
Minimum pension liability adjustment..... 280 280
---- ------ ------- ------- -------
Balances at December 31, 1996.............. $478 $3,431 $27,376 $(451) $30,834
==== ====== ======= ======= =======
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-27
<PAGE> 116
LOBDELL EMERY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLAR AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31,
--------------------------------
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net loss.................................................... $ (7,851) $ (800) $ (36)
Adjustments to reconcile net loss to net cash provided by
operating activities
Depreciation.............................................. 13,746 12,486 12,045
Deferred income taxes..................................... (3,922) (1,332) (1,395)
Pension liability......................................... (2,230) 657 159
Postretirement medical benefits liability................. 2,750 2,245 2,923
Equipment impairment...................................... 3,000
Loss (Gain) on sale of equipment.......................... (23) (34) 68
Changes in operating assets and liabilities affecting cash
Trade receivables......................................... 3,745 (644) (4,397)
Inventories............................................... 4,129 (1,594) (66)
Income taxes receivable/payable........................... (1,601) 290 (1,569)
Reimbursable tooling...................................... 360 (386) (483)
Prepaid expenses and other current assets................. 635 (649) 60
Advance under shareholders' redemption agreement.......... (1,542) 500 113
Other noncurrent assets................................... 3,456 (2,948) 1,619
Trade accounts payable.................................... 3,487 (1,769) (961)
Employee compensation..................................... 542 554 72
Accrued expenses and other current liabilities............ (5) 1,241 219
Other noncurrent liabilities.............................. 220 9 850
-------- -------- --------
NET CASH PROVIDED BY OPERATING ACTIVITIES............ 18,896 7,826 9,221
-------- -------- --------
INVESTING ACTIVITIES
Acquisitions of property, plant and equipment............... (16,439) (14,917) (8,696)
Proceeds from sale of equipment............................. 37 276 175
-------- -------- --------
NET CASH USED IN INVESTING ACTIVITIES................ (16,402) (14,641) (8,521)
FINANCING ACTIVITIES
Proceeds from long-term borrowing arrangements.............. 25,000 8,500 27,020
Principal payments on long-term borrowing arrangements...... (23,932) (5,618) (32,831)
Net borrowings (payments) under lines of credit............. (4,000) 5,350 5,550
Proceeds from exercise of stock options..................... 213 74
Dividends................................................... (124) (257)
Redemption and retirement of redeemable common stock........ (1,581) (903)
-------- -------- --------
NET CASH USED IN FINANCING ACTIVITIES................ (2,932) 6,740 (1,347)
-------- -------- --------
NET DECREASE IN CASH AND CASH EQUIVALENTS................... (438) (75) (647)
Cash and cash equivalents at beginning of year.............. 716 791 1,438
-------- -------- --------
Cash and cash equivalents at end of year.................... $ 278 $ 716 $ 791
======== ======== ========
Cash paid for interest...................................... $ 3,774 $ 3,411 $ 2,732
======== ======== ========
Cash paid for income taxes.................................. $ 963 $ 291 $ 3,067
======== ======== ========
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-28
<PAGE> 117
LOBDELL EMERY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1996, 1995 AND 1994
(DOLLAR AMOUNTS IN THOUSANDS)
NOTE 1. NATURE OF OPERATIONS
Lobdell Emery Corporation (the Corporation) is a full-service supplier of
metal stampings and welded assemblies used as original equipment components
primarily by North American original equipment automotive manufacturers. The
Corporation's products are used in a wide variety of sport utility vehicles,
light and medium trucks, vans and passenger cars. The Corporation primarily
operates from five plants located in the Midwest which account for approximately
98% of the Corporation's sales for the year ended December 31, 1996. The
Corporation's hourly workforce is represented by various locals of the United
Auto Workers.
Sales to the Corporation's two primary customers as a percentage of total
sales approximated the following for the years ended December 31:
<TABLE>
<CAPTION>
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Ford Motor Company.......................................... 43% 52% 64%
General Motors Corporation.................................. 49% 40% 29%
</TABLE>
Accounts receivable from Ford Motor Company and General Motors Corporation
represent approximately 47% and 49%, respectively, of the December 31, 1996
accounts receivable balance.
Although the Corporation is directly affected by the economic well being of
the automotive industry and customers referred to above, management does not
believe significant credit risk exists at December 31, 1996. The Corporation
does not require collateral to reduce such risk and historically has not
experienced significant losses related to receivables from individual customers
or groups of customers in the automotive industry.
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation
The consolidated balance sheets include the accounts of Lobdell Emery
Corporation and its wholly-owned subsidiaries, Lewis Emery Capital Corporation
(Lewis), Concept Management Corporation and subsidiaries (Concept), Laserweld
International (Laserweld) and Parallel Group International (Parallel). Concept
Management Corporation also includes the accounts of its wholly-owned
subsidiaries, Winchester Fabrication Corporation (Winchester) and Creative
Fabrication Corporation (Creative). 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 affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities 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.
Revenue Recognition
Revenue is recognized by the Corporation upon shipment of product to the
customer.
Financial Instruments
At December 31, 1996, the carrying amount of financial instruments such as
cash and cash equivalents, trade receivables and payables and unexpended bond
proceeds, approximated their fair values. The carrying
F-29
<PAGE> 118
LOBDELL EMERY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1996, 1995 AND 1994
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES -- (CONTINUED)
amount of the long-term customer receivables and borrowings at December 31,
1996, approximated their fair values based on the variable interest rates
available to the Corporation for similar arrangements.
Cash Equivalents
The Corporation considers all highly-liquid investments with maturity of
three months or less when purchased to be cash equivalents.
Inventories
Inventories are stated at the lower of cost or market. Cost is principally
determined by the last-in, first-out (LIFO) method.
Unexpended Bond Proceeds
Unexpended bond proceeds in the accompanying consolidated balance sheets
represent unexpended proceeds from the issuance of industrial development
revenue bonds by Creative as discussed in Note 6, and are invested in allowable
money market accounts and commercial paper with a maturity of 90 days or less.
Property, Plant and Equipment
Property, plant and equipment are stated on the basis of historical cost
and include expenditures for improvements which materially increase the useful
lives of existing assets. Expenditures for normal repair and maintenance are
charged to operations as incurred. For federal income tax purposes, depreciation
is computed using accelerated and straight-line methods. For financial reporting
purposes, depreciation is computed principally using the straight-line method
over the following estimated useful lives:
<TABLE>
<CAPTION>
YEARS
-----
<S> <C>
Land improvements........................................... 15
Buildings................................................... 30
Machinery and equipment..................................... 3-10
</TABLE>
At December 31, 1996, the Corporation had a machine in process at a vendor
location. The aggregate cost of the machine will be $5,300, for which the
Corporation has recorded approximately $2,700 in the accompanying consolidated
balance sheet. The remaining $2,600 will be recorded by the Corporation upon
final technical approval of the machine.
In accordance with the provisions of Statement of Financial Accounting
Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of," the Corporation established an impairment
reserve against certain of the assets of Laserweld in the amount of $3,000 at
December 31, 1996. The reserve represents the difference between the fair value
of the Laserweld assets, based primarily on a recent independent appraisal, and
the cost of such assets.
Environmental Compliance and Remediation
Environmental expenditures that relate to current operations are expensed
or capitalized as appropriate. Expenditures that relate to an existing condition
caused by past operations which do not contribute to current or future revenue
generation are expensed. Liabilities are recorded when environmental assessments
and/or remedial efforts are probable and the costs can be reasonably estimated.
Estimated costs are based upon
F-30
<PAGE> 119
LOBDELL EMERY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1996, 1995 AND 1994
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES -- (CONTINUED)
enacted laws and regulations, existing technology and the most probable method
of remediation. The costs determined are not discounted and exclude the effects
of inflation and other social and economic factors.
Income Taxes
Deferred taxes are provided to give recognition to the effect of expected
future tax consequences of temporary differences between the carrying amounts
for financial reporting purposes and the tax bases for income tax purposes of
assets and liabilities.
Reimbursable Tooling
Reimbursable tooling represents net costs incurred on tooling projects for
which the Corporation expects to be reimbursed by customers. Ongoing estimates
of total costs to be incurred on each tooling project are made by management and
losses, if any, are recorded when known. Generally, tooling revenue is
recognized upon acceptance of the tooling by the customer.
At December 31, 1996, approximately $2,800 of reimbursable tooling was in
process at various vendor locations. These amounts, which have not been recorded
in the accompanying consolidated balance sheet, will be recorded and paid upon
the Corporation's receipt of payment from the owners of the tooling.
Net Loss Per Share
Net loss per share is determined by dividing net loss by the weighted
average number of common shares outstanding during the period.
Reclassifications
Certain amounts from the prior year have been reclassified to conform with
the current year presentation.
NOTE 3. INVENTORIES
Inventories are comprised of the following at December 31:
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
Raw materials............................................... $ 3,851 $ 3,861
Finished goods and work-in-process.......................... 5,278 10,177
------- -------
9,129 14,038
LIFO reserve................................................ (3,046) (3,826)
------- -------
$ 6,083 $10,212
======= =======
</TABLE>
The Corporation does not separately identify finished goods from
work-in-process.
During 1996, inventory quantities were reduced. This reduction resulted in
a liquidation of LIFO inventory quantities carried at lower costs prevailing in
prior years as compared with the cost of 1996 purchases, the effect of which
increased net income by approximately $300.
F-31
<PAGE> 120
LOBDELL EMERY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1996, 1995 AND 1994
NOTE 4. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are comprised of the following at December
31:
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
Land and land improvements............................. $ 11,130 $ 10,760
Buildings.............................................. 33,515 32,801
Machinery and equipment, net of impairment reserve of
$3,000 in 1996....................................... 137,914 127,389
Construction-in-process................................ 6,495 5,216
--------- ---------
189,054 176,166
Less -- accumulated depreciation....................... (116,250) (103,663)
--------- ---------
$ 72,804 $ 72,503
========= =========
</TABLE>
NOTE 5. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
Accrued expenses and other current liabilities are comprised of the
following at December 31:
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
Accrued workers' compensation............................... $2,438 $2,438
Accrued property taxes...................................... 1,950 1,622
Accrued medical benefits.................................... 1,816 1,615
Other....................................................... 307 841
------ ------
$6,511 $6,516
====== ======
</TABLE>
NOTE 6. BORROWING ARRANGEMENTS
Borrowings consist of the following at December 31:
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
BANK SYNDICATE -- TERM LOAN, LOBDELL EMERY CORPORATION
Interest at variable spread over prime (8.25% at December
31, 1996). Quarterly principal payments of $893 plus
interest, matures September 12, 1999...................... $24,107 $21,230
BANK -- TERM LOAN, LEWIS
Interest at .625% over 90-day LIBOR (6.19% at December 31,
1996). Quarterly principal payments of approximately $400,
matures October 1, 1998................................... 3,227 4,936
BANK SYNDICATE -- REVOLVING CREDIT LINE, LOBDELL EMERY
CORPORATION
Interest at variable spread over prime (8.25% at December
31, 1996)................................................. 7,600 11,600
INDUSTRIAL DEVELOPMENT REVENUE BONDS -- CREATIVE
$8,500 issued September 27, 1995, floating rate interest
(4.35% at December 31, 1996). Quarterly principal payments
based on graduated maturity schedule. Backed by NBD Bank
letter of credit.......................................... 8,400 8,500
------- -------
Total.................................................. 43,334 46,266
Less -- current portion of long-term borrowings............. (2,200) (7,169)
------- -------
Long-term borrowings -- less current portion................ $41,134 $39,097
======= =======
</TABLE>
F-32
<PAGE> 121
LOBDELL EMERY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1996, 1995 AND 1994
NOTE 6. BORROWING ARRANGEMENTS -- (CONTINUED)
Subsequent to December 31, 1996, the Bank syndicate term loan and revolving
credit line were paid in full, with accrued interest, in connection with the
merger described in Note 15. These borrowings were replaced with a $54,000 term
loan, $38,000 revolving line of credit and $3,000 swing line of credit, each
expiring on January 10, 2002. Accordingly, these amounts are classified as
long-term borrowings at December 31, 1996. The term loan bears interest at a
variable spread over 90-day LIBOR, and the revolving and swing lines of credit
bear interest at a variable spread over the prime rate. The Corporation also
entered into an $18,000 capital expenditure line of credit that expires on
January 10, 2002. The agreements contain various financial and other covenants.
Borrowings are secured by substantially all of the assets of the Corporation.
The proceeds of the Lewis term debt were used to finance customer tooling.
The debt is collateralized by a customer purchase order which allows for
recovery of the term-debt principal and interest, administrative cost and a
predetermined markup.
The proceeds of the industrial development revenue bonds were used to
finance the real and personal property of Creative. These bonds are backed by an
NBD Bank letter of credit, which carries a rate of .8% and is collateralized by
substantially all assets of Creative. The letter of credit reimbursement
agreement includes covenants requiring minimum tangible capital, debt service
coverage and limitations on other indebtedness.
NOTE 7. STOCK OPTION PLAN
The Corporation adopted a stock option plan in 1990 which provides for the
granting of discretionary and nondiscretionary options, alternative stock
appreciation rights, cash payment rights, incentive stock options, or a
combination thereof. Each option granted under the plan is for a unit consisting
of one share of Class A and ten shares of Class B common stock. During the years
ended December 31, 1995 and 1994 the Corporation recorded compensation expense
of $213 and $70, respectively. No options were granted or exercised during the
year ended December 31, 1996. Subsequent to December 31, 1996 and in connection
with the merger described in Note 15, all of the outstanding stock options were
canceled. The costs incurred by the Corporation in connection with the
cancellation of the outstanding stock options were reimbursed by L-E
Acquisition, Inc. at close. In accordance with Emerging Issues Task Force Issue
No. 85-45, "Business Combinations: Settlement of Stock Options and Awards," the
Corporation has treated the reimbursement as a credit to compensation expense
recognized in connection with the cancellation of the aforementioned stock
options. The disclosures required under Statement of Financial Accounting
Standards No. 123, "Accounting for Stock-Based Compensation," have been omitted
as all outstanding stock options were canceled subsequent to December 31, 1996.
Because the acquiring company (see Note 15) has no stock option plan, the
Corporation's management does not believe such disclosure to be relevant to the
users of the consolidated financial statements.
F-33
<PAGE> 122
LOBDELL EMERY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1996, 1995 AND 1994
NOTE 8. INCOME TAXES
The Corporation's benefit for income taxes consists of the following for
the years ended December 31:
<TABLE>
<CAPTION>
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Current
Federal....................................... $ (647) $ 399 $ 1,425
State......................................... 371 375
------- ------- -------
(647) 770 1,800
------- ------- -------
Deferred
Federal....................................... (3,405) (869) (1,206)
State......................................... (517) (165) (152)
------- ------- -------
(3,922) (1,034) (1,358)
------- ------- -------
$(4,569) $ (264) $ 442
======= ======= =======
</TABLE>
A reconciliation between the Corporation's income tax provision (benefit)
and the amount computed by applying the statutory income tax rate to income
before income taxes is as follows for the years ended December 31:
<TABLE>
<CAPTION>
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Statutory rate...................................... $(4,223) $(362) $311
State taxes, net of federal benefit................. (517) 136 147
Nondeductible items................................. 212 104 76
Other............................................... (41) (142) (92)
------- ----- ----
Provision (benefit) for income taxes................ $(4,569) $(264) $442
======= ===== ====
</TABLE>
F-34
<PAGE> 123
LOBDELL EMERY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1996, 1995 AND 1994
NOTE 8. INCOME TAXES -- (CONTINUED)
Significant components of the Corporation's deferred tax assets and
(liabilities) are as follows at December 31:
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
Deferred tax liabilities
Tax depreciation in excess of book........................ $(8,312) $(8,619)
Prepaid pension asset..................................... (427) (574)
------- -------
Gross deferred tax liabilities.............................. (8,739) (9,193)
------- -------
Deferred tax assets
Postretirement medical benefits........................... 7,463 6,418
Equipment impairment reserve.............................. 1,140
Workers' compensation..................................... 926 927
Medical benefits accrual.................................. 687 611
Allowance for bad debts................................... 477 190
Environmental reserves.................................... 334 334
Postemployment benefits................................... 323 323
AMT credit carryforward................................... 1,871 1,708
Other..................................................... 1,330 540
------- -------
Gross deferred tax assets................................... 14,551 11,051
------- -------
Valuation allowance......................................... (200)
------- -------
Net deferred tax asset...................................... $ 5,612 $ 1,858
======= =======
</TABLE>
A valuation allowance is provided on the tax benefits otherwise associated
with certain tax attributes unless it is considered more likely than not that
the benefit will be realized.
The Corporation has net operating loss carryforwards for state income tax
purposes with potential future tax benefits of approximately $150 at December
31, 1996, which expire during the years 2010 and 2011.
The Corporation has Tennessee Jobs Tax Credit carryforwards of
approximately $200 at December 31, 1996, which expire during the years 2010 and
2011.
NOTE 9. BENEFIT PLANS
The Corporation sponsors six noncontributory-defined benefit pension plans
covering substantially all employees meeting the age and length of service
requirements as specified in the plans. The plan covering salaried employees
provides pension benefits that are based on a percentage of the employee's
average monthly compensation during the five highest consecutive years out of
their last ten years, and their years of credited service up to a maximum of 30
years. The Corporation's hourly pension plans do not provide for increases in
future compensation levels. The Corporation's funding policy for this plan is to
make contributions in amounts sufficient to annually fund the plan's current
service cost and the initial past service cost, plus interest, over a period of
30 years. Plans covering hourly employees generally provide benefits of stated
amounts based on their unique labor agreements for each year of service. The
Corporation's funding policy for these plans is to make at least the minimum
annual contributions required by applicable regulations.
F-35
<PAGE> 124
LOBDELL EMERY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1996, 1995 AND 1994
NOTE 9. BENEFIT PLANS -- (CONTINUED)
The following table sets forth the plans' funded status and amounts
recognized on the Corporation's balance sheet at December 31:
<TABLE>
<CAPTION>
1996 1995
------------------------- -------------------------
OVERFUNDED UNDERFUNDED OVERFUNDED UNDERFUNDED
PLANS PLANS PLANS PLANS
---------- ----------- ---------- -----------
<S> <C> <C> <C> <C>
Actuarial present value of benefit obligation:
Vested benefits................................ $ 14,784 $ 21,270 $ 13,718 $ 18,926
Nonvested benefits............................. 1,174 1,468 1,143 1,597
-------- -------- -------- --------
15,958 22,738 14,861 20,523
Effect of projected future compensation levels... 3,278 2,866
-------- -------- -------- --------
Projected benefit obligation for service
rendered....................................... 19,236 22,738 17,727 20,523
Plan assets at fair value (primarily U.S.
government securities, bonds and notes and
mutual funds).................................. (18,857) (19,656) (17,092) (17,477)
-------- -------- -------- --------
Plan assets less than projected benefit
obligation..................................... 379 3,082 635 3,046
Unrecognized net loss............................ (2,080) (865) (2,612) (1,353)
Unrecognized prior service cost.................. 174 (2,757) 227 (1,572)
Unrecognized net obligation being recognized over
15-20 years.................................... 300 (346) 350 (426)
Adjustment required to recognize minimum
liability...................................... 3,968 3,332
-------- -------- -------- --------
(Prepaid) accrued pension cost................... $ (1,227) $ 3,082 $ (1,400) $ 3,027
======== ======== ======== ========
</TABLE>
The minimum pension liability in excess of the allowable intangible asset
of $751 and $1,218 at December 31, 1996 and 1995, respectively, has been
recorded as a separate component of equity, net of tax.
Net periodic pension cost included the following components for the year
ended December 31:
<TABLE>
<CAPTION>
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Service cost.................................... $ 1,100 $ 857 $ 1,142
Interest cost................................... 2,800 2,641 2,418
Actual return on plan assets.................... (4,322) (5,867) (232)
Net amortization and deferral................... 1,560 3,606 (1,993)
------- ------- -------
Net periodic pension cost....................... $ 1,138 $ 1,237 $ 1,335
======= ======= =======
</TABLE>
Actuarial assumptions used in determining the projected benefit obligation
are as follows:
<TABLE>
<CAPTION>
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Discount rate............................................. 7.5% 7.5% 8.5%
Rate of increase in future compensation................... 4.5% 4.5% 4.5%
Expected long-term rate of return on assets............... 9.0% 9.0% 8.0%
</TABLE>
The Corporation sponsors a Supplemental Employee Retirement Plan (SERP)
which covers three key officers of the Corporation. At December 31, 1996, the
Corporation has accrued a liability of $217 related to the SERP.
The Corporation sponsors five defined contribution 401(k) plans. The
Salaried Employees' Retirement Savings Plan covers all salaried employees of the
Corporation and Winchester. The Alma Hourly Employees'
F-36
<PAGE> 125
LOBDELL EMERY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1996, 1995 AND 1994
NOTE 9. BENEFIT PLANS -- (CONTINUED)
Retirement Savings Plan, the Argos Hourly Employees' Retirement Savings Plan,
the Creative Fabrication Corporation and the Greencastle Hourly Employees' Plan
cover all eligible hourly employees at the respective locations. The Corporation
generally contributes 25% of the first 6% of the base compensation that a
participant contributes to the plans.
NOTE 10. POSTRETIREMENT MEDICAL BENEFITS
In addition to the Corporation's defined benefit pension plans, the
Corporation sponsors unfunded defined benefit medical plans that provide
postretirement medical benefits to certain full-time employees meeting the age,
length of service and contractual requirements as specified in the plans. The
plan covering salaried employees is a contributory plan providing medical
benefits to those hired before July 1, 1993. The percentage of cost paid by the
retiree currently ranges from 10% for 30 or more years of service at retirement
to 55% for 15 years of service at retirement, with Corporation contributions
commencing upon attainment of age 62. Those retiring with less than 15 years of
service and those hired after June 30, 1993 may participate in the plan at their
own cost. The plan is currently noncontributory for those employees who retired
prior to July 1, 1993. The plans covering hourly employees provide medical
benefit plan options that are similar to those offered to active hourly
employees, with Corporation contributions limited either to that available under
traditional coverage for Alma hourly retirees or to 87% of the total applicable
premium for Greencastle retirees.
The following table presents the plans' funded status reconciled with
amounts recognized in the Corporation's balance sheets at December 31:
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
Accumulated postretirement benefit obligation
Retirees............................................... $ 14,420 $ 13,132
Full eligible active plan participants................. 4,767 4,408
Other active plan participants......................... 14,613 12,931
-------- --------
Total unfunded obligation......................... 33,800 30,471
Unrecognized loss........................................ (2,618) (1,481)
Unrecognized transition obligation....................... (11,543) (12,101)
-------- --------
Postretirement medical benefits liability................ $ 19,639 $ 16,889
======== ========
</TABLE>
Net periodic postretirement benefit cost included the following components
for the year ended December 31:
<TABLE>
<CAPTION>
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Service cost.......................................... $ 947 $ 785 $1,088
Interest cost......................................... 2,216 2,010 2,238
Amortization of transition obligation prior losses.... 722 643 997
------ ------ ------
Net periodic postretirement benefit cost.............. $3,885 $3,438 $4,323
====== ====== ======
</TABLE>
The weighted average discount rate used in determining the accumulated
postretirement benefit obligation was 7.5% in 1996 and 1995. The weighted
average annual assumed rate of increase in the per capita cost of covered
benefits (i.e., healthcare cost trend rate) is 9.2% in 1997 trending to 6.5% in
2008 and thereafter for retirees less than 65 years of age. For retirees 65
years of age and over, the rate is 8.9% in 1997 trending to 6.5% in 2008 and
thereafter. The healthcare cost trend rate assumption has a significant effect
on the amounts reported. For example, increasing the assumed healthcare cost
trend rates by one percentage
F-37
<PAGE> 126
LOBDELL EMERY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1996, 1995 AND 1994
NOTE 10. POSTRETIREMENT MEDICAL BENEFITS -- (CONTINUED)
point in each year would increase the accumulated postretirement benefit
obligation as of December 31, 1996 and net periodic postretirement benefit cost
for the year then ended by approximately $4,861 and $496, respectively.
NOTE 11. SHAREHOLDERS' REDEMPTION AGREEMENT AND REDEEMABLE COMMON STOCK
Due to the death of a major shareholder, the Corporation entered into an
agreement in December, 1988, providing for the redemption from the estate of any
class of common stock. The Corporation shall purchase for cash certain shares of
common stock as required each year, for the payment by the estate of federal and
state taxes and other miscellaneous expenses allowed by Internal Revenue Code
Section 6166. The redemption price is based upon the fair value, as previously
determined by an independent appraisal at the date of death, adjusted for
subsequent increases or decreases in book value as defined in the agreement.
Subsequent to December 31, 1996 and in connection with the merger as described
in Note 15, a portion of the common stock owned by the estate will be redeemed
to cover payment of remaining taxes and administrative expenses. Prior to the
merger, $1,542 was advanced to the estate to effectuate a release of an Internal
Revenue Service lien. Common shares that are redeemable under that terms of the
agreement have been recorded in the consolidated balance sheets as Redeemable
Common Stock. During the years ended December 31, 1995 and 1994, the Company
redeemed 165,555 shares and 96,597 shares, respectively, at a per share price of
$9.55 and $9.34, respectively. The redeemable common stock has been accreted to
its redemption value in each of the accompanying consolidated balance sheets.
NOTE 12. LEWIS EMERY CAPITAL CORPORATION
Lewis was established in order to facilitate the financing of a tooling
project for Ford Motor Company (Ford). In 1993, Lewis signed a contract to
finance $8,500 of tooling. The transaction was financed with proceeds from the
term loan described in Note 6. The receivable from Ford is due in 20 quarterly
installments through October 1998.
NOTE 13. COMMITMENTS AND CONTINGENCIES
Operating Leases
As of December 31, 1996, the Corporation had long-term operating leases
covering certain machinery and equipment. The minimum rental commitments under
noncancellable operating leases with lease terms in excess of one year are as
follows as of December 31, 1996:
<TABLE>
<S> <C>
1997........................................................ $ 4,690
1998........................................................ 3,241
1999........................................................ 3,367
2000........................................................ 1,178
2001........................................................ 3,355
-------
$15,831
=======
</TABLE>
Environmental Matters
The Corporation is subject to federal, state and local laws and regulations
which govern environmental matters. These laws regulate the discharge of
materials into the environment and may require the Corporation to remove or
mitigate the environmental effects of the disposal or release of petroleum or
chemical substances. The Corporation has identified several environmental
matters resulting from prior operations. Due to the relatively early stage of
investigation of certain of these identified matters as well as potential
indemnification
F-38
<PAGE> 127
LOBDELL EMERY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1996, 1995 AND 1994
NOTE 13. COMMITMENTS AND CONTINGENCIES -- (CONTINUED)
by other potentially responsible parties, management is unable to reasonably
estimate the ultimate cost of remediating certain of these identified
environmental matters. At December 31, 1996 and 1995, the Corporation has a
liability of approximately $880 recorded for estimated costs of known
environmental matters.
General
The Corporation is subject to various claims, lawsuits and administrative
proceedings related to matters arising out of the normal course of business. In
the opinion of management, after reviewing the information which is currently
available with respect to such matters and consulting with legal counsel, any
liability which may ultimately be incurred with respect to these matters will
not materially affect the financial position of the Corporation.
NOTE 14. RELATED-PARTY TRANSACTION
During 1996, the Corporation paid sales commissions, based upon qualified
foreign sales to Grace Emery Sales Corporation, a Domestic International Sales
Corporation (DISC) owned by the shareholders of the Corporation. Commissions
payable to the DISC are subject to certain restrictions. Commissions were $369,
$521 and $772 in 1996, 1995 and 1994, respectively.
NOTE 15. SUBSEQUENT EVENT
On January 10, 1997, pursuant to an Agreement and Plan of Merger among
Lobdell Emery Corporation, certain shareholders of Lobdell Emery Corporation,
BMG-MI, Inc. and L-E Acquisition, Inc. as amended, certain Lobdell Emery
Corporation shareholders and option holders had their respective shares and
options redeemed for cash of approximately $8,500 and all outstanding shares of
common stock of Lobdell Emery Corporation (Oldco) were exchanged for shares of
preferred stock of L-E Acquisition, Inc. with a face value of approximately
$40,800. In addition, approximately $3,500 of expenses incurred by the
Corporation were reimbursed by L-E Acquisition, Inc. Subsequent to the exchange
of Oldco's common stock for preferred stock, L-E Acquisition, Inc. was merged
with and into Lobdell Emery Corporation (Newco).
NOTE 16. RESTATEMENT OF PRIOR YEAR FINANCIAL STATEMENTS
The Corporation's management has restated the consolidated financial
statements for periods prior to December 31, 1996. The consolidated financial
statements have been restated to correct the misstatement of certain assets and
liabilities including accounts receivable, accrued employee benefit related
costs and accrued environmental costs, net of related tax benefits. The effect
of the restatement was to decrease retained earnings at January 1, 1994 by
$1,987, decrease net loss by $36 ($.01 per share) for the year ended December
31, 1995, and increase net loss by $647 ($.15 per share) for the year ended
December 31, 1994.
F-39
<PAGE> 128
======================================================
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS IN CONNECTION WITH THE OFFER MADE HEREBY, AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY, NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS
BEEN NO CHANGE IN THE INFORMATION SET FORTH HEREIN OR IN THE AFFAIRS OF THE
COMPANY SINCE THE DATE AS OF WHICH INFORMATION IS GIVEN IN THIS PROSPECTUS. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER OR SOLICITATION BY ANYONE IN ANY
JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH
THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANY
PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information................... 2
Summary................................. 3
Risk Factors............................ 14
Use of Proceeds......................... 20
Capitalization.......................... 21
Pro Forma Combined Financial Data....... 22
Selected Consolidated Historical
Financial Data........................ 27
Management's Discussion and Analysis of
Financial Condition and Results of
Operations............................ 28
The Exchange Offer...................... 32
Business................................ 38
Management.............................. 49
Principal Shareholders.................. 53
Certain Transactions.................... 54
Description of Certain Indebtedness and
Preferred Stock....................... 55
Description of the Notes................ 58
Certain Federal Income Tax
Considerations........................ 84
Plan of Distribution.................... 85
Legal Matters........................... 85
Experts................................. 85
Index to Consolidated Financial
Statements............................ F-1
</TABLE>
======================================================
======================================================
$125,000,000
OXFORD AUTOMOTIVE, INC.
10 1/8% SENIOR SUBORDINATED NOTES DUE 2007
[OXFORD AUTOMOTIVE, INC. LOGO]
OFFER TO EXCHANGE
10 1/8% SENIOR SUBORDINATED NOTES DUE 2007
------------------------
PROSPECTUS
------------------------
DATED , 1997
======================================================
<PAGE> 129
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Sections 561 through 571 of the Michigan Business Corporation Act (the
"MBCA") set forth the conditions and limitations governing the indemnification
of officers, directors and other persons by Michigan corporations.
In general, the MBCA allows Michigan corporations to indemnify a person who
was or is a party or is threatened to be made a party to a threatened, pending
or completed action, suit, or proceeding, whether civil, criminal,
administrative, or investigative and whether formal or informal, other than an
action by or in the right of the corporation, by reason of the fact that such
person is or was a director, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer, partner,
trustee, employee, or agent of another enterprise, against expenses, including
attorneys' fees, judgments, penalties, fines and amounts paid in settlement
actually and reasonably incurred in connection therewith, if such person acted
in good faith and in a manner reasonably believed to be in or not opposed to the
best interests of the corporation or its shareholders, and with respect to a
criminal action or proceeding, had no reasonable cause to believe his or her
conduct was unlawful.
The MBCA also allows Michigan corporations to indemnify such a person who
was or is a party or is threatened to be made a party to a threatened, pending
or completed action or suit by or in the right of the corporation against
expenses, including actual and reasonable attorneys' fees, and amounts paid in
settlement actually and reasonably incurred by the person in connection with the
action or suit, if such person acted in good faith and in a manner reasonably
believed to be in or not opposed to the best interests of the corporation or its
shareholders. However, indemnification shall not be made for a claim, issue or
matter in which the person is found liable to the corporation unless and only to
the extent that a court of competent jurisdiction has determined that, despite
the adjudication of liability but in view of all circumstances of the case, the
person is fairly and reasonably entitled to indemnification for the expenses
which the court considers proper.
The Bylaws of Oxford Automotive require Oxford Automotive to indemnify
directors and officers to the extent permitted by the MBCA.
Oxford Automotive has entered into an agreement with each of its directors
under which Oxford Automotive agrees to indemnify the director against certain
liabilities and expenses incurred by the director by reason of serving as a
director of Oxford Automotive or in certain other capacities at the request of
Oxford Automotive. In general, under the agreements, Oxford Automotive agrees to
indemnify the director to the extent permitted by the MBCA subject to the
following: (a) Oxford Automotive agrees to reimburse the director for expenses
incurred prior to the final disposition of the matter or proceeding, subject to
certain limitations; and (b) the director may file a suit against Oxford
Automotive if Oxford Automotive refuses to indemnify the director, and the court
is authorized to determine whether the director is entitled to be indemnified
whether or not a determination in such respect has or has not been made by the
Board of Directors, independent legal counsel, or the shareholders of Oxford
Automotive.
The MBCA permits 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 against liabilities arising out of such person's positions with the
corporation, whether or not the corporation would have the power to indemnify
such person against liability under the MBCA.
Oxford Automotive carries a directors and officers liability insurance
policy which insures directors and officers of Oxford Automotive against certain
liability by reason of certain acts or omissions in connection with their duties
for Oxford Automotive and which insures Oxford Automotive against certain
amounts for which it is legally obligated to pay or for which it has agreed or
is required to indemnify the directors or officers. During each policy year, the
aggregate limit of liability under the policy is $5,000,000, and the insurer is
generally obligated to pay for any loss experienced by a director or officer and
for any loss in excess of $50,000 experienced by Oxford Automotive. The
insurance policy is in effect until October 25, 1997.
II-1
<PAGE> 130
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits. A list of exhibits included as part of this Registration
Statement is set forth in the Exhibit Index which immediately precedes
such exhibits and is incorporated herein by reference.
(b) Financial Statement Schedules.
II -- Valuation and Qualifying Accounts.
ITEM 22. UNDERTAKINGS.
Each undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the
information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in
volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered)
and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if,
in the aggregate, the changes in volume and price represent no
more than a 20% change in the maximum aggregate offering price
set forth in the "Calculation of Registration Fee" table in the
effective registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement.
(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.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrants pursuant to the provisions described under Item 20 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
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by a co-
registrant of expenses incurred or paid by a director, officer or controlling
person of such co-registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, such co-registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
Each undersigned registrant hereby undertakes:
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
II-2
<PAGE> 131
contained in documents filed subsequent to the effective date of the
registration statement through the date of responding to the request.
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-3
<PAGE> 132
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certified that it has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized in the City
of Bloomfield Hills and State of Michigan on August 4, 1997.
OXFORD AUTOMOTIVE, INC.
By: /s/ STEVEN M. ABELMAN
------------------------------------
Steven M. Abelman
President and Chief Executive
Officer
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Selwyn
Isakow and Rex E. Schlaybaugh, Jr., and each of them, his attorneys-in-fact for
him in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the same,
with exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as might or could be done in
person, hereby ratifying and confirming all that each of said attorneys-in-fact
and agents, or his substitute or substitutes, may do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities indicated on August 4, 1997.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>
/s/ SELWYN ISAKOW Chairman of the Board and Director
- ---------------------------------------------
Selwyn Isakow
/s/ REX E. SCHLAYBAUGH, JR. Vice Chairman of the Board and Director
- ---------------------------------------------
Rex E. Schlaybaugh, Jr.
/s/ STEVEN M. ABELMAN President, Chief Executive Officer and Director
- ---------------------------------------------
Steven M. Abelman
/s/ DONALD C. CAMPION Senior Vice President-Chief Financial Officer
- --------------------------------------------- (Principal Accounting and Financial Officer)
Donald C. Campion
/s/ MANFRED J. WALT Director
- ---------------------------------------------
Manfred J. Walt
</TABLE>
II-4
<PAGE> 133
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certified that it has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized in the City
of Bloomfield Hills and State of Michigan on August 4, 1997.
LOBDELL EMERY CORPORATION
By: /s/ STEVEN M. ABELMAN
------------------------------------
Steven M. Abelman, President
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Selwyn
Isakow and Rex E. Schlaybaugh, Jr., and each of them, his attorneys-in-fact for
him in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the same,
with exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as might or could be done in
person, hereby ratifying and confirming all that each of said attorneys-in-fact
and agents, or his substitute or substitutes, may do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities indicated on August 4, 1997.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>
/s/ STEVEN M. ABELMAN President (Principal Executive Officer) and
- --------------------------------------------- Director
Steven M. Abelman
/s/ DONALD C. CAMPION Vice President-Chief Financial Officer, Treasurer
- --------------------------------------------- (Principal Accounting and Financial Officer) and
Donald C. Campion Director
/s/ JOHN H. FERGUSON Director
- ---------------------------------------------
John H. Ferguson
Director
- ---------------------------------------------
D. Kennedy Fesenmyer
</TABLE>
II-5
<PAGE> 134
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certified that it has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized in the City
of Bloomfield Hills and State of Michigan on August 4, 1997.
BMG NORTH AMERICA LIMITED
By: /s/ ROBERT LACOURCIERE
------------------------------------
Robert LaCourciere, President
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Selwyn
Isakow and Rex E. Schlaybaugh, Jr., and each of them, his attorneys-in-fact for
him in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the same,
with exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as might or could be done in
person, hereby ratifying and confirming all that each of said attorneys-in-fact
and agents, or his substitute or substitutes, may do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities indicated on August 4, 1997.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>
/s/ ROBERT LACOURCIERE President (Principal Executive Officer)
- ---------------------------------------------
Robert LaCourciere
/s/ JOHN H. FERGUSON Vice President, Chief Financial Officer, Treasurer
- --------------------------------------------- and Secretary (Principal Accounting and Financial
John H. Ferguson Officer)
/s/ LAWRENCE C. CORNWALL Director
- ---------------------------------------------
Lawrence C. Cornwall
/s/ SELWYN ISAKOW Director
- ---------------------------------------------
Selwyn Isakow
Director
- ---------------------------------------------
James W. Robinson
/s/ MANFRED J. WALT Director
- ---------------------------------------------
Manfred J. Walt
Director
- ---------------------------------------------
Donald Holton
</TABLE>
II-6
<PAGE> 135
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certified that it has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized in the City
of Bloomfield Hills and State of Michigan on August 4, 1997.
BMG HOLDINGS, INC.
By: /s/ SELWYN ISAKOW
------------------------------------
Selwyn Isakow, President
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Selwyn
Isakow and Rex E. Schlaybaugh, Jr., and each of them, his attorneys-in-fact for
him in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the same,
with exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as might or could be done in
person, hereby ratifying and confirming all that each of said attorneys-in-fact
and agents, or his substitute or substitutes, may do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities indicated on August 4, 1997.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>
/s/ SELWYN ISAKOW President (Principal Executive Officer) and
- --------------------------------------------- Director
Selwyn Isakow
/s/ JOHN H. FERGUSON Treasurer (Principal Accounting and Financial
- --------------------------------------------- Officer)
John H. Ferguson
Director
- ---------------------------------------------
James W. Robinson
/s/ MANFRED J. WALT Director
- ---------------------------------------------
Manfred J. Walt
</TABLE>
II-7
<PAGE> 136
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certified that it has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized in the City
of Bloomfield Hills and State of Michigan on August 4, 1997.
WINCHESTER FABRICATION CORPORATION
By: /s/ STEVEN M. ABELMAN
------------------------------------
Steven M. Abelman, President
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Selwyn
Isakow and Rex E. Schlaybaugh, Jr., and each of them, his attorneys-in-fact for
him in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the same,
with exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as might or could be done in
person, hereby ratifying and confirming all that each of said attorneys-in-fact
and agents, or his substitute or substitutes, may do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities indicated on August 4, 1997.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>
/s/ STEVEN M. ABELMAN President (Principal Executive Officer) and
- --------------------------------------------- Director
Steven M. Abelman
/s/ DONALD C. CAMPION Vice President-Chief Financial Officer, Treasurer
- --------------------------------------------- (Principal Accounting and Financial Officer) and
Donald C. Campion Director
/s/ JOHN H. FERGUSON Director
- ---------------------------------------------
John H. Ferguson
</TABLE>
II-8
<PAGE> 137
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certified that it has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized in the City
of Bloomfield Hills and State of Michigan on August 4, 1997.
CREATIVE FABRICATION CORPORATION
By: /s/ STEVEN M. ABELMAN
------------------------------------
Steven M. Abelman, President
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Selwyn
Isakow and Rex E. Schlaybaugh, Jr., and each of them, his attorneys-in-fact for
him in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the same,
with exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as might or could be done in
person, hereby ratifying and confirming all that each of said attorneys-in-fact
and agents, or his substitute or substitutes, may do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities indicated on August 4, 1997.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>
/s/ STEVEN M. ABELMAN President (Principal Executive Officer) and
- --------------------------------------------- Director
Steven M. Abelman
/s/ DONALD C. CAMPION Vice President-Chief Financial Officer, Treasurer
- --------------------------------------------- (Principal Accounting and Financial Officer) and
Donald C. Campion Director
/s/ JOHN H. FERGUSON Director
- ---------------------------------------------
John H. Ferguson
</TABLE>
II-9
<PAGE> 138
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certified that it has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized in the City
of Bloomfield Hills and State of Michigan on August 4, 1997.
PARALLEL GROUP INTERNATIONAL, INC.
By: /s/ STEVEN M. ABELMAN
------------------------------------
Steven M. Abelman, President
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Selwyn
Isakow and Rex E. Schlaybaugh, Jr., and each of them, his attorneys-in-fact for
him in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the same,
with exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as might or could be done in
person, hereby ratifying and confirming all that each of said attorneys-in-fact
and agents, or his substitute or substitutes, may do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities indicated on August 4, 1997.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>
/s/ STEVEN M. ABELMAN President (Principal Executive Officer) and
- --------------------------------------------- Director
Steven M. Abelman
/s/ DONALD C. CAMPION Vice President-Chief Financial Officer, Treasurer
- --------------------------------------------- (Principal Accounting and Financial Officer) and
Donald C. Campion Director
/s/ JOHN H. FERGUSON Director
- ---------------------------------------------
John H. Ferguson
</TABLE>
II-10
<PAGE> 139
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certified that it has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized in the City
of Bloomfield Hills and State of Michigan on August 4, 1997.
LASERWELD INTERNATIONAL, L.L.C.
By: Lobdell Emery Corporation, its
sole member
By: /s/ STEVEN M. ABELMAN
------------------------------------
Steven M. Abelman, President
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Selwyn
Isakow and Rex E. Schlaybaugh, Jr., and each of them, his attorneys-in-fact for
him in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the same,
with exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as might or could be done in
person, hereby ratifying and confirming all that each of said attorneys-in-fact
and agents, or his substitute or substitutes, may do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities indicated on August 4, 1997.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>
/s/ STEVEN M. ABELMAN President (Principal Executive Officer) and
- --------------------------------------------- Director of Lobdell Emery Corporation
Steven M. Abelman
/s/ DONALD C. CAMPION Vice President-Chief Financial Officer, Treasurer
- --------------------------------------------- (Principal Accounting and Financial Officer) and
Donald C. Campion Director of Lobdell
/s/ JOHN H. FERGUSON Director of Lobdell Emery Corporation
- ---------------------------------------------
John H. Ferguson
</TABLE>
II-11
<PAGE> 140
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certified that it has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized in the City
of Bloomfield Hills and State of Michigan on August 4, 1997.
CONCEPT MANAGEMENT CORPORATION
By: /s/ STEVEN M. ABELMAN
------------------------------------
Steven M. Abelman, President
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Selwyn
Isakow and Rex E. Schlaybaugh, Jr., and each of them, his attorneys-in-fact for
him in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the same,
with exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as might or could be done in
person, hereby ratifying and confirming all that each of said attorneys-in-fact
and agents, or his substitute or substitutes, may do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities indicated on August 4, 1997.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>
/s/ STEVEN M. ABELMAN President (Principal Executive Officer) and
- --------------------------------------------- Director
Steven M. Abelman
/s/ DONALD C. CAMPION Vice President-Chief Financial Officer, Treasurer
- --------------------------------------------- (Principal Accounting and Financial Officer) and
Donald C. Campion Director
/s/ JOHN H. FERGUSON Director
- ---------------------------------------------
John H. Ferguson
</TABLE>
II-12
<PAGE> 141
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certified that it has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized in the City
of Bloomfield Hills and State of Michigan on August 4, 1997.
LEWIS EMERY CAPITAL CORPORATION
By: /s/ STEVEN M. ABELMAN
------------------------------------
Steven M. Abelman, President
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Selwyn
Isakow and Rex E. Schlaybaugh, Jr., and each of them, his attorneys-in-fact for
him in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the same,
with exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as might or could be done in
person, hereby ratifying and confirming all that each of said attorneys-in-fact
and agents, or his substitute or substitutes, may do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities indicated on August 4, 1997.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>
/s/ STEVEN M. ABELMAN President (Principal Executive Officer) and
- --------------------------------------------- Director
Steven M. Abelman
/s/ DONALD C. CAMPION Vice President-Chief Financial Officer, Treasurer
- --------------------------------------------- (Principal Accounting and Financial Officer) and
Donald C. Campion Director
/s/ JOHN H. FERGUSON Director
- ---------------------------------------------
John H. Ferguson
</TABLE>
II-13
<PAGE> 142
OXFORD AUTOMOTIVE, INC.
SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS
(DOLLAR AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
PERIOD PERIOD
FROM FROM
OCTOBER 28, APRIL 1,
1995 1995
YEAR ENDED THROUGH THROUGH YEAR ENDED
MARCH 31, MARCH 31, OCTOBER 27, MARCH 31,
1997 1996 1995 1995
---------- ----------- ----------- ----------
<S> <C> <C> <C> <C>
Balance, beginning of period...................... 39 31 25 22
Additions
Acquisition of Lobdell Emery Corporation........ 1,254 -- -- --
Provision for additional allowance.............. 12 8 5 12
Deductions
Currency translation adjustments................ -- -- 1 --
Doubtful accounts (charged) recovered........... (33) -- -- (9)
----- -- -- --
Balance, end of period............................ 1,272 39 31 25
===== == == ==
</TABLE>
S-1
<PAGE> 143
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
<C> <S>
2.1 Agreement and Plan of Merger by and among Howell Industries,
Inc., the Company and HI Acquisition, Inc., dated May 21,
1997. The Agreement and Plan of Merger does not contain the
Disclosure Schedules which include routine background
information relating to the parties. The registrant will
furnish supplementally a copy of the omitted material to the
Commission upon request.
2.2 Shareholders Agreement by and among the Company, HI
Acquisition, Inc., and NBD Bank and Morton Schiff,
co-trustees of the Herbert H. Freedland Marital Trusts,
dated May 21, 1997.
3.1 Articles of Incorporation of the Company
3.2 Articles of Incorporation of Lobdell Emery Corporation
3.3 Articles of Incorporation of BMG North America Limited
3.4 Articles of Incorporation of BMG Holdings, Inc.
3.5 Articles of Incorporation of Winchester Fabrication
Corporation
3.6 Articles of Incorporation of Creative Fabrication
Corporation
3.7 Articles of Incorporation of Parallel Group International,
Inc.
3.8 Articles of Organization of Laserweld International, L.L.C.
3.9 Articles of Incorporation of Concept Management Corporation
3.10 Articles of Incorporation of Lewis Emery Capital Corporation
3.11 Bylaws of the Company
3.12 Bylaws of Lobdell Emery Corporation
3.13 Bylaws of BMG North America Limited
3.14 Bylaws of BMG Holdings, Inc.
3.15 Bylaws of Winchester Fabrication Corporation
3.16 Bylaws of Creative Fabrication Corporation
3.17 Bylaws of Parallel Group International, Inc.
3.18 Bylaws of Concept Management Corporation
3.19 Bylaws of Lewis Emery Capital Corporation
4.1 Indenture, dated as of June 15, 1997, by and among the
Company, the Subsidiary Guarantors and First National Trust
Association, as Trustee (including form of the 10 1/8%
Senior Subordinated Notes Due 2007 and form of the Guaranty)
4.2 Credit Agreement between the Company and NBD Bank, as agent,
dated June 24, 1997
4.3 Security Agreement between the Company and NBD Bank, as
agent, dated June 24, 1997
4.4 Security Agreement between 829500 Ontario Limited and First Chicago
NBD Bank, Canada, dated June 24, 1997
4.5 Security Agreement between 976459 Ontario Limited and First Chicago
NBD Bank, Canada, dated June 24, 1997
4.6 Security Agreement between BMG Holdings, Inc. and First Chicago
NBD Bank, Canada, dated June 24, 1997
4.7 Security Agreement between BMG North America Limited and First Chicago
NBD Bank, Canada, dated June 24, 1997
4.8 Security Agreement among Lobdell Emery and its subsidiaries
and NBD Bank, as agent, dated June 24, 1997
</TABLE>
<PAGE> 144
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
<C> <S>
4.9 Guarantee Agreement among 829500 Ontario Limited, 976459
Ontario Limited, BMG Holdings, Inc. and NBD Bank, as agent,
dated June 24, 1997
4.10 Guarantee Agreement between BMG North America Limited and
NBD Bank, as agent, dated June 24, 1997
4.11 Guarantee Agreement among Lobdell Emery and its subsidiaries
and NBD Bank, as agent, dated June 24, 1997
4.12 Pledge Agreement and Irrevocable Proxy between the Company
and NBD Bank, as agent, dated June 24, 1997
4.13 Pledge Agreement and Irrevocable Proxy between Lobdell Emery
and NBD Bank, as agent, dated June 24, 1997
4.14 Pledge Agreement and Irrevocable Proxy between Concept
Management Corporation and NBD Bank, as agent, dated June
24, 1997
4.15 Subrogation and Contribution Agreement among the Company and
the Guarantors, dated June 24, 1997
4.16 Registration Agreement dated June 24, 1997 by and among the
Company, the Subsidiary Guarantors and the Initial
Purchasers
5.1 Opinion of Dykema Gossett PLLC
5.2 Opinion of Fasken Campbell Godfrey
10.1 Form of RPI Note
10.2 Form of Director Indemnification Agreement
10.3 Employment and Noncompetition Agreement between the Company
and Steven M. Abelman
10.4 Employment and Noncompetition Agreement between the Company
and Donald C. Campion
10.5 Employment Agreement between BMG North America and Larry C. Cornwall
10.6 Shareholders Agreement among certain of the Shareholders of
the Company and BMG-MI, Inc. (now known as Oxford
Automotive, Inc.), dated October 23, 1995
10.7 Shareholders Agreement among certain of the Shareholders of
the Company and the Company dated January 10, 1997
10.8 Management and Consulting Agreement between the Company and
The Oxford Investment Group, Inc., dated June 24, 1997
10.9 Settlement Agreement and Mutual Release, dated July 15,
1997, regarding Lobdell Preferred Shareholders
10.10 Agreement and Plan of Merger dated as of November 14, 1996,
by and between Lobdell Emery Corporation , BMG-MI, Inc. (now
known as "Oxford Automotive, Inc."), L-E Acquisition, Inc.,
the Shareholders of Lobdell Emery Corporation, and D.
Kennedy Fesenmyer, as Shareholders' Agent. The Agreement and
Plan of Merger does not contain the Disclosure Schedules
which include routine background information relating to the
parties. The registrant will furnish supplementally a copy
of the omitted material to the Commission upon request.
10.11 Amendment to Agreement and Plan of Merger, dated December
27, 1996 by and among Lobdell Emery Corporation BMG-MI, Inc.
(now known as "Oxford Automotive, Inc."), L-E Acquisition,
Inc., D. Kennedy Fesenmyer, as Shareholders' Agent, and
Lobdell Holdings, Inc.
10.12 Agreement and Plan of Merger, dated as of January 8, 1997
among Lobdell Holdings, Inc. and BMG-MI, Inc.(now known as
"Oxford Automotive, Inc."). The Agreement and Plan of Merger
does not contain the Disclosure Schedules which include
routine background information relating to the parties. The
registrant will furnish supplementally a copy of the omitted
material to the Commission upon request.
</TABLE>
<PAGE> 145
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
<C> <S>
12 Statement regarding computation of ratios
21 Subsidiaries of the Registrant
23.1 Consent of Price Waterhouse LLP
23.2 Consent of Price Waterhouse LLP
23.3 Consent of Deloitte & Touche
23.4 Consent of Dykema Gossett PLLC (included in Exhibit 5.1
hereof)
23.5 Consent of Fasken Campbell Godfrey (included in Exhibit 5.2
hereof)
24 Powers of Attorney (included on signature pages to this
Registration Statement)
25 Form T-1 Statement of Eligibility and Qualification on Form
T-1 of First Trust, National Association
27 Financial Data Schedule
99.1 Form of Letter of Transmittal
99.2 Form of Notice of Guaranteed Delivery
</TABLE>
<PAGE> 1
EXHIBIT 2.1
Execution Copy
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
OXFORD AUTOMOTIVE, INC. AND
HI ACQUISITION, INC.
and
HOWELL INDUSTRIES, INC.
Dated as of May 21, 1997
<PAGE> 2
TABLE OF CONTENTS
ARTICLE I THE MERGER..................................2
SECTION 1.1 The Merger..................................2
SECTION 1.2 Effective Time..............................2
SECTION 1.3 Effect of the Merger........................2
SECTION 1.4 Articles of Incorporation, By-Laws..........2
SECTION 1.5 Directors and Officers......................3
SECTION 1.6 Effect on Capital Stock.....................3
SECTION 1.7 Exchange of Certificates....................4
SECTION 1.8 Stock Transfer Books........................5
SECTION 1.9 No Further Ownership Rights in
Company Common Stock........................5
SECTION 1.10 Lost, Stolen or Destroyed Certificates......6
SECTION 1.11 Taking of Necessary Action; Further Action..6
SECTION 1.12 Material Adverse Effect.....................6
ARTICLE II REPRESENTATIONS AND WARRANTIES OF
THE COMPANY.................................6
SECTION 2.1 Organization and Qualification;
Subsidiaries................................7
SECTION 2.2 Articles of Incorporation and By-Laws.......7
SECTION 2.3 Capitalization..............................7
SECTION 2.4 Authority Relative to this Agreement........8
SECTION 2.5 Material Agreements; No Conflict;
Required Filings and Consents...............9
SECTION 2.6 Compliance, Permits.........................10
SECTION 2.7 SEC Filings; Financial Statements...........11
SECTION 2.8 Absence of Certain Changes or Events........11
SECTION 2.9 No Undisclosed Liabilities..................12
SECTION 2.10 Absence of Litigation.......................12
SECTION 2.11 Employee Benefit Plans, Employment
Agreements..................................12
SECTION 2.12 Labor Matters...............................14
SECTION 2.13 Restrictions on Business Activities.........14
SECTION 2.14 Title to Property...........................14
SECTION 2.15 Taxes.......................................14
SECTION 2.16 Environmental Matters.......................16
SECTION 2.17 Intellectual Property.......................18
SECTION 2.18 Interested Party Transactions...............19
SECTION 2.19 Insurance...................................19
SECTION 2.20 Opinion of Financial Advisor................20
SECTION 2.21 Brokers.....................................20
SECTION 2.22 Change in Control Payments..................20
SECTION 2.23 Expenses....................................20
SECTION 2.24 Products Liability and Warranty Claims......20
ARTICLE III REPRESENTATIONS AND WARRANTIES OF PARENT
AND MERGER SUB..............................21
SECTION 3.1 Organization and Qualification;
Subsidiaries................................21
SECTION 3.2 Articles of Incorporation and By-Laws.......21
SECTION 3.3 Authority Relative to this Agreement........21
SECTION 3.4 No Conflict, Required Filings and Consents..21
SECTION 3.5 Share Ownership.............................22
SECTION 3.6 Ownership of Merger Sub; No Prior
Activities..................................22
SECTION 3.7 Financing...................................22
<PAGE> 3
SECTION 3.8 Solvency....................................22
ARTICLE IV CONDUCT OF BUSINESS PENDING THE MERGER......23
SECTION 4.1 Conduct of Business by the Company
Pending the Merger..........................23
SECTION 4.2 No Solicitation.............................25
ARTICLE V ADDITIONAL AGREEMENTS.......................27
SECTION 5.1 HSR Act.....................................27
SECTION 5.2 Shareholder Meeting.........................27
SECTION 5.3 Access to Information; Confidentiality......27
SECTION 5.4 Consents; Approvals.........................27
SECTION 5.5 Indemnification and Insurance...............28
SECTION 5.6 Notification of Certain Matters.............29
SECTION 5.7 Further Action..............................29
SECTION 5.8 Public Announcements........................29
SECTION 5.9 Conveyance Taxes............................29
SECTION 5.10 Shareholder Agreement; Michigan Law.........29
SECTION 5.11 Title Policy and Survey.....................30
ARTICLE VI CONDITIONS TO THE MERGER....................31
SECTION 6.1 Conditions to Obligation of Each
Party to Effect the Merger..................31
SECTION 6.2 Additional Conditions to Obligations of
Parent and Merger Sub.......................32
SECTION 6.3 Additional Conditions to Obligation of
the Company.................................33
ARTICLE VII TERMINATION.................................34
SECTION 7.1 Termination.................................34
SECTION 7.2 Effect of Termination.......................36
SECTION 7.3 Fees and Expenses...........................36
ARTICLE VIII GENERAL PROVISIONS..........................37
SECTION 8.1 Effectiveness of Representations,
Warranties and Agreements; Knowledge, Etc...37
SECTION 8.2 Notices.....................................37
SECTION 8.3 Certain Definitions.........................39
SECTION 8.4 Amendment...................................40
SECTION 8.5 Waiver......................................40
SECTION 8.6 Headings....................................40
SECTION 8.7 Severability................................40
SECTION 8.8 Entire Agreement............................40
SECTION 8.9 Assignment; Guarantee of Merger Sub.........40
SECTION 8.10 Parties in Interest.........................40
SECTION 8.11 Failure or Indulgence Not Waiver; Remedies
Cumulative..................................41
SECTION 8.12 Governing Law...............................41
SECTION 8.13 Counterparts................................41
Section 2.1 Organization and Qualification;
Subsidiaries
Section 2.3 Capitalization
Section 2.5(a) Material Agreements
<PAGE> 4
Section 2.5(b) Agreement Defaults
Section 2.5(c) No Conflict
Section 2.6(a) Compliance
Section 2.6(b) Permits
Section 2.7(a) SEC Filings; Financial Statements
Section 2.8 Absence of Changes
Section 2.9 Undisclosed Liabilities
Section 2.10 Absence of Litigation
Section 2.11(a) Employee Plans and Agreements
Section 2.11(b) Employee Benefit Matters
Section 2.11(c) Employee Option Plans
Section 2.11(d) Agreements with Employees and
Consultants
Section 2.12 Labor Matters
Section 2.15(b) Taxes
Section 2.16(a) Environmental Matters
Section 2.17(b) Intellectual Property
Section 2.17(c) Intellectual Property Licenses
Section 2.18 Interested Party Transactions
Section 2.19 Insurance
Section 2.22 Change in Control Payments
Section 2.23 Expenses
Section 2.24 Product Liability and Warranty Claims
Section 4.1(e) Conduct of Business
<PAGE> 5
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of May 21, 1997 (this "Agreement"),
among Oxford Automotive, Inc., a Michigan corporation ("Parent"), HI
Acquisition, Inc., a Michigan corporation and a wholly owned subsidiary of
Parent ("Merger Sub"), and Howell Industries, Inc., a Michigan corporation (the
"Company").
WITNESSETH:
WHEREAS, the Boards of Directors of Parent, Merger Sub and the Company
have each determined that it is advisable and in the best interests of their
respective shareholders for Parent to enter into a business combination with
the Company upon the terms and subject to the conditions set forth herein;
WHEREAS, in furtherance of such combination, the Boards of Directors of
Parent, Merger Sub and the Company have each approved the merger of Merger Sub
with and into the Company (the "Merger") in accordance with the applicable
provisions of the Michigan Business Corporation Act (the "MBCA") and upon the
terms and subject to the conditions set forth herein;
WHEREAS, pursuant to the Merger, each outstanding share (a "Share") of the
Company's common stock (the "Company Common Stock"), shall be converted into
the right to receive the Merger Consideration (as defined in Section 1.6(a)),
upon the terms and subject to the conditions set forth herein; and
WHEREAS, as an inducement to Parent to acquire the Company, and as a
condition to Parent's willingness to enter into this Agreement, Parent, Merger
Sub and the Herbert H. Freedland Trust (the "Shareholder") are entering into a
shareholder agreement (the "Shareholder Agreement") pursuant to which the
Shareholder has agreed to (i) grant Parent and Merger Sub an irrevocable option
to buy its Shares at $37.00 per Share, and (ii) in the event that such
irrevocable option is not theretofore exercised, to vote its Shares in favor of
the Merger, in each case upon the terms and subject to the conditions set forth
therein;
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements herein contained, and intending to be legally bound hereby,
Parent, Merger Sub and the Company hereby agree as follows:
ARTICLE I
THE MERGER
SECTION 1.1 The Merger.
(a) Effective Time. At the Effective Time (as defined in Section 1.2),
and subject to and upon the terms and conditions of this Agreement, and the
MBCA, Merger Sub shall be merged with and into the Company, the separate
corporate existence of Merger Sub shall cease, and the Company shall continue
as the surviving corporation. The Company as the surviving corporation after
the Merger is hereinafter sometimes referred to as the "Surviving Corporation."
<PAGE> 6
(b) Closing. Unless this Agreement shall have been terminated and the
transactions herein contemplated shall have been abandoned pursuant to Section
7.1 and subject to the satisfaction or waiver of the conditions set forth in
Article VI, the consummation of the Merger will take place as promptly as
practicable (and in any event within two business days) after satisfaction or
waiver of the conditions set forth in Article VI, at the offices of Dykema
Gossett PLLC, 1577 North Woodward Avenue, Suite 300, Bloomfield Hills,
Michigan, unless another date, time or place is agreed to in writing by the
parties hereto (the "Closing").
SECTION 1.2 Effective Time. As promptly as practicable after the
satisfaction or waiver of the conditions set forth in Article VI, the parties
hereto shall cause the Merger to be consummated by filing a certificate of
merger as contemplated by the MBCA (the "Certificate of Merger"), together with
any required related certificates, with the Department of Consumer and Industry
Services of the State of Michigan, in such form as required by, and executed in
accordance with the relevant provisions of, the MBCA (the time of such filing
being the "Effective Time").
SECTION 1.3 Effect of the Merger. At the Effective Time, the effect of
the Merger shall be as provided in this Agreement, the Certificate of Merger
and the applicable provisions of the MBCA. Without limiting the generality of
the foregoing, and subject thereto, at the Effective Time all the property,
rights, privileges, powers and franchises of the Company and Merger Sub shall
vest in the Surviving Corporation, and all debts, liabilities and duties of the
Company and Merger Sub shall become the debts, liabilities and duties of the
Surviving Corporation.
SECTION 1.4 Articles of Incorporation, By-Laws.
(a) Articles of Incorporation. Unless otherwise determined by Parent
prior to the Effective Time, at the Effective Time the Articles of
Incorporation of the Company, as in effect immediately prior to the Effective
Time, shall be the Articles of Incorporation of the Surviving Corporation until
thereafter amended in accordance with the MBCA and such Articles of
Incorporation.
(b) By-Laws. Unless otherwise determined by Parent prior to the
Effective Time, the By-Laws of the Company, as in effect immediately prior to
the Effective Time, shall be the By-Laws of the Surviving Corporation until
thereafter amended in accordance with the MBCA, the Articles of Incorporation
of the Surviving Corporation and such By-Laws.
SECTION 1.5 Directors and Officers. The Board of Directors of Merger
Sub immediately prior to the Effective Time shall be the initial Board of
Directors of the Surviving Corporation, each member to hold office in
accordance with the Articles of Incorporation and By-Laws of the Surviving
<PAGE> 7
Corporation, and the officers of Merger Sub immediately prior to the Effective
Time shall be the initial officers of the Surviving Corporation, in each case
until their respective successors are duly elected or appointed and qualified.
SECTION 1.6 Effect on Capital Stock. At the Effective Time, by virtue
of the Merger and without any action on the part of the Parent, Merger Sub, the
Company or the holders of any of the following securities:
(a) Conversion of Securities. Each Share issued and outstanding
immediately prior to the Effective Time (excluding any Shares to be canceled
pursuant to Section 1.6(b)) shall be converted into the right to receive
$37.00, in cash, without interest (the "Merger Consideration").
(b) Cancellation. Each Share owned by Parent, Merger Sub or any direct
or indirect wholly owned subsidiary of the Company or Parent immediately prior
to the Effective Time shall, by virtue of the Merger and without any action on
the part of the holder thereof, cease to be outstanding, be canceled and
retired without payment of any consideration therefor and cease to exist.
(c) Stock Options. At or immediately prior to the Effective Time, each
outstanding employee and director stock option to purchase Shares (an "Option")
granted under the Howell Industries, Inc. 1995 Stock Incentive Plan for Key
Employees (such plans or arrangements, the "Company Stock Option Plan"), shall
be canceled, and each holder of any such Option, whether or not then vested or
exercisable, shall be paid by the Company, at or immediately prior to the
Effective Time for each such Option, in consideration therefor an amount in
cash determined by multiplying (i) the excess, if any, of $37.00 per Share over
the applicable exercise price of such Option by (ii) the number of Shares such
holder could have purchased (assuming full vesting of all Options) had such
holder exercised such Option in full immediately prior to the Effective Time.
The Company shall use all reasonable efforts to effectuate the foregoing,
including without limitation, amending the Option Plans and obtaining any
necessary consents from Option holders; provided, however, that prior to the
Effective Time, the Board of Directors of the Company shall adopt such
resolutions or take such other actions as are required to adjust and which
action, if any, shall be acceptable in all reasonable respects to the Parent,
effective immediately prior to the Effective Time, the terms of each
outstanding Option as to which any such consent is not obtained prior to the
Effective Time to provide that such Option shall be converted into the right,
upon exercise of such Option at any time after the Effective Time, to receive
an amount in cash equal to $37.00 for each Share subject to such Option, or,
alternatively, upon the surrender and cancellation of such Option at any time
after the Effective Time to receive an amount in cash determined by multiplying
(i) the excess, if any, of $37.00 per Share over the applicable exercise price
of such Option by (ii) the number of Shares subject to such Option, in either
case without interest or any other adjustment thereto.
(d) Capital Stock of Merger Sub. Each share of common stock, without
par value, of Merger Sub issued and outstanding immediately prior to the
Effective Time shall be converted into and exchanged for one validly issued,
fully paid and nonassessable share of common stock, without par value, of the
<PAGE> 8
Surviving Corporation.
SECTION 1.7 Exchange of Certificates.
(a) Exchange Agent. Parent shall designate NBD Bank, Comerica Bank,
Michigan National Bank, or other bank or trust company satisfactory to the
Company, to act as agent for holders of Company Common Stock (the "Exchange
Agent"), to receive funds to which such holders shall become entitled pursuant
to Section 1.6(a). Parent shall deposit immediately prior to or at the
Effective Time such funds with the Exchange Agent. Such funds shall be
invested by the Exchange Agent as directed by Parent or the Surviving
Corporation in trust for the benefit of the holders of Company Common Stock,
for payment in accordance with this Section 1.7 in exchange for outstanding
Shares.
(b) Exchange Procedures. As soon as reasonably practicable after the
Effective Time, Parent will instruct the Exchange Agent to mail to each holder
of record of Certificates (i) a letter of transmittal (which shall specify that
delivery shall be effected, and risk of loss and title to the Certificates
shall pass, only upon proper delivery of the Certificates to the Exchange Agent
and shall be in such form and have such other provisions as Parent and the
Company may reasonably specify), and (ii) instructions to effect the surrender
of the Certificates in exchange for payment of the Merger Consideration. Upon
surrender of a Certificate for cancellation to the Exchange Agent together with
such letter of transmittal, duly executed, and such other customary documents
as may be required pursuant to such instructions, the holder of such
Certificate shall be entitled to receive in exchange therefor the Merger
Consideration, and the Certificate so surrendered shall forthwith be canceled.
In the event of a transfer of ownership of Shares which is not registered in
the transfer records of the Company as of the Effective Time, the Merger
Consideration may be paid in accordance with this Article I to a transferee if
the Share is presented to the Exchange Agent, accompanied by all documents
required to evidence and effect such transfer pursuant to this Section 1.7(b)
and by evidence that any applicable stock transfer taxes have been paid. Until
surrendered as contemplated by this Section 1.7(b) such Certificates shall
represent solely the right to receive the Merger Consolidation with respect to
each of the Shares represented thereby.
(c) Transfers of Ownership. If any Merger Consideration is to be paid
in a name other than that in which the Certificate surrendered in exchange
therefor is registered, it will be a condition to the payment thereof that the
Certificate so surrendered will be properly endorsed and otherwise in proper
form for transfer and that the person requesting such exchange will have paid
to Parent or any agent designated by it any transfer or other taxes required by
reason of the payment of the Merger Consideration to any name other than that
of the registered holder of the certificate surrendered, or have established to
the satisfaction of Parent or any agent designated by it that such tax has been
paid or is not payable.
(d) Termination of Fund; No Liability. At any time following six months
after the Effective Time, the Surviving
<PAGE> 9
Corporation shall be entitled to require the Exchange Agent to deliver to it
any funds (including interest received with respect thereto) which had been
made available to the Exchange Agent and which have not been disbursed to
holders of Certificates, and thereafter such holders shall be entitled to look
to the Surviving Corporation (subject to abandoned property, escheat or other
similar laws) only as general creditors thereof with respect to the Merger
Consideration payable upon the surrender of their Certificates, without any
interest thereon. Notwithstanding the foregoing, neither Parent, Merger Sub
nor the Company shall be liable to any holder of Company Common Stock for any
Merger Consideration delivered to a public official pursuant to any applicable
abandoned property, escheat or similar law.
(e) Withholding Rights. Parent or the Exchange Agent shall be entitled
to deduct and withhold from the Merger Consideration otherwise payable pursuant
to this Agreement to any holder of Company Common Stock such amounts as Parent
or the Exchange Agent is required to deduct and withhold with respect to the
making of such payment under the Internal Revenue Code of 1986, as amended (the
"Code"), or any provision of state, local or foreign tax law. To the extent
that amounts are so withheld by Parent or the Exchange Agent, such withheld
amounts shall be treated for all purposes of this Agreement as having been paid
to the holder of the Shares in respect of which such deduction and withholding
was made by Parent or the Exchange Agent.
SECTION 1.8 Stock Transfer Books. At the Effective Time, the stock
transfer books of the Company shall be closed, and there shall be no further
registration of transfers of Company Common Stock thereafter on the records of
the Company.
SECTION 1.9 No Further Ownership Rights in Company Common Stock. The
Merger Consideration delivered upon the surrender for exchange of Shares in
accordance with the terms hereof shall be deemed to have been issued in full
satisfaction of all rights pertaining to such Shares, and there shall be no
further registration of transfers on the records of the Surviving Corporation
of Shares which were outstanding immediately prior to the Effective Time. If,
after the Effective Time, Shares are presented to the Surviving Corporation for
any reason, they shall be canceled and exchanged as provided in this Article I.
SECTION 1.10 Lost, Stolen or Destroyed Certificates. In the event any
Certificates shall have been lost, stolen or destroyed, the Exchange Agent
shall issue in exchange for such lost, stolen or destroyed Certificates, upon
the making of an affidavit of that fact by the holder thereof, the Merger
Consideration as provided in this Article; provided, however, that Parent may,
in its discretion and as a condition precedent to the payment thereof, require
the owner of such lost, stolen or destroyed Certificates to deliver a bond in
such sum as it may reasonably direct as indemnity against any claim that may be
made against Parent or the Exchange Agent with respect to the Certificates
alleged to have been lost, stolen or destroyed.
SECTION 1.11 Taking of Necessary Action; Further Action. Each of
Parent, Merger Sub and the Company will take all such reasonable and lawful
action as may be necessary or appropriate in order to effectuate the Merger in
accordance with this
<PAGE> 10
Agreement as promptly as practicable. If, at any time after the Effective
Time, any such further action is necessary or desirable to carry out the
purposes of this Agreement and to vest the Surviving Corporation with full
right, title and possession to all assets, property, rights, privileges, powers
and franchises of the Company and Merger Sub, the officers and directors of the
Company and Merger Sub immediately prior to the Effective Time are fully
authorized in the name of their respective corporations or otherwise to take,
and will take, all such lawful and necessary action.
SECTION 1.12 Material Adverse Effect. When used in connection with the
Company or any of its subsidiaries, or Parent or any of its subsidiaries, as
the case may be, the term "Material Adverse Effect" means any change, effect or
circumstance that, individually or when taken together with all other such
changes, effects or circumstances that have occurred prior to the date of
determination of the occurrence of the Material Adverse Effect, (a) is or is
reasonably likely to be materially adverse to the business, assets (including
intangible assets), financial condition or results of operations of the Company
and its subsidiaries or Parent and its subsidiaries, as the case may be, in
each case taken as a whole, or (b) is or is reasonably likely to prevent the
consummation of the transactions contemplated hereby.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Parent and Merger Sub that,
except as set forth in the written disclosure schedule delivered on or prior to
the date hereof by the Company to Parent that is arranged in paragraphs
corresponding to the numbered and lettered paragraphs contained in this Article
II (the "Company Disclosure Schedule"):
SECTION 2.1 Organization and Qualification; Subsidiaries. Each of the
Company and each of its subsidiaries is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation and has the requisite corporate power and authority necessary to
own, lease and operate the properties it purports to own, operate or lease and
to carry on its business as it is now being conducted, except where the failure
to be so organized, existing and in good standing or to have such power,
authority and Approvals could not reasonably be expected to have a Material
Adverse Effect. Each of the Company and each of its subsidiaries is duly
qualified or licensed as a foreign corporation to do business, and is in good
standing, in each jurisdiction where the character of its properties owned,
leased or operated by it or the nature of its activities makes such
qualification or licensing necessary, except for such failures to be so duly
qualified or licensed and in good standing that could not reasonably be
expected to have a Material Adverse Effect. A true and complete list of all of
the Company's subsidiaries, together with the jurisdiction of incorporation of
each subsidiary, the authorized capitalization of each subsidiary, and the
percentage of each subsidiary's outstanding capital stock owned by the Company
or another subsidiary, is set forth in Section 2.1 of the Company Disclosure
<PAGE> 11
Schedule. Except as set forth in Section 2.1 of the Company Disclosure
Schedule, the Company does not directly or indirectly own any equity or similar
interest in, or any interest convertible into or exchangeable or exercisable
for, any equity or similar interest in, any corporation, partnership, joint
venture or other business association or entity, with respect to which interest
the Company has invested or is required to invest $100,000 or more, excluding
securities in any publicly traded company held for investment by the Company
and comprising less than five percent of the outstanding stock of such company.
SECTION 2.2 Articles of Incorporation and By-Laws. The Company has
heretofore furnished to Parent a complete and correct copy of its Articles of
Incorporation and By-Laws as amended to date, and has furnished or made
available to Parent the Articles of Incorporation and By-Laws (or equivalent
organizational documents) of each of its subsidiaries (the "Subsidiary
Documents"). Such Articles of Incorporation, By-Laws and Subsidiary Documents
are in full force and effect. Neither the Company nor any of its subsidiaries
is in violation of any of the provisions of its Articles of Incorporation or
By-Laws or Subsidiary Documents.
SECTION 2.3 Capitalization. The authorized capital stock of the Company
consists of (i) 2,500,000 shares of Company Common Stock and (ii) 250,000
shares of preferred stock, $1.00 par value, none of which preferred stock is
issued and outstanding. As of May 20, 1997, (i) 622,738 shares of Company
Common Stock were issued and outstanding, all of which are validly issued,
fully paid and nonassessable, (ii) no shares of Company Common Stock were held
by subsidiaries of the Company, and (iii) 10,000 shares of Company Common Stock
were reserved for future issuance pursuant to outstanding stock options granted
under the Company Stock Option Plans. No material change in such
capitalization has occurred between May 20, 1997 and the date hereof. Except
as set forth in Section 2.3 or Section 2.11 of the Company Disclosure Schedule,
there are no options, warrants or other rights, agreements, arrangements or
commitments of any character relating to the issued or unissued capital stock
of the Company or any of its subsidiaries or obligating the Company or any of
its subsidiaries to issue or sell any shares of capital stock of, or other
equity interests in, the Company or any of its subsidiaries. All shares of
Company Common Stock subject to issuance as aforesaid, upon issuance on the
terms and conditions specified in the instruments pursuant to which they are
issuable, shall be duly authorized, validly issued, fully paid and
nonassessable. Except as disclosed in Section 2.3 of the Company Disclosure
Schedule, there are no obligations, contingent or otherwise, of the Company or
any of its subsidiaries to repurchase, redeem or otherwise acquire any shares
of Company Common Stock or the capital stock of any subsidiary or to provide
funds to or make any investment (in the form of a loan, capital contribution,
guaranty or otherwise) in any such subsidiary or any other entity. Except as
set forth in Sections 2.1 and 2.3 of the Company Disclosure Schedule, all of
the outstanding shares of capital stock of each of the Company's subsidiaries
is duly authorized, validly issued, fully paid and nonassessable, and all such
shares are owned by the Company or another subsidiary of the Company free and
clear of all security interests, liens, claims, pledges, agreements,
limitations in the Company's voting rights,
<PAGE> 12
charges or other encumbrances of any nature whatsoever (collectively, "Liens").
SECTION 2.4 Authority Relative to this Agreement. (a) The Company has
all necessary corporate power and authority to execute and deliver this
Agreement and to perform its obligations hereunder and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
by the Company and the consummation by the Company of the transactions
contemplated hereby have been duly and validly authorized by all necessary
corporate action, and no other corporate proceedings on the part of the Company
are necessary to authorize this Agreement or to consummate the transactions so
contemplated (other than the approval of this Agreement by the holders of at
least a majority of the outstanding shares of Company Common Stock entitled to
vote in accordance with the MBCA and the Company's Articles of Incorporation
and By-Laws). The Board of Directors of the Company has determined that it is
advisable and in the best interest of the Company's shareholders for the
Company to enter into a business combination with Parent upon the terms and
subject to the conditions of this Agreement, and has unanimously recommended
that the Company's shareholders approve and adopt this Agreement and the
Merger. This Agreement has been duly and validly executed and delivered by the
Company and, assuming the due authorization, execution and delivery by Parent
and Merger Sub, as applicable, constitutes a legal, valid and binding
obligation of the Company enforceable against the Company in accordance with
its terms.
(b) The Board of Directors of the Company has duly and validly approved
and taken all corporate action required to be taken by the Board of Directors
for the consummation of the transactions contemplated by this Agreement and the
Shareholder Agreement including, but not limited to, all actions required to
render the provisions of Section 775 through Section 784 of the MBCA
restricting business combinations with "interested shareholders" inapplicable
to such transactions and to provide that none of Parent, Merger Sub or any of
their affiliates shall become an"interested shareholder" upon the execution and
delivery of the Shareholder Agreement or the acquisition of Shares pursuant
thereto, such that any business combination thereafter proposed among Parent or
Merger Sub or their affiliates and the Company shall be exempt from the
requirements of such Sections. The Company has taken all action necessary to
opt out of Sections 790 through 799 of the MBCA in order to render the
provisions of such statutes restricting voting rights of "control shares"
inapplicable to Shares acquired by Parent, Merger Sub or their affiliates
pursuant to the Merger or the Shareholder Agreement.
SECTION 2.5 Material Agreements; No Conflict; Required Filings and
Consents.
(a) Section 2.5(a) of the Company Disclosure Schedule includes a list of
(i) all loan agreements, indentures, mortgages, pledges, conditional sale or
title retention agreements, security agreements, guaranties, standby letters
of credit, equipment leases or lease purchase agreements to which the Company
or any of its subsidiaries is a party or by which any of them is bound, other
than office equipment and vehicle leases in an aggregate amount not exceeding
$50,000; (ii) all contracts,
<PAGE> 13
agreements, commitments or other understandings or arrangements to which the
Company or any of its subsidiaries is a party or by which any of them or any of
their respective properties or assets are bound or affected, but excluding
contracts, agreements, commitments or other understandings or arrangements
entered into in the ordinary course of business and involving, in each case,
payments or receipts by the Company or any of its subsidiaries of less than
$20,000 in any single instance; and (iii) all agreements which, as of the date
hereof, are required to be filed as "material contracts" with the Securities
Exchange Commission ("SEC") pursuant to the requirements of the Securities
Exchange Act of 1934, as amended, and the SEC's rules and regulations
thereunder (the "Exchange Act").
(b) Except as disclosed in Section 2.5(b) of the Company Disclosure
Schedule, (i) neither the Company nor any of its subsidiaries has breached, is
in default under, or has received written notice of any breach of or default
under, any of the agreements, contracts or other instruments referred to in
clauses (i), (ii) or (iii) of Section 2.5(a), (ii) to the best knowledge of the
Company, no other party to any of the agreements, contracts or other
instruments referred to in clauses (i), (ii) or (iii) of Section 2.5 (a) has
breached or is in default of any of its obligations thereunder, and (iii) each
of the agreements, contracts and other instruments referred to in clauses (i),
(ii) or (iii) of Section 2.5(a) is in full force and effect.
(c) Except as set forth in Section 2.5(c) of the Company Disclosure
Schedule, the execution and delivery of this Agreement by the Company does not,
and the performance of this Agreement by the Company and the consummation of
the transactions contemplated hereby will not, (i) conflict with or violate the
Articles of Incorporation or By-Laws of the Company, (ii) conflict with or
violate any federal, foreign, state or provincial law, rule, regulation, order,
judgment or decree (collectively, "Laws") applicable to the Company or any of
its subsidiaries or by which its or any of their respective properties is bound
or affected, or (iii) result in any breach of or constitute a default (or an
event that with notice or lapse of time or both would become a default under),
or impair the Company's or any of its subsidiaries' rights or alter the rights
or obligations of any third party under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or result in the
creation of a Lien on any of the properties or assets of the Company or any of
its subsidiaries pursuant to, any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or obligation
to which the Company or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries or its or any of their respective properties
is bound or affected.
(d) The execution and delivery of this Agreement by the Company does
not, and the performance of this Agreement by the Company will not, require any
consent, approval, authorization or permit of, or filing with or notification
to, any federal, foreign, state or provincial governmental or regulatory
authority except (i) for applicable requirements, if any, of the Securities
Act, the Exchange Act, state securities laws ("Blue Sky Laws"), the pre-merger
notification requirements of the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended (the "HSR Act"),
<PAGE> 14
any required foreign antitrust or similar filings and the filing and
recordation of appropriate merger or other documents as required by the MBCA,
and (ii) where the failure to obtain such consents, approvals, authorizations
or permits, or to make such filings or notifications, would not prevent
consummation of the Merger, or otherwise prevent the Company from performing
its obligations under this Agreement, or would not otherwise have a Material
Adverse Effect. As provided by Section 762(2)(a) and (b) of the MBCA, no
shareholder is entitled to dissent from the Merger. Neither the Articles of
Incorporation or By-laws provide the shareholders with, nor has the Board of
Directors of the Company provided, pursuant to resolution or otherwise, the
shareholders with, a right to dissent from the Merger in accordance with the
provisions of Section 762(1)(f) of the MBCA.
SECTION 2.6 Compliance, Permits.
(a) Except as disclosed in Section 2.6(a) of the Company Disclosure
Schedule, neither the Company nor any of its subsidiaries is in conflict with,
or in default or violation of, (i) any Law applicable to the Company or any of
its subsidiaries or by which its or any of their respective properties is bound
or affected or (ii) any note, bond, mortgage, indenture, contract, agreement,
lease, license, franchise or other instrument or obligation to which the
Company or any of its subsidiaries is a party or by which the Company or any of
its subsidiaries or its or any of their respective properties is bound or
affected.
(b) Except as disclosed in Section 2.6(b) of the Company Disclosure
Schedule, the Company and its subsidiaries hold all permits, licenses,
easements, variances, exemptions, consents, certificates, orders and approvals
from governmental authorities which are necessary for the operation of the
business of the Company and its subsidiaries taken as a whole as it is now
being conducted (collectively, the "Company Permits"). The Company and its
subsidiaries are in compliance with the terms of the Company Permits, except
where the failure to so comply could not reasonably be expected to have a
Material Adverse Effect.
SECTION 2.7 SEC Filings; Financial Statements.
(a) The Company has filed all forms, reports and documents required to be
filed with the SEC and has made available to Parent (i) its Annual Reports on
Form 10-K for the fiscal years ended July 31, 1996, 1995 and 1994, (ii) its
Quarterly Reports on Form 10-Q for the periods ended October 31, 1996 and
January 31, 1997, (iii) all proxy statements relating to the Company's meetings
of Shareholders (whether annual or special) since August 1, 1993, (iv) all
other reports or registration statements filed by the Company with the SEC, and
(v) all amendments and supplements to all such reports and registration
statements filed by the Company with the SEC (collectively, the "Company SEC
Reports"). Except as disclosed in Section 2.7 of the Company Disclosure
Schedule, the Company SEC Reports (i) were prepared in all material respects in
accordance with the requirements of the Securities Act or the Exchange Act, as
the case may be, and (ii) did not at the time they were filed (or if amended or
superseded by a filing prior to the date of this Agreement, then on the date of
such filing) contain any untrue statement of a material fact or omit to state a
material fact required to be
<PAGE> 15
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading. None of
the Company's subsidiaries is required to file any forms, reports or other
documents with the SEC.
(b) Each of the consolidated financial statements (including, in each
case, any related notes thereto) contained in the Company SEC Reports was
prepared in accordance with generally accepted accounting principles applied on
a consistent basis throughout the periods involved (except as may be indicated
in the notes thereto), and each fairly presents in all material respects the
consolidated financial position of the Company and its subsidiaries as at the
respective dates thereof and the consolidated results of its operations and
cash flows and shareholders equity for the periods indicated, except that the
unaudited interim financial statements may not include footnotes and were or
are subject to normal and recurring year-end adjustments which were not or are
not expected to be material in amount.
SECTION 2.8 Absence of Certain Changes or Events. Except as set forth
in Section 2.8 of the Company Disclosure Schedule or the Company SEC Reports,
since August 1, 1996, the Company has conducted its business in the ordinary
course and there has not occurred: (a) any Material Adverse Effect; (b) any
amendments or changes in the Articles of Incorporation or By-laws of the
Company except as contemplated by this Agreement; (c) any damage to,
destruction or loss of any asset of the Company (whether or not covered by
insurance) that could reasonably be expected to have a Material Adverse Effect;
(d) any material change by the Company in its accounting methods, principles or
practices; (e) any material revaluation by the Company of any of its assets,
including, without limitation, writing down the value of inventory or writing
off notes or accounts receivable other than in the ordinary course of business;
(f) any other action or event that would have required the consent of Parent
pursuant to Section 4.1 had such action or event occurred after the date of
this Agreement; or (g) any sale of a material amount of property or assets of
the Company or any of its subsidiaries, except in the ordinary course of
business.
SECTION 2.9 No Undisclosed Liabilities. Except as is disclosed in
Section 2.9 of the Company Disclosure Schedule or the Company's SEC Reports,
neither the Company nor any of its subsidiaries has any liabilities or
obligations of any nature (absolute, accrued, contingent or otherwise) that
have had, or could reasonably be likely to have, a Material Adverse Effect or
would be required to be disclosed or provided for in a balance sheet (or in the
notes thereto) prepared in accordance with generally accepted accounting
principles, except liabilities or obligations (a) adequately provided for in
the Company's audited balance sheet (including any related notes thereto) for
the fiscal year ended July 31, 1996 contained in the Company's Annual Report on
Form 10-K for such year (the "1996 Company Balance Sheet") or (b) immaterial
liabilities or obligations incurred since July 31, 1996 in the ordinary course
of business consistent with past practice.
SECTION 2.10 Absence of Litigation. Except as set forth
<PAGE> 16
in Section 2.10 of the Company Disclosure Schedule, there are no claims,
actions, suits, proceedings or investigations pending or, to the knowledge of
the Company, threatened against the Company or any of its subsidiaries, or any
properties or rights of the Company or any of its subsidiaries, before any
federal, foreign, state or provincial court, arbitrator or administrative,
governmental or regulatory authority or body that could reasonably be expected
to have a Material Adverse Effect.
SECTION 2.11 Employee Benefit Plans, Employment Agreements.
(a) Section 2.11 (a) of the Company Disclosure Schedule lists all
employee pension plans (as defined in Section 3(2) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA")), all employee welfare plans
(as defined in Section 3(1) of ERISA, and all other material bonus, stock
option, stock purchase, incentive, deferred compensation, supplemental
retirement, severance and other similar fringe or employee benefit plans,
programs or arrangements, and any employment, executive compensation,
consulting or severance agreements, written or otherwise, for the benefit of,
or relating to, any current or former employee, officer or director (including
any beneficiary of any such employee) of, or any current or former consultant
(including any beneficiary of any such consultant) to, the Company, any trade
or business (whether or not incorporated) which is a member of a controlled
group including the Company or which is under common control with the Company
(an "ERISA Affiliate") within the meaning of Section 414 of the Code, or any
subsidiary of the Company under which the Company currently has a liability, as
well as each plan with respect to which the Company or an ERISA Affiliate could
incur liability under Section 4069 (if such plan has been or were terminated)
or Section 4212(c) of ERISA (all such plans, practices and programs are
referred to as the "Company Employee Plans"). The Parent has been provided
true and correct copies of (i) each such written Company Employee Plan (other
than those referred to in Section 4(b)(4) of ERISA), (ii) the three (3) most
recent annual report on Form 5500 series, with accompanying schedules and
attachments, filed with respect to each Company Employee Plan required to make
such a filing, and (iii) the three (3) most recent actuarial evaluations or
assessments, if any, prepared with respect to any such Company Employee Plan.
(b) Except as shown on Section 2.11(b) of the Company Disclosure Schedule
(i) none of the Company Employee Plans promises or provides retiree medical or
other retiree welfare benefits to any person, and neither the Company nor any
ERISA Affiliate has ever maintained, contributed to, or been required to
contribute to, any plan that is or was a "multi-employer plan" as such term is
defined in Section 3(37) of ERISA, a pension plan subject to Title IV of ERISA
or a plan subject to Part 3 of Title I of ERISA; (ii) there has been no
"prohibited transaction," as such term is defined in Section 406 of ERISA and
Section 4975 of the Code, with respect to any Company Employee Plan, which
could result in any material liability of the Company or any of its
subsidiaries; (iii) all Company Employee Plans are in compliance in all
material respects with the requirements prescribed by any and all Laws
(including ERISA and the Code), currently in effect with respect thereto
(including all applicable requirements for
<PAGE> 17
notification to participants or the Department of Labor, Internal Revenue
Service (the "IRS") or Secretary of the Treasury), and the Company and each of
its subsidiaries have performed all material obligations required to be
performed by them under, are not in any material respect in default under or
violation of, and have no knowledge of any default or violation by any other
party to, any of the Company Employee Plans; (iv) each Company Employee Plan
intended to qualify under Section 401(a) of the Code and each trust intended to
qualify under Section 501(a) of the Code is the subject of a favorable
determination letter from the IRS, and nothing has occurred which may
reasonably be expected to impair such determination; and (v) there are no
lawsuits or other claims (other than claims for benefits in the ordinary
course) pending or, to the best knowledge of the Company, threatened with
respect to any Company Employee Plan.
(c) Section 2.3 or Section 2.11(c) of the Company Disclosure Schedule
sets forth a true and complete list of each current or former employee, officer
or director of the Company or any of its subsidiaries who holds (i) any option
to purchase Company Common Stock as of the date hereof, together with the
number of shares of Company Common Stock subject to such option, the option
price of such option (to the extent determined as of the date hereof), whether
such option is intended to qualify as an incentive stock option within the
meaning of Section 422(b) of the Code (an "ISO"), and the expiration date of
such option; (ii) any other right, directly or indirectly, to acquire Company
Common Stock, together with the number of shares of Company Common Stock
subject to such right. Section 2.3 or Section 2.11(c) of the Company
Disclosure Schedule also sets forth the total number of such ISOs, such
nonqualified options and such other rights.
(d) Section 2.11(d) of the Company Disclosure Schedule sets forth a true
and complete list of: (i) all employment agreements with employees, officers
or directors of the Company or any of its subsidiaries; (ii) all agreements
with consultants who are individuals with the Company or any of its
subsidiaries; (iii) all employees of, or consultants to, the Company or any of
its subsidiaries who have executed a non-competition agreement with the Company
or any of its subsidiaries; (iv) all severance agreements, programs and
policies of the Company or any of its subsidiaries with or relating to its
employees, officers or directors, excluding programs and policies required to
be maintained by law; and (v) all plans, programs, agreements and other
arrangements of the Company or any of its subsidiaries with or relating to its
employees, officers or directors which contain change in control provisions.
SECTION 2.12 Labor Matters. There are no controversies pending or, to
the knowledge of the Company or any of its subsidiaries, threatened, between
the Company or any of its subsidiaries and any of their respective employees,
which controversies have or could reasonably be expected to have a Material
Adverse Effect. Except as set forth in Section 2.12 of the Company Disclosure
Schedule, neither the Company nor any of its subsidiaries is a party to any
collective bargaining agreement or other labor union contract applicable to
persons employed by the Company or its subsidiaries, nor does the Company
<PAGE> 18
or any of its subsidiaries know of any activities or proceedings of any labor
union to organize any such employees. Neither the Company nor any of its
subsidiaries has any knowledge of any strikes, slowdowns, work stoppages,
lockouts, or threats thereof, by or with respect to any employees of the
Company or any of its subsidiaries.
SECTION 2.13 Restrictions on Business Activities. Except for this
Agreement, there is no agreement, judgement injunction, order or decree binding
upon the Company or any of its subsidiaries which has or could reasonably be
expected to have the effect of prohibiting or impairing any business practice
of the Company or any of its subsidiaries, any acquisition of property by the
Company or any of its subsidiaries or the conduct of business by the Company or
any of its subsidiaries as currently conducted or as proposed to be conducted
by the Company.
SECTION 2.14 Title to Property. The Company and each of its subsidiaries
have good and marketable title to all of their properties and assets, free and
clear of all liens, charges and encumbrances, except liens for taxes not yet
due and payable and such liens or other imperfections of title, if any, as do
not materially detract from the value of or interfere with the present use of
the property affected thereby, and, with respect to real property, except for
defects which will be disclosed as contemplated by Section 5.11. All leases
pursuant to which the Company or any of its subsidiaries lease from others
material amounts of real or personal property are in good standing, valid and
effective in accordance with their respective terms, and there is not, under
any of such leases, any existing material default or event of default (or event
which with notice or lapse of time, or both, would constitute a material
default).
SECTION 2.15 Taxes.
(a) For purposes of this Agreement, "Tax" or "Taxes" shall mean taxes,
fees, levies, duties, tariffs, imposts, and governmental impositions or charges
of any kind in the nature of (or similar to) taxes, payable to any federal,
state, local or foreign taxing authority, including (without limitation) (i)
income, franchise, profits, gross receipts, ad valorem, net worth, value added,
sales, use, service, real or personal property, special assessments, capital
stock, license, payroll, withholding, employment, social security, workers'
compensation, unemployment compensation, utility, severance, production,
excise, stamp, occupation, premiums, windfall profits, transfer and gains
taxes, and (ii) interest, penalties, additional taxes and additions to tax
imposed with respect thereto; and "Tax Returns" shall mean returns, reports,
and information statements with respect to Taxes required to be filed with the
IRS or any other federal, foreign, state or provincial taxing authority,
domestic or foreign, including, without limitation, consolidated, combined and
unitary tax returns.
(b) Other than as disclosed in Section 2.15(b) of the Company Disclosure
Schedule, (i) the Company and its subsidiaries have timely filed all Tax
Returns required to be filed by them, (ii) the Company and its subsidiaries
have paid and discharged all Taxes shown to be due on such returns and have
withheld all
<PAGE> 19
Taxes required to be withheld with respect to employees in connection with or
with respect to the periods or transactions covered by such Tax Returns and
have paid all other Taxes as are due, except such as are being contested in
good faith by appropriate proceedings (to the extent that any such proceedings
are required) and with respect to which the Company is maintaining adequate
reserves, and (iii) there are no other Taxes that would be due if asserted by a
taxing authority, except with respect to which the Company is maintaining
reserves to the extent currently required and Taxes which in the aggregate do
not exceed $50,000 in amount. Except as disclosed in Section 2.15(b) of the
Company Disclosure Schedule: (i) there are no tax liens on any assets of the
Company or any subsidiary thereof; (ii) neither the Company nor any of its
subsidiaries has granted any waiver of any statute of limitations with respect
to, or any extension of a period for the assessment of, any Tax; (iii) neither
the Company nor any of its subsidiaries has received any written notice of any
Tax deficiency outstanding, proposed or assessed against the Company or any of
its subsidiaries, or of any audit or other examination threatened, proposed or
currently in progress of any Tax Return of the Company or any of its
subsidiaries; (iv) there is no contract, agreement plan or arrangement,
including but not limited to the provisions of the Agreement, covering any
employee or former employee of the Company or any of its subsidiaries that,
individually or collectively, could give rise to the payment of any amount that
would not be deductible pursuant to Section 280G or subject to the excise tax
pursuant to Section 4999 of the Code; (v) neither the Company nor any of its
subsidiaries is a party to or bound by any tax indemnity, tax sharing or tax
allocation agreements; (vi) neither the Company nor any of its subsidiaries has
filed any consent agreement under Section 341(f) of the Code or agreed to have
Section 341(f)(2) of the Code apply to any disposition of a subsection (f)
asset (as defined in Section 341(f)(4) of the Code) owned by the Company; and
(vii) neither the Company nor any of its subsidiaries has ever been a member of
an affiliated group of corporations within the meaning of Section 1504 of the
Code. The accruals and reserves for Taxes (including deferred taxes) reflected
in the 1996 Company Balance Sheet are adequate to cover all Taxes required to
be accrued through the date thereof (including interest and penalties, if any,
thereon and Taxes being contested) in accordance with generally accepted
accounting principles.
(c) Neither the Company nor any of its subsidiaries is, or has been, a
United States real property holding corporation (as defined in Section
897(c)(2) of the Code) during the applicable period specified in Section
897(c)(1)(A)(ii) of the Code. To the best knowledge of the Company, neither
the Company nor any of its subsidiaries owns any property of a character, the
indirect transfer of which, pursuant to this Agreement, would give rise to any
material documentary, stamp or other transfer tax.
SECTION 2.16 Environmental Matters.
(a) Except as set forth on the Company Disclosure Schedule, which matters
as so disclosed will not in the aggregate involve liability of the Company or
any of its subsidiaries in excess of $600,000, and other conditions that are
not reasonably likely to have a Material Adverse Effect, the Company and each
of its
<PAGE> 20
subsidiaries represent and warrant:
(i) Each of the Company and its subsidiaries are and have been in
substantial compliance with all applicable Environmental Laws
(as defined below);
(ii) There is no suit, claim, action, demand, executive or
administrative order, directive, investigation or proceeding
pending or threatened, before any court, governmental agency or
board or other forum against it or any of its subsidiaries (A)
for alleged noncompliance (including by any predecessor) with,
or liability under, any Environmental Law or (B) relating to the
presence of or release into the environment of any Hazardous
Material (as defined below) or oil, whether or not occurring at
or on a site owned, leased or operated by it or any of its
subsidiaries;
(iii) There is no reasonable basis for any suit, claim, action,
demand, executive or administrative order, directive or
proceeding of a type described in Section 2.16(a)(ii).
(iv) The properties currently or formerly owned or operated by the
Company or any of its subsidiaries (including, without
limitation, soil, groundwater or surface water on, under or
adjacent to the properties, and buildings thereon) do not
contain any Hazardous Material (as defined below) in excess of
what is permitted under applicable Environmental Law (provided,
however, that with respect to properties formerly owned or
operated by the Company or any of its subsidiaries, such
representation is limited to the period the Company or any such
subsidiary owned or operated such properties);
(v) Neither the Company nor any of its subsidiaries has received any
notice, demand letter, executive or administrative order,
directive or request for information from any Federal, state,
local or foreign governmental entity or any third party
indicating that it may be in violation of, or liable under, any
Environmental Law;
(vi) There are no underground storage tanks on, in or under any
properties of the Company or any of its subsidiaries and no
underground storage tanks have been closed or removed from any
properties which are or where previously owned by the Company or
any of its subsidiaries (provided, however, that with respect to
properties formerly owned or operated by the Company or any of
its subsidiaries, such representation is limited to the period
the Company or any such subsidiary owned or operated such
properties);
(vii) During the period of the Company's or any of
<PAGE> 21
its subsidiaries, ownership or operation of any of their
respective current properties, there has been no contamination
by or release of Hazardous Material or oil in, on, under or
affecting such properties. Prior to the period of the Company's
or any of its subsidiaries' ownership or operation of any of
their respective current properties, there was no contamination
by or release of Hazardous Material or oil in, on, under or
affecting any such property.
(b) The following definitions apply for purposes of this Section 3.21:
"Environmental Law" means (A) any federal, state or local law, statute,
ordinance, rule, regulation, code, license, permit, authorization, approval,
consent, legal doctrine, order, directive, executive or administrative order,
judgment, decree, injunction, requirement or agreement with any governmental
entity, (x) relating to the protection, preservation or restoration of the
environment (which includes, without limitation, air, water vapor, surface
water, groundwater, drinking water supply, structures, soil, surface land,
subsurface land, plant and animal life or any other natural resource), or to
human health or safety, or (y) the exposure to, or the use, storage, recycling,
treatment, generation, transportation, processing, handling, labeling,
production, release or disposal of, Hazardous Materials, in each case as
amended and as now in effect, including all current Environmental Laws. The
term Environmental Law includes, without limitation, the federal Comprehensive
Environmental Response Compensation and Liability act of 1980, the Superfund
Amendments and Reauthorization Act, the federal Water Pollution Control Act of
1972, the federal Clean Air Act, the federal Clean Water Act, the federal
Resource Conservation and Recovery Act of 1976 (including the Hazardous and
Solid Waste Amendments thereto), the federal Solid Waste Disposal and the
federal Toxic Substances Control Act, the Federal insecticide, Fungicide and
Rodenticide Act, the Federal Occupational Safety and Health Act of 1970, the
Federal Hazardous Materials Transportation Act, or any so called "Superfund" or
"Superlien" law, each as amended and as now or hereafter in effect, and (B) any
common law or equitable doctrine (including, without limitation, injunctive
relief and tort doctrines such as negligence, nuisance, trespass and strict
liability) that may impose liability or obligations for injuries or damages due
to, or threatened as a result of, the presence of or exposure to any Hazardous
Material; and (iv) "Hazardous Material" means any substance in any
concentration which is or could be detrimental to human health or safety or to
the environment, currently or hereafter listed, defined, designated or
classified as hazardous, toxic, radioactive or dangerous, or otherwise
regulated, under any Environmental Law, whether by type or by quantity,
including any substance containing any such substance as a component.
Hazardous Material includes, without limitation, any toxic waste, pollutant,
contaminant, hazardous substance, toxic substance, hazardous waste, special
waste, industrial substance, oil or petroleum or any derivative or by-product
thereof, radon, radioactive material, asbestos, asbestos-containing material,
urea formaldehyde foam insulation, lead and polychlorinated biphenyl.
<PAGE> 22
SECTION 2.17 Intellectual Property.
(a) The Company, directly or indirectly, owns, or is licensed or
otherwise possesses legally enforceable rights to use, all patents, trademarks,
trade names, service marks, copyrights, and any applications therefor,
technology, know-how, computer software programs or applications (in both
source code and object code form), and tangible or intangible proprietary
information or material that are material to the business of the Company and
its subsidiaries as currently conducted or as proposed to be conducted by the
Company or its subsidiaries (the "Company Intellectual Property Rights").
(b) Section 2.17(b) of the Company Disclosure Schedule sets forth a
complete list of all patents, trademarks, registered copyrights, trade names
and service marks, and any applications therefor, included in the Company
Intellectual Property Rights, and specifies, where applicable, the
jurisdictions in which each such Company Intellectual Property Right has been
issued or registered or in which an application for such issuance and
registration has been filed, including the respective registration or
application numbers and the names of all registered owners.
(c) Section 2.17(c) of the Company Disclosure Schedule sets forth a
complete list of all material licenses, sublicenses and other agreements as to
which the Company or any of its subsidiaries is a party and pursuant to which
the Company, any of its subsidiaries or any other person is authorized to use
any Company Intellectual Property Right or other trade secret material to the
Company or any of its subsidiaries, and includes the identity of all parties
thereto, a description of the nature and subject matter thereof, the applicable
royalty (if any) and the term thereof. None of the Company or any of its
subsidiaries is in violation of any license, sublicense or agreement described
on such list except such violations as do not materially impair the Company's
or such subsidiary's rights under such license, sublicense or agreement. The
execution and delivery of this Agreement by the Company, and the consummation
of the transactions contemplated hereby, will neither cause the Company or any
of its subsidiaries to be in violation or default under any such license,
sublicense or agreement, nor entitle any other party to any such license,
sublicense or agreement to terminate or modify such license, sublicense or
agreement.
(d) Either the Company or one of its subsidiaries is the sole and
exclusive owner or licensee of, with all right, title and interest in and to
(free and clear of any liens or encumbrances) the Company Intellectual Property
Rights, and has sole and exclusive rights to the use thereof or the material
covered thereby in connection with the services or products in respect of which
the Company Intellectual Property Rights are being used. No claims with
respect to the Company Intellectual Property Rights have been asserted or, to
the knowledge of the Company, are threatened by any person nor are there any
valid grounds, to the knowledge of the Company, for any bona fide claims (i) to
the effect that the manufacture, sale or use of any of the products of the
Company or any of its subsidiaries as now manufactured, sold or licensed or
used or proposed for manufacture, use, sale or licensing by the Company or any
of its
<PAGE> 23
subsidiaries infringes on any copyright, patent, trade mark, service mark or
trade secret, (ii) against the use by the Company or any of its subsidiaries of
any trademarks, service marks, trade names, trade secrets, copyrights, patents,
technology, know-how or computer software programs and applications used in the
business of the Company and its subsidiaries as currently conducted or as
proposed to be conducted, or (iii) challenging the ownership by the Company or
any of its subsidiaries, or the validity or effectiveness, of any of the
Company Intellectual Property Rights. All registered trademarks, service marks
and copyrights held by the Company are valid and subsisting. To the knowledge
of the Company, there is no unauthorized use, infringement or misappropriation
of any of the Company Intellectual Property Rights by any third party,
including any employee or former employee of the Company or any of its
subsidiaries. Neither the Company nor any of its subsidiaries has entered into
any agreement under which the Company or its subsidiaries is restricted from
selling, licensing or otherwise distributing any of its products to any class
of customers, in any geographic area, during any period of time or in any
segment of the market.
SECTION 2.18 Interested Party Transactions. Except as set forth in
Section 2.18 of the Company Disclosure Schedule, since July 31, 1996, no event
has occurred that would be required to be reported as a Certain Relationship or
Related Transaction, pursuant to Item 404 of Regulation S-K promulgated by the
SEC.
SECTION 2.19 Insurance. All material fire and casualty, general
liability, business interruption, product liability, professional liability and
sprinkler and water damage insurance policies maintained by the Company or any
of its subsidiaries are in character and amount at least equivalent to that
carried by persons engaged in similar businesses and subject to the same or
similar perils or hazards, and all such policies are with reputable insurance
carriers, provide full and adequate coverage for all normal risks incident to
the business of the Company and its subsidiaries and their respective
properties and assets. Section 2.19 of the Company Disclosure Schedule
contains a complete and accurate list of all such insurance policies.
SECTION 2.20 Opinion of Financial Advisor. The Company has been advised
by its financial advisor, Roney & Co., that in its opinion, as of the date
hereof, the Merger Consideration set forth herein is fair to the holders of
Shares from a financial point of view.
SECTION 2.21 Brokers. No broker, finder or investment banker (other than
Roney & Co., the fees and expenses of whom will be paid by the Company) is
entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of the Company or its subsidiaries or affiliates. The
Company has heretofore furnished to Parent a complete and correct copy of all
agreements between the Company and Roney & Co. pursuant to which such firm
would be entitled to any payment relating to the transactions contemplated
hereunder.
SECTION 2.22 Change in Control Payments. Except as set
<PAGE> 24
forth on Section 2.11(d) or Section 2.22 of the Company Disclosure Schedule,
neither the Company nor any of its subsidiaries have any plans, programs or
agreements to which they are parties, or to which they are subject, pursuant to
which payments may be required or acceleration of benefits may be required upon
a change of control of the Company.
SECTION 2.23 Expenses. Section 2.23 of the Company Disclosure Schedule
attached hereto sets forth a description of the expenses of the Company and its
subsidiaries which the Company expects to incur, or has incurred, in connection
with the transactions contemplated by this Agreement. True and complete copies
of any written agreements relating to such expenses have been provided to
Parent.
SECTION 2.24 Products Liability and Warranty Claims. Except as set forth
on the Company Disclosure Schedule:
(a) the Company has not made any oral or written warranties with respect
to the quality or absence of defects of its products or services which are in
force as of the date of this Agreement except for warranties made to General
Motors Corporation, Chrysler Corporation and Ford Motor Company in the ordinary
course of business pursuant to customary purchase orders or supply agreements;
(b) there are no liabilities of or claims against the Company and, to the
knowledge of the Company, no liabilities or claims are threatened against the
Company, with respect to any product liability (or similar claim) of the
Company or product warranty (or similar claim) of the Company that relates to
any product manufactured or sold by the Company;
(c) the Company has no knowledge of any facts or circumstances which
might reasonable give rise to such liabilities or claims.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
Parent and Merger Sub hereby, jointly and severally, represent and warrant
to the Company that, except as set forth in the written disclosure schedule
delivered on or prior to the date hereof by Parent to the Company that is
arranged in paragraphs corresponding to the numbered and lettered paragraphs
contained in this Article III (the "Parent Disclosure Schedule"):
SECTION 3.1 Organization and Qualification; Subsidiaries. Each of
Parent and Merger Sub is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation and has
the requisite corporate power and authority to carry on its business as it is
now being conducted, except where the failure to be so organized, existing and
in good standing or to have such power, authority and Approvals could not
reasonably be expected to have a Material Adverse Effect.
SECTION 3.2 Articles of Incorporation and By-Laws. Parent
<PAGE> 25
and Merger Sub have heretofore furnished to the Company complete and correct
copies of its Articles of Incorporation and By-Laws, as amended to date. Such
Articles of Incorporation and By-Laws are in full force and effect. Neither
Parent nor Merger Sub is in violation of any of the provisions of its Articles
of Incorporation or By-Laws.
SECTION 3.3 Authority Relative to this Agreement. Each of Parent and
Merger Sub has all necessary corporate power and authority to execute and
deliver this Agreement and to perform its obligations hereunder and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement by Parent and Merger Sub and the consummation by Parent and
Merger Sub of the transactions contemplated hereby have been duly and validly
authorized by all necessary corporate action on the part of Parent and Merger
Sub, and no other corporate proceedings on the part of Parent or Merger Sub are
necessary to authorize this Agreement or to consummate the transactions
contemplated thereby. This Agreement has been duly and validly executed and
delivered by Parent and Merger Sub and, assuming the due authorization,
execution and delivery by the Company, constitutes a legal, valid and binding
obligation of Parent and Merger Sub enforceable against each of them in
accordance with its terms.
SECTION 3.4 No Conflict, Required Filings and Consents.
(a) The execution and delivery of this Agreement by Parent and Merger
Sub do not, and the performance of this Agreement by Parent and Merger Sub will
not, (i) conflict with or violate the Articles of Incorporation or By-Laws of
Parent or Merger Sub, (ii) conflict with or violate any Law applicable to
Parent or any of its subsidiaries or by which its or their respective
properties are bound or affected, or (iii) result in any breach of or
constitute a default (or an event which with notice or lapse of time or both
would become a default) under, or impair Parent's or any of its subsidiaries'
rights or alter the rights or obligations of any third party under, or give to
others any rights of termination, amendment, acceleration or cancellation of,
or result in the creation of a Lien on any of the properties or assets of
Parent or any of its subsidiaries pursuant to, any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or other
instrument or obligation to which Parent or any of its subsidiaries is a party
or by which Parent or any of its subsidiaries or its or any of their respective
properties are bound or affected.
(b) The execution and delivery of this Agreement by Parent and Merger
Sub does not, and the performance of this Agreement by Parent and Merger Sub
will not, require any consent, approval, authorization or permit of, or filing
with or notification to, any governmental or regulatory authority, domestic or
foreign, except (i) for the pre-merger notification requirements of the HSR
Act, or any foreign antitrust or similar filings and the filing and recordation
of appropriate merger or other documents as required by the MBCA, and (ii)
where the failure to obtain such consents, approvals, authorizations or
permits, or to make such filings or notifications, would not prevent
consummation of the Merger, or otherwise prevent Parent or Merger Sub from
performing their respective obligations under this Agreement, and
<PAGE> 26
would not have a Material Adverse Effect.
SECTION 3.5 Share Ownership. Neither Parent, Merger Sub nor any of their
affiliates own any shares of Company Common Stock.
SECTION 3.6 Ownership of Merger Sub; No Prior Activities.
(a) Merger Sub was formed solely for the purpose of engaging in the
transactions contemplated by this Agreement.
(b) As of the date hereof and the Effective Time, except for obligations
or liabilities incurred in connection with its incorporation or organization
and the transactions contemplated by this Agreement and except for this
Agreement and any other agreements or arrangements contemplated by this
Agreement, Merger Sub has not and will not have incurred, directly or
indirectly, through any subsidiary or affiliate, any obligations or liabilities
or engaged in any business activities of any type or kind whatsoever or entered
into any agreements or arrangements with any person.
SECTION 3.7 Financing. Parent has received reasonable assurances that it
shall have financing available to complete the transaction.
SECTION 3.8 Solvency. Upon consummation of the transaction, Parent and
the Company each will be able to meet its debts as they mature and have assets
in excess of its liabilities.
ARTICLE IV
CONDUCT OF BUSINESS PENDING THE MERGER
SECTION 4.1 Conduct of Business by the Company Pending the Merger. The
Company covenants and agrees that, during the period from the date of this
Agreement and continuing until the earlier of the termination of this Agreement
or the Effective Time, unless Parent shall otherwise agree in writing, the
Company shall conduct its business and shall cause the businesses of its
subsidiaries to be conducted only in, and the Company and its subsidiaries
shall not take any action except in, the ordinary course of business and in a
manner consistent with past practice other than actions taken by the Company or
its subsidiaries in contemplation of the Merger; and the Company shall use all
reasonable commercial efforts to preserve substantially intact the business
organization of the Company and its subsidiaries, to keep available the
services of the present officers, employees and consultants of the Company and
its subsidiaries and to preserve the present relationships of the Company and
its subsidiaries with customers, suppliers and other persons with which the
Company or any of its subsidiaries has significant business relations. By way
of amplification and not limitation, except as contemplated by this Agreement,
neither the Company nor any of its subsidiaries shall, during the period from
the date of this Agreement and continuing until the earlier of the termination
of this Agreement or the Effective Time, directly or
<PAGE> 27
indirectly do, or propose to do, any of the following without the prior written
consent of Parent:
(a) amend or otherwise change the Articles of Incorporation or By-Laws
of the Company or any of its subsidiaries;
(b) issue, sell, pledge, dispose of or encumber, or authorize the
issuance, sale, pledge, disposition or encumbrance of, any shares of capital
stock of any class, or any options, warrants, convertible securities or other
rights of any kind to acquire any shares of capital stock, or any other
ownership interest (including, without limitation, any phantom interest) in the
Company, any of its subsidiaries or affiliates (except for the issuance of
shares of Company Common Stock issuable pursuant to Stock Options which were
granted under the Company Stock Option Plan and are outstanding on the date
hereof).
(c) sell, pledge, dispose of or encumber any assets of the Company or
any of its subsidiaries (except for (i) sales of assets in the ordinary course
of business and in a manner consistent with past practice, (ii) dispositions of
obsolete or worthless assets, and (iii) sales of immaterial assets not in
excess of $10,000 in the aggregate);
(d) (i) declare, set aside, make or pay any dividend or other
distribution (whether in cash, stock or property or any combination thereof) in
respect of any of its capital stock, except that a wholly owned subsidiary of
the Company may declare and pay a dividend to its parent and except that the
Company may pay normal quarterly dividends of $.25 per Share to shareholders of
record on August 31, 1997 and on November 30, 1997, (ii) split, combine or
reclassify any of its capital stock or issue or authorize or propose the
issuance of any other securities in respect of, in lieu of or in substitution
for shares of its capital stock, or (iii) amend the terms or change the period
of exercisability of, purchase, repurchase, redeem or otherwise acquire, or
permit any subsidiary to purchase, repurchase, redeem or otherwise acquire, any
of its securities or any securities of its subsidiaries, including, without
limitation, shares of Company Common Stock or any option, warrant or right,
directly or indirectly, to acquire shares of Company Common Stock, or propose
to do any of the foregoing;
(e) (i) acquire (by merger, consolidation, or acquisition of stock or
assets) any corporation, partnership or other business organization or division
thereof, except as described in Section 2.8 of the Company Disclosure Schedule;
(ii) incur any indebtedness for borrowed money or issue any debt securities or
assume, guarantee or endorse or otherwise as an accommodation become
responsible for, the obligations of any person or, except in the ordinary
course of business consistent with past practice, make any loans or advances;
(iii) enter into or amend any material contract or agreement calling for
aggregate payments in excess of $25,000; (iv) authorize any capital
expenditures or purchase of fixed assets which are, in the aggregate, in excess
of $50,000 (other than for office furnishings in an amount in the aggregate not
to exceed $10,000 and capital expenditures described in Section 4.1(e) of the
Company Disclosure Schedule) for the Company and its subsidiaries taken as a
whole; or (v)
<PAGE> 28
enter into or amend any contract, agreement, commitment or arrangement to
effect any of the matters prohibited by this Section 4.1(e);
(f) other than the payment of normal cash bonuses payable to employees
for the year ending July 31, 1997 in an aggregate amount not to exceed
$260,000, and normal raises reasonably acceptable to Parent, increase the
compensation payable or to become payable to its officers or employees, or
grant any severance or termination pay to, or enter into any employment or
severance agreement with any director, officer or other employee of the Company
or any of its subsidiaries, or establish, adopt, enter into or amend any
collective bargaining, bonus, profit sharing, thrift, compensation, stock
option, restricted stock, pension, retirement, deferred compensation,
employment, termination, severance or other plan, agreement, trust, fund,
policy or arrangement for the benefit of any current or former directors,
officers or employees, except, in each case, as may be required by law;
(g) take any action to change accounting policies or procedures
(including, without limitation, procedures with respect to revenue recognition,
payments of accounts payable and collection of accounts receivable);
(h) make any material tax election inconsistent with past practice or
settle or compromise any material federal, state, local or foreign tax
liability or agree to an extension of a statute of limitations;
(i) pay, discharge or satisfy any claims, liabilities or obligations
(absolute, accrued, asserted or unasserted, contingent or otherwise), other
than the payment, discharge or satisfaction in the ordinary course of business
and consistent with past practice of liabilities reflected or reserved against
in the financial statements contained in the Company SEC Reports filed prior to
the date of this Agreement or incurred in the ordinary course of business and
consistent with past practice; or
(j) take, or agree in writing or otherwise to take, any of the actions
described in Sections 4.1 (a) through (i) above, or any action which would make
any of the representations or warranties of the Company contained in this
Agreement untrue or incorrect or prevent the Company from performing or cause
the Company not to perform its covenants hereunder.
SECTION 4.2 No Solicitation.
(a) The Company and its subsidiaries and affiliates will not, and the
Company and its subsidiaries and affiliates will use their best efforts to
ensure that their respective officers, directors, employees, investment
bankers, attorneys, accountants and other agents do not, directly or
indirectly: (i) initiate, solicit or encourage, or take any action to
facilitate the making of, any offer or proposal which constitutes or is
reasonably likely to lead to any Acquisition Proposal (as defined below) of the
Company or any subsidiary or affiliate or an inquiry with respect thereto, or
(ii) in the event of an unsolicited Acquisition Proposal for the Company, or
any subsidiary or
<PAGE> 29
affiliate, engage in negotiations or discussions with, or provide any
information or data to any Person (as defined below) relating to any
Acquisition Proposal, unless (i) such unsolicited Acquisition Proposal is in
writing and meets the requirements of an Acceptable Offer (as defined below)
and (ii) the Company's Board of Directors determines in good faith after
consultation with outside legal counsel to the Company that the failure to
engage in such negotiation or discussions or provide such information would
result in a breach of the Board of Directors' fiduciary duties under applicable
law.
(b) The Company shall notify Parent and Merger Sub orally and in writing
of any such offers, proposals or Acquisition Proposals (including without
limitation the terms and conditions thereof and the identity of the Person
making it), within 24 hours of the receipt thereof, and will keep Parent fully
apprised of all developments with respect to any such Acquisition Proposal.
The Company shall give Parent written notice (an "Intent Notice") of each
Acquisition Proposal that the Company intends to accept as an Acceptable Offer
in accordance with the terms hereof (which shall include without limitation the
terms and conditions thereof, the identity of the Person who made the
Acceptable Offer and evidence of compliance with the provisions of Sections
4.2(e) hereof) at least ten calendar days prior to accepting such offer or
otherwise entering into any agreement or understanding with respect thereto, in
order to provide Parent with the right of first refusal to substantially match
the terms thereof, in which event the Company shall execute an amendment to
this Agreement presented to it by Parent to reflect such new terms (the "Right
of First Refusal"). For purposes hereof, any modification of an Acceptable
Offer shall constitute a new Acquisition Proposal.
(c) The Company shall, and shall cause its Subsidiaries and affiliates,
and their respective officers, directors, employees, investment bankers,
attorneys, accountants and other agents to, immediately cease and cause to be
terminated all existing discussions and negotiations, if any, with any parties
conducted heretofore with respect to any Acquisition Proposal relating to the
Company. Notwithstanding anything to the contrary, nothing contained in this
Section 4.2 shall prohibit the Company or its Board of Directors from (i)
taking and disclosing to the Company's shareholders a position with respect to
a tender offer by a third party pursuant to Rules 14d-9 and 14e-2 promulgated
under the Exchange Act, or (ii) making such disclosure to the Company's
shareholders which the Board of Directors of the Company determines, in good
faith after consultation with outside legal counsel to the Company, it is
required to make under applicable law.
(d) As used in this Agreement, "Acquisition Proposal" when used in
connection with any Person shall mean any tender or exchange offer involving
such Person, any proposal for a merger, consolidation or other business
combination involving such Person or any subsidiary of such Person, any
proposal or offer to acquire in any manner a substantial equity interest in, or
a substantial portion of the business or assets of, such Person or any
subsidiary of such Person, any proposal or offer with respect to any
recapitalization or restructuring with respect to such Person or any subsidiary
of such Person or any proposal or offer
<PAGE> 30
with respect to any other transaction similar to any of the foregoing with
respect to such Person, or any subsidiary of such Person; provided, however,
that, as used in this Agreement, the term "Acquisition Proposal shall not apply
to any transaction of the type described in this subsection (d) involving
Parent, Merger Sub or their affiliates. As used in this Section 4.2, "Person"
shall mean any corporation, partnership, person or other entity or group
(including the Company and its affiliates and representatives, but excluding
Parent or any of its affiliates or representatives).
(e) As used in this Agreement, "Acceptable Offer" shall mean an
unsolicited bona fide executed written offer for an Acquisition Proposal
received by the Company in accordance with Section 4.2 hereof; provided, that
(i) concurrently with the receipt by the Company of such offer, the offeror
demonstrates proof of its financial capability and authority to consummate the
transactions contemplated by such offer (including without limitation the
payment required by Section 4.2(e)(ii) below); (ii) unless Parent has exercised
the Right of First Refusal, the offeror or the Company shall on the tenth
calendar day following delivery to Parent of the Intent Notice, pay to Parent,
in immediately available funds, the Fee (as defined in Section 7.3(b)); and
(iii) such offer provides for net cash proceeds to the Company or to each
shareholder (in addition to amounts paid pursuant to clause (ii) above) in an
amount greater than that provided for hereunder (or, in the event such amount
has been increased pursuant to the exercise by Parent of its Right of First
Refusal, such greater amount).
ARTICLE V
ADDITIONAL AGREEMENTS
SECTION 5.1 HSR Act. As promptly as practicable after the date of the
execution of this Agreement, the Company and Parent shall file notifications
under and in accordance with the HSR Act and any applicable antitrust or
similar acts in connection with the Merger and the transactions contemplated
hereby and respond as promptly as practicable to any inquiries received from
the Federal Trade Commission (the "FTC"), the Antitrust Division of the
Department of Justice (the "Antitrust Division"), and any applicable foreign
agencies or authorities having jurisdiction for additional information or
documentation and to respond as promptly as practicable to all inquiries and
requests received from any State Attorney General or other governmental
authority in connection with antitrust matters.
SECTION 5.2 Shareholder Meeting. The Company shall call and hold a
meeting of the shareholders of the Company (the "Shareholder Meeting") as
promptly as practicable and in accordance with applicable laws for the purpose
of voting upon the adoption of this Agreement and the approval of the Merger.
The Company shall use all reasonable efforts to solicit from its shareholders
proxies in favor of the adoption of this Agreement and approval of the
transactions contemplated hereby and shall take all other action necessary or
advisable to secure the vote
<PAGE> 31
or consent of shareholders to obtain such approvals. Subject to fiduciary
duties under applicable law as determined in good faith after consultation with
outside legal counsel to the Company, the Board of Directors of the Company
shall recommend and declare advisable such adoption and approval.
SECTION 5.3 Access to Information; Confidentiality. Upon reasonable
notice, the Company shall (and shall cause its subsidiaries to) afford to the
officers, employees, accountants, counsel and other representatives of Parent,
reasonable access, during the period to the Effective Time, to all its
properties, books, contracts, commitments and records and, during such period,
the Company shall (and shall cause its subsidiaries to) furnish promptly to
Parent all information concerning its business, properties and personnel as
Parent may reasonably request, and shall make available to Parent the
appropriate individuals (including attorneys, accountants and other
professionals) for discussion of the Company's business, properties and
personnel as Parent may reasonably request. Parent shall keep such information
confidential in accordance with the terms of the confidentiality agreement,
dated November 20, 1997 (the "Confidentiality Agreement"), between Parent and
the Company.
SECTION 5.4 Consents; Approvals. The Company and Parent shall each use
their reasonable best efforts to obtain all consents, waivers, approvals,
authorizations or orders (including, without limitation, all United States and
foreign governmental and regulatory rulings and approvals), and the Company and
Parent shall make all filings (including, without limitation, all filings with
United States and foreign governmental or regulatory agencies) required in
connection with the authorization, execution and delivery of this Agreement by
the Company and Parent and the consummation by them of the transactions
contemplated hereby, in each case as promptly as practicable.
SECTION 5.5 Indemnification and Insurance.
(a) The By-laws of the Surviving Corporation shall contain the provisions
with respect to indemnification set forth in the By-laws of the Company, which
provisions shall not be amended, repealed or otherwise modified for a period of
six years from the Effective Time in any manner that would adversely affect the
rights thereunder of individuals who at the Effective Time were directors,
officers, employees or agents of the Company, unless such modification is
required by law.
(b) The Company shall, to the fullest extent permitted under applicable
law or under the Company's Articles of Incorporation, By-laws or any applicable
indemnification agreements and regardless of whether the Merger becomes
effective, indemnify, defend and hold harmless, and, after the Effective Time,
the Surviving Corporation shall, to the fullest extent permitted under
applicable law, indemnify, defend and hold harmless, each present and former
director, officer or employee of the Company or any of its subsidiaries
(collectively, the "Indemnified Parties") against any costs or expenses
(including attorneys' fees), judgments, fines, losses, claims, damages,
liabilities and amounts paid in settlement in connection with any
<PAGE> 32
claim, action, suit, proceeding or investigation, whether civil, criminal,
administrative or investigative, with respect to any acts or omissions
occurring at or prior to the Effective Time. Subject to the indemnification
agreements disclosed in the Company Disclosure Schedule, any determination
required to be made with respect to whether an Indemnified Party's conduct
complied with the standards set forth under Michigan law, the Company's
Articles of Incorporation, By-laws or indemnification agreements, as the case
may be, shall be made by independent counsel mutually acceptable to Parent and
the Indemnified Party.
(c) The Surviving Corporation shall maintain in effect for three years
from the Effective Time the current directors and officers liability insurance
policies maintained by the Company (or policies of at least the same coverage
containing terms and conditions which are not materially less favorable to the
Indemnified Parties) with respect to matters occurring prior to the Effective
Time, provided that the Surviving Corporation shall not be required to pay more
than 125% of the current annual cost of such insurance.
(d) This Section shall survive the consummation of the Merger at the
Effective Time, is intended to benefit the Company, the Surviving Corporation
and the Indemnified Parties, shall be binding on all successors and assigns of
the Surviving Corporation and shall be enforceable by the Indemnified Parties.
SECTION 5.6 Notification of Certain Matters. The Company shall give
prompt notice to Parent of (i) the occurrence or nonoccurrence of any event
the occurrence or nonoccurrence of which would be likely to cause any
representation or warranty contained in this Agreement to become materially
untrue or inaccurate, or (ii) any failure of the Company materially to comply
with or satisfy any covenant, condition or agreement to be complied with or
satisfied by it hereunder; provided, however, that the delivery of any notice
pursuant to this Section shall not limit or otherwise affect the remedies
available hereunder to Parent or Merger Sub; and provided further that failure
to give such notice shall not be treated as a breach of covenant for the
purposes of Section 6.2(b) unless the failure to give such notice results in
material prejudice to Parent or Merger Sub.
SECTION 5.7 Further Action. Upon the terms and subject to the
conditions hereof each of the parties hereto shall use all reasonable efforts
to take, or cause to be taken, all actions and to do, or cause to be done, all
other things necessary, proper or advisable to consummate and make effective as
promptly as practicable the transactions contemplated by this Agreement, to
obtain in a timely manner all necessary waivers, consents and approvals and to
effect all necessary registrations and filings, and otherwise to satisfy or
cause to be satisfied all conditions precedent to its obligations under this
Agreement. The foregoing covenant shall not include any obligation by Parent
or the Company to agree to divest, abandon, license or take similar action with
respect to any assets (tangible or intangible) of Parent or the Company.
SECTION 5.8 Public Announcements. Parent and the Company shall consult
with each other before issuing any press release with respect to the Merger or
this Agreement and shall not issue
<PAGE> 33
any such press release or make any such public statement without the prior
consent of the other party, which shall not be unreasonably withheld; provided,
however, that a party may, without the prior consent of the other party, issue
such press release or make such public statement as may upon the advice of
counsel be required by law or the rules and regulations of the American Stock
Exchange, if it has used all reasonable efforts to consult with the other party
prior thereto.
SECTION 5.9 Conveyance Taxes. Parent and the Company shall cooperate in
the preparation, execution and filing of all returns, questionnaires,
applications, or other documents regarding any real property transfer or gains,
sales, use, transfer, value added, stock transfer and stamp taxes, any
transfer, recording, registration and other fees, and any similar taxes which
become payable in connection with the transactions contemplated hereby that are
required or permitted to be filed at or before the Effective Time.
SECTION 5.10 Shareholder Agreement; Michigan Law. The Company,
regardless of any termination of this Agreement (other than a termination of
this Agreement pursuant to Section 7.1(a) or 7.1(h) hereof), shall not (a) take
any action which, in the reasonable judgment of Parent, would impede, interfere
with or attempt to discourage the transactions contemplated by this Agreement
or the Shareholder Agreement, (b) amend, revoke, withdraw or modify the
approval of the Merger and the other transactions contemplated hereby so as to
render the restrictions of Section 775 through Section 784 of the MBCA
applicable to Parent, Merger Sub or their affiliates, or to any business
combination proposed by any of them before or after, or as the result of, the
execution and delivery of the Shareholder Agreement or the acquisition of
Shares pursuant thereto, or (c) opt in to Section 790 through Section 799 of
the MBCA, or (d) take action rendering the requirements of any of the Sections
of the MBCA cited in this Section 5.11 inapplicable to any other Person or any
business combination between the Company and any other Person or its
affiliates.
SECTION 5.11 Title Policy and Survey.
(a) Within forty-five (45) days of the date of this Agreement, the
Company shall deliver to the Parent (i) a complete title search issued by a
title insurance company, reasonably acceptable to Parent ("Title Insurer"), for
an ALTA form of owner's policy of title insurance, committing the Title Insurer
to issue such policy at Closing, insuring the Parent as the holder of a fee
simple title to the Owned Real Property, as defined below, in an amount equal
to the fair market value of the Owned Real Property as agreed upon by the
Company and the Parent or, if the Company and the Parent are not able to so
agree, as determined by a third party, independent real property appraiser,
such insurance to meet he requirements set forth in the following paragraph
(the "Title Commitment"), and (ii) copies of all recorded documents affecting
the Owned Real Property that constitute encumbrances against the Owned Real
Property or exceptions to the Company's title. If the Title Commitment shall
contain any encumbrances or exceptions (other than the Permitted Title
Exceptions, as defined below) to which the Parent has objections, Parent shall
notify the Company of such objections in
<PAGE> 34
writing within ten (10) days of the date on which the Parent has received the
Title Commitment and copies of all recorded documents and the survey required
by this Section 5.11. The Company shall use its best efforts to eliminate all
such objected to encumbrances or exceptions within thirty (30) days following
such notice, and shall be required, at or before the Closing, to discharge at
or before the Closing the lien or encumbrance. With respect to any
encumbrances or exceptions which are properly objected to by the Parent and
which the Company shall fail to eliminate within the thirty (30) day period,
the Parent may, at its sole discretion:
(i) Waive its objections to and accept title subject to such
encumbrances or exceptions; or
(ii) Terminate this Agreement.
The Title Commitment shall commit the Title Insurer to provide coverage as
set forth in Section 5.11(a), and to delete the preprinted or so-called
"standard" exceptions, including a survey exception. The Title Commitment
shall include the following endorsements: (i) insuring the gap between the
date of the closing and the date on which any deeds are recorded, if necessary,
whichever is later, (ii) ALTA 3.1 zoning with parking, (iii) contiguity, (iv)
ALTA 9 comprehensive, (v) tax parcel, (vi) survey, and (vii) a legal
description of the Owned Real Property in a form and contents satisfactory to
the Parent. The Company shall deliver to the Title Insurer such instruments,
documents, indemnities and releases as the Title Insurer shall reasonably
require to obtain the deletions of those preprinted or "standard" exceptions.
The Title Commitment shall be updated at Closing to confirm that no new liens
or encumbrances have been filed against the Owned Real Property, and shall be
endorsed by the Title Insurer as of the date of Closing. At the Closing, the
Parent may elect to be issued the policy of title insurance meeting the
requirements of this Section 5.11.
(b) Within forty-five (45) days of the date of this Agreement, the
Company shall deliver to the Parent an ALTA/ASCM survey of the Owned Real
Property certified to the Parent and the Title Insurer for the purpose of
permitting the Title Insurer to issue the title insurance policy described in
this Section 5.11 (the "Survey"). The expense of the Survey shall be paid by
the Company. In the event the Survey discloses material encroachments or other
conditions unacceptable to the Parent, the Parent shall so notify the Company
within thirty (30) days of receipt of the Survey, and the Company shall
eliminate or correct such conditions to the satisfaction of the Parent within
thirty (30) days. If the Company shall fail to correct such conditions within
the thirty (30) day period, the Parent shall have the remedies provided in
Section 5.11(a). If this Agreement is terminated on account of such Survey
disclosures, the Survey and any copies of the Survey shall be delivered to and
become the sole property of the Company.
(c) "Owned Real Property" shall mean all real property owned by the
Company, including property located at (i) 170 Sharon Bedford, Masury, Ohio,
and (ii) 100 Fair Street, Lapeer, Michigan. "Permitted Title Exceptions" shall
mean (i) liens for Taxes and assessments not yet due and payable for which
reserves
<PAGE> 35
are established on the company's consolidated financial statements, and (ii)
any other encumbrances or exceptions not objected to by the Parent pursuant to
Section 5.11(a), which in the reasonable opinion of Parent do not materially
detract from the value of or interfere with the present use of the property
affected thereby.
ARTICLE VI
CONDITIONS TO THE MERGER
SECTION 6.1 Conditions to Obligation of Each Party to Effect the Merger.
The respective obligations of each party to effect the Merger shall be subject
to the satisfaction at or prior to the Effective Time of the following
conditions:
(a) Shareholder Approval. This Agreement and the Merger shall have been
approved and adopted by the requisite vote of the shareholders of the Company;
(b) HSR Act. The waiting period applicable to the consummation of the
Merger under the HSR Act and any applicable foreign antitrust or similar acts
shall have expired or been terminated;
(c) No Injunctions or Restraints; Illegality. No temporary restraining
order, preliminary or permanent injunction or other order issued by any court
of competent jurisdiction or other legal restraint or prohibition preventing
the consummation of the Merger shall be in effect, nor shall any proceeding
brought by any administrative agency or commission or other governmental
authority or instrumentality, domestic or foreign, seeking any of the foregoing
be pending; and there shall not be any action taken, or any statute, rule,
regulation or order enacted, entered, enforced or deemed applicable to the
Merger, which makes the consummation of the Merger illegal; and
(d) Governmental Actions. There shall not have been instituted, pending
or threatened any action or proceeding (or any investigation or other inquiry
that might result in such an action or proceeding) by any governmental
authority or administrative agency before any governmental authority,
administrative agency or court of competent jurisdiction, nor shall there be in
effect any judgment, decree or order of any governmental authority,
administrative agency or court of competent jurisdiction, in either case,
seeking to prohibit or limit Parent from exercising all material rights and
privileges pertaining to its ownership of the Surviving Corporation or the
ownership or operation by Parent or any of its subsidiaries of all or a
material portion of the business or assets of Parent or any of its
subsidiaries, or seeking to compel Parent or any of its subsidiaries to dispose
of or hold separate all or any material portion of the business or assets of
Parent or any of its subsidiaries (including the Surviving Corporation and its
subsidiaries), as a result of the Merger or the transactions contemplated by
this Agreement.
SECTION 6.2 Additional Conditions to Obligations of Parent and Merger
Sub. The obligations of Parent and Merger Sub
<PAGE> 36
to effect the Merger are also subject to the following conditions:
(a) Representations and Warranties. The representations and warranties
of the Company contained in this Agreement shall, if qualified by materiality,
be true and correct and, if not so qualified, be true and correct in all
material respects at and as of the Effective Time as if made at and as of such
time, except for (i) changes contemplated by this Agreement, and (ii) those
representations and warranties which address matters only as of a particular
date (which shall have been true and correct to the extent required as of such
date), with the same force and effect as if made at and as of the Effective
Time, and Parent and Merger Sub shall have received a certificate to such
effect signed by the President and the Chief Financial Officer of the Company;
(b) Agreements and Covenants. The Company shall have performed or
complied in all material respects with all agreements and covenants required by
this Agreement to be performed or complied with by it at or prior to the
Effective Time, and Parent and Merger Sub shall have received a certificate to
such effect signed by the President and the Chief Financial Officer of the
Company;
(c) Consents Obtained. All material consents, waivers, approvals,
authorizations or orders required to be obtained, and all filings required to
be made, by the Company for the due authorization, execution and delivery of
this Agreement and the consummation by it of the transactions contemplated
hereby shall have been obtained and made by the Company;
(d) Estoppel Certificates. Each of the firms providing services to the
Company with respect to legal services, accounting services, investment banking
services, printing services, environmental services and other miscellaneous
services with respect to the transaction contemplated by this Agreement shall
provide to the Company, in a form reasonably satisfactory to Parent, a
certificate setting forth the total fees owed such person by the Company with
respect to the transaction. Such fees, in the aggregate, shall not exceed the
amounts set forth in Section 2.23 of the Company Disclosure Schedule;
(e) Agreement Amendments. The Employment Agreement of Morton I. Schiff,
dated August 18, 1994, as amended December 12, 1996, shall have been amended in
a manner reasonably acceptable to Parent so that the total of all amounts
received by Morton I. Schiff from the Company as a result of the transactions
contemplated by this Agreement do not exceed the maximum amount permitted by
Section 280G of the Code so as to prohibit the Company from deducting such
payment as an ordinary and necessary business expense.
(f) Shareholder Agreement. Section 1.1 of the Shareholder Agreement
shall have been approved by the Probate Court for the County of Oakland without
material modification; and
(g) Opinion of Counsel. Parent and Merger Sub shall have received the
opinion of Honigman Miller Schwartz and Cohn, counsel to the Company, the form
and substance of which shall be reasonably satisfactory to parent and Merger
Sub and their
<PAGE> 37
counsel.
SECTION 6.3 Additional Conditions to Obligation of the Company. The
obligation of the Company to effect the Merger is also subject to the following
conditions:
(a) Representations and Warranties. The representations and warranties
of Parent and Merger Sub contained in this Agreement shall, if qualified by
materiality, be true and correct and, if not so qualified, be true and correct
in all material respects on and as of the Effective Time, except for (i)
changes contemplated by this Agreement and, (ii) those representations and
warranties which address matters only as of a particular date (which shall have
been true and correct to the extent required as of such date) with the same
force and effect as if made on and as of the Effective Time, and the Company
shall have received a certificate to such effect signed by the Chairman and the
Chief Financial Officer of Parent;
(b) Agreements and Covenants. Parent and Merger Sub shall have
performed or complied in all material respects with all agreements and
covenants required by this Agreement to be performed or complied with by them
on or prior to the Effective Time, and the Company shall have received a
certificate to such effect signed by the Chairman and the Chief Financial
Officer of Parent;
(c) Consents Obtained. All material consents, waivers, approvals,
authorizations or orders required to be obtained, and all filings required to
be made, by Parent and Merger Sub for the authorization, execution and delivery
of this Agreement and the consummation by them of the transactions contemplated
hereby shall have been obtained and made by Merger Sub; and
(d) Opinion of Counsel. The Company shall have received the opinion of
Dykema Gossett PLLC, counsel to Parent and Merger Sub, the form and substance
of which shall be reasonably satisfactory to the Company and its counsel.
ARTICLE VII
TERMINATION
SECTION 7.1 Termination. This Agreement may be terminated at any time
prior to the Effective Time, notwithstanding approval thereof by the
shareholders of the Company:
(a) by mutual written consent duly of the Boards of Directors of Parent
and the Company; or
(b) by either Parent or the Company if the Merger shall not have been
consummated by December 31, 1997 (provided that the right to terminate this
Agreement under this Section 7.1(b) shall not be available to any party whose
failure to fulfill any obligation under this Agreement has been the cause of or
resulted in the failure of the Merger to occur on or before such date); or
(c) by either Parent or the Company if a court of competent jurisdiction
or governmental, regulatory or
<PAGE> 38
administrative agency or commission shall have issued a nonappealable final
order, decree or ruling or taken any other action having the effect of
permanently restraining, enjoining or otherwise prohibiting the Merger
(provided that the right to terminate this Agreement under this Section 7.1(c)
shall not be available to any party who has not complied with its obligations
under Section 5.7 and such noncompliance materially contributed to the issuance
of any such order, decree or ruling or the taking of such action); or
(d) by Parent or the Company, if the requisite vote of the shareholders
of the Company shall not have been obtained by December 15, 1997, except that
the Company shall not be entitled to elect to terminate this Agreement unless
it has complied with its obligations under Section 5.2; or
(e) by Parent or the Company, respectively (i) if any representation or
warranty of the Company or Parent, respectively, set forth in this Agreement
shall be untrue when made or become untrue, or (ii) upon a breach of any
covenant or agreement on the part of the Company or Parent, respectively, set
forth in this Agreement, such that in either case of (i) or (ii) above the
conditions set forth in Section 6.2(a) or 6.2(b), or Section 6.3(a) or 6.3(b),
as the case may be, would not be satisfied (either (i) or (ii) above being a
"Terminating Breach"). Notwithstanding the foregoing, if a Terminating Breach
of the type described in (i) above is cured by eliminating the facts or
circumstances giving rise to the untruth (and not by simply correcting or
supplementing the disclosure with respect thereto) (A) within 30 days of the
earlier of (i) the date it becomes known to officers of Parent or the Company,
as the case may be, or (ii) the date on which notice is given by the Company to
Parent under Section 5.6 of the Agreement or notice is given by the Parent to
the Company, as the case may be; and (B) upon terms reasonably satisfactory to
the other party (and, in the case of the Company, without the payment of
money), then neither Parent nor the Company, respectively, may terminate this
Agreement on account of such Terminating Breach; provided, that the right to
cure provided in this sentence shall not be available for any untruth
constituting an intentional misstatement or omission;
(f) by Parent, if: (i) the Board of Directors of the Company shall
withdraw, modify or change its approval or recommendation of this Agreement or
the Merger in a manner adverse to Parent or shall have resolved to do so; or
(ii) the Board of Directors of the Company shall have recommended to the
shareholders of the Company an Acquisition Proposal, or has resolved to do so;
or
(g) by Parent, if any person (or "group", as defined in Section 13(d)(3)
of the Exchange Act) other than Parent or its affiliates or the Shareholder is
or becomes the beneficial owner of 19.9% or more of the outstanding Shares; or
(h) by the Company, if the Company shall have accepted an Acceptable
Offer in compliance with the terms of Section 4.2 hereof as evidenced by the
execution of a definitive agreement with respect thereto; or
<PAGE> 39
(i) by Parent, within 15 calendar days after the date hereof if the
Parent reasonably determines, based on the advice of its environmental
consultant, that (i) the representation in Section 2.16 is incorrect, or (ii)
environmental liabilities of the Company over the three (3) year period
subsequent to the Closing are reasonably anticipated to exceed $600,000; or
(iii) the Company's liabilities relating to the real property previously
conveyed by the Company to Wilkie Brothers Conveyers, Inc. ("Wilkie"),
including, but not limited to, liabilities to Wilkie, the City of Marysville
and the State of Michigan, related to the environmental contamination of such
real property are likely to exceed $580,000.
(j) by Parent, if the condition set forth in Section 6.2(f) is not
satisfied within forty five (45) days of the date hereof; or
(k) by Parent, pursuant to Section 5.11 or if the condition set forth in
Section 6.2(d) has not been satisfied.
SECTION 7.2 Effect of Termination. In the event of the termination of
this Agreement pursuant to Section 7.1, this Agreement shall forthwith become
void and there shall be no liability on the part of any party hereto or any of
its affiliates, directors, officers or shareholders except (i) for a
Terminating Breach (A) under Section 7.1(e)(i) if the untruth in the
representation or warranty arose from an intentional misstatement or omission
or (B) under Section 7.1(e)(ii), (ii) as set forth in Section 7.3 and Section
8.1 hereof, and (iii) nothing herein shall relieve any party from liability for
any breach of a covenant or agreement contained in this Agreement.
SECTION 7.3 Fees and Expenses.
(a) Except as set forth in this Section 7.3, all fees and expenses
incurred in connection with this Agreement and the transactions contemplated
hereby shall be paid by the party incurring such expenses, whether or not the
Merger is consummated, except that the Company shall promptly reimburse the
Parent for one-half of the filing fee paid by the Parent pursuant to the HSR
Act.
(b) The Company shall pay Parent a fee of $1,000,000 (the "Fee") upon
the first to occur of the following events:
(i) the termination of this Agreement by Parent or the Company
pursuant to Section 7.1(d) at a time when the Parent is also entitled to
terminate this Agreement pursuant to Section 7.1(f), as a result of the
failure to receive the requisite vote for approval and adoption of this
Agreement and Merger by the shareholders of the Company at the Shareholder
Meeting; or
(ii) the termination of this Agreement by Parent pursuant to Section
7.1(f); or
(iii) the termination of this Agreement by Parent pursuant to
Section 7.1(g) if, within one year of any such termination, a person shall
acquire or beneficially own a majority of the then outstanding shares of
the Company
<PAGE> 40
Common Stock or obtained representation on the Company's Board of
Directors or shall enter into a definitive agreement with the Company with
respect to an Acquisition Proposal or similar business combination; or
(iv) the termination of this Agreement by the Company pursuant to
Section 7.1(h).
(c) The Company shall reimburse Parent its reasonable out-of-pocket fees
and expenses relating to the transactions contemplated by this Agreement in the
event that (i) this Agreement is terminated by Parent or the Company pursuant
to Section 7.1(d) as the result of the failure to receive the requisite vote
for approval and adoption of this Agreement and the Merger by the shareholders
of the Company at the Shareholder Meeting, and (ii) the Parent is not entitled
to terminate this Agreement pursuant to Section 7.1(f).
(d) The Fee and expenses payable pursuant to Sections 7.3(b) or 7.3(c)
shall be paid within one business day after the first to occur of any of such
events, except to the extent otherwise provided in Section 4.2(e).
ARTICLE VIII
GENERAL PROVISIONS
SECTION 8.1 Effectiveness of Representations, Warranties and Agreements;
Knowledge, Etc.
(a) Except as otherwise provided in this Section 8.1, the
representations, warranties and agreements of each party hereto shall remain
operative and in full force and effect regardless of any investigation made by
or on behalf of any other party hereto, any person controlling any such party
or any of their officers or directors, whether prior to or after the execution
of this Agreement. The representations, warranties and agreements in this
Agreement shall terminate at the Effective Time or upon the termination of this
Agreement pursuant to Section 7.1, as the case may be, except that the
agreements set forth in this Section 8.1 shall survive independently; those
set forth in Article I and in Section 5.5 shall survive the Effective Time
indefinitely; those set forth in Section 5.10 shall survive such termination
for so long as the Shareholder Agreement is in full force and effect; and those
set forth in Section 7.3 shall survive such termination indefinitely. The
Confidentiality Agreement shall survive termination of this Agreement as
provided therein.
(b) Notwithstanding anything to the contrary contained in this Agreement,
the Company Disclosure Schedule or the Parent Disclosure Schedule, any
information disclosed in one section of this Agreement, the Company Disclosure
Schedule or the Parent Disclosure Schedule shall be deemed to be disclosed with
respect to this Agreement, and all sections of the Company Disclosure Schedule
or the Parent Disclosure Schedule, as the case may be, into which they are
specifically incorporated by reference.
SECTION 8.2 Notices. All notices and other communications
<PAGE> 41
given or made pursuant hereto shall be in writing and shall be deemed to have
been duly given or made if and when delivered personally or by overnight
courier to the parties at the following addresses or sent by electronic
transmission, with confirmation received, to the telecopy numbers specified
below (or at such other address or telecopy number for a party as shall be
specified by like notice):
(a) If to Parent or Merger Sub:
Oxford Automotive, Inc.
2000 North Woodward Avenue, Suite 130
Bloomfield Hills, Michigan 48304
Telecopier No.: (810) 540-7280
Telephone No.: (810) 540-0031
Attention: President
With a copy to:
Rex E. Schlaybaugh, Jr., Secretary
Oxford Automotive, Inc.
2000 North Woodward Avenue, Suite 130
Bloomfield Hills, Michigan 48304
Telecopier No.: (810) 540-7280
Telephone No.: (810) 540-0031
(b) If to the Company:
Howell Industries, Inc.
Suite 650
17515 West Nine Mile Road
Southfield, Michigan 48075
Telecopier No.: (810) 424-8131
Telephone No.: (810) 424-8220
Attention: President
With a copy to:
Cyril Moscow, Esq.
Honigman Miller Schwartz and Cohn
First National Building
Detroit, Michigan 48286
Telecopier No.: (313) 962-0176
Telephone No.: (313) 256-7718
SECTION 8.3 Certain Definitions. For purposes of this Agreement, the
term:
(a) "affiliates" means a person that directly or indirectly, through one
or more intermediaries, controls, is controlled by, or is under common control
with, the first mentioned person; including, without limitation, any
partnership or joint venture in which the first mentioned person (either alone,
or through or together with any other subsidiary) has, directly or indirectly,
an interest of 5% or more;
<PAGE> 42
(b) "beneficial owner" with respect to any shares of Company Common
Stock means a person who shall be deemed to be the beneficial owner of such
shares (i) which such person or any of its affiliates or associates (as such
term is defined in Rule 12b-2 of the Exchange Act) beneficially owns, directly
or indirectly, (ii) which such person or any of its affiliates or associates
has, directly or indirectly, (A) the right to acquire (whether such right is
exercisable immediately or subject only to the passage of time), pursuant to
any agreement, arrangement or understanding or upon the exercise of conversion
rights, exchange rights, warrants or options, or otherwise, or (B) the right to
vote pursuant to any agreement, arrangement or understanding, or (iii) which
are beneficially owned, directly or indirectly, by any other persons with whom
such person or any of its affiliates or associates has any agreement,
arrangement or understanding for the purpose of acquiring, holding, voting or
disposing of any shares;
(c) "business day" means any day other than a day on which banks in the
State of Michigan are required or authorized to be closed;
(d) "control" (including the terms "controlled by" and "under common
control with") means the possession, directly or indirectly or as trustee or
executor, of the power to direct or cause the direction of the management or
policies of a person, whether through the ownership of stock, as trustee or
executor, by contract or credit arrangement or otherwise;
(e) "person" means an individual, corporation, partnership, association,
trust, unincorporated organization, other entity or group (as defined in
Section 13(d)(3) of the Exchange Act); and
(f) "subsidiary" or "subsidiaries" of the Company, Parent or any other
person means any corporation, partnership, joint venture or other legal entity
of which the Company, the Surviving Corporation, Parent or such other person,
as the case may be (either alone or through or together with any other
subsidiary), owns, directly or indirectly, more than 50% of the stock or other
equity interests the holders of which are generally entitled to vote for the
election of the board of directors or other governing body of such corporation
or other legal entity.
SECTION 8.4 Amendment. This Agreement may be amended by the parties
hereto by action taken by or on behalf of their respective Boards of Directors
at any time prior to the Effective Time; provided, however, that, after
approval of the Merger by the shareholders of the Company, no amendment may be
made which by law requires further approval by such shareholders without such
further approval. This Agreement may not be amended except by an instrument in
writing signed by the parties hereto.
SECTION 8.5 Waiver. At any time prior to the Effective Time, any party
hereto may with respect to any other party hereto (a) extend the time for the
performance of any of the obligations or other acts, (b) waive any inaccuracies
in the representations and warranties contained herein or in any document
delivered pursuant hereto, or (c) waive compliance with any of the
<PAGE> 43
agreements or conditions contained herein. Any such extension or waiver shall
be valid only if set forth in an instrument in writing signed by the party or
parties to be bound thereby.
SECTION 8.6 Headings. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
SECTION 8.7 Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of
law, or public policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the economic or
legal substance of the transactions contemplated hereby is not affected in any
manner adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties
hereto shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as possible in an acceptable
manner to the end that the transactions contemplated hereby are fulfilled to
the fullest extent possible.
SECTION 8.8 Entire Agreement. This Agreement constitutes the entire
agreement and supersedes all prior agreements and undertakings (other than the
Confidentiality Agreement), both written and oral, among the parties, or any of
them, with respect to the subject matter hereof.
SECTION 8.9 Assignment; Guarantee of Merger Sub Obligations. This
Agreement shall not be assigned by operation of law or otherwise, except that
Parent and Merger Sub may assign all or any of their rights hereunder to any
subsidiary thereof provided that no such assignment shall relieve the assigning
party of its obligations hereunder. Parent guarantees the full and punctual
performance by Merger Sub of all the obligations hereunder of Merger Sub or any
such assignees.
SECTION 8.10 Parties in Interest. This Agreement shall be binding upon
and inure solely to the benefit of each party hereto, and nothing in this
Agreement, express or implied, is intended to or shall confer upon any other
person any right, benefit or remedy of any nature whatsoever under or by reason
of this Agreement, including, without limitation, by way of subrogation, other
than Section 5.5 (which is intended to be for the benefit of the Indemnified
Parties and may be enforced by such Indemnified Parties).
SECTION 8.11 Failure or Indulgence Not Waiver; Remedies Cumulative. No
failure or delay on the part of any party hereto in the exercise of any right
hereunder shall impair such right or be construed to be a waiver of, or
acquiescence in, any breach of any representation, warranty or agreement
herein, nor shall any single or partial exercise of any such right preclude any
other or further exercise thereof or of any other right. All rights and
remedies existing under this Agreement are cumulative to, and not exclusive of,
any rights or remedies otherwise available.
SECTION 8.12 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the internal laws of the State of Michigan
applicable to contracts executed and
<PAGE> 44
fully performed within the State of Michigan.
SECTION 8.13 Counterparts. This Agreement may be executed in one or
more counterparts, and by the different parties hereto in separate
counterparts, each of which when executed shall be deemed to be an original but
all of which taken together shall constitute one and the same agreement.
[This space intentionally left blank.]
<PAGE> 45
IN WITNESS WHEREOF, Parent, Merger Sub and the Company have caused this
Agreement to be executed as of the date first written above by their respective
officers thereunto duly authorized.
OXFORD AUTOMOTIVE, INC.
By:................................
Name: Selwyn Isakow
Title: Chairman
HI ACQUISITION, INC.
By:................................
Name:
Title:
HOWELL INDUSTRIES, INC.
By:..................................
Name: Morton I. Schiff
Title: President
<PAGE> 1
EXHIBIT 2.2
SHAREHOLDER AGREEMENT
This SHAREHOLDER AGREEMENT (the "Agreement") is entered into as of May 21,
1997 by and among Oxford Automotive, Inc., a Michigan corporation ("Parent"),
HI Acquisition, Inc., a Michigan corporation and a wholly owned subsidiary of
Parent ("Merger Sub"), and NBD Bank, a Michigan banking corporation, and Morton
Schiff, co-trustees of the Herbert H. Freedland Marital Trusts established
under the Herbert H. Freedland Trust Agreement dated November 3, 1972 (the
"Shareholder").
RECITALS
WHEREAS, concurrently herewith, Parent and Merger Sub are entering into an
Agreement and Plan of Merger (the "Merger Agreement") with Howell Industries,
Inc., a Michigan corporation (the "Company"), pursuant to which Parent will
acquire the Company, on the terms and subject to the conditions set forth in
the Merger Agreement, by means of a merger (the "Merger") of Merger Sub into
the Company (capitalized terms used herein and not otherwise defined are used
as defined in the Merger Agreement); and
WHEREAS, as of the date hereof the Shareholder beneficially owns directly
or indirectly 202,972 shares of Company Common Stock (the "Shares"), which
Shares constitute approximately 32.6% of the issued and outstanding shares of
Company Common Stock; and
WHEREAS, as an inducement to Parent to acquire the Company, and as a
condition to Parent's willingness to enter into the Merger Agreement and
consummate the transactions contemplated thereby, Parent and Merger Sub have
required that the Shareholder agree, and the Shareholder has agreed (i) to
grant Parent and Merger Sub an irrevocable option to buy the Shares at $37.00
per share, subject to adjustment as provided herein (the "Option"); and (ii) in
the event such option is not theretofore exercised, to vote the Shares in favor
of the Merger; and
WHEREAS, the Board of Directors of the Company has approved this
Agreement, the Merger Agreement, the Merger and the transactions contemplated
thereby.
NOW THEREFORE, in consideration of the premises and the representations,
warranties and agreements contained herein, and such other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties agree as follows:
1. Option.
<PAGE> 2
1.1 Grant of Option.
(a) In order to induce Parent and Merger Sub to enter into the
Merger Agreement, the Shareholder hereby irrevocably grants to Parent and
Merger Sub the Option exercisable in whole but not in part from and after the
date hereof, to purchase Shares at a purchase price of $37.00 per Share (or, if
increased subsequent to the date hereof, the Merger Consideration set forth in
Section 1.6(a) of the Merger Agreement). The Option shall terminate and shall
no longer be exercisable, nor shall the Shares subject to the Option be
purchasable hereunder at a Closing (as defined below) notwithstanding any
notice of exercise contemplated by Section 1.1(c) with respect thereto, from
and after the earlier of (i) termination of the Merger Agreement pursuant to
Section 7.1(a) thereof or (ii) December 31, 1997.
(b) The obligation of the Shareholder to sell the Shares at Closing
is subject to the following conditions:
(i) neither Parent nor Merger Sub shall be in breach in any
material respect of the Merger Agreement;
(ii) all waiting periods under the HSR Act and any securities
laws applicable to the exercise of the Option shall have expired or been
terminated;
(iii) there shall be no preliminary or permanent injunction
or other order, decree or ruling issued by any governmental or regulatory
authority or agency (a "Governmental Entity"), nor any statute, rule,
regulation or order promulgated or enacted by any Governmental Entity
prohibiting, or otherwise restraining, such exercise of the Option; and
(iv) the Shareholder shall have received an order of the Probate
Court for the County of Oakland, Michigan, approving this Agreement.
(c) In the event Parent or Merger Sub wish to exercise the Option,
Parent shall deliver notice thereof to the Shareholder, specifying the date,
time and place for the closing of such purchase. A closing of the purchase of
the Shares pursuant to the Option (a "Closing") shall take place on the date,
at the time and at the place specified in such notice; provided, that if at
such date any of the conditions specified in Section 1.1(b) hereof shall not
have been satisfied or waived, Parent may postpone such Closing until a date
within two business days after such conditions are satisfied or waived. At the
Closing, the Shareholder will deliver to Parent or Merger Sub (in accordance
with Parent's instructions) the certificates representing the Shares being
purchased pursuant to Section 1.1(a), duly endorsed or accompanied by stock
powers duly executed in blank. At such Closing, Parent or Merger Sub shall
either (i) wire transfer to the account designated by the Shareholder or (ii)
deliver to the Shareholder a certified or bank cashier's check payable to or
upon the order of the Shareholder, in each case in an amount equal to the
number of Shares being purchased from the Shareholder at such Closing
multiplied by $37.00 in immediately available funds.
<PAGE> 3
1.2 Assignment of Dividends and Other Distributions. The Shareholder
shall be entitled to receive any and all dividends and other distributions that
may be declared, set aside or paid by the Company with respect to the Shares
during the term of this Agreement.
1.3 No Liens. The Shareholder agrees that, in connection with the
transfer of Shares to Parent or Merger Sub pursuant to the Option, it shall
transfer to and unconditionally vest in the Parent or Merger Sub, as the case
may be, good and valid title to the Shares, free and clear of all claims,
liens, restrictions, security interests, pledges, limitations and encumbrances
whatsoever, except those arising hereunder.
1.4 No Purchase. Parent and Merger Sub may allow the Option to terminate
without purchasing all or any Shares pursuant to the exercise thereof.
2. Voting.
The Shareholder hereby agrees that (for so long as the Merger Agreement is
in effect), at any meeting of the holders of Company Common Stock, however
called, or in connection with any written consent of the holders of Company
Common Stock, it shall vote (or cause to be voted) the Shares (a) in favor of
the Merger, the execution and delivery by the Company of the Merger Agreement
and the approval of the terms thereof and each of the other actions
contemplated by the Merger Agreement and this Agreement and any actions
required in furtherance thereof and hereof; (b) against any action or agreement
that would result in a breach in any respect of any covenant, representation or
warranty or any other obligation or agreement of the Company under the Merger
Agreement or of the Shareholder under this Agreement; and (c) except as
otherwise agreed to in writing in advance by Parent, against any of the
following actions or agreements (other than the Merger Agreement or the
transactions contemplated thereby): (i) any action or agreement that is
intended, or could reasonably be expected, to impede, interfere with, delay,
postpone or attempt to discourage or adversely affect the Merger, and the
transactions contemplated by this Agreement and the Merger Agreement; (ii) any
extraordinary corporate transaction, such as a merger, consolidation or other
business combination involving the Company and its subsidiaries; (iii) a sale,
lease or transfer of a material amount of assets of the Company or its
subsidiaries or a reorganization, recapitalization, dissolution or liquidation
of the Company or its subsidiaries; (iv) any change in the management or Board
of Directors of the Company, except as proposed by Parent; (v) any change in
the present capitalization or dividend policy of the Company; (vi) any
amendment of the Company's articles of incorporation or bylaws; or (vii) any
other material change in the Company's corporate structure or business.
3. Representation and Warranties. The Shareholder represents and
warrants to Parent and Merger Sub as follows:
3.1 Ownership of Shares. On the date hereof, the Shareholder is the
record owner of the Shares and, on the date hereof, the Shares constitute all
of the shares of Company Common Stock owned of record and beneficially by the
Shareholder. The
<PAGE> 4
Shareholder has sole voting power, sole power of disposition and sole power to
agree to all of the matters set forth in this Agreement with respect to all of
the Shares, with no limitations, qualifications or restrictions on such rights,
and the Shares are the only shares of Company Common Stock over which the
Shareholder has such powers or otherwise are owned of record or beneficially by
the Shareholder as of the date hereof. The Shareholder has received written
evidence (a copy of which has been provided to Parent and Merger Sub) that the
Company's Board of Directors has taken all action necessary to ensure that,
upon the execution and delivery of this Agreement or exercise of the Option,
the Parent or Merger Sub, as the case may be, (a) shall have the unencumbered
right to vote the Shares, (b) will not become an "acquiring person" or acquire
"control shares" as such terms are used or defined in Section 790 through
Section 799 of the Michigan Business Corporation Act (the "MBCA"), and (c) will
not become an "interested shareholder" as such term is used or defined in
Section 775 through 784 of the MBCA.
3.2 Power, Binding Agreement. The Shareholder has the legal capacity,
power and authority to enter into and perform all of its obligations under this
Agreement. The execution, delivery and performance of this Agreement by the
Shareholder will not violate any other agreement to which the Shareholder is a
party, including without limitation any voting agreement, shareholders
agreement or voting trust. This Agreement has been duly and validly executed
and delivered by the Shareholder and constitutes a valid and binding agreement
of the Shareholder, enforceable against the Shareholder in accordance with its
terms, except that such enforceability may be limited by bankruptcy, insolvency
or similar laws affecting creditors' rights.
3.3 No Conflicts. Except for filings under the HSR Act and the Exchange
Act, (a) no filing with, and no permit, authorization, consent or approval of,
any Federal, state or foreign public body or authority is necessary for the
execution of this Agreement by the Shareholder and the consummation by the
Shareholder of the transactions contemplated hereby and (b) neither the
execution and delivery of this Agreement by the Shareholder nor the
consummation by the Shareholder of the transactions contemplated hereby nor
compliance by the Shareholder with any of the provisions hereof shall
(i)conflict with or result in any breach of any applicable organizational
documents applicable to the Shareholder, (ii) result in a violation or breach
of, or constitute (with or without notice or lapse of time or both) a default
(or give rise to any third party right of termination, cancellation, material
modification or acceleration) under any of the terms, conditions or provisions
of any note, bond, mortgage, indenture, license, contract, commitment,
arrangement, understanding, agreement or other instrument or obligation to
which the Shareholder is a party or by which the Shareholder or any of its
properties or assets may be bound or (iii) violate any order, writ, injunction,
decree, statute, rule or regulation applicable to the Shareholder or any of its
properties or assets.
3.4 Encumbrances. The Shares and the certificates representing the
Shares are now, and at all times during the term hereof will be, held by the
Shareholder, or by a nominee or custodian for the benefit of the Shareholder,
free and clear of
<PAGE> 5
all liens, claims, security interests, proxies, voting trusts or agreements,
understandings or arrangements or any other encumbrances whatsoever, except for
any such encumbrances or proxies arising hereunder.
3.5 Finder's Fees. No investment banker, broker, financial advisor,
finder or other person is entitled to a commission or fee from Parent, Merger
Sub or the Company in respect of this Agreement or the transactions
contemplated hereby based upon any arrangement or agreement made by or on
behalf of the Shareholder, except as otherwise specifically provided in the
Merger Agreement or arrangements or agreements made by or on behalf of Parent
or Merger Sub by its authorized representatives.
3.6 Reliance by Parent. The Shareholder understands and acknowledges
that Parent is entering into, and causing Merger Sub to enter into, the Merger
Agreement in reliance upon the Shareholder's execution and delivery of this
Agreement and the representations, warranties and covenants of the Shareholder
set forth herein.
3.7 Ownership of Shares. All Shares owned beneficially or of record by
the Shareholder were acquired at such a time and in such a manner as set forth
on the certificate attached hereto as Exhibit 3.7.
4. Other Covenants of the Shareholder. The Shareholder hereby covenants
and agrees as follows:
4.1 No Solicitation. The Shareholder shall not (in the capacity of a
shareholder of the Company or otherwise), directly or indirectly solicit
(including by way of furnishing information) or respond to any inquiries or the
making of any proposal by any person or entity (other than Parent or any
affiliate of Parent) concerning any Acquisition Proposal, except as permitted
by Section 4.2 of the Merger Agreement. If the Shareholder receives any such
inquiry or proposal with respect to the sale of the Shares, then the
Shareholder shall promptly inform Parent in the same manner as set forth in
Section 4.2 of the Merger Agreement. The Shareholder shall immediately cease
and cause to be terminated any existing activities, discussions or negotiations
with any parties conducted heretofore with respect to any of the foregoing.
4.2 Restriction on Transfer, Proxies and Non-Interference; Stop Transfer
Order.
(a) The Shareholder hereby agrees, while this Agreement is in
effect, and except as specifically contemplated hereby, not to (i) offer for
sale, sell, transfer, tender, pledge, encumber, assign or otherwise dispose of,
or enter into any contract, option or other arrangement or understanding with
respect to the offer for sale, sale, transfer, tender, pledge, encumbrance,
assignment or other disposition of, any of the Shares or any interest therein,
(ii) grant any proxies or powers of attorney, deposit any of the Shares into a
voting trust or enter into a voting agreement with respect to any of the Shares
or (iii) take any action that would make any representation or warranty of the
Shareholder contained herein untrue or incorrect or have the effect of
preventing or disabling the Shareholder
<PAGE> 6
from performing its obligations under this Agreement.
(b) In furtherance of the provisions of Section 4.2(a) hereof,
concurrently herewith the Shareholder shall and hereby does authorize the
Company's counsel to notify the Company's transfer agent that there is a stop
transfer order with respect to all of the Shares and that this Agreement places
limits on the voting and transfer of the Shares.
4.3 Notice of Additional Shares. The Shareholder hereby agrees to
promptly notify Parent in writing of the number of After-Acquired Shares (as
defined below) that may be acquired by the Shareholder, if any, after the date
hereof. Any After-Acquired Shares shall become Shares subject to the terms of
this Agreement.
4.4 No Inconsistent Agreements. The Shareholder shall not enter into any
agreement or understanding with any person or entity the effect of which would
be inconsistent or violative of the provisions of this Agreement.
4.5 Further Assurances. From time to time, at the other party's request
and without further consideration, each party hereto shall execute and deliver
such additional documents and take all such further action as may be necessary
or desirable to consummate and make effective, in the most expeditious manner
practicable, the transactions contemplated by this Agreement. Without limiting
the generality of the foregoing, the Shareholder shall use its best efforts to
satisfy the condition set forth in Section 1.1(b)(iv) within 30 days of the
date hereof.
5. Miscellaneous.
5.1 Fees and Expenses. All costs and expenses incurred in connection
with this Agreement and the consummation of the transactions contemplated
hereby shall be paid by the party incurring such expenses.
5.2 Survival of Representations and Warranties. All representations and
warranties contained in this Agreement shall survive the delivery of and
payment for the Shares.
5.3 Amendment and Modification. This Agreement may be amended, modified
and supplemented in any and all respects by written agreement of the parties
hereto.
5.4 Assignment. Neither this Agreement nor any of the rights, interests
or obligations hereunder shall be assigned by any of the parties hereto
(whether by operation of law or otherwise) without the prior written consent of
the other parties, except that Merger Sub may assign, in its sole discretion,
any or all of its rights, interests and obligations hereunder to Parent.
Subject to the preceding sentence, this Agreement will be binding upon, inure
to the benefit of and be enforceable by, the parties and their respective
successors and assigns.
5.5 Specific Performance. Each of the parties hereto recognizes and
acknowledges that a breach by it of any covenants or agreements contained in
this Agreement will cause the other
<PAGE> 7
party to sustain damages for which it would not have an adequate remedy at law
for money damages, and therefore each of the parties hereto agrees that in the
event of any such breach the aggrieved party shall be entitled to the remedy of
specific performance of such covenants and agreements and injunctive and
other equitable relief in addition to any other remedy to which it may be
entitled, at law or in equity. Without limiting the generality of the
foregoing, Section 2 hereof constitutes a voting agreement under Section 461 of
the MBCA.
5.6 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed given upon personal delivery, facsimile
transmission (which is confirmed), telex or delivery by an overnight express
courier service (delivery, postage or freight charges prepaid), or on the
fourth day following deposit in the United States mail (if sent by registered
or certified mail, return receipt requested, delivery, postage or freight
charges prepaid), addressed to the parties at the following addresses (or at
such other address for a party as shall be specified by like notice):
If to the Shareholder:
NBD Bank
1116 W. Long Lake Road
Bloomfield Hills, Michigan 48302
Attention: Lyle F. Dahlberg, Vice President
Telephone No.: (248) 645-7301
Telecopy No.: (248) 645-6849
with a copy to:
John A. Thurber, Esq.
Miller, Canfield, Paddock & Stone P.L.C.
Suite 100
1400 N. Woodward
Bloomfield Hills, Michigan 48304
If to Parent or Merger Sub, to:
Oxford Automotive, Inc.
2000 North Woodward Avenue
Bloomfield Hills, Michigan 48304
Attention: President
Telephone No.: (248) 540-0031
Telecopy No.: (248) 540-7280
with a copy to:
Oxford Automotive, Inc.
2000 North Woodward Avenue
Bloomfield Hills, Michigan 48304
Attention: Rex E. Schlaybaugh, Jr., Esq., Secretary
Telephone No.: (248) 540-0031
Telecopy No.: (248) 540-7280
5.7 Definitions; Interpretation.
<PAGE> 8
(a) As used in this Agreement, (i) the term "After-Acquired Shares"
shall mean any shares of Company Common Stock acquired directly or indirectly,
or otherwise beneficially owned, by the Shareholder in any capacity after the
date hereof and prior to the termination hereof, whether upon the exercise of
options, warrants or rights, the conversion or exchange of convertible or
exchangeable securities, or by means of a purchase, dividend, distribution,
gift, bequest, inheritance or as a successor in interest in any capacity
(including a fiduciary capacity) or otherwise; (ii) the term "affiliate(s)"
shall have the meaning set forth in Rule 12b-2 of the Exchange Act and (ii) the
phrases "beneficially own" or "beneficial ownership" with respect to any
securities shall mean having "beneficial ownership" of such securities (as
determined pursuant to Rule 13d-3 under the Exchange Act), including pursuant
to any agreement, arrangement or understanding, whether or not in writing
(without duplicative counting of the same securities by the same holder,
securities beneficially owned by a person shall include securities beneficially
owned by all other persons with whom such Person would constitute a "group"
within the meaning of Rule 13d-5 of the Exchange Act).
(b) When a reference is made in this Agreement to a Section, such
reference shall be to a Section in this Agreement unless otherwise indicated.
The words "include," "includes" and "including" when used herein shall be
deemed in each case to be followed by the words "without limitation." The
descriptive headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement.
5.8 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be considered one and the same agreement and
shall become effective when two or more counterparts have been signed by each
of the parties and delivered to the other party, it being understood that all
parties need not sign the same counterpart.
5.9 Entire Agreement, No Third Party Beneficiaries, Rights of Ownership.
This Agreement (a) constitutes the entire agreement and supersedes all prior
agreements and understandings, both written and oral, among the parties with
respect to the subject matter hereof, and (b) is not intended to confer upon
any person other than the parties hereto any rights or remedies hereunder.
5.10 Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction or other authority
to be invalid, void, unenforceable or against its regulatory policy, the
remainder of the terms, provisions, covenants and restrictions of this
Agreement shall remain in full force and effect and shall in no way be
affected, impaired or invalidated.
[This space intentionally left blank.]
5.11 Governing Law. This Agreement shall be governed and
<PAGE> 9
construed in accordance with the laws of the State of Michigan without giving
effect to the principles of conflicts of law thereof.
IN WITNESS WHEREOF, Parent, Merger Sub and the Shareholder have caused
this Agreement to be duly executed as of the day and year first above written.
OXFORD AUTOMOTIVE, INC.
By:
Name:
Title:
HI ACQUISITION, INC.
By:
Name:
Title:
NBD BANK, Co-Trustee
By:
Name: Lyle F. Dahlberg
Title: First Vice President
Morton Schiff, Co-Trustee
<PAGE> 1
EXHIBIT 3.1
MICHIGAN DEPARTMENT OF CONSUMER AND INDUSTRY SERVICES
CORPORATION, SECURITIES AND LAND DEVELOPMENT BUREAU
ARTICLES OF INCORPORATION
For use by Domestic Profit Corporations
ARTICLE I
The name of the corporation is Oxford Automotive, Inc.
ARTICLE II
The purpose or purposes for which the Corporation is organized is to
engage in any activity within the purposes for which corporations may be
organized under the Michigan Business Corporation Act ("the MBCA").
ARTICLE III
The total authorized shares: 400,000 shares of common stock.
ARTICLE IV
The name of the registered agent is: Robert H. Orley.
The address of the registered office is: 2000 North Woodward Avenue, Suite 130
Bloomfield Hills, Michigan 48304
ARTICLE V
The name and address of the incorporator is Gerald T. Lievois, Dykema
Gossett PLLC, 400 Renaissance Center, Detroit, Michigan 48243-1668.
ARTICLE VI
When a compromise or arrangement or any plan of reorganization of this
corporation is proposed between this corporation and its creditors or any class
of them and/or between this corporation and its shareholders or any class of
them, any court of equity jurisdiction within the state of Michigan may, on the
application of this corporation or of any creditor or any shareholder thereof,
or on the application of any receiver or receivers appointed for this
corporation, order a meeting of the creditors or class of creditors, and/or of
the shareholders or class of shareholders, as the case may be, to be affected
by the proposed compromise or arrangement or reorganization, to be summoned in
such manner as said court directs. If a majority in number, representing 3/4
in value of the creditors or class of creditors, and/or of the shareholders or
class of shareholders, as the case may be, to be affected by the proposed
compromise or arrangement or reorganization, agrees to any
<PAGE> 2
compromise or arrangement or to any reorganization of this corporation as a
consequence of such compromise or arrangement, said compromise or arrangement
and said reorganization shall, if sanctioned by the court to which the said
application has been made, be binding on all the creditors or class of
creditors, and/or on all the shareholders or class of shareholders, as the case
may be, and also on this corporation.
ARTICLE VII
Any action required or permitted by the Act to be taken at any annual or
special meeting of shareholders may be taken without a meeting, without prior
notice and without a vote, if consents in writing, setting forth the action so
taken, is signed by the holders of outstanding stock having not less than the
minimum number of votes that would be necessary to authorize or take the action
at a meeting at which all shares entitled to vote thereon were present and
voted. The written consents shall bear the date of signature of each
shareholder who signs the consent. No written consents shall be effective to
take the corporate action referred to unless, within 60 days after the record
date for determining shareholders entitled to express consent to or to dissent
from a proposal without a meeting, written consents signed by a sufficient
number of shareholders to take the action are delivered to the corporation.
Delivery shall be to the corporation's registered office, its principal place
of business, or an officer or agent of the corporation having custody of the
minutes of the proceedings of its shareholders. Delivery made to a
corporation's registered office shall be by hand or by certified mail, return
receipt requested.
Prompt notice of the taking of the corporate action without a meeting by
less than unanimous written consent shall be given to shareholders who have not
consented in writing.
ARTICLE VIII
No director of the corporation shall be personally liable to the
corporation or its shareholders for monetary damages for breach of fiduciary
duty as a director, provided that the foregoing shall not eliminate or limit
the liability of a director for any of the following: (1) breach of the
director's duty of loyalty to the corporation or its shareholders; (2) acts or
omissions not in good faith or that involve intentional misconduct or knowing
violation of law; (3) a violation of Section 551(1) of the Michigan Business
Corporation Act (the "MBCA"); or (4) a transaction from which the director
derived an improper personal benefit. If the MBCA is amended to authorize the
further elimination of limitation of the liability of directors, then the
liability of a director of the corporation, in addition to the limitation on
personal liability contained in these articles of incorporation, shall be
limited to the fullest extent permitted by the MBCA as so amended. No
amendment or repeal of this Article shall apply to or have any effect on the
liability or alleged liability of any director of the corporation for or with
respect to any acts or omissions of such director occurring prior to such
amendment or repeal.
2
<PAGE> 1
EXHIBIT 3.2
MICHIGAN DEPARTMENT OF CONSUMER AND INDUSTRY SERVICES
CORPORATION, SECURITIES AND LAND DEVELOPMENT BUREAU
Date Received (FOR BUREAU USE ONLY)
Name: Gerald T. Lievois
Dykema Gossett PLLC
Address: 1577 North Woodward, Ste 300
Bloomfield Hills, MI 48304 EFFECTIVE DATE:
DOCUMENT WILL BE RETURNED TO NAME AND ADDRESS INDICATED ABOVE
CORPORATE IDENTIFICATION NUMBER
0 5 9 - 8 3 7
RESTATED ARTICLES OF INCORPORATION
For use by Domestic Profit Corporations
Pursuant to the provisions of Act 284, Public Acts of 1972, as amended,
the undersigned corporation executes the following Restated Articles of
Incorporation which shall supersede all prior Articles of Incorporation, as
amended, of the corporation and shall be the Articles of Incorporation for the
corporation.
ARTICLE I
Name
The name of the corporation is Lobdell Emery Corporation (the
"Corporation").
ARTICLE II
Purpose
The purpose or purposes for which the Corporation is organized is to
engage in any activity within the purposes for which corporations may be
organized under the Michigan Business Corporation Act ("the MBCA").
<PAGE> 2
ARTICLE III
Authorized Capital
1. The total number of shares of stock which the Corporation
shall have the authority to issue is 20,000 shares of common stock
("Common Stock") and 600,000 shares of preferred stock ("Preferred
Stock").
2. The designations, voting powers, preferences and relative,
participating, optional or other special rights, and qualifications,
limitations or restrictions of the shares of stock shall be as
follows:
General Provisions Applicable to All Shares
Subject to the power of the Board of Directors to provide to the contrary
with respect to any one or more series of Preferred Stock at any time
authorized, no holder of stock of any class of the Corporation shall be
entitled as a matter of right to purchase or subscribe for any part of any
unissued stock of any class, or of any additional stock of any class of capital
stock of the Corporation, or of any bonds, certificates of indebtedness,
debentures, or other securities, whether or not convertible into other
securities, but any such stock or other securities may be issued and disposed
of pursuant to resolution adopted by the Board of Directors to such persons,
firms, corporations or associations and upon such terms and for such
consideration as the Board of Directors in the exercise of its discretion may
determine and as may be permitted by law without action by the shareholders of
the Corporation. The Board of Directors may provide for payment therefor to be
received by the Corporation in cash, property, or services, as authorized by
the MBCA. Any and all shares of stock so issued for which the consideration so
provided for has been paid or delivered, as provided in the MBCA, shall be
deemed fully paid and not liable to any further call or assessment.
Provisions Applicable to Common Stock
Except as otherwise required by law or by these Articles of Incorporation,
each holder of Common Stock shall have one vote for each share of stock held by
such holder on all matters to be voted upon by the holders of Common Stock
whether or not any one or more series of Preferred Stock shall be entitled to
voting rights or to more or less than one vote for each share of Preferred
Stock.
Subject to the preferential dividend rights, if any, applicable to shares
of Preferred Stock and subject to applicable requirements, if any, with respect
to the setting aside of sums for purchase of, redemption of or sinking funds
for, Preferred Stock, the holders of Common Stock shall be entitled to receive,
to the extent permitted by law, such dividends as may be declared from time to
time by the Board of Directors.
2
<PAGE> 3
In the event of any liquidation, dissolution or winding up of the
Corporation, the holders of Common Stock shall be entitled, after payment or
provision for payment of the debts and other liabilities of the Corporation and
the amounts to which the holders of any Preferred Stock shall be entitled, to
share ratably in the remaining net assets of the Corporation or the proceeds
thereof.
Provisions Applicable to Preferred Stock
The Board of Directors is expressly authorized at any time, and from time
to time, to provide for the issuance of shares of Preferred Stock in one or
more series, and for such consideration or considerations as the Board of
Directors may determine, with such voting powers, full or limited, or without
voting powers and with such designations, preferences and relative
participating, optional or other special rights and qualifications, limitations
or restrictions thereof as shall be stated and expressed in the resolution or
resolutions providing for the issue thereof adopted by the Board of Directors,
all except as otherwise required by law or by these Articles of Incorporation
and including, but not limited to, the following:
(a) The distinctive designation and number of shares comprising
such series.
(b) The dividend rate or rates on the shares of such series and
the relation such dividends shall bear to the dividends payable on
any other class of capital stock or on any other series of Preferred
Stock, the terms and conditions upon which and the periods in
respect of which dividends shall be payable, whether and upon what
conditions such dividends shall be cumulative and, if cumulative,
the date or dates from which dividends shall accumulate.
(c) Whether the shares of such series shall be redeemable and, if
redeemable, whether redeemable for cash, bonds, securities, or other
property or rights, including securities of any other corporation,
at the option of either the holder or the Corporation or upon the
happening of a specified event, the limitations and restrictions
with respect to such redemption, the time or times when the price or
prices or rate or rates at which, the adjustments with which and the
manner in which such shares shall be redeemable, including the
manner of selecting shares of such series for redemption if less
than all shares are to be redeemed.
(d) The rights to which the holders of shares of such series
shall be entitled and the preferences, if any, over any other series
(or of any other series over such series) upon the voluntary or
involuntary liquidation, dissolution or winding up of the
Corporation, which rights may vary depending on whether such
liquidation, dissolution or winding up is voluntary or involuntary
and, if voluntary, may vary at different dates.
(e) Whether the shares of such series shall be subject to the
operation of a purchase, retirement or sinking fund and, if so,
whether and upon what conditions such purchase, retirement, or
sinking fund shall be cumulative or noncumulative, the extent
3
<PAGE> 4
to which and the manner in which such fund shall be applied to
the purchase or redemption of the shares of such series for
retirement or to other corporate purposes and the terms and
provisions relative to the operation thereof.
(f) Whether the shares of such series shall be convertible or
exchangeable into shares of any other class or of any other series
of any class of capital stock, or into bonds, notes or debentures of
the Corporation, at the option of either the holder or the
Corporation or upon the happening of a specified event, and, if so
convertible or exchangeable, the price or prices or the rate or
rates of conversion or exchange and the method, if any, of adjusting
the same, and any other terms and conditions of such conversion or
exchange.
(g) The voting powers, full and/or limited, if any, of the shares
of such series, and whether and under what conditions the shares of
such series (alone or together with the shares of one or more other
series) shall be entitled to vote separately as a single class, upon
any merger or other transaction of the Corporation, or upon any
other matter, including but without limitation the election of one
or more additional directors of the Corporation in case of dividend
arrearages or other specified events.
(h) Whether the issuance of any additional shares of such series,
or of any shares of any other series, shall be subject to
restrictions as to issuance, or as to the powers, preferences or
rights of any such other series.
(i) Any other preferences, privileges and powers and relative,
participating, optional or other special rights, and qualifications,
limitations or restrictions of such series, as the Board of
Directors may deem advisable and as shall not be inconsistent with
the provisions of these Articles of Incorporation.
All shares of Preferred Stock of any one series shall be of equal rank and
identical in all respects except that shares of any one series issued at
different times may differ as to the dates from which dividends thereon, if
cumulative, shall be cumulative.
Any resolution of the Board of Directors establishing and designating a
series of Preferred Stock and fixing and defining the relevant rights and
preferences thereof shall be filed with the Department of Consumer and Industry
Services of the State of Michigan and when so filed shall constitute an
amendment to these Articles of Incorporation.
SEE ATTACHED ANNEX A FOR ADDITIONAL PROVISIONS TO THIS ARTICLE III.
4
<PAGE> 5
ARTICLE IV
Registered Office and Resident Agent
The address of the initial registered office is 2000 North Woodward
Avenue, Suite 130, Bloomfield Hills, Michigan 48304. The mailing address of
the initial registered office is 2000 North Woodward Avenue, Suite 130,
Bloomfield Hills, Michigan 48304. The name of the initial resident agent is
Robert H. Orley.
ARTICLE V
Limitation of Director Liability
No director of the Corporation shall be personally liable to the
Corporation or its shareholders for monetary damages for breach of fiduciary
duty as a director, provided that the foregoing shall not eliminate or limit
the liability of a director for any of the following: (i) breach of the
director's duty of loyalty to the Corporation or its shareholders; (ii) acts or
omissions not in good faith or that involve intentional misconduct or knowing
violation of law; (iii) a violation of Section 551(1) of the MBCA; or (iv) a
transaction from which the director derived an improper personal benefit.
If the MBCA hereafter is amended to authorize the further elimination of
limitation of the liability of directors, then the liability of a director of
the Corporation, in addition to the limitation on personal liability contained
herein, shall be limited to the fullest extent permitted by the MBCA as so
amended.
No amendment or repeal of this Article V shall apply to or have any effect
on the liability or alleged liability of any director of the Corporation for or
with respect to any acts or omissions of such director occurring prior to such
amendment or repeal.
ARTICLE VI
Compromise, Arrangement, or Plan of Reorganization
Whenever a compromise or arrangement or any plan of reorganization of this
Corporation is proposed between this Corporation and its creditors or any class
of them and/or between this Corporation and its shareholders or any class of
them, any court of equity jurisdiction within the state of Michigan may, on the
application of this Corporation or of any creditor or any shareholder thereof,
or on the application of any receiver or receivers appointed for this
Corporation, order a meeting of the creditors or class of creditors, and/or of
the shareholders or class of shareholders, as the case may be, to be affected
by the proposed compromise or arrangement or reorganization, to be summoned in
such manner as said court directs.
5
<PAGE> 6
If a majority in number, representing three-fourths (3/4) in value of the
creditors or class of creditors, and/or of the shareholders or class of
shareholders, as the case may be, to be affected by the proposed compromise or
arrangement or reorganization, agrees to any compromise or arrangement or to
any reorganization of this Corporation as a consequence of such compromise or
arrangement, said compromise or arrangement and said reorganization shall, if
sanctioned by the court to which the said application has been made, be binding
on all the creditors or class of creditors, and/or on all the shareholders or
class of shareholders, as the case may be, and also on this Corporation.
ARTICLE VII
Corporate Action Without Meeting of Shareholders
Any action required or permitted by the MBCA to be taken at any annual or
special meeting of shareholders may be taken without a meeting, without prior
notice and without a vote, if a consent in writing, setting forth the action so
taken, is signed by the holders of outstanding stock having not less than the
minimum number of votes that would be necessary to authorize or take the action
at a meeting at which all shares entitled to vote thereon were present and
voted.
Prompt notice of the taking of the corporate action without a meeting by
less than unanimous written consent shall be given to shareholders who have not
consented in writing.
6
<PAGE> 7
ANNEX A
1. DESIGNATION OF PREFERRED STOCK:
(a) Four Hundred Eighty Thousand (480,000) shares of Preferred Stock of
the Company are hereby constituted as the original number of shares of a series
of Preferred Stock designated as Series A $3.00 Cumulative Preferred Stock
("Series A Preferred").
(b) Sixty Thousand (60,000) shares of Preferred Stock of the Company are
hereby constituted as the original number of shares of a series of Preferred
Stock designated as Series B Preferred Stock ("Series B Preferred"). The term
"Articles of Incorporation" when used herein shall include all statements or
certificates filed pursuant to law with respect to any series of Preferred
Stock.
2. PREFERENCES:
The Company may issue any shares of preferred stock or any other class
or series of stock ranking junior to or on a parity with the Series A Preferred
or the Series B Preferred as to dividends, redemption rights, liquidation rights
or other rights without the affirmative vote or written consent of the holders
of the Series A Preferred or the Series B Preferred. So long as any shares of
Series A Preferred or Series B Preferred remain outstanding, the Company may
not issue any shares of preferred stock or any other class or series of stock
ranking senior to the Series A Preferred as to dividends, redemption rights,
liquidation rights or other rights without the affirmative vote or written
consent of a majority of the outstanding shares of Series A Preferred and
Series B Preferred, voting together as a single class.
3. DIVIDENDS:
(a) The holders of Series A Preferred shall be entitled to receive when
and as declared by the Board of Directors of the Company out of funds of the
Company legally available for payment, cumulative cash dividends at an annual
rate of $3.00 per share. Dividends on the Series A Preferred shall be payable
semi-annually, on July 15 and January 15 of each year or on the first
succeeding business day thereafter if such day is not a business day (each a
"Dividend Payment Date"), commencing July 15, 1997. Such dividends shall be
payable to holders of record as they appear on the stock records of the Company
at the close of business on such record dates (each a "Record Date"), not
exceeding 45 days nor fewer than 10 days preceding the payment dates thereof,
as shall be fixed by the Board of Directors. Semi-annual dividend periods
(each a "Dividend Period") commence on and include the fifteenth day of July
and January of each year, and shall end on and include the day next preceding
the next following Dividend Payment Date. Dividends shall accrue
A-1
<PAGE> 8
from the date of issuance, whether or not earned or declared. Dividends shall
be cumulative from such date, whether or not in any Dividend Period or Dividend
Periods there shall be funds of the Company legally available for the payment
of such dividends. Accumulations of dividends on shares of Series A Preferred
shall not bear interest. Dividends payable on the Series A Preferred for any
period greater or less than a full Dividend Period shall be computed on the
basis of a 360-day year consisting of twelve 30-day months. Dividends payable
on the Series A Preferred Stock for each full Dividend Period shall be computed
by dividing the annual dividend rate by two.
(b) All dividends declared on the Series A Preferred for any Dividend
Period and on any class or series of stock of the Company ranking on a parity
with the Series A Preferred as to dividends shall be declared pro rata so that
the amounts of dividends per share declared for such period on the Series A
Preferred and on any class or series of stock ranking on a parity with the
Series A Preferred as to dividends, that were outstanding during such period,
shall in all cases bear to each other the same ratio that the respective
dividend rates of such stock for such period bear to each other.
(c) The Company shall not declare or pay any dividend or other
distribution, other than in Common Stock or other stock not expressly
designated as being on a parity with or senior to the Series A Preferred
("Junior Stock"), with respect to any Junior Stock or Common Stock of the
Company or redeem or set apart funds for the purchase or redemption of any
Junior Stock through a sinking fund or otherwise, or purchase any shares of its
Common Stock, unless (i) all accrued and unpaid dividends with respect to the
Series A Preferred and any other stock ranking on a parity with the Series A
Preferred ("Parity Stock") have been paid, or funds have been set apart for
payment of such dividends and (ii) sufficient funds have been set apart for the
Company for the payment of the dividend for the current Dividend Period with
respect to the Series A Preferred and any Parity Stock. Provided, however,
that this restriction shall not apply to the repurchase of shares of Common
Stock from employees, officers, directors, consultants or other persons
performing services for the Company or any subsidiary pursuant to agreements
under which the Company has the option to repurchase such shares upon the
occurrence of certain events, such as the termination of employment.
4. REDEMPTION:
(a) The Company shall redeem, from any source of funds legally available
therefor, all of the Series A Preferred and the Series B Preferred on December
31, 2006 (the "Mandatory Redemption Date"). The Company shall effect such
redemption on the Mandatory Redemption Date by paying in cash in exchange for
the shares of Series A Preferred and Series B Preferred to be redeemed a sum
equal to $100.00 per share of Series A Preferred and $100.00 per share of
Series B Preferred (each as adjusted for any stock dividends, combinations or
splits with respect to such shares) plus, with respect to the Series A
Preferred, all declared or accumulated but unpaid dividends on such shares (the
"Redemption Price"). However, if BMG-MI, Inc., the parent of the Company, does
not commence a public offering of common stock which is (i) exclusively for
cash, (ii) subject to an effective registration statement filed with the
Securities and Exchange Commission and (iii) underwritten on a firm commitment
basis by one or more underwriters (an "Initial Public Offering") prior to June
30, 2006, the payment for the shares of Series A Preferred to
A-2
<PAGE> 9
be redeemed shall be a sum equal to $103.00 per share of Series A Preferred (as
adjusted for any stock dividends, combinations or splits with respect to such
shares) plus all declared or accumulated but unpaid dividends on such shares.
(b) At the individual option of each holder of shares of Series A
Preferred, if an Initial Public Offering does not take place on or before
December 31, 2001, the Company shall redeem on December 31 of each year
commencing with 2002 and continuing thereafter, (each an "Optional Redemption
Date"), the number of shares of Series A Preferred held by such holder that is
specified in a written request for redemption, which shall include the specific
number of shares to be redeemed from such holder and the specific certificates
representing the shares to be redeemed, delivered to the Company by the holder
on or prior to the October 1 immediately preceding the applicable Optional
Redemption Date, by paying in cash therefor, the Redemption Price, provided,
however that the Company shall not be required under this Section 4(d) to
redeem from any particular holder, a number of shares of Series A Preferred
greater than 20% of the aggregate number of shares of Series A Preferred held
by such holder immediately prior to the initial Optional Redemption Date.
(c) As used herein, the term "Redemption Date" shall refer to each of
"Mandatory Redemption Date" and "Optional Redemption Date." At least 15, but
no more than 30, days prior to each Redemption Date, the Company shall mail
written notice (the "Redemption Notice"), postage prepaid, to each holder of
record of the Series A Preferred or the Series B Preferred to be redeemed, at
the holder's address last shown on the Company's records, notifying such holder
of the redemption to be effected, specifying the number of shares to be
redeemed from such holder, the Redemption Date, the Redemption Price, the place
at which payment may be obtained and calling upon such holder to surrender to
the Company, in the manner and at the place designated, such holder's
certificate or certificates representing the shares to be redeemed. On or
after the Redemption Date, and against payment of the Redemption Price, each
holder of the Series A Preferred and Series B Preferred to be redeemed shall
surrender the certificates representing such shares to the Company, in the
manner and at the place designated in the Redemption Notice, and thereupon the
Redemption Price of such shares shall be payable in immediately available funds
to the order of the person whose name appears on such certificate or
certificates as the owner of such shares, and each surrendered certificate
shall be canceled. In the event less than all the shares represented by any
such certificate are redeemed, a new certificate shall be issued representing
the unredeemed shares.
(d) If and when the Redemption Price is paid, dividends shall cease to
accrue on the Series A Preferred called for redemption, and the Series A
Preferred and Series B Preferred shall no longer be deemed to be outstanding
and all rights of the holders of such shares, except the right to receive the
Redemption Price without interest upon surrender of their certificate or
certificates, shall cease and terminate with respect to such shares.
(e) In the event that cumulative dividends on any other series of stock
ranking, as to dividends, on a parity with the Series A Preferred have not been
paid or declared and set apart for payment, the Series A Preferred and Series B
Preferred may not be redeemed in part and the Company may not purchase or
acquire shares of Series A Preferred, Series B Preferred or such other
A-3
<PAGE> 10
stock otherwise than pursuant to a purchase or exchange offer made on the same
terms to all holders of shares of Series A Preferred, Series B Preferred and
such other stock.
5. LIQUIDATION:
(a) In the event of any liquidation, dissolution or winding up of the
affairs of the Company, whether voluntary or involuntary, after payment of the
debts and other liabilities of the Company and provision for the rights in such
event of any series of stock ranking prior in liquidation to the Series A
Preferred and Series B Preferred, if any, the holders of Series A Preferred and
the Series B Preferred shall be entitled to receive $100.00 per share (as
adjusted for any stock dividends, combinations or splits with respect to such
shares) plus, with respect to the Series A Preferred, an amount per share equal
to any unpaid, accrued and accumulated dividends (whether or not earned or
declared) without interest. The Series A Preferred and the Series B Preferred
shall rank on a parity as to the receipt of the respective preferential amounts
for each such series upon the occurrence of such event. If upon liquidation,
dissolution, or winding up of the Company, the assets of the Company available
for distribution to its shareholders shall be insufficient to pay the holders
of the Series A Preferred and the Series B Preferred the full amounts to which
they respectively shall be entitled, the holders of the Series A Preferred and
the Series B Preferred shall share ratably in any distribution of assets
according to the respective amounts which would be payable in respect of the
shares held by them upon such distribution if all amounts payable on or with
respect to said shares were paid in full.
(b) Upon any such liquidation, dissolution or winding up, the
preferential amounts with respect to the Series A Preferred and the Series B
Preferred and any class or series ranking on a parity with the Series A
Preferred and the Series B Preferred shall be distributed pro rata in
accordance with the aggregate preferential amounts of the Series A Preferred,
Series B Preferred and such other classes or series of stock, if any, out of or
to the extent of the net assets of the Company legally available for such
distribution, before any distributions are made with respect to any Common
Stock or any Junior Stock. Neither a consolidation or merger of the Company
with another Company nor a sale or transfer of all or substantially all of the
Company's assets nor a statutory share exchange shall be considered a
liquidation, dissolution or winding up, voluntary or involuntary, of the
Company.
6. VOTING RIGHTS:
(a) The holders of the Series A Preferred and the Series B Preferred
shall not be entitled to any voting rights, except as set forth below, or as
required by applicable law. So long as any shares of the Series A Preferred or
Series B Preferred are outstanding, the Company will not, without the consent
of the holders of a majority of the outstanding shares of the Series A
Preferred and Series B Preferred, voting together as a single class, (a) amend,
alter or repeal or otherwise change any provision of its Articles of
Incorporation, or the resolutions of its Board of Directors authorizing and
creating the Series A Preferred and Series B Preferred so as to materially and
adversely affect the rights, preferences, powers or privileges of the Series A
Preferred or the Series
A-4
<PAGE> 11
B Preferred, or (b) create, authorize, issue or increase the authorized or
issued amount of any class or series of any equity securities of the Company,
or any warrants, options or other rights convertible or exchangeable into any
class or series of any equity securities of the Company, ranking prior to the
Series A Preferred as to dividend rights, redemption rights and rights on
liquidation, winding-up or dissolution of the Company.
(b) The creation or the issuance of Parity Stock or Junior Stock with
respect to the payment of dividends and the distribution of assets upon
liquidation, dissolution or winding-up, shall not be considered to be an
adverse change requiring a vote of the holders of the Series A Preferred and
the Series B Preferred.
(c) The number of directors which shall constitute the full Board of
Directors of the Company shall be fixed from time to time by the Board of
Directors. At the time of their election, one of such directors, shall be
designated as the Series A Preferred Stock Director. The holders of the Series
A Preferred, voting as a separate class, shall be entitled to elect the Series
A Preferred Stock Director. The initial Series A Preferred Stock Director
shall be D. Kennedy Fesenmyer. Unless otherwise provided herein, the holders
of the Series A Preferred shall not be entitled to vote in the election of the
other directors, or any other matters.
So long as any shares of the Series A Preferred remain outstanding, in the
event of a failure of the Company to pay three consecutive semi-annual dividend
payments pursuant to Section 3 hereof ( "Event of Default"), then the holders
of the Series A Preferred, voting as a separate class, shall be entitled to
elect one additional director, who shall be an additional director to the then
existing Board of Directors. When the Event of Default is cured, the holders
of the Series A Preferred shall be divested of such special voting power for
one additional director, but always subject to the same provisions for the
vesting of such special voting power in such holders in case of any future
Event of Default. Upon termination of such special voting power as provided
above, the one additional director shall automatically cease to be a director
and the term of office of such additional director shall terminate. Upon the
written request of the holders of not less than 25% of the Series A Preferred
outstanding at the time of such request, addressed to the Secretary at the
principal business office of the Company, the Secretary shall call a meeting of
the holders of the Series A Preferred for the election of such additional
director, at which meeting the holders of the Series A Preferred shall vote as
a separate class. Such meeting shall be held on a date not less than ten nor
more than sixty days after the date of such request, upon notice similar to
that provided in the bylaws of the Company for a special meeting of
shareholders. The holders of a majority of the Series A Preferred present at
such meeting in person or by proxy shall be entitled to elect the additional
director provided for herein.
7. ADDITIONAL RESTRICTIONS:
(a) So long as any shares of Series A Preferred remain outstanding, the
Company shall not, without the vote or written consent by the holders of a
majority of the then outstanding shares of the Series A Preferred, voting as a
single class, and will not permit any of its subsidiaries
A-5
<PAGE> 12
to affirmatively create or grant any pledge, security interest, mortgage, deed
of trust or other similar encumbrance on or with respect to any real estate of
the company which was the real estate of the Lobdell Emery Corporation as of
November 14, 1996.
(b) No holder of Preferred Stock shall transfer, sell or assign any such
Preferred Stock prior to February 1, 1999, except transfers or assignments to
an inter vivos trust or by bequest. After February 1, 1999, each holder of
Preferred Stock who proposes to sell, transfer or assign (other than a transfer
to an inter vivos trust or transfer by gift or bequest) any Preferred Stock
shall first give written notice to the Company of the proposed transfer,
stating the name of the proposed purchaser, the number of shares to be
transferred, the price per share, and all of the other material terms of the
proposed transfer. For thirty days after such notice, the Company shall have a
first option to purchase all (but not less than all) of the Preferred Stock to
be transferred, at the price of the proposed transfer and on the other material
terms of the proposed transfer. If the Company fails to purchase all such
shares, they may be transferred to the purchaser designated in such notice, at
the price and on the terms described in such notice, within fifteen days after
the expiration of the thirty-day option period. After the expiration of such
fifteen-day period, no Preferred Stock may be transferred to any person without
again complying with this Section 7(b). The closing of any sale of Preferred
Stock to the Company pursuant to this Section 7(b) shall take place at the
principal business office of the Company. Upon tender of the purchase price,
the holder of such Preferred Stock shall endorse and deliver to the Company all
certificates representing the purchased shares, together with all other
documents that may be necessary or desirable to accomplish a complete transfer
of such shares. If such holder fails to deliver any certificate, notice, or
other document required by this Section 7(b), the Company may set aside the
purchase price, to be held for such holder without interest and without any
fiduciary obligation, and such holder shall have no further rights with respect
to the shares to be purchased, including but not limited to the right to
receive any distribution with respect to such shares.
8. STOCK SPLITS, COMBINATIONS, ETC.:
In the event of any split, reverse split or combination of the Series A or
Series B Preferred, or any distribution with respect to the Series A or Series
B Preferred, of additional shares of Series A or Series B Preferred, the
dividend rate provided in Section 3, the amount payable upon the liquidation,
dissolution or winding up of the Company pursuant to Section 5 and the
Redemption Price payable pursuant to Section 4 shall be equitably adjusted by
the Board of Directors to reflect the number of shares of Series A or Series B
Preferred, as applicable, outstanding immediately after such event as a
percentage of the number of shares of Series A or Series B Preferred
outstanding immediately after the last such prior adjustment, or of the number
of shares of Series A Preferred and Series B Preferred originally issued, if
there has been no such prior adjustment.
9. FINANCIAL STATEMENTS:
(a) As soon as practicable, and in any event within 120 days after the
close of each fiscal year of the Company, the Company shall mail or otherwise
furnish to the holders of the Series
A-6
<PAGE> 13
A and Series B Preferred consolidated statements of income, retained earnings
and changes in financial position of the Company and its consolidated
subsidiaries for such fiscal year and a consolidated balance sheet of the
Company and its consolidated subsidiaries as of the close of such fiscal year,
and notes to each, all in reasonable detail, setting forth in comparative form
the corresponding figures for the preceding fiscal year, prepared in accordance
with generally accepted accounting principles and certified by independent
certified public accountants of recognized standing selected by the Company.
(b) As soon as practicable, and in any event within 45 days after the
close of each of the first three quarters of each fiscal year of the Company,
the Company shall mail or otherwise furnish to the holders of the Series A and
Series B Preferred unaudited consolidated statements of income, retained
earnings and changes in financial position of the Company and its consolidated
subsidiaries for such fiscal quarter and for the period from the beginning of
such fiscal year to the end of such fiscal quarter, and an unaudited
consolidated balance sheet of the Company and its consolidated subsidiaries as
of the close of such fiscal quarter, and notes to each, all in reasonable
detail, setting forth in comparative form the corresponding figures for the
same period or as of the same date during the preceding fiscal quarter, and
certified by the chief financial officer of the Company as presenting fairly
the financial position of the Company and its consolidated subsidiaries as of
the end of such fiscal quarter and the results of their operations and the
changes in their financial position for such fiscal quarter, in conformity with
generally accepted accounting principles but subject to year-end audit
adjustments.
A-7
<PAGE> 14
RETURN DOCUMENT TO:
Gerald T. Lievois
Dykema Gossett PLLC
1577 North Woodward Avenue
Suite 300
Bloomfield Hills, Michigan 48304
NAME OF ORGANIZATION REMITTING FEES:
Dykema Gossett PLLC
PREPARER'S NAME AND BUSINESS TELEPHONE NUMBER:
Gerald T. Lievois
(810) 540-0866
<PAGE> 1
EXHIBIT 3.3
PROVINCE OF ONTARIO
MINISTRY OF CONSUMER AND COMMERCIAL RELATIONS
ARTICLES OF INCORPORATION
1. The name of the corporation is:
BMG North America Limited
2. The address of the registered office is:
70 University Avenue
Suite 1450
Toronto, Ontario M5J 2M4
3. Number (or minimum and maximum number) of directors is:
A minimum of 1 and a maximum of 20.
4. The first director(s) is/are:
<TABLE>
<CAPTION>
Residence address, giving street & No. or R.R. Resident Canadian
First name, initials and surname No. or municipality and postal code State Yes or No
- -------------------------------- ---------------------------------------------- -----------------
<S> <C> <C>
Leo Joseph Dion 533 Dahlia Crescent Yes
Pickering, Ontario L1W 3G4
</TABLE>
5. Restrictions, if any, on business the corporation may carry on or on
powers the corporation may exercise:
Nil.
6. The classes and any maximum number of shares that the corporation is
authorized to issue:
An unlimited number of Class 1 Special shares
An unlimited number of common shares
7. Rights, privileges, restrictions and conditions (if any) attaching to
each class of shares and directors authority with respect to any class of
shares which may be issued in series:
(A) (i) Each Class 1 Special share shall entitle the holder thereof to
receive for each fiscal year of the corporation, when, as and if
declared by the board of directors of the corporation, out of the
monies of the corporation properly applicable to the payment of
dividends, a fixed preferential cumulative dividend:
<PAGE> 2
(a) in respect of the period commencing on the date of issue and
ending on March 31, 1993, of $0.06663 per share; and
(b) for any fiscal year of the Corporation commencing at any
time from and after April 1, 1993 of $0.08 per share provided that
at any such fiscal year is less than 365 days or if such share has
been issued and outstanding for less than 365 days during such
fiscal year the amount of the dividend shall be pro rated on a day
to day basis based on the number of days in such fiscal year or
the number of days during such fiscal year that such share was
issued and outstanding.
(ii) Any dividend may be paid in one or more instalments in the
discretion of the board of directors of the corporation.
(iii) Such fixed cumulative preferential dividend payable for
any fiscal year of the corporation and all unpaid cumulative dividends
accrued thereon with respect to prior fiscal years, whether or not
declared, shall be paid on all the Class 1 Special shares at the time
outstanding in such fiscal year before any dividend is declared and
paid on the common shares.
(B) In the event of the liquidation, dissolution or winding-up of the
corporation, whether voluntary or involuntary, the holder of each Class 1
Special share shall be entitled to receive, before any distribution of any
part of the assets of the corporation among the holders of common shares,
the sum of $1.00 per Class 1 Special share together with all unpaid
cumulative dividends accrued thereon, whether or not declared, and no more;
provided, however, if the aggregate amount available for distribution to
the holders of Class 1 Special shares is less than the amount otherwise
payable to them pursuant to the provisions hereof, then each Class 1
Special share shall entitle the holder thereof to participate in the amount
so available for distribution, pro rata.
(C) The corporation may, at any time on or before the date which is five
years and one day after the first issuance of Class 1 Special shares (the
"Purchase Date") upon giving notice as hereinafter provided, redeem the
whole or any part of the Class 1 Special shares upon payment of the sum of
$1.00 for each share to be redeemed together with all unpaid cumulative
dividends accrued thereon, whether or not declared. Not less than 14 days'
notice in writing of such redemption shall be given by mailing such notice
to the registered holders of the shares to be redeemed, specifying the date
(herein called the "Redemption Date" and place or places of redemption.
Upon the Redemption Date the corporation shall pay or cause to be paid to
the order of the registered holder of each Class 1 Special share to be
redeemed the redemption price therefor on presentation and surrender, at
the place or places specified for redemption in the notice, of the
certificates) representing such Class 1 Special shares. If a part only of
the Class 1 Special shares represented by any certificate shall be
redeemed, a new certificate for the balance shall be issued at the expense
of the corporation. From and after the Redemption Date, the holder of each
Class 1 Special share to be redeemed, as
2
<PAGE> 3
aforesaid, shall cease to be entitled to dividends and shall not be
entitled to exercise any of the rights as shareholder in respect thereof
unless payment of the redemption price shall not be made upon presentation
of certificate(s) in accordance with the foregoing provisions, in which
case the rights of the holder shall remain unaffected. The dividends and
shall not be entitled to exercise any of the rights as shareholder in
respect thereof unless payment of the redemption price shall not be made
upon presentation of certificates in accordance with the foregoing
provisions, in which case the rights of the holder shall remain unaffected.
The corporation shall have the right at any time after the Redemption Date
as aforesaid to deposit the redemption price of the Class 1 Special shares
to be redeemed or of such of the said shares represented by certificates as
have not as of the date of such deposit been surrendered by the holder
thereof in connection with such redemption to a special account at any
chartered bank or any trust company to be paid without interest to or to
the order of the holder of such Class 1 Special shares upon presentation
and surrender to such bank or trust company of the certificates
representing the same and upon such deposit(s) being made the Class 1
Special shares in respect whereof such deposit(s) shall have been made
shall be deemed to have been redeemed and the right of the holder(s)
thereof after such deposit or such Redemption Date, as the case may be,
shall be limited to receiving without interest the redemption price so
deposited against presentation and surrender of the said certificates held
by him. Any interest allowed on any such deposit shall belong to the
corporation, provided that with any such deposit the corporation shall
forthwith mail to the holder of each such Class 1 Special share a notice in
writing advising of such deposit and specifying the name of the chartered
bank or trust company, as the case may be, wherein such special account is
for the time being maintained.
Where a part only of the Class 1 Special shares is to be redeemed, the
shares to be redeemed shall be selected either:
(i) as nearly as may be in proportion to the number of Class 1
Special shares registered in the name of each shareholder; or
(ii) in such other manner as the board of directors determines
with the consent in writing of all of the holders of the Class 1
Special shares at the time outstanding.
(D) Any registered holder of Class 1 Special shares, may, at any time
after the date which is five years and one day after the first
issuance of Class 1 Special shares, at his option, upon giving notice as
hereinafter provided, require the corporation at any time or times to
redeem all or any part of the Class 1 Special shares held by him, and the
corporation shall pay to such holder for each such share which the holder
requires to be redeemed, the sum of $1.00 together with all unpaid
cumulative dividends accrued thereon, whether or not declared. In the
event that any registered holder of Class 1 Special shares desires to
require the redemption, as aforesaid, of all or any part of the Class 1
Special shares held by him, such registered holder shall mail by prepaid
mail addressed to the corporation at its registered of his intention to
require redemption, which notice shall also specify therein the number of
3
<PAGE> 4
Class 1 special shares to be so redeemed. On the date 14 days next
following the receipt of such notice by the corporation (herein called the
"Redemption Date"), the corporation shall pay or cause to be paid to the
order of the registered holder of such Class 1 special shares the
redemption price on presentation and surrender at the registered office
of the corporation of the certificates representing the Class 1 Special
shares specified in the notice. If a part only of the Class 1 Special
shares represented by any certificate shall be redeemed, a new certificate
for the balance shall be issued at the expense of the corporation. From
and after the Redemption Date, the holder of the Class 1 Special shares to
be redeemed, as aforesaid, shall cease to be entitled to dividends and
shall not be entitled to exercise any of the rights as shareholder in
respect thereof unless payment of the redemption price shall not be made
upon presentation of certificates in accordance with the foregoing
provisions, in which case the rights of the holder shall remain unaffected.
(E) Except as herein expressly provided, the Class 1 Special shares
shall not confer any right upon the holder thereof to participate in
profits or assets of the corporation.
(F) The corporation may, at any time and from time to time, purchase for
cancellation the whole or any part of the Class 1 special shares at the
lowest price at which, in the opinion of the directors of the corporation,
such shares are obtainable and in the case of the Class 1 Special shares,
together with all unpaid cumulative dividends accrued thereon whether or
not declared. Except where the corporation is purchasing or otherwise
acquiring shares issued by it to settle or compromise a debt or claim
asserted by or against the corporation, to eliminate fractional shares or
to fulfil the terms of a nonassignable agreement under which the
corporation has an option or is obliged to purchase shares owned by a
current or former director, officer or employee of the corporation, the
shares shall be purchased either:
(i) with the consent of all the holders of Class 1 Special
shares; or
(ii) pursuant to tenders received by the corporation upon request for
tenders addressed to all the holders of the Class 1 Special shares at
the time outstanding, and the corporation shall accept only the lowest
tenders.
Where, in response to the invitation for tenders, two or more
shareholders submit tenders at the same price and the tenders are accepted
by the corporation as to part only of the shares the corporation shall
accept part of the shares offered.
(G) If a holder of Class 1 Special shares sends the notice set out in
paragraph (D) hereof exercising the right of retraction set out therein,
and the Corporation is unable to pay the amounts required to redeem the
Class 1 Special shares registered in the name of such holder the Class 1
Special shares shall be automatically entitled, as a class, to that number
of votes in the capital of the Corporation equal to that number which when
aggregated with the number of votes attaching to common shares held by such
holder (and persons not dealing at
4
<PAGE> 5
arm's length with such holder), results in the holder of the Class 1
Special shares holding 50% plus one of all votes then exercisable.
(H) Holders of shares of a class (whether Class 1 Special shares or
common shares) are not entitled to vote separately as a class or dissent
upon a proposal to amend the articles of the corporation to:
(i) increase or decrease any maximum number of authorized shares
of such class or increase any maximum number of authorized shares of
any class or series having rights or privileges equal or superior to
the shares of such Class;
(ii) effect an exchange, reclassification or cancellation of the
shares of such class; or
(iii) create a new class or series of shares equal or superior to
shares of such class.
(I) Except as otherwise provided by law, the holders of the Class 1
Special shares shall not be entitled to vote at any meetings of the
shareholders of the corporation but shall be entitled to notice of meetings
of shareholders called for the purpose of authorizing the dissolution of
the corporation or the sale, lease or exchange of all or substantially all
the property of the corporation other than in the ordinary course of
business of the corporation.
(J) Where notice is required by the provisions hereof to be sent the
notice may be waived or the time for the notice may be waived or abridged
at any time with the consent in writing of the person entitled thereto.
8. The issue, transfer or ownership of shares (is/is not restricted and the
restrictions (if any) are as follows:
No share of the Corporation shall be transferred without the consent
of the board of directors by resolution or in writing.
9. Other provisions, if any, are:
10. The names and addresses of the Full residence address or address of
incorporators are registered office or of principal place
First Name, initials and last name of business giving street & No. or
or corporate name R.R. No., municipality and postal code
Leo Joseph Dion 533 Dahlia Crescent
Pickering, Ontario L1W 3G4
5
<PAGE> 6
These articles are signed in duplicate.
Signatures of incorporators
/s/ Leo Joseph Dion
-------------------------------
Leo Joseph Dion
<PAGE> 1
EXHIBIT 3.4
PROVINCE OF ONTARIO
MINISTRY OF CONSUMER AND COMMERCIAL RELATIONS
ARTICLES OF INCORPORATION
1. The name of the corporation is:
BMG Holdings Inc.
2. The address of the registered office is:
66 Wellington Street West
Suite 3600
Toronto, Ontario M5K 1N6
3. Number (or minimum and maximum number) of directors is:
A minimum of 1 and a maximum of 11.
4. The first director(s) is/are:
<TABLE>
<CAPTION>
Residence address, giving street & No. or R.R. Resident Canadian
First name, initials and surname No. or municipality and postal code State Yes or No
- -------------------------------- ---------------------------------------------- -----------------
<S> <C> <C>
Anthony F. Baldanza 37 St. Leonards Crescent Yes
Toronto, Ontario
M4N 3A5
</TABLE>
5. Restrictions, if any, on business the corporation may carry on or on
powers the corporation may exercise:
There are no restrictions on the business the Corporation may carry on or
on the powers the Corporation may exercise.
6. The classes and any maximum number of shares that the corporation is
authorized to issue:
The Corporation is authorized to issue an unlimited number of shares of 1
class designated as common shares.
7. Rights, privileges, restrictions and conditions (if any) attaching to
each class of shares and directors authority with respect to any class of
shares which may be issued in series:
Not applicable.
<PAGE> 2
8. The issue, transfer or ownership of shares (is/is not restricted and the
restrictions (if any) are as follows:
The right to transfer shares of the Corporation shall be restricted in
that no shares shall be transferred without either a) the consent of the
directors of the Corporation expressed by a resolution passed by the
directors or by an instrument or instruments in writing signed by a
majority of the directors, which consent may be given either prior or
subsequent to the time of transfer of such shares; or b) the consent of the
holders of shares of the Corporation to which are attached at least a
majority of the votes attaching to all shares of the Corporation for the
time being outstanding carrying a voting right either under all
circumstances or under some circumstances that have occurred and are
continuing, expressed by resolution passed by such shareholders or by an
instrument or instruments in writing by such shareholders, which consent
may be given either prior or subsequent to the time of transfer of such
shares.
9. Other provisions, if any, are:
1. that the number of shareholders of the Corporation, exclusive of
persons who are in the employment of the Corporation and exclusive of
persons, who, having been formerly in the employment of the
Corporation, were, while in that employment, and have continued after
the termination of that employment to be shareholders of the
Corporation, is limited to not more than 50, 2 or more persons who are
the joint registered owners of 1 or more shares being counted as 1
shareholder; and
2. that any invitation to the public to subscribe for any securities
of the Corporation is hereby prohibited.
10. The names and addresses of the Full residence address or address of
incorporators are registered office or of principal
First Name, initials and place of business giving street &
last name No. or R.R. No., municipality and
or corporate name postal code
------------------------------ ------------------------------------
Anthony F. Baldanza 37 St. Leonards Crescent
Toronto, Ontario
M4N 3A5
These articles are signed in duplicate.
Signatures of incorporators
/s/ Anthony F. Baldanza
-----------------------------
Anthony F. Baldanza
2
<PAGE> 1
EXHIBIT 3.5
MICHIGAN DEPARTMENT OF COMMERCE - CORPORATION AND SECURITIES BUREAU
ARTICLES OF INCORPORATION
For use by Domestic Profit Corporations
ARTICLE I
The name of the corporation is: WINCHESTER FABRICATION CORPORATION
ARTICLE II
The purpose or purposes for which the corporation is formed is to engage in any
activity within the purposes for which corporations may be formed under the
Business Corporation Act of Michigan.
ARTICLE III
The total authorized shares:
1. Common Shares: 60,000
2. A statement of all or any of the relative rights, preferences and
limitations of the shares of each class is as follows:
There shall be only one class of stock, i.e., voting common stock and
all shares of stock shall possess the same rights and privileges.
ARTICLE VI
1. The address of the registered office is:
1325 E. Superior
Alma, Michigan 48801
2. The mailing address of the registered office if different from the
registered office address:
P.O. Box 129
Alma, Michigan 48801
3. The name of the resident agent at the registered office is: Charles
L. Dardas
<PAGE> 2
ARTICLE V
The name(s) and address(es) of the incorporator(s) is (are) as follows:
James V. Finkbeiner
812 Second National Bank Building
Saginaw, MI 48607
ARTICLE VI
When a compromise or arrangement or a plan of reorganization of this
corporation is proposed between this corporation and its creditors or any class
of them or between this corporation and its shareholder or any class of them, a
court of equity jurisdiction within the state, on application of this
corporation or of a creditor or shareholder thereof, or on application of a
receiver appointed for the corporation, may order a meeting of the creditors or
class of creditors or of the shareholders or class of shareholders to be
affected by the proposed compromise or arrangement or reorganization, to be
summoned in such manner as the court directs. If a majority in number
representing 3/4 in value of the creditors or class of creditors, or of the
shareholders or class of shareholders to be affected by the proposed compromise
or arrangement or a reorganization, agree to a compromise or arrangement or a
reorganization of this corporation as a consequence of the compromise or
arrangement, the compromise or arrangement and the reorganization, if
sanctioned by the court to which the application has been made, shall be
binding on all the creditors or class of creditors, or on all the shareholders
or class of shareholders and also on this corporation.
ARTICLE VII
Any action required or permitted by the Act to be taken at an annual or special
meeting of shareholders may be taken without a meeting, without prior notice
and without a vote, if consents in writing, setting forth the action so taken,
are signed by the holders of outstanding shares having not less than the
minimum number of votes that would be necessary to authorize or take the action
at a meeting at which all shares entitled to vote on the action were present
and voted. The written consents shall bear the date of signature of each
shareholder who signs the consent. No written consents shall be effective to
take the corporate action referred to unless, within 60 days after the record
date for determining shareholder entitled to express consent to or to dissent
from a proposal without a meeting, written consents signed by a sufficient
number of shareholders to take the action are delivered to the corporation.
Delivery shall be to the corporation's registered office, its principal place
of business, or an officer or agent of the corporation having custody of the
minutes of the proceedings of its shareholders. Delivery made to a
corporation's registered office shall be by hand or by certified or registered
mail, return receipt requested.
Prompt notice of the taking of the corporate action without a meeting by less
than unanimous written consent shall be given to shareholders who have not
consented in writing.
2
<PAGE> 3
ARTICLE VIII
No director of the Corporation shall be held personally liable to the
Corporation or its shareholders for monetary damages for any breach of
fiduciary duty as a director; provided, however, that this provision does not
limit or eliminate a director's liability for: breaching the duty of loyalty
to the Corporation or its shareholders, failing to act in good faith, engaging
in intentional misconduct, knowingly violating a law, violating Section 551(1)
of the Michigan Business Corporation Act or obtaining an improper personal
benefit. If the Michigan Business Corporation Act is amended to authorize
corporate action further eliminating or limiting the personal liability of
directors, then the liability of a director of the Corporation shall be
eliminated or limited to the fullest extent permitted by the Michigan Business
Corporation Act, as so amended.
Any repeal or modification of the foregoing paragraph shall not adversely
affect any right or protection of a director of the Corporation existing at the
time of such repeal or modification.
I (We), the incorporator(s) sign my (our) name(s) this 7th day of December,
1994.
By: /s/ James V. Finkbeiner
-------------------------------
James V. Finkbeiner
3
<PAGE> 1
EXHIBIT 3.6
CHARTER
OF
CREATIVE FABRICATION CORPORATION
1. The name of the corporation is:
Creative Fabrication Corporation
2. The number of shares the corporation is authorized to issue is:
60,000
3. (a) The complete address of the corporation's registered office in
Tennessee is:
c/o CT Corporation System
530 Gay Street
Knoxville, Tennessee 37902
County of Knox
(b) The name of the initial registered agent, to be located at the address
listed in 3(a) is:
CT Corporation System
4. The name and complete address of each incorporator is:
Claudia L. Saari
30600 Telegraph Road, Ste. 3275
Bingham Farms, MI 48025
5. The complete addresses of the corporation's principal office is:
1325 East Superior Street
Alma, MI 48801
6. The corporation is a corporation for profit.
7. Any action required or permitted by the Act to be taken at an annual
or special meeting of shareholders may be taken without a meeting, without
prior notice, and without a vote, if consents in writing, setting forth the
action so taken, are signed by the holders of outstanding shares having not
less than the minimum number of votes that would be necessary to authorize
or take the action at a meeting at which all shares entitled to vote on the
action were present and voted. The written consents shall bear the date of
signature of each shareholder who signs the consent. No written consents
shall be effective to take the corporate action referred to unless,
<PAGE> 2
within 60 days after the record date for determining shareholders to take
the action are delivered to the corporation. Delivery shall be to the
corporation's registered office, its principal place of business, or an
officer or agent of the corporation having custody of the minutes of the
proceedings of its shareholders. Delivery made to a corporation's
registered office shall be by hand or by certified or registered mail,
return receipt requested.
Prompt notice of the taking of the corporation action without a
meeting by less than unanimous written consent shall be given to
shareholders who would have been entitled to notice of the shareholder
meeting if the action had been taken at a meeting and who have not
consented in writing.
8. No director of the Corporation shall be held personally liable to the
Corporation or its shareholders for monetary damages for any breach of
fiduciary duty as a director; provided, however, that this provision does
not limit or eliminate a director's liability for: breaching the duty of
loyalty to the Corporation or its shareholders, failing to act in good
faith, engaging in intentional misconduct or knowingly violating a law.
Dated: 7/26/95 /s/ Claudia L. Saari
------------------------------
Claudia L. Saari
2
<PAGE> 1
EXHIBIT 3.7
STATE OF INDIANA
OFFICE OF THE SECRETARY OF STATE
ARTICLES OF INCORPORATION
The undersigned, desiring to form a corporation (hereinafter referred to as
"Corporation") pursuant to the provisions of the Indiana Business Corporation
Law, as amended, executes the following Articles of Incorporation:
ARTICLE I - NAME
Name of Corporation: Parallel Group International, Inc.
ARTICLE II - REGISTERED OFFICE AND AGENT
The name and street address of the Corporation's Registered Agent and
Registered Office for service of process are:
Name of Registered Agent:
C T CORPORATION SYSTEM
Address of Registered Office (street or building):
One North Capitol Avenue
Indianapolis, Indiana 46204
Principal Office: The post office address of the principal office of the
Corporation is:
1325 E. Superior Street
Alma, MI 48801
ARTICLE III - AUTHORIZED SHARES
Number of shares: 60,000
ARTICLE IV - INCORPORATORS
(the name(s) and address(es) of the incorporators of the corporation)
Claudia L. Saari Doris J. Donati
30600 Telegraph Road 30600 Telegraph Road
Bingham Farms, MI 48025 Bingham Farms, MI 48025
ARTICLE V
<PAGE> 2
Any action required or permitted by the Act to be taken at an annual or
special meeting of shareholders may be taken without a meeting, without prior
notice and without a vote, if consents in writing, setting forth the action so
taken, are signed by the holders of outstanding shares having not less than the
minimum number of votes that would be necessary to authorize or take the action
at a meeting at which all shares entitled to vote on the action were present
and voted. The written consents shall bear the date of signature of each
shareholder who signs the consent. no written consents shall be effective to
take the corporate action referred to unless, within 60 days after the record
date for determining shareholders entitled to express consent to or to dissent
from a proposal without a meeting, written consents dated not more than 10 days
before the record date and signed by a sufficient number of shareholders to
take the action are delivered to the corporation. Delivery shall be to the
corporation's registered office, its principal place of business, or an officer
or agent of the corporation having custody of the minutes of the proceedings of
its shareholders. Delivery made to a corporation's registered office shall be
by hand or by certified or registered mail, return receipt requested.
Prompt notice of the taking of the corporate action without a meeting by
less than unanimous written consent shall be given to shareholders who would
have been entitled to notice of the shareholder meeting if the action had been
taken at a meeting and who have not consented in writing.
ARTICLE VI
No director of the Corporation shall be held personally liable to the
Corporation or its shareholders for monetary damages for any breach of
fiduciary duty as a director; provided, however, that this provision does not
limit or eliminate a director's liability for: beaching the duty of loyalty to
the Corporation or its shareholders, failing to act in good faith, engaging in
intentional misconduct, knowingly violating a law, violating the Indiana
Business Corporation Law ("IBCL") or obtaining an improper personal benefit.
If the IBCL is amended to authorize corporate action further eliminating or
limiting the personal liability of directors, then the liability of a director
of the corporation shall be eliminated or limited to the fullest extent
permitted by the IBCL, as so amended.
Any repeal or modification of the foregoing paragraph shall not adversely
affect any right or protection of a director of the Corporation existing at the
time of such repeal or modification.
In Witness Whereof, the undersigned being all the incorporators of said
corporation execute these Articles of Incorporation and verify, subject to
penalties of perjury, that the statements contained herein are true, this ___
day of December, 1995.
Signature: /s/ Claudia L. Saari
---------------------
Claudia L. Saari
Signature: /s/ Doris J. Donati
-------------------
Doris J. Donati
2
<PAGE> 1
EXHIBIT 3.8
STATE OF INDIANA
ARTICLES OF ORGANIZATION
OF A DOMESTIC LIMITED LIABILITY COMPANY
ARTICLE I
The name of the limited liability company is:
LASERWELD INTERNATIONAL, L.L.C.
ARTICLE II
The duration of the limited liability company is thirty (30) years from
the date of filing of these Articles of Organization.
ARTICLE III
1. The address of the registered office is:
One North Capitol
Indianapolis, Indiana 46204
2. The mailing address of the registered office if different than above:
------------------
, Indiana
--------------------- ---------
3. The name of the resident agent at the registered office is:
C T Corporation
<PAGE> 2
Signed this 20th day of October, 1995
By:
-------------------------------
(Signature)
-------------------------------
(Type or Print Name and Title)
Prepared by:
MICHAEL J. SAUER
BRAUN KENDRICK FINKBEINER P.L.C.
812 Second National Bank Building
Saginaw, MI 48607
(517) 753-3461
2
<PAGE> 1
EXHIBIT 3.9
MICHIGAN DEPARTMENT OF COMMERCE - CORPORATION AND SECURITIES BUREAU
ARTICLES OF INCORPORATION
For use by Domestic Profit Corporations
ARTICLE I
The name of the corporation is: CONCEPT MANAGEMENT CORPORATION
ARTICLE II
The purpose or purposes for which the corporation is formed is to engage in any
activity within the purposes for which corporations may be formed under the
Business Corporation Act of Michigan.
ARTICLE III
The total authorized shares:
1. Common Shares: 500,000
2. A statement of all or any of the relative rights, preferences and
limitations of the shares of each class is as follows:
There shall be only one class of stock, i.e., voting common stock and
all shares of stock shall possess the same rights and privileges.
ARTICLE VI
1. The address of the registered office is:
1325 E. Superior
Alma, Michigan 48801
2. The mailing address of the registered office if different from the
registered office address:
P.O. Box 129
Alma, Michigan 48801
3. The name of the resident agent at the registered office is: Charles
L. Dardas
<PAGE> 2
ARTICLE V
The name(s) and address(es) of the incorporator(s) is (are) as follows:
James V. Finkbeiner
812 Second National Bank Building
Saginaw, MI 48607
ARTICLE VI
When a compromise or arrangement or a plan of reorganization of this
corporation is proposed between this corporation and its creditors or any class
of them or between this corporation and its shareholder or any class of them, a
court of equity jurisdiction within the state, on application of this
corporation or of a creditor or shareholder thereof, or on application of a
receiver appointed for the corporation, may order a meeting of the creditors or
class of creditors or of the shareholders or class of shareholders to be
affected by the proposed compromise or arrangement or reorganization, to be
summoned in such manner as the court directs. If a majority in number
representing 3/4 in value of the creditors or class of creditors, or of the
shareholders or class of shareholders to be affected by the proposed compromise
or arrangement or a reorganization, agree to a compromise or arrangement or a
reorganization of this corporation as a consequence of the compromise or
arrangement, the compromise or arrangement and the reorganization, if
sanctioned by the court to which the application has been made, shall be
binding on all the creditors or class of creditors, or on all the shareholders
or class of shareholders and also on this corporation.
ARTICLE VII
Any action required or permitted by the Act to be taken at an annual or special
meeting of shareholders may be taken without a meeting, without prior notice
and without a vote, if consents in writing, setting forth the action so taken,
are signed by the holders of outstanding shares having not less than the
minimum number of votes that would be necessary to authorize or take the action
at a meeting at which all shares entitled to vote on the action were present
and voted. The written consents shall bear the date of signature of each
shareholder who signs the consent. No written consents shall be effective to
take the corporate action referred to unless, within 60 days after the record
date for determining shareholder entitled to express consent to or to dissent
from a proposal without a meeting, written consents signed by a sufficient
number of shareholders to take the action are delivered to the corporation.
Delivery shall be to the corporation's registered office, its principal place
of business, or an officer or agent of the corporation having custody of the
minutes of the proceedings of its shareholders. Delivery made to a
corporation's registered office shall be by hand or by certified or registered
mail, return receipt requested.
Prompt notice of the taking of the corporate action without a meeting by less
than unanimous written consent shall be given to shareholders who have not
consented in writing.
2
<PAGE> 3
ARTICLE VIII
No director of the Corporation shall be held personally liable to the
Corporation or its shareholders for monetary damages for any breach of
fiduciary duty as a director; provided, however, that this provision does not
limit or eliminate a director's liability for: breaching the duty of loyalty
to the Corporation or its shareholders, failing to act in good faith, engaging
in intentional misconduct, knowingly violating a law, violating Section 551(1)
of the Michigan Business Corporation Act or obtaining an improper personal
benefit. If the Michigan Business Corporation Act is amended to authorize
corporate action further eliminating or limiting the personal liability of
directors, then the liability of a director of the Corporation shall be
eliminated or limited to the fullest extent permitted by the Michigan Business
Corporation Act, as so amended.
Any repeal or modification of the foregoing paragraph shall not adversely
affect any right or protection of a director of the Corporation existing at the
time of such repeal or modification.
I (We), the incorporator(s) sign my (our) name(s) this 7th day of December,
1994.
By: /s/ James V. Finkbeiner
------------------------------
James V. Finkbeiner
3
<PAGE> 1
EXHIBIT 3.10
MICHIGAN DEPARTMENT OF COMMERCE - CORPORATION AND SECURITIES BUREAU
ARTICLES OF INCORPORATION
For use by Domestic Profit Corporations
ARTICLE I
The name of the corporation is: LEWIS EMERY CAPITAL CORPORATION
ARTICLE II
The purpose or purposes for which the corporation is formed is to engage in any
activity within the purposes for which corporations may be formed under the
Business Corporation Act of Michigan.
ARTICLE III
The total authorized shares:
1. Common Shares: 60,000
2. A statement of all or any of the relative rights, preferences and
limitations of the shares of each class is as follows:
There shall be only one class of stock, i.e., voting common stock and
all shares of stock shall possess the same rights and privileges.
ARTICLE VI
1. The address of the registered office is:
1325 E. Superior
Alma, Michigan 48801
2. The mailing address of the registered office if different from the
registered office address:
P.O. Box 129
Alma, Michigan 48801
3. The name of the resident agent at the registered office is: Charles
L. Dardas
<PAGE> 2
ARTICLE V
The name(s) and address(es) of the incorporator(s) is (are) as follows:
The Lobdell-Emery Manufacturing Company
1325 E. Superior
Alma, MI 48801
ARTICLE VI
When a compromise or arrangement or a plan of reorganization of this
corporation is proposed between this corporation and its creditors or any class
of them or between this corporation and its shareholder or any class of them, a
court of equity jurisdiction within the state, on application of this
corporation or of a creditor or shareholder thereof, or on application of a
receiver appointed for the corporation, may order a meeting of the creditors or
class of creditors or of the shareholders or class of shareholders to be
affected by the proposed compromise or arrangement or reorganization, to be
summoned in such manner as the court directs. If a majority in number
representing 3/4 in value of the creditors or class of creditors, or of the
shareholders or class of shareholders to be affected by the proposed compromise
or arrangement or a reorganization, agree to a compromise or arrangement or a
reorganization of this corporation as a consequence of the compromise or
arrangement, the compromise or arrangement and the reorganization, if
sanctioned by the court to which the application has been made, shall be
binding on all the creditors or class of creditors, or on all the shareholders
or class of shareholders and also on this corporation.
ARTICLE VII
Any action required or permitted by the Act to be taken at an annual or special
meeting of shareholders may be taken without a meeting, without prior notice
and without a vote, if consents in writing, setting forth the action so taken,
are signed by the holders of outstanding shares having not less than the
minimum number of votes that would be necessary to authorize or take the action
at a meeting at which all shares entitled to vote on the action were present
and voted. The written consents shall bear the date of signature of each
shareholder who signs the consent. No written consents shall be effective to
take the corporate action referred to unless, within 60 days after the record
date for determining shareholder entitled to express consent to or to dissent
from a proposal without a meeting, written consents signed by a sufficient
number of shareholders to take the action are delivered to the corporation.
Delivery shall be to the corporation's registered office, its principal place
of business, or an officer or agent of the corporation having custody of the
minutes of the proceedings of its shareholders. Delivery made to a
corporation's registered office shall be by hand or by certified or registered
mail, return receipt requested.
2
<PAGE> 3
Prompt notice of the taking of the corporate action without a meeting by less
than unanimous written consent shall be given to shareholders who have not
consented in writing.
ARTICLE VIII
No director of the Corporation shall be held personally liable to the
Corporation or its shareholders for monetary damages for any breach of
fiduciary duty as a director; provided, however, that this provision does not
limit or eliminate a director's liability for: breaching the duty of loyalty
to the Corporation or its shareholders, failing to act in good faith, engaging
in intentional misconduct, knowingly violating a law, violating Section 551(1)
of the Michigan Business Corporation Act or obtaining an improper personal
benefit. If the Michigan Business Corporation Act is amended to authorize
corporate action further eliminating or limiting the personal liability of
directors, then the liability of a director of the Corporation shall be
eliminated or limited to the fullest extent permitted by the Michigan Business
Corporation Act, as so amended.
Any repeal or modification of the foregoing paragraph shall not adversely
affect any right or protection of a director of the Corporation existing at the
time of such repeal or modification.
I (We), the incorporator(s) sign my (our) name(s) this 13th day of August,
1992.
THE LOBDELL-EMERY MANUFACTURING COMPANY
By: /s/ Charles L. Dardas
----------------------------------
Charles L. Dardas
Executive Vice President
3
<PAGE> 1
EXHIBIT 3.11
BYLAWS
OF
OXFORD AUTOMOTIVE, INC.
ARTICLE I
OFFICES
1.01 Principal Office. The principal office of the corporation
shall be at such place within the State of Michigan as the Board of Directors
shall determine from time to time.
1.02 Other Offices. The corporation also may have offices at such
other places as the Board of Directors from time to time determines or the
business of the corporation requires.
ARTICLE II
SEAL
2.01 Seal. The corporation may have a seal in such form as the
Board of Directors may from time to time determine. The seal may be used by
causing it or a facsimile to be impressed, affixed or otherwise reproduced.
ARTICLE III
CAPITAL STOCK
3.01 Issuance of Shares. The shares of capital stock of the
corporation shall be issued in such amounts, at such times, for such
consideration and on such terms and conditions as the Board shall deem
advisable, subject to the Articles of Incorporation and any requirements of the
laws of the State of Michigan.
3.02 Certificates for Shares. The shares of the corporation shall
be represented by certificates signed by the Chairman of the Board, the
President or a Vice President and also may be signed by the Secretary,
Treasurer, Assistant Secretary, or Assistant Treasurer of the corporation, and
may be sealed with the seal of the corporation or a facsimile thereof. A
certificate representing shares shall state upon its face that the corporation
is formed under the laws of the State of Michigan, the name of the person to
whom it is issued, the number and class of shares, and the designation of the
series, if any, which the certificate represents, restrictive legend, and such
other provisions as may be required by the laws of the State of Michigan.
<PAGE> 2
3.03 Transfer of Shares. The shares of the capital stock of the
corporation are transferable only on the books of the corporation upon
surrender of the certificate therefor, properly endorsed for transfer, and the
presentation of such evidences of ownership and validity of the assignment as
the corporation may require.
3.04 Registered Shareholders. The corporation shall be entitled to
treat the person in whose name any share of stock is registered as the owner
thereof for purposes of dividends and other distributions in the course of
business, or in the course of recapitalization, merger, plan of share exchange,
reorganization, sale of assets, liquidation or otherwise and for the purpose of
votes, approvals and consents by shareholders, and for the purpose of notices
to shareholders, and for all other purposes whatever, and shall not be bound to
recognize any equitable or other claim to or interest in such shares on the
part of any other person, whether or not the corporation shall have notice
thereof, save as expressly required by the laws of the State of Michigan.
3.05 Lost or Destroyed Certificates. Upon the presentation to the
corporation of a proper affidavit attesting the loss, destruction or mutilation
of any certificate or certificates for shares of stock of the corporation, the
Board of Directors shall direct the issuance of a new certificate or
certificates to replace the certificates so alleged to be lost, destroyed or
mutilated. The Board of Directors may require as a condition precedent to the
issuance of new certificates a bond or agreement of indemnity, in such form and
amount and with such sureties, or without sureties, as the Board of Directors
may direct or approve.
ARTICLE IV
SHAREHOLDERS AND MEETINGS OF SHAREHOLDERS
4.01 Place of Meetings. All meetings of shareholders shall be held
at the principal office of the corporation or at such other place as shall be
determined by the Board of Directors and stated in the notice of meeting.
4.02 Annual Meeting. The annual meeting of the shareholders of the
corporation shall be held at such time as the Board of Directors shall from
time to time determine. Directors shall be elected at each annual meeting and
such other business shall be transacted as may come before the meeting.
4.03 Special Meetings. Special meetings of shareholders may be
called by the Board of Directors, the Chairman of the Board (if such office is
filled) or the President and shall be called by the President or Secretary at
the written request of shareholders holding a majority of the shares of stock
of the corporation outstanding and entitled to vote. The request shall state
the purpose or purposes for which the meeting is to be called.
4.04 Notice of Meetings. Except as otherwise provided by statute,
written notice of the time, place and purposes of a meeting of shareholders
shall be given not less than 10 nor more than
2
<PAGE> 3
60 days before the date of the meeting to each shareholder of record entitled
to vote at the meeting, either personally or by mailing such notice to the
shareholder's last address as it appears on the books of the corporation. No
notice need be given of an adjourned meeting of the shareholders provided the
time and place to which such meeting is adjourned are announced at the meeting
at which the adjournment is taken and at the adjourned meeting only such
business is transacted as might have been transacted at the original meeting.
However, if after the adjournment a new record date is fixed for the adjourned
meeting, a notice of the adjourned meeting shall be given to each shareholder
of record on the new record date entitled to notice as provided in this Bylaw.
4.05 Record Dates. The Board of Directors may fix in advance a
date as the record date for the purpose of determining shareholders entitled to
notice of and to vote at a meeting of shareholders or an adjournment thereof,
or to express consent or to dissent from a proposal without a meeting, or for
the purpose of determining shareholders entitled to receive payment of a
dividend or allotment of a right, or for the purpose of any other action. The
date fixed shall not be more than 60 nor less than 10 days before the date of
the meeting, nor more than 60 days before any other action. In such case only
such shareholders as shall be shareholders of record on the date so fixed shall
be entitled to notice of and to vote at such meeting or adjournment thereof, or
to express consent or to dissent from such proposal, or to receive payment of
such dividend or to receive such allotment of rights, or to participate in any
other action, as the case may be, notwithstanding any transfer of any stock on
the books of the corporation, or otherwise, after any such record date.
Nothing in this Bylaw shall affect the rights of a shareholder and the
shareholder's transferee or transferor as between themselves.
4.06 List of Shareholders. The Secretary of the corporation or the
agent of the corporation having charge of the stock transfer records for shares
of the corporation shall make and certify a complete list of the shareholders
entitled to vote at a shareholders' meeting or any adjournment thereof. The
list shall be arranged alphabetically within each class and series, with the
address of, and the number of shares held by, each shareholder; be produced at
the time and place of the meeting; be subject to inspection by any shareholder
during the whole time of the meeting; and be prima facie evidence as to who are
the shareholders entitled to examine the list or vote at the meeting.
4.07 Quorum. Unless a greater or lesser quorum is required in the
Articles of Incorporation or by the laws of the State of Michigan, the
shareholders present at a meeting in person or by proxy who, as of the record
date for such meeting, were holders of a majority of the outstanding shares of
the corporation entitled to vote at the meeting shall constitute a quorum at
the meeting. Whether or not a quorum is present, a meeting of shareholders may
be adjourned by a vote of the shares present in person or by proxy. When the
holders of a class or series of shares are entitled to vote separately on an
item of business, this Bylaw applies in determining the presence of a quorum of
such class or series for transaction of such item of business.
4.08 Proxies. A shareholder entitled to vote at a meeting of
shareholders or to express consent or dissent without a meeting may authorize
other persons to act for the shareholder by proxy.
3
<PAGE> 4
A proxy shall be signed by the shareholder or the shareholder's authorized
agent or representative and shall not be valid after the expiration of three
years from its date unless otherwise provided in the proxy. A proxy is
revocable at the pleasure of the shareholder executing it except as otherwise
provided by the laws of the State of Michigan.
4.09 Voting. Each outstanding share is entitled to one vote on
each matter submitted to a vote, unless otherwise provided in the Articles of
Incorporation. Votes may be cast orally or in writing. When an action, other
than the election of directors, is to be taken by a vote of the shareholders,
it shall be authorized by a majority of the votes cast by the holders of shares
entitled to vote thereon, unless a greater vote is required by the Articles of
Incorporation or by the laws of the State of Michigan. Except as otherwise
provided by the Articles of Incorporation, directors shall be elected by a
plurality of the votes cast at any election.
ARTICLE V
DIRECTORS
5.01 Number. The business and affairs of the corporation shall be
managed by or under the direction of the Board of Directors. The number of
directors shall be not less than one nor more than ten directors as shall be
fixed from time to time by the Board of Directors. The directors need not be
residents of Michigan or shareholders of the corporation.
5.02 Election, Resignation and Removal. Directors shall be elected
at each annual meeting of the shareholders, each to hold office until the next
annual meeting of shareholders and until the director's successor is elected
and qualified, or until the director's resignation or removal. A director may
resign by written notice to the corporation. The resignation is effective upon
its receipt by the corporation or a subsequent time as set forth in the notice
of resignation. A director or the entire Board of Directors may be removed,
with or without cause, by vote of the holders of a majority of the shares
entitled to vote at an election of directors.
5.03 Vacancies. Vacancies in the Board of Directors occurring by
reason of death, resignation, removal, increase in the number of directors or
otherwise shall be filled by the affirmative vote of a majority of the
remaining directors though less than a quorum of the Board of Directors, unless
filled by proper action of the shareholders of the corporation. Each person so
elected shall be a director for a term of office continuing only until the next
election of directors by the shareholders. A vacancy that will occur at a
specific date, by reason of a resignation effective at a later date or
otherwise, may be filled before the vacancy occurs, but the newly elected
director may not take office until the vacancy occurs.
5.04 Annual Meeting. The Board of Directors shall meet each year
immediately after the annual meeting of the shareholders, or within three days
of such time excluding Sundays and legal holidays if such later time is deemed
advisable, at the place where such meeting of the shareholders has been held or
such other place as the Board may determine, for the purpose of election of
officers
4
<PAGE> 5
and consideration of such business that may properly be brought before the
meeting; provided, that if less than a majority of the directors appear for an
annual meeting of the Board of Directors the holding of such annual meeting
shall not be required and the matters which might have been taken up therein
may be taken up at any later special or annual meeting, or by consent
resolution.
5.05 Regular and Special Meetings. Regular meetings of the Board
of Directors may be held at such times and places as the majority of the
directors may from time to time determine at a prior meeting or as shall be
directed or approved by the vote or written consent of all the directors.
Special meetings of the Board may be called by the Chairman of the Board (if
such office is filled) or the President and shall be called by the President or
Secretary upon the written request of any two directors.
5.06 Notices. No notice shall be required for annual or regular
meetings of the Board or for adjourned meetings, whether regular or special.
Three days' written notice shall be given for special meetings of the Board,
and such notice shall state the time, place and purpose or purposes of the
meeting.
5.07 Quorum and Voting. A majority of the Board of Directors then
in office, or of the members of a committee thereof, constitutes a quorum for
the transaction of business. The vote of a majority of the directors present
at any meeting at which there is a quorum shall be the acts of the Board or of
the committee, except as a larger vote may be required by the laws of the State
of Michigan. A member of the Board or of a committee designated by the Board
may participate in a meeting by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can communicate with each other. Participation in a meeting in this
manner constitutes presence in person at the meeting.
5.08 Executive and Other Committees. The Board of Directors may,
by resolution passed by a majority of the whole Board, appoint one or more
members of the Board as an executive committee to exercise all powers and
authorities of the Board in management of the business and affairs of the
corporation, except that the committee shall not have power or authority to (a)
amend the Articles of Incorporation; (b) adopt an agreement of merger or
consolidation; (c) recommend to shareholders the sale, lease or exchange of all
or substantially all of the corporation's property and assets; (d) recommend to
shareholders a dissolution of the corporation or revocation of a dissolution;
(e) amend these Bylaws; (f) fill vacancies in the Board; or (g) unless
expressly authorized by the Board, declare a dividend or authorize the issuance
of stock.
The Board of Directors from time to time may, by like resolution,
appoint such other committees of one or more directors to have such authority
as shall be specified by the Board in the resolution making such appointments.
The Board of Directors may designate one or more directors as alternate members
of any committee who may replace an absent or disqualified member at any
meeting thereof.
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5.09 Dissents. A director who is present at a meeting of the Board
of Directors, or a committee thereof of which the director is a member, at
which action on a corporate matter is taken is presumed to have concurred in
that action unless the director's dissent is entered in the minutes of the
meeting or unless the director files a written dissent to the action with the
person acting as secretary of the meeting before the adjournment thereof or
shall forward such dissent by registered mail to the Secretary of the
corporation promptly after the adjournment of the meeting. Such right to
dissent does not apply to a director who voted in favor of such action. A
director who is absent from a meeting of the Board, or a committee thereof of
which the director is a member, at which any such action is taken is presumed
to have concurred in the action unless the director files a written dissent
with the Secretary of the corporation within a reasonable time after the
director has knowledge of the action.
5.10 Compensation. The Board of Directors, by affirmative vote of
a majority of directors in office and irrespective of any personal interest of
any of them, may establish reasonable compensation of directors for services to
the corporation as directors or officers.
ARTICLE VI
NOTICES, WAIVERS OF NOTICE AND MANNER OF ACTING
6.01 Notices. All notices of meetings required to be given to
shareholders, directors or any committee of directors may be given by mail,
telecopy, telegram, radiogram or cablegram to any shareholder, director or
committee member at the addressee's last address as it appears on the books of
the corporation. Such notice shall be deemed to be given at the time when the
same shall be mailed or otherwise dispatched.
6.02 Waiver of Notice. Notice of the time, place and purpose of
any meeting of shareholders, directors or committee of directors may be waived
by telecopy, telegram, radiogram, cablegram or other writing, either before or
after the meeting, or in such other manner as may be permitted by the laws of
the State of Michigan. Attendance of a person at any meeting of shareholders,
in person or by proxy, or at any meeting of directors or of a committee of
directors, constitutes a waiver of notice of the meeting except as follows:
(a) In the case of a shareholder, unless the shareholder at the
beginning of the meeting objects to holding the meeting or transacting business
at the meeting, or unless with respect to consideration of a particular matter
at the meeting that is not within the purpose or purposes described in the
meeting notice, the shareholder objects to considering the matter when it is
presented.
(b) In the case of a director, unless he or she at the beginning
of the meeting, or upon his or her arrival, objects to the meeting or the
transacting of business at the meeting and does not thereafter vote for or
assent to any action taken at the meeting.
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6.03 Action By Directors Without a Meeting. Any action required or
permitted at any meeting of directors or committee of directors may be taken
without a meeting, without prior notice and without a vote, if all of the
directors or committee members entitled to vote thereon consent thereto in
writing, before or after the action is taken.
6.04 Action By Shareholders Without a Meeting. Any action required
or permitted by the Michigan Business Corporation Act to be taken at any annual
or special meeting of shareholders may be taken without a meeting, without
prior notice and without a vote, if a consent in writing, setting forth the
action so taken, is signed by the holders of outstanding stock having not less
than the minimum number of votes that would be necessary to authorize or take
the action at a meeting at which all shares entitled to vote thereon were
present and voted.
Prompt notice of the taking of the corporate action without a meeting
by less than unanimous written consent shall be given to shareholders who have
not consented in writing.
ARTICLE VII
OFFICERS
7.01 Number. The Board of Directors shall elect or appoint a
President, a Secretary and a Treasurer, and may select a Chairman of the Board,
a Vice Chairman of the Board and one or more Vice Presidents, Assistant
Secretaries or Assistant Treasurers. The President, Chairman of the Board, if
any, and Vice Chairman of the Board, if any, shall be members of the Board of
Directors. Any two or more of the above offices, except those of President and
Vice President, and Chairman of the Board and Vice Chairman of the Board, may
be held by the same person. No officer shall execute, acknowledge or verify an
instrument in more than one capacity if the instrument is required by law, the
Articles of Incorporation or these Bylaws to be executed, acknowledged, or
verified by one or more officers.
7.02 Term of Office, Resignation and Removal. An officer shall
hold office for the term for which he is elected or appointed and until his
successor is elected or appointed and qualified, or until his resignation or
removal. An officer may resign by written notice to the corporation. The
resignation is effective upon its receipt by the corporation or at a subsequent
time specified in the notice of resignation. An officer may be removed by the
Board with or without cause. The removal of an officer shall be without
prejudice to his contract rights, if any. The election or appointment of an
officer does not of itself create contract rights.
7.03 Vacancies. The Board of Directors may fill any vacancies in
any office occurring for whatever reason.
7.04 Authority. All officers, employees and agents of the
corporation shall have such authority and perform such duties in the conduct
and management of the business and affairs of the corporation as may be
designated by the Board of Directors and these Bylaws.
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ARTICLE VIII
DUTIES OF OFFICERS
8.01 Chairman of the Board. The Chairman of the Board, if such office is
filled, shall preside at all meetings of the shareholders and of the Board of
Directors at which the Chairman is present.
8.02 Vice Chairman of the Board. The Vice Chairman of the Board, if such
office is filled, shall, in the absence or disability of the Chairman of the
Board, perform the duties and exercise the powers of the Chairman of the Board
and shall perform such other duties as the Board of Directors or the Chairman
of the Board may from time to time prescribe.
8.03 President. The President shall be the chief executive officer of
the corporation. The President shall see that all orders and resolutions of
the Board are carried into effect, and the President shall have the general
powers of supervision and management usually vested in the chief executive
officer of a corporation, including the authority to vote all securities of
other corporations and business organizations held by the corporation. In the
absence or disability of the Chairman of the Board and the Vice Chairman of the
Board, or if both of such offices have not been filled, the President also
shall perform the duties of the Chairman of the Board as set forth in these
Bylaws.
8.04 Vice Presidents. The Vice Presidents, in order of their seniority,
shall, in the absence or disability of the President, perform the duties and
exercise the powers of the President and shall perform such other duties as the
Board of Directors or the President may from time to time prescribe.
8.05 Secretary. The Secretary shall attend all meetings of the Board of
Directors and of shareholders and shall record all votes and minutes of all
proceedings in a book to be kept for that purpose, shall give or cause to be
given notice of all meetings of the shareholders and of the Board of Directors,
and shall keep in safe custody the seal of the corporation and, when authorized
by the Board, affix the same to any instrument requiring it, and when so
affixed it shall be attested by the signature of the Secretary, or by the
signature of the Treasurer or an Assistant Secretary. The Secretary may
delegate any of the duties, powers and authorities of the Secretary to one or
more Assistant Secretaries, unless such delegation is disapproved by the Board.
8.06 Treasurer. The Treasurer shall have the custody of the corporate
funds and securities; shall keep full and accurate accounts of receipts and
disbursements in books of the corporation; and shall deposit all moneys and
other valuable effects in the name and to the credit of the corporation in such
depositories as may be designated by the Board of Directors. The Treasurer
shall render to the President and directors, whenever they may require it, an
account of his or her transactions as Treasurer and of the financial condition
of the corporation. The Treasurer may delegate any of his or her duties,
powers and authorities to one or more Assistant Treasurers unless such
delegation is disapproved by the Board of Directors.
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8.07 Assistant Secretaries and Treasurers. The Assistant Secretaries, in
order of their seniority, shall perform the duties and exercise the powers and
authorities of the Secretary in case of the Secretary's absence or disability.
The Assistant Treasurers, in the order of their seniority, shall perform the
duties and exercise the powers and authorities of the Treasurer in case of the
Treasurer's absence or disability. The Assistant Secretaries and Assistant
Treasurers shall also perform such duties as may be delegated to them by the
Secretary and Treasurer, respectively, and also such duties as the Board of
Directors may prescribe.
ARTICLE IX
SPECIAL CORPORATE ACTS
9.01 Orders for Payment of Money. All checks, drafts, notes, bonds,
bills of exchange and orders for payment of money of the corporation shall be
signed by such officer or officers or such other person or persons as the Board
of Directors may from time to time designate.
9.02 Contracts and Conveyances. The Board of Directors of the
corporation may in any instance designate the officer and/or agent who shall
have authority to execute any contract, conveyance, mortgage or other
instrument on behalf of the corporation, or may ratify or confirm any
execution. When the execution of any instrument has been authorized without
specification of the executing officers or agents, the Chairman of the Board,
the Vice Chairman of the Board, the President or any Vice President, and the
Secretary or Assistant Secretary or Treasurer or Assistant Treasurer, may
execute the same in the name and on behalf of this corporation and may affix
the corporate seal thereto.
ARTICLE X
BOOKS AND RECORDS
10.01 Maintenance of Books and Records. The proper officers and
agents of the corporation shall keep and maintain such books, records and
accounts of the corporation's business and affairs, minutes of the proceedings
of its shareholders, Board and committees, if any, and such stock ledgers and
lists of shareholders, as the Board of Directors shall deem advisable, and as
shall be required by the laws of the State of Michigan and other states or
jurisdictions empowered to impose such requirements. Books, records and
minutes may be kept within or without the State of Michigan in a place which
the Board shall determine.
10.02 Reliance on Books and Records. In discharging his or her
duties, a director or an officer of the corporation, when acting in good faith,
may rely upon information, opinions, reports, or statements, including
financial statements and other financial data, if prepared or presented by any
of the following:
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(a) One or more directors, officers, or employees of the corporation, or
of a business organization under joint control or common control, whom the
director or officer reasonably believes to be reliable and competent in the
matters presented.
(b) Legal counsel, public accountants, engineers, or other persons as to
matters the director or officer reasonably believes are within the person's
professional or expert competence.
(c) A committee of the board of which he or she is not a member if the
director or officer reasonably believes the committee merits confidence.
A director or officer is not entitled to rely on the information set forth
above if he or she has knowledge concerning the matter in question that makes
reliance otherwise permitted unwarranted.
ARTICLE XI
INDEMNIFICATION
11.01 Non-Derivative Actions. Subject to all of the other provisions
of this Article XI, the corporation shall indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative
or investigative and whether formal or informal (other than an action by or in
the right of the corporation) by reason of the fact that the person is or was a
director or officer of the corporation, or is or was serving at the request of
the corporation as a director, officer, partner, trustee, employee, or agent of
another foreign or domestic corporation, partnership, joint venture, trust or
other enterprise, whether for profit or not, against expenses (including actual
and reasonable attorneys' fees), judgments, penalties, fines, and amounts paid
in settlement actually and reasonably incurred by him or her in connection with
such action, suit or proceeding if the person acted in good faith and in a
manner the person reasonably believed to be in or not opposed to the best
interests of the corporation or its shareholders, and with respect to any
criminal action or proceeding, if the person had no reasonable cause to believe
his or her conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction, or upon a plea of nolo
contendere or its equivalent, shall not, of itself, create a presumption that
the person did not act in good faith and in a manner which the person
reasonably believed to be in or not opposed to the best interests of the
corporation or its shareholders, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his or her conduct was
unlawful.
11.02 Derivative Actions. Subject to all of the provisions of this
Article XI, the corporation shall indemnify any person who was or is a party to
or is threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of the corporation to procure a judgment in
its favor by reason of the fact that the person is or was a director or officer
of the corporation, or is or was serving at the request of the corporation as a
director, officer, partner, trustee, employee, or agent of another foreign or
domestic corporation, partnership, joint venture, trust or other enterprise,
whether for profit or not, against expenses (including attorneys' fees) and
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amounts paid in settlement actually and reasonably incurred by the person in
connection with such action or suit if the person acted in good faith and in a
manner the person reasonably believed to be in or not opposed to the best
interests of the corporation or its shareholders. However, indemnification
shall not be made for any claim, issue or matter in which such person has been
found liable to the corporation unless and only to the extent that the court in
which such action or suit was brought has determined upon application that,
despite the adjudication of liability but in view of all circumstances of the
case, such person is fairly and reasonably entitled to indemnification for the
reasonable expenses incurred.
11.03 Expenses of Successful Defense. To the extent that a person
has been successful on the merits or otherwise in defense of any action, suit
or proceeding referred to in Section 11.01 or 11.02 of these Bylaws, or in
defense of any claim, issue or matter in the action, suit or proceeding, the
person shall be indemnified against actual and reasonable expenses (including
attorneys' fees) incurred by such person in connection with the action, suit or
proceeding and any action, suit or proceeding brought to enforce the mandatory
indemnification provided by this Section ll.03.
11.04 Definition. For the purposes of Sections 11.01 and 11.02,
"other enterprises" shall include employee benefit plans; "fines" shall include
any excise taxes assessed on a person with respect to an employee benefit plan;
and "serving at the request of the corporation" shall include any service as a
director, officer, employee, or agent of the corporation which imposes duties
on, or involves services by, the director or officer with respect to an
employee benefit plan, its participants or beneficiaries; and a person who
acted in good faith and in a manner the person reasonably believed to be in the
interest of the participants and beneficiaries of an employee benefit plan
shall be considered to have acted in a manner "not opposed to the best
interests of the corporation or its shareholders" as referred to in Sections
11.01 and 11.02.
11.05 Contract Right; Limitation on Indemnity. The right to
indemnification conferred in this Article XI shall be a contract right, and
shall apply to services of a director or officer as an employee or agent of the
corporation as well as in such person's capacity as a director or officer.
Except as provided in Section 11.03 of these Bylaws, the corporation shall have
no obligations under this Article XI to indemnify any person in connection with
any proceeding, or part thereof, initiated by such person without authorization
by the Board of Directors.
11.06 Determination That Indemnification is Proper. Any
indemnification under Section 11.01 or 11.02 of these Bylaws (unless ordered by
a court) shall be made by the corporation only as authorized in the specific
case upon a determination that indemnification of the person is proper in the
circumstances because the person has met the applicable standard of conduct set
forth in Section 11.01 or 11.02, whichever is applicable, and upon an
evaluation of the reasonableness of expenses and amount paid in settlement.
Such determination and evaluation shall be made in any of the following ways:
(a) By a majority vote of a quorum of the Board consisting of directors
who are not parties or threatened to be made parties to such action, suit or
proceeding.
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(b) If the quorum described in clause (a) above is not obtainable, then
by a majority vote of a committee of directors duly designated by the Board of
Directors and consisting solely of two or more directors who are not at the
time parties or threatened to be made parties to the action, suit or
proceeding.
(c) By independent legal counsel in a written opinion which counsel
shall be selected in one of the following ways: (i) by the board or its
committee in the manner prescribed in subparagraph (a) or (b); or (ii) if a
quorum of the board cannot be obtained under subparagraph (a) and a committee
cannot be designated under subparagraph (b), by the board.
(d) By all directors who are independent directors as defined in Section
107(3) of the Michigan Business Corporation Act and who are not parties or
threatened to be made parties to the action, suit or proceeding.
(e) By the shareholders, but shares held by directors or officers who
are parties or threatened to be made parties to the action, suit or proceeding
may not be voted.
11.07 Proportionate Indemnity. If a person is entitled to
indemnification under Section 11.01 or 11.02 of these Bylaws for a portion of
expenses, including attorneys' fees, judgments, penalties, fines, and amounts
paid in settlement, but not for the total amount thereof, the corporation shall
indemnify the person for the portion of the expenses, judgments, penalties,
fines, or amounts paid in settlement for which the person is entitled to be
indemnified.
11.08 Expense Advance. The corporation may pay or reimburse the
reasonable expenses incurred by a person referred to in Section 11.01 or 11.02
of these bylaws who is a party or threatened to be made a party to an action,
suit, or proceeding in advance of final disposition of the proceeding if all of
the following apply: (a) the person furnishes the corporation a written
affirmation of his or her good faith belief that he or she has met the
applicable standard of conduct set forth in Section 11.01 or 11.02; (b) the
person furnishes the corporation a written undertaking executed personally, or
on his or her behalf, to repay the advance if it is ultimately determined that
he or she did not meet the standard of conduct; (c) the authorization of
payment is made in the manner specified in Section 11.06; and (d) a
determination is made that the facts then known to those making the
determination would not preclude indemnification under Section 11.01 or 11.02.
The undertaking shall be an unlimited general obligation of the person on whose
behalf advances are made but need not be secured.
11.09 Non-Exclusivity of Rights. The indemnification or advancement
of expenses provided under this Article XI is not exclusive of other rights to
which a person seeking indemnification or advancement of expenses may be
entitled under a contractual arrangement with the corporation. However, the
total amount of expenses advanced or indemnified from all sources combined
shall not exceed the amount of actual expenses incurred by the person seeking
indemnification or advancement of expenses.
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11.10 Indemnification of Employees and Agents of the Corporation.
The corporation may, to the extent authorized from time to time by the Board of
Directors, grant rights to indemnification and to the advancement of expenses
to any employee or agent of the corporation to the fullest extent of the
provisions of this Article XI with respect to the indemnification and
advancement of expenses of directors and officers of the corporation.
11.11 Former Directors and Officers. The indemnification provided in
this Article XI continues as to a person who has ceased to be a director or
officer and shall inure to the benefit of the heirs, executors and
administrators of such person.
11.12 Insurance. The corporation may 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, partner, trustee, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against any liability
asserted against the person and incurred by him or her in any such capacity or
arising out of his or her status as such, whether or not the corporation would
have power to indemnify the person against such liability under these Bylaws or
the laws of the State of Michigan.
11.13 Changes in Michigan Law. In the event of any change of the
Michigan statutory provisions applicable to the corporation relating to the
subject matter of this Article XI, then the indemnification to which any
person shall be entitled hereunder shall be determined by such changed
provisions, but only to the extent that any such change permits the corporation
to provide broader indemnification rights than such provisions permitted the
corporation to provide prior to any such change. Subject to Section 11.14, the
Board of Directors is authorized to amend these Bylaws to conform to any such
changed statutory provisions.
11.14 Amendment or Repeal of Article XI. No amendment or repeal of
this Article XI shall apply to or have any effect on any director or officer of
the corporation for or with respect to any acts or omissions of such director or
officer occurring prior to such amendment or repeal.
ARTICLE XII
AMENDMENTS
12.01 Amendments. The Bylaws of the corporation may be amended,
altered or repealed, in whole or in part, by the shareholders or by the Board
of Directors at any meeting duly held in accordance with these Bylaws, provided
that notice of the meeting includes notice of the proposed amendment,
alteration or repeal.
Dated: May 1, 1997
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EXHIBIT 3.12
BYLAWS
of
LOBDELL EMERY CORPORATION
Effective January 10, 1997
<PAGE> 2
BYLAWS OF
LOBDELL EMERY CORPORATION
Article I
Offices
1.1 Principal Office. The principal office of Lobdell Emery
Corporation (the "Corporation") shall be at such place within the State of
Michigan as the Board of Directors of the Corporation (the "Board") shall
determine from time to time.
1.2 Other Offices. The Corporation also may have offices at such
other places as the Board from time to time determines or the business of the
Corporation requires.
Article II
Seal
2.1 Seal. The Corporation may have a seal in such form as the
Board may from time to time determine. The seal may be used by causing it or a
facsimile to be impressed, affixed, or reproduced in any other manner
Article III
Capital Stock
3.1 Issuance of Shares. The shares of capital stock of the
Corporation shall be issued in such amounts, at such times, for such
consideration and on such terms and conditions as the Board shall deem
advisable, subject to the Articles of Incorporation and any requirements of the
laws of the State of Michigan.
3.2 Certificates for Shares. The shares of the Corporation shall
be represented by certificates signed by the Chairman of the Board, President
or a Vice President and also may be signed by the Treasurer, Assistant
Treasurer, Secretary or Assistant Secretary of the Corporation, and may be
sealed with the seal of the Corporation or a facsimile thereof. A certificate
representing shares shall state upon its face that the Corporation is formed
under the laws of the State of Michigan, the name of the person to whom it is
issued, the number and class of shares, and the designation of the series, if
any, which the certificate represents, and such other pro visions as may be
required by the laws of the State of Michigan.
3.3 Transfer of Shares. The shares of the capital stock of the
Corporation are transferable only on the books of the Corporation upon
surrender of the certificate therefor, properly endorsed
<PAGE> 3
for transfer, and the presentation of such evidence of ownership and validity
of the assignment as the Corporation may require
3.4 Registered Shareholders. The Corporation shall be entitled to
treat the person in whose name any share of stock is registered as the owner
thereof for purposes of dividends and other distributions in the course of
business, or in the course of recapitalization, merger, plan of share exchange,
reorganization, sale of assets, liquidation or otherwise and for the purpose of
votes, approvals and consents by shareholders, and for the purpose of notices
to shareholders, and for all other purposes whatever, and shall not be bound to
recognize any equitable or other claim to or interest in such shares on the
part of any other person, whether or not the Corporation shall have notice
thereof, save as expressly required by the laws of the State of Michigan.
3.5 Lost or Destroyed Certificates. Upon the presentation to the
Corporation of a proper affidavit attesting the loss, destruction or mutilation
of any certificate or certificates for shares of stock of the Corporation, the
Board shall direct the issuance of a new certificate or certificates to replace
the certificates so alleged to be lost, destroyed or mutilated. The Board may
require as a condition precedent to the issuance of new certificates a bond or
agreement of indemnity, in such form and amount and with such sureties, or
without sureties, as the Board may direct or approve.
Article IV
Shareholders and Meetings of Shareholders
4.1 Place of Meetings. All meetings of shareholders shall be held
at the principal office of the Corporation or at such other place as shall be
determined by the Board and stated in the notice of meeting.
4.2 Annual Meeting. The annual meeting of the shareholders of the
Corporation shall be held on the last Monday of the fourth calendar month after
the end of the Corporation's fiscal year at 2 o'clock in the afternoon.
Directors shall be elected at each annual meeting and such other business
transacted as may come before the meeting.
4.3 Special Meetings. Special meetings of shareholders may be
called by the Board, the Chairman of the Board (if such office is filled) or
the President and shall be called by the President or Secretary at the written
request of shareholders holding a majority of the shares of common stock of the
Corporation outstanding and entitled to vote. The request shall state the
purpose or purposes for which the meeting is to be called.
4.4 Notice of Meetings. Except as otherwise provided by statute,
written notice of the time, place and purposes of a meeting of shareholders
shall be given not less than 10 nor more than 60 days before the date of the
meeting to each shareholder of record entitled to vote at the meeting, either
personally or by mailing such notice to the shareholder's last address as it
appears on the books of the Corporation. No notice need be given of an
adjourned meeting of the shareholders
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provided the time and place to which such meeting is adjourned are announced at
the meeting at which the adjournment is taken and at the adjourned meeting only
such business is transacted as might have been transacted at the original
meeting. However, if after the adjournment a new record date is fixed for the
adjourned meeting a notice of the adjourned meeting shall be given to each
shareholder of record on the new record date entitled to notice as provided in
this Bylaw.
4.5 Record Dates. The Board may fix in advance a date as the
record date for the purpose of determining shareholders entitled to notice of
and to vote at a meeting of shareholders or an adjournment thereof, or to
express consent or to dissent from a proposal without a meeting, or for the
purpose of determining shareholders entitled to receive payment of a dividend
or allotment of a rights or for the purpose of any other action. The date
fixed shall not be more than 60 nor less than 10 days before the date of the
meeting, nor more than 60 days before any other action. In such case only such
shareholders as shall be shareholders of record on the date so fixed shall be
entitled to notice of and to vote at such meeting or adjournment thereof, or to
express consent or to dissent from such proposal, or to receive payment of such
dividend or to receive such allotment of rights, or to participate in any other
action, as the case may be, notwithstanding any transfer of any stock on the
books of the Corporation, or otherwise, after any such record date. Nothing in
this Bylaw shall affect the rights of a shareholder and the shareholder's
transferee or transferor as between themselves.
4.6 List of Shareholders. The Secretary of the Corporation or the
agent of the Corporation having charge of the stock transfer records for shares
of the Corporation shall make and certify a complete list of the shareholders
entitled to vote at a shareholders meeting or any adjournment thereof. The
list shall be arranged alphabetically within each class and series, with the
address of, and the number of shares held by, each shareholder; be produced at
the time and place of the meeting, be subject to inspection by any shareholder
during the whole time of the meeting, and be prima facie evidence as to who are
the shareholders entitled to examine the list or vote at the meeting.
4.7 Quorum. Unless a greater or lesser quorum is required in the
Articles of Incorporation or by the laws of the State of Michigan, the
shareholders present at a meeting in person or by proxy who, as of the record
date for such meeting, were holders of a majority of the outstanding shares of
the Corporation entitled to vote at the meeting shall constitute a quorum at
the meeting. Whether or not a quorum is present, a meeting of shareholders may
be adjourned by the affirmative vote of a majority of the votes cast by the
holders of shares present in person or by proxy. When the holders of a class
or series of shares are entitled to vote separately on an item of business,
this Bylaw applies in determining the presence of a quorum of such class or
series for transaction of such item of business.
4.8 Proxies. A shareholder entitled to vote at a meeting of
shareholders or to express consent or dissent without a meeting may authorize
other persons to act for the shareholder by proxy. A proxy shall be signed by
the shareholder or the shareholder's authorized agent or representative and
shall not be valid after the expiration of three years from its date unless
otherwise provided in
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the proxy. A proxy is revocable at the pleasure of the shareholder executing
it except as otherwise provided by the laws of the State of Michigan.
4.9 Voting. Each outstanding share is entitled to one vote on
each matter submitted to a vote, unless otherwise provided in the Articles of
Incorporation. Votes may be cast orally or in writing, but if more than 25
shareholders of record are entitled to vote, then votes shall be cast in
writing signed by the shareholder or the shareholder's proxy. When an action,
other than the election of directors, is to be taken by a vote of the
shareholders, it shall be authorized by a majority of the votes cast by the
holders of shares entitled to vote thereon, unless a greater vote is required
by the Articles of Incorporation or by the laws of the State of Michigan.
Except as otherwise provided by the Articles of Incorporation, directors shall
be elected by a plurality of the votes cast at any election.
Article V
Directors
5.1 Number. The business and affairs of the corporation shall be
managed by a Board of not less one (1) nor more than seven (7) directors as
shall be fixed from time to time by the Board. The directors need not be
residents of Michigan or shareholders of the Corporation.
5.2 Election, Resignation and Removal. Subject to the provisions
of the Articles of Incorporation, directors shall be elected at each annual
meeting of the shareholders, each to hold office until the next annual meeting
of shareholders and until the director's successor is elected and qualified, or
until the director's resignation or removal. A director may resign by written
notice to the Corporation. The resignation is effective upon its receipt by
the Corporation or a subsequent time as set forth in the notice of resignation.
A director or the entire Board may be removed, with or without cause, by a
majority of the votes cast by the holders of shares entitled to vote at an
election of directors.
5.3 Vacancies. Subject to the provisions of the Articles of
Incorporation, vacancies on the Board occurring by reason of death,
resignation, removal, increase in the number of directors or otherwise shall be
filled by the affirmative vote of a majority of the remaining directors though
less than a quorum of the Board, unless filled by proper action of the
shareholders of the corporation. Each person so elected shall be a director
for a term of office continuing only until the next election of directors by
the shareholders. A vacancy that will occur at a specific date, by reason of a
resignation effective at a later date or otherwise, may be filled before the
vacancy occurs, but the newly elected director may not take office until the
vacancy occurs.
5.4 Annual Meeting. The Board shall meet each year immediately
after the annual meeting of the shareholders, or within three days of such time
excluding Sundays and legal holidays if such later time is deemed advisable, at
the place where such meeting of the shareholders has been held or such other
place as the Board may determine, for the purpose of election of officers and
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consideration of such business that may properly be brought before the meeting,
provided, that if less than a majority of the directors appear for an annual
meeting of the Board the holding of such annual meeting shall not be required
and the matters which might have been taken up therein may be taken up at any
later special or annual meeting, or by consent resolution.
5.5 Regular and Special Meetings. Regular meetings of the Board
may be held at such times and places as the majority of the directors may from
time to time determine at a prior meeting or as shall be directed or approved
by the vote or written consent of all the directors. Special meetings of the
Board may be called by the Chairman of the Board of Directors (if such office
is filled) or the President and shall be called by the President or Secretary
upon the written request of any two directors.
5.6 Notices. No notice shall be required for annual or regular
meetings of the Board or for adjourned meetings, whether regular or special.
Three days written notice shall be given for special meetings of the Board, and
such notice shall state the time, place and purpose or purposes of the meeting.
5.7 Quorum. A majority of the Directors then in office, or of the
members of a committee thereof, constitutes a quorum for the transaction of
business. The vote of a majority of the directors present at any meeting at
which there is a quorum shall be the acts of the Board or of the committee,
except as a larger vote may be required by the laws of the State of Michigan.
A member of the Board or of a committee designated by the Board may participate
in a meeting by means of conference telephone or similar communications
equipment by means of which all persons participating in the meeting can
communicate with each other. Participation in a meeting in this manner
constitutes presence in person at the meeting.
5.8 Executive and Other Committees. The Board may, by resolution
passed by a majority of the whole Board, appoint three or more members of the
Board as an executive committee to exercise all powers and authorities of the
Board in management of the business and affairs of the corporation, except that
the committee shall not have power or authority to (a) amend the Articles of
Incorporation; (b) adopt an agreement of merger or plan of share exchange; (c)
recommend to shareholders the sale, lease or exchange of all or substantially
all of the Corporation s property and assets; (d) recommend to shareholders a
dissolution of the Corporation or revocation of a dissolution; (e) amend these
Bylaws; (f) fill vacancies in the Board; or (g) unless expressly authorized by
the Board, declare a distribution or dividend or authorize the issuance of
stock.
The Board from time to time may, by like resolution, appoint such
other committees of one or more directors to have such authority as shall be
specified by the Board in the resolution making such appointments. The Board
may designate one or more directors as alternate members of any committee who
may replace an absent or disqualified member at any meeting thereof.
5.9 Dissents. A director who is present at a meeting of the
Board, or a committee thereof of which the director is a member, at which
action on a corporate matter is taken is presumed to have
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concurred in that action unless the director's dissent is entered in the
minutes of the meeting or unless the director files a written dissent to the
action with the person acting as secretary of the meeting before the
adjournment thereof or shall forward such dissent by registered mail to the
Secretary of the Corporation promptly after the adjournment of the meeting.
Such right to dissent does not apply to a director who voted in favor of such
action. A director who is absent from a meeting of the Board, or a committee
thereof of which the director is a member, at which any such action is taken is
presumed to have concurred in the action unless the director files a written
dissent with the Secretary of the Corporation within a reasonable time after
the director has knowledge of the action.
5.10 Compensation. The Board, by affirmative vote of a majority of
directors in office and irrespective of any personal interest of any of them,
may establish reasonable compensation of directors for services to the
Corporation as directors or officers.
Article VI
Notices, Waivers of Notice And Manner of Acting
6.1 Notices. All notices of meetings required to be given to
shareholders, directors or any committee of directors may be given by mail,
telecopy, telegram, radiogram or cablegram to any shareholder, director or
committee member at the addressee's last address as it appears on the books of
the Corporation. Such notice shall be deemed to be given at the time when the
same shall be mailed or otherwise dispatched.
6.2 Waiver of Notice. Notice of the time, place and purpose of
any meeting of shareholders, directors or committee of directors may be waived
by telecopy, telegram, radiogram, cablegram or other writing, either before or
after the meeting, or in such other manner as may be permitted by the laws of
the State of Michigan. Attendance of a person at any meeting of shareholders,
in person or by proxy, or at any meeting of directors or of a committee of
directors, constitutes a waiver of notice of the meeting except as follows:
(a) In the case of a shareholder, unless the shareholder
at the beginning of the meeting objects to holding the meeting or transacting
business at the meeting, or unless with respect to consideration of a
particular matter at the meeting that is not within the purpose or purposes
described in the meeting notice, the shareholder objects to considering the
matter when it is presented; and
(b) In the case of a director, unless he or she at the
beginning of the meeting, or upon his or her arrival, objects to the meeting or
the transacting of business at the meeting and does not thereafter vote for or
assent to any action taken at the meeting.
6.3 Action Without a Meeting. Except as may be provided otherwise
in the Articles of Incorporation for action to be taken by shareholders, any
action required or permitted at any meeting
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of shareholders or directors or committee of directors may be taken without a
meeting, without prior notice and without a vote, if all of the shareholders or
directors or committee members entitled to vote thereon consent thereto in
writing, before or after the action is taken.
Article VII
Officers
7.1 Number. The Board shall elect or appoint a President, a
Secretary and a Treasurer, and may elect a Chairman of the Board, and one or
more Vice Presidents, Assistant Secretaries or Assistant Treasurers. The
President and Chairman of the Board, if any, shall be members of the Board.
Any two or more of the above offices, except those of President and Vice
President, may be held by the same person. No officer shall execute,
acknowledge or verify an instrument in more than one capacity if the instrument
is required by law, the Articles of Incorporation or these Bylaws to be
executed, acknowledged, or verified by one or more officers.
7.2 Term of Office, Resignation and Removal. An officer shall
hold office for the term for which he or she is elected or appointed and until
his successor is elected or appointed and qualified, or until his or her
resignation or removal. An officer may resign by written notice to the
Corporation. The resignation is effective upon its receipt by the Corporation
or at a subsequent time specified in the notice of resignation. An officer may
be removed by the Board with or without cause. The removal of an officer shall
be without prejudice to his contract rights, if any. The election or
appointment of an officer does not of itself create contract rights.
7.3 Vacancies. The Board may fill any vacancies in any office
occurring for whatever reason.
7.4 Authority. All officers, employees and agents of the
Corporation shall have such authority and perform such duties in the conduct
and management of the business and affairs of the Corporation as may be
designated by the Board and these Bylaws.
Article VIII
Duties of Officers
8.1 Chairman of the Board. The Chairman of the Board, if such
office is filled, shall preside at all meetings of the shareholders and of the
Board at which the Chairman is present.
8.2 President. The President shall be the chief executive officer
of the Corporation. The President shall see that all orders and resolutions of
the Board are carried into effect, and the President shall have the general
powers of supervision and management usually vested in the chief executive
officer of a Corporation, including the authority to vote all securities of
other corporations and business organizations held by the Corporation. In the
absence or disability of the Chairman of
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the Board, or if that office has not been filled, the President also shall
perform the duties of the Chairman of the Board as set forth in these Bylaws.
8.3 Vice Presidents. The Vice Presidents, in order of their
seniority, shall, in the absence or disability of the President, perform the
duties and exercise the powers of the President and shall perform such other
duties as the Board or the President may from time to time prescribe.
8.4 Secretary. The Secretary shall attend all meetings of the
Board and of shareholders and shall record all votes and minutes of all
proceeding in a book to be kept for that purpose, shall give or cause to be
given notice of all meetings of the shareholders and of the Board, and shall
keep in safe custody the seal of the corporation and, when authorized by the
Board, affix the same to any instrument requiring it, and when so affixed it
shall be attested by the signature of the Secretary, or by the signature of the
Treasurer or an Assistant Secretary. The Secretary may delegate any of the
duties, powers and authorities of the Secretary to one or more Assistant
Secretaries, unless such delegation is disapproved by the Board.
8.5 Treasurer. The Treasurer shall have the custody of the
corporate funds and securities; shall keep full and accurate accounts of
receipts and disbursements in books of the Corporation; and shall deposit all
moneys and other valuable effects in the name and to the credit of the
Corporation in such depositories as may be designated by the Board. The
Treasurer shall render to the President and directors, whenever they may
require it, an account of his or her transactions as Treasurer and of the
financial condition of the Corporation. The Treasurer may delegate any of his
or her duties, powers and authorities to one or more Assistant Treasurers
unless such delegation is disapproved by the Board.
8.6 Assistant Secretaries and Treasurers. The Assistant
Secretaries, in order of their seniority, shall perform the duties and exercise
the powers and authorities of the Secretary in case of the Secretary s absence
or disability. The Assistant Treasurers, in the order of their seniority,
shall perform the duties and exercise the powers and authorities of the
Treasurer in case of the Treasurer's absence or disability. The Assistant
Secretaries and Assistant Treasurers shall also perform such duties as may be
delegated to them by the Secretary and Treasurer, respectively, and also such
duties as the Board may prescribe.
Article IX
Special Corporate Acts
9.1 Orders for Payment of Money. All checks, drafts, notes,
bonds, bills of exchange and orders for payment of money of the Corporation
shall be signed by such officer or officers or such other person or persons as
the Board may from time to time designate.
9.2 Contracts and Conveyances. The Board of the Corporation may
in any instance designate the officer and/or agent who shall have authority to
execute any contract, conveyance,
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mortgage or other instrument on behalf of the Corporation, or may ratify or
confirm any execution. When the execution of any instrument has been
authorized without specification of the executing officers or agents, the
Chairman of the Board, the President or any Vice President, and the Secretary
or Assistant Secretary or Treasurer or Assistant Treasurer, may execute the
same in the name and on behalf of the Corporation and may affix the corporate
seal thereto.
Article X
Books and Records
10.1 Maintenance of Books and Records. The proper officers and
agents of the Corporation shall keep and maintain such books, records and
accounts of the Corporation's business and affairs, minutes of the proceedings
of its shareholders, Board and committees, if any, and such stock ledgers and
lists of shareholders, as the Board shall deem advisable, and as shall be
required by the laws of the State of Michigan and other states or jurisdictions
empowered to impose such requirements. Books, records and minutes may be kept
within or without the State of Michigan in a place which the Board shall
determine.
10.2 Reliance on Books and Records. In discharging his or her
duties, a director or an officer of the Corporation, when acting in good faith,
may rely upon information, opinions, reports, or statements, including
financial statements and other financial data, if prepared or presented by any
of the following:
(a) One or more directors, officers, or employees of the
Corporation, or of a business organization under joint control or common
control, whom the director or officer reasonably believes to be reliable and
competent in the matters presented.
(b) Legal counsel, public accountants, engineers, or
other persons as to matters the director or officer reasonably believes are
within the persons professional or expert competence.
(c) A committee of the board of which he or she is not a
member if the director or officer reasonably believes the committee merits
confidence.
A director or officer is not entitled to rely on the information set forth
above if he or she has knowledge concerning the matter in question that makes
reliance otherwise permitted unwarranted.
Article XI
Indemnification
11.1 Non-Derivative Actions. Subject to all of the other
provisions of this Article XI, the Corporation shall indemnify any person who
was or is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
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administrative or investigative and whether formal or informal (other than an
action by or in the right of the Corporation) by reason of the fact that the
person is or was a director or officer of the Corporation, or is or was serving
at the request of the Corporation as a director, officer, partner, trustee,
employee, or agent of another foreign or domestic corporation, partnership,
joint venture, trust or other enterprise, whether for profit or not, against
expenses (including actual and reasonable attorneys' fees), judgments,
penalties, fines, and amounts paid in settlement actually and reasonably
incurred by him or her in connection with such action, suit or proceeding if
the person acted in good faith and in a manner the person reasonably believed
to be in or not opposed to the best interests of the Corporation or its
shareholders, and, with respect to any criminal action or proceedings, if the
person had no reasonable cause to believe his or her conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, shall not, of
itself, create a presumption that the person did not act in good faith and in a
manner which the person reasonably believed to be in or not opposed to the best
interests of the Corporation or its shareholders, and, with respect to any
criminal action or proceeding, had reasonable cause to believe that his or her
conduct was unlawful.
11.2 Derivative Actions. Subject to all of the provisions of this
Article XI, the Corporation shall indemnify any person who was or is a party to
or is threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of the Corporation to procure a judgment in
its favor by reason of the fact that the person is or was a director or officer
of the Corporation, or is or was serving at the request of the Corporation as a
director, officer, partner, trustee, employee, or agent of another foreign or
domestic Corporation, partnership, joint venture, trust or other enterprise,
whether for profit or not, against expenses (including actual and reasonable
attorneys' fees) and amounts paid in settlement actually and reasonably
incurred by the person in connection with such action or suit if the person
acted in good faith and in a manner the person reasonably believed to be in or
not opposed to the best interests of the Corporation or its shareholders.
However, indemnification shall not be made for any claim, issue or matter in
which such person has been found liable to the Corporation unless and only to
the extent that the court in which such action or suit was brought has
determined upon application that, despite the adjudication of liability but in
view of all circumstances of the case, such person is fairly and reasonably
entitled to indemnification for the reasonable expenses incurred.
11.3 Expenses of Successful Defense. To the extent that a person
has been successful on the merits or otherwise in defense of any action, suit
or proceeding referred to in Section 11.1 or 11.2 of these Bylaws, or in
defense of any claim, issue or matter in the action, suit or proceeding, the
person shall be indemnified against actual and reasonable expenses (including
attorneys' fees) incurred by such person in connection with the action, suit or
proceeding and any action, suit or proceeding brought to enforce the mandatory
indemnification provided by this Section 11.3.
11.4 Definition. For the purposes of Sections 11.1 and 11.2,
"other enterprises" shall include employee benefit plans; "fines" shall include
any excise taxes assessed on a person with respect to an employee benefit plan;
and "serving at the request of the Corporation" shall include any service as a
director, officer, employee, or agent of the Corporation which imposes duties
on, or
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involves services by, the director or officer with respect to an employee
benefit plan, its participants or beneficiaries, and a person who acted in good
faith and in a manner the person reasonably believed to be in the interest of
the participants and beneficiaries of an employee benefit plan shall be
considered to have acted in a manner "not opposed to the best interests of the
Corporation or its shareholders" as referred to in Sections 11.1 and 11.2.
11.5 Contract Right; Limitation on Indemnity. The right to
indemnification conferred in this Article XI shall be a contract right, and
shall apply to services of a director or officer as an employee or agent of the
Corporation as well as in such person s capacity as a director or officer.
Except as provided in Section 11.3 of these Bylaws, the Corporation shall have
no obligations under this Article XI to indemnify any person in connection with
any proceeding, or part thereof, initiated by such person without authorization
by the Board.
11.6 Determination That Indemnification is Proper. Any
indemnification under Section 11.1 or 11.2 of these Bylaws (unless ordered by a
court) shall be made by the Corporation only as authorized in the specific case
upon a determination that indemnification of the person is proper in the
circumstances because the person has met the applicable standard of conduct set
forth in Section 11.1 or 11.2, whichever is applicable, and upon an evaluation
of the reasonableness of expenses and amount paid in settlement. Such
determination and evaluation shall be made in any of the following ways:
(a) By a majority vote of a quorum of the Board
consisting of directors who are not parties or threatened to be made parties to
such action, suit or proceeding;
(b) If the quorum described in clause (a) above is not
obtainable, then by a majority vote of a committee of directors duly designated
by the Board and consisting solely of two or more directors who are not at the
time parties or threatened to be made parties to the action, suit or
proceeding;
(c) By independent legal counsel in a written opinion,
which counsel shall be selected in one of the following ways: (i) by the Board
or its committee in the manner prescribed in subparagraph (a) or (b); or (ii)
if a quorum of the Board cannot be obtained under subparagraph (a) and a
committee cannot be designated under subparagraph (b), by the Board;
(d) By all directors who are independent directors as
defined in Section 107(3) of the Michigan Business Corporation Act and who are
not parties or threatened to be made parties to the action, suit or proceeding;
or
(e) By the shareholders, but shares held by directors or
officers who are parties or threatened to be made parties to the action, suit
or proceeding may not be voted.
11.7 Proportionate Indemnity. If a person is entitled to
indemnification under Section 11.1 or 11.2 of these Bylaws for a portion of
expenses, including attorneys' fees, judgments, penalties,
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fines, and amounts paid in settlement, but not for the total amount thereof,
the Corporation shall indemnify the person for the portion of the expenses,
judgments, penalties, fines, or amounts paid in settlement for which the person
is entitled to be indemnified.
11.8 Expense Advance. The Corporation may pay or reimburse the
reasonable expenses incurred by a person referred to in Section 11.1 or 11.2 of
these Bylaws who is a party or threatened to be made a party to an action,
suit, or proceeding in advance of final disposition of the proceeding if all of
the following apply: (a) the person furnishes the Corporation a written
affirmation of his or her good faith belief that he or she has met the
applicable standard of conduct set forth in Section 11.1 or 11.2; (b) the
person furnishes the corporation a written undertaking executed personally, or
on his or her behalf, to repay the advance if it is ultimately determined that
he or she did not meet the standard of conduct; (c) the authorization of
payment is made in the manner specified in Section 11.6; and (d) a
determination is made that the facts then known to those making the
determination would not preclude indemnification under Section 11.1 or 11.2.
The undertaking shall be an unlimited general obligation of the person on whose
behalf advances are made but need not be secured.
11.9 Non-Exclusivity of Rights. The indemnification or advancement
of expenses provided under this Article XI is not exclusive of other rights to
which a person seeking indemnification or advancement of expenses may be
entitled under a contractual arrangement with the Corporation. However, the
total amount of expenses advanced or indemnified from all sources combined
shall not exceed the amount of actual expenses incurred by the person seeking
indemnification or advancement of expenses.
11.10 Indemnification of Employees and Agents of the Corporation.
The Corporation may, to the extent authorized from time to time by the Board,
grant rights to indemnification and to the advancement of expenses to any
employee or agent of the Corporation to the fullest extent of the provisions of
this Article XI with respect to the indemnification and advancement of expenses
of directors and officers of the Corporation.
11.11 Former Directors and Officers. The indemnification provided
in this Article XI continues as to a person who has ceased to be a director or
officer and shall inure to the benefit of the heirs, executors and
administrators of such person.
11.12 Insurance. The Corporation may 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, partner, trustee, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise
against any liability asserted against the person and incurred by him or her in
any such capacity or arising out of his or her status as such, whether or not
the Corporation would have power to indemnify the person against such liability
under these Bylaws or the laws of the State of Michigan.
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11.13 Changes in Michigan Law. In the event of any change of the
Michigan statutory provisions applicable to the Corporation relating to the
subject matter of this Article XI, then the indemnification to which any person
shall be entitled hereunder shall be determined by such changed provisions, but
only to the extent that any such change permits the Corporation to provide
broader indemnification rights than such provisions permitted the Corporation
to provide prior to any such change. Subject to Section 11.14, the Board is
authorized to amend these Bylaws to conform to any such changed statutory
provisions.
11.14 Amendment or Repeal of Article XI. No amendment or repeal of
this Article XI shall apply to or have any effect on any director or officer of
the Corporation for or with respect to any acts or omissions of such director
or officer occurring prior to such amendment or repeal.
Article XII
Amendments
12.1 Amendments. The Bylaws may be amended, altered or repealed,
in whole or in part, by the shareholders or by the Board at any meeting duly
held in accordance with these Bylaws, provided that notice of the meeting
includes notice of the proposed amendment, alteration or repeal.
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EXHIBIT 3.13
BYLAWS OF
BMG North America Limited
BY-LAW NO. 1
a by-law relating generally to the
transaction of the business and affairs of
827064 ONTARIO LIMITED
(the "Corporation")
DEFINITIONS AND INTERPRETATION
1. In this by-law:
"Act" means the Business Corporations Act, 1982 and the regulations
thereunder, as amended from time to time, or any successor Act or
regulations thereto, as the case may be;
"Board" means the board of directors of the Corporation;
"meetings of shareholders" includes annual and special meetings.
Unless it is otherwise provided for herein, any other words and expressions
used in this by-law have the meaning attributed thereto in the Act.
INTERPRETATION
2. Words importing the singular number only shall include, the plural and
vice versa; words importing the masculine gender shall include the
feminine and neuter genders and vice versa.
MEETINGS OF SHAREHOLDERS
3. ANNUAL MEETING - If required, the annual meeting of the shareholders shall
be held at the time and place determined by the Board, or failing it, subject
to the Act, by the president, or failing him, by the secretary, for the purpose
of hearing and receiving the reports and statements required by the Act to be
read or laid before the shareholders of the Corporation at an annual meeting,
electing directors, appointing auditors, if any, and fixing or authorizing the
Board to fix the auditor's remuneration and for the transaction of such other
business as may properly be brought before the meeting.
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4. SPECIAL MEETING - Subject to the Act, the Board, the president or the
secretary may at any time call a special meeting of the shareholders of the
Corporation to be held at the time and place determined by the Board or the
person calling the meeting.
5. NOTICES - Notice of the time and place of each meeting of shareholders
shall be sent not less than 10 nor more than 50 days before the date of
the meeting to each director, to the auditor and to each shareholder entitled
to vote at the meeting. Notice of a meeting of shareholders called for any
purpose other than consideration of the minutes of an earlier meeting,
financial statements and auditors's report, election of directors and
reappointment of the incumbent auditor shall state the nature of such business
in sufficient detail to permit the shareholder to form a reasoned judgment
thereon and shall state the text of any special resolution to be submitted to
the meeting.
6. PERSONS ENTITLED TO BE PRESENT - The only persons entitled to attend a
meeting of shareholders are those persons entitled to vote thereat, the
directors of the Corporation, the auditor of the Corporation, if any, and
others who are entitled or required under any provision of the Act or the
by-laws of the Corporation to be present at the meeting. Any other person may
be admitted only on the invitation of the chairman of the meeting or with the
consent of the meeting.
7. QUORUM - Holders of 51% of the shares entitled to vote at a meeting of
shareholders, whether present in person or represented by proxy, constitute a
quorum. If a quorum is present at the opening of a meeting of shareholders,
the shareholders present may proceed with the business of the meeting
notwithstanding that a quorum is not present throughout the meeting.
8. PROXIES -
(a) A shareholder entitled to vote at a meeting of shareholders may by
means of a proxy appoint a proxyholder or one or more alternate
proxyholders, who are not required to be shareholders, to attend and act
at the meeting in the manner and to the extent authorized by the proxy
and with the authority conferred by the proxy.
(b) A proxy shall be executed by the shareholder or by his attorney
authorized in writing or, if the shareholder is a body corporate, by an
officer or attorney thereof duly authorized.
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9. REPRESENTATIVE - If a body corporate or association is a shareholder of
the Corporation, the Corporation shall recognize any individual authorized by a
resolution of the board of directors or governing body of the body corporate or
association to represent it at meetings of shareholders of the Corporation. An
- -individual so authorized may exercise on behalf of the body corporate or
association he represents all the powers it could exercise if it were an
individual shareholder.
10. SCRUTINEERS - At each meeting of the shareholders one or more scrutineers
may be appointed to serve at the meeting by. a resolution of the meeting or by
the chairman with the consent of the meeting. Such scrutineers need not be
shareholders of the Corporation.
11. VOTES TO GOVERN - Subject to the Act or the articles of the Corporation or
a unanimous shareholder agreement, at all meetings of shareholders, all
questions proposed for the consideration of the shareholders shall be
determined by a majority of the votes cast on the question.
12. VOTING -
(a) Voting at a meeting of shareholders shall be by show of hands except
where a ballot is demanded by a shareholder or proxyholder entitled to
vote at the meeting. A shareholder or proxyholder may demand a ballot
either before or after any vote by show of hands. Upon a show of hands
every person present and entitled to vote has one vote. Whenever a vote
by show of hands has been taken upon a motion, unless a ballot thereon is
demanded, a declaration by the chairman of the meeting that the vote upon
the motion has been carried or carried by a particular majority or not
carried and an entry to that effect in the minutes of the meeting is
prima facie evidence of the fact without proof of the number or
proportion of the votes recorded in favour of or against the motion, and
the result of the vote so taken is the decision of the shareholders of
the Corporation upon the motion. A demand for a ballot may be withdrawn
at any time prior to the taking of the ballot.
(b) Upon a ballot each shareholder who is present or represented by proxy
is entitled, in respect of the shares which he is entitled to vote at the
meeting upon
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the motion, to that number of votes provided by the Act or
the articles in respect of those shares and the result of the ballot is
the decision of the shareholders of the Corporation upon the motion.
13. CHAIRMAN - If the chairman of the board, if one is appointed, the
president or any vice-president fails to assume the chairmanship of a
meeting in accordance with Paragraphs 21, 22 and 23 of this by-law within 15
minutes after the time appointed for the holding of the meeting, the persons
present at the meeting and entitled to vote thereat shall choose a person from
their number to be the chairman.
DIRECTORS
14. QUORUM - Subject to the articles of the Corporation, a quorum at any
meeting of directors is:
(a) where the articles set out the number of directors, a majority of
that number; or
(b) where the articles set out the minimum and maximum number of
directors, a majority of the number of directors which then constitutes
the Board.
15. ELECTION AND TERM - Shareholders of the Corporation shall, at the first
meeting of shareholders and at each succeeding annual meeting of shareholders,
elect directors to hold office for a term expiring at the first annual meeting
of shareholders following their election.
16. CALLING OF MEETINGS - The Board, a quorum of the directors, the president
or the secretary may at any time call a meeting of the Board to be held at the
time and place determined by the Board or by the person calling the meeting.
Meetings of the Board may be held at any place within or outside Ontario. In
any financial year of the Corporation, a majority of the meetings of the Board
need not be held within Canada. Notice of every meeting so called shall be
given to each director by sending the notice not less than 2 days before the
day on which the meeting is to be held. A director may in any manner and at
any time waive notice of a meeting of directors and attendance of a director at
a meeting of directors is a waiver of notice of the meeting, except where a
director attends a meeting for the express purpose of objecting to the
transaction of any business on the grounds that the meeting is not lawfully
called.
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If a quorum of directors is present, each newly elected Board may without
notice hold its first meeting for the purposes of its organization and the
election and appointment of officers immediately following the meeting of
shareholders at which such Board was elected.
17. CHAIRMAN - If the chairman of the board, if one is appointed, the
president or any vice-president fails to assume the chairmanship of a
meeting in accordance with Paragraphs 21, 22 and 23 of this by-law 15 minutes
after the time appointed for holding the meeting, the persons present at the
meeting and entitled to vote thereat shall choose one of their number to be
chairman.
18. NOTICES - Notice of a meeting of directors need not specify the purpose of
or the business to be transacted at the meeting except where the Act requires
such purpose or business to be specified.
19. VOTES TO GOVERN - At all meetings of the Board every question shall be
decided by a majority of the votes cast on the question and in the case of an
equality of votes the Chairman of the meeting shall not be entitled to a second
or casting vote.
OFFICERS
20. APPOINTMENT - Subject to the articles and any unanimous shareholder
agreement, the Board may from time to time appoint a president, one or more
vice-presidents (to which title may be added words indicating seniority or
function), a secretary, a treasurer and such other officers as the Board may
determine, including one or more assistants to any of the officers so
appointed. The Board may specify the duties of and, in accordance with this
by-law and subject to the provisions of the Act, delegate to such officers
powers to manage the business and affairs of the Corporation. Two or more
offices of the Corporation may be held by the same person.
21. CHAIRMAN OF THE BOARD - The Board may from time to time appoint a chairman
of the board who shall be a director. If appointed, the chairman shall,
subject to the provisions of the Act, the articles or any unanimous shareholder
agreement, preside at all meetings of the shareholders and of the Board and
have such other powers and duties as the Board may specify. During the absence
or disability of the chairman of the board, his
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duties shall be performed and his powers exercised by the managing
director, if any, or by the president.
22. PRESIDENT - Subject to any duties imposed upon the chairman of the board,
if one is appointed, the president shall preside at all meetings of the
shareholders and of the Board and is responsible for the general supervision,
subject to the authority of the Board, of the business and affairs of the
Corporation.
23. VICE-PRESIDENT - During the absence or inability of the president to act,
his duties shall be performed and his powers shall be exercised by the
vice-president, if any, or if there is more than one, by the vice-president
selected by the Board. A vice-president shall also perform such duties and
exercise such powers as the president or the Board may from time to time
delegate to him.
24. SECRETARY - The secretary shall:
(a) give or cause to be given all notices required to be given to
shareholders, directors, auditors and members of committees;
(b) attend all meetings of directors, shareholders and committees and
enter or cause to be entered in books kept for that purpose minutes of
all proceedings at such meetings; and
(c) be the custodian of all books, papers, records, documents, corporate
seals, if any, and other instruments of the Corporation save those
entrusted by resolution of the Board to the custody of the treasurer or
other officer or agent of the corporation.
The secretary may delegate his duties to a nominee from time to time.
25. TREASURER - The treasurer shall keep or cause to be kept full and accurate
books of account in which shall be recorded all receipts and disbursements of
the Corporation; control the deposit of money, the safekeeping of securities
and the disbursement of funds; and render to the Board whenever required of
him, an account of the financial affairs of the Corporation.
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26. POWERS AND DUTIES OF OTHER OFFICERS - The powers and duties of all other
officers shall be such as the terms of their engagement call for or as the
Board or the president may specify. Any of the powers and duties of an officer
to whom an assistant has been appointed may be exercised and performed by such
assistant unless the Board or the president otherwise directs.
27. VARIATION OF POWERS AND DUTIES - The Board may from time to time and
subject to the provisions of the Act, vary, add to or limit the powers and
duties of any officer.
28. TERM OF OFFICE - The terms of employment of the officers shall be settled
by the Board. In the absence of written agreement to the contrary, each
officer holds office until he resigns, his successor is appointed or he is
removed by the Board at its pleasure.
29. FIDELITY BONDS - The Board may at any time require any officer, employee
or agent of the Corporation to furnish a bond for the faithful
discharge of his duties, in such form and with such surety as the Board
determines.
PROTECTION OF DIRECTORS, OFFICERS AND OTHERS
30. LIMITATION OF LIABILITY - No director or officer shall be liable for the
acts, receipts, neglects or defaults of any other director or officer or
employee, or for joining in any receipt or other act for conformity, or for any
loss, damage or expense happening to the Corporation through the insufficiency
or deficiency of title to any property acquired for or on behalf of the
corporation, or for the insufficiency or deficiency of any security in or upon
which any of the monies of the Corporation shall be invested, or for any loss
or damage arising from the bankruptcy, insolvency or tortious acts of any
person with whom any of the monies, securities or effects of the Corporation
shall be deposited, or for any loss occasioned by any error of judgment or
oversight on his part, or for any other loss, damage or misfortune whatever
which shall happen in the execution of the duties of his office or in relation
thereto; provided that nothing herein shall relieve any director or officer
from the duty to act in accordance with the Act and the regulations thereunder
or from liability for any breach thereof.
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31. INDEMNITY - Subject to the Act, the Corporation shall indemnify a director
or officer, a former director or officer, or a person who acts or acted at the
Corporation's request as a director or officer of a body corporate of which the
Corporation is or was a shareholder or creditor (or a person who undertakes or
has undertaken any liability on behalf of the Corporation or any such body
corporate) and his heirs and legal representatives, against all costs, charges
and expenses, including an amount paid to settle an action or satisfy a
judgment, reasonably incurred by him in respect of any civil, criminal or
administrative action or proceeding to which he is made a party by reason of
being or having been a director or officer of the Corporation or such body
corporate, if:
(a) he acted honestly and in good faith with a view to the best interests
of the Corporation; and
(b) in the case of a criminal or administrative action or proceeding that
is enforced by a monetary penalty, he had reasonable grounds for
believing that his conduct was lawful.
BANKING ARRANGEMENTS, CONTRACTS, ETC.
32. BANKING ARRANGEMENTS - All funds of the Corporation shall be deposited in
its name in such account or accounts as are designated by the Board.
Withdrawals from such account or accounts and the making, signing, drawing,
accepting, endorsing, negotiating, lodging, depositing or transferring of any
cheques, promissory notes, drafts, acceptances, bills of exchange and orders
for the payment of money with the institution maintaining such account or
accounts shall be made by such person or persons as the Board from time to time
determines.
33. EXECUTION OF INSTRUMENTS - Deeds, transfers, assignments, contracts and
any other documents of the Corporation, shall be signed by any director.
The corporate seal shall be affixed to such instruments as require the
same.
Notwithstanding any provision to the contrary contained in the by-laws of
the Corporation, the Board may at any time or times direct the manner in which
and the person or persons by whom any particular deed, transfer, assignment,
contract or other document, or any class of deeds, transfers, assignments,
contracts or other documents, shall be signed.
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SHARES
34. SHARE CERTIFICATES -
(a) Every shareholder is entitled, at his option, to a share certificate
or a non-transferable written acknowledgment of his right to obtain a
share certificate from the Corporation in respect of the shares of the
Corporation held by him, but the Corporation is not bound to issue more
than one share certificate in respect of a share or shares held jointly
by several persons, and delivery of a share certificate to one of several
joint shareholders is sufficient delivery to all.
(b) A share certificate shall be manually signed by at least one director
or officer of the Corporation or by or on behalf of a registrar, transfer
agent, branch transfer agent or other authenticating agent of the
Corporation.
(c) Notwithstanding the foregoing, a fractional share certificate need
not be manually signed.
35. REPLACEMENT OF SHARE CERTIFICATES - Where the registered holder of a share
certificate claims that the share certificate has been lost, apparently
destroyed or wrongfully taken, the Corporation shall issue a new share
certificate in place of the original share certificate if the owner:
(a) so requests before the Corporation has notice that the share
certificate has been acquired by a bona fide purchaser;
(b) files with the Corporation an indemnity bond sufficient in the
Corporation's opinion to protect the Corporation and any transfer agent,
registrar or other agent of the Corporation from any loss that it or any
of them may suffer by complying with the request to issue a new share
certificate; and
(c) satisfies any other reasonable requirements imposed by the
Corporation.
36. The Corporation has a lien on each share registered in the name of a
shareholder or his legal representative for a debt of that shareholder to the
Corporation.
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37. ENFORCEMENT OF LIENS - If any shareholder (the "Defaulting
Shareholder") defaults in payment of any monies owing by such shareholder to
the Corporation, which default continues for a period of 30 days after notice
in writing of such default has been given by the Corporation to such
shareholder, the Corporation may sell all or any part of the shares then
registered in the name of the Defaulting Shareholder (the "shares") at a bona
fide public or private sale or auction, at which sale or auction any director,
officer or shareholder of the Corporation may purchase the shares or the
Corporation may purchase the shares free of any right or equity of redemption,
which right or equity is hereby expressly waived. The terms and manner of
auction or sale shall be at the sole discretion of the Corporation. The
Corporation may accept any offer which it in its absolute discretion considers
advisable upon such terms, whether cash or credit or partly cash and partly
credit, as it in its discretion considers advisable. Notice of any public or
private sale or auction shall be given to the Defaulting Shareholder at least
15 days prior to the date on which such sale is to be held. The proceeds of
such sale shall be used and applied firstly to the cost and expense of such
sale incurred by the Corporation, including legal fees, secondly to reimburse
the Corporation for out-of-pocket expenses incurred in connection with the sale
and thirdly, for the payment in full of the monies due to the Corporation from
any Defaulting Shareholder. The balance of the proceeds, if any, shall be paid
to the Defaulting Shareholder. If the proceeds of the sale are insufficient to
pay the amount due to the Corporation, then the Defaulting Shareholder shall
remain liable the Corporation for any such deficiency. The rights of the
Corporation hereunder shall be in addition to any rights at law available to
the Corporation for the enforcement of its liens or for the collection of the
debt of the Defaulting Shareholder.
CORPORATE DISTRIBUTIONS
38. DIVIDENDS - A dividend payable in cash shall be paid by cheque to the
order of each registered holder of shares of the class in respect of
which such dividend has been declared as at the record date for the
determination of shareholders entitled to receive such dividend and delivered
to each such holder or mailed by ordinary mail, postage prepaid, to such holder
at his last address appearing on the securities register of the Corporation
unless such holder otherwise directs in writing. In the case of joint holders
the cheque shall, unless such joint holders otherwise direct in writing, be
made payable to the order of all of such joint holders and if more than one
address appears on the securities register of the Corporation in respect of
such joint holding the cheque shall be delivered or mailed to the first
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address so appearing. The mailing or delivery of such cheque as
aforesaid shall satisfy and discharge all liability for the dividend to the
extent of the sum represented thereby, unless such cheque be not paid at par in
Canadian funds on due presentation at the municipality in which the registered
office of the Corporation is situate or at any other place where it is by its
terms payable. In the event of non-receipt of any dividend cheque by the
person to whom it is mailed or delivered as aforesaid, the Corporation shall
issue to such person a replacement cheque for a like amount upon being
furnished with such indemnity and evidence of non-receipt as the Board may from
time to time prescribe, whether generally or in any particular case.
39. JOINT SHAREHOLDERS - If two or more persons are registered as joint
holders of any share, any one of such persons may give effectual
receipts for the certificates issued in respect thereof and for any dividend,
bonus, return of capital or other money payable or warrant issuable in respect
of such share.
NOTICE
40. METHOD OF GIVING - A notice or document required by the Act, the
regulations, the articles or the by-laws to be sent to a shareholder or
director of the Corporation may be sent' by prepaid mail addressed to, or may
be delivered personally to:
(a) the shareholder at his latest address shown in the records of the
Corporation or its transfer agent; and
(b) the director at his latest address as shown in the records of the
Corporation or in the most recent notice filed under the Corporations
Information Act, whichever is the more current.
41. WAIVER OF NOTICE - Where a notice or document is required by the Act or
the regulations or by any by-law to be sent, the notice may be waived
or the time for the notice may be waived or abridged at any time with the
consent in writing of the person entitled thereto.
42. OMISSIONS AND ERRORS - The accidental omission to give any notice to any
shareholder, director, officer or auditor or the non-receipt of any notice by
any shareholder, director, officer or auditor or any error in any notice not
affecting the
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substance thereof shall not invalidate any action taken at any meeting held
pursuant or otherwise founded thereon.
43. NOTICE TO JOINT SHAREHOLDERS - All notices with respect to any shares
registered in more than one name may, if more than one address appears on the
books of the Corporation in respect to such joint holding, be given to such
joint shareholders at the first address so appearing, and notice so given shall
be sufficient notice to all the holders of such shares.
44. PERSONS ENTITLED BY DEATH OR OPERATION OF LAW - Every person who, by
operation of law, transfer, death of a shareholder or by any other means
whatsoever, becomes entitled to any share. or shares shall be bound by every
notice in respect of such share or shares which is duly given to the person
from whom he derived his title to such share or shares until such time as his
name and address are entered on the books of the Corporation (whether it be
before or after the event upon which he became so entitled).
45. SIGNATURE OF NOTICE - The signature of any notice to be given by the
Corporation may be written or printed or partly written and partly printed.
SHAREHOLDERS' AGREEMENT
46. Notwithstanding anything contained in this by-law and any amendment or
supplement hereto, the provisions of-this by-law and any amendment or
supplement hereto shall be amended to the extent necessary to give effect to
the provisions of any shareholders' agreement in force between the Corporation
and its shareholders, and to the extent that there is any conflict between the
provisions of this by-law and any amendment or supplement hereto and any such
shareholders, agreement, the provisions of such shareholders, agreement shall
prevail.
MADE by the Board the 21st day of March, 1989.
/s/ Leo Joseph Dion /s/ Leo Joseph Dion
- -------------------------------- -------------------------------------
President - Leo Joseph Dion Secretary - Leo Joseph Dion
CONFIRMED by the shareholder in accordance with the Act the 21st day of
March, 1989.
/s/ Leo Joseph Dion
----------------------------------------
Secretary - Leo Joseph Dion
<PAGE> 1
EXHIBIT 3.14
BY-LAW NUMBER 1
A BY-LAW RELATING TO THE BUSINESS AND AFFAIRS OF
BMG HOLDINGS INC.
ARTICLE I
INTERPRETATION
1.01 DEFINITIONS
In this by-law:
"Act" means the Business Corporations Act (Ontario) and the
regulations enacted pursuant to it and any statute and regulations
that may be substituted for them, as amended from time to time;
"articles" means the articles, as that term is defined in the
Act, of the Corporation;
"auditor" means the auditor of the Corporation;
"board" means the board of directors of the Corporation;
"by-law" means a by-law of the Corporation;
"Corporation" means the corporation incorporated on April 28,
1995 under the name BMG Holdings Inc.;
"director" means a director of the Corporation;
"officer" means an officer of the Corporation, and reference to
any specific officer is to the person holding that office of the
Corporation;
"person" means an individual, body corporate, partnership,
joint venture, trust, unincorporated organization, association, the
Crown or any agency or instrumentality thereof, or any entity
recognized by law;
"proxyholder" means a person holding a valid proxy for a shareholder;
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"resident Canadian" has the meaning ascribed to that phrase in the Act;
"shareholder" means a shareholder of the Corporation; and
"voting person" means, in respect of a meeting of shareholders,
an individual who is either a shareholder entitled to vote at that
meeting, a duly authorized representative of a shareholder entitled to
vote at the meeting or a proxyholder entitled to vote at the meeting.
1.02 NUMBER, GENDER AND HEADINGS
In this by-law, words in the singular include the plural and vice-versa
and words in one gender include all genders. The insertion of headings in this
by-law and its division into articles, sections and other subdivisions are for
convenience of reference only, and shall not affect the interpretation of this
by-law.
1.03 BY-LAW SUBORDINATE TO OTHER DOCUMENTS
This by-law is subordinate to, and should be read in conjunction with,
the Act, the articles and any unanimous shareholder agreement of the
Corporation.
1.04 COMPUTATION OF TIME
The computation of time and any period of days shall be determined in
accordance with the Act.
ARTICLE 2
DIRECTORS
2.01 NOTICE OF MEETING
Any director or the president may call a meeting of the board by giving
notice stating the time and place of the meeting to each of the directors other
than the director giving that notice. Notices sent by delivery or electronic
means shall be sent no less than 48 hours before the time of the meeting.
Notices sent by mail shall be sent no less than 5 days before the day of the
meeting.
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The board may appoint, by resolution, dates, time and places for
meetings of the board. A copy of any such resolution shall be sent to each
director forthwith after being passed, but no other notice is required for any
such meeting.
2.02 MEETINGS WITHOUT NOTICE
A meeting of the board may be held without notice immediately following
the first or any annual meeting of shareholders.
2.03 PLACE OF MEETING
A meeting of the board may be held at any place within or outside
Ontario, and no such meeting need be held at a place within Canada.
2.04 NO NOTICE TO NEWLY APPOINTED DIRECTOR
A person need not be given notice of the meeting at which that person
is appointed by the other directors to fill a vacancy on the board if present
at that meeting.
2.05 QUORUM FOR DIRECTORS' MEETINGS
If there are 1 or 2 directors, all of the directors constitute a quorum
at a meeting of the board. If there are 3, 4 or 5 directors, a majority of the
directors constitute a quorum at a meeting of the board. Otherwise, such a
quorum consists of the next whole number larger than 2/5ths of the number of
directors. In this section, the "number of directors" is either:
(a) the number of directors specified in the articles; or
(b) if a minimum and maximum number of directors is provided
for in the articles, the number determined from time to time by
special resolution or, if the special resolution empowers the
directors to determine the number, by resolution of the directors, or
if no such resolution has been passed, the number of directors named
in the articles.
2.06 CHAIRMAN OF DIRECTORS' MEETINGS
The chairman of a meeting of the board must be a director present at
the meeting who consents to preside as chairman. The first mentioned of the
chairman of the board, the managing director or the president who so qualifies
shall preside as chairman of the meeting. If none
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of them is so qualified, the directors present at the meeting shall choose a
director to preside as chairman of the meeting.
2.07 VOTES AT DIRECTORS' MEETINGS
Each director present at a meeting of the board shall have 1 vote on
each motion arising. Motions arising at meetings of the board shall be decided
by a majority vote. The chairman of the meeting shall not have a second or
casting vote.
2.08 WHEN DIRECTORS CEASE TO HOLD OFFICE
A director ceases to hold office when the Act or the articles so
provide, or when that director ceases to be a resident Canadian, if as
a result the majority of directors on the board would not be resident
Canadians.
ARTICLE 3
OFFICERS
Each officer shall hold office during the pleasure of the board. Any
officer may, however, resign at any time by giving notice to the Corporation.
ARTICLE 4
MEETINGS OF SHAREHOLDERS
4.01 NOTICE OF SHAREHOLDERS' MEETINGS
The board may call a meeting of shareholders by causing notice of the
time and place of the meeting to be sent to each shareholder entitled to vote
at the meeting, each director and the auditor. Such notice shall be sent no
less than 21 days and no more than 50 days before the meeting, if the
Corporation is an offering corporation (as defined in the Act), or no less than
10 days and no more than 50 days before the meeting, if the Corporation is not
an offering corporation.
4.02 QUORUM AT MEETINGS OF SHAREHOLDERS
If the Corporation has only 1 shareholder entitled to vote at a meeting
of shareholders, that shareholder constitutes a quorum. Otherwise, any 2
voting persons present shall constitute a quorum, but only to appoint a
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chairman and adjourn the meeting. For all other purposes, a quorum consists of
at least 2 voting persons present and authorized to cast in the aggregate not
less than 25% of the total number of votes attaching to all shares carrying the
right to vote at that meeting.
4.03 CHAIRMAN'S VOTE
The chairman of any meeting of shareholders shall not have a second or
casting vote.
4.04 VOTING
Unless the chairman of a meeting of shareholders directs a ballot, or a
voting person demands one, each motion shall be voted upon by a show of hands.
Each voting person has 1 vote in a vote by show of hands. A ballot may be
directed or demanded either before or after a vote by show of hands. If a
ballot is taken, a prior vote by show of hands has no effect.
4.05 SCRUTINEERS
The chairman of a meeting of shareholders may appoint for that meeting
1 or more scrutineers, who need not be voting persons.
4.06 WHO MAY ATTEND SHAREHOLDERS' MEETING
The only persons entitled to attend a meeting of shareholders are
voting persons, the president, the directors, the auditor and others permitted
by the chairman of the meeting.
ARTICLE 5
SECURITY CERTIFICATES
Security certificates shall be in such form as the board may approve or
the Corporation adopt. The president or the board may order the cancellation
of any security certificate that has become defaced and the issuance of a
replacement certificate for it when the defaced certificate is delivered to the
Corporation or to a transfer agent or branch transfer agent of the Corporation.
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ARTICLE 6
PAYMENTS
6.01 CHEQUES
Any amount payable in cash to shareholders (including dividends payable
in cash) may be paid by cheque drawn on any of the Corporation's bankers to the
order of each registered holder of shares of the class or series in respect of
which such amount is to be paid. Cheques may be sent by delivery or first
class mail to such registered holder at that holder's address appearing on the
register of shareholders, unless that holder otherwise directs in writing. By
sending a cheque, as provided in this by-law, in the amount of the dividend
less any tax that the Corporation is required to withhold, the Corporation
discharges its liability to pay the amount of that dividend, unless the cheque
is not paid on due presentation.
6.02 CHEQUES TO JOINT HOLDERS
Cheques payable to joint holders shall be made payable to the order of
all such joint holders unless such joint holders direct otherwise. Such
cheques may be sent to the holders at the address appearing on the register of
shareholders in respect of that joint holding, to the first address so
appearing if there is more than one, or to such other address as those joint
holders direct in writing.
6.03 NON-RECEIPT OF CHEQUES
The Corporation shall issue a replacement cheque in the same amount to
any person who does not receive a cheque sent as provided in this by- law, if
that person has satisfied the conditions regarding indemnity, evidence of
non-receipt and title set by the board from time to time, either generally or
for that particular case.
6.04 CURRENCY OF DIVIDENDS
Dividends or other distributions payable in cash may be paid to some
shareholders in Canadian currency and to other shareholders in equivalent
amounts of a currency or currencies other than Canadian currency. The board
may declare dividends or other distributions in any currency or in alternative
currencies and make such provisions as it deems advisable for the payment of
such dividends or other distributions.
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ARTICLE 7
EXECUTION OF DOCUMENTS
7.01 SIGNATORIES
The following are the only persons authorized to sign any document on
behalf of the Corporation, other than in the usual and ordinary course of the
Corporation's business:
(a) any person appointed by resolution of the board to sign a specific
document, that type of document or generally on behalf of the
Corporation, or
(b) any two of the directors and officers of the Corporation.
Any document so signed may, but need not, have the corporate seal
applied, if there is one.
7.02 FACSIMILE SIGNATURES
The signature of any person authorized to sign on behalf of the
Corporation may, if specifically authorized by resolution of the board, be
written, printed, stamped, engraved, lithographed or otherwise mechanically
reproduced. Anything so signed shall be as valid as if it had been signed
manually, even if that person has ceased to hold office when anything so signed
is issued or delivered, until revoked by resolution of the board.
ARTICLE 8
INFORMATION PROVIDED TO SHAREHOLDERS
Except as required by the Act or authorized by the board, no
shareholder is entitled by virtue of being a shareholder to disclosure of any
information or records respecting the Corporation or its business.
<PAGE> 8
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ARTICLE 9
PROTECTION AND INDEMNITY
9.01 TRANSACTIONS WITH THE CORPORATION
No director or officer shall be disqualified, by virtue of being a
director, or by holding any other office of, or place of profit under, the
Corporation or any body corporate in which the Corporation is a shareholder or
is otherwise interested, from entering into, or from being concerned or
interested in any manner in, any contract, transaction or arrangement made, or
proposed to be made, with the Corporation or any body corporate in which the
Corporation is interested and no such contract, transaction or arrangement.
shall be void or voidable for any such reason. No director or officer shall be
liable to account to the Corporation for any profit arising from any such
office or place of profit or realized in respect of any such contract,
transaction or arrangement. Except as required by the Act, no director or
officer must make any declaration or disclosure of interest or, in the case of
a director, refrain from voting in respect of any such contract, transaction or
arrangement.
9.02 LIMITATION OF LIABILITY
Subject to the Act, no director or officer shall be liable for:
(a) the acts, receipts, neglects or defaults of any other person;
(b) joining in any receipt or act for conformity;
(c) any loss, damage or expense to the Corporation arising from the
insufficiency or deficiency of title to any property acquired by or
on behalf of the Corporation;
(d) the insufficiency or deficiency of any security in or upon which any
moneys of the Corporation are invested;
(e) any loss, damage or expense arising from the bankruptcy, insolvency,
act or omission of any person with whom any monies, securities
or other property of the Corporation are lodged or deposited;
(f) any loss, damage or expense occasioned by any error of judgment or
oversight;
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(g) any other loss, damage or expense related to the performance or
non-performance of the duties of that person's office.
9.03 CONTRACTS ON BEHALF OF THE CORPORATION
Subject to the Act, any contract entered into, or action taken or
omitted, by or on behalf of the Corporation shall, if duly approved by a
resolution of the shareholders, be deemed for all purposes to have had the
prior authorization of the shareholders.
9.04 INDEMNITY OF DIRECTORS AND OFFICERS
As required or permitted by the Act, the Corporation shall indemnify
each Indemnified Person against all costs, charges and expenses, including an
amount paid to settle an action or satisfy a judgment, that that Indemnified
Person reasonably incurs in respect of any civil, criminal or administrative
action or proceeding to which that Indemnified Person is made a party by reason
of being or having been a director or officer of the Corporation or of a body
corporate of which the Corporation is or was a shareholder or creditor if:
(a) that Indemnified Person acted honestly and in good faith with a view to
the best interest of the Corporation; and
(b) in the case of a criminal or administrative action or proceeding that
is enforced by a monetary penalty, that Indemnified Person had
reasonable grounds for believing that the conduct was lawful.
"Indemnified Person" means
(a) each director and former director of the Corporation,
(b) each officer and former officer of the Corporation,
(c) each person who acts or acted at the Corporation's request as a
director or officer of a body corporate of which the Corporation is
or was a shareholder or creditor, and
(d) the respective heirs and legal representatives of each of the persons
designated in paragraphs (a) through (c).
<PAGE> 10
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9.05 INDEMNITIES NOT LIMITING
The provisions of this Article 10 shall be in addition to and not in
substitution for any rights, immunities and protections to which an Indemnified
Person is otherwise entitled.
ARTICLE 10
NOTICES
10.01 PROCEDURE FOR SENDING NOTICES
Notice shall be deemed to have been sufficiently sent if sent in
writing to the address of the addressee on the books of the Corporation and
delivered in person, sent by prepaid first class mail or sent by any electronic
means of sending messages, including telex or facsimile transmission, which
produces a paper record. Notice shall not be- sent by mail if there is any
general interruption of postal services in the municipality in which or to
which it is mailed. Each notice so sent shall be deemed to have been received
on the day it was delivered or sent by electronic means or on the fifth day
after it was mailed.
10.02 NOTICES TO SUCCESSORS IN TITLE
Notice to a shareholder is sufficient notice to each successor in title
to that shareholder until the name and address of that successor have been
entered on the Corporation's share register.
10.03 NOTICE TO JOINT SHAREHOLDERS
Notice to one joint shareholder is sufficient notice to all of them.
Such notice shall be addressed to all such joint holders and sent to the
address for them on the Corporation's register of shareholders or to the first
such address if there is more than one.
10.04 FACSIMILE SIGNATURES ON NOTICES
The signature on any notice or other communication or document to be
sent by the Corporation may be written, printed, stamped, engraved,
lithographed or otherwise mechanically reproduced.
<PAGE> 11
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10.05 OMISSION OF NOTICE DOES NOT INVALIDATE ACTIONS
All actions taken at a meeting in respect of which a notice has been
sent shall be valid even if:
(a) by accident, notice was not sent to any person,
(b) notice was not received by any person, or
(c) there was an error in a notice that did not affect the substance of
that notice.
10.06 WAIVER OF NOTICE
Any person entitled to notice under the Act, the articles or the
by-laws may waive that notice. Waiver, either before or after the event
referred to in the notice, shall cure any default in sending that notice.
ARTICLE 11
REPEAL OF FORMER BY-LAWS
11.01 FORMER BY-LAWS MAY BE REPEALED
The directors may repeal one or more by-laws by passing a by-law that
contains provisions to that effect.
11.02 EFFECT OF REPEAL OF BY-LAWS
The repeal of any by-law in whole or part shall not in any way affect
the validity of any act done or right, privilege, obligation or liability
acquired or incurred thereunder prior to such repeal. All directors, officers
and other persons acting under any by-law repealed in whole or part shall
continue to act as if elected or appointed under the provisions of this by-law.
MADE by the directors the 15th day of June, 1995.
[SIG] [SIG]
- ----------------------------- ------------------------------
President Secretary
<PAGE> 1
EXHIBIT 3.15
BY-LAWS
OF
WINCHESTER FABRICATION CORPORATION
* * * * *
ARTICLE I
SHARES OF STOCK
SECTION 1. Certificate of Shares. The certificates for shares
of the Capital Stock of this company shall be in such form, not inconsistent
with the Articles of Incorporation of the company, as shall be prepared or be
approved by the Board of Directors. The certificates shall be signed by the
President or a Vice President, and also by the Secretary or an Assistant
Secretary.
SECTION 2. Transfer of Shares. Shares of the Capital Stock of
the company shall be transferred by endorsement of the certificates or by
assignment separate from the certificates representing said shares by the
registered holder thereof or his attorney, and its surrender to the Secretary
for cancellation. Whereupon the Secretary shall issue to the transferee or
transferees, as specified by the endorsement, new certificates for a like
number of shares. Transfers shall be made only upon the books of the company
and upon said surrender and cancellation; and shall entitle the transferee to
all the privileges, rights and interests of a shareholder of this company.
SECTION 3. Closing of Transfer Books. The stock transfer books
for meetings of the shareholders may be closed as follows:
The Board of Directors is authorized to fix in advance a date, not
more than 60 days nor less than 10 days preceding the date of any meeting of
stockholders, or the date for the payment of any dividend, or the date for the
allotment of rights, or the date when any change or conversion or exchange of
Capital Stock shall go into effect, or a date in connection with obtaining such
consent, as a record date for the determination of the stockholders entitled to
notice of, and to vote at, any such meeting and any adjournment thereof, or
entitled to receive payment of any such dividend, or to any such allotment of
rights, or to exercise the rights in respect to any such change, conversion or
exchange of Capital Stock, or to give such consent, and in such case such
stockholders and only such stockholders as shall be stockholders of record on
the date so fixed shall be entitled to such notice of, and to vote at, such
meeting and any adjournment thereof, or to receive payment of such dividend, or
to receive such allotment of rights, or to exercise such rights, or to give
such consent, as the case may be, notwithstanding any transfer of any stock on
the books of the corporation after any such record date fixed as aforesaid.
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<PAGE> 2
SECTION 4. Registered Stockholders. The corporation shall be
entitled to treat the holder of record of any share or shares of stock as the
holder in fact thereof and accordingly shall not be bound to recognize any
equitable or other claim to or interest in such share on the part of any other
person, whether or not it shall have express or other notice thereof, save as
expressly provided by the laws of Michigan.
SECTION 5. Lien. The corporation shall have a lien upon all
stock or property of its members invested therein, for all debts due to it by
the owners thereof.
SECTION 6. Lost Certificates. In case of the loss of any
certificate of shares of stock, upon due proof by the registered holder or his
representatives, by affidavit of such loss, the Secretary shall issue a
duplicate certificate in its place, upon the corporation being fully
indemnified therefor, but indemnity may be waived by the Board of Directors.
SECTION 7. Dividends. The Board of Directors, in its
discretion, from time to time, may declare dividends upon the Capital Stock
from the earned surplus and net profits of the company.
SECTION 8. Fiscal Year. The fiscal year of the company shall
end on the 31st day of December in each year.
SECTION 9. Corporate Seal. The Board of Directors shall provide
a suitable corporate seal, which seal shall be in the charge of the Secretary,
and shall be used by him.
ARTICLE II
MEETING OF SHAREHOLDERS
SECTION 1. Place of Meetings. All meetings of the shareholders
of the corporation shall be held at such place, within or without the State of
Michigan, as may be determined by the Board of Directors.
SECTION 2. Annual Meeting. The annual meeting of the
shareholders for the election of directors and for the transaction of such
other business as may come before the meeting shall be held on the first
Tuesday in May in each year. If it shall happen at any time that an election
of directors is not held on the day designated therefor, it shall be lawful on
any other day upon due notice as provided in these By-Laws to hold such
election.
SECTION 3. Notice. Written notice of the date, time and place
of any shareholders' meeting shall be mailed to each shareholder at his last
known address, as the same appears on the stock book of the company, or if no
such address appears, at his last known place of address, at least ten days
prior to any meeting and any notice of special meeting shall indicate briefly
the object or objects
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<PAGE> 3
thereof. Nevertheless, if all the shareholders waive notice of the meeting, no
notice of the same shall be required, and whenever all the shareholders shall
meet in person or by proxy, such meeting shall be valid for all purposes,
without call or notice, and at such meeting any corporate action shall not be
invalid for want of notice.
SECTION 4. Quorum. At any meeting of the shareholders, the
holders of a majority of all the voting shares of the Capital Stock of the
company issued and outstanding, present in person or represented by proxy,
shall constitute a quorum. Meetings at which less than a quorum is represented
may, however, be adjourned from time to time to a further date by those who
attend, without further notice other than the announcement at such meeting, and
when a quorum shall be present upon any such adjourned day, any business may be
transacted which might have been transacted at the meeting as originally
called.
SECTION 5. Voting. Each shareholder shall be entitled to one
vote for each share of voting stock standing registered in his name on the
books of the company, in person or by proxy duly appointed in writing and filed
with the Secretary of the meeting, on all questions and elections. No proxy
shall be voted after three years from its date unless said proxy provides for a
longer period.
SECTION 6. Organization. The President or chairman of the Board
may call meetings of the shareholders to order and may act as Chairman of such
meetings, unless otherwise determined by the holders of a majority of all the
shares of the Capital Stock present in person or by proxy at the meeting. The
Secretary of the company shall act as Secretary of all meetings of the company,
but in the absence of the Secretary at any meeting of the share-holders or his
inability to act as Secretary, the presiding officer may appoint any person to
act as Secretary of the meeting.
SECTION 7. Inspectors. Whenever any shareholder present at a
meeting of shareholders shall request the appointment of inspectors, a majority
of the shareholders present at such meeting and entitled to vote thereat, shall
appoint inspectors who need not be shareholders. If the right of any person to
vote at such meeting shall be challenged, the inspectors of election shall
determine such right. The inspectors shall receive and count the votes either
upon an election or for the decision of any question and shall determine the
result. Their certificate of any vote shall be prima facie evidence thereof.
SECTION 8. Giving Notice. Any notice required by statute or by
these By-Laws to be given to the shareholders, or to directors, or to any
officer of the company, shall be deemed to be sufficient to be given by
depositing the same in a post office box, in a sealed, postpaid wrapper,
addressed to such shareholder, director, or officer at his last known address
as appears on the books and records of the company, and such notice shall be
deemed to have been given at the time of such mailing.
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<PAGE> 4
SECTION 9. New Shareholders. Every person becoming a
shareholder in this company shall be deemed to assent to these By-Laws and
shall designate to the Secretary the address to which he desires that the
notice herein required to be given may be sent, and all notices mailed to such
addresses, with postage prepaid, shall be considered as duly given at the date
of mailing, and any person failing to so designate his address shall be deemed
to have waived notice of such meeting.
ARTICLE III
DIRECTORS
SECTION 1. Number and Term of Directors. The business property
and affairs of this company shall be managed by a Board of Directors composed
of not less than three nor more than seven members, who need not be
shareholders. At each annual meeting, or any special meeting where election of
directors is to be considered, before proceeding with the election of
directors, the shareholders shall by resolution designate the number of
directors within the foregoing. Each director shall hold office for the term
for which he is elected and until his successor is elected and qualified.
SECTION 2. Place of Meeting. The directors may hold their
meetings in such place or places within or without this state as a majority of
the Board of Directors may, from time to time, determine.
SECTION 3. Meeting. Meetings of the Board of Directors may be
called at any time by the Chairman of the Board, President or Secretary, or by
a majority of the Board of Directors. Directors shall be notified of the date,
time and place of all meetings of the Board at least 24 hours prior thereto,
except that no notice will be required in connection with regular meetings of
the Board if so provided by appropriate resolution of the Board, and if the
date, time and place of such meetings are also covered by Board resolution.
Any director, however, shall be deemed to have waived such notice by his
attendance at any meeting.
SECTION 4. Quorum. A majority of the Board of Directors shall
constitute a quorum for the transaction of business, and if at any meeting of
the Board of Directors there be less than a quorum present, a majority of those
present may adjourn the meeting from time to time.
SECTION 5. Vacancies. Vacancies in the Board of Directors shall
be filled by the remaining members of the Board and each person so elected
shall be a director until his successor is elected by the shareholders, who may
make such election at the next annual meeting of the stockholders or at any
special meeting duly called for that purpose.
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<PAGE> 5
SECTION 6. Delegation of Powers. For any reason deemed
sufficient by the Board of Directors, whether occasioned by absence or
otherwise, the Board may delegate all or any of the powers and duties of any
officer to any other officer or director, but no officer or director shall
execute, acknowledge or verify any instrument in more than one capacity.
SECTION 7. Power to Appoint Executive Committee. The Board of
Directors shall have power to appoint by resolution an executive committee
and/or any other committee composed of one or more directors who, to the extent
provided in such resolution, shall have and exercise the authority of the Board
of Directors in the management of the business of the company between meetings
of the Board.
SECTION 8. Compensation. The compensation of directors,
officers and agents may be fixed by the Board.
ARTICLE IV
OFFICERS
SECTION 1. The Board of Directors shall select a President, a
Secretary and a Treasurer and may select a Chairman of the Board, one or more
Vice Presidents, Assistant Secretaries and Assistant Treasurers, who need not
be stockholders and who shall be elected by the Board of Directors at their
regular annual meeting. The term of office shall be for one year and until
their successors are chosen. No one of such officers, except the President,
need be a director, but a Vice President who is not a director cannot succeed
to or fill the office of the President. Any two of the above offices, except
those of President and Vice President, may be held by the same person, but no
officer shall execute, acknowledge or verify any instrument in more than one
capacity. The Board of Directors may fix the salaries of the officers of the
Company.
SECTION 2. The Board of Directors may also appoint such other
officers and agents, including a Chairman of the Board, as they may deem
necessary for the transaction of the business of the company. All officers and
agents shall respectively have such authority and perform such duties in the
management of the property and affairs of the corporation as may be designated
by the Board of Directors. Without limitation of any right of an officer or
agent to recover damages for breach of contract, the Board of Directors may
remove any officer or agent whenever, in their judgment, the business interests
of the company will be served thereby.
SECTION 3. The Board of Directors may secure the fidelity of any
or all of its officers and of any employee by bond or otherwise.
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<PAGE> 6
ARTICLE V
DUTIES OF OFFICERS
SECTION 1. Chairman of the Board. He may preside at all
meetings of the shareholders and Board of Directors when present. The Chairman
of the Board may be the chief executive officer of the corporation, and in the
recess of the Board of Directors may have the general control and management of
its business affairs as the Board of Directors may from time to time determine,
subject, however, to the right of the Board of Directors to delegate any
specific power to any other officer or officers of the corporation.
SECTION 2. President. The President, in the absence of the
Chairman of the Board, may preside at all meetings of the shareholders and
Board of Directors. He may have general supervision of the affairs of the
corporation, shall sign or countersign all certificates, contracts or other
instruments of the corporation, as authorized by the Board of Directors, shall
make reports to the Board of Directors and shareholders, and shall perform such
other duties as are incident to the office or are properly required of him by
the Board of Directors.
SECTION 3. Vice President. In case the office of President
shall become vacant by death, resignation, or otherwise or in case of the
absence of the President, or his disability to discharge the duties of his
office, such duties shall, for the time being, devolve upon the Vice President
who shall do and perform such other acts as the Board of Directors may, from
time to time, authorize him to do, but a Vice President who is not a director
cannot succeed to or fill the office of President.
SECTION 4. Treasurer. The Treasurer shall have custody and keep
account of all money, funds and property of the company, unless otherwise
determined by the Board of Directors, and he shall render such accounts and
present such statement to the directors and President as may be required of
him. He shall deposit all funds of the company which may come into his hands
in such bank or banks as the Board of Directors may designate. He shall keep
his bank accounts in the name of the company, and shall exhibit his books and
accounts, at all reasonable times, to any director of the company upon
application at the office of the company during business hours. He shall pay
out money as the business may require upon the order of the properly
constituted officer or officers of the company, taking proper vouchers
therefor; provided, however, that the Board of Directors shall have power by
resolution to delegate any of the duties of the Treasurer to other officers,
and to provide by what officers, if any, all bills, notes, checks, vouchers,
orders or other instruments shall be countersigned. He shall perform, in
addition, such other duties as may be delegated to him by the Board of
Directors.
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<PAGE> 7
SECTION 5. Secretary. The Secretary of the company shall keep
the minutes of all the meetings of the shareholders and Board of Directors in
books provided for that purpose; he shall attend to the giving and receiving of
all notices of the company; he shall sign, with the President or Vice
President, in the name of the company, all contracts authorized by the Board of
Directors, and when necessary shall affix the corporate seal of the company
thereto; he shall have charge of the certificate books, transfer books and
stock ledgers and such other books and papers as the Board of Directors may
direct; all of which shall, at all reasonable times, be open to the examination
of any director upon application at the office of Secretary, and in addition,
such other duties as may be delegated to him by the Board of Directors.
SECTION 6. Assistant Secretary and Assistant Treasurer. The
Assistant Secretary, in the absence or disability of the Secretary, shall
perform the duties and exercise the powers of the Secretary. The Assistant
Treasurer, in the absence or disability of the Treasurer, shall perform the
duties and exercise the powers of the Treasurer.
ARTICLE VI
INDEMNIFICATION
Any person shall be indemnified and reimbursed by this Company for
expenses actually and reasonably incurred by him or her and liabilities imposed
upon him or her in connection with or arising out of any action, suit or
proceeding, civil or criminal, or threat thereof, in which he or she may be
involved by reason of his or her being or having been a director, officer, or
employee of this Company, or of any firm, corporation or organization which he
or she served in any capacity at the request of the Company, to the maximum
extent permitted by, and in accordance with, the relevant provisions of the
Michigan Business Corporation Act. Neither this Company nor its directors or
officers shall be liable to anyone for any determination of such directors or
officers as to the existence or absence of conduct which would provide a basis
for making or refusing to make any payment hereunder or for taking or omitting
to take any other action hereunder, in reliance upon the advice of counsel. A
court of competent jurisdiction may make a determination as to the right of a
person to indemnification and reimbursement hereunder in any specific case upon
the application of such person, despite the failure or refusal of the directors
and shareholders to make provision therefor. The foregoing right of
indemnification and reimbursement shall not be exclusive of other rights to
which such person may be entitled as a matter of law and shall inure to the
benefit of his or her heirs, executors and administrators. Notwithstanding
anything herein to the contrary, the right of indemnification herein provided
shall be applicable only to the extent that such liabilities and expenses are
not otherwise recoverable by or through (i) policies of insurance which may be
carried by or for the benefit of such persons, or this corporation, or any
other corporation or organization, or (ii) other rights
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<PAGE> 8
against unrelated third parties. The indemnification rights covered herein
shall continue to apply to an individual who has ceased to be a director,
officer or employee.
ARTICLE VII
EXECUTION OF INSTRUMENTS
SECTION 1. Checks, Etc. All checks, drafts and orders for
payment of money. shall be signed in the. name of the company by such officers
or agents as the Board of Directors, or the Executive Committee, shall from
time to time designate for that purpose.
SECTION 2. Contracts, Conveyances, Etc. Contracts, conveyances,
notes, bills and other instruments may be executed by the President or any Vice
President, and the Secretary or any Assistant Secretary, with authority to
affix the corporate seal thereto, provided, however, that if, in any case, the
directors or executive committee shall see fit to direct a different method of
execution or signature, then execution may be in that manner, notwithstanding
any other provisions of the By-Laws relating thereto.
ARTICLE VIII
AMENDMENTS
SECTION 1. The shareholders of the Board of Directors may alter,
amend, add to or repeal these By-Laws, including the fixing and altering of the
Board of Directors; provided that the Board of Directors shall not make or
alter any By-Laws fixing their qualifications, classifications or term of
office.
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<PAGE> 1
EXHIBIT 3.16
BY-LAWS
OF
CREATIVE FABRICATION CORPORATION
* * * * *
ARTICLE I
SHARES OF STOCK
SECTION 1. Certificate of Shares. The certificates for shares
of the Capital Stock of this company shall be in such form, not inconsistent
with the Articles of Incorporation of the company, as shall be prepared or be
approved by the Board of Directors. The certificates shall be signed by the
President or a Vice President, and also by the Secretary or an Assistant
Secretary.
SECTION 2. Transfer of Shares. Shares of the Capital Stock of
the company shall be transferred by endorsement of the certificates or by
assignment separate from the certificates representing said shares by the
registered holder thereof or his attorney, and its surrender to the Secretary
for cancellation. Whereupon the Secretary shall issue to the transferee or
transferees, as specified by the endorsement, new certificates for a like
number of shares. Transfers shall be made only upon the books of the company
and upon said surrender and cancellation; and shall entitle the transferee to
all the privileges, rights and interests of a shareholder of this company.
SECTION 3. Closing of Transfer Books. The stock transfer books
for meetings of the shareholders may be closed as follows:
The Board of Directors is authorized to fix in advance a date, not
more than 60 days nor less than 10 days preceding the date of any meeting of
stockholders, or the date for the payment of any dividend, or the date for the
allotment of rights, or the date when any change or conversion or exchange of
Capital Stock shall go into effect, or a date in connection with obtaining
such consent, as a record date for the determination of the stockholders
entitled to notice of, and to vote at, any such meeting and any adjournment
thereof, or entitled to receive payment of any such dividend, or to any such
allotment of rights, or to exercise the rights in respect to any such change,
conversion or exchange of Capital Stock, or to give such consent, and in such
case such stockholders and only such stockholders as shall be stockholders of
record on the date so fixed shall be entitled to such notice of, and to vote
at, such meeting and any adjournment thereof, or to receive payment of such
dividend, or to receive such allotment of rights, or to exercise such rights,
or to give such consent, as the case may be, notwithstanding any transfer of
any stock on the books of the corporation after any such record date fixed as
aforesaid.
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<PAGE> 2
SECTION 4. Registered Stockholders. The corporation shall be
entitled to treat the holder of record of any share or shares of stock as the
holder in fact thereof and accordingly shall not be bound to recognize any
equitable or other claim to or interest in such share on the part of any other
person, whether or not it shall have express or other notice thereof, save as
expressly provided by the laws of Tennesee.
SECTION 5. Lien. The corporation shall have a lien upon all
stock or property of its members invested therein, for all debts due to it by
the owners thereof.
SECTION 6. Lost Certificates. In case of the loss of any
certificate of shares of stock, upon due proof by the registered holder or his
representatives, by affidavit of such loss, the Secretary shall issue a
duplicate certificate in its place, upon the corporation being fully
indemnified therefor, but indemnity may be waived by the Board of Directors.
SECTION 7. Dividends. The Board of Directors, in its
discretion, from time to time, may declare dividends upon the Capital Stock
from the earned surplus and net prof its of the company.
SECTION 8. Fiscal Year. The fiscal year of the company shall
end on the 31st day of December in each year.
SECTION 9. Corporate Seal. The Board of Directors shall provide
a suitable corporate seal, which seal shall be in the charge of the Secretary,
and shall be used by him.
ARTICLE II
MEETING OF SHAREHOLDERS
SECTION 1. Place of Meetings. All meetings of the shareholders
of the corporation shall be held at such place, within or without the state of
Tennessee, as may be determined by the Board of Directors.
SECTION 2. Annual Meetings. The annual meeting of the
shareholders for the election of directors and for the transaction of such
other business as may come before the meeting shall be held on the first
Tuesday in May in each year. if it shall happen at any time that an election of
directors is not held on the day designated therefor, it shall be lawful on any
other day upon due notice as provided in these By-Laws to hold such election.
SECTION 3. Notice. Written notice of the date, time and place
of any shareholders' meeting shall be mailed to each shareholder at his last
known address, as the same appears on the stock book of the company, or if no
such address appears, at his last known place of address, at least ten days
prior to any meeting and any notice of special meeting shall indicate briefly
the object or objects
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<PAGE> 3
thereof. Nevertheless, if all the shareholders waive notice--of the meeting,
no notice of the same shall be required, and whenever all the shareholders
shall meet in person or by proxy, such meeting shall be valid for all purposes,
without call or notice, and at such meeting any corporate action shall not be
invalid for want of notice.
SECTION 4. Quorum. At any meeting of the shareholders, the
holders of a majority of all the voting shares of the Capital Stock of the
company issued and outstanding, present in person or represented by proxy,
shall constitute a quorum. Meetings at which less than a quorum is represented
may, however, be adjourned from time to time to a further date by those who
attend, without further notice other than the announcement at such meeting, and
when a quorum shall be present upon any such adjourned day, any business may be
transacted which might have been transacted at the meeting as originally
called.
SECTION 5. Voting. Each shareholder shall be entitled to one
vote for each share of voting stock standing registered in his name on the
books of the company, in person or by proxy duly appointed in writing and filed
with the Secretary of the meeting, on all questions and elections. No proxy
shall be voted after three years from its date unless said proxy provides for a
longer period.
SECTION 6. Organization. The President or Chairman of the Board
may call meetings of the shareholders to order and may act as Chairman of such
meetings, unless otherwise determined by the holders of a majority of all the
shares of the Capital Stock present in person or by proxy at the meeting. The
Secretary of the company shall act as Secretary of all meetings of the company,
but in the absence of the Secretary at any meeting of the shareholders or his
inability to act as Secretary, the presiding officer may appoint any person to
act as Secretary of the meeting.
SECTION 7. Inspectors. Whenever any shareholder present at a
meeting of shareholders shall request the appointment of inspectors, a majority
of the shareholders present at such meeting and entitled to vote thereat, shall
appoint inspectors who need not be shareholders. If the right of any person to
vote at such meeting shall be challenged, the inspectors of election shall
determine such right. The inspectors shall receive and count the votes either
upon an election or for the decision of any question and shall determine the
result. Their certificate of any vote shall be prima facie evidence thereof.
SECTION 8. Giving Notice. Any notice required by statute or by
these By-Laws to be given to the shareholders, or to directors, or to any
officer of the company, shall be deemed to be sufficient to be given by
depositing the same in a post office box, in a sealed, postpaid wrapper,
addressed to such shareholder, director or officer at his last known address as
appears on the books and records of the company, and such notice shall be
deemed to have been given At the time of such mailing.
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<PAGE> 4
SECTION 9. New Shareholders. Every person becoming a
shareholder in this company shall be deemed to assent to these By-Laws and
shall designate to the Secretary the address to which he desires that the
notice herein required to be given may be sent, and all notices mailed to such
addresses, with postage prepaid, shall be considered as duly given at the date
of mailing, and any person failing to so designate his address shall be deemed
to have waived notice of such meeting.
ARTICLE III
DIRECTORS
SECTION 1. Number and Term of Directors. The business property
and affairs of this company shall be managed by a Board of Directors composed
of not less than three nor more than seven members, who need not be
shareholders. At each annual meeting, or any special meeting where election of
directors is to be. considered, before proceeding with the election of
directors, the shareholders shall by resolution designate the number of
directors within the foregoing. Each director shall hold office for the term
for which he is elected and until his successor is elected and qualified.
SECTION 2. Place of Meeting. The directors may hold their
meetings in such place or places within or without this state as a majority of
the Board of Directors may, from time to time, determine.
SECTION 3. Meetings. Meetings of the Board of Directors may be
called at any time by the Chairman of the Board, President or Secretary, or by
a majority of the Board of Directors. Directors shall be notified of the date,
time and place of all meetings of the Board at least 24 hours prior thereto,
except that no notice will be required in connection with regular meetings of
the Board if so provided by appropriate resolution of the Board, and if the
date, time and place of such meetings are also covered by Board resolution.
Any director, however, shall be deemed to have waived such notice by his
attendance at any meeting.
SECTION 4. Quorum. A majority of the Board of Directors shall
constitute a quorum for the transaction of business, and if at any meeting of
the Board of Directors there be less than a quorum present, a majority of those
present may adjourn the meeting from time to time.
SECTION 5. Vacancies. Vacancies in the Board of Directors shall
be filled by the remaining members of the Board and each person so elected
shall be a director until his successor is elected by the shareholders, who may
make such election at the next annual meeting of the stockholders or at any
special meeting duly called for that purpose.
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SECTION 6. Delegation of Powers. For any reason deemed
sufficient by the Board of Directors, whether occasioned by absence or
otherwise, the Board may delegate all or any of the powers and duties of any
officer to any other officer or director, but no officer or director shall
execute, acknowledge or verify any instrument in more than one capacity.
SECTION 7. Power to Appoint Executive Committee. The Board of
Directors shall have power to appoint by resolution an executive committee
and/or any other committee composed of one or more directors who, to the extent
provided in such resolution, shall have and exercise the authority of the Board
of Directors in the management of the business of the company between meetings
of the Board.
SECTION 8. Compensation. The compensation of directors,
officers and agents may be fixed by the Board.
ARTICLE IV
OFFICERS
SECTION 1. The Board of Directors shall select a President, a
Secretary and a Treasurer and may select a Chairman of the Board, one or more
Vice Presidents, Assistant Secretaries and Assistant Treasurers, who need not
be stockholders and who shall be elected by the Board of Directors at their
regular annual meeting. The term of office shall be for one year and until
their successors are chosen. No one of such officers, except the President,
need be a director, but a Vice President who is not a director cannot succeed
to or fill the office of the President. Any two of the above offices, except
those of President and Vice President, may be held by the same person, but no
officer shall execute, acknowledge or verify any instrument in more than one
capacity. The Board of Directors may fix the salaries of the officers of the
Company.
SECTION 2. The Board of Directors may also appoint such other
officers and agents, including a Chairman of the Board, as they may deem
necessary for the transaction of the business of the company. All officers and
agents shall respectively have such authority and perform such duties in the
management of the property and affairs of the corporation as may be designated
by the Board of Directors. Without limitation of any right of an officer or
agent to recover damages for breach of contract, the Board of Directors may
remove any officer or agent whenever, in their judgment, the business interests
of the company will be served thereby.
SECTION 3. The Board of Directors may secure the fidelity of any
or all of its officers and of any employee by bond or otherwise.
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<PAGE> 6
ARTICLE V
DUTIES OF OFFICERS
SECTION 1. Chairman of the Board. He may preside at all
meetings of the shareholders and Board of Directors when present. The Chairman
of the Board may be the chief executive officer of the corporation, and in the
recess of the Board of Directors may have the general control and management of
its business affairs as the Board of Directors may from time to time determine,
subject, however, to the right of the Board of Directors to delegate any
specific power to any other officer or officers of the corporation.
SECTION 2. President. The President, in the absence of the
Chairman of the Board, may preside at all meetings of the shareholders and
Board of Directors. He may have general supervision of the affairs of the
corporation, shall sign or countersign all certificates, contracts or other
instruments of the corporation, as authorized by the Board of Directors, shall
make reports to the Board of Directors and shareholders, and shall perform such
other duties as are incident to the office or are properly required of him by
the Board of Directors.
SECTION 3. Vice President. In case the office of President
shall become vacant by death, resignation, or otherwise, or in case of the
absence of the President, or his disability to discharge the duties of his
office, such duties shall, for the time being, devolve upon the Vice President
who shall do and perform such other acts as the Board of Directors may, from
time to time, authorize him to do, but a Vice President who is not a director
cannot succeed to or fill the office of President.
SECTION 4. Treasurer. The Treasurer shall have custody and keep
account of all money, funds and property of the company, unless otherwise
determined by the Board of Directors, and he shall render such accounts and
present such statement to the directors and President as may be required of
him. He shall deposit all funds of the company which may come into his hands
in such bank or banks as the Board of Directors may designate. He shall keep
his bank accounts in the name of the company, and shall exhibit his books and
accounts, at all reasonable times, to any director of the company upon
application at the office of the company during business hours. He shall pay
out money as the business may require upon the order of the properly
constituted officer or officers of the company, taking proper vouchers
therefor; provided, however, that the Board of Directors shall have power by
resolution to delegate any of the duties of the Treasurer to other officers,
and to provide by what officers, if any, all bills, notes, checks, vouchers,
orders or other instruments shall be countersigned. He shall perform, in
addition, such other duties as may be delegated to him by the Board of
Directors.
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<PAGE> 7
SECTION 5. Secretary. The Secretary of the company shall keep
the minutes of all the meetings of the shareholders and Board of Directors in
books provided for that purpose; he shall attend to the giving and receiving of
all notices of the company; he shall sign, with the President or Vice
President, in the name of the company, all contracts authorized by the Board of
Directors, and when necessary shall affix the corporate seal of the company
thereto; he shall have charge of the certificate books, transfer books and
stock ledgers and such other books and papers as the Board of Directors may
direct; all of which shall, at all reasonable times, be open to the examination
of any director upon application at the office of Secretary, and in addition,
such other duties as may be delegated to him by the Board of Directors.
SECTION 6. Assistant Secretary and Assistant Treasurer. The
Assistant Secretary, in the absence or disability of the Secretary, shall
perform the duties and exercise the powers of the Secretary. The Assistant
Treasurer, in the absence or disability of the. Treasurer, shall perform the
duties and exercise the powers of the Treasurer.
ARTICLE VI
INDEMNIFICATION
Any person shall be indemnified and reimbursed by this Company for
expenses actually and reasonably incurred by him or her and liabilities imposed
upon him or her in connection with or arising out of any action, suit or
proceeding, civil or criminal, or threat thereof, in which he or she may be
involved by reason of his or her being or having been a director, officer, or
employee of this Company, or of any firm, corporation or organization which he
or she served in any capacity at the request of the Company, to the maximum
extent permitted by, and in accordance with, the relevant provisions of the
corporate laws of Tennessee. Neither this Company nor its directors or
officers shall be liable to anyone for any determination of such directors or
officers as to the existence or absence of conduct which would provide a basis
for making or refusing to make any payment hereunder or for taking or omitting
to take any other action hereunder, in reliance upon the advice of counsel. A
court of competent jurisdiction may make a determination as to the right of a
person to indemnification and reimbursement hereunder in any specific case upon
the application of such person, despite the failure or refusal of the directors
and shareholders to make provision therefor. The foregoing right of
indemnification and reimbursement shall not be exclusive of other rights to
which such person may be entitled as a matter of law and shall inure to the
benefit of his or her heirs, executors and administrators. Notwithstanding
anything herein to the contrary, the right of indemnification herein provided
shall be applicable only to the extent that such liabilities and expenses are
not otherwise recoverable by or through (i) policies of insurance which may be
carried by or for the benefit of such persons, or this corporation, or any
other corporation or organization, or (ii) other rights
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<PAGE> 8
against unrelated third parties. The indemnification rights covered herein
shall continue to apply to an individual who has ceased to be a director,
officer or employee.
ARTICLE VII
EXECUTION OF INSTRUMENTS
SECTION 1. Checks, Etc. All checks, drafts and orders for
payment of money shall be signed in the name of the company by such officers or
agents as the Board of Directors, or the Executive Committee, shall from time
to time designate for that purpose.
SECTION 2. Contracts, Conveyances, Etc. Conveyances, notes,
bills and other instruments may be executed by the President or any Vice
President, and the Secretary or any Assistant Secretary, with authority to
affix the corporate seal thereto, provided, however, that if, in any case, the
directors or executive committee shall see fit to direct a different method of
execution or signature, then execution may be in that manner, notwithstanding
any other provisions of the By-Laws relating thereto.
ARTICLE VIII
AMENDMENTS
SECTION 1. The shareholders or the Board of Directors may alter,
amend, add to or repeal these By-Laws, including the fixing and altering of the
Board of Directors; provided that the Board of Directors shall not make or
alter any By-Laws fixing their qualifications, classifications or term of
office.
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<PAGE> 1
EXHIBIT 3.17
BY-LAWS
OF
PARALLEL GROUP INTERNATIONAL, INC.
* * * * *
ARTICLE I
SHARES OF STOCK
SECTION 1. Certificate of Shares. The certificates for shares
of the Capital Stock of this company shall be in such form, not inconsistent
with the Articles of Incorporation of the company, as shall be prepared or be
approved by the Board of Directors. The certificates shall be signed by the
President or a Vice President, and also by the Secretary or an Assistant
Secretary.
SECTION 2. Transfer of Shares. Shares of the Capital Stock of
the company shall be transferred by endorsement of the certificates or by
assignment separate from the certificates representing said shares by the
registered holder thereof or his attorney, and its surrender to the Secretary
for cancellation. Whereupon the Secretary shall issue to the transferee or
transferees, as specified by the endorsement, new certificates for a like
number of shares. Transfers shall be made only upon the books of the company
and upon said surrender and cancellation; and shall entitle the transferee to
all the privileges, rights and interests of a shareholder of this company.
SECTION 3. Closing of Transfer Books. The stock transfer books
for meetings of the shareholders may be closed as follows:
The Board of Directors is authorized to fix in advance a date, not
more than 60 days nor less than 10 days preceding the date of any meeting of
stockholders, or the date for the payment of any dividend, or the date for the
allotment of rights, or the date when any change or conversion or exchange of
Capital Stock shall go into effect, or a date in connection with obtaining
such consent, as a record date for the determination of the stockholders
entitled to notice of, and to vote at, any such meeting and any adjournment
thereof, or entitled to receive payment of any such dividend, or to any such
allotment of rights, or to exercise the rights in respect to any such change,
conversion or exchange of Capital Stock, or to give such consent, and in such
case such stockholders and only such stockholders as shall be stockholders of
record on the date so fixed shall be entitled to such notice of, and to vote
at, such meeting and any adjournment thereof, or to receive payment of such
dividend, or to receive such allotment of rights, or to exercise such rights,
or to give such consent, as the case may be, notwithstanding any transfer of
any stock on the books of the corporation after any such record date fixed as
aforesaid.
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<PAGE> 2
SECTION 4. Registered Stockholders. The corporation shall be
entitled to treat the holder of record of any share or shares of stock as the
holder in fact thereof and accordingly shall not be bound to recognize any
equitable or other claim to or interest in such share on the part of any other
person, whether or not it shall have express or other notice thereof, save as
expressly provided by the laws of Indiana.
SECTION 5. Lien. The corporation shall have a lien upon all
stock or property of its members invested therein, for all debts due to it by
the owners thereof.
SECTION 6. Lost Certificates. In case of the loss of any
certificate of shares of stock, upon due proof by the registered holder or his
representatives, by affidavit of such loss, the Secretary shall issue a
duplicate certificate in its place, upon the corporation being fully
indemnified therefor, but indemnity may be waived by the Board of Directors.
SECTION 7. Dividends. The Board of Directors, in its
discretion, from time to time, may declare dividends upon the Capital Stock
from the earned surplus and net prof its of the company.
SECTION 8. Fiscal Year. The fiscal year of the company shall
end on the 31st day of December in each year.
SECTION 9. Corporate Seal. The Board of Directors shall provide
a suitable corporate seal, which seal shall be in the charge of the Secretary,
and shall be used by him.
ARTICLE II
MEETING OF SHAREHOLDERS
SECTION 1. Place of Meetings. All meetings of the shareholders
of the corporation shall be held at such place, within or without the state of
Indiana, as may be determined by the Board of Directors.
SECTION 2. Annual Meetings. The annual meeting of the
shareholders for the election of directors and for the transaction of such
other business as may come before the meeting shall be held on the first
Tuesday in May in each year. if it shall happen at any time that an election of
directors is not held on the day designated therefor, it shall be lawful on any
other day upon due notice as provided in these By-Laws to hold such election.
SECTION 3. Notice. Written notice of the date, time and place
of any shareholders' meeting shall be mailed to each shareholder at his last
known address, as the same appears on the stock book of the company, or if no
such address appears, at his last known place of address, at least ten days
prior to any meeting and any notice of special meeting shall indicate briefly
the object or objects
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<PAGE> 3
thereof. Nevertheless, if all the shareholders waive notice of the meeting,
no notice of the same shall be required, and whenever all the shareholders
shall meet in person or by proxy, such meeting shall be valid for all purposes,
without call or notice, and at such meeting any corporate action shall not be
invalid for want of notice.
SECTION 4. Quorum. At any meeting of the shareholders, the
holders of a majority of all the voting shares of the Capital Stock of the
company issued and outstanding, present in person or represented by proxy,
shall constitute a quorum. Meetings at which less than a quorum is represented
may, however, be adjourned from time to time to a further date by those who
attend, without further notice other than the announcement at such meeting, and
when a quorum shall be present upon any such adjourned day, any business may be
transacted which might have been transacted at the meeting as originally
called.
SECTION 5. Voting. Each shareholder shall be entitled to one
vote for each share of voting stock standing registered in his name on the
books of the company, in person or by proxy duly appointed in writing and filed
with the Secretary of the meeting, on all questions and elections. No proxy
shall be voted after three years from its date unless said proxy provides for a
longer period.
SECTION 6. Organization. The President or Chairman of the Board
may call meetings of the shareholders to order and may act as Chairman of such
meetings, unless otherwise determined by the holders of a majority of all the
shares of the Capital Stock present in person or by proxy at the meeting. The
Secretary of the company shall act as Secretary of all meetings of the company,
but in the absence of the Secretary at any meeting of the shareholders or his
inability to act as Secretary, the presiding officer may appoint any person to
act as Secretary of the meeting.
SECTION 7. Inspectors. Whenever any shareholder present at a
meeting of shareholders shall request the appointment of inspectors, a majority
of the shareholders present at such meeting and entitled to vote thereat, shall
appoint inspectors who need not be shareholders. If the right of any person to
vote at such meeting shall be challenged, the inspectors of election shall
determine such right. The inspectors shall receive and count the votes either
upon an election or for the decision of any question and shall determine the
result. Their certificate of any vote shall be prima facie evidence thereof.
SECTION 8. Giving Notice. Any notice required by statute or by
these By-Laws to be given to the shareholders, or to directors, or to any
officer of the company, shall be deemed to be sufficient to be given by
depositing the same in a post office box, in a sealed, postpaid wrapper,
addressed to such shareholder, director or officer at his last known address as
appears on the books and records of the company, and such notice shall be
deemed to have been given At the time of such mailing.
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<PAGE> 4
SECTION 9. New Shareholders. Every person becoming a
shareholder in this company shall be deemed to assent to these By-Laws and
shall designate to the Secretary the address to which he desires that the
notice herein required to be given may be sent, and all notices mailed to such
addresses, with postage prepaid, shall be considered as duly given at the date
of mailing, and any person failing to so designate his address shall be deemed
to have waived notice of such meeting.
ARTICLE III
DIRECTORS
SECTION 1. Number and Term of Directors. The business property
and affairs of this company shall be managed by a Board of Directors composed
of not less than three nor more than seven members, who need not be
shareholders. At each annual meeting, or any special meeting where election of
directors is to be. considered, before proceeding with the election of
directors, the shareholders shall by resolution designate the number of
directors within the foregoing. Each director shall hold office for the term
for which he is elected and until his successor is elected and qualified.
SECTION 2. Place of Meeting. The directors may hold their
meetings in such place or places within or without this state as a majority of
the Board of Directors may, from time to time, determine.
SECTION 3. Meetings. Meetings of the Board of Directors may be
called at any time by the Chairman of the Board, President or Secretary, or by
a majority of the Board of Directors. Directors shall be notified of the date,
time and place of all meetings of the Board at least 24 hours prior thereto,
except that no notice will be required in connection with regular meetings of
the Board if so provided by appropriate resolution of the Board, and if the
date, time and place of such meetings are also covered by Board resolution.
Any director, however, shall be deemed to have waived such notice by his
attendance at any meeting.
SECTION 4. Quorum. A majority of the Board of Directors shall
constitute a quorum for the transaction of business, and if at any meeting of
the Board of Directors there be less than a quorum present, a majority of those
present may adjourn the meeting from time to time.
SECTION 5. Vacancies. Vacancies in the Board of Directors shall
be filled by the remaining members of the Board and each person so elected
shall be a director until his successor is elected by the shareholders, who may
make such election at the next annual meeting of the stockholders or at any
special meeting duly called for that purpose.
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<PAGE> 5
SECTION 6. Delegation of Powers. For any reason deemed
sufficient by the Board of Directors, whether occasioned by absence or
otherwise, the Board may delegate all or any of the powers and duties of any
officer to any other officer or director, but no officer or director shall
execute, acknowledge or verify any instrument in more than one capacity.
SECTION 7. Power to Appoint Executive Committee. The Board of
Directors shall have power to appoint by resolution an executive committee
and/or any other committee composed of one or more directors who, to the extent
provided in such resolution, shall have and exercise the authority of the Board
of Directors in the management of the business of the company between meetings
of the Board.
SECTION 8. Compensation. The compensation of directors,
officers and agents may be fixed by the Board.
ARTICLE IV
OFFICERS
SECTION 1. The Board of Directors shall select a President, a
Secretary and a Treasurer and may select a Chairman of the Board, one or more
Vice Presidents, Assistant Secretaries and Assistant Treasurers, who need not
be stockholders and who shall be elected by the Board of Directors at their
regular annual meeting. The term of office shall be for one year and until
their successors are chosen. No one of such officers, except the President,
need be a director, but a Vice President who is not a director cannot succeed
to or fill the office of the President. Any two of the above offices, except
those of President and Vice President, may be held by the same person, but no
officer shall execute, acknowledge or verify any instrument in more than one
capacity. The Board of Directors may fix the salaries of the officers of the
Company.
SECTION 2. The Board of Directors may also appoint such other
officers and agents, including a Chairman of the Board, as they may deem
necessary for the transaction of the business of the company. All officers and
agents shall respectively have such authority and perform such duties in the
management of the property and affairs of the corporation as may be designated
by the Board of Directors. Without limitation of any right of an officer or
agent to recover damages for breach of contract, the Board of Directors may
remove any officer or agent whenever, in their judgment, the business interests
of the company will be served thereby.
SECTION 3. The Board of Directors may secure the fidelity of any
or all of its officers and of any employee by bond or otherwise.
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<PAGE> 6
ARTICLE V
DUTIES OF OFFICERS
SECTION 1. Chairman of the Board. He may preside at all
meetings of the shareholders and Board of Directors when present. The Chairman
of the Board may be the chief executive officer of the corporation, and in the
recess of the Board of Directors may have the general control and management of
its business affairs as the Board of Directors may from time to time determine,
subject, however, to the right of the Board of Directors to delegate any
specific power to any other officer or officers of the corporation.
SECTION 2. President. The President, in the absence of the
Chairman of the Board, may preside at all meetings of the shareholders and
Board of Directors. He may have general supervision of the affairs of the
corporation, shall sign or countersign all certificates, contracts or other
instruments of the corporation, as authorized by the Board of Directors, shall
make reports to the Board of Directors and shareholders, and shall perform such
other duties as are incident to the office or are properly required of him by
the Board of Directors.
SECTION 3. Vice President. In case the office of President
shall become vacant by death, resignation, or otherwise, or in case of the
absence of the President, or his disability to discharge the duties of his
office, such duties shall, for the time being, devolve upon the Vice President
who shall do and perform such other acts as the Board of Directors may, from
time to time, authorize him to do, but a Vice President who is not a director
cannot succeed to or fill the office of President.
SECTION 4. Treasurer. The Treasurer shall have custody and keep
account of all money, funds and property of the company, unless otherwise
determined by the Board of Directors, and he shall render such accounts and
present such statement to the directors and President as may be required of
him. He shall deposit all funds of the company which may come into his hands
in such bank or banks as the Board of Directors may designate. He shall keep
his bank accounts in the name of the company, and shall exhibit his books and
accounts, at all reasonable times, to any director of the company upon
application at the office of the company during business hours. He shall pay
out money as the business may require upon the order of the properly
constituted officer or officers of the company, taking proper vouchers
therefor; provided, however, that the Board of Directors shall have power by
resolution to delegate any of the duties of the Treasurer to other officers,
and to provide by what officers, if any, all bills, notes, checks, vouchers,
orders or other instruments shall be countersigned. He shall perform, in
addition, such other duties as may be delegated to him by the Board of
Directors.
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<PAGE> 7
SECTION 5. Secretary. The Secretary of the company shall keep
the minutes of all the meetings of the shareholders and Board of Directors in
books provided for that purpose; he shall attend to the giving and receiving of
all notices of the company; he shall sign, with the President or Vice
President, in the name of the company, all contracts authorized by the Board of
Directors, and when necessary shall affix the corporate seal of the company
thereto; he shall have charge of the certificate books, transfer books and
stock ledgers and such other books and papers as the Board of Directors may
direct; all of which shall, at all reasonable times, be open to the examination
of any director upon application at the office of Secretary, and in addition,
such other duties as may be delegated to him by the Board of Directors.
SECTION 6. Assistant Secretary and Assistant Treasurer. The
Assistant Secretary, in the absence or disability of the Secretary, shall
perform the duties and exercise the powers of the Secretary. The Assistant
Treasurer, in the absence or disability of the. Treasurer, shall perform the
duties and exercise the powers of the Treasurer.
ARTICLE VI
INDEMNIFICATION
Any person shall be indemnified and reimbursed by this Company for
expenses actually and reasonably incurred by him or her and liabilities imposed
upon him or her in connection with or arising out of any action, suit or
proceeding, civil or criminal, or threat thereof, in which he or she may be
involved by reason of his or her being or having been a director, officer, or
employee of this Company, or of any firm, corporation or organization which he
or she served in any capacity at the request of the Company, to the maximum
extent permitted by, and in accordance with, the relevant provisions of the
Indiana Business Corporation Law. Neither this Company nor its directors or
officers shall be liable to anyone for any determination of such directors or
officers as to the existence or absence of conduct which would provide a basis
for making or refusing to make any payment hereunder or for taking or omitting
to take any other action hereunder, in reliance upon the advice of counsel. A
court of competent jurisdiction may make a determination as to the right of a
person to indemnification and reimbursement hereunder in any specific case upon
the application of such person, despite the failure or refusal of the directors
and shareholders to make provision therefor. The foregoing right of
indemnification and reimbursement shall not be exclusive of other rights to
which such person may be entitled as a matter of law and shall inure to the
benefit of his or her heirs, executors and administrators. Notwithstanding
anything herein to the contrary,, the right of indemnification herein provided
shall be applicable only to the extent that such liabilities and expenses are
not otherwise recoverable by or through (i) policies of insurance which may be
carried by or for the benefit of such persons, or this corporation, or any
other corporation or organization, or (ii) other rights
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<PAGE> 8
against unrelated third parties. The indemnification rights covered herein
shall continue to apply to an individual who has ceased to be a director,
officer or employee.
ARTICLE VII
EXECUTION OF INSTRUMENTS
SECTION 1. Checks, Etc. All checks, drafts and orders for
payment of money shall be signed in the name of the company by such officers or
agents as the Board of Directors, or the Executive Committee, shall from time
to time designate for that purpose.
SECTION 2. Contracts, Conveyances, Etc. Conveyances, notes,
bills and other instruments may be executed by the President or any Vice
President, and the Secretary or any Assistant Secretary, with authority to
affix the corporate seal thereto, provided, however, that if, in any case, the
directors or executive committee shall see fit to direct a different method of
execution or signature, then execution may be in that manner, notwithstanding
any other provisions of the By-Laws relating thereto.
ARTICLE VIII
AMENDMENTS
SECTION 1. The shareholders or the Board of Directors may alter,
amend, add to or repeal these By-Laws, including the fixing and altering of the
Board of Directors; provided that the Board of Directors shall not make or
alter any By-Laws fixing their qualifications, classifications or term of
office.
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<PAGE> 1
EXHIBIT 3.18
BY-LAWS
OF
CONCEPT MANAGEMENT CORPORATION
* * * * *
ARTICLE I
SHARES OF STOCK
SECTION 1. Certificate of Shares. The certificates for shares
of the Capital Stock of this company shall be in such form, not inconsistent
with the Articles of Incorporation of the company, as shall be prepared or be
approved by the Board of Directors. The certificates shall be signed by the
President or a Vice President, and also by the Secretary or an Assistant
Secretary.
SECTION 2. Transfer of Shares. Shares of the Capital Stock of
the company shall be transferred by endorsement of the certificates or by
assignment separate from the certificates representing said shares by the
registered holder thereof or his attorney, and its surrender to the Secretary
for cancellation. Whereupon the Secretary shall issue to the transferee or
transferees, as specified by the endorsement, new certificates for a like
number of shares. Transfers shall be made only upon the books of the company
and upon said surrender and cancellation; and shall entitle the transferee to
all the privileges, rights and interests of a shareholder of this company.
SECTION 3. Closing of Transfer Books. The stock transfer books
for meetings of the shareholders may be closed as follows:
The Board of Directors is authorized to fix in advance a date, not
more than 60 days nor less than 10 days preceding the date of any meeting of
stockholders, or the date for the payment of any dividend, or the date for the
allotment of rights, or the date when any change or conversion or exchange of
Capital Stock shall go into effect, or a date in connection with obtaining such
consent, as a record date for the determination of the stockholders entitled to
notice of, and to vote at, any such meeting and any adjournment thereof, or
entitled to receive payment of any such dividend, or to any such allotment of
rights, or to exercise the rights in respect to any such change, conversion or
exchange of Capital Stock, or to give such consent, and in such case such
stockholders and only such stockholders as shall be stockholders of record on
the date so fixed shall be entitled to such notice of, and to vote at, such
meeting and any adjournment thereof, or to receive payment of such dividend, or
to receive such allotment of rights, or to exercise such rights, or to give
such consent, as the case may be, notwithstanding any transfer of any stock on
the books of the corporation after any such record date fixed as aforesaid.
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SECTION 4. Registered Stockholders. The corporation shall be
entitled to treat the holder of record of any share or shares of stock as the
holder in fact thereof and accordingly shall not be bound to recognize any
equitable or other claim to or interest in such share on the part of any other
person, whether or not it shall have express or other notice thereof, save as
expressly provided by the laws of Michigan.
SECTION 5. Lien. The corporation shall have a lien upon all
stock or property of its members invested therein, for all debts due to it by
the owners thereof.
SECTION 6. Lost Certificates. In case of the loss of any
certificate of shares of stock, upon due proof by the registered holder or his
representatives, by affidavit of such loss, the Secretary shall issue a
duplicate certificate in its place, upon the corporation being fully
indemnified therefor, but indemnity may be waived by the Board of Directors.
SECTION 7. Dividends. The Board of Directors, in its
discretion, from time to time, may declare dividends upon the Capital Stock
from the earned surplus and net profits of the company.
SECTION 8. Fiscal Year. The fiscal year of the company shall
end on the 31st day of December in each year.
SECTION 9. Corporate Seal. The Board of Directors shall provide
a suitable corporate seal, which seal shall be in the charge of the Secretary,
and shall be used by him.
ARTICLE II
MEETING OF SHAREHOLDERS
SECTION 1. Place of Meetings. All meetings of the shareholders
of the corporation shall be held at such place, within or without the State of
Michigan, as may be determined by the Board of Directors.
SECTION 2. Annual Meeting. The annual meeting of the
shareholders for the election of directors and for the transaction of such
other business as may come before the meeting shall be held on the first
Tuesday in May in each year. If it shall happen at any time that an election
of directors is not held on the day designated therefor, it shall be lawful on
any other day upon due notice as provided in these By-Laws to hold such
election.
SECTION 3. Notice. Written notice of the date, time and place
of any shareholders' meeting shall be mailed to each shareholder at his last
known address, as the same appears on the stock book of the company, or if no
such address appears, at his last known place of address, at least ten days
prior to any meeting and any notice of special meeting shall indicate briefly
the object or objects
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thereof. Nevertheless, if all the shareholders waive notice of the meeting, no
notice of the same shall be required, and whenever all the shareholders shall
meet in person or by proxy, such meeting shall be valid for all purposes,
without call or notice, and at such meeting any corporate action shall not be
invalid for want of notice.
SECTION 4. Quorum. At any meeting of the shareholders, the
holders of a majority of all the voting shares of the Capital Stock of the
company issued and outstanding, present in person or represented by proxy,
shall constitute a quorum. Meetings at which less than a quorum is represented
may, however, be adjourned from time to time to a further date by those who
attend, without further notice other than the announcement at such meeting, and
when a quorum shall be present upon any such adjourned day, any business may be
transacted which might have been transacted at the meeting as originally
called.
SECTION 5. Voting. Each shareholder shall be entitled to one
vote for each share of voting stock standing registered in his name on the
books of the company, in person or by proxy duly appointed in writing and filed
with the Secretary of the meeting, on all questions and elections. No proxy
shall be voted after three years from its date unless said proxy provides for a
longer period.
SECTION 6. Organization. The President or chairman of the Board
may call meetings of the shareholders to order and may act as Chairman of such
meetings, unless otherwise determined by the holders of a majority of all the
shares of the Capital Stock present in person or by proxy at the meeting. The
Secretary of the company shall act as Secretary of all meetings of the company,
but in the absence of the Secretary at any meeting of the share-holders or his
inability to act as Secretary, the presiding officer may appoint any person to
act as Secretary of the meeting.
SECTION 7. Inspectors. Whenever any shareholder present at a
meeting of shareholders shall request the appointment of inspectors, a majority
of the shareholders present at such meeting and entitled to vote thereat, shall
appoint inspectors who need not be shareholders. If the right of any person to
vote at such meeting shall be challenged, the inspectors of election shall
determine such right. The inspectors shall receive and count the votes either
upon an election or for the decision of any question and shall determine the
result. Their certificate of any vote shall be prima facie evidence thereof.
SECTION 8. Giving Notice. Any notice required by statute or by
these By-Laws to be given to the shareholders, or to directors, or to any
officer of the company, shall be deemed to be sufficient to be given by
depositing the same in a post office box, in a sealed, postpaid wrapper,
addressed to such shareholder, director, or officer at his last known address
as appears on the books and records of the company, and such notice shall be
deemed to have been given at the time of such mailing.
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SECTION 9. New Shareholders. Every person becoming a
shareholder in this company shall be deemed to assent to these By-Laws and
shall designate to the Secretary the address to which he desires that the
notice herein required to be given may be sent, and all notices mailed to such
addresses, with postage prepaid, shall be considered as duly given at the date
of mailing, and any person failing to so designate his address shall be deemed
to have waived notice of such meeting.
ARTICLE III
DIRECTORS
SECTION 1. Number and Term of Directors. The business property
and affairs of this company shall be managed by a Board of Directors composed
of not less than three nor more than seven members, who need not be
shareholders. At each annual meeting, or any special meeting where election of
directors is to be considered, before proceeding with the election of
directors, the shareholders shall by resolution designate the number of
directors within the foregoing. Each director shall hold office for the term
for which he is elected and until his successor is elected and qualified.
SECTION 2. Place of Meeting. The directors may hold their
meetings in such place or places within or without this state as a majority of
the Board of Directors may, from time to time, determine.
SECTION 3. Meeting. Meetings of the Board of Directors may be
called at any time by the Chairman of the Board, President or Secretary, or by
a majority of the Board of Directors. Directors shall be notified of the date,
time and place of all meetings of the Board at least 24 hours prior thereto,
except that no notice will be required in connection with regular meetings of
the Board if so provided by appropriate resolution of the Board, and if the
date, time and place of such meetings are also covered by Board resolution.
Any director, however, shall be deemed to have waived such notice by his
attendance at any meeting.
SECTION 4. Quorum. A majority of the Board of Directors shall
constitute a quorum for the transaction of business, and if at any meeting of
the Board of Directors there be less than a quorum present, a majority of those
present may adjourn the meeting from time to time.
SECTION 5. Vacancies. Vacancies in the Board of Directors shall
be filled by the remaining members of the Board and each person so elected
shall be a director until his successor is elected by the shareholders, who may
make such election at the next annual meeting of the stockholders or at any
special meeting duly called for that purpose.
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SECTION 6. Delegation of Powers. For any reason deemed
sufficient by the Board of Directors, whether occasioned by absence or
otherwise, the Board may delegate all or any of the powers and duties of any
officer to any other officer or director, but no officer or director shall
execute, acknowledge or verify any instrument in more than one capacity.
SECTION 7. Power to Appoint Executive Committee. The Board of
Directors shall have power to appoint by resolution an executive committee
and/or any other committee composed of one or more directors who, to the extent
provided in such resolution, shall have and exercise the authority of the Board
of Directors in the management of the business of the company between meetings
of the Board.
SECTION 8. Compensation. The compensation of directors,
officers and agents may be fixed by the Board.
ARTICLE IV
OFFICERS
SECTION 1. The Board of Directors shall select a President, a
Secretary and a Treasurer and may select a Chairman of the Board, one or more
Vice Presidents, Assistant Secretaries and Assistant Treasurers, who need not
be stockholders and who shall be elected by the Board of Directors at their
regular annual meeting. The term of office shall be for one year and until
their successors are chosen. No one of such officers, except the President,
need be a director, but a Vice President who is not a director cannot succeed
to or fill the office of the President. Any two of the above offices, except
those of President and Vice President, may be held by the same person, but no
officer shall execute, acknowledge or verify any instrument in more than one
capacity. The Board of Directors may fix the salaries of the officers of the
Company.
SECTION 2. The Board of Directors may also appoint such other
officers and agents, including a Chairman of the Board, as they may deem
necessary for the transaction of the business of the company. All officers and
agents shall respectively have such authority and perform such duties in the
management of the property and affairs of the corporation as may be designated
by the Board of Directors. Without limitation of any right of an officer or
agent to recover damages for breach of contract, the Board of Directors may
remove any officer or agent whenever, in their judgment, the business interests
of the company will be served thereby.
SECTION 3. The Board of Directors may secure the fidelity of any
or all of its officers and of any employee by bond or otherwise.
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ARTICLE V
DUTIES OF OFFICERS
SECTION 1. Chairman of the Board. He may preside at all
meetings of the shareholders and Board of Directors when present. The Chairman
of the Board may be the chief executive officer of the corporation, and in the
recess of the Board of Directors may have the general control and management of
its business affairs as the Board of Directors may from time to time determine,
subject, however, to the right of the Board of Directors to delegate any
specific power to any other officer or officers of the corporation.
SECTION 2. President. The President, in the absence of the
Chairman of the Board, may preside at all meetings of the shareholders and
Board of Directors. He may have general supervision of the affairs of the
corporation, shall sign or countersign all certificates, contracts or other
instruments of the corporation, as authorized by the Board of Directors, shall
make reports to the Board of Directors and shareholders, and shall perform such
other duties as are incident to the office or are properly required of him by
the Board of Directors.
SECTION 3. Vice President. In case the office of President
shall become vacant by death, resignation, or otherwise, or in case of the
absence of the President, or his disability to discharge the duties of his
office, such duties shall, for the time being, devolve upon the Vice President
who shall do and perform such other acts as the Board of Directors may, from
time to time, authorize him to do, but a Vice President who is not a director
cannot succeed to or fill the office of President.
SECTION 4. Treasurer. The Treasurer shall have custody and keep
account of all money, funds and property of the company, unless otherwise
determined by the Board of Directors, and he shall render such accounts and
present such statement to the directors and President as may be required of
him. He shall deposit all funds of the company which may come into his hands
in such bank or banks as the Board of Directors may designate. He shall keep
his bank accounts in the name of the company, and shall exhibit his books and
accounts, at all reasonable times, to any director of the company upon
application at the office of the company during business hours. He shall pay
out money as the business may require upon the order of the properly
constituted officer or officers of the company, taking proper vouchers
therefor; provided, however, that the Board of Directors shall have power by
resolution to delegate any of the duties of the Treasurer to other officers,
and to provide by what officers, if any, all bills, notes, checks, vouchers,
orders or other instruments shall be countersigned. He shall perform, in
addition, such other duties as may be delegated to him by the Board of
Directors.
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SECTION 5. Secretary. The Secretary of the company shall keep
the minutes of all the meetings of the shareholders and Board of Directors in
books provided for that purpose; he shall attend to the giving and receiving of
all notices of the company; he shall sign, with the President or Vice
President, in the name of the company, all contracts authorized by the Board of
Directors, and when necessary shall affix the corporate seal of the company
thereto; he shall have charge of the certificate books, transfer books and
stock ledgers and such other books and papers as the Board of Directors may
direct; all of which shall, at all reasonable times, be open to the examination
of any director upon application at the office of Secretary, and in addition,
such other duties as may be delegated to him by the Board of Directors.
SECTION 6. Assistant Secretary and Assistant Treasurer. The
Assistant Secretary, in the absence or disability of the Secretary, shall
perform the duties and exercise the powers of the Secretary. The Assistant
Treasurer, in the absence or disability of the Treasurer, shall perform the
duties and exercise the powers of the Treasurer.
ARTICLE VI
INDEMNIFICATION
Any person shall be indemnified and reimbursed by this Company for
expenses actually and reasonably incurred by him or her and liabilities imposed
upon him or her in connection with or arising out of any action, suit or
proceeding, civil or criminal, or threat thereof, in which he or she may be
involved by reason of his or her being or having been a director, officer, or
employee of this Company, or of any firm, corporation or organization which he
or she served in any capacity at the request of the Company, to the maximum
extent permitted by, and in accordance with, the relevant provisions of the
Michigan Business Corporation Act. Neither this Company nor its directors or
officers shall be liable to anyone for any determination of such directors or
officers as to the existence or absence of conduct which would provide a basis
for making or refusing to make any payment hereunder or for taking or omitting
to take any other action hereunder, in reliance upon the advice of counsel. A
court of competent jurisdiction may make a determination as to the right of a
person to indemnification and reimbursement hereunder in any specific case upon
the application of such person, despite the failure or refusal of the directors
and shareholders to make provision therefor. The foregoing right of
indemnification and reimbursement shall not be exclusive of other rights to
which such person may be entitled as a matter of law and shall inure to the
benefit of his or her heirs, executors and administrators. Notwithstanding
anything herein to the contrary, the right of indemnification herein provided
shall be applicable only to the extent that such liabilities and expenses are
not otherwise recoverable by or through (i) policies of insurance which may be
carried by or for the benefit of such persons, or this corporation, or any
other corporation or organization, or (ii) other rights
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against unrelated third parties. The indemnification rights covered herein
shall continue to apply to an individual who has ceased to be a director,
officer or employee.
ARTICLE VII
EXECUTION OF INSTRUMENTS
SECTION 1. Checks, Etc. All checks, drafts and orders for
payment of money. shall be signed in the. name of the company by such officers
or agents as the Board of Directors, or the Executive Committee, shall from
time to time designate for that purpose.
SECTION 2. Contracts, Conveyances, Etc. Contracts, conveyances,
notes, bills and other instruments may be executed by the President or any Vice
President, and the Secretary or any Assistant Secretary, with authority to
affix the corporate seal thereto, provided, however, that if, in any case, the
directors or executive committee shall see fit to direct a different method of
execution or signature, then execution may be in that manner, notwithstanding
any other provisions of the By-Laws relating thereto.
ARTICLE VIII
AMENDMENTS
SECTION 1. The shareholders of the Board of Directors may alter,
amend, add to or repeal these By-Laws, including the fixing and altering of the
Board of Directors; provided that the Board of Directors shall not make or
alter any By-Laws fixing their qualifications, classifications or term of
office.
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EXHIBIT 3.19
BY-LAWS
OF
LEWIS EMERY CAPITAL CORPORATION
* * * * *
ARTICLE I
SHARES OF STOCK
SECTION 1. Certificate of Shares. The certificates for shares
of the Capital Stock of this company shall be in such form, not inconsistent
with the Articles of Incorporation of the company, as shall be prepared or be
approved by the Board of Directors. The certificates shall be signed by the
President or a Vice President, and also by the Secretary or an Assistant
Secretary.
SECTION 2. Transfer of Shares. Shares of the Capital Stock of
the company shall be transferred by endorsement of the certificates or by
assignment separate from the certificates representing said shares by the
registered holder thereof or his attorney, and its surrender to the Secretary
for cancellation. Whereupon the Secretary shall issue to the transferee or
transferees, as specified by the endorsement, new certificates for a like
number of shares. Transfers shall be made only upon the books of the company
and upon said surrender and cancellation; and shall entitle the transferee to
all the privileges, rights and interests of a shareholder of this company.
SECTION 3. Closing of Transfer Books. The stock transfer books
for meetings of the shareholders may be closed as follows:
The Board of Directors is authorized to fix in advance a date, not
more than 60 days nor less than 10 days preceding the date of any meeting of
stockholders, or the date for the payment of any dividend, or the date for the
allotment of rights, or the date when any change or conversion or exchange of
Capital Stock shall go into effect, or a date in connection with obtaining such
consent, as a record date for the determination of the stockholders entitled to
notice of, and to vote at, any such meeting and any adjournment thereof, or
entitled to receive payment of any such dividend, or to any such allotment of
rights, or to exercise the rights in respect to any such change, conversion or
exchange of Capital Stock, or to give such consent, and in such case such
stockholders and only such stockholders as shall be stockholders of record on
the date so fixed shall be entitled to such notice
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of, and to vote at, such meeting and any adjournment thereof, or to receive
payment of such dividend, or to receive such allotment of rights, or to
exercise such rights, or to give such consent, as the case may be,
notwithstanding any transfer of any stock on the books of the corporation after
any such record date fixed as aforesaid.
SECTION 4. Registered Stockholders. The corporation shall be
entitled to treat the holder of record of any share or shares of stock as the
holder in fact thereof and accordingly shall not be bound to recognize any
equitable or other claim to or interest in such share on the part of any other
person, whether or not it shall have express or other notice thereof, save as
expressly provided by the laws of Michigan.
SECTION 5. Lien. The corporation shall have a lien upon all
stock or property of its members invested therein, for all debts due to it by
the owners thereof.
SECTION 6. Lost Certificates. In case of the loss of any
certificate of shares of stock, upon due proof by the registered holder or his
representatives, by affidavit of such loss, the Secretary shall issue a
duplicate certificate in its place, upon the corporation being fully
indemnified therefor, but indemnity may be waived by the Board of Directors.
SECTION 7. Dividends. The Board of Directors, in its
discretion, from time to time, may declare dividends upon the Capital Stock
from the earned surplus and net profits of the company.
SECTION 8. Fiscal Year. The fiscal year of the company shall
end on the 31st day of December in each year.
SECTION 9. Corporate Seal. The Board of Directors shall provide
a suitable corporate seal, which seal shall be in the charge of the Secretary,
and shall be used by him.
ARTICLE II
MEETING OF SHAREHOLDERS
SECTION 1. Place of Meetings. All meetings of the shareholders
of the corporation shall be held at such place, within or without the State of
Michigan, as may be determined by the Board of Directors.
SECTION 2. Annual Meeting. The annual meeting of the
shareholders for the election of directors and for the transaction
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of such other business as may come before the meeting shall be held on the
first Tuesday in May in each year. If it shall happen at any time that an
election of directors is not held on the day designated therefor, it shall be
lawful on any other day upon due notice as provided in these By-Laws to hold
such election.
SECTION 3. Notice. Written notice of the date, time and place
of any shareholders' meeting shall be mailed to each shareholder at his last
known address, as the same appears on the stock book of the company, or if no
such address appears, at his last known place of address, at least ten days
prior to any meeting and any notice of special meeting shall indicate briefly
the object or objects thereof. Nevertheless, if all the shareholders waive
notice of the meeting, no notice of the same shall be required, and whenever
all the shareholders shall meet in person or by proxy, such meeting shall be
valid for all purposes, without call or notice, and at such meeting any
corporate action shall not be invalid for want of notice.
SECTION 4. Quorum. At any meeting of the shareholders, the
holders of a majority of all the voting shares of the Capital Stock of the
company issued and outstanding, present in person or represented by proxy,
shall constitute a quorum. Meetings at which less than a quorum is represented
may, however, be adjourned from time to time to a further date by those who
attend, without further notice other than the announcement at such meeting, and
when a quorum shall be present upon any such adjourned day, any business may be
transacted which might have been transacted at the meeting as originally
called.
SECTION 5. Voting. Each shareholder shall be entitled to one
vote for each share of voting stock standing registered in his name on the
books of the company, in person or by proxy duly appointed in writing and filed
with the Secretary of the meeting, on all questions and elections. No proxy
shall be voted after three years from its date unless said proxy provides for a
longer period.
SECTION 6. Organization. The President or chairman of the Board
may call meetings of the shareholders to order and may act as Chairman of such
meetings, unless otherwise determined by the holders of a majority of all the
shares of the Capital Stock present in person or by proxy at the meeting. The
Secretary of the company shall act as Secretary of all meetings of the company,
but in the absence of the Secretary at any meeting of the share-holders or his
inability to act as Secretary, the presiding officer may appoint any person to
act as Secretary of the meeting.
SECTION 7. Inspectors. Whenever any shareholder present at a
meeting of shareholders shall request the appointment of
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inspectors, a majority of the shareholders present at such meeting and entitled
to vote thereat, shall appoint inspectors who need not be shareholders. If the
right of any person to vote at such meeting shall be challenged, the inspectors
of election shall determine such right. The inspectors shall receive and count
the votes either upon an election or for the decision of any question and shall
determine the result. Their certificate of any vote shall be prima facie
evidence thereof.
SECTION 8. Giving Notice. Any notice required by statute or by
these By-Laws to be given to the shareholders, or to directors, or to any
officer of the company, shall be deemed to be sufficient to be given by
depositing the same in a post office box, in a sealed, postpaid wrapper,
addressed to such shareholder, director, or officer at his last known address
as appears on the books and records of the company, and such notice shall be
deemed to have been given at the time of such mailing.
SECTION 9. New Shareholders. Every person becoming a
shareholder in this company shall be deemed to assent to these By-Laws and
shall designate to the Secretary the address to which he desires that the
notice herein required to be given may be sent, and all notices mailed to such
addresses, with postage prepaid, shall be considered as duly given at the date
of mailing, and any person failing to so designate his address shall be deemed
to have waived notice of such meeting.
ARTICLE III
DIRECTORS
SECTION 1. Number and Term of Directors. The business property
and affairs of this company shall be managed by a Board of Directors composed
of not less than three nor more than seven members, who need not be
shareholders. At each annual meeting, or any special meeting where election of
directors is to be considered, before proceeding with the election of
directors, the shareholders shall by resolution designate the number of
directors within the foregoing. Each director shall hold office for the term
for which he is elected and until his successor is elected and qualified.
SECTION 2. Place of Meeting. The directors may hold their
meetings in such place or places within or without this state as a majority of
the Board of Directors may, from time to time, determine.
SECTION 3. Meeting. Meetings of the Board of Directors may be
called at any time by the Chairman of the Board, President or
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Secretary, or by a majority of the Board of Directors. Directors shall be
notified of the date, time and place of all meetings of the Board at least 24
hours prior thereto, except that no notice will be required in connection with
regular meetings of the Board if so provided by appropriate resolution of the
Board, and if the date, time and place of such meetings are also covered by
Board resolution. Any director, however, shall be deemed to have waived such
notice by his attendance at any meeting.
SECTION 4. Quorum. A majority of the Board of Directors shall
constitute a quorum for the transaction of business, and if at any meeting of
the Board of Directors there be less than a quorum present, a majority of those
present may adjourn the meeting from time to time.
SECTION 5. Vacancies. Vacancies in the Board of Directors shall
be filled by the remaining members of the Board and each person so elected
shall be a director until his successor is elected by the shareholders, who may
make such election at the next annual meeting of the stockholders or at any
special meeting duly called for that purpose.
SECTION 6. Delegation of Powers. For any reason deemed
sufficient by the Board of Directors, whether occasioned by absence or
otherwise, the Board may delegate all or any of the powers and duties of any
officer to any other officer or director, but no officer or director shall
execute, acknowledge or verify any instrument in more than one capacity.
SECTION 7. Power to Appoint Executive Committee. The Board of
Directors shall have power to appoint by resolution an executive committee
and/or any other committee composed of one or more directors who, to the extent
provided in such resolution, shall have and exercise the authority of the Board
of Directors in the management of the business of the company between meetings
of the Board.
SECTION 8. Compensation. The compensation of directors,
officers and agents may be fixed by the Board.
ARTICLE IV
OFFICERS
SECTION 1. The Board of Directors shall select a President, a
Secretary and a Treasurer and may select a Chairman of the Board, one or more
Vice Presidents, Assistant Secretaries and Assistant Treasurers, who need not
be stockholders and who shall be elected by the Board of Directors at their
regular annual
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meeting. The term of office shall be for one year and until their
successors are chosen. No one of such officers, except the President, need be
a director, but a Vice President who is not a director cannot succeed to or
fill the office of the President. Any two of the above offices, except those
of President and Vice President, may be held by the same person, but no officer
shall execute, acknowledge or verify any instrument in more than one capacity.
The Board of Directors may fix the salaries of the officers of the Company.
SECTION 2. The Board of Directors may also appoint such other
officers and agents, including a Chairman of the Board, as they may deem
necessary for the transaction of the business of the company. All officers and
agents shall respectively have such authority and perform such duties in the
management of the property and affairs of the corporation as may be designated
by the Board of Directors. Without limitation of any right of an officer or
agent to recover damages for breach of contract, the Board of Directors may
remove any officer or agent whenever, in their judgment, the business interests
of the company will be served thereby.
SECTION 3. The Board of Directors may secure the fidelity of any
or all of its officers and of any employee by bond or otherwise.
ARTICLE V
DUTIES OF OFFICERS
SECTION 1. Chairman of the Board. He may preside at all
meetings of the shareholders and Board of Directors when present. The Chairman
of the Board may be the chief executive officer of the corporation, and in the
recess of the Board of Directors may have the general control and management of
its business affairs as the Board of Directors may from time to time determine,
subject, however, to the right of the Board of Directors to delegate any
specific power to any other officer or officers of the corporation.
SECTION 2. President. The President, in the absence of the
Chairman of the Board, may preside at all meetings of the shareholders and
Board of Directors. He may have general supervision of the affairs of the
corporation, shall sign or countersign all certificates, contracts or other
instruments of the corporation, as authorized by the Board of Directors, shall
make reports to the Board of Directors and shareholders, and shall perform such
other duties as are incident to the office or are properly required of him by
the Board of Directors.
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SECTION 3. Vice President. In case the office of President
shall become vacant by death, resignation, or otherwise, or in case of the
absence of the President, or his disability to discharge the duties of his
office, such duties shall, for the time being, devolve upon the Vice President
who shall do and perform such other acts as the Board of Directors may, from
time to time, authorize him to do, but a Vice President who is not a director
cannot succeed to or fill the office of President.
SECTION 4. Treasurer. The Treasurer shall have custody and keep
account of all money, funds and property of the company, unless otherwise
determined by the Board of Directors, and he shall render such accounts and
present such statement to the directors and President as may be required of
him. He shall deposit all funds of the company which may come into his hands
in such bank or banks as the Board of Directors may designate. He shall keep
his bank accounts in the name of the company, and shall exhibit his books and
accounts, at all reasonable times, to any director of the company upon
application at the office of the company during business hours. He shall pay
out money as the business may require upon the order of the properly
constituted officer or officers of the company, taking proper vouchers
therefor; provided, however, that the Board of Directors shall have power by
resolution to delegate any of the duties of the Treasurer to other officers,
and to provide by what officers, if any, all bills, notes, checks, vouchers,
orders or other instruments shall be countersigned. He shall perform, in
addition, such other duties as may be delegated to him by the Board of
Directors.
SECTION 5. Secretary. The Secretary of the company shall keep
the minutes of all the meetings of the shareholders and Board of Directors in
books provided for that purpose; he shall attend to the giving and receiving of
all notices of the company; he shall sign, with the President or Vice
President, in the name of the company, all contracts authorized by the Board of
Directors, and when necessary shall affix the corporate seal of the company
thereto; he shall have charge of the certificate books, transfer books and
stock ledgers and such other books and papers as the Board of Directors may
direct; all of which shall, at all reasonable times, be open to the examination
of any director upon application at the office of Secretary, and in addition,
such other duties as may be delegated to him by the Board of Directors.
SECTION 6. Assistant Secretary and Assistant Treasurer. The
Assistant Secretary, in the absence or disability of the Secretary, shall
perform the duties and exercise the powers of the Secretary. The Assistant
Treasurer, in the absence or disability of the Treasurer, shall perform the
duties and exercise the powers of the Treasurer.
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<PAGE> 8
ARTICLE VI
INDEMNIFICATION
Any person shall be indemnified and reimbursed by this Company for
expenses actually and reasonably incurred by him or her and liabilities imposed
upon him or her in connection with or arising out of any action, suit or
proceeding, civil or criminal, or threat thereof, in which he or she may be
involved by reason of his or her being or having been a director, officer, or
employee of this Company, or of any firm, corporation or organization which he
or she served in any capacity at the request of the Company, to the maximum
extent permitted by, and in accordance with, the relevant provisions of the
Michigan Business Corporation Act. Neither this Company nor its directors or
officers shall be liable to anyone for any determination of such directors or
officers as to the existence or absence of conduct which would provide a basis
for making or refusing to make any payment hereunder or for taking or omitting
to take any other action hereunder, in reliance upon the advice of counsel. A
court of competent jurisdiction may make a determination as to the right of a
person to indemnification and reimbursement hereunder in any specific case upon
the application of such person, despite the failure or refusal of the directors
and shareholders to make provision therefor. The foregoing right of
indemnification and reimbursement shall not be exclusive of other rights to
which such person may be entitled as a matter of law and shall inure to the
benefit of his or her heirs, executors and administrators. Notwithstanding
anything herein to the contrary, the right of indemnification herein provided
shall be applicable only to the extent that such liabilities and expenses are
not otherwise recoverable by or through (i) policies of insurance which may be
carried by or for the benefit of such persons, or this corporation, or any
other corporation or organization, or (ii) other rights against unrelated third
parties. The indemnification rights covered herein shall continue to apply to
an individual who has ceased to be a director, officer or employee.
ARTICLE VII
EXECUTION OF INSTRUMENTS
SECTION 1. Checks, Etc. All checks, drafts and orders for
payment of money shall be signed in the name of the company by such officers
or agents as the Board of Directors, or the Executive Committee, shall from
time to time designate for that purpose.
SECTION 2. Contracts, Conveyances, Etc. Contracts, conveyances,
notes, bills and other instruments may be executed by the
-8-
<PAGE> 9
President or any Vice President, and the Secretary or any Assistant Secretary,
with authority to affix the corporate seal thereto, provided, however, that if,
in any case, the directors or executive committee shall see fit to direct a
different method of execution or signature, then execution may be in that
manner, notwithstanding any other provisions of the By-Laws relating thereto.
ARTICLE VIII
AMENDMENTS
SECTION 1. The shareholders of the Board of Directors may alter,
amend, add to or repeal these By-Laws, including the fixing and altering of the
Board of Directors; provided that the Board of Directors shall not make or
alter any By-Laws fixing their qualifications, classifications or term of
office.
-9-
<PAGE> 1
EXHIBIT 4.1
================================================================================
OXFORD AUTOMOTIVE INC.,
as Company,
THE SUBSIDIARY GUARANTORS named herein
and
FIRST TRUST NATIONAL ASSOCIATION,
as Trustee
10 1/8% Senior Subordinated Notes Due 2007
____________________
INDENTURE
Dated as of June 15, 1997
____________________
================================================================================
<PAGE> 2
CROSS-REFERENCE TABLE
TIA Section Indenture Section
- ----------- -----------------
310(a) (1) .......................................... 7.9; 7.10
(a) (2) .......................................... 7.10
(a) (3) .......................................... N.A.
(a) (4) .......................................... N.A.
(b) .............................................. 7.8; 7.10
(c) .............................................. N.A.
311(a) .............................................. 7.11
(b) .............................................. 7.11
312(a) .............................................. 2.5
(b) .............................................. 2.5; 13.3
(c) .............................................. 13.3
313(a) .............................................. 7.6
(b) (1) .......................................... 7.6
(b) (2) .......................................... N.A.
(c) .............................................. 13.2
(d) .............................................. 7.6
314(a) .............................................. 4.2; 4.10; 13.2
(b) .............................................. N.A.
(c) (1) .......................................... 13.4
(c) (2) .......................................... 13.4
(c) (3) .......................................... N.A.
(d) .............................................. N.A.
(e) .............................................. 13.5
(f) .............................................. 4.10
315(a) .............................................. 7.1
(b) .............................................. 7.5; 13.2
(c) .............................................. 7.1
(d) .............................................. 7.1
(e) .............................................. 6.11
316(a) (last sentence) .............................. 13.6
(a) (1) (A) ...................................... 6.5
(a) (1) (B) ...................................... 6.4
(a) (2) .......................................... N.A.
(b) .............................................. 6.7
317(a) (1) .......................................... 6.9
(a) (2) .......................................... 6.9
(b) .............................................. 2.4
318(a) .............................................. 13.1
N.A. means Not Applicable.
Note: This Cross-Reference Table shall not, for any purpose, be deemed to be a
part of the Indenture.
<PAGE> 3
TABLE OF CONTENTS
Page
----
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1. Definitions ............................................. 1
SECTION 1.2. Other Definitions ....................................... 23
SECTION 1.3. Incorporation by Reference Of Trust Indenture Act ....... 24
SECTION 1.4. Rules of Construction ................................... 25
ARTICLE 2
THE SECURITIES
SECTION 2.1. Form and Dating ......................................... 25
SECTION 2.2. Execution and Authentication ............................ 26
SECTION 2.3. Registrar and Paying Agent .............................. 27
SECTION 2.4. Paying Agent To Hold Money in Trust ..................... 28
SECTION 2.5. Securityholder Lists .................................... 28
SECTION 2.6. Transfer and Exchange ................................... 28
SECTION 2.7. Replacement Securities .................................. 32
SECTION 2.8. Outstanding Securities .................................. 32
SECTION 2.9. Temporary Securities .................................... 33
SECTION 2.10. Cancellation ............................................ 33
SECTION 2.11. Defaulted Interest ...................................... 33
SECTION 2.12. CUSIP Numbers ........................................... 34
SECTION 2.13. Restrictive Legends ..................................... 34
SECTION 2.14. Special Transfer Provisions ............................. 36
ARTICLE 3
REDEMPTION
SECTION 3.1. Optional Redemption ..................................... 39
SECTION 3.2. Notices to Trustee ...................................... 40
SECTION 3.3. Selection of Securities To Be Redeemed .................. 40
SECTION 3.4. Notice of Redemption .................................... 40
SECTION 3.5. Effect of Notice of Redemption .......................... 41
SECTION 3.6. Deposit of Redemption Price ............................. 42
SECTION 3.7. Securities Redeemed in Part ............................. 42
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<PAGE> 4
Page
----
ARTICLE 4
COVENANTS
SECTION 4.1. Payment of Securities ................................... 42
SECTION 4.2. SEC Reports ............................................. 43
SECTION 4.3. Limitation on Indebtedness. ............................. 43
SECTION 4.4. Limitation on Restricted Payments ....................... 46
SECTION 4.5. Limitation on Restrictions on Distributions from
Restricted Subsidiaries ............................... 49
SECTION 4.6. Limitation on Sales of Assets and Subsidiary Stock ...... 51
SECTION 4.7. Limitation on Affiliate Transactions .................... 55
SECTION 4.8. Change of Control ....................................... 56
SECTION 4.9. Compliance Certificate .................................. 57
SECTION 4.10. Further Instruments and Acts ............................ 58
SECTION 4.11. Limitation on Liens ..................................... 58
SECTION 4.12. Limitation on Issuance or Sale of Capital Stock of
Restricted Subsidiaries ............................... 58
SECTION 4.13. Payment of Taxes and Other Claims ....................... 59
SECTION 4.14. Future Guarantors ....................................... 59
SECTION 4.15. Maintenance of Office or Agency ......................... 59
SECTION 4.16. Corporate Existence ..................................... 60
ARTICLE 5
SUCCESSOR COMPANY
SECTION 5.1. Merger, Consolidation and Sale of Assets ................ 60
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.1. Events of Default ....................................... 62
SECTION 6.2. Acceleration ............................................ 65
SECTION 6.3. Other Remedies .......................................... 65
SECTION 6.4. Waiver of Past Defaults ................................. 66
SECTION 6.5. Control by Majority ..................................... 66
SECTION 6.6. Limitation on Suits ..................................... 66
SECTION 6.7. Rights of Holders to Receive Payment .................... 67
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<PAGE> 5
Page
----
SECTION 6.8. Collection Suit by Trustee .............................. 67
SECTION 6.9. Trustee May File Proofs of Claim ........................ 67
SECTION 6.10. Priorities .............................................. 68
SECTION 6.11. Undertaking for Costs ................................... 68
SECTION 6.12. Waiver of Stay or Extension Laws ........................ 68
ARTICLE 7
TRUSTEE
SECTION 7.1. Duties of Trustee ....................................... 69
SECTION 7.2. Rights of Trustee ....................................... 70
SECTION 7.3. Individual Rights of Trustee ............................ 71
SECTION 7.4. Trustee's Disclaimer .................................... 72
SECTION 7.5. Notice of Defaults ...................................... 72
SECTION 7.6. Reports by Trustee to Holders ........................... 72
SECTION 7.7. Compensation and Indemnity .............................. 72
SECTION 7.8. Replacement of Trustee .................................. 73
SECTION 7.9. Successor Trustee by Merger ............................. 75
SECTION 7.10. Eligibility; Disqualification ........................... 75
SECTION 7.11. Preferential Collection of Claims Against Company ....... 75
ARTICLE 8
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.1. Discharge of Liability on Securities; Defeasance ......... 76
SECTION 8.2. Conditions to Defeasance ................................. 77
SECTION 8.3. Application of Trust Money ............................... 79
SECTION 8.4. Repayment to Company ..................................... 79
SECTION 8.5. Indemnity for Government Obligations ..................... 79
SECTION 8.6. Reinstatement ............................................ 79
ARTICLE 9
AMENDMENTS
SECTION 9.1. Without Consent of Holders ............................... 80
SECTION 9.2. With Consent of Holders .................................. 81
SECTION 9.3. Compliance with Trust Indenture Act ...................... 82
SECTION 9.4. Revocation and Effect of Consents and Waivers ............ 82
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<PAGE> 6
Page
----
SECTION 9.5. Notation on or Exchange of Securities ................... 83
SECTION 9.6. Trustee to Sign Amendments .............................. 83
ARTICLE 10
SUBORDINATION OF THE SECURITIES
SECTION 10.1. Agreement To Subordinate ................................ 83
SECTION 10.2. Liquidation; Dissolution; Bankruptcy .................... 84
SECTION 10.3. Default on Senior Indebtedness .......................... 86
SECTION 10.4. Payment of Subordinated Debt Permitted if No Default .... 88
SECTION 10.5. When Subordinated Debt Must Be Paid Over ................ 88
SECTION 10.6. Notices by the Company .................................. 88
SECTION 10.7. Subrogation ............................................. 88
SECTION 10.8. Relative Rights ......................................... 89
SECTION 10.9. Subordination May Not Be Impaired by the Company ........ 89
SECTION 10.10. Distribution of Notice to Representative ................ 90
SECTION 10.11. Rights of Trustee and Paying Agent ...................... 90
SECTION 10.12. Consent of Holders of Specified Senior Indebtedness ..... 91
SECTION 10.13. Contractual Subordination ............................... 91
ARTICLE 11
SUBSIDIARY GUARANTIES
SECTION 11.1. Guaranties .............................................. 91
SECTION 11.2. Limitation on Liability ................................. 94
SECTION 11.3. Successors and Assigns .................................. 94
SECTION 11.4. No Waiver ............................................... 94
SECTION 11.5. Modification ............................................ 95
SECTION 11.6. Release of Subsidiary Guarantor ......................... 95
SECTION 11.7. Execution of Supplemental Indenture for Future
Subsidiary Guarantors ................................. 95
ARTICLE 12
SUBORDINATION OF SUBSIDIARY GUARANTIES
SECTION 12.1. Agreement to Subordinate ................................ 96
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<PAGE> 7
Page
----
SECTION 12.2. Liquidation; Dissolution; Bankruptcy .................... 97
SECTION 12.3. Default on Subsidiary Guarantor Senior Indebtedness ..... 98
SECTION 12.4. Payments of Subordinated Debt Permitted if No
Default ............................................... 100
SECTION 12.5. When Subordinated Debt Must Be Paid Over ................ 100
SECTION 12.6. Notices by a Subsidiary Guarantor ....................... 100
SECTION 12.7. Subrogation ............................................. 101
SECTION 12.8. Relative Rights ......................................... 101
SECTION 12.9. Subordination May Not Be Impaired by the Subsidiary
Guarantor ............................................. 101
SECTION 12.10. Distribution or Notice to Representative ................ 102
SECTION 12.11. Rights of Trustee and Paying Agent ...................... 102
SECTION 12.12. Consent of Holders of Senior Indebtedness ............... 103
SECTION 12.13. Contractual Subordination ............................... 103
ARTICLE 13
MISCELLANEOUS
SECTION 13.1. Trust Indenture Act Controls ............................ 103
SECTION 13.2. Notices ................................................. 104
SECTION 13.3 Communication by Holders with Other Holders ............. 105
SECTION 13.4. Certificate and Opinion as to Conditions Precedent ...... 105
SECTION 13.5. Statements Required in Certificate or Opinion ........... 105
SECTION 13.6. When Securities Disregarded ............................. 106
SECTION 13.7. Rules by Trustee, Paying Agent and Registrar ............ 106
SECTION 13.8. Legal Holidays .......................................... 106
SECTION 13.9. Governing Law ........................................... 106
SECTION 13.10. No Recourse Against Others .............................. 107
SECTION 13.11. Successors .............................................. 107
SECTION 13.12. Multiple Originals ...................................... 107
SECTION 13.13. Table of Contents; Headings ............................. 107
SECTION 13.14. Severability Clause ..................................... 107
Signatures .............................................................. 100
Exhibit A - Form of Security ............................................ A-1
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<PAGE> 8
Page
----
Exhibit B - Form of Exchange Security ................................... B-1
Exhibit C - Form of Certificate To Be Delivered in Connection with
Transfers to Non-QIB Accredited Investors ................. C-1
Exhibit D - Form of Certificate To Be Delivered in Connection with
Transfers Pursuant to Regulation S ........................ D-1
Exhibit E - Form of Guarantee ........................................... E-1
Note: This Table of Contents shall not, for any purpose, be deemed to
be part of the Indenture.
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<PAGE> 9
INDENTURE dated as of June 15, 1997, between OXFORD AUTOMOTIVE INC., a
Michigan corporation (the "Company"), certain of the Company's subsidiaries
signatory hereto (each a "Subsidiary Guarantor" and, collectively, the
"Subsidiary Guarantors") and FIRST TRUST NATIONAL ASSOCIATION, a national
banking corporation, as trustee (the "Trustee").
Each party agrees as follows for the benefit of the other parties and
for the equal and ratable benefit of the Holders of the Company's 10 1/8% Senior
Subordinated Notes Due 2007 (the "Securities"):
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1. Definitions.
"Additional Assets" means (i) any property or assets (other than
Indebtedness and Capital Stock) in a Related Business; or (ii) the Capital Stock
of a Person that becomes a Restricted Subsidiary as a result of the acquisition
of such Capital Stock by the Company or another Restricted Subsidiary; provided,
however, that any such Restricted Subsidiary is primarily engaged in a Related
Business.
"Affiliate" of any specified Person means any other Person, directly
or indirectly, controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any 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 provisions described under Sections 4.4, 4.6 and 4.7 only,
"Affiliate" shall also mean any beneficial owner of Capital Stock representing
10% or more of the total voting power of the Voting Stock (on a fully diluted
basis) of the Company or of rights or warrants to purchase such Capital Stock
(whether or not currently exercisable) and any Person who would be an Affiliate
of any such beneficial owner pursuant to the first sentence hereof.
"Asset Disposition" means any sale, lease, transfer or other
disposition (or series of related sales, leases, transfers or dispositions) by
the Company or any Restricted Subsidiary, including any disposition by means of
a merger,
<PAGE> 10
-2-
consolidation or similar transaction (each referred to for the purposes of this
definition as a "disposition"), of (i) any shares of Capital Stock of a
Restricted Subsidiary (other than directors' qualifying shares and, to the
extent required by local ownership laws in foreign countries, shares owned by
foreign shareholders), (ii) all or substantially all the assets of any
division, business segment or comparable line of business of the Company or any
Restricted Subsidiary or (iii) any other assets of the Company or any
Restricted Subsidiary outside of the ordinary course of business of the Company
or such Restricted Subsidiary. Notwithstanding the foregoing, the term "Asset
Disposition" shall not include (x) a disposition by a Restricted Subsidiary to
the Company or by the Company or a Restricted Subsidiary to a Wholly Owned
Subsidiary, (y) for purposes of Section 4.6, a disposition that constitutes a
Permitted Investment or a Restricted Payment permitted by Section 4.4, and (z)
a disposition of assets having a fair market value of less than $1 million.
"Attributable Debt" in respect of a Sale/Leaseback Transaction means,
as at the time of determination, the present value (discounted at the interest
rate borne by the Securities, compounded annually) of the total obligations of
the lessee for rental payments during the remaining term of the lease included
in such Sale/Leaseback Transaction (including any period for which such lease
has been extended).
"Average Life" means, as of the date of determination, with respect to
any Indebtedness or Preferred Stock, the quotient obtained by dividing (i) the
sum of the products of the numbers of years from the date of determination to
the dates of each successive scheduled principal payment of such Indebtedness or
redemption or similar payment with respect to such Preferred Stock multiplied by
the amount of such payment by (ii) the sum of all such payments.
"Bank Credit Agreements" means the Senior Credit Facility and any
other bank credit agreement or similar facility entered into in the future by
the Company or any Restricted Subsidiary as any of the same may be amended,
waived, modified, Refinanced or replaced from time to time (except to the extent
that any such amendment, waiver, modification, replacement or Refinancing would
be prohibited by the terms of this Indenture).
"Bank Indebtedness" means any and all present and future amounts
payable under or in respect of the Bank Credit Agreements, including principal,
premium (if any), interest
<PAGE> 11
-3-
(including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization, whether or not a claim for post-filing
interest is allowed in such proceedings), fees, charges, expenses, reimbursement
obligations, Guarantees and all other amounts and other Obligations payable
thereunder or in respect thereof at any time.
"Board of Directors" means the Board of Directors of the Company or
any committee thereof duly authorized to act on behalf of such Board.
"Business Day" means each day which is not a Legal Holiday.
"Capital Lease Obligations" means an obligation that is required to be
classified and accounted for as a capital lease for financial reporting purposes
in accordance with GAAP, and the amount of Indebtedness represented by such
obligation shall be the capitalized amount of such obligation determined 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,
rights to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) equity of such Person, including any Preferred
Stock, but excluding any debt securities convertible into such equity.
"Change of Control" means the occurrence of any of the following
events:
(i) any "person" or "group" (as such terms are used in Sections 13(d)
and 14(d) of the Exchange Act), other than one or more Permitted Holders,
is or becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5
under the Exchange Act, except that for purposes of this clause (i) such
person or group shall be deemed to have "beneficial ownership" of all
shares that any such person or group has the right to acquire, whether such
right is exercisable immediately or only after the passage of time),
directly or indirectly, of more than 40% of the total voting power of the
Voting Stock of the Company; provided, however, that such event shall not
be deemed to be a Change of Control so long as the Permitted Holders
beneficially own, directly or indirectly, in the aggregate a
<PAGE> 12
-4-
greater percentage of the total voting power of the Voting Stock of the
Company than such other person or group;
(ii) after the first public offering of common stock of the Company,
during any period of two consecutive years, individuals who at the
beginning of such period constituted the Board of Directors (together with
any new directors whose election by such Board of Directors or whose
nomination for election by the shareholders of the Company was approved by
a majority vote of the directors of the Company then still in office who
were either directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any reason to
constitute a majority of the Board of Directors then in office; or
(iii) the merger or consolidation of the Company with or into another
Person or the merger of another Person with or into the Company, or the
sale of all or substantially all the assets of the Company to another
Person (other than a Person that is controlled by the Permitted Holders),
and, in the case of any such merger or consolidation, the securities of the
Company that are outstanding immediately prior to such transaction and
which represent 100% of the aggregate voting power of the Voting Stock of
the Company are changed into or exchanged for cash, securities or property,
unless pursuant to such transaction such securities are changed into or
exchanged for, in addition to any other consideration, securities of the
surviving corporation that represent immediately after such transaction, at
least a majority of the aggregate voting power of the Voting Stock of the
surviving corporation.
"Code" means the Internal Revenue Code of 1986, as amended.
"Consolidated Coverage Ratio" as of any date of determination means
the ratio of (i) the aggregate amount of EBITDA for the period of the most
recent four consecutive fiscal quarters ending at least 45 days (or, if less,
the number of days after the end of such fiscal quarter as the consolidated
financial statements of the Company shall be available) prior to the date of
such determination (determined, for the first three fiscal quarters ending
subsequent to the Issue Date, by annualizing such quarters to the extent
completed) to (ii) Consolidated Interest Expense for such four fiscal quarters;
provided, however, that (1) if the Company or any Restricted Subsidiary has
Incurred any Indebtedness since the be-
<PAGE> 13
-5-
ginning of such period that remains outstanding on such date of determination or
if the transaction giving rise to the need to calculate the Consolidated
Coverage Ratio is an Incurrence of Indebtedness, or both, EBITDA and
Consolidated Interest Expense for such period shall be calculated after giving
effect on a pro forma basis to such Indebtedness as if such Indebtedness had
been Incurred on the first day of such period and the discharge of any other
Indebtedness repaid, repurchased, defeased or otherwise discharged with the
proceeds of such new Indebtedness as if such discharge had occurred on the first
day of such period (except that, in the case of Indebtedness used to finance
working capital needs incurred under a revolving credit or similar arrangement,
the amount thereof shall be deemed to be the average daily balance of such
Indebtedness during such four-fiscal-quarter period), (2) if since the beginning
of such period the Company or any Restricted Subsidiary shall have made any
Asset Disposition, the EBITDA for such period shall be reduced by an amount
equal to the EBITDA (if positive) directly attributable to the assets which are
the subject of such Asset Disposition for such period, or increased by an amount
equal to the EBITDA (if negative) directly attributable thereto for such period,
and Consolidated Interest Expense for such period shall be reduced by an amount
equal to the Consolidated Interest Expense directly attributable to any
Indebtedness of the Company or any Restricted Subsidiary repaid, repurchased,
defeased, assumed by a third person (to the extent the Company and its
Restricted Subsidiaries are no longer liable for such Indebtedness) or otherwise
discharged with respect to the Company and its continuing Restricted
Subsidiaries in connection with such Asset Disposition for such period (or, if
the Capital Stock of any Restricted Subsidiary is sold, the Consolidated
Interest Expense for such period directly attributable to the Indebtedness of
such Restricted Subsidiary to the extent the Company and its continuing
Restricted Subsidiaries are no longer liable for such Indebtedness after such
sale), (3) if since the beginning of such period the Company shall have
consummated a Public Equity Offering following which there is a Public Market,
Consolidated Interest Expense for such period shall be reduced by an amount
equal to the Consolidated Interest Expense directly attributable to any
Indebtedness of the Company or any Restricted Subsidiary repaid, repurchased,
defeased or otherwise discharged with respect to the Company and its Restricted
Subsidiaries in connection with such Public Equity Offering for such period, (4)
if since the beginning of such period the Company or any Restricted Subsidiary
(by merger or otherwise) shall have made an Investment in any Restricted
Subsidiary (or any Person which becomes a Restricted Subsidiary) or an
acquisition of assets, which acquisition constitutes all or substan-
<PAGE> 14
-6-
tially all of an operating unit of a business, including any such Investment or
acquisition occurring in connection with a transaction requiring a calculation
to be made hereunder, EBITDA and Consolidated Interest Expense for such period
shall be calculated after giving pro forma effect thereto (including the
Incurrence of any Indebtedness) as if such Investment or acquisition occurred on
the first day of such period and (5) if since the beginning of such period any
Person (that subsequently became a Restricted Subsidiary or was merged with or
into the Company or any Restricted Subsidiary since the beginning of such
period) shall have made any Asset Disposition, any Investment or acquisition of
assets that would have required an adjustment pursuant to clause (3) or (4)
above if made by the Company or a Restricted Subsidiary during such period,
EBITDA and Consolidated Interest Expense for such period shall be calculated
after giving pro forma effect thereto as if such Asset Disposition, Investment
or acquisition occurred on the first day of such period. For purposes of this
definition, whenever pro forma effect is to be given to an acquisition of
assets, the amount of income, earnings or expense relating thereto and the
amount of Consolidated Interest Expense associated with any Indebtedness
Incurred in connection therewith, the pro forma calculations shall be prepared
in accordance with Article 11 of Regulation S-X promulgated by the SEC as
determined in good faith by a responsible financial or accounting Officer of the
Company. If any Indebtedness bears a floating rate of interest and is being
given pro forma effect, the interest of such Indebtedness shall be calculated as
if the rate in effect on the date of determination had been the applicable rate
for the entire period (taking into account any Interest Rate Agreement
applicable to such Indebtedness if such Interest Rate Agreement has a remaining
term in excess of 12 months).
"Consolidated Interest Expense" means, for any period, the total
interest expense of the Company and its consolidated Restricted Subsidiaries,
plus, to the extent not included in such total interest expense, and to the
extent incurred by the Company or its Restricted Subsidiaries, (i) interest
expense attributable to Capital Lease Obligations, (ii) amortization of debt
discount, (iii) capitalized interest, (iv) non-cash interest expense, (v)
commissions, discounts and other fees and charges owed with respect to letters
of credit and bankers' acceptance financing, (vi) net costs associated with
Hedging Obligations (including amortization of fees), (vii) Preferred Stock
dividends in respect of all Preferred Stock held by Persons other than the
Company or a Wholly Owned Subsidiary, and (viii) interest actually paid on any
Indebtedness of any other Person that is Guaranteed by the Company or
<PAGE> 15
-7-
any Restricted Subsidiary. Notwithstanding the foregoing, net interest expense
attributable to Tooling Indebtedness shall not be included in Consolidated
Interest Expense except to the extent such expense would be included in interest
expense in accordance with GAAP.
"Consolidated Net Income" means, for any period, the net income of the
Company and its consolidated Subsidiaries; provided, however, that there shall
not be included in such Consolidated Net Income: (i) any net income (or loss)
of any Person if such Person is not a Restricted Subsidiary, except that subject
to the exclusion contained in clause (iv) below, the Company's equity in the net
income of any such Person for such period shall be included in such Consolidated
Net Income up to the aggregate amount of cash actually distributed by such
Person during such period to the Company or a Restricted Subsidiary as a
dividend or other distribution (subject, in the case of a dividend or other
distribution paid to a Restricted Subsidiary, to the limitations contained in
clause (iii) below); (ii) for purposes of subclause (a)(iii)(A) of Section 4.4
only, any net income (or loss) of any Person acquired by the Company or a
Subsidiary in a pooling of interests transaction for any period prior to the
date of such acquisition; (iii) any net income of any Restricted Subsidiary if
such Restricted Subsidiary is subject to restrictions, directly or indirectly,
on the payment of dividends or the making of distributions by such Restricted
Subsidiary, directly or indirectly, to the Company, except that (A) subject to
the exclusion contained in clause (iv) below, the Company's equity in the net
income of any such Restricted Subsidiary for such period shall be included in
such Consolidated Net Income up to the aggregate amount of cash that could have
been distributed by such Restricted Subsidiary consistent with such restriction
during such period to the Company or another Restricted Subsidiary as a dividend
or other distribution (subject, in the case of a dividend or other distribution
paid to another Restricted Subsidiary, to the limitation contained in this
clause) and (B) the Company's equity in a net loss of any such Restricted
Subsidiary for such period shall be included in determining such Consolidated
Net Income; (iv) any gain (or loss) realized upon the sale or other disposition
of any assets of the Company or its consolidated Subsidiaries (including
pursuant to any sale-and-leaseback arrangement) which is not sold or otherwise
disposed of in the ordinary course of business and any gain (or loss) realized
upon the sale or other disposition of any Capital Stock of any Person; (v)
extraordinary gains or losses; and (vi) the cumulative effect of a change in
accounting principles. Notwithstanding the foregoing, for the purposes of
Section 4.4 only, there shall be
<PAGE> 16
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excluded from Consolidated Net Income any dividends, repayments of loans or
advances or other transfers of assets from Unrestricted Subsidiaries to the
Company or a Restricted Subsidiary to the extent such dividends, repayments or
transfers increase the amount of Restricted Payments permitted under such
covenant pursuant to clause (a)(iii)(D) thereof.
"Consolidated Net Worth" means the total of the amounts shown on the
balance sheet of the Company and its consolidated Subsidiaries, determined on a
consolidated basis in accordance with GAAP, as of the end of the most recent
fiscal quarter of the Company ending at least 45 days prior to the taking of any
action for the purpose of which the determination is being made, as (i) the par
or stated value of all outstanding Capital Stock of the Company plus (ii)
paid-in capital or capital surplus relating to such Capital Stock plus (iii) any
retained earnings or earned surplus less (A) any accumulated deficit and (B) any
amounts attributable to Disqualified Stock.
"Currency Agreement" means, with respect to any Person, any foreign
exchange contract, currency swap agreement or other similar agreement to which
such Person is a party or a beneficiary.
"Default" means any event which is, or after notice or passage of time
or both would be, an Event of Default.
"Designated Senior Indebtedness" means (i) the Bank Indebtedness and
(ii) any other Senior Indebtedness of the Company which, at the date of
determination, has an aggregate principal amount outstanding of, or under which,
at the date of determination, the holders thereof are committed to lend up to,
at least $10 million and is specifically designated by the Company in the
instrument evidencing or governing such Senior Indebtedness as "Designated
Senior Indebtedness" for purposes of this Indenture.
"Depository" means The Depository Trust Company, its nominees and
their respective successors.
"Disqualified Stock" means, with respect to any Person, any Capital
Stock 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
(i) matures or is mandatorily redeemable pursuant to a sinking fund obligation
or otherwise, (ii) is convertible or exchangeable, at the option of the holder
thereof, for Indebtedness or Disqualified Stock or (iii) is redeemable at the
option of the holder
<PAGE> 17
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thereof, in whole or in part, in each case on or prior to the first anniversary
of the Stated Maturity of the Securities.
"EBITDA" for any period means the sum of Consolidated Net Income plus
Consolidated Interest Expense plus, without duplication the following to the
extent deducted in calculating such Consolidated Net Income: (i) income tax
expense (including Michigan Single Business Tax Expense), (ii) depreciation
expense, (iii) amortization expense, and (iv) all other non-cash items reducing
Consolidated Net Income (other than items that will require cash payments and
for which an accrual or reserve is, or is required by GAAP to be, made), less
all non-cash items increasing Consolidated Net Income, in each case for such
period. Notwithstanding the foregoing, the provision for taxes based on the
income or profits of, and the depreciation and amortization of, a Subsidiary of
the Company shall be added to Consolidated Net Income to compute EBITDA only to
the extent (and in the same proportion) that the net income of such Subsidiary
was included in calculating Consolidated Net Income.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Securities" means the 10 1/8% Senior Subordinated Notes due
2007 to be issued in exchange for the Initial Securities pursuant to the
Registration Agreement or, with respect to the Initial Securities issued under
this Indenture subsequent to the Issue Date pursuant to Section 2.2, a
registration agreement substantially identical to the Registration Agreement.
"Existing Preferred Stock" means the Series A $3.00 cumulative
Preferred Stock issued by Lobdell and the Series B Preferred Stock issued by
Lobdell in the aggregate amount of $50.7 million, less any shares of such
preferred stock repurchased, redeemed or cancelled subsequent to the Issue Date,
as the terms of such preferred stock shall exist as of the Issue Date.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect as of the Issue Date, including those set forth
in (i) the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants, (ii) statements and
pronouncements of the Financial Accounting Standards Board and (iii) in such
other statements by such other entity as approved by a significant segment of
the accounting profession.
<PAGE> 18
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"Guarantee" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Indebtedness or other obligation
of any Person and any obligation, direct or indirect, contingent or otherwise,
of such Person (i) to purchase or pay (or advance or supply funds for the
purchase or payment of) such Indebtedness or other obligation of such Person
(whether arising by virtue of partnership arrangements or by agreements to
keep-well, to purchase assets, goods, securities or services, to take-or-pay or
to maintain financial statement conditions or otherwise) or (ii) entered into
for the purpose of assuring in any other manner the obligee of such Indebtedness
or other obligation of the payment thereof or to protect such obligee against
loss in respect thereof (in whole or in part); provided, however, that the term
"Guarantee" shall not include endorsements for collection or deposit in the
ordinary course of business. The term "Guarantee" used as a verb has a
corresponding meaning.
"Guarantor" means any Person Guaranteeing any obligation.
"Hedging Obligations" of any Person means the obligations of such
Person pursuant to any Interest Rate Agreement or Currency Agreement.
"Holder" or "Securityholder" means the Person in whose name a Security
is registered on the Registrar's books.
"Incur" means issue, assume, Guarantee, incur or otherwise become
liable for; provided, however, that any Indebtedness or Capital Stock of a
Person existing at the time such Person becomes a Subsidiary (whether by merger,
consolidation, acquisition or otherwise) shall be deemed to be Incurred by such
Subsidiary at the time it becomes a Subsidiary; provided, further, however, that
in the case of a discount security, neither the accrual of interest nor the
accretion of original issue discount shall be considered an Incurrence of
Indebtedness, but the entire face amount of such security shall be deemed
Incurred upon the issuance of such security. The term "Incurrence" when used as
a noun shall have a correlative meaning.
"Indebtedness" means, with respect to any Person on any date of
determination (without duplication), (i) the principal of and premium (if any)
in respect of (A) indebtedness of such Person for money borrowed and (B)
indebtedness evidenced by notes, debentures, bonds or other similar instruments
for the payment of which such Person is responsible or liable;
<PAGE> 19
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(ii) all Capital Lease Obligations of such Person and all Attributable Debt in
respect of Sale/Leaseback Transactions entered into by such Person; (iii) all
obligations of such Person issued or assumed as the deferred purchase price of
property or services, all conditional sale obligations of such Person and all
obligations of such Person under any title retention agreement (but excluding
trade accounts payable arising in the ordinary course of business and which are
not more than 90 days past due and not in dispute), which purchase price or
obligation is due more than six months after the date of placing such property
in service or taking delivery and title thereto or the completion of such
services (provided that, in the case of obligations of an acquired Person
assumed in connection with an acquisition of such Person, such obligations would
constitute Indebtedness of such Person); (iv) all obligations of such Person for
the reimbursement of any obligor on any letter of credit, banker's acceptance or
similar credit transaction (other than obligations with respect to letters of
credit securing obligations (other than obligations described in (i) through
(iii) above) entered into in the ordinary course of business of such Person to
the extent such letters of credit are not drawn upon or, if and to the extent
drawn upon, such drawing is reimbursed no later than the tenth Business Day
following receipt by such Person of a demand for reimbursement following payment
on the letter of credit); (v) the amount of all obligations of such Person with
respect to the redemption, repayment or other repurchase of any Disqualified
Stock or, with respect to any Subsidiary of such Person, any Preferred Stock
(but excluding, in each case, any accrued dividends); (vi) all obligations of
the type referred to in clauses (i) through (v) of other Persons and all
dividends of other Persons for the payment of which, in either case, such Person
is responsible or liable, directly or indirectly, as obligor, guarantor or
otherwise, including by means of any Guarantee; (vii) all obligations of the
type referred to in clauses (i) through (vi) of other Persons secured by any
Lien on any property or asset of such Person (whether or not such obligation is
assumed by such Person), the amount of such obligation being deemed to be the
lesser of the value of such property or assets or the amount of the obligation
so secured; and (viii) to the extent not otherwise included in this definition,
Hedging Obligations of such Person. The amount of Indebtedness of any Person at
any date shall be the outstanding balance at such date of all unconditional
obligations as described above and the maximum liability, upon the occurrence of
the contingency giving rise to the obligation, of any contingent obligations as
described above at such date; provided, however, that the amount outstanding at
any time of any Indebtedness issued with
<PAGE> 20
-12-
original issue discount shall be deemed to be the face amount of such
Indebtedness less the remaining unamortized portion of the original issue
discount of such Indebtedness at such time as determined in conformity with
GAAP.
"Indenture" means this Indenture as amended or supplemented from time
to time by one or more supplemental indentures entered into pursuant to the
applicable provisions hereof or otherwise in accordance with the terms hereof.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as that term is defined in Rule 501(a)(1), (2), (3) or (7)
under the Securities Act.
"Initial Purchasers" means, collectively, Salomon Brothers Inc,
Merrill Lynch, Pierce, Fenner & Smith Incorporated, McDonald & Company
Securities, Inc., First Chicago Capital Markets, Inc. and Schroder Wertheim &
Co. Incorporated.
"Initial Securities" means, collectively, (i) the 10 1/8% Senior
Subordinated Notes due 2007 of the Company issued on the Issue Date and (ii) one
or more series of 10 1/8% Senior Subordinated Notes due 2007 that are issued
under this Indenture subsequent to the Issue Date pursuant to Section 2.2, in
each case for so long as such securities constitute Restricted Securities.
"Interest Rate Agreement" means any interest rate swap agreement,
interest rate cap agreement or other financial agreement or arrangement designed
solely to protect the Company or any Restricted Subsidiary against fluctuations
in interest rates.
"Investment" in any Person means any direct or indirect advance, loan
(other than advances to customers in the ordinary course of business that are
recorded as accounts receivable on the balance sheet of such Person) or other
extensions of credit (including by way of Guarantee or similar arrangement) or
capital contribution to (by means of any transfer of cash or other property to
others or any payment for property or services for the account or use of
others), or any purchase or acquisition of Capital Stock, Indebtedness or other
similar instruments issued by such Person. For purposes of the definition of
"Unrestricted Subsidiary," the definition of "Restricted Payment" and Section
4.4 hereof, (i) "Investment" shall include the portion (proportionate to the
Company's equity interest in such Subsidiary) of the fair market value of the
net assets of any Subsidiary of the Company at the time
<PAGE> 21
-13-
that such Subsidiary is designated an Unrestricted Subsidiary; provided,
however, that upon a redesignation of such Subsidiary as a Restricted
Subsidiary, the Company shall be deemed to continue to have a permanent
"Investment" in an Unrestricted Subsidiary equal to an amount (if positive)
equal to (x) the Company's "Investment" in such Subsidiary at the time of such
redesignation less (y) the portion (proportionate to the Company's equity
interest in such Subsidiary) of the fair market value of the net assets of such
Subsidiary at the time of such redesignation, and (ii) any property transferred
to or from an Unrestricted Subsidiary shall be valued at its fair market value
at the time of such transfer, in each case as determined in good faith by the
Board of Directors.
"Issue Date" means the date on which the Securities are originally
issued.
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions are not required to be open in the State of New York.
"Lien" means any mortgage, pledge, security interest, encumbrance,
lien or charge of any kind (including any conditional sale or other title
retention agreement or lease in the nature thereof).
"Moody's" means Moody's Investors Service, Inc.
"Net Available Cash" from an Asset Disposition means cash payments
received by the Company or any of its Subsidiaries therefrom (including any cash
payments received by way of deferred payment of principal pursuant to a note or
installment receivable or otherwise, but only as and when received, but
excluding any other consideration received in the form of assumption by the
acquiring Person of Indebtedness or other obligations relating to such
properties or assets or received in any other noncash form) in each case net of
(i) all legal, title and recording tax expenses, commissions and other fees and
expenses incurred, and all Federal, state, provincial, foreign and local taxes
required to be paid or accrued as a liability under GAAP, as a consequence of
such Asset Disposition, (ii) all payments made on any Indebtedness which is
secured by any assets subject to such Asset Disposition, in accordance with the
terms of any Lien upon or other security agreement of any kind with respect to
such assets, or which must by its terms, 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 distributions and other
<PAGE> 22
-14-
payments required to be made to minority interest holders in Subsidiaries or
Joint Ventures as a result of such Asset Disposition and (iv) the deduction of
appropriate amounts provided by the seller as a reserve, in accordance with
GAAP, against any liabilities associated with the property or other assets
disposed in such Asset Disposition and retained by the Company or any Restricted
Subsidiary after such Asset Disposition including without limitation under any
indemnification obligations associated with such Asset Disposition.
"Net Cash Proceeds," with respect to any issuance or sale of Capital
Stock, means the cash proceeds of such issuance or sale net of attorneys' fees,
accountants' fees, underwriters' or placement agents' fees, discounts or
commissions and brokerage, consultant and other fees actually incurred in
connection with such issuance or sale and net of taxes paid or payable as a
result thereof.
"Non-U.S. Person" means a person who is not a U.S. Person, as defined
in Regulation S.
"Obligations" means all present and future obligations for principal,
premium, interest (including, without limitation, any interest accruing
subsequent to the filing of a petition of bankruptcy at the rate provided for in
the documentation with respect thereto, whether or not such interest is an
allowed claim under applicable law), penalties, fees, indemnifications,
reimbursements (including, without limitation, all reimbursement and other
obligation pursuant to any letters of credit, bankers acceptances or similar
instruments or documents), damages and other liabilities payable under the
documentation at any time governing any indebtedness.
"Officer" means the Chairman of the Board, any Vice Chairman, the
Chief Executive Officer, the Chief Financial Officer, the President, any
Executive Vice President, Vice President -- Finance (or any such other officer
that performs similar duties), the Secretary or the Assistant Secretary of the
Company.
"Officers' Certificate" means with respect to any Person a certificate
signed by two Officers, one of which is the Chairman of the Board, the Chief
Executive Officer, the Chief Financial Officer, the President, any Executive
Vice President (or any such other officer that performs similar duties).
<PAGE> 23
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"Opinion of Counsel" means a written opinion from legal counsel who is
reasonably acceptable to the Trustee. The counsel may be an employee of or
counsel to the Company or the Trustee.
"Permitted Holders" means (i) any of Selwyn Isakow, his spouse and any
of his lineal descendants and their respective spouses (collectively, the
"Isakow Family") whether acting in their own name or as one or as a majority of
persons having the power to exercise the voting rights attached to, or having
investment power over, shares held by others, (ii) any controlled Affiliate of
any member of the Isakow Family, and (iii) any trust solely for the benefit of
one or more members of the Isakow Family (whether or not any member of the
Isakow Family is a trustee of such trust).
"Permitted Investment" means an Investment by the Company or any
Restricted Subsidiary in (i) the Company; (ii) a Restricted Subsidiary or a
Person that will, upon the making of such Investment, become a Restricted
Subsidiary; provided, however, that the primary business of such Restricted
Subsidiary is a Related Business; (iii) another Person if as a result of such
Investment such other Person is merged or consolidated with or into, or
transfers or conveys all or substantially all its assets to, the Company or a
Restricted Subsidiary; provided, however, that such Person's primary business is
a Related Business; (iv) Temporary Cash Investments; (v) receivables owing to
the Company or any Restricted Subsidiary if created or acquired in the ordinary
course of business and payable or dischargeable in accordance with customary
trade terms; provided, however, that such trade terms may include such
concessionary trade terms as the Company or any such Restricted Subsidiary deems
reasonable under the circumstances; (vi) payroll, travel and similar advances to
cover matters that are expected at the time of such advances ultimately to be
treated as expenses for accounting purposes and that are made in the ordinary
course of business; (vii) loans or advances to employees made in the ordinary
course of business consistent with past practices of the Company or such
Restricted Subsidiary; (viii) stock, obligations or securities received in
settlement of debts created in the ordinary course of business and owing to the
Company or any Restricted Subsidiary or in satisfaction of judgments; (ix)
Persons other than Restricted Subsidiaries that are primarily engaged in a
Related Business, in an aggregate amount not to exceed $15 million (to the
extent utilized for an Investment, such amount will be reinstated to the extent
that the Company or any Restricted Subsidiary receives dividends, repayments of
loans or other transfers of assets as a return of
<PAGE> 24
-16-
such Investment); (x) any Person to the extent such Investment is received in
exchange for the transfer to such Person of the assets owned as of the Issue
Date by Laserweld International L.L.C.; and (xi) any Person to the extent such
Investment represents the non-cash portion of the consideration received for an
Asset Disposition as permitted under Section 4.6 hereof.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization,
government or any agency or political subdivision thereof or any other entity.
"Preferred Stock," as applied to the Capital Stock of any corporation,
means Capital Stock of any class or classes (however designated) which is
preferred as to the payment of dividends, or as to the distribution of assets
upon any voluntary or involuntary liquidation or dissolution of such
corporation, over shares of Capital Stock of any other class of such
corporation.
"principal" of a Security means the principal of the Security plus the
premium, if any, payable on the Security which is due or overdue or is to become
due at the relevant time.
"Private Placement Legend" means the legend initially set forth on the
securities in the form set forth in Section 2.13.
"Public Equity Offering" means an underwritten primary public offering
of common stock of the Company pursuant to an effective registration statement
under the Securities Act.
"Public Market" means any time after (i) a Public Equity Offering has
been consummated and (ii) at least 10% of the total issued and outstanding
common stock of the Company has been distributed by means of an effective
registration statement under the Securities Act or sales pursuant to Rule 144
under the Securities Act.
"Purchase Money Indebtedness" means Indebtedness (i) consisting of the
deferred purchase price of property, conditional sale obligations, obligations
under any title retention agreement, other purchase money obligations and
obligations in respect of industrial revenue bonds or similar Indebtedness, in
each case where the maturity of such Indebtedness does not exceed the
anticipated useful life of the asset being financed, and (ii) incurred to
finance the acquisition by the Company or
<PAGE> 25
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a Restricted Subsidiary of such asset, including additions and improvements;
provided, however, that any Lien arising in connection with any such
Indebtedness shall be limited to the specified asset being financed or, in the
case of real property or fixtures, including additions and improvements, the
real property on which such asset is attached; and provided, further, however,
that such Indebtedness is Incurred within 90 days after such acquisition of such
asset by the Company or Restricted Subsidiary.
"Qualified Institutional Buyer" or "QIB" shall have the meaning
specified in Rule 144A under the Securities Act.
"Refinance" means, in respect of any Indebtedness, to refinance,
extend, renew, refund, repay, prepay, redeem, defease or retire, or to issue
other Indebtedness in exchange or replacement for, such Indebtedness.
"Refinanced" and "Refinancing" shall have correlative meanings.
"Refinancing Indebtedness" means Indebtedness that Refinances any
Indebtedness of the Company or any Restricted Subsidiary existing on the Issue
Date or Incurred in compliance with this Indenture; provided, however, that (i)
such Refinancing Indebtedness has a Stated Maturity no earlier than the Stated
Maturity of the Indebtedness being Refinanced, (ii) such Refinancing
Indebtedness has an Average Life at the time such Refinancing Indebtedness is
Incurred that is equal to or greater than the Average Life of the Indebtedness
being Refinanced and (iii) such Refinancing Indebtedness has an aggregate
principal amount (or if Incurred with original issue discount, an aggregate
issue price) that is equal to or less than the aggregate principal amount (or if
Incurred with original issue discount, the aggregate accreted value) then
outstanding or committed (plus fees and expenses, including any premium and
defeasance costs) under the Indebtedness being Refinanced; provided, further,
however, that Refinancing Indebtedness shall not include (x) Indebtedness of a
Subsidiary that Refinances Indebtedness of the Company or (y) Indebtedness of
the Company or a Restricted Subsidiary that Refinances Indebtedness of an
Unrestricted Subsidiary.
"Registration Agreement" means the Registration Agreement dated the
Issue Date among the Company and the Initial Purchasers.
"Regulation S" means Regulation S under the Securities Act.
<PAGE> 26
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"Related Business" means any business related, ancillary or
complementary (as determined in good faith by the Board of Directors) to the
businesses of the Company and the Restricted Subsidiaries on the Issue Date.
"Representative" means any trustee, agent or representative (if any)
for an issue of Senior Indebtedness of the Company.
"Responsible Officer" means, when used with respect to the Trustee,
any officer assigned to the Corporate Trust Office, including any vice
president, assistant vice president, assistant secretary or any other officer of
the Trustee to whom any corporate trust matter is referred because of his or her
knowledge or familiarity with the particular subject.
"Restricted Payment" means, with respect to any Person, (i) the
declaration or payment of any dividends or any other distributions on or in
respect of its Capital Stock (including any payment in connection with any
merger or consolidation involving such Person) or similar payment to the holders
of its Capital Stock, except dividends or distributions payable solely in its
Capital Stock (other than Disqualified Stock) and except dividends or
distributions payable solely to the Company or a Restricted Subsidiary (and, if
such Restricted Subsidiary is not wholly owned, to its other shareholders on a
pro rata basis or on a basis that results in the receipt by the Company or a
Restricted Subsidiary of dividends or distributions of greater value than it
would receive on a pro rata basis), (ii) the purchase, redemption or other
acquisition or retirement for value of any Capital Stock of the Company held by
any Person or of any Capital Stock of a Restricted Subsidiary held by any
Affiliate of the Company (other than a Restricted Subsidiary), including the
exercise of any option to exchange any Capital Stock (other than into Capital
Stock of the Company that is not Disqualified Stock), (iii) the purchase,
repurchase, redemption, defeasance or other acquisition or retirement for value,
prior to scheduled maturity, scheduled repayment or scheduled sinking fund
payment of any Subordinated Obligations (other than the purchase, repurchase or
other acquisition of Subordinated Obligations purchased in anticipation of
satisfying a sinking fund obligation, principal installment or final maturity,
in each case due within one year of the date of acquisition) or (iv) the making
of any Investment in any Person (other than a Permitted Investment).
"Restricted Security" has the meaning assigned to such term in Rule
144(a)(3) under the Securities Act; provided,
<PAGE> 27
-19-
however, that the Trustee shall be entitled to request and conclusively rely on
an Opinion of Counsel with respect to whether any Note constitutes a
SecurityRestricted Security.
"Restricted Subsidiary" means any Subsidiary of the Company that is
not an Unrestricted Subsidiary.
"Rule 144A" means Rule 144A under the Securities Act.
"Sale/Leaseback Transaction" means an arrangement relating to property
now owned or hereafter acquired whereby the Company or a Restricted Subsidiary
transfers such property to a Person and the Company or a Restricted Subsidiary
leases it from such Person.
"SEC" means the Securities and Exchange Commission.
"Securities" shall mean the Initial Securities and the Exchange
Securities.
"Secured Indebtedness" means any Indebtedness of the Company secured
by a Lien. "Secured Indebtedness" of any Subsidiary Guarantor has a correlative
meaning.
"Senior Credit Facility" means the credit agreement dated as of the
Issue Date, between the Company, the lenders and other persons party thereto and
NBD Bank, as Agent, together with the related documents thereto executed at any
time (including, without limitation, any guarantee agreements, security
agreements and other collateral documents) and the credit facilities thereunder,
in each case as such documents may be amended (including, without limitation,
any amendment and restatement thereof), supplemented or otherwise modified from
time to time, including any agreement extending the maturity of, refinancing,
replacing or otherwise restructuring (including, without limitation, increasing
the amount of available borrowings thereunder (provided that such increase in
borrowings is permitted by Section 4.3 hereof or adding subsidiaries as
additional borrowers or guarantors thereunder).
"Senior Indebtedness" of the Company means (i) all Bank Indebtedness
of the Company, whether outstanding on the Issue Date or thereafter Incurred,
including the Guarantees by the Company of all Bank Indebtedness, and (ii)
accrued and unpaid interest (including interest accruing on or after the filing
of any petition in bankruptcy or for reorganization relating to the Company
whether or not a claim for post-filing interest is allowed in such proceeding)
in respect of (A) indebt-
<PAGE> 28
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edness of the Company for money borrowed and (B) indebtedness evidenced by
notes, debentures, bonds or other similar instruments for the payment of which
the Company is responsible or liable unless, in the instrument creating or
evidencing the same or pursuant to which the same is outstanding, it is provided
that such obligations are subordinate in right of payment to the Securities;
provided, however, that Senior Indebtedness shall not include (1) any obligation
of the Company to any Subsidiary, (2) any liability for Federal, state, local or
other taxes owed or owing by the Company, (3) any accounts payable or other
liability to trade creditors arising in the ordinary course of business
(including guarantees thereof or instruments evidencing such liabilities), (4)
any Indebtedness of the Company (and any accrued and unpaid interest in respect
thereof) which is subordinate or junior in any respect (other than as a result
of the Indebtedness being unsecured) to any other Indebtedness or other
obligation of the Company, including any Senior Subordinated Indebtedness and
any Subordinated Obligations, (5) any obligations with respect to any Capital
Stock or (6) that portion of any Indebtedness which at the time of Incurrence is
Incurred in violation of this Indenture. "Senior Indebtedness" of any
Subsidiary Guarantor has a correlative meaning.
"Senior Subordinated Indebtendess" of the Company means the Securities
and any other Obligations under or in connection with the Securities, this
Indenture and/or any related agreements, documents or instruments, whether now
owing or hereafter incurred or owing and any other Indebtedness of the Company
that specifically provides that such Indebtedness is to rank pari passu with the
Securities in right of payment and is not subordinated by its terms in right of
payment to any Indebtedness or other obligation of the Company which is not
Senior Indebtedness. "Senior Subordinated Indebtedness" of any Subsidiary
Guarantor has a correlative meaning.
"Significant Subsidiary" means any Restricted Subsidiary that would be
a "Significant Subsidiary" of the Company within the meaning of Rule 1-02 under
Regulation S-X promulgated by the SEC.
"Stated Maturity" means, with respect to any security, the date
specified in such security as the fixed date on which the final payment of
principal of such security is due and payable, including pursuant to any
mandatory redemption provision (but excluding any provision providing for the
repurchase of such security at the option of the holder thereof upon
<PAGE> 29
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the happening of any contingency unless such contingency has occurred).
"Subordinated Obligation" means any Indebtedness of the Company
(whether outstanding on the Issue Date or thereafter Incurred) which is
subordinate or junior in right of payment to the Securities pursuant to a
written agreement to that effect. "Subordinated Obligation" of any Subsidiary
Guarantor has a correlative meaning.
"Subsidiary" means, in respect of any Person, any corporation,
association, partnership or other business entity of which more than 50% of the
total voting power of shares of Capital Stock or other interests (including
partnership interests) entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees thereof
is at the time owned or controlled, directly or indirectly, by (i) such Person,
(ii) such Person and one or more Subsidiaries of such Person or (iii) one or
more Subsidiaries of such Person.
"Subsidiary Guarantor" means each Subsidiary designated as such on the
signature pages of the Indenture and any other Subsidiary that has issued a
Subsidiary Guaranty.
"Subsidiary Guaranty" means the Guarantee by a Subsidiary Guarantor of
the Company's obligations with respect to the Securities.
"S&P" means Standard and Poor's Ratings Service.
"Temporary Cash Investments" means any of the following: (i) any
investment in direct obligations of the United States of America or any agency
thereof or obligations guaranteed by the United States of America or any agency
thereof, (ii) investments in time deposit accounts, certificates of deposit and
money market deposits maturing within 180 days of the date of acquisition
thereof issued by a bank or trust company which is organized under the laws of
the United States of America, any state thereof or any foreign country
recognized by the United States, and which bank or trust company has capital,
surplus and undivided profits aggregating in excess of $50,000,000 (or the
foreign currency equivalent thereof) and has outstanding debt which is rated "A"
(or such similar equivalent rating) or higher by at least one nationally
recognized statistical rating organization (as defined in Rule 436 under the
Securities Act) or any money-market fund sponsored by a registered broker,
dealer or mutual fund distributor,
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(iii) repurchase obligations with a term of not more than 30 days for underlying
securities of the types described in clause (i) above entered into with a bank
meeting the qualifications described in clause (ii) above, (iv) investments in
commercial paper, maturing not more than 90 days after the date of acquisition,
issued by a corporation (other than an Affiliate of the Company) organized and
in existence under the laws of the United States of America, any State thereof
or the District of Columbia or any foreign country recognized by the United
States of America with a rating at the time as of which any investment therein
is made of "P-1" (or higher) according to Moody's or "A-1" (or higher) according
to S&P and (v) investments in securities with maturities of six months or less
from the date of acquisition issued or fully guaranteed by any state,
commonwealth or territory of the United States of America, or by any political
subdivision or taxing authority thereof, and rated at least "A" by S&P or "A" by
Moody's.
"Tooling Indebtedness" means all present and future Indebtedness of
the Company or any Restricted Subsidiary the proceeds of which are utilized to
finance dies, molds, tooling and similar items (collectively "Tooling") for
which the sales of such Tooling is covered under specific written purchase
orders or agreements between the Company or any Restricted Subsidiary and the
purchaser of such Tooling.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sections
1 77aaa-77bbbb) as in effect on the date of this Indenture, except as provided
in Section 9.3.
"Trustee" means the party named as such in this Indenture until a
successor replaces it and, thereafter, means the successor.
"Trust Officer" means the Chairman of the Board, the President or any
other officer or assistant officer of the Trustee assigned by the Trustee to
administer its corporate trust matters.
"Uniform Commercial Code" means the New York Uniform Commercial Code
as in effect from time to time.
"Unrestricted Subsidiary" means (i) any Subsidiary of the Company that
at the time of determination shall be designated an Unrestricted Subsidiary by
the Board of Directors in the manner provided below and (ii) any Subsidiary of
an Unrestricted Subsidiary. The Board of Directors may designate any Subsidiary
of the Company (including any newly acquired or
<PAGE> 31
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newly formed Subsidiary) to be an Unrestricted Subsidiary unless such Subsidiary
or any of its Subsidiaries owns any Capital Stock or Indebtedness of, or holds
any Lien on any property of, the Company or any other Subsidiary of the Company
that is not a Subsidiary of the Subsidiary to be so designated; provided,
however, that either (A) the Subsidiary to be so designated has total assets of
$1,000 or less or (B) if such Subsidiary has assets greater than $1,000, such
designation would be permitted under Section 4.4. The Board of Directors may
designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided,
however, that immediately after giving effect to such designation (x) the
Company could Incur $1.00 of additional Indebtedness under Section 4.3(a) and
(y) no Default shall have occurred and be continuing. Any such designation by
the Board of Directors shall be notified by the Company 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.
"U.S. Government Obligations" means direct obligations (or
certificates representing an ownership interest in such obligations) of the
United States of America (including any agency or instrumentality thereof) for
the payment of which the full faith and credit of the United States of America
is pledged and which are not callable at the issuer's option.
"Voting Stock" of a Person means all classes of Capital Stock or other
interests (including partnership interests) of such Person then outstanding and
normally entitled (without regard to the occurrence of any contingency) to vote
in the election of directors, managers or trustees thereof.
"Wholly Owned Subsidiary" means a Restricted Subsidiary all the
Capital Stock of which (other than directors' qualifying shares) is owned by the
Company and/or one or more Wholly Owned Subsidiaries.
SECTION 1.2. Other Definitions.
Term Defined in Section
---- ------------------
"Affiliate Transaction" 4.7
"Agent Members" 2.6
"Bankruptcy Law" 6.1
"Blockage Notice" 10.3(c)
"covenant defeasance option" 8.1(b)
"Custodian" 6.1
<PAGE> 32
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Term Defined in Section
---- ------------------
"defeasance trust" 8.2
"Event of Default" 6.1
"Excess Proceeds" 4.6(a)
"Excess Proceeds Offer" 4.6(a)
"Excess Proceeds Offer Amount" 4.6(c)
"Excess Proceeds Offer Period" 4.6(c)
"Excess Proceeds Payment" 10.3
"Global Securities" 2.1(b)
"Guaranteed Obligations" 11.1
"legal defeasance option" 8.1(b)
"Notice of Default" 6.1
"Participants" 2.6
"pay the subordinated debt" 10.3
"Paying Agent" 2.3
"Payment Blockage Period" 10.3(c)
"Physical Securities" 2.1
"Private Placement Legend" 2.13
"Purchase Date" 4.6(b)
"Registrar" 2.3
"Securities Register" 2.3
"Successor Company" 5.1
SECTION 1.3. Incorporation by Reference of Trust Indenture Act. This
Indenture is subject to the mandatory provisions of the TIA, which are
incorporated by reference in and made a part of this Indenture. The following
TIA terms have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the Securities means the Company and any other obligor on
the indenture securities.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule have the
meanings assigned to them by such definitions.
<PAGE> 33
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SECTION 1.4. Rules of Construction. Unless the context otherwise
requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) "including" means including without limitation;
(5) words in the singular include the plural and words in the plural
include the singular;
(6) the principal amount of any non-interest-bearing or other discount
security at any date shall be the principal amount thereof that would be shown
on a balance sheet of the Company dated such date prepared in accordance with
GAAP;
(7) all references to $, US$, dollars or United States dollars shall
refer to the lawful currency of the United States; and
(8) "herein," "hereof" and other words of similar import refer to this
Indenture as a whole and not to any particular Article, Section or other
subdivision.
ARTICLE 2
THE SECURITIES
SECTION 2.1. Form and Dating. (A) The Securities and the Trustee's
certificate of authentication shall be substantially in the form of Exhibit A,
which is hereby incorporated in and expressly made a part of this Indenture. The
Exchange Securities and the Trustee's certificate of authentication relating
thereto shall be substantially in the form of Exhibit B hereto. The Securities
may have notations, legends or endorsements required by law, stock exchange
rules, agreements to which the Company is subject, if any, or usage (provided
that any such notation, legend or endorsement is in a form acceptable to the
Company). Each Security shall be dated the date of its authentication. If
required, the Securities may bear the appropriate legend regarding any original
issue discount for federal income tax purposes. Each Security shall have an
executed Guarantee from each of the Subsidiary Guarantors.
<PAGE> 34
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The terms and provisions contained in the Securities, annexed hereto
as Exhibits A and B, shall constitute, and are hereby expressly made, a part of
this Indenture and, to the extent applicable, the Company, the Subsidiary
Guarantors and the Trustee, by their execution and delivery of this Indenture,
expressly agree to such terms and provisions and to be bound thereby.
(b) Global Securities. The Securities offered and sold in reliance
on Rule 144A, Securities offered and sold to institutional "accredited
investors" (as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities
Act) and Securities offered and sold in reliance on Regulation S shall be issued
initially in the form of one or more permanent Global Securities ("Global
Securities") in definitive, fully registered form without interest coupons, in
substantially the form of Exhibit A, which shall be deposited on behalf of the
purchasers of the Securities represented thereby with the Trustee, at the
Trustee's office in New York City, as custodian for the Depository, and
registered in the name of the Depository or a nominee of the Depository, duly
executed by the Company (and having an executed Guarantee endorsed thereon) and
authenticated by the Trustee as hereinafter provided and shall bear the legend
set forth in Section 2.13. The aggregate principal amount of the Global
Securities may from time to time be increased or decreased by adjustments made
on the records of the Trustee and the Depository or its nominee in the limited
circumstances hereinafter provided.
Securities issued in exchange for interests in Global Securities
pursuant to Section 2.6 may be issued in the form of permanent certificated
Securities in registered form in substantially the form set forth in Exhibit A
(the "Physical Securities"). All Securities offered and sold in reliance on
Regulation S shall remain in the form of a Global Security until the
consummation of the Exchange Offer pursuant to the Registration Agreement;
provided, however, that all of the time periods specified in the Registration
Agreement to be complied with by the Company have been so complied with.
SECTION 2.2. Execution and Authentication. An Officer of the Company
and each Subsidiary Guarantor shall sign the Securities for the Company and the
Guarantees for the Subsidiary Guarantors by manual or facsimile signature. If
an Officer whose signature is on a Security no longer holds that office at the
time the Trustee authenticates the Security, the Security shall be valid
nevertheless. A Security shall not be valid until an authorized signatory of
the Trustee manually signs the
<PAGE> 35
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certificate of authentication on the Security. The signature shall be conclusive
evidence that the Security has been authenticated under this Indenture. The
Trustee shall authenticate and make available for delivery (i) Initial
Securities for original issue in an aggregate principal amount of $125,000,000
and (ii) Exchange Securities from time to time for issue only in exchange for a
like principal amount of Initial Securities, in each case, upon a written order
of the Company signed by an Officer of the Company. Such order shall specify
the amount of the Securities to be authenticated and the date on which the
Securities are to be authenticated. The aggregate principal amount of
Securities outstanding at any time may not exceed $160,000,000 except as
provided in Section 2.7. The Trustee may appoint an authenticating agent
acceptable to the Company to authenticate the Securities, upon the consent of
the Company to such appointment. Unless limited by the terms of such
appointment, an authenticating agent may authenticate Securities whenever the
Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent has the
same rights as any Registrar, Paying Agent or agent for service of notices and
demands.
SECTION 2.3. Registrar and Paying Agent. The Company shall maintain
an office or agency where Securities may be presented for registration of
transfer or for exchange (the "Registrar") and an office or agency where
Securities may be presented for payment (the "Paying Agent"). The Registrar,
acting on behalf of and as agent for the Company, shall keep a register (the
"Securities Register") of the Securities and of their transfer and exchange.
The Company may have one or more co-registrars and one or more additional paying
agents.
The term "Paying Agent" includes any additional paying agent. The
Company shall enter into an appropriate agency agreement with any Registrar,
Paying Agent or co-registrar not a party to this Indenture, which shall
incorporate the terms of the TIA. The agreement shall implement the provisions
of this Indenture that relate to such agent. The Company shall notify the
Trustee of the name and address of any such agent. If the Company fails to
maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be
entitled to appropriate compensation therefor pursuant to Section 7.7. The
Company may act as Paying Agent, Registrar, co-Registrar or transfer agent.
The Company initially appoints the Trustee as Registrar and Paying
Agent in connection with the Securities, until such time as the Trustee has
resigned or a successor has been
<PAGE> 36
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appointed. Any of the Registrar, the Paying Agent or any other agent may resign
upon 30 days' notice to the Company.
SECTION 2.4. Paying Agent To Hold Money in Trust. On or prior to
each due date of the principal and interest on any Security, the Company shall
deposit with the Paying Agent a sum sufficient to pay such principal and
interest when so becoming due. The Company shall require each Paying Agent
(other than the Trustee) to agree in writing that the Paying Agent shall hold in
trust for the benefit of Securityholders or the Trustee all money held by the
Paying Agent for the payment of principal of or interest on the Securities and
shall notify the Trustee of any default by the Company in making any such
payment. If the Company or a Subsidiary acts as Paying Agent, it shall
segregate the money held by it as Paying Agent and hold it as a separate trust
fund. The Company at any time may require a Paying Agent to pay all money held
by it to the Trustee and to account for any funds disbursed by the Paying Agent.
Upon complying with this Section, the Paying Agent shall have no further
liability for the money delivered to the Trustee.
SECTION 2.5. Securityholder Lists. The Trustee shall preserve in as
current a form as is reasonably practicable the most recent list available to it
of the names and addresses of Securityholders. If the Trustee is not the
Registrar, the Company shall furnish to the Trustee, in writing at least five
Business Days before each interest payment date and at such other times as the
Trustee may request in writing, a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of Securityholders;
provided that as long as the Trustee is the Registrar, no such list need be
furnished.
SECTION 2.6. Transfer and Exchange. The Securities shall be issued
in registered form and shall be transferable only upon the surrender of a
Security for registration of transfer. When a Security is presented to the
Registrar or a co-registrar with a request to register a transfer, the Registrar
and the Trustee may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and the Registrar shall record in the
Securities Register the transfer as requested if the requirements of Section
8-401(1) of the Uniform Commercial Code are met, and thereupon one or more new
Securities in the same aggregate principal amount shall be issued to the
designated assignee or transferee and the old Security will be returned to the
Company. When Securities are presented to the Registrar or a co-registrar with
a request to exchange them for an equal principal amount of Secu-
<PAGE> 37
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rities of other denominations, the Registrar shall make the exchange as
requested, in the same manner, if the same requirements are met. To permit
registration of transfers and exchanges, the Company shall execute and the
Trustee shall authenticate Securities and each of the Subsidiary Guarantors
shall execute a Guarantee thereon at the Registrar's or co-registrar's request.
The Company may require payment of a sum sufficient to pay all taxes,
assessments or other governmental charges in connection with any transfer or
exchange pursuant to this Section. The Company shall not be required to make and
the Registrar need not register transfers or exchanges of Securities selected
for redemption (except, in the case of Securities to be redeemed in part, the
portion thereof not to be redeemed) or any Securities for a period of 15 days
before a selection of Securities to be redeemed or 15 days before an interest
payment date.
Prior to the due presentation for registration of transfer of any
Security, the Company, the Trustee, the Paying Agent, the Registrar or any
co-registrar may deem and treat the person in whose name a Security is
registered as the absolute owner of such Security for the purpose of receiving
payment of principal of and interest on such Security and for all other purposes
whatsoever, whether or not such Security is overdue, and none of the Company,
the Trustee, the Paying Agent, the Registrar or any co-registrar shall be
affected by notice to the contrary.
All Securities issued upon any transfer or exchange pursuant to the
terms of this Indenture will evidence the same debt and will be entitled to the
same benefits under this Indenture as the Securities surrendered upon such
transfer or exchange.
With respect to Global Securities:
(1) Each Global Security authenticated under this Indenture shall (i)
be registered in the name of the Depository designated for such Global Security
or a nominee thereof, (ii) be deposited with such Depository or a nominee
thereof or custodian therefor, (iii) bear legends as set forth in Section 2.13
and (iv) constitute a single Security for all purposes of this Indenture.
Members of, or participants in, the Depository ("Agent Members") shall
have no rights under this Indenture with respect to any Global Security held on
their behalf by the Depository, or the Trustee as its custodian, or under the
<PAGE> 38
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Global Securities, and the Depository may be treated by the Company, the
Trustee and any Agent of the Company or the Trustee as the absolute owner of
such Global Security for all purposes whatsoever. Notwithstanding the
foregoing, nothing herein shall prevent the Company, the Trustee or any Agent
of the Company or the Trustee from giving effect to any written certification,
proxy or other authorization furnished by the Depository or impair, as between
the Depository and its Agent Members, the operation of customary practices
governing the exercise of the rights of a Holder of any Security.
(2) Transfers of a Global Security shall be limited to transfers in
whole but not in part to the Depository, its successors or their respective
nominees. Interests of beneficial owners in a Global Security may be transferred
or exchanged for Physical Securities in accordance with the rules and procedures
of the Depository and the provisions of Section 2.14. In addition, a Global
Security is exchangeable for certificated Securities if (i) the Depository
notifies the Company that it is unwilling or unable to continue as a Depository
for such Global Security or if at any time the Depository ceases to be a
clearing agency registered under the Exchange Act,(ii) the Company executes and
delivers to the Trustee a notice that such Global Security shall be so
transferable, registrable, and exchangeable, and such transfers shall be
registrable or (iii) there shall have occurred and be continuing an Event of
Default or an event which, with the giving of notice or lapse of time or both,
would constitute an Event of Default with respect to the Securities represented
by such Global Security. Any Global Security that is exchangeable for
certificated Securities pursuant to the preceding sentence will be transferred
to, and registered and exchanged for, certificated Securities in authorized
denominations, without legends applicable to a Global Security, and registered
in such names as the Depository holding such Global Security may direct. Subject
to the foregoing, a Global Security is not exchangeable, except for a Global
Security of like denomination to be registered in the name of the Depository or
its nominee. In the event that a Global Security becomes exchangeable for
certificated Securities, (i) certificated Securities will be issued only in
fully registered form in denominations of $1,000 or integral multiples thereof,
(ii) payment of principal, any repurchase price, and interest on the
certificated Securities will be payable, and the transfer of the certificated
Securities will be registrable, at the office or agency of the Company
maintained for such purposes, and (iii) no service charge will be made for any
registration or transfer or exchange of the certificated Securities, although
the Company may require payment of a sum suf-
<PAGE> 39
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ficient to cover any tax or governmental charge imposed in connection therewith.
(3) Securities issued in exchange for a Global Security or any portion
thereof shall have an aggregate principal amount equal to that of such Global
Security or portion thereof to be so exchanged, shall be registered in such
names and be in such authorized denominations as the Depository shall designate
and shall bear the applicable legends provided for herein. Any Global Security
to be exchanged in whole shall be surrendered by the Depository to the Trustee.
With respect to any Global Security to be exchanged in part, either such Global
Security shall be so surrendered for exchange or, if the Trustee is acting as
custodian for the Depository or its nominee with respect to such Global
Security, the principal amount thereof shall be reduced, by an amount equal to
the portion thereof to be so exchanged, by means of an appropriate adjustment
made on the records of the Trustee. Upon any such surrender or adjustment, the
Trustee shall authenticate and deliver the Security issuable on such exchange to
or upon the order of the Depository or an authorized representative thereof.
(4) Every Security authenticated and delivered upon registration of
transfer of, or in exchange for or in lieu of, a Global Security or any portion
thereof, whether pursuant to this Section 2.6, Section 2.7, 2.9, 2.14 or
otherwise, shall be authenticated and delivered in the form of, and shall be, a
Global Security, unless such Security is registered in the name of a Person
other than the Depository for such Global Security or a nominee thereof. Members
of, or participants in, the Depository ("Participants") shall have no rights
under this Indenture with respect to any Global Security held on their behalf by
the Depository or by the Trustee as the custodian of the Depository or under
such Global Security, and the Depository may be treated by the Company, the
Trustee and any agent of the Company or the Trustee as the absolute owner of
such Global Security for all purposes whatsoever. Notwithstanding the foregoing,
nothing herein shall prevent the Company, the Trustee or any agent of the
Company or the Trustee from giving effect to any written certification, proxy or
other authorization furnished by the Depository or impair, as between the
Depository and its Participants, the operation of customary practices of such
Depository governing the exercise of the rights of a holder of a beneficial
interest in any Global Security.
SECTION 2.7. Replacement Securities. If a mutilated Security is
surrendered to the Trustee or Registrar or if the Holder of a Security claims
that the Security has been lost,
<PAGE> 40
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destroyed or wrongfully taken, the Company shall issue and the Trustee shall
authenticate a replacement Security and the Subsidiary Guarantors shall execute
a Guarantee thereon if the requirements of Section 8-405 of the Uniform
Commercial Code are met and the Holder satisfies any other reasonable
requirements of the Trustee and the Company. Such Holder shall furnish an
indemnity bond sufficient in the judgment of the Company, the Subsidiary
Guarantors and the Trustee to protect the Company, the Subsidiary Guarantors,
the Trustee, the Paying Agent, the Registrar and any co-registrar from any loss
which any of them may suffer if a Security is replaced. The Company and the
Trustee may charge the Holder for their expenses in replacing a Security.
Every replacement Security issued pursuant to the terms of this
Section shall constitute an additional obligation of the Company and the
Subsidiary Guarantors under this Indenture.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities.
SECTION 2.8. Outstanding Securities. Securities outstanding at any
time are all Securities authenticated by the Trustee except for those canceled
by it, those delivered to it for cancellation and those described in this
Section as not outstanding. Subject to the provisions of Section 13.6, a
Security does not cease to be outstanding because the Company or an Affiliate of
the Company holds the security.
If a Security is replaced pursuant to Section 2.7, it ceases to be
outstanding unless the Trustee and the Company receive proof satisfactory to
them that the replaced Security is held by a bona fide purchaser.
If the Paying Agent segregates and holds in trust, in accordance with
this Indenture, on a redemption date or maturity date or, pursuant to Section
8.1(a), within 91 days prior thereto, money sufficient to pay all principal and
interest payable on that redemption or maturity date with respect to the
Securities (or portions thereof) to be redeemed or maturing, as the case may be,
then on and after such date such Securities (or portions thereof) cease to be
outstanding and on and after such redemption or maturity date interest on them
ceases to accrue.
<PAGE> 41
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SECTION 2.9. Temporary Securities. Until definitive Securities are
ready for delivery, the Company may prepare and the Trustee shall authenticate
temporary Securities. Temporary Securities shall be substantially in the form
of definitive Securities but may have variations that the Company considers
appropriate for temporary Securities. Without unreasonable delay, the Company
shall prepare and the Trustee shall authenticate definitive Securities and
deliver them in exchange for temporary securities.
SECTION 2.10. Cancellation. The Company at any time may deliver
Securities to the Trustee for cancellation. The Registrar and the Paying Agent
shall forward to the Trustee any Securities surrendered to them for registration
of transfer, exchange or payment. The Trustee and no one else shall cancel all
Securities surrendered for registration of transfer, exchange, payment or
cancellation and deliver such canceled Securities to the Company. The Trustee
shall from time to time provide the Company a list of all Securities that have
been canceled as requested by the Company. The Company may not issue new
Securities to replace Securities it has redeemed, paid or delivered to the
Trustee for cancellation.
SECTION 2.11. Defaulted Interest. If the Company defaults in a
payment of interest on the Securities, the Company shall pay defaulted interest
(plus interest on such defaulted interest to the extent lawful) in any lawful
manner in accordance with Section 4.1. The Company may pay the defaulted
interest to the persons who are Securityholders on a subsequent special record
date. The Company shall fix or cause to be fixed any such special record date
and payment date to the reasonable satisfaction of the Trustee and shall
promptly mail to each Securityholder a notice that states the special record
date, the payment date and the amount of defaulted interest to be paid.
SECTION 2.12. CUSIP Numbers. The Company in issuing the Securities
may use "CUSIP" numbers (if then generally in use), and, if so, the Trustee
shall use "CUSIP" numbers in notices of redemption as a convenience to Holders;
provided that any such notice may state that no representation is made as to the
correctness of such numbers either as printed on the Securities or as contained
in any notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Securities, and any such redemption shall
not be affected by any defect in or omission of such numbers. The Company will
promptly notify the Trustee of any change in the CUSIP numbers.
<PAGE> 42
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SECTION 2.13. Restrictive Legends. Each Global Security and Physical
Security that constitutes a Restricted Security or is sold in compliance with
Regulation S shall bear the following legend (the "Private Placement Legend") on
the face thereof until after the second anniversary of the later of the Issue
Date and the last date on which the Company or any Affiliate of the Company was
the owner of such Security (or any predecessor security) (or such shorter period
of time as permitted by Rule 144(k) under the Securities Act or any successor
provision thereunder) (or such longer period of time as may be required under
the Securities Act or applicable state securities laws in the opinion of counsel
for the Company, unless otherwise agreed by the Company and the Holder thereof):
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING THIS
SECURITY, AGREES FOR THE BENEFIT OF THE COMPANY THAT THIS SECURITY MAY NOT BE
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED (X) PRIOR TO THE SECOND ANNIVERSARY OF
THE ISSUANCE HEREOF (OR A PREDECESSOR SECURITY HERETO) OR (Y) BY ANY HOLDER THAT
WAS AN AFFILIATE OF THE COMPANY AT ANY TIME DURING THE THREE MONTHS PRECEDING
THE DATE OF SUCH TRANSFER, IN EITHER CASE OTHER THAN (1) TO THE COMPANY, (2) SO
LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT ("RULE 144A") TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS
A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A 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 (AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE
CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS SECURITY), (3) IN AN OFFSHORE
TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT (AS
INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON
THE REVERSE OF THIS SECURITY), AND, IF SUCH TRANSFER IS BEING EFFECTED BY
CERTAIN TRANSFERORS SPECIFIED IN THE INDENTURE (AS DEFINED BELOW) PRIOR TO THE
EXPIRATION OF THE "40 DAY RESTRICTED PERIOD" (WITHIN THE MEANING OF RULE
903(c)(3) OF REGULATION S UNDER THE SECURITIES ACT), A CERTIFICATE WHICH MAY BE
OBTAINED FROM THE COMPANY OR THE TRUSTEE IS DELIVERED BY THE TRANSFEREE TO THE
COMPANY AND THE TRUSTEE, (4) TO AN INSTITUTION THAT IS AN "ACCREDITED INVESTOR"
AS DEFINED IN RULE 501(a)(1), (2) (3) OR (7) UNDER THE SECURITIES ACT (AS
INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON
THE REVERSE OF THIS SECURITY) THAT IS ACQUIRING THIS SECURITY FOR INVESTMENT
PURPOSES AND NOT FOR DISTRIBUTION, AND A CERTIFICATE IN THE FORM ATTACHED TO
THIS SECURITY IS DELIVERED
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BY THE TRANSFEREE TO THE COMPANY AND THE TRUSTEE (PROVIDED THAT CERTAIN HOLDERS
SPECIFIED IN THE INDENTURE MAY NOT TRANSFER THIS SECURITY PURSUANT TO THIS
CLAUSE (4) PRIOR TO THE EXPIRATION OF THE "40 DAY RESTRICTED PERIOD" (WITHIN THE
MEANING OF RULE 903(c)(3) OF REGULATION S UNDER THE SECURITIES ACT)), (5)
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY
RULE 144 (IF APPLICABLE) UNDER THE SECURITIES ACT, OR (6) 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. AN INSTITUTIONAL ACCREDITED INVESTOR HOLDING THIS SECURITY AGREES IT
WILL FURNISH TO THE COMPANY AND THE TRUSTEE SUCH CERTIFICATES AND OTHER
INFORMATION AS THEY MAY REASONABLY REQUIRE TO CONFIRM THAT ANY TRANSFER BY IT OF
THIS SECURITY COMPLIES WITH THE FOREGOING RESTRICTIONS. THE HOLDER HEREOF, BY
PURCHASING THIS SECURITY, REPRESENTS AND AGREES FOR THE BENEFIT OF THE COMPANY
THAT IT IS (1) A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A
OR (2) AN INSTITUTION THAT IS AN "ACCREDITED INVESTOR" AS DEFINED IN RULE
501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT AND THAT IT IS HOLDING THIS
SECURITY FOR INVESTMENT PURPOSES AND NOT FOR DISTRIBUTION OR (3) A NON-U.S.
PERSON OUTSIDE THE UNITED STATES WITHIN THE MEANING OF (OR AN ACCOUNT SATISFYING
THE REQUIREMENTS OF PARAGRAPH (o)(2) OR RULE 902 UNDER) REGULATION S UNDER THE
SECURITIES ACT.
Each Global Security shall also bear the following legend on the face
thereof:
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN
DEFINITIVE FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE
DEPOSITORY TO A NOMINEE OF THE DEPOSITORY, OR BY ANY SUCH NOMINEE OF THE
DEPOSITORY, OR BY THE DEPOSITORY OR NOMINEE OF SUCH SUCCESSOR DEPOSITORY OR ANY
SUCH NOMINEE TO A SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITORY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO AN ISSUER OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
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TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN
SECTION 2.14 OF THE INDENTURE.
SECTION 2.14. Special Transfer Provisions. (a) Transfers to Non-QIB
Institutional Accredited Investors and Non-U.S. Persons. The following
provisions shall apply with respect to the registration of any proposed transfer
of a Security constituting a Restricted Security to any Institutional Accredited
Investor which is not a QIB or to any Non-U.S. Person:
(i) the Registrar shall register the transfer of any Security
constituting a Restricted Security whether or not such Security bears the
Private Placement Legend, if (x) the requested transfer is after the second
anniversary of the Issue Date (provided, however, that neither the Company
nor any Affiliate of the Company has held any beneficial interest in such
Security, or portion thereof, at any time on or prior to the second
anniversary of the Issue Date) or (y) (1) in the case of a transfer to an
Institutional Accredited Investor which is not a QIB (excluding Non-U.S.
Persons), the proposed transferee has delivered to the Registrar a
certificate substantially in the form of Exhibit C hereto and any legal
opinions and certifications required thereby or (2) in the case of a
transfer to a Non-U.S. Person, the proposed transferor has delivered to the
Registrar a certificate substantially in the form of Exhibit D hereto; and
(ii) if the proposed transferor is an Agent Member holding a
beneficial interest in the Global Security, upon receipt by the Registrar
of (x) the certificate, if any, required by paragraph (i) above and (y)
written instructions given in accordance with the Depository's and the
Registrar's procedures,
whereupon (a) the Registrar shall reflect on its books and records the date and
(if the transfer does not involve a transfer of outstanding Physical Securities)
a decrease in the principal amount of such Global Security in an amount equal to
the principal amount of the beneficial interest in the Global Security to be
transferred, and (b) the Company shall execute, the Subsidiary Guarantors shall
execute the Guarantees on, and the
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Trustee shall authenticate and deliver, one or more Physical Securities of like
tenor and amount.
(b) Transfers to QIBs. The following provisions shall apply with
respect to the registration of any proposed transfer of a Security constituting
a Restricted Security to a QIB (excluding transfers to Non-U.S. Persons):
(i) the Registrar shall register the transfer if such transfer is
being made by a proposed transferor who has checked the box provided for on
the form of Security stating, or has otherwise advised the Company and the
Registrar in writing, that the sale has been made in compliance with the
provisions of Rule 144A to a transferee who has signed the certification
provided for on the form of Security stating, or has otherwise advised the
Company and the Registrar in writing, that it is purchasing the Security
for its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a QIB within the
meaning of Rule 144A, and is aware that the sale to it is being made in
reliance on Rule 144A and acknowledges that it has received such
information regarding the Company as it has requested pursuant to Rule 144A
or has determined not to request such information and that it is aware that
the transferor is relying upon its foregoing representations in order to
claim the exemption from registration provided by Rule 144A; and
(ii) if the proposed transferee is an Agent Member, and the Securities
to be transferred consist of Physical Securities which after transfer are
to be evidenced by an interest in a Global Security, upon receipt by the
Registrar of written instructions given in accordance with the Depository's
and the Registrar's procedures, the Registrar shall reflect on its books
and records the date and an increase in the principal amount of such Global
Security in an amount equal to the principal amount of the Physical
Securities to be transferred, and the Trustee shall cancel the Physical
Securities so transferred.
(c) Private Placement Legend. Upon the transfer, exchange or
replacement of Securities not bearing the Private Placement Legend, the
Registrar shall deliver Securities that do not bear the Private Placement
Legend. Upon the transfer, exchange or replacement of Securities bearing the
Private Placement Legend, the Registrar shall deliver only Securities that bear
the Private Placement Legend unless (i) the requested
<PAGE> 46
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transfer is after the second anniversary of the Issue Date (provided, however,
that neither the Company nor any Affiliate of the Company has held any
beneficial interest in such Security, or portion thereof, at any time prior to
or on the second anniversary of the Issue Date), or (ii) there is delivered to
the Registrar an Opinion of Counsel reasonably satisfactory to the Company and
the Trustee to the effect that neither such legend nor the related restrictions
on transfer are required in order to maintain compliance with the provisions of
the Securities Act.
(d) General. By its acceptance of any Security bearing the Private
Placement Legend, each Holder of such a Security acknowledges the restrictions
on transfer of such Security set forth in this Indenture and in the Private
Placement Legend and agrees that it will transfer such Security only as provided
in this Indenture.
The Registrar shall retain copies of all letters, notices and other
written communications received pursuant to Section 2.6 or this Section 2.14.
The Company shall have the right to inspect and make copies of all such letters,
notices or other written communications at any reasonable time during the
Registrar's normal business hours upon the giving of reasonable written notice
to the Registrar.
(e) Transfers of Securities Held by Affiliates. Any certificate (i)
evidencing a Security that has been transferred to an Affiliate of the Company
within two years after the Issue Date, as evidenced by a notation on the
Assignment Form for such transfer or in the representation letter delivered in
respect thereof or (ii) evidencing a Security that has been acquired from an
Affiliate (other than by an Affiliate) in a transaction or a chain of
transactions not involving any public offering, shall, until two years after the
last date on which either the Company or any Affiliate of the Company was an
owner of such Security, in each case, bear a legend in substantially the form
set forth in Section 2.13 hereof, unless otherwise agreed by the Company (with
written notice thereof to the Trustee).
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ARTICLE 3
REDEMPTION
SECTION 3.1. Optional Redemption.
(a) Except as set forth in the following paragraph, the Securities
will not be redeemable at the option of the Company prior to June 15, 2002.
Thereafter, the Securities will be redeemable, at the Company's option, in whole
or in part at any time or from time to time, upon not less than 30 nor more than
60 days' prior notice mailed by first class mail to each Holder's registered
address, at the following redemption prices (expressed as percentages of the
principal amount thereof), plus accrued and unpaid interest to the redemption
date (subject to the right of Holders of record on the relevant record date to
receive interest due on the relevant interest payment date), if redeemed during
the twelve-month period commencing on June 15 of the years set forth below:
Year Percentage
---- ----------
2002............................ 105.063%
2003............................ 103.375%
2004............................ 101.688%
2005 and thereafter............. 100.000%
(b) At any time and from time to time, on or prior to June 15, 2000,
the Company may, at its option, redeem in the aggregate up to 35% of the
original principal amount of the Securities with the proceeds of one or more
Public Equity Offerings following which there is a Public Market, at a
redemption price (expressed as a percentage of principal amount) of 110.125%
plus accrued and unpaid interest, if any, to the redemption date (subject to the
right of Holders of record on the relevant record date to receive of interest
due on the relevant interest payment date); provided, however, that at least 65%
of the original aggregate principal amount of the Securities must remain
outstanding after each such redemption.
SECTION 3.2. Notices to Trustee. If the Company elects to redeem
Securities pursuant to Section 3.1, they shall notify the Trustee in writing of
the redemption date, the principal amount of Securities to be redeemed and the
paragraph of the Securities pursuant to which the redemption will occur. The
Company shall give each notice to the Trustee provided for in this Section at
least 45 days before the redemption date unless the Trustee consents to a
shorter period. Such notice shall be
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accompanied by an Officers' Certificate from the Company to the effect that such
redemption will comply with the provisions herein.
SECTION 3.3. Selection of Securities To Be Redeemed. If fewer than
all the Securities are to be redeemed, the Trustee shall select the Securities
to be redeemed pro rata or by lot or by such other method that complies with
applicable legal and securities exchange requirements, if any, and that the
Trustee in its sole discretion shall deem to be fair and appropriate and in
accordance with methods generally used at the time of selection by fiduciaries
in similar circumstances. The Trustee shall make the selection from outstanding
Securities not previously called for redemption. The Trustee may select for
redemption portions of the principal of Securities that have denominations
larger than $1,000. Securities and portions of them the Trustee selects shall
be in amounts of $1,000 or a whole multiple of $1,000. Provisions of this
Indenture that apply to Securities called for redemption also apply to portions
of Securities called for redemption. The Trustee shall notify the Company
promptly of the Securities or portions of Securities to be redeemed. In the
event the Company is required to make an offer to repurchase Securities pursuant
to Sections 4.6 or 4.8 and the amount available for such offer is not evenly
divisible by $1,000, the Trustee shall promptly refund to the Company any
remaining funds, which in no event will exceed $1,000.
SECTION 3.4. Notice of Redemption. At least 30 days but not more
than 60 days before a date for redemption of Securities, the Company shall mail
a notice of redemption by first-class mail to the registered address appearing
in the Security Register of each Holder of Securities to be redeemed. The
notice shall identify the Securities (including CUSIP numbers, if any) to be
redeemed and shall state:
(1) the redemption date;
(2) the redemption price;
(3) the name and address of the Paying Agent;
(4) that Securities called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
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(5) if fewer than all the outstanding Securities are to be redeemed,
the identification and principal amounts of the particular Securities to be
redeemed;
(6) that, unless the Company defaults in making such redemption
payment, interest on Securities (or portion thereof) called for redemption
ceases to accrue on and after the redemption date;
(7) the paragraph of the Securities pursuant to which the Securities
called for redemption are being redeemed;
(8) the CUSIP number, if any, printed on the Securities being
redeemed; and
(9) that no representation is made as to the correctness or accuracy
of the CUSIP number, if any, listed in such notice or printed on the
Securities.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's sole expense. In such
event, the Company shall provide the Trustee with the information required by
this Section.
SECTION 3.5. Effect of Notice of Redemption. Once notice of
redemption is mailed, Securities called for redemption become due and payable on
the redemption date and at the redemption price stated in the notice. Upon
surrender to the Paying Agent, such Securities shall be paid at the redemption
price stated in the notice, plus accrued interest to the redemption date. Such
notice if mailed in the manner herein provided shall be conclusively presumed to
have been given, whether or not the Holder receives such notice. Failure to
give notice or any defect in the notice to any Holder shall not affect the
validity of the notice to any other Holder.
SECTION 3.6. Deposit of Redemption Price. Prior to 11:00 a.m. (New
York City time) on the redemption date, the Company shall deposit with the
Trustee or Paying Agent (or, if the Company or a Subsidiary is the Paying Agent,
shall segregate and hold in trust) money sufficient to pay the redemption price
of and accrued interest (if any) on all Securities or portions thereof to be
redeemed on that date other than Securities or portions of Securities called for
redemption which have been delivered by the Company to the Trustee for
cancellation.
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SECTION 3.7. Securities Redeemed in Part. Upon surrender of a
Security that is redeemed in part (with, if the Company or the Trustee so
requires, due endorsement by, or 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), the Company shall execute, and the
Trustee shall authenticate and deliver to the Holder of such Security without
service charge, a new Security or Securities of any authorized denomination as
requested by such Holder, in aggregate principal amount equal to and in exchange
for the unredeemed portion of the principal of the Security so surrendered,
except that if a Global Security is so surrendered, the Company shall execute,
and the Trustee shall authenticate and deliver to the Depository for such Global
Security, without service charge, a new Global Security in denomination equal to
and in exchange for the unredeemed portion of the principal of the Global
Security so surrendered.
ARTICLE 4
COVENANTS
SECTION 4.1. Payment of Securities. The Company shall promptly pay
the principal of and interest on the Securities on the dates and in the manner
provided in the Securities and in this Indenture. Principal and interest shall
be considered paid on the date due if on such date the Trustee or the Paying
Agent holds in accordance with this Indenture money sufficient to pay all
principal and interest then due. The Company shall pay interest on overdue
principal at 1% per annum in excess of the rate per annum set forth in the
Securities, and it shall pay interest on overdue installments of interest at the
same rate to the extent lawful.
SECTION 4.2. SEC Reports. Until such time as the Company shall
become subject to the reporting requirements of Section 13 or 15(d) of the
Exchange Act, the Company shall provide the Trustee, the Initial Purchasers, the
Securityholders and prospective Securityholders (upon request) with such annual
reports and such information, documents and other reports as are specified in
Section 13 or 15(d) of the Exchange Act and applicable to a U.S. corporation
subject to such Sections, and such information, documents and other reports to
be so provided at the times specified for filing of such information, documents
and reports under such Sections. Thereafter, notwithstanding that the Company
may not be required to remain subject to the reporting requirements of Section
13 or 15(d) of the Exchange Act, the Company shall file with the SEC and provide
the
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Trustee and Securityholders and prospective Securityholders (upon request) with
such annual reports and such information, documents and other reports as are
specified in Sections 13 and 15(d) of the Exchange Act and applicable to a U.S.
corporation subject to such Sections, and such information, documents and other
reports to be so filed and provided at the times specified for the filing of
such information, documents and reports under such Sections; provided, however,
that the Company shall not be required to file any report, document or other
information with the SEC if the SEC does not permit such filing.
SECTION 4.3. Limitation on Indebtedness.
(a) The Company will not, and will not permit any Restricted
Subsidiary to, Incur, directly or indirectly, any Indebtedness unless,
immediately after giving effect to such Incurrence, the Consolidated Coverage
Ratio exceeds 2.00 to 1 if such Indebtedness is Incurred prior to June 15, 1999,
and 2.25 to 1 if such Indebtedness is Incurred thereafter.
(b) Notwithstanding Section 4.3(a), the Company and its Restricted
Subsidiaries may Incur any or all of the following Indebtedness:
(i) Indebtedness and other Obligations Incurred pursuant to the Bank
Credit Agreements; provided, however, that, after giving effect to any such
Incurrence, the aggregate principal amount of such Indebtedness and other
Obligations then outstanding, does not exceed the greater of (x) $110
million and (y) the sum of (A) 60% of the net book value of the inventory
of the Company and its Restricted Subsidiaries, (B) 90% of the net book
value of the accounts receivable of the Company and its Restricted
Subsidiaries, in each case determined in accordance with GAAP and (C) $70
million;
(ii) Indebtedness represented by the Securities issued in the Offering
(and the Exchange Securities);
(iii) Indebtedness outstanding on the Issue Date (other than
Indebtedness described in clause (i) of this Section 4.3(b)), including,
without limitation, the Existing Preferred Stock;
(iv) Indebtedness of the Company owed to and held by any Wholly Owned
Subsidiary or Indebtedness of a Restricted Subsidiary owed to and held by
the Company or a Wholly Owned Subsidiary; provided, however, that any sub-
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sequent issuance or transfer of any Capital Stock which results in any such
Wholly Owned Subsidiary ceasing to be a Wholly Owned Subsidiary or any
subsequent transfer of such Indebtedness (other than to the Company or
Wholly Owned Subsidiary) shall be deemed, in each case, to constitute the
Incurrence of such Indebtedness by the issuer thereof;
(v) Refinancing Indebtedness in respect of Indebtedness Incurred
pursuant to paragraph (a) or pursuant to clause (i), (ii), (iii) or this
clause (v) of this Section 4.3(b);
(vi) Indebtedness in respect of performance bonds, bankers'
acceptances, letters of credit and surety or appeal bonds entered into by
the Company and the Restricted Subsidiaries in the ordinary course of their
business;
(vii) Hedging Obligations consisting of Interest Rate Agreements and
Currency Agreements entered into in the ordinary course of business and not
for the purpose of speculation; provided, however, that, in the case of
Currency Agreements and Interest Rate Agreements, such Currency Agreements
and Interest Rate Agreements do not increase the Indebtedness of the
Company outstanding at any time other than as a result of fluctuations in
foreign currency exchange rates or interest rates or by reason of fees,
indemnities and compensation payable thereunder;
(viii) Purchase Money Indebtedness and Capital Lease Obligations
Incurred to finance the acquisition or improvement by the Company or a
Restricted Subsidiary of any assets in the ordinary course of business and
which do not exceed $15 million in the aggregate at any time outstanding;
(ix) Indebtedness and other Obligations represented by the
Subsidiary Guaranties and Guarantees of Indebtedness Incurred pursuant to
the Bank Credit Agreements;
(x) Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument inadvertently
(except in the case of daylight overdrafts) drawn against insufficient
funds in the ordinary course of business, provided that such Indebtedness
is extinguished within five business days of Incurrence;
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(xi) Indebtedness of the Company and its Restricted Subsidiaries
arising from agreements providing for indemnification, adjustment of
purchase price or similar obligations, in any case Incurred in connection
with the disposition of any assets of the Company or any Restricted
Subsidiary (other than Guarantees of Indebtedness Incurred by any Person
acquiring all or any portion of such assets for the purpose of financing
such acquisition), in a principal amount not to exceed the gross proceeds
actually received by the Company or any Restricted Subsidiary in connection
with such disposition;
(xii) Tooling Indebtedness; and
(xiii) Indebtedness in an aggregate principal amount which, together
with all other Indebtedness of the Company and its Restricted Subsidiaries
outstanding on the date of such Incurrence (other than Indebtedness
permitted by clauses (i) through (xii) above or paragraph (a)), does not
exceed $20 million.
(c) Notwithstanding the foregoing, the Company shall not, and shall
not permit any Restricted Subsidiary to, Incur any Indebtedness pursuant to the
foregoing Section 4.3(b) if the proceeds thereof are used, directly or
indirectly, to Refinance (i) any Subordinated Obligations unless such
Indebtedness shall be subordinated to the Securities, and the Subsidiary
Guaranties, as applicable, to at least the same extent as such Subordinated
Obligations or (ii) any Senior Subordinated Indebtedness unless such
Indebtedness shall be Senior Subordinated Indebtedness or shall be subordinated
to the Securities and the Subsidiary Guaranties, as applicable.
(d) For purposes of determining compliance with this Section 4.3, (i)
in the event that an item of Indebtedness meets the criteria of more than one of
the types of Indebtedness described above, the Company, in its sole discretion,
will classify such item of Indebtedness and only be required to include the
amount and type of such Indebtedness in one of the above clauses and (ii) an
item of Indebtedness may be divided and classified in more than one of the types
of Indebtedness described above.
(e) Notwithstanding paragraphs (a) and (b) of this Section 4.3, the
Company shall not, and shall not permit any Subsidiary Guarantor to, Incur (i)
any Indebtedness if such Indebtedness is subordinate or junior in ranking in any
respect to any Senior Indebtedness of the Company or such Subsidiary
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Guarantor, as applicable, unless such Indebtedness is Senior Subordinated
Indebtedness or is expressly subordinated in right of payment to Senior
Subordinated Indebtedness or (ii) any Secured Indebtedness that is not Senior
Indebtedness of the Company or such Subsidiary Guarantor, as applicable, unless
contemporaneously therewith effective provision is made to secure the
Securities or the Subsidiary Guaranty, as applicable, equally and ratably with
such Secured Indebtedness for so long as such Secured Indebtedness is secured
by a Lien.
SECTION 4.4. Limitation on Restricted Payments.
(a) The Company will not, and will not permit any Restricted
Subsidiary to, directly or indirectly, make a Restricted Payment if at the time
the Company or such Restricted Subsidiary makes such Restricted Payment: (i) a
Default will have occurred and be continuing (or would result therefrom); (ii)
the Company is not able to Incur an additional $1.00 of Indebtedness under
Section 4.3(a); or (iii) the aggregate amount of such Restricted Payment
together with all other Restricted Payments (the amount of any payments made in
property other than cash to be valued at the fair market value of such property
as determined in good faith by the Board of Directors) declared or made since
the Issue Date would exceed the sum of:
(A) 50% of the Consolidated Net Income accrued during the period
(treated as one accounting period) from the beginning of the fiscal
quarter immediately following the fiscal quarter during which the
Securities are originally issued to the end of the most recent fiscal
quarter prior to the date of such Restricted Payment for which
financial statements of the Company are available (or, in case such
Consolidated Net Income accrued during such period (treated as one
accounting period) shall be a deficit, minus 100% of such deficit);
(B) the aggregate Net Cash Proceeds received by the Company from
the issuance or sale of its Capital Stock (other than Disqualified
Stock) subsequent to the Issue Date (other than an issuance or sale to
a Subsidiary of the Company);
(C) the amount by which Indebtedness of the Company or its
Restricted Subsidiaries is reduced on the Company's balance sheet upon
the conversion or exchange (other than by a Subsidiary of the Company)
subsequent to the Issue Date, of any Indebtedness of
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the Company or its Restricted Subsidiaries convertible or exchangeable
for Capital Stock (other than Disqualified Stock) of the Company (less
the amount of any cash, or the fair market value of any other
property, distributed by the Company or any Restricted Subsidiary upon
such conversion or exchange);
(D) an amount equal to the sum of (i) the net reduction in
Investments in Unrestricted Subsidiaries resulting from dividends,
repayments of loans or advances or other transfers of assets
subsequent to the Issue Date, in each case to the Company or any
Restricted Subsidiary from Unrestricted Subsidiaries, and (ii) the
portion (proportionate to the Company's equity interest in such
Subsidiary) of the fair market value of the net assets of an
Unrestricted Subsidiary at the time such Unrestricted Subsidiary is
designated a Restricted Subsidiary; provided, however, that the
foregoing sum shall not exceed, in the case of any Unrestricted
Subsidiary, the amount of Investments previously made (and treated as
a Restricted Payment) by the Company or any Restricted Subsidiary in
such Unrestricted Subsidiary; and
(E) $5 million.
(b) The provisions of Section 4.4(a) will not prohibit:
(i) any purchase or redemption of Capital Stock or Subordinated
Obligations of the Company or any Restricted Subsidiary made in exchange
for, or out of the proceeds of the substantially concurrent sale of,
Capital Stock of the Company (other than Disqualified Stock and other than
Capital Stock issued or sold to a Subsidiary of the Company); provided,
however, that (x) such purchase or redemption shall be excluded from the
calculation of the amount of Restricted Payments and (y) the Net Cash
Proceeds from such sale shall be excluded from the calculation of amounts
under Section 4.4(a)(iii)(B);
(ii) any purchase or redemption of (A) Subordinated Obligations of the
Company made in exchange for, or out of the proceeds of the substantially
concurrent sale of, Indebtedness of the Company which is permitted to be
Incurred pursuant to Section 4.3(b) and (c) or (B) Subordinated Obligations
of a Restricted Subsidiary
<PAGE> 56
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made in exchange for, or out of the proceeds of the substantially
concurrent sale of, Indebtedness of such Restricted Subsidiary or the
Company which is permitted to be Incurred pursuant to Section 4.3(b) and
(c); provided, however, that such purchase or redemption shall be excluded
from the calculation of the amount of Restricted Payments;
(iii) any purchase or redemption of (A) Disqualified Stock of the
Company made in exchange for, or out of the proceeds of the substantially
concurrent sale of, Disqualified Stock of the Company or (B) Disqualified
Stock of a Restricted Subsidiary made in exchange for, or out of the
proceeds of the substantially concurrent sale of, Disqualified Stock of
such Restricted Subsidiary or the Company; provided, however, that (1) at
the time of such exchange, no Default or Event of Default shall have
occurred and be continuing or would result therefrom and (2) such purchase
or redemption will be excluded from the calculation of the amount of
Restricted Payments;
(iv) dividends paid within 60 days after the date of declaration
thereof if at such date of declaration such dividend would have complied
with Section 4.4(a); provided, however, that at the time of payment of such
dividend, no other Default shall have occurred and be continuing (or would
result therefrom); provided, further, however, that such dividend shall be
included in the calculation of the amount of Restricted Payments;
(v) the repurchase of shares of, or options to purchase shares of,
Capital Stock of the Company or any of its Subsidiaries from officers,
former officers, employees, former employees, directors or former directors
of the Company or any of its Subsidiaries (or permitted transferees of such
employees, former employees, directors or former directors), pursuant to
the terms of the agreements (including employment agreements) or plans (or
amendments thereto) approved by the Board of Directors under which such
individuals purchase or sell, or are granted the option to purchase or
sell, shares of such common stock; provided, however, that the aggregate
amount of such repurchases shall not exceed $2.5 million in any one year
and $5.0 million in the aggregate; provided, further, however, that (1) at
the time of such repurchase, no Default or Event of Default shall have
occurred and be continuing or would result therefrom and (2) all such re-
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purchases shall be included in the calculation of the amount of Restricted
Payments; or
(vi) dividends and redemptions required to be made with respect to the
Existing Preferred Stock; provided, however, that (1) at the time of any
such dividend or redemption, no Default or Event of Default shall have
occurred and be continuing or would result therefrom and (2) all such
dividends and redemptions shall be included in the calculation of the
amount of Restricted Payments.
SECTION 4.5. Limitation on Restrictions on Distributions from
Restricted Subsidiaries. The Company will not, and will not permit any
Restricted Subsidiary to, create or otherwise cause or permit to exist or become
effective any consensual encumbrance or consensual restriction on the ability of
any Restricted Subsidiary (a) to pay dividends or make any other distributions
on its Capital Stock to the Company or a Restricted Subsidiary or pay any
Indebtedness owed to the Company, (b) to make any loans or advances to the
Company or (c) to transfer any of its property or assets to the Company, except:
(i) any encumbrance or restriction pursuant to an agreement in effect
at or entered into on the Issue Date;
(ii) any encumbrance or restriction with respect to a Restricted
Subsidiary pursuant to an agreement relating to any Indebtedness Incurred
by such Restricted Subsidiary which was entered into on or prior to the
date on which such Restricted Subsidiary was acquired by the Company (other
than as consideration in, or to provide all or any portion of the funds or
credit support utilized to consummate, the transaction or series of related
transactions pursuant to which such Restricted Subsidiary became a
Restricted Subsidiary or was acquired by the Company) and outstanding on
such date;
(iii) any encumbrance or restriction pursuant to an agreement
effecting a Refinancing of Indebtedness Incurred pursuant to an agreement
referred to in clause (i) or (ii) of this Section 4.5 (or effecting a
Refinancing of such Refinancing Indebtedness pursuant to this clause (iii))
or contained in any amendment to an agreement referred to in clause (i) or
(ii) of this Section 4.5 or this clause (iii); provided, however, that the
encumbrances and restrictions with respect to such Restricted Subsidiary
contained in any such refinancing agreement or amendment are
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no more restrictive in any material respect than encumbrances and
restrictions with respect to such Restricted Subsidiary contained in such
agreements;
(iv) any such encumbrance or restriction consisting of customary
non-assignment provisions in leases governing leasehold interests to the
extent such provisions restrict the transfer of the lease or the property
leased thereunder;
(v) in the case of this Section 4.5(c), restrictions contained in
security agreements or mortgages securing Indebtedness (other than Tooling
Indebtedness) of a Restricted Subsidiary to the extent such restrictions
restrict the transfer of the property subject to such security agreements
or mortgages;
(vi) any restriction with respect to a Restricted Subsidiary imposed
pursuant to an agreement entered into for the sale or disposition of all or
substantially all the Capital Stock or assets of such Restricted Subsidiary
pending the closing of such sale or disposition; and
(vii) any restrictions imposed by operation of applicable law.
SECTION 4.6. Limitation on Sales of Assets and Subsidiary Stock.
(a) The Company will not, and will not permit any Restricted
Subsidiary to, directly or indirectly, consummate any Asset Disposition unless
the Company or such Restricted Subsidiary receives consideration at the time of
such Asset Disposition at least equal to the fair market value (including as to
the value of all non-cash consideration), as determined in good faith by the
Board of Directors, of the shares and assets subject to such Asset Disposition,
and at least 75% of the consideration thereof received by the Company or such
Restricted Subsidiary is in the form of cash or cash equivalents.
With respect to any Asset Disposition occurring on or after the Issue
Date from which the Company or any Restricted Subsidiary receives Net Available
Cash, the Company or such Restricted Subsidiary shall (i) within 360 days after
the date such Net Available Cash is received and to the extent the Company or
such Restricted Subsidiary elects (or is required by the terms of any Senior
Indebtedness) to (A) apply an amount equal to such Net Available Cash to prepay,
repay or purchase
<PAGE> 59
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Senior Indebtedness of the Company or such Restricted Subsidiary, in each case
owing to a Person other than the Company or any Affiliate of the Company, or (B)
invest an equal amount, or the amount not so applied pursuant to clause (A), in
Additional Assets (including by means of an Investment in Additional Assets by a
Restricted Subsidiary with Net Available Cash received by the Company or another
Restricted Subsidiary) and (ii) apply such excess Net Available Cash (to the
extent not applied pursuant to clause (i)) as provided in the following
paragraphs of this Section 4.6; provided, however, that in connection with any
prepayment, repayment or purchase of Senior Indebtedness pursuant to clause (A)
above, the Company or such Restricted Subsidiary shall retire such Senior
Indebtedness and shall cause the related loan commitment (if any) to be
permanently reduced in an amount equal to the principal amount so prepaid,
repaid or purchased. The amount of Net Available Cash required to be applied
pursuant to clause (ii) above and not theretofore so applied shall constitute
"Excess Proceeds." Pending application of Net Available Cash pursuant to this
provision, such Net Available Cash shall be invested in Temporary Cash
Investments.
If at any time the aggregate amount of Excess Proceeds not theretofore
subject to an Excess Proceeds Offer (as defined below) totals at least $5
million, the Company shall, not later than 30 days after the end of the period
during which the Company is required to apply such Excess Proceeds pursuant to
clause (i) of the immediately preceding paragraph of this Section 4.6(a) (or, if
the Company so elects, at any time within such period), make an offer (an
"Excess Proceeds Offer") to purchase from the Holders on a pro rata basis an
aggregate principal amount of Securities equal to the Excess Proceeds (rounded
down to the nearest multiple of $1,000) on such date, at a purchase price equal
to 100% of the principal amount of such Securities, plus, in each case, accrued
interest (if any) to the date of purchase (the "Excess Proceeds Payment"). Upon
completion of an Excess Proceeds Offer the amount of Excess Proceeds remaining
after application pursuant to such Excess Proceeds Offer, (including payment of
the purchase price for Securities duly tendered) may be used by the Company for
any corporate purpose (to the extent not otherwise prohibited by the Indenture).
For the purposes of this Section 4.6, the following are deemed to be
cash or cash equivalents: (x) the assumption of Indebtedness of the Company or
any Restricted Subsidiary and the release of the Company or such Restricted
Subsidiary from all liability on such Indebtedness in connection with such As-
<PAGE> 60
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set Disposition, and (y) securities received by the Company or any Restricted
Subsidiary from the transferee that are immediately converted by the Company or
such Restricted Subsidiary into cash.
(b) Promptly, and in any event within 30 days after the Company
becomes obligated to make an Excess Proceeds Offer, the Company shall be
obligated to deliver to the Trustee and send, by first-class mail to each
Holder, at the address appearing in the Security Register, a written notice
stating that the Holder may elect to have his Securities purchased by the
Company either in whole or in part (subject to prorationing as hereinafter
described in the event the Excess Proceeds Offer is oversubscribed) in integral
multiples of $1,000 of principal amount, at the applicable purchase price. The
notice, which shall govern the terms of the Excess Proceeds Offer, shall include
such disclosures as are required by law and shall specify (i) that the Excess
Proceeds Offer is being made pursuant to this Section 4.6; (ii) the purchase
price (including the amount of accrued interest, if any) for each Security and
the purchase date not less than 30 days nor more than 60 days after the date of
such notice (the "Purchase Date"); (iii) that any Security not tendered or
accepted for payment will continue to accrue interest in accordance with the
terms thereof; (iv) that, unless the Company defaults on making the payment, any
Security accepted for payment pursuant to the Excess Proceeds Offer shall cease
to accrue interest on and after the Purchase Date; (v) that Securityholders
electing to have Securities purchased pursuant to an Excess Proceeds Offer will
be required to surrender their Securities to the Paying Agent at the address
specified in the notice at least three business days prior to the Purchase Date
and must complete any form letter of transmittal proposed by the Company and
acceptable to the Trustee and the Paying Agent; (vi) that Securityholders will
be entitled to withdraw their election if the Paying Agent receives, not later
than one business day prior to the Purchase Date, a telex, facsimile
transmission or letter setting forth the name of the Securityholder, the
principal amount of Securities the Securityholder delivered for purchase, the
Security certificate number (if any) and a statement that such Securityholder is
withdrawing its election to have such Securities purchased; (vii) that if
Securities in a principal amount in excess of the aggregate principal amount
which the Company has offered to purchase are tendered pursuant to the Excess
Proceeds Offer, the Company shall purchase Securities on a pro rata basis among
the Securities tendered (with such adjustments as may be deemed appropriate by
the Company so that only Securities in denominations of $1,000 or integral
multiples of $1,000 shall be ac-
<PAGE> 61
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quired); (viii) that Securityholders whose Securities are purchased only in part
will be issued new Securities equal in principal amount to the unpurchased
portion of the Securities surrendered; and (ix) the instructions that Security
holders must follow in order to tender their Securities.
(c) Not later than the date upon which written notice of an Excess
Proceeds Offer is delivered to the Trustee as provided below, the Company shall
deliver to the Trustee an Officers' Certificate as to (i) the amount of the
Excess Proceeds Offer (the "Excess Proceeds Offer Amount"), (ii) the allocation
of the Net Available Cash from the Asset Dispositions pursuant to which such
Excess Proceeds Offer is being made and (iii) the compliance of such allocation
with the provisions of Section 4.6(a). Upon the expiration of the period for
which the Excess Proceeds Offer remains open (the "Excess Proceeds Offer
Period"), the Company shall deliver to the Trustee for cancellation the
Securities or portions thereof which have been properly tendered to and are to
be accepted by the Company. Not later than 11:00 a.m. (New York City time) on
the Purchase Date, the Company shall irrevocably deposit with the Trustee or
with a paying agent (or, if the Company is acting as Paying Agent, segregate and
hold in trust) an amount in cash sufficient to pay the Excess Proceeds Offer
Amount for all Securities properly tendered to and accepted by the Company. The
Trustee shall, on the Purchase Date, mail or deliver payment to each tendering
Holder in the amount of the purchase price.
(d) Holders electing to have a Security purchased will be required to
surrender the Security, together with all necessary endorsements and other
appropriate materials duly completed, to the Company at the address specified in
the notice at least three Business Days prior to the Purchase Date. Holders
will be entitled to withdraw their election in whole or in part if the Trustee
or the Company receives not later than one Business Day prior to the Purchase
Date, a facsimile transmission or letter setting forth the name of the Holder,
the principal amount of the Security (which shall be $1,000 or an integral
multiple thereof) which was delivered for purchase by the Holder, the aggregate
principal amount of such Security (if any) that remains subject to the original
notice of the Excess Proceeds Offer and that has been or will be delivered for
purchase by the Company and a statement that such Holder is withdrawing his
election to have such Security purchased. If at the expiration of the Excess
Proceeds Offer Period the aggregate principal amount of Securities surrendered
by Holders exceeds the Excess Proceeds Offer Amount, the Company shall select
the Securities to be purchased on a pro rata basis (with
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such adjustments as may be deemed appropriate by the Company so that only
securities in denominations of $1,000, or integral multiples thereof, shall be
purchased). Holders whose Securities are purchased only in part will be issued
new Securities equal in principal amount to the unpurchased portion of the
Securities surrendered.
(e) A Security shall be deemed to have been accepted for purchase at
the time the Trustee, directly or through an agent, mails or delivers payment
therefor to the surrendering Holder.
(f) The Company shall comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Securities pursuant to this
Section 4.6. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Section 4.6, the Company shall
comply with the applicable securities laws and regulations and shall not be
deemed to have breached its obligations under this Section by virtue thereof.
SECTION 4.7. Limitation on Affiliate Transactions.
(a) The Company will not, and will not permit any Restricted
Subsidiary to, enter into or permit to exist any transaction or series of
related transactions (including the purchase, sale, lease or exchange of any
property, employee compensation arrangements or the rendering of any service)
with any Affiliate of the Company (an "Affiliate Transaction") unless the terms
thereof (1) are no less favorable to the Company or such Restricted Subsidiary
than those that could be obtained at the time of such transaction in
arm's-length dealings with a Person who is not such an Affiliate, (2) if such
Affiliate Transaction (or series of related Affiliate Transactions) involves
aggregate payments in an amount in excess of $1.0 million in any one year, (i)
are set forth in writing, (ii) comply with clause (1) of this Section 4.7 and
(iii) have been approved by a majority of the disinterested members of the Board
of Directors, and (3) if such Affiliate Transaction (or series of related
Affiliate Transactions) involves aggregate payments in an amount in excess of
$5.0 million in any one year, (i) comply with clause (2) and (ii) have been
determined by a nationally recognized investment banking firm to be fair, from a
financial standpoint, to the Company and its Restricted Subsidiaries.
<PAGE> 63
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(b) Section 4.7(a) shall not prohibit (i) any Restricted Payment
permitted to be paid pursuant to Section 4.4, (ii) any issuance of securities,
or other payments, awards or grants in cash, securities or otherwise, pursuant
to, or the funding of, employment arrangements, stock options and stock
ownership plans in the ordinary course of business and approved by the Board of
Directors, (iii) the grant of stock options or similar rights to employees and
directors of the Company in the ordinary course of business and pursuant to
plans approved by the Board of Directors, (iv) loans or advances to employees in
the ordinary course of business of the Company or its Restricted Subsidiaries,
(v) fees, compensation or employee benefit arrangements paid to and indemnity
provided for the benefit of directors, officers or employees of the Company or
any Subsidiary in the ordinary course of business, (vi) payments made to The
Oxford Investment Group, Inc. for (x) management and consulting services in an
aggregate amount not to exceed $1,000,000 in any one year and (y) investment
banking services in connection with acquisition of assets or businesses, by the
Company or any Subsidiary not to exceed the greater of (A) 1.25% of the purchase
price paid by the Company or such Subsidiary for the assets or business acquired
(including Indebtedness assumed by the Company or such Subsidiary as part of
such acquisition) and (B) $200,000; or (vii) any Affiliate Transaction between
the Company and a Restricted Subsidiary or between Restricted Subsidiaries in
the ordinary course of business (so long as the other stockholders of any
participating Restricted Subsidiaries which are not Wholly Owned Restricted
Subsidiaries are not themselves Affiliates of the Company).
SECTION 4.8. Change of Control.
(a) Upon the occurrence of a Change of Control, each Holder shall
have the right to require that the Company repurchase all or a portion of such
Holder's Securities at a purchase price in cash equal to 101% of the principal
amount thereof, plus accrued and unpaid interest, if any, to the date of
repurchase (subject to the right of Holders of record on the relevant record
date to receive interest due on the relevant interest payment date), in
accordance with the terms contemplated in Section 4.8(b).
(b) Within 30 days following any Change of Control, the Company shall
mail a notice to each Holder with a copy to the Trustee stating:
(1) that a Change of Control has occurred and that such Holder has the
right to require the Company to pur-
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chase such Holder's Securities at a purchase price in cash equal to 101% of
the principal amount outstanding at the repurchase date, plus accrued and
unpaid interest, if any, to the date of repurchase (subject to the right of
Holders of record on the relevant record date to receive interest on the
relevant interest payment date);
(2) the circumstances and relevant facts and relevant financial
information regarding such Change of Control;
(3) the repurchase date (which shall be no earlier than 30 days nor
later than 60 days from the date such notice is mailed); and
(4) the instructions determined by the Company, consistent with this
Section 4.8, that a Holder must follow in order to have its Securities
repurchased.
(c) Holders electing to have a Security purchased will be required to
surrender the Security, together with all necessary endorsements and other
appropriate materials duly completed, to the Company at the address specified in
the notice at least three Business Days prior to the purchase date. Holders
will be entitled to withdraw their election if the Trustee or the Company
receives not later than one Business Day prior to the purchase date, a facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of the Security which was delivered for purchase by the Holder as to
which such notice of withdrawal is being submitted and a statement that such
Holder is withdrawing his election to have such Security purchased.
(d) On the purchase date, all Securities purchased by the Company
under this Section shall be delivered to the Trustee for cancellation, and the
Company shall pay the purchase price plus accrued and unpaid interest, if any,
to the Holders entitled thereto.
(e) The Company shall comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Securities pursuant to this
Section. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Section, the Company shall comply
with the applicable securities laws and regulations and shall not be deemed to
have breached its obligations under this Section by virtue thereof.
<PAGE> 65
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(f) Notwithstanding the occurrence of a Change of Control, the
Company shall not be obligated to repurchase the Securities or otherwise comply
with this Section if the Company has irrevocably elected to redeem all the
Securities in accordance with Article Three; provided that the Company does not
default in its redemption obligations pursuant to such election.
SECTION 4.9. Compliance Certificate. The Company shall deliver to
the Trustee within 120 days after the end of each fiscal year of the Company an
Officers' Certificate, one of the signers of which shall be the principal
executive, financial or accounting officer of the Company, stating that in the
course of the performance by the signers of their duties as Officers of the
Company they would normally have knowledge of any Default and whether or not the
signers know of any Default that occurred during such period. If they do, the
certificate shall describe the Default, its status and what action the Company
is taking or proposes to take with respect thereto. The Company also shall
comply with TIA Section 314(a)(4).
SECTION 4.10. Further Instruments and Acts. Upon request of the
Trustee, the Company will execute and deliver such further instruments and do
such further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.
SECTION 4.11. Limitation on Liens. The Company will not, and will not
permit any Restricted Subsidiary to, directly or indirectly, Incur or permit to
exist any Lien of any nature whatsoever on any property of the Company or any
Restricted Subsidiary (including Capital Stock of a Restricted Subsidiary),
whether owned at the Issue Date or thereafter acquired, which secures
Indebtedness that ranks pari passu with or is subordinated to the Securities or
the Subsidiary Guaranties unless
(i) if such Lien secures Indebtedness that ranks pari passu with the
Securities and the Subsidiary Guaranties, the Securities are secured on an
equal and ratable basis with the obligation so secured until such time as
such obligation is no longer secured by a Lien; or
(ii) if such Lien secures Indebtedness that is subordinated to the
Securities and the Subsidiary Guaranties, such Lien shall be subordinated
to a Lien granted to the Holders on the same collateral as that securing
such Lien to the same extent as such subordinated Indebtedness is
<PAGE> 66
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subordinated to the Security and the Subsidiary Guaranties.
SECTION 4.12. Limitation on Issuance or Sale of Capital Stock of
Restricted Subsidiaries. The Company will not (i) sell, pledge, hypothecate or
otherwise dispose of any shares of Capital Stock of a Restricted Subsidiary
(other than pledges of Capital Stock securing Senior Indebtedness), or (ii)
permit any Restricted Subsidiary, directly or indirectly, to issue or sell or
otherwise dispose of any shares of its Capital Stock other than (A) to the
Company or a Wholly Owned Subsidiary, (B) directors' qualifying shares, (C) if,
immediately after giving effect to such issuance or sale, such Restricted
Subsidiary would no longer constitute a Restricted Subsidiary, or (D) the
issuance of Preferred Stock by any Subsidiary Guarantor as partial payment for
the acquisition by such Subsidiary Guarantor of Additional Assets.
Notwithstanding the foregoing, the Company may sell, and may permit a Restricted
Subsidiary to issue and sell, up to 20% of the outstanding Common Stock of a
Restricted Subsidiary to officers and employees of such Restricted Subsidiary.
The proceeds of any sale of such Capital Stock permitted hereby will be treated
as Net Available Cash from an Asset Disposition and must be applied in
accordance with Section 4.6.
SECTION 4.13. Payment of Taxes and Other Claims. The Company shall,
and shall cause each of its Subsidiaries to, pay or discharge or cause to be
paid or discharged, before the same shall become delinquent, all taxes,
assessments and governmental charges levied or imposed upon its or its
Subsidiaries' income, profits or property; provided, however, that neither the
Company nor any of its Subsidiaries shall be required to pay or discharge or
cause to be paid or discharged any such tax, assessment, charge or claim whose
amount, applicability or validity is being contested in good faith by
appropriate negotiations or proceedings and for which disputed amounts adequate
reserves have been made in accordance with GAAP.
SECTION 4.14. Future Guarantors. The Company shall cause each
Restricted Subsidiary that at any time becomes an obligor or guarantor with
respect to any obligations under one or more Bank Credit Agreements to execute
and deliver to the Trustee a supplemental indenture pursuant to which such
Restricted Subsidiary will Guarantee payment of the Securities on the same terms
and conditions as those set forth in this Indenture. Each Subsidiary Guaranty
will be limited in amount to an amount not to exceed the maximum amount that can
be Guaranteed by the applicable Subsidiary Guarantor without rendering such
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Subsidiary Guaranty voidable under applicable law relating to fraudulent
conveyance or fraudulent transfer or similar laws affecting the rights of
creditors generally.
SECTION 4.15. Maintenance of Office or Agency. The Company shall
maintain in the Borough of Manhattan the City of New York, an office or agency
(which may be an office or agency of the Trustee, Registrar or co-Registrar),
where Securities may be surrendered for registration of transfer or exchange or
for presentation for payment and where notices and demands to or upon the
Company in respect of the Securities and this Indenture may be served. The
Company will give prompt written notice to the Trustee of the location, and any
change in the location, of such office or agency. If at any time the Company
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the address of the Trustee's office
in New York City as set forth in Section 13.2.
The Company may also from time to time designate one or more other
offices or agencies where the Securities may be presented or surrendered for any
or all such purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in the
Borough of Manhattan, the City of New York, for such purposes. The Company will
give prompt written notice to the Trustee of any such designation or rescission
and of any change in the location of any such other office or agency.
The Company hereby initially designates the Trustee's office in New
York City as set forth in Section 13.2 as an agency of the Company in accordance
with Section 2.3.
SECTION 4.16. Corporate Existence. Subject to Article 5 and Section
4.6, the Company shall do or cause to be done, at its own cost and expense, all
things necessary to, and will cause each of its Restricted Subsidiaries to,
preserve and keep in full force and effect the corporate or partnership
existence and rights (charter and statutory), licenses and/or franchises of the
Company and each of its Restricted Subsidiaries; provided, however, that the
Company or any of its Restricted Subsidiaries shall not be required to preserve
any such rights, licenses or franchises if the Board of Directors shall
reasonably determine that the preservation thereof is no longer desirable in the
conduct of the business of the Company and the Subsidiaries, taken as a whole.
<PAGE> 68
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ARTICLE 5
SUCCESSOR COMPANY
SECTION 5.1. Merger, Consolidation and Sale of Assets. The Company
will not consolidate with or merge with or into, or convey, transfer or lease,
in one transaction or a series of related transactions, all or substantially all
its assets to, any Person, unless:
(i) the resulting, surviving or transferee Person (the "Successor
Company") will be a Person organized and existing under the laws of the
United States of America, any State thereof or the District of Columbia and
the Successor Company (if not the Company) will expressly assume, by an
indenture supplemental hereto, executed and delivered to the Trustee, in
form satisfactory to the Trustee, all the obligations of the Company under
the Securities and this Indenture;
(ii) immediately after giving effect to such transaction on a pro
forma basis (and treating any Indebtedness which becomes an obligation of
such Successor Company or any Subsidiary as a result of such transaction as
having been Incurred by such Successor Company or such Subsidiary at the
time of such transaction), no Default will have occurred and be continuing;
(iii) except in the case of a merger the sole purpose of which is to
change the Company's jurisdiction of incorporation, immediately after
giving effect to such transaction on a pro forma basis, the Successor
Company would be able to Incur an additional $1.00 of Indebtedness pursuant
to Section 4.3(a);
(iv) immediately after giving effect to such transaction on a pro
forma basis, the Successor Company will have a Consolidated Net Worth in an
amount that is not less than the Consolidated Net Worth of the Company
immediately prior to such transaction; and
(v) the Company will have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger or transfer and such supplemental indenture (if any)
comply with this Indenture.
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Opinions of Counsel required to be delivered under this Section or
elsewhere in this Indenture may have qualifications customary for opinions of
the type required and counsel delivering such Opinions of Counsel may rely on
certificates of the Company or government or other officials customary for
opinions of the type required, including certificates certifying as to matters
of fact.
The Successor Company will be the successor to the Company and succeed
to, and be substituted for, and may exercise every right and power of, the
Company under this Indenture, but the predecessor Company in the case of a
conveyance, transfer or lease, will not be released from the obligation to pay
the principal of and interest on the Securities.
Notwithstanding the foregoing clauses (ii), (iii) and (iv) of this
Section 5.1, any Restricted Subsidiary may consolidate with, merge into or
transfer all or part of its properties and assets to the Company.
The Company shall not permit any Subsidiary Guarantor to consolidate
with or merge with or into, or convey, transfer or lease, in one transaction or
a series of transactions, all or substantially all its assets to, any Person,
unless: (i) the resulting, surviving or transferee Person (if not such
Subsidiary) shall be a Person organized and existing under the laws of the
United States of America, any State thereof or the District of Columbia and the
Successor Company (if not such Subsidiary) shall expressly assume, by a Guaranty
Agreement, in form satisfactory to the Trustee, all the obligations of such
Subsidiary under its Subsidiary Guaranty; (ii) immediately after giving effect
to such transaction on a pro forma basis (and treating any Indebtedness which
becomes an obligation of the resulting, surviving or transferee Person as a
result of such transaction as having been Incurred by such Person at the time of
such transaction), no Default shall have occurred and be continuing; and (iii)
the Company shall have delivered to the Trustee an Officers' Certificate and an
Opinion of Counsel, each stating that such consolidation, merger or transfer and
such Guaranty Agreement comply with the Indenture. The provisions of clauses
(i) and (iii) above shall not apply to any transactions which constitute an
Asset Disposition if the Company has complied with the applicable provisions of
Section 4.6.
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ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.1. Events of Default. An "Event of Default" occurs if:
(i) the Company defaults in the payment of interest on any Security
when the same becomes due and payable (whether or not such payment is
prohibited by the provisions of Article 10 hereof), and such default
continues for a period of 30 days;
(ii) the Company defaults in the payment of the principal of any
Security when the same becomes due and payable at its Stated Maturity, upon
optional redemption, upon required repurchase, upon declaration or
otherwise (whether or not such payment is prohibited by the provisions of
in Article 10 hereof);
(iii) the Company fails to comply for 30 days after notice with any
obligations under Sections 4.3, 4.4, 4.6 or 5.1;
(iv) the Company fails to comply with any of its agreements in the
Securities or this Indenture (other than those referred to in (i), (ii), or
(iii) above) and such failure continues for 60 days after the notice
specified below;
(v) the Company or any Restricted Subsidiary of the Company fails to
pay any Indebtedness within any applicable grace period after final
maturity or acceleration of any such Indebtedness by the holders thereof
because of a default and the total amount of such Indebtedness unpaid or
accelerated exceeds $5.0 million;
(vi) the Company or any Significant Subsidiary of the Company pursuant
to or within the meaning of any Bankruptcy Law:
(A) commences a voluntary case;
(B) consents to the entry of an order for relief against it in an
involuntary case in which it is the debtor;
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(C) consents to the appointment of a Custodian of it or for any
substantial part of its property; or
(D) makes a general assignment for the benefit of its creditors;
or takes any comparable action under any foreign laws relating to
insolvency;
(vii) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(A) is for relief against the Company or any Significant
Subsidiary of the Company in an involuntary case;
(B) appoints a Custodian of the Company or any Significant
Subsidiary of the Company or for any substantial part of the property
of the Company or Significant Subsidiary;
(C) orders the winding up or liquidation of the Company or any
Significant Subsidiary of the Company;
(or any similar relief is granted under any foreign laws) and the order or
decree remains unstayed and in effect for 60 days;
(viii) the rendering of any judgment or decree for the payment of
money in excess of $5.0 million against the Company or any Restricted
Subsidiary if such judgment or decree remains unpaid and outstanding for a
period of 60 days following such judgment and is not discharged, waived or
stayed within 60 days after such judgment or decree thereof; or
(ix) a Subsidiary Guaranty ceases to be in full force and effect
(other than in accordance with the terms of such Subsidiary Guaranty) or a
Subsidiary Guarantor denies or disaffirms its obligations under its
Subsidiary Guaranty.
The foregoing will constitute Events of Default whatever the reason for any
such Event of Default and whether it is voluntary or involuntary or is effected
by operation of law or pursuant to any judgment, decree or order of any court
or any order, rule or regulation of any administrative or governmental body.
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The term "Bankruptcy Law" means Title 11, United States Code, as
amended, or any similar federal or state law for the relief of debtors. The
term "Custodian" means any receiver, trustee, assignee, liquidator, custodian or
similar official under any Bankruptcy Law.
A Default under clause (iii) or (iv) of this Section 6.1 is not an
Event of Default until the Trustee or the Holders of at least 25% in aggregate
principal amount of the outstanding Securities notify the Company of the Default
and the Company does not cure such Default within the time specified after
receipt of such notice. Such notice must specify the Default, demand that it be
remedied and state that such notice is a "Notice of Default".
The Company shall deliver to the Trustee, within 30 days after the
occurrence thereof, written notice in the form of an Officers' Certificate of
any Event of Default under clause (v) of this Section 6.1 and any event which
with the giving of notice or the lapse of time would become an Event of Default
under clause (iii), (iv) or (viii) of this Section 6.1, its status and what
action the Company is taking or proposes to take with respect thereto.
SECTION 6.2. Acceleration. If an Event of Default occurs and is
continuing, the Trustee by notice to the Company, or the Holders of at least 25%
in aggregate principal amount of the outstanding Securities by notice to the
Company and the Trustee, may declare the principal of and accrued but unpaid
interest on all the Securities to be due and payable. Upon such a declaration,
such principal and interest shall be due and payable immediately. If an Event of
Default specified in Section 6.1(vi) or (vii) with respect to the Company occurs
and is continuing, the principal of and interest on all the Securities will ipso
facto become and be immediately due and payable without any declaration or other
act on the part of the Trustee or any Securityholders. The Holders of a majority
in aggregate principal amount of the outstanding Securities by notice to the
Trustee may rescind an acceleration and its consequences if the rescission would
not conflict with any judgment or decree and if all existing Events of Default
have been cured or waived except nonpayment of principal or interest that has
become due solely because of acceleration. No such rescission shall affect any
subsequent Default or impair any right consequent thereto.
SECTION 6.3. Other Remedies. If an Event of Default occurs and is
continuing, the Trustee may pursue any available
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remedy to collect the payment of principal of or interest on the Securities or
to enforce the performance of any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Securityholder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are, to the extent
permitted by law, cumulative.
SECTION 6.4. Waiver of Past Defaults. The Holders of a majority in
aggregate principal amount of the Securities then outstanding by notice to the
Trustee may waive any past or existing Default and its consequences except (i) a
Default in the payment of the principal of or interest on a Security or (ii) a
Default in respect of a provision that under Section 9.2 cannot be amended
without the consent of each Securityholder affected. When a Default is waived,
it is deemed cured, and any Event of Default arising therefrom shall be deemed
to have been cured, but no such waiver shall extend to any subsequent or other
Default or impair any consequent right.
SECTION 6.5. Control by Majority. The Holders of a majority in
aggregate principal amount of the Securities then outstanding may direct the
time, method and place of conducting any proceeding for any remedy available to
the Trustee or of exercising any trust or power conferred on the Trustee.
However, the Trustee may refuse to follow any direction that conflicts with law
or this Indenture or, subject to Section 7.1, that the Trustee determines is
unduly prejudicial to the rights of other Securityholders or would involve the
Trustee in personal liability; provided, however, that the Trustee may take any
other action deemed proper by the Trustee that is not inconsistent with such
direction. Prior to taking any action hereunder, the Trustee shall be entitled
to indemnification from the Securityholders satisfactory to it in its sole
discretion against all losses and expenses caused by taking or not taking such
action.
SECTION 6.6. Limitation on Suits. A Securityholder may not pursue
any remedy with respect to this Indenture or the Securities unless:
(1) the Holder gives to the Trustee written notice stating that an
Event of Default is continuing;
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(2) the Holders of at least 25% in aggregate principal amount of the
Securities then outstanding make a written request to the Trustee to pursue
the remedy;
(3) such Holder or Holders offer to the Trustee reasonable security or
indemnity against any loss, liability or expense;
(4) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer of security or indemnity; and
(5) the Holders of a majority in aggregate principal amount of the
Securities then outsthanding do not give the Trustee a direction
inconsistent with the request during such 60-day period.
A Securityholder may not use this Indenture to prejudice the rights of
another Securityholder or to obtain a preference or priority over another
Securityholder.
SECTION 6.7. Rights of Holders to Receive Payment. Notwithstanding
any other provision of this Indenture, the right of any Holder to receive
payment of principal, premium (if any) or interest on the Securities held by
such Holder, on or after the respective due dates expressed in the Securities,
or to bring suit for the enforcement of any such payment on or after such
respective dates, shall not be impaired or affected without the consent of such
Holder.
SECTION 6.8. Collection Suit by Trustee. If an Event of Default
specified in Section 6.1(i) or (ii) occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Company for the whole amount then due and owing (together with interest on any
unpaid interest to the extent lawful) and the amounts provided for in Section
7.7.
SECTION 6.9. Trustee May File Proofs of Claim. The Trustee may file
such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee and the Securityholders
allowed in any judicial proceedings relative to the Company, its creditors or
its property and, unless prohibited by law or applicable regulations, may vote
on behalf of the Holders in any election of a trustee in bankruptcy or other
Person performing similar functions, and any Custodian in any such judicial
proceeding is hereby authorized by each Holder to make payments to the Trus-
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tee and, in the event that the Trustee shall consent to the making of such
payments directly to the Holders, to pay to the Trustee any amount due it for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and its counsel, and any other amounts due the Trustee under
Section 7.7.
SECTION 6.10. Priorities. If the Trustee collects any money or
property pursuant to this Article 6, it shall pay out the money or property in
the following order, subject to applicable law:
FIRST: to the Trustee for amounts due under Section 7.7;
SECOND: to Securityholders for amounts due and unpaid on the
Securities for principal (including any premium) and interest, ratably,
without preference or priority of any kind, according to the amounts due
and payable on the Securities for principal (including any premium) and
interest, respectively; and
THIRD: to the Company.
The Trustee may, upon prior written notice to the Company, fix a
record date and payment date for any payment to Securityholders pursuant to this
Section. At least 15 days before such record date, the Company shall mail to
each Securityholder and the Trustee a notice that states the record date, the
payment date and amount to be paid.
SECTION 6.11. Undertaking for Costs. In any suit for the enforcement
of any right or remedy under this Indenture or in any suit against the Trustee
for any action taken or omitted by it as Trustee, a court in its discretion may
require the filing by any party litigant in the suit of an undertaking to pay
the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys' fees and expenses, against any party
litigant in the suit, having due regard to the merits and good faith of the
claims or defenses made by the party litigant. This Section does not apply to a
suit by the Trustee, a suit by a Holder pursuant to Section 6.7 or a suit by
Holders of more than 10% in aggregate principal amount of the outstanding
Securities.
SECTION 6.12. Waiver of Stay or Extension Laws. The Company (to the
extent it may lawfully do so) shall not at any time insist upon, or plead, or in
any manner whatsoever claim
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or take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and shall not hinder, delay or impede the execution of any power herein
granted to the Trustee, but shall suffer and permit the execution of every such
power as though no such law had been enacted.
ARTICLE 7
TRUSTEE
SECTION 7.1. Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise the rights and powers vested in it by this Indenture and
use the same degree of care and skill in their exercise as a prudent Person
would exercise or use under the circumstances in the conduct of such Person's
own affairs.
(b) Except during the continuance of an Event of Default:
(1) the Trustee undertakes to perform such duties and only such duties
as are specifically set forth in this Indenture and no implied covenants or
obligations shall be read into this Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture. However,
in the case of any such certificates or opinions which by any provision
hereof are specifically required to be furnished to the Trustee, the
Trustee shall examine the certificates and opinions to determine whether or
not they conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(1) this paragraph does not limit the effect of paragraph (b) of this
Section;
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(2) the Trustee shall not be liable for any error of judgment made in
good faith by a Trust Officer unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Sections 6.2 and 6.5 hereof.
(d) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers, if it shall have reasonable grounds to believe that repayment
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it.
(e) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b), (c) and (d) of this Section and to
the provisions of the TIA.
(f) Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law.
(g) The Trustee shall have no responsibility to examine or review and
shall have no liability for the contents of any documents submitted to or
delivered to any Holder of Securities by the Company in the nature of a
solicitation or an official statement or offering circular, whether preliminary
or final.
(h) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section and to the provisions of the TIA.
SECTION 7.2. Rights of Trustee. Subject to Section 7.1,
(a) The Trustee may rely on any document believed by it to be genuine
and to have been signed or presented by the proper person. The Trustee need not
investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require
an Officers' Certificate or an Opinion of
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Counsel. The Trustee shall not be liable for any action it takes or omits
to take in good faith in reliance on the Officers' Certificate or Opinion
of Counsel.
(c) The Trustee may act through agents and shall not be responsible
for the misconduct or negligence of any agent appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or within its
rights or powers; provided, however, that the Trustee's conduct does not
constitute willful misconduct or negligence.
(e) The Trustee may consult with counsel of its selection, and the
advice or opinion of counsel with respect to legal matters relating to this
Indenture and the Securities shall be full and complete authorization and
protection from liability in respect to any action taken, omitted or
suffered by it hereunder in good faith and in accordance with the advice or
opinion of such counsel.
(f) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction
of any of the Holders pursuant to this Indenture, unless such Holders shall
have offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which might be incurred by it in compliance
with such request or direction.
(g) Except with respect to Section 4.1, the Trustee shall have no
duty to inquire as to the performance of the Company's covenants in Article
4. In addition, the Trustee shall not be deemed to have knowledge of any
Default of Event of Default except (i) any Default or Event of Default
occurring pursuant to Sections 6.1(i), 6.1(ii) and 4.1 or (ii) any Default
or Event of Default of which a responsible Officer of the Trustee shall
have received written notification or obtained actual knowledge.
SECTION 7.3. Individual Rights of Trustee. The Trustee in its
individual or any other capacity may become the owner or pledgee of Securities
and may otherwise deal with the Company or its respective Affiliates with the
same rights it would have if it were not Trustee. Any Paying Agent, Registrar,
co-registrar or co-paying agent may do the same with like
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rights. However, the Trustee must comply with Sections 7.10 and 7.11.
SECTION 7.4. Trustee's Disclaimer. The Trustee shall not be
responsible for and makes no representation as to the validity or adequacy of
this Indenture or the Securities, it shall not be accountable for the Company's
use of the proceeds from the Securities, and it shall not be responsible for any
statement of the Company in this Indenture or in any document issued in
connection with the sale of the Securities or in the Securities other than the
Trustee's certificate of authentication.
SECTION 7.5. Notice of Defaults. If a Default occurs and is
continuing and if it is known to a responsible Officer of the Trustee, the
Trustee shall mail to each Securityholder notice of the Default within 30 days
after it is known by a Trust Officer or written notice is received by the
Trustee. Except in the case of a Default in payment of principal of or interest
on any Security (including payments pursuant to the mandatory redemption
provisions of such Security, if any), the Trustee may withhold the notice if and
so long as a committee of its Trust Officers in good faith determines that
withholding the notice is in the interests of Securityholders.
SECTION 7.6. Reports by Trustee to Holders. As promptly as
practicable after each May 15 beginning with the May 15 following the date of
this Indenture, and in any event prior to July 15 in each year, the Trustee
shall mail to each Securityholder a brief report dated as of May 15 that
complies with TIA Section 313(a). The Trustee also shall comply with TIA
Section 313(b). Prior to delivery to the Holders, the Trustee shall deliver to
the Company a copy of any report it delivers to Holders pursuant to this Section
7.6.
A copy of each report at the time of its mailing to Securityholders
shall be filed with the SEC and each stock exchange (if any) on which the
Securities are listed. The Company agrees to notify promptly the Trustee
whenever the Securities become listed on any stock exchange and of any delisting
thereof.
SECTION 7.7. Compensation and Indemnity. The Company shall pay to
the Trustee from time to time such reasonable compensation for its services as
the Company and the Trustee shall from time to time agree in writing. The
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Company shall reimburse the
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Trustee upon request for all reasonable out-of-pocket expenses incurred or made
by it, including costs of collection, in addition to such compensation for its
services, except any such expense, disbursement or advance as may arise from its
negligence, willful misconduct or bad faith. Such expenses shall include the
reasonable compensation and expenses, disbursements and advances of the
Trustee's agents, counsel, accountants and experts. The Trustee shall provide
the Company reasonable notice of any expenditure not in the ordinary course of
business; provided that prior approval by the Company of any such expenditure
shall not be a requirement for the making of such expenditure nor for
reimbursement by the Company thereof. The Company shall indemnify each of the
Trustee and any predecessor Trustees against any and all loss, damage, claim,
liability or expense (including attorneys' fees and expenses) (other than taxes
applicable to the Trustee's compensation hereunder) incurred by it in connection
with the acceptance or administration of this trust and the performance of its
duties hereunder. The Trustee shall notify the Company promptly of any claim
for which it may seek indemnity. Failure by the Trustee to so notify the
Company shall not relieve the Company of its obligations hereunder. The Company
shall defend the claim and the Trustee shall cooperate in the defense of such
claim. The Trustee may have separate counsel at its own expense. The Company
need not reimburse any expense or indemnify against any loss, liability or
expense incurred by the Trustee through the Trustee's own willful misconduct,
negligence or bad faith. The Company need not pay for any settlement made
without its written consent.
To secure the Company's payment obligations in this Section, the
Trustee shall have a lien prior to the Securities on all money or property held
or collected by the Trustee other than money or property held in trust to pay
principal of and interest on particular Securities.
The Company's payment obligations pursuant to this Section shall
survive the discharge of this Indenture. When the Trustee incurs expenses after
the occurrence of a Default specified in Section 6.1(vi) or (vii) with respect
to the Company, the expenses are intended to constitute expenses of
administration under the Bankruptcy Law.
SECTION 7.8. Replacement of Trustee. The Trustee may resign at any
time upon 30 days notice to the Company. The Holders of a majority in principal
amount of the Securities then outstanding may remove the Trustee by so notifying
the
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Trustee and may appoint a successor Trustee. The Company shall remove the
Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the Trustee or
its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns, is removed by the Company or by the Holders of
a majority in principal amount of the Securities and such Holders do not
reasonably promptly appoint a successor Trustee, or if a vacancy exists in the
office of Trustee for any reason (the Trustee in such event being referred to
herein as the retiring Trustee), the Company shall promptly appoint a successor
Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Securityholders. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee, subject to the lien
provided for in Section 7.7.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee or the Holders of
10% in principal amount of the Securities may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any Securityholder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
Notwithstanding the replacement of the Trustee pursuant to this
Section, the Company's obligations under Section 7.7 shall continue for the
benefit of the retiring Trustee.
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SECTION 7.9. Successor Trustee by Merger. If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all its corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation without any
further act shall be the successor Trustee, provided that such corporation shall
be eligible under this Article 7 and TIA Section 3.10(a).
In case at the time such successor or successors by merger, conversion
or consolidation to the Trustee shall succeed to the trusts created by this
Indenture any of the Securities shall have been authenticated but not delivered,
any such successor to the Trustee may adopt the certificate of authentication of
any predecessor trustee, and deliver such Securities so authenticated; and in
case at that time any of the Securities shall not have been authenticated, any
successor to the Trustee may authenticate such Securities either in the name of
any predecessor hereunder or in the name of the successor to the Trustee; and in
all such cases such certificates shall have the full force which it is anywhere
in the Securities or in this Indenture provided that the certificate of the
Trustee shall have.
SECTION 7.10. Eligibility; Disqualification. The Trustee shall at
all times satisfy the requirements of TIA Section 310(a). The Trustee shall
have a combined capital and surplus of at least $25,000,000 as set forth in its
most recent published annual report of condition. The Trustee shall comply with
TIA Section 310(b); provided, however, that there shall be excluded from the
operation of TIA Section 310(b)(1) any indenture or indentures under which
other securities or certificates of interest or participation in other
securities of the Company are outstanding if the requirements for such exclusion
set forth in TIA Section 310(b)(1) are met.
SECTION 7.11. Preferential Collection of Claims Against Company. The
Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated.
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ARTICLE 8
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.1. Discharge of Liability on Securities; Defeasance.
(a) When (i) the Company delivers to the Trustee all outstanding
Securities (other than Securities replaced pursuant to Section 2.7) for
cancellation or (ii) all outstanding Securities have become due and payable,
whether at maturity or as a result of the mailing of a notice of redemption
pursuant to Article 3 hereof , and, in each case of this clause (ii), the
Company irrevocably deposits or causes to be deposited with the Trustee United
States dollars or U.S. Government Obligations sufficient to pay and discharge
the entire indebtedness on the Securities not heretofore delivered to the
Trustee for cancellation, for the principal of, premium, if any, and interest to
the date of deposit (other than Securities replaced pursuant to Section 2.7),
and if in either case the Company pays all other sums payable hereunder by the
Company, then this Indenture shall, subject to Section 8.1(c), cease to be of
further effect. The Trustee shall acknowledge satisfaction and discharge of
this Indenture on demand of the Company accompanied by an Officers' Certificate
from the Company that all conditions precedent provided for herein relating to
satisfaction and discharge of this Indenture have been complied with and at the
cost and expense of the Company.
(b) Subject to Sections 8.1(c) and 8.2, the Company at any time may
terminate (i) all of its obligations under the Securities and this Indenture
("legal defeasance option") or (ii) its obligations under Article 4 and the
operation of Sections 6.1(iii), 6.1(iv), 6.1(v), 6.1(vi) and 6.1(vii) (but only
with respect to a Significant Subsidiary), 6.1(viii) and 5.1(iii) and 5.1(iv)
("covenant defeasance option"). The Company may exercise its legal defeasance
option notwithstanding its prior exercise of its covenant defeasance option.
If the Company exercises its legal defeasance option, payment of the
Securities may not be accelerated because of an Event of Default with respect
thereto. If the Company exercises its covenant defeasance option, payment of
the Securities may not be accelerated due to a failure to comply with Article 4
or the operation of Sections 6.1(iii) (but, only with respect to a failure to
comply with Sections 4.3, 4.4, 4.6, 5.1(iii) and 5.1(iv)), 6.1(iv), 6.1(v),
6.1(vi) and 6.1(vii) (but only with respect to a Significant Subsidiary), or
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6.1(viii) or because of the failure of the Company to comply with 5.1(iii) and
5.1(iv). If the Company exercises its legal defeasance option or its covenant
defeasance option, each Subsidiary Guarantor will be released from all of its
obligations under Article 11.
Upon satisfaction of the conditions set forth herein and upon request
of the Company, the Trustee shall acknowledge in writing the discharge of those
obligations that the Company terminates.
(c) Notwithstanding clauses (a) and (b) above, the Company's
obligations in Sections 2.3, 2.4, 2.5, 2.6, 2.7, 7.7, 7.8, 8.3, 8.4, 8.5 and 8.6
shall survive until the Securities have been paid in full. Thereafter, the
Company's obligations in Sections 7.7, 8.4 and 8.5 shall survive.
SECTION 8.2. Conditions to Defeasance. The Company may exercise its
legal defeasance option or its covenant defeasance option only if:
(1) the Company irrevocably deposits or causes to be deposited in
trust (the "defeasance trust") with the Trustee money or U.S. Government
Obligations which through the scheduled payment of principal and interest
in respect thereof in accordance with their terms will provide cash at such
times and in such amounts as will be sufficient to pay principal and
interest when due on all outstanding Securities (except Securities replaced
pursuant to Section 2.7) to maturity or redemption, as the case may be;
(2) the Company delivers to the Trustee a certificate from a
nationally recognized firm of independent accountants expressing their
opinion that the payments of principal and interest when due and without
reinvestment on the deposited U.S. Government Obligations plus any
deposited money without investment will provide cash at such times and in
such amounts as will be sufficient to pay principal and interest when due
on all outstanding Securities (except Securities replaced pursuant to
Section 2.7) to maturity or redemption, as the case may be;
(3) 91 days pass after the deposit is made and during the 91-day
period no Default specified in Section 6.1(vi) or (vii) with respect to the
Company occurs which is continuing at the end of the period;
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(4) the deposit does not result in a breach of, or otherwise
constitute a default under any other agreement or investment with respect
to any Senior Indebtedness and no default exists under any Indebtedness;
(5) the Company delivers to the Trustee an Opinion of Counsel to the
effect that the trust resulting from the deposit does not constitute, or is
qualified as, a regulated investment company under the Investment Company
Act of 1940;
(6) the Company shall have delivered to the Trustee an Opinion of
Counsel stating that the Securityholders will not recognize income, gain or
loss for federal income tax purposes as a result of such deposit and
defeasance and will be subject to federal income tax on the same amounts,
in the same manner and at the same times as would have been the case if
such deposit and defeasance had not occurred;
(7) in the case of the covenant defeasance option, the Company shall
have delivered to the Trustee an Opinion of Counsel to the effect that the
Securityholders will not recognize income, gain or loss for federal income
tax purposes as a result of such covenant defeasance and will be subject to
federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such deposit and covenant defeasance
had not occurred;
(8) the Company delivers to the Trustee an Officers' Certificate and
an Opinion of Counsel, each stating that all conditions precedent to the
defeasance and discharge of the Securities as contemplated by this Article
8 have been complied with; and
(9) the Company shall have paid or duly provided for payment under
terms mutually satisfactory to the Company and the Trustee all amounts then
due to the Trustee pursuant to Section 7.7 hereof.
Opinions of Counsel required to be delivered under this Section may
have qualifications customary for opinions of the type required and counsel
delivering such Opinions of Counsel may rely on certificates of the Company or
government or other officials customary for opinions of the type required,
including certificates certifying as to matters of fact.
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Before or after a deposit, the Company may make arrangements
satisfactory to the Trustee for the redemption of Securities at a future date in
accordance with Article 3.
SECTION 8.3. Application of Trust Money. The Trustee shall hold in
trust money or U.S. Government Obligations deposited with it pursuant to this
Article 8. It shall apply the deposited money and the money from U.S.
Government Obligations either directly or through the Paying Agent (including
the Company acting as its own Paying Agent as the Trustee may determine) and in
accordance with this Indenture to the payment of principal of and interest on
the Securities.
SECTION 8.4. Repayment to Company. The Trustee and the Paying Agent
shall notify the Company of any excess money or Securities held by them at any
time and shall promptly turn over to the Company upon request any excess money
or securities held by them at any time.
Subject to any applicable abandoned property law, the Trustee and the
Paying Agent shall pay to the Company upon written request any money held by
them for the payment of principal or interest that remains unclaimed for two
years, and, thereafter, Securityholders entitled to the money must look to the
Company for payment as general creditors.
SECTION 8.5. Indemnity for Government Obligations. The Company shall
pay and shall indemnify the Trustee against any tax, fee or other charge imposed
on or assessed against deposited U.S. Government Obligations or the principal
and interest received on such U.S. Government Obligations other than any such
tax, fee or other charge which by law is for the account of the Holders of the
defeased Securities; provided that the Trustee shall be entitled to charge any
such tax, fee or other charge to such Holder's account.
SECTION 8.6. Reinstatement. If the Trustee or Paying Agent is unable
to apply any money or U.S. Government Obligations in accordance with this
Article 8 by reason of any legal proceeding or by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, the Company's obligations under this
Indenture and the Securities shall be revived and reinstated as though no
deposit had occurred pursuant to this Article 8 until such time as the Trustee
or Paying Agent is permitted to apply all such money or U.S. Government
Obligations in accordance with this Article 8; provided, however, that, (a) if
the Company has made any payment of interest on or
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principal of any Securities following the reinstatement of their obligations,
the Company shall be subrogated to the rights of the Holders of such Securities
to receive such payment from the money or U.S. Government Obligations held by
the Trustee or Paying Agent and (b) unless otherwise required by any legal
proceeding or any order or judgment of any court or governmental authority, the
Trustee or Paying Agent shall return all such money and U.S. Government
Obligations to the Company promptly after receiving a written request therefor
at any time, if such reinstatement of the Company's obligations has occurred and
continues to be in effect.
ARTICLE 9
AMENDMENTS
SECTION 9.1. Without Consent of Holders. The Company and the Trustee
may amend this Indenture or the Securities without notice to or consent of any
Securityholder:
(1) to cure any ambiguity, omission, defect or inconsistency;
(2) to comply with Article 5;
(3) to provide for uncertificated Securities in addition to or in
place of certificated Securities; provided, however, that the
uncertificated Securities are issued in registered form for purposes of
Section 163(f) of the Code or in a manner such that the uncertificated
Securities are as described in Section 163(f)(2)(B) of the Code;
(4) to add Guarantees with respect to the Securities;
(5) to release Subsidiary Guarantors when permitted by this Indenture;
(6) to secure the Securities;
(7) to add to the covenants of the Company for the benefit of the
Holders or to surrender any right or power herein conferred upon the
Company;
(8) to make any change that does not adversely affect the rights of
any Securityholder; or
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(9) to comply with any requirements of the SEC in connection with
qualifying this Indenture under the TIA.
After an amendment under this Section becomes effective, the Company
shall mail to Securityholders a notice briefly describing such amendment. The
failure to give such notice to all Securityholders, or any defect therein, shall
not impair or affect the validity of an amendment under this section.
SECTION 9.2. With Consent of Holders. The Company and the Trustee
may amend this Indenture or the Securities without notice to any Securityholder
but with the written consent of the Holders of at least a majority in principal
amount of the Securities then outstanding. However, without the consent of each
Securityholder affected, an amendment may not:
(1) reduce the amount of Securities whose Holders must consent to an
amendment;
(2) reduce the rate of or extend the time for payment of interest on
any Security;
(3) reduce the principal of or extend the Stated Maturity of any
Security;
(4) reduce the premium payable upon the redemption of any Security or
change the time at which any Security may be redeemed in accordance with
Article 3;
(5) make any Security payable in money other than that stated in the
Security;
(6) impair the right of any Holder to institute suit for the
enforcement of any payment on or with respect to such Holder's Securities
or any Subsidiary Guaranty;
(7) make any change in the amendment provisions which require each
Holder's consent or in the waiver provisions; or
(8) make any change to the subordination provisions of this Indenture
that would adversely affect the securityholders.
It shall not be necessary for the consent of the Holders under this
Section to approve the particular form of
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any proposed amendment, but it shall be sufficient if such consent approves the
substance thereof.
After an amendment under this Section becomes effective, the Company
shall mail to Securityholders a notice briefly describing such amendment. The
failure to give such notice to all Securityholders, or any defect therein, shall
not impair or affect the validity of an amendment under this Section.
SECTION 9.3. Compliance with Trust Indenture Act. Every amendment to
this Indenture or the Securities shall comply with the TIA as then in effect.
SECTION 9.4. Revocation and Effect of Consents and Waivers. A
consent to an amendment or a waiver by a Holder of a Security shall bind the
Holder and every subsequent Holder of that Security or portion of the Security
that evidences the same debt as the consenting Holder's Security, even if
notation of the consent or waiver is not made on the Security. An amendment or
waiver becomes effective once the requisite number of consents are received by
the Company or the Trustee. After an amendment or waiver becomes effective, it
shall bind every Securityholder.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Securityholders entitled to give their consent or
take any other action described above or required or permitted to be taken
pursuant to this Indenture. If a record date is fixed, then notwithstanding the
immediately preceding paragraph, those Persons who were Securityholders at such
record date (or their duly designated proxies), and only those Persons, shall be
entitled to give such consent or to revoke any consent previously given or to
take any such action, whether or not such Persons continue to be Holders after
such record date. No such consent shall be valid or effective for more than 120
days after such record date.
SECTION 9.5. Notation on or Exchange of Securities. If an amendment
changes the terms of a Security, the Trustee may require the Holder of the
Security to deliver it to the Trustee. The Trustee may place an appropriate
notation on the Security regarding the changed terms and return it to the
Holder.
Alternatively, if the Company or the Trustee so determine, the Company
in exchange for the Security shall issue
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and the Trustee shall authenticate a new Security that reflects the changed
terms. Failure to make the appropriate notation or to issue a new Security
shall not affect the validity of such amendment.
SECTION 9.6. Trustee to Sign Amendments. The Trustee shall sign any
amendment authorized pursuant to this Article 9 if the amendment does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
If it does, the Trustee may but need not sign it. In signing such amendment the
Trustee shall be entitled to receive indemnity reasonably satisfactory to it and
to receive, and (subject to Section 7.1) shall be fully protected in relying
upon, an Officers' Certificate and an Opinion of Counsel stating that such
amendment complies with the provisions of Article 9 of this Indenture.
ARTICLE 10
SUBORDINATION OF THE SECURITIES
SECTION 10.1. Agreement To Subordinate. Notwithstanding any other
provision to the contrary in this Indenture, the Company covenants and agrees,
and each Holder by accepting a Security covenants and agrees, that the payment
of principal of, premium (if any) and interest on and all other Obligations
under or in connection with the Indebtedness now or hereafter evidenced by the
Securities, the Subsidiary Guaranties, this Indenture and/or related agreements,
documents or instruments is subordinate in right of payment, to the extent and
in the manner provided in this Article, to the prior payment in full of all
Senior Indebtedness of the Company or the relevant Subsidiary Guarantor, as the
case may be, whether outstanding on the Issue Date or thereafter incurred,
including all Obligations of the Company and such Subsidiary Guarantor under the
Senior Credit Facility. The subordination provisions set forth in this Article
are for the benefit of, and shall be enforceable directly by, the holders of
Senior Indebtedness.
Each Holder authorizes and directs the Trustee on such Holder's behalf
to take such action as may be necessary or appropriate, in the sole discretion
of the Trustee, to acknowledge or effectuate the subordination between the
Holders and the holders of Senior Indebtedness of the Company as provided in
this Article and appoints the Trustee as such Holder's attorney-in-fact for any
and all such purposes, including, in the event of any voluntary or involuntary
liquidation or dissolution of the Company, whether total or partial, or in a
bank-
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ruptcy, reorganization, insolvency, receivership, dissolution, assignment for
the benefit of creditors, marshalling of assets or similar proceeding relating
to the Company or its property, the timely filing of a claim for the unpaid
balance of such Holder's Securities in the form required in said proceeding and
cause said claim to be approved. If the Trustee does not file a proper claim or
proof of debt in the form required in such proceeding prior to 20 days before
the expiration of the time to file such claim or claims, then the Representative
is hereby authorized to have the right to file and is hereby authorized to file
an appropriate claim for and on behalf of the Holders; provided, however, that
any such claim filed by the Representative shall be superseded by the claim, if
any, subsequently filed by the Trustee.
Each Holder by accepting a Security acknowledges and agrees that the
subordination provision set forth in this Article are, and are intended to be,
an inducement and consideration to each holder of any Senior Indebtedness of the
Company, whether such Senior Indebtedness was created before or after the
issuance of the Securities, to acquire and continue to hold, or to continue to
hold, such Senior Indebtedness, and such holder of Senior Indebtedness shall be
deemed conclusively to have relied upon such subordination provisions in
acquiring and continuing to hold, or in continuing to hold, such Senior
Indebtedness, and such holder is made an obligee hereunder and may enforce
directly such subordination provisions.
SECTION 10.2. Liquidation; Dissolution; Bankruptcy. Upon any payment
or distribution of the assets of the Company of any kind or character, whether
in cash, property or securities, to creditors upon a total or partial
liquidation or dissolution or reorganization of or similar proceeding relating
to the Company or its property or in a bankruptcy, reorganization, insolvency,
receivership or similar proceeding:
(a) the holders of Senior Indebtedness of the Company shall be
entitled to receive payment in full in cash of such Senior Indebtedness
before Holders are entitled to receive any payment; and
(b) until the Senior Indebtedness of the Company is paid in full in
cash any payment or distribution to which Holders would be entitled but for
this Article shall be made to holders of such Senior Indebtedness, as their
interests may appear.
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Upon any prepayment, payment or distribution referred to in this
Article, the Trustee and the Holders shall be entitled to rely upon any order or
decree of a court of competent jurisdiction in which such proceedings are
pending for the purpose of ascertaining the identity of Persons entitled to
participate in such payment or distribution, the holders of Senior Indebtedness,
the amount thereof or payable thereon and all other facts pertinent thereto or
to this Article, and the Trustee and the Holders shall be entitled to rely upon
a certificate of the liquidating trustee or agent or other Person (including any
Representative of holders of Senior Indebtedness of the Company) making any
payment or distribution to the Trustee or to the Holders for the purpose of
ascertaining the identity of Persons entitled to participate in such payment or
distribution, the holders of Senior Indebtedness, the amount thereof or payable
thereon, the amount or amounts paid or distributed thereon and all other facts
pertinent thereto or to this Article. In the event that the Trustee determines
in good faith that further evidence is required with respect to the right of any
Person, as a holder of Senior Indebtedness, to participate in any payment or
distribution pursuant to this Section, the Trustee may requires such Person (at
the expense of the Holders) to furnish evidence to the reasonable satisfaction
of the Trustee, acting in good faith, as to the amount of such Senior
Indebtedness held by such Person, as to the extent to which such Person is
entitled to participate in such payment or distribution, and as to other facts
pertinent to the rights of such Person under this Section, and if such evidence
is not furnished, the Trustee may defer any payment to such Person pending
judicial determination as to the right of such Person to receive payment.
The consolidation or merger of the Company with or into any Person, or
the sale, assignment, transfer, lease, conveyance or other disposition of all or
substantially all of the Company's assets to any Person, upon the terms and
conditions set forth in Article 5, shall not be deemed to be liquidation,
dissolution or reorganization or similar proceeding relating to the Company for
purposes of this Section if the Person formed by or surviving such consolidation
or merger, or to which such sale, assignment, transfer, lease, conveyance or
other disposition is made, shall, as a part of such consolidation, merger, sale,
assignment, transfer, lease, conveyance or other disposition, comply with the
conditions set forth in Article 5.
If a payment or distribution is made to Holders that, due to the
subordination provisions, should not have been made to them, such Holders are
required to hold it in trust for the
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holders of Senior Indebtedness of the Company and pay it over to them as their
interests may appear.
SECTION 10.3. Default on Senior Indebtedness.
(a) If any Senior Indebtedness of the Company is not paid when due,
the Company may not: (i) pay, directly or indirectly, principal of, premium (if
any) or interest on the Securities or any other Obligations under or in
connection with the Securities, this Indenture and/or any related agreements,
documents or instruments; (ii) make any deposit pursuant to Article 8; or (iii)
repurchase, redeem or otherwise retire any Securities (collectively "pay the
Subordinated Debt") unless the default shall have been cured or waived or such
Senior Indebtedness has been paid in full in cash.
(b) If any default on any Senior Indebtedness of the Company (other
than as set forth in Section 10.3(a)) occurs and such Senior Indebtedness is
accelerated in accordance with its terms, the Company may not pay the
Subordinated Debt, unless the default shall have been cured or waived and any
such acceleration has been rescinded or such Senior Indebtedness has been paid
in full in cash.
(c) Notwithstanding Sections 10.3(a) and (b), the Company may pay the
Subordinated Debt without regard to the foregoing if the Company and the Trustee
receive written notice approving such payment from the Representative of the
Senior Indebtedness with respect to which either of the events set forth in
Sections 10.3(a) and (b) has occurred and is continuing. During the continuance
of any default (other than a default described in Sections 10.3(a) and (b)) with
respect to any Senior Indebtedness of the Company pursuant to which the maturity
thereof may be accelerated immediately without further notice (except such
notice as may be required to effect such acceleration) or the expiration of any
applicable grace periods, the Company may not pay the Subordinated Debt for a
period (a "Payment Blockage Period") commencing upon the receipt by the Trustee
(with a copy to the Company) of written notice (a "Blockage Notice") of such
default from the Representative of the holders of such Designated Senior
Indebtedness specifying an election to effect a Payment Blockage Period and
ending 180 days thereafter (or earlier if such Payment Blockage Period is
terminated (i) by written notice to the Trustee and the Company from the Person
or Persons who gave such Blockage Notice, (ii) because the default giving rise
to such Blockage Notice has been waived in writing or (iii) because such
Designated Senior Indebtedness has been repaid in full in cash).
Notwithstanding
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the provisions described in the immediately preceding sentence, unless the
holders of such Designated Senior Indebtedness or the Representative of such
holders has accelerated the maturity of such Designated Senior Indebtedness, the
Company may resume payments on the Securities after the end of such Payment
Blockage Period. The Securities shall not be subject to more than one Payment
Blockage Period in any consecutive 360-day period, irrespective of the number of
such nonpayment defaults with respect to Designated Senior Indebtedness during
such period.
(d) The Company covenants that it will, upon request of the Trustee,
deliver an Officers' Certificate (with copies thereof to the Representative of
each class of Senior Indebtedness of the Company) showing in reasonable detail
the Senior Indebtedness outstanding as of the date of such Officers' Certificate
and the Representative of each class of Senior Indebtedness. The Trustee may
conclusively rely thereon except to the extent that it shall have received, from
the Representative of any class of Senior Indebtedness, notice in writing
controverting any of the statements made therein. Not less than 10 days prior
to making any distribution in respect of Senior Indebtedness pursuant to this
Section, the Trustee shall deliver to each Representative of any class of Senior
Indebtedness copies of the most recent Officers' Certificate filed with it by
the Company pursuant to this subsection (d).
(e) In the event that the Securities are declared due and payable
before their Stated Maturity in accordance with Article 6, then and in such
event the holders of Senior Indebtedness outstanding at the time the Securities
so become due and payable shall be entitled to receive payment in full in cash
of all amounts due or to become due on or in respect of such Senior Indebtedness
(whether or not an event of default has occurred thereunder or such Senior
Indebtedness is, or has been declared to be, due and payable prior to the date
on which it otherwise would have become due and payable) before the Holders
shall be entitled to receive any Security Payment.
SECTION 10.4. Payment of Subordinated Debt Permitted if No Default.
Nothing contained in this Article or elsewhere in this Indenture, or in any of
the Securities, shall prevent the Company or any Person acting on behalf of the
Company, at any time except as otherwise provided in Section 10.2 from paying
the Subordinated Debt.
SECTION 10.5. When Subordinated Debt Must Be Paid Over. In the event
that any payment on the Subordinated Debt is made to the Trustee or the Holders
that, because of this Ar-
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ticle, should not have been so made or may not be paid over to the Holders, such
payment shall be held by the Trustee or the Holders who receive such payment, as
the case may be, for the benefit of, and shall forthwith be paid over or
delivered to, the holders of the Senior Indebtedness of the Company remaining
unpaid or their Representatives, as their interests may appear, to the extent
necessary to irrevocably and indefeasibly pay such Senior Indebtedness in full
in cash in accordance with its terms, after giving effect to any concurrent
payment or distribution to or for the holders of such Senior Indebtedness.
SECTION 10.6. Notices by the Company. The Company shall promptly
notify the Trustee, each Paying Agent and the Representative of any facts known
to the Company that would cause a payment on the Subordinated Debt to violate
this Article, but failure to give such notice shall not affect the subordination
provided in this Article of the Securities to Senior Indebtedness. Without
limiting the foregoing, if payment of the Securities is accelerated because of
an Event of Default, the Company shall promptly notify the Representative of the
acceleration.
SECTION 10.7. Subrogation. After all Senior Indebtedness is
irrevocably and indefeasibly paid in full in cash and until the Securities are
paid in full, Holders shall be subrogated to the rights of holders of Senior
Indebtedness to receive distributions applicable to Senior Indebtedness to the
extent that distributions otherwise payable to Holders have been applied to the
payment of Senior Indebtedness. A distribution made under this Article to
holders of Senior Indebtedness which otherwise would have been made to Holders
is not, as between the Company and the Holders, payment by the Company on Senior
Indebtedness.
SECTION 10.8. Relative Rights. This Article defines the relative
rights of Holders and holders of Senior Indebtedness. Nothing in this Indenture
shall:
(a) impair, as between the Company and the Holders, the obligation of
the Company, which is absolute and unconditional, to pay the principal of,
premium (if any) and interest on the Securities in accordance with their
terms;
(b) affect the relative rights of Holders and creditors of the
Company other than holders of Senior Indebtedness; or
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(c) prevent the Trustee or any Holder from exercising its available
remedies upon a Default or Event of Default, subject to the rights of
holders of Senior Indebtedness to receive prepayment, payments and
distributions otherwise payable to Holders.
If the Company fails because of this Article to pay the principal of,
premium (if any) or interest on a Security on the due date or upon the
acceleration thereof, the failure is still a Default or Event of Default.
SECTION 10.9. Subordination May Not Be Impaired by the Company. No
right of any holder of Senior Indebtedness of the Company to enforce the
subordination of the Indebtedness evidenced by the Securities shall be impaired
by (a) any act or failure to act by the Company or by its failure to comply with
this Indenture, (b) any release of any collateral or any guarantor or any Person
of the Company's obligations under the Senior Indebtedness, (c) any amendment,
supplement, extension, renewal, restatement or other modification of the Senior
Indebtedness, (d) any settlement or compromise of any Senior Indebtedness, (e)
the unenforceability of any of the Senior Indebtedness or (f) the failure of any
holder of Senior Indebtedness to pursue claims against the Company. The terms
of the subordination provisions contained in this Article 10 will not apply to
payments from money or the proceeds of U.S. Government Obligations held in
trust by the Trustee for the payment of principal of and interest on the
Securities pursuant to and in accordance with the provisions described in
Article 8.
SECTION 10.10. Distribution of Notice to Representative. Whenever a
distribution is to be made or a notice given to holders of Senior Indebtedness
of the Company, the distribution may be made and the notice given to their
Representative (if any).
SECTION 10.11. Rights of Trustee and Paying Agent. The Trustee or any
Payment Agent may continue to make payments in respect of the Securities and
shall not be charged with knowledge of the existence of facts that would
prohibit the making of any such payment unless, not less than three Business
Days prior to the date of any such payment, a Responsible Officer of the Trustee
receives written notice reasonably satisfactory to it that payments in respect
of the Securities may not be made under this Article. Only the Company, a
Representative (satisfactorily identified to the Trustee) or a holder of a class
of Senior Indebtedness that has no Representative (satisfactorily identified to
the Trustee) may give the notice.
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Prior to the receipt of such notice, the Trustee and any Paying Agent shall be
entitled in all respects to assume that no such facts exist. In any case, the
Trustee shall have no responsibility to the holders of Senior Indebtedness for
payments made to Holders by the Company or any Paying Agent unless cash payments
are made at the direction of the Trustee after receipt of such notice referred
to above.
Neither the Trustee nor any Payment Agent shall be deemed to owe any
fiduciary duty to the holders of Senior Indebtedness.
The Trustee in its individual or any other capacity may hold Senior
Indebtedness with the same rights it would have if it were not Trustee. With
respect to the holders of Senior Indebtedness, the Trustee undertakes to perform
or to observe only such of its covenants and obligations as are specifically set
forth in this Article 10, and no implied covenants or obligations with respect
to the holders of Senior Indebtedness shall be read into this Indenture against
the Trustee. The Trustee shall not be liable to any holder of Senior
Indebtedness if it shall mistakenly pay over or deliver to Holders, the Company
or any other Person moneys or assets to which any holder of Senior Indebtedness
shall be entitled by virtue of this Article 10 or otherwise.
SECTION 10.12. Consent of Holders of Senior Indebtedness. The
provisions of this Article (including the definitions contained in this Article
and references to this Article contained in this Indenture) shall not be
amended, waived or modified in a manner that would adversely affect the rights
of the holders of any Senior Indebtedness of the Company, and no such amendment,
waiver or modification shall become effective, unless the holders of such Senior
Indebtedness shall have consented in writing (in accordance with the provisions
of the agreement governing such Senior Indebtedness) to such amendment, waiver
or modification.
SECTION 10.13. Contractual Subordination. This Article 10 represents
a bona fide agreement of contractual subordination pursuant to Section 510(b) of
the United States Bankruptcy Code.
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ARTICLE 11
SUBSIDIARY GUARANTIES
SECTION 11.1. Guaranties. Each Subsidiary Guarantor hereby
unconditionally and irrevocably guarantees, jointly and severally, to each
Holder and to the Trustee and its successors and assigns (a) the full and
punctual payment of principal of, premium, if any, and interest on the
Securities when due, whether at maturity, by acceleration, by redemption or
otherwise, and all other monetary obligations of the Company under this
Indenture and the Securities and (b) the full and punctual performance within
applicable grace periods of all other obligations of the Company under this
Indenture and the Securities (all the foregoing being hereinafter collectively
called the "Guaranteed Obligations"). Each Subsidiary Guarantor further agrees
that the Guaranteed Obligations may be extended or renewed, in whole or in part,
without notice or further assent from such Subsidiary Guarantor and that such
Subsidiary Guarantor will remain bound under this Article 11 notwithstanding any
extension or renewal of any Guaranteed Obligation.
Each Subsidiary Guarantor waives presentation to, demand of, payment
from and protest to the Company of any of the Guaranteed Obligations and also
waives notice of protest for nonpayment. Each Subsidiary Guarantor waives
notice of any default under the Securities or the Guaranteed Obligations. The
obligations of each Subsidiary Guarantor hereunder shall not be affected by (a)
the failure of any Holder or the Trustee to assert any claim or demand or to
enforce any right or remedy against the Company or any other Person under this
Indenture, the Securities or any other agreement or otherwise; (b) any extension
or renewal of any thereof; (c) any rescission, waiver, amendment or modification
of any of the terms or provisions of this Indenture, the Securities or any other
agreement; (d) the release of any security held by any Holder or the Trustee for
the Guaranteed Obligations or any of them; (e) the failure of any Holder or the
Trustee to exercise any right or remedy against any other guarantor of the
Guaranteed Obligations; or (f) any change in the ownership of such Subsidiary
Guarantor.
Each Subsidiary Guarantor further agrees that its Subsidiary Guaranty
herein constitutes a guarantee of payment, performance and compliance when due
(and not a guarantee of collection) and waives any right to require that any
resort be had by any Holder or the Trustee to any security held for payment of
the Guaranteed Obligations.
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Each Subsidiary Guaranty is, to the extent and in the manner set forth
in Article 12, subordinated and subject in right of payment to the prior payment
in full of the principal of and premium, if any, and interest on all Senior
Indebtedness of the Subsidiary Guarantor giving such Subsidiary Guaranty and
each Subsidiary Guaranty is made subject to such provisions of this Indenture.
Except as expressly set forth in Sections 8.2, 11.2 and 11.6, the
obligations of each Subsidiary Guarantor hereunder shall not be subject to any
reduction, limitation, impairment or termination for any reason, including any
claim of waiver, release, surrender, alteration or compromise, and shall not be
subject to any defense of setoff, counterclaim, recoupment or termination
whatsoever or by reason of the invalidity, illegality or unenforceability of the
Guaranteed Obligations or otherwise. Without limiting the generality of the
foregoing, the obligations of each Subsidiary Guarantor herein shall not be
discharged or impaired or otherwise affected by the failure of any Holder or the
Trustee to assert any claim or demand or to enforce any remedy under this
Indenture, the Securities or any other agreement, by any waiver or modification
of any thereof, by any default, failure or delay, willful or otherwise, in the
performance of the Guaranteed Obligations, or by any other act or thing or
omission or delay to do any other act or thing which may or might in any manner
or to any extent vary the risk of such Subsidiary Guarantor or would otherwise
operate as a discharge of such Subsidiary Guarantor as a matter of law or
equity.
Each Subsidiary Guarantor further agrees that its Subsidiary Guaranty
herein shall continue to be effective or be reinstated, as the case may be, if
at any time payment, or any part thereof, of principal of, premium, if any, or
interest on any Guaranteed Obligation is rescinded or must otherwise be restored
by any Holder or the Trustee upon the bankruptcy or reorganization of the
Company or otherwise.
In furtherance of the foregoing and not in limitation of any other
right which any Holder or the Trustee has at law or in equity against any
Subsidiary Guarantor by virtue hereof, upon the failure of the Company to pay
the principal of, premium, if any, or interest on any Obligation when and as the
same shall become due, whether at maturity, by acceleration, by redemption or
otherwise, or to perform or comply with any other Guaranteed Obligation, each
Subsidiary Guarantor hereby promises to and will, upon receipt of written demand
by the Trustee, forthwith pay, or cause to be paid, in cash, to the Hold-
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ers or the Trustee an amount equal to the sum of (i) the unpaid amount of
such Guaranteed Obligations, (ii) accrued and unpaid interest on such
Guaranteed Obligations (but only to the extent not prohibited by law) and (iii)
all other monetary Guaranteed Obligations of the Company to the Holders and the
Trustee.
Each Subsidiary Guarantor agrees that it shall not be entitled to any
right of subrogation in respect of any Guaranteed Obligations guaranteed hereby
until payment in full of all Guaranteed Obligations and all obligations to which
the Guaranteed Obligations are subordinated as provided in Article 12. Each
Subsidiary Guarantor further agrees that, as between it, on the one hand, and
the Holders and the Trustee, on the other hand, (x) the maturity of the
Guaranteed Obligations hereby may be accelerated as provided in Article 6 for
the purposes of such Subsidiary Guarantor's Subsidiary Guaranty herein,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the Obligations guaranteed hereby, and (y) in the
event of any declaration of acceleration of such Obligations as provided in
Article 6, such Obligations (whether or not due and payable) shall forthwith
become due and payable by such Subsidiary Guarantor for the purposes of this
Section.
Each Subsidiary Guarantor also agrees to pay any and all costs and
expenses (including reasonable attorneys' fees) incurred by the Trustee or any
Holder in enforcing any rights under this Section.
SECTION 11.2. Limitation on Liability. Any term or provision of this
Indenture to the contrary notwithstanding, the maximum aggregate amount of the
obligations guaranteed hereunder by any Subsidiary Guarantor shall not exceed
the maximum amount that can be hereby guaranteed without rendering this
Indenture, as it relates to such Subsidiary Guarantor, voidable under applicable
law relating to fraudulent conveyance or fraudulent transfer or similar laws
affecting the rights of creditors generally. To effectuate the foregoing
intention, the obligations of each Subsidiary Guarantor shall be limited to the
maximum amount as will, after giving effect to all other contingent and fixed
liabilities of such Subsidiary Guarantor and after giving effect to any
collections from or payments made by or on behalf of any other Subsidiary
Guarantor in respect of the obligations of such other Subsidiary Guarantor under
its Subsidiary Guaranty or pursuant to its contribution obligations hereunder,
result in the obligations of such Subsidiary Guarantor under its Subsidiary
Guaranty not constituting a fraudulent conveyance or fraudulent transfer under
federal,
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state or foreign law. Each Subsidiary Guarantor that makes a payment or
distribution under a Subsidiary Guaranty shall be entitled to a contribution
from each other Subsidiary Guarantor in an amount based on the consolidated net
worth of each Subsidiary Guarantor.
SECTION 11.3. Successors and Assigns. This Article 11 shall be
binding upon each Subsidiary Guarantor and its successors and assigns and shall
enure to the benefit of the successors and assigns of the Trustee and the
Holders and, in the event of any transfer or assignment of rights by any Holder
or the Trustee, the rights and privileges conferred upon that party in this
Indenture and in the Securities shall automatically extend to and be vested in
such transferee or assignee, all subject to the terms and conditions of this
Indenture.
SECTION 11.4. No Waiver. Neither a failure nor a delay on the part of
either the Trustee or the Holders in exercising any right, power or privilege
under this Article 11 shall operate as a waiver thereof, nor shall a single or
partial exercise thereof preclude any other or further exercise of any right,
power or privilege. The rights, remedies and benefits of the Trustee and the
Holders herein expressly specified are cumulative and not exclusive of any other
rights, remedies or benefits which either may have under this Article 11 at law,
in equity, by statute or otherwise.
SECTION 11.5. Modification. No modification, amendment or waiver of
any provision of this Article 11, nor the consent to any departure by any
Subsidiary Guarantor therefrom, shall in any event be effective unless the same
shall be in writing and signed by the Trustee, and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which
given. No notice to or demand on any Subsidiary Guarantor in any case shall
entitle such Subsidiary Guarantor to any other or further notice or demand in
the same, similar or other circumstances.
SECTION 11.6. Release of Subsidiary Guarantor. A Subsidiary Guarantor
may, by execution and delivery to the Trustee of a supplemental indenture
satisfactory to the Trustee, be released from its Guarantee upon the sale of all
of its Capital Stock, or all or substantially all of the assets of the
applicable Subsidiary Guarantor, to any Person that is not a Subsidiary of the
Company, if such sale is made in compliance with this Indenture.
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SECTION 11.7. Execution of Supplemental Indenture for Future
Subsidiary Guarantors. Each Subsidiary which is required to become a Subsidiary
Guarantor pursuant to Section 4.14 shall, and the Company shall cause each such
Subsidiary to, promptly execute and deliver to the Trustee a supplemental
indenture in the form of Exhibit F hereto pursuant to which such Subsidiary
shall become a Subsidiary Guarantor under this Article 11 and shall guarantee
the Obligations. Concurrently with the execution and delivery of such
supplemental indenture, the Company shall deliver to the Trustee an Opinion of
Counsel to the effect that such supplemental indenture has been duly authorized,
executed and delivered by such Subsidiary and that, subject to the application
of bankruptcy, insolvency, moratorium, fraudulent conveyance or transfer and
other similar laws relating to creditors' rights generally and to the principles
of equity, whether considered in a proceeding at law or in equity, the
Subsidiary Guaranty of such Subsidiary Guarantor is a legal, valid and binding
obligation of such Subsidiary Guarantor, enforceable against such Subsidiary
Guarantor in accordance with its terms.
ARTICLE 12
SUBORDINATION OF SUBSIDIARY GUARANTIES
SECTION 12.1. Agreement To Subordinate. Notwithstanding any other
provision to the contrary in this Indenture, each Subsidiary Guarantor covenants
and agrees, and each Holder by accepting a Security covenants and agrees, that
all payments by such Subsidiary Guarantor in respect of its Subsidiary Guarantee
are subordinated in right of payment, to the extent and in the manner provided
in this Article, to the prior payment in full of all Senior Indebtedness of such
Subsidiary Guarantor, whether outstanding on the Issue Date or thereafter
incurred, including all Obligations of the Company and such Subsidiary Guarantor
under the Senior Credit Facility. The subordination provisions set forth in
this Article are for the benefit of, and shall be enforceable directly by, the
holders of Senior Indebtedness.
Each Holder authorizes and directs the Trustee on such Holder's behalf
to take such action as may be necessary or appropriate, in the sole discretion
of the Trustee, to acknowledge or effectuate the subordination between the
Holders and the holders of Senior Indebtedness of each subsidiary Guarantor as
provided in this Article and appoints the Trustee as such Holder's
attorney-in-fact for any and all such proposes, including, in the event of any
voluntary or involuntary liquida-
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tion or dissolution of a Subsidiary Guarantor, whether total or partial, or in a
bankruptcy, reorganization, insolvency, receivership, dissolution, assignment
for the benefit of creditors, marshalling of assets or similar proceeding
relating to a Subsidiary Guarantor or its property, the timely filing of a claim
for the unpaid balance of such Holder's Securities in the form required in said
proceeding and cause said claim to be approved. If the Trustee does not file a
property claim or proof to debt in the form required in such proceeding prior to
20 days before the expiration of the time to exile such claim or claims, then
the Representative is hereby authorized to have the right to file and is hereby
authorized to file an appropriate claim for and on behalf of the Holders;
provided, however, that any such claim filed by such Representative shall be
superseded by the claim, if any, subsequently filed by the Trustee.
Each Holder by accepting a Security acknowledges and agrees that the
subordination provisions set forth in this Article are, and are intended to be,
an inducement and consideration to each holder of Senior Indebtedness of each
Subsidiary Guarantor, whether such Senior Indebtedness was created before or
after the issuance of the Securities, to acquire and continue to hold, or to
continue to hold, such Senior Indebtedness, and such holder of Senior
Indebtedness shall be deemed conclusively to have relied upon such subordination
provisions in acquiring and continuing to hold, or in continuing to hold, such
Senior Indebtedness, and such holder is made an obligee hereunder and may
enforce directly such subordination provisions.
SECTION 12.2. Liquidation; Dissolution; Bankruptcy. Upon any payment
or distribution of the assets of any Subsidiary Guarantor of any kind or
character, whether in cash, property or securities, to creditors upon a total or
partial liquidation or dissolution or reorganization or similar proceeding
relating to such Subsidiary Guarantor or its property or in a bankruptcy,
reorganization, insolvency, receivership or similar proceeding:
(a) the holders of Senior Indebtedness of such Subsidiary Guarantor
shall be entitled to receive payment in full in cash of such Senior
Indebtedness before Holders are entitled to receive any payment; and
(b) until the Senior Indebtedness of such Subsidiary Guarantor is
paid in full, any payment or distribution to which Holders would be
entitled but for this Article shall
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be made to holders of Senior Indebtedness of such Subsidiary Guarantor, as
their interests may appear.
Upon any payment or distribution referred to in this Article, the
Trustee and the Holders shall be entitled to rely upon any order or decree of a
court of competent jurisdiction in which such proceedings are pending for the
purpose of ascertaining the identity of Persons entitled to participate in such
payment or distribution, the holders of Senior Indebtedness, the amount thereof
or payable thereon and all other facts pertinent thereto or to this Article, and
the Trustee and the Holders shall be entitled to rely upon a certificate of the
liquidating trustee or agent or other Person (including any Representative of
holders of Senior Indebtedness of such Subsidiary Guarantor) making any payment
or distribution to the Trustee or to the Holders for the purpose of ascertaining
the identity of Persons entitled to participate in such payment or distribution,
the holders of Senior Indebtedness, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article. In the event that the Trustee determines in good
faith that further evidence is required with respect to the right of any Person,
as a holder of Senior Indebtedness, to participate in any payment or
distribution pursuant to this Section, the Trustee may request such Person (at
the expense of the Holders) to furnish evidence to the reasonable satisfaction
of the Trustee, acting in good faith, as to the amount of such Senior
Indebtedness held by such Person, as to the extent to which such Person is
entitled to participate in such payment or distribution, and as to the other
facts pertinent to the rights of such Person under this Section, and if such
evidence is not furnished, the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive
payment.
The consolidation or merger of a Subsidiary Guarantor with or into any
Person, or the sale, assignment, transfer, lease, conveyance or other
disposition of all or substantially all of such Subsidiary Guarantor's assets to
any Person, in compliance with the terms and conditions set forth in Sections
5.1 and 5.2, shall not be deemed to be a liquidation, dissolution or
reorganization or similar proceeding relating to such Subsidiary Guarantor for
purposes of this Section.
SECTION 12.3. Default on Senior Indebtedness.
(a) If any Senior Indebtedness of a Subsidiary Guarantor is not paid
when due, such Subsidiary Guarantor may not
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pay the Subordinated Debt unless the default shall have been cured or waived or
such Senior Indebtedness has been paid in full.
(b) If any default on any Senior Indebtedness of a Subsidiary
Guarantor (other than as set forth in Section 12.3(a)) occurs and such Senior
Indebtedness is accelerated in accordance with its terms, such Subsidiary
Guarantor may not pay the Subordinated Debt unless the default shall have been
cured or waived and any such acceleration has been rescinded or such Senior
Indebtedness has been paid in full in cash.
(c) Notwithstanding Sections 12.3(a) and (b), the Subsidiary
Guarantors may pay the Subordinated Debt without regard to the foregoing if the
Subsidiary Guarantors and the Trustee receive written notice approving such
payment from the Representative of the Senior Indebtedness with respect to which
either of the events set forth in Sections 12.3(a) and (b) has occurred and is
continuing. During the continuance of any default (other than a default
described in Sections 12.3(a) and (b)) with respect to any Senior Indebtedness
of a Subsidiary Guarantor pursuant to which the maturity thereof may be
accelerated immediately without further notice (except such notice as may be
required to effect such acceleration) or the expiration of any applicable grace
periods, the Subsidiary Guarantors may not pay the Subordinated Debt for the
Payment Blockage Period commencing upon the receipt by the Trustee (with a copy
to the Subsidiary Guarantors) of a Blockage Notice from the Representative of
the holders of such Designated Senior Indebtedness specifying an election to
effect a Payment Blockage Period and ending 180 days thereafter (or earlier if
such Payment Blockage Period is terminated (i) by written notice to the Trustee
and the Subsidiary Guarantor from the Person or Persons who gave such Blockage
Notice, (ii) because the default giving rise to such Blockage Notice has been
waived in writing or (iii) because such Designated Senior Indebtedness has been
repaid in full in cash). Notwithstanding the provisions described in the
immediately preceding sentence, unless the holders of such Designated Senior
Indebtedness or the Representative of such holders has accelerated the maturity
of such Designated Senior Indebtedness, the Subsidiary Guarantor may resume
payments on the Securities after the end of such Payment Blockage Period. The
Securities shall not be subject to more than one Payment Blockage Period in any
consecutive 360-day period, irrespective of the number of such nonpayment
defaults with respect to Designated Senior Indebtedness during such period.
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(d) Each Subsidiary Guarantor covenants that it will, upon request of
the Trustee, deliver an Officers' Certificate (with copies thereof to the
Representative of each class of Senior Indebtedness of such Subsidiary
Guarantor) showing in reasonable detail the Senior Indebtedness outstanding as
of the date of such Officers' Certificate and the Representative of each class
of such Senior Indebtedness. The Trustee may conclusively rely thereon except
to the extent that it shall have received, from the Representative of any class
of such Senior Indebtedness, notice in writing controverting any of the
statements made therein. Not less than 10 days prior to making any distribution
in respect of Senior Indebtedness pursuant to this Section, the Trustee shall
deliver to each Representative of any class of such Senior Indebtedness copies
of the most recent Officers' Certificate filed with it by such Subsidiary
Guarantor pursuant to this subsection (d).
(e) In the event that the Securities are declared due and payable
before their Stated Maturity in accordance with Article 6, then and in such
event the holders of Senior Indebtedness of any Subsidiary Guarantor outstanding
at the time the Securities so become due and payable shall be entitled to
receive payment in full in cash of all amounts due or to become due on or in
respect of such Senior Indebtedness (whether or not an Event of Default has
occurred thereunder or the Senior Indebtedness of such Subsidiary Guarantor is,
or has been declared to be, due and payable prior to the date on which it
otherwise would have become due and payable) before the Holders shall be
entitled to receive any Security Payment.
SECTION 12.4. Payments of Subordinated Debt Permitted if No Default.
Nothing contained in this Article or elsewhere in this Indenture, or in any of
the Securities, shall prevent a Subsidiary Guarantor or any Person acting on
behalf of a Subsidiary Guarantor, at any time except as otherwise provided in
Section 12.2 or 12.3, from paying the Subordinated Debt.
SECTION 12.5. When Subordinated Debt Must Be Paid Over. In the event
that any payment is made on the Subordinated Debt to the Trustee or the Holders
that, because of this Article, should not have been so made or may not be paid
over to the Holders, such payment shall be held by the Trustee or the Holders
who receive such payment, as the case may be, for the benefit of, and shall
forthwith be paid over or delivered to, the holders of the Senior Indebtedness
of the Subsidiary Guarantors remaining unpaid or their Representatives, as their
interests may appear, to the extent necessary to irrevocably
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and indefeasibly pay such Senior Indebtedness in full in cash or in accordance
with its terms, after giving effect to any concurrent payment or distribution to
or for the holders of such Senior Indebtedness.
SECTION 12.6. Notices by a Subsidiary Guarantor. Each Subsidiary
Guarantor shall promptly notify the Trustee, each Paying Agent and the
Representative of any facts known to such Subsidiary Guarantor that would cause
a payment on the Subordinated Debt to violate this Article, but failure to give
such notice shall not affect the subordination provided in this Article of any
Subsidiary Guarantee to holders of Senior Indebtedness of such Subsidiary
Guarantor. Without limiting the foregoing, if payment of the Securities is
accelerated because of an Event of Default, the Subsidiary Guarantors shall
promptly notify the Representative of the acceleration.
SECTION 12.7. Subrogation. After all Senior Indebtedness is
irrevocably and indefeasibly paid in full in cash and until the Securities are
paid in full, Holders shall be subrogated to the rights of holders of Senior
Indebtedness of the respective Subsidiary Guarantors to receive distributions
applicable to Senior Indebtedness to the extent that distributions otherwise
payable to Holders have been applied to the payment of Senior Indebtedness. A
distribution made under this Article to holders of Senior Indebtedness which
otherwise should have been made to Holders is not, as between a Subsidiary
Guarantor and the Holders, payment by such Subsidiary Guarantor on Senior
Indebtedness.
SECTION 12.8. Relative Rights. This Article defines the relative
rights of Holders and holders of Senior Indebtedness of the Subsidiary
Guarantors. Nothing in this Indenture shall:
(a) impair, as between a Subsidiary Guarantor and the Holders, the
obligation of a Subsidiary Guarantor, which is absolute and unconditional,
to make any payment in accordance with the terms of its Subsidiary
Guaranty;
(b) affect the relative rights of Holders and creditors of a
Subsidiary Guarantor other than holders of Senior Indebtedness of such
Subsidiary Guarantor; or
(c) prevent the Trustee or any Holder from exercising its available
remedies upon a Default or Event of Default, subject to the rights of
holders of Senior Indebt-
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edness to receive prepayment, payments and distributions otherwise payable
to Holders.
If a Subsidiary Guarantor fails because of this Article to pay the
principal of (or premium, if any) or interest on a Security on the due date or
upon the acceleration thereof, the failure is still a Default or Event of
Default.
SECTION 12.9. Subordination May Not Be Impaired by the Subsidiary
Guarantor. No right of any holder of Senior Indebtedness to enforce the
subordination of the Obligation of a Subsidiary Guarantor pursuant to its
Subsidiary Guaranty shall be impaired by (a) any act or failure to act by such
Subsidiary Guarantor or by its failure to comply with this Indenture, (b) any
release of any collateral or any guarantor or any Person or such Subsidiary
Guarantor's obligations under Senior Indebtedness, (c) any amendment,
supplement, extension, renewal, restatement or other modification of any Senior
Indebtedness, (d) any settlement or compromise of any Senior Indebtedness, (e)
the unenforceability of any of the Senior Indebtedness or (f) the failure of any
holder of Senior Indebtedness to pursue claims against such Subsidiary
Guarantor. The terms of the subordination provisions contained in this Article
12 will not apply to payments from money or the proceeds of U.S. Government
Obligations held in trust by the Trustee for the payment of principal of and
interest on the Securities pursuant to and in accordance with the provisions
described in Article 8.
SECTION 12.10. Distribution or Notice to Representative. Whenever a
distribution is to be made or a notice given to holders of Senior Indebtedness,
the distribution may be made and the notice given to their Representative (if
any).
SECTION 12.11. Rights of Trustee and Paying Agent. The Trustee or any
Paying Agent may continue to make payments in respect of the Securities and
shall not be charged with knowledge of the existence of facts that would
prohibit the making of any such payment unless, not less than three Business
Days prior to the date of any such payment, a Responsible Officer of the Trustee
receives written notice reasonably satisfactory to it that payments in respect
of the Securities may not be made under this Article. Only a Subsidiary
Guarantor, a Representative (satisfactorily identified to the Trustee) or a
holder of a class of Senior Indebtedness that has no Representative
(satisfactorily identified to the Trustee) may give the notice. Prior to the
receipt of such notice, the Trustee and any Paying Agent shall be entitled in
all respects to assume that no such facts exist. In any case, the Trustee shall
have
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no responsibility to the holders of Senior Indebtedness for payments made to
Holders by a Subsidiary Guarantor or any Paying Agent unless such payments are
made at the direction of the Trustee after receipt of such notice referred to
above.
Neither the Trustee nor any Paying Agent shall be deemed to owe any
fiduciary duty to the holders of Senior Indebtedness. With respect to the
holders of Senior Indebtedness, the Trustee undertakes to perform or to observe
only such of its covenants and obligations as are specifically set forth in this
Article 12, and no implied covenants or obligations with respect to the holders
of Senior Indebtedness shall be read into this Indenture against the Trustee.
The Trustee shall not be liable to any holders of Senior Indebtedness if it
shall mistakenly pay over or deliver to Holders, the Company or any other Person
moneys or assets to which any holder of Senior Indebtedness shall be entitled by
virtue of this Article 12 or otherwise.
The Trustee in its individual or any other capacity may hold Senior
Indebtedness with the same rights it would have if it were not Trustee.
This Section is solely for the benefit of the Trustee and any Paying
Agents and shall not limit the obligations of the Holders under Section 12.5.
SECTION 12.12. Consent of Holders of Senior Indebtedness. The
provisions of this Article (including the definitions contained in this Article
and references to this Article contained in this Indenture) shall not be
amended, waived or modified in a manner that would adversely affect the rights
of the holders of any Senior Indebtedness of the Subsidiary Guarantors, and no
such amendment, waiver or modification shall become effective, unless the
holders of such Senior Indebtedness shall have consented in writing (in
accordance with the provisions of the Agreement governing such Senior
Indebtedness) to such amendment, waiver or modification.
SECTION 12.13. Contractual Subordination. This Article represents a
bona fide agreement of contractual subordination pursuant to Section 510(b) of
the United States Bankruptcy Code.
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ARTICLE 13
MISCELLANEOUS
SECTION 13.1. Trust Indenture Act Controls. If any provision of this
Indenture limits, qualifies or conflicts with another provision which is
required to be included in this Indenture by the TIA, the required provision
shall control. If this Indenture excludes any provision of the TIA that is
required to be included, such provision shall be deemed included herein.
SECTION 13.2. Notices. Any notice or communication shall be in
writing and delivered in person, by overnight courier or facsimile (if to the
Company, with receipt confirmed by an Officer) or mailed by first-class mail
addressed as follows:
If to the Company or any Subsidiary Guarantor:
Oxford Automotive, Inc.
2365 Franklin Road
Bloomfield Hills, MI 48203
Attention: Selwyn Isakow
With copies to:
Dykema Gossett
1577 North Woodward Avenue
Suite 300
Bloomfield Hills, MI 48304
Attention: Rex E. Schlaybaugh, Jr., Esq.
If to the Trustee:
First Trust National Association
Buhl Building, Suite 740
535 Griswold Street
Detroit, MI 48226
Attention: Corporate Trust Trustee Administration
The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication mailed or sent by overnight courier or
facsimile to a Securityholder shall be sent to the Securityholder at the
Securityholder's address as it ap-
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pears on the registration books of the Registrar and shall be sufficiently given
if so sent within the time prescribed.
Failure to send a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is sent in the manner provided
above, it is duly given, whether or not the addressee receives it.
Where this Indenture provides for notice in any manner, such notice
may be waived in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice.
SECTION 13.3. Communication by Holders with Other Holders.
Securityholders may communicate pursuant to TIA Section 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar and anyone else shall have
the protection of TIA Section 312(c).
SECTION 13.4. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take or refrain
from taking any action under this Indenture, the Company shall furnish to the
Trustee to the extent required by the TIA or this Indenture:
(1) an Officers' Certificate (which in connection with the original
issuance of the Securities need only be executed by one Officer for the
Company) in form and substance reasonably satisfactory to the Trustee
stating that, in the opinion of the signers, all conditions precedent, if
any, provided for in this Indenture relating to the proposed action have
been complied with; and
(2) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of such counsel,
all such conditions precedent have been complied with.
SECTION 13.5. Statements Required in Certificate or Opinion. Each
certificate or opinion with respect to compliance with a covenant or condition
provided for in this Indenture shall include:
(1) a statement that the individual making such certificate or opinion
has read such covenant or condition;
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(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such individual, he has made
such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has
been complied with; and
(4) a statement as to whether or not, in the opinion of such
individual, such covenant or condition has been complied with; provided,
that an Opinion of Counsel can rely as to matters of fact on an Officers'
Certificate or a certificate of a public official.
SECTION 13.6. When Securities Disregarded. In determining whether
the Holders of the required principal amount of Securities have concurred in any
direction, waiver or consent, Securities owned by the Company or by any Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Company shall be disregarded and deemed not to be
outstanding, except that, for the purpose of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Securities which the Trustee actually knows are so owned shall be so
disregarded. Also, subject to the foregoing, only Securities outstanding at the
time shall be considered in any such determination.
SECTION 13.7. Rules by Trustee, Paying Agent and Registrar. The
Trustee may make reasonable rules for action by or a meeting of Securityholders.
The Trustee shall provide the Company reasonable notice of such rules. The
Registrar and the Paying Agent may make reasonable rules for their functions.
SECTION 13.8. Legal Holidays. If a payment date is a Legal Holiday,
payment shall be made on the next succeeding day that is not a Legal Holiday,
and no interest shall accrue for the intervening period. If a regular record
date is a Legal Holiday, the record date shall not be affected.
SECTION 13.9. Governing Law. This Indenture and the Securities shall
be governed by, and construed in accordance with, the laws of the State of New
York without giving effect to applicable principles of conflict of laws to the
extent that
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the application of the laws of another jurisdiction would be required thereby.
SECTION 13.10. No Recourse Against Others. No recourse for the
payment of the principal of, premium, if any, or interest on any of the
Securities or for any claim based thereon or otherwise in respect thereof, and
no recourse under or upon any obligation, covenant or agreement of the Company
in this Indenture, or in any of the Securities or because of the creation of any
Indebtedness represented hereby and thereby, shall be had against any
incorporator, stockholder, officer, director, employee or controlling person of
the Company or any Successor Person thereof. Each Holder, by accepting a
Security, waives and releases all such liability. The waiver and release shall
be part of the consideration for the issuance of the Securities.
SECTION 13.11. Successors. All agreements of the Company in this
Indenture and the Securities shall bind the Company's successors. All
agreements of the Trustee in this Indenture shall bind its successors.
SECTION 13.12. Multiple Originals. The parties may sign any number
of copies of this Indenture. Each signed copy shall be an original, but all of
them together represent the same agreement. One signed copy is enough to prove
this Indenture.
SECTION 13.13. Table of Contents; Headings. The table of contents,
cross-reference sheet and headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not intended
to be considered a part hereof and shall not modify or restrict any of the terms
or provisions hereof.
SECTION 13.14. Severability Clause. In case any provision in this
Indenture or in the Securities shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
<PAGE> 114
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IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed as of the date first written above.
THE COMPANY:
OXFORD AUTOMOTIVE INC.
By: /s/ Steven M. Abelman
---------------------------
Name: Steven M. Abelman
Title: President
SUBSIDIARY GUARANTORS:
BMG NORTH AMERICA LIMITED
By: /s/ Robert LaCourciere
---------------------------
Name: Robert LaCourciere
Title: President
LOBDELL EMERY CORPORATION
By: /s/ Charles L. Dardas
--------------------------
Name: Charles L. Dardas
Title: President
WINCHESTER FABRICATION CORPORATION
By: /s/ Charles L. Dardas
---------------------------
Name: Charles L. Dardas
Title: President
<PAGE> 115
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CREATIVE FABRICATION CORPORATION
By: /s/ Charles L. Dardas
------------------------------
Name: Charles L. Dardas
Title: President
PARALLEL GROUP INTERNATIONAL, INC.
By: /s/ Charles L. Dardas
------------------------------
Name: Charles L. Dardas
Title: President
CONCEPT MANAGEMENT CORPORATION
By: /s/ Charles L. Dardas
------------------------------
Name: Charles L. Dardas
Title: President
LEWIS EMERY CAPITAL CORPORATION
By: /s/ Charles L. Dardas
------------------------------
Name: Charles L. Dardas
Title President
<PAGE> 116
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LASERWELD INTERNATIONAL L.L.C.
By: Lobdell Emery Corporation, its Sole Member
By: /s/ Charles L. Dardas
--------------------------------------
Name: Charles L. Dardas
Title President
BMG HOLDINGS, INC.
By: /s/ John H. Ferguson
--------------------------------------
Name: John H. Ferguson
Title President
TRUSTEE:
FIRST TRUST NATIONAL ASSOCIATION,
as Trustee
By: /s/ Nan L. Packard
-------------------------------------
Name: Nan L. Packard
Title: Assistant Vice President
<PAGE> 117
EXHIBIT A
FACE OF SECURITY
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW
YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. TRANSFERS OF THIS GLOBAL
SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF
DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND LIMITED TO
TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE
REFERRED TO ON THE REVERSE HEREOF.
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING THIS
SECURITY, AGREES FOR THE BENEFIT OF THE COMPANY THAT THIS SECURITY MAY NOT BE
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED (X) PRIOR TO THE SECOND ANNIVERSARY OF
THE ISSUANCE HEREOF (OR A PREDECESSOR SECURITY HERETO) OR (Y) BY ANY HOLDER THAT
WAS AN AFFILIATE OF THE COMPANY AT ANY TIME DURING THE THREE MONTHS PRECEDING
THE DATE OF SUCH TRANSFER, IN EITHER CASE OTHER THAN (1) TO THE COMPANY, (2) SO
LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT ("RULE 144A") TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS
A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A 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 (AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE
CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS SECURITY), (3) IN AN OFFSHORE
TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT (AS
INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON
THE REVERSE OF THIS SECURITY), AND, IF SUCH TRANSFER IS BEING EFFECTED BY
CERTAIN TRANSFERORS SPECIFIED IN THE INDENTURE (AS DEFINED BELOW) PRIOR TO THE
EXPIRATION OF THE "40 DAY RESTRICTED
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PERIOD" (WITHIN THE MEANING OF RULE 903(c)(3) OF REGULATION S UNDER THE
SECURITIES ACT), A CERTIFICATE WHICH MAY BE OBTAINED FROM THE COMPANY OR THE
TRUSTEE IS DELIVERED BY THE TRANSFEREE TO THE COMPANY AND THE TRUSTEE, (4) TO AN
INSTITUTION THAT IS AN "ACCREDITED INVESTOR" AS DEFINED IN RULE 501(a)(1), (2),
(3) OR (7) UNDER THE SECURITIES ACT (AS INDICATED BY THE BOX CHECKED BY THE
TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS SECURITY) THAT
IS ACQUIRING THIS SECURITY FOR INVESTMENT PURPOSES AND NOT FOR DISTRIBUTION, AND
A CERTIFICATE IN THE FORM ATTACHED TO THIS SECURITY IS DELIVERED BY THE
TRANSFEREE TO THE COMPANY AND THE TRUSTEE (PROVIDED THAT CERTAIN HOLDERS
SPECIFIED IN THE INDENTURE MAY NOT TRANSFER THIS SECURITY PURSUANT TO THIS
CLAUSE (4) PRIOR TO THE EXPIRATION OF THE "40 DAY RESTRICTED PERIOD" (WITHIN THE
MEANING OF RULE 903(c)(3) OF REGULATION S UNDER THE SECURITIES ACT)), (5)
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY
RULE 144 (IF APPLICABLE) UNDER THE SECURITIES ACT, OR (6) 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. AN INSTITUTIONAL ACCREDITED INVESTOR HOLDING THIS SECURITY AGREES IT
WILL FURNISH TO THE COMPANY AND THE TRUSTEE SUCH CERTIFICATES AND OTHER
INFORMATION AS THEY MAY REASONABLY REQUIRE TO CONFIRM THAT ANY TRANSFER BY IT OF
THIS SECURITY COMPLIES WITH THE FOREGOING RESTRICTIONS. THE HOLDER HEREOF, BY
PURCHASING THIS SECURITY, REPRESENTS AND AGREES FOR THE BENEFIT OF THE COMPANY
THAT IT IS (1) A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A
OR (2) AN INSTITUTION THAT IS AN "ACCREDITED INVESTOR" AS DEFINED IN RULE
501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT AND THAT IT IS HOLDING THIS
SECURITY FOR INVESTMENT PURPOSES AND NOT FOR DISTRIBUTION OR (3) A NON-U.S.
PERSON OUTSIDE THE UNITED STATES WITHIN THE MEANING OF (OR AN ACCOUNT SATISFYING
THE REQUIREMENTS OF PARAGRAPH (o)(2) OR RULE 902 UNDER) REGULATION S UNDER THE
SECURITIES ACT.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN
DEFINITIVE FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE
DEPOSITORY TO A NOMINEE OF THE DEPOSITORY, OR BY ANY SUCH NOMINEE OF THE
DEPOSITORY, OR BY THE DEPOSITORY OR NOMINEE OF SUCH SUCCESSOR DEPOSITORY OR ANY
SUCH NOMINEE TO A SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITORY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO AN ISSUER OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
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AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND
ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN
SECTION 2.14 OF THE INDENTURE.
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<PAGE> 120
No.
$125,000,000
10 1/8% Senior Subordinated Notes Due 2007
CUSIP No.
OXFORD AUTOMOTIVE INC., a Michigan corporation, promises to pay to
Cede & Co., or registered assigns, the principal sum of One Hundred Twenty-Five
Million Dollars on June 15, 2007.
Interest Payment Dates: June 15 and December 15.
Record Dates: June 1 and December 1.
Additional provisions of this Security are set forth on the reverse
side of this Security.
IN WITNESS WHEREOF, the Company has caused this Security to be signed
manually or by facsimile by its duly authorized officers.
OXFORD AUTOMOTIVE INC.
By:
--------------------------
Name:
Title:
Dated: June 24, 1997
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
First Trust National Association, as Trustee, certifies that this is one of
the Securities referred to in the within-mentioned Indenture.
By: FIRST TRUST NATIONAL
ASSOCIATION, as Trustee
---------------------------
Authorized Signatory
Date of Authentication:
June 24, 1997
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REVERSE OF SECURITY
10 1/8% SENIOR SUBORDINATED SECURITY DUE 2007
1. Interest
OXFORD AUTOMOTIVE INC., a Michigan corporation (such entity, and its
successors and assigns under the Indenture hereinafter referred to, and each
other entity which is required to become the Company pursuant to the Indenture,
and its successors and assigns under the Indenture, being herein called the
"Company"), promises to pay interest on the principal amount of this Security at
the rate per annum shown above. The Company will pay interest semiannually on
June 15 and December 15 of each year, commencing December 15, 1997. Interest on
the Securities will accrue from the most recent date on which interest has been
paid or, if no interest has been paid, from, June 24, 1997. Interest will be
computed on the basis of a 360-day year of twelve 30-day months. The Company
shall pay interest on overdue principal at 1% per annum in excess of the rate
borne by the Securities, and it shall pay interest on overdue installments of
interest at the same rate to the extent lawful.
2. Method of Payment
The Company will pay interest on the Securities (except defaulted
interest) to the Persons who are registered holders of Securities at the close
of business on the record date immediately preceding the interest payment date
even if Securities are canceled on registration of transfer or registration of
exchange (including pursuant to an Exchange Offer (as defined in the applicable
Registration Agreement)) after the record date. Holders must surrender
Securities to a Paying Agent to collect principal payments. The Company will
pay principal and interest in money of the United States that at the time of
payment is legal tender for payment of public and private debts ("U.S. Legal
Tender"). However, the Company may pay principal and interest by its check
payable in such U.S. Legal Tender. The Company may deliver any such interest
payment to the Paying Agent or to a Holder's registered address.
3. Paying Agent and Registrar
Initially, First Trust National Association, a National banking
corporation ("Trustee"), will act as Paying
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Agent and Registrar. The Company may appoint and change any Paying Agent,
Registrar or co-registrar without notice. The Company may act as Paying Agent,
Registrar, co-Registrar or transfer agent.
4. Indenture
The Company issued the Securities under an Indenture dated as of June
15, 1997 (the "Indenture"), among the Company, the Subsidiary Guarantors and the
Trustee. This Security is one of a duly authorized issue of Initial Securities
of the Company designated as its 10 1/8% Senior Subordinated Notes due 2007 (the
"Initial Securities"). The Securities include the Initial Securities, the
Exchange Securities (as defined in the Indenture) and the Unrestricted
Securities, as defined below, issued in exchange for the Initial Securities
pursuant to the Registration Agreement or, with respect to the Initial
Securities issued under the Indenture subsequent to the Issue Date, a
registration agreement substantially identical to the Registration Agreement
with the Initial Purchasers. The Initial Securities and the Unrestricted
Securities are treated as a single class of securities under the Indenture. The
terms of the Securities include those stated in the Indenture and those made
part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C.
Section. 77aaa-77bbbb) as in effect on the date of the Indenture (the "TIA").
Terms defined in the Indenture and not defined herein have the meanings ascribed
thereto in the Indenture. The Securities are subject to all such terms, and
Securityholders are referred to the Indenture and the TIA for a statement of
those terms. Any conflict between this Security and the Indenture will be
governed by the Indenture.
The Securities are unsecured senior subordinated obligations of the
Company limited to $160,000,000 aggregate principal amount (subject to Section
2.7 of the Indenture). The Indenture imposes certain limitations on the
Incurrence of Indebtedness by the Company and its Restricted Subsidiaries, the
existence of liens, the payment of dividends on, and redemption of, the Capital
Stock of the Company and its Subsidiaries, restricted payments, the sale or
transfer of assets and Subsidiary stock, the issuance or sale of Capital Stock
of Restricted Subsidiaries, the investments of the Company and its Restricted
Subsidiaries, consolidations, mergers and transfers of all or substantially all
the assets of the Company, and transactions with Affiliates. In addition, the
Indenture limits the ability of the Company and certain of its Subsidiaries
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to restrict distributions and dividends from Restricted Subsidiaries.
To guarantee the due and punctual payment of the principal, premium
and interest, if any, on the Securities and all other amounts payable by the
Company under the Indenture and the Securities when and as the same shall be due
and payable, whether at maturity, by acceleration or otherwise, according to the
terms of the Securities and the Indenture, the Subsidiary Guarantors have
unconditionally guaranteed the Obligations on a senior subordinated basis
pursuant to the terms of the Indenture.
5. Optional Redemption
Except as set forth in the next paragraph, the Securities may not be
redeemed at the option of the Company prior to June 15, 2002. Thereafter, the
Securities will be redeemable, at the Company's option, in whole or in part, at
any time or from time to time, at the following redemption prices (expressed in
percentages of principal amount), plus accrued and unpaid interest to the
redemption date (subject to the right of Holders of record on the relevant
record date to receive interest due on the relevant interest payment date) if
redeemed during the 12-month period commencing on June 15 of the years set forth
below:
Period Percentage
------ ----------
2002............... 105.063%
2003............... 103.375%
2004............... 101.688%
2005 and thereafter 100.000%
In addition, at any time and from time to time prior to June 15, 2000,
the Company may redeem in the aggregate up to 35% of the original principal
amount of the Securities with the proceeds of one or more Public Equity
Offerings following which there is a Public Market, at a redemption price
(expressed as a percentage of principal amount) of 110.125% plus accrued and
unpaid interest, if any, to the redemption date (subject to the right of Holders
of record on the relevant record date to receive interest due on the relevant
interest payment date); provided, however, that at least 65% of the original
aggregate principal amount of the Securities must remain outstanding after each
such redemption.
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<PAGE> 124
6. Notice of Redemption
Notice of redemption will be mailed by first-class mail at least 30
days but not more than 60 days before the redemption date to each Holder of
Securities to be redeemed at his registered address. Securities in
denominations larger than $1,000 may be redeemed in part but only in whole
multiples of $1,000. If money sufficient to pay the redemption price of and
accrued interest on all Securities (or portions thereof) to be redeemed on the
redemption date is deposited with the Paying Agent on or before the redemption
date and certain other conditions are satisfied, on and after such date interest
ceases to accrue on such Securities (or such portions thereof) called for
redemption. If a notice or communication is sent in the manner provided in the
Indenture, it is duly given, whether or not the addressee receives it. Failure
to send a notice or communication to a Securityholder or any defect in it shall
not affect its sufficiency with respect to other Securityholders.
In addition, in the event of certain Asset Dispositions, the Company
will be required to make an offer to purchase Securities at a purchase price of
100% of their principal amount plus accrued interest to the date of purchase
(subject to the rights of Holders of record on the relevant record date to
receive interest due on the relevant interest payment date) as provided in, and
subject to the terms of, the Indenture.
7. Change of Control
Upon a Change of Control, each Holder of Securities will have the
right to require the Company to repurchase all or any part of the Securities of
such Holder at a repurchase price in cash equal to 101% of the principal amount
of the Securities to be repurchased plus accrued and unpaid interest to the date
of repurchase (subject to the right of Holders of record on the relevant record
date to receive interest due on the related interest payment date) as provided
in, and subject to the terms of, the Indenture.
8. The Registration Agreement
The holder of this Security is entitled to the benefits of a
Registration Agreement, dated as of June 24, 1997, among the Company, the
Subsidiary Guarantors and the Initial Purchasers named therein (as such may be
amended from time to time, the "Registration Agreement"). Capitalized terms
used in
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<PAGE> 125
this subsection but not defined herein have the meanings assigned to them in
the Registration Agreement.
In the event that (i) neither the Exchange Offer Registration
Statement nor the Shelf Registration Statement has been filed with the
Commission within 45 days after the Closing Date, (ii) the Exchange Offer
Registration Statement has not been declared effective within 120 days after the
Closing Date, (iii) neither the Registered Exchange Offer has been consummated
nor the Shelf Registration Statement has been declared effective within 150 days
after the Closing Date, or (iv) after either the Exchange Offer Registration
Statement or the Shelf Registration Statement has been declared effective, such
Registration Statement thereafter ceases to be effective or usable (subject to
certain exceptions) in connection with resales of the Securities at any time
that the Company is obligated to maintain the effectiveness thereof pursuant to
the Registration Agreement (each such event referred to in clauses (i) through
(iv) above being referred to herein as a "Registration Default"), interest
("Special Interest") will accrue on this Security (in addition to the interest
described above) from and including the date on which any Registration Default
shall occur but excluding the date on which all Registration Defaults have been
cured. Special Interest shall accrue at a rate of 0.25% per annum during the
90-day period immediately following the occurrence of any Registration Default
and shall increase by 0.25% per annum at the end of each subsequent 90-day
period, but in no event shall Special Interest accrue at a rate in excess of
1.00% per annum.
9. Subordination
The Securities are subordinated to Senior Indebtedness of the Company,
as defined in the Indenture. To the extent provided in the Indenture, Senior
Indebtedness of the Company must be paid before the Securities may be paid. In
addition, each Subsidiary Guaranty is subordinated to Senior Indebtedness of the
relevant Subsidiary Guarantor, as defined in the Indenture. The Company and
each Subsidiary Guarantor agrees, and each Holder by accepting a Security
agrees, to the subordination provisions contained in the Indenture and
authorizes the Trustee to give it effect and appoints the Trustee as
attorney-in-fact for such purpose.
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10. Denominations; Transfer; Exchange
The Securities are in registered form, without coupons, and in
denominations of $1,000 and integral multiples of $1,000. A Holder may transfer
or exchange Securities in accordance with the Indenture. The Registrar may
require a Holder, among other things, to furnish appropriate endorsements or
transfer documents and to pay any taxes and fees required by law or permitted by
the Indenture, including any transfer tax or other similar governmental charge
payable in connection therewith. The Registrar need not register the transfer
of or exchange any Securities selected for redemption (except, in the case of a
Security to be redeemed in part, the portion of the Security not to be redeemed)
or any Securities for a period of 15 days before a selection of Securities to be
redeemed or 15 days before an interest payment date.
11. Persons Deemed Owners
The registered Holder of this Security may be treated as the owner of
it for all purposes.
12. Unclaimed Money
If money for the payment of principal or interest remains unclaimed
for two years, the Trustee or Paying Agent shall pay the money back to the
Company at its written request unless an abandoned property law designates
another Person. After any such payment, Holders entitled to the money must look
only to the Company and not to the Trustee for payment.
13. Discharge and Defeasance
Subject to certain conditions, the Company at any time may terminate
some or all of its obligations under the Securities and the Indenture if the
Company deposits with the Trustee money or U.S. Government Obligations for the
payment of principal and interest on the Securities to redemption or maturity,
as the case may be.
14. Amendment, Waiver
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Securities may be amended with the consent of the Holders of at
least a majority in principal amount outstanding of the Securities and (ii) any
past default
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<PAGE> 127
or compliance with any provision may be waived with the consent of the Holders
of a majority in principal amount outstanding of the Securities. Subject to
certain exceptions set forth in the Indenture, without the consent of any
Securityholder, the Company, the Subsidiary Guarantors and the Trustee may amend
the Indenture or the Securities to cure any ambiguity, omission, defect or
inconsistency, to comply with Article 5 of the Indenture, to provide for
uncertificated Securities in addition to or in place of certificated Securities,
to add guarantees with respect to the Securities, to secure the Securities, to
add additional covenants or surrender rights and powers conferred on the
Company, to make any change that does not adversely affect the rights of any
Securityholder or to comply with any request of the SEC in connection with
qualifying the Indenture under the TIA.
15. Defaults and Remedies
Under the Indenture, Events of Default include (i) default for 30 days
in payment of interest on the Securities; (ii) default in payment of principal
on any Security when due at its Stated Maturity, upon redemption pursuant to
paragraphs 5 or 6 above, upon required repurchase, upon acceleration or
otherwise, (iii) failure by the Company to comply with Article 5 of the
Indenture; (iv) failure by the Company to comply with other agreements in the
Indenture or the Securities, in certain cases subject to notice and lapse of
time; (iv) failure by the Company or any Significant Subsidiary to pay any
Indebtedness within any applicable grace period after final maturity or
acceleration by the Holders thereof because of a default and the total amount of
such Indebtedness unpaid or accelerated exceeds $5.0 million; (v) certain events
of bankruptcy, insolvency or reorganization of the Company or any Significant
Subsidiary; and (vi) the rendering of any judgments or decrees for the payment
of money in excess of $5.0 million.
If an Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of the Securities then outstanding
may declare all the Securities to be due and payable. Certain events of
bankruptcy or insolvency are Events of Default which will result in the
Securities being due and payable immediately upon the occurrence of such Events
of Default.
Securityholders may not enforce the Indenture or the Securities except
as provided in the Indenture. The Trustee
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may refuse to enforce the Indenture or the Securities unless it receives
reasonable indemnity or security. Subject to certain limitations, Holders of a
majority in principal amount of the Securities may direct the Trustee in its
exercise of any trust or power. The Trustee may withhold from Securityholders
notice of any continuing Default (except a Default in payment of principal or
interest) if it determines that withholding notice is in the interest of the
Holders.
16. Trustee Dealings with the Company
Subject to certain limitations imposed by the TIA, the Trustee under
the Indenture, in its individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with and collect obligations owed
to it by the Company or any of its Affiliates and may otherwise deal with the
Company or any of its Affiliates with the same rights it would have if it were
not Trustee.
17. No Recourse Against Others
No recourse for the payment of the principal of, premium, if any, or
interest on any of the Securities or for any claim based thereon or otherwise in
respect thereof, and no recourse under or upon any obligation, covenant or
agreement of the Company in the Indenture, or in any of the Securities or
because of the creation of any Indebtedness represented hereby and thereby,
shall be had against any incorporator, stockholder, officer, director, employee
or controlling person of the Company, a Subsidiary Guarantor or any Successor
Person thereof. Each Holder, by accepting a Security, waives and releases all
such liability.
18. Guarantees
This Security will be entitled to the benefits of certain Guarantees,
if any, made for the benefit of the Holders. Reference is hereby made to the
Indenture for a statement of the respective rights, limitations of rights,
duties and obligations thereunder of the Subsidiary Guarantors, the Trustee and
the Holders.
19. Governing Law
The Indenture and the Securities shall be governed by, and construed
in accordance with, the laws of the State of
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New York without giving effect to applicable principles of conflict of laws to
the extent that the application of the laws of another jurisdiction would be
required thereby.
20. Authentication
This Security shall not be valid until an authorized signatory of the
Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.
21. Abbreviations
Customary abbreviations may be used in the name of a Securityholder or
an assignee, such as TEN COM (= tenants in common), TEN ENT (= tenants by the
entireties), JT TEN (= joint tenants with rights of survivorship and not as
tenants in common), CUST (= custodian), and U/G/M/A (= Uniform Gift to Minors
Act).
22. CUSIP Numbers
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures the Company has caused CUSIP numbers to be
printed on the Securities and have directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Securityholders. No representation is
made as to the accuracy of such numbers either as printed on the Securities or
as contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
The Company will furnish to any Securityholder upon written request
and without charge to the Securityholder a copy of the Indenture. Requests may
be made as follows:
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If to the Company:
Oxford Automotive, Inc.
2365 Franklin Road
Bloomfield Hills, Michigan 48203
Attention: Secretary
If to the Trustee:
First Trust National Association
Buhl Building, Suite 740
535 Griswold Street
Detroit, MI 48226
Attention: Corporate Trust Trustee Administration
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ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
_____________________________________________________________
(Print or type assignee's name, address and zip code)
_____________________________________________________________
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint __________ agent to transfer this Security on
the books of the Company. The agent may substitute another to act for
him.
Date: _______________ Your Signature: _______________
Sign exactly as your name appears
on the other side of this Security.
Signature Guarantee: _______________
(Signature must be guaranteed)
In connection with any transfer of this Security occurring
prior to the date which is the earlier of (i) the date of the
declaration by the Commission of the effectiveness of a registration
statement under the Securities Act of 1933, as amended (the "Securities
Act") covering resales of this Security (which effectiveness shall not
have been suspended or terminated at the date of the transfer) and (ii)
[ ], the undersigned confirms that it has not utilized any
general solicitation or general advertising in connection with the
transfer:
[Check One]
(1) __ to the Company or a subsidiary thereof; or
(2) __ pursuant to and in compliance with Rule 144A under the
Securities Act of 1933, as amended; or
(3) __ to an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securi-
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<PAGE> 132
ties Act of 1933, as amended) that has furnished to the Trustee a
signed letter containing certain representations and agreements (the
form of which letter can be obtained from the Trustee); or
(4) __ outside the United states to a "foreign person" in compliance with
Rule 904 of Regulation S under the Securities Act of 1933, as
amended; or
(5) __ pursuant to the exemption from registration provided by Rule 144
under the Securities Act of 1933, as amended; or
(6) __ pursuant to an effective registration statement under the Securities
Act of 1933, as amended; or
(7) __ pursuant to another available exemption from the registration
requirements of the Securities Act of 1933, as amended.
and unless the box below is checked, the undersigned confirms that such Note is
not being transferred to an "affiliate" of the Company as defined in Rule 144
under the Securities Act of 1933, as amended (an "Affiliate"):
[ ] The transferee is an Affiliate of the Company.
Unless one of the items is checked, the Trustee will refuse to
register any of the Securities evidenced by this certificate in the name of any
person other than the registered Holder thereof; provided, however, that if item
(3), (4), (5) or (7) is checked, the Company or the Trustee may require, prior
to registering any such transfer of the Securities, in their sole discretion,
such written legal opinions, certifications (including an investment letter in
the case of box (3) or (4)) and other information as the Trustee or the Company
has reasonably requested to confirm that such transfer is being made pursuant to
an exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act of 1933, as amended.
If none of the foregoing items are checked, the Trustee or Registrar
shall not be obligated to register this Security in the name of any person other
than the Holder hereof unless and until the conditions to any such transfer of
registra-
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tion set forth herein and in Section 2.14 of the Indenture shall have been
satisfied.
Dated: ____________________ Signed: _____________________________
(Sign exactly as name appears
on the otherside of this
Security)
Signature Guarantee: _______________________________________
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<PAGE> 134
TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED
The undersigned represents and warrants that it is purchasing this
Security for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, as amended and is aware that the sale to it is being made in reliance on
Rule 144A and acknowledges that it has received such information regarding the
Issuer as the undersigned has requested pursuant to Rule 144A or has determined
not to request such information and that it is aware that the transferor is
relying upon the undersigned's foregoing representations in order to claim the
exemption from registration provided by Rule 144A.
Dated: ______________ ________________________________________________
NOTICE: To be executed by an executive officer
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OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.6 or 4.8 of the Indenture, check the box:
If you want to elect to have only part of this Security purchased by
the Company pursuant to Section 4.6 or 4.8 of the Indenture, state the
amount: $
Date: ______________ Your Signature: ______________________
(Sign exactly as your name appears on
the other side of the Security)
Signature Guarantee: ________________________________________________________
(Signature must be guaranteed)
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<PAGE> 136
EXHIBIT B
FACE OF SECURITY
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW
YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. TRANSFERS OF THIS GLOBAL
SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF
DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND LIMITED TO
TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE
REFERRED TO ON THE REVERSE HEREOF.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN
DEFINITIVE FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE
DEPOSITORY TO A NOMINEE OF THE DEPOSITORY, OR BY ANY SUCH NOMINEE OF THE
DEPOSITORY, OR BY THE DEPOSITORY OR NOMINEE OF SUCH SUCCESSOR DEPOSITORY OR ANY
SUCH NOMINEE TO A SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITORY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO AN ISSUER OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE
LIMITED TO
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TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN SECTION 2.14 OF
THE INDENTURE.
B-2
<PAGE> 138
No.
$125,000,000
10 1/8% Senior Subordinated Notes Due 2007
CUSIP No.
OXFORD AUTOMOTIVE INC., a Michigan corporation, promises to pay to
Cede & Co., or registered assigns, the principal sum of One Hundred Twenty-Five
Million Dollars on June 15, 2007.
Interest Payment Dates: June 15 and December 15.
Record Dates: June 1 and December 1.
Additional provisions of this Security are set forth on the reverse
side of this Security.
IN WITNESS WHEREOF, the Company has caused this Security to be signed
manually or by facsimile by its duly authorized officers.
OXFORD AUTOMOTIVE INC.
By:______________________________
Name:
Title:
Dated: June 24, 1997
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
First Trust National Association, as Trustee, certifies that this is one of the
Securities referred to in the within-mentioned Indenture.
By: FIRST TRUST
NATIONAL ASSOCIATION,
as Trustee
_________________________________
Authorized Signatory
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<PAGE> 139
Date of Authentication:
June 24, 1997
B-4
<PAGE> 140
REVERSE OF SECURITY
10 1/8% SENIOR SUBORDINATED NOTE DUE 2007
1. Interest
OXFORD AUTOMOTIVE INC., a Michigan corporation (such entity, and its
successors and assigns under the Indenture hereinafter referred to, and each
other entity which is required to become the Company pursuant to the Indenture,
and its successors and assigns under the Indenture, being herein called the
"Company"), promises to pay interest on the principal amount of this Security at
the rate per annum shown above. The Company will pay interest semiannually on
June 15 and December 15 of each year, commencing December 15, 1997. Interest on
the Securities will accrue from the most recent date on which interest has been
paid or, if no interest has been paid, from, June 24, 1997. Interest will be
computed on the basis of a 360-day year of twelve 30-day months. The Company
shall pay interest on overdue principal at 1% per annum in excess of the rate
borne by the Securities, and it shall pay interest on overdue installments of
interest at the same rate to the extent lawful.
2. Method of Payment
The Company will pay interest on the Securities (except defaulted
interest) to the Persons who are registered holders of Securities at the close
of business on the record date immediately preceding the interest payment date
even if Securities are canceled on registration of transfer or registration of
exchange (including pursuant to an Exchange Offer (as defined in the applicable
Registration Agreement)) after the record date. Holders must surrender
Securities to a Paying Agent to collect principal payments. The Company will
pay principal and interest in money of the United States that at the time of
payment is legal tender for payment of public and private debts ("U.S. Legal
Tender"). However, the Company may pay principal and interest by its check
payable in such U.S. Legal Tender. The Company may deliver any such interest
payment to the Paying Agent or to a Holder's registered address.
3. Paying Agent and Registrar
Initially, First Trust National Association, a National banking
corporation ("Trustee"), will act as Paying
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<PAGE> 141
Agent and Registrar. The Company may appoint and change any Paying Agent,
Registrar or co-registrar without notice. The Company may act as Paying Agent,
Registrar, co-Registrar or transfer agent.
4. Indenture
The Company issued the Securities under an Indenture dated as of June
15, 1997 (the "Indenture"), among the Company, the Subsidiary Guarantors and the
Trustee. This Security is one of a duly authorized issue of Unrestricted
Securities of the Company designated as its 10 1/8% Senior Subordinated Notes
due 2007 (the "Unrestricted Securities"). The Securities include the 10 1/8%
Senior Subordinated Notes due 2007 (the "Initial Securities"), the Exchange
Securities (as defined in the Indenture) and the Unrestricted Securities, as
defined below issued in exchange for the Initial Securities pursuant to the
Registration Agreement or, with respect to the Initial Securities issued under
the Indenture subsequent to the Issue Date, a registration agreement
substantially identical to the Registration Agreement with the Initial
Purchasers. The Initial Securities and the Unrestricted Securities are treated
as a single class of securities under the Indenture. The terms of the
Securities include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. Section
77aaa-77bbbb) as in effect on the date of the Indenture (the "TIA"). Terms
defined in the Indenture and not defined herein have the meanings ascribed
thereto in the Indenture. The Securities are subject to all such terms, and
Securityholders are referred to the Indenture and the TIA for a statement of
those terms. Any conflict between this Security and the Indenture will be
governed by the Indenture.
The Securities are unsecured senior subordinated obligations of the
Company limited to $160,000,000 aggregate principal amount (subject to Section
2.7 of the Indenture). The Indenture imposes certain limitations on the
Incurrence of Indebtedness by the Company and its Restricted Subsidiaries, the
existence of liens, the payment of dividends on, and redemption of, the Capital
Stock of the Company and its Subsidiaries, restricted payments, the sale or
transfer of assets and Subsidiary stock, the issuance or sale of Capital Stock
of Restricted Subsidiaries, the investments of the Company and its Restricted
Subsidiaries, consolidations, mergers and transfers of all or substantially all
the assets of the Company, and transactions with Affiliates. In addition, the
Indenture lim-
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its the ability of the Company and certain of its Subsidiaries to restrict
distributions and dividends from Restricted Subsidiaries.
To guarantee the due and punctual payment of the principal, premium and
interest, if any, on the Securities and all other amounts payable by the
Company under the Indenture and the Securities when and as the same shall be
due and payable, whether at maturity, by acceleration or otherwise, according
to the terms of the Securities and the Indenture, the Subsidiary Guarantors
have unconditionally guaranteed the Obligations on a senior subordinated basis
pursuant to the terms of the Indenture.
5. Optional Redemption
Except as set forth in the next paragraph, the Securities may not be
redeemed prior to June 15, 2002. Thereafter, the Securities will be redeemable,
at the Company's option, in whole or in part, at any time or from time to time,
at the following redemption prices (expressed in percentages of principal
amount), plus accrued and unpaid interest to the redemption date (subject to the
right of Holders of record on the relevant record date to receive interest due
on the relevant interest payment date) if redeemed during the 12-month period
commencing on June 15 of the years set forth below:
Period Percentage
------ ----------
2002........................ 105.063%
2003........................ 103.375%
2004........................ 101.688%
2005 and thereafter......... 100.000%
In addition, at any time and from time to time prior to June 15, 2000,
the Company may redeem in the aggregate up to 35% of the original principal
amount of the Securities with the proceeds of one or more Public Equity
Offerings following which there is a Public Market, at a redemption price
(expressed as a percentage of principal amount) of 110.125% plus accrued and
unpaid interest, if any, to the redemption date (subject to the right of Holders
of record on the relevant record date to receive interest due on the relevant
interest payment date); provided, however, that at least 65% of the original
aggregate principal amount of the Securities must remain outstanding after each
such redemption.
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<PAGE> 143
6. Notice of Redemption
Notice of redemption will be mailed by first-class mail at least 30
days but not more than 60 days before the redemption date to each Holder of
Securities to be redeemed at his registered address. Securities in
denominations larger than $1,000 may be redeemed in part but only in whole
multiples of $1,000. If money sufficient to pay the redemption price of and
accrued interest on all Securities (or portions thereof) to be redeemed on the
redemption date is deposited with the Paying Agent on or before the redemption
date and certain other conditions are satisfied, on and after such date interest
ceases to accrue on such Securities (or such portions thereof) called for
redemption. If a notice or communication is sent in the manner provided in the
Indenture, it is duly given, whether or not the addressee receives it. Failure
to send a notice or communication to a Securityholder or any defect in it shall
not affect its sufficiency with respect to other Securityholders.
In addition, in the event of certain Asset Dispositions, the Company
will be required to make an offer to purchase Securities at a purchase price of
100% of their principal amount plus accrued interest to the date of purchase
(subject to the rights of Holders of record on the relevant record date to
receive interest due on the relevant interest payment date) as provided in, and
subject to the terms of, the Indenture.
7. Change of Control
Upon a Change of Control, each Holder of Securities will have the
right to require the Company to repurchase all or any part of the Securities of
such Holder at a repurchase price in cash equal to 101% of the principal amount
of the Securities to be repurchased plus accrued and unpaid interest to the date
of repurchase (subject to the right of Holders of record on the relevant record
date to receive interest due on the related interest payment date) as provided
in, and subject to the terms of, the Indenture.
8. Subordination
The Securities are subordinated to Senior Indebtedness of the Company,
as defined in the Indenture. To the extent provided in the Indenture, Senior
Indebtedness of the Company must be paid before the Securities may be paid. In
addition, each Subsidiary Guaranty is subordinated to Senior In-
B-8
<PAGE> 144
debtedness of the relevant Subsidiary Guarantor, as defined in the Indenture.
The Company and each Subsidiary Guarantor agrees, and each Holder by accepting a
Security agrees, to the subordination provisions contained in the Indenture and
authorizes the Trustee to give it effect and appoints the Trustee as
attorney-in-fact for such purpose.
9. Denominations; Transfer; Exchange
The Securities are in registered form, without coupons, and in
denominations of $1,000 and integral multiples of $1,000. A Holder may transfer
or exchange Securities in accordance with the Indenture. The Registrar may
require a Holder, among other things, to furnish appropriate endorsements or
transfer documents and to pay any taxes and fees required by law or permitted by
the Indenture, including any transfer tax or other similar governmental charge
payable in connection therewith. The Registrar need not register the transfer
of or exchange any Securities selected for redemption (except, in the case of a
Security to be redeemed in part, the portion of the Security not to be redeemed)
or any Securities for a period of 15 days before a selection of Securities to be
redeemed or 15 days before an interest payment date.
10. Persons Deemed Owners
The registered Holder of this Security may be treated as the owner of
it for all purposes.
11. Unclaimed Money
If money for the payment of principal or interest remains unclaimed
for two years, the Trustee or Paying Agent shall pay the money back to the
Company at its written request unless an abandoned property law designates
another Person. After any such payment, Holders entitled to the money must look
only to the Company and not to the Trustee for payment.
12. Discharge and Defeasance
Subject to certain conditions, the Company at any time may terminate
some or all of its obligations under the Securities and the Indenture if the
Company deposits with the Trustee money or U.S. Government Obligations for the
payment of principal and interest on the Securities to redemption or maturity,
as the case may be.
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<PAGE> 145
13. Amendment, Waiver
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Securities may be amended with the consent of the Holders of at
least a majority in principal amount outstanding of the Securities and (ii) any
past default or compliance with any provision may be waived with the consent of
the Holders of a majority in principal amount outstanding of the Securities.
Subject to certain exceptions set forth in the Indenture, without the consent of
any Securityholder, the Company, the Subsidiary Guarantors and the Trustee may
amend the Indenture or the Securities to cure any ambiguity, omission, defect or
inconsistency, to comply with Article 5 of the Indenture, to provide for
uncertificated Securities in addition to or in place of certificated Securities,
to add guarantees with respect to the Securities, to secure the Securities, to
add additional covenants or surrender rights and powers conferred on the
Company, to make any change that does not adversely affect the rights of any
Securityholder or to comply with any request of the SEC in connection with
qualifying the Indenture under the TIA.
14. Defaults and Remedies
Under the Indenture, Events of Default include (i) default for 30 days
in payment of interest on the Securities; (ii) default in payment of principal
on any Security when due at its Stated Maturity, upon redemption pursuant to
paragraphs 5 or 6 above, upon required repurchase, upon acceleration or
otherwise, (iii) failure by the Company to comply with Article 5 of the
Indenture; (iv) failure by the Company to comply with other agreements in the
Indenture or the Securities, in certain cases subject to notice and lapse of
time; (iv) failure by the Company or any Significant Subsidiary to pay any
Indebtedness within any applicable grace period after final maturity or
acceleration by the Holders thereof because of a default and the total amount of
such Indebtedness unpaid or accelerated exceeds $5.0 million; (v) certain events
of bankruptcy, insolvency or reorganization of the Company or any Significant
Subsidiary; and (vi) the rendering of any judgments or decrees for the payment
of money in excess of $5.0 million.
If an Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of the Securities then outstanding
may declare all the Securities to be due and payable. Certain events of
bankruptcy or insol-
B-10
<PAGE> 146
vency are Events of Default which will result in the Securities being due and
payable immediately upon the occurrence of such Events of Default.
Securityholders may not enforce the Indenture or the Securities except
as provided in the Indenture. The Trustee may refuse to enforce the Indenture
or the Securities unless it receives reasonable indemnity or security. Subject
to certain limitations, Holders of a majority in principal amount of the
Securities may direct the Trustee in its exercise of any trust or power. The
Trustee may withhold from Securityholders notice of any continuing Default
(except a Default in payment of principal or interest) if it determines that
withholding notice is in the interest of the Holders.
15. Trustee Dealings with the Company
Subject to certain limitations imposed by the TIA, the Trustee under
the Indenture, in its individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with and collect obligations owed
to it by the Company or any of its Affiliates and may otherwise deal with the
Company or any of its Affiliates with the same rights it would have if it were
not Trustee.
16. No Recourse Against Others
No recourse for the payment of the principal of, premium, if any, or
interest on any of the Securities or for any claim based thereon or otherwise in
respect thereof, and no recourse under or upon any obligation, covenant or
agreement of the Company in the Indenture, or in any of the Securities or
because of the creation of any Indebtedness represented hereby and thereby,
shall be had against any incorporator, stockholder, officer, director, employee
or controlling person of the Company, a Subsidiary Guarantor or any Successor
Person thereof. Each Holder, by accepting a Security, waives and releases all
such liability.
17. Guarantees
This Security will be entitled to the benefits of certain Guarantees,
if any, made for the benefit of the Holders. Reference is hereby made to the
Indenture for a statement of the respective rights, limitations of rights,
duties and ob-
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<PAGE> 147
ligations thereunder of the Subsidiary Guarantors, the Trustee and the Holders.
18. Governing Law
The Indenture and the Securities shall be governed by, and construed
in accordance with, the laws of the State of New York without giving effect to
applicable principles of conflict of laws to the extent that the application of
the laws of another jurisdiction would be required thereby.
19. Authentication
This Security shall not be valid until an authorized signatory of the
Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.
20. Abbreviations
Customary abbreviations may be used in the name of a Securityholder or
an assignee, such as TEN COM (= tenants in common), TEN ENT (= tenants by the
entireties), JT TEN (= joint tenants with rights of survivorship and not as
tenants in common), CUST (= custodian), and U/G/M/A (= Uniform Gift to Minors
Act).
21. CUSIP Numbers
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures the Company has caused CUSIP numbers to be
printed on the Securities and have directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Securityholders. No representation is
made as to the accuracy of such numbers either as printed on the Securities or
as contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
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<PAGE> 148
The Company will furnish to any Securityholder upon written request
and without charge to the Securityholder a copy of the Indenture. Requests may
be made as follows:
If to the Company:
Oxford Automotive, Inc.
2365 Franklin Road
Bloomfield Hills, Michigan 48203
Attention: Secretary
If to the Trustee:
First Trust National Association
Buhl Building, Suite 740
535 Griswold Street
Detroit, MI 48226
Attention: Corporate Trust Trustee Administration
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<PAGE> 149
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
_____________________________________________________________
(Print or type assignee's name, address and zip code)
_____________________________________________________________
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint __________ agent to transfer this Security on
the books of the Company. The agent may substitute another to act
for him.
Date: _______________ Your Signature: _______________
Sign exactly as your name appears on
the other side of this Security.
Signature Guarantee: _____________________
(Signature must be guaranteed)
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<PAGE> 150
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.6 or 4.8 of the Indenture, check the box: [ ]
If you want to elect to have only part of this Security purchased by
the Company pursuant to Section 4.6 or 4.8 of the Indenture, state the
amount: $
Date: ______________ Your Signature: _______________
(Sign exactly as your name appears on the
other side of the Security)
Signature Guarantee: ________________________________________________
(Signature must be guaranteed)
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<PAGE> 151
EXHIBIT C
Form of Certificate To Be
Delivered in Connection with
Transfers to Non-QIB Accredited Investors
[ ], [ ]
[ ]
[ ]
[ ]
Ladies and Gentlemen:
In connection with our proposed purchase of 10 1/8% Senior
Subordinated Notes due 2007 (the "Securities") of Oxford Automotive, Inc., a
Michigan corporation (the "Company"), we confirm that:
1. We have received a copy of the Offering Memorandum (the "Offering
Memorandum"), dated June 19, 1997, relating to the Securities and such
other information as we deem necessary in order to make our investment
decision. We acknowledge that we have read and agreed to the matters
stated in the section entitled "Notice to Investors" of such Offering
Memorandum.
2. We understand that any subsequent transfer of the Securities is
subject to certain restrictions and conditions set forth in the Indenture
relating to the Securities (the "Indenture") as described in the Offering
Memorandum and the undersigned agrees to be bound by, and not to resell,
pledge or otherwise transfer the Securities except in compliance with, such
restrictions and conditions and the Securities Act of 1933, as amended (the
"Securities Act"), and all applicable State securities laws.
3. We understand that the offer and sale of the Securities have not
been registered under the Securities Act, and that the Securities may not
be offered or sold within the United States or to, or for the account or
benefit of, U.S. persons except as permitted in the following sentence. We
agree, on our own behalf and on behalf of any accounts for which we are
acting as hereinaf-
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<PAGE> 152
ter stated, that if we should sell any Securities, we will do so only (i)
to the Company or any subsidiary thereof, (ii) inside the United States in
accordance with Rule 144A under the Securities Act to a "qualified
institutional buyer" (as defined in Rule 144A promulgated under the
Securities Act), (iii) inside the United States to an institutional
"accredited investor" (as defined below) that, prior to such transfer,
furnishes (or has furnished on its behalf by a U.S. broker-dealer) to the
Trustee (as defined in the Indenture) a signed letter containing certain
representations and agreements relating to the restrictions on transfer of
the Securities (the form of which letter can be obtained from the Trustee),
(iv) outside the United States in accordance with Rule 904 of Regulation S
promulgated under the Securities Act to non-U.S. persons, (v) pursuant to
the exemption from registration provided by Rule 144 under the Securities
Act (if available), or (vi) pursuant to an effective registration statement
under the Securities Act, and we further agree to provide to any person
purchasing any of the Securities from us a notice advising such purchaser
that resales of the Securities are restricted as stated herein.
4. We understand that, on any proposed resale of any Securities, we
will be required to furnish to the Trustee and the Company such
certification, legal opinions and other information as the Trustee and the
Company may reasonably require to confirm that the proposed sale complies
with the foregoing restrictions. We further understand that the Securities
purchased by us will bear a legend to the foregoing effect.
5. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and
have such knowledge and experience in financial and business matters as to
be capable of evaluating the merits and risks of our investment in the
Securities, and we and any accounts for which we are acting are each able
to bear the economic risk of our or their investment, as the case may be.
6. We are acquiring the Securities purchased by us for our account or
for one or more accounts (each of which is an institutional "accredited
investor") as to each of which we exercise sole investment discretion.
C-2
<PAGE> 153
You, the Company, the Trustee and others are entitled to rely upon
this letter and are irrevocably authorized to produce this letter or a copy
hereof to any interested party in any administrative or legal proceeding or
official inquiry with respect to the matters covered hereby.
Very truly yours,
[Name of Transferee]
By: ______________________________
Name:
Title:
C-3
<PAGE> 154
EXHIBIT D
Form of Certificate To Be Delivered
in Connection with Transfers
Pursuant to Regulation S
[ ], [ ]
[ ]
[ ]
[ ]
[ ]
Re: Oxford Automotive, Inc. (the "Company")
10 1/8% Senior Subordinated Notes due 2007 (the "Securities")
Ladies and Gentlemen:
In connection with our proposed sale of $[ ] aggregate
principal amount of the Securities, we confirm that such sale has been effected
pursuant to and in accordance with Regulation S under the U.S. Securities Act of
1933, as amended (the "Securities Act"), and, accordingly, we represent that:
(1) the offer of the Securities was not made to a person in the United
States;
(2) either (a) at the time the buy offer was originated, the
transferee was outside the United States or we and any person acting on our
behalf reasonably believed that the transferee was outside the United
States, or (b) the transaction was executed in, on or through the
facilities of a designated off-shore securities market and neither we nor
any person acting on our behalf knows that the transaction has been
pre-arranged with a buyer in the United States;
(3) no directed selling efforts have been made in the United States in
contravention of the requirements of Rule 903(b) or Rule 904(b) of
Regulation S, as applicable;
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act; and
D-1
<PAGE> 155
(5) we have advised the transferee of the transfer restrictions
applicable to the Securities.
You, the Company and counsel for the Company are entitled to rely upon
this letter and are irrevocably authorized to produce this letter or a copy
hereof to any interested party in any administrative or legal proceedings or
official inquiry with respect to the matters covered hereby. Terms used in this
certificate have the meanings set forth in Regulation S.
Very truly yours,
[Name of Transferor]
By: ________________________________
Authorized Signature
D-2
<PAGE> 156
EXHIBIT E
GUARANTEE
For value received, the undersigned hereby unconditionally guarantees,
as principal obligor and not only as a surety, to the Holder of this Security
the cash payments in United States dollars of principal of, premium, if any, and
interest on this Security (and including Additional Interest payable thereon) in
the amounts and at the times when due and interest on the overdue principal,
premium, if any, and interest, if any, of this Security, if lawful, and the
payment or performance of all other obligations of the Company under the
Indenture (as defined below) or the Securities, to the Holder of this Security
and the Trustee, all in accordance with and subject to the terms and limitations
of this Security, Article Eleven of the Indenture and this Guarantee. This
Guarantee will become effective in accordance with Article Eleven of the
Indenture and its terms shall be evidenced therein. The validity and
enforceability of any Guarantee shall not be affected by the fact that it is not
affixed to any particular Security. Capitalized terms used but not defined
herein shall have the meanings ascribed to them in the Indenture dated as of
June 24, 1997, among Oxford Automotive, Inc., a Michigan corporation, as issuer
(the "Company"), each of the Subsidiary Guarantors named therein and First Trust
National Association, as trustee (the "Trustee"), as amended or supplemented
(the "Indenture").
The obligations of the undersigned to the Holders of Securities and to
the Trustee pursuant to this Guarantee and the Indenture are expressly set forth
in Article Eleven of the Indenture and reference is hereby made to the Indenture
for the precise terms of the Guarantee and all of the other provisions of the
Indenture to which this Guarantee relates.
THIS GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO PRINCIPLES OF
CONFLICTS OF LAW. Each Guarantor hereby agrees to submit to the jurisdiction of
the courts of the State of New York in any action or proceeding arising out of
or relating to this Guarantee.
This Guarantee is subject to release upon the terms set forth in the
Indenture.
E-1
<PAGE> 157
IN WITNESS WHEREOF, each Guarantor has caused its Guarantee to be duly
executed.
By:____________________
BMG NORTH AMERICA LIMITED
By: _______________________________
Name:
Title:
LOBDELL EMERY CORPORATION
By: _______________________________
Name:
Title:
WINCHESTER FABRICATION CORPORATION
By: _______________________________
Name:
Title:
CREATIVE FABRICATION CORPORATION
By: ________________________________
Name:
Title:
E-2
<PAGE> 158
PARALLEL GROUP INTERNATIONAL, INC.
By: _______________________________
Name:
Title:
CONCEPT MANAGEMENT CORPORATION
By: ______________________________
Name:
Title:
LEWIS EMERY CAPITAL CORPORATION
By: _______________________________
Name:
Title:
E-3
<PAGE> 159
LASERWELD INTERNATIONAL L.L.C.
By: _________________________________
Name:
Title:
BMG HOLDINGS, INC.
By: _________________________________
Name:
Title:
By: _________________________________
Name:
Title:
E-4
<PAGE> 160
EXHIBIT F
FORM OF SUPPLEMENTAL INDENTURE
SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated as of
_______________, among [Subsidiary Guarantors] (the "New Subsidiary Guarantor"),
a subsidiary of Oxford Automotive, Inc. (or its successor), a Michigan
corporation (the "Company"), OXFORD AUTOMOTIVE, INC., the Subsidiary Guarantors
(the "Existing Subsidiary Guarantors") under the Indenture referred to below,
and FIRST TRUST NATIONAL ASSOCIATION, a national banking corporation, as trustee
under the Indenture referred to below (the "Trustee").
W I T N E S S E T H :
WHEREAS the Company has heretofore executed and delivered to the
Trustee an Indenture (as such may be amended from time to time, the
"Indenture"), dated as of June 24, 1997, providing for the issuance of an
aggregate principal amount of $160,000,000 of 10 1/8% Senior Subordinated Notes
due 2007 (the "Securities");
WHEREAS Section 4.14 of the Indenture provides that under certain
circumstances the Company is required to cause the New Subsidiary Guarantor to
execute and deliver to the Trustee a supplemental indenture pursuant to which
the New Subsidiary Guarantor shall unconditionally guarantee all of the
Company's obligations under the Securities pursuant to a Subsidiary Guaranty on
the terms and conditions set forth herein; and
WHEREAS pursuant to Section 9.1 of the Indenture, the Trustee, the
Company and Existing Subsidiary Guarantors are authorized to execute and deliver
this Supplemental Indenture;
NOW THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt of which is hereby acknowledged, the New
Subsidiary Guarantor, the Company, the Existing Subsidiary Guarantors and the
Trustee mutually covenant and agree for the equal and ratable benefit of the
holders of the Securities as follows:
F-1
<PAGE> 161
1. Definitions. (a) Capitalized terms used herein without definition
shall have the meanings assigned to them in the Indenture.
(b) For all purposes of this Supplemental Indenture, except as
otherwise herein expressly provided or unless the context otherwise requires:
(i) the terms and expressions used herein shall have the same meanings as
corresponding terms and expressions used in the Indenture; and (ii) the words
"herein," "hereof" and "hereby" and other words of similar import used in this
Supplemental Indenture refer to this Supplemental Indenture as a whole and not
to any particular section hereof.
2. Agreement to Guarantee. The New Subsidiary Guarantor hereby
agrees, jointly and severally with all other Subsidiary Guarantors, to guarantee
the Company's obligations under the Securities on the terms and subject to the
conditions set forth in Article 11 of the Indenture and to be bound by all other
applicable provisions of the Indenture. From and after the date hereof, the New
Subsidiary Guarantor shall be a Subsidiary Guarantor for all purposes under the
Indenture and the Securities.
3. Ratification of Indenture; Supplemental Indentures Part of
Indenture. Except as expressly amended hereby, the Indenture is in all respects
ratified and confirmed and all the terms, conditions and provisions thereof
shall remain in full force and effect. This Supplemental Indenture shall form a
part of the Indenture for all purposes, and every holder of Securities
heretofore or hereafter authenticated and delivered shall be bound hereby.
4. Governing Law. THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT
GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT
THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
5. Trustee Makes No Representation. The Trustee makes no
representation as to the validity or sufficiency of this Supplemental Indenture.
6. Counterparts. The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy
F-2
<PAGE> 162
shall be an original, but all of them together represent the same agreement.
7. Effect of Headings. The Section headings herein are for
convenience only and shall not affect the construction thereof.
F-3
<PAGE> 163
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed as of the date first above written.
[NEW SUBSIDIARY GUARANTOR]
By:______________________________
Name:
Title:
OXFORD AUTOMOTIVE, INC.
By:______________________________
Name:
Title:
[SUBSIDIARY GUARANTORS]
By:______________________________
Name:
Title:
FIRST TRUST NATIONAL ASSOCIATION, as
Trustee
By:______________________________
Name:
Title:
F-4
<PAGE> 1
EXHIBIT 4.2
Execution Copy
OXFORD AUTOMOTIVE, INC.
------------------------------------------
CREDIT AGREEMENT
dated as of June 24, 1997
------------------------------------------
THE BORROWING SUBSIDIARIES PARTY HERETO,
THE LENDERS PARTY HERETO
and
NBD BANK, as Agent
ARRANGED BY FIRST CHICAGO CAPITAL MARKETS, INC.
<PAGE> 2
<TABLE>
<CAPTION>
Article Page
- ------- ----
<S> <C> <C>
I. DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Certain Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Other Definitions; Rules of Construction . . . . . . . . . . . . . . . . . . . . . . . . . 18
II. THE COMMITMENTS, THE SWINGLINE FACILITY
AND THE ADVANCES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
2.1 Commitment of the Lenders and Canadian and
Swingline Facility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
2.2 Termination and Reduction of Commitments . . . . . . . . . . . . . . . . . . . . . . . . . 21
2.3 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
2.4 Disbursement of Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
2.5 Conditions for First Disbursement . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
2.6 Further Conditions for Disbursement . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
2.7 Subsequent Elections as to Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . 27
2.8 Limitation of Requests and Elections . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
2.9 Minimum Amounts; Limitation on Number of Borrowings; Etc. . . . . . . . . . . . . . . . . 28
2.10 Borrowing Base Adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
2.11 Security and Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
III. PAYMENTS AND PREPAYMENTS OF ADVANCES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
3.1 Principal Payments and Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
3.2 Interest Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
3.3 Letters of Credit and Acceptances . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
3.4 Additional Terms of Acceptances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
3.5 Payment Method . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
3.6 No Setoff or Deduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
3.7 Payment on Non-Business Day; Payment Computations . . . . . . . . . . . . . . . . . . . . 35
3.8 Additional Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
3.9 Illegality and Impossibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
3.10 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
3.11 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
3.12 Substitution of Lender . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
IV. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
4.1 Corporate Existence and Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
4.2 Corporate Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
4.3 Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
4.4 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
4.5 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
4.6 Financial Condition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
4.7 Use of Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
4.8 Consents, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
4.9 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
4.10 Title to Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
4.11 Borrowing Base . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
4.12 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
4.13 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
4.14 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
4.15 Solvency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
4.16 No Defaults under Certain Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
</TABLE>
i
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<TABLE>
<S> <C> <C>
4.17 Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
4.18 Preferred Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
4.19 Investment Company Act; Other Regulations . . . . . . . . . . . . . . . . . . . . . . . . 42
4.20 Subordinated Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
4.21 Unrestricted Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
V. COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
5.1 Affirmative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
(a) Preservation of Corporate Existence, Etc. . . . . . . . . . . . . . . . . . . . . 43
(b) Compliance with Laws, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
(c) Maintenance of Properties; Insurance . . . . . . . . . . . . . . . . . . . . . . 43
(d) Reporting Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
(e) Accounting; Access to Records, Books, Etc. . . . . . . . . . . . . . . . . . . . 45
(f) Maintenance of Business Lines . . . . . . . . . . . . . . . . . . . . . . . . . . 46
(g) Additional Security and Collateral . . . . . . . . . . . . . . . . . . . . . . . 46
(h) Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
5.2 Negative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
(a) Net Worth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
(b) Total Debt to EBITDA Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
(c) Fixed Charge Coverage Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
(d) Interest Coverage Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
(e) Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
(f) Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
(g) Merger; Acquisitions; Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
(h) Disposition of Assets; Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
(i) Nature of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
(j) Dividends and Other Restricted Payments . . . . . . . . . . . . . . . . . . . . . 50
(k) Capital Expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
(l) Loans, Advances and Investments . . . . . . . . . . . . . . . . . . . . . . . . . 50
(m) Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . 50
(n) Sale and Leaseback Transactions . . . . . . . . . . . . . . . . . . . . . . . . . 51
(o) Negative Pledge Limitation . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
(p) FSC Commissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
(q) Inconsistent Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
(r) Subsidiary Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
(s) Preferred Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
(t) Other Indebtedness and Agreements . . . . . . . . . . . . . . . . . . . . . . . . 52
(u) Management Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
(v) Restricted Subsidiaries.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
5.3 Additional Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
VI. DEFAULT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
6.1 Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
(a) Nonpayment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
(b) Misrepresentation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
(c) Certain Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
(d) Other Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
(e) Cross Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
(f) Judgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
(g) ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
(h) Insolvency, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
(i) Security Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
(j) Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
6.2 Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
</TABLE>
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<TABLE>
<S> <C> <C>
6.3 Distribution of Proceeds of Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . 55
VII. THE AGENT AND THE LENDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
7.1 Appointment and Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
7.2 Agent and Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
7.3 Scope of Agent's Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
7.4 Reliance by Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
7.5 Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
7.6 Liability of Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
7.7 Nonreliance on Agent and Other Lenders . . . . . . . . . . . . . . . . . . . . . . . . . . 58
7.8 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
7.9 Successor Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
7.10 Sharing of Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
VIII. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
8.1 Amendments, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
8.2 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
8.3 No Waiver By Conduct; Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . . . 61
8.4 Reliance on and Survival of Various Provisions . . . . . . . . . . . . . . . . . . . . . . 61
8.5 Expenses; Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
8.6 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
8.7 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
8.8 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
8.9 Table of Contents and Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
8.10 Construction of Certain Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
8.11 Integration and Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
8.12 Independence of Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
8.13 Interest Rate Limitation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
8.14 Judgment and Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
8.15 Waiver of Jury Trial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
</TABLE>
iii
<PAGE> 5
EXHIBITS
Exhibit A - Borrowing Base Certificate
Exhibit B - Company Security Agreement
Exhibit C - Environmental Certificate
Exhibit D - Guaranty
Exhibit E - Guarantor Security Agreement
Exhibit F - Revolving Credit Note
Exhibit G - Swingline Note
Exhibit H - Disbursement of Advances
Exhibit I - Disbursement of Swingline Loans
Exhibit J - Subsequent Elections as to Borrowings
Exhibit K - Assignment and Acceptance
SCHEDULES
Schedule 1.1(A) - Existing Letters of Credit
Schedule 1.1(B) - GM Agreement
Schedule 1.1(C) - Senior Subordinated Debt Documents
Schedule 4.4 - Subsidiaries
Schedule 4.5 - Litigation
Schedule 4.17 - Intellectual Property
Schedule 4.18 - Lobdell Preferred Stock
Schedule 4.20 - Other Subordinated Debt
Schedule 5.2(e) - Indebtedness
Schedule 5.2(f) - Liens
Schedule 5.2(o) - Negative Pledges
Schedule 5.2(u) - Management Fees
iv
<PAGE> 6
THIS CREDIT AGREEMENT, dated as of June 24,1997 (this "Agreement"), is
by and among OXFORD AUTOMOTIVE, INC., a Michigan corporation (the "Company"),
each of the Subsidiaries of the Company designated in Section 1.1 as a
Borrowing Subsidiary (a "Borrowing Subsidiary" and collectively with the
Company the "Borrowers"), the lenders set forth on the signature pages hereof,
their successors and assigns, and each other Person becoming a lender hereunder
from time to time (collectively, together with any Affiliates of such Lenders
designated by such Lenders to make Canadian Advances hereunder, the "Lenders"
and individually a "Lender"), and NBD BANK, a Michigan banking corporation, as
agent (in such capacity, and collectively with any of its Affiliates designated
by it to administer any of its functions hereunder at any time, the "Agent")
for the Lenders.
The parties hereto agree as follows:
ARTICLE I.
DEFINITIONS
1.1 Certain Definitions. As used herein the following terms shall
have the following respective meanings:
"Acceptance" shall mean Bankers' Acceptances and BA Equivalent Loans.
"Acceptance Fee" shall mean the fee payable at the time of the
acceptance of Bankers' Acceptances established by multiplying the face amount
of such Bankers' Acceptances by the Applicable Margin and by multiplying the
product so obtained by a fraction having a numerator equal to the number of
days in the term of such Bankers' Acceptances and a denominator of 365.
"Acquisition" is defined in Section 5.2(g).
"Advance" shall mean any Loan, any acceptance of any Bankers'
Acceptance, any BA Equivalent Loan, and any Letter of Credit Advance.
"Affiliate", when used with respect to any Person, shall mean any other
Person which, directly or indirectly, controls or is controlled by or is under
common control with such Person. For purposes of this definition "control"
(including the correlative meanings of the terms "controlled by" and "under
common control with"), with respect to any Person, shall mean possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of such Person, whether through the ownership of voting
securities or by contract or otherwise, and a Person shall be deemed to control
another Person if the controlling Person owns 10% or more of any class of
voting securities (or other ownership interest) of the controlled Person.
"Applicable Lending Office" shall mean, with respect to any Loan made
by any Lender or with respect to such Lender's Commitments, the office of such
Lender or of any Affiliate of such Lender located at the address specified as
the applicable lending office for such Lender set forth next to the name of
such Lender in the signature pages hereof or any other office or Affiliate of
such Lender or of any Affiliate of such Lender hereafter selected and notified
in writing to the Company and the Agent by such Lender. Any Affiliate of any
such Lender so selected and notified shall have all rights of a Lender
hereunder.
<PAGE> 7
"Applicable Margin" shall mean, with respect to any Floating Rate Loan,
Bankers' Acceptance, LIBOR Loan, commitment fee payable under Section 2.3(a)
and Letter of Credit fee payable pursuant to Section 2.3(b), as the case may
be, the per annum rate (expressed as a percentage) in accordance with the
following:
<TABLE>
<CAPTION>
Total Debt to Floating Rate Bankers' Letter of Credit Commitment Fees
EBITDA Ratio Loans Acceptances and Fees
LIBOR Loans
<S> <C> <C> <C> <C>
>5.00
0.75% 2.25% 2.25% 0.50%
>4.51 but <5.00 0.50% 2.00% 2.00% 0.45%
>3.75 but <4.50 0.25% 1.75% 1.75% 0.375%
>3.00 but <3.75 0.0% 1.50% 1.50% 0.30%
<3.00 0.0% 1.25% 1.25% 0.25%
</TABLE>
The Applicable Margin shall be based upon the Total Debt to EBITDA
Ratio as calculated as of the last day of each fiscal quarter of the Company
and the Applicable Margin shall be adjusted on (a) the last day of the second
month following the close of the fiscal quarter for the first three fiscal
quarters, and (b) the last day of the fourth month following the close of the
last fiscal quarter, based on the financial statements of the Company and
related compliance certificate pursuant to Section 5.1(d) to the Lenders, and
shall remain in effect until the next change to be effected pursuant to this
definition and shall be adjusted for the first time on the earlier of (i) if
requested by the Agent, the date of any Acquisition (other than the Acquisition
of Howell) by the Company or any of its Subsidiaries in which any Borrower or
Guarantor incurs any Indebtedness or makes any loan, advance or investment in
any Unrestricted Subsidiary, based on the pro forma Total Debt to EBITDA Ratio
after giving effect to such acquisition, on a pro forma basis acceptable to the
Agent, or (ii) based on the financial statements delivered to the Agent for the
fiscal quarter ending September 30, 1997; provided that the Applicable Margin
shall be based on a Total Debt to EBITDA Ratio of greater than 3.00 to 1.00 but
less than or equal to 3.75 to 1.00 until it is adjusted for the first time
hereunder.
"Assignment and Acceptance" is defined in Section 8.6(d).
"Available Commitment" shall mean, as to any Lender at any time, an
amount equal to the excess, if any, of (a) the amount of such Lender's
Commitment at such time over (b) the aggregate Canadian Advances made by such
Lender outstanding at such time.
"BA Equivalent Loan" shall mean a Loan contemplated as such in Section
3.4.
"BA Rate" shall mean the rate per annum determined as being the
arithmetic average (rounded upwards, if necessary, to the nearest .01%) of the
rates quoted for NBD Canada for one month bankers' acceptances as appears on
the Reuters Screen CDOR (Certificate of Deposit Offered Rate) page, as
determined as at 10:00 a.m. (Toronto time) on the relevant Business Day (for
non-Business Days, and if no CDOR rate is available for a given Business Day,
the CDOR rate for the immediately previous Business Day for which a CDOR rate
is available shall be used)
2
<PAGE> 8
"BA Interest Period" shall mean, relative to any Bankers Acceptance or
BA Equivalent Loan, the period beginning on (and including) the date on which
such Bankers Acceptance is accepted or continued or such BA Equivalent Loan is
made or continued to (but excluding) the date which is 30, 60 or 90 days
thereafter, as selected by the Company.
"Bankers' Acceptance" shall mean a non-interest bearing bill of
exchange in a form satisfactory to the Agent, denominated in CAD, drawn and
endorsed by a Borrowing Subsidiary and presented to each Canadian Lender for
acceptance pursuant to this Agreement.
"BMG" shall mean BMG North America Limited, a corporation incorporated
under the laws of the Province of Ontario, Canada.
"Borrowing" shall mean the aggregation of Advances, including each
Letter of Credit and Bankers' Acceptance issuance, of the Lenders to be made to
any Borrower, or continuations and conversions of any Advances, made pursuant
to Article II on a single date and, in the case of any LIBOR Loans or Bankers'
Acceptances, for a single Interest Period, which Borrowings may be classified
for purposes of this Agreement by reference to the type of Loans or the type of
Advance comprising the related Borrowing, e.g., a "LIBOR Borrowing" is a
Borrowing comprised of LIBOR Loans and a "Letter of Credit Borrowing" is an
Advance comprised of a single Letter of Credit.
"Borrowing Base" shall mean, as of any date, the sum of:
(a) an amount equal to 85% of the value of Eligible Accounts
Receivable, plus
(b) an amount equal to 50% of the value of Eligible Tooling
Reimbursement Payments, plus
(c) an amount equal to 50% of the value of Eligible Inventory, plus
(d) an amount equal to 50% of the value of Eligible Tooling, plus
(e) an amount equal to
(i) 65% of the net book value of Eligible Fixed
Assets, other than Eligible Fixed Assets acquired pursuant to an
Acquisition (exclusive of the Eligible Fixed Assets of Howell to be
acquired in connection with the Acquisition of Howell, which Eligible
Fixed Assets of Howell will be included in this clause (i) when Howell
becomes a Guarantor hereunder) after the Effective Date, and
(ii) the following amount with respect to Eligible
Fixed Assets acquired pursuant to an Acquisition (exclusive of the
Eligible Fixed Assets of Howell to be acquired in connection with the
Acquisition of Howell) after the Effective Date: (A) if appraisals of
such Eligible Fixed Assets are not performed, 50% of the net book value
of such Eligible Fixed Assets or (B) if appraisals of such Eligible
Fixed Assets are performed, then an amount equal to the lesser of (x)
65% of the net book value of such Eligible Fixed Assets or (y) such
percentage
3
<PAGE> 9
of the net book value of such Eligible Fixed Assets which would
equate to 80% of the orderly liquidation value shown in such appraisals
for equipment and 80% of the fair market value shown in such appraisals
for real estate with respect to such Eligible Fixed Assets, provided
that (1) with respect to such Eligible Fixed Assets acquired in
connection with an Acquisition after the Effective Date, the net
book value of such assets will be the higher of the net book value
immediately prior to such Acquisition or immediately after such
Acquisition, provided further that if the value is determined by
reference to the net book value of such assets immediately prior to
such Acquisition the Company shall apply its normal depreciation
policies to such assets and (2) such appraisals shall be done by an
independent third party appraiser acceptable to the Agent.
"Borrowing Base Certificate" for any date shall mean an appropriately
completed report as of such date in substantially the form of Exhibit A hereto,
certified as true and correct as of such date by the Chief Financial Officer or
Treasurer of the Company.
"Borrowing Subsidiary" shall mean any Canadian Subsidiary designated by
the Company to the Agent as a "Borrowing Subsidiary" hereunder so long as (a)
each of the Company and each Guarantor guarantees the obligation of such
Borrowing Subsidiary pursuant to a Guaranty, and grants a first priority lien
and security interest on its assets to the extent required under Section 2.11
to secure such Guaranty and all obligations of such Borrowing Subsidiary, (b)
such Borrowing Subsidiary delivers all corporate or organizational documents
and authorizing resolutions and legal opinions requested by the Agent and (c)
such Borrowing Subsidiary executes all agreements, instruments and documents
and takes such other action requested by the Agent, including without
limitation becoming bound by the terms hereof as a Borrowing Subsidiary and
granting a first priority lien and security interest on its assets to the
extent required under Section 2.11 to secure all Canadian Advances and other
obligations of such Borrowing Subsidiary to the Lenders and the Agent. As of
the Effective Date, the only Borrowing Subsidiary is BMG.
"Business Day" shall mean a day other than a Saturday, Sunday or other
day on which the Agent is not open to the public for carrying on substantially
all of its banking functions in Detroit, Michigan or, with respect to any
Canadian Advance, NBD Canada is not open to the public for carrying on
substantially all of its banking functions in Toronto, Ontario.
"CAD" or "C$" shall mean the lawful money of Canada.
"Canadian Advances" shall mean all Loans, including Acceptances,
denominated in CAD.
"Canadian Lender" shall mean any Lender which, whether directly or
through an Affiliate of such Lender, can make Canadian Advances hereunder free
of withholding taxes of Canada and that is designated to the Agent and the
Company as a Canadian Lender.
"Canadian Percentage" of any Canadian Lender as of any date, shall mean
a fraction (expressed as a percentage), the numerator of which is the
Commitment of such Canadian Lender and the denominator which is the aggregate
Commitments of all Canadian Lenders.
4
<PAGE> 10
"Canadian Subsidiary" shall mean any Subsidiary of the Company
organized under the laws of Canada or any Province thereof.
"Capital Lease" of any Person shall mean any lease which, in accordance
with Generally Accepted Accounting Principles, is or should be capitalized on
the books of such Person.
"Capital Stock" shall mean (i) in the case of any corporation, all
capital stock and any securities exchangeable for or convertible into capital
stock and any warrants, rights or other options to purchase or otherwise
acquire capital stock or such securities or any other form of equity
securities, (ii) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of corporate stock, (iii) in the case of a partnership or limited
liability company, partnership or membership interests (whether general or
limited) and (iv) any other interest or participation that confers on a Person
the right to receive a share of the profits and losses of, or distribution of
assets of, the issuing Person.
"Change in Control" shall mean:
(a) prior to a primary sale or sales of shares of Capital Stock of
the Company resulting in the sale of more than 50% of each class of outstanding
Capital Stock of the Company pursuant to any one or more public offerings
thereof (a "Majority IPO"), Permitted Holders shall cease to control, directly
or indirectly, in each case free and clear of all Liens, a majority (on a fully
diluted basis) of the issued and outstanding shares of Voting Stock of the
Company and have the right and authority to appoint, designate or otherwise
elect a majority of the members of the board of directors of the Company;
(b) after a Majority IPO, (i) Permitted Holders shall cease to
control, directly, or indirectly, in each case free and clear of all Liens, at
least 20% (on a fully diluted basis) of the issued and outstanding shares of
Voting Stock of the Company and have the right and authority to appoint,
designate or otherwise elect at least 20% of the members of the board of
directors of the Company or (ii) any person, or two or more persons acting in
concert, acquire or own beneficial ownership (within the meaning of Rule 13d-3
of the Securities and Exchange Commission under the Securities Exchange Act of
1934) an amount of the outstanding shares of Voting Stock of the Company or the
Company on a fully diluted basis which is equal to or greater than the amount
owned by the Permitted Holders free and clear of any Lien; or
(c) any "Change of Control" as defined in the Senior Subordinated
Note Indenture.
"Commitment" shall mean, with respect to each Lender, the commitment of
each such Lender to make or accept, as the case may be, Loans and to
participate in Letter of Credit Advances made through the Agent pursuant to
Section 2.1, in amounts not exceeding in aggregate principal amount outstanding
at any time the respective Commitment amounts for each such Lender set forth
next to the name of each such Lender in the signature pages hereof, or, as the
Lender becoming a party hereto after the Effective Date, as set forth in the
applicable Assignment and Acceptance, in each case as reduced or modified
pursuant to this Agreement.
"Company Security Agreement" shall mean the security agreement entered
into by the Company for the benefit of the Agent and the Lenders pursuant to
this Agreement in substantially the form of Exhibit B hereto, as amended or
modified from time to time.
5
<PAGE> 11
"Consolidated" or "consolidated" shall mean, when used with reference
to any financial term in this Agreement, the aggregate for two or more persons
of the amounts signified by such term for all such persons determined on a
consolidated basis in accordance with Generally Accepted Accounting Principles.
"Contingent Liabilities" of any Person shall mean, as of any date, all
obligations of others for which such Person is contingently liable, as
guarantor, surety, accommodation party, partner or in any other capacity, or in
respect of which obligations such Person assures a creditor against loss or
agrees to take any action to prevent any such loss (other than endorsements of
negotiable instruments for collection in the ordinary course of business),
including without limitation all reimbursement obligations of such Person in
respect of any letters of credit, surety bonds or similar obligations and all
obligations of such Person to advance funds to, or to purchase assets, property
or services from, any other Person in order to maintain the financial condition
of such other Person.
"Creative" shall mean Creative Fabrication Corporation, a Tennessee
corporation.
"Creative Letter of Credit" shall mean the irrevocable letter of credit
number 442 issued by NBD Bank on September 27, 1995 for the account of
Creative, as renewed or extended or otherwise modified from time to time.
"Creative Revenue Bond" shall mean the $8,500,000 Industrial
Development Revenue Bond (Creative Fabrication Corporation Project), Series
1995 issued by the Industrial Development Board of the County of McMinn, a
public non-profit corporation and public instrumentality of the County of
McMinn, Tennessee.
"Creative Revenue Bond Documents" shall mean the indenture of trust,
loan agreement, reimbursement agreement, irrevocable letter of credit, pledge
and security agreement, deed of trust, security agreement, fixture filing and
assignment of rents, security agreement, guarantor security agreement,
irrevocable guaranty agreement and all other agreements and documents executed
or issued in connection with the Creative Revenue Bond, all as amended or
modified from time to time.
"Default" shall mean any event or condition which might become an Event
of Default with notice or lapse of time or both.
"Defaulting Lender" shall mean any Lender that fails to make available
to the Agent such Lender's Loans required to be made hereunder or shall have
not made a payment required to be made to the Agent hereunder. Once a Lender
becomes a Defaulting Lender, such Lender shall continue as a Defaulting Lender
until such time as such Defaulting Lender makes available to the Agent the
amount of such Defaulting Lender's Loans and all other amounts required to be
paid to the Agent pursuant to this Agreement.
"Discount Rate" shall mean with respect to Bankers' Acceptances issued
pursuant to this Agreement with the same maturity date, the rate determined by
the Agent as being the discount rate, calculated on the basis of a year of 365
days, of the Agent established in accordance with its normal practices at or
about 10:00 a.m. on the date of issue of such Bankers' Acceptances, for
bankers' acceptances having a comparable face value and an identical maturity
date to the face value and maturity date of the Agent's portion of such issue
of Bankers' Acceptances.
6
<PAGE> 12
"Discounted Proceeds" shall mean in respect of any Bankers' Acceptance
to be accepted and purchased by a Lender hereunder on any day, an amount
(rounded to the nearest whole cent, and with one-half of one cent being rounded
up) calculated on such day by multiplying (i) the face amount of such Bankers'
Acceptance by (ii) the price, where the price is determined by dividing one by
the sum of one plus the product of (A) the Discount Rate (expressed as a
decimal) and (B) a fraction, the numerator of which is the number of days in
the term of such Bankers' Acceptance and the denominator of which is 365.
"Disqualified Stock" shall mean any Capital Stock that, 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 redeemable
at the option of the holder thereof, in whole or in part, or which otherwise
has any mandatory payments with respect thereto.
"Dollar Equivalent" shall mean as of any date, with respect to any
amount in a currency other than Dollars, the sum in Dollars resulting from the
conversion of such amount from such currency into Dollars at the spot exchange
rate determined by the Agent to be available to it for the purchase of such
currency with Dollars at approximately 11:00 a.m. local time of the Applicable
Lending Office on such date as a determination of the Dollar Equivalent is
made.
"Documents" shall have the meaning ascribed thereto in Section 3.3(b).
"Dollars" and "$" shall mean the lawful money of the United States of
America.
"Domestic Subsidiary" shall mean each present and future Subsidiary of
the Company which is not a Foreign Subsidiary.
"EBITDA" for any period shall mean the sum of Net Income plus, without
duplication, the following to the extent deducted in calculating such
Net Income: (i) Interest Expense, (ii) income tax expense (including Michigan
Single Business Taxes expense), (iii) depreciation expense, (iv) amortization
expense and (v) all other non-cash items reducing Net Income (other than items
that will require cash payments and for which an accrual or reserve is, or is
required by Generally Accepted Accounting Principles to be, made, except as
otherwise consented to by the Agent), less all non-cash items increasing Net
Income, in each case for such period. Notwithstanding the foregoing, the
provision for taxes based on the income or profits of, and the depreciation and
amortization of, a Subsidiary of the Company shall be added to Net Income to
compute EBITDA only to the extent (and in the same proportion) that the net
income of such Subsidiary was included in calculating Net Income.
"Effective Date" shall mean the effective date specified in the final
paragraph of this Agreement.
"Eligible Accounts Receivable" shall mean, as of any date and without
duplication, those trade accounts receivable owned by a Borrower or a Guarantor
that are payable in Dollars, CAD or any other readily available and freely
tradable currency acceptable to the Agent and in which such Borrower or
Guarantor has granted to the Agent for the benefit of the Lenders and the Agent
a first-priority perfected security interest pursuant to the Security
Agreements, subject to only such Liens as are permitted Section 5.2(f)(i),
valued at the face amount thereof less sales, excise or similar taxes and less
returns, discounts, claims, credits and allowances of any nature at any time
issued, owing, granted, outstanding, available or claimed, but shall not
include any such account receivable (a) that is not a bona fide existing
obligation created by the sale and actual delivery of inventory, goods or other
property, or
7
<PAGE> 13
the furnishing of services or other good and sufficient consideration to
customers of a Borrower or a Guarantor in the ordinary course of business, (b)
that is more than 90 days past due or that remains outstanding more than 90
days after the earlier of the date of the invoice or the shipment of the
related inventory, goods or other property or the furnishing of the related
services or other consideration, (c) that is subject to any dispute,
contra-account, defense, offset or counterclaim or any Lien (except those in
favor of the Agent for the benefit of the Lenders and the Agent under the
Security Documents), or the inventory, goods, property, services or other
consideration of which such account receivable constitutes proceeds is subject
to any such Lien, (d) in respect of which the inventory, goods, property,
services or other consideration have been rejected, (e) that is due from any
Affiliate or Subsidiary of any Borrower or Guarantor, (f) that has been
classified by any Borrower or Guarantor as doubtful or has otherwise failed to
meet established or customary credit standards of any Borrower or Guarantor,
(g) that is payable by any Person located outside the United States or Canada
(which shall not be deemed to include any territories of the United States or
Canada), other than a Subsidiary of General Motors Corporation, Ford Motor
Company or Chrysler Corporation, or any other substantial auto manufacturer or
supplier approved by the Agent, (h) with respect to which any representation or
warranty contained in Section 4.11 is incorrect at any time, (i) that is
payable by the United States or any of its departments, agencies or
instrumentalities or by any state or other governmental entity unless such
Borrower or Guarantor shall have notified the Agent thereof and shall have
executed and delivered any and all instruments and documents and taken such
other action required by the Agent to duly effect the assignment thereof to the
Agent under the Federal Assignment of Claims Act, as amended, or other
applicable law now or hereafter in effect, (j) that is payable by any Person as
to which 30% or more of the accounts receivable payable by such Person to any
Borrower or Guarantor do not otherwise constitute Eligible Accounts Receivable,
(k) that is payable by any Person that is the subject of any proceeding seeking
to adjudicate it a bankrupt or insolvent or seeking liquidation, winding up or
reorganization, arrangement, adjustment, protection, relief or composition of
it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief or protection of debtors or seeking the appointment of
a receiver, trustee, custodian or other similar official for it or for any
substantial part of its property, or that is not generally paying its debts as
they become due or has admitted in writing its inability to pay its debts
generally or has made a general assignment for the benefit of creditors, (l)
that is evidenced by a promissory note or other instrument, (m) that is
subordinate or junior in right or priority of payment to any other obligation
or claim, (n) arising as a result of or relating to Tooling if such account
receivable is not currently due or arising as a result of or relating to
Tooling if it arises under any Tooling Contract financed by any lender other
than by Advances by the Lenders under this Agreement, or (o) that for any other
reason is at any time reasonably deemed by the Agent to be ineligible.
"Eligible Fixed Assets" shall mean, as of any date, those tangible
fixed assets owned by a Borrower or a Guarantor in which such Borrower or
Guarantor has granted to the Agent and Lenders a first-priority perfected
security interest pursuant to the Security Agreements, subject to only such
Liens as are permitted Section 5.2(f)(i),but not including any such fixed asset
(a) that is not usable in the business of a Borrower or Guarantor, (b) that is
located outside the United States or Canada or such other jurisdiction approved
by the Agent, (c) that is subject to, or any accounts or other proceeds
resulting from the sale or other disposition thereof could be subject to, any
Lien (except those in favor of the Agent and the Lenders under the Security
Agreements, (d) that is not in the possession of the Company, (e) that is held
for sale or lease or is the subject of any lease, (f) that is subject to any
trademark, trade name or licensing arrangement, or any law, rule or regulation,
that could limit or impair the ability of the Agent and the Lenders to promptly
exercise all rights of the Agent and the Lenders under the Security Agreements,
(g) if such fixed asset is located on premises not owned by the Company and the
landlord or other owner of such premises shall not have waived its distraint,
lien and similar rights with respect to such fixed asset, and shall not have
agreed to permit the Agent to enter such premises after the
8
<PAGE> 14
occurrence of an Event of Default pursuant to a waiver and agreement of such
person in favor of and in form and substance acceptable to the Agent, (h) with
respect to which any insurance proceeds are not payable to the Agent as a
lender loss payee or are payable to any loss payee other than the Agent or a
Borrower or Guarantor, and (i) that for any other reason is at any time
reasonably deemed by the Agent to be ineligible.
"Eligible Inventory" shall mean, as of any date, that inventory owned
by a Borrower or a Guarantor that constitutes raw materials, work-in-process or
finished goods in which such Borrower or Guarantor has granted to the Agent for
the benefit of the Lenders and the Agent a first-priority perfected security
interest pursuant to the Security Agreements, subject to only such Liens as are
permitted Section by 5.2(f)(i), valued at the lower of cost or market on a FIFO
basis, but shall not include any such inventory (a) that does not constitute
raw materials, work-in-process or finished goods readily salable or usable in
the business of a Borrower or a Guarantor, (b) that is located outside the
United States or Canada (which shall not be deemed to include any territories
of the United States or Canada) or such other jurisdiction approved by the
Agent, (c) that is subject to, or any accounts or other proceeds resulting from
the sale or other disposition thereof could be subject to, any Lien (except
those in favor of the Agent for the benefit of the Lenders and the Agent under
the Security Documents), including any sale on approval or sale or return
transaction or any consignment, (d) that is not in the possession of such
Borrower or Guarantor, (e) that is held for lease or is the subject of any
lease, (f) that is subject to any trademark, trade name or licensing
arrangement, or any law, rule or regulation, that could limit or impair the
ability of the Agent to promptly exercise all rights of the Agent under the
Security Documents, (g) if such inventory is located on premises not owned by
such Borrower or Guarantor and the landlord or other owner of such premises
shall not have waived its distraint, lien and similar rights with respect to
such inventory and shall not have agreed to permit the Lenders and the Agent to
enter such premises pursuant to a waiver and agreement of such Person in favor
of and in form and substance acceptable to the Lenders and the Agent or any
other substantial auto manufacturer or supplier approved by the Agent, (h) with
respect to which any insurance proceeds are not payable to the Agent for the
benefit of the Lenders as a lender loss payee or are payable to any loss payee
other than the Agent or such Borrower or Guarantor, (i) that is classified as
Eligible Tooling or Eligible Tooling Reimbursement Payments, or (j) that for
any other reason is at any time reasonably deemed by the Agent to be
ineligible.
"Eligible Tooling" shall mean such portion of assets, net of any
payments received thereon, of a Borrower or Guarantor which consists of
Tooling, provided that each of the following conditions is satisfied: (a) the
sale of such Tooling is covered under specific written purchase orders or
agreements between a Borrower or Guarantor and the purchaser of such Tooling,
and the terms and provisions of all such purchase orders and agreements and the
purchaser thereof must be satisfactory to the Agent, (b) the Agent has a first
priority, perfected and enforceable security interest in such Tooling and any
account receivable or other proceeds of a Borrower or Guarantor relating to
such Tooling , subject to only such Liens as are permitted by Section
5.2(f)(i), and (c) the unpaid balance of such Tooling as represented by a
Borrower or Guarantor is not subject to any defense, counterclaim, setoff,
contra-account, credit, allowance or adjustment. For purposes of this
definition, all Tooling of a Borrower or Guarantor which is the subject of any
Tooling Contract financed by any lender other than by Advances by the Lenders
under this Agreement shall be excluded from this definition, and no (i)
accounts receivable included within Eligible Accounts Receivable, (ii) Eligible
Tooling Reimbursement Payments or (iii) Eligible Inventory shall be included as
part of Eligible Tooling.
"Eligible Tooling Reimbursement Payments" shall mean such portion of
long term assets, net of any payments received thereon, of a Borrower or
Guarantor which consists of Tooling reimbursement payments provided that each
of the following conditions are satisfied: (a) the sale of the
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<PAGE> 15
related Tooling is covered under specific written purchase orders or agreements
between a Borrower or Guarantor and the purchaser of such Tooling, and the
terms and provisions of all such purchase orders and agreements and the
purchaser thereof must be satisfactory to the Agent, (b) the Agent has a first
priority, perfected and enforceable security interest in such long term assets
and any account receivable or other proceeds of a Borrower or Guarantor
relating to such long term assets, subject to only such Liens as are permitted
by Section 5.2(f)(i), (c) the unpaid balance of such Tooling as represented by
a Borrower or Guarantor is not subject to any defense, counterclaim, setoff,
contra-account, credit, allowance or adjustment and (d) such Tooling is
completed and has been approved by the purchaser thereof. For purposes of this
definition, all Tooling reimbursement payments of a Borrower or Guarantor which
are the subject of any Tooling Contract financed by any lender other than by
Advances by the Lenders under this Agreement shall be excluded from this
definition and no (i) Eligible Inventory, (ii), Eligible Tooling or (iii)
accounts receivable included within Eligible Accounts Receivable shall be
included as part of Eligible Tooling Reimbursement Payments.
"Environmental Certificate" shall mean the environmental certificate
given by the Borrowers and the Guarantors to the Agent for the benefit of the
Lenders pursuant to this Agreement in substantially the form of Exhibit C
hereto.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time, and the regulations thereunder.
"ERISA Affiliate" shall mean, with respect to any Person, any trade or
business (whether or not incorporated) which, together with such Person or any
Subsidiary of such Person, would be treated as a single employer under Section
414 of the Code and the regulations promulgated thereunder.
"Event of Default" shall mean any of the events or conditions described
in Section 6.1.
"Existing Letters of Credit" shall mean the letters of credit set forth
on Schedule 1.1(A).
"Federal Funds Rate" shall mean the per annum rate established and
announced by the Agent from time to time as the opening federal funds rate paid
by the Agent in its regional federal funds market for overnight borrowings from
other banks, which Federal Funds Rate shall change simultaneously with any
change in such announced rates.
"Fixed Charges" shall mean, for any period, the sum, without
duplication, of (a) Interest Expense for such period, plus (b) all payments of
principal or other sums paid or payable during such period by the Company or
its Restricted Subsidiaries with respect to Indebtedness of the Company or its
Restricted Subsidiaries, other than (i) payments on the Advances and (ii)
payments on Tooling Indebtedness, plus (c) all debt discount and expense
amortized or required to be amortized during such period by the Company or its
Restricted Subsidiaries, plus (d) Rental Charges paid or payable during such
period by the Company and its Restricted Subsidiaries, plus (e) all dividends,
distributions and other obligations paid with respect to any class of the
Company's Capital Stock or any dividend, payment or distribution paid in
connection with the redemption, purchase, retirement or other acquisition,
directly or indirectly, of any shares of the Company's Capital Stock, (f) all
net income taxes accrued in such period by the Company or its Restricted
Subsidiaries, plus (g) all payments of principal or other sums paid or payable,
whether directly or indirectly, during such period by the Company or any of its
Restricted Subsidiaries with respect to Indebtedness of any Unrestricted
Subsidiary.
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"Fixed Charge Coverage Ratio" shall mean, for any period, the ratio of
(a) the sum of (i) the EBITDA for such period (provided that EBITDA as
calculated in determining the Fixed Charge Coverage Ratio for (i) the fiscal
quarter ending June 30, 1997 shall be equal to the sum of the EBITDA for the
fiscal quarter ending June 30, 1997 plus $21,144,000, (ii) the fiscal quarter
ending September 30, 1997 shall be equal to the sum of EBITDA for the two
quarters ending September 30, 1997 plus $14,096,000 and (iii) the fiscal
quarter ending December 31, 1997 shall be equal to the sum of EBITDA for the
three fiscal quarters ending December 31, 1997 plus $7,048,000), plus (ii) the
Rental Charges for such period (provided that the Rental Charges for (i) the
fiscal quarter ending September 30, 1997 shall be equal to the product of the
Rental Charges for the two quarters ending September 30, 1997 times two and
(iii) the fiscal quarter ending December 31, 1997 shall be equal to the product
of the Rental Charges for the three fiscal quarters ending December 31, 1997
times four thirds) to (b) the Fixed Charges for such period (provided that the
Fixed Charges for (i) the fiscal quarter ending September 30, 1997 shall be
equal to the product of the Fixed Charges for the two quarters ending September
30, 1997 times two and (iii) the fiscal quarter ending December 31, 1997 shall
be equal to the product of the Fixed Charges for the three fiscal quarters
ending December 31, 1997 times four thirds)
"Floating Rate" shall mean the per annum rate equal to the sum of (a)
the Applicable Margin, plus (b) (i) with respect to U.S. Advances and other
obligations denominated in Dollars, the greater of (x) the Prime Rate in effect
from time to time, and (y) the sum of one half of one percent (1/2%) per annum
plus the Federal Funds Rate in effect from time to time; and (ii) with respect
to Canadian Advances and other obligations denominated in CAD, the greater of
(x) the per annum rate of interest quoted, published and commonly known as the
"prime rate" of NBD Canada which NBD Canada establishes as the reference rate
of interest in order to determine interest rates for loans to its Canadian
commercial borrowers, which rate is not necessarily the lowest rate of interest
offered by NBD Canada in connection with extensions of credit; and (y) the BA
Rate plus 1/2 of 1% per annum; in each case adjusted automatically with each
quoted or published change in such rate, all without the necessity of any
notice to any Borrower, which Floating Rate shall change simultaneously with
any change in any such rates.
"Floating Rate Loan" shall mean any Loan which bears interest at the
Floating Rate.
"Foreign Subsidiary" shall mean any Subsidiary incorporated or formed
in any jurisdiction other than any State of the United States of America.
"Generally Accepted Accounting Principles" shall mean generally
accepted accounting principles applied on a basis consistent with that
reflected in the financial statements referred to in Section 4.6.
"GM Agreement" shall mean the non-offset agreement of General Motors in
the form of Schedule 1.1(B) hereto.
"Guaranties" shall mean each guaranty entered into by the Guarantors
for the benefit of the Agent and the Lenders pursuant to this Agreement in
substantially the form of Exhibit D hereto, as amended or modified from time to
time.
"Guarantor Security Agreement" shall mean each security agreement
entered into by the Guarantors for the benefit of the Agent and the Lenders
pursuant to this Agreement in substantially the form of Exhibit E hereto, as
amended or modified from time to time.
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"Guarantors" shall mean each Domestic Subsidiary of the Company
existing as of the Effective Date, each Canadian Subsidiary, the Company (in
its capacity as guarantor of the Borrowing Subsidiaries), and each Person
becoming a Restricted Subsidiary of the Company after the Effective Date or
otherwise entering into a Guaranty from time to time.
"Howell" shall mean Howell Industries, Inc., a Michigan corporation.
"Indebtedness" of any Person shall mean, as of any date, (a) all
obligations of such Person for borrowed money, and similar monetary obligations
evidenced by bonds, notes, debentures, Capital Lease obligations, bankers
acceptances or otherwise, (b) all obligations of such Person as lessee under
any Capital Lease, (c) all obligations which are secured by any Lien existing
on any asset or property of such Person whether or not the obligation secured
thereby shall have been assumed by such Person, (d) all obligations of such
Person for the unpaid purchase price for goods, property or services acquired
by such Person, except for trade accounts payable and taxes arising in the
ordinary course of business that are not past due, (e) all obligations of such
Person to purchase goods, property or services where payment therefor is
required regardless of whether delivery of such goods or property or the
performance of such services is ever made or tendered (generally referred to as
"take or pay contracts"), (f) all Rate Hedging Obligations, and (g) all
Contingent Liabilities.
"Intercreditor Agreement" shall mean the Intercreditor Agreement dated
on or about the Effective Date in form and substance satisfactory to the Agent
among the Agent, BMG and all other material lenders to BMG or any of its
Subsidiaries, as amended or modified from time to time.
"Interest Coverage Ratio" shall mean, for any period, the ratio of (a)
EBITDA for such period to (b) Interest Expense for such period.
"Interest Expense" shall mean, for any period, the total interest
expense of the Company and its consolidated Restricted Subsidiaries, plus, to
the extent not included in such total interest expense, and to the extent
incurred by the Company or its Restricted Subsidiaries, (i) interest expense
attributable to Capital Lease obligations, (ii) amortization of debt discount,
(iii) capitalized interest, (iv) non-cash interest expense, (v) commissions,
discounts and other fees and charges owed with respect to letters of credit and
bankers' acceptance financing, (vi) net costs associated with Rate Hedging
Agreements (including amortization of fees), (vii) Preferred Stock dividends in
respect of all Preferred Stock held by Persons other than the Company or a
Restricted Subsidiary, and (viii) interest actually paid by the Company or any
Restricted Subsidiary on any Indebtedness of any other Person. Notwithstanding
the foregoing, net interest expense attributable to Tooling Indebtedness shall
not be included in Interest Expense.
"Interest Payment Date" shall mean (a) with respect to any LIBOR Loan
or Acceptance, the last day of each Interest Period with respect thereto and,
in the case of any Interest Period exceeding three months, those days that
occur during such Interest Period at intervals of three months after the first
day of such Interest Period, and (b) in all other cases, the last Business Day
of each March, June, September and December occurring after the date hereof,
commencing with the first such Business Day occurring after the date of this
Agreement.
"Interest Period" shall mean any BA Interest Period or LIBOR Interest
Period.
"Letter of Credit" shall mean a standby or commercial letter of credit
issued by the Agent on behalf of the Lenders for the account of the Company
under an application and/or other
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documentation acceptable to the Agent requiring, among other things, immediate
reimbursement by the Company to the Agent in respect of all drafts or other
demand for payment honored thereunder and all expenses paid or incurred by the
Agent relative thereto, and shall include the Creative Letter of Credit and all
other Existing Letters of Credit.
"Letter of Credit Advance" shall mean each issuance of a Letter of
Credit.
"LIBOR" shall mean, with respect to any LIBOR Loan and the related
LIBOR Interest Period, the per annum rate that is equal to the sum of:
(a) the Applicable Margin, plus
(b) the rate per annum obtained by dividing (i) the per annum rate
of interest at which deposits in Dollars for such LIBOR Interest Period and in
an aggregate amount comparable to the amount of such LIBOR Loan to be made by
the Agent in its capacity as a Lender hereunder are offered to the Agent by
other prime banks in the London interbank market, at approximately 11:00 a.m.
London time, on the second LIBOR Business Day prior to the first day of such
LIBOR Interest Period by (ii) an amount equal to one minus the stated maximum
rate (expressed as a decimal) of all reserve requirements (including, without
limitation, any marginal, emergency, supplemental, special or other reserves)
that are specified on the first day of such LIBOR Interest Period by the Board
of Governors of the Federal Reserve System (or any successor agency thereto)
for determining the maximum reserve requirement with respect to eurocurrency
funding (currently referred to as "Eurocurrency liabilities" in Regulation D of
such Board) maintained by a member bank of such System; all as conclusively
determined by the Agent, such sum to be rounded up, if necessary, to the
nearest whole multiple of one one-hundredth of one percent (1/100 of 1%).
"LIBOR Business Day" shall mean, with respect to any LIBOR Loan, a day
which is both a Business Day and a day on which dealings in Dollar deposits are
carried out in the London interbank market.
"LIBOR Interest Period" shall mean, with respect to any LIBOR Loan, the
period commencing on the day such LIBOR Loan is made or converted to a LIBOR
Loan and ending on the day which is one, two or three months thereafter (or
such longer period requested by the Company and acceptable to the Lenders), as
the Company may elect under this Agreement, and each subsequent period
commencing on the last day of the immediately preceding LIBOR Interest Period
and ending on the day which is one, two or three months thereafter (or such
longer period requested by the Company and acceptable to the Lenders), as the
Company may elect under this Agreement, provided, however, that (a) any LIBOR
Interest Period which commences on the last LIBOR Business Day of a calendar
month (or on any day for which there is no numerically corresponding day in the
appropriate subsequent calendar month) shall end on the last LIBOR Business Day
of the appropriate subsequent calendar month, (b) each LIBOR Interest Period
which would otherwise end on a day which is not a LIBOR Business Day shall end
on the next succeeding LIBOR Business Day or, if such next succeeding LIBOR
Business Day falls in the next succeeding calendar month, on the next preceding
LIBOR Business Day, and (c) no LIBOR Interest Period which would end after the
Termination Date shall be permitted.
"LIBOR Loan" shall mean any Loan which bears interest at LIBOR.
"Lien" shall mean any pledge, assignment, hypothecation, mortgage,
security interest, deposit arrangement, option, conditional sale or title
retaining contract, sale and leaseback transaction,
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financing statement filing, lessor's or lessee's interest under any lease,
subordination of any claim or right, or any other type of lien, charge,
encumbrance, preferential arrangement or other claim or right.
"Loan" shall mean any Revolving Credit Loan and any Swingline Loan.
Any Loan or any portion thereof may also be denominated as a Floating Rate
Loan, a Bankers' Acceptance or BA Equivalent Loan or a LIBOR Loan and such
Loans are referred to herein as "types" of Loans.
"Loan Documents" shall mean, collectively, this Agreement, the Notes,
the Security Documents and any other agreement, instrument or document executed
in connection with any of the foregoing at any time.
"Lobdell" shall mean Lobdell Emery Corporation, a Michigan corporation.
"Lobdell Preferred Stock" shall mean all existing preferred stock
issued by Lobdell, including the Series B Preferred Stock and Series A
Preferred Stock, in the aggregate amount of $50,700,000.
"Lobdell Preferred Stock Documents" shall mean all stock certificates,
agreements and other documents relating to the terms of the Preferred Stock or
otherwise relating to the Preferred Stock.
"Material Adverse Effect" shall mean (i) a material adverse effect on
the property, business, operations, financial condition, liabilities or
capitalization of the Company and its Restricted Subsidiaries, taken as a
whole, (ii) a material adverse effect on the ability of the Company or any
Guarantor to perform its obligations under the Loan Documents or (iii) a
material adverse effect on the rights and remedies of the Agent or the Lenders
under the Loan Documents.
"Multiemployer Plan" shall mean any "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA or Section 414(f) of the Code.
"NBD Canada" shall mean First Chicago NBD Bank, Canada, a Canadian
chartered bank.
"Net Cash Proceeds" means, without duplication (a) in connection with
any sale or other disposition of any asset or any settlement by, or receipt of
payment in respect of, any property insurance claim or condemnation award, the
cash proceeds (including any cash payments received by way of deferred payment
of principal pursuant to a note or installment receivable or purchase price
adjustment receivable or otherwise, but only as and when received) of such
sale, settlement or payment, net of reasonable and documented attorneys' fees,
accountants' fees, investment banking fees, amounts required to be applied to
the repayment of Indebtedness secured by a Lien expressly permitted hereunder
on any asset which is the subject of such sale, insurance claim or condemnation
award (other than any Lien in favor of the Agent for the benefit of the Agent
and the Lenders) and other customary fees actually incurred in connection
therewith and net of taxes paid or reasonably estimated to be payable as a
result thereof and (b) in connection with any issuance or sale of any equity
securities or debt securities or instruments or the incurrence of loans, the
cash proceeds received from such issuance or incurrence, net of investment
banking fees, reasonable and documented attorneys' fees, accountants' fees,
underwriting discounts and commissions and other reasonable and customary fees
and expenses actually incurred in connection therewith.
"Net Income" shall mean, for any period, the net income of the
Company and its consolidated Restricted Subsidiaries; provided, however, that
there shall not be included in such Net
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<PAGE> 20
Income: (i) any net income (or loss) of any Person if such Person is not a
Restricted Subsidiary, except that subject to the exclusion contained in clause
(iv) below, the Company's equity in the net income of any such Person for such
period shall be included in such Net Income up to the aggregate amount of cash
actually distributed by such Person during such period to the Company or a
Restricted Subsidiary as a dividend or other distribution (subject, in the case
of a dividend or other distribution paid to a Restricted Subsidiary, to the
limitations contained in clause (iii) below); (ii) any net income (or loss) of
any Person acquired by the Company or a Subsidiary in a pooling of interests
transaction for any period prior to the date of such acquisition; (iii) any net
income of any Restricted Subsidiary if such Restricted Subsidiary is subject to
restrictions, directly or indirectly, on the payment of dividends or the making
of distributions by such Restricted Subsidiary, directly or indirectly, to the
Company, except that (A) subject to the exclusion contained in clause (iv)
below, the Company's equity in the net income of any such Restricted Subsidiary
for such period shall be included in such Net Income up to the aggregate amount
of cash that could have been distributed by such Restricted Subsidiary
consistent with such restriction during such period to the Company or another
Restricted Subsidiary as a dividend or other distribution (subject, in the case
of a dividend or other distribution paid to another Restricted Subsidiary, to
the limitation contained in this clause) and (B) the Company's equity in a net
loss of any such Restricted Subsidiary for such period shall be included in
determining such Net Income; (iv) any gain (or loss) realized upon the sale or
other disposition of any assets of the Company or its consolidated Subsidiaries
(including pursuant to any sale-and-leaseback arrangement) which is not sold or
otherwise disposed of in the ordinary course of business and any gain (or loss)
realized upon the sale or other disposition of any Capital Stock of any Person;
(v) extraordinary or nonrecurring gains or non-cash losses; and (vi) the
cumulative effect of a change in accounting principles.
"Net Worth" of any Person shall mean, as of any date, the amount of any
capital stock, paid in capital and similar equity accounts plus (or minus in
the case of a deficit) the capital surplus and retained earnings of such Person
and the amount of any foreign currency translation adjustment account shown as
a capital account of such Person, less treasury stock, all as determined under
Generally Accepted Accounting Principles.
"Non Canadian Lender" is defined is Section 2.1(c)(iii).
"Note" shall mean any Revolving Credit Note or any Swingline Note.
"Overdue Rate" shall mean (a) in respect of principal of Floating Rate
Loans, a rate per annum that is equal to the sum of three percent (3%) per
annum plus the Floating Rate, (b) in respect of principal of LIBOR Loans, a
rate per annum that is equal to the sum of three percent (3%) per annum plus
the per annum rate in effect thereon until the end of the then current Interest
Period for such Loan and, thereafter, a rate per annum that is equal to the sum
of three percent (3%) per annum plus the Floating Rate, and (c) in respect of
other amounts payable by the Company hereunder (other than interest), a per
annum rate that is equal to the sum of three percent (3%) per annum plus the
Floating Rate.
"Oxford" shall mean The Oxford Investment Group, Inc., a Michigan
corporation.
"PBGC" shall mean the Pension Benefit Guaranty Corporation and any
entity succeeding to any or all of its functions under ERISA.
"Permitted Disqualified Stock" is defined is Section 5.2(j).
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<PAGE> 21
"Permitted Holders" shall mean (i) any of Selwyn Isakow, his spouse and
any of his lineal descendants and their respective spouses (collectively, the
"Isakow Family") whether acting in their own name or as one or as a majority of
persons having the power to exercise the voting rights attached to, or having
investment power over, shares held by others, (ii) any Person wholly owned and
controlled by any member of the Isakow Family, and (iii) any trust solely for
the benefit of one or more members of the Isakow Family (whether or not any
member of the Isakow Family is a trustee of such trust).
"Permitted Liens" shall mean Liens permitted by Section 5.2(f) hereof.
"Person" shall include an individual, a corporation, an association, a
partnership, a limited liability company, a trust or estate, a joint stock
company, an unincorporated organization, a joint venture, a trade or business
(whether or not incorporated), a government (foreign or domestic) and any
agency or political subdivision thereof, or any other entity.
"Plan" shall mean, with respect to any Person, any pension plan
(including a Multiemployer Plan) subject to Title IV of ERISA or to the minimum
funding standards of Section 412 of the Code which has been established or
maintained by such Person, any Subsidiary of such Person or any ERISA
Affiliate, or by any other Person if such Person, any Subsidiary of such Person
or any ERISA Affiliate could have liability with respect to such pension plan.
"Pledge Agreements" shall mean each pledge agreement entered into by
the Company or any Guarantor for the benefit of the Agent and the Lenders
pursuant to this Agreement in form and substance satisfactory to the Agent, as
amended or modified from time to time.
"Preferred Stock" shall mean all Lobdell Preferred Stock and all other
preferred stock or similar Capital Stock issued by the Company or any of its
Restricted Subsidiaries at any time.
"Prime Rate" shall mean the per annum rate announced by the
Agent from time to time as its "prime rate" (it being acknowledged that such
announced rate may not necessarily be the lowest rate charged by the Agent to
any of its customers); which Prime Rate shall change simultaneously with any
change in such announced rate.
"Prohibited Transaction" shall mean any transaction involving any Plan
which is proscribed by Section 406 of ERISA or Section 4975 of the Code.
"Rate Hedging Agreement" shall mean an agreement, device or arrangement
entered into by the Company or any of its Restricted Subsidiaries providing for
payments which are related to fluctuations of interest rates, exchange rates or
forward rates, including, but not limited to, dollar-denominated or
cross-currency interest rate exchange agreements, forward currency exchange
agreements, interest rate cap or collar protection agreements, forward rate
currency or interest rate options, puts and warrants.
"Rate Hedging Obligations" of a Person shall mean any and all
obligations of such Person, whether absolute or contingent and howsoever and
whensoever created, arising, evidenced or acquired (including all renewals,
extensions and modifications thereof and substitutions therefor), under (i) any
and all Rate Hedging Agreements, and (ii) any and all cancellations, buy backs,
reversals, terminations or assignments of any Rate Hedging Agreement.
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"Rental Charges" shall mean the maximum amount of all rents and other
payments (exclusive of property taxes, property and liability insurance
premiums and maintenance costs) paid or required to be paid by the Company or
its Restricted Subsidiaries during such period under any lease of real or
personal property in respect of which the Company or its Restricted
Subsidiaries is obligated as a lessee or user, other than any Capital Lease.
"Reportable Event" shall mean a reportable event as described in
Section 4043(b) of ERISA including those events as to which the thirty (30) day
notice period is waived under Part 2615 of the regulations promulgated by the
PBGC under ERISA.
"Required Lenders" shall mean Lenders holding not less than (i) 51% (or
100% where required pursuant to Section 8.1) of the Commitments, or (ii) 51%
(or 100% where required pursuant to Section 8.1) of the Advances if the
Commitments have expired or been terminated.
"Restricted Subsidiary" shall mean each Subsidiary of the Company
existing as of the Effective Date (including the Guarantors and the Borrowing
Subsidiaries) and each other Subsidiary of the Company that is designated by
the Company as a Restricted Subsidiary.
"Revolving Credit Advance" shall mean any Revolving Credit Loan and any
Letter of Credit Advance.
"Revolving Credit Loan" shall mean any borrowing, including any
Bankers' Acceptance, under Section 2.4 evidenced by Revolving Credit Notes and
made pursuant to Section 2.1(a) or (b).
"Revolving Credit Note" shall mean any promissory note of a Borrower
evidencing the Revolving Credit Loans made to it in substantially the form
annexed hereto as Exhibit F, as amended or modified from time to time and
together with any promissory note or notes issued in exchange or replacement
therefor.
"Security Agreements" shall mean the Company Security Agreement and the
Guarantor Security Agreements.
"Security Documents" shall mean, collectively, the Security Agreements,
the Documents, the Environmental Certificate, the Creative Bond Documents, the
Guaranties, the Pledge Agreements, the subrogation and contribution agreement
and all other related agreements and documents, including financing statements
and similar documents, delivered pursuant to this Agreement or otherwise
entered into by any Person to secure or guarantee the Advances or otherwise
relating hereto.
"Senior Subordinated Debt Documents" shall mean the Senior Subordinated
Note Indenture, the Senior Subordinated Notes and all agreements and documents
executed in connection therewith at any time, including without limitation
those agreements and documents listed on Schedule 1.1-C hereto.
"Senior Subordinated Notes" shall mean the Senior Subordinated Notes
issued by the Company in the aggregate principal amount of $125,000,000 due
2007 issued pursuant to the Senior Subordinated Note Indenture.
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"Senior Subordinated Note Indenture" shall mean the Senior Subordinated
Indenture between the Company and First Trust National Association, as trustee,
dated as of June 24, 1997, as amended or modified from time to time.
"Solvent" when used with respect to any Person, means that, as of any
date of determination, (a) the amount of the "present fair saleable value" of
the assets of such Person will, as of such date, exceed the amount of all
"liabilities of such Person, contingent or otherwise," as of such date, as such
quoted terms are determined in accordance with applicable federal and state
laws governing determinations of the insolvency of debtors, (b) the present
fair saleable value of the assets of such Person will, as of such date, be
greater than the amount that will be required to pay the liability of such
Person on its debts as such debts become absolute and matured, (c) such Person
will not have, as of such date, an unreasonably small amount of capital with
which to conduct its business, and (d) such Person will be able to pay its
debts as they mature. For purposes of this definition, (i) "debt" means
liability on a "claim", and (ii) "claim" means any (x) right to payment,
whether or not such a right is reduced to judgment, liquidated, unliquidated,
fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable,
secured or unsecured or (y) right to an equitable remedy for breach of
performance if such breach gives rise to a right to payment, whether or not
such right to an equitable remedy is reduced to judgment, fixed, contingent,
matured or unmatured, disputed, undisputed, secured or unsecured.
"Subordinated Debt" of any Person shall mean, as of any date, that
Indebtedness of such Person for borrowed money which is expressly subordinate
and junior in right and priority of payment to the Advances and other
Indebtedness of such Person to the Lenders in manner and by agreement
satisfactory in form and substance to the Agent and subject to such other terms
and provisions, including without limitation maturities, covenants, defaults,
rates and fees, acceptable to the Agent, and shall include, without limitation,
all indebtedness owing pursuant to the Senior Subordinated Debt Documents and
any Permitted Disqualified Stock.
"Subordinated Debt Documents" shall mean the Senior Subordinated Debt
Documents and any other agreement or document evidencing or relating to any
Subordinated Debt, whether under the Senior Subordinated Notes or any other
Subordinated Debt.
"Subsidiary" of any Person shall mean any other Person (whether now
existing or hereafter organized or acquired) in which (other than directors
qualifying shares required by law) at least a majority of the securities or
other ownership interests of each class having ordinary voting power or
analogous right (other than securities or other ownership interests which have
such power or right only by reason of the happening of a contingency), at the
time as of which any determination is being made, are owned, beneficially and
of record, by such Person or by one or more of the other Subsidiaries of such
Person or by any combination thereof. Unless otherwise specified, reference to
"Subsidiary" shall mean a Subsidiary of the Company.
"Swingline Facility" shall have the meaning specified in Section
2.1(c).
"Swingline Loan" shall mean any loan under Section 2.4 evidenced by a
Swingline Note and made by the Agent (including NBD Canada) to a Borrower
pursuant to Section 2.1(c).
"Swingline Note" shall mean any promissory note of a Borrower
evidencing the Swingline Loans in substantially the form of Exhibit G hereto,
as amended or modified from time to time and together with any promissory note
or notes issued in exchange or replacement therefor.
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"Tax Sharing Agreement" shall mean any tax sharing or similar
agreement, if any, entered into between the Company and its Subsidiaries at any
time, as amended or modified from time to time.
"Termination Date" shall mean the earlier to occur of (a) June 24, 2003
and (b) the date on which the Commitments shall be terminated pursuant to
Section 2.2 or Section 6.2.
"Tooling" shall mean dies, molds, tooling and similar items.
"Tooling Contract" shall mean any contract for the fabrication or
purchase of Tooling.
"Tooling Indebtedness" shall mean all Indebtedness of the Company and
its Restricted Subsidiaries incurred for the purpose of financing Tooling,
which Indebtedness can be and is being fully serviced by payments for such
Tooling so financed and which payments are not in dispute, all as reasonably
determined by the Agent.
"Total Debt" shall mean, as of any date, each of the following, on a
consolidated basis for the Company and its Restricted Subsidiaries without
duplication: (a) all Indebtedness for borrowed money and similar monetary
obligations evidenced by bonds, notes, debentures, Capital Lease obligations,
bankers acceptances or otherwise, including without limitation obligations in
respect of the deferred purchase price of properties or assets, in each case
whether direct or indirect; plus (b) all liabilities secured by any Lien
existing on property owned or acquired subject thereto, whether or not the
liability secured thereby shall have been assumed; plus (c) all reimbursements
obligations under outstanding letters of credit in respect of drafts which may
be presented or have been presented and have not yet been paid and are not
included in clause (a) above; plus (d) Permitted Disqualified Stock; plus (e)
all guarantees and all other Contingent Liabilities with respect to any of the
indebtedness, obligations or liabilities described in the foregoing clauses
(a), (b), (c)or (d), including without limitation all guarantees and other
Contingent Liabilities of the Company or any Restricted Subsidiary with respect
to any such indebtedness, obligations or liabilities of any Unrestricted
Subsidiaries; less (f) unexpended proceeds of the Creative Revenue Bond; less
(g) Tooling Indebtedness; less (h) cash equivalents acceptable to the Agent and
cash of the Company and its Restricted Subsidiaries, less any book overdrafts,
bank overdrafts or similar items.
"Total Debt to EBITDA Ratio" shall mean, at any time, the ratio of (a)
Total Debt at such time to (b) EBITDA, calculated as of the four most recently
completed fiscal quarters of the Company (provided that EBITDA as calculated in
determining the Total Debt to EBITDA Ratio for (i) the fiscal quarter ending
June 30, 1997 shall be equal to the sum of the EBITDA for the fiscal quarter
ending June 30, 1997 plus $21,144,000, (ii) the fiscal quarter ending September
30, 1997 shall be equal to the sum of EBITDA for the two quarters ending
September 30, 1997 plus $14,096,000 and (iii) the fiscal quarter ending
December 31, 1997 shall be equal to the sum of EBITDA for the three fiscal
quarters ending December 31, 1997 plus $7,048,000), all as determined in
accordance with Generally Accepted Accounting Principles.
"U.S. Advances" shall mean all Loans denominated in Dollars and all
Letters of Credit.
"U.S. Percentage" of any Lender as of any date, shall mean a fraction
(expressed as a percentage), the numerator of which is the difference of (a)
the Commitment of such Lender on such date minus (b) the Canadian Advances made
by such Lender (including any Affiliate of such Lender) which
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are outstanding as of such date, after giving effect to any Canadian Advances
to be made as of such date, and the denominator of which is the aggregate
Commitments of all Lenders.
"Unfunded Benefit Liabilities" shall mean, with respect to any Plan as
of any date, the net pension liability as determined under FAS 87.
"Unrestricted Guaranties" shall mean all Contingent Liabilities of the
Company or of any Guarantor with respect to any Indebtedness of any
Unrestricted Subsidiaries, which Contingent Liabilities shall be deemed
outstanding in an amount equal to the maximum amount that could be payable
thereunder.
"Unrestricted Subsidiary" shall mean any Subsidiary of the Company
(including any newly acquired or newly formed Subsidiary) which is not a
Restricted Subsidiary.
"Voting Stock" of a Person shall mean all classes of Capital Stock or
other interests (including partnership interests) of such Person then
outstanding and normally entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees
thereof.
"Wholly Owned Subsidiary" shall mean a Subsidiary all the Capital Stock
of which (other than directors' qualifying shares) is owned by the Company
and/or one or more other Wholly Owned Subsidiaries.
1.2 Other Definitions; Rules of Construction. As used herein, the
terms "Agent", "Lender", "Lenders", "Company", "Borrowing Subsidiary",
"Borrowers" and "this Agreement" shall have the respective meanings ascribed
thereto in the introductory paragraph of this Agreement. Such terms, together
with the other terms defined in Section 1.1, shall include both the singular
and the plural forms thereof and shall be construed accordingly. All
computations required hereunder and all financial terms used herein shall be
made or construed in accordance with Generally Accepted Accounting Principles
unless such principles are inconsistent with the express requirements of this
Agreement; provided that, if the Company notifies the Agent that the Company
wishes to amend any covenant in Article V to eliminate the effect of any change
in Generally Accepted Accounting Principles in the operation of such covenant
(or if the Agent notifies the Company that the Required Lenders wish to amend
Article V for such purpose), then the Company's compliance with such covenant
shall be determined on the basis of Generally Accepted Accounting Principles in
effect immediately before the relevant change in Generally Accepted Accounting
Principles became effective, until either such notice is withdrawn or such
covenant is amended in a manner satisfactory to the Company and the Required
Lenders. Use of the terms "herein", "hereof", and "hereunder" shall be deemed
references to this Agreement in its entirety and not to the Section or clause
in which such term appears. References to "Sections" and "subsections" shall
be to Sections and subsections, respectively, of this Agreement unless
otherwise specifically provided. Notwithstanding anything herein, in any
financial statements of the Company or in Generally Accepted Accounting
Principles to the contrary, for purposes of calculating the Applicable Margin
and of calculating and determining compliance with the financial covenants in
Sections 5.2(a), (b), (c) and (d), including defined terms used therein, (i) no
Unrestricted Subsidiary shall be consolidated with the Company and its other
Subsidiaries and each Unrestricted Subsidiary shall be treated as if it were an
equity interest and all income, liabilities and assets of each Unrestricted
Subsidiary shall be excluded from all such calculations and determinations
thereunder except to the extent expressly provided herein, and (ii) any
acquisitions made by the Company or any of its Subsidiaries, including through
mergers or consolidations and including any related financial transactions,
during the period for which such financial covenants were calculated shall be
deemed to
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have occurred on the first day of the relevant period for which such financial
covenants were calculated on a pro forma basis acceptable to the Agent.
ARTICLE II.
THE COMMITMENTS, THE SWINGLINE FACILITY
AND THE ADVANCES
2.1 Commitment of the Lenders and Canadian and Swingline Facility.
(a) U.S. Advances. Each Lender agrees, for itself only,
subject to the terms and conditions of this Agreement, to make Loans to the
Company pursuant to Section 2.4 and to participate in Letter of Credit Advances
to the Company pursuant to Section 2.4 and Section 3.3, from time to time from
and including the Effective Date to but excluding the Termination Date,
denominated in Dollars and not to exceed in aggregate principal amount at any
time outstanding to the Company the respective amounts determined pursuant to
Section 2.1(d).
(b) Canadian Advances. (i) Each Canadian Lender agrees,
for itself only, subject to the terms and conditions of this Agreement, to make
Canadian Advances to the Borrowing Subsidiaries pursuant to Section 2.4, from
time to time from and including the Effective Date to be excluding the
Termination Date, not to exceed an aggregate principal amount at any time
outstanding to the Borrowing Subsidiaries the respective amounts determined
pursuant to Section 2.1(d).
(ii) If on any date a Canadian Advance is to be made to a
Borrowing Subsidiary (A) such Canadian Advance may not be made because the
aggregate Commitments of the Canadian Lenders would be exceeded and (B) the
amount by which such Commitments of the Canadian Lenders would be exceeded is
less than or equal to the aggregate unused Commitments of Lenders that are not
Canadian Lenders, each Lender that is not a Canadian Lender shall make a U.S.
Advance to the Company on such date, if the conditions for such an Advance are
satisfied, and the proceeds of such U.S. Advance shall be simultaneously
applied to repay the outstanding U.S. Advances of the Canadian Lenders, in each
case in amounts such that, after giving effect to such Borrowing and repayments
and the Borrowing from the Canadian Lenders of the requested Canadian Advance,
the provisions of Section 2.1(d) will not be violated. If any Borrowing of
U.S. Advances is required pursuant to this Section 2.1(b)(ii), the Company
shall notify the Agent in the manner provided for U.S. Advances in Section 2.4
and the Agent will notify each Lender of the amount to be advanced by such
Lender.
(c) Swingline Loans. (i) Any Borrower may request the
Agent to make, and the Agent may, in its sole discretion, make Swingline Loans
to the Borrowers from time to time on any Business Day during the period from
the Effective Date until the Termination Date in an aggregate principal amount
for all Borrowers not to exceed at any time the lesser of (A) the Dollar
Equivalent of $10,000,000 (the "Swingline Facility") and (B) the aggregate
amount of Revolving Credit Advances that could be but is not borrowed as of
such date. Each Lender's Commitment shall be deemed utilized by an amount
equal to such Lender's pro rata share (based on such Lender's Commitment) of
each Swingline Loan for purposes of determining the amount of Revolving Credit
Advances required to be made by such Lender, but no Lender's (including NBD
Bank's) Commitment, shall be deemed utilized for purposes of determining
commitment fees under Section 2.3(a). Swingline Loans shall bear interest at
the Floating Rate. Within the limits of the Swingline Facility, so long as the
Agent, in its sole discretion, elects to make Swingline Loans, the Borrowers
may borrow and reborrow under this Section 2.1(c)(i). Swingline Loans to the
Borrowing Subsidiaries will be made by the Agent through its Affiliate NBD
Canada.
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(ii) The Agent may at any time in its sole and
absolute discretion require that any Swingline Loan be refunded by a Floating
Rate Borrowing from the Lenders (or the Canadian Lenders in the case of a
Swingline Loan to a Borrowing Subsidiary), and upon written notice thereof by
the Agent to such Lenders and the relevant Borrower, such Borrower shall be
deemed to have requested a Floating Rate Borrowing in an amount equal to the
amount of such Swingline Loan, and such Floating Rate Borrowing shall be made
to refund such Swing Line Loan. Each such Lender shall be absolutely and
unconditionally obligated to fund its pro rata share (based on such Lender's
Commitment) of such Floating Rate Borrowing or, if applicable, purchase a
participating interest in the Swingline Loans pursuant to Section 2.1(c)(iii)
and such obligation shall not be affected by any circumstance, including,
without limitation, (A) any set-off, counterclaim, recoupment, defense or other
right which such Lender has or may have against the Agent, NBD Canada or the
Company or any if its Subsidiaries or anyone else for any reason whatsoever;
(B) the occurrence or continuance of a Default or an Event of Default, subject
to Section 2.1(c)(iii); (C) any adverse change in the condition (financial or
otherwise) of the Company or any of its Subsidiaries; (D) any breach of this
Agreement or any other agreement by any other Lender, the Company or any
Guarantor; or (E) any other circumstance, happening or event whatsoever,
whether or not similar to any of the foregoing (including without limitation
the Company's failure to satisfy any conditions contained in Article II or any
other provision of this Agreement).
(iii) If Floating Rate Loans may not be made by the
Lenders as described in Section 2.1(c)(ii) due to any Event of Default pursuant
to Section 6.1(h) or if the Lenders are otherwise legally prohibited from
making Floating Rate Loans, then effective on the date each such Floating Rate
Loan would otherwise have been made, each Lender (or the Canadian Lenders in
the case of a Swingline Loan to a Borrowing Subsidiary) severally agrees that
it shall unconditionally and irrevocably, without regard to the occurrence of
any Default or Event of Default or any other circumstances, in lieu of deemed
disbursement of Loans, to the extent of such Lender's Commitment, purchase a
participating interest in the Swingline Loans by paying its participation
percentage thereof. Each such Lender will immediately transfer to the Agent,
in same day funds, the amount of its participation. After such payment to the
Agent, each Lender shall share on a pro rata basis (calculated by reference to
its Commitment) in any interest which accrues thereon and in all repayments
thereof. If and to the extent that any such Lender shall not have so made the
amount of such participating interest available to the Agent, such Lender and
the Borrowers severally agree to pay to the Agent forthwith on demand such
amount together with interest thereon, for each day from the date of demand by
the Agent until the date such amount is paid to the Agent, at (A) in the case
of the Borrowers, the interest rate specified above and (B) in the case of such
Lender, the Federal Funds Rate for the first five days after the date of demand
by the Agent and thereafter at the interest rate specified above.
(d) Limitation on Amount of Advances. Notwithstanding
anything in this Agreement to the contrary, (i) the Dollar Equivalent to the
aggregate principal amount of the Revolving Credit Advances made or
participated in by any Lender (which for any Lender includes all U.S. Advances
and all Canadian Advances by such Lender, which directly by such Lender or
through an Affiliate of such Lender in the case of Canadian Advances) at any
time outstanding shall not exceed the amount of its respective Commitment as of
the date any such Advance is made, (ii) the aggregate principal amount of
Letter of Credit Advances outstanding at any time shall not exceed $15,000,000,
(iii) the aggregate Dollar Equivalent of all Canadian Advances shall not exceed
$25,000,000 at any time, (iv) the sum of the Dollar Equivalent of the aggregate
Advances plus the Dollar Equivalent of the aggregate amount of Unrestricted
Guaranties shall not exceed the aggregate Commitments and (v) the sum of the
Dollar Equivalent to the aggregate Advances plus the aggregate Dollar
Equivalent of the Unrestricted Guaranties shall not exceed the amount of the
Borrowing Base.
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2.2 Termination and Reduction of Commitments. (a) The Company
shall have the right to terminate or reduce the Commitments at any time and
from time to time, provided that (i) the Company shall give three Business
Days' prior written notice of such termination or reduction to the Agent
specifying the amount and effective date thereof, (ii) each partial reduction
of the Commitments shall be in a minimum amount of $1,000,000 and in an
integral multiple of $1,000,000 and shall reduce the Commitments of all of the
Lenders proportionately in accordance with the respective Commitment amounts
for each such Lender set forth in the signature pages hereof next to name of
each such Lender, (iii) no such termination or reduction shall be permitted
with respect to any portion of the Commitments as to which a request for an
Advance pursuant to Section 2.4 is then pending and (iv) the Commitments may
not be terminated if any Advance is then outstanding with respect to such
Commitments and may not be reduced below the principal amount of Advances with
respect to such Commitments then outstanding. The Commitments or any portion
thereof terminated or reduced pursuant to this Section 2.2 may not be
reinstated.
(b) For purposes of this Agreement, a Letter of Credit
Advance (i) shall be deemed outstanding in an amount equal to the sum of the
maximum amount available to be drawn under the related Letter of Credit on or
after the date of determination and on or before the stated expiry date thereof
plus the amount of any draws under such Letter of Credit that have not been
reimbursed as provided in Section 3.3 and (ii) shall be deemed outstanding at
all times on and before such stated expiry date or such earlier date on which
all amounts available to be drawn under such Letter of Credit have been fully
drawn, and thereafter until all related reimbursement obligations have been
paid pursuant to Section 3.3. As provided in Section 3.3, upon each payment
made by the Agent in respect of any draft or other demand for payment under any
Letter of Credit, the amount of any Letter of Credit Advance outstanding
immediately prior to such payment shall be automatically reduced by the amount
of each Loan deemed advanced, if any, in respect of the related reimbursement
obligation of the Company.
2.3 Fees. (a) The Company agrees to pay to the Agent, for the
benefit of each Lender, a commitment fee on the daily average unused amount
(with Letter of Credit Advances constituting usage under the Commitment and
with Unrestricted Guaranties and Swingline Loans not constituting usage under
the Commitment for purposes of this Section 2.3(a)) of its respective
Commitment during each calendar quarter or portion thereof, for the period from
the Effective Date to but excluding the Termination Date, at a rate equal to
the Applicable Margin in effect. Accrued commitment fees shall be payable
quarterly in arrears on the last Business Day of each March, June, September
and December, commencing on the first such Business Day occurring after the
Effective Date, and on the Termination Date.
(b) The Company agrees to pay to the Agent, for the
benefit of the Lenders, a fee computed at the rate equal to the then Applicable
Margin in effect of the maximum amount available to be drawn from time to time
under each Letter of Credit for the period from and including the date of
issuance, extension or renewal, as the case may be, of such Letter of Credit to
and including the expiry date of such Letter of Credit, provided that the Agent
shall retain, for its own account from each such fee, a fee computed at the
rate of 0.25% per annum of such maximum amount for such period. Such fees are
payable quarterly in arrears on the last Business Day of each March, June,
September and December. The Company further agrees to pay to the Agent, on
demand, such other customary administrative fees, charges and expenses of the
Agent in respect of the issuance, negotiation, acceptance, amendment, transfer
and payment of such Letter of Credit or otherwise payable pursuant to the
application and related documentation under which such Letter of Credit is
issued. Notwithstanding
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anything in the Creative Revenue Bond Documents to the contrary, the fees
payable for the Creative Letter of Credit shall be governed by this Section
2.3(b) as of and after the Effective Date.
(c) The Company further agrees to pay to the Agent and/or
its Affiliates such fees in such amounts as may from time to time be agreed
upon in writing by the Company and the Agent.
2.4 Disbursement of Advances. (a) The applicable Borrower shall
give the Agent notice of its request for an Advance in substantially the form
of Exhibit H hereto not later than 1:00 p.m. Detroit time (i) three LIBOR
Business Days prior to the date such Borrowing is requested to be made if such
Borrowing is to be made as a LIBOR Borrowing, (ii) five Business Days prior to
the date any Letter of Credit Borrowing is requested to be made, (iii) three
Business Days prior to the date such Borrowing is requested to be made if such
Borrowing is to be made as an Acceptance Borrowing and (iv) one Business Day
prior to the date such Borrowing is requested to be made in all other cases,
which notice shall specify whether a LIBOR Borrowing, Floating Rate Borrowing,
Acceptance or Letter of Credit Borrowing is requested and, in the case of each
requested LIBOR Borrowing or Acceptance Borrowing, the Interest Period to be
initially applicable to such Borrowing and, in the case of each Letter of
Credit Borrowing, such information as may be necessary for the issuance thereof
by the Agent. The Applicable Borrower shall give the Agent notice of its
request for each Swingline Loan in substantially the form of Exhibit I hereto
not later than 1:00 p.m. Detroit time on the same Business Day such Swingline
Loan is requested to be made. The Agent, not later than the Business Day next
succeeding the day such notice is given, shall provide notice of such requested
Borrowing (not including Swingline Loans) to each Lender. Subject to the terms
and conditions of this Agreement, the proceeds of each such requested Borrowing
or Swingline Loan shall be made available to such Borrower by depositing the
proceeds thereof in immediately available funds, in an account maintained and
designated by such Borrower at the principal office of the Agent in the case of
U.S. Advances and at the principal office of NBD Canada in the case of Canadian
Advances. Subject to the terms and conditions of this Agreement, the Agent
shall, on the date any Letter of Credit Borrowing is requested to be made,
issue the related Letter of Credit on behalf of the Lenders for the account of
the Company. Notwithstanding anything herein to the contrary, the Agent may
decline to issue any requested Letter of Credit on the basis that the
beneficiary, the purpose of issuance or the terms or the conditions of drawing
are unacceptable to it in its reasonable discretion.
(b) Each Lender, on the date any Borrowing is requested to
be made, shall make its pro rata share of such Borrowing available in
immediately available funds for disbursement to the applicable Borrower
pursuant to the terms and conditions of this Agreement. Unless the Agent shall
have received notice from any Lender prior to the date such Borrowing is
requested to be made under this Section 2.4 that such Lender will not make
available to the Agent such Lender's pro rata portion of such Borrowing, the
Agent may assume that such Lender has made such portion available to the Agent
on the date such Borrowing is requested to be made in accordance with this
Section 2.4. Each Lender's pro rata share of any U.S. Advance shall be based
on its U.S. Percentage, and each Canadian Advance shall be made by the Canadian
Lenders (either directly or through an Affiliate) based on its Canadian
Percentage. If and to the extent such Lender shall not have so made such pro
rata portion available to the Agent, the Agent may (but shall not be obligated
to) make such amount available to such Borrower , and such Lender and such
Borrower severally agree to pay to the Agent forthwith on demand such amount
together with interest thereon, for each day from the date such amount is made
available to such Borrower by the Agent until the date such amount is repaid to
the Agent, at a rate per annum equal to the interest rate applicable to such
Borrowing during such period. If such Lender shall pay such amount to the
Agent together with interest, such amount so paid shall constitute a Loan by
such Lender as a part of such Borrowing for purposes of this Agreement. The
failure of any Lender to make its pro rata portion
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of any such Borrowing available to the Agent shall not relieve any other Lender
of its obligations to make available its pro rata portion of such Borrowing on
the date such Borrowing is requested to be made, but no Lender shall be
responsible for failure of any other Lender to make such pro rata portion
available to the Agent on the date of any such Borrowing.
(c) All Revolving Credit Loans made under this Section 2.4
to the Borrowers shall be evidenced by the Revolving Credit Notes issued by the
Borrowers and all Swingline Loans under this Section 2.4 shall be evidenced by
the Swingline Notes issued by the Borrowers, and all such Loans shall be due
and payable and bear interest as provided in Article III. Each Lender is
hereby authorized by the Borrowers to record on the schedules attached to the
Notes or in its books and records, the date, amount and type of each Loan and
the duration of the related Interest Period (if applicable), the amount of each
payment or prepayment of principal thereon, and the other information provided
for on such schedule, which schedule or books and records, as the case may be,
shall constitute prima facie evidence of the information so recorded, provided,
however, that failure of any Lender to record, or any error in recording, any
such information shall not relieve the Borrowers of their obligations to repay
the outstanding principal amount of the Loans, all accrued interest thereon and
other amounts payable with respect thereto in accordance with the terms of the
Notes and this Agreement. Subject to the terms and conditions of this
Agreement, the Borrowers may borrow Loans under this Section 2.4 and under
Section 3.3, prepay Loans pursuant to Section 3.1 and reborrow Loans, under
this Section 2.4 and under Section 3.3.
(d) Nothing in this Agreement shall be construed to
require or authorize any Lender to issue any Letter of Credit, it being
recognized that the Agent has the sole obligation under this Agreement to issue
Letters of Credit on behalf of the Lenders. Upon each issuance, extension and
renewal by the Agent, each Lender shall automatically and unconditionally
acquire a pro rata risk participation interest in such Letter of Credit Advance
based on the amount of its respective Commitment, and each Existing Letter of
Credit shall be deemed issued hereunder and each Lender shall automatically and
unconditionally acquire a pro rata risk participation interest therein based on
the amount of its respective Commitment, upon becoming a Lender hereunder. If
the Agent shall honor a draft or other demand for payment presented or made
under any Letter of Credit, the Agent shall provide notice thereof to each
Lender promptly after such draft or demand is honored unless the Company shall
have satisfied its reimbursement obligation under Section 3.3 by payment to the
Agent on such date. Each Lender, on the date of such notice, shall absolutely
and unconditionally make its pro rata share, (based on its Commitment) of the
amount paid by the Agent available in immediately available funds at the
principal office of the Agent for the account of the Agent. If and to the
extent such Lender shall not have made such pro rata portion available to the
Agent, such Lender and the Company severally agree to pay to the Agent
forthwith on demand such amount together with interest thereon, for each day
from the date such amount was paid by the Agent until such amount is so made
available to the Agent at a per annum rate equal to the interest rate
applicable during such period to the Floating Rate Loans. If a Loan has been
disbursed in respect to the reimbursement obligation of the Company under
Section 3.3 in the case of Letter of Credit, then if such Lender shall pay such
amount to the Agent together with such interest, such amount so paid shall
constitute a Loan by such Lender as part of such Borrowing disbursed in respect
of the reimbursement obligation of the Company under Section 3.3 for purposes
of this Agreement. The failure of any Lender to make its pro rata portion of
any such amount paid by the Agent available to the Agent shall not relieve any
other Lender of its obligation to make available its pro rata portion of such
amount, but no Lender shall be responsible for failure of any other Lender to
make such pro rata portion available to the Agent.
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2.5 Conditions for First Disbursement. The obligation of the
Lenders to make the first Borrowing hereunder is subject to receipt by each
Lender and the Agent of the following documents and completion of the following
matters, in form and substance satisfactory to each Lender and the Agent:
(a) Charter Documents. Certificates of recent date of the
appropriate authority or official of each Borrower and each Guarantor's
respective state or province of organization (listing all charter documents of
each Borrower and each Guarantor, respectively, on file in that office if such
listing is available) and certifying as to the good standing and existence of
each Borrower and each Guarantor, respectively, together with copies of such
charter documents of each Borrower and each Guarantor, certified as of a recent
date by such authority or official and certified as true and correct as of the
Effective Date by a duly authorized officer of each Borrower and each
Guarantor, respectively;
(b) Operating Agreements, By-Laws and Corporate
Authorizations. Copies of the operating agreements or article of
incorporation, as the case may be, and by-laws of each Borrower and each
Guarantor together with all authorizing resolutions and evidence of other
corporate action taken by each Borrower and each Guarantor to authorize the
execution, delivery and performance by each Borrower and each Guarantor of the
Loan Documents to which each Borrower and such Guarantor, respectively, is a
party and the consummation by each Borrower and such Guarantor, respectively,
of the transactions contemplated hereby, certified as true and correct as of
the Effective Date by a duly authorized officer of each Borrower and each
Guarantor, respectively;
(c) Incumbency Certificate. Certificates of incumbency of
each Borrower and each Guarantor containing, and attesting to the genuineness
of, the signatures of those officers authorized to act on behalf of each
Borrower and such Guarantor in connection with the Loan Documents to which each
Borrower or such Guarantor is a party and the consummation by each Borrower and
such Guarantor of the transactions contemplated hereby, certified as true and
correct as of the Effective Date by a duly authorized officer of each Borrower
and each Guarantor, respectively;
(d) Notes. The Revolving Credit Notes duly executed on
behalf of the Borrowers for each Lender and the Swingline Notes duly executed
on behalf of the Borrowers for the Agent and NBD Canada;
(e) Security Documents. The Security Agreements duly
executed on behalf of the Company and the Guarantors, the Pledge Agreements
duly executed by the Company and, to the extent applicable, each Guarantor and
the Guaranties duly executed on behalf of each Guarantor, granting to the
Lenders and the Agent the collateral and security intended to be provided
pursuant to Section 2.11, together with:
(i) Recording, Filing, Etc. Evidence of the
recordation, filing and other action (including payment of any applicable taxes
or fees) in such jurisdictions as the Lenders or the Agent may deem necessary
or appropriate with respect to the Security Documents, including the filing of
financing statements, financing statement assignments, financing statement
amendments and similar documents which the Lenders and the Agent may deem
necessary or appropriate to create, preserve or perfect the liens, security
interests and other rights intended to be granted to the Lenders or the Agent
thereunder, together with Uniform Commercial Code record and other searches in
such offices as the Lenders or the Agent may request;
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(ii) Leased Property; Landlord Waivers. A
schedule setting forth all real property leased by the Company and each
Guarantor, together with copies of the related leases, certified as true and
correct as of the Effective Date by a duly authorized officer of the Company,
and an agreement of each landlord under such leases, in form and substance
acceptable to the Lenders and the Agent, waiving its distraint, lien and
similar rights with respect to any property subject to the Security Documents
and agreeing to permit the Lenders and the Agent to enter such premises in
connection therewith;
(iii) Casualty and Other Insurance. Evidence that
the casualty and other insurance required pursuant to Section 5.1(c) and the
Security Agreements is in full force and effect;
(iv) Stock. The original stock certificates of
the Capital Stock of each Restricted Subsidiary and appropriate stock powers,
together with any recording and any consents and waivers requested by the Agent
with respect to the exercise of any rights under the Pledge Agreements,
including without limitation any shareholders' and board of directors' consents
so requested; and
(v) Environmental Matters. The Environmental
Certificate duly executed on behalf of the Borrowers and each of the
Guarantors;
(f) Legal Opinion. The favorable written opinion of
Dykema Gossett PLLC and Fasken Campell Godfrey, counsels for the Borrowers and
Guarantors, with respect to such matters as the Agent may reasonably request;
(g) Consents, Approvals, Etc. Copies of all governmental
and nongovernmental consents, approvals, authorizations, declarations,
registrations or filings, if any, required on the part of the Company or any
Guarantor in connection with the execution, delivery and performance of the
Loan Documents or the transactions contemplated hereby or as a condition to the
legality, validity or enforceability of the Loan Documents, certified as true
and correct and in full force and effect as of the Effective Date by a duly
authorized officer of the Company, or, if none is required, a certificate of
such officer to that effect;
(h) Fees. Payment of the fees described in Section
2.3(c);
(i) Termination of Existing Credit Agreements. Evidence
in form and substance satisfactory to the Agent regarding the termination of
all commitments and other credit facilities under the Credit Agreement dated as
of January 10, 1997 among Lobdell, the lenders party thereto, and NBD Bank, as
Agent, and the Credit Agreement dated as of February 11, 1997 among BMG, the
lenders party thereto, and NBD Canada, as Agent, together with the payment of
all indebtedness and liabilities owing pursuant thereto, and it is acknowledged
and agreed that this Agreement is in substitution and replacement for such
credit agreements and all liens and security interests granted pursuant thereto
shall continue hereunder and all financing statements filed in connection
therewith shall remain in effect with respect to the Loan Documents executed in
connection herewith;
(j) Solvency Certificate. A solvency certificate duly
executed by the Company and its Subsidiaries in form and substance satisfactory
to the Agent;
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(k) Subordinated Debt. Evidence satisfactory to the Agent
that the Company has incurred Subordinated Debt in an amount equal to or
greater than $125,000,000 in accordance with the Senior Subordinated Debt
Documents, all Senior Subordinated Debt Documents shall have been delivered to
the Agent and shall be satisfactory to the Agent and all transactions
contemplated pursuant to the Senior Subordinated Debt Documents shall have been
completed;
(l) Intercreditor Agreement. The Intercreditor Agreement
duly executed by all parties thereto, together with any documents required in
connection therewith by the Agent; and
(m) Miscellaneous. Such other documents, and completion
of such other matters, as the Agent may reasonably request.
2.6 Further Conditions for Disbursement. The obligation of the
Lenders to make any Advance (including the first Advance), or any continuation
or conversion under Section 2.7, is further subject to the satisfaction of the
following conditions precedent:
(a) The representations and warranties contained in
Article IV hereof, and in the other Loan Documents, shall be true and correct
on and as of the date such Advance is made (both before and after such Advance
is made) as if such representations and warranties were made on and as of such
date;
(b) No Default or Event of Default shall exist or shall
have occurred and be continuing on the date such Advance is made (whether
before or after such Advance is made);
(c) The Agent shall have received the Borrowing Base
Certificate if required pursuant to Section 5.1(d)(v) as of the close of
business on the last day of the month next preceding the date such Advance is
made; and
(d) In the case of any Letter of Credit Advance, the
Company shall have delivered to the Agent an application for the related Letter
of Credit and other related documentation requested by and acceptable to the
Agent appropriately completed and duly executed on behalf of the Company; and
(e) In the case of any Acceptance, the Borrowing
Subsidiary shall have delivered all documents and agreements required pursuant
to Section 3.4.
The Borrowers shall be deemed to have made a representation and warranty to the
Lenders at the time of the making of, and the continuation or conversion of,
each Advance to the effects set forth in clauses (a) and (b). For purposes of
this Section 2.6 the representations and warranties contained in Section 4.6
hereof shall be deemed made with respect to both the financial statements
referred to therein and the most recent financial statements delivered pursuant
to Section 5.1(d)(ii) and (iii).
2.7 Subsequent Elections as to Borrowings. The applicable
Borrower may elect (a) to continue a LIBOR Borrowing, or a portion thereof, as
a LIBOR Borrowing or (b) to convert a LIBOR Borrowing or a portion thereof to a
Floating Rate Borrowing, (c) to convert a Floating Rate Borrowing to a LIBOR
Borrowing, (d) to continue an Acceptance or a portion thereof, as an Acceptance
or (e) to convert an Acceptance or a portion thereof to a Floating Rate
Borrowing, in each case by giving notice thereof to the Agent (with sufficient
executed copies for each Lender) in substantially the form of Exhibit J hereto
not later than 1:00 p.m. Detroit time three LIBOR Business Days prior to the
date any such
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continuation of or conversion to a LIBOR Borrowing is to be effective, not
later than 1:00 p.m. Toronto time three Business Days prior to the date any
such continuation of or conversion to an Acceptance is to be effective and not
later than 1:00 p.m. Detroit time on one Business Day prior to the date of any
such continuation or conversion is to be effective in all other cases, provided
that an outstanding LIBOR Borrowing or Acceptance Borrowing may only be
converted on the last day of the then current Interest Period with respect
to such Borrowing, and provided, further, if a continuation of a Borrowing as,
or a conversion of a Borrowing to, a LIBOR Borrowing or Acceptance Borrowing is
requested, such notice shall also specify the Interest Period to be applicable
thereto upon such continuation or conversion. The Agent, not later than the
Business Day next succeeding the day such notice is given, shall provide notice
of such election to the Lenders. If the applicable Borrower shall not timely
deliver such a notice with respect to any outstanding LIBOR Borrowing or
Acceptance Borrowing, such Borrower shall be deemed to have elected to convert
such LIBOR Borrowing or Acceptance Borrowing to a Floating Rate Borrowing on
the last day of the then current Interest Period with respect to such
Borrowing.
2.8 Limitation of Requests and Elections. Notwithstanding any
other provision of this Agreement to the contrary, (a) if, upon receiving a
request for a LIBOR Borrowing pursuant to Section 2.4, or a request for a
continuation of a LIBOR Borrowing or a request for a conversion of a Floating
Rate Borrowing to a LIBOR Borrowing pursuant to Section 2.7, (i) deposits in
Dollars for periods comparable to the LIBOR Interest Period elected by the
Company are not available to any Lender in the relevant interbank market, or
(ii) LIBOR will not adequately and fairly reflect the cost to any Lender of
making, funding or maintaining the related LIBOR Loan or (iii) by reason of
national or international financial, political or economic conditions or by
reason of any applicable law, treaty or other international agreement, rule or
regulation (whether domestic or foreign) now or hereafter in effect, or the
interpretation or administration thereof by any governmental authority charged
with the interpretation or administration thereof, or compliance by any Lender
with any guideline, request or directive of such authority (whether or not
having the force of law), including without limitation exchange controls, it is
impracticable, unlawful or impossible for, or shall limit or impair the ability
of, any Lender to make or fund the relevant Loan or to so continue or convert
such Loan then the Company shall not be entitled, so long as such circumstances
continue, to request such a Borrowing pursuant to Section 2.4 or a continuation
of or conversion to such a Borrowing pursuant to Section 2.7 and (b) if the
Agent shall have determined that by reason of circumstances affecting the money
market, there is no market for Acceptances, then the right of the Borrowing
Subsidiary to request Acceptances and the acceptance thereof shall be suspended
until the Agent determines that the circumstances causing such suspension no
longer exists and the Agent so notifies the Borrowing Subsidiary. In the event
that such circumstances no longer exist, the Lenders shall again consider
requests for such Borrowings pursuant to Section 2.4, and requests for
continuations of and conversions to such Borrowings pursuant to Section 2.7.
2.9 Minimum Amounts; Limitation on Number of Borrowings; Etc.
Except for (a) Borrowings which exhaust the entire remaining amount of the
Commitments, and (b) payments required pursuant to Section 3.1(c), each
Floating Rate Borrowing in denominated Dollars and each prepayment thereof
shall be in a minimum amount of $500,000 and in an integral multiple of
$100,000, each LIBOR Borrowing and each continuation or conversion thereof
pursuant to Section 2.7 shall be in a minimum amount of $2,000,000 and in an
integral multiple of $500,000, each Letter of Credit Advance shall be in a
minimum amount of $100,000, each Floating Rate denominated in CAD and each
prepayment thereof shall be in a minimum amount of CAD $500,000 and in integral
multiple of CAD $100,000, and each Acceptance and each continuation or
conversion thereof pursuant to Section 2.7 shall be in a minimum amount of CAD
$2,000,000 and in an integral multiple of CAD $500,000. The aggregate number
of LIBOR Borrowings and Acceptance Borrowing outstanding at any one time under
this Agreement may
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not exceed eight (8). The aggregate number of Letter of Credit Advances
outstanding at any time under this Agreement may not exceed five (5). No
Letter of Credit shall have a stated expiry date earlier than 30 days after the
date of issuance or later than the earlier to occur of (i) the first
anniversary of its date of issuance or (ii) the fifth Business Day before the
Termination Date.
2.10 Borrowing Base Adjustments. The Borrowers agree that if at
any time any trade account receivable, fixed asset, tooling reimbursement
obligation or any inventory of the Borrowers or any Guarantor fails to
constitute Eligible Accounts Receivable, Eligible Fixed Assets, Eligible
Inventory, Eligible Tooling or Eligible Tooling Reimbursement Payments, as the
case may be, for any reason, the Agent may, at any time upon written notice to
the Company and notwithstanding any prior classification of eligibility,
classify such asset or property as ineligible and exclude the same from the
computation of the Borrowing Base without in any way impairing the rights of
the Lenders and the Agent, in and to the same under the Security Agreements.
The Borrowers agree that real estate shall only be included in the Borrowing
Base if the Borrowers shall have delivered an appraisal acceptable to the Agent
performed by an independent third party appraiser acceptable to the Agent.
2.11 Security and Collateral. To secure the payment when due of
the Notes and all other obligations of the Company under this Agreement or any
Rate Hedging Agreement to the Lenders and the Agent, the Company shall execute
and deliver, or cause to be executed and delivered, to the Lenders and the
Agent Security Documents granting the following:
(a) Security interests in all present and future accounts,
inventory, equipment, general intangibles, instruments, chattel paper,
documents, fixtures and all other personal property of each Borrower and each
Guarantor, which security interests shall secure all present and future
indebtedness, obligations and liabilities of the Borrowers to the Lenders and
the Agent.
(b) Guarantees of all Guarantors, which Guarantees shall
guarantee all present and future indebtedness, obligations and liabilities of
the Borrowers to the Lenders and the Agent.
(c) Pledges of 100% of the Capital Stock of all Restricted
Subsidiaries owned directly or indirectly by the Company.
(d) All real property owned at any time by Howell
Industries if the Company acquires, directly or indirectly, Howell Industries
at any time.
(e) All other security and collateral described in the
Security Documents.
ARTICLE III.
PAYMENTS AND PREPAYMENTS OF ADVANCES
3.1 Principal Payments and Prepayments.
(a) Unless earlier payment is required under this
Agreement, the Borrowers shall pay to the Lenders on the Termination Date the
entire outstanding principal amount of the Advances.
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(b) The Company may at any time and from time to time
prepay all or a portion of the Loans, without premium or penalty, provided that
(i) the Company may not prepay any portion of any Borrowing as to which an
election for a continuation of or a conversion to a LIBOR Borrowing or
Acceptance Borrowing is pending pursuant to Section 2.7, and (ii) unless
earlier payment is required under this Agreement, any LIBOR Borrowing or
Acceptance Borrowing may only be prepaid on the last day of the then current
Interest Period with respect to such Borrowing,
(c) If at any time the aggregate outstanding principal
amount of the Advances shall exceed any of the limits provided under Section
2.1(d), the Borrowers shall forthwith pay to the Lenders an amount for
application to the outstanding principal amount of the Loans, or provide to the
Lenders cash collateral in respect of outstanding Letters of Credit in an
amount, such that the aggregate amount of such payments with respect to the
Loans and such cash collateral is not less than the amount of such excess.
(d) In addition to all other payments of the Advances
required hereunder, the Borrowers shall prepay the Advances by an amount equal
to 100% of all of the Net Cash Proceeds from any sale or other disposition of
any assets, other than the sale of inventory in the ordinary course of business
upon customary credit terms, sales of scrap or obsolete material or equipment
which are not material in the aggregate, in excess of $2,000,000 in aggregate
amount in any fiscal year (other than such Net Cash Proceeds which are used
within 180 days of the date received to purchase an asset of comparable value)
if after giving effect to such sale the Company is not able to borrow at least
$10,000,000 of additional Advances hereunder, which payments shall be due 20
days after the end of each month for all such sales and other dispositions
during such month. The Company shall provide a certificate to the Agent within
20 days after each sale of assets, excluding any sale of assets which is not in
excess of $2,000,000 in aggregate amount in any fiscal year, which, but for the
above parenthetical, would cause a prepayment under this Section 3.1(d), which
certificate shall describe such sale of assets and estimate when such Net Cash
Proceeds will be used to purchase assets of a comparable value; and if such Net
Cash Proceeds are not used within 180 days after such sale or such earlier date
when the Company has determined not to purchase assets of comparable value with
such Net Cash Proceeds the Company will then prepay the Loans with such Net
Cash Proceeds. Notwithstanding the foregoing, upon and during the continuance
of any Event of Default, 100% of all the Net Cash Proceeds from any sale or
other disposition of any assets shall be used to prepay the Advances.
3.2 Interest Payments. The Borrowers shall pay interest to the
Lenders on the unpaid principal amount of each Loan made to them, for the
period commencing on the date such Loan is made until such Loan is paid in
full, on each Interest Payment Date and at maturity (whether at stated
maturity, by acceleration or otherwise), and thereafter on demand, at, in the
case of Swingline Loans, the Floating Rate and, in all other cases, the
following rates per annum:
(a) During such periods that such Loan is a Floating Rate
Loan, the Floating Rate.
(b) During such periods that such Loan is a LIBOR Loan,
the LIBOR applicable to such Loan for each related LIBOR Interest Period.
(c) During such periods such Loan is a BA Equivalent Loan,
the applicable rate specified in Section 3.4.
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Notwithstanding the foregoing, the Borrowers shall pay interest on demand by
the Agent at the Overdue Rate on the outstanding principal amount of any Loan
and any other amount payable by the Borrowers hereunder (other than interest)
which is not paid in full when due (whether at stated maturity, by acceleration
or otherwise) for the period commencing on the due date thereof until the same
is paid in full.
For the purposes of the Interest Act (Canada) and Canadian Advances hereunder:
(i) whenever any interest or fee under this Agreement is
calculated using a rate based on a year of 360 days or 365 days, such
rate determined pursuant to such calculation, when expressed as an
annual rate, is equivalent to (X) the applicable rate based on a year
of 360 days or 365 days, as the case may be, (Y) multiplied by the
actual number of days in the relevant calendar year, and (Z) divided by
360 or 365 as the case may be;
(ii) the principal of deemed reinvestment of interest does not
apply to any interest calculation under this Agreement; and
(iii) the rates of interest stipulated in this Agreement are
intended to be nominal rates and not effective rates or yields.
3.3 Letters of Credit and Acceptances. (a) (i) The Borrowers
agree to pay to the Lenders, on the day on which the Agent shall honor a draft
or other demand for payment presented or made under any Letter of Credit and on
the maturity date of each Bankers' Acceptance, an amount equal to the amount
paid by the Agent in respect of such draft or other demand under such Letter of
Credit, an amount equal to the face value of each Bankers' Acceptance accepted
by such Lender maturing on that day (notwithstanding that a Lender may be the
holder thereof at maturity) and all reasonable expenses paid or incurred by the
Agent relative thereto. Unless the Borrowers shall have made such payment to
the Lenders on such day, upon each such payment by the Agent with respect to a
Letter of Credit and each such maturity date of each Banker's Acceptance, the
Agent shall be deemed to have disbursed to the relevant Borrowers, and such
Borrowers shall be deemed to have elected to satisfy its reimbursement and
payment obligation by, a Revolving Credit Borrowing bearing interest at the
Floating Rate for the account of the Lenders in an amount equal to the amount
so paid by the Agent in respect of such draft or other demand under such Letter
of Credit or in the face value of such Banker's Acceptance then maturing. Such
Revolving Credit Borrowing shall be disbursed notwithstanding any failure to
satisfy any conditions for disbursement of any Loan set forth in Article II
hereof and, to the extent of the Revolving Credit Borrowing so disbursed, the
reimbursement and payment obligation of the Company under this Section
3.3(a)(i) shall be deemed satisfied; provided, however, that nothing in this
Section 3.3 shall be deemed to constitute a waiver of any Default or Event of
Default caused by the failure to the conditions for disbursement or otherwise.
(ii) If, for any reason (including without
limitation as a result of the occurrence of an Event of Default with respect to
the Company pursuant to Section 6.1(g)), Floating Rate Loans may not be made by
the Lenders as described in Section 3.3(a)(i), then (A) the Borrowers agree
that each amount not paid pursuant to the first sentence of Section 3.3(a)(i)
shall bear interest, payable on demand by the Agent, at the interest rate then
applicable to Floating Rate Borrowings, and (B) effective on the date each such
Floating Rate Borrowing would otherwise have been made, each Lender severally
agrees that it shall unconditionally and irrevocably, without regard to the
occurrence of any Default or Event of Default, in lieu of deemed disbursement
of Floating Rate Loans, to the extent of such Lender's Commitment in the case
of Letters of Credit, purchase a participating interest in each reimbursement
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amount paid by the Agent with respect to Letters of Credit. Each Lender will
immediately transfer to the Agent, in same day funds, the amount of its
participation. Each Lender shall share on a pro rata basis (calculated by
reference to its Commitment) in any interest which accrues thereon and in all
repayments thereof. If and to the extent that any Lender shall not have so
made the amount of such participating interest available to the Agent, such
Lender and the Borrowers severally agree to pay to the Agent forthwith on
demand such amount together with interest thereon, for each day from the date
of demand by the Agent until the date such amount is paid to the Agent, at (x)
in the case of the Borrowers, the interest rate then applicable to Floating
Rate Borrowings and (y) in the case of such Lender, the Federal Funds Rate for
the first five days after the date of demand by the Agent and thereafter at the
interest rate then applicable to Floating Rate Borrowings.
(b) The reimbursement and other payment obligations of the
Borrowers under this Section 3.3 shall be absolute, unconditional and
irrevocable and shall remain in full force and effect until all obligations of
the Borrowers to the Lenders hereunder shall have been satisfied, and such
obligations of the Borrowers shall not be affected, modified or impaired upon
the happening of any event, including without limitation, any of the following,
whether or not with notice to, or the consent of, the Borrowers:
(i) Any lack of validity or enforceability of any
Letter of Credit, Acceptance or any documentation relating to any Letter of
Credit, any Acceptance or to any transaction related in any way thereto (the
"Documents");
(ii) Any amendment, modification, waiver, consent,
or any substitution, exchange or release of or failure to perfect any interest
in collateral or security, with respect to any of the Documents;
(iii) The existence of any claim, setoff, defense
or other right which the Company or any of its Subsidiaries may have at any
time against any beneficiary or any transferee of any Letter of Credit or
Acceptance (or any persons or entities for whom any such beneficiary,
transferee or holder may be acting), the Agent or any Lender or any other
Person or entity, whether in connection with any of the Documents, the
transactions contemplated herein or therein or any unrelated transactions;
(iv) Any draft or other statement or document
presented under any Letter of Credit or Acceptance proving to be forged,
fraudulent, invalid or insufficient in any respect or any statement therein
being untrue or inaccurate in any respect;
(v) Payment by the Agent to the beneficiary under
any Letter of Credit against presentation of documents which do not comply with
the terms of the Letter of Credit, including failure of any documents to bear
any reference or adequate reference to such Letter of Credit;
(vi) Any failure, omission, delay or lack on the
part of the Agent or any Lender or any party to any of the Documents to
enforce, assert or exercise any right, power or remedy conferred upon the
Agent, any Lender or any such party under this Agreement or any of the
Documents, or any other acts or omissions on the part of the Agent, any Lender
or any such party;
(vii) Any defense based on the lack of presentment
for payment and any other defense to payment of any amounts due to a Lender in
respect of any Acceptance accepted by it pursuant to this Agreement which might
exist solely by reason of such Acceptance being held, at the maturity thereof,
by such Lender in its own right;
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(viii) Any other event or circumstance that would,
in the absence of this clause, result in the release or discharge by operation
of law or otherwise of the Company from the performance or observance of any
obligation, covenant or agreement contained in this Section 3.3.
No setoff, counterclaim, reduction or diminution of any obligation or
any defense of any kind or nature which any Borrower has or may have against
the beneficiary or holder of any Letter of Credit or Acceptance shall be
available hereunder to any Borrower against the Agent or any Lender. Nothing
in this Section 3.3 shall limit the liability, if any, of the Agent and the
Lenders to the Company pursuant to Section 8.5(b).
3.4 Additional Terms for Acceptances. Subject to the terms and
conditions hereof, upon giving to the Agent prior written notice in accordance
with Section 2.4 hereof, on any Business Day a Borrowing Subsidiary may borrow
from the Lenders by way of Acceptances, provided that:
(a) (i) each Lender shall have received a Bankers' Acceptance
or Bankers' Acceptances in the aggregate principal amount of such Borrowing
from such Lender in due and proper form duly completed and executed by the
Borrowing Subsidiary and presented for acceptance to such Lender prior to 10:00
a.m. (Toronto time) on the date for such Borrowing, together with such other
document or documents as such Lender may reasonably require (including the
execution by the Borrowing Subsidiary of such Lender's usual form of bankers'
acceptances) and the Acceptance Fee shall have been paid to such Lender at or
prior to such time;
(ii) each Bankers' Acceptance shall be stated to
mature on a Business Day, no later than the Termination Date, which is 30, 60
or 90 days from the date of its acceptance;
(iii) each Bankers' Acceptance shall be stated to
mature on a Business Day in such a way that no Lender will be required to incur
any costs for the redeployment of funds as a consequence of any repayment
required during any period for which such Bankers' Acceptance is outstanding;
(iv) no days of grace shall be permitted on any
Bankers' Acceptance; and
(v) the aggregate face amount of the Bankers'
Acceptances to be accepted by a Lender shall be determined by the Agent by
reference to the respective relevant Commitments of the Lenders, except that,
if the face amount of a Bankers' Acceptance which would otherwise be accepted
by a Lender would not be $100,000 or a whole multiple thereof, such face amount
shall be increased or reduced by the Agent in its sole discretion to $100,000
or the nearest whole multiple of that amount, as appropriate.
(b) The Borrowing Subsidiary acknowledges, agrees and
confirms that each Lender may at any time and from time to time hold, sell,
rediscount or otherwise dispose of any Acceptance accepted and purchased by it
hereunder. The Borrowing Subsidiary acknowledges, agrees and confirms with the
Lenders that the records of each Lender in respect of payment of any Banker's
Acceptance by such Lender shall be binding on the Borrowing Subsidiary and
shall be conclusive evidence (in the absence of manifest error) of a Floating
Rate Loan to the Borrowing Subsidiary and of an amount owing by the Borrowing
Subsidiary to such lender.
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(c) In the event a Lender is unable to accept Bankers'
Acceptances, such Lender shall have the right at the time of accepting drafts
to require the Borrowing Subsidiary to accept a Loan from such Lender in lieu
of the issue and acceptance of a Bankers' Acceptance requested by the Borrowing
Subsidiary to be accepted so that there shall be outstanding while the Bankers'
Acceptances are outstanding BA Equivalent Loans from such Lender as
contemplated herein. The principal amount of each BA Equivalent Loan shall be
that amount which, when added to the amount of interest (calculated at the
applicable Discount Rate) which will accrue during the BA Equivalent Interest
Period shall be equal, at maturity, to the face amount of the drafts which
would have been accepted by such Lender had it accepted Bankers' Acceptances.
The "BA EQUIVALENT INTEREST PERIOD" for each BA Equivalent Loan shall be equal
to the Interest Period of the drafts presented for acceptance as Bankers'
Acceptances on the relevant date of Borrowing. On the relevant date of the
Borrowing the Borrowing Subsidiary shall pay to the Administrative Agent a fee
equal to the Acceptance Fee which would have been payable to such Lender if it
were a Lender accepting drafts having a term to maturity equal to the
applicable BA Equivalent Interest Period and an aggregate face amount equal to
the sum of the principal amount of the BA Equivalent Loan and the interest
payable thereon by the Borrowing Subsidiary for the Applicable BA Equivalent
Interest Period. The provisions of this Agreement dealing with Bankers'
Acceptances shall apply, mutatis mutandis, to BA Equivalent Loans.
(d) Each Bankers' Acceptance issued pursuant to this
Agreement shall be purchased by the Lender accepting such Bankers' Acceptance
for the Discounted Proceeds thereof. Concurrent with the acceptance of each
Bankers' Acceptance, each Lender shall make available to the Agent the
Discounted Proceeds thereof for disbursement to the Borrowing Subsidiary in
accordance with the terms hereof. In each case, upon receipt of such
Discounted Proceeds from the Lenders and upon fulfilment of the applicable
conditions set forth herein, the Agent shall make such funds available to the
Borrowing Subsidiary in accordance with this Agreement. Upon each issue of
Bankers' Acceptances as a result of the conversion of outstanding Borrowings
into Bankers' Acceptances, the Borrowing Subsidiary shall, concurrently with
the conversion, pay in advance to the Agent on behalf of the Lenders, the
amount by which the face value of such Bankers' Acceptances exceeds the
Discounted Proceeds of such Bankers' Acceptances, to be applied against the
principal amount of the Borrowing being so converted. The Borrowing Subsidiary
shall at the same time pay to the Agent the applicable Acceptance Fee.
(e) To enable the Lenders to make Advances in the manner
specified in this Section 3.4, the Borrowing Subsidiary shall, in accordance
with the request of each Lender either (i) provide a power of attorney to
complete, sign, endorse and issue Bankers' Acceptances, in such form as such
Lender may require; or (ii) supply each Lender with such number of drafts as
such Lender may reasonably request, duly endorsed and executed on behalf of the
Borrowing Subsidiary. Each Lender shall exercise such care in the custody and
safekeeping of drafts as it would exercise in the custody and safekeeping of
similar property owned by it. Each Lender will, upon request by the Borrowing
Subsidiary, promptly advise the Borrowing Subsidiary of the number and
designations, if any, of the uncompleted drafts then held by it.
3.5 Payment Method. (a) All payments with respect to U.S.
Advances to be made by the Borrowers hereunder will be made in Dollars and all
payments with respect to Canadian Advances to made by the Borrowers hereunder
shall be made in CAD, and in each case in immediately available funds to the
Agent for the account of the relevant Lenders at its address referred to in
Section 8.2 not later than 1:00 p.m. Detroit time on the date on which such
payment shall become due and, with respect to Canadian Advances, to NBD Canada
for the account of the relevant Lenders at its address referred to in Section
8.2 not later than 1:00 p.m. Toronto time on the date on which such payment
shall become due. Payments received after 1:00 p.m. shall be deemed to be
payments made prior to 1:00 p.m. on the next succeeding Business Day. The
Borrowers hereby authorize the Agent (including NBD Canada) to
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charge their accounts with the Agent (including NBD Canada) in order to cause
timely payment of amounts due hereunder to be made (subject to sufficient funds
being available in such accounts for that purpose).
(b) At the time of making each such payment, the Company
shall, subject to the other terms and conditions of this Agreement, specify to
the Agent that Borrowing or other obligation of the Company hereunder to which
such payment is to be applied. In the event that the Company fails to so
specify the relevant obligation or if an Event of Default shall have occurred
and be continuing, the Agent may apply such payments as it may determine in its
sole discretion.
(c) On the day such payments are deemed received, the
Agent shall remit to the Lenders their pro rata shares of such payments in
immediately available funds. In the case of payments of principal and interest
on any Borrowing, such pro rata shares shall be determined with respect to each
such Lender by the ratio which the outstanding principal balance of its Loan
included in such Borrowing bears to the outstanding principal balance of the
Loans of all of the Lenders included in such Borrowing, in the case of fees
paid pursuant to Section 2.3 and other amounts payable hereunder (other than
the Agent's fees and amounts payable to any Lender under Section 3.8), such pro
rata shares shall be determined with respect to each such Lender by the ratio
which the Commitments of such Lender bears to the Commitments of all the
Lenders or such other pro rata shares as specified in this Agreement.
3.6 No Setoff or Deduction. Subject to Section 3.11, all payments
of principal of and interest on the Advances and other amounts payable by the
Borrowers hereunder shall be made by the Borrowers without setoff or
counterclaim and, subject to the next succeeding sentence, free and clear of,
and without deduction or withholding for, or on account of, any present or
future taxes, levies, imposts, duties, fees, assessments, or other charges of
whatever nature, imposed by any governmental authority, or by any department,
agency or other political subdivision or taxing authority. Subject to Section
3.11, any such taxes, levies, imposts, duties, fees, assessments or other
charges are imposed, the Borrowers will pay such additional amounts as may be
necessary so that payment of principal and of interest on the Loans and other
amounts payable hereunder, after withholding or deduction for or on account
thereof, will not be less than any amount provided to be paid hereunder and, in
any such case, the Borrowers will furnish to the Banks certified copies of all
tax receipts evidencing the payment of such amounts within 45 days after the
date any such payment is due pursuant to applicable law.
3.7 Payment on Non-Business Day; Payment Computations. Except as
otherwise provided in this Agreement to the contrary, whenever any installment
of principal of, or interest on, any Loan or any other amount due hereunder
becomes due and payable on a day which is not a Business Day, the maturity
thereof shall be extended to the next succeeding Business Day and, in the case
of any installment of principal, interest shall be payable thereon at the rate
per annum determined in accordance with this Agreement during such extension.
Computations of interest and other amounts due under this Agreement shall be
made on the basis of a year of 360 days (or 365 or 366 days, as the case may
be, when determining the Floating Rate or rates or fees with respect to
Acceptances) for the actual number of days elapsed, including the first day but
excluding the last day of the relevant period.
3.8 Additional Costs. (a) In the event that any applicable law,
treaty or other international agreement, rule or regulation (whether domestic
or foreign) now or hereafter in effect and whether or not presently applicable
to any Lender or the Agent, or any interpretation or administration thereof by
any governmental authority charged with the interpretation or administration
thereof, or compliance by any Lender or the Agent with any guideline, request
or directive of any such authority
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(whether or not having the force of law), shall (i) affect the basis of
taxation of payments to any Lender or the Agent of any amounts payable by the
Borrowers under this Agreement (other than taxes imposed on the overall net
income of any Lender or the Agent, by the jurisdiction, or by any political
subdivision or taxing authority of any such jurisdiction, in which any Lender
or the Agent, as the case may be, has its principal office), (ii) shall impose,
modify or deem applicable any reserve, special deposit or similar requirement
against assets of, deposits with or for the account of, or credit extended by
any Lender or the Agent, or (iii) shall impose any other condition with respect
to this Agreement, or any of the Commitments, the Notes or the Loans or any
Letter of Credit, and the result of any of the foregoing is to increase the
cost to any Lender or the Agent, as the case may be, of making, funding or
maintaining any LIBOR Loan or any Letter of Credit or to reduce the amount of
any sum receivable by any Lender or the Agent, as the case may be, thereon,
then the Borrowers shall pay to such Lender or the Agent, as the case may be,
from time to time, upon request by such Lender (with a copy of such request to
be provided to the Agent) or the Agent, additional amounts sufficient to
compensate such Lender or the Agent, as the case may be, for such increased
cost or reduced sum receivable to the extent, in the case of any LIBOR Loan,
such Lender or the Agent is not compensated therefor in the computation of the
interest rate applicable to such LIBOR Loan. A statement as to the amount of
such increased cost or reduced sum receivable, prepared in good faith and in
reasonable detail by such Lender or the Agent, as the case may be, and
submitted by such Lender or the Agent, as the case may be, to the relevant
Borrower, shall be prima facie evidence thereof.
(b) In the event that any applicable law, treaty or other
international agreement, rule or regulation (whether domestic or foreign) now
or hereafter in effect and whether or not presently applicable to any Lender or
the Agent, or any interpretation or administration thereof by any governmental
authority charged with the interpretation or administration thereof, or
compliance by any Lender or the Agent with any guideline, request or directive
of any such authority (whether or not having the force of law), including any
risk-based capital guidelines, affects or would affect the amount of capital
required or expected to be maintained by such Lender or the Agent (or any
corporation controlling such Lender or the Agent) and such Lender or the Agent,
as the case may be, determines that the amount of such capital is increased by
or based upon the existence of such Lender's or the Agent's obligations
hereunder and such increase has the effect of reducing the rate of return on
such Lender's or the Agent's (or such controlling corporation's) capital as a
consequence of such obligations hereunder to a level below that which such
Lender or the Agent (or such controlling corporation) could have achieved but
for such circumstances (taking into consideration its policies with respect to
capital adequacy) by an amount deemed by such Lender or the Agent to be
material, then the Borrowers shall pay to such Lender or the Agent, as the case
may be, from time to time, upon request by such Lender (with a copy of such
request to be provided to the Agent) or the Agent, additional amounts
sufficient to compensate such Lender or the Agent (or such controlling
corporation) for any increase in the amount of capital and reduced rate of
return which such Lender or the Agent reasonably determines to be allocable to
the existence of such Lender's or the Agent's obligations hereunder. A
statement as to the amount of such compensation, prepared in good faith and in
reasonable detail by such Lender or the Agent, as the case may be, and
submitted by such Lender or the Agent to the relevant Borrower, shall be prima
facie evidence thereof.
3.9 Illegality and Impossibility. In the event that any
applicable law, treaty or other international agreement, rule or regulation
(whether domestic or foreign) now or hereafter in effect and whether or not
presently applicable to any Lender, or any interpretation or administration
thereof by any governmental authority charged with the interpretation or
administration thereof, or compliance by any Lender with any guideline, request
or directive of such authority (whether or not having the force of law),
including without limitation exchange controls, shall make it unlawful or
impossible for any
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Lender to maintain any Loan under this Agreement, the relevant Borrower shall
upon receipt of notice thereof from such Lender repay in full the then
outstanding principal amount of each Loan so affected, together with all
accrued interest thereon to the date of payment and all amounts owing to such
Lender under Section 3.10, (a) on the last day of the then current Interest
Period applicable to such Loan if such Lender may lawfully continue to maintain
such Loan to such day, or (b) immediately if such Lender may not continue to
maintain such Loan to such day.
3.10 Indemnification. If any Borrower makes any payment of
principal with respect to any LIBOR Loan on any other date than the last day of
a LIBOR Interest Period applicable thereto (whether pursuant to Section 3.1(c),
Section 3.9, Section 6.2 or otherwise), or if any Borrower fails to borrow any
LIBOR Loan after notice has been given to the Lenders in accordance with
Section 2.4, or if any Borrower fails to make any payment of principal or
interest in respect of a LIBOR Loan when due, such Borrower shall reimburse
each Lender on demand for any resulting loss or expense incurred by each such
Lender, including without limitation any loss incurred in obtaining,
liquidating or employing deposits from third parties, whether or not such
Lender shall have funded or committed to fund such Loan. A statement as to the
amount of such loss or expense, prepared in good faith and in reasonable detail
by such Lender and submitted by such Lender to the relevant Borrower, shall be
conclusive and binding for all purposes absent manifest error in computation.
Calculation of all amounts payable to such Lender under this Section 3.10 shall
be made as though such Lender shall have actually funded or committed to fund
the relevant LIBOR Loan through the purchase of an underlying deposit in an
amount equal to the amount of such Loan in the relevant market and having a
maturity comparable to the related Interest Period and through the transfer of
such deposit to a domestic office of such Lender in the United States;
provided, however, that such Lender may fund any LIBOR Loan in any manner it
sees fit and the foregoing assumption shall be utilized only for the purpose of
calculation of amounts payable under this Section 3.10.
3.11 Taxes. (a) Each Lender (which, for purposes of this Section
3.11, shall not include any Affiliate of such Lender used to make Canadian
Advances hereunder) that is not organized and incorporated under the laws of
the United States or any State thereof making U.S. Advances agrees to file with
the Agent and the Company, in duplicate, (a) on or before the later of (i) the
Effective Date and (ii) the date such Lender becomes a Lender under this
Agreement and (b) thereafter, for each taxable year of such Lender (in the case
of a Form 4224) or for each third taxable year of such Lender (in the case of
any other form) during which interest or fees arising under this Agreement and
the Notes are received, unless not legally able to do so as a result of a
change in the United States income tax enacted, or treaty promulgated, after
the date specified in the preceding clause (a), on or prior to the immediately
following due date of any payment by the Company hereunder, a properly
completed and executed copy of either Internal Revenue Service Form 4224 or
Internal Revenue Service Form 1001 and Internal Revenue Service Form W-8 or
Internal Revenue Service Form W-9 and any additional form necessary for
claiming complete exemption from United States withholding taxes (or such other
form as is required to claim complete exemption from United States withholding
taxes), if and as provided by the Code or other pronouncements of the United
States Internal Revenue Service, and such Lender warrants to the Company that
the form so filed will be true and complete; provided that such Lender's
failure to complete and execute such Form 4224 or Form 1001, or Form W-8 or
Form W-9, as the case may be, and any such additional form (or any successor
form or forms) shall not relieve the Company of any of its obligations under
this Agreement, except as otherwise provided in this Section 3.11.
(b) Notwithstanding anything herein to the contrary, for
any period with respect to which a Lender has failed to provide the Company
with the appropriate form pursuant to Section 3.11(a) (unless such failure is
due to a change in treaty, law or regulation occurring subsequent to the date
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on which a form originally was required to be provided), such Lender shall not
be entitled to indemnification under Section 3.6 with respect to withholding
taxes imposed by the United States; provided, however, that should a Lender,
which is otherwise exempt from or subject to a reduced rate of withholding tax,
become subject to withholding because of its failure to deliver a form required
hereunder, the Borrowers shall take such steps as such Lender shall reasonably
request to assist such Lender to recover such taxes.
(c) Each Canadian Lender that is created or organized
under the laws of a jurisdiction other than Canada or a Province thereof making
Canadian Advances shall deliver, or have its designated Affiliate to be used to
make Canadian Advances deliver, to the Company and the Agent on the Effective
Date (or on the date on which such Canadian Lender becomes a Lender hereunder),
evidence that the Minister of National Revenue is satisfied that payments made
to such Lender hereunder are not subject to Taxes pursuant to Regulation 805(2)
of the Income Tax Act ("Evidence of Canadian Tax Exemption"). In addition,
from time to time after the Effective Date (or the date on which such Canadian
Lender becomes a Lender hereunder) upon the reasonable request of the Company,
each such Canadian Lender further agrees to deliver to the Company and the
Agent further Evidence of Canadian Tax Exemption, unless any change in treaty,
law, regulation or official interpretation thereof prevents such Lender from
duly providing same. Notwithstanding anything in this Section 3.11 to the
contrary, the Company shall not have any obligation to pay any withholding
taxes or to indemnify any Canadian Lender for any withholding taxes to the
extent that such taxes result from the failure of such Lender to comply with
its obligations under this paragraph.
(d) Notwithstanding anything herein to the contrary, for
any period with respect to which a Canadian Lender has failed to provide the
Company with the appropriate form pursuant to Section 3.11(c) (unless such
failure is due to a change in treaty, law or regulation occurring subsequent to
the date on which a form originally was required to be provided), such Canadian
Lender shall not be entitled to indemnification under Section 3.6 with respect
to withholding taxes imposed by Canada; provided however, that should a
Canadian Lender, which is otherwise exempt from or subject to a reduced rate of
withholding tax, become subject to withholding taxes because of its failure to
deliver a form required hereunder, the Company shall take such steps as such
Lender shall reasonably request to assist such Lender to recover such Taxes.
(e) If any Borrower is required to pay additional amounts
to or for the account of any Lender pursuant to Section 3.6, and each Lender
which is not a Canadian Lender shall be entitled to such amounts if it is ever
required to make or participate in Canadian Advances under this Agreement, then
such Lender will change the jurisdiction of its Applicable Lending Office so as
to eliminate or reduce any such additional payment which may thereafter accrue
if such change, in the judgment of such Lender, is not otherwise
disadvantageous to such Lender. For the purposes of making any Canadian
Advances, any Lender may designate any Affiliate of such Lender in Canada to
make such Canadian Advances on its behalf, provided that such designation is
made in writing to the Agent and the Borrowers. Upon such designation, such
Affiliate shall have all rights as a Lender with respect to such Canadian
Advances.
3.12 Substitution of Lender. If (i) the obligation of any Lender
to make or maintain LIBOR Loans has been suspended pursuant to Section 3.9 when
not all Lenders' obligations have been suspended, (ii) any Lender has demanded
compensation under Section 3.8 when all Lendershave not done so or (iii) any
Lender is a Defaulting Lender, the Company shall have the right, if no Default
or Event of Default then exists, to replace such Lender (a "Replaced Lender")
with one or more other lenders (collectively, the "Replacement Lender")
acceptable to the Agent, provided that (x) at the time of any replacement
pursuant to this Section 3.12, the Replacement Lender shall enter into one or
more Assignment
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and Acceptances, pursuant to which the Replacement Lender shall acquire the
Commitments and outstanding Advances and other obligations of the Replaced
Lender and, in connection therewith, shall pay to the Replaced Lender in
respect thereof an amount equal to the sum of (A) the amount of principal of,
and all accrued interest on, all outstanding Loans of the Replaced Lender, (B)
the amount of all accrued, but theretofore unpaid, fees owing to the Replaced
Lender under Section 2.3 and (C) the amount which would be payable by the
Company to the Replaced Lender pursuant to Section 3.10 if the Company prepaid
at the time of such replacement all of the Loans of such Replaced Lender
outstanding at such time and (y) all obligations of the Company then owing to
the Replaced Lender (other than those specifically described in clause (x)
above in respect of which the assignment purchase price has been, or is
concurrently being, paid) shall be paid in full to such Replaced Lender
concurrently with such replacement. Upon the execution of the respective
Assignment and Acceptances, the payment of amounts referred to in clauses (x)
and (y) above and, if so requested by the Replacement Lender, delivery to the
Replacement Lender of the appropriate Note or Notes executed by the Company,
the Replacement Lender shall become a Lender hereunder and the Replaced Lender
shall cease to constitute a Lender hereunder. The provisions of this Agreement
(including without limitation Sections 3.10 and 8.5) shall continue to govern
the rights and obligations of a Replaced Lender with respect to any Loans made
or any other actions taken by such lender while it was a Lender. Nothing
herein shall release any Defaulting Lender from any obligation it may have to
any Borrower, the Agent or any other Lender.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES
The Borrowers represent and warrant to the Lenders and the Agent that:
4.1 Corporate Existence and Power. Each of the Borrowers and the
Guarantors is a corporation duly organized, validly existing and in good
standing under the laws of its respective jurisdiction of incorporation or
formation, and is duly qualified to do business, and is in good standing, in
all additional jurisdictions where such qualification is necessary under
applicable law, except for jurisdictions where their failure to be so qualified
would not result in any Material Adverse Effect. Each of the Company and the
Guarantors has all requisite corporate or other organizational power to own or
lease the properties used in its business and to carry on its business as now
being conducted and as proposed to be conducted, and to execute and deliver the
Loan Documents to which it is a party and to engage in the transactions
contemplated by this Agreement.
4.2 Corporate Authority. The execution, delivery and performance
by each of the Borrowers and the Guarantors of the Loan Documents to which each
of them is a party have been duly authorized by all necessary corporate or
other organizational action and are not in contravention of any law, rule or
regulation, or any judgment, decree, writ, injunction, order or award of any
arbitrator, court or governmental authority, or of the terms of such Borrower's
or such Guarantor's charter, operating agreement or by-laws, or of any contract
or undertaking to which such Borrower or such Guarantor is a party or by which
such Borrower or such Guarantor or any of their property may be bound or
affected and will not result in the imposition of any Lien on any of such
Borrower's or such Guarantor's property or of any of such Borrower's or such
Guarantor's property, except for Permitted Liens.
4.3 Binding Effect. These Loan Documents to which each of the
Borrowers and the Guarantors is a party when delivered hereunder will be,
legal, valid and binding obligations of such Borrower and such Guarantor,
respectively, enforceable against each of them in accordance with their
respective terms.
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4.4 Subsidiaries. Schedule 4.4 hereto correctly sets forth the
corporate name, jurisdiction of incorporation or formation and ownership of
each Subsidiary of the Company. Each such Subsidiary and each corporation or
other organization becoming a Subsidiary of the Company after the date hereof
is and will be a corporation or other organization duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation and is and will be duly qualified to do business in each
additional jurisdiction where such qualification is or may be necessary under
applicable law, except for such failure which could not have a Material Adverse
Effect. Each Subsidiary of the Company has and will have all requisite
corporate or other organizational power to own or lease the properties used in
its business and to carry on its business as now being conducted and as
proposed to be conducted. All outstanding shares of Capital Stock of each
Subsidiary of the Company have been and will be validly issued and are and will
be fully paid and nonassessable and, except with respect to the Lobdell
Preferred Stock or as disclosed in writing to and approved by the Agent from
time to time, are and will be owned, beneficially and of record, by the Company
or another Subsidiary of the Company free and clear of any Liens.
4.5 Litigation. Except as set forth in Schedule 4.5 hereto, there
is no action, suit or proceeding pending or, to the best of the Company's
knowledge, threatened against or affecting the Company or any of its
Subsidiaries before or by any court, governmental authority or arbitrator,
which if adversely decided might result, either individually or collectively,
in any Material Adverse Effect and, to the best of the Company's knowledge,
there is no basis for any such action, suit or proceeding.
4.6 Financial Condition. The consolidated and consolidating
balance sheet of the Company and its Subsidiaries and the consolidated and
consolidating statements of income, retained earnings and cash flows of the
Company and its Subsidiaries for the fiscal year ended March 31, 1997 and
reported on by Price Waterhouse LLP, independent certified public accountants,
copies of which have been furnished to the Lenders, fairly present, and the
financial statements of the Company and its Subsidiaries delivered pursuant to
Section 5.1(d) will fairly present, the consolidated financial position of the
Company and its Subsidiaries as at the respective dates thereof, and the
consolidated results of operations of the Company and its Subsidiaries for the
respective periods indicated, all in accordance with Generally Accepted
Accounting Principles consistently applied (subject, in the case of said
interim statements, to year-end audit adjustments). There has been no Material
Adverse Effect since March 31, 1997. There is no Contingent Liability of the
Company or any of its Subsidiaries that is not reflected in such financial
statements or in the notes thereto which could have a Material Adverse Effect.
Neither the Company nor any Restricted Subsidiary is liable directly or
indirectly, for any of the Indebtedness or other liabilities of any
Unrestricted Subsidiary or for any Contingent Liabilities with respect to any
Unrestricted Subsidiary except as permitted by Section 5.2(e).
4.7 Use of Advances. The Company will use the proceeds of the
Advances to refinance existing indebtedness of the Guarantors, to acquire
machinery and equipment for the Guarantors and for its and the Guarantors'
general corporate purposes. Neither the Company nor any of its Subsidiaries
extends or maintains, in the ordinary course of business, credit for the
purpose, whether immediate, incidental, or ultimate, of buying or carrying
margin stock (within the meaning of Regulation U of the Board of Governors of
the Federal Reserve System), and no part of the proceeds of any Advance will be
used for the purpose, whether immediate, incidental, or ultimate, of buying or
carrying any such margin stock or maintaining or extending credit to others for
such purpose. After applying the proceeds of each Advance, such margin stock
will not constitute more than 25% of the value of the assets (either of the
Company alone or of the Company and its Subsidiaries on a consolidated basis)
that are subject to
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any provisions of any Loan Document that may cause the Advances to be deemed
secured, directly or indirectly, by margin stock.
4.8 Consents, Etc. Except for such consents, approvals,
authorizations, declarations, registrations or filings delivered by the Company
pursuant to Section 2.5(g), if any, each of which is in full force and effect,
no consent, approval or authorization of or declaration, registration or filing
with any governmental authority or any nongovernmental Person or entity,
including without limitation any creditor, lessor or stockholder of the Company
or any of its Subsidiaries, is required on the part of any Borrower or any
Guarantor in connection with the execution, delivery and performance of the
Loan Documents or the transactions contemplated hereby or as a condition to the
legality, validity or enforceability of any of the Loan Documents.
4.9 Taxes. The Company and its Subsidiaries have filed all tax
returns (federal, state and local) required to be filed and have paid all taxes
shown thereon to be due, including interest and penalties, or have established
adequate financial reserves on their respective books and records for payment
thereof. Neither the Company nor any of its Subsidiaries knows of any actual
or proposed tax assessment or any basis therefor, and no extension of time for
the assessment of deficiencies in any federal or state tax has been granted by
the Company or any such Subsidiary. The Company will not amend any Tax Sharing
Agreement without the prior approval of the Agent.
4.10 Title to Properties. Except as otherwise disclosed in the
latest balance sheet referred to in Section 4.6 or delivered pursuant to
Section 5.1(d), the Company or one or more of its Subsidiaries have good and
marketable fee simple title to all of the real property, and a valid and
indefeasible ownership or leasehold interest in all of the other properties and
assets (including, without limitation, the collateral subject to the Security
Documents to which any of them is a party) reflected in said balance sheet or
subsequently acquired by the Company or any such Subsidiary. All of such
properties and assets are free and clear of any Lien, except for Permitted
Liens.
4.11 Borrowing Base. All trade accounts receivable, fixed assets
and inventory of the Borrowers and the Guarantors represented or reported by
the Company to be, or otherwise included in, Eligible Accounts Receivable,
Eligible Fixed Assets and Eligible Inventory, comply in all respects with the
requirements therefor set forth in the respective definitions thereof, and the
computation of the Borrowing Base set forth in each Borrowing Base Certificate
is true and correct. The aggregate amount of all Advances plus all
Unrestricted Guarantees is equal to or less than the Borrowing Base.
4.12 ERISA. The Company and its ERISA Affiliates and their
respective Plans are in compliance in all material respects with those
provisions of ERISA and of the Code which are applicable with respect to any
Plan. No Prohibited Transaction and no Reportable Event has occurred with
respect to any such Plan which could, in the aggregate, result in any liability
to the Company or any of its ERISA Affiliates in excess of $2,000,000. None of
the Company or any of its ERISA Affiliates is an employer with respect to any
Multiemployer Plan. The Company and its ERISA Affiliates have met or are
meeting in compliance with all laws and regulations the minimum funding
requirements under ERISA and the Code with respect to each of their respective
Plans, if any, and have not incurred any liability to the PBGC or any Plan.
The execution, delivery and performance of the Loan Documents does not
constitute a Prohibited Transaction. There is no Unfunded Benefit Liability,
with respect to any Plan of the Company or its ERISA Affiliates which could
have a Material Adverse Effect.
4.13 Disclosure. No report or other information furnished in
writing by or on behalf of the Company or any of its Subsidiaries to any Lender
or the Agent in connection with the negotiation
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or administration of this Agreement contains any material misstatement of fact
or omits to state any material fact or any fact necessary to make the
statements contained therein not misleading in light of the circumstances in
which they were made. No Loan Document nor any other document, certificate, or
report or statement or other information furnished to any Lender or the Agent
by or on behalf of the Company or any of its Subsidiaries in connection with
the transactions contemplated hereby contains any untrue statement of a
material fact or omits to state a material fact in order to make the statements
contained herein and therein not misleading in light of the circumstances in
which they were made. There is no fact known to the Company which materially
and adversely affects, or which in the future may (so far as the Company can
now reasonably foresee) materially and adversely affect, the business,
properties, operations or condition, financial or otherwise, of the Company or
any of its Subsidiaries, which has not been set forth in this Agreement
(including without limitation the schedules hereto) or in the other documents,
certificates, statements, reports and other information furnished in writing to
the Lenders by or on behalf of the Company or any of its Subsidiaries in
connection with the transactions contemplated hereby.
4.14 Environmental Matters. The representations and warranties set
forth in the Environmental Certificate are true and complete.
4.15 Solvency. The Company and its Subsidiaries are and, after
giving effect to the transactions described herein and the Subordinated Debt
Documents and to the incurrence or assumption of all obligations being incurred
or assumed in connection herewith, will be Solvent.
4.16 No Defaults under Certain Agreements. Neither the Company nor
any of its Subsidiaries is in default or has received any written notice of
default under or with respect to any contract or agreement to which it is a
party or by which it is bound, including without limitation any agreements for
the incurrence of any indebtedness or any tooling or purchase contracts, which
could have a Material Adverse Effect. No Default or Event of Default has
occurred and is continuing.
4.17 Intellectual Property. Set forth on Schedule 4.17 is a
complete and accurate list of all patents, trademarks, trade names, service
marks and copyrights, and all applications therefor and licenses thereof, of
the Company and each of its Subsidiaries showing as of the Effective Date the
jurisdiction in which registered, the registration number and the date of
registration. The Company and each of its Subsidiaries owns, or is licensed to
use, all trademarks, tradenames, service marks, copyrights, technology,
know-how and processes necessary for the conduct of its business as currently
conducted (the "Intellectual Property") except for those the failure to own or
license which could not reasonably be expected to have a Material Adverse
Effect. No claim has been asserted and is pending by any Person challenging or
questioning the use of any such Intellectual Property or the validity or
effectiveness of any such Intellectual Property, nor does the Company or any of
its Subsidiaries know of any valid basis for any such claim, the use of such
Intellectual Property by the Company and each of its Subsidiaries does not
infringe on the rights of any Person, and, to the knowledge of the Company, no
Intellectual Property has been infringed, misappropriated or diluted by any
other Person except for such claims, infringements, misappropriation and
dilutions that, in the aggregate, could not have a Material Adverse Effect.
4.18 Preferred Stock. All Lobdell Preferred Stock Documents are
listed on Schedule 4.18 hereto, and true, correct and complete copies of all
Lobdell Preferred Stock Documents have been delivered to the Agent. All
dividends, distributions, redemptions and other payments required on the
Lobdell Preferred Stock are described on Schedule 4.18. Other than the Lobdell
Preferred Stock, there is no other Preferred Stock as of the Effective Date.
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4.19 Investment Company Act; Other Regulations. Neither the
Company nor any of its Subsidiaries is an "investment company", or a company
"controlled" by an "investment company", within the meaning of the Investment
Company Act of 1940, as amended. Neither the Company nor any of its
Subsidiaries is subject to regulation under any federal or state statute or
regulation which limits its ability to incur Indebtedness.
4.20 Senior Subordinated Debt Documents. All representations and
warranties of the Company contained in any Senior Subordinated Debt Document
are true and correct in all material respects. The Company will be receiving
net proceeds in the approximate amount of $120,800,000 on the Effective Date
from its issuance of the Senior Subordinated Notes, and all agreements,
instruments and documents executed or delivered pursuant to the issuance of the
Senior Subordinated Notes are described on Schedule 1.1 hereto. All Advances
and all other present and future indebtedness, obligations and liabilities
pursuant to the Loan Documents and all Rate Hedging Obligations of each
Borrower and each Guarantor owed to any Lender is "Senior Debt " and
"Designated Senior Debt" as defined in the Senior Subordinated Debt Documents
and, other than the Advances and all other present and future indebtedness,
obligations and liabilities pursuant to the Loan Documents, there is no other
"Designated Senior Debt" thereunder. There is no Event of Default or event or
condition which could become an Event of Default with notice or lapse of time
or both, under the Senior Subordinated Debt Documents and each of the Senior
Subordinated Debt Documents is in full force and effect. Other than pursuant
to the Senior Subordinated Notes and as described on Schedule 4.20, there is no
obligation pursuant to any Senior Subordinated Debt Document or other document
or agreement evidencing or relating to any Subordinated Debt outstanding or to
be outstanding on the Effective Date which obligates the Company to pay any
principal or interest or redeem any of its Capital Stock or incur any other
monetary obligation.
4.21 Unrestricted Subsidiaries. Other than the guaranties
permitted by Section 5.2(e)(viii), neither the Company nor any Restricted
Subsidiary of the Company is liable, directly or indirectly, for any of the
Indebtedness or other liabilities of any Unrestricted Subsidiary or has any
Contingent Liabilities with respect to any Unrestricted Subsidiary, other than
trade payables for the sale of goods in the ordinary course of business and in
compliance with Section 5.2(m).
ARTICLE V.
COVENANTS
5.1 Affirmative Covenants. The Company covenants and agrees that,
until the termination of all Commitments and Letters of Credit and thereafter
until payment in full of the principal of and accrued interest on the Notes and
the payment and performance of all other obligations of the Company under this
Agreement, any agreement executed in connection herewith and any Rate Hedging
Agreement with any Lender, unless the Required Lenders shall otherwise consent
in writing, it shall, and shall cause each of its Restricted Subsidiaries to:
(a) Preservation of Corporate Existence, Etc. Do or cause
to be done all things necessary to preserve, renew and keep in full force and
effect its legal existence and its qualification as a foreign corporation or
other organization in good standing in each jurisdiction in which such
qualification is necessary under applicable law, and the rights, licenses,
permits (including those required under Environmental Laws), franchises,
patents, copyrights, trademarks and trade names material to the conduct of its
businesses, except to the extent any of the foregoing would not have a Material
Adverse Effect; and defend all of the foregoing against all claims, actions,
demands, suits or
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proceedings at law or in equity or by or before any governmental
instrumentality or other agency or regulatory authority.
(b) Compliance with Laws, Etc. Comply in all respects
with all applicable laws, rules, regulations and orders of any governmental
authority, whether federal, state, local or foreign (including without
limitation ERISA, the Code and Environmental Laws), in effect from time to
time, except to the extent any of the foregoing would not have a Material
Adverse Effect; and pay and discharge promptly when due all taxes, assessments
and governmental charges or levies imposed upon it or upon its income, revenues
or property, before the same shall become delinquent or in default, as well as
all lawful claims for labor, materials and supplies or otherwise, which, if
unpaid, might give rise to Liens upon such properties or any portion thereof,
except to the extent that payment of any of the foregoing is then being
contested in good faith by appropriate legal proceedings and with respect to
which adequate financial reserves have been established on the books and
records of the Company or any of its Restricted Subsidiaries.
(c) Maintenance of Properties; Insurance. Maintain,
preserve and protect all property that is material to the conduct of the
business of the Company or any of its Restricted Subsidiaries and keep such
property in good repair, working order and condition and from time to time
make, or cause to be made all needful and proper repairs, renewals, additions,
improvements and replacements thereto necessary in order that the business
carried on in connection therewith may be properly conducted at all times in
accordance with customary and prudent business practices for similar
businesses, except to the extent any of the foregoing would not have a Material
Adverse Effect; and maintain in full force and effect insurance with
responsible and reputable insurance companies or associations in such amounts,
on such terms and covering such risks, including fire and other risks insured
against by extended coverage, as is usually carried by companies engaged in
similar businesses and owning similar properties similarly situated and
maintain in full force and effect public liability insurance, insurance against
claims for personal injury or death or property damage occurring in connection
with any of its activities or any properties owned, occupied or controlled by
it, in such amount as it shall reasonably deem necessary, and maintain such
other insurance as may be required by law or as may be reasonably requested by
the Required Lenders for purposes of assuring compliance with this Section
5.1(c).
(d) Reporting Requirements. Furnish to the Lenders and
the Agent the following:
(i) Promptly and in any event within three
calendar days after becoming aware of the occurrence of (A) any Default or
Event of Default, (B) the commencement of any material litigation against, by
or affecting the Company or any of its Restricted Subsidiaries, and any
material developments therein, or (C) entering into any material contract or
undertaking that is not entered into in the ordinary course of business or (D)
any development in the business or affairs of the Company or any of its
Restricted Subsidiaries which has resulted in or which is likely in the
reasonable judgment of the Company, to result in a Material Adverse Effect, a
statement of the Chief Financial Officer or Treasurer of the Company setting
forth details of each such Default or Event of Default or such litigation,
material contract or undertaking or development and the action which the
Company or such Subsidiary, as the case may be, has taken and proposes to take
with respect thereto;
(ii) As soon as available and in any event within
45 days after the end of each of the first three fiscal quarters of the
Company, the consolidated and consolidating balance sheets of the Company and
its Restricted Subsidiaries as of the end of such quarter, and the related
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consolidated and consolidating statements of income, retained earnings and
changes in cash flows for the period commencing at the end of the previous
fiscal year and ending with the end of such quarter, setting forth in each case
in comparative form the corresponding figures for the corresponding date or
period of the preceding fiscal year, all in reasonable detail and duly
certified (subject to year-end audit adjustments) by the Chief Financial
Officer or Treasurer of the Company as having been prepared in accordance with
Generally Accepted Accounting Principles, together with a certificate of the
Chief Financial Officer or Treasurer of the Company stating (A) that no Default
or Event of Default has occurred and is continuing or, if a Default or Event of
Default has occurred and is continuing, a statement setting forth the details
thereof and the action which the Company has taken and proposes to take with
respect thereto, and (B) that a computation (which computation shall accompany
such certificate and shall be in reasonable detail) showing compliance with
Section 5.2(a), (b), (c) and (d) hereof is in conformity with the terms of this
Agreement;
(iii) As soon as available and in any event within
100 days after the end of each fiscal year of the Company, a copy of the
consolidated balance sheet of the Company and its Subsidiaries as of the end of
such fiscal year and the related consolidated statements of income, retained
earnings and changes in cash flows of the Company and its Subsidiaries for such
fiscal year, with a customary audit report of Price Waterhouse LLP, or other
independent certified public accountants selected by the Company and acceptable
to the Agent, without qualifications unacceptable to the Agent, together with a
certificate of the Chief Financial Officer or the Treasurer of the Company
stating (A) that no Default or Event of Default has occurred and is continuing
and, if such a Default or Event of Default exists and is continuing, a
statement setting forth the nature and status thereof, and (B) that a
computation (which computation shall accompany such certificate and shall be in
reasonable detail) showing compliance with Sections 5.2(a), (b), (c) and (d)
hereof is in conformity with the terms of this Agreement;
(iv) Promptly after the sending or filing thereof,
copies of all reports, proxy statements and financial statements which the
Company or any of its Subsidiaries sends to or files with any of their
respective security holders or any securities exchange or the Securities and
Exchange Commission or any successor agency thereof;
(v) On or before the 15th day after the end of
each month during which the Advances exceeded $35,000,000 on any date during
such month and at least two Business Days prior to any request for an Advance
which would cause the Aggregate Advances to exceed $35,000,000, a Borrowing
Base Certificate prepared as of the close of business on the last day of such
month or the most recently ended month, as the case may be, together with
supporting schedules, in form and detail satisfactory to the Agent, setting
forth such information as the Agent may request with respect to the aging,
value, location and other information relating to the computation of the
Borrowing Base and the eligibility of any property or assets included in such
computation, certified as true and correct by the Chief Financial Officer or
Treasurer of the Company;
(vi) As soon as available and in any event at
least 30 days prior to the end of each fiscal year of the Company, copies of
preliminary capital and operating budgets and financial forecasts for the
Company and its Subsidiaries for the following fiscal year, and as soon as
available in any event within 30 days after the end of each fiscal year of the
Company, copies of the final capital and operating budgets and financial
forecasts for the Company and its Subsidiaries for such fiscal year, in each
case prepared on both a consolidated and consolidating basis and for a
twelve-month period (or more frequent period if so prepared by the Company in
the ordinary course) by or under the direction of the Chief Financial Officer
or Treasurer of the Company in form and detail satisfactory to the Agent,
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and, promptly and in any event within 10 days after preparation thereof, copies
of any revisions to such budgets and forecasts;
(vii) Promptly and in any event within 10 calendar
days after receiving or becoming aware thereof (A) a copy of any notice of
intent to terminate any Plan of the Company its Subsidiaries or any ERISA
Affiliate filed with the PBGC, (B) a statement of the Chief Financial Officer
or Treasurer of the Company setting forth the details of the occurrence of any
Reportable Event with respect to any such Plan, (C) a copy of any notice that
the Company, any of its Subsidiaries or any ERISA Affiliate may receive from
the PBGC relating to the intention of the PBGC to terminate any such Plan or to
appoint a trustee to administer any such Plan, or (D) a copy of any notice of
failure to make a required installment or other payment within the meaning of
Section 412(n) of the Code or Section 302(f) of ERISA with respect to any such
Plan;
(viii) As soon as available and in any event within
30 days after the end of each month, a report with respect to the Company
setting forth a summary and aging of accounts payable of the Company, a
listing of any checks held after the due date of the related vendor invoice and
setting forth the corresponding due dates of such invoices, in form and detail
satisfactory to the Agent, certified as true and correct by the Chief Financial
Officer or Treasurer of the Company;
(ix) Promptly and in any event within 10 days
after receipt, a copy of any management letter or comparable analysis prepared
by the auditors for the Company or any of its Subsidiaries; and
(x) Promptly, such other information respecting
the business, properties, operations or condition, financial or otherwise, of
the Company or any of its Restricted Subsidiaries or any of its Unrestricted
Subsidiaries with respect to which the Company or any of its Restricted
Subsidiaries has any Contingent Liabilities as any Lender or the Agent may from
time to time reasonably request.
(e) Accounting; Access to Records, Books, Etc. Maintain a
system of accounting established and administered in accordance with sound
business practices to permit preparation of financial statements in accordance
with Generally Accepted Accounting Principles and to comply with the
requirements of this Agreement and, at any reasonable time and from time to
time, (i) during regular business hours, permit any Lender or the Agent or any
agents or representatives thereof to examine and make copies of and abstracts
from the records and books of account of, and visit the properties of, the
Company and its Subsidiaries, and to discuss the affairs, finances and accounts
of the Company and its Subsidiaries with their respective directors, officers,
employees and independent auditors, and by this provision the Company hereby
authorizes such persons to discuss such affairs, finances and accounts with any
Lender or the Agent and (ii) during regular business hours, permit the Agent or
any of its agents or representatives to conduct a comprehensive field audit of
its books, records, properties and assets, including without limitation all
collateral subject to the Security Documents; and
(f) Maintenance of Business Lines. Maintain all principal
lines of business in which the Company or any of its Restricted Subsidiaries is
presently engaged.
(g) Additional Security and Collateral. Promptly (i)
execute and deliver, and cause each Restricted Subsidiary of the Company to
execute and deliver, additional Security Documents, within 30 days after
request therefor by the Lenders and the Agent, sufficient to grant to the Agent
for the benefit of the Lenders and the Agent liens and security interests in
any after acquired
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property of the type described in Section 2.11 and (ii) cause each Person
becoming a Restricted Subsidiary of the Company from time to time to execute
and deliver to the Agent, within 30 days after such Person becomes a Restricted
Subsidiary, a Guaranty and Security Documents, together with other related
documents described in Section 2.5 sufficient to grant to the Agent for the
benefit of the Lenders and the Agent liens and security interests in all
collateral of the type described in Section 2.11. The Company shall notify the
Agent, within 10 days after the occurrence thereof, of the acquisition of any
property by the Company or any Restricted Subsidiary that is not subject to the
existing Security Documents, any Person's becoming a Restricted Subsidiary and
any other event or condition that may require additional action of any nature
in order to preserve the effectiveness and perfected status of the liens and
security interests of the Lenders and the Agent with respect to such property
pursuant to the Security Documents.
(h) Further Assurances. Execute and deliver, and cause
each Restricted Subsidiary of the Company to execute and deliver, within 30
days after request therefor by the Lenders and the Agent, all further
instruments and documents and take all further action that may be necessary or
desirable, or that the Agent may request, in order to give effect to, and to
aid in the exercise and enforcement of the rights and remedies of the Lenders
under, the Loan Documents, including without limitation causing each lessor of
real property to the Company or any of its Restricted Subsidiaries to execute
and deliver to the Agent, prior to or upon the commencement of any tenancy, an
agreement in form and substance acceptable to the Lenders and the Agent duly
executed on behalf of such lessor waiving any distraint, lien and similar
rights with respect to any property subject to the Security Documents and
agreeing to permit the Lenders and the Agent to enter such premises in
connection therewith.
5.2 Negative Covenants. Until the termination of all Commitments
and Letters of Credit and thereafter until payment in full of the principal of
and accrued interest on the Notes and the payment and performance of all other
obligations of the Company under this Agreement, any agreement executed in
connection herewith and any Rate Hedging Agreement with any Lender, the Company
agrees that, unless the Required Lenders shall otherwise consent in writing, it
shall not, and shall not permit any of its Restricted Subsidiaries to:
(a) Net Worth. Permit or suffer the Consolidated Net
Worth of the Company and its Restricted Subsidiaries to be less than (i)
$35,400,000, plus (ii) an amount equal to 50% of Consolidated net income of the
Company and its Subsidiaries (without reduction for a net loss) for each fiscal
year of the Company subsequent to its fiscal year ended March 31, 1997, plus
(iii) an amount equal to 100% of the Net Cash Proceeds in connection with the
issuance or other sale by the Company of any of its Capital Stock.
(b) Total Debt to EBITDA Ratio. Permit or suffer the
Total Debt to EBITDA Ratio to be greater than (i) 5.50 to 1.00 at any time
prior to June 30, 1998, or (ii) 5.00 to 1.00 at any time from and including
June 30, 1998 to but excluding June 30, 1999 or (iii) 4.50 to 1.00 at any time
thereafter.
(c) Fixed Charge Coverage Ratio. Permit or suffer the
Fixed Charge Coverage Ratio determined as of the end of each fiscal quarter of
the Company, commencing with the fiscal quarter ending September 30, 1997, for
the period of four fiscal quarters then ended, to be less than (i) 1.45 to 1.0
as of the end of any fiscal quarter of the Company ending on or before March
31, 1998 or (ii) 1.60 to 1.0 as of the end of any fiscal quarter thereafter.
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(d) Interest Coverage Ratio. Permit or suffer the
Interest Coverage Ratio, determined as of the end of each fiscal quarter of the
Company for the period of the four fiscal quarters then ended, to be less (i)
2.0 to 1.0 as of the end of any fiscal quarter ending on or before March 31,
1999 or (ii) than 2.25 to 1.0 as of the end of any fiscal quarter therafter.
(e) Indebtedness. Create, incur, assume or in any manner
become liable in respect of, or suffer to exist, any Indebtedness other than:
(i) The Advances and the other obligations and
liabilities pursuant to any of the Loan Documents;
(ii) The Indebtedness described in Schedule
5.2(e), including Contingent Liabilities, provided that no increase in the
principal amount thereof shall be permitted;
(iii) Indebtedness of the Company or any Restricted
Subsidiary owing to the Company or any Guarantor, provided that any such
Indebtedness owing by the Company shall be fully subordinate to all Advances
and all other obligations of the Company to the Agent and the Lenders, by
written agreement pursuant to terms and conditions satisfactory to the Agent
and the Required Lenders;
(iv) Indebtedness constituting purchase money debt
or Capital Leases in aggregate outstanding principal amount not exceeding
$10,000,000 at any time;
(v) Subordinated Debt under the Senior
Subordinated Notes in aggregate principal amount not to exceed $125,000,000;
(vi) Other Subordinated Debt of the Company or any
Guarantor, provided that (A) after giving effect to such Subordinated Debt, the
Company is able to borrow at least $10,000,000 of additional Loans, (B) both
before and after giving effect to such Subordinated Debt, no Event of Default
or Default exists or would be caused thereby, (C) after giving effect to such
Subordinated Debt, the pro forma Total Debt to EBITDA Ratio is at least 0.25
below the level required under Section 5.2(b), on a pro forma basis acceptable
to the Agent;
(vii) Tooling Indebtedness on terms and in amounts
acceptable to the Agent, which consent will not be unreasonably withheld;
(viii) Rate Hedging Agreements with any Lender or
other person acceptable to the Agent, provided that no Rate Hedging Agreement
shall be entered into for purposes of financial speculation;
(ix) Guaranties by the Company of Unrestricted
Subsidiaries in an aggregate amount (valued at the maximum amount that could be
payable thereunder) not to exceed $30,000,000, provided that any such
guaranties may not be incurred unless: (A) both before and after giving effect
to such guaranty the Company is able to borrow at least $10,000,000 of
additional Loans, (B) all such guaranties shall be collection guaranties on
terms and conditions satisfactory to the Agent, (C) both before and after
giving effect to such guaranty, no Event of Default or Default exists or would
be caused thereby, (D) both before and after giving effect to such guaranty,
the pro forma Total Debt to EBITDA Ratio is at least 0.25 below the level
required under Section 5.2(b), on a pro forma basis
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acceptable to the Agent, and (E) the Company provides such certificates and
legal opinions prior to the incurrence of such guaranty as requested by the
Agent; and
(x) Indebtedness of the Restricted Subsidiaries
of BMG in aggregate principal amount not to exceed $2,500,000 and secured by
the real property owned by such Subsidiaries as of the Effective Date, provided
that the terms of such Indebtedness are no more onerous on such Subsidiaries as
the terms of the Indebtedness of such Subsidiaries secured by such real
property that existed immediately prior to the Effective Date.
(f) Liens. Create, incur or suffer to exist any Lien on
any of the assets, rights, revenues or property, real, personal or mixed,
tangible or intangible, whether now owned or hereafter acquired, of the Company
or any of its Restricted Subsidiaries, other than:
(i) Liens for taxes not delinquent or for taxes
being contestedb in good faith by appropriate proceedings and as to which
adequate financial reserves have been established on its books and records;
(ii) Liens (other than any Lien imposed by ERISA
or any Environmental Law) created and maintained in the ordinary course of
business which do not secure obligations material in the aggregate and which
would not have a Material Adverse Effect and which constitute (A) pledges or
deposits under worker's compensation laws, unemployment insurance laws or
similar legislation, (B) good faith deposits in connection with bids, tenders,
contracts or leases to which the Company or any of its Subsidiaries is a party
for a purpose other than borrowing money or obtaining credit, including rent
security deposits, (C) liens imposed by law, such as those of carriers,
warehousemen and mechanics, if payment of the obligation secured thereby is not
yet due, (D) Liens securing taxes, assessments or other governmental charges or
levies not yet subject to penalties for nonpayment, and (E) pledges or
deposits to secure public or statutory obligations of the Company or any of its
Subsidiaries, or surety, customs or appeal bonds to which the Company or any of
its Subsidiaries is a party;
(iii) Liens affecting real property which
constitute minor survey exceptions or defects or irregularities in title, minor
encumbrances, easements or reservations of, or rights of others for, rights of
way, sewers, electric lines, telegraph and telephone lines and other similar
purposes, or zoning or other restrictions as to the use of such real property,
provided that all of the foregoing, in the aggregate, do not at any time
materially detract from the value of said properties or materially impair
their use in the operation of the businesses of the Company or any of its
Subsidiaries;
(iv) Liens created pursuant to the Security
Documents and Liens expressly permitted by the Security Documents;
(v) Each Lien described in Schedule 5.2(f) hereto
may be suffered to exist upon the same terms as those existing on the date
hereof, but no increase in the principal amount thereof shall be permitted;
(vi) Any Lien created to secure payment of a
portion of the purchase price of, or existing at the time of acquisition of,
any tangible fixed asset acquired by the Company or any of its Restricted
Subsidiaries may be created or suffered to exist upon such fixed asset if the
outstanding principal amount of the Indebtedness secured by such Lien does not
at any time exceed 100% of the purchase price paid by the Company or such
Restricted Subsidiary for such fixed asset and
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the aggregate principal amount of all Indebtedness secured by such Liens does
not exceed the amount permitted under Section 5.2(e)(iv), provided that such
Lien does not encumber any other asset at any time owned by the Company or such
Restricted Subsidiary, and provided, further, that not more than one such Lien
shall encumber such fixed asset at any one time;
(vii) Liens in favor of the Company or any of its
Restricted Subsidiaries as security for Indebtedness of any Subsidiary to the
Company or another Restricted Subsidiary;
(viii) The interest or title of a lessor under any
lease otherwise permitted under this Agreement with respect to the property
subject to such lease to the extent performance of the obligations of the
Company or its Restricted Subsidiary thereunder are not delinquent; and
(ix) Liens on the real property owned by such
Subsidiaries as of the Effective Date securing the Indebtedness permitted by
Section 5.2(b)(x).
(g) Merger; Acquisitions; Etc. Purchase or otherwise
acquire, whether in one or a series of transactions, directly or indirectly,
all or a substantial portion of the business assets, rights, revenues or
property, real, personal or mixed, tangible or intangible, of any Person, or
all or a substantial portion of the capital stock of or other ownership
interest in any other Person (an "Acquisition"); nor merge or consolidate or
amalgamate with any other Person or take any other action having a similar
effect; provided, however, that this Section 5.2(g) shall not prohibit any
merger or acquisition if (i) such merger involves the Company, the Company
shall be the surviving or continuing corporation thereof, (ii) immediately
before and after giving effect such merger or acquisition, no Default or Event
of Default shall exist or shall have occurred and be continuing and the
representations and warranties contained in Article IV and in the other Loan
Documents shall be true and correct on and as of the date thereof (both before
and after such merger or acquisition is consummated) as if made on the date
such merger or acquisition is consummated, (iii) at least 10 Business Days'
prior to the consummation of such merger or acquisition, the Company shall have
provided to the Lenders an opinion of counsel and a certificate of the Chief
Financial Officer or Treasurer of the Company (attaching pro forma computations
acceptable to the Agent to demonstrate compliance with all financial covenants
hereunder), each stating that such merger or acquisition complies with this
Section 5.2(g), all laws and regulations and that any other conditions under
this Agreement relating to such transaction have been satisfied, and such
certificate shall contain such other information and certifications as
requested by the Agent and be in form and substance satisfactory to the Agent,
(iv) at least 10 Business Days' prior to the consummation of such merger or
acquisition, the Company shall have delivered all acquisition documents and
other agreements and documents relating to such merger or acquisition, and the
Agent shall have completed a satisfactory review thereof and completed such
other due diligence satisfactory to the Agent, provided that if such
acquisition is being done by an Unrestricted Subsidiary or such merger involves
Unrestricted Subsidiaries only then the requirements of this clause (iv) will
be satisfied if the Company provides the Lenders with a certificate
representing that neither the Company nor any Restricted Subsidiary shall be
liable, directly or indirectly, for any of the Indebtedness or other
liabilities of such Unrestricted Subsidiary or for any Contingent Liabilities
with respect to any such Unrestricted Subsidiary except as permitted by Section
5.2(e), (v) immediately before and after giving effect to such merger or
acquisition, the pro forma Total Debt to EBITDA Ratio is at least 0.25 below
the level required under Section 5.2(b), on a pro forma basis acceptable to the
Agent, (vi) both before and after giving effect to such merger and acquisition,
the Company is able to borrow at least $10,000,000 of additional Loans, (vii)
the Company shall, at least 10 Business Days prior to the consummation of
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merger or acquisition, provide such other certificates and documents as
requested by the Agent, in form and substance satisfactory to the Agent, and
(viii) the target of such merger or acquisition is in the same line of business
as the Company. Notwithstanding the foregoing, the requirements listed in
clauses (ii), (iii), (iv), (v), (vi) and (vii) of this Section 5.2(g) shall not
be required to be satisfied in connection with any acquisition done solely by
an Unrestricted Subsidiary, provided that the terms of Section 5.2(e)(ix),
Section 5.2(l) and all other terms and provisions hereof shall be applicable.
(h) Disposition of Assets; Etc. Sell, lease, license,
transfer, assign or otherwise dispose of all or any portion of its business,
assets, rights, revenues or property, real, personal or mixed, tangible or
intangible, whether in one or a series of transactions, other than inventory
sold in the ordinary course of business upon customary credit terms and sales
of scrap or obsolete material or equipment which are not material in the
aggregate, and shall not permit or suffer any Subsidiary to do any of the
foregoing; provided, however, that this Section 5.2(h) shall not prohibit any
such sale, lease, license, transfer, assignment or other disposition if (i) the
consolidated book value (disregarding any write-downs of such book value other
than ordinary depreciation and amortization) of all of the business, assets,
rights, revenues and property of the Company and its Restricted Subsidiaries
disposed of in any consecutive twelve-month period shall be less than 10% of
the consolidated book value of the assets of the Company and its Restricted
Subsidiaries as of the beginning of such twelve month period and the aggregate
book value of all assets disposed of after the Effective Date shall be less
than 25% of the consolidated book value of assets of the Company and its
Restricted Subsidiaries at the time of any such disposition and if, immediately
after such transaction, no Default or Event of Default shall exist or shall
have occurred and be continuing, (ii) sales as to which proceeds are used
within 180 days to purchase or construct assets of at least equivalent value to
those sold, (iii) transfers of assets from any Subsidiary to the Company or a
Guarantor which is a wholly Owned Subsidiary; provided, however, in the case of
any of the foregoing permitted sales, leases, licenses, transfers, assignments
or other dispositions (an "Asset Sale") the Company shall not, and shall not
permit any of its Restricted Subsidiaries to, consummate an Asset Sale unless
(A) the Company (or the Subsidiary, as the case may be) receives consideration
at the time of such Asset Sale at least equal to the fair market value
(evidenced by a resolution of the Board of Directors set forth in an officer's
certificate delivered to the Agent) of the assets and (B) at least 75% of the
consideration therefor received by the Company or such Restricted Subsidiary is
in the form of cash, provided that cash equivalents and the assumption of
Indebtedness of the Company or any Guarantor and the unconditional release of
the Company or such Guarantor from such Indebtedness in connection with such
Asset Sale, in each case acceptable to the Agent, shall be considered cash for
purposes of this Section 5.2(h); provided that the amount of (x) any
liabilities (as shown on the Company's or such Restricted Subsidiary's' most
recent balance sheet), of the Company or any Restricted Subsidiary that are
assumed by the transferee of any such assets such that the Company or such
Restricted Subsidiary have no further liability and (y) any securities, notes
or other obligations received by the Company or any such Restricted Subsidiary
from such transferee that are converted by the Company or such Restricted
Subsidiary into cash (to the extent of the cash received), shall be deemed to
be cash for purposes of this provision and the definition of Net Cash Proceeds,
and the Agent promptly shall obtain a first priority security interest in any
non cash consideration for any Asset Sale.
(i) Nature of Business. Make any material change in the
nature of its business from that engaged in on the date of this Agreement or
engage in any other businesses other than those in which it is engaged on the
date of this Agreement.
(j) Dividends and Other Restricted Payments. Make, pay,
declare or authorize any dividend, payment or other distribution in respect of
any class of its Capital Stock or any dividend, payment or distribution in
connection with the redemption, purchase, retirement or other
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acquisition, directly or indirectly, of any Capital Stock other than such
dividends, payments or other distributions (i) to the extent payable solely in
shares of common stock of the Company, (ii) to the extent payable to the
Company by a Restricted Subsidiary of the Company, (iii) dividends and
distributions on Preferred Stock to the extent permitted under Section 5.2(s),
(iv) if no Event of Default or Default exists or would be caused thereby, an
aggregate amount not to exceed $1,000,000 made after the Effective Date, (v)
which in aggregate amount do not exceed 25% of the Net Income accrued during
fiscal quarters ending after the Effective Date for which the Total Debt to
EBITDA Ratio was not greater than 3.0 to 1.0, provided that both before and
after the making or declaration of such dividend, payment or other distribution
(A) the pro forma Total Debt to EBITDA Ratio is not greater than 3.0 to 1.0, on
a pro forma basis acceptable to the Agent, (B) the Company is able to borrow at
least $10,000,000 of additional Loans and (C) no Default or Event of Default
shall have occurred or be caused thereby, and (vi) if no Event of Default or
Default exists or would be caused thereby, an aggregate amount not to exceed
$2,000,000 made after the Effective Date for the purpose of redeeming the
Capital Stock of the Company owned by any employee of the Company, other than a
Permitted Holder, upon the termination of the employment by the Company or any
of its Restricted Subsidiaries of such employee, provided that (A) any amounts
used to redeem such Capital Stock under this clause (vi) shall first reduce the
amount allowed or accumulated under Section 5.2(j)(iv) until the amount allowed
thereunder is exhausted and then shall reduce the amount allowed under Section
5.2(j)(v) and (B) the amounts payable for the redemption of such Capital Stock
will not be paid any sooner than contractually required. The Company will not,
and will not permit any of its Restricted Subsidiaries, to issue any Preferred
Stock or any Disqualified Stock, other than (1) any Preferred Stock which does
not require any dividends, payments, redemptions or other distributions of any
kind until at least one year after the Termination Date, (2) the existing
Lobdell Preferred Stock and (3) any other Preferred Stock or Disqualified Stock
which meets all of the requirements for the issuance by the Company of
Subordinated Debt (i.e. all payments and other obligations thereunder are
expressly subordinate and junior in right and priority of payment to the
Advances and other Indebtedness of such Person to the Lenders in manner and by
agreement satisfactory in form and substance to the Agent and such Preferred
Stock or Disqualified Stock is subject to such other terms and provisions,
including without limitation maturities, covenants, defaults, rates and fees,
acceptable to the Agent), and such Preferred Stock and Disqualified Stock
allowed under this clause (3) shall be treated as if it were Subordinated Debt
for all purposes of this Agreement and is defined herein as "Permitted
Disqualified Stock".
(k) Capital Expenditures. Acquire or contract to acquire
any fixed asset or make any other capital expenditure if the aggregate purchase
price and other acquisition costs of all such fixed assets acquired and other
capital expenditures made by the Company or any of its Restricted Subsidiaries
during any fiscal year of the Company would exceed, on a consolidated basis, an
amount equal to (i) $30,000,000 for the fiscal year of the Company ending March
31, 1998, or (ii) for any fiscal year thereafter, the sum of (A) $30,000,000,
plus (B) the amount by which the allowed capital expenditures for the most
recently ended fiscal year exceeded the actual capital expenditures for such
fiscal year, provided that the amount added pursuant to this clause (B) shall
not exceed one third of the allowed capital expenditures for the most recently
ended fiscal year, plus (C) 25% of the amount by which EBITDA was in excess of
$45,000,000 for the most recently ended fiscal year, plus (D) the depreciation
expense for the most recently ended fiscal year relating solely to fixed assets
(other than fixed assets of Howell) acquired pursuant to an Acquisition after
the Effective Date.
(l) Loans, Advances and Investments. Make any loan or
advance of any of its funds or property or make any other extension of credit
to, or increase its investment or acquire any additional interest whatsoever
in, any Person, or enter into any joint venture or similar arrangement with any
other person, other than (i) loans and advances to Guarantors which are
evidenced by promissory
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notes payable on demand in form and substance satisfactory to the Agent and
which are pledged to the Agent for the benefit of the Lenders and investments
in Guarantors, and (ii) loans and advances to, and investments in, Unrestricted
Subsidiaries, Restricted Subsidiaries which are not Wholly Owned Subsidiaries
or joint ventures which do not exceed $40,000,000 for all of foregoing in
aggregate outstanding amount (with the outstanding amount thereof being deemed
decreased by any cash repayments of such loans or advances or cash dividends
paid to the Company or any Restricted Subsidiary with respect to any such
investments), provided that (A) if such transaction involves a loan or advance,
such loans and advances are evidenced by promissory notes in form and substance
satisfactory to the Agent and which are pledged to the Agent for the benefit of
the Lenders, (B) both before and after giving effect to such loan, advance or
investment, the pro forma Total Debt to EBITDA Ratio is at least 0.25 below the
level required under Section 5.2(b), on a pro forma basis acceptable to the
Agent, (C) both before and after giving effect to such loan or advance the
Company is able to borrow at least $10,000,000 of additional Loans, and (D) no
Event of Default or Default exists or would be caused thereby and the Company
provides such certificates and legal opinions as requested by the Agent in
connection therewith.
(m) Transactions with Affiliates. Enter into or
permit to exist any transaction or series of related transactions (including
without limitation the purchase, sale, lease or exchange of any property,
employee compensation arrangements or rendering of any service) with any
Affiliate of the Company (an "Affiliate Transaction") unless the terms of such
transaction (i) are no less favorable to the Company or such Restricted
Subsidiary than those that could be obtained at the time of such transaction in
a comparable transaction in arm's-length dealings with a person who is not such
an Affiliate, (ii) if such Affiliate Transaction (or series of related
Affiliated Transactions) involves aggregate payments in an amount in excess of
$1,000,000 in any one year, (A) are set forth in writing, (B) comply with
clause (i) of this Section 5.2(m) and (C) have been approved by a majority of
disinterested members of the Board of Directors of the Company, and (iii) if
such Affiliate Transaction (or series of related Affiliate Transactions)
involves aggregate payments in an amount in excess of $5,000,000 in any one
year, (A) comply with clause (ii) and (B) have been determined by a nationally
recognized investment banking firm to be fair, from a financial standpoint, to
the Company and its Restricted Subsidiaries.
(n) Sale and Leaseback Transactions. Become or remain
liable in any way, whether directly or by assignment or as a guarantor or other
contingent obligor, for the obligations of the lessee or user under any lease
or contract for the use of any real or personal property if such property is
owned on the date of this Agreement or thereafter acquired by the Company or
any of its Subsidiaries and has been or is to be sold or transferred to any
other Person and was, is or will be used by the Company or any such Subsidiary
for substantially the same purpose as such property was used by the Company or
such Subsidiary prior to such sale or transfer.
(o) Negative Pledge Limitation. Enter into any agreement
with any Person, other than the Lenders or the Agent pursuant hereto and other
than the existing provisions without amendment contained in the Lobdell
Preferred Stock Documents and in the agreements listed on Schedule 5.2(o),
which prohibits or limits the ability of the Company or any Restricted
Subsidiary to create, incur, assume or suffer to exist any Lien upon any of its
assets, rights, revenues or property, real, personal or mixed, tangible or
intangible, whether now owned or hereafter acquired.
(p) FSC Commissions. Pay or become obligated for the
payment during any fiscal year of the Company, commissions to all related
wholly owned foreign sales corporations in excess of $550,000 in aggregate
amount plus reimbursement of the reasonable administrative expenses of such
wholly owned foreign sales corporations.
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(q) Inconsistent Agreements. Enter into any agreement
containing any provision which would be violated or breached by this Agreement
or any of the transactions contemplated hereby or by performance by the Company
or any of its Subsidiaries of its obligations in connection therewith.
(r) Subsidiary Dividends. Other than those restrictions
existing as of the Effective Date without giving effect to any amendment
thereof on or after the Effective Date, permit any of its Restricted
Subsidiaries, directly or indirectly, to create or otherwise cause or suffer to
exist or become effective any consensual encumbrance or restriction which by
its terms materially restricts the ability of any such Subsidiary to (i) pay
dividends or make any other distributions on such Restricted Subsidiary's
Capital Stock, (ii) pay any Indebtedness owed to the Company or any of its
other Restricted Subsidiaries, (iii) make any loans or advances to the Company
or any of such other Restricted Subsidiaries or (iv) transfer any material
portion of its assets to the Company or any of such other Restricted
Subsidiaries.
(s) Preferred Stock. Make any amendment or modification
to any Lobdell Preferred Stock Document, other than any adjustment in the price
of the Lobdell Preferred Stock based on post closing adjustments and which do
not result in any additional obligations of Lobdell or of the Company or any of
its Restricted Subsidiaries, or enter into any other agreement or document
relating thereto other than the documents listed on Schedule 4.18 hereto or
make, pay, declare or authorize any dividend, payment or other distribution
with respect to any Preferred Stock or any dividend, payment or distribution in
connection with the redemption, purchase, retirement or other acquisition,
directly or indirectly, of any Preferred Stock other than as required under the
Lobdell Preferred Stock Documents listed on Schedule 4.18 hereto, provided that
no dividend, payment or other distribution in respect to the Preferred Stock or
dividend, payment or distribution in connection with the redemption, purchase,
retirement or other acquisition, directly or indirectly, of any Preferred
Stock, including those required under the Lobdell Preferred Stock Documents,
will be made if any Event of Default exists under Section 6.1(a) or would be
caused thereby.
(t) Other Indebtedness and Agreements. Make any amendment
or modification to any indenture, note or other agreement evidencing or
governing any Indebtedness (other than Indebtedness hereunder of the Company or
any of its Subsidiaries) or to the Tax Sharing Agreement, or directly or
indirectly voluntarily prepay, defease or in substance defease, purchase,
redeem, retire or otherwise acquire any such Indebtedness, (except, when no
Default or Event of Default exists, (i) to the extent described on Schedule
4.20 and (ii) for the prepayment of Subordinated Debt solely from the Net Cash
Proceeds received by the Company from the primary sale or sales of shares of
common stock (which may not be Disqualified Stock)of the Company pursuant to
any one or more public offerings thereof), or designate any Indebtedness (other
than the Indebtedness under the Loan Documents and under Rate Hedging
Agreements with Lenders) as "Designated Senior Debt" under the Senior
Subordinated Debt Documents.
(u) Management Fees. Pay any management, consulting or
similar fees or amounts to any of its Affiliates other than (i) to the Company
or a Guarantor and (ii) as described on Schedule 5.2(u), without giving effect
to any amendment or modification of the agreement described on Schedule 5.2(u),
provided that no such management, consulting or similar fees or amounts (other
than out of pocket expenses) shall be paid pursuant to this clause (ii) if any
Event of Default or Default exists or would be caused thereby, and Oxford
Investment has acknowledged and agreed that no such management, consulting or
similar fees or amounts (other than out of pocket expenses) will be so paid.
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(v) Restricted Subsidiaries. Except with the consent of
the Agent, which consent will not be unreasonably withheld, permit or suffer
any Restricted Subsidiary to not be a Wholly Owned Subsidiary, other than
Laserweld International, L.L.C. ("Laserweld") or Creative, provided that no
loans or advances to, investments in or sales or other transfers of assets to
Laser or Creative have been made by the Company or any Restricted Subsidiary at
any time on or after the Effective Date.
5.3 Additional Covenants.
(a) Other Terms. If at any time any Borrower or Guarantor
shall enter into or be a party to any instrument or agreement with respect to
any Indebtedness which in the aggregate, together with any related
Indebtedness, exceeds $500,000, including all such instruments or agreements in
existence as of the date hereof and all such instruments or agreements entered
into after the date hereof, relating to or amending any terms or conditions
applicable to any of such Indebtedness which includes covenants, terms,
conditions or defaults not substantially provided for in this Agreement or more
favorable to the lender or lenders thereunder than those provided for in this
Agreement, then the Company shall promptly so advise the Agent and the Lenders.
Thereupon, if the Agent shall request, upon notice to the Company, the Agent
and the Lenders shall enter into an amendment to this Agreement or an
additional agreement (as the Agent may request), providing for substantially
the same covenants, terms, conditions and defaults as those provided for in
such instrument or agreement to the extent required and as may be selected by
the Agent. In addition to the foregoing, any covenants or defaults or similar
provisions (which include without limitation any provisions requiring any
mandatory prepayments or defeasance under the Senior Subordinated Debt
Documents) not substantially provided for in this Agreement or more favorable
to the holders of Subordinated Debt issued in connection therewith are hereby
incorporated by reference into this Agreement to the same extent as if set
forth fully herein, and no subsequent amendment, waiver, termination or
modification thereof shall affect any such covenants, terms, conditions or
defaults as incorporated herein.
(b) Restricted and Unrestricted Subsidiaries. Neither the
Company nor any Restricted Subsidiary of the Company shall be liable at any
time, directly or indirectly, for any of the Indebtedness or other liabilities
of any such Unrestricted Subsidiary or for any Contingent Liabilities with
respect to any Unrestricted Subsidiary except as permitted by Section 5.2(e).
No Restricted Subsidiary may be designated as an Unrestricted Subsidiary at any
time without the prior written approval of the Agent and the Required Lenders.
Any Unrestricted Subsidiary may be designated as a Restricted Subsidiary by the
Company at any time provided that (i) such designation is approved by the
Agent, (ii) no Event of Default or Default exists or would be caused thereby,
(iii) immediately before and after giving effect to such designation, the
Company is able to borrow on a pro forma basis at least $10,000,000 of
additional Loans, and (iv) immediately before and after giving effect to such
designation, the pro forma Total Debt to EBITDA Ratio is at least 0.25 below
the level required under Section 5.2(b), all on a pro forma basis acceptable to
the Agent.
ARTICLE VI.
DEFAULT
6.1 Events of Default. The occurrence of any one of the following
events or conditions shall be deemed an "Event of Default" hereunder unless
waived pursuant to Section 8.1:
(a) Nonpayment. The Company shall fail to pay when due,
whether at stated maturity, by acceleration or otherwise, any principal on the
Loans or any reimbursement
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obligation under Section 3.3 (whether by deemed disbursement of a Revolving
Credit Borrowing or otherwise), or, within five days after becoming due, any
interest on the Loans or any fees or any other amount payable hereunder; or
(b) Misrepresentation. Any representation or warranty
made by the Company or any of the Guarantors in Article IV hereof, or in any
Security Document, or any other certificate, report, financial statement or
other document furnished by or on behalf of the Company or any of the
Guarantors in connection with this Agreement, shall prove to have been
incorrect in any material respect when made or deemed made; or
(c) Certain Covenants. The Company shall fail to perform
or observe any term, covenant or agreement contained in Article V hereof; or
(d) Other Defaults. Any default which remains uncured
beyond any applicable cure period shall exist under any material purchase or
tooling contract that could have a Material Adverse Effect, or the Company or
any Guarantor shall fail to perform or observe any other term, covenant or
agreement contained in this Agreement or in any other Loan Document, and any
such failure shall remain unremedied for 15 calendar days after written notice
thereof shall have been given to the Company by the Agent; or
(e) Cross Default. The Company or any of its Restricted
Subsidiaries shall fail to pay any part of the principal of, the premium, if
any, or the interest on, or any other payment of money due under any of its
Indebtedness (other than Indebtedness hereunder), beyond any period of grace
provided with respect thereto, which individually or together with other such
Indebtedness as to which any such failure exists has an aggregate outstanding
principal amount in excess of $2,000,000; or if the Company or any of its
Restricted Subsidiaries fails to perform or observe any other term, covenant or
agreement contained in, or if any other event or condition occurs or exists
under, any agreement, document or instrument evidencing or securing any such
Indebtedness having such aggregate outstanding principal amount, or under which
any such Indebtedness was incurred, issued or created, beyond any period of
grace, if any, provided with respect thereto; or
(f) Judgments. One or more judgments or orders for the
payment of money in an aggregate amount of $2,000,000 shall be rendered against
the Company or any of its Restricted Subsidiaries, or any other judgment or
order (whether or not for the payment of money) shall be rendered against or
shall affect the Company or any of its Restricted Subsidiaries which causes or
could cause a Material Adverse Effect, and either (i) such judgment or order
shall have remained unsatisfied and the Company or such Restricted Subsidiary
shall not have taken action necessary to stay enforcement thereof by reason of
pending appeal or otherwise, prior to the expiration of the applicable period
of limitations for taking such action or, if such action shall have been taken,
a final order denying such stay shall have been rendered, or (ii) enforcement
proceedings shall have been commenced by any creditor upon any such judgment or
order; or
(g) ERISA. The occurrence of a Reportable Event that
results in or could result in liability of the Company or any of its ERISA
Affiliates to the PBGC or to any Plan and such Reportable Event is not
corrected within 30 days after the occurrence thereof; or the occurrence of any
Reportable Event which could constitute grounds for termination of any Plan of
the Company or any of its ERISA Affiliates by the PBGC or for the appointment
by the appropriate United States District Court of a trustee to administer any
such Plan and such Reportable Event is not corrected within 30 days after the
occurrence thereof; or the Company or any of its ERISA Affiliates shall fail to
pay when due any
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liability to the PBGC or to a Plan; or any Person engages in a Prohibited
Transaction with respect to any Plan which results in or could result in
liability of the Company, any of its ERISA Affiliates, any Plan of the Company
or any of its ERISA Affiliates or any fiduciary of any such Plan; or the PBGC
shall have instituted proceedings to terminate, or to cause a trustee to be
appointed to administer, any Plan of the Company or any of its ERISA
Affiliates; or failure by the Company or any of their ERISA Affiliates to make
a required installment or other payment to any Plan within the meaning of
Section 302(f) of ERISA or Section 412(n) of the Code that results in or could
result in liability of the Company or any of their ERISA Affiliates to the PBGC
or any Plan; or the withdrawal of the Company or any of its ERISA Affiliates
from a Plan during a plan year in which it was a "substantial employer" as
defined in Section 4001(9a)(2) of ERISA; or the Company or any of its ERISA
Affiliates becomes an employer with respect to any Multiemployer Plan without
the prior written consent of the Agent, and in each case above, such event or
condition, together with all other events or conditions, if any, could subject
the Company and its Restricted Subsidiaries to any tax, penalties or other
liability which in the aggregate may exceed $2,000,000; or
(h) Insolvency, Etc. the Company or any of its Restricted
Subsidiaries shall be dissolved or liquidated (or any judgment, order or decree
therefor shall be entered), or shall generally not pay its debts as they become
due, or shall admit in writing its inability to pay its debts generally, or
shall make a general assignment for the benefit of creditors, or shall
institute, or there shall be instituted against the Company or any of its
Restricted Subsidiaries any proceeding or case seeking to adjudicate it a
bankrupt or insolvent or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief or composition of it or its debts
under any law relating to bankruptcy, insolvency or reorganization or relief or
protection of debtors or seeking the entry of an order for relief, or the
appointment of a receiver, trustee, custodian or other similar official for it
or for any substantial part of its assets, rights, revenues or property, and,
if such proceeding is instituted against the Company or such Restricted
Subsidiary and is being contested by the Company or such Restricted Subsidiary,
as the case may be, in good faith by appropriate proceedings, such proceeding
shall remain undismissed or unstayed for a period of 60 days; or the Company or
such Restricted Subsidiary shall take any action (corporate or other) to
authorize or further any of the actions described above in this subsection; or
(i) Security Documents. Any event of default described in
any Loan Document shall have occurred and be continuing, or any material
provision of any Loan Document shall at any time for any reason cease to be
valid and binding and enforceable against any obligor thereunder, or the
validity, binding effect or enforceability thereof shall be contested by any
Person, or any obligor, shall deny that it has any or further liability or
obligation thereunder, or any material provision thereof shall be terminated,
invalidated or set aside, or be declared ineffective or inoperative or in any
way cease to give or provide to the Lenders and the Agent the benefits
purported to be created thereby; or
(j) Control. Any Change of Control shall occur.
6.2 Remedies. (a) Upon the occurrence and during the continuance
of any Event of Default, the Agent may and, upon being directed to do so by the
Required Lenders, shall by written notice to the Company (i) terminate the
Commitments or (ii) declare the outstanding principal of, and accrued interest
on, the Notes, all unpaid reimbursement obligations in respect of drawings
under Letters of Credit and all other amounts owing under this Agreement to be
immediately due and payable, or (iii) demand immediate delivery of cash
collateral, and the Company agrees to deliver such cash collateral upon demand,
in an amount equal to the maximum amount that may be available to be drawn at
any time prior to the stated expiry of all outstanding Letters of Credit, or
any one or more of the foregoing, whereupon the Commitments shall terminate
forthwith and all such amounts, including such cash
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collateral, shall become immediately due and payable, provided that in the case
of any event or condition described in Section 6.1(h) with respect to the
Company or any Guarantor, the Commitments shall automatically terminate
forthwith and all such amounts, including such cash collateral, shall
automatically become immediately due and payable without notice; in all cases
without demand, presentment, protest, diligence, notice of dishonor or other
formality, all of which are hereby expressly waived. Such cash collateral
delivered in respect of outstanding Letters of Credit shall be deposited in a
special cash collateral account to be held by the Agent as collateral security
for the payment and performance of the Company's obligations under this
Agreement to the Lenders and the Agent.
(b) The Agent may and, upon being directed to do so by the
Required Lenders, shall, in addition to the remedies provided in Section
6.2(a), exercise and enforce any and all other rights and remedies available to
it or the Lenders, whether arising under any Loan Document or under applicable
law, in any manner deemed appropriate by the Agent, including suit in equity,
action at law, or other appropriate proceedings, whether for the specific
performance (to the extent permitted by law) of any covenant or agreement
contained in any Loan Document or in aid of the exercise of any power granted
in any Loan Document.
(c) Upon the occurrence and during the continuance of any
Event of Default, each Lender may at any time and from time to time, without
notice to the Company (any requirement for such notice being expressly waived
by the Company) set off and apply against any and all of the obligations of the
Company now or hereafter existing under this Agreement, whether owing to such
Lender or any other Lender or the Agent, any and all deposits (general or
special, time or demand, provisional or final) at any time held and other
indebtedness at any time owing by such Lender to or for the credit or the
account of the Company and any property of the Company from time to time in
possession of such Lender, irrespective of whether or not such Lender shall
have made any demand hereunder and although such obligations may be contingent
and unmatured. The Company hereby grants to the Lenders and the Agent a lien
on and security interest in all such deposits, indebtedness and property as
collateral security for the payment and performance of the obligations of the
Company under this Agreement. The rights of such Lender under this Section
6.2(c) are in addition to other rights and remedies (including, without
limitation, other rights of setoff) which such Lender may have.
(d) Notwithstanding anything in this Agreement or any Loan
Document to the contrary, on the Termination Date each Lender agrees,
unconditionally and irrevocably, that it will purchase, either through an
assignment or a participation or such other manner required by the Agent, an
interest in all of the Advances then outstanding, including all U.S. Advances
and all Canadian Advances (whether or not such Lender is a Canadian Lender),
such that each Lender's share of each Advance is equal to its pro rata share
thereof based on the amount its Commitment bears to the aggregate Commitment of
all Lenders. Such assignments and participations will be made pursuant to such
procedures and documents required by the Agent, and all appropriate adjustments
among the Lenders will be made. Each Lender shall be absolutely and
unconditionally obligated under this Section 6.2(d) and such obligation shall
not be affected by any circumstance, including, without limitation, (A) any
set-off, counterclaim, recoupment, defense or other right which such Lender has
or may have against the Agent, NBD Canada or the Company or any if its
Subsidiaries or anyone else for any reason whatsoever; (B) the occurrence or
continuance of a Default or an Event of Default; (C) any adverse change in the
condition (financial or otherwise) of the Company or any of its Subsidiaries;
(D) any breach of this Agreement or any other agreement by any other Lender
(provided that any Defaulting Lender shall not be entitled to receive any
payments or other transfers under this Section 6.2(d) and the Agent will make
all appropriate adjustments hereunder), the Company or any Guarantor; or (E)
any other circumstance, happening or event whatsoever, whether or not similar
to any of the foregoing. The Borrowers shall be
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liable, jointly and severally, for any withholding taxes, if any which may
payable under Section 3.6 as a result of such participations or assignments.
6.3 Distribution of Proceeds of Collateral. All proceeds of any
realization on the collateral pursuant to the Security Documents and any
payments received by the Agent or any Lender subsequent to and during the
continuance of any Event of Default, shall be allocated and distributed by the
Agent as follows:
(a) First, to the payment of all costs and expenses and
other amounts owing to the Agent, including without limitation all attorneys'
fees, in connection with the enforcement of the Security Documents and
otherwise administering this Agreement;
(b) Second, to the payment of all fees, including
commitment fees, owing to the Lenders pursuant to this Agreement and the Notes
on a pro rata basis (other than fees which are payable solely to the Agent or
any Lender directly) in accordance with the respective Advances of the Lenders
or any other amounts owing to the Agent, for application to payment of such
liabilities;
(c) Third, to the Lenders on a pro rata basis in
accordance with the respective Advances of the Lenders consisting of interest
owing to the Lenders under this Agreement and theNotes and net obligations and
liabilities relating to Rate Hedging Agreements, for application to payment of
such liabilities;
(d) Fourth, to the Lenders on a pro rata basis in
accordance with the respective Advances of the Lenders consisting of principal
(including without limitation any cash collateral for any outstanding Letters
of Credit), for application to payment of such liabilities;
(e) Fifth, to the payment of any and all other amounts
owing to the Lenders under this Agreement on a pro rata basis in accordance
with the respective Advances of the Lenders for application to payment of such
liabilities; and
(f) Sixth, to the Company, its Restricted Subsidiaries or
such other Person as may be legally entitled thereto.
Notwithstanding the foregoing, no payments of principal, interest or fees
delivered to the Agent for the account of any Defaulting Lender shall be
delivered by the Agent to such Defaulting Lender. Instead, such payments
shall, for so long as such Defaulting Lender shall be a Defaulting Lender, be
held by the Agent, and the Agent is hereby authorized and directed by all
parties hereto to hold such funds in escrow and apply such funds as follows:
(i) First, if applicable to any payments due to
the Agent, and
(ii) Second, to Loans required to be made by such
Defaulting Lender on any borrowing date to the extent such Defaulting Lender
fails to make such Loans.
Notwithstanding the foregoing, upon the termination of all Commitments and the
payment and performance of all of the Advances and other obligations owing
hereunder (other than those owing to a Defaulting Lender), any funds then held
in escrow by the Agent pursuant to the preceding sentence shall be distributed
to each Defaulting Lender, pro rata in proportion to amounts that would be due
to each Defaulting Lender but for the fact that it is a Defaulting Lender.
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ARTICLE VII.
THE AGENT AND THE LENDERS
7.1 Appointment and Authorization. Each Lender hereby irrevocably
appoints and authorizes the Agent to take such action as agent on its behalf
and to exercise such powers under the Loan Documents as are delegated to the
Agent by the terms hereof or thereof, together with all such powers as are
reasonably incidental thereto. The provisions of this Article VII are solely
for the benefit of the Agent and the Lenders, and the Borrowers shall not have
any rights as a third party beneficiary of any of the provisions hereof. In
performing its functions and duties under this Agreement, the Agent shall act
solely as agent of the Lenders and does not assume and shall not be deemed to
have assumed any obligation towards or relationship of agency or trust with or
for any Borrower.
7.2 Agent and Affiliates. NBD Bank in its capacity as a Lender
hereunder shall have the same rights and powers hereunder as any other Lender
and may exercise or refrain from exercising the same as though it were not the
Agent. NBD Bank and its Affiliates may (without having to account therefor to
any Lender) accept deposits from, lend money to, and generally engage in any
kind of banking, trust, financial advisory or other business with the Company
or any of its Subsidiaries as if it were not acting as Agent hereunder, and may
accept fees and other consideration therefor without having to account for the
same to the Lenders.
7.3 Scope of Agent's Duties. The Agent shall have no duties or
responsibilities except those expressly set forth herein, and shall not, by
reason of this Agreement, have a fiduciary relationship with any Lender, and no
implied covenants, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or shall otherwise exist against the Agent. As to
any matters not expressly provided for by this Agreement (including, without
limitation, collection and enforcement actions under the Notes and the Security
Documents), the Agent shall not be required to exercise any discretion or take
any action, but the Agent shall take such action or omit to take any action
pursuant to the reasonable written instructions of the Required Lenders and may
request instructions from the Required Lenders. The Agent shall in all cases
be fully protected in acting, or in refraining from acting, pursuant to the
written instructions of the Required Lenders (or all of the Lenders, as the
case may be, in accordance with the requirements of this Agreement), which
instructions and any action or omission pursuant thereto shall be binding upon
all of the Lenders; provided, however, that the Agent shall not be required to
act or omit to act if, in the judgment of the Agent, such action or omission
may expose the Agent to personal liability or is contrary to the Loan Documents
or applicable law.
7.4 Reliance by Agent. The Agent shall be entitled to rely upon
any certificate, notice, document or other communication (including any cable,
telegram, telex, facsimile transmission or oral communication) believed by it
to be genuine and correct and to have been sent or given by or on behalf of a
proper Person. The Agent may treat the payee of any Note as the holder thereof
unless and until the Agent receives written notice of the assignment thereof
pursuant to the terms of this Agreement signed by such payee and the Agent
receives the written agreement of the assignee that such assignee is bound
hereby to the same extent as if it had been an original party hereto. The
Agent may employ agents (including without limitation collateral agents and
including without limitation NBD Canada with respect to administering the
Canadian Advances, acting as collateral agent in Canada and enforcing any of
the Agent's rights and remedies under the Loan Documents in Canada) and may
consult with legal counsel (who may be counsel for the Borrowers), independent
public accountants and other experts selected by it and shall not be liable to
the Lenders, except as to money or property received by it or its authorized
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agents, for the negligence or misconduct of any such agent selected by it with
reasonable care or for any action taken or omitted to be taken by it in good
faith in accordance with the advice of such counsel, accountants or experts.
In performing any of the functions of the Agent, NBD Canada or any other
Affiliate of the Agent shall be entitled to all of the same powers, immunities,
exculpations, indemnifications and other rights of the Agent described in this
Article VII and otherwise in the Loan Documents. It is acknowledged and agreed
that NBD Canada will be acting as collateral agent for the Lenders with respect
to all collateral in Canada, and all liens and security interests in Canada
will be in favor of NBD Canada for the benefit of itself and each of the
Lenders, and as administrative agent for payments and fundings of Canadian
Advances.
7.5 Default. The Agent shall not be deemed to have knowledge of
the occurrence of any Default or Event of Default, unless the Agent has
received written notice from a Lender or the Borrowers specifying such Default
or Event of Default and stating that such notice is a "Notice of Default". In
the event that the Agent receives such a notice, the Agent shall give written
notice thereto to the Lenders.
7.6 Liability of Agent. Neither the Agent nor any of its
directors, officers, agents, or employees shall be liable to the Lenders for
any action taken or not taken by it or them in connection herewith with the
consent or at the request of the Required Lenders or in the absence of its or
their own gross negligence or willful misconduct. Neither the Agent nor any of
its directors, officers, agents or employees shall be responsible for or have
any duty to ascertain, inquire into or verify (i) any recital, statement,
warranty or representation contained in any Loan Document, or in any
certificate, report, financial statement or other document furnished in
connection with this Agreement, (ii) the performance or observance of any of
the covenants or agreements of the Borrowers or any Guarantor, (iii) the
satisfaction of any condition specified in Article II hereof, or (iv) the
validity, effectiveness, legal enforceability, value or genuineness of any Loan
Document or any collateral subject thereto or any other instrument or document
furnished in connection herewith.
7.7 Nonreliance on Agent and Other Lenders. Each Lender
acknowledges and agrees that it has, independently and without reliance on the
Agent or any other Lender, and based on such documents and information as it
has deemed appropriate, made its own credit analysis of the Company and its
Subsidiaries and decision to enter into this Agreement and that it will,
independently and without reliance upon the Agent or any other Lender, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own analysis and decision in taking or not taking
action under this Agreement. The Agent shall not be required to keep itself
informed as to the performance or observance by the Company or any of its
Subsidiaries of the Loan Documents or any other documents referred to or
provided for herein or to inspect the properties or books of the Company or any
of its Subsidiaries and, except for notices, reports and other documents and
information expressly required to be furnished to the Lenders by the Agent
hereunder, the Agent shall not have any duty or responsibility to provide any
Lender with any information concerning the affairs, financial condition or
business of the Company or any of its Subsidiaries which may come into the
possession of the Agent or any of its affiliates.
7.8 Indemnification. The Lenders agree to indemnify the Agent (to
the extent not reimbursed by the Borrowers, but without limiting any obligation
of the Borrowers to make such reimbursement), ratably according to the
respective principal amounts of the Advances then outstanding made by each of
them (or if no Advances are at the time outstanding, ratably according to the
respective amounts of their Commitments), from and against any and all claims,
damages, losses, liabilities, costs or expenses of any kind or nature
whatsoever (including, without limitation, fees and disbursements of
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counsel) which may be imposed on, incurred by, or asserted against the Agent in
any way relating to or arising out of this Agreement or the transactions
contemplated hereby or any action taken or omitted by the Agent under this
Agreement, provided, however, that no Lender shall be liable for any portion
of such claims, damages, losses, liabilities, costs or expenses resulting from
the Agent's gross negligence or willful misconduct. Without limitation of the
foregoing, each Lender agrees to reimburse the Agent promptly upon demand for
its ratable share of any out-of-pocket expenses (including without limitation
fees and expenses of counsel) incurred by the Agent in connection with the
preparation, execution, delivery, administration, modification, amendment or
enforcement (whether through negotiations, legal proceedings or otherwise) of,
or legal advice in respect of rights or responsibilities under, this Agreement,
to the extent that the Agent is not reimbursed for such expenses by the
Borrowers, but without limiting the obligation of the Borrowers to make such
reimbursement. Each Lender agrees to reimburse the Agent promptly upon demand
for its ratable share of any amounts owing to the Agent by the Lenders pursuant
to this Section. If the indemnity furnished to the Agent under this Section
shall, in the judgment of the Agent, be insufficient or become impaired, the
Agent may call for additional indemnity from the Lenders and cease, or not
commence, to take any action until such additional indemnity is furnished.
7.9 Successor Agent. The Agent may resign as such at any time
upon ten days' prior written notice to the Company and the Lenders. In the
event of any such resignation, the Required Lenders shall, by an instrument in
writing delivered to the Company and the Agent, appoint a successor (which
successor shall be approved by the Company provided no Default or Event of
Default then exists), which shall be a commercial bank organized under the laws
of the United States or any State thereof and having a combined capital and
surplus of at least $500,000,000. If a successor is not so appointed or does
not accept such appointment before the Agent's resignation becomes effective,
the retiring Agent may appoint a temporary successor to act until such
appointment by the Required Lenders is made and accepted or if no such
temporary successor is appointed as provided above by the retiring Agent, the
Required Lenders shall thereafter perform all the duties of the Agent hereunder
until such appointment by the Required Lenders is made and accepted. Any
successor to the Agent shall execute and deliver to the Borrowers and the
Lenders an instrument accepting such appointment and thereupon such successor
Agent, without further act, deed, conveyance or transfer shall become vested
with all of the properties, rights, interests, powers, authorities and
obligations of its predecessor hereunder with like effect as if originally
named as Agent hereunder. Upon request of such successor Agent, the Borrowers
and the retiring Agent shall execute and deliver such instruments of
conveyance, assignment and further assurance and do such other things as may
reasonably be required for more fully and certainly vesting and confirming in
such successor Agent all such properties, rights, interests, powers,
authorities and obligations. The provisions of this Article VII shall
thereafter remain effective for such retiring Agent with respect to any actions
taken or omitted to be taken by such Agent while acting as the Agent hereunder.
7.10 Sharing of Payments. The Lenders agree among themselves that,
in the event that any Lender shall obtain payment in respect of any Advance or
any other obligation owing to the Lenders under this Agreement through the
exercise of a right of set-off, banker's lien, counterclaim or otherwise in
excess of its ratable share of payments received by all of the Lenders on
account of the Advances and other obligations (or if no Advances are
outstanding, ratably according to the respective amounts of the Commitments),
such Lender shall promptly purchase from the other Lenders participations in
such Advances and other obligations in such amounts, and make such other
adjustments from time to time, as shall be equitable to the end that all of the
Lenders share such payment in accordance with such ratable shares. The Lenders
further agree among themselves that if payment to a Lender obtained by such
Lender through the exercise of a right of set-off, banker's lien, counterclaim
or
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otherwise as aforesaid shall be rescinded or must otherwise be restored, each
Lender which shall have shared the benefit of such payment shall, by repurchase
of participations theretofore sold, return its share of that benefit to each
Lender whose payment shall have been rescinded or otherwise restored. The
Borrowers agree that any Lender so purchasing such a participation may, to the
fullest extent permitted by law, exercise all rights of payment, including
set-off, banker's lien or counterclaim, with respect to such participation as
fully as if such Lender were a holder of such Advance or other obligation in
the amount of such participation. The Lenders further agree among themselves
that, in the event that amounts received by the Lenders and the Agent hereunder
are insufficient to pay all such obligations or insufficient to pay all such
obligations when due, the fees and other amounts owing to the Agent in such
capacity shall be paid therefrom before payment of obligations owing to the
Lenders under this Agreement. Except as otherwise expressly provided in this
Agreement, if any Lender or the Agent shall fail to remit to the Agent or any
other Lender an amount payable by such Lender or the Agent to the Agent or such
other Lender pursuant to this Agreement on the date when such amount is due,
such payments shall be made together with interest thereon for each date from
the date such amount is due until the date such amount is paid to the Agent or
such other Lender at a rate per annum equal to the rate at which borrowings are
available to the payee in its overnight federal funds market. It is further
understood and agreed among the Lenders and the Agent that if the Agent shall
engage in any other transactions with the Borrowers and shall have the benefit
of any collateral or security therefor which does not expressly secure the
obligations arising under this Agreement except by virtue of a so-called
dragnet clause or comparable provision, the Agent shall be entitled to apply
any proceeds of such collateral or security first in respect of the obligations
arising in connection with such other transaction before application to the
obligations arising under this Agreement.
ARTICLE VIII.
MISCELLANEOUS
8.1 Amendments, Etc. (a) No amendment, modification, termination
or waiver of any provision of this Agreement nor any consent to any departure
therefrom shall be effective unless the same shall be in writing and signed by
the Required Lenders and, to the extent any rights or duties of the Agent may
be affected thereby, the Agent, provided, however, that no such amendment,
modification, termination, waiver or consent shall, without the consent of the
Agent and all of the Lenders, (i) authorize or permit the extension of time
for, or any reduction of the amount of, any payment of the principal of, or
interest on, the Notes or any Letter of Credit reimbursement obligation, or any
fees or other amount payable hereunder, (ii) amend or extend the respective
Commitments of any Lender set forth on the signature pages hereof or modify the
provisions of this Section regarding the taking of any action under this
Section or the provisions of Section 6.3 or Section 7.10 or the definition of
Required Lenders or any provision of this Agreement requiring the consent of
all of the Lenders, (iii) provide for the discharge of any material Guarantor
under the Guaranties or the release of any substantial amount of the collateral
subject to any Security Document, other than the release of Liens on Collateral
that is permitted to be sold by this Agreement, and the Agent is hereby
authorized to release any such Liens, or (iv) modify any other provision of
this Agreement which by its terms requires the consent of all of the Lenders.
(b) Any such amendment, waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.
(c) Notwithstanding anything herein to the contrary, no
Defaulting Lender shall be entitled to vote (whether to consent or to withhold
its consent) with respect to any amendment,
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modification, termination or waiver of any provision of this Agreement or any
departure therefrom or any direction from the Lenders to the Agent, and, for
purposes of determining the Required Lenders at any time, the Commitments and
the Advances of each Defaulting Lenders shall be disregarded.
8.2 Notices. (a) Except as otherwise provided in Section 8.2(c)
hereof, all notices and other communications hereunder shall be in writing and
shall be delivered or sent to the Borrowers at 2000 N. Woodward Avenue,
Bloomfield Hills, Michigan 48304, Attention: President, Facsimile No. (810)
540-7280, Facsimile Confirmation No. (810) 540-0031, and to the Agent and the
Lenders at the respective addresses for notices set forth on the signatures
pages hereof, or to such other address as may be designated by the Borrowers,
the Agent or any Lender by notice to the other parties hereto. All notices and
other communications shall be deemed to have been given at the time of actual
delivery thereof to such address, or, unless sooner delivered, (i) if sent by
certified or registered mail, postage prepaid, to such address, on the third
day after the date of mailing, or (ii) if sent by facsimile transmission, upon
confirmation of receipt by telephone at the number specified for confirmation,
provided, however, that notices to the Agent shall not be effective until
received. Each Borrowing Subsidiary agrees that the Company may give any
notices or other requests on its behalf under this Agreement, including without
limitation requests for Advances, and the Borrowing Subsidiary will be bound
thereby.
(b) Notices by the Borrowers to the Agent with respect to
terminations or reductions of the Commitments pursuant to Section 2.2, requests
for Borrowings pursuant to Section 2.4, requests for continuations or
conversions of Borrowings pursuant to Section 2.7 and notices of prepayment
pursuant to Section 3.1 shall be irrevocable and binding on the Borrowers.
(c) Any notice to be given by the Borrowers to the Agent
pursuant to Sections 2.4, 2.7 or 3.1 and any notice to be given by the Agent or
any Lender hereunder, may be given by telephone, and all such notices must be
immediately confirmed in writing in the manner provided in Section 8.2(a). Any
such notice given by telephone shall be deemed effective upon receipt thereof
by the party to whom such notice is to be given. The Borrowers shall indemnify
and hold harmless the Lenders and the Agent from any and all losses, damages,
liabilities and claims arising from their good faith reliance on any such
telephone notice.
8.3 No Waiver By Conduct; Remedies Cumulative. No course of
dealing on the part of the Agent or any Lender, nor any delay or failure on the
part of the Agent or any Lender in exercising any right, power or privilege
hereunder shall operate as a waiver of such right, power or privilege or
otherwise prejudice the Agent's or such Lender's rights and remedies hereunder;
nor shall any single or partial exercise thereof preclude any further exercise
thereof or the exercise of any other right, power or privilege. No right or
remedy conferred upon or reserved to the Agent or any Lender under any Loan
Document is intended to be exclusive of any other right or remedy, and every
right and remedy shall be cumulative and in addition to every other right or
remedy granted thereunder or now or hereafter existing under any applicable
law. Every right and remedy granted by any Loan Document or by applicable law
to the Agent or any Lender may be exercised from time to time and as often as
may be deemed expedient by the Agent or any Lender and, unless contrary to the
express provisions of any Loan Document, irrespective of the occurrence or
continuance of any Default or Event of Default.
8.4 Reliance on and Survival of Various Provisions. All terms,
covenants, agreements, representations and warranties of any Borrower or
Guarantor made herein or in any Security Document or in any certificate,
report, financial statement or other document furnished by or on behalf of any
Borrower or Guarantor in connection with this Agreement shall be deemed to be
material and to
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have been relied upon by the Lenders, notwithstanding any investigation
heretofore or hereafter made by any Lender or on such Lender's behalf, and
those covenants and agreements of the Borrowers set forth in Sections 3.8, 3.10
and 8.5 hereof shall survive the repayment in full of the Advances and the
termination of the Commitments.
8.5 Expenses; Indemnification. (a) The Borrowers jointly and
severally agree to pay, or reimburse the Agent for the payment of, on demand,
(i) the reasonable fees and expenses of counsel to the Agent, including without
limitation the fees and expenses of Dickinson, Wright, Moon, Van Dusen &
Freeman, in connection with the preparation, execution, delivery and
administration of the Loan Documents and in connection with advising the Agent
as to its rights and responsibilities with respect thereto, and in connection
with any amendments, waivers or consents in connection therewith, (ii) all
stamp and other taxes and fees payable or determined to be payable in
connection with the execution, delivery, filing or recording of the Loan
Documents (or the verification of filing, recording, perfection or priority
thereof) or the consummation of the transactions contemplated hereby, and any
and all liabilities with respect to or resulting from any delay in paying or
omitting to pay such taxes or fees, (iii) all reasonable costs and expenses of
the Agent and the Lenders (including reasonable fees and expenses of counsel
and whether incurred through negotiations, legal proceedings or otherwise)) in
connection with any Default or Event of Default or the enforcement of, or the
exercise or preservation of any rights under, any Loan Document or in
connection with any refinancing or restructuring of the credit arrangements
provided under this Agreement in connection with any Event of Default and (iv)
all reasonable costs and expenses of the Agent (including reasonable fees and
expenses of counsel) in connection with any action or proceeding relating to a
court order, injunction or other process or decree restraining or seeking to
restrain the Agent from paying any amount under, or otherwise relating in any
way to, any Letter of Credit and any and all costs and expenses which any of
them may incur relative to any payment under any Letter of Credit.
(b) The Borrowers jointly and severally hereby indemnify
and agree to hold harmless the Lenders and the Agent, and their respective
officers, directors, employees and agents, from and against any and all claims,
damages, losses, liabilities, costs or expenses of any kind or nature
whatsoever which the Lenders or the Agent or any such Person may incur or which
may be claimed against any of them by reason of or in connection with any
Letter of Credit, and neither any Lender nor the Agent or any of their
respective officers, directors, employees or agents shall be liable or
responsible for: (i) the use which may be made of any Letter of Credit or for
any acts or omissions of any beneficiary in connection therewith; (ii) the
validity, sufficiency or genuineness of documents or of any endorsement
thereon, even if such documents should in fact prove to be in any or all
respects invalid, insufficient, fraudulent or forged; (iii) payment by the
Agent to the beneficiary under any Letter of Credit against presentation of
documents which do not comply with the terms of any Letter of Credit, including
failure of any documents to bear any reference or adequate reference to such
Letter of Credit; (iv) any error, omission, interruption or delay in
transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Letter of Credit; or (v) any other event or
circumstance whatsoever arising in connection with any Letter of Credit;
provided, however, that the Company shall not be required to indemnify the
Lenders and the Agent and such other persons, and the Lenders shall be liable
to the Company to the extent, but only to the extent, of any direct, as opposed
to consequential or incidental, damages suffered by the Company which were
caused by (A) the Agent's wrongful dishonor of any Letter of Credit after the
presentation to it by the beneficiary thereunder of a draft or other demand for
payment and other documentation strictly complying with the terms and
conditions of such Letter of Credit, or (B) the payment by the Agent to the
beneficiary under any Letter of Credit against presentation of documents which
do not comply with the terms of the Letter of Credit to the extent, but only to
the extent, that such payment constitutes gross negligence of willful
misconduct of the Agent. It
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is understood that in making any payment under a Letter of Credit the Agent
will rely on documents presented to it under such Letter of Credit as to any
and all matters set forth therein without further investigation and regardless
of any notice or information to the contrary, and such reliance and payment
against documents presented under a Letter of Credit substantially complying
with the terms thereof shall not be deemed gross negligence or willful
misconduct of the Agent in connection with such payment. It is further
acknowledged and agreed that the Company may have rights against the
beneficiary or others in connection with any Letter of Credit with respect to
which the Lenders are alleged to be liable and it shall be a precondition of
the assertion of any liability of the Lenders under this Section that the
Company shall first have exhausted all remedies in respect of the alleged loss
against such beneficiary and any other parties obligated or liable in
connection with such Letter of Credit and any related transactions.
(c) Each Borrower hereby jointly and severally indemnifies
and agrees to hold harmless the Lenders and the Agent, and their respective
officers, directors, employees and agents, from and against any and all claims,
damages, losses, liabilities, costs or expenses of any kind or nature
whatsoever (including reasonable attorneys fees and disbursements incurred in
connection with any investigative, administrative or judicial proceeding
whether or not such Person shall be designated as a party thereto) which the
Lenders or the Agent or any such Person may incur or which may be claimed
against any of them by reason of or in connection with entering into this
Agreement or the transactions contemplated hereby, including without limitation
those arising in connection with or relating to any acquisition and the
transactions contemplated thereby and under Environmental Laws; provided,
however, that the Borrowers shall not be required to indemnify any such Lender
and the Agent or such other Person, to the extent, but only to the extent, that
such claim, damage, loss, liability, cost or expense is attributable to the
gross negligence or willful misconduct of such Lender or the Agent, as the case
may be.
(d) In consideration of the execution and delivery of this
Agreement by each Lender and the extension of the Commitments, each Borrower
hereby jointly and severally indemnifies, exonerates and holds the Agent, each
Lender and each of their respective affiliates, officers, directors, employees
and agents (collectively, the "Indemnified Parties") free and harmless from and
against any and all actions, causes of action, suits, losses, costs,
liabilities and damages, and expenses incurred in connection therewith
(irrespective of whether any such Indemnified Party is a party to the action
for which indemnification hereunder is sought), including reasonable attorneys'
fees and disbursements (collectively, the "Indemnified Liabilities"), incurred
by the Indemnified Parties or any of them as a result of, or arising out of, or
relating to:
(i) any transaction financed or to be financed in
whole or in part, directly or indirectly, with the proceeds of any Advance;
(ii) the entering into and performance of this
Agreement and any other agreement or instrument executed in connection herewith
by any of the Indemnified Parties (including any action brought by or on behalf
of any Borrower as the result of any determination by the Required Lenders not
to fund any Advance unless such determination is determined by a final non
appealable order by of competent jurisdiction to be wrongful);
(iii) any investigation, litigation or proceeding
related to any acquisition or proposed acquisition by the Company or any of its
Subsidiaries of any portion of the stock or assets of any Person or any merger,
investment, issuance of Capital Stock or any transaction related
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thereto by the Company or any of its Subsidiaries, whether or not the Agent or
such Lender is party thereto;
(iv) any investigation, litigation or proceeding
related to any environmental cleanup, audit, compliance or other matter
relating to the protection of the environment or the release by the Company or
any of its Subsidiaries of any Hazardous Material; or
(v) the presence on or under, or the escape,
seepage, leakage, spillage, discharge, emission, discharging or releasing from,
any real property owned or operated by the Company or any of its Subsidiaries
of any Hazardous Material (including any losses, liabilities, damages,
injuries, costs, expenses or claims asserted or arising under any Environmental
Law), regardless of whether caused by, or within the control of, the Company or
such Subsidiary, except for any such Indemnified Liabilities arising for the
account of a particular Indemnified Party by reason of the activities of the
Indemnified Party on the property of the Company or such Subsidiary conducted
subsequent to a foreclosure on such property by the Lenders or by reason of the
relevant Indemnified Party's gross negligence or willful misconduct or breach
of this Agreement, and if and to the extent that the foregoing undertaking may
be unenforceable for any reason, the Company hereby agrees to make the maximum
contribution to the payment and satisfaction of each of the Indemnified
Liabilities which is permissible under applicable law. The Company shall be
obligated to indemnify the Indemnified Parties for all Indemnified Liabilities
subject to and pursuant to the foregoing provisions, regardless of whether the
Company or any of its Subsidiaries had knowledge of the facts and circumstances
giving rise to such Indemnified Liability.
8.6 Successors and Assigns. (a) This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns, provided that the Borrowers may not, without the prior
consent of the Lenders, assign their rights or obligations hereunder or under
the Notes or any Security Document and the Lenders shall not be obligated to
make any Advance hereunder to any entity other than the Borrowers.
(b) Any Lender may sell to any financial institution or
institutions, and such financial institution or institutions may further sell,
a participation interest (undivided or divided) in, the Advances and such
Lender's rights and benefits under the Loan Documents, and to the extent of
that participation interest such participant or participants shall have the
same rights and benefits against the Borrowers under Section 3.8, 3.10 and
6.2(c) as it or they would have had if such participant or participants were
the Lender making the Advances to the Borrowers hereunder, provided, however,
that (i) such Lender's obligations under this Agreement shall remain unmodified
and fully effective and enforceable against such Lender, (ii) such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations, (iii) such Lender shall remain the holder of its Notes for
all purposes of this Agreement, (iv) the Borrowers, the Agent and the other
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement, and
(v) such Lender shall not grant to its participant any rights to consent or
withhold consent to any action taken by such Lender or the Agent under this
Agreement other than action requiring the consent of all of the Lenders
hereunder.
(c) The Agent from time to time in its sole discretion may
appoint agents for the purpose of servicing and administering this Agreement
and the transactions contemplated hereby and enforcing or exercising any
rights or remedies of the Agent provided under any Loan Documents or otherwise.
In furtherance of such agency, the Agent may from time to time direct that the
Borrowers provide notices, reports and other documents contemplated by this
Agreement (or duplicates thereof) to
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such agent. The Borrowers hereby consent to the appointment of such agent and
agrees to provide all such notices, reports and other documents and to
otherwise deal with such agent acting on behalf of the Agent in the same manner
as would be required if dealing with the Agent itself.
(d) Each Lender may, with the prior consent of the Company
(which shall not be unreasonably withheld and may not be withheld if an Event
of Default has occurred and is continuing) and the Agent, assign to one or more
banks or other entities all or a portion of its rights and obligations under
this Agreement (including, without limitation, all or a portion of its
Commitment, the Advances owing to it and the Notes held by it); provided,
however, that (i) each such assignment shall be of a uniform, and not a
varying, percentage of all rights and obligations, (ii) except in the case of
an assignment of all of a Lender's rights and obligations under this Agreement,
the amount of the Commitment of the assigning Lender being assigned pursuant to
each such assignment (determined as of the date of the Assignment and
Acceptance with respect to such assignment) shall in no event be less than
$5,000,000, and in integral multiples of $1,000,000 thereafter, or such lesser
amount as the Company and the Agent may consent, (iii) the parties to each such
assignment shall execute and deliver to the Agent, for its acceptance and
recording in the Register, an Assignment and Acceptance in the form of Exhibit
K hereto (an "Assignment and Acceptance"), together with any Note or Notes
subject to such assignment and a processing and recordation fee of $4,000, and
(iv) any Lender may without the consent of the Company or the Agent, and
without paying any fee, assign to any Affiliate of such Lender that is a bank
or financial institution all of its rights and obligations under this
Agreement. Upon such execution, delivery, acceptance and recording, from and
after the effective date specified in such Assignment and Acceptance, (x) the
assignee thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Assignment and
Acceptance, have the rights and obligations of a Lender hereunder and (y) the
Lender assignor thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment and Acceptance,
relinquish its rights and be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all of the remaining
portion of an assigning Lender's rights and obligations under this Agreement,
such Lender shall cease to be a party hereto).
(e) By executing and delivering an Assignment and
Acceptance, the Lender assignor thereunder and the assignee thereunder confirm
to and agree with each other and the other parties hereto as follows: (i)
other than as provided in such Assignment and Acceptance, such assigning Lender
makes no representation or warranty and assumes no responsibility with respect
to any statements, warranties or representations made in or in connection with
this Agreement or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement or any other instrument or
document furnished pursuant hereto; (ii) such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of the Company and its Subsidiaries or the performance or
observance by the Borrowers and the Guarantors of any of their obligations
under this Agreement or any other instrument or document furnished pursuant
hereto; (iii) such assignee confirms that it has received a copy of this
Agreement, together with copies of the financial statements referred to in
Section 4.6 and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance; (iv) such assignee will, independently and without
reliance upon the Agent, such assigning Lender or any other Lender and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement; (v) such assignee appoints and authorizes the Agent to take
such action as agent on its behalf and to exercise such powers and discretion
under this Agreement as are delegated to the Agent by the terms hereof,
together with such powers and discretion as are reasonably incidental thereto;
and (vi) such
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assignee agrees that it will perform in accordance with their terms all of the
obligations that by the terms of this Agreement are required to be performed by
it as a Lender.
(f) The Agent shall maintain at its address designated on
the signature pages hereof a copy of each Assignment and Acceptance delivered
to and accepted by it and a register for the recordation of the names and
addresses of the Lenders and the Commitment of, and principal amount of the
Advances owing to, each Lender from time to time (the "Register"). The entries
in the Register shall be conclusive and binding for all purposes, absent
manifest error, and the Borrowers, the Agent and the Lenders may treat each
Person whose name is recorded in the Register as a Lender hereunder for all
purposes of this Agreement. The Register shall be available for inspection by
the Borrowers or any Lender at any reasonable time and from time to time upon
reasonable prior notice.
(g) Upon its receipt of an Assignment and Acceptance
executed by an assigning Lender and an assignee, together with any Note or
Notes subject to such assignment, the Agent shall, if such Assignment and
Acceptance has been completed, (i) accept such Assignment and Acceptance, (ii)
record the information contained therein in the Register and (iii) give prompt
notice thereof to the Company. Within five Business Days after its receipt of
such notice, the Borrowers, at its own expense, shall execute and deliver to
the Agent in exchange for the surrendered Note or Notes a new Note or Notes to
the order of such assignee in an amount equal to the Commitment assumed by it
pursuant to such Assignment and Acceptance and, if the assigning Lender has
retained a Commitment hereunder, a new Note to the order of the assigning
Lender in an amount equal to the Commitment retained by it hereunder. Such new
Note or Notes shall be in an aggregate principal amount equal to the aggregate
principal amount of such surrendered Note or Notes, shall be dated the
effective date of such Assignment and Acceptance and shall otherwise be in
substantially the form of Exhibit K hereto.
(h) The Borrowers shall not be liable for any costs or
expenses of any Lender in effectuating any participation or assignment under
this Section 8.6.
(i) The Lenders may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
8.6, disclose to the assignee or participant or proposed assignee or
participant any information relating to the Company and its Subsidiaries.
(j) Notwithstanding any other provision set forth in this
Agreement, any Lender may at any time create a security interest in, or assign,
all or any portion of its rights under this Agreement (including, without
limitation, the Advances owing to it and the Note or Notes held by it) in favor
of any Federal Reserve Lender in accordance with Regulation A of the Board of
Governors of the Federal Reserve System; provided that such creation of a
security interest or assignment shall not release such Lender from its
obligations under this Agreement.
8.7 Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument, and any of the parties hereto may execute this Agreement by signing
any such counterpart.
8.8 Governing Law. This Agreement is a contract made under, and
shall be governed by and construed in accordance with, the law of the State of
Michigan applicable to contracts made and to be performed entirely within such
State and without giving effect to choice of law principles of such State. The
Borrowers and the Lenders further agrees that any legal or equitable action or
proceeding with respect to any Loan Document or the transactions contemplated
hereby shall be brought in any court of the State of Michigan, or in any court
of the United States of America sitting in Michigan,
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and each of the Borrowers and the Lenders hereby submits to and accepts
generally and unconditionally the jurisdiction of those courts with respect to
its Person and property, and, in the case of each Borrower irrevocably appoints
the Company as its agent for service of process and irrevocably consents to the
service of process in connection with any such action or proceeding by personal
delivery to such agent or to the Company, as the case may be, or by the mailing
thereof by registered or certified mail, postage prepaid to the Company at its
address for notices pursuant to Section 8.2. The Borrowers shall at all times
maintain such an agent in Michigan for such purpose and shall notify the
Lenders and the Agent of such agent's address in Michigan within ten days of
any change of address. Nothing in this paragraph shall affect the right of the
Lenders and the Agent to serve process in any other manner permitted by law or
limit the right of the Lenders or the Agent to bring any such action or
proceeding against the Borrowers or any property in the courts of any other
jurisdiction. The Borrowers and the Lenders hereby irrevocably waives any
objection to the laying of venue of any such action or proceeding in the above
described courts.
8.9 Table of Contents and Headings. The table of contents and the
headings of the various subdivisions hereof are for the convenience of
reference only and shall in no way modify any of the terms or provisions
hereof.
8.10 Construction of Certain Provisions. If any provision of this
Agreement refers to any action to be taken by any Person, or which such Person
is prohibited from taking, such provision shall be applicable whether such
action is taken directly or indirectly by such Person, whether or not expressly
specified in such provision.
8.11 Integration and Severability. The Loan Documents embody the
entire agreement and understanding between the Borrowers, the Agent and the
Lenders, and supersede all prior agreements and understandings, relating to the
subject matter hereof. In case any one or more of the obligations of the
Borrowers under the Loan Document shall be invalid, illegal or unenforceable in
any jurisdiction, the validity, legality and enforceability of the remaining
obligations of the Borrowers shall not in any way be affected or impaired
thereby, and such invalidity, illegality or unenforceability in one
jurisdiction shall not affect the validity, legality or enforceability of the
obligations of the Borrowers under any Loan Document in any other jurisdiction.
8.12 Independence of Covenants. All covenants hereunder shall be
given independent effect so that if a particular action or condition is not
permitted by any such covenant, the fact that it would be permitted by an
exception to, or would be otherwise within the limitations of, another covenant
shall not avoid the occurrence of a Default or an Event of Default if such
action is taken or such condition exists.
8.13 Interest Rate Limitation. Notwithstanding any provisions of
any Loan Document, in no event shall the amount of interest paid or agreed to
be paid by the Borrowers exceed an amount computed at the highest rate of
interest permissible under applicable law. If, from any circumstances
whatsoever, fulfillment of any provision of any Loan Document at the time
performance of such provision shall be due, shall involve exceeding the
interest rate limitation validly prescribed by law which a court of competent
jurisdiction may deem applicable hereto, then, ipso facto, the obligations to
be fulfilled shall be reduced to an amount computed at the highest rate of
interest permissible under applicable law, and if for any reason whatsoever
any Lender shall ever receive as interest an amount which would be deemed
unlawful under such applicable law such interest shall be automatically applied
to the payment of principal of the Advances outstanding hereunder (whether or
not then due and payable)
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and not to the payment of interest, or shall be refunded to the relevant
Borrower if such principal and all other obligations of the Borrowers to the
Lenders have been paid in full.
8.14 Judgment and Payment. (a) If, for the purpose of obtaining
judgment in any court, it is necessary to convert a sum owing hereunder by any
Borrower in one currency into another currency, such Borrower agrees, to the
fullest extent that it may effectively do so, that the rate of exchange used
shall be that at which in accordance with normal banking procedures in the
relevant jurisdiction the relevant Lender could purchase the first currency
with such other currency for the first currency on the Business Day immediately
preceding the day on which the final judgment is given.
(b) The obligations of any Borrower in respect of any sum
due to any party hereto or any holder of the obligations owing hereunder (the
"Applicable Creditor") shall, notwithstanding any payment obligation or
judgment in a currency (the "Payment Currency") other than applicable currency,
be discharged only to the extent that, on the Business Day following receipt by
the Applicable Creditor of any sum adjudged to be so due in the Payment
Currency, the Applicable Creditor may in accordance with normal banking
procedures in the relevant jurisdiction purchase applicable currency with the
Payment Currency; if the amount of applicable currency so purchased is less
than the sum originally due to the Applicable Creditor in applicable currency,
each Borrower agrees, as a separate obligation and notwithstanding any such
judgment, to indemnify the Applicable Creditor against such loss. The
obligations of the Borrowers contained in this Section 8.14 shall survive the
termination of this Agreement and the payment of all other amounts owing
hereunder.
8.15 WAIVER OF JURY TRIAL. THE LENDERS AND THE AGENT AND THE
BORROWERS, AFTER CONSULTING OR HAVING HAD THE OPPORTUNITY TO CONSULT WITH
COUNSEL, KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT ANY OF THEM
MAY HAVE TO A TRIAL BY JURY IN ANY LITIGATION BASED UPON OR ARISING OUT OF THIS
AGREEMENT OR ANY RELATED INSTRUMENT OR AGREEMENT OR ANY OF THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT OR ANY COURSE OF CONDUCT, DEALING, STATEMENTS
(WHETHER ORAL OR WRITTEN) OR ACTIONS OF ANY OF THEM. NEITHER ANY LENDER, THE
AGENT, NOR THE BORROWERS SHALL SEEK TO CONSOLIDATE, BY COUNTERCLAIM OR
OTHERWISE, ANY SUCH ACTION IN WHICH A JURY TRIAL HAS BEEN WAIVED WITH ANY OTHER
ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. THESE
PROVISIONS SHALL NOT BE DEEMED TO HAVE BEEN MODIFIED IN ANY RESPECT OR
RELINQUISHED BY ANY PARTY HERETO EXCEPT BY A WRITTEN INSTRUMENT EXECUTED BY
SUCH PARTY.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered on the 24th day of June 1997, which shall be the
Effective Date of this Agreement.
OXFORD AUTOMOTIVE, INC.
By: [SIG]
----------------------------------------
Its: Vice President Financial Operations
------------------------------------
BMG NORTH AMERICA LIMITED
By: [SIG]
----------------------------------------
Its: Chief Financial Officer
------------------------------------
<PAGE> 79
Address for Notices: NBD BANK, as a Lender and as Agent
NBD Bank
611 Woodward Avenue By: [SIG]
------------------------------------
Detroit, Michigan 48226
Its: Authorized Agent
---------------------------
Attention: Rick Ellis
Facsimile No.: (313) 226-0855
Facsimile
Confirmation No.: (313) 225-3743
Commitment: $110,000,000
Percentage of
Total Commitments: 100%
Applicable Lending Office:
NBD Bank
611 Woodward Avenue
Detroit, Michigan 48226
Address for Notices: FIRST CHICAGO NBD BANK, CANADA, as
the Affiliate designated by NBD Bank
to make Canadian Advances on its
behalf and as Agent for the purposes
specified in this Agreement
161 Bay Street, Suite 4240
Toronto, Ontario M5J 2S1 By: [SIG]
------------------------------------
Attention: Michael Bauer
Its: Authorized Agent
---------------------------
Facsimile No.: (416) 363-7574
Facsimile
Confirmation No.: (416) 865-0466
<PAGE> 1
EXHIBIT 4.3
COMPANY SECURITY AGREEMENT
THIS SECURITY AGREEMENT, dated as of June 24, 1997 (this "Security
Agreement"), is made by OXFORD AUTOMOTIVE, INC., a Michigan corporation, (the
"Debtor"), in favor of NBD BANK, a Michigan banking corporation, as agent (in
such capacity, the "Agent") for the benefit of itself and the lenders (the
"Lenders") now or hereafter parties to the Credit Agreement described below.
RECITALS
A. The Debtor and the Borrowing Subsidiary identified from time to time
therein have entered into a Credit Agreement of even date herewith (as amended
or modified from time to time, including any agreement entered into in
substitution therefor, the "Credit Agreement"), with the Lenders and the Agent
pursuant to which the Lenders may make Advances (as therein defined) to the
Debtor and the Borrowing Subsidiary.
B. Under the terms of the Credit Agreement, the Debtor has agreed to grant
to the Agent, for the benefit of itself and the Lenders, a first-priority
security interest, subject only to security interests expressly permitted by
the Credit Agreement, in and to the Collateral hereinafter described.
AGREEMENTS
To secure (a) the prompt and complete payment of all indebtedness and
other obligations of the Debtor or any Subsidiary now or hereafter owing to the
Lenders or the Agent under or on account of the Credit Agreement, any Security
Document or any Letters of Credit, notes or other instruments issued to the
Agent or any Lender pursuant thereto, (b) the performance of the covenants
under the Credit Agreement and the Security Documents and any monies expended
by the Lender in connection therewith, (c) the prompt and complete payment of
all obligations and performance of all covenants of the Debtor under any
interest rate or currency swap agreements or similar transactions with any
Lender and (d) the prompt and complete payment of any and all other
indebtedness, obligations and liabilities of any kind of the Debtor or any
Subsidiary to the Agent and the Lenders, or any of them, in all cases, of any
kind or nature, howsoever created or evidenced and whether now or hereafter
existing, direct or indirect (including without limitation any participation
interest acquired by any Lender in any such indebtedness, obligations or
liabilities of the Debtor or any Subsidiary to any other person and any
interest rate swap, cap or similar
<PAGE> 2
agreement), absolute or contingent, joint and/or several, secured or unsecured,
arising by operation of law or otherwise, and whether incurred by the Debtor or
any Subsidiary as principal, surety, endorser, guarantor, accommodation party
or otherwise, including without limitation all principal and all interest
(including any interest accruing subsequent to any petition filed by or against
the Debtor or any Subsidiary under the U.S. Bankruptcy Code), indemnity and
reimbursement obligations, charges, expenses, fees, attorneys' fees and
disbursements and any other amounts owing thereunder (all of the aforesaid
indebtedness, obligations and liabilities of the Debtor and its Subsidiaries
being herein called the "Secured Obligations", and all of the documents,
agreements and instruments among the Debtor, the Subsidiaries, the Agent, the
Lenders, or any of them, evidencing or securing the repayment of, or otherwise
pertaining to, the Secured Obligations including without limitation the Credit
Agreement, the Notes, the Letters of Credit and the Security Documents, being
herein collectively called the "Operative Documents"), for value received and
pursuant to the Credit Agreement, the Debtor hereby grants, assigns and
transfers to the Agent for the benefit of the Lenders a first-priority security
interest, subject only to Permitted Liens, in and to the following described
property whether now owned or existing or hereafter acquired or arising and
wherever located (all of which is herein collectively called the "Collateral"):
(a) All of the Debtor's present and future accounts, documents,
instruments, general intangibles and chattel paper, including, but without
limitation, all accounts receivable, all contract rights, all deposit accounts
and all monies and claims for money due or to become due to the Debtor, all
security held or granted to the Debtor, and all assets described in clause (d)
below;
(b) All of the Debtor's furniture, fixtures, machinery and equipment,
whether now owned or hereafter acquired, and wherever located, and whether used
by the Debtor or any other person, or leased by the Debtor to any person and
whether the interest of the Debtor is as owner, lessee or otherwise;
(c) All of the Debtor's present and future inventory of every type,
wherever located, including but not limited to raw materials, work in process,
finished goods and all inventory that is available for leasing or leased to
others by the Debtor;
(d) All other present and future assets of the Debtor (whether tangible or
intangible), including but not limited to all trademarks, trade names, patents,
industrial designs, masks, trade secrets, copyrights, franchises, customer
lists, computer programs, software, tax refund claims, licenses and permits,
and the good will associated therewith and all federal, state, foreign and
other applications and registrations therefor, all reissues, divisions,
continuations, renewals, extensions and continuations-in-part thereof now or
hereafter in effect, all income, license royalties, damages and payments now
and hereafter due or payable under and with respect thereto, including, without
limitation, any damages, proceeds or payments for past or future infringements
thereof and all income, royalties, damages and payments under all licenses
thereof, the right to sue for past, present and future infringements thereof,
all right, title and interest of the Debtor as licensor under any of
SECURITY AGREEMENT
- 2 -
<PAGE> 3
the foregoing whether now owned and existing or hereafter arising, and all
other rights and other interests corresponding thereto throughout the world
(all of the assets described in this clause (d) collectively referred to as the
"Intellectual Property");
(e) All books, records, files, correspondence, computer programs, tapes,
disks, cards, accounting information and other data of the Debtor related in
any way to the Collateral described in clauses (a), (b), (c) and (d) above,
including but not limited to any of the foregoing necessary to administer, sell
or dispose of any of the Collateral;
(f) All substitutions and replacements for, and all additions and
accessions to, any and all of the foregoing; and
(g) All products and all proceeds of any and all of the foregoing, and, to
the extent not otherwise included, all payments under insurance (whether or not
the Agent is the loss payee thereof), and any indemnity, warranty or guaranty,
payable by reason of loss or damage to or otherwise with respect to any of the
foregoing.
1. Representations, Warranties, Covenants and Agreements. The Debtor
further represents and warrants to and covenants and agrees with the Agent for
the benefit of the Lenders as follows:
(a) Ownership of Collateral; Security Interest Priority. At the time
any Collateral becomes subject to a security interest of the Agent hereunder,
unless the Agent shall otherwise consent, the Debtor shall be deemed to have
represented and warranted that (i) the Debtor is the lawful owner of such
Collateral and has the right and authority to subject the same to the security
interest of the Agent hereunder; (ii) other than Permitted Liens (as defined in
the Credit Agreement) and lessors' interest with respect to any security
interest in any property leased by the Debtor as lessee, none of the Collateral
is subject to any Lien other than that in favor of the Agent for the benefit of
the Lenders and there is no effective financing statement or other filing
covering any of the Collateral on file in any public office, other than in
favor of the Agent for the benefit of the Lenders. This Security Agreement
creates in favor of the Agent for the benefit of the Lenders a valid
first-priority security interest, subject only to Permitted Liens, in the
Collateral enforceable against the Debtor and all third parties and securing
the payment of the Secured Obligations. All financing statements necessary to
perfect such security interest in the Collateral have been delivered by the
Debtor to the Agent for filing.
(b) Location of Offices, Records and Facilities. The Debtor's chief
executive office and chief place of business and the office where the Debtor
keeps its records concerning its accounts, contract rights, chattel paper,
instruments, general intangibles and other obligations arising out of or in
connection with the sale or lease of goods or the rendering of services or
otherwise ("Receivables"), and all originals of all leases and other chattel
paper which evidence
SECURITY AGREEMENT
- 3 -
<PAGE> 4
Receivables, is at the location listed on Schedule 1(b)(i) hereto. The Debtor
will provide the Agent with prior written notice of any proposed change in the
location of its chief executive office. The Debtor's only other offices and
facilities are at the locations set forth in Schedule 1(b)(ii) hereto. The
Debtor will provide the Agent with prior written notice of any change in the
locations of its other offices and the facilities at which any assets of the
Debtor are located. The tax identification number of the Debtor is set
forth on Schedule 1(b)(i). The name of the Debtor is correctly set forth on the
signature pages hereof, and the Debtor operates under no other names. The
Debtor shall not change its name without the prior written consent of the
Agent.
(c) Location of Inventory, Fixtures, Machinery and Equipment. (i) All
Collateral consisting of inventory is, and will be, located at the locations
listed on Schedule 1(c)(i) hereto, and at no other locations without the prior
written consent of the Agent. (ii) All Collateral consisting of fixtures,
machinery or equipment, is, and will be, located at the locations listed on
Schedule 1(c)(ii) hereto, and at no other locations without the prior written
consent of the Agent. If the Collateral described in clauses (i) or (ii) is
kept at leased locations or warehoused, the Debtor has obtained appropriate
landlord's lien waivers or appropriate warehousemen's notices have been sent,
each satisfactory to the Agent, unless waived by the Agent.
(d) Liens, Etc. The Debtor will keep the Collateral free at all times
from any and all liens, security interests or encumbrances other than those
described in paragraph 1(a)(ii) and those consented to in writing by the
Required Lenders. The Debtor will not, without the prior written consent of the
Agent, sell, lease, license, transfer, assign or otherwise dispose of, or
permit or suffer to be sold, leased, licensed, transferred, assigned or
otherwise disposed of, any of the Collateral, except for, prior to an Event of
Default only (notwithstanding any other agreement), the following: inventory
sold in the ordinary course of business and other assets permitted to be sold,
leased, licensed, transferred, assigned or otherwise disposed under Section
5.2(f) of the Credit Agreement. The Agent or its attorneys may at any and all
reasonable times inspect the Collateral and for such purpose may enter upon any
and all premises where the Collateral is or might be kept or located.
(e) Insurance. The Debtor shall keep the tangible Collateral insured at
all times against loss by theft, fire and other casualties. Said insurance
shall be issued by a company rated A or better by A.M. Best and shall be in
amounts sufficient to protect the Agent and the Lenders against any and all
loss or damage to the Collateral. The policy or policies which evidence said
insurance shall be delivered to the Agent upon request, shall contain a lender
loss payable clause in favor of the Agent for the benefit of the Lenders, shall
name the Agent for the benefit of the Lenders as an additional insured, as its
interest may appear, shall not permit amendment, cancellation or termination
without giving the Agent at least 30 days' prior written notice thereof, and
shall otherwise be in form and substance satisfactory to the Agent.
Reimbursement under any liability insurance maintained by the Debtor pursuant
to this paragraph 1(e) may be paid directly to the person who shall have
incurred liability covered by such insurance, provided that if there is no
SECURITY AGREEMENT
- 4 -
<PAGE> 5
Default or Event of Default (whether before or after any event which caused any
reimbursement under any liability insurance) the Debtor may use the proceeds of
such insurance solely to repair or replace the property damaged if the
insurance proceeds are less than $500,000 and if there is any Event of Default
or Default, and if such reimbursement is greater than $500,000 or there is any
Default or Event of Default such amounts shall be paid to the Agent for
application to the Secured Obligations.
(f) Taxes, Etc. The Debtor will pay promptly, and within the time that
they can be paid without interest or penalty, any taxes, assessments and
similar imposts and charges, not being contested in good faith, which are now
or hereafter may become a Lien upon any of the Collateral. If the Debtor fails
to pay any such taxes, assessments or other imposts or charges in accordance
with this paragraph, the Agent shall have the option to do so and the Debtor
agrees to repay forthwith all amounts so expended by the Agent with interest at
the Overdue Rate.
(g) Further Assurances. The Debtor will do all acts and things and will
execute all financing statements and writings reasonably requested by the Agent
to establish, maintain and continue a perfected and valid security interest of
the Agent for the benefit of the Lenders in the Collateral, and will promptly
on demand pay all reasonable costs and expenses of filing and recording all
instruments, including the costs of any searches deemed necessary by the Agent,
to establish and determine the validity and the priority of the Agent's
security interests for the benefit of the Lenders. A carbon, photographic or
other reproduction of this Security Agreement or any financing statement
covering the Collateral shall be sufficient as a financing statement.
(h) List of Patents, Copyrights, Mask Works and Trademarks. Attached
hereto as Schedule 1(h)(i) is a list of all patents and patent applications
owned by the Debtor. Attached hereto as Schedule 1(h)(ii) is a list of all
registered copyrights and all mask works and applications therefor owned by the
Debtor. Attached hereto as Schedule 1(h)(iii) is a list of all trademarks and
service marks owned by the Debtor. If the Debtor at any time owns any
additional patents, copyrights, mask works, trademarks, service marks or any
applications therefor not listed on such schedules, the Debtor shall give the
Agent prompt written notice thereof and hereby authorizes the Agent to modify
this Agreement by amending Schedules 1(h)(i), 1(h)(ii) and 1(h)(iii) hereto to
include all future patents, copyrights, mask works, trademarks, service marks
and applications therefor and agrees to execute all further instruments and
agreements, if any, if requested by the Agent to evidence the Agent's interest
for the benefit of the Lenders therein.
(i) Maintenance of Tangible Collateral. The Debtor will cause the
tangible Collateral material to the conduct of its business to be maintained
and preserved in the same condition, repair and working order as when new,
ordinary wear and tear excepted, and in accordance with any manufacturer's
manual, and shall forthwith, or, in the case of any loss or damage to any of
the tangible Collateral as quickly as practicable after the occurrence thereof,
make or cause to be made all repairs, replacements, and other improvements
which are necessary or
SECURITY AGREEMENT
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<PAGE> 6
desirable to such end. The Debtor shall promptly furnish to the Agent a
statement respecting any loss or damage to any of the tangible Collateral.
(j) Special Rights Regarding Receivables. The Agent or any of its
agents may, at any time and from time to time in its sole discretion and
irrespective of the existence of any Event of Default under this Security
Agreement, verify, directly with each person (collectively, the "Obligors")
which owes any Receivables to the Debtor, the Receivables in any manner. The
Agent or any of its agents may, at any time from time to time after and during
the continuance of an Event of Default under this Security Agreement, notify
the Obligors of the security interest of the Agent for the benefit of the
Lenders in the Collateral and/or direct such Obligors that all payments in
connection with such obligations and the Collateral be made directly to the
Agent in the Agent's name. If the Agent or any of its agents shall collect
such obligations directly from the Obligors, the Agent or any of its agents
shall have the right to resolve any disputes relating to returned goods
directly with the Obligors in such manner and on such terms as the Agent or any
of its agents shall deem appropriate. The Debtor directs and authorizes any
and all of its present and future account debtors to comply with requests for
information from the Agent, the Agent's designees and agents and/or auditors,
relating to any and all business transactions between the Debtor and the
Obligors. The Debtor further directs and authorizes all of its Obligors upon
receiving a notice or request sent by the Agent or the Agent's agents or
designees to pay directly to the Agent any and all sums of money or proceeds
now or hereafter owing by the Obligors to the Debtor, as provided in this
paragraph 1(j) and any such payment shall act as a discharge of any debt of
such Obligor to the Debtor in the same manner as if such payment had been made
directly to the Debtor. The Debtor agrees to take any and all action as the
Agent may reasonably request to assist the Agent in exercising the rights
described in this paragraph 1(j).
(k) Maintenance of Intellectual Property and Other Intangible
Collateral. The Debtor shall preserve and maintain all rights of the Debtor and
the Agent for the benefit of the Lenders in all material Intellectual Property
and all other material intangible Collateral, including without limitation the
payment of all maintenance fees and filing fees and the taking of all
appropriate action at the Debtor's expense to halt the infringement of any of
the Intellectual Property or other Collateral, provided that, with respect to
halting the infringement of any Intellectual Property or other Collateral, the
Debtor does not need to take all such appropriate action if the Debtor has, or
after Event of Default the Agent has, reasonably determined that it is not in
its best interest to demand or enforce cessation of such infringement or other
conduct because it is either not material or because the adverse consequences
to the Debtor would outweigh the benefits gained by such demand or enforcement.
2. Events of Default. The occurrence of any Event of Default shall be
deemed an Event of Default under this Security Agreement.
SECURITY AGREEMENT
- 6 -
<PAGE> 7
3. Remedies. Upon the occurrence of any Event of Default, the Agent shall
have and may exercise any one or more of the rights and remedies provided to it
under this Security Agreement or any of the other Operative Documents or
provided by law, including but not limited to all of the rights and remedies of
a secured party under the Uniform Commercial Code, and the Debtor hereby agrees
to assemble the Collateral and make it available to the Agent at a place to be
designated by the Agent which is reasonably convenient to both parties,
authorizes the Agent to take possession of the Collateral with or without
demand and with or without process of law and to sell and dispose of the same
at public or private sale and to apply the proceeds of such sale to the costs
and expenses thereof (including reasonable attorneys' fees and disbursements,
incurred by the Agent) and then to the payment and satisfaction of the Secured
Obligations. Any requirement of reasonable notice shall be met if the Agent
sends such notice to the Debtor, by registered or certified mail, at least 10
days prior to the date of sale, disposition or other event giving rise to a
required notice. The Agent may be the purchaser at any such sale. The Debtor
expressly authorizes such sale or sales of the Collateral in advance of and to
the exclusion of any sale or sales of or other realization upon any other
collateral securing the Secured Obligations. The Agent shall have no
obligation to preserve rights against prior parties. The Debtor hereby waives
as to the Agent and each Lender any right of subrogation or marshalling of such
Collateral and any other collateral for the Secured Obligations. To this end,
the Debtor hereby expressly agrees that any such collateral or other security
of the Debtor or any other party which the Agent or any Lender may hold, or
which may come to the Agent or any Lender's possession, may be dealt with in
all respects and particulars as though this Security Agreement were not in
existence. The parties hereto further agree that public sale of the Collateral
by auction conducted in any county in which any Collateral is located or in
which the Agent or the Debtor does business after advertisement of the time and
place thereof shall, among other manners of public and private sale, be deemed
to be a commercially reasonable disposition of the Collateral. The Debtor
shall be liable for any deficiency remaining after disposition of the
Collateral. Such sale shall be on such terms as the Agent may determine, for
cash or credit or against future delivery in the discretion of the Agent.
4. Special Remedies Concerning Certain Collateral.
(a) Upon the occurrence of any Event of Default, the Debtor shall, if
requested to do so in writing, and to the extent so requested (i) promptly
collect and enforce payment of all amounts due the Debtor on account of, in
payment of, or in connection with, any of the Collateral, (ii) hold all
payments in the form received by the Debtor as trustee for the Agent and the
Lenders, without commingling with any funds belonging to the Debtor, and (iii)
forthwith deliver all such payments to the Agent with endorsement to the
Agent's order of any checks or similar instruments.
(b) Upon the occurrence of any Event of Default, the Debtor shall, if
requested to do so, and to the extent so requested, notify all Obligors and
other persons with obligations to the Debtor on account of or in connection
with any of the Collateral of the security interest of the
SECURITY AGREEMENT
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<PAGE> 8
Agent for the benefit of the Lenders in the Collateral and direct such account
debtors and other persons that all payments in connection with such obligations
and the Collateral be made directly to the Agent. The Agent itself may, upon
the occurrence of an Event of Default, so notify and direct any such account
debtor or other person that such payments are to be made directly to the Agent.
(c) Upon the occurrence of any Event of Default, for purposes of
assisting the Agent in exercising its rights and remedies provided to it under
this Security Agreement, the Debtor (i) hereby irrevocably constitutes and
appoints the Agent its true and lawful attorney, for and in the Debtor's name,
place and stead, to collect, demand, receive, sue for, compromise, and give
good and sufficient releases for, any monies due or to become due on account
of, in payment of, or in connection with the Collateral, (ii) hereby
irrevocably authorizes the Agent to endorse the name of the Debtor, upon any
checks, drafts, or similar items which are received in payment of, or in
connection with, any of the Collateral, and to do all things necessary in order
to reduce the same to money, (iii) with respect to any Collateral, hereby
irrevocably assents to all extensions or postponements of the time of payment
thereof or any other indulgence in connection therewith, to each substitution,
exchange or release of Collateral, to the addition or release of any party
primarily or secondarily liable, to the acceptance of partial payments thereon
and the settlement, compromise or adjustment (including adjustment of insurance
payments) thereof, all in such manner and at such time or times as the Agent
shall deem advisable and (iv) hereby irrevocably authorizes the Agent to notify
the post office authorities to change the address for delivery of the Debtor's
mail to an address designated by the Agent, and the Agent may receive, open and
dispose of all mail addressed to the Debtor. Notwithstanding any other
provisions of this Security Agreement, it is expressly understood and agreed
that the Agent shall have no duty, and shall not be obligated in any manner, to
make any demand or to make any inquiry as to the nature or sufficiency of any
payments received by it or to present or file any claim or take any other
action to collect or enforce the payment of any amounts due or to become due on
account of or in connection with any of the Collateral.
5. Remedies Cumulative. No right or remedy conferred upon or reserved to
the Agent under any Operative Document is intended to be exclusive of any other
right or remedy, and every right and remedy shall be cumulative and in addition
to every other right or remedy given hereunder or now or hereafter existing
under any applicable law. Every right and remedy of the Agent under any
Operative Document or under applicable law may be exercised from time to time
and as often as may be deemed expedient by the Agent. To the extent that it
lawfully may, the Debtor agrees that it will not at any time insist upon,
plead, or in any manner whatever claim or take any benefit or advantage of any
applicable present or future stay, extension or moratorium law, which may
affect observance or performance of any provisions of any Operative Document;
nor will it claim, take or insist upon any benefit or advantage of any present
or future law providing for the valuation or appraisal of any security for its
obligations under any Operative Document prior to any sale or sales thereof
which may be made under or by virtue of any instrument governing the
SECURITY AGREEMENT
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<PAGE> 9
same; nor will the Debtor, after any such sale or sales, claim or exercise any
right, under any applicable law to redeem any portion of such security so sold.
6. Conduct No Waiver. No waiver shall be effective unless in writing
executed by the Agent and any waiver or forbearance on the part of the Agent in
enforcing any of its rights under this Security Agreement shall not operate as
a waiver of any other default or of the same default on a future occasion or of
such right.
7. Governing Law; Consent to Jurisdiction; Definitions. This Security
Agreement is a contract made under, and shall be governed by and construed in
accordance with, the law of the State of Michigan applicable to contracts made
and to be performed entirely within such State and without giving effect to
choice of law principles of such State. The Debtor agrees that any legal action
or proceeding with respect to this Security Agreement or the transactions
contemplated hereby may be brought in any court of the State of Michigan, or in
any court of the United States of America sitting in Michigan, and the Debtor
hereby submits to and accepts generally and unconditionally the jurisdiction of
those courts with respect to its person and property, and irrevocably appoints
the President of the Debtor, at the Debtor's address set forth in the Credit
Agreement, as its agent for service of process and irrevocably consents to the
service of process in connection with any such action or proceeding by personal
delivery to such agent or to the Debtor or by the mailing thereof by registered
or certified mail, postage prepaid to the Debtor at its address set forth in
the Credit Agreement. Nothing in this paragraph shall affect the right of the
Agent to serve process in any other manner permitted by law or limit the right
of the Agent to bring any such action or proceeding against the Debtor or its
property in the courts of any other jurisdiction. The Debtor hereby
irrevocably waives any objection to the laying of venue of any such suit or
proceeding in the above described courts. Terms used but not defined herein
shall have the respective meanings ascribed thereto in the Credit Agreement.
Unless otherwise defined herein or in the Credit Agreement, terms used in
Article 9 of the Uniform Commercial Code in the State of Michigan are used
herein as therein defined on the date hereof. The headings of the various
subdivisions hereof are for convenience of reference only and shall in no way
modify any of the terms or provisions hereof.
8. Notices. All notices, demands, requests, consents and other
communications hereunder shall be delivered in the manner described in the
Credit Agreement.
9. Rights Not Construed as Duties. The Agent and the Lenders neither
assume nor shall any of them have any duty of performance or other
responsibility under any contracts in which the Agent has or obtains, for the
benefit of the Lenders, a security interest hereunder. If the Debtor fails to
perform any agreement contained herein, the Agent may but is in no way
obligated to itself perform, or cause performance of, such agreement, and the
reasonable expenses of the Agent incurred in connection therewith shall be
payable by the Debtor under paragraph 12 hereof. The powers conferred on the
Agent hereunder are solely to protect its interests for the benefit of the
SECURITY AGREEMENT
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<PAGE> 10
Lenders in the Collateral and shall not impose any duty upon it to exercise any
such powers. Except for the safe custody of any Collateral in its possession
and accounting for monies actually received by it hereunder, the Agent shall
have no duty as to any Collateral or as to the taking of any necessary steps to
preserve rights against prior parties or any other rights pertaining to any
Collateral.
10. Amendments. None of the terms and provisions of this Security
Agreement may be modified or amended in any way except by an instrument in
writing executed by each of the parties hereto.
11. Severability. If any one or more provisions of this Security
Agreement should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected, impaired or prejudiced thereby.
12. Expenses. (a) The Debtor agrees to indemnify the Agent and the
Lenders from and against any and all claims, losses and liabilities growing out
of or resulting from this Security Agreement (including, without limitation,
enforcement of this Security Agreement), except claims, losses or liabilities
resulting from the Agent's or any Lender's gross negligence or willful
misconduct.
(b) The Debtor will, upon demand, pay to the Agent an amount of any and
all reasonable expenses, including the reasonable fees and disbursements of its
counsel and of any experts and agents, which the Agent may incur in connection
with (i) the administration of this Security Agreement, (ii) the custody,
preservation, use or operation of, or the sale of, collection from or other
realization upon, any of the Collateral, (iii) the exercise or enforcement of
any of the rights of the Agent hereunder or under the Operative Documents, or
(iv) the failure of the Debtor to perform or observe any of the provisions
hereof.
13. Successors and Assigns; Termination. This Security Agreement shall
create a continuing security interest in the Collateral and shall be binding
upon the Debtor, its successors and assigns, and inure, together with the
rights and remedies of the Agent hereunder, to the benefit of the Agent, the
Lenders and their respective successors, transferees and assigns. Upon the
payment in full in immediately available funds of all of the Secured
Obligations and the termination of all commitments to lend under the Operative
Documents, the security interest granted hereunder shall terminate and all
rights to the Collateral shall revert to the Debtor.
14. Waiver of Jury Trial. The Agent and the Lenders, in accepting this
Security Agreement, and the Debtor, after consulting or having had the
opportunity to consult with counsel, knowingly, voluntarily and intentionally
waive any right any of them may have to a trial by jury in any litigation based
upon or arising out of this Security Agreement or any related instrument or
SECURITY AGREEMENT
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<PAGE> 11
agreement or any of the transactions contemplated by this Security Agreement or
any course of conduct, dealing, statements (whether oral or written) or actions
of any of them. Neither the Agent, the Lenders nor the Debtor shall seek to
consolidate, by counterclaim or otherwise, any such action in which a jury
trial has been waived with any other action in which a jury trial cannot be or
has not been waived. These provisions shall not be deemed to have been
modified in any respect or relinquished by the Agent, any Lender or the Debtor
except by a written instrument executed by each of them.
(space intentionally left blank)
SECURITY AGREEMENT
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<PAGE> 12
IN WITNESS WHEREOF, the Debtor has caused this Security Agreement to be
duly executed as of the day and year first set forth above.
OXFORD AUTOMOTIVE, INC.
By: [sig]
-------------------------
Its: Vice President - Financial Operations
-------------------------------------
Accepted and Agreed:
NBD BANK, as Agent on behalf
of the Lenders
By: Richard C. Ellis
------------------------
Its: Authorized Agent
------------------
SECURITY AGREEMENT
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<PAGE> 13
CERTIFICATE OF ACKNOWLEDGEMENT
STATE OF MICHIGAN )
) ss.
COUNTY OF _________ )
The foregoing Security Agreement was acknowledged before me on this 24th
day of June, 1997 by John H. Ferguson, the Vice-President -- Financial
Operations of Oxford Automotive, Inc., a Michigan corporation, on behalf of
said corporation.
(Seal) Notary Public
Linda M. Anolick
--------------------------
LINDA M. ANOLICK
NOTARY PUBLIC-WAYNE COUNTY, MICH.
MY COMMISSION EXPIRES 08-30-98
STATE OF MICHIGAN )
) ss.
COUNTY OF OAKLAND )
The foregoing Security Agreement was acknowledged before me on this 24th
day of June, 1997, by Richard Ellis the Authorized Agent of NBD
Bank, a Michigan banking corporation, as Agent, on behalf of said corporation.
(Seal) Notary Public
Linda M. Anolic
--------------------------
LINDA M. ANOLICK
NOTARY PUBLIC-WAYNE COUNTY, MICH.
MY COMMISSION EXPIRES 08-30-98
SECURITY AGREEMENT
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<PAGE> 1
EXHIBIT 4.4
GUARANTOR SECURITY AGREEMENT
This GUARANTOR SECURITY AGREEMENT, dated as of June 24, 1997 (this
"Security Agreement"), is by 829500 ONTARIO LIMITED, a corporation organized
under the laws of the Province of Ontario (the "Debtor") in favor of FIRST
CHICAGO NBD BANK, CANADA, in its capacity as the Affiliate designated by NBD
Bank, a Michigan banking corporation, to make Canadian Advances and as
collateral agent for the Lenders for the purpose of holding this security as
specified in the Credit Agreement referred to below (the "Secured Party").
1. CREATION OF SECURITY INTEREST
(1) For value received, Debtor hereby grants to Secured Party a
security interest (the "Security Interest") in the undertaking of Debtor and in
all Goods (including all parts, accessories, attachments, special tools,
additions and accessions thereto), Chattel Paper, Documents of Title (whether
negotiable or not), Instruments, Intangibles and Securities now owned or
hereafter owned or acquired by or on behalf of Debtor (including such as may be
returned to or repossessed by Debtor) and in all proceeds and renewals thereof,
accretions thereto and substitutions therefor (hereinafter collectively called
"Collateral"), including, without limitation, all of the following now owned or
hereafter owned or acquired by or on behalf of Debtor:
(i) all inventory of whatever kind and wherever situate
("Inventory");
(ii) all equipment (other than Inventory) of whatever kind
and wherever situate, including, without limitation,
all machinery, tools, apparatus, plant, furniture,
fixtures and vehicles of whatsoever nature or kind;
(iii) all book accounts and book debts and generally all
accounts, debts, dues, claims, choses in action and
demands of every nature and kind howsoever arising or
secured including letters of credit and advices of
credit, which are now due, owing or accruing or
growing due to or owned by or which may hereafter
become due, owing or accruing or growing due to or
owned by Debtor ("Debts");
(iv) all deeds, documents, writings, papers, books of
account and other books relating to or being records
of Debts, Chattel Paper or Documents of Title or by
which such are or may hereafter be secured,
evidenced, acknowledged or made payable;
(v) all contractual rights and insurance claims and all
goodwill, patents, trademarks, copyrights, and other
industrial property;
(vi) all monies other than trust monies lawfully belonging
to others; and
<PAGE> 2
(vii) all property described in any schedule now or
hereafter annexed hereto.
(2) The Security Interest granted hereby shall not extend or apply
to and Collateral shall not include the last day of the term of any lease or
agreement therefor but upon the enforcement of the Security Interest Debtor
shall stand possessed of such last day in trust to assign the same to any
person acquiring such term.
(3) The terms "Goods", "Chattel Paper", "Documents of Title",
"Instruments", "Intangibles", "Securities", "proceeds", "inventory" and
"accession" whenever used herein shall be interpreted pursuant to their
respective meanings when used in the Personal Property Security Act of Ontario,
as amended from time to time, which Act, including amendments thereto and any
Act substituted therefor and amendments thereto is herein referred to as the
"P.P.S.A." Provided always that the term "Goods" when used herein shall not
include "consumer goods" of Debtor as that term is defined in the P.P.S.A., and
the term "Inventory" when used herein shall include livestock and the young
thereof after conception and crops that become such within the year of
execution of this Security Agreement. Any reference herein to "Collateral"
shall, unless the context otherwise requires, be deemed a reference to
"Collateral or any part thereof".
(4) As used herein, the term "Credit Agreement" means the Credit
Agreement dated as of the date hereof among Oxford Automotive, Inc., a
corporation incorporated under the laws of the State of Michigan (the
"Company"), each of the Subsidiaries designated under Section 1.1 of the Credit
Agreement as a "Borrowing Subsidiary", the lenders party thereto from time to
time ( the "Lenders") and the Agent, as amended or modified from time to time.
Capitalized terms used but not defined herein shall have the meanings ascribed
thereto in the Credit Agreement.
2. OBLIGATIONS SECURED
The Security Interest granted hereby secures payment and satisfaction
of any and all of the following (the "Obligations"): any and all existing and
future indebtedness, obligation and liability of every kind, nature and
character, direct or indirect, absolute or contingent (including without
limitation all indebtedness, obligations and liabilities pursuant to any Loans,
Letters of Credit, Bankers' Acceptances and other Advances and all interest,
fees, and other charges thereon and all renewals, extensions and modifications
thereof and all fees, costs and expenses incurred by the Agent or any of the
Lenders in connection with the documentation, administration, collection or
enforcement thereof), of the Debtor or of the Company to the Agent or any of
the Lenders or any branch, subsidiary or affiliate thereof, howsoever and
whensoever created, arising, evidenced or acquired pursuant to the Credit
Agreement, the Notes, the Security Documents, any Rate Hedging Agreements or
any other agreement, instrument or documents executed in connection therewith
at any time (all of the foregoing, as amended or modified from time to time,
collectively referred to as the "Loan Documents"). The Obligations secured by
this Agreement are continuing in nature and include those Obligations secured
by the Guarantor Security Agreement dated February 11, 1997 by the Debtor in
favor of the Secured Party.
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<PAGE> 3
3. REPRESENTATIONS AND WARRANTIES OF DEBTOR
Debtor represents and warrants and so long as this Security Agreement
remains in effect shall be deemed to continuously represent and warrant that:
(1) the Collateral is genuine and owned by Debtor free of all
security interests, mortgages, liens, claims, charges or other encumbrances
(hereinafter collectively called "Liens"), save for the Security Interest and
Permitted Liens;
(2) to the best of the Debtor's knowledge, other than as disclosed
in writing by the Debtor to the Secured Party, each Debt, Chattel Paper and
Instrument constituting Collateral is enforceable in accordance with its terms
against the party obligated to pay the same (the "Account Debtor"), and the
amount represented by Debtor to Secured Party from time to time as owing by
each Account Debtor or by all Account Debtors will be the correct amount
actually and unconditionally owing by such Account Debtor or Account Debtors,
except for normal cash discounts where applicable, and no Account Debtor will
have any defence, set off, claim or counterclaim against Debtor which can be
asserted against Secured Party, whether in any proceeding to enforce Collateral
or otherwise; and
(3) the locations specified n Schedule "A" hereto as to business
operations and records are accurate and complete and, with respect to Goods
(including Inventory) constituting Collateral, the locations specified in
Schedule "A" hereto are accurate and complete save for Goods in transit to such
locations and Inventory on lease or consignment; and all fixtures or Goods
about to become fixtures and all crops and all oil, gas or other minerals to be
extracted and all timber to be cut which forms part of the Collateral will be
situate at one of such locations.
4. USE OF COLLATERAL BY DEBTOR AND CONFIRMATION OF COLLATERAL BY SECURED
PARTY
Subject to compliance with Debtor's covenants contained herein, Debtor
may, until default, possess, operate, collect, use and enjoy and deal with
Collateral in the ordinary course of Debtor's business in any manner not
inconsistent with the provisions hereof; provided always that Secured Party
shall have the right at any time and from time to time to confirm the existence
and state of the Collateral in any manner Secured Party may consider
appropriate and Debtor agrees to furnish all assistance and information and to
perform all such acts as Secured Party may reasonably request in connection
therewith and to all places where Collateral may be located and to all premises
occupied by Debtor.
5. RECEIPTS OF INCOME FROM AND INTEREST ON COLLATERAL
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<PAGE> 4
(1) Until default, Debtor shall have the right to receive any
monies constituting income from or interest on Collateral and if Secured Party
receives any such monies prior to default, Secured Party shall either credit
the same to the account of Debtor or pay the same promptly to Debtor.
(2) After default, Debtor will not request or receive any monies
constituting income from or interest on Collateral and if Debtor receives any
such monies, Debtor will receive the same in trust for and promptly pay the
same to Secured Party.
6. INCREASES, PROFITS, PAYMENTS OR DISTRIBUTIONS REGARDING COLLATERAL
(1) Whether or not default has occurred, Debtor authorizes Secured
Party
(i) to receive any increase in or profits on Collateral
(other than money) and to hold the same as part of
Collateral; money so received shall be treated as
income for the purposes of Clause 5 hereof and dealt
with accordingly; and
(ii) to receive any payment or distribution upon
redemption or retirement or upon dissolution and
liquidation of the issuer of Collateral; to surrender
Collateral in exchange therefor; and to hold any such
payment or distribution as part of the Collateral.
(2) If Debtor receives any such increase or profits (other than
money) or payments or distributions, Debtor will receive the same in trust for
and deliver the same promptly to Secured Party to be held by Secured Party as
herein provided.
7. SECURITIES FORMING PART OF COLLATERAL
If Collateral at any time includes Securities, Debtor authorizes
Secured Party to transfer the same or any part thereof into its own name or
that of its nominee(s) so that Secured Party or its nominee(s) may appear of
record as the sole owner thereof; provided that, until default, Secured Party
shall deliver promptly to Debtor all notices or other communications received
by it or its nominee(s) as such registered owner and, upon demand and receipt
of payment of any necessary expenses thereof, shall issue to Debtor or its
order a proxy to vote and take all action with respect to such Securities.
After enforcement of remedies hereunder, Debtor waives all rights to receive
any notices or communications received by Secured Party or its nominee(s) as
such registered owner and agrees that no proxy issued by Secured Party to
Debtor or its order as aforesaid shall thereafter be effective.
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<PAGE> 5
8. COLLECTION OF DEBTS FORMING PART OF COLLATERAL
After default, Secured Party may notify all or any Account Debtors of
the Security Interest and may also direct such Account Debtors to make all
payments on Collateral to Secured Party. Debtor acknowledges that any payments
on or other proceeds of Collateral received by Debtor from Account Debtors,
before or after notification of this Security Interest to Account Debtors, if
received after default, shall be received and held by Debtor in trust for
Secured Party and shall be turned over to Secured Party upon request.
9. COVENANTS OF THE DEBTOR
So long as this Security Agreement remains in effect, Debtor covenants
and agrees:
(1) to defend the Collateral against the claims and demands of all
other parties claiming the same or an interest therein; to keep the Collateral
free from all Liens, except for the Security Interest and Permitted Liens or
hereafter approved in writing, prior to their creation or assumption, by
Secured Party; and not to sell, exchange, transfer, assign, lease, or otherwise
dispose of Collateral or any interest therein without the prior written consent
of Secured Party, except to the extent permitted under the Credit Agreement;
provided always that, until default, Debtor may, in the ordinary course of
Debtor's business, sell or lease Inventory and, subject to Clause 8 hereof, use
monies available to Debtor;
(2) to notify Secured Party promptly of:
(i) any change in the information contained herein or in
the Schedules hereto relating to Debtor, Debtor's
business or Collateral; and
(ii) any material loss of or damage to Collateral;
(3) to keep the Collateral in good order, condition and repair and
not to use Collateral in violation of the provisions of this Security Agreement
or any other agreement relating to Collateral or any policy insuring Collateral
or any applicable statute, law, by-law, rule, regulation or ordinance;
(4) to do, execute, acknowledge and deliver such financing
statements and further assignments, transfers, documents, acts, matters and
things (including further schedules hereto) as may be reasonably requested by
Secured Party of or with respect to Collateral in order to give effect to these
presents and to pay all costs for searches and filings in connection therewith;
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(5) to pay all taxes, rates, levies, assessments and other charges
of every nature which may be lawfully levied, assessed or imposed against or in
respect of Debtor or Collateral as and when the same become due and payable;
(6) to insure the Collateral for such periods, in such amounts, on
such terms and against loss or damage by fire and such other risks as Secured
Party shall reasonably direct with loss payable to Secured Party and Debtor, as
insured, as their respective interests may appear, and to pay all premiums
therefor;
(7) to prevent Collateral, save Inventory sold or leased as
permitted hereby, from being or becoming an accession to other property not
covered by this Security Agreement;
(8) to carry on and conduct the business of Debtor in a proper and
efficient manner and so as to protect and preserve the Collateral and to keep,
in accordance with generally accepted accounting principles, consistently
applied, proper books of account for Debtor's business as well as accurate and
complete records concerning Collateral, and mark any and all such records and
Collateral as Secured Party's request so as to indicate the Security Interest;
and
(9) to deliver to Secured Party from time to time promptly upon
request:
(i) any Documents of Title, Instruments, Securities and
Chattel Paper constituting, representing or relating
to Collateral;
(ii) all books of account and all records, ledgers,
reports, correspondence, schedules, documents,
statements, lists and other writing relating to
Collateral for the purpose of inspecting, auditing or
copying the same;
(iii) all financial statements prepared by or for Debtor
regarding Debtor's business;
(iv) all policies and certificates of insurance relating
to Collateral; and
(v) such information concerning Collateral, Debtor and
Debtor's business and affairs as Secured Party may
reasonably request.
10. EVENTS OF DEFAULT
The happening of any of the following events or conditions shall
constitute default hereunder which is herein referred to as "default":
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<PAGE> 7
(1) the nonpayment when due, whether by acceleration or otherwise,
of any principal or interest forming part of the Obligations or the failure of
Debtor to observe or perform any obligation, covenant, term, provision or
condition contained in this Security Agreement; or
(2) any Event of Default under the Credit Agreement;
11. ACCELERATION
Secured Party, in its sole discretion, may declare all or any part of
the Obligations not payable on demand to be immediately due and payable,
without demand or notice of any kind, in the event of default. The provisions
of this clause are not intended in any way to affect any rights of Secured
Party with respect to Obligations which may now or hereafter be payable on
demand.
12. REMEDIES
(1) Upon default, Secured Party may appoint or reappoint by
instrument in writing, any person or persons, whether an officer or officers or
an employee or employees of Secured Party or not, to be a receiver or receivers
(hereinafter called a "Receiver", which term when used herein shall include a
receiver and manager) of Collateral (including any interest, income or profits
therefrom) and may remove any Receiver so appointed and appoint another in his
stead. Any such Receiver shall, so far as concerns responsibility for his
acts, be deemed the agent of Debtor and not Secured Party, and Secured Party
shall not be in any way responsible for any misconduct, negligence or
nonfeasance on the part of any such Receiver, his servants, agents or
employees. Subject to the provisions of the instrument appointing him, any
such Receiver shall have power to take possession of Collateral, to preserve
Collateral or its value, to carry on or concur in carrying on all or any part
of the business of Debtor and to sell, lease or otherwise dispose of or concur
in selling, leasing or otherwise disposing of Collateral. To facilitate the
foregoing powers, any such Receiver may, to the exclusion of all others,
including Debtor, enter upon, use and occupy all premises owned or occupied by
Debtor wherein Collateral may be situate, maintain Collateral upon such
premises, borrow money on a secured or unsecured basis and use Collateral
directly in carrying on Debtor's business or otherwise, as such Receiver shall,
in his discretion, determine. Except as may be otherwise directed by Secured
Party, all monies received from time to time by such Receiver in carrying out
his appointment shall be received in trust for and paid over to Secured Party.
Every such Receiver may, in the discretion of Secured Party, be vested with all
or any of the rights and powers of Secured Party.
(2) Upon default, Secured Party may, either directly or through
its agents or nominees, exercise all the powers and rights given to a Receiver
by virtue of the foregoing subclause (1).
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<PAGE> 8
(3) Secured Party may take possession of, collect, demand, sue on,
enforce, recover and receive Collateral and give valid and binding receipts and
discharges therefor and in respect thereof and, upon default, Secured Party may
sell, lease or otherwise dispose of Collateral in such manner, at such time or
otherwise dispose of Collateral in such manner, at such time or times and place
or places, for such consideration and upon such terms and conditions as to
Secured Party may seem reasonable.
(4) In addition to those rights granted herein and in any other
agreement now or hereafter in effect between Debtor and Secured Party and in
addition to any other rights Secured Party may have at law or in equity,
Secured Party shall have, both before and after default, all rights and
remedies of a secured party under the P.P.S.A. Provided always that Secured
Party shall not be liable or accountable for any failure to exercise its
remedies, take possession of, collect, enforce, realize, sell, lease or
otherwise dispose of Collateral or to institute proceedings for such purposes.
Furthermore, Secured Party shall have no obligation to take any steps to
preserve rights against prior parties to any Instrument or Chattel Paper,
whether Collateral or proceeds and whether or not in Secured Party's possession
and shall not be liable or accountable for failure to do so.
(5) Debtor acknowledges that Secured Party or any Receiver
appointed by it may take possession of Collateral wherever it may be located
and by any method permitted by law and Debtor agrees upon request from Secured
Party or any such Receiver to assemble and deliver possession of Collateral at
such place or places as directed.
(6) Debtor agrees to pay all costs, charges and expenses
reasonably incurred by Secured Party or any Receiver appointed by it, whether
directly or for services rendered (including reasonable solicitors' and
auditors' costs and other legal expenses and Receiver remuneration), in
operating Debtor's accounts, in preparing or enforcing this Security Agreement,
taking custody of, preserving, repairing, processing, preparing for disposition
and disposing of Collateral and in enforcing or collecting Obligations and all
such costs, charges and expenses together with any monies owing as a result of
any borrowing by Secured Party or any Receiver appointed by it, as permitted
hereby, shall be a first charge on the proceeds of realization, collection or
disposition of Collateral and shall be secured hereby.
(7) Unless the Collateral in question is perishable or unless
Secured Party believes on reasonable grounds that the Collateral in question
will decline speedily in value, Secured Party will give Debtor such notice of
the date, time and place of any public sale or of the date after which any
private disposition of Collateral is to be made, as may be required by the
P.P.S.A.
13. DISPOSITION OF MONIES
Subject to any applicable requirements of the P.P.S.A., all monies
collected or received by Secured Party pursuant to or in exercise of any right
it possesses with respect to Collateral shall be
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<PAGE> 9
applied on account of the Obligations in such manner as described in the Credit
Agreement or, at the option of Secured Party, may be held unappropriated in a
collateral account or released to Debtor, all without prejudice to the
liability of Debtor or the rights of Secured Party hereunder. Debtor hereby
acknowledges that if the disposition of all or any Collateral by Secured Party
or a Receiver pursuant hereto does not give rise to sufficient funds to pay all
Obligations secured hereby Debtor shall remain liable for any deficiency until
all Obligations have been paid or satisfied in full. Any surplus shall be
accounted for as required by law.
14. MISCELLANEOUS
(1) Debtor hereby authorizes Secured Party to file such financing
statements and other documents and do such acts, matters and things (including
completing and adding schedules hereto identifying Collateral or any Permitted
Liens affecting Collateral or identifying the locations at which Debtor's
business is carried on and Collateral and records relating thereto are situate)
as Secured Party may deem appropriate to perfect and continue the Security
Interest, to protect and preserve Collateral and its Security Interest in the
Collateral and to realize upon the Security Interest and Debtor hereby
irrevocably constitutes and appoints each Vice-President from time to time of
Secured Party the true and lawful attorney of Debtor, with full power of
substitution, to do any of the foregoing in the name of Debtor whenever and
wherever it may be deemed necessary or expedient.
(2) Without limiting any other right of Secured Party, whenever
the Obligations are immediately due and payable or Secured Party has the right
to declare the Obligations to be immediately due and payable (whether or not it
has so declared), Secured Party may, in its sole discretion, set off against
the Obligations any and all monies then owed to Debtor by Secured Party in any
capacity, whether or not due, and Secured Party shall be deemed to have
exercised such right of set off immediately at the time of making its decision
to do so even though any charge therefor is made or entered on Secured Party's
records subsequent thereto.
(3) Upon Debtor's failure to perform any of its duties hereunder,
Secured Party may, but shall not be obligated to, perform any or all of such
duties, and Debtor shall pay to Secured Party, forthwith upon written demand
therefor, an amount equal to the expense incurred by Secured Party in so doing
plus interest thereon from the date such expense is incurred until it is paid
at the Overdue Rate.
(4) After default, Secured Party may grant extensions of time and
other indulgences, take and give up security, accept compositions, compound,
comprise, settle, grant releases and discharges and otherwise deal with Debtor,
debtors of Debtor, sureties and others and with Collateral and other security
as Secured Party may see fit without prejudice to the liability of Debtor or
Secured Party's right to hold and realize the Security Interest. Furthermore,
Secured Party may, after default, demand, collect and sue on Collateral in
either Debtor's or Secured Party's name, at Secured Party's
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option, and may endorse Debtor's name on any and all cheques, commercial paper
and any other Instruments pertaining to or constituting Collateral.
(5) No delay or omission by Secured Party in exercising any right
or remedy hereunder or with respect to any Obligations shall operate as a
waiver thereof or of any other right or remedy, and no single or partial
exercise thereof shall preclude any other or further exercise thereof or the
exercise of any other right or remedy. Furthermore, Secured Party may remedy
any default by Debtor hereunder or with respect to any Obligations in any
reasonable manner without waiving the default remedied and without waiving any
other prior or subsequent default by Debtor. All rights and remedies of
Secured Party granted or recognized herein are cumulative and may be exercised
at any time and from time to time independently or in combination.
(6) Debtor waives protest of any Instrument constituting
Collateral at any time held by Secured Party on which Debtor is in any way
liable and, subject to Clause 12(7), notice of any other action taken by
Secured Party.
(7) This Security Agreement shall enure to the benefit of and be
binding upon the parties hereto and their respective heirs, executors,
administrators, successors and assigns. In any action brought by an assignee
of this Security Agreement and the Security Interest or any part thereof to
enforce any rights hereunder, Debtor shall not assert against the assignee any
claim or defence which Debtor now has or hereafter may have against Secured
Party.
(8) Save for any schedules which may be added hereto pursuant to
the provisions hereof, no modification, variation or amendment of any provision
of this Security Agreement shall be made except by a written agreement executed
by the parties hereto and no waiver of any provision hereof shall be effective
unless in writing.
(9) This Security Agreement and the transactions evidenced hereby
shall be governed by and construed in accordance with the laws of the Province
of Ontario as the same may from time to time be in effect, including, where
applicable, the P.P.S.A.
(10) Subject to the requirements of Clauses 12(7) and 14(11)
hereof, whenever either party hereto is required or entitled to notify or
direct the other or to make a demand or request upon the other, such notice,
direction, demand or request shall be in writing shall be sufficiently given
only if delivered to the party for whom it is intended at the principal address
of such party herein set forth or as changed pursuant hereto or if sent by
prepaid registered mail addressed to the party for whom it is intended at the
principal address of such party herein set forth or as changed pursuant hereto.
Either party may notify the other pursuant hereto of any change in such party's
principal address to be used for the purposes hereof.
(11) This Security Agreement and the security afforded hereby is in
addition to and not in substitution for any other security now or hereafter
held by Secured Party and is, and is intended
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to be, a continuing Security Agreement and shall remain in full force and
effect until the Obligations have been paid and satisfied in full.
(12) The headings used in this Security Agreement are for
convenience only and are not to be considered a part of this Security Agreement
and do not in any way limit or amplify the terms and provisions of this
Security Agreement.
(13) When the context so requires, the singular number shall be
read as if the plural were expressed and the provisions hereof shall be read
with all grammatical changes necessary dependent upon the person referred to
being a male, female, firm or corporation.
(14) If any provisions of this Security Agreement, as amended from
time to time, shall be deemed invalid or void, in whole or in part, by any
court of competent jurisdiction, the remaining terms and provisions of this
Security Agreement shall remain in full force and effect.
(15) Nothing herein contained shall in any way obligate Secured
Party to grant, continue, renew, extend time for payment of or accept anything
which constitutes or would constitute Obligations.
(16) The Security Interest created hereby is intended to attach
when this Security Agreement is signed by Debtor and delivered to Secured
Party.
15. COPY OF AGREEMENT
Debtor hereby acknowledges receipt of a copy of this Security
Agreement.
IN WITNESS WHEREOF Debtor has executed this Security Agreement this
24th day of June, 1997.
829500 ONTARIO LIMITED
By:___________________________________
Name:
Title:
Agreed to and Accepted by:
FIRST CHICAGO NBD BANK, CANADA,
as the Affiliate designated by NBD Bank to make
Canadian Advances and as collateral agent for the
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<PAGE> 12
Lenders for the purpose of holding this security
as specified in the Credit Agreement
By:___________________________________
Its:_________________________
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<PAGE> 1
EXHIBIT 4.5
GUARANTOR SECURITY AGREEMENT
This GUARANTOR SECURITY AGREEMENT, dated as of June 24, 1997 (this
"Security Agreement"), is by 976459 ONTARIO LIMITED, a corporation organized
under the laws of the Province of Ontario (the "Debtor") in favor of FIRST
CHICAGO NBD BANK, CANADA, in its capacity as the Affiliate designated by NBD
Bank, a Michigan banking corporation, to make Canadian Advances and as
collateral agent for the Lenders for the purpose of holding this security as
specified in the Credit Agreement referred to below (the "Secured Party").
1. CREATION OF SECURITY INTEREST
(1) For value received, Debtor hereby grants to Secured Party a security
interest (the "Security Interest") in the undertaking of Debtor and in all
Goods (including all parts, accessories, attachments, special tools, additions
and accessions thereto), Chattel Paper, Documents of Title (whether negotiable
or not), Instruments, Intangibles and Securities now owned or hereafter owned
or acquired by or on behalf of Debtor (including such as may be returned to or
repossessed by Debtor) and in all proceeds and renewals thereof, accretions
thereto and substitutions therefor (hereinafter collectively called
"Collateral"), including, without limitation, all of the following now owned or
hereafter owned or acquired by or on behalf of Debtor:
(i) all inventory of whatever kind and wherever
situate ("Inventory");
(ii) all equipment (other than Inventory) of whatever
kind and wherever situate, including, without limitation, all
machinery, tools, apparatus, plant, furniture, fixtures and
vehicles of whatsoever nature or kind;
(iii) all book accounts and book debts and generally
all accounts, debts, dues, claims, choses in action and
demands of every nature and kind howsoever arising or secured
including letters of credit and advices of credit, which are
now due, owing or accruing or growing due to or owned by or
which may hereafter become due, owing or accruing or growing
due to or owned by Debtor ("Debts");
(iv) all deeds, documents, writings, papers, books of
account and other books relating to or being records of Debts,
Chattel Paper or Documents of Title or by which such are or
may hereafter be secured, evidenced, acknowledged or made
payable;
(v) all contractual rights and insurance claims and
all goodwill, patents, trademarks, copyrights, and other
industrial property;
(vi) all monies other than trust monies lawfully
belonging to others; and
(vii) all property described in any schedule now or
hereafter annexed hereto.
<PAGE> 2
(2) The Security Interest granted hereby shall not extend or
apply to and Collateral shall not include the last day of the term of any lease
or agreement therefor but upon the enforcement of the Security Interest Debtor
shall stand possessed of such last day in trust to assign the same to any
person acquiring such term.
(3) The terms "Goods", "Chattel Paper", "Documents of Title",
"Instruments", "Intangibles", "Securities", "proceeds", "inventory" and
"accession" whenever used herein shall be interpreted pursuant to their
respective meanings when used in the Personal Property Security Act of Ontario,
as amended from time to time, which Act, including amendments thereto and any
Act substituted therefor and amendments thereto is herein referred to as the
"P.P.S.A." Provided always that the term "Goods" when used herein shall not
include "consumer goods" of Debtor as that term is defined in the P.P.S.A., and
the term "Inventory" when used herein shall include livestock and the young
thereof after conception and crops that become such within the year of
execution of this Security Agreement. Any reference herein to "Collateral"
shall, unless the context otherwise requires, be deemed a reference to
"Collateral or any part thereof".
(4) As used herein, the term "Credit Agreement" means the Credit
Agreement dated as of the date hereof among Oxford Automotive, Inc., a
corporation incorporated under the laws of the State of Michigan (the
"Company"), each of the Subsidiaries of the Company designated under Section
1.1 of the Credit Agreement as a "Borrowing Subsidiary", the lenders party
thereto from time to time (the "Lenders") and the Agent, as amended or
modified from time to time. Capitalized terms used but not defined herein shall
have the meanings ascribed thereto in the Credit Agreement.
2. OBLIGATIONS SECURED
The Security Interest granted hereby secures payment and
satisfaction of any and all of the following (the "Obligations"): any and all
existing and future indebtedness, obligation and liability of every kind,
nature and character, direct or indirect, absolute or contingent (including
without limitation all indebtedness, obligations and liabilities pursuant to
any Loans, Letters of Credit, Bankers' Acceptances and other Advances and all
interest, fees, and other charges thereon and all renewals, extensions and
modifications thereof and all fees, costs and expenses incurred by the Agent or
any of the Lenders in connection with the documentation, administration,
collection or enforcement thereof), of the Debtor or of the Company to the
Agent or any of the Lenders or any branch, subsidiary or affiliate thereof,
howsoever and whensoever created, arising, evidenced or acquired pursuant to
the Credit Agreement, the Notes, the Security Documents, any Rate Hedging
Agreements or any other agreement, instrument or documents executed in
connection therewith at any time (all of the foregoing, as amended or modified
from time to time, collectively referred to as the "Loan Documents"). The
Obligations secured by this Agreement are continuing in nature and include
those Obligations secured by the Guarantor Security Agreement dated February
11, 1997 by the Debtor in favor of the Secured Party.
3. REPRESENTATIONS AND WARRANTIES OF DEBTOR
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<PAGE> 3
Debtor represents and warrants and so long as this Security Agreement
remains in effect shall be deemed to continuously represent and warrant that:
(1) the Collateral is genuine and owned by Debtor free of all
security interests, mortgages, liens, claims, charges or other encumbrances
(hereinafter collectively called "Liens"), save for the Security Interest and
Permitted Liens;
(2) to the best of the Debtor's knowledge, other than as
disclosed in writing by the Debtor to the Secured Party, each Debt, Chattel
Paper and Instrument constituting Collateral is enforceable in accordance with
its terms against the party obligated to pay the same (the "Account Debtor"),
and the amount represented by Debtor to Secured Party from time to time as
owing by each Account Debtor or by all Account Debtors will be the correct
amount actually and unconditionally owing by such Account Debtor or Account
Debtors, except for normal cash discounts where applicable, and no Account
Debtor will have any defence, set off, claim or counterclaim against Debtor
which can be asserted against Secured Party, whether in any proceeding to
enforce Collateral or otherwise; and
(3) the locations specified n Schedule "A" hereto as to business
operations and records are accurate and complete and, with respect to Goods
(including Inventory) constituting Collateral, the locations specified in
Schedule "A" hereto are accurate and complete save for Goods in transit to such
locations and Inventory on lease or consignment; and all fixtures or Goods
about to become fixtures and all crops and all oil, gas or other minerals to be
extracted and all timber to be cut which forms part of the Collateral will be
situate at one of such locations.
4. USE OF COLLATERAL BY DEBTOR AND CONFIRMATION OF COLLATERAL BY SECURED
PARTY
Subject to compliance with Debtor's covenants contained herein, Debtor
may, until default, possess, operate, collect, use and enjoy and deal with
Collateral in the ordinary course of Debtor's business in any manner not
inconsistent with the provisions hereof; provided always that Secured Party
shall have the right at any time and from time to time to confirm the existence
and state of the Collateral in any manner Secured Party may consider
appropriate and Debtor agrees to furnish all assistance and information and to
perform all such acts as Secured Party may reasonably request in connection
therewith and to all places where Collateral may be located and to all premises
occupied by Debtor.
5. RECEIPTS OF INCOME FROM AND INTEREST ON COLLATERAL
(1) Until default, Debtor shall have the right to receive any monies
constituting income from or interest on Collateral and if Secured Party
receives any such monies prior to default, Secured Party shall either credit
the same to the account of Debtor or pay the same promptly to Debtor.
(2) After default, Debtor will not request or receive any monies
constituting income from
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<PAGE> 4
or interest on Collateral and if Debtor receives any such monies, Debtor will
receive the same in trust for and promptly pay the same to Secured Party.
6. INCREASES, PROFITS, PAYMENTS OR DISTRIBUTIONS REGARDING COLLATERAL
(1) Whether or not default has occurred, Debtor authorizes Secured Party
(i) to receive any increase in or profits on
Collateral (other than money) and to hold the same as part of
Collateral; money so received shall be treated as income for
the purposes of Clause 5 hereof and dealt with accordingly;
and
(ii) to receive any payment or distribution upon
redemption or retirement or upon dissolution and liquidation
of the issuer of Collateral; to surrender Collateral in
exchange therefor; and to hold any such payment or
distribution as part of the Collateral.
(2) If Debtor receives any such increase or profits (other than money)
or payments or distributions, Debtor will receive the same in trust for and
deliver the same promptly to Secured Party to be held by Secured Party as
herein provided.
7. SECURITIES FORMING PART OF COLLATERAL
If Collateral at any time includes Securities, Debtor authorizes Secured
Party to transfer the same or any part thereof into its own name or that of its
nominee(s) so that Secured Party or its nominee(s) may appear of record as the
sole owner thereof; provided that, until default, Secured Party shall deliver
promptly to Debtor all notices or other communications received by it or its
nominee(s) as such registered owner and, upon demand and receipt of payment of
any necessary expenses thereof, shall issue to Debtor or its order a proxy to
vote and take all action with respect to such Securities. After enforcement of
remedies hereunder, Debtor waives all rights to receive any notices or
communications received by Secured Party or its nominee(s) as such registered
owner and agrees that no proxy issued by Secured Party to Debtor or its order
as aforesaid shall thereafter be effective.
8. COLLECTION OF DEBTS FORMING PART OF COLLATERAL
After default, Secured Party may notify all or any Account Debtors of the
Security Interest and may also direct such Account Debtors to make all payments
on Collateral to Secured Party. Debtor acknowledges that any payments on or
other proceeds of Collateral received by Debtor from Account Debtors, before or
after notification of this Security Interest to Account Debtors, if received
after default, shall be received and held by Debtor in trust for Secured Party
and shall be turned over
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to Secured Party upon request.
9. COVENANTS OF THE DEBTOR
So long as this Security Agreement remains in effect, Debtor covenants and
agrees:
(1) to defend the Collateral against the claims and demands of all other
parties claiming the same or an interest therein; to keep the Collateral free
from all Liens, except for the Security Interest and Permitted Liens or
hereafter approved in writing, prior to their creation or assumption, by
Secured Party; and not to sell, exchange, transfer, assign, lease, or otherwise
dispose of Collateral or any interest therein without the prior written consent
of Secured Party, except to the extent permitted under the Credit Agreement;
provided always that, until default, Debtor may, in the ordinary course of
Debtor's business, sell or lease Inventory and, subject to Clause 8 hereof, use
monies available to Debtor;
(2) to notify Secured Party promptly of:
(i) any change in the information contained herein or
in the Schedules hereto relating to Debtor, Debtor's business
or Collateral; and
(ii) any material loss of or damage to Collateral;
(3) to keep the Collateral in good order, condition and repair and not
to use Collateral in violation of the provisions of this Security Agreement or
any other agreement relating to Collateral or any policy insuring Collateral or
any applicable statute, law, by-law, rule, regulation or ordinance;
(4) to do, execute, acknowledge and deliver such financing statements
and further assignments, transfers, documents, acts, matters and things
(including further schedules hereto) as may be reasonably requested by Secured
Party of or with respect to Collateral in order to give effect to these
presents and to pay all costs for searches and filings in connection therewith;
(5) to pay all taxes, rates, levies, assessments and other charges of
every nature which may be lawfully levied, assessed or imposed against or in
respect of Debtor or Collateral as and when the same become due and payable;
(6) to insure the Collateral for such periods, in such amounts, on such
terms and against loss or damage by fire and such other risks as Secured Party
shall reasonably direct with loss payable to Secured Party and Debtor, as
insured, as their respective interests may appear, and to pay all premiums
therefor;
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<PAGE> 6
(7) to prevent Collateral, save Inventory sold or leased as permitted
hereby, from being or becoming an accession to other property not covered by
this Security Agreement;
(8) to carry on and conduct the business of Debtor in a proper and
efficient manner and so as to protect and preserve the Collateral and to keep,
in accordance with generally accepted accounting principles, consistently
applied, proper books of account for Debtor's business as well as accurate and
complete records concerning Collateral, and mark any and all such records and
Collateral as Secured Party's request so as to indicate the Security Interest;
and
(9) to deliver to Secured Party from time to time promptly upon request:
(i) any Documents of Title, Instruments, Securities
and Chattel Paper constituting, representing or relating to
Collateral;
(ii) all books of account and all records, ledgers,
reports, correspondence, schedules, documents, statements,
lists and other writing relating to Collateral for the
purpose of inspecting, auditing or copying the same;
(iii) all financial statements prepared by or for
Debtor regarding Debtor's business;
(iv) all policies and certificates of insurance
relating to Collateral; and
(v) such information concerning Collateral, Debtor
and Debtor's business and affairs as Secured Party may
reasonably request.
10. EVENTS OF DEFAULT
The happening of any of the following events or conditions shall
constitute default hereunder which is herein referred to as "default":
(1) the nonpayment when due, whether by acceleration or otherwise, of
any principal or interest forming part of the Obligations or the failure of
Debtor to observe or perform any obligation, covenant, term, provision or
condition contained in this Security Agreement; or
(2) any Event of Default under the Credit Agreement.
11. ACCELERATION
Secured Party, in its sole discretion, may declare all or any part of the
Obligations not
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<PAGE> 7
payable on demand to be immediately due and payable, without demand or notice
of any kind, in the event of default. The provisions of this clause are not
intended in any way to affect any rights of Secured Party with respect to
Obligations which may now or hereafter be payable on demand.
12. REMEDIES
(1) Upon default, Secured Party may appoint or reappoint by instrument
in writing, any person or persons, whether an officer or officers or an
employee or employees of Secured Party or not, to be a receiver or receivers
(hereinafter called a "Receiver", which term when used herein shall include a
receiver and manager) of Collateral (including any interest, income or profits
therefrom) and may remove any Receiver so appointed and appoint another in his
stead. Any such Receiver shall, so far as concerns responsibility for his
acts, be deemed the agent of Debtor and not Secured Party, and Secured Party
shall not be in any way responsible for any misconduct, negligence or
nonfeasance on the part of any such Receiver, his servants, agents or
employees. Subject to the provisions of the instrument appointing him, any
such Receiver shall have power to take possession of Collateral, to preserve
Collateral or its value, to carry on or concur in carrying on all or any part
of the business of Debtor and to sell, lease or otherwise dispose of or concur
in selling, leasing or otherwise disposing of Collateral. To facilitate the
foregoing powers, any such Receiver may, to the exclusion of all others,
including Debtor, enter upon, use and occupy all premises owned or occupied by
Debtor wherein Collateral may be situate, maintain Collateral upon such
premises, borrow money on a secured or unsecured basis and use Collateral
directly in carrying on Debtor's business or otherwise, as such Receiver shall,
in his discretion, determine. Except as may be otherwise directed by Secured
Party, all monies received from time to time by such Receiver in carrying out
his appointment shall be received in trust for and paid over to Secured Party.
Every such Receiver may, in the discretion of Secured Party, be vested with all
or any of the rights and powers of Secured Party.
(2) Upon default, Secured Party may, either directly or through its
agents or nominees, exercise all the powers and rights given to a Receiver by
virtue of the foregoing subclause (1).
(3) Secured Party may take possession of, collect, demand, sue on,
enforce, recover and receive Collateral and give valid and binding receipts and
discharges therefor and in respect thereof and, upon default, Secured Party may
sell, lease or otherwise dispose of Collateral in such manner, at such time or
otherwise dispose of Collateral in such manner, at such time or times and place
or places, for such consideration and upon such terms and conditions as to
Secured Party may seem reasonable.
(4) In addition to those rights granted herein and in any other
agreement now or hereafter in effect between Debtor and Secured Party and in
addition to any other rights Secured Party may have at law or in equity,
Secured Party shall have, both before and after default, all rights and
remedies of a secured party under the P.P.S.A. Provided always that Secured
Party shall not be
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<PAGE> 8
liable or accountable for any failure to exercise its remedies, take possession
of, collect, enforce, realize, sell, lease or otherwise dispose of Collateral
or to institute proceedings for such purposes. Furthermore, Secured Party
shall have no obligation to take any steps to preserve rights against prior
parties to any Instrument or Chattel Paper, whether Collateral or proceeds and
whether or not in Secured Party's possession and shall not be liable or
accountable for failure to do so.
(5) Debtor acknowledges that Secured Party or any Receiver appointed by
it may take possession of Collateral wherever it may be located and by any
method permitted by law and Debtor agrees upon request from Secured Party or
any such Receiver to assemble and deliver possession of Collateral at such
place or places as directed.
(6) Debtor agrees to pay all costs, charges and expenses reasonably
incurred by Secured Party or any Receiver appointed by it, whether directly or
for services rendered (including reasonable solicitors' and auditors' costs and
other legal expenses and Receiver remuneration), in operating Debtor's
accounts, in preparing or enforcing this Security Agreement, taking custody of,
preserving, repairing, processing, preparing for disposition and disposing of
Collateral and in enforcing or collecting Obligations and all such costs,
charges and expenses together with any monies owing as a result of any
borrowing by Secured Party or any Receiver appointed by it, as permitted
hereby, shall be a first charge on the proceeds of realization, collection or
disposition of Collateral and shall be secured hereby.
(7) Unless the Collateral in question is perishable or unless Secured
Party believes on reasonable grounds that the Collateral in question will
decline speedily in value, Secured Party will give Debtor such notice of the
date, time and place of any public sale or of the date after which any private
disposition of Collateral is to be made, as may be required by the P.P.S.A.
13. DISPOSITION OF MONIES
Subject to any applicable requirements of the P.P.S.A., all monies
collected or received by Secured Party pursuant to or in exercise of any right
it possesses with respect to Collateral shall be applied on account of the
Obligations in such manner as described in the Credit Agreement or, at the
option of Secured Party, may be held unappropriated in a collateral account or
released to Debtor, all without prejudice to the liability of Debtor or the
rights of Secured Party hereunder. Debtor hereby acknowledges that if the
disposition of all or any Collateral by Secured Party or a Receiver pursuant
hereto does not give rise to sufficient funds to pay all Obligations secured
hereby Debtor shall remain liable for any deficiency until all Obligations have
been paid or satisfied in full. Any surplus shall be accounted for as required
by law.
14. MISCELLANEOUS
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<PAGE> 9
(1) Debtor hereby authorizes Secured Party to file such financing
statements and other documents and do such acts, matters and things (including
completing and adding schedules hereto identifying Collateral or any Permitted
Liens affecting Collateral or identifying the locations at which Debtor's
business is carried on and Collateral and records relating thereto are situate)
as Secured Party may deem appropriate to perfect and continue the Security
Interest, to protect and preserve Collateral and its Security Interest in the
Collateral and to realize upon the Security Interest and Debtor hereby
irrevocably constitutes and appoints each Vice-President from time to time of
Secured Party the true and lawful attorney of Debtor, with full power of
substitution, to do any of the foregoing in the name of Debtor whenever and
wherever it may be deemed necessary or expedient.
(2) Without limiting any other right of Secured Party, whenever the
Obligations are immediately due and payable or Secured Party has the right to
declare the Obligations to be immediately due and payable (whether or not it
has so declared), Secured Party may, in its sole discretion, set off against
the Obligations any and all monies then owed to Debtor by Secured Party in any
capacity, whether or not due, and Secured Party shall be deemed to have
exercised such right of set off immediately at the time of making its decision
to do so even though any charge therefor is made or entered on Secured Party's
records subsequent thereto.
(3) Upon Debtor's failure to perform any of its duties hereunder,
Secured Party may, but shall not be obligated to, perform any or all of such
duties, and Debtor shall pay to Secured Party, forthwith upon written demand
therefor, an amount equal to the expense incurred by Secured Party in so doing
plus interest thereon from the date such expense is incurred until it is paid
at the Overdue Rate.
(4) After default, Secured Party may grant extensions of time and other
indulgences, take and give up security, accept compositions, compound,
comprise, settle, grant releases and discharges and otherwise deal with Debtor,
debtors of Debtor, sureties and others and with Collateral and other security
as Secured Party may see fit without prejudice to the liability of Debtor or
Secured Party's right to hold and realize the Security Interest. Furthermore,
Secured Party may, after default, demand, collect and sue on Collateral in
either Debtor's or Secured Party's name, at Secured Party's option, and may
endorse Debtor's name on any and all cheques, commercial paper and any other
Instruments pertaining to or constituting Collateral.
(5) No delay or omission by Secured Party in exercising any right or
remedy hereunder or with respect to any Obligations shall operate as a waiver
thereof or of any other right or remedy, and no single or partial exercise
thereof shall preclude any other or further exercise thereof or the exercise of
any other right or remedy. Furthermore, Secured Party may remedy any default
by Debtor hereunder or with respect to any Obligations in any reasonable manner
without waiving the default remedied and without waiving any other prior or
subsequent default by Debtor. All rights and remedies of Secured Party granted
or recognized herein are cumulative and may be exercised at any time and from
time to time independently or in combination.
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<PAGE> 10
(6) Debtor waives protest of any Instrument constituting Collateral at
any time held by Secured Party on which Debtor is in any way liable and,
subject to Clause 12(7), notice of any other action taken by Secured Party.
(7) This Security Agreement shall enure to the benefit of and be binding
upon the parties hereto and their respective heirs, executors, administrators,
successors and assigns. In any action brought by an assignee of this Security
Agreement and the Security Interest or any part thereof to enforce any rights
hereunder, Debtor shall not assert against the assignee any claim or defence
which Debtor now has or hereafter may have against Secured Party.
(8) Save for any schedules which may be added hereto pursuant to the
provisions hereof, no modification, variation or amendment of any provision of
this Security Agreement shall be made except by a written agreement executed by
the parties hereto and no waiver of any provision hereof shall be effective
unless in writing.
(9) This Security Agreement and the transactions evidenced hereby shall
be governed by and construed in accordance with the laws of the Province of
Ontario as the same may from time to time be in effect, including, where
applicable, the P.P.S.A.
(10) Subject to the requirements of Clauses 12(7) and 14(11) hereof,
whenever either party hereto is required or entitled to notify or direct the
other or to make a demand or request upon the other, such notice, direction,
demand or request shall be in writing shall be sufficiently given only if
delivered to the party for whom it is intended at the principal address of such
party herein set forth or as changed pursuant hereto or if sent by prepaid
registered mail addressed to the party for whom it is intended at the principal
address of such party herein set forth or as changed pursuant hereto. Either
party may notify the other pursuant hereto of any change in such party's
principal address to be used for the purposes hereof.
(11) This Security Agreement and the security afforded hereby is in
addition to and not in substitution for any other security now or hereafter
held by Secured Party and is, and is intended to be, a continuing Security
Agreement and shall remain in full force and effect until the Obligations have
been paid and satisfied in full.
(12) The headings used in this Security Agreement are for convenience
only and are not to be considered a part of this Security Agreement and do not
in any way limit or amplify the terms and provisions of this Security
Agreement.
(13) When the context so requires, the singular number shall be read as
if the plural were expressed and the provisions hereof shall be read with all
grammatical changes necessary dependent upon the person referred to being a
male, female, firm or corporation.
(14) If any provisions of this Security Agreement, as amended from time
to time, shall be
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<PAGE> 11
deemed invalid or void, in whole or in part, by any court of competent
jurisdiction, the remaining terms and provisions of this Security Agreement
shall remain in full force and effect.
(15) Nothing herein contained shall in any way obligate Secured Party to
grant, continue, renew, extend time for payment of or accept anything which
constitutes or would constitute Obligations.
(16) The Security Interest created hereby is intended to attach when this
Security Agreement is signed by Debtor and delivered to Secured Party.
15. COPY OF AGREEMENT
Debtor hereby acknowledges receipt of a copy of this Security Agreement.
IN WITNESS WHEREOF Debtor has executed this Security Agreement this 24th
day of June, 1997.
976459 ONTARIO LIMITED
By:______________________
Name:
Title:
Agreed to and Accepted by:
FIRST CHICAGO NBD BANK, CANADA,
as the Affiliate designated by NBD Bank to make
Canadian Advances and as collateral agent for the
Lenders for the purpose of holding this security
as specified in the Credit Agreement
By:__________________________________
Its:____________________________
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<PAGE> 1
] EXHIBIT 4.6
GUARANTOR SECURITY AGREEMENT
This GUARANTOR SECURITY AGREEMENT, dated as of June 24, 1997 (this
"Security Agreement"), is by BMG HOLDINGS INC., a corporation organized under
the laws of the Province of Ontario (the "Debtor") in favor of FIRST CHICAGO
NBD BANK, CANADA, in its capacity as the Affiliate designated by NBD Bank, a
Michigan banking corporation, to make Canadian Advances and as collateral agent
for the Lenders for the purpose of holding this security as specified in the
Credit Agreement referred to below (the "Secured Party").
1. CREATION OF SECURITY INTEREST
(1) For value received, Debtor hereby grants to Secured Party a
security interest (the "Security Interest") in the undertaking of Debtor and in
all Goods (including all parts, accessories, attachments, special tools,
additions and accessions thereto), Chattel Paper, Documents of Title (whether
negotiable or not), Instruments, Intangibles and Securities now owned or
hereafter owned or acquired by or on behalf of Debtor (including such as may be
returned to or repossessed by Debtor) and in all proceeds and renewals thereof,
accretions thereto and substitutions therefor (hereinafter collectively called
"Collateral"), including, without limitation, all of the following now owned or
hereafter owned or acquired by or on behalf of Debtor:
(i) all inventory of whatever kind and wherever situate
("Inventory");
(ii) all equipment (other than Inventory) of whatever kind
and wherever situate, including, without limitation,
all machinery, tools, apparatus, plant, furniture,
fixtures and vehicles of whatsoever nature or kind;
(iii) all book accounts and book debts and generally all
accounts, debts, dues, claims, choses in action and
demands of every nature and kind howsoever arising or
secured including letters of credit and advices of
credit, which are now due, owing or accruing or
growing due to or owned by or which may hereafter
become due, owing or accruing or growing due to or
owned by Debtor ("Debts");
(iv) all deeds, documents, writings, papers, books of
account and other books relating to or being records
of Debts, Chattel Paper or Documents of Title or by
which such are or may hereafter be secured,
evidenced, acknowledged or made payable;
(v) all contractual rights and insurance claims and all
goodwill, patents, trademarks, copyrights, and other
industrial property;
(vi) all monies other than trust monies lawfully belonging
to others; and
(vii) all property described in any schedule now or
hereafter annexed hereto.
<PAGE> 2
(2) The Security Interest granted hereby shall not extend or apply
to and Collateral shall not include the last day of the term of any lease or
agreement therefor but upon the enforcement of the Security Interest Debtor
shall stand possessed of such last day in trust to assign the same to any
person acquiring such term.
(3) The terms "Goods", "Chattel Paper", "Documents of Title",
"Instruments", "Intangibles", "Securities", "proceeds", "inventory" and
"accession" whenever used herein shall be interpreted pursuant to their
respective meanings when used in the Personal Property Security Act of Ontario,
as amended from time to time, which Act, including amendments thereto and any
Act substituted therefor and amendments thereto is herein referred to as the
"P.P.S.A." Provided always that the term "Goods" when used herein shall not
include "consumer goods" of Debtor as that term is defined in the P.P.S.A., and
the term "Inventory" when used herein shall include livestock and the young
thereof after conception and crops that become such within the year of
execution of this Security Agreement. Any reference herein to "Collateral"
shall, unless the context otherwise requires, be deemed a reference to
"Collateral or any part thereof".
(4) As used herein, the term "Credit Agreement" means the Credit
Agreement dated as of the date hereof among Oxford Automotive, Inc., a
corporation incorporated under the laws of the State of Michigan (the
"Company"), each of the Subsidiaries of the Company designated under Section
1.1 of the Credit Agreement as a "Borrowing Subsidiary", the lenders party
thereto from time to time (the "Lenders") and the Agent, as amended or
modified from time to time. Capitalized terms used but not defined herein
shall have the meanings ascribed thereto in the Credit Agreement.
2. OBLIGATIONS SECURED
The Security Interest granted hereby secures payment and satisfaction
of any and all of the following (the "Obligations"): any and all existing and
future indebtedness, obligation and liability of every kind, nature and
character, direct or indirect, absolute or contingent (including without
limitation all indebtedness, obligations and liabilities pursuant to any Loans,
Letters of Credit, Bankers' Acceptances and other Advances and all interest,
fees, and other charges thereon and all renewals, extensions and modifications
thereof and all fees, costs and expenses incurred by the Agent or any of the
Lenders in connection with the documentation, administration, collection or
enforcement thereof), of the Debtor or of the Company to the Agent or any of
the Lenders or any branch, subsidiary or affiliate thereof, howsoever and
whensoever created, arising, evidenced or acquired pursuant to the Credit
Agreement, the Notes, the Security Documents, any Rate Hedging Agreements or
any other agreement, instrument or documents executed in connection therewith
at any time (all of the foregoing, as amended or modified from time to time,
collectively referred to as the "Loan Documents").
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<PAGE> 3
3. REPRESENTATIONS AND WARRANTIES OF DEBTOR
Debtor represents and warrants and so long as this Security Agreement
remains in effect shall be deemed to continuously represent and warrant that:
(1) the Collateral is genuine and owned by Debtor free of all
security interests, mortgages, liens, claims, charges or other encumbrances
(hereinafter collectively called "Liens"), save for the Security Interest and
Permitted Liens;
(2) to the best of the Debtor's knowledge, other than as disclosed
in writing by the Debtor to the Secured Party, each Debt, Chattel Paper and
Instrument constituting Collateral is enforceable in accordance with its terms
against the party obligated to pay the same (the "Account Debtor"), and the
amount represented by Debtor to Secured Party from time to time as owing by
each Account Debtor or by all Account Debtors will be the correct amount
actually and unconditionally owing by such Account Debtor or Account Debtors,
except for normal cash discounts where applicable, and no Account Debtor will
have any defence, set off, claim or counterclaim against Debtor which can be
asserted against Secured Party, whether in any proceeding to enforce Collateral
or otherwise; and
(3) the locations specified n Schedule "A" hereto as to business
operations and records are accurate and complete and, with respect to Goods
(including Inventory) constituting Collateral, the locations specified in
Schedule "A" hereto are accurate and complete save for Goods in transit to such
locations and Inventory on lease or consignment; and all fixtures or Goods
about to become fixtures and all crops and all oil, gas or other minerals to be
extracted and all timber to be cut which forms part of the Collateral will be
situate at one of such locations.
4. USE OF COLLATERAL BY DEBTOR AND CONFIRMATION OF COLLATERAL BY SECURED
PARTY
Subject to compliance with Debtor's covenants contained herein, Debtor
may, until default, possess, operate, collect, use and enjoy and deal with
Collateral in the ordinary course of Debtor's business in any manner not
inconsistent with the provisions hereof; provided always that Secured Party
shall have the right at any time and from time to time to confirm the existence
and state of the Collateral in any manner Secured Party may consider
appropriate and Debtor agrees to furnish all assistance and information and to
perform all such acts as Secured Party may reasonably request in connection
therewith and to all places where Collateral may be located and to all premises
occupied by Debtor.
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<PAGE> 4
5. RECEIPTS OF INCOME FROM AND INTEREST ON COLLATERAL
(1) Until default, Debtor shall have the right to receive any
monies constituting income from or interest on Collateral and if Secured Party
receives any such monies prior to default, Secured Party shall either credit
the same to the account of Debtor or pay the same promptly to Debtor.
(2) After default, Debtor will not request or receive any monies
constituting income from or interest on Collateral and if Debtor receives any
such monies, Debtor will receive the same in trust for and promptly pay the
same to Secured Party.
6. INCREASES, PROFITS, PAYMENTS OR DISTRIBUTIONS REGARDING COLLATERAL
(1) Whether or not default has occurred, Debtor authorizes Secured
Party
(i) to receive any increase in or profits on Collateral
(other than money) and to hold the same as part of
Collateral; money so received shall be treated as
income for the purposes of Clause 5 hereof and dealt
with accordingly; and
(ii) to receive any payment or distribution upon
redemption or retirement or upon dissolution and
liquidation of the issuer of Collateral; to surrender
Collateral in exchange therefor; and to hold any such
payment or distribution as part of the Collateral.
(2) If Debtor receives any such increase or profits (other than
money) or payments or distributions, Debtor will receive the same in trust for
and deliver the same promptly to Secured Party to be held by Secured Party as
herein provided.
7. SECURITIES FORMING PART OF COLLATERAL
If Collateral at any time includes Securities, Debtor authorizes
Secured Party to transfer the same or any part thereof into its own name or
that of its nominee(s) so that Secured Party or its nominee(s) may appear of
record as the sole owner thereof; provided that, until default, Secured Party
shall deliver promptly to Debtor all notices or other communications received
by it or its nominee(s) as such registered owner and, upon demand and receipt
of payment of any necessary expenses thereof, shall issue to Debtor or its
order a proxy to vote and take all action with respect to such Securities.
After enforcement of remedies hereunder, Debtor waives all rights to receive
any notices or communications received by Secured Party or its nominee(s) as
such registered owner and agrees that no proxy issued by Secured Party to
Debtor or its order as aforesaid shall thereafter be effective.
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<PAGE> 5
8. COLLECTION OF DEBTS FORMING PART OF COLLATERAL
After default, Secured Party may notify all or any Account Debtors of
the Security Interest and may also direct such Account Debtors to make all
payments on Collateral to Secured Party. Debtor acknowledges that any payments
on or other proceeds of Collateral received by Debtor from Account Debtors,
before or after notification of this Security Interest to Account Debtors, if
received after default, shall be received and held by Debtor in trust for
Secured Party and shall be turned over to Secured Party upon request.
9. COVENANTS OF THE DEBTOR
So long as this Security Agreement remains in effect, Debtor covenants
and agrees:
(1) to defend the Collateral against the claims and demands of all
other parties claiming the same or an interest therein; to keep the Collateral
free from all Liens, except for the Security Interest and Permitted Liens or
hereafter approved in writing, prior to their creation or assumption, by
Secured Party; and not to sell, exchange, transfer, assign, lease, or otherwise
dispose of Collateral or any interest therein without the prior written consent
of Secured Party, except to the extent permitted under the Credit Agreement;
provided always that, until default, Debtor may, in the ordinary course of
Debtor's business, sell or lease Inventory and, subject to Clause 8 hereof, use
monies available to Debtor;
(2) to notify Secured Party promptly of:
(i) any change in the information contained herein or in
the Schedules hereto relating to Debtor, Debtor's
business or Collateral; and
(ii) any material loss of or damage to Collateral;
(3) to keep the Collateral in good order, condition and repair and
not to use Collateral in violation of the provisions of this Security Agreement
or any other agreement relating to Collateral or any policy insuring Collateral
or any applicable statute, law, by-law, rule, regulation or ordinance;
(4) to do, execute, acknowledge and deliver such financing
statements and further assignments, transfers, documents, acts, matters and
things (including further schedules hereto) as may be reasonably requested by
Secured Party of or with respect to Collateral in order to give effect to these
presents and to pay all costs for searches and filings in connection therewith;
(5) to pay all taxes, rates, levies, assessments and other charges
of every nature which may be lawfully levied, assessed or imposed against or in
respect of Debtor or Collateral as and
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<PAGE> 6
when the same become due and payable;
(6) to insure the Collateral for such periods, in such amounts, on
such terms and against loss or damage by fire and such other risks as Secured
Party shall reasonably direct with loss payable to Secured Party and Debtor, as
insured, as their respective interests may appear, and to pay all premiums
therefor;
(7) to prevent Collateral, save Inventory sold or leased as
permitted hereby, from being or becoming an accession to other property not
covered by this Security Agreement;
(8) to carry on and conduct the business of Debtor in a proper and
efficient manner and so as to protect and preserve the Collateral and to keep,
in accordance with generally accepted accounting principles, consistently
applied, proper books of account for Debtor's business as well as accurate and
complete records concerning Collateral, and mark any and all such records and
Collateral as Secured Party's request so as to indicate the Security Interest;
and
(9) to deliver to Secured Party from time to time promptly upon
request:
(i) any Documents of Title, Instruments, Securities and
Chattel Paper constituting, representing or relating
to Collateral;
(ii) all books of account and all records, ledgers,
reports, correspondence, schedules, documents,
statements, lists and other writing relating to
Collateral for the purpose of inspecting, auditing or
copying the same;
(iii) all financial statements prepared by or for Debtor
regarding Debtor's business;
(iv) all policies and certificates of insurance relating
to Collateral; and
(v) such information concerning Collateral, Debtor and
Debtor's business and affairs as Secured Party may
reasonably request.
10. EVENTS OF DEFAULT
The happening of any of the following events or conditions shall
constitute default hereunder which is herein referred to as "default":
(1) the nonpayment when due, whether by acceleration or otherwise,
of any principal or interest forming part of the Obligations or the failure of
Debtor to observe or perform any obligation, covenant, term, provision or
condition contained in this Security Agreement; or
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<PAGE> 7
(2) any Event of Default under the Credit Agreement.
11. ACCELERATION
Secured Party, in its sole discretion, may declare all or any part of
the Obligations not payable on demand to be immediately due and payable,
without demand or notice of any kind, in the event of default. The provisions
of this clause are not intended in any way to affect any rights of Secured
Party with respect to Obligations which may now or hereafter be payable on
demand.
12. REMEDIES
(1) Upon default, Secured Party may appoint or reappoint by
instrument in writing, any person or persons, whether an officer or officers or
an employee or employees of Secured Party or not, to be a receiver or receivers
(hereinafter called a "Receiver", which term when used herein shall include a
receiver and manager) of Collateral (including any interest, income or profits
therefrom) and may remove any Receiver so appointed and appoint another in his
stead. Any such Receiver shall, so far as concerns responsibility for his
acts, be deemed the agent of Debtor and not Secured Party, and Secured Party
shall not be in any way responsible for any misconduct, negligence or
nonfeasance on the part of any such Receiver, his servants, agents or
employees. Subject to the provisions of the instrument appointing him, any
such Receiver shall have power to take possession of Collateral, to preserve
Collateral or its value, to carry on or concur in carrying on all or any part
of the business of Debtor and to sell, lease or otherwise dispose of or concur
in selling, leasing or otherwise disposing of Collateral. To facilitate the
foregoing powers, any such Receiver may, to the exclusion of all others,
including Debtor, enter upon, use and occupy all premises owned or occupied by
Debtor wherein Collateral may be situate, maintain Collateral upon such
premises, borrow money on a secured or unsecured basis and use Collateral
directly in carrying on Debtor's business or otherwise, as such Receiver shall,
in his discretion, determine. Except as may be otherwise directed by Secured
Party, all monies received from time to time by such Receiver in carrying out
his appointment shall be received in trust for and paid over to Secured Party.
Every such Receiver may, in the discretion of Secured Party, be vested with all
or any of the rights and powers of Secured Party.
(2) Upon default, Secured Party may, either directly or through
its agents or nominees, exercise all the powers and rights given to a Receiver
by virtue of the foregoing subclause (1).
(3) Secured Party may take possession of, collect, demand, sue on,
enforce, recover and receive Collateral and give valid and binding receipts and
discharges therefor and in respect thereof and, upon default, Secured Party may
sell, lease or otherwise dispose of Collateral in such manner, at such time or
otherwise dispose of Collateral in such manner, at such time or times and place
or places, for such consideration and upon such terms and conditions as to
Secured Party may seem
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<PAGE> 8
reasonable.
(4) In addition to those rights granted herein and in any other
agreement now or hereafter in effect between Debtor and Secured Party and in
addition to any other rights Secured Party may have at law or in equity,
Secured Party shall have, both before and after default, all rights and
remedies of a secured party under the P.P.S.A. Provided always that Secured
Party shall not be liable or accountable for any failure to exercise its
remedies, take possession of, collect, enforce, realize, sell, lease or
otherwise dispose of Collateral or to institute proceedings for such purposes.
Furthermore, Secured Party shall have no obligation to take any steps to
preserve rights against prior parties to any Instrument or Chattel Paper,
whether Collateral or proceeds and whether or not in Secured Party's possession
and shall not be liable or accountable for failure to do so.
(5) Debtor acknowledges that Secured Party or any Receiver
appointed by it may take possession of Collateral wherever it may be located
and by any method permitted by law and Debtor agrees upon request from Secured
Party or any such Receiver to assemble and deliver possession of Collateral at
such place or places as directed.
(6) Debtor agrees to pay all costs, charges and expenses
reasonably incurred by Secured Party or any Receiver appointed by it, whether
directly or for services rendered (including reasonable solicitors' and
auditors' costs and other legal expenses and Receiver remuneration), in
operating Debtor's accounts, in preparing or enforcing this Security Agreement,
taking custody of, preserving, repairing, processing, preparing for disposition
and disposing of Collateral and in enforcing or collecting Obligations and all
such costs, charges and expenses together with any monies owing as a result of
any borrowing by Secured Party or any Receiver appointed by it, as permitted
hereby, shall be a first charge on the proceeds of realization, collection or
disposition of Collateral and shall be secured hereby.
(7) Unless the Collateral in question is perishable or unless
Secured Party believes on reasonable grounds that the Collateral in question
will decline speedily in value, Secured Party will give Debtor such notice of
the date, time and place of any public sale or of the date after which any
private disposition of Collateral is to be made, as may be required by the
P.P.S.A.
13. DISPOSITION OF MONIES
Subject to any applicable requirements of the P.P.S.A., all monies
collected or received by Secured Party pursuant to or in exercise of any right
it possesses with respect to Collateral shall be applied on account of the
Obligations in such manner as described in the Credit Agreement or, at the
option of Secured Party, may be held unappropriated in a collateral account or
released to Debtor, all without prejudice to the liability of Debtor or the
rights of Secured Party hereunder. Debtor hereby acknowledges that if the
disposition of all or any Collateral by Secured Party or a Receiver pursuant
hereto does not give rise to sufficient funds to pay all Obligations secured
hereby Debtor
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shall remain liable for any deficiency until all Obligations have been paid or
satisfied in full. Any surplus shall be accounted for as required by law.
14. MISCELLANEOUS
(1) Debtor hereby authorizes Secured Party to file such financing
statements and other documents and do such acts, matters and things (including
completing and adding schedules hereto identifying Collateral or any Permitted
Liens affecting Collateral or identifying the locations at which Debtor's
business is carried on and Collateral and records relating thereto are situate)
as Secured Party may deem appropriate to perfect and continue the Security
Interest, to protect and preserve Collateral and its Security Interest in the
Collateral and to realize upon the Security Interest and Debtor hereby
irrevocably constitutes and appoints each Vice-President from time to time of
Secured Party the true and lawful attorney of Debtor, with full power of
substitution, to do any of the foregoing in the name of Debtor whenever and
wherever it may be deemed necessary or expedient.
(2) Without limiting any other right of Secured Party, whenever
the Obligations are immediately due and payable or Secured Party has the right
to declare the Obligations to be immediately due and payable (whether or not it
has so declared), Secured Party may, in its sole discretion, set off against
the Obligations any and all monies then owed to Debtor by Secured Party in any
capacity, whether or not due, and Secured Party shall be deemed to have
exercised such right of set off immediately at the time of making its decision
to do so even though any charge therefor is made or entered on Secured Party's
records subsequent thereto.
(3) Upon Debtor's failure to perform any of its duties hereunder,
Secured Party may, but shall not be obligated to, perform any or all of such
duties, and Debtor shall pay to Secured Party, forthwith upon written demand
therefor, an amount equal to the expense incurred by Secured Party in so doing
plus interest thereon from the date such expense is incurred until it is paid
at the Overdue Rate.
(4) After default, Secured Party may grant extensions of time and
other indulgences, take and give up security, accept compositions, compound,
comprise, settle, grant releases and discharges and otherwise deal with Debtor,
debtors of Debtor, sureties and others and with Collateral and other security
as Secured Party may see fit without prejudice to the liability of Debtor or
Secured Party's right to hold and realize the Security Interest. Furthermore,
Secured Party may, after default, demand, collect and sue on Collateral in
either Debtor's or Secured Party's name, at Secured Party's option, and may
endorse Debtor's name on any and all cheques, commercial paper and any other
Instruments pertaining to or constituting Collateral.
(5) No delay or omission by Secured Party in exercising any right
or remedy hereunder or with respect to any Obligations shall operate as a
waiver thereof or of any other right or remedy,
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and no single or partial exercise thereof shall preclude any other or further
exercise thereof or the exercise of any other right or remedy. Furthermore,
Secured Party may remedy any default by Debtor hereunder or with respect to any
Obligations in any reasonable manner without waiving the default remedied and
without waiving any other prior or subsequent default by Debtor. All rights
and remedies of Secured Party granted or recognized herein are cumulative and
may be exercised at any time and from time to time independently or in
combination.
(6) Debtor waives protest of any Instrument constituting
Collateral at any time held by Secured Party on which Debtor is in any way
liable and, subject to Clause 12(7), notice of any other action taken by
Secured Party.
(7) This Security Agreement shall enure to the benefit of and be
binding upon the parties hereto and their respective heirs, executors,
administrators, successors and assigns. In any action brought by an assignee
of this Security Agreement and the Security Interest or any part thereof to
enforce any rights hereunder, Debtor shall not assert against the assignee any
claim or defence which Debtor now has or hereafter may have against Secured
Party.
(8) Save for any schedules which may be added hereto pursuant to
the provisions hereof, no modification, variation or amendment of any provision
of this Security Agreement shall be made except by a written agreement executed
by the parties hereto and no waiver of any provision hereof shall be effective
unless in writing.
(9) This Security Agreement and the transactions evidenced hereby
shall be governed by and construed in accordance with the laws of the Province
of Ontario as the same may from time to time be in effect, including, where
applicable, the P.P.S.A.
(10) Subject to the requirements of Clauses 12(7) and 14(11)
hereof, whenever either party hereto is required or entitled to notify or
direct the other or to make a demand or request upon the other, such notice,
direction, demand or request shall be in writing shall be sufficiently given
only if delivered to the party for whom it is intended at the principal address
of such party herein set forth or as changed pursuant hereto or if sent by
prepaid registered mail addressed to the party for whom it is intended at the
principal address of such party herein set forth or as changed pursuant hereto.
Either party may notify the other pursuant hereto of any change in such party's
principal address to be used for the purposes hereof.
(11) This Security Agreement and the security afforded hereby is in
addition to and not in substitution for any other security now or hereafter
held by Secured Party and is, and is intended to be, a continuing Security
Agreement and shall remain in full force and effect until the Obligations have
been paid and satisfied in full.
(12) The headings used in this Security Agreement are for
convenience only and are not to be considered a part of this Security Agreement
and do not in any way limit or amplify the terms
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and provisions of this Security Agreement.
(13) When the context so requires, the singular number shall be
read as if the plural were expressed and the provisions hereof shall be read
with all grammatical changes necessary dependent upon the person referred to
being a male, female, firm or corporation.
(14) If any provisions of this Security Agreement, as amended from
time to time, shall be deemed invalid or void, in whole or in part, by any
court of competent jurisdiction, the remaining terms and provisions of this
Security Agreement shall remain in full force and effect.
(15) Nothing herein contained shall in any way obligate Secured
Party to grant, continue, renew, extend time for payment of or accept anything
which constitutes or would constitute Obligations.
(16) The Security Interest created hereby is intended to attach
when this Security Agreement is signed by Debtor and delivered to Secured
Party.
15. COPY OF AGREEMENT
Debtor hereby acknowledges receipt of a copy of this Security
Agreement.
IN WITNESS WHEREOF Debtor has executed this Security Agreement this
24th day of June, 1997.
BMG HOLDINGS, INC.
By:___________________________________
Name:
Title:
Agreed to and Accepted by:
FIRST CHICAGO NBD BANK, CANADA,
as the Affiliate designated by NBD Bank to make
Canadian Advances and as collateral agent for
the Lenders for the purpose of holding this security
as specified in the Credit Agreement
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EXHIBIT 4.7
GUARANTOR SECURITY AGREEMENT
This GUARANTOR SECURITY AGREEMENT, dated as of June 24, 1997 (this
"Security Agreement"), is by BMG NORTH AMERICA LIMITED, a corporation organized
under the laws of the Province of Ontario (the "Debtor") in favor of FIRST
CHICAGO NBD BANK, CANADA, in its capacity as the Affiliate designated by NBD
Bank, a Michigan banking corporation, to make Canadian Advances and as
collateral agent for the Lenders for the purpose of holding this security as
specified in the Credit Agreement referred to below (the "Secured Party").
1. CREATION OF SECURITY INTEREST
(1) For value received, Debtor hereby grants to Secured Party a
security interest (the "Security Interest") in the undertaking of Debtor and in
all Goods (including all parts, accessories, attachments, special tools,
additions and accessions thereto), Chattel Paper, Documents of Title (whether
negotiable or not), Instruments, Intangibles and Securities now owned or
hereafter owned or acquired by or on behalf of Debtor (including such as may be
returned to or repossessed by Debtor) and in all proceeds and renewals thereof,
accretions thereto and substitutions therefor (hereinafter collectively called
"Collateral"), including, without limitation, all of the following now owned or
hereafter owned or acquired by or on behalf of Debtor:
(i) all inventory of whatever kind and wherever situate
("Inventory");
(ii) all equipment (other than Inventory) of whatever kind
and wherever situate, including, without limitation,
all machinery, tools, apparatus, plant, furniture,
fixtures and vehicles of whatsoever nature or kind;
(iii) all book accounts and book debts and generally all
accounts, debts, dues, claims, choses in action and
demands of every nature and kind howsoever arising or
secured including letters of credit and advices of
credit, which are now due, owing or accruing or
growing due to or owned by or which may hereafter
become due, owing or accruing or growing due to or
owned by Debtor ("Debts");
(iv) all deeds, documents, writings, papers, books of
account and other books relating to or being records
of Debts, Chattel Paper or Documents of Title or by
which such are or may hereafter be secured,
evidenced, acknowledged or made payable;
(v) all contractual rights and insurance claims and all
goodwill, patents, trademarks, copyrights, and other
industrial property;
(vi) all monies other than trust monies lawfully belonging
to others; and
<PAGE> 2
(vii) all property described in any schedule now or
hereafter annexed hereto.
(2) The Security Interest granted hereby shall not extend or apply
to and Collateral shall not include the last day of the term of any lease or
agreement therefor but upon the enforcement of the Security Interest Debtor
shall stand possessed of such last day in trust to assign the same to any
person acquiring such term.
(3) The terms "Goods", "Chattel Paper", "Documents of Title",
"Instruments", "Intangibles", "Securities", "proceeds", "inventory" and
"accession" whenever used herein shall be interpreted pursuant to their
respective meanings when used in the Personal Property Security Act of Ontario,
as amended from time to time, which Act, including amendments thereto and any
Act substituted therefor and amendments thereto is herein referred to as the
"P.P.S.A." Provided always that the term "Goods" when used herein shall not
include "consumer goods" of Debtor as that term is defined in the P.P.S.A., and
the term "Inventory" when used herein shall include livestock and the young
thereof after conception and crops that become such within the year of
execution of this Security Agreement. Any reference herein to "Collateral"
shall, unless the context otherwise requires, be deemed a reference to
"Collateral or any part thereof".
(4) As used herein, the term "Credit Agreement" means the Credit
Agreement dated as of the date hereof among Oxford Automotive, Inc., a
corporation incorporated under the laws of the State of Michigan (the
"Company"), each of the Subsidiaries designated under Section 1.1 of the Credit
Agreement as a "Borrowing Subsidiary", the lenders party thereto from time to
time ( the "Lenders") and the Agent, as amended or modified from time to time.
Capitalized terms used but not defined herein shall have the meanings ascribed
thereto in the Credit Agreement.
2. OBLIGATIONS SECURED
The Security Interest granted hereby secures payment and satisfaction
of any and all of the following (the "Obligations"): any and all existing and
future indebtedness, obligation and liability of every kind, nature and
character, direct or indirect, absolute or contingent (including without
limitation all indebtedness, obligations and liabilities pursuant to any Loans,
Letters of Credit, Bankers' Acceptances and other Advances and all interest,
fees, and other charges thereon and all renewals, extensions and modifications
thereof and all fees, costs and expenses incurred by the Agent or any of the
Lenders in connection with the documentation, administration, collection or
enforcement thereof), of the Debtor or of the Company to the Agent or any of
the Lenders or any branch, subsidiary or affiliate thereof, howsoever and
whensoever created, arising, evidenced or acquired pursuant to the Credit
Agreement, the Notes, the Security Documents, any Rate Hedging Agreements or
any other agreement, instrument or documents executed in connection therewith
at any time (all of the foregoing, as amended or modified from time to time,
collectively referred to as the "Loan Documents"). The Obligations secured by
this Agreement are continuing in nature and include those Obligations secured
by the Company Security Agreement dated as of February 11, 1997 by the Debtor
in favor of the Secured Party.
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<PAGE> 4
3. REPRESENTATIONS AND WARRANTIES OF DEBTOR
Debtor represents and warrants and so long as this Security Agreement
remains in effect shall be deemed to continuously represent and warrant that:
(1) the Collateral is genuine and owned by Debtor free of all
security interests, mortgages, liens, claims, charges or other encumbrances
(hereinafter collectively called "Liens"), save for the Security Interest and
Permitted Liens;
(2) to the best of the Debtor's knowledge, other than as disclosed
in writing by the Debtor to the Secured Party, each Debt, Chattel Paper and
Instrument constituting Collateral is enforceable in accordance with its terms
against the party obligated to pay the same (the "Account Debtor"), and the
amount represented by Debtor to Secured Party from time to time as owing by
each Account Debtor or by all Account Debtors will be the correct amount
actually and unconditionally owing by such Account Debtor or Account Debtors,
except for normal cash discounts where applicable, and no Account Debtor will
have any defence, set off, claim or counterclaim against Debtor which can be
asserted against Secured Party, whether in any proceeding to enforce Collateral
or otherwise; and
(3) the locations specified n Schedule "A" hereto as to business
operations and records are accurate and complete and, with respect to Goods
(including Inventory) constituting Collateral, the locations specified in
Schedule "A" hereto are accurate and complete save for Goods in transit to such
locations and Inventory on lease or consignment; and all fixtures or Goods
about to become fixtures and all crops and all oil, gas or other minerals to be
extracted and all timber to be cut which forms part of the Collateral will be
situate at one of such locations.
4. USE OF COLLATERAL BY DEBTOR AND CONFIRMATION OF COLLATERAL BY SECURED
PARTY
Subject to compliance with Debtor's covenants contained herein, Debtor
may, until default, possess, operate, collect, use and enjoy and deal with
Collateral in the ordinary course of Debtor's business in any manner not
inconsistent with the provisions hereof; provided always that Secured Party
shall have the right at any time and from time to time to confirm the existence
and state of the Collateral in any manner Secured Party may consider
appropriate and Debtor agrees to furnish all assistance and information and to
perform all such acts as Secured Party may reasonably request in connection
therewith and to all places where Collateral may be located and to all premises
occupied by Debtor.
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<PAGE> 5
5. RECEIPTS OF INCOME FROM AND INTEREST ON COLLATERAL
(1) Until default, Debtor shall have the right to receive any
monies constituting income from or interest on Collateral and if Secured Party
receives any such monies prior to default, Secured Party shall either credit
the same to the account of Debtor or pay the same promptly to Debtor.
(2) After default, Debtor will not request or receive any monies
constituting income from or interest on Collateral and if Debtor receives any
such monies, Debtor will receive the same in trust for and promptly pay the
same to Secured Party.
6. INCREASES, PROFITS, PAYMENTS OR DISTRIBUTIONS REGARDING COLLATERAL
(1) Whether or not default has occurred, Debtor authorizes Secured
Party
(i) to receive any increase in or profits on Collateral
(other than money) and to hold the same as part of
Collateral; money so received shall be treated as
income for the purposes of Clause 5 hereof and dealt
with accordingly; and
(ii) to receive any payment or distribution upon
redemption or retirement or upon dissolution and
liquidation of the issuer of Collateral; to surrender
Collateral in exchange therefor; and to hold any such
payment or distribution as part of the Collateral.
(2) If Debtor receives any such increase or profits (other than
money) or payments or distributions, Debtor will receive the same in trust for
and deliver the same promptly to Secured Party to be held by Secured Party as
herein provided.
7. SECURITIES FORMING PART OF COLLATERAL
If Collateral at any time includes Securities, Debtor authorizes
Secured Party to transfer the same or any part thereof into its own name or
that of its nominee(s) so that Secured Party or its nominee(s) may appear of
record as the sole owner thereof; provided that, until default, Secured Party
shall deliver promptly to Debtor all notices or other communications received
by it or its nominee(s) as such registered owner and, upon demand and receipt
of payment of any necessary expenses thereof, shall issue to Debtor or its
order a proxy to vote and take all action with respect to such Securities.
After enforcement of remedies hereunder, Debtor waives all rights to receive
any notices or communications received by Secured Party or its nominee(s) as
such registered owner and agrees that no proxy issued by Secured Party to
Debtor or its order as aforesaid shall thereafter be effective.
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<PAGE> 6
8. COLLECTION OF DEBTS FORMING PART OF COLLATERAL
After default, Secured Party may notify all or any Account Debtors of
the Security Interest and may also direct such Account Debtors to make all
payments on Collateral to Secured Party. Debtor acknowledges that any payments
on or other proceeds of Collateral received by Debtor from Account Debtors,
before or after notification of this Security Interest to Account Debtors, if
received after default, shall be received and held by Debtor in trust for
Secured Party and shall be turned over to Secured Party upon request.
9. COVENANTS OF THE DEBTOR
So long as this Security Agreement remains in effect, Debtor covenants
and agrees:
(1) to defend the Collateral against the claims and demands of all
other parties claiming the same or an interest therein; to keep the Collateral
free from all Liens, except for the Security Interest and Permitted Liens or
hereafter approved in writing, prior to their creation or assumption, by
Secured Party; and not to sell, exchange, transfer, assign, lease, or otherwise
dispose of Collateral or any interest therein without the prior written consent
of Secured Party, except to the extent permitted under the Credit Agreement;
provided always that, until default, Debtor may, in the ordinary course of
Debtor's business, sell or lease Inventory and, subject to Clause 8 hereof, use
monies available to Debtor;
(2) to notify Secured Party promptly of:
(i) any change in the information contained herein or in
the Schedules hereto relating to Debtor, Debtor's
business or Collateral; and
(ii) any material loss of or damage to Collateral;
(3) to keep the Collateral in good order, condition and repair and
not to use Collateral in violation of the provisions of this Security Agreement
or any other agreement relating to Collateral or any policy insuring Collateral
or any applicable statute, law, by-law, rule, regulation or ordinance;
(4) to do, execute, acknowledge and deliver such financing
statements and further assignments, transfers, documents, acts, matters and
things (including further schedules hereto) as may be reasonably requested by
Secured Party of or with respect to Collateral in order to give effect to these
presents and to pay all costs for searches and filings in connection therewith;
(5) to pay all taxes, rates, levies, assessments and other charges
of every nature which
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<PAGE> 7
may be lawfully levied, assessed or imposed against or in respect of Debtor or
Collateral as and when the same become due and payable;
(6) to insure the Collateral for such periods, in such amounts, on
such terms and against loss or damage by fire and such other risks as Secured
Party shall reasonably direct with loss payable to Secured Party and Debtor, as
insured, as their respective interests may appear, and to pay all premiums
therefor;
(7) to prevent Collateral, save Inventory sold or leased as
permitted hereby, from being or becoming an accession to other property not
covered by this Security Agreement;
(8) to carry on and conduct the business of Debtor in a proper and
efficient manner and so as to protect and preserve the Collateral and to keep,
in accordance with generally accepted accounting principles, consistently
applied, proper books of account for Debtor's business as well as accurate and
complete records concerning Collateral, and mark any and all such records and
Collateral as Secured Party's request so as to indicate the Security Interest;
and
(9) to deliver to Secured Party from time to time promptly upon
request:
(i) any Documents of Title, Instruments, Securities and
Chattel Paper constituting, representing or relating
to Collateral;
(ii) all books of account and all records, ledgers,
reports, correspondence, schedules, documents,
statements, lists and other writing relating to
Collateral for the purpose of inspecting, auditing or
copying the same;
(iii) all financial statements prepared by or for Debtor
regarding Debtor's business;
(iv) all policies and certificates of insurance relating
to Collateral; and
(v) such information concerning Collateral, Debtor and
Debtor's business and affairs as Secured Party may
reasonably request.
10. EVENTS OF DEFAULT
The happening of any of the following events or conditions shall
constitute default hereunder which is herein referred to as "default":
(1) the nonpayment when due, whether by acceleration or otherwise,
of any principal or
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interest forming part of the Obligations or the failure of Debtor to observe or
perform any obligation, covenant, term, provision or condition contained in
this Security Agreement; or
(2) any Event of Default under the Credit Agreement;
11. ACCELERATION
Secured Party, in its sole discretion, may declare all or any part of
the Obligations not payable on demand to be immediately due and payable,
without demand or notice of any kind, in the event of default. The provisions
of this clause are not intended in any way to affect any rights of Secured
Party with respect to Obligations which may now or hereafter be payable on
demand.
12. REMEDIES
(1) Upon default, Secured Party may appoint or reappoint by
instrument in writing, any person or persons, whether an officer or officers or
an employee or employees of Secured Party or not, to be a receiver or receivers
(hereinafter called a "Receiver", which term when used herein shall include a
receiver and manager) of Collateral (including any interest, income or profits
therefrom) and may remove any Receiver so appointed and appoint another in his
stead. Any such Receiver shall, so far as concerns responsibility for his
acts, be deemed the agent of Debtor and not Secured Party, and Secured Party
shall not be in any way responsible for any misconduct, negligence or
nonfeasance on the part of any such Receiver, his servants, agents or
employees. Subject to the provisions of the instrument appointing him, any
such Receiver shall have power to take possession of Collateral, to preserve
Collateral or its value, to carry on or concur in carrying on all or any part
of the business of Debtor and to sell, lease or otherwise dispose of or concur
in selling, leasing or otherwise disposing of Collateral. To facilitate the
foregoing powers, any such Receiver may, to the exclusion of all others,
including Debtor, enter upon, use and occupy all premises owned or occupied by
Debtor wherein Collateral may be situate, maintain Collateral upon such
premises, borrow money on a secured or unsecured basis and use Collateral
directly in carrying on Debtor's business or otherwise, as such Receiver shall,
in his discretion, determine. Except as may be otherwise directed by Secured
Party, all monies received from time to time by such Receiver in carrying out
his appointment shall be received in trust for and paid over to Secured Party.
Every such Receiver may, in the discretion of Secured Party, be vested with all
or any of the rights and powers of Secured Party.
(2) Upon default, Secured Party may, either directly or through
its agents or nominees, exercise all the powers and rights given to a Receiver
by virtue of the foregoing subclause (1).
(3) Secured Party may take possession of, collect, demand, sue on,
enforce, recover and receive Collateral and give valid and binding receipts and
discharges therefor and in respect thereof
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<PAGE> 9
and, upon default, Secured Party may sell, lease or otherwise dispose of
Collateral in such manner, at such time or otherwise dispose of Collateral in
such manner, at such time or times and place or places, for such consideration
and upon such terms and conditions as to Secured Party may seem reasonable.
(4) In addition to those rights granted herein and in any other
agreement now or hereafter in effect between Debtor and Secured Party and in
addition to any other rights Secured Party may have at law or in equity,
Secured Party shall have, both before and after default, all rights and
remedies of a secured party under the P.P.S.A. Provided always that Secured
Party shall not be liable or accountable for any failure to exercise its
remedies, take possession of, collect, enforce, realize, sell, lease or
otherwise dispose of Collateral or to institute proceedings for such purposes.
Furthermore, Secured Party shall have no obligation to take any steps to
preserve rights against prior parties to any Instrument or Chattel Paper,
whether Collateral or proceeds and whether or not in Secured Party's possession
and shall not be liable or accountable for failure to do so.
(5) Debtor acknowledges that Secured Party or any Receiver
appointed by it may take possession of Collateral wherever it may be located
and by any method permitted by law and Debtor agrees upon request from Secured
Party or any such Receiver to assemble and deliver possession of Collateral at
such place or places as directed.
(6) Debtor agrees to pay all costs, charges and expenses
reasonably incurred by Secured Party or any Receiver appointed by it, whether
directly or for services rendered (including reasonable solicitors' and
auditors' costs and other legal expenses and Receiver remuneration), in
operating Debtor's accounts, in preparing or enforcing this Security Agreement,
taking custody of, preserving, repairing, processing, preparing for disposition
and disposing of Collateral and in enforcing or collecting Obligations and all
such costs, charges and expenses together with any monies owing as a result of
any borrowing by Secured Party or any Receiver appointed by it, as permitted
hereby, shall be a first charge on the proceeds of realization, collection or
disposition of Collateral and shall be secured hereby.
(7) Unless the Collateral in question is perishable or unless
Secured Party believes on reasonable grounds that the Collateral in question
will decline speedily in value, Secured Party will give Debtor such notice of
the date, time and place of any public sale or of the date after which any
private disposition of Collateral is to be made, as may be required by the
P.P.S.A.
13. DISPOSITION OF MONIES
Subject to any applicable requirements of the P.P.S.A., all monies
collected or received by Secured Party pursuant to or in exercise of any right
it possesses with respect to Collateral shall be applied on account of the
Obligations in such manner as described in the Credit Agreement or, at the
option of Secured Party, may be held unappropriated in a collateral account or
released to Debtor,
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all without prejudice to the liability of Debtor or the rights of Secured Party
hereunder. Debtor hereby acknowledges that if the disposition of all or any
Collateral by Secured Party or a Receiver pursuant hereto does not give rise to
sufficient funds to pay all Obligations secured hereby Debtor shall remain
liable for any deficiency until all Obligations have been paid or satisfied in
full. Any surplus shall be accounted for as required by law.
14. MISCELLANEOUS
(1) Debtor hereby authorizes Secured Party to file such financing
statements and other documents and do such acts, matters and things (including
completing and adding schedules hereto identifying Collateral or any Permitted
Liens affecting Collateral or identifying the locations at which Debtor's
business is carried on and Collateral and records relating thereto are situate)
as Secured Party may deem appropriate to perfect and continue the Security
Interest, to protect and preserve Collateral and its Security Interest in the
Collateral and to realize upon the Security Interest and Debtor hereby
irrevocably constitutes and appoints each Vice-President from time to time of
Secured Party the true and lawful attorney of Debtor, with full power of
substitution, to do any of the foregoing in the name of Debtor whenever and
wherever it may be deemed necessary or expedient.
(2) Without limiting any other right of Secured Party, whenever
the Obligations are immediately due and payable or Secured Party has the right
to declare the Obligations to be immediately due and payable (whether or not it
has so declared), Secured Party may, in its sole discretion, set off against
the Obligations any and all monies then owed to Debtor by Secured Party in any
capacity, whether or not due, and Secured Party shall be deemed to have
exercised such right of set off immediately at the time of making its decision
to do so even though any charge therefor is made or entered on Secured Party's
records subsequent thereto.
(3) Upon Debtor's failure to perform any of its duties hereunder,
Secured Party may, but shall not be obligated to, perform any or all of such
duties, and Debtor shall pay to Secured Party, forthwith upon written demand
therefor, an amount equal to the expense incurred by Secured Party in so doing
plus interest thereon from the date such expense is incurred until it is paid
at the Overdue Rate.
(4) After default, Secured Party may grant extensions of time and
other indulgences, take and give up security, accept compositions, compound,
comprise, settle, grant releases and discharges and otherwise deal with Debtor,
debtors of Debtor, sureties and others and with Collateral and other security
as Secured Party may see fit without prejudice to the liability of Debtor or
Secured Party's right to hold and realize the Security Interest. Furthermore,
Secured Party may, after default, demand, collect and sue on Collateral in
either Debtor's or Secured Party's name, at Secured Party's option, and may
endorse Debtor's name on any and all cheques, commercial paper and any other
Instruments pertaining to or constituting Collateral.
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(5) No delay or omission by Secured Party in exercising any right
or remedy hereunder or with respect to any Obligations shall operate as a
waiver thereof or of any other right or remedy, and no single or partial
exercise thereof shall preclude any other or further exercise thereof or the
exercise of any other right or remedy. Furthermore, Secured Party may remedy
any default by Debtor hereunder or with respect to any Obligations in any
reasonable manner without waiving the default remedied and without waiving any
other prior or subsequent default by Debtor. All rights and remedies of
Secured Party granted or recognized herein are cumulative and may be exercised
at any time and from time to time independently or in combination.
(6) Debtor waives protest of any Instrument constituting
Collateral at any time held by Secured Party on which Debtor is in any way
liable and, subject to Clause 12(7), notice of any other action taken by
Secured Party.
(7) This Security Agreement shall enure to the benefit of and be
binding upon the parties hereto and their respective heirs, executors,
administrators, successors and assigns. In any action brought by an assignee
of this Security Agreement and the Security Interest or any part thereof to
enforce any rights hereunder, Debtor shall not assert against the assignee any
claim or defence which Debtor now has or hereafter may have against Secured
Party.
(8) Save for any schedules which may be added hereto pursuant to
the provisions hereof, no modification, variation or amendment of any provision
of this Security Agreement shall be made except by a written agreement executed
by the parties hereto and no waiver of any provision hereof shall be effective
unless in writing.
(9) This Security Agreement and the transactions evidenced hereby
shall be governed by and construed in accordance with the laws of the Province
of Ontario as the same may from time to time be in effect, including, where
applicable, the P.P.S.A.
(10) Subject to the requirements of Clauses 12(7) and 14(11)
hereof, whenever either party hereto is required or entitled to notify or
direct the other or to make a demand or request upon the other, such notice,
direction, demand or request shall be in writing shall be sufficiently given
only if delivered to the party for whom it is intended at the principal address
of such party herein set forth or as changed pursuant hereto or if sent by
prepaid registered mail addressed to the party for whom it is intended at the
principal address of such party herein set forth or as changed pursuant hereto.
Either party may notify the other pursuant hereto of any change in such party's
principal address to be used for the purposes hereof.
(11) This Security Agreement and the security afforded hereby is in
addition to and not in substitution for any other security now or hereafter
held by Secured Party and is, and is intended to be, a continuing Security
Agreement and shall remain in full force and effect until the Obligations have
been paid and satisfied in full.
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<PAGE> 12
(12) The headings used in this Security Agreement are for
convenience only and are not to be considered a part of this Security Agreement
and do not in any way limit or amplify the terms and provisions of this
Security Agreement.
(13) When the context so requires, the singular number shall be
read as if the plural were expressed and the provisions hereof shall be read
with all grammatical changes necessary dependent upon the person referred to
being a male, female, firm or corporation.
(14) If any provisions of this Security Agreement, as amended from
time to time, shall be deemed invalid or void, in whole or in part, by any
court of competent jurisdiction, the remaining terms and provisions of this
Security Agreement shall remain in full force and effect.
(15) Nothing herein contained shall in any way obligate Secured
Party to grant, continue, renew, extend time for payment of or accept anything
which constitutes or would constitute Obligations.
(16) The Security Interest created hereby is intended to attach
when this Security Agreement is signed by Debtor and delivered to Secured
Party.
15. COPY OF AGREEMENT
Debtor hereby acknowledges receipt of a copy of this Security
Agreement.
IN WITNESS WHEREOF Debtor has executed this Security Agreement this
24th day of June, 1997.
BMG NORTH AMERICA LIMITED
By:___________________________________
Name:
Title:
Agreed to and Accepted by:
FIRST CHICAGO NBD BANK, CANADA,
as the Affiliate designated by NBD Bank to make
Canadian Advances and as collateral agent for
the Lenders for the purpose of holding this security
as specified in the Credit Agreement
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<PAGE> 1
EXHIBIT 4.8
GUARANTOR SECURITY AGREEMENT
THIS SECURITY AGREEMENT, dated as of June 24, 1997 (this "Security
Agreement"), is made by LOBDELL EMERY CORPORATION, a Michigan corporation,
CREATIVE FABRICATION CORPORATION, a Tennessee corporation, WINCHESTER
FABRICATION CORPORATION, a Michigan Corporation, PARALLEL GROUP INTERNATIONAL,
INC., an Indiana corporation, LASERWELD INTERNATIONAL, L.L.C., an Indiana
limited liability company, CONCEPT MANAGEMENT CORPORATION, a Michigan
corporation, and LEWIS EMERY CAPITAL CORPORATION, a Michigan corporation (each
individually, a "Grantor" and, collectively, the "Grantors"), in favor of NBD
BANK, a Michigan banking corporation, as agent (in such capacity, the "Agent")
for the benefit of itself and the lenders (the "Lenders") now or hereafter
parties to the Credit Agreement described below.
RECITALS
A. Oxford Automotive, Inc. (the "Borrower") and the Borrowing Subsidiary
identified from time to time therein have entered into a Credit Agreement of
even date herewith (as amended or modified from time to time, including any
agreement entered into in substitution therefor, the "Credit Agreement"), with
the Lenders and the Agent pursuant to which the Lenders may make Advances (as
therein defined) to the Borrower and the Borrowing Subsidiary.
B. The Grantors are subsidiaries and affiliates of the Borrower, and are
engaged in common enterprises with the Borrower and other Grantors.
C. The Grantors have guaranteed the Borrower's and the Borrowing
Subsidiary's obligations under the Credit Agreement pursuant to a Guaranty
Agreement dated as of June __, 1997 (as hereafter amended, modified or
restated, the "Guaranty").
D. As a condition to the effectiveness of the obligation of the Lenders
under the Credit Agreement, each Grantor has agreed to grant to the Agent, for
the benefit of itself and the Lenders, a first-priority security interest,
subject only to security interests expressly permitted by the Credit Agreement,
in and to the Collateral hereinafter described.
AGREEMENTS
To secure (a) the prompt and complete payment of all indebtedness and
other obligations of the Borrower, the Borrowing Subsidiary or any Grantor now
or hereafter owing to the Lenders or the Agent under or on account of the
Credit Agreement, any Security Document or any Letter of Credit, notes or other
instruments issued to the Agent or any Lender pursuant thereto, (b) the
performance of the covenants under the Credit Agreement and the Security
Documents and any monies expended by the Lender in connection therewith, (c)
the prompt and complete payment of all obligations and performance of all
covenants of the Borrower and the Borrowing Subsidiary
<PAGE> 2
under any interest rate or currency swap agreements or similar transactions
with any Lender, (d) the prompt and complete payment of all indebtedness of any
Grantor under the Guaranty and (e) the prompt and complete payment of any and
all other indebtedness, obligations and liabilities of any kind of the
Borrower, the Borrowing Subsidiary or any Grantor to the Agent and the Lenders,
or any of them, in all cases, of any kind or nature, howsoever created or
evidenced and whether now or hereafter existing, direct or indirect (including
without limitation any participation interest acquired by any Lender in any
such indebtedness, obligations or liabilities of the Borrower, the Borrowing
Subsidiary or any Grantor to any other person and any interest rate swap, cap
or similar agreement), absolute or contingent, joint and/or several, secured or
unsecured, arising by operation of law or otherwise, and whether incurred by
the Borrower, the Borrowing Subsidiary or any Grantor as principal, surety,
endorser, guarantor, accommodation party or otherwise, including without
limitation all principal and all interest (including any interest accruing
subsequent to any petition filed by or against the Borrower, the Borrowing
Subsidiary or any Grantor under the U.S. Bankruptcy Code), indemnity and
reimbursement obligations, charges, expenses, fees, attorneys' fees and
disbursements and any other amounts owing thereunder (all of the aforesaid
indebtedness, obligations and liabilities of the Borrower, the Borrowing
Subsidiary and each Grantor being herein called the "Secured Obligations", and
all of the documents, agreements and instruments among the Debtors, the
Subsidiaries, the Agent, the Lenders, or any of them, evidencing or securing
the repayment of, or otherwise pertaining to, the Secured Obligations including
without limitation the Credit Agreement, the Notes, the Letters of Credit and
the Security Documents, being herein collectively called the "Operative
Documents"), for value received and pursuant to the Credit Agreement, each
Grantor hereby grants, assigns and transfers to the Agent for the benefit of
the Lenders a first-priority security interest, subject only to Permitted
Liens, in and to the following described property whether now owned or existing
or hereafter acquired or arising and wherever located (all of which is herein
collectively called the "Collateral"):
(a) All of such Grantor's present and future accounts, documents,
instruments, general intangibles and chattel paper, including, but without
limitation, all accounts receivable, all contract rights, all deposit accounts
and all monies and claims for money due or to become due to such Grantor, all
security held or granted to such Grantor, and all assets described in clause
(d) below;
(b) All of such Grantor's furniture, fixtures, machinery and equipment,
whether now owned or hereafter acquired, and wherever located, and whether used
by such Grantor or any other person, or leased by such Grantor to any person
and whether the interest of such Grantor is as owner, lessee or otherwise;
(c) All of such Grantor's present and future inventory of every type,
wherever located, including but not limited to raw materials, work in process,
finished goods and all inventory that is available for leasing or leased to
others by such Grantor;
(d) All other present and future assets of such Grantor (whether tangible
or intangible), including but not limited to all trademarks, trade names,
patents, industrial designs, masks, trade names, trade secrets, copyrights,
franchises, customer lists, computer programs, software, tax refund
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<PAGE> 3
claims, licenses and permits, and the good will associated therewith and all
federal, state, foreign and other applications and registrations therefor, all
reissues, divisions, continuations, renewals, extensions and
continuations-in-part thereof now or hereafter in effect, all income, license
royalties, damages and payments now and hereafter due or payable under and with
respect thereto, including, without limitation, any damages, proceeds or
payments for past or future infringements thereof and all income, royalties,
damages and payments under all licenses thereof, the right to sue for past,
present and future infringements thereof, all right, title and interest of such
Grantor as licensor under any of the foregoing whether now owned and existing
or hereafter arising, and all other rights and other interests corresponding
thereto throughout the world (all of the assets described in this clause (d)
collectively referred to as the "Intellectual Property");
(e) All books, records, files, correspondence, computer programs, tapes,
disks, cards, accounting information and other data of such Grantor related in
any way to the Collateral described in clauses (a), (b), (c) and (d) above,
including but not limited to any of the foregoing necessary to administer, sell
or dispose of any of the Collateral;
(f) All substitutions and replacements for, and all additions and
accessions to, any and all of the foregoing; and
(g) All products and all proceeds of any and all of the foregoing, and,
to the extent not otherwise included, all payments under insurance (whether or
not the Agent is the loss payee thereof), and any indemnity, warranty or
guaranty, payable by reason of loss or damage to or otherwise with respect to
any of the foregoing.
1. Representations, Warranties, Covenants and Agreements. Each Grantor
further represents and warrants to and covenants and agrees with the Agent for
the benefit of the Lenders as follows:
(a) Ownership of Collateral; Security Interest Priority. At the
time any Collateral becomes subject to a security interest of the Agent
hereunder, unless the Agent shall otherwise consent, such Grantor shall be
deemed to have represented and warranted that (i) such Grantor is the lawful
owner of such Collateral and has the right and authority to subject the same to
the security interest of the Agent hereunder; (ii) other than Permitted Liens
(as defined in the Credit Agreement) and lessors' interest with respect to any
security interest in any property leased by such Grantor as lessee, none of the
Collateral is subject to any Lien other than that in favor of the Agent for the
benefit of the Lenders and there is no effective financing statement or other
filing covering any of the Collateral on file in any public office, other than
in favor of the Agent for the benefit of the Lenders. This Security Agreement
creates in favor of the Agent for the benefit of the Lenders a valid
first-priority security interest, subject only to Permitted Liens, in the
Collateral enforceable against such Grantor and all third parties and securing
the payment of the Secured Obligations. All financing statements necessary to
perfect such security interest in the Collateral have been delivered by such
Grantor to the Agent for filing.
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<PAGE> 4
(b) Location of Offices, Records and Facilities. Such Grantor's
chief executive office and chief place of business and the office where such
Grantor keeps its records concerning its accounts, contract rights, chattel
paper, instruments, general intangibles and other obligations arising out of or
in connection with the sale or lease of goods or the rendering of services or
otherwise ("Receivables"), and all originals of all leases and other chattel
paper which evidence Receivables, is at the location listed on Schedule 1(b)(i)
hereto. Such Grantor will provide the Agent with prior written notice of any
proposed change in the location of its chief executive office. Such Grantor's
only other offices and facilities are at the locations set forth in Schedule
1(b)(ii) hereto. Such Grantor will provide the Agent with prior written notice
of any change in the locations of its other offices and the facilities at which
any assets of such Grantor are located. The tax identification number of
such Grantor is set forth on Schedule 1(b)(i). The name of such Grantor is
correctly set forth on the signature pages hereof, and such Grantor operates
under no other names. Such Grantor shall not change its name without the prior
written consent of the Agent.
(c) Location of Inventory, Fixtures, Machinery and Equipment. (i)
All Collateral consisting of inventory is, and will be, located at the
locations listed on Schedule 1(c)(i) hereto, and at no other locations without
the prior written consent of the Agent. (ii) All Collateral consisting of
fixtures, machinery or equipment, is, and will be, located at the locations
listed on Schedule 1(c)(ii) hereto, and at no other locations without the prior
written consent of the Agent. If the Collateral described in clauses (i) or
(ii) is kept at leased locations or warehoused, such Grantor has obtained
appropriate landlord's lien waivers or appropriate warehousemen's notices have
been sent, each satisfactory to the Agent, unless waived by the Agent.
(d) Liens, Etc. Such Grantor will keep the Collateral free at all
times from any and all liens, security interests or encumbrances other than
those described in paragraph 1(a)(ii) and those consented to in writing by the
Required Lenders. Such Grantor will not, without the prior written consent of
the Agent, sell, lease, license, transfer, assign or otherwise dispose of, or
permit or suffer to be sold, leased, licensed, transferred, assigned or
otherwise disposed of, any of the Collateral, except for, prior to an Event of
Default only (notwithstanding any other agreement), the following: inventory
sold in the ordinary course of business and other assets permitted to be sold,
leased, licensed, transferred, assigned or otherwise disposed under Section
5.2(f) of the Credit Agreement. The Agent or its attorneys may at any and all
reasonable times inspect the Collateral and for such purpose may enter upon any
and all premises where the Collateral is or might be kept or located.
(e) Insurance. Such Grantor shall keep the tangible Collateral
insured at all times against loss by theft, fire and other casualties. Said
insurance shall be issued by a company rated A or better by A.M. Best and shall
be in amounts sufficient to protect the Agent and the Lenders against any and
all loss or damage to the Collateral. The policy or policies which evidence
said insurance shall be delivered to the Agent upon request, shall contain a
lender loss payable clause in favor of the Agent for the benefit of the
Lenders, shall name the Agent for the benefit of the Lenders as an additional
insured, as its interest may appear, shall not permit amendment, cancellation
or termination without giving the Agent at least 30 days' prior written notice
thereof, and shall
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<PAGE> 5
otherwise be in form and substance satisfactory to the Agent. Reimbursement
under any liability insurance maintained by such Grantor pursuant to this
paragraph 1(e) may be paid directly to the person who shall have incurred
liability covered by such insurance, provided that if there is no Default or
Event of Default (whether before or after any event which caused any
reimbursement under any liability insurance) such Grantor may use the proceeds
of such insurance solely to repair or replace the property damaged if the
insurance proceeds are less than $500,000 and if there is any Event of Default
or Default, and if such reimbursement is greater than $500,000 or there is any
Default or Event of Default such amounts shall be paid to the Agent for
application to the Secured Obligations.
(f) Taxes, Etc. Such Grantor will pay promptly, and within the
time that they can be paid without interest or penalty, any taxes, assessments
and similar imposts and charges, not being contested in good faith, which are
now or hereafter may become a Lien upon any of the Collateral. If such Grantor
fails to pay any such taxes, assessments or other imposts or charges in
accordance with this paragraph, the Agent shall have the option to do so and
such Grantor agrees to repay forthwith all amounts so expended by the Agent
with interest at the Overdue Rate.
(g) Further Assurances. Such Grantor will do all acts and things
and will execute all financing statements and writings reasonably requested by
the Agent to establish, maintain and continue a perfected and valid security
interest of the Agent for the benefit of the Lenders in the Collateral, and
will promptly on demand pay all reasonable costs and expenses of filing and
recording all instruments, including the costs of any searches deemed necessary
by the Agent, to establish and determine the validity and the priority of the
Agent's security interests for the benefit of the Lenders. A carbon,
photographic or other reproduction of this Security Agreement or any financing
statement covering the Collateral shall be sufficient as a financing statement.
(h) List of Patents, Copyrights, Mask Works and Trademarks.
Attached hereto as Schedule 1(h)(i) is a list of all patents and patent
applications owned by such Grantor. Attached hereto as Schedule 1(h)(ii) is a
list of all registered copyrights and all mask works and applications therefor
owned by such Grantor. Attached hereto as Schedule 1(h)(iii) is a list of all
trademarks and service marks owned by such Grantor. If such Grantor at any
time owns any additional patents, copyrights, mask works, trademarks, service
marks or any applications therefor not listed on such schedules, such Grantor
shall give the Agent prompt written notice thereof and hereby authorizes the
Agent to modify this Agreement by amending Schedules 1(h)(i), 1(h)(ii) and
1(h)(iii) hereto to include all future patents, copyrights, mask works,
trademarks, service marks and applications therefor and agrees to execute all
further instruments and agreements, if any, if requested by the Agent to
evidence the Agent's interest for the benefit of the Lenders therein.
(i) Maintenance of Tangible Collateral. Such Grantor will cause
the tangible Collateral material to the conduct of its business to be
maintained and preserved in the same condition, repair and working order as
when new, ordinary wear and tear excepted, and in accordance with any
manufacturer's manual, and shall forthwith, or, in the case of any loss or
damage to any of the tangible Collateral as quickly as practicable after the
occurrence thereof, make
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<PAGE> 6
or cause to be made all repairs, replacements, and other improvements which are
necessary or desirable to such end. Such Grantor shall promptly furnish to the
Agent a statement respecting any loss or damage to any of the tangible
Collateral.
(j) Special Rights Regarding Receivables. The Agent or any of its
agents may, at any time and from time to time in its sole discretion and
irrespective of the existence of any event of default under this Security
Agreement, verify, directly with each person (collectively, the "Obligors")
which owes any Receivables to such Grantor, the Receivables in any manner. The
Agent or any of its agents may, at any time from time to time after and during
the continuance of an event of default under this Security Agreement, notify
the Obligors of the security interest of the Agent for the benefit of the
Lenders in the Collateral and/or direct such Obligors that all payments in
connection with such obligations and the Collateral be made directly to the
Agent in the Agent's name. If the Agent or any of its agents shall collect
such obligations directly from the Obligors, the Agent or any of its agents
shall have the right to resolve any disputes relating to returned goods
directly with the Obligors in such manner and on such terms as the Agent or any
of its agents shall deem appropriate. Such Grantor directs and authorizes any
and all of its present and future account debtors to comply with requests for
information from the Agent, the Agent's designees and agents and/or auditors,
relating to any and all business transactions between such Grantor and the
Obligors. Such Grantor further directs and authorizes all of its Obligors upon
receiving a notice or request sent by the Agent or the Agent's agents or
designees to pay directly to the Agent any and all sums of money or proceeds
now or hereafter owing by the Obligors to such Grantor, as provided in this
paragraph 1(j) and any such payment shall act as a discharge of any debt of
such Obligor to such Grantor in the same manner as if such payment had been
made directly to such Grantor. Such Grantor agrees to take any and all action
as the Agent may reasonably request to assist the Agent in exercising the
rights described in this paragraph 1(j).
(k) Maintenance of Intellectual Property and Other Intangible
Collateral. Such Grantor shall preserve and maintain all rights of such
Grantor and the Agent for the benefit of the Lenders in all material
Intellectual Property and all other material intangible Collateral, including
without limitation the payment of all maintenance fees and filing fees and the
taking of all appropriate action at such Grantor's expense to halt the
infringement of any of the Intellectual Property or other Collateral, provided
that, with respect to halting the infringement of any Intellectual Property or
other Collateral, such Grantor does not need to take all such appropriate
action if such Grantor has, or after Event of Default the Agent has, reasonably
determined that it is not in its best interest to demand or enforce cessation
of such infringement or other conduct because it is either not material or
because the adverse consequences to such Grantor would outweigh the benefits
gained by such demand or enforcement.
2. Events of Default. The occurrence of any Event of Default shall be
deemed an Event of Default under this Security Agreement.
3. Remedies. Upon the occurrence of any Event of Default, the Agent
shall have and may exercise any one or more of the rights and remedies provided
to it under this Security
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Agreement or any of the other Operative Documents or provided by law, including
but not limited to all of the rights and remedies of a secured party under the
Uniform Commercial Code, and each Grantor hereby agrees to assemble the
Collateral and make it available to the Agent at a place to be designated by
the Agent which is reasonably convenient to both parties, authorizes the Agent
to take possession of the Collateral with or without demand and with or without
process of law and to sell and dispose of the same at public or private sale
and to apply the proceeds of such sale to the costs and expenses thereof
(including reasonable attorneys' fees and disbursements, incurred by the Agent)
and then to the payment and satisfaction of the Secured Obligations. Any
requirement of reasonable notice shall be met if the Agent sends such notice to
such Grantors, by registered or certified mail, at least 5 days prior to the
date of sale, disposition or other event giving rise to a required notice. The
Agent may be the purchaser at any such sale. Each Grantor expressly authorizes
such sale or sales of the Collateral in advance of and to the exclusion of any
sale or sales of or other realization upon any other collateral securing the
Secured Obligations. The Agent shall have no obligation to preserve rights
against prior parties. Each Grantor hereby waives as to the Agent and each
Lender any right of subrogation or marshalling of such Collateral and any other
collateral for the Secured Obligations. To this end, each Grantor hereby
expressly agrees that any such collateral or other security of such Grantor or
any other party which the Agent or any Lender may hold, or which may come to
the Agent or any Lender's possession, may be dealt with in all respects and
particulars as though this Security Agreement were not in existence. The
parties hereto further agree that public sale of the Collateral by auction
conducted in any county in which any Collateral is located or in which the
Agent or such Grantor does business after advertisement of the time and place
thereof shall, among other manners of public and private sale, be deemed to be
a commercially reasonable disposition of the Collateral. Each Grantor shall be
liable for any deficiency remaining after disposition of the Collateral. Such
sale shall be on such terms as the Agent may determine, for cash or credit or
against future delivery in the discretion of the Agent.
4. Special Remedies Concerning Certain Collateral.
(a) Upon the occurrence of any Event of Default, each Grantor shall,
if requested to do so in writing, and to the extent so requested (i) promptly
collect and enforce payment of all amounts due such Grantor on account of, in
payment of, or in connection with, any of the Collateral, (ii) hold all
payments in the form received by such Grantor as trustee for the Agent and the
Lenders, without commingling with any funds belonging to such Grantor, and
(iii) forthwith deliver all such payments to the Agent with endorsement to the
Agent's order of any checks or similar instruments.
(b) Upon the occurrence of any event of default, each Grantor shall,
if requested to do so, and to the extent so requested, notify all Obligors and
other persons with obligations to such Grantor on account of or in connection
with any of the Collateral of the security interest of the Agent for the
benefit of the Lenders in the Collateral and direct such account debtors and
other persons that all payments in connection with such obligations and the
Collateral be made directly
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to the Agent. The Agent itself may, upon the occurrence of an Event of
Default, so notify and direct any such account debtor or other person that such
payments are to be made directly to the Agent.
(c) Upon the occurrence of any event of default, for purposes of
assisting the Agent in exercising its rights and remedies provided to it under
this Security Agreement, each Grantor (i) hereby irrevocably constitutes and
appoints the Agent its true and lawful attorney, for and in such Grantor's
name, place and stead, to collect, demand, receive, sue for, compromise, and
give good and sufficient releases for, any monies due or to become due on
account of, in payment of, or in connection with the Collateral, (ii) hereby
irrevocably authorizes the Agent to endorse the name of such Grantor, upon any
checks, drafts, or similar items which are received in payment of, or in
connection with, any of the Collateral, and to do all things necessary in order
to reduce the same to money, (iii) with respect to any Collateral, hereby
irrevocably assents to all extensions or postponements of the time of payment
thereof or any other indulgence in connection therewith, to each substitution,
exchange or release of Collateral, to the addition or release of any party
primarily or secondarily liable, to the acceptance of partial payments thereon
and the settlement, compromise or adjustment (including adjustment of insurance
payments) thereof, all in such manner and at such time or times as the Agent
shall deem advisable and (iv) hereby irrevocably authorizes the Agent to notify
the post office authorities to change the address for delivery of such
Grantor's mail to an address designated by the Agent, and the Agent may
receive, open and dispose of all mail addressed to such Grantor.
Notwithstanding any other provisions of this Security Agreement, it is
expressly understood and agreed that the Agent shall have no duty, and shall
not be obligated in any manner, to make any demand or to make any inquiry as to
the nature or sufficiency of any payments received by it or to present or file
any claim or take any other action to collect or enforce the payment of any
amounts due or to become due on account of or in connection with any of the
Collateral.
5. Remedies Cumulative. No right or remedy conferred upon or reserved to
the Agent under any Operative Document is intended to be exclusive of any other
right or remedy, and every right and remedy shall be cumulative and in addition
to every other right or remedy given hereunder or now or hereafter existing
under any applicable law. Every right and remedy of the Agent under any
Operative Document or under applicable law may be exercised from time to time
and as often as may be deemed expedient by the Agent. To the extent that it
lawfully may, each Grantor agrees that it will not at any time insist upon,
plead, or in any manner whatever claim or take any benefit or advantage of any
applicable present or future stay, extension or moratorium law, which may
affect observance or performance of any provisions of any Operative Document;
nor will it claim, take or insist upon any benefit or advantage of any present
or future law providing for the valuation or appraisal of any security for its
obligations under any Operative Document prior to any sale or sales thereof
which may be made under or by virtue of any instrument governing the same; nor
will such Grantor, after any such sale or sales, claim or exercise any right,
under any applicable law to redeem any portion of such security so sold.
6. Conduct No Waiver. No waiver shall be effective unless in writing
executed by the Agent and any waiver or forbearance on the part of the Agent in
enforcing any of its rights under this Security Agreement shall not operate as
a waiver of any other default or of the same default on a
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future occasion or of such right.
7. Governing Law; Consent to Jurisdiction; Definitions. This Security
Agreement is a contract made under, and shall be governed by and construed in
accordance with, the law of the State of Michigan applicable to contracts made
and to be performed entirely within such State and without giving effect to
choice of law principles of such State. Each Grantor agrees that any legal
action or proceeding with respect to this Security Agreement or the
transactions contemplated hereby may be brought in any court of the State of
Michigan, or in any court of the United States of America sitting in Michigan,
and each Grantor hereby submits to and accepts generally and unconditionally
the jurisdiction of those courts with respect to its person and property, and
irrevocably appoints the President of such Grantor, at such Grantor's address
set forth in the Credit Agreement, as its agent for service of process and
irrevocably consents to the service of process in connection with any such
action or proceeding by personal delivery to such agent or to such Grantor or
by the mailing thereof by registered or certified mail, postage prepaid to such
Grantor at its address set forth in the Credit Agreement. Nothing in this
paragraph shall affect the right of the Agent to serve process in any other
manner permitted by law or limit the right of the Agent to bring any such
action or proceeding against such Grantor or its property in the courts of any
other jurisdiction. Each Grantor hereby irrevocably waives any objection to
the laying of venue of any such suit or proceeding in the above described
courts. Terms used but not defined herein shall have the respective meanings
ascribed thereto in the Credit Agreement. Unless otherwise defined herein or
in the Credit Agreement, terms used in Article 9 of the Uniform Commercial Code
in the State of Michigan are used herein as therein defined on the date hereof.
The headings of the various subdivisions hereof are for convenience of
reference only and shall in no way modify any of the terms or provisions
hereof.
8. Notices. All notices, demands, requests, consents and other
communications hereunder shall be delivered in the manner described in the
Credit Agreement.
9. Rights Not Construed as Duties. The Agent and the Lenders neither
assume nor shall any of them have any duty of performance or other
responsibility under any contracts in which the Agent has or obtains, for the
benefit of the Lenders, a security interest hereunder. If any Grantor fails to
perform any agreement contained herein, the Agent may but is in no way
obligated to itself perform, or cause performance of, such agreement, and the
reasonable expenses of the Agent incurred in connection therewith shall be
payable by such Grantors under paragraph 12 hereof. The powers conferred on
the Agent hereunder are solely to protect its interests for the benefit of the
Lenders in the Collateral and shall not impose any duty upon it to exercise any
such powers. Except for the safe custody of any Collateral in its possession
and accounting for monies actually received by it hereunder, the Agent shall
have no duty as to any Collateral or as to the taking of any necessary steps to
preserve rights against prior parties or any other rights pertaining to any
Collateral.
10. Amendments. None of the terms and provisions of this Security
Agreement may be modified or amended in any way except by an instrument in
writing executed by each of the parties hereto.
9
<PAGE> 10
11. Severability. If any one or more provisions of this Security
Agreement should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected, impaired or prejudiced thereby.
12. Expenses. (a) Each Grantor agrees, jointly and severally, to
indemnify the Agent and the Lenders from and against any and all claims, losses
and liabilities growing out of or resulting from this Security Agreement
(including, without limitation, enforcement of this Security Agreement), except
claims, losses or liabilities resulting from the Agent's or any Lender's gross
negligence or willful misconduct.
(b) Each Grantor will, upon demand, pay to the Agent an amount of any
and all reasonable expenses, including the reasonable fees and disbursements of
its counsel and of any experts and agents, which the Agent may incur in
connection with (i) the administration of this Security Agreement, (ii) the
custody, preservation, use or operation of, or the sale of, collection from or
other realization upon, any of the Collateral, (iii) the exercise or
enforcement of any of the rights of the Agent hereunder or under the Operative
Documents, or (iv) the failure of any Grantor to perform or observe any of the
provisions hereof.
13. Successors and Assigns; Termination. This Security Agreement shall
create a continuing security interest in the Collateral and shall be binding
upon each Grantor, its successors and assigns, and inure, together with the
rights and remedies of the Agent hereunder, to the benefit of the Agent, the
Lenders and their respective successors, transferees and assigns. Upon the
payment in full in immediately available funds of all of the Secured
Obligations and the termination of all commitments to lend under the Operative
Documents, the security interest granted hereunder shall terminate and all
rights to the Collateral shall revert to such Grantors.
14. Waiver of Jury Trial. The Agent and the Lenders, in accepting this
Security Agreement, and each Grantor, after consulting or having had the
opportunity to consult with counsel, knowingly, voluntarily and intentionally
waive any right any of them may have to a trial by jury in any litigation based
upon or arising out of this Security Agreement or any related instrument or
agreement or any of the transactions contemplated by this Security Agreement or
any course of conduct, dealing, statements (whether oral or written) or actions
of any of them. Neither the Agent, the Lenders nor any Grantor shall seek to
consolidate, by counterclaim or otherwise, any such action in which a jury
trial has been waived with any other action in which a jury trial cannot be or
has not been waived. These provisions shall not be deemed to have been
modified in any respect or relinquished by the Agent, any Lender or any Grantor
except by a written instrument executed by each of them.
IN WITNESS WHEREOF, the Grantors have caused this Security Agreement to be
duly executed as of the day and year first set forth above.
10
<PAGE> 11
LOBDELL EMERY CORPORATION
By: _________________________________
Its: _______________________________
CREATIVE FABRICATION CORPORATION
By: _________________________________
Its: _______________________________
WINCHESTER FABRICATION CORPORATION
By: _________________________________
Its: _______________________________
PARALLEL GROUP INTERNATIONAL, INC.
By: _________________________________
Its: _______________________________
LASERWELD INTERNATIONAL, L.L.C.
By: _________________________________
Its: _______________________________
CONCEPT MANAGEMENT CORPORATION
By: _________________________________
11
<PAGE> 12
Its: _______________________________
12
<PAGE> 13
LEWIS EMERY CAPITAL CORPORATION
By: _________________________________
Its: _______________________________
Accepted and Agreed:
NBD BANK, as Agent on behalf
of the Lenders
By: ___________________________________
Its: _________________________________
13
<PAGE> 14
CERTIFICATE OF ACKNOWLEDGMENT
STATE OF MICHIGAN )
) ss.
COUNTY OF WAYNE )
The foregoing Security Agreement was acknowledged before me on this _____
day of June, 1997, by John H. Ferguson, the Assistant Treasurer of Lobdell
Emery Corporation, a Michigan corporation, on behalf of said corporation.
(Seal) Notary Public
____________________________________
STATE OF MICHIGAN )
) ss.
COUNTY OF WAYNE )
The foregoing Security Agreement was acknowledged before me on this _____
day of June, 1997, by John H. Ferguson, the Assistant Treasurer of
Creative Fabrication Corporation, a Tennessee corporation, on behalf of said
corporation.
(Seal) Notary Public
____________________________________
14
<PAGE> 15
STATE OF MICHIGAN )
) ss.
COUNTY OF WAYNE )
The foregoing Security Agreement was acknowledged before me on this _____
day of June, 1997, by ____________________, the ___________________ of
Winchester Fabrication Corporation, a Michigan corporation, on behalf of said
corporation.
(Seal) Notary Public
____________________________________
STATE OF MICHIGAN )
) ss.
COUNTY OF WAYNE )
The foregoing Security Agreement was acknowledged before me on this _____
day of June, 1997 by ____________________, the ___________________ of
Parallel Group International, Inc., an Indiana corporation, on behalf of said
corporation.
(Seal) Notary Public
____________________________________
15
<PAGE> 16
STATE OF MICHIGAN )
) ss.
COUNTY OF WAYNE )
The foregoing Security Agreement was acknowledged before me on this _____
day of June, 1997 by John H. Ferguson, the Assistant Treasurer of Lobdell
Emery Corporation, the sole member of Laserweld International, L.L.C., an
Indiana limited liability company, on behalf of said limited liability company.
(Seal) Notary Public
____________________________________
STATE OF MICHIGAN )
) ss.
COUNTY OF WAYNE )
The foregoing Security Agreement was acknowledged before me on this _____
day of June, 1997 by John H. Ferguson, the Assistant Treasurer of Concept
Management Corporation, a Michigan corporation, on behalf of said corporation.
(Seal) Notary Public
____________________________________
16
<PAGE> 17
STATE OF MICHIGAN )
) ss.
COUNTY OF WAYNE )
The foregoing Security Agreement was acknowledged before me on this _____
day of June, 1997 by ____________________, the ___________________ of
Lewis Emery Capital Corporation, a Michigan corporation, on behalf of said
corporation.
(Seal) Notary Public
____________________________________
STATE OF MICHIGAN )
) ss.
COUNTY OF WAYNE )
The foregoing Security Agreement was acknowledged before me on this _____
day of June, 1997, by ____________________, the ___________________ of NBD
Bank, a Michigan banking corporation, as Agent, on behalf of said corporation.
(Seal) Notary Public
____________________________________
17
<PAGE> 1
EXHIBIT 4.9
GUARANTEE
This Agreement of Guarantee, dated the 24th day of June, 1997
is by 976459 Ontario Limited, a corporation incorporated pursuant to the laws
of the Province of Ontario, 829500 Ontario Limited, a corporation incorporated
pursuant to the laws of the Province of Ontario, and BMG Holdings, Inc., a
corporation incorporated pursuant to the laws of the Province of Ontario
(individually a "Guarantor", and collectively the "Guarantors") in favour of
the Lenders (as defined below) and NBD Bank, as Agent for the Lenders (in such
capacity, the "Agent").
RECITALS
A. Oxford Automotive, Inc., a corporation incorporated
pursuant to the laws of the State of Michigan (the "Company") and BMG North
America Limited, a corporation incorporated pursuant to the laws of the
Province of Ontario or any other subsidiary designated as a Borrowing
Subsidiary (the "Borrowing Subsidiary") have entered into a Credit Agreement
dated as of the date hereof (as amended or modified from time to time, the
"Credit Agreement") among the lenders party thereto from time to time (the
"Lenders") and the Agent.
B. Each of the Guarantors has reviewed the Credit
Agreement, the Notes, the Security Documents, any Rate Hedging Agreements and
all other documents, agreements, instruments and certificates furnished by or
on behalf of the Company and the Borrowing Subsidiary in connection therewith
at any time, including without limitation all interest rate swap, cap and
similar agreements with any Lender (collectively, the "Swap Documents") and
together with any other documents, agreements, instruments and certificates
evidencing or otherwise pertaining to the Obligations (as hereinafter defined)
(collectively, the "Loan Documents"), and each of the Guarantors has determined
that it is in its interest and to its financial benefit that the parties to the
Loan Documents enter into the transactions contemplated hereby.
C. It is a condition to the Credit Agreement that the
Guarantors enter into this Agreement in order to assist the Company and the
Borrowing Subsidiary, for the benefit of the Company, the Borrowing Subsidiary
and the Guarantors.
In consideration of the premises hereof, the Guarantors
covenant and agree with the Agent and the Lenders as follows:
1. Guarantee
Each of the Guarantors, for good and valuable consideration
received, hereby absolutely, irrevocably and unconditionally binds and obliges
itself solidarily with the Company and the Borrowing Subsidiary in favour of
each of the Lenders and the Agent, for the fulfilment when due, whether at
stated maturity, by acceleration or otherwise, of any and all existing and
future indebtedness, obligation and liability of every kind, nature and
character, direct or indirect,
<PAGE> 2
absolute or contingent (including without limitation all indebtedness,
obligations and liabilities pursuant to any Loans, Letters of Credit, Bankers'
Acceptances and other Advances and all interest, fees, and other charges
thereon and all renewals, extensions and modifications thereof and all fees,
costs and expenses incurred by the Agent or any of the Lenders in connection
with the documentation, administration, collection or enforcement thereof), of
the Company and the Borrowing Subsidiary to the Agent or any of the Lenders or
any branch, subsidiary or affiliate thereof, howsoever and whensoever created,
arising, evidenced or acquired pursuant to the Credit Agreement, the Notes, the
Security Documents, any Rate Hedging Agreements, the Swap Documents or any
other Loan Document (all such indebtedness, obligations and liabilities being
herein collectively called the "OBLIGATIONS"). Each of the Guarantors shall be
considered as primarily liable to the Lenders and the Agent, and shall not be
released nor its liability hereunder limited or lessened by any variation or
departure from the provisions of this Agreement nor by the Lenders or the
Agent's granting time, taking or giving up securities, accepting compositions,
granting releases or discharges, or otherwise dealing with any Person, nor by
any other thing whatsoever, either of a like nature to the foregoing or
otherwise whereby as guarantor only, a Guarantor would or might be released,
and none of the Lenders or the Agent shall be bound to exhaust its recourses
against the Company, the Borrowing Subsidiary or any other Person or any
security it may hold before being entitled to payment from each of the
Guarantors. Each of the Guarantors hereby expressly waives all of its rights
to the benefits of division and of discussion. The Guarantors covenant and
agree that until such time as each of the Lenders and the Agent shall have been
indefeasibly paid in full all Obligations, no payment will be taken, demanded,
received or accepted by a Guarantor of or on account of the principal amount of
or interest of any indebtedness incurred by a Guarantor in fulfilment of its
obligations under this Agreement or on any other indebtedness payable by the
Company or the Borrowing Subsidiary, each of the Guarantors agreeing that this
said indebtedness shall, at all times, be fully subordinated to and rank in
time and right of payment junior to the Obligations, and each of the Guarantors
hereby renounces any rights of compensation and/or set-off and/or counterclaim.
Each of the Guarantors hereby expressly postpones all of its rights to the
benefit of subrogation until full repayment of the Obligations and the
termination of all Letters of Credit, Acceptances and Commitments. Each of the
Guarantors hereby determines and agrees that the execution, delivery and
performance of this Agreement by such Guarantor is necessary and convenient to
the conduct, promotion or attainment of the business of the Company, the
Borrowing Subsidiary and the Guarantor and in furtherance of the corporate
purposes of the Guarantor.
2. Guarantee Absolute
Each of the Guarantors guarantees that the Obligations will be
paid strictly in accordance with the terms of this Agreement, regardless of any
Law, regulation, or order now or hereafter in effect in any jurisdiction
affecting any of such terms or the rights of the Agent or the Lenders with
respect thereto. The liability of each of the Guarantors under this Agreement
shall be absolute and unconditional irrespective of:
(i) any lack of validity or enforceability of any
provisions of any Loan Document or any other agreement or
instrument relating to this Agreement;
-2-
<PAGE> 3
(ii) any change in the time, manner or place of payment of
or in any other term of, all or any of the Obligations or any
other amendment, restatement or waiver of or any consent to
departure from this Agreement;
(iii) any exchange, release or non-perfection of any
collateral or any release or amendment or waiver of or consent
to departure from any other guarantee, for all or any of the
Obligations;
(iv) the reconstruction, reorganization, consolidation,
amalgamation or merger of the Company or the Borrowing
Subsidiary with or into any other Person, or the transfer,
sale, lease or other disposition by the Company or the
Borrowing Subsidiary of all or substantially all of its assets
or business to any other Person, whether or not affected in
compliance with the provisions of this Agreement; or
(v) any other circumstance which might otherwise
constitute a defence available to, or a discharge of, the
Company, the Borrowing Subsidiary or a guarantor.
The liability of each of the Guarantors under this Agreement
shall continue to be effective or be reinstated, as the case may be, if at any
time any payment of any of the Obligations is rescinded or must otherwise be
returned by the Agent or any Lender upon the insolvency, bankruptcy or
reorganization or otherwise of the Company or the Borrowing Subsidiary, all as
though such payment had not been made.
3. Waiver
Each of the Guarantors hereby waives promptness, diligence,
notice of acceptance and any other notice with respect to any of the
Obligations and its liability hereunder and any requirement that the Agent or
any Lender protect, secure, perfect or insure any Lien, if any, or any property
subject thereto or exhaust any right or take any action against the Company or
the Borrowing Subsidiary or any other Person or any collateral.
4. Continuing Guarantee
The obligations of each of the Guarantors under this Article
Agreement shall be a continuing guarantee and shall:
(vi) remain in full force and effect until payment in full
of the Obligations and all other amounts payable under this
Agreement;
(vii) be binding upon each of the Guarantors, their
successors and assigns; and
(viii) enure to the benefit of and be enforceable by the
Lenders, the Agent and their respective successors,
transferees and assigns.
-3-
<PAGE> 4
Without limiting the generality of the foregoing clause (iii),
upon any assignment by any Lender of all or any part of any interest in this
Agreement by it to any other Person in accordance with the terms of the Loan
Documents, such other Person shall thereupon become vested with all the rights
in respect thereof granted to such Lender herein or otherwise.
5. Miscellaneous
(a) This Agreement shall be construed in accordance with
and governed by the laws of the Province of Ontario.
(b) Each payment to be made by the Guarantors under this
Agreement in respect of the Obligations shall be made without set-off or
counterclaim and regardless of any other condition or contingency.
(c) If any one or more provisions of this Agreement
should be invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein shall
not in any way be affected, impaired, prejudiced or disturbed thereby. If at
any time any portion of the obligations of any Guarantor under this Agreement
shall be determined by a court of competent jurisdiction to be invalid,
unenforceable or avoidable, the remaining portion of the obligations of such
Guarantor under this Agreement shall not in any way be affected, impaired,
prejudiced or disturbed thereby and shall remain valid and enforceable to the
fullest extent permitted by applicable law.
(d) The amounts payable under this Agreement are payable
free and clear and without deduction for any and all present and future taxes,
levies, imposts, deductions, charges and withholdings of any federal,
provincial, local, foreign or other governmental authority. Any such amount
deducted or withheld from such payment shall not be deemed a realization of any
amount due hereunder. Each Guarantor agrees to pay to the Agent and the
Lenders, upon demand, additional amounts sufficient to compensate each of them
for such amounts deducted or withheld. A detailed statement as to the amounts
deducted or withheld, prepared in good faith and submitted by the Agent or any
Lender to the Guarantor, shall be conclusive and binding for all purposes,
absent manifest error in computation.
(e) As a separate, additional and continuing obligation,
each Guarantor unconditionally and irrevocably undertakes and agrees with the
Agent and the Lenders that, should the Obligations not be recoverable from the
Guarantor under Section 1 for any reason whatsoever (including, without
limitation, by reason of any provision of any Loan Document being or becoming
void, unenforceable, or otherwise invalid under any applicable law) then,
notwithstanding any knowledge thereof by the Agent or any of the Lenders at any
time, each Guarantor as sole, original and independent obligor, upon demand by
the Agent, will make payment to the Agent of the Obligations by way of a full
indemnity in such currency and otherwise in such manner as is provided in the
Credit Agreement or such other agreement or instrument, as the case may be.
-4-
<PAGE> 5
(f) Each of the Guarantors, after consulting or after
having the opportunity to consult with counsel, knowingly, voluntarily and
intentionally waives any right any of them may have to a trial by jury in any
litigation based upon or arising out of this Agreement or any related
instrument or agreement or any of the transactions contemplated by this
Agreement or any course of conduct, dealing, statements or actions of any of
them. Guarantors shall not seek to consolidate, by counterclaim or otherwise,
any such action in which a jury trial has been waived with any other action in
which a jury trial cannot be or has not been waived.
(g) No amendment or waiver of any provision of this
Agreement or consent to any departure by any Guarantor therefrom shall be
effective unless the same shall be in writing and signed by the Guarantor, the
Required Lenders and the Agent, and then such amendment, waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given.
(h) Each Guarantor agrees to be bound by all covenants
and other agreements applicable to such Guarantor contained in the Credit
Agreement or any other Loan Document, and hereby agrees with and makes all
representations and warranties made by the Company in the Credit Agreement with
respect to such Guarantor. Capitalized terms used but not defined herein shall
have the meaning ascribed thereto in the Credit Agreement.
976459 ONTARIO LIMITED
By: John H. Ferguson
-----------------------------------
Name: John H. Ferguson
Title: Treasurer
829500 ONTARIO LIMITED
By: John H. Ferguson
-----------------------------------
Name: John H. Ferguson
Title: Treasurer
BMG HOLDINGS, INC.
By: John H. Ferguson
-----------------------------------
Name: John H. Ferguson
Title Treasurer
-5-
<PAGE> 1
EXHIBIT 4.10
GUARANTEE
This Agreement of Guarantee, dated the 24th day of June, 1997
is by BMG North America Limited, a corporation incorporated pursuant to the
laws of the Province of Ontario (the "Guarantor") in favour of the Lenders (as
defined below) and NBD Bank, as Agent for the Lenders (in such capacity, the
"Agent").
RECITALS
A. Oxford Automotive, Inc., a corporation incorporated
pursuant to the laws of the State of Michigan (the "Company") and the Guarantor
or any other Borrowing Subsidiary designated as such therein have entered into
a Credit Agreement dated as of the date hereof (as amended or modified from
time to time, the "Credit Agreement") among the lenders party thereto from time
to time (the "Lenders") and the Agent.
B. The Guarantor has reviewed the Credit Agreement, the
Notes, the Security Documents and all other documents, agreements, instruments
and certificates furnished by or on behalf of the Company in connection
therewith at any time, including without limitation all interest rate swap, cap
and similar agreements with any lender (collectively, the "Swap Documents") and
together with any other documents, agreements, instruments and certificates
evidencing or otherwise pertaining to the Obligations (as hereinafter defined)
(collectively, the "Loan Documents"), and the Guarantor has determined that it
is in its interest and to its financial benefit that the parties to the Loan
Documents enter into the transactions contemplated hereby.
C. It is a condition to the Credit Agreement that the
Guarantor enter into this Agreement in order to assist the Company, for the
mutual benefit of the Company and the Guarantor.
In consideration of the premises hereof, the Guarantor
covenants and agrees with the Agent and the Lenders as follows:
1. Guarantee
Guarantor, for good and valuable consideration received,
hereby absolutely, irrevocably and unconditionally binds and obliges itself
solidarily with the Company in favour of each of the Lenders and the Agent, for
the fulfilment when due, whether at stated maturity, by acceleration or
otherwise, of any and all existing and future indebtedness, obligation and
liability of every kind, nature and character, direct or indirect, absolute or
contingent (including without limitation all indebtedness, obligations and
liabilities pursuant to any Loans, Letters of Credit, Bankers' Acceptances and
other Advances and all interest, fees, and other charges thereon and all
renewals, extensions and modifications thereof and all fees, costs and expenses
incurred by the Agent or any of the Lenders in connection with the
documentation, administration, collection or enforcement thereof), of the
Company to the Agent or any of the Lenders or any branch, subsidiary or
affiliate thereof, howsoever and whensoever created, arising, evidenced or
acquired
<PAGE> 2
pursuant to the Credit Agreement, the Notes, the Security Documents, any Rate
Hedging Agreements, the Swap Documents or any other Loan Document (all such
indebtedness, obligations and liabilities being herein collectively called the
"OBLIGATIONS"). Guarantor shall be considered as primarily liable to the
Lenders and the Agent, and shall not be released nor its liability hereunder
limited or lessened by any variation or departure from the provisions of this
Agreement nor by the Lenders or the Agent's granting time, taking or giving up
securities, accepting compositions, granting releases or discharges, or
otherwise dealing with any Person, nor by any other thing whatsoever, either of
a like nature to the foregoing or otherwise whereby as guarantor only,
Guarantor would or might be released, and none of the Lenders or the Agent
shall be bound to exhaust its recourses against the Company or any other Person
or any security it may hold before being entitled to payment from the
Guarantor. Guarantor hereby expressly waives all of its rights to the benefits
of division and of discussion. Guarantor covenants and agrees that until such
time as each of the Lenders and the Agent shall have been indefeasibly paid in
full all Obligations, no payment will be taken, demanded, received or accepted
by Guarantor of or on account of the principal amount of or interest of any
indebtedness incurred by Guarantor in fulfilment of its obligations under this
Agreement or on any other indebtedness payable by the Company, Guarantor
agreeing that this said indebtedness shall, at all times, be fully subordinated
to and rank in time and right of payment junior to the Obligations, and
Guarantor hereby renounces any rights of compensation and/or set-off and/or
counterclaim. Guarantor hereby expressly postpones all of its rights to the
benefit of subrogation until full repayment of the Obligations and the
termination of all Letters of Credit, Acceptances and Commitments. Guarantor
agrees that the execution, delivery and performance of this Agreement by such
Guarantor is necessary and convenient to the conduct, promotion or attainment
of the business of the Company and the Guarantor and in furtherance of the
corporate purposes of the Guarantor.
2. Guarantee Absolute
Guarantor guarantees that the Obligations will be paid
strictly in accordance with the terms of this Agreement, regardless of any Law,
regulation, or order now or hereafter in effect in any jurisdiction affecting
any of such terms or the rights of the Agent or the Lenders with respect
thereto. The liability of Guarantor under this Agreement shall be absolute and
unconditional irrespective of:
(i) any lack of validity or enforceability of any
provisions of any Loan Document or any other agreement or
instrument relating to this Agreement;
(ii) any change in the time, manner or place of payment of
or in any other term of, all or any of the Obligations or any
other amendment, restatement or waiver of or any consent to
departure from this Agreement;
(iii) any exchange, release or non-perfection of any
collateral or any release or amendment or waiver of or consent
to departure from any other guarantee, for all or any of the
Obligations;
-2-
<PAGE> 3
(iv) the reconstruction, reorganization, consolidation,
amalgamation or merger of the Company with or into any other
Person, or the transfer, sale, lease or other disposition by
the Company of all or substantially all of its assets or
business to any other Person, whether or not affected in
compliance with the provisions of this Agreement; or
(v) any other circumstance which might otherwise
constitute a defence available to, or a discharge of, the
Company or a guarantor.
The liability of Guarantor under this Agreement shall continue
to be effective or be reinstated, as the case may be, if at any time any
payment of any of the Obligations is rescinded or must otherwise be returned by
the Agent or any Lender upon the insolvency, bankruptcy or reorganization of
the Company or otherwise, all as though such payment had not been made.
3. Waiver
Guarantor hereby waives promptness, diligence, notice of
acceptance and any other notice with respect to any of the Obligations and its
liability hereunder and any requirement that the Agent or any Lender protect,
secure, perfect or insure any Lien, if any, or any property subject thereto or
exhaust any right or take any action against the Company or any other Person or
any collateral.
4. Continuing Guarantee
The obligations of Guarantor under this Article Agreement
shall be a continuing guarantee and shall:
(vi) remain in full force and effect until payment in full
of the Obligations and all other amounts payable under this
Agreement;
(vii) be binding upon Guarantor, its successors and
assigns; and
(viii) enure to the benefit of and be enforceable by the
Lenders, the Agent and their respective successors,
transferees and assigns.
Without limiting the generality of the foregoing clause (iii),
upon any assignment by any Lender of all or any part of any interest in this
Agreement by it to any other Person in accordance with the terms of the Loan
Documents, such other Person shall thereupon become vested with all the rights
in respect thereof granted to such Lender herein or otherwise.
5. Miscellaneous
(a) This Agreement shall be construed in accordance with
and governed by the laws of the Province of Ontario.
-3-
<PAGE> 4
(b) Each payment to be made by Guarantor under this
Agreement in respect of the Obligations shall be made without set-off or
counterclaim and regardless of any other condition or contingency.
(c) If any one or more provisions of this Agreement
should be invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein shall
not in any way be affected, impaired, prejudiced or disturbed thereby. If at
any time any portion of the obligations of Guarantor under this Agreement shall
be determined by a court of competent jurisdiction to be invalid, unenforceable
or avoidable, the remaining portion of the obligations of such Guarantor under
this Agreement shall not in any way be affected, impaired, prejudiced or
disturbed thereby and shall remain valid and enforceable to the fullest extent
permitted by applicable law.
(d) The amounts payable under this Agreement are payable
free and clear and without deduction for any and all present and future taxes,
levies, imposts, deductions, charges and withholdings of any federal,
provincial, local, foreign or other governmental authority. Any such amount
deducted or withheld from such payment shall not be deemed a realization of any
amount due hereunder. Guarantor agrees to pay to the Agent and the Lenders,
upon demand, additional amounts sufficient to compensate each of them for such
amounts deducted or withheld. A detailed statement as to the amounts deducted
or withheld, prepared in good faith and submitted by the Agent or any Lender to
the Guarantor, shall be conclusive and binding for all purposes, absent
manifest error in computation.
(e) As a separate, additional and continuing obligation,
Guarantor unconditionally and irrevocably undertakes and agrees with the Agent
and the Lenders that, should the Obligations not be recoverable from the
Guarantor under Section 1 for any reason whatsoever (including, without
limitation, by reason of any provision of any Loan Document being or becoming
void, unenforceable, or otherwise invalid under any applicable law) then,
notwithstanding any knowledge thereof by the Agent or any of the Lenders at any
time, Guarantor as sole, original and independent obligor, upon demand by the
Agent, will make payment to the Agent of the Obligations by way of a full
indemnity in such currency and otherwise in such manner as is provided in the
Credit Agreement or such other agreement or instrument, as the case may be.
(f) Guarantor, after consulting or after having the
opportunity to consult with counsel, knowingly, voluntarily and intentionally
waive any right any of them may have to a trial by jury in any litigation based
upon or arising out of this Agreement or any related instrument or agreement or
any of the transactions contemplated by this Agreement or any course of
conduct, dealing, statements or actions of any of them. Guarantor shall not
seek to consolidate, by counterclaim or otherwise, any such action in which a
jury trial has been waived with any other action in which a jury trial cannot
be or has not been waived.
(g) No amendment or waiver of any provision of this
Agreement or consent to any departure by Guarantor therefrom shall be effective
unless the same shall be in writing and
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<PAGE> 5
signed by the Guarantor, the Required Lenders and the Agent, and then such
amendment, waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given.
(h) Guarantor agrees to be bound by all covenants and
other agreements applicable to such Guarantor contained in the Credit Agreement
or any other Loan Document, and hereby agrees with and makes all
representations and warranties made by the Company in the Credit Agreement with
respect to Guarantor. Capitalized terms used but not defined herein shall have
the meaning ascribed thereto in the Credit Agreement.
BMG NORTH AMERICA LIMITED
By: John H. Ferguson
--------------------------------
Name: John H. Ferguson
Title: Treasurer
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<PAGE> 1
EXHIBIT 4.11
GUARANTY AGREEMENT
THIS GUARANTY AGREEMENT, dated as of June 24, 1997 (this "Guaranty"),
is made by LOBDELL EMERY CORPORATION, a Michigan corporation, WINCHESTER
FABRICATION CORPORATION, a Michigan corporation, CREATIVE FABRICATION
CORPORATION, a Tennessee corporation, PARALLEL GROUP INTERNATIONAL, INC., an
Indiana corporation, LASERWELD INTERNATIONAL, L.L.C., an Indiana limited
liability company, CONCEPT MANAGEMENT CORPORATION, a Michigan corporation, and
LEWIS EMERY CAPITAL CORPORATION, a Michigan corporation (the foregoing are
hereinafter sometimes referred to individually as a "Guarantor" and
collectively as the "Guarantors"), in favor of the lenders (the "Lenders")
which are parties to the Credit Agreement hereinafter defined and NBD BANK, a
Michigan banking corporation, as agent (in such capacity, the "Agent") for such
Lenders under the Credit Agreement.
RECITALS
A. Oxford Automotive, Inc., a Michigan corporation (the
"Borrower") and BMG North America Limited or any other subsidiary designated as
a Borrowing Subsidiary under the Credit Agreement identified herein (the
"Borrowing Subsidiary") have entered into a Credit Agreement, dated as of June
24, 1997 (as amended or modified from time to time, including any agreement
entered into in substitution therefor, the "Credit Agreement"), with the
Lenders and the Agent pursuant to which the Lenders may make Advances to the
Borrower and the Borrowing Subsidiary.
B. As a condition to the effectiveness of the obligations of the
Lenders under the Credit Agreement, each Guarantor is required to guarantee,
among other things, the obligations of the Borrower and the Borrowing
Subsidiary in respect of the Advances and other obligations of the Borrower and
the Borrowing Subsidiary under the Operative Documents (as hereinafter
defined).
C. Each Guarantor has reviewed the Credit Agreement, the Notes,
the Letters of Credit and all other documents, agreements, instruments and
certificates furnished by or on behalf of the Borrower and the Borrowing
Subsidiary in connection therewith, including without limitation all interest
rate swap, cap and similar agreements with any Lender (collectively, the "Swap
Documents") (all of the foregoing, as amended or modified from time to time and
together with any agreements or instruments in replacement thereof, being
herein collectively referred to as the "Operative Documents"), and each
Guarantor has determined that it is in its interest and to its financial
benefit that the parties to the Operative Documents enter into the transactions
contemplated thereby.
<PAGE> 2
AGREEMENTS
For valuable consideration, the receipt and sufficiency of which are
hereby acknowledged and as further consideration, and as an inducement to the
Lenders and the Agent to maintain the credit facilities established by the
Operative Documents, each Guarantor agrees with the Lenders and the Agent as
follows:
1. Guarantee of Obligations. (a) Each Guarantor hereby (i)
guarantees, as principal obligor and not as surety only, to the Lenders the
prompt payment of the principal of and any and all accrued and unpaid interest
(including interest which otherwise may cease to accrue by operation of any
insolvency law, rule, regulation or interpretation thereof) on the Advances and
all other obligations of the Borrower and the Borrowing Subsidiary to the
Lenders and the Agent under the Credit Agreement, the Notes, the Letters of
Credit, the Security Documents and the Swap Documents when due, whether by
scheduled maturity, acceleration or otherwise, all in accordance with the terms
of the Credit Agreement, the Swap Documents, the Notes and the other Operative
Documents, including, without limitation, default interest, all reimbursement
obligations in respect of any letters of credit, indemnification payments and
all reasonable costs and expenses incurred by the Lenders and the Agent in
connection with enforcing any obligations of the Borrower and the Borrowing
Subsidiary thereunder, including without limitation the reasonable fees and
disbursements of counsel, (ii) guarantees the prompt and punctual performance
and observance of each and every term, covenant or agreement contained in any
Operative Document to be performed or observed on the part of the Borrower and
the Borrowing Subsidiary and (iii) agrees to make prompt payment, on demand, of
any and all reasonable costs and expenses incurred by the Lenders or the Agent
in connection with enforcing the obligations of any Guarantor hereunder,
including, without limitation, the reasonable fees and disbursements of counsel
(all of the foregoing being collectively referred to as the "Guaranteed
Obligations").
(b) If for any reason any duty, agreement or obligation
of the Borrower or the Borrowing Subsidiary contained in any Operative Document
shall not be performed or observed by the Borrower or the Borrowing Subsidiary
as provided therein, or if any amount payable under or in connection with any
Operative Document shall not be paid in full when the same becomes due and
payable, each Guarantor undertakes, but without duplication, to perform or
cause to be performed promptly each of such duties, agreements and obligations
and to pay forthwith each such amount to the Agent for the account of the
Lenders regardless of any defense or setoff or counterclaim which the Borrower
or the Borrowing Subsidiary or the Guarantor may have or assert, and regardless
of any other condition or contingency.
2. Nature of Guaranty. This Guaranty is an absolute and
unconditional and irrevocable guaranty of payment and not a guaranty of
collection and is wholly independent of and in addition to other rights and
remedies of the Lenders and the Agent and is not contingent upon the pursuit by
the Lenders and the Agent of any such rights and remedies, such pursuit being
hereby waived by each Guarantor.
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<PAGE> 3
3. Waivers and Other Agreements. Each Guarantor hereby
unconditionally (a) waives any requirement that the Lenders or the Agent, upon
the occurrence of an Event of Default first make demand upon, or seek to
enforce remedies against the Borrower or the Borrowing Subsidiary before
demanding payment under or seeking to enforce this Guaranty, (b) covenants that
this Guaranty will not be discharged except by complete performance of all
obligations of the Borrower or the Borrowing Subsidiary contained in the
Operative Documents, (c) agrees that this Guaranty shall remain in full force
and effect without regard to, and shall not be affected or impaired, without
limitation, by any invalidity, irregularity or unenforceability in whole or in
part of any of the Operative Documents or any of the Guaranteed Obligations, or
any limitation on the liability of the Borrower or the Borrowing Subsidiary
thereunder, or any limitation on the method or terms of payment thereunder
which may or hereafter be caused or imposed in any manner whatsoever
(including, without limitation, usury laws), (d) waives diligence, presentment
and protest with respect to, and any notice of default or dishonor in the
payment of any amount at any time payable by the Borrower or the Borrowing
Subsidiary under or in connection with any of the Operative Documents, and
further waives notice of any of the matters referred to in paragraph 4 below,
and further waives all notices which may be required by statute, rule of law or
otherwise to preserve any rights of the Lenders or the Agent, including without
limitation any requirement of notice of acceptance of, or other formality
relating to this Guaranty and (e) agrees that the Guaranteed Obligations shall
include any amounts paid by the Borrower or the Borrowing Subsidiary to the
Lenders or the Agent which may be required to be returned to the Borrower or
the Borrowing Subsidiary or to its representative or to a trustee, custodian or
receiver for the Borrower or the Borrowing Subsidiary.
4. Obligations Absolute. The obligations, covenants, agreements
and duties of any Guarantor under this Guaranty shall not be released, affected
or impaired by any of the following whether or not undertaken with notice to or
consent of any Guarantor: (a) an assignment or transfer, in whole or in part,
of any of the Guaranteed Obligations or any of the Operative Documents although
made without notice to or consent of any Guarantor, or (b) any waiver by any
Lender or the Agent or by any other person, of the performance or observance by
the Borrower or the Borrowing Subsidiary of any of the agreements, covenants,
terms or conditions contained in any of the Operative Documents, or (c) any
indulgence in or the extension of the time for payment by the Borrower or the
Borrowing Subsidiary of any amounts payable under or in connection with any of
the Operative Documents, or of the time for performance by the Borrower or the
Borrowing Subsidiary of any other obligations under or arising out of any of
the Operative Documents, or the extension or renewal thereof, or (d) the
modification, amendment or waiver (whether material or otherwise) of any duty,
agreement or obligation of the Borrower or the Borrowing Subsidiary set forth
in any of the Operative Documents (the modification, amendment or waiver from
time to time of any of the Operative Documents to which the Borrower or the
Borrowing Subsidiary is a party being expressly authorized without further
notice to or consent of any Guarantor), or (e) the voluntary or involuntary
liquidation, sale or other disposition of all or substantially all of the
assets of the Borrower or the Borrowing Subsidiary or any receivership,
insolvency, bankruptcy, reorganization, or other similar proceedings, affecting
the Borrower or any of its assets or the Borrowing Subsidiary or any of its
assets, or (f) the merger or consolidation of the Borrower or the Borrowing
Subsidiary with or into any other person or any transfer or other disposition
of any shares of capital stock of the
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<PAGE> 4
Borrower or the Borrowing Subsidiary by the holder thereof, or (g) the release
of discharge of the Borrower, the Borrowing Subsidiary or any other obligor
from the performance or observance of any agreement, covenant, term or
condition contained in any Operative Document, by operation of law, (h) the
release of any security, if any, for the obligations of the Borrower or the
Borrowing Subsidiary under any of the Operative Documents, or the impairment of
or failure to perfect an interest in any such security, or (i) the running of
any limitations period otherwise applicable, or (j) any exercise or
non-exercise of any right, remedy, power or privilege in respect of this
Guaranty or any of the Operative Documents, including without limitation the
release, discharge, or variance of the liability of any Guarantor, or (k) any
other cause whether similar or dissimilar to the foregoing which would release,
affect or impair the obligations, covenants, agreements or duties of the
Guarantor hereunder.
5. Joint and Several Obligations. The obligations of the
Guarantors hereunder shall be several and also joint each with all or with any
one or more of the other parties now or hereafter guaranteeing any of the
Guaranteed Obligations, and such obligations of the Guarantors may be enforced
against each Guarantor separately or against any two or more jointly, or
against some separately and some jointly.
6. No Investigation by Lenders or Agent. Each of the Guarantors
hereby waives unconditionally any obligation which, in the absence of such
provision, the Lenders or the Agent might otherwise have to investigate or to
assure that there has been compliance with the law of any jurisdiction with
respect to the Guaranteed Obligations recognizing that, to save both time and
expense, each Guarantor has requested that the Lenders and the Agent not
undertake such investigation. Each Guarantor hereby expressly confirms that
the obligations of such Guarantor hereunder shall remain in full force and
effect without regard to compliance or noncompliance with any such law and
irrespective of any investigation or knowledge of any Lender or the Agent of
any such law.
7. Indemnity. As a separate, additional and continuing
obligation, each Guarantor unconditionally and irrevocably undertakes and
agrees with the Lenders and the Agent that, should the Guaranteed Obligations
not be recoverable from any Guarantor under paragraph 1 hereof for any reason
whatsoever (including, without limitation, by reason of any provision of the
Operative Document being or becoming void, unenforceable, or otherwise invalid
under any applicable law) then, notwithstanding any knowledge thereof by any
Lender or the Agent at any time, each Guarantor as sole, original and
independent obligor, upon demand by the Agent, will make payment to the Agent
for the account of the Lenders and the Agent of the Guaranteed Obligations by
way of a full indemnity in such currency and otherwise in such manner as is
provided in the Operative Documents.
8. Subordination. Each Guarantor agrees that any present or
future indebtedness, obligations or liabilities of the Borrower and the
Borrowing Subsidiary to such Guarantor shall be fully subordinate and junior in
right and priority of payment to any present or future indebtedness,
obligations or liabilities of the Borrower and the Borrowing Subsidiary to the
Lenders and the Agent. Each Guarantor waives any right of subrogation to the
rights of any Lender or the Agent against any Borrower or any Borrowing
Subsidiary or any other person
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<PAGE> 5
obligated for payment of the Guaranteed Obligations and any right of
reimbursement or indemnity whatsoever arising or accruing out of any payment
which such Guarantor may make pursuant to this Guaranty and the Notes, and any
right of recourse to security for the debts and obligations of each Borrower
and any Borrowing Subsidiary, unless and until the entire principal balance of
and interest on the Guaranteed Obligations shall have been paid in full.
9. Representations, Warranties and Other Agreements. Each
Guarantor represents and warrants that (a) the execution, delivery and
performance by such Guarantor of this Guaranty are within its corporate powers,
have been duly authorized by all necessary corporate action, require no action
by or in respect of, or filing with, any governmental body, and do not
contravene, or constitute a default under, any provision of applicable law or
regulation or of the articles of incorporation or other charter documents or
bylaws of such Guarantor, or of any agreement, judgment, injunction, order,
decree or other instrument binding upon such Guarantor or its property; (b)
this Guaranty has been duly executed and constitutes a legal, valid and binding
obligation of such Guarantor, enforceable against such Guarantor in accordance
with its terms, except as such enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to
creditors' rights and except that the remedy of specific performance and
injunctive and other forms of equitable relief are subject to equitable
defenses and to the discretion of the court for which any proceedings may be
brought; and (c) as of the date hereof, each of the following is true and
correct for such Guarantor: (i) the fair saleable value and the fair valuation
of such Guarantor's property is greater than the total amount of its
liabilities (including contingent liabilities) and greater than the amount that
would be required to pay its probable aggregate liability on its existing debts
as they become absolute and matured, (ii) such Guarantor's capital is not
unreasonably small in relation to its current and/or contemplated business or
other undertaken transactions, and (iii) such Guarantor does not intend to
incur, or believe that it will incur, debt beyond its ability to pay such debts
as they become due; and (d) each of the representations and warranties set
forth in Article IV of the Credit Agreement are true and correct with respect
to such Guarantor.
10. Remedies. (a) Upon the occurrence and during the continuance
of any Event of Default, the Lenders, or the Agent on behalf of the Lenders,
may, in addition to the remedies provided in the Operative Documents, enforce
its rights either by suit in equity, or by action at law, or by other
appropriate proceedings, whether for the specific performance (to the extent
permitted by law) of any covenant or agreement contained in this Guaranty or in
aid of the exercise of any power granted in this Guaranty and may enforce
payment under this Guaranty and any of its other rights available at law or in
equity.
(b) Upon the occurrence and during the continuance of any
Event of Default hereunder, the Lenders are hereby authorized at any time and
from time to time, without notice to any Guarantor (any requirement for such
notice being expressly waived by each Guarantor) to set off and apply against
any and all of the obligations of the Guarantors now or hereafter existing
under this Guaranty any and all deposits (general or special, time or demand,
provisional or final) at any time held and other indebtedness at any time owing
by the Lenders to or for the credit or the account of the Guarantors and any
property of the Guarantors from time to time in possession of the Lenders,
irrespective of whether or not the Lenders shall have made any demand hereunder
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<PAGE> 6
and although such obligations may be contingent and unmatured. The rights of
the Lenders under this paragraph 10(b) are in addition to other rights and
remedies (including, without limitation, other rights of setoff) which the
Lenders may have.
(c) To the extent that it lawfully may, each Guarantor
agrees that it will not at any time insist upon or plead, or in any manner
whatever claim or take any benefit or advantage of any applicable present or
future stay, extension or moratorium law, which may affect observance or
performance of the provisions of this Guaranty, or any of the Operative
Documents nor will it claim, take or insist upon any benefit or advantage of
any present or future law providing for the evaluation or appraisal of any
security for its obligations hereunder or the obligations of the Borrower and
the Borrowing Subsidiary under the Operative Documents prior to any sale or
sales thereof which may be made under or by virtue of any instrument governing
the same.
11. Amendments, Etc. This Guaranty may be amended from time to
time and any provision hereof may be waived in accordance with the requirements
of Section 8.1 of the Credit Agreement. No such amendment or waiver of any
provision of this Guaranty nor consent to any departure by any Guarantor
therefrom shall in any event be effective unless the same shall be in writing
and signed by the Required Lenders or all of the Lenders, as the case may be,
and, to the extent any rights or duties of the Agent may be affected, the
Agent, and then such amendment, waiver of consent shall be effective only in
the specific instance and for the specific purpose for which given.
12. Notices. All notices, demands, requests, consents and other
communications hereunder shall be in writing and shall be delivered or sent to
all or any of the Guarantors and to the Lenders and the Agent at the respective
addresses for notice set forth in Section 8.2 of the Credit Agreement or to
such other address as may be designated by the Guarantors, the Agent or any
Lender by notice to the other parties hereto. All notices and other
communications shall be made in accordance with Section 8.2 of the Credit
Agreement.
13. Conduct No Waiver; Remedies Cumulative. The obligations of
each Guarantor under this Guaranty are continuing obligations and a separate
and independent cause of action shall arise in respect of each enforcement
hereunder and default hereunder or under the Credit Agreement. No course of
dealing on the part of any Lender or the Agent, nor any delay or failure on the
part of any Lender or the Agent in exercising any right, power or privilege
hereunder shall operate as a waiver of such right, power or privilege or
otherwise prejudice the rights and remedies of the Lenders and the Agent
hereunder; nor shall any single or partial exercise thereof preclude any
further exercise thereof or the exercise of any other right, power or
privilege. No right or remedy conferred upon or reserved to the Lenders or the
Agent under this Guaranty is intended to be exclusive of any other right or
remedy, and every right and remedy shall be cumulative and in addition to every
other right or remedy given hereunder or now or hereafter existing under any
applicable law. Every right and remedy given by this Guaranty or by applicable
law to the Lenders or the Agent may be exercised from time to time and as often
as may be deemed expedient by them.
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<PAGE> 7
14. Reliance on and Survival of Various Provisions. All terms,
covenants, agreements, representations and warranties of each Guarantor made
herein or in any certificate or other document delivered pursuant hereto shall
be deemed to be material and to have been relied upon by the Lenders and the
Agent, notwithstanding any investigation heretofore or hereafter made by any
Lender or the Agent or on its behalf.
15. Successors and Assigns. The rights and remedies of the
Lenders and the Agent hereunder shall inure to the benefit of the Lenders and
the Agent and their respective successors and assigns, and the duties and
obligations of each Guarantor hereunder shall be binding upon such Guarantor
and its successors and assigns. No assignment of this Guaranty by any
Guarantor shall be permitted unless the prior written consent of the Required
Lenders is obtained.
16. Survival of Lenders' Rights and Remedies. Notwithstanding any
provision of this Guaranty to the contrary, the execution and delivery by the
Guarantors of this Guaranty, and the Lenders' and the Agent's acceptance
thereof, shall not be deemed to (a) be a consent to any action, whether
heretofore or hereafter taken, by the Borrower or the Borrowing Subsidiary in
violation of any provision of any Operative Document, (b) be a waiver of any
provision of any Operative Document or (c) prejudice any rights or remedies
which the Lenders and the Agent may now have or have in the future under or in
connection with any Operative Document, including without limitation any such
rights or remedies with respect to any Event of Default or event causing or
permitting acceleration under any Operative Document which may heretofore have
occurred and be continuing or may hereafter occur.
17. Governing Law; Consent to Jurisdiction. This Guaranty is a
contract made under, and the rights and obligations of the parties hereunder,
shall be governed by and construed in accordance with, the laws of the State of
Michigan applicable to contracts to be made and to be performed entirely with
such State. Each Guarantor further agrees that any legal action or proceeding
brought with respect to this Guaranty or the transactions contemplated hereby
may be brought in any court of the State of Michigan, or any court of the
United States of America sitting in Michigan, and each Guarantor hereby
irrevocably submits to and accepts generally and unconditionally the
jurisdiction and venue of those courts with respect to its person and property.
18. Definitions; Headings. Terms used but not defined herein
shall have the respective meanings ascribed thereto in the Credit Agreement.
The headings of the various subdivisions hereof are for convenience of
reference only and shall in no way modify any of the terms or provisions
hereof.
19. Integration; Severability; Enforceability. This Guaranty
embodies the entire agreement and understanding among the Guarantors, the
Lenders and the Agent, and supersedes all prior agreements and understandings,
relating to the subject matter hereof. If any one or more provisions of this
Guaranty should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected, impaired, prejudiced or disturbed
thereby. If at any time any portion of the obligations of any Guarantor under
this Guaranty shall be determined by a court of competent jurisdiction to be
invalid, unenforceable or avoidable, the remaining portion of the obligations
of
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<PAGE> 8
such Guarantor and each other Guarantor under this Guaranty shall not in any
way be affected, impaired, prejudiced or disturbed thereby and shall remain
valid and enforceable to the fullest extent permitted by applicable law. If at
any time all or any portion of the obligations of any Guarantor under this
Guaranty would otherwise be determined by a court of competent jurisdiction to
be invalid, unenforceable or avoidable under Section 548 of the federal
Bankruptcy Code or under a similar applicable law of any jurisdiction, then
notwithstanding any other provisions of this Guaranty to the contrary such
obligation or portion thereof of such Guarantor under this Guaranty shall be
limited to the greatest of (i) the value of any quantifiable economic benefits
accruing to such Guarantor as a result of this Guaranty, (ii) an amount equal
to 95% of the excess on the date the relevant Guaranteed Obligations were
incurred of the present fair saleable value of the assets of such Guarantor
over the amount of all liabilities of such Guarantor, contingent or otherwise,
other than under this Guaranty and (iii) the maximum amount for which this
Guaranty is determined to be enforceable.
20. Reinstatement. This Guaranty shall remain in full force and
effect and continue to be effective in the event any petition be filed by or
against the Borrower, the Borrowing Subsidiary or any Guarantor for liquidation
or reorganization, in the event the Borrower, the Borrowing Subsidiary or any
Guarantor becomes insolvent or makes an assignment for the benefit of creditors
or in the event a receiver or trustee be appointed for all or any significant
part of any Borrower's, any Borrowing Subsidiary's or any Guarantor's assets,
and shall continue to be effective or be reinstated, as the case may be, if at
any time payment and performance of the Guaranteed Obligations, or any part
thereof, is, pursuant to applicable law, rescinded or reduced in amount, or
must otherwise be restored or returned by the Agent or any Lender, whether as a
"voidable preference", "fraudulent conveyance", or otherwise, all as though
such payment or performance had not been made. In the event that any payment,
or any part thereof, is rescinded, reduced, restored or returned, the
Guaranteed Obligations shall be reinstated and deemed reduced only by such
amount paid and not so rescinded, reduced, restored or returned.
21. Counterpart Execution. This Guaranty may be signed upon any
number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Guaranty shall become effective as to each Guarantor when a counterpart
hereof shall have been signed by such Guarantor.
22. Waiver of Jury Trial. The Agent, the Lenders and each of the
Guarantors, after consulting or having had the opportunity to consult with
counsel, knowingly, voluntarily and intentionally waive any right any of them
may have to a trial by jury in any litigation based upon or arising out of this
Guaranty or any related instrument or agreement or any of the transactions
contemplated by this Guaranty. Neither the Agent, any Lender nor any Guarantor
shall seek to consolidate, by counterclaim or otherwise, any such action in
which a jury trial has been waived with any other action in which a jury trial
cannot be or has not been waived. These provisions shall not be deemed to have
been modified in any respect or relinquished by the Agent, any Lender or any
Guarantor except by a written instrument executed by all of them.
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<PAGE> 9
IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be duly
executed and delivered as of the day and year first above written.
LOBDELL EMERY CORPORATION
By: John H. Ferguson
------------------------------------
Its: Assistant Treasurer
-----------------------------------
WINCHESTER FABRICATION CORPORATION
By: John H. Ferguson
------------------------------------
Its: Assistant Treasurer
-----------------------------------
CREATIVE FABRICATION CORPORATION
By: John H. Ferguson
------------------------------------
Its: Assistant Treasurer
-----------------------------------
PARALLEL GROUP INTERNATIONAL, INC.
By: John H. Ferguson
------------------------------------
Its: Assistant Treasurer
-----------------------------------
LASERWELD INTERNATIONAL, L.L.C.
By: Lobdell Emery Corporation, its
sole member
By: John H. Ferguson
------------------------------------
Its: Assistant Treasurer
-----------------------------------
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<PAGE> 10
CONCEPT MANAGEMENT CORPORATION
By: John H. Ferguson
------------------------------------
Its: Assistant Treasurer
-----------------------------------
LEWIS EMERY CAPITAL CORPORATION
By: John H. Ferguson
------------------------------------
Its: Assistant Treasurer
-----------------------------------
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<PAGE> 1
EXHIBIT 4.12
PLEDGE AGREEMENT AND IRREVOCABLE PROXY
THIS PLEDGE AGREEMENT dated as of June 24, 1997 (this "Pledge
Agreement"), is given by OXFORD AUTOMOTIVE, INC., a Michigan corporation (the
"Company"), in favor of NBD Bank, a Michigan banking corporation, as agent (in
such capacity, the "Agent") for the benefit of itself and the lenders (the
"Lenders") now or hereafter parties to the Credit Agreement described below.
RECITALS
A. The Company (also occasionally referred to as the "Borrower")
and the Borrowing Subsidiary identified from time to time therein (the
"Borrowing Subsidiary") have entered into a Credit Agreement, dated as of June
24, 1997, (as amended or modified from time to time, including any agreement
entered into in substitution therefor, the "Credit Agreement"), with the
Lenders parties thereto and the Agent pursuant to which the Lenders may make
Advances (as therein defined) to the Borrower and the Borrowing Subsidiary.
B. As a condition precedent to the effectiveness of the Bank's
obligations under the Credit Agreement, the Company has agreed to pledge to the
Agent, for the benefit of the Lenders, and grant a first-priority security
interest to the Agent, for the benefit of the Lenders, in and to the collateral
described herein and to execute this Pledge Agreement.
For value received and pursuant to the Credit Agreement, the Company
hereby grants a first-priority security interest to the Agent, for the benefit
of the Lenders, in and to all of the outstanding capital stock of the companies
listed on the schedule attached hereto as Schedule 1 (the "Pledged
Subsidiaries", and said shares of stock, together with any other shares and
securities from time to time receivable or otherwise distributed in respect of
or in exchange for any or all of such shares, being called the "Pledged
Stock"), to secure, (a) the prompt and complete payment of all indebtedness and
other obligations of the Company or any Subsidiary now or hereafter owing to
the Lenders or the Agent under or on account of the Credit Agreement, any
Security Document or any letters of credit, notes or other instruments issued
to the Agent or Lenders pursuant thereto, (b) the performance of the covenants
under the Credit Agreement and the Security Documents and any monies expended
by the Agent in connection therewith payable under the Credit Agreement and (c)
the prompt and complete payment of all obligations and performance of all
covenants of the Company under any interest rate or currency swap agreements or
similar transactions with any Bank (all of the aforesaid indebtedness,
obligations and liabilities of the Company and its Subsidiaries being herein
called the "Secured Obligations", and all of the documents, agreements and
instruments among the Company, the Subsidiaries, the Agent, the Lenders, or any
of them, evidencing or securing the repayment of, or otherwise pertaining to,
the Secured Obligations being herein collectively called the "Operative
Documents"). The Company is herewith delivering to the Agent for the benefit
of the Lenders originals of all stock certificates of the Pledged Stock or
taking such other action acceptable to the Agent and the Required Lenders to
perfect the security interest in the Pledged Stock granted hereby.
<PAGE> 2
The Company further represents and warrants to, and agrees with, the
Agent for the benefit of the Lenders as follows:
1. Representations and Warranties. The Company represents and
warrants that the Pledged Stock is represented by the stock certificate or
certificates or shares described on Schedule 1 hereto, and that such stock
certificate or certificates, accompanied by an instrument of assignment or
transfer duly executed in blank by the Company as the owner named in such stock
certificate or certificates, have been delivered to the Agent by the Company.
The Company further represents and warrants that (a) the Pledged Stock is duly
authorized and validly issued, fully paid and nonassessable and constitutes
100% of all of the issued and outstanding shares of the capital stock of each
Pledged Subsidiary (except with respect to Lobdell Emery Corporation which has
Preferred Stock outstanding), (b) the Company is the legal and beneficial owner
of the Pledged Stock, free and clear of all Liens other than the Lien of Agent
hereunder, with requisite right and power to deliver, pledge and assign the
Pledged Stock to the Agent hereunder, and (c) the pledge of the Pledged Stock
pursuant to this Pledge Agreement creates in favor of the Agent a valid and
perfected first-priority security interest in the Pledged Stock enforceable
against the Company and all third parties and securing the payment of the
Secured Obligations.
2. Title; Stock Rights, Dividends, Etc. The Company will warrant
and defend the Agent's title to the Pledged Stock, and the security interest
herein created, against all claims of all persons, and will maintain and
preserve such security interest. It is understood and agreed that the
collateral hereunder includes any stock rights, stock dividends, liquidating
dividends, new securities, payments, distributions and proceeds (including cash
dividends and sale proceeds) and other property to which the Company may become
entitled by reason of the ownership of the Pledged Stock during the existence
of this Pledge Agreement, and any such property received by the Company shall
be held in trust and forthwith delivered to the Agent to be held hereunder in
accordance with the terms of this Pledge Agreement.
3. Registration Rights. If any Pledged Subsidiary at any time or
from time to time proposes to register any of its securities under the
Securities Act of 1933, the Company will at each such time give notice to the
Agent of such Pledged Subsidiary's intentions so to do. Upon the request of
the Agent given 30 days after receipt of such notice, the Company will cause
all Pledged Stock of such Pledged Subsidiary to be included in the registration
statement proposed to be filed, all to the extent requisite to permit the
public sale or other public disposition of such Pledged Stock so registered by
the holders thereof. The costs and expenses of all such registrations and
qualifications under said Act shall be paid by the Company or such Pledged
Subsidiary, except that underwriting discounts and commissions in respect of
any Pledged Stock sold pursuant to any such registration statement shall be
borne by the sellers thereof. As expeditiously as possible after the effective
date of any such registration statement, the Company will deliver in exchange
for any certificates representing shares of Pledged Stock so registered
pursuant to such registration, which bear any restrictive legend, new Pledged
Stock certificates not bearing such legend or any similar legend. In the event
of any such registration, the Company hereby agrees to indemnify and hold
PLEDGE AGREEMENT AND IRREVOCABLE PROXY
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<PAGE> 3
harmless the Agent and the Lenders as pledgee of the Pledged Stock against any
losses, claims, damages or liabilities to which the Agent and the Lenders may
become subject to the extent that such losses, claims, damages or liabilities
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in any such registration statement, and any
preliminary prospectus or filed prospectus, or in any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, and will reimburse the Agent and
the Lenders for any legal or other expenses reasonably incurred by the Agent
and the Lenders in connection with investigating or defending any such loss,
claim, damage or liability. The indemnifications contained in this paragraph
shall include each person, if any, who controls the Agent or any Bank.
4. Events of Default; Remedies.
(a) Upon the occurrence of any Event of Default under the Credit
Agreement, which has not been remedied by the Company, the Borrower, or the
Borrowing Subsidiary within fifteen (15) days after the Borrower or the
Borrowing Subsidiary receives written notice of such occurrence from the Agent
(the "Cure Period"), an Event of Default shall be deemed to have occurred
hereunder and the Agent shall have all of the rights, remedies and
responsibilities provided by law and/or by this Pledge Agreement, including but
not limited to all of the rights, remedies and responsibilities of a secured
party under the Michigan Uniform Commercial Code, and the Company hereby
authorizes the Agent, in accordance with the Michigan Uniform Commercial Code,
to sell all or any part of the Pledged Stock at public or private sale and to
apply the proceeds of such sale to the costs and expenses thereof (including
the reasonable attorneys' fees and disbursements incurred by the Agent) and
then to the payment of the other Secured Obligations. Any requirement of
reasonable notice in connection with such sale shall be met if the Agent sends
such notice to the Company, by registered or certified mail, at least 5 days
prior to the date of sale, disposition or other event giving rise to the
required notice. The Agent or any Bank may be the purchaser at any such sale.
The Agent shall be under no obligation to preserve rights against prior
parties.
(b) The Company hereby waives as to the Agent and the Lenders any
right of subrogation or marshaling of such stock and other collateral for
indebtedness or other obligations owed to the Agent and the Lenders. To this
end, the Company hereby expressly agrees that any such collateral or other
security of the Company or any other party which the Agent or any Bank may
hold, or which may come to any of their possession, may be dealt with in all
respects and particulars as though this Pledge Agreement were not in existence.
The Company agrees and acknowledges that because of applicable securities laws,
the Agent may not be able to effect a public sale of the Pledged Stock and
sales at a private sale may be on terms less favorable than if such securities
were sold at a public sale and may be at a price less favorable than a public
sale.
(c) The Company irrevocably designates, makes, constitutes and
appoints the Agent (and all persons designated by the Agent) as its true and
lawful attorney (and agent-in-fact) and the Agent, or the Agent's agent, may,
upon and after an Event of Default hereunder which has not been waived,
PLEDGE AGREEMENT AND IRREVOCABLE PROXY
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<PAGE> 4
with notice to the Company if the Secured Obligations have not been accelerated
and without notice if the Secured Obligations have been accelerated, take any
action as the Agent reasonably deems necessary under the circumstances to
enforce or otherwise take action in respect to the Pledged Stock as required
hereby, or to carry out any other obligation or duty of the Company under this
Agreement.
(d) Notwithstanding the foregoing, the Agent, on behalf of the
Lenders, agrees that it shall not exercise any remedy hereunder, including the
remedies set forth in Section 5, until such time as Agent has exercised its
remedies under the Company Security Agreement and Guarantor Security Agreement
and has realized upon substantially all of the assets subject thereto to the
extent permitted by law; provided that the Agent and the Lenders may exercise
all rights and remedies hereunder immediately upon the occurrence of, and
nothing in this Section 4(d) shall limit or otherwise impair any of the Agent's
and the Lenders' interests, rights and remedies in, any bankruptcy, insolvency
or similar proceeding.
5. Additional Remedies; Irrevocable Proxy.
(a) After satisfaction of the sale provisions of Section 4 but
subject to Section 4(d) herein, the Agent may transfer into its name, or into
the name of its nominee or nominees, any or all of the Pledged Stock and may
vote any or all of the Pledged Stock (whether or not so transferred) and may
otherwise act with respect thereto as though it were the outright owner
thereof, the Company hereby irrevocably constituting and appointing the Agent
as the proxy and attorney-in-fact of the Company, with full power of
substitution, to do so.
(b) Upon the occurrence of the events described in Section 5(a)
above, the Agent may vote the Pledged Stock to remove the directors and
officers of any Pledged Subsidiary, and to elect new directors and officers of
any Pledged Subsidiary, who thereafter shall manage the affairs of such Pledged
Subsidiary, operate its properties and carry on its business and otherwise take
any action with respect to the business, properties and affairs of such Pledged
Subsidiary which such new directors shall deem necessary or appropriate,
including, but not limited to, the maintenance, repair, renewal or alteration
of any or all of the properties of such Pledged Subsidiary, the leasing,
subleasing, sale or other disposition of any or all of such properties, the
borrowing of money on the credit of such Pledged Subsidiary, and the employment
of attorneys, agents or other employees deemed by such new directors to be
necessary for the proper operation, conduct, winding up or liquidation of the
business, properties and affairs of such Pledged Subsidiary, and all revenues
from the operation, conduct, winding up or liquidation of the business,
properties and affairs of such Pledged Subsidiary after the payment of expenses
thereof shall be applied to the payment of the Secured Obligations.
(c) The Company agrees that the proxy granted in this paragraph 5
is coupled with an interest and is and shall be both valid and irrevocable so
long as the Pledged Stock is subject to this Pledge Agreement. The Company
further acknowledges that the term of said proxy may exceed three years from
the date hereof.
PLEDGE AGREEMENT AND IRREVOCABLE PROXY
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<PAGE> 5
6. Remedies Cumulative. No right or remedy conferred upon or
reserved to the Agent and the Lenders under any Operative Document is intended
to be exclusive of any other right or remedy, and every right and remedy shall
be cumulative in addition to every other right or remedy given hereunder or now
or hereafter existing under any applicable law. Every right and remedy of the
Agent and the Lenders under any Operative Document or under applicable law may
be exercised from time to time and as often as may be deemed expedient by the
Agent and the Lenders. To the extent that it lawfully may, the Company agrees
that it will not at any time insist upon, plead, or in any manner whatever
claim or take any benefit or advantage of any applicable present or future
stay, extension or moratorium law, which may affect observance or performance
of any provisions of any Operative Document; nor will it claim, take or insist
upon any benefit or advantage of any present or future law providing for the
valuation or appraisal of any security for its obligations under any Operative
Document prior to any sale or sales thereof which may be made under or by
virtue of any instrument governing the same; nor will it, after any such sale
or sales, claim or exercise any right, under any applicable law to redeem any
portion of such security so sold.
7. Conduct No Waiver. No waiver of default shall be effective
unless in writing executed by the Agent and waiver of any default or
forbearance on the part of the Agent in enforcing any of its rights under this
Pledge Agreement shall not operate as a waiver of any other default or of the
same default on a future occasion or of such right.
8. Governing Law; Definitions. This Pledge Agreement is a
contract made under, and shall be governed by and construed in accordance with,
the law of the State of Michigan applicable to contracts made and to be
performed entirely within such State and without giving effect to choice of law
principles of such State. The Company agrees that any legal action or
proceeding with respect to this Pledge Agreement or the transactions
contemplated hereby may be brought in any court of the State of Michigan, or in
any court of the United States of America sitting in Michigan, and the Company
hereby submits to and accepts generally and unconditionally the jurisdiction of
those courts with respect to its person and property, and irrevocably appoints
the Chief Financial Officer of the Company, at the Company's address set forth
in the Credit Agreement, as its agent for service of process and irrevocably
consents to the service of process in connection with any such action or
proceeding by personal delivery to such agent or to the Company or by the
mailing thereof by registered or certified mail, postage prepaid to the Company
at its address set forth in the Credit Agreement. Nothing in this paragraph
shall affect the right of the Agent to serve process in any other manner
permitted by law or limit the right of the Agent to bring any such action or
proceeding against the Company or its property in the courts of any other
jurisdiction. The Company hereby irrevocably waives any objection to the
laying of venue of any such suit or proceeding in the above described courts.
Terms used but not defined herein shall have the respective meanings ascribed
thereto in the Credit Agreement. Unless otherwise defined herein or in the
Credit Agreement, terms used in Article 9 of the Uniform Commercial Code in the
State of Michigan are used herein as therein defined on the date hereof. The
headings of the various subdivisions hereof are for convenience of reference
only and shall in no way modify any of the terms or provisions hereof.
PLEDGE AGREEMENT AND IRREVOCABLE PROXY
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<PAGE> 6
9. Notices. All notices, demands, requests, consents and other
communications hereunder shall be delivered in the manner described in the
Credit Agreement.
10. Rights Not Construed as Duties. The Agent neither assumes nor
shall it have any duty of performance or other responsibility under any
contracts in which the Agent has or obtains a security interest hereunder. If
the Company fails to perform any agreement contained herein, the Agent may but
is in no way obligated to itself perform, or cause performance of, such
agreement, and the reasonable expenses of the Agent incurred in connection
therewith shall be payable by the Company under paragraph 13. The powers
conferred on the Agent hereunder are solely to protect its interests in the
Pledged Stock and shall not impose any duty upon it to exercise any such
powers. Except for the safe custody of any Pledged Stock in its possession and
accounting for monies actually received by it hereunder, the Agent shall have
no duty as to any Pledged Stock or as to the taking of any necessary steps to
preserve rights against prior parties or any other rights pertaining to any
Pledged Stock.
11. Amendments. None of the terms and provisions of this Pledge
Agreement may be modified or amended in any way except by an instrument in
writing executed by each of the parties hereto.
12. Severability. If any one or more provisions of this Pledge
Agreement should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected, impaired or prejudiced thereby.
13. Expenses.
(a) The Company agrees to indemnify the Agent from and against any
and all claims, losses and liabilities growing out of or resulting from this
Pledge Agreement (including, without limitation, enforcement of this Pledge
Agreement), except claims, losses or liabilities resulting from the Agent's
gross negligence or willful misconduct.
(b) The Company will, upon written demand, pay to the Agent an
amount of any and all reasonable and documented expenses, including the
reasonable fees and disbursements of its counsel and of any experts and agents,
which the Agent may incur in connection with (i) the administration of this
Pledge Agreement, (ii) the custody, preservation, use or operation of, or the
sale of, collection from or other realization upon, any of the Pledged Stock,
(iii) the exercise or enforcement of any of the rights of the Agent hereunder
or under the Operative Documents, or (iv) the failure of the Company to perform
or observe any of the provisions hereof.
14. Successors and Assigns; Termination. This Pledge Agreement
shall create a continuing security interest in the Pledged Stock and shall be
binding upon the Company, its successors and assigns, and inure, together with
the rights and remedies of the Agent hereunder, to the benefit of the Agent and
its successors, transferees and assigns. Upon the payment in full in
PLEDGE AGREEMENT AND IRREVOCABLE PROXY
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<PAGE> 7
immediately available funds of all of the Secured Obligations and the
termination of all commitments to lend under the Operative Documents, the
security interest granted hereunder shall terminate and upon such termination
the Agent shall assign, transfer and deliver without recourse and without
warranty the Pledged Stock to the Company (and any property received in respect
thereof) as has not theretofore been sold or otherwise applied pursuant to the
provisions of this Pledge Agreement.
15. Waiver of Jury Trial. The Agent and the Lenders, in accepting
this Pledge Agreement, and the Company, after consulting or having had the
opportunity to consult with counsel, knowingly, voluntarily and intentionally
waive any right any of them may have to a trial by jury in any litigation based
upon or arising out of this Pledge Agreement or any related instrument or
agreement or any of the transactions contemplated by this Pledge Agreement or
any course of conduct, dealing, statements (whether oral or written) or actions
of any of them. Neither the Agent, the Lenders, nor the Company shall seek to
consolidate, by counterclaim or otherwise, any such action in which a jury
trial has been waived with any other action in which a jury trial cannot be or
has not been waived. These provisions shall not be deemed to have been
modified in any respect or relinquished by either the Agent and the Lenders or
the Company except by a written instrument executed by all of them.
IN WITNESS WHEREOF, the Company has caused this Pledge Agreement to be
duly executed as of the day and year first above written.
OXFORD AUTOMOTIVE, INC.
By:
____________________________________
Its:
________________________________
Accepted and Agreed:
NBD BANK, as Agent
By:
____________________________________
Its:
___________________________________
PLEDGE AGREEMENT AND IRREVOCABLE PROXY
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<PAGE> 1
EXHIBIT 4.13
PLEDGE AGREEMENT AND IRREVOCABLE PROXY
THIS PLEDGE AGREEMENT dated as of June 24, 1997 (this "Pledge
Agreement"), is given by LOBDELL EMERY CORPORATION, a Michigan corporation (the
"Company"), in favor of NBD Bank, a Michigan banking corporation, as agent (in
such capacity, the "Agent") for the benefit of itself and the lenders (the
"Lenders") now or hereafter parties to the Credit Agreement described below.
RECITALS
A. Oxford Automotive, Inc., a Michigan corporation (the
"Borrower") and the Borrowing Subsidiaries identified from time to time therein
(the "Borrowing Subsidiary") have entered into a Credit Agreement, dated as of
June 24, 1997, (as amended or modified from time to time, including any
agreement entered into in substitution therefor, the "Credit Agreement"), with
the Lenders parties thereto and the Agent pursuant to which the Lenders may
make Advances (as therein defined) to the Borrower and the Borrowing
Subsidiary.
B. The Company is a subsidiary of the Borrower, and is engaged in
a common enterprise with the Borrower and other subsidiaries of the Borrower.
C. The Company, together with the other subsidiaries of the
Company, has guaranteed the Borrower's and the Borrowing Subsidiary's
obligations under the Credit Agreement pursuant to a Guaranty Agreement dated
as of June 24, 1997 (as hereinafter amended, modified or restated, the
"Guaranty").
D. As a condition precedent to the effectiveness of the Bank's
obligations under the Credit Agreement, the Company has agreed to pledge to the
Agent, for the benefit of the Lenders, and grant a first-priority security
interest to the Agent, for the benefit of the Lenders, in and to the collateral
described herein and to execute this Pledge Agreement.
For value received and pursuant to the Credit Agreement, the Company
hereby grants a first-priority security interest to the Agent, for the benefit
of the Lenders, in and to all of the outstanding capital stock of the companies
listed on the schedule attached hereto as Schedule 1 (the "Pledged
Subsidiaries", and said shares of stock, together with any other shares and
securities from time to time receivable or otherwise distributed in respect of
or in exchange for any or all of such shares, being called the "Pledged
Stock"), to secure, (a) the prompt and complete payment of all indebtedness and
other obligations of the Company or any Subsidiary now or hereafter owing to
the Lenders or the Agent under or on account of the Credit Agreement, any
Security Document or any letters of credit, notes or other instruments issued
to the Agent or Lenders pursuant thereto, (b) the performance of the covenants
under the Credit Agreement and the Security Documents and any monies expended
by the Agent in connection therewith payable under the Credit Agreement and (c)
the prompt and complete payment of all obligations and performance of all
covenants of the Company under any interest rate or currency swap agreements or
similar transactions with any Bank (all of the aforesaid indebtedness,
obligations and liabilities of the Company and its Subsidiaries
<PAGE> 2
being herein called the "Secured Obligations", and all of the documents,
agreements and instruments among the Company, the Subsidiaries, the Agent, the
Lenders, or any of them, evidencing or securing the repayment of, or otherwise
pertaining to, the Secured Obligations being herein collectively called the
"Operative Documents"). The Company is herewith delivering to the Agent for
the benefit of the Lenders originals of all stock certificates of the Pledged
Stock or taking such other action acceptable to the Agent and the Required
Lenders to perfect the security interest in the Pledged Stock granted hereby.
The Company further represents and warrants to, and agrees with, the
Agent for the benefit of the Lenders as follows:
1. Representations and Warranties. The Company represents and
warrants that the Pledged Stock is represented by the stock certificate or
certificates or shares described on Schedule 1 hereto, and that such stock
certificate or certificates, accompanied by an instrument of assignment or
transfer duly executed in blank by the Company as the owner named in such stock
certificate or certificates, have been delivered to the Agent by the Company.
The Company further represents and warrants that (a) the Pledged Stock is duly
authorized and validly issued, fully paid and nonassessable and constitutes
100% of all of the issued and outstanding shares of the capital stock of each
Pledged Subsidiary, (b) the Company is the legal and beneficial owner of the
Pledged Stock, free and clear of all Liens other than the Lien of Agent
hereunder, with requisite right and power to deliver, pledge and assign the
Pledged Stock to the Agent hereunder, and (c) the pledge of the Pledged Stock
pursuant to this Pledge Agreement creates in favor of the Agent a valid and
perfected first-priority security interest in the Pledged Stock enforceable
against the Company and all third parties and securing the payment of the
Secured Obligations.
2. Title; Stock Rights, Dividends, Etc. The Company will warrant
and defend the Agent's title to the Pledged Stock, and the security interest
herein created, against all claims of all persons, and will maintain and
preserve such security interest. It is understood and agreed that the
collateral hereunder includes any stock rights, stock dividends, liquidating
dividends, new securities, payments, distributions and proceeds (including cash
dividends and sale proceeds) and other property to which the Company may become
entitled by reason of the ownership of the Pledged Stock during the existence
of this Pledge Agreement, and any such property received by the Company shall
be held in trust and forthwith delivered to the Agent to be held hereunder in
accordance with the terms of this Pledge Agreement.
3. Registration Rights. If any Pledged Subsidiary at any time or
from time to time proposes to register any of its securities under the
Securities Act of 1933, the Company will at each such time give notice to the
Agent of such Pledged Subsidiary's intentions so to do. Upon the request of
the Agent given 30 days after receipt of such notice, the Company will cause
all Pledged Stock of such Pledged Subsidiary to be included in the registration
statement proposed to be filed, all to the extent requisite to permit the
public sale or other public disposition of such Pledged Stock so registered by
the holders thereof. The costs and expenses of all such registrations and
PLEDGE AGREEMENT AND IRREVOCABLE PROXY
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<PAGE> 3
qualifications under said Act shall be paid by the Company or such Pledged
Subsidiary, except that underwriting discounts and commissions in respect of
any Pledged Stock sold pursuant to any such registration statement shall be
borne by the sellers thereof. As expeditiously as possible after the effective
date of any such registration statement, the Company will deliver in exchange
for any certificates representing shares of Pledged Stock so registered
pursuant to such registration, which bear any restrictive legend, new Pledged
Stock certificates not bearing such legend or any similar legend. In the event
of any such registration, the Company hereby agrees to indemnify and hold
harmless the Agent and the Lenders as pledgee of the Pledged Stock against any
losses, claims, damages or liabilities to which the Agent and the Lenders may
become subject to the extent that such losses, claims, damages or liabilities
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in any such registration statement, and any
preliminary prospectus or filed prospectus, or in any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, and will reimburse the Agent and
the Lenders for any legal or other expenses reasonably incurred by the Agent
and the Lenders in connection with investigating or defending any such loss,
claim, damage or liability. The indemnifications contained in this paragraph
shall include each person, if any, who controls the Agent or any Bank.
4. Events of Default; Remedies.
(a) Upon the occurrence of any Event of Default under the Credit
Agreement, which has not been remedied by the Company, the Borrower, or the
Borrowing Subsidiary within fifteen (15) days after the Borrower or the
Borrowing Subsidiary receives written notice of such occurrence from the Agent
(the "Cure Period"), an Event of Default shall be deemed to have occurred
hereunder and the Agent shall have all of the rights, remedies and
responsibilities provided by law and/or by this Pledge Agreement, including but
not limited to all of the rights, remedies and responsibilities of a secured
party under the Michigan Uniform Commercial Code, and the Company hereby
authorizes the Agent, in accordance with the Michigan Uniform Commercial Code,
to sell all or any part of the Pledged Stock at public or private sale and to
apply the proceeds of such sale to the costs and expenses thereof (including
the reasonable attorneys' fees and disbursements incurred by the Agent) and
then to the payment of the other Secured Obligations. Any requirement of
reasonable notice in connection with such sale shall be met if the Agent sends
such notice to the Company, by registered or certified mail, at least 5 days
prior to the date of sale, disposition or other event giving rise to the
required notice. The Agent or any Bank may be the purchaser at any such sale.
The Agent shall be under no obligation to preserve rights against prior
parties.
(b) The Company hereby waives as to the Agent and the Lenders any
right of subrogation or marshaling of such stock and other collateral for
indebtedness or other obligations owed to the Agent and the Lenders. To this
end, the Company hereby expressly agrees that any such collateral or other
security of the Company or any other party which the Agent or any Bank may
hold, or which may come to any of their possession, may be dealt with in all
respects and particulars as though this Pledge Agreement were not in existence.
The Company agrees and acknowledges that
PLEDGE AGREEMENT AND IRREVOCABLE PROXY
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<PAGE> 4
because of applicable securities laws, the Agent may not be able to effect a
public sale of the Pledged Stock and sales at a private sale may be on terms
less favorable than if such securities were sold at a public sale and may be at
a price less favorable than a public sale.
(c) The Company irrevocably designates, makes, constitutes and
appoints the Agent (and all persons designated by the Agent) as its true and
lawful attorney (and agent-in-fact) and the Agent, or the Agent's agent, may,
upon and after an Event of Default hereunder which has not been waived, with
notice to the Company if the Secured Obligations have not been accelerated and
without notice if the Secured Obligations have been accelerated, take any
action as the Agent reasonably deems necessary under the circumstances to
enforce or otherwise take action in respect to the Pledged Stock as required
hereby, or to carry out any other obligation or duty of the Company under this
Agreement.
(d) Notwithstanding the foregoing, the Agent, on behalf of the
Lenders, agrees that it shall not exercise any remedy hereunder, including the
remedies set forth in Section 5, until such time as Agent has exercised its
remedies under the Company Security Agreement and Guarantor Security Agreement
and has realized upon substantially all of the assets subject thereto to the
extent permitted by law; provided that the Agent and the Lenders may exercise
all rights and remedies hereunder immediately upon the occurrence of, and
nothing in this Section 4(d) shall limit or otherwise impair any of the Agent's
and the Lenders' interests, rights and remedies in, any bankruptcy, insolvency
or similar proceeding.
5. Additional Remedies; Irrevocable Proxy.
(a) After satisfaction of the sale provisions of Section 4, but
subject to Section 4(d) herein, the Agent may transfer into its name, or into
the name of its nominee or nominees, any or all of the Pledged Stock and may
vote any or all of the Pledged Stock (whether or not so transferred) and may
otherwise act with respect thereto as though it were the outright owner
thereof, the Company hereby irrevocably constituting and appointing the Agent
as the proxy and attorney-in-fact of the Company, with full power of
substitution, to do so.
(b) Upon the occurrence of the events described in Section 5(a)
above, the Agent may vote the Pledged Stock to remove the directors and
officers of any Pledged Subsidiary, and to elect new directors and officers of
any Pledged Subsidiary, who thereafter shall manage the affairs of such Pledged
Subsidiary, operate its properties and carry on its business and otherwise take
any action with respect to the business, properties and affairs of such Pledged
Subsidiary which such new directors shall deem necessary or appropriate,
including, but not limited to, the maintenance, repair, renewal or alteration
of any or all of the properties of such Pledged Subsidiary, the leasing,
subleasing, sale or other disposition of any or all of such properties, the
borrowing of money on the credit of such Pledged Subsidiary, and the employment
of attorneys, agents or other employees deemed by such new directors to be
necessary for the proper operation, conduct, winding up or liquidation of the
business, properties and affairs of such Pledged Subsidiary, and all revenues
from the operation, conduct, winding up or liquidation of the business,
properties and affairs of such
PLEDGE AGREEMENT AND IRREVOCABLE PROXY
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Pledged Subsidiary after the payment of expenses thereof shall be applied to
the payment of the Secured Obligations.
(c) The Company agrees that the proxy granted in this paragraph 5
is coupled with an interest and is and shall be both valid and irrevocable so
long as the Pledged Stock is subject to this Pledge Agreement. The Company
further acknowledges that the term of said proxy may exceed three years from
the date hereof.
6. Remedies Cumulative. No right or remedy conferred upon or
reserved to the Agent and the Lenders under any Operative Document is intended
to be exclusive of any other right or remedy, and every right and remedy shall
be cumulative in addition to every other right or remedy given hereunder or now
or hereafter existing under any applicable law. Every right and remedy of the
Agent and the Lenders under any Operative Document or under applicable law may
be exercised from time to time and as often as may be deemed expedient by the
Agent and the Lenders. To the extent that it lawfully may, the Company agrees
that it will not at any time insist upon, plead, or in any manner whatever
claim or take any benefit or advantage of any applicable present or future
stay, extension or moratorium law, which may affect observance or performance
of any provisions of any Operative Document; nor will it claim, take or insist
upon any benefit or advantage of any present or future law providing for the
valuation or appraisal of any security for its obligations under any Operative
Document prior to any sale or sales thereof which may be made under or by
virtue of any instrument governing the same; nor will it, after any such sale
or sales, claim or exercise any right, under any applicable law to redeem any
portion of such security so sold.
7. Conduct No Waiver. No waiver of default shall be effective
unless in writing executed by the Agent and waiver of any default or
forbearance on the part of the Agent in enforcing any of its rights under this
Pledge Agreement shall not operate as a waiver of any other default or of the
same default on a future occasion or of such right.
8. Governing Law; Definitions. This Pledge Agreement is a
contract made under, and shall be governed by and construed in accordance with,
the law of the State of Michigan applicable to contracts made and to be
performed entirely within such State and without giving effect to choice of law
principles of such State. The Company agrees that any legal action or
proceeding with respect to this Pledge Agreement or the transactions
contemplated hereby may be brought in any court of the State of Michigan, or in
any court of the United States of America sitting in Michigan, and the Company
hereby submits to and accepts generally and unconditionally the jurisdiction of
those courts with respect to its person and property, and irrevocably appoints
the Chief Financial Officer of the Company, at the Company's address set forth
in the Credit Agreement, as its agent for service of process and irrevocably
consents to the service of process in connection with any such action or
proceeding by personal delivery to such agent or to the Company or by the
mailing thereof by registered or certified mail, postage prepaid to the Company
at its address set forth in the Credit Agreement. Nothing in this paragraph
shall affect the right of the Agent to serve process in any other manner
permitted by law or limit the right of the Agent to bring any such action or
proceeding against the Company or its property in the courts of any other
jurisdiction. The Company hereby
PLEDGE AGREEMENT AND IRREVOCABLE PROXY
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irrevocably waives any objection to the laying of venue of any such suit or
proceeding in the above described courts. Terms used but not defined herein
shall have the respective meanings ascribed thereto in the Credit Agreement.
Unless otherwise defined herein or in the Credit Agreement, terms used in
Article 9 of the Uniform Commercial Code in the State of Michigan are used
herein as therein defined on the date hereof. The headings of the various
subdivisions hereof are for convenience of reference only and shall in no way
modify any of the terms or provisions hereof.
9. Notices. All notices, demands, requests, consents and other
communications hereunder shall be delivered in the manner described in the
Credit Agreement.
10. Rights Not Construed as Duties. The Agent neither assumes nor
shall it have any duty of performance or other responsibility under any
contracts in which the Agent has or obtains a security interest hereunder. If
the Company fails to perform any agreement contained herein, the Agent may but
is in no way obligated to itself perform, or cause performance of, such
agreement, and the reasonable expenses of the Agent incurred in connection
therewith shall be payable by the Company under paragraph 13. The powers
conferred on the Agent hereunder are solely to protect its interests in the
Pledged Stock and shall not impose any duty upon it to exercise any such
powers. Except for the safe custody of any Pledged Stock in its possession and
accounting for monies actually received by it hereunder, the Agent shall have
no duty as to any Pledged Stock or as to the taking of any necessary steps to
preserve rights against prior parties or any other rights pertaining to any
Pledged Stock.
11. Amendments. None of the terms and provisions of this Pledge
Agreement may be modified or amended in any way except by an instrument in
writing executed by each of the parties hereto.
12. Severability. If any one or more provisions of this Pledge
Agreement should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected, impaired or prejudiced thereby.
13. Expenses.
(a) The Company agrees to indemnify the Agent from and against any
and all claims, losses and liabilities growing out of or resulting from this
Pledge Agreement (including, without limitation, enforcement of this Pledge
Agreement), except claims, losses or liabilities resulting from the Agent's
gross negligence or willful misconduct.
(b) The Company will, upon written demand, pay to the Agent an
amount of any and all reasonable and documented expenses, including the
reasonable fees and disbursements of its counsel and of any experts and agents,
which the Agent may incur in connection with (i) the administration of this
Pledge Agreement, (ii) the custody, preservation, use or operation of, or the
sale of, collection from or other realization upon, any of the Pledged Stock,
(iii) the exercise or enforcement of any of
PLEDGE AGREEMENT AND IRREVOCABLE PROXY
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the rights of the Agent hereunder or under the Operative Documents, or (iv) the
failure of the Company to perform or observe any of the provisions hereof.
14. Successors and Assigns; Termination. This Pledge Agreement
shall create a continuing security interest in the Pledged Stock and shall be
binding upon the Company, its successors and assigns, and inure, together with
the rights and remedies of the Agent hereunder, to the benefit of the Agent and
its successors, transferees and assigns. Upon the payment in full in
immediately available funds of all of the Secured Obligations and the
termination of all commitments to lend under the Operative Documents, the
security interest granted hereunder shall terminate and upon such termination
the Agent shall assign, transfer and deliver without recourse and without
warranty the Pledged Stock to the Company (and any property received in respect
thereof) as has not theretofore been sold or otherwise applied pursuant to the
provisions of this Pledge Agreement.
15. Waiver of Jury Trial. The Agent and the Lenders, in accepting
this Pledge Agreement, and the Company, after consulting or having had the
opportunity to consult with counsel, knowingly, voluntarily and intentionally
waive any right any of them may have to a trial by jury in any litigation based
upon or arising out of this Pledge Agreement or any related instrument or
agreement or any of the transactions contemplated by this Pledge Agreement or
any course of conduct, dealing, statements (whether oral or written) or actions
of any of them. Neither the Agent, the Lenders, nor the Company shall seek to
consolidate, by counterclaim or otherwise, any such action in which a jury
trial has been waived with any other action in which a jury trial cannot be or
has not been waived. These provisions shall not be deemed to have been
modified in any respect or relinquished by either the Agent and the Lenders or
the Company except by a written instrument executed by all of them.
IN WITNESS WHEREOF, the Company has caused this Pledge Agreement to be
duly executed as of the day and year first above written.
LOBDELL EMERY CORPORATION
By:
____________________________________
Its:
__________________________________
Accepted and Agreed:
NBD BANK, as Agent
By:
___________________________
PLEDGE AGREEMENT AND IRREVOCABLE PROXY
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Its:
_____________________________________
PLEDGE AGREEMENT AND IRREVOCABLE PROXY
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<PAGE> 1
EXHIBIT 4.14
PLEDGE AGREEMENT AND IRREVOCABLE PROXY
THIS PLEDGE AGREEMENT dated as of June 24, 1997 (this "Pledge
Agreement"), is given by CONCEPT MANAGEMENT CORPORATION, a Michigan corporation
(the "Company"), in favor of NBD Bank, a Michigan banking corporation, as agent
(in such capacity, the "Agent") for the benefit of itself and the lenders (the
"Lenders") now or hereafter parties to the Credit Agreement described below.
RECITALS
A. Oxford Automotive, Inc., a Michigan corporation (the
"Borrower") and the Borrowing Subsidiaries identified from time to time therein
(the "Borrowing Subsidiary") have entered into a Credit Agreement, dated as of
June 24, 1997 (as amended or modified from time to time, including any
agreement entered into in substitution therefor, the "Credit Agreement"), with
the lenders parties thereto and the Agent pursuant to which the Lenders may
make Advances (as therein defined) to the Borrower and the Borrowing
Subsidiary.
B. The Company is a subsidiary of the Borrower, and is engaged in
a common enterprise with the Borrower and other subsidiaries of the Borrower.
C. The Company, together with the other subsidiaries of the
Company, has guaranteed the Borrower's and the Borrowing Subsidiary's
obligations under the Credit Agreement pursuant to a Guaranty Agreement dated
as of June 24, 1997 (as hereinafter amended, modified or restated, the
"Guaranty").
D. As a condition precedent to the effectiveness of the Bank's
obligations under the Credit Agreement, the Company has agreed to pledge to the
Agent, for the benefit of the Lenders, and grant a first-priority security
interest to the Agent, for the benefit of the Lenders, in and to the collateral
described herein and to execute this Pledge Agreement.
For value received and pursuant to the Credit Agreement, the Company
hereby grants a first-priority security interest to the Agent, for the benefit
of the Lenders, in and to all of the outstanding capital stock of the companies
listed on the schedule attached hereto as Schedule 1 (the "Pledged
Subsidiaries", and said shares of stock and beneficial interests, together with
any other shares and securities from time to time receivable or otherwise
distributed in respect of or in exchange for any or all of such shares, being
called the "Pledged Stock"), to secure, (a) the prompt and complete payment of
all indebtedness and other obligations of the Borrower or any Subsidiary now or
hereafter owing to the Lenders or the Agent under or on account of the Credit
Agreement, any Security Document or any Letter of Credit, notes or other
instruments issued to the Agent or any Lender pursuant thereto, (b) the
performance of the covenants under the Credit Agreement and the Security
Documents and any monies expended by the Agent in connection therewith payable
under the Credit Agreement, (c) the prompt and complete payment of all
obligations and performance of all covenants of the Borrower under any interest
rate or currency swap agreements or similar transactions with any Lender, and
(d) the prompt and complete payment of all indebtedness of the
<PAGE> 2
Company and any other guarantor under the Guaranty, (all of the aforesaid
indebtedness, obligations and liabilities of the Company and its Subsidiaries
being herein called the "Secured Obligations", and all of the documents,
agreements and instruments among the Company, the Subsidiaries, the Agent, the
Lenders, or any of them, evidencing or securing the repayment of, or otherwise
pertaining to, the Secured Obligations being herein collectively called the
"Operative Documents"). The Company is herewith delivering to the Agent for
the benefit of the Lenders originals of all stock certificates of the Pledged
Stock or taking such other action acceptable to the Agent and the Required
Lenders to perfect the security interest in the Pledged Stock granted hereby.
The Company further represents and warrants to, and agrees with, the
Agent for the benefit of the Lenders as follows:
1. Representations and Warranties. The Company represents and
warrants that the Pledged Stock is represented by the stock certificate or
certificates or shares described on Schedule 1 hereto, and that such stock
certificate or certificates, accompanied by an instrument of assignment or
transfer duly executed in blank by the Company as the owner named in such stock
certificate or certificates, have been delivered to the Agent by the Company.
The Company further represents and warrants that (a) the Pledged Stock is duly
authorized and validly issued, fully paid and nonassessable and constitutes
100% of all of the issued and outstanding shares of the capital stock of each
Pledged Subsidiary, (b) the Company is the legal and beneficial owner of the
Pledged Stock, free and clear of all Liens other than the Lien of Agent
hereunder, with requisite right and power to deliver, pledge and assign the
Pledged Stock to the Agent hereunder, and (c) the pledge of the Pledged Stock
pursuant to this Pledge Agreement creates in favor of the Agent a valid and
perfected first-priority security interest in the Pledged Stock enforceable
against the Company and all third parties and securing the payment of the
Secured Obligations.
2. Title; Stock Rights, Dividends, Etc. The Company will warrant
and defend the Agent's title to the Pledged Stock, and the security interest
herein created, against all claims of all persons, and will maintain and
preserve such security interest. It is understood and agreed that the
collateral hereunder includes any stock rights, stock dividends, liquidating
dividends, new securities, payments, distributions and proceeds (including cash
dividends and sale proceeds) and other property to which the Company may become
entitled by reason of the ownership of the Pledged Stock during the existence
of this Pledge Agreement, and any such property received by the Company shall
be held in trust and forthwith delivered to the Agent to be held hereunder in
accordance with the terms of this Pledge Agreement.
3. Registration Rights. If any Pledged Subsidiary at any time or
from time to time proposes to register any of its securities under the
Securities Act of 1933, the Company will at each such time give notice to the
Agent of such Pledged Subsidiary's intentions so to do. Upon the request of
the Agent given 30 days after receipt of such notice, the Company will cause
all Pledged Stock of such Pledged Subsidiary to be included in the registration
statement proposed to be filed, all to the extent requisite to permit the
public sale or other public disposition of such Pledged Stock
PLEDGE AGREEMENT AND IRREVOCABLE PROXY
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so registered by the holders thereof. The costs and expenses of all such
registrations and qualifications under said Act shall be paid by the Company or
such Pledged Subsidiary, except that underwriting discounts and commissions in
respect of any Pledged Stock sold pursuant to any such registration statement
shall be borne by the sellers thereof. As expeditiously as possible after the
effective date of any such registration statement, the Company will deliver in
exchange for any certificates representing shares of Pledged Stock so
registered pursuant to such registration, which bear any restrictive legend,
new Pledged Stock certificates not bearing such legend or any similar legend.
In the event of any such registration, the Company hereby agrees to indemnify
and hold harmless the Agent and the Lenders as pledgee of the Pledged Stock
against any losses, claims, damages or liabilities to which the Agent and the
Lenders may become subject to the extent that such losses, claims, damages or
liabilities arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any such registration
statement, and any preliminary prospectus or filed prospectus, or in any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and will
reimburse the Agent and the Lenders for any legal or other expenses reasonably
incurred by the Agent and the Lenders in connection with investigating or
defending any such loss, claim, damage or liability. The indemnifications
contained in this paragraph shall include each person, if any, who controls the
Agent or any Bank.
4. Events of Default; Remedies.
(a) Upon the occurrence of any Event of Default under the Credit
Agreement, which has not been remedied by the Company, the Borrower, or the
Borrowing Subsidiary within fifteen (15) days after the Borrower or the
Borrowing Subsidiary receives written notice of such occurrence from the Agent
(the "Cure Period"), an Event of Default shall be deemed to have occurred
hereunder and the Agent shall have an Event of Default shall be deemed to have
occurred hereunder and the Agent shall have all of the rights, remedies and
responsibilities provided by law and/or by this Pledge Agreement, including but
not limited to all of the rights, remedies and responsibilities of a secured
party under the Michigan Uniform Commercial Code, and the Company hereby
authorizes the Agent, accordance with the Michigan Uniform Commercial Code, to
sell all or any part of the Pledged Stock at public or private sale and to
apply the proceeds of such sale to the costs and expenses thereof (including
the reasonable attorneys' fees and disbursements incurred by the Agent) and
then to the payment of the other Secured Obligations. Any requirement of
reasonable notice in connection with such sale shall be met if the Agent sends
such notice to the Company, by registered or certified mail, at least 5 days
prior to the date of sale, disposition or other event giving rise to the
required notice. The Agent or any Bank may be the purchaser at any such sale.
The Agent shall be under no obligation to preserve rights against prior
parties.
(b) The Company hereby waives as to the Agent and the Lenders any
right of subrogation or marshaling of such stock and other collateral for
indebtedness or other obligations owed to the Agent and the Lenders. To this
end, the Company hereby expressly agrees that any such collateral or other
security of the Company or any other party which the Agent or any Bank may
hold, or
PLEDGE AGREEMENT AND IRREVOCABLE PROXY
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<PAGE> 4
which may come to any of their possession, may be dealt with in all respects
and particulars as though this Pledge Agreement were not in existence. The
Company agrees and acknowledges that because of applicable securities laws, the
Agent may not be able to effect a public sale of the Pledged Stock and sales at
a private sale may be on terms less favorable than if such securities were sold
at a public sale and may be at a price less favorable than a public sale.
(c) The Company irrevocably designates, makes, constitutes and
appoints the Agent (and all persons designated by the Agent) as its true and
lawful attorney (and agent-in-fact) and the Agent, or the Agent's agent, may,
upon and after an Event of Default hereunder which has not been waived, with
notice to the Company if the Secured Obligations have not been accelerated and
without notice if the Secured Obligations have been accelerated, take any
action as the Agent reasonably deems necessary under the circumstances to
enforce or otherwise take action in respect to the Pledged Stock as required
hereby, or to carry out any other obligation or duty of the Company under this
Agreement.
(d) Notwithstanding the foregoing, the Agent, on behalf of the
Lenders, agrees that it shall not exercise any remedy hereunder, including the
remedies set forth in Section 5, until such time as Agent has exercised its
remedies under the Company Security Agreement and Guarantor Security Agreement
and has realized upon substantially all of the assets subject thereto to the
extent permitted by law; provided that the Agent and the Lenders may exercise
all rights and remedies hereunder immediately upon the occurrence of, and
nothing in this Section 4(d) shall limit or otherwise impair any of the Agent's
and the Lenders' interests, rights and remedies in, any bankruptcy, insolvency
or similar proceeding.
5. Additional Remedies; Irrevocable Proxy.
(a) After satisfaction of the sale provisions of Section 4 but
subject to Section 4(d) herein, the Agent may transfer into its name, or into
the name of its nominee or nominees, any or all of the Pledged Stock and may
vote any or all of the Pledged Stock (whether or not so transferred) and may
otherwise act with respect thereto as though it were the outright owner
thereof, the Company hereby irrevocably constituting and appointing the Agent
as the proxy and attorney-in-fact of the Company, with full power of
substitution, to do so.
(b) Upon the occurrence of the events described in Section 5(a)
above, the Agent may vote the Pledged Stock to remove the directors and
officers of any Pledged Subsidiary, and to elect new directors and officers of
any Pledged Subsidiary, who thereafter shall manage the affairs of such Pledged
Subsidiary, operate its properties and carry on its business and otherwise take
any action with respect to the business, properties and affairs of such Pledged
Subsidiary which such new directors shall deem necessary or appropriate,
including, but not limited to, the maintenance, repair, renewal or alteration
of any or all of the properties of such Pledged Subsidiary, the leasing,
subleasing, sale or other disposition of any or all of such properties, the
borrowing of money on the credit of such Pledged Subsidiary, and the employment
of attorneys, agents or other employees deemed by such new directors to be
necessary for the proper operation, conduct, winding up or
PLEDGE AGREEMENT AND IRREVOCABLE PROXY
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liquidation of the business, properties and affairs of such Pledged Subsidiary,
and all revenues from the operation, conduct, winding up or liquidation of the
business, properties and affairs of such Pledged Subsidiary after the payment
of expenses thereof shall be applied to the payment of the Secured Obligations.
(c) The Company agrees that the proxy granted in this paragraph 5
is coupled with an interest and is and shall be both valid and irrevocable so
long as the Pledged Stock is subject to this Pledge Agreement. The Company
further acknowledges that the term of said proxy may exceed three years from
the date hereof.
6. Remedies Cumulative. No right or remedy conferred upon or
reserved to the Agent and the Lenders under any Operative Document is intended
to be exclusive of any other right or remedy, and every right and remedy shall
be cumulative in addition to every other right or remedy given hereunder or now
or hereafter existing under any applicable law. Every right and remedy of the
Agent and the Lenders under any Operative Document or under applicable law may
be exercised from time to time and as often as may be deemed expedient by the
Agent and the Lenders. To the extent that it lawfully may, the Company agrees
that it will not at any time insist upon, plead, or in any manner whatever
claim or take any benefit or advantage of any applicable present or future
stay, extension or moratorium law, which may affect observance or performance
of any provisions of any Operative Document; nor will it claim, take or insist
upon any benefit or advantage of any present or future law providing for the
valuation or appraisal of any security for its obligations under any Operative
Document prior to any sale or sales thereof which may be made under or by
virtue of any instrument governing the same; nor will it, after any such sale
or sales, claim or exercise any right, under any applicable law to redeem any
portion of such security so sold.
7. Conduct No Waiver. No waiver of default shall be effective
unless in writing executed by the Agent and waiver of any default or
forbearance on the part of the Agent in enforcing any of its rights under this
Pledge Agreement shall not operate as a waiver of any other default or of the
same default on a future occasion or of such right.
8. Governing Law; Definitions. This Pledge Agreement is a
contract made under, and shall be governed by and construed in accordance with,
the law of the State of Michigan applicable to contracts made and to be
performed entirely within such State and without giving effect to choice of law
principles of such State. The Company agrees that any legal action or
proceeding with respect to this Pledge Agreement or the transactions
contemplated hereby may be brought in any court of the State of Michigan, or in
any court of the United States of America sitting in Michigan, and the Company
hereby submits to and accepts generally and unconditionally the jurisdiction of
those courts with respect to its person and property, and irrevocably appoints
the Chief Financial Officer of the Company, at the Company's address set forth
in the Credit Agreement, as its agent for service of process and irrevocably
consents to the service of process in connection with any such action or
proceeding by personal delivery to such agent or to the Company or by the
mailing thereof by registered or certified mail, postage prepaid to the Company
at its address set forth in the Credit Agreement. Nothing in this paragraph
shall affect the right of the Agent to serve process in any
PLEDGE AGREEMENT AND IRREVOCABLE PROXY
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other manner permitted by law or limit the right of the Agent to bring any such
action or proceeding against the Company or its property in the courts of any
other jurisdiction. The Company hereby irrevocably waives any objection to the
laying of venue of any such suit or proceeding in the above described courts.
Terms used but not defined herein shall have the respective meanings ascribed
thereto in the Credit Agreement. Unless otherwise defined herein or in the
Credit Agreement, terms used in Article 9 of the Uniform Commercial Code in the
State of Michigan are used herein as therein defined on the date hereof. The
headings of the various subdivisions hereof are for convenience of reference
only and shall in no way modify any of the terms or provisions hereof.
9. Notices. All notices, demands, requests, consents and other
communications hereunder shall be delivered in the manner described in the
Credit Agreement.
10. Rights Not Construed as Duties. The Agent neither assumes nor
shall it have any duty of performance or other responsibility under any
contracts in which the Agent has or obtains a security interest hereunder. If
the Company fails to perform any agreement contained herein, the Agent may but
is in no way obligated to itself perform, or cause performance of, such
agreement, and the reasonable expenses of the Agent incurred in connection
therewith shall be payable by the Company under paragraph 13. The powers
conferred on the Agent hereunder are solely to protect its interests in the
Pledged Stock and shall not impose any duty upon it to exercise any such
powers. Except for the safe custody of any Pledged Stock in its possession and
accounting for monies actually received by it hereunder, the Agent shall have
no duty as to any Pledged Stock or as to the taking of any necessary steps to
preserve rights against prior parties or any other rights pertaining to any
Pledged Stock.
11. Amendments. None of the terms and provisions of this Pledge
Agreement may be modified or amended in any way except by an instrument in
writing executed by each of the parties hereto.
12. Severability. If any one or more provisions of this Pledge
Agreement should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected, impaired or prejudiced thereby.
13. Expenses.
(a) The Company agrees to indemnify the Agent from and against any
and all claims, losses and liabilities growing out of or resulting from this
Pledge Agreement (including, without limitation, enforcement of this Pledge
Agreement), except claims, losses or liabilities resulting from the Agent's
gross negligence or willful misconduct.
(b) The Company will, upon written demand, pay to the Agent an
amount of any and all reasonable and documented expenses, including the
reasonable fees and disbursements of its counsel and of any experts and agents,
which the Agent may incur in connection with (i) the administration
PLEDGE AGREEMENT AND IRREVOCABLE PROXY
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<PAGE> 7
of this Pledge Agreement, (ii) the custody, preservation, use or operation of,
or the sale of, collection from or other realization upon, any of the Pledged
Stock, (iii) the exercise or enforcement of any of the rights of the Agent
hereunder or under the Operative Documents, or (iv) the failure of the Company
to perform or observe any of the provisions hereof.
14. Successors and Assigns; Termination. This Pledge Agreement
shall create a continuing security interest in the Pledged Stock and shall be
binding upon the Company, its successors and assigns, and inure, together with
the rights and remedies of the Agent hereunder, to the benefit of the Agent and
its successors, transferees and assigns. Upon the payment in full in
immediately available funds of all of the Secured Obligations and the
termination of all commitments to lend under the Operative Documents, the
security interest granted hereunder shall terminate and upon such termination
the Agent shall assign, transfer and deliver without recourse and without
warranty the Pledged Stock to the Company (and any property received in respect
thereof) as has not theretofore been sold or otherwise applied pursuant to the
provisions of this Pledge Agreement.
15. Waiver of Jury Trial. The Agent and the Lenders, in accepting
this Pledge Agreement, and the Company, after consulting or having had the
opportunity to consult with counsel, knowingly, voluntarily and intentionally
waive any right any of them may have to a trial by jury in any litigation based
upon or arising out of this Pledge Agreement or any related instrument or
agreement or any of the transactions contemplated by this Pledge Agreement or
any course of conduct, dealing, statements (whether oral or written) or actions
of any of them. Neither the Agent, the Lenders, nor the Company shall seek to
consolidate, by counterclaim or otherwise, any such action in which a jury
trial has been waived with any other action in which a jury trial cannot be or
has not been waived. These provisions shall not be deemed to have been
modified in any respect or relinquished by either the Agent and the Lenders or
the Company except by a written instrument executed by all of them.
IN WITNESS WHEREOF, the Company has caused this Pledge Agreement to be
duly executed as of the day and year first above written.
CONCEPT MANAGEMENT CORPORATION
By:
Its:
Accepted and Agreed:
NBD BANK, as Agent
PLEDGE AGREEMENT AND IRREVOCABLE PROXY
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<PAGE> 8
By:
Its:
PLEDGE AGREEMENT AND IRREVOCABLE PROXY
-8-
<PAGE> 1
EXHIBIT 4.15
SUBROGATION AND CONTRIBUTION AGREEMENT
This SUBROGATION AND CONTRIBUTION AGREEMENT (as amended or modified
from time to time, this "Agreement") is entered into as of June 24, 1997 by and
among the Company and the Guarantors for the purpose of establishing the
respective rights and obligations of subrogation and contribution among them in
connection with the Credit Agreement. Capitalized terms used herein and not
otherwise defined shall have the meanings set forth in the Credit Agreement.
RECITALS
A. Oxford Automotive, Inc. (the "Company"), its Subsidiaries
identified from time to time therein as a Borrowing Subsidiary (the "Borrowing
Subsidiary"), the lenders party thereto from time to time (the "Lenders") and
NBD Bank, as agent for the Lenders (in such capacity, the "Agent") are party to
a Credit Agreement dated June 24, 1997 (as amended or modified from time to
time, the "Credit Agreement").
B. Each of Lobdell Emery Corporation, Winchester Fabrication
Corporation, Creative Fabrication Corporation, Parallel Group International,
Inc., Laserweld International, L.L.C., Concept Management Corporation, Lewis
Emery Capital Corporation, BMG Holdings, Inc., 9676459 Ontario Limited and
829500 Ontario Limited (collectively, the "Guarantors" and each a "Guarantor")
has guaranteed the payment of all present and future indebtedness, obligations
and liabilities of the Company and the Borrowing Subsidiary to the Agent and
the Lenders (as further described in the applicable guaranty agreements, the
"Guaranteed Obligations") pursuant to Guaranty Agreement and the Guarantee
Agreement, each dated June 24, 1997 (such Guaranty Agreement and Guarantee
Agreement, as amended or modified from time to time, the "Guaranty").
A. As a result of the transactions contemplated by the Credit
Agreement, each Guarantor will benefit, directly and indirectly, from the
Guaranteed Obligations and in consideration thereof desire to enter into this
Agreement to allocate such benefits among themselves and to provide a fair and
equitable arrangement to make contributions when any payment is made by a
Guarantor of the Guaranteed Obligations (such payment being referred to herein
as a "Contribution").
AGREEMENT
In consideration of the foregoing premises and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the
Guarantors hereby agree as follows:
1. Contribution. In order to provide for just and equitable
contribution among the Guarantors in the event any Contribution is made by a
Guarantor (a "Funding Guarantor") under the Credit Agreement, that Funding
Guarantor shall be entitled to a contribution from certain other Guarantors for
all payments, damages and expenses incurred by that Funding Guarantor in
discharging any of the Guaranteed Obligations, in the manner and to the extent
set forth in this Agreement. The amount of any Contribution under this
Agreement shall be equal to the payment
1
<PAGE> 2
made by the Funding Guarantor pursuant to the Credit Agreement and shall be
determined as of the date on which the such payment is made.
2. Benefit Amount Defined. For purposes of this Agreement the
"Benefit Amount" of any Guarantor as of any date of determination shall be the
net value of the benefits to such Guarantor and all of its Subsidiaries from
extensions of credit made by the Lenders to the Company under the Credit
Agreement; provided, that in determining the contribution liability of any
Guarantor which is a Subsidiary to its direct or indirect parent corporation or
of any Guarantor to its direct or indirect Subsidiary, the Benefit Amount of
such Subsidiary and its Subsidiaries, if any, shall be subtracted in
determining the Benefit Amount of the parent corporation. Such benefits
(collectively, the "Benefits") of any Guarantor shall include, without
limitation, benefits of funds constituting proceeds of Advances which are
deposited into the account of the Company by the Lenders and which are in turn
advanced or contributed by the Company to such Guarantor or any of its
Subsidiaries and benefits of Letters of Credit issued for the account of the
Company and used for such Guarantor's or any of its Subsidiaries' purposes. In
the case of any proceeds of Advances or Benefits advanced or contributed to, or
received by, a Person (an "Owned Entity") any of the equity interests of which
are owned directly or indirectly by a Guarantor, the Benefit Amount of such
Guarantor with respect thereto shall be that portion of the net value of the
benefits attributable to such proceeds of Advances or Benefits equal to the
direct or indirect percentage ownership of such Guarantor in its Owned Entity.
3. Contribution Obligation. Each Guarantor shall be liable to a
Funding Guarantor in an amount equal to the greater of (A) the product of (i) a
fraction the numerator of which is the Benefit Amount of such Guarantor, and
the denominator of which is the total amount of Guaranteed Obligations and (ii)
the amount of Guaranteed Obligations paid by such Funding Guarantor and (B) the
excess of the fair salable value of the property of such Guarantor over the
total liabilities of such Guarantor (including the maximum amount reasonably
expected to become due in respect of contingent liabilities), as the case may
be, determined as of the date on which the payment by a Funding Guarantor is
deemed made for purposes of this Agreement (giving effect to all payments made
by other Funding Guarantors as of such date in a manner to maximize the amount
of such contributions)
4. Allocation. In the event that at any time there exists more
than one Funding Guarantor with respect to any Contribution (in any such case,
the "Applicable Contribution"), then payment from other Guarantors pursuant to
this Agreement shall be allocated among such Funding Guarantors in proportion
to the total amount of the Contribution made for or on account of the Company
by each such Funding Guarantor pursuant to the Applicable Contribution. In the
event that at any time any Guarantor pays an amount under this Agreement in
excess of the amount calculated pursuant to clause (A) of Section 3 hereof,
that Guarantor shall be deemed to be a Funding Guarantor to the extent of such
excess and shall be entitled to contribution from the Guarantors in accordance
with the provisions of this Agreement.
5. Subrogation. If any Guarantor makes a payment in respect of
the Guaranteed Obligations it shall be subrogated to the rights of the payee
against the Company and the Borrowing Subsidiary with respect to such payment.
Any payments made hereunder by the Company or the Borrowing Subsidiary shall be
credited against amounts payable by the Company or the Borrowing Subsidiary
pursuant to any subrogation rights of the Guarantors which received the
payments under this Agreement.
2
<PAGE> 3
6. Representations and Warranties. Each Guarantor represents and
warrants to each other party hereto and to the Lenders and the Agent that:
(a) the execution, delivery and performance by such
Guarantor of this Agreement are within such party's corporate powers, have been
duly authorized by all necessary corporate action, require no action by or in
respect of, or filing with, any governmental body, agency or official, and do
not contravene, or constitute a default under, any provision of applicable law
or regulation or of the articles of incorporation or other charter document or
bylaws of such Guarantor, or of any agreement, judgment, injunction, order,
decree or other instrument binding upon such Guarantor, or result in the
creation or imposition of any lien, security interest or other charge or
encumbrance on any asset of such Guarantor;
(b) this Agreement constitutes a legal, valid and binding
agreement of such Guarantor, enforceable against such party in accordance with
its terms.
(c) the Guarantors are engaged as an integrated group in
the business of the design and manufacture of automobile components; that the
Guarantors have requested that the Lenders continue to lend and make credit
available to the Company and the Borrowing Subsidiary for the purpose of
financing the integrated operations of the Company and the Guarantors, with
each Guarantor expecting to derive benefit, directly or indirectly, from the
advances and other credit extended by the Lenders to the Company and the
Borrowing Subsidiary, both in each Guarantor's separate capacity and as a
member of the integrated group, inasmuch as the successful operation and
condition of each Guarantor is dependent upon the continued successful
performance of the integrated group as a whole; and
(d) Each of the Guarantors has determined that the
delivery and performance of this Agreement, the Guaranty and the other
agreements executed in connection therewith (the Credit Agreement, the Notes,
this Agreement, the Guaranty and the other Security Documents are collectively
referred to as the "Loan Documents") are necessary and convenient to the
conduct, promotion or attainment of the business of such Guarantor and is in
furtherance of the corporate purposes of such Guarantor.
7. Subsidiary Payment. The amount of contribution payable under
this Agreement by any Guarantor shall be reduced by the amount of any
contribution paid hereunder by a Subsidiary of such Guarantor.
8. Equitable Allocation. If as a result of any reorganization,
recapitalization, or other corporate change any Guarantor, or as a result of
any amendment, waiver or modification of the terms and conditions governing the
Loan Documents or the Guaranteed Obligations, or for any other reason, the
contributions under this Agreement become inequitable, then the parties hereto
shall promptly modify and amend this Agreement to provide for an equitable
allocation of the contributions. Any of the foregoing modifications and
amendments shall be in writing and signed by all parties hereto.
9. Asset of Party to Which Contribution is Owing. The parties
hereto acknowledge that the rights to subrogation and contribution hereunder
shall constitute an asset in favor of the party to which such subrogation or
contribution is owing.
3
<PAGE> 4
10. Subordination. No payments payable by any Guarantor pursuant
to the terms hereof or otherwise pursuant to any rights of subrogation,
contribution, reimbursement, indemnity or any similar rights arising under any
Loan Document or otherwise arising by law shall be paid until all Guaranteed
Obligations are paid in full in cash and all Commitments and all Letters of
Credit have expired or been terminated. Nothing contained in this Agreement
shall affect the Guaranteed Obligations, the obligation of the Company and the
Borrowing Subsidiary to pay the Guaranteed obligations, the absolute and
unconditional obligations of the Guarantors to jointly and severally pay the
Guaranteed Obligations pursuant to the Guaranty or any of the other obligations
of any party hereto to the Agent or any Lender under the Credit Agreement, the
Guaranty or any other Loan Document.
11. Successors and Assigns; Amendments. This Agreement shall be
binding upon each party hereto and its respective successors and assigns and
shall inure to the benefit of the parties hereto and their respective
successors and assigns, and in the event of any transfer or assignment of
rights by a Guarantor, the rights and privileges herein conferred upon that
Guarantor shall automatically extend to and be vested in such transferee or
assignee, all subject to the terms and condition hereof. This Agreement shall
not be amended without the prior written consent of the Required Lenders. This
Agreement is for the benefit of the parties hereto and for the benefit of the
Agent and the Lenders and may be enforced by any one, or more, or all of them
in accordance with the terms hereof.
12. Termination. This Agreement shall remain in effect and shall
not be terminated until all Guaranteed Obligations are paid in full in cash,
such payment is not subject to any possibility of revocation or rescission and
all Commitments and all Letters of Credit have expired or been terminated.
13. CHOICE OF LAW. THIS AGREEMENT AND ANY INSTRUMENT OR AGREEMENT
REQUIRED HEREUNDER SHALL BE DEEMED TO BE MADE UNDER, SHALL BE GOVERNED BY, AND
SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
MICHIGAN WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS.
14. Counterparts. This Agreement, and any modifications or
amendments hereto, may be executed in any number of counterparts, each of which
when so executed and delivered shall constitute an original for all purposes,
but all such counterparts taken together shall constitute one and the same
instrument.
15. Effectiveness. This Agreement shall become effective as to
any party upon the execution hereof by such party and delivery of its executed
counterpart to the Agent.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first written above.
OXFORD AUTOMOTIVE, INC.
By: John H. Ferguson
-----------------------------------
Its: Vice President - Financial
Operations and Assistant Secretary
----------------------------------
4
<PAGE> 5
BMG NORTH AMERICA LIMITED
By: John H. Ferguson
-----------------------------------
Its: Treasurer
----------------------------------
LOBDELL EMERY CORPORATION
By: John H. Ferguson
-----------------------------------
Its: Assistant Treasurer
----------------------------------
CREATIVE FABRICATION CORPORATION
By: John H. Ferguson
-----------------------------------
Its: Assistant Treasurer
----------------------------------
WINCHESTER FABRICATION CORPORATION
By: John H. Ferguson
-----------------------------------
Its: Assistant Treasurer
----------------------------------
PARALLEL GROUP INTERNATIONAL, INC.
By: John H. Ferguson
-----------------------------------
Its: Assistant Treasurer
----------------------------------
LASERWELD INTERNATIONAL, L.L.C.
By: Lobdell Emery Corporation, its
sole member
By: John H. Ferguson
-----------------------------------
Its: Assistant Treasurer
----------------------------------
CONCEPT MANAGEMENT CORPORATION
By: John H. Ferguson
-----------------------------------
Its: Assistant Treasurer
----------------------------------
5
<PAGE> 6
LEWIS EMERY CAPITAL CORPORATION
By: John H. Ferguson
-----------------------------------
Its: Assistant Treasurer
----------------------------------
BMG HOLDINGS INC.
By: John H. Ferguson
-----------------------------------
Its: Treasurer
----------------------------------
976459 ONTARIO LIMITED
By: John H. Ferguson
-----------------------------------
Its: Treasurer
----------------------------------
829500 ONTARIO LIMITED
By: John H. Ferguson
-----------------------------------
Its: Treasurer
----------------------------------
6
<PAGE> 1
EXHIBIT 4.16
OXFORD AUTOMOTIVE, INC.
Senior Subordinated Notes Due 2007
REGISTRATION AGREEMENT
New York, New York
June 24, 1997
Salomon Brothers Inc
Merrill Lynch, Pierce, Fenner &
Smith Incorporated
McDonald & Company
First Chicago Capital Markets, Inc.
Schroder Wertheim & Co. Incorporated
c/o Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048
Ladies and Gentlemen:
Oxford Automotive, Inc., a Michigan corporation (the "Company"),
proposes to issue and sell to certain purchasers (the "Purchasers"), upon the
terms set forth in a purchase agreement of even date herewith (the "Purchase
Agreement"), its $125,000,000 aggregate principal amount 10-1/8% Senior
Subordinated Notes due 2007 (the "Securities") which Securities will be
guaranteed by BMG North America Limited, an Ontario corporation; BMG Holdings,
Inc., an Ontario corporation; Lobdell Emery Corporation, a Michigan
corporation; Winchester Fabrication Corporation, a Michigan corporation;
Creative Fabrication Corporation, a Tennessee corporation; Parallel Group
International, Inc., an Indiana corporation; Laserweld International LLC, an
Indiana corporation; Concept Management Corporation, a Michigan corporation,
and Lewis Emery Capital Corporation, a Michigan corporation, (each a
"Subsidiary Guarantor" and collectively the "Subsidiary Guarantors") (the
"Initial Placement"). The Company and the Subsidiary Guarantors are
collectively referred to herein as the "Issuers." As an inducement to the
Purchasers to enter into the Purchase Agreement and in satisfaction of a
condition to your obligations thereunder, the Issuers agree with you, (i) for
your benefit and the benefit of the other Purchasers and (ii) for the benefit
of the holders from time to time of the Securities (including you and the other
Purchasers) (each of the foregoing, a "Holder" and, together, the "Holders"),
as follows:
<PAGE> 2
-2-
1. Definitions. Capitalized terms used herein
without definition shall have their respective meanings set forth in the
Purchase Agreement. As used in this Agreement, the following capitalized
defined terms shall have the following meanings:
"Act" means the Securities Act of 1933, as amended, and the rules and
regulations of the Commission promulgated thereunder.
"Affiliate" of any specified person means any other person
which, directly or indirectly, is in control of, is controlled by, or is under
common control with, such specified person. For purposes of this definition,
control of a person means the power, direct or indirect, to direct or cause the
direction of the management and policies of such person whether by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Closing Date" has the meaning set forth in the Purchase
Agreement.
"Commission" means the Securities and Exchange Commission.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated
thereunder.
"Exchange Offer Registration Period" means the one year period
following the consummation of the Registered Exchange Offer, exclusive of any
period during which any stop order shall be in effect suspending the
effectiveness of the Exchange Offer Registration Statement.
"Exchange Offer Registration Statement" means a registration
statement of the Company on an appropriate form under the Act with respect to
the Registered Exchange Offer, all amendments and supplements to such
registration statement, including post-effective amendments, in each case
including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.
"Exchanging Dealer" means any Holder (which may include the
Purchasers) which is a broker-dealer, electing to exchange Securities acquired
for its own account as a result of market-making activities or other trading
activities, for New Securities.
<PAGE> 3
-3-
"Final Memorandum" has the meaning set forth in the Purchase
Agreement.
"Holder" has the meaning set forth in the preamble hereto.
"Indenture" means the Indenture relating to the Securities
dated as of June 15, 1997, between the Company, the Subsidiary Guarantors and
First Trust National Association, as trustee, as the same may be amended from
time to time in accordance with the terms thereof.
"Initial Placement" has the meaning set forth in the preamble
hereto.
"Majority Holders" means the Holders of a majority of the
aggregate principal amount of securities registered under a Registration
Statement.
"Managing Underwriters" means the investment banker or
investment bankers and manager or managers that shall administer an
underwritten offering.
"New Securities" means debt securities of the Company
identical in all material respects to the Securities (except that the cash
interest and interest rate step-up provisions and the transfer restrictions
will be modified or eliminated, as appropriate), to be issued under the
Indenture or the New Securities Indenture.
"New Securities Indenture" means an indenture between the
Company, the Subsidiary Guarantors and the New Securities Trustee, identical in
all material respects with the Indenture (except that the cash interest and
interest rate step-up provisions will be modified or eliminated, as
appropriate).
"New Securities Trustee" means a bank or trust company
reasonably satisfactory to the Purchaser, as trustee with respect to the New
Securities under the New Securities Indenture.
"Prospectus" means the prospectus included in any Registration
Statement (including, without limitation, a prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A under the Act), as amended or
supplemented by any prospectus supplement, with respect to the terms of the
offering of any portion of the Securities or the
<PAGE> 4
-4-
New Securities, covered by such Registration Statement, and all amendments and
supplements to the Prospectus, including post-effective amendments.
"Registered Exchange Offer" means the proposed offer to the
Holders to issue and deliver to such Holders, in exchange for the securities, a
like principal amount of the New Securities.
"Registration Statement" means any Exchange Offer Registration
Statement or Shelf Registration Statement that covers any of the Securities or
the New Securities pursuant to the provisions of this Agreement, amendments and
supplements to such registration statement, including post-effective
amendments, in each case including the Prospectus contained therein, all
exhibits thereto and all material incorporated by reference therein.
"Securities" has the meaning set forth in the preamble hereto.
"Shelf Registration" means a registration effected pursuant to
Section 3 hereof.
"Shelf Registration Period" has the meaning set forth in
Section 3(b) hereof.
"Shelf Registration Statement" means a "shelf" registration
statement of the Company pursuant to the provisions of Section 3 hereof which
covers some or all of the Securities or New Securities, as applicable, on an
appropriate form under Rule 415 under the Act, or any similar rule that may be
adopted by the Commission, amendments and supplements to such registration
statement, including post-effective amendments, in each case including the
Prospectus contained therein, all exhibits thereto and all material
incorporated by reference therein.
"Trustee" means the trustee with respect to the Securities
under the Indenture.
"underwriter" means any underwriter of Securities in connection with
an offering thereof under a Shelf Registration Statement.
2. Registered Exchange Offer; Resales of New Securities by
Exchanging Dealers; Private Exchange. (a) The Issuers shall prepare and, not
later than 45 days following the Closing Date, shall file with the Commission
the Exchange Offer Regis-
<PAGE> 5
-5-
tration Statement with respect to the Registered Exchange Offer. The Issuers
shall cause the Exchange Offer Registration Statement to become effective under
the Act within 120 days of the Closing Date.
(b) Upon the effectiveness of the Exchange Offer
Registration Statement, the Issuers shall promptly commence the Registered
Exchange Offer, it being the objective of such Registered Exchange Offer to
enable each Holder electing to exchange Securities for New Securities (assuming
that such Holder is not an affiliate of the Issuers within the meaning of the
Act, acquires the New Securities in the ordinary course of such Holder's
business and has no arrangements with any person to participate in the
distribution of the New Securities) to trade such New Securities from and after
their receipt without any limitations or restrictions under the Act and without
material restrictions under the securities laws of a substantial proportion of
the several states of the United States.
(c) In connection with the Registered Exchange Offer, the
Issuers shall:
(i) mail to each Holder a copy of the Prospectus forming
part of the Exchange Offer Registration Statement, together with an
appropriate letter of transmittal and related documents;
(ii) keep the Registered Exchange Offer open for not less
than 30 days and not more than 45 days after the date notice thereof is
mailed to the Holders (or longer if required by applicable law);
(iii) utilize the services of a depositary for the Registered
Exchange Offer with an address in the Borough of Manhattan, The City
of New York; and
(iv) comply in all respects with all applicable laws.
(d) As soon as practicable after the close of the
Registered Exchange Offer, the Issuers shall:
(i) accept for exchange all Securities tendered and not validly
withdrawn pursuant to the Registered Exchange Offer;
(ii) deliver to the Trustee for cancellation all securities so
accepted for exchange; and
<PAGE> 6
-6-
(iii) cause the Trustee or the New Securities Trustee, as the case
may be, promptly to authenticate and deliver to each Holder of
Securities, New Securities equal in principal amount to the Securities
of such Holder so accepted for exchange.
(e) The Purchasers and the Issuers acknowledge that,
pursuant to interpretations by the Commission's staff of Section 5 of the Act,
and in the absence of an applicable exemption therefrom, each Exchanging Dealer
is required to deliver a Prospectus in connection with a sale of any New
Securities received by such Exchanging Dealer pursuant to the Registered
Exchange Offer in exchange for Securities acquired for its own account as a
result of market-making activities or other trading activities. Accordingly,
the Issuers shall:
(i) include the information set forth in Annex A hereto on the
cover of the Exchange Offer Registration Statement, in Annex B hereto in
the forepart of the Exchange Offer Registration Statement in a section
setting forth details of the Exchange Offer, and in Annex C hereto in
the underwriting or plan of distribution section of the Prospectus
forming a part of the Exchange Offer Registration Statement, and include
the information set forth in Annex D hereto in the Letter of Transmittal
delivered pursuant to the Registered Exchange Offer; and
(ii) use their best efforts to keep the Exchange Offer
Registration Statement continuously effective under the Act during the
Exchange Offer Registration Period for delivery by Exchanging Dealers in
connection with sales of New Securities received pursuant to the
Registered Exchange Offer, as contemplated by Section 4(h) below.
(f) In the event that any Purchaser determines that it is
not eligible to participate in the Registered Exchange Offer with respect to
the exchange of Securities constituting any portion of an unsold allotment, at
the request of such Purchaser, the Issuers shall issue and deliver to such
Purchaser or the party purchasing New Securities registered under a Shelf
Registration Statement as contemplated by Section 3 hereof from such Purchaser,
in exchange for such Securities, a like principal amount of New Securities.
The Issuers shall seek to cause the CUSIP Service Bureau to issue the same
CUSIP number for such New Securities as for New Securities issued pursuant to
the Registered Exchange Offer.
<PAGE> 7
-7-
3. Shelf Registration. If, (i) because of any change in law or
applicable interpretations thereof by the Commission's staff, the Issuers
determine upon advice of their outside counsel that they are not permitted to
effect the Registered Exchange Offer as contemplated by Section 2 hereof, or
(ii) if for any other reason the Registered Exchange Offer is not consummated
within 150 days of the date hereof, or (iii) if any Purchaser so requests with
respect to Securities held by it following consummation of the Registered
Exchange Offer, or (iv) if any Holder (other than a Purchaser) is not eligible
to participate in the Registered Exchange Offer or (v) in the case of any
Purchaser that participates in the Registered Exchange Offer or acquires New
Securities pursuant to Section 2(f) hereof, such Purchaser does not receive
freely tradeable New Securities in exchange for Securities constituting any
portion of an unsold allotment (it being understood that, for purposes of this
Section 3, (x) the requirement that a Purchaser deliver a Prospectus containing
the information required by Items 507 and/or 508 of Regulation S-K under the
Act in connection with sales of New Securities acquired in exchange for such
Securities shall result in such New Securities being not "freely tradeable" but
(y) the requirement that an Exchanging Dealer deliver a Prospectus in
connection with sales of New Securities acquired in the Registered Exchange
Offer in exchange for Securities acquired as a result of market-making
activities or other trading activities shall not result in such New Securities
being not "freely tradeable"), the following provisions shall apply:
(a) The Issuers shall as promptly as practicable (but in no event
more than 45 days after so required or requested pursuant to this
Section 3), file with the Commission and thereafter shall cause to be
declared effective under the Act a Shelf Registration Statement
relating to the offer and sale of the Securities or the New Securities,
as applicable, by the Holders from time to time in accordance with the
methods of distribution elected by such Holders and set forth in such
Shelf Registration Statement; provided that, with respect to New
Securities received by a Purchaser in exchange for securities
constituting any portion of an unsold allotment, the Issuers may, if
permitted by current interpretations by the Commission's staff, file a
post-effective amendment to the Exchange Offer Registration Statement
containing the information required by Regulation S-K Items 507 and/or
508, as applicable, in satisfaction of its obligations under this
paragraph (a) with respect thereto, and any such Exchange Offer
Registration Statement, as so amended, shall
<PAGE> 8
-8-
be referred to herein as, and governed by the provisions herein applicable
to, a Shelf Registration Statement.
(b) The Issuers shall use their best efforts to keep the Shelf
Registration Statement continuously effective in order to permit the
Prospectus forming part thereof to be usable by Holders for a period of
three years from the date the Shelf Registration Statement is declared
effective by the Commission or such shorter period that will terminate
when all the Securities or New Securities, as applicable, covered by the
Shelf Registration Statement have been sold pursuant to the Shelf
Registration Statement (in any such case, such period being called the
"Shelf Registration Period"). The Issuers shall be deemed not to have
used their best efforts to keep the Shelf Registration Statement effective
during the requisite period if any Issuer voluntarily takes any action
that would result in Holders of securities covered thereby not being able
to offer and sell such securities during that period, unless (i) such
action is required by applicable law, or (ii) such action is taken by such
Issuer in good faith and for valid business reasons (not including
avoidance of such Issuer's obligations hereunder), including the
acquisition or divestiture of assets, so long as the such Issuer promptly
thereafter complies with the requirements of Section 4(k) hereof, if
applicable.
4. Registration Procedures. In connection with any Shelf
Registration Statement and, to the extent applicable, any Exchange Offer
Registration Statement, the following provisions shall apply:
(a) The Issuers shall furnish to you, prior to the filing thereof
with the Commission, a copy of any Shelf Registration Statement and any
Exchange Offer Registration Statement, and each amendment thereof and each
amendment or supplement, if any, to the Prospectus included therein and
shall use their best efforts to reflect in each such document, when so
filed with the Commission, such comments as you reasonably may propose.
(b) The Issuers shall ensure that (i) any Registration Statement
and any amendment thereto and any Prospectus forming part thereof and any
amendment or supplement thereto complies in all material respects with the
Act and the rules and regulations thereunder, (ii) any Registration
Statement and any amendment thereto does not, when it becomes effective,
contain an untrue statement of a mate-
<PAGE> 9
-9-
rial fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading and (iii) any
Prospectus forming part of any Registration Statement, and any amendment
or supplement to such Prospectus, does not include an untrue statement of
a material fact or omit to state a material fact necessary in order
to make the statements, in the light of the circumstances under which they
were made, not misleading.
(c) (1) The Issuers shall advise you or your representative and,
in the case of a Shelf Registration Statement, the Holders of securities
covered thereby, and, if requested by you or your representative or any
such Holder, confirm such advice in writing:
(i) when a Registration Statement and any amendment thereto
has been filed with the Commission and when the Registration Statement or
any post-effective amendment thereto has become effective; and
(ii) of any request by the Commission for amendments or
supplements to the Registration Statement or the Prospectus included
therein or for additional information.
(2) The Issuers shall advise you or your representative and, in
the case of a Shelf Registration Statement, the Holders of securities covered
thereby, and, in the case of an Exchange Offer Registration Statement, any
Exchanging Dealer which has provided in writing to the Company a telephone or
facsimile number and address for notices, and, if requested by you or your
representative or any such Holder or Exchanging Dealer, confirm such advice in
writing:
(i) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the
initiation of any proceedings for that purpose;
(ii) of the receipt by the Issuers of any notification with
respect to the suspension of the qualification of the securities included
therein for sale in any jurisdiction or the initiation or threatening of
any proceeding for such purpose; and
<PAGE> 10
-10-
(iii) of the happening of any event that requires the making of any
changes in the Registration Statement or the Prospectus so that, as of
such date, the statements therein are not misleading and do not omit to
state a material fact required to be stated therein or necessary to make
the statements therein (in the case of the Prospectus, in light of the
circumstances under which they were made) not misleading (which advice
shall be accompanied by an instruction to suspend the use of the Prospectus
until the requisite changes have been made).
(d) The Issuers shall use their best efforts to obtain the
withdrawal of any order suspending the effectiveness of any Registration
Statement at the earliest possible time.
(e) The Issuers shall furnish to each Holder of securities
included within the coverage of any Shelf Registration Statement, without
charge, at least one copy of such Shelf Registration Statement and any
post-effective amendment thereto, including financial statements and schedules,
and, if the Holder so requests in writing, all exhibits (including those
incorporated by reference).
(f) The Issuers shall, during the Shelf Registration Period,
deliver to each Holder of securities included within the coverage of any Shelf
Registration Statement, without charge, as many copies of the Prospectus
(including each preliminary Prospectus) included in such Shelf Registration
Statement and any amendment or supplement thereto as such Holder may reasonably
request; and the Issuers consent to the use of the Prospectus or any amendment
or supplement thereto by each of the selling Holders of securities in
connection with the offering and sale of the securities covered by the
Prospectus or any amendment or supplement thereto.
(g) The Issuers shall furnish to each Exchanging Dealer which so
requests, without charge, at least one copy of the Exchange Offer Registration
Statement and any post-effective amendment thereto, including financial
statements and schedules, any documents incorporated by reference therein, and,
if the Exchanging Dealer so requests in writing, all exhibits (including those
incorporated by reference).
<PAGE> 11
-11-
(h) The Issuers shall, during the Exchange Offer Registration
Period, promptly deliver to each Exchanging Dealer, without charge, as many
copies of the Prospectus included in such Exchange Offer Registration Statement
and any amendment or supplement thereto as such Exchanging Dealer may
reasonably request for delivery by such Exchanging Dealer in connection with a
sale of New Securities received by it pursuant to the Registered Exchange
Offer; and the Issuers consent to the use of the Prospectus or any amendment or
supplement thereto by any such Exchanging Dealer, as aforesaid.
(i) Prior to the Registered Exchange Offer or any other offering
of securities pursuant to any Registration Statement, the Issuers shall
register or qualify or cooperate with the Holders of securities included
therein and their respective counsel in connection with the registration or
qualification of such securities for offer and sale under the securities or
blue sky laws of such jurisdictions as any such Holders reasonably request in
writing and do any and all other acts or things necessary or advisable to
enable the offer and sale in such jurisdictions of the securities covered by
such Registration Statement; provided, however, that the Issuers will not be
required to qualify generally to do business in any jurisdiction where it is
not then so qualified or to take any action which would subject it to general
service of process or to taxation in any such jurisdiction where it is not then
so subject.
(j) The Issuers shall cooperate with the Holders of Securities to
facilitate the timely preparation and delivery of certificates representing
Securities to be sold pursuant to any Registration Statement free of any
restrictive legends and in such denominations and registered in such names as
Holders may request prior to sales of securities pursuant to such Registration
Statement.
(k) Upon the occurrence of any event contemplated by
paragraph (c)(2)(iii) above, the Issuers shall promptly prepare a
post-effective amendment to any Registration Statement or an amendment or
supplement to the related Prospectus or file any other required document so
that, as thereafter delivered to purchasers of the Securities included therein,
the Prospectus will not include an untrue statement of a material fact or omit
to state any material fact necessary to make the statements therein, in the
<PAGE> 12
-12-
light of the circumstances under which they were made, not misleading.
(l) Not later than the effective date of any such Registration
Statement hereunder, the Issuers shall provide a CUSIP number for the
Securities or New Securities, as the case may be, registered under such
Registration Statement, and provide the applicable trustee with printed
certificates for such Securities or New Securities, in a form eligible for
deposit with The Depository Trust Company.
(m) The Issuers shall use their best efforts to comply with all
applicable rules and regulations of the Commission and shall make generally
available to its security holders as soon as practicable after the effective
date of the applicable Registration Statement an earnings statement satisfying
the provisions of Section 11(a) of the Act.
(n) The Issuers shall cause the Indenture or the New Securities
Indenture, as the case may be, to be qualified under the Trust Indenture Act in
a timely manner.
(o) The Issuers may require each Holder of Securities to be sold
pursuant to any Shelf Registration Statement to furnish to the Issuers such
information regarding the Holder and the distribution of such Securities as the
Issuers may from time to time reasonably require for inclusion in such
Registration Statement. No Holder may include any of its Securities in any
Shelf Registration Statement pursuant to this Agreement unless and until such
Holder furnishes to the Issuers in writing, within 20 days after receipt of a
written request therefor, such information as the Issuers may reasonably
request, including, but not limited to, information specified by Regulation S-K
or otherwise required by the Commission for use in connection with any Shelf
Registration Statement or Prospectus or preliminary Prospectus included
therein. Each Holder as to which any Shelf Registration Statement is being
effected agrees to furnish promptly to the Issuers all information required to
be disclosed in order to make the information previously furnished to the
Issuers by such Holder not materially misleading.
(p) The Issuers shall, if requested, promptly incorporate in a
Prospectus supplement or post-effective amendment to a Shelf Registration
Statement, such information
<PAGE> 13
-13-
as the Managing Underwriters and Majority Holders reasonably agree should be
included therein and shall make all required filings of such Prospectus
supplement or post-effective amendment as soon as notified of the matters to be
incorporated in such Prospectus supplement or post-effective amendment.
(q) In the case of any Shelf Registration Statement, the Issuers
shall enter into such agreements (including underwriting agreements) and take
all other appropriate actions in order to expedite or facilitate the
registration or the disposition of the Securities, and in connection therewith,
if an underwriting agreement is entered into, cause the same to contain
indemnification provisions and procedures no less favorable than those set
forth in Section 6 (or such other provisions and procedures acceptable to the
Majority Holders and the Managing Underwriters, if any), with respect to all
parties to be indemnified pursuant to Section 6 from Holders of Securities to
the Company.
(r) In the case of any Shelf Registration Statement, the Issuers
shall (i) make reasonably available for inspection by the Holders of Securities
to be registered thereunder, any underwriter participating in any disposition
pursuant to such Registration Statement, and any attorney, accountant or other
agent retained by the Holders or any such underwriter all relevant financial
and other records, pertinent corporate documents and properties of the Issuers
and their subsidiaries; (ii) cause the Issuers' officers, directors and
employees to supply all relevant information reasonably requested by the
Holders or any such underwriter attorney, accountant or agent in connection
with any such Registration Statement as is customary for similar due diligence
examinations; provided, however, that any information that is designated in
writing by the Issuers, in good faith, as confidential at the time of delivery
of such information shall be kept confidential by the Holders or any such
underwriter, attorney, accountant or agent, unless such disclosure is made in
connection with a court proceeding or required by law, or such information
becomes available to the public generally or through a third party without an
accompanying obligation of confidentiality; (iii) make such representations and
warranties to the Holders of Securities registered thereunder and the
underwriters, if any, in form, substance and scope as are customarily made by
issuers to underwriters in primary underwritten offerings and covering
<PAGE> 14
-14-
matters including, but not limited to, those set forth in the Purchase
Agreement; (iv) obtain opinions of counsel to the Issuers and updates thereof
(which counsel and opinions (in form, scope and substance) shall be reasonably
satisfactory to the Managing Underwriters, if any) addressed to each selling
Holder of Securities registered thereunder and the underwriters, if any, in
customary form and covering such matters as are customarily covered in opinions
requested in underwritten offerings; (v) obtain "cold comfort" letters and
updates thereof from the independent certified public accountants of the
Issuers (and, if necessary, any other independent certified public accountants
of any subsidiary of the Issuers or of any business acquired by the Issuers for
which financial statements and financial data are, or are required to be,
included in the Registration Statement), addressed to each selling Holder of
securities registered thereunder and the underwriters, if any, in customary
form and covering matters of the type customarily covered in "cold comfort"
letters in connection with primary underwritten offerings; and (vi) deliver
such documents and certificates as may be reasonably requested by the Majority
Holders and the Managing Underwriters, if any, including those to evidence
compliance with Section 4(k) and with any customary conditions contained in the
underwriting agreement or other agreement entered into by the Issuers. The
foregoing actions set forth in clauses (iii), (iv), (v) and (vi) of this
Section 4(r) shall be performed at (A) the effectiveness of such Registration
Statement and each post-effective amendment thereto and (B) each closing under
any underwriting or similar agreement as and to the extent required thereunder.
(s) In the case of any Exchange Offer Registration Statement, the
Issuers shall, to the extent requested by any Purchaser, (i) make reasonably
available for inspection by such Purchaser, and any attorney, accountant or
other agent retained by such Purchaser, all relevant financial and other
records, pertinent corporate documents and properties of the Issuers and their
subsidiaries; (ii) cause the Issuers' officers, directors and employees to
supply all relevant information reasonably requested by such Purchaser or any
such attorney, accountant or agent in connection with any such Registration
Statement as is customary for similar due diligence examinations; provided,
however, that any information that is designated in writing by the Issuers, in
good faith, as confidential at the time of delivery of such information shall
be kept
<PAGE> 15
-15-
confidential by such Purchaser or any such attorney, accountant or agent,
unless such disclosure is made in connection with a court proceeding or
required by law, or such information becomes available to the public
generally or through a third party without an accompanying obligation of
confidentiality; (iii) make such representations and warranties to such
Purchaser, in form, substance and scope as are customarily made by issuers
to underwriters in primary underwritten offerings and covering matters
including, but not limited to, those set forth in the Purchase Agreement;
(iv) obtain opinions of counsel to the Issuers and updates thereof (which
counsel and opinions (in form, scope and substance) shall be reasonably
satisfactory to such Purchaser and its counsel, addressed to such
Purchaser, covering such matters as are customarily covered in opinions
requested in underwritten offerings; (v) obtain "cold comfort" letters and
updates thereof from the independent certified public accountants of the
Issuers (and, if necessary, any other independent certified public
accountants of any subsidiary of the Issuers or of any business acquired by
the Issuers for which financial statements and financial data are, or are
required to be, included in the Registration Statement), addressed to such
Purchaser, in customary form and covering matters of the type customarily
covered in "cold comfort" letters in connection with primary underwritten
offerings, or if requested by such Purchaser or its counsel in lieu of a
"cold comfort" letter, an agreed-upon procedures letter under Statement on
Auditing Standards No. 35, covering matters requested by such Purchaser or
its counsel; and (vi) deliver such documents and certificates as may be
reasonably requested by such Purchaser or its counsel, including those to
evidence compliance with Section 4(k) and with conditions customarily
contained in underwriting agreements. The foregoing actions set forth in
clauses (iii), (iv), (v), and (vi) of this Section 4(s) shall be performed
at the close of the Registered Exchange Offer and the effective date of any
post-effective amendment to the Exchange Offer Registration Statement.
5. Registration Expenses. The Issuers shall bear all expenses
incurred in connection with the performance of their obligations
under Sections 2, 3 and 4 hereof and, in the event of any Shelf Registration
Statement, will reimburse the Holders for the reasonable fees and disbursements
of one firm or counsel designated by the Majority Holders to act as counsel for
the Holders in connection therewith, and, in the case of any Exchange Offer
Registration Statement, will reimburse the
<PAGE> 16
-16-
Purchasers for the reasonable fees and disbursements of one firm or counsel
acting in connection therewith.
6. Indemnification and Contribution. (a) In connection with any
Registration Statement, the Issuers, jointly and severally, agree to indemnify
and hold harmless each Holder of Securities covered thereby (including each
Purchaser and, with respect to any Prospectus delivery as contemplated in
Section 4(h) hereof, each Exchanging Dealer), the directors, officers,
employees and agents of each such Holder and each person who controls any such
Holder within the meaning of either the Act or the Exchange Act against any and
all losses, claims, damages or liabilities, joint or several, to which they or
any of them may become subject under the Act, the Exchange Act or other Federal
or state statutory law or regulation, at common law or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement as originally filed
or in any amendment thereof, or in any preliminary Prospectus or Prospectus, or
in any amendment thereof or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein in light of
the circumstances under which they were made not misleading, and agrees to
reimburse each such indemnified party, as incurred, for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that the Issuers will not be liable in any case to the extent that any such
loss, claim, damage or liability arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with written information furnished
to the Issuers by or on behalf of any such Holder specifically for inclusion
therein and provided, further, with respect to any untrue statement or omission
of a material fact made in any Preliminary Prospectus, the indemnity agreement
contained in this Section 6(a) shall not inure to the benefit of any Holder (or
any of the directors, officers and employees of such Holder or any controlling
person of such Holder) from whom the person asserting any such loss, claim,
damage or liability purchased the Securities concerned, to the extent that any
such loss, claim, damage or liability of such Holder occurs under circumstances
where it shall have been determined by a court of competent jurisdiction by
final and nonappealable judgment that (x) the Issuers had previously furnished
copies of the Prospectus to the Holder, (y) the untrue
<PAGE> 17
-17-
statement or omission of a material fact contained in the Preliminary
Prospectus was corrected in the Prospectus and (z) there was not sent or given
to such person, at or prior to the written confirmation of the sale of such
Securities to such person, a copy of the Prospectus. This indemnity agreement
will be in addition to any liability which the Company may otherwise have.
The Issuers, jointly and severally, also agree to indemnify or
contribute to Losses of, as provided in Section 6(d), any underwriters of
Securities registered under a Shelf Registration Statement, their officers and
directors and each person who controls such underwriters on substantially the
same basis as that of the indemnification of the Purchaser and the selling
Holders provided in this Section 6(a) and shall, if requested by any Holder,
enter into an underwriting agreement reflecting such agreement, as provided in
Section 4(q) hereof.
(b) Each Holder of Securities covered by a Registration
Statement (including each Purchaser and, with respect to any Prospectus
delivery as contemplated in Section 4(h) hereof, each Exchanging Dealer)
severally agrees to indemnify and hold harmless (i) the Issuers, (ii) each of
their directors, (iii) each of their respective officers who signs such
Registration Statement and (iv) each person who controls the Issuers within the
meaning of either the Act or the Exchange Act to the same extent as the
foregoing indemnity from the Issuers to each such Holder, but only with
reference to written information relating to such Holder furnished to the
Issuers by or on behalf of such Holder specifically for inclusion in the
documents referred to in the foregoing indemnity. This indemnity agreement
will be in addition to any liability which any such Holder may otherwise have.
(c) Promptly after receipt by an indemnified party under
this Section 6 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the
indemnifying party under this Section 6, notify the indemnifying party in
writing of the commencement thereof; but the failure so to notify the
indemnifying party (i) will not relieve it from liability under paragraph (a)
or (b) above unless and to the extent it did not otherwise learn of such action
and such failure results in the forfeiture by the indemnifying party of
substantial rights and defenses and (ii) will not, in any event, relieve the
indemnifying party from any obligations to any indemnified party other than the
indemnification obligation provided in paragraph (a) or (b) above. The
indemnifying party shall be entitled to ap-
<PAGE> 18
-18-
point counsel of the indemnifying party's choice at the indemnifying party's
expense to represent the indemnified party in any action for which
indemnification is sought (in which case the indemnifying party shall not
thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth below);
provided, however, that such counsel shall be reasonably satisfactory to the
indemnified party. Notwithstanding the indemnifying party's election to
appoint counsel to represent the indemnified party in an action, the
indemnified party shall have the right to employ separate counsel (including
local counsel), and the indemnifying party shall bear the reasonable fees,
costs and expenses of such separate counsel (and local counsel) if (i) the use
of counsel chosen by the indemnifying party to represent the indemnified party
would present such counsel with a conflict of interest, (ii) the actual or
potential defendants in, or targets of, any such action include both the
indemnified party and the indemnifying party and counsel to the indemnified
party shall have reasonably concluded that there may be legal defenses
available to such indemnified party and/or other indemnified parties which are
different from or additional to those available to the indemnifying party,
(iii) the indemnifying party shall not have employed counsel reasonably
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of the institution of such action or (iv) the
indemnifying party shall authorize the indemnified party to employ separate
counsel at the expense of the indemnifying party. An indemnifying party will
not, without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any pending
or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional release
of each indemnified party from all liability arising out of such claim, action,
suit or proceeding.
(d) In the event that the indemnity provided in
paragraph (a) or (b) of this Section 6 is unavailable to or insufficient to
hold harmless an indemnified party for any reason, then each applicable
indemnifying party, in lieu of indemnifying such indemnified party, shall have
a joint and several obligation to contribute to the aggregate losses, claims,
damages and liabilities (including legal or other expenses reasonably incurred
in connection with investigating or defending same) (collectively, "Losses") to
which such indemnified party may be subject in such proportion as is
appropriate to reflect
<PAGE> 19
-19-
the relative benefits received by such indemnifying party, on the one hand, and
such indemnified party, on the other hand, from the Initial Placement and the
Registration Statement which resulted in such Losses; provided, however, that
in no case shall any Purchaser or any subsequent Holder of any Security or New
Security be responsible, in the aggregate, for any amount in excess of the
purchase discount or commission applicable to such Security, or in the case of
a New Security, applicable to the Security which was exchangeable into such New
Security, as set forth on the cover page of the Final Memorandum, nor shall any
underwriter be responsible for any amount in excess of the underwriting
discount or commission applicable to the Securities purchased by such
underwriter under the Registration Statement which resulted in such Losses. If
the allocation provided by the immediately preceding sentence is unavailable
for any reason, the indemnifying party and the indemnified party shall
contribute in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of such indemnifying party, on
the one hand, and such indemnified party, on the other hand, in connection with
the statements or omissions which resulted in such Losses as well as any other
relevant equitable considerations. Benefits received by the Issuers shall be
deemed to be equal to proceeds from the Initial Placement net of purchase
discounts and commissions (before deducting expenses) as set forth on the cover
page of the Final Memorandum. Benefits received by the Purchasers shall be
deemed to be equal to the total purchase discounts and commissions as set forth
on the cover page of the Final Memorandum, and benefits received by any other
Holders shall be deemed to be equal to the value of receiving Securities or New
Securities, as applicable, registered under the Act. Benefits received by any
underwriter shall be deemed to be equal to the total underwriting discounts and
commissions, as set forth on the cover page of the Prospectus forming a part of
the Registration Statement which resulted in such Losses. Relative fault shall
be determined by reference to whether any alleged untrue statement or omission
relates to information provided by the indemnifying party, on the one hand, or
by the indemnified party, on the other hand. The parties agree that it would
not be just and equitable if contribution were determined by pro rata
allocation or any other method of allocation which does not take account of the
equitable considerations referred to above. Notwithstanding the provisions of
this paragraph (d), no person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. For
purposes of this Section 6, each person who controls a Holder within the
meaning of either
<PAGE> 20
-20-
the Act or the Exchange Act and each director, officer, employee and agent of
such Holder shall have the same rights to contribution as such Holder, and each
person who controls the Issuers within the meaning of either the Act or the
Exchange Act, each officer of the Issuers who shall have signed the
Registration Statement and each director of the Issuers shall have the same
rights to contribution as the Company or the Subsidiary Guarantors
respectively, subject in each case to the applicable terms and conditions of
this paragraph (d).
(e) The provisions of this Section 6 will remain in full
force and effect, regardless of any investigation made by or on behalf of any
Holder or the Issuers or any of the officers, directors or controlling
persons referred to in Section 6 hereof, and will survive the sale by a Holder
of securities covered by a Registration Statement.
7. Miscellaneous.
(a) No Inconsistent Agreements. The Issuers have not, as of the
date hereof, entered into, nor shall any of them, on or after the date
hereof, enter into, any agreement with respect to their securities that is
inconsistent with the rights granted to the Holders herein or otherwise
conflicts with the provisions hereof.
(b) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended,
qualified, modified or supplemented, and waivers or consents to departures
from the provisions hereof may not be given, unless the Issuers have
obtained the written consent of the Holders of at least a majority of the
then outstanding aggregate principal amount of Securities (or, after the
consummation of any Exchange Offer in accordance with Section 2 hereof, of
New Securities); provided that, with respect to any matter that directly or
indirectly affects the rights of any Purchaser hereunder, the Issuers shall
obtain the written consent of each such Purchaser against which such
amendment, qualification, supplement, waiver or consent is to be effective.
Notwithstanding the foregoing (except the foregoing proviso), a waiver or
consent to departure from the provisions hereof with respect to a matter
that relates exclusively to the rights of Holders whose securities are
being sold pursuant to a Registration Statement and that does not directly
or indirectly affect the rights of other Holders may be given by the
Majority Holders, determined on the
<PAGE> 21
-21-
basis of securities being sold rather than registered under such
Registration Statement.
(c) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery,
first-class mail, telex, telecopier, or air courier guaranteeing overnight
delivery:
(1) if to a Holder, at the most current address given by such
holder to the Issuers in accordance with the provisions of this
Section 7(c), which address initially is, with respect to each Holder,
the address of such Holder maintained by the Registrar under the
Indenture, with a copy in like manner to Salomon Brothers Inc;
(2) if to you, initially at the respective addresses set
forth in the Purchase Agreement; and
(3) if to the Issuers, initially at the address of the
Company set forth in the Purchase Agreement with copies as indicated
therein.
All such notices and communications shall be deemed to have
been duly given when received.
The Purchasers or the Issuers by notice to the other may designate
additional or different addresses for subsequent notices or communications.
(d) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of
the parties, including, without the need for an express assignment or any
consent by the Issuers thereto, subsequent Holders of Securities and/or New
Securities. The Issuers hereby agree to extend the benefits of this
Agreement to any Holder of Securities and/or New Securities and any such
Holder may specifically enforce the provisions of this Agreement as if an
original party hereto.
(e) Counterparts. This agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same agreement.
<PAGE> 22
-22-
(f) Headings. The headings in this agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning
hereof.
(g) Governing Law. This agreement shall be governed by and
construed in accordance with the internal laws of the State of New York
applicable to agreements made and to be performed in said State.
(h) Severability. In the event that any one of more of the
provisions contained herein, or the application thereof in any
circumstances, is held invalid, illegal or unenforceable in any respect for
any reason, the validity, legality and enforceability of any such provision
in every other respect and of the remaining provisions hereof shall not be
in any way impaired or affected thereby, it being intended that all of the
rights and privileges of the parties shall be enforceable to the fullest
extent permitted by law.
(i) Securities Held by the Issuers, etc. Whenever the consent or
approval of Holders of a specified percentage of principal amount of
Securities or New Securities is required hereunder, Securities or New
Securities, as applicable, held by the Issuers or their Affiliates (other
than subsequent Holders of Securities or New Securities if such subsequent
Holders are deemed to be Affiliates solely by reason of their holdings of
such Securities or New Securities) shall not be counted in determining
whether such consent or approval was given by the Holders of such required
percentage.
Please confirm that the foregoing correctly sets forth the
agreement between the Issuers and you.
Very truly yours,
OXFORD AUTOMOTIVE, INC.
By: ___________________
Name:
Title:
LOBDELL EMERY CORPORATION
<PAGE> 23
-23-
By: ___________________
Name:
Title:
BMG NORTH AMERICA LIMITED
By: ___________________
Name:
Title:
WINCHESTER FABRICATION CORPORATION
By: ___________________
Name:
Title:
CONCEPT MANAGEMENT CORPORATION
By: ___________________
Name:
Title:
LEWIS EMERY CAPITAL CORPORATION
By: ___________________
Name:
Title:
CREATIVE FABRICATION CORPORATION
By: ___________________
Name:
Title:
<PAGE> 24
-24-
PARALLEL GROUP INTERNATIONAL, INC.
By: ___________________
Name:
Title:
BMG HOLDINGS, INC.
By: ___________________
Name:
Title:
LASERWELD INTERNATIONAL LLC
By: ___________________
Name:
Title:
Accepted June 24, 1997
SALOMON BROTHERS INC
MERRILL LYNCH, PIERCE, FENNER &
SMITH INCORPORATED
McDONALD & CO.
FIRST CHICAGO CAPITAL MARKETS, INC.
SCHRODER WERTHEIM & CO. INCORPORATED
By: SALOMON BROTHERS INC
By: ____________________
Name:
Title:
<PAGE> 25
ANNEX A
Annex A
-------
Each broker-dealer that receives New Securities 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 Securities. 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 Securities received in exchange for Securities where such
New Securities were acquired by such broker-dealer as a result of
market-making activities or other trading activities. The Issuers have agreed
that, starting on the Expiration Date (as defined herein) and ending on the
close of business on the first anniversary of the Expiration Date, they will
make this Prospectus available to any broker-dealer for use in connection with
any such resale. See "Plan of Distribution."
<PAGE> 26
ANNEX B
Annex B
-------
Each broker-dealer that receives New Securities for its own account in
exchange for Securities, where such Securities 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 Securities. See "Plan of Distribution."
<PAGE> 27
ANNEX C
PLAN OF DISTRIBUTION
--------------------
Each broker-dealer that receives New Securities 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 Securities. 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 Securities received in exchange for Securities
where such Securities were acquired as a result of market-making activities or
other trading activities. The Issuers have agreed that, starting on the
Expiration Date and ending on the close of business on the first anniversary of
the Expiration Date, they will make this Prospectus, as amended or
supplemented, available to any broker-dealer for use in connection with any
such resale. In addition, until __________, 199_, all dealers effecting
transactions in the New Securities may be required to deliver a prospectus.
The Issuers will not receive any proceeds from any sale of New Securities by
broker-dealers. New Securities 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 Securities or a combination of such
methods of resale, at market prices prevailing at the time of resale, 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 Securities. Any
broker-dealer that resells New Securities 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 Securities may be deemed to be an
"underwriter" within the meaning of the Securities Act and any profit of any
such resale of New Securities 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 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.
For a period of one year after the Expiration Date, the Issuers will promptly
send additional copies of this Prospectus and any amendment or supplement to
this Prospectus to any broker-dealer that requests such documents in the Letter
of Transmittal. The Issuers have agreed to pay all expenses inci-
<PAGE> 28
dent to the Exchange Offer (including the expenses of one counsel for the
holders of the Securities) other than commissions or concessions of any brokers
or dealers and will indemnify the holders of the Securities (including any
broker-dealers) against certain liabilities, including liabilities under the
Securities Act.
If applicable, add information required by Regulation S-K Items 507
and/or 508.
C-2
<PAGE> 29
ANNEX D
Rider A
-------
CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE
10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY
AMENDMENTS OR SUPPLEMENTS THERETO.
Name: ____________________________________
Address:___________________________________
___________________________________
Rider B
-------
If the undersigned is not a broker-dealer, the undersigned represents that it
is not engaged in, and does not intend to engage in, a distribution of New
Securities. If the undersigned is a broker-dealer that will receive New
Securities for its own account in exchange for securities, it represents that
the Securities to be exchanged for New Securities were acquired by it as a
result of market-making activities or other trading activities and acknowledges
that it will deliver a prospectus in connection with any resale of such New
Securities; however, by so acknowledging and by delivering a prospectus, the
undersigned will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act.
<PAGE> 1
[DYKEMA GOSSETT LETTERHEAD]
DIRECT DIAL
(313) 568-5412
EXHIBIT 5.1
August 4, 1997
Oxford Automotive, Inc.
2365 Franklin Road
Bloomfield Hills, Michigan 48203
Re: Registration Statement on S-4 in connection with the Exchange
Offer of 10 1/8% Senior Subordinated Notes Due 2007 for 10 1/8%
Senior Subordinated Notes Due 2007
Ladies and Gentlemen:
We have acted as counsel for Oxford Automotive, Inc., a Michigan
company (the "Company") and Lobdell Emery Corporation, a Michigan corporation,
Winchester Fabrication Corporation, a Michigan corporation, Creative
Fabrication Corporation, a Tennessee corporation, Parallel Group International,
Inc., an Indiana corporation, Laserweld International LLC, an Indiana
limited liability company, Concept Management Corporation, a Michigan
corporation and Lewis Emery Capital Corporation, a Michigan corporation (each a
"Subsidiary Guarantor" and together the "Subsidiary Guarantors") in connection
with the preparation and filing with the Securities and Exchange Commission
under the Securities Act of 1933, as amended (the "Act"), of a Registration
Statement on Form S-4 (the "Registration Statement") relating to the Exchange
Offer by the Company of up to $125,000,000 aggregate principal amount of 10
1/8% Senior Subordinated Notes due 2007, (the "Notes") for $125,000,000
aggregated of 10 1/8% Senior Subordinated Notes due 2007. The Notes are to be
issued pursuant to an Indenture (the "Indenture") by and among the Company and
First Trust National Association, as Trustee.
In so acting, we have examined and relied upon the originals, or
copies certified or otherwise identified to our satisfaction, of such company
records, documents, certificates and other instruments as in our judgment are
necessary or appropriate to enable us to render the opinions expressed below.
Based upon the foregoing, we are of the opinion that:
<PAGE> 2
Oxford Automotive, Inc.
August 4, 1997
Page 2
1. The Notes, when executed and authenticated in
accordance with the terms of the Indenture, and upon
issuance in accordance with the terms of the Exchange Offer
in the Prospectus constituting a part of the Registration
Statement, will be valid and binding obligations of the
Company, enforceable against the Company in accordance with
their terms, except as (a) the enforceability thereof may
be limited by or subject to bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium or other
similar laws now or hereafter affecting creditors' rights
generally and (b) rights of acceleration and the availability
of equitable remedies may be limited by equitable principles
of general applicability.
2. Each Subsidiary Guaranty, when executed and authenticated in
accordance with the terms of the Indenture, and upon issuance
in accordance with the terms of the Exchange Offer in the
Prospectus constituting a part of the Registration Statement,
will be a valid and binding obligation of each Subsidiary
Guarantor, enforceable against such Subsidiary Guarantor in
accordance with its terms, except as (a) the enforceability
thereof may be limited by or subject to bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium
or other similar laws now or hereafter affecting creditors'
rights generally and (b) rights of acceleration and the
availability of equitable remedies may be limited by
equitable principles of general applicability.
In rendering the opinions set forth above, we have assumed that the
laws of the State of New York as to the enforceability of the Notes and the
Subsidiary Guaranties are not different from the laws of the State of Michigan
(excluding the choice of law rules).
We hereby consent to the use of this opinion as an Exhibit to the
Registration Statement, and to the reference to our firm under the heading
"Legal Matters" in the Prospectus constituting a part of the Registration
Statement. In giving such consent, we do not concede that we are experts
within the meaning of the Act or the rules or regulations thereunder or that
this consent is required by Section 7 of the Act.
Very truly yours,
DYKEMA GOSSETT PLLC
/s/ Dykema Gossett PLLC
<PAGE> 1
EXHIBIT 5.2
[FASKEN CAMPBELL GODFREY LETTERHEAD]
August 4, 1997
Oxford Automotive
2000 N. Woodward Avenue
Bloomfield Hills, Michigan
U.S.A. 48304
Attention: The President
Dear Sirs:
U.S. $125,000,000 10 1/8% Senior Subordinated Guaranteed Notes
Due 2007, to be issued and sold by Oxford Automotive, Inc.
We have acted as Ontario counsel for BMG North America Limited ("BMG") in
connection with the execution and delivery by it of certain documents relating
to the issue and sale by Oxford Automotive, Inc. ("OXFORD AUTOMOTIVE") of U.S.
$125,000,000 10 1/8% Senior Subordinated Notes Due 2007 (the "OLD NOTES") and
in connection with the offer by Oxford Automotive (the "EXCHANGE OFFER") to
exchange its 101/8% Senior Subordinated Notes Due 2007 (the "EXCHANGE NOTES",
and together with the Old Notes, the "NOTES") for any and all of the
outstanding Old Notes.
The Old Notes have been, and the Exchange Notes will be, issued pursuant to (i)
an Indenture (the "INDENTURE") dated as of June 15, 1997 between Oxford
Automotive, certain of its subsidiaries as guarantors and First National Trust
Association as trustee for the holders of the Notes (the "TRUSTEE"), (ii) a
Purchase Agreement (the "PURCHASE AGREEMENT") dated June 19, 1997 among Oxford
Automotive, certain of its subsidiaries as guarantors, Salomon Brothers Inc. and
certain other representatives of purchasers of the Old Notes (all such
purchasers pursuant to the Purchase Agreement being collectively referred to as
the "PURCHASERS"), and (iii) a Registration Agreement (the "REGISTRATION
AGREEMENT") dated June 24, 1997, among Oxford Automotive, each of the
guarantors and certain representatives of the Purchasers.
We have also acted as Ontario counsel for each of BMG and BMG Holdings Inc.
("HOLDINGS") in connection with the giving of certain guarantees (each, a
"GUARANTEE") of Oxford Automotive's obligations
<PAGE> 2
[FASKEN CAMPBELL GODFREY LETTERHEAD]
-ii-
under the Indenture, the Purchase Agreement, the Registration Agreement and the
Notes (collectively, the "DOCUMENTS"). (BMG and Holdings are herein
collectively called the "GUARANTORS", and individually called a "GUARANTOR".)
The opinions given in this letter are limited to the law applicable in the
Province of Ontario, and the statutes and regulations of the Province of Ontario
and of Canada applicable in Ontario (collectively, "Ontario Law").
Accordingly, we do not express any opinion with respect to the laws of any
jurisdiction other than Ontario Law in force as at the date of this opinion
letter.
We have made the following assumptions specific to this transaction:
(A) under New York Law, the chosen governing law of each of the
Documents,
(i) none of the documents imposes any obligation, liability or
indebtedness, whether actual or contingent, present or
future, primary or secondary (collectively, "LIABILITIES") on
any of the Guarantors in relation to any Liabilities of any
other person, other than Liabilities of Oxford Automotive in
respect of the Notes, and
(ii) none of the Documents creates any mortgage, charge, lien,
encumbrance, security interest or other right in the
way of security in or on any real or personal property of
either Guarantor, except in relation to its Guarantee;
(B) Each party to the Documents is a body corporate duly organized and
incorporated and validly existing under the laws of its
jurisdiction of incorporation, has all requisite capacity, power and
authority to execute, deliver and perform each of the Documents to
which it is a party, has taken all necessary corporate, statutory,
regulatory and other action to authorize the execution, delivery and
performance by it of each such Document and duly authorized signing
officers of each such party have executed and delivered each such
document (other than the Exchange Notes) on each such party's behalf in
accordance with all applicable laws;
(c) the Trustee and each of the Purchasers is resident in a jurisdiction
outside of Canada and does not have a permanent establishment or
tangible assets in Canada, a representative office in Canada, or
employees ordinarily resident in Canada, and, while the Trustee and
some of the Purchasers or their representatives may have discussed
financing proposals in Canada or may have discussed the financing
<PAGE> 3
[FASKEN CAMPBELL GODFREY LETTERHEAD]
-iii-
contemplated by the documents in general terms in Canada with Oxford
Automotive and the Guarantors (or any of them), none of the
Trustee and the Purchasers conducted negotiations in Canada with Oxford
Automotive and the Guarantors (or any of them) with respect to the
Documents or the transactions contemplated thereby and the decision of
the Trustee and each of the Purchasers to participate in such
transactions was not made in Canada;
(D) the foregoing assumptions in this letter, are true accurate and complete
with respect to the matters addressed in them as of the time and date of
execution of the Exchange Notes by the issuers thereof, and there has
been no change in Ontario Law or any other applicable law, or the facts
assumed by or known to us at the date thereof; and
(E) the Exchange Notes will be duly executed and delivered by Oxford
Automotive in accordance with all applicable laws and in the form or
substantially in the form of the Note set out in a Schedule or Exhibit
to the Indenture, and on each date of execution and delivery of an
Exchange Note, each Guarantor will be a wholly-owned subsidiary (for the
purposes of section 20 of the Ontario Business Corporations Act) of
Oxford Automotive.
Based upon and relying on the foregoing and subject to the assumptions and
qualifications set out herein, we are of the opinion that:
1. An action to enforce each Guarantee could be commenced by the Trustee in
a court of competent jurisdiction in the Province of Ontario (an
"ONTARIO COURT"), in which event an Ontario Court would recognize the
choice of the laws of the State of New York ("NEW YORK LAW") as a valid
choice of law to govern the Guarantee and would apply New York Law to
all issues that an Ontario Court characterized as substantive under the
conflict of laws' rules of Ontario Law, assuming that:
(a) such choice of law is legal under New York Law;
(b) such choice of law was made bona fide, and, without limiting the
foregoing, such choice of law was not made for the purpose of
avoiding the mandatory laws of any other jurisdiction;
<PAGE> 4
[FASKEN CAMPBELL GODFREY LETTERHEAD]
-iv-
(c) there is no reason for avoiding such choice of law on the grounds
of public policy in the Province of Ontario as determined by an
Ontario Court;
(d) New York Law is not an assertion of sovereign power of a political
nature by the State of New York or the United States of America; and
(e) New York Law was specifically pleaded and proved as a question of
fact before the Ontario Court.
An Ontario Court will, however, apply Ontario Law to those issues that the
Ontario Court characterizes as procedural or administrative under the
conflict of laws' rules of Ontario Law. No opinion is expressed as to
whether remedies available under New York Law would be available from an
Ontario Court.
2. Any judgment (a "NEW YORK JUDGMENT") against any of the Guarantors in
any action taken in the courts of the State of New York (the "NEW YORK
COURT") to enforce a payment obligation of that Guarantor under its
Guarantee would be recognized and enforced by an Ontario Court in a
separate Ontario action without re-examination of the merits of the New
York action, if each of the following criteria is satisfied:
(a) the New York Judgment is for a debt or fixed sum of money other
than a judgment in proceedings of a revenue, expropriatory, penal,
criminal or similar nature;
(b) the New York Judgment is final, conclusive and enforceable where
rendered;
(c) the New York Court that renders the New York Judgment has
jurisdiction over the Guarantor and the subject matter of its
Guarantee;
(d) the New York Judgment does not conflict with another final and
conclusive judgment in the same cause of action;
(e) the New York Judgment is not obtained by fraud or trick;
(f) the claim for relief on which the New York Judgment is based and
enforcement of the New York Judgment in
<PAGE> 5
[FASKEN CAMPBELL GODFREY LETTERHEAD]
-v-
Ontario are not repugnant to public under Ontario Law;
(g) the New York Court rendering the New York Judgement is impartial
and provides procedures compatible with the due process standards
of an Ontario Court, and without limiting the foregoing:
(i) the proceedings leading to the New York Judgment are
not contrary to the rules of natural justice, and
(ii) the relevant Guarantor received sufficent notice of the
proceedings in the New York Court to enable it to defend
the action in which the New York Judgment is rendered;
(h) if the New York Judgment is obtained by default, there has been
no manifest error in the granting of such judgment;
(i) the proceedings in the New York Court are not contrary to an
agreement between the parties under which the dispute in question
is to be settled otherwise than by proceedings in the New York
Court;
(j) if the jurisdiction in the New York Court is based on personal
service alone, the New York Court is not a seriously inconvenient
forum for the trial of the action;
(k) the procedural rules for commencement and maintenance of the
enforcement proceedings in Ontario are observed;
(l) no new, admissible evidence relevant to the New York Judgment is
discovered before the Ontario Court renders judgment;
(m) no order restricting enforcement of the New York Judgment has
been made by the Attorney General of Canada under the Foreign
Extraterritorial Measures Act (Canada);
(n) no order has been made by the Competition Tribunal established
under the Competion Act (Canada) restricting implementation of
the New York Judgment as
<PAGE> 6
[FASKEN CAMPBELL GODFREY LETTERHEAD]
-vi-
adversely affecting competition in Canada or domestic or
foreign trade and commerce in Canada; and
(o) the action to enforce the New York Judgment in an Ontario court
is commenced within six years of the date of such judgment.
3. The express submission by each Guarantor to the non-exclusive
jurisdiction of a New York Court in respect of its Guarantee would be
regarded by an Ontario Court as sufficient under Ontario Law to grant
personal jurisdiction over the Guarantor to a New York Court. Under
Ontario Law, an Ontario Court would recognize that a New York Court
has jurisdiction over the subject matter of the relevant Guarantee.
4. None of the Guarantors is entitled to any sovereign immunity under
Ontario Law.
The opinions expressed above are subject to the following qualifications:
(a) the enforceability of each Guarantee or any judgment (including,
without limitation, any New York Judgment) arising out of or in
connection with each Guarantee may be limited by applicable bankruptcy,
insolvency, winding-up, reorganization, arrangement, moratorium or
other laws affecting creditors' rights generally. Without limiting the
generality of the foregoing,
(i) the ability to recover or claim for certain costs or expenses
may be subject to judicial discretion,
(ii) section 347 of the Criminal Code (Canada) prohibits the payment
of "interest" at a "criminal rate" (as such terms are defined
therein),
(iii) any action on any Guarantee may be proscribed by the Limitations
Act (Ontario) after the applicable limitation period has
expired, and
(iv) a money judgment by an Ontario court may be awarded only in
Canadian currency and may be based on a rate of exchange in
existence on a date other than the date of payment;
(b) the enforceability of each Guarantee may be limited by general
principles of equity, and no opinion is given as to any specific
remedy that may be granted, imposed or rendered (including equitable
remedies such as specific performance and injunction);
<PAGE> 7
[FASKEN CAMPBELL GODFREY LETTERHEAD]
-vii-
(c) an Ontario Court reserves the right to decline jurisdiction in any
action relating to a Guarantee on the basis that Ontario is an
inconvenient forum or if concurrent proceedings are being brought
elsewhere, notwithstanding any waiver of the right to raise such
objection or defence in the Documents;
(d) provisions in any Document permitting service of legal process by
posting or transmission of copies thereof in accordance with the notice
clause of such document may not be recognized as good service by an
Ontario court;
(e) section 4 of the Interest Act (Canada) may restrict the amount of
interest payable by the Guarantors to the rate or percentage of five per
cent per annum; and
(f) no opinion is expressed in this letter on the effect of the securities
laws of the Province of Ontario on any of the Documents or on the
Exchange Offer.
We hereby consent to the use of this opinion as an Exhibit to the Registration
Statement on Form S-4 (the "REGISTRATION STATEMENT") relating to the Exchange
Offer, and to the reference to our firm under the heading "Legal Matters" in
the Prospectus constituting a part of the Registration Statement. In giving
such consent, we do not concede that we are experts within the meaning of
the Securities Act of 1933 or the rules or regulations thereunder, or that this
consent is required by Section 7 of that Act.
Yours truly,
FASKEN CAMPBELL GODFREY
/s/ Fasken Campbell Godfrey
<PAGE> 1
EXHIBIT 10.1
Form of Note
The following document is the form of Non-Negotiable Demand Note payable by
RPI, Inc. to Lobdell Emery Corporation. RPI, Inc. has issued a total of four
such notes to Lobdell Emery Corporation. The Notes are identical in all
material respects except as to the amount and the date. The four notes are in
the amounts of $250,000, $100,000, $150,000, and $300,000, and are dated May
2, 1997, May 21, 1997, June 6, 1997, and July 11, 1997, respectively.
<PAGE> 2
NON - NEGOTIABLE DEMAND NOTE
$300,000 Bloomfield Hills, Michigan
Demand Note July 11, 1997
FOR VALUE RECEIVED, RPI, Inc., a Michigan corporation (the "Maker"),
promises to pay to the order of Lobdell Emery Corporation, a Michigan
corporation (the "Payee"), at such place as the Payee may designate in writing,
the principal sum of Three Hundred Thousand Dollars ($300,000), together with
interest as provided in this Demand Note, which shall be legal tender in
payment of all debts and dues, public and private, at the time of payment, in
the manner provided in this Demand Note.
The principal balance of this Demand Note shall be paid with interest
on the outstanding principal balance determined on a basis of a year of twelve
30-day months at the prime rate of interest of NBD Bank, as announced by NBD
Bank from time to time, plus one percent (1.0%).
The Maker shall pay the entire principal balance and unpaid interest
accrued on the principal balance on the demand of the Payee.
Commencing on August 1, 1997, the Maker shall make payments of
interest on the outstanding principal balance of this Demand Note to the Payee
on the first day of each month until the principal amount is paid in full. If
the Maker fails to make full payment of principal or interest when due, the
entire unpaid balance of both principal and interest shall thereafter bear
interest at the rate of ten percent (10.0%) per annum until paid in full.
This Demand Note is and shall be subject and subordinate to all
existing and future indebtedness of the Maker to Comerica Bank.
This Demand Note is non-negotiable.
This Demand Note may be paid by the Maker, in whole or in part, at any
time, without penalty.
In no event shall the interest rate charged or received under this
Demand Note at any time exceed the maximum interest rate permitted under
applicable law. Payments received by the Payee under this Demand Note which
would otherwise cause the interest rate under this Demand Note to exceed such
maximum interest rate shall, to the extent of such excess, be deemed
prepayments of principal and applied as such. If the Payee shall reasonably
determine that the legal authority to charge the interest rate under this
Demand Note has been adjudicated to be usurious or otherwise limited by
statute, then the unpaid principal balance of this Demand Note, with any
accrued interest thereon and thereafter at the highest legal rate then
permitted to be charged by stipulation in writing between the Maker and the
Payee, at the option of the Payee, shall immediately become due and payable.
1 of 2
<PAGE> 3
Any payment made by mail will be credited as of the day the payment
was mailed as evidenced by the post-mark.
Time is of the essence of this Demand Note. Failure by the Payee to
exercise any right under this Demand Note shall not constitute a waiver of the
right to exercise the same.
The Maker and all endorsers, sureties and guarantors, of this Demand
Note, hereby jointly and severally waive presentment for payment, demand,
notice of non-payment, notice of protest and protest of this Demand Note,
diligence in collection or bringing suit, and all endorsers, sureties and
guarantors of this Demand Note consent to any and all extensions of time,
renewals, waivers or modifications that may be granted by the Payee with
respect to payment or other provisions of this Demand Note, and to the release
of any collateral or any part of this Demand Note, with or without
substitution.
This Demand Note shall be governed by and construed in accordance with
the laws of the State of Michigan without regard to its choice of law
principals.
This Note is made in connection with the ongoing discussions between
the Maker, the Payee, and the Payee's parent corporation, Oxford Automotive,
Inc. (the "Parent"), regarding a possible merger or similar transaction
involving the Maker and the Payee, the Parent or one of their affiliates (the
"Proposed Transaction"). The Maker acknowledges that the Payee and the Parent
will expend time and resources in connection with the Proposed Transaction.
The Maker agrees that for the period ending December 31, 1997, the Maker will
deal exclusively with the Payee, the Parent and/or their affiliates in
connection with the sale of the Maker, such that neither the Maker nor its
affiliates, employees and representatives will, directly or indirectly, without
the Payee's or the Parent's prior written consent, solicit, encourage or
initiate any offer or proposal from, or engage in any discussions with, or
provide any information to, any corporation, partnership, limited liability
company, person or other entity or group, other than the Payee or the Parent
and their affiliates, employees and representatives, concerning any transaction
involving the sale of any stock or assets of the Maker (other than sales of
product in the ordinary course of business) or a merger, consolidation,
liquidation, recapitalization or similar transaction involving the Maker nor
shall the Maker accept any proposal with respect to any similar transaction.
Dated: July 11, 1997
RPI, INC.
By: ________________________
Name: ________________________
Title: ________________________
2 of 2
<PAGE> 1
EXHIBIT 10.2
Form of Director Indemnification Agreement
The following document is the form of Director Indemnification
Agreement entered into between Oxford Automotive, Inc. and each of its
directors. The agreements are identical in all material respects except as to
the identity of the parties thereto and the dates of execution. The additional
Director Indemnification Agreements omitted are between Oxford Automotive,
Inc. and each of Steven M. Abelman, Rex E. Schlaybargh, Jr., and Manfred Walt.
<PAGE> 2
DIRECTOR INDEMNIFICATION AGREEMENT
This Indemnification Agreement (the "Agreement") is made as of the 10th
day of January, 1997, by and between Oxford Automotive, Inc., a Michigan
Corporation (the "Company"), and Selwyn Isakow (the "Director").
A. It is essential to the Company to retain and attract as directors the
most capable persons available.
B. The substantial increase in corporate litigation subjects directors to
expensive litigation risks and it is therefore reasonable, prudent and
necessary for the Company contractually to obligate itself to indemnify
directors to the fullest extent permitted by the Michigan Business Corporation
Act so that capable persons will serve or continue to serve the Company.
C. The Director is willing to serve, continue to serve and to take on
additional service for or on behalf of the Company on the condition that the
Director be so indemnified.
NOW, THEREFORE, in consideration of the covenants contained herein and of
the Director's continuing service to the Company, the Company and the Director
do hereby agree as follows:
l. Definitions. The following terms as used in this Agreement shall have
the following respective meanings:
"Change in Control" means a change in control of a nature that would be
required to be reported in response to Item 6(e) of Schedule 14A of Regulation
14a promulgated under the Securities Exchange Act of 1934, as amended, provided
that, without limitation, such a change in control shall be deemed to have
occurred if (i) during any period of two consecutive years, individuals who at
the beginning of such period constitute the Board of Directors of the Company
and any new director whose election by the Board of Directors or nomination for
election by the Company's shareholders was approved by a vote of at least
two-thirds (2/3) of the directors then still in office who either were
directors at the beginning of the period or whose election or nomination for
election was previously so approved, cease for any reason to constitute a
majority thereof; (ii) the shareholders of the Company approve a merger or
consolidation of the Company with any other corporation, other than a merger or
consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) at least 80% of the total voting power represented by the
voting securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation; or (iii) the shareholders of
the Company approve a plan of complete liquidation of the Company or an
agreement for the sale or disposition by the Company (in one transaction or a
series of transactions) of all or substantially all of the Company's assets.
<PAGE> 3
"Expenses" means all expenses, liabilities and losses, including
attorneys' fees, judgments, fines, and amounts paid or to be paid in settlement
of a Proceeding.
"Proceeding" means any threatened, pending or completed action, suit or
proceeding (or part thereof), whether civil, criminal, administrative or
investigative.
2. Services by Director. The Director agrees to serve as a director of
the Company for so long as the Director is duly elected or appointed or until
the tender of the Director's written resignation.
3. Indemnification. Subject to the terms and conditions of this
Agreement, the Company shall indemnify and hold harmless the Director to the
fullest extent authorized by the Michigan Business Corporation Act, as the same
exists or may hereafter be amended (but, in the case of any such amendment,
only to the extent that such amendment permits the Company to provide broader
indemnification rights than said law permitted the Company to provide prior to
such change), against all Expenses reasonably incurred or suffered by the
Director in connection with any Proceeding in which the Director is or was a
party to or witness or other participant in, or is threatened to be made a
party to or witness or other participant in, or is involved by reason of the
fact that the Director is or was a director, officer or employee of the Company
or is or was serving at the request of the Company as a director, officer,
partner, trustee, administrator, employee or agent of another corporation or of
a partnership, joint venture, trust or other enterprise, including service with
respect to employee benefit plans, whether the basis of the Proceeding is
alleged action in an official capacity as a director, officer, partner,
trustee, administrator, employee or agent or in any other capacity while
serving as a director, officer, partner, trustee, administrator, employee or
agent; provided, however, that, except as provided in Section 5 hereof with
respect to Proceedings to enforce rights to indemnification, the Company shall
indemnify the Director seeking indemnification in connection with a Proceeding
(or part thereof) initiated by the Director only if such proceeding (or part
thereof) was authorized by the Board of Directors of the Company.
4. Expenses. The right to indemnification conferred under Section 3
hereof shall include the right to be paid by the Company for Expenses incurred
in defending any such Proceeding in advance of its final disposition; provided,
however, that the payment of such Expenses incurred by the Director in advance
of the final disposition of a Proceeding shall be made only upon (i) delivery
to the Company of (A) a written affirmation by the Director of the Director's
good faith belief that the Director has met the applicable standard of conduct
set forth in the Michigan Business Corporation Act, and (B) an undertaking, by
or on behalf of the Director, to repay all advances if it shall ultimately be
determined by final judicial decision that the Director did not meet such
standard of conduct and (ii) a determination that the facts then known to those
making the determination to advance payment of such Expenses would not preclude
indemnification under the Michigan Business Corporation Act.
5. Right of the Director to Bring Suit. (a) If a claim under Section 3
hereof is not paid in full by the Company within thirty (30) days after notice
to the Company as provided in Section
2
<PAGE> 4
9 hereof, the Director may at any time thereafter bring suit against the
Company in any court of competent jurisdiction to recover the unpaid amount of
the claim and, if successful in whole or in part, the Director shall be
entitled to be paid also the expense of prosecuting such claim.
(b) It shall be a defense to any such action seeking indemnification under
Section 3 hereof (other than an action brought to enforce a claim for Expenses
incurred in defending any Proceeding in advance of its final disposition where
the required undertaking has been tendered to the Company in accordance with
Section 4 hereof) that the Director has not met the applicable standard of
conduct set forth in the Michigan Business Corporation Act. Further, in any
action brought by the Company to recover advances, the Company shall be
entitled to recover such advances, if the Director has not met the applicable
standard of conduct set forth in the Michigan Business Corporation Act.
Neither the failure of the Company (including its Board of Directors,
independent legal counsel, or its shareholders) to have made a determination
prior to the commencement of such action that indemnification of the Director
is proper in the circumstances because the Director has met the applicable
standard of conduct set forth in the Michigan Business Corporation Act, nor an
actual determination by the Company (including its Board of Directors,
independent legal counsel, or its shareholders) that the Director has not met
such applicable standard of conduct, shall be a defense to an action brought by
the Director or create a presumption that the Director has not met the
applicable standard of conduct. In any action brought by the Director to
enforce a right hereunder, or by the Company to recover payments by the Company
of advances, the burden of proof shall be on the Company.
6. Assumption of Claim. The Company shall be entitled, but not obligated,
to assume the defense of any Proceeding with respect to which indemnification
is sought, with counsel satisfactory to the Director, upon the delivery to the
Director of written notice of the Company's election to do so. After delivery
of such notice, the Company will not be liable to the Director under this
Agreement for any expenses (including legal expenses) subsequently incurred by
the Director in defending such Proceeding; provided however, that the Director
shall have the right to employ his or her own counsel in any Proceeding but the
fees and expenses of such counsel incurred after delivery of notice from the
Company of its assumption of such defense shall be at the Director's expense;
and provided, further that if (i) the employment of such counsel by the
Director has been previously authorized by the Company, (ii) the Director shall
have reasonably concluded that there may be a conflict of interest between the
Company and the Director in the conduct of any such defense or (iii) the
Company shall not, in fact, have employed counsel to assume the defense of such
action, the fees and expenses of such counsel shall be at the expense of the
Company.
7. Non-Exclusivity of Rights. The rights provided hereunder shall not be
deemed exclusive of any other rights which the Director may be entitled under
any statute, agreement, provision of the Articles of Incorporation or Bylaws of
the Company, vote of shareholders or disinterested directors of the Company, or
otherwise, and such rights shall continue after the Director ceases to serve
the Company as a director.
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8. Settlement. Unless and until a Change in Control has occurred, the
Company shall have no obligation to indemnify the Director under this Agreement
for any amounts paid in settlement of any Proceeding effected without the
Company's prior written consent. The Company shall not settle any claim in any
manner which would impose any obligation on the Director without the Director's
written consent. Neither the Company nor the Director shall unreasonably
withhold their consent to any proposed settlement.
9. Notice of Claim. The Director, as a condition precedent to his right
to be indemnified under this Agreement, shall give to the Company notice in
writing as soon as practicable of any claim made against him for which
indemnity will or could be sought under this Agreement. Notice to the Company
shall be directed to its principal business office Attention: President (or
such other address as the Company shall designate in writing to the Director).
Notice shall be deemed received if sent by prepaid mail properly addressed, the
date of such notice being the date postmarked. In addition, the Director shall
give the Company such information and cooperation as it may reasonably request.
10. Severability. In the event that any provision of this Agreement is
determined by a court to require the Company to do or to fail to do an act
which is in violation of applicable law, such provision shall be limited or
modified in its application to the minimum extent necessary to avoid a
violation of law, and, as so limited or modified, such provision and the
balance of this Agreement shall be enforceable in accordance with their terms.
11. Choice of Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Michigan.
12. Successors and Assigns. This Agreement shall be (i) binding upon all
successors and assigns of the Company (including any transferee of all or
substantially all of its assets and any successor by merger or otherwise by
operation of law) and (ii) shall be binding on and inure to the benefit of the
heirs, personal representatives, executors and administrators of the Director.
13. Amendment. No amendment, modification, termination or cancellation of
this Agreement shall be effective unless made in writing and signed by each of
the parties hereto.
[this space intentionally left blank]
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IN WITNESS WHEREOF, the Company and the Director have executed this
Agreement as of the day and year first above written.
OXFORD AUTOMOTIVE, INC.
By: /s/ Selwyn Isakow
-------------------------
Selwyn Isakow, President
DIRECTOR
/s/ Selwyn Isakow
------------------------
Selwyn Isakow
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EXHIBIT 10.3
EMPLOYMENT AND NONCOMPETITION AGREEMENT
This Agreement is dated as of May 1, 1997, and is between Steven M.
Abelman, (the "Employee"), and Oxford Automotive, Inc., a Michigan corporation
(the "Company").
In consideration of the premises herein contained, the parties agree as
follows:
1. Employment. The Company employs you, the Employee, as President and
Chief Executive Officer of the Company, and you accept such employment, upon
the terms and conditions set forth in this Agreement.
2. Duties During Employment Period. You shall perform and discharge well
and faithfully such duties for the Company and any of its subsidiaries as may
be assigned to you from time to time by the Board of Directors (the "Board") or
Chairman of the Board (the "Chairman") of the Company and, in the absence of
such assignment, such services customary to such office as are necessary to the
operations of the Company. Such duties shall initially include: building the
existing business of the Company, integrating new businesses into the company
and positioning the Company for an initial public offering of its stock prior
to 2000. You shall report to the Chairman at such times and in such detail as
the Chairman shall require and you shall devote all of your business time,
attention and energies to the business of the Company and its subsidiaries.
3. Term. Your employment under Sections 1 and 2 of this Agreement shall
commence on the date hereof and shall terminate as provided in Section 9 below
(the "Employment Period"). Your employment with the Company shall be
terminable at will and you and the Company shall have the right to terminate
your employment with or without cause in accordance with Section 9 below.
4. Employment Period Compensation.
(a) Base Salary. For all services to be rendered by you hereunder
(including services as director, officer, employee, member of any committee of
the Company or any subsidiary or division or otherwise), the Company shall pay
to you during the Employment Period an annual salary of $250,000 (payable in
bi-weekly installments). The Board may, at its option, make such additional
salary increases as they deem appropriate in light of your performance and the
Company's performance. All payments shall be subject to all applicable taxes
required to be withheld by the Company pursuant to federal, state or local law.
(b) Other Benefits. The Company shall provide you with the fringe
benefits, perquisites, and other benefits of employment provided to executive
officers of the Company from time to time during the Employment Period, subject
to the generally applicable eligibility and other provisions of the various
plans and programs in effect from time to time. These benefits will be
adjusted from time to time as determined by the Board, as such benefits may be
adjusted for general application among all executive officers.
<PAGE> 2
(c) Automobile Allowance. The Company shall provide you with the use
of a an automobile or an automobile allowance during the Employment Period, in
connection with the services to be rendered by you hereunder, which shall be on
terms comparable to that provided to the other executive officers of the
Company.
(d) Contingent Bonus. After each fiscal year that ends during the
Employment Period, the Board will consider granting to you a bonus, in such
amount (if any) up to 60% of your annual base salary as the Board may determine
in its sole discretion.
(e) Vacation. You shall be entitled to four weeks paid vacation during
each calendar year of the Employment Period (provided that four weeks shall be
provided to you during the balance of 1997), to be taken at such times as shall
not, in the reasonable judgment of the Chairman, materially interfere with the
fulfillment of your duties under this Agreement. Unused vacation time may not
be carried over to the following year. You shall also be entitled to as many
holidays and personal days as are in accordance with the Company's policy then
in effect for its employees generally, upon such terms as may be provided for
general application to all employees of the Company.
5. Confidential Information, Improvements, Etc.
(a) Disclosure of Information. You understand and agree that the
Confidential Information (as hereinafter defined) used in the business of the
Company or its affiliates is a valuable, special and unique asset of the
Company and shall be and remain the sole and exclusive property of the Company.
Accordingly, you agree that you will not, during or after your employment with
the Company, take from the Company's premises, or directly or indirectly
reproduce, use, disclose or reveal said Confidential Information to any person,
firm, corporation, association or other entity for any reason or purpose
whatsoever, except as required in connection with the performance of your
duties under this Agreement or as required by law or under court order or as
authorized in writing by the Company; and further agree that you will never use
any such Confidential Information for any purpose other than in fulfillment of
your employment duties with the Company. In the event of the termination of
your employment, you agree to immediately deliver to the Company all written
materials in your possession regarding said Confidential Information and not
retain or transfer any copies thereof.
(b) Confidential Information. "Confidential Information" as used
herein, means:
(i) the terms and conditions of any business transaction that the
Company or any of its subsidiaries has performed or has offered to perform
with any customer or prospective customer while you have been employed by the
Company or which you learned of while employed by the Company or any of its
subsidiaries;
(ii) any forms, business plans, manuals, operating procedures and
policies of the Company or any of its subsidiaries;
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(iii) any other facts or data that are treated as confidential and
proprietary by the Company or any of its subsidiaries and that are disclosed to
or learned by you during your employment with the Company;
(iv) any documents that relate to, refer to, are involved with,
summarize, embody or constitute the Confidential Information defined in
this paragraph (b) ("documents", as used herein means forms, manuals,
compilations of data, summaries, printouts, contracts, agreements,
correspondence, memoranda, notes, files, invoices, price lists, data bases and
all copies thereof, of any kind whatsoever, whether typewritten, handwritten or
recorded electronically).
(c) Improvements, Etc. You will treat as for the sole benefit of the
Company, and fully and promptly disclose and assign to the Company without
additional "future" compensation, all ideas, discoveries, inventions and
improvements, whether patentable or not, which relate to the business, or
activities of the Company or any of its subsidiaries or which result from or
relate to the subject matter of any work which you may do for, on the premises
of, at the expense of, or on behalf of the Company or any of its subsidiaries,
and which are or have been made, conceived or reduced to practice by you, alone
or jointly with others, during or after usual working hours, either on or off
your job, while you are employed by the Company.
At the Company's expense, at any time during or after such
employment, you will sign all papers and do such other acts as the Company deems
necessary or desirable or may reasonably require of you to assign and protect
the Company's or its nominee's rights to such ideas, discoveries, inventions and
improvements, including applying for, obtaining and enforcing patents,
trademarks or copyrights on such ideas, discoveries, inventions and improvements
in any and all countries of the world.
(d) Notice. This confidentiality covenant shall not in any way limit or
restrict you from obtaining or maintaining employment in the industry in which
the Company operates, it is specifically intended to restrict and prohibit you
from using Confidential Information obtained during your employment. The
Company is concerned that you might subsequently use Confidential Information
obtained during your employment, to the Company's or its officers, directors,
and shareholders' detriment. So that your subsequent employers are aware of
this confidentiality covenant, you agree that during the Restricted Period as
described in Subsection (e) below, you shall inform all future employers of
said covenant.
(e) Restricted Period. As used herein, the term "Restricted Period"
shall mean the period commencing with the date hereof and ending on the date
that is two years after the termination of your employment with the Company.
6. Business Relationships. You understand and agree that establishing
business relationships with representatives of the organizations served by the
Company is a demanding difficult procedure requiring a great deal of time,
effort and money, and requires the building of confidence and goodwill, and
that the Company should have the right to hold such established
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<PAGE> 4
business relationships as its own. You therefore agree that during the
Restricted Period, except when acting on behalf of the Company, you will not,
directly or indirectly, request or advise any client or prospective client of
the Company to withhold, curtail or cancel their business with the Company. In
addition, you agree that with respect to the Business Activities (defined
below), you will not directly or indirectly call on, or solicit any client or
prospective client of the Company whose identity as such client or prospective
client, first became known to you through your employment with the Company,
whether before or after this agreement is signed, whether the relationship was
developed by you or not.
7. Covenant Not To Compete.
(a) Noncompetition. You acknowledge that the services to be provided
hereunder are unique and that their loss would cause irreparable injury to the
Company. You also hereby acknowledge and recognize the highly competitive
nature of the Company's business and, accordingly, in consideration of your
employment by the Company, you agree to the following:
(i) That during the Restricted Period, you will not, directly or
indirectly (other than on behalf of the Company), engage in the design,
development, manufacture, sale, marketing or servicing of products or provision
of services which at any time heretofore or hereafter during your employment
with the Company were designed, developed, manufactured, sold, marketed,
serviced or provided by the Company; or engage in any activity which is in
competition with the activities of the Company (the "Business Activities")
whether such engagement is as an officer, director, proprietor, employee,
partner, investor (other than as a holder of less than 5% of the outstanding
capital stock of a publicly traded corporation), consultant, advisor, agent or
otherwise, in any geographic area in which at any time prior to or during your
employment with the Company the products or services of the Company were
distributed or provided by the Company or in which the Company has competed.
(ii) That during the Restricted Period, you will not, directly or
indirectly, engage in any Business Activities (other than on behalf of the
Company) by supplying products or providing services which at any time prior to
or during your employment with the Company were supplied or provided by the
Company to any customer, client or prospective client with whom the Company at
any time prior to or during your employment with the Company has done any
business, whether as an officer, director, proprietor, employee, partner,
investor (other than as a holder of less than 5% of the outstanding capital
stock of a publicly traded corporation), consultant, advisor, agent or
otherwise.
(iii) During the Restricted Period you will not directly or
indirectly solicit, for your own account or for the account of any other person
or entity other than the Company, induce or influence any client, prospective
client, customer, supplier, lender, lessor or any other person which has a
business relationship with the Company at any time during the Restricted Period
to discontinue or reduce the extent of such relationship with the Company.
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<PAGE> 5
(iv) During the Restricted Period, you will not (A) directly or
indirectly recruit, solicit or otherwise induce or influence any employee or
sales agent of the Company to discontinue such employment or agency relationship
with the Company, or (B) employ or seek to employ, or cause or permit any
business which competes directly or indirectly with the Business Activities (the
"Competitive Business") to employ or seek to employ for any Competitive
Business, any person who is then (or was at any time within six months prior to
the date either you or the Competitive Business employs or seeks to employ such
person) employed by the Company.
8. Remedies. You acknowledge and agree that the Company's remedy at law
for a breach or threatened breach of any of the provisions of Sections 5, 6 or
7 would be inadequate. In recognition of this fact, in the event of a breach
by you of any of the provisions of Sections 5, 6 or 7 as determined by the
Company in its sole discretion acting in good faith, you agree that, in
addition to its remedy at law, all of your rights to payment or otherwise under
this Agreement and all amounts then or thereafter due to you from the Company
under this Agreement may be terminated, upon a final determination that there
was such a breach in accordance with Section 19 hereof, provided, however, that
the Company shall not be required to pay any amount hereunder prior to such
final determination, except upon receipt of an agreement by you to repay such
amount which you are ultimately determined not to be entitled. In addition,
the Company, without posting any bond, shall be entitled to obtain equitable
relief in the form of specific performance, temporary restraining order,
temporary or permanent injunction or any other equitable remedy which may then
be available. Nothing herein contained shall be construed as prohibiting the
Company from pursuing any other remedies available to it for such breach or
threatened breach.
9. Termination.
Employment. This Agreement shall terminate upon the first to occur of
(i) receipt by you from the Company of notice that the Company has in its
discretion elected to terminate your employment without cause, for any reason
or no reason, in which case, subject to the provisions of Section 10 of this
Agreement, (A) if notice of such termination is provided to you within 24
months of the date hereof you shall receive severance pay in an amount equal to
your then annual base salary, payable in equal monthly installments over a
period of twelve months, and (B) if notice of such termination is provided to
you after 24 months from the date hereof you shall receive severance pay in an
amount equal to 1-1/2 times your then annual base salary, payable in equal
monthly installments over a period of 18 months, and such compensation in each
such case shall be the only compensation you shall be entitled to in connection
with such termination, (ii) your death, (iii) at the option of the Company,
your Disability, and for purposes of this Agreement, the term "Disability"
shall be deemed to have occurred upon written notice to you (or your guardian
or other person, if any, who has then been placed in charge of your affairs) by
the Company given at any time that you shall have failed, because of illness or
incapacity, for a period of 90 consecutive days, or for an aggregate period of
at least 120 days during the preceding 12 month period, to render services of
the character rendered by you for the Company prior to such illness or
incapacity (the date of such Disability shall be deemed to be the fifth
business day following the date of such notice), (iv) receipt
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<PAGE> 6
by the Company from you of notice that you have elected to terminate your
employment, or (v) your discharge by the Board for cause. For purposes of this
Agreement, an event or occurrence constituting "cause" shall mean your
dishonesty or insubordination, your violation of any Company policies, your
conviction for any felony or for a crime involving fraud or misrepresentation,
your deliberate conduct, engaged in without the prior approval of the Board,
resulting in a material loss to the Company or theft from the Company, your
gross neglect or willful misconduct in connection with the performance of your
duties hereunder, or a material violation by you of any of the provisions of
this Agreement.
In the event of termination of employment for any reason specified in
paragraph (a)(ii), (iii), (iv) or (v) hereof, the Company shall no longer be
obligated to make any salary payments or other benefits of any kind whatsoever
to you or your estate other than any vested employee benefits required by law
to be provided by the Company. However, any salary payments earned but not yet
made shall be pro rated on a daily basis and made by the Company to you or your
estate. You recognize and understand that all oral representations, prior,
contemporaneous or subsequent to the execution of this Agreement are not to be
relied upon and that nothing contained in any document published or to be
published by the Company shall in any way modify the above terms regarding
termination.
10. Repurchase Option.
(a) Option. If your employment with the Company is terminated for any
reason, the Company has the option, at any time thereafter, to purchase all or
any portion of the shares of capital stock you then own in the Company or in
any successor to the Company (the "Shares"). The date of issuance of the
Shares (the "Issuance Date") may not be the same for all Shares and, if that is
the case, the purchase price for the Shares set forth below shall be calculated
with respect to each Share based upon each Share's particular Issuance Date.
This option may be exercised by the Company at any time upon ten days prior
written notice of such election (an "Election Notice"). The right of the
Company to purchase your Shares may be assigned by the Company to any successor
to the Company, any affiliate of the Company or any existing or subsequent
shareholder of the Company.
(b) Purchase Price. The purchase price for the Shares shall be the
fair market value of the Company as of the date of the Election Notice,
determined by an appraiser selected by the Company experienced in the appraisal
of companies engaged in the same business as the Company. The purchase price
for the Shares shall be the pro rata portion of the fair market value of the
Company, provided, however, that the purchase price for certain Shares shall be
subject to a reduction ("Price Reduction") (i) of 50%, if your employment is
terminated for any reason before the first anniversary of the applicable
Issuance Date, (ii) of 40% if your employment is terminated for any reason
thereafter but before the second anniversary of the applicable Issuance Date,
(iii) of 30% if your employment is terminated for any reason thereafter but
before the third anniversary of the applicable Issuance Date, (iv) of 20% if
your employment is terminated for any reason thereafter but before the fourth
anniversary of the applicable Issuance Date, and (v) of 10% if your
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employment is terminated for any reason thereafter but before the fifth
anniversary of the applicable Issuance Date. Notwithstanding the foregoing,
the Price Reduction shall not reduce the purchase price for the Shares below
that amount of cash paid by you for the Shares, up to and including the date of
your termination (including the principal payments made on any promissory note
used to purchase any Shares). Except as provided below, the purchase price for
certain Shares shall not be reduced if your employment is terminated for any
reason after the fifth anniversary of the applicable Issuance Date. The
purchase price for the Shares, after reduction based on the date of termination
of employment hereunder, if any, shall be reduced further by any severance
payments that the Company shall be required to pay to you pursuant to Section 9
of this Agreement.
(c) Payment Terms. The purchase price shall be payable not later than
90 days after the date of election and shall be paid through the set off ("Set
Off") of any outstanding promissory notes provided by you as payment for any of
the Shares, with any excess paid in immediately available funds (the "Excess
Cash Payment"), subject to the following. The aggregate of the Set Off and
the Excess Cash Payment shall not exceed the amount you paid for the Shares.
In the event the purchase price to be paid to you for the Shares is greater
than the amount you paid for the Shares, the balance owed shall be paid by the
Company in the form of a promissory note. The note shall (a) be subordinate
to all other debt of the Company if the Company is the purchaser, (b) be
unsecured, (c) have a five-year term providing for annual payments of principal
equal to 20% of the unpaid purchase price, (d) permit prepayment, in whole or
in part, without penalty, and (e) be non-negotiable.
11. Notices. Any notice required or permitted to be given under this
Agreement shall be deemed properly given if in writing and if mailed by
registered or certified mail, postage prepaid with return receipt requested or
sent by express courier service, charges prepaid by shipper, to your residence
address as evidenced in the Company records, or to the principal offices of the
Company, to the attention of the Chairman, in the case of notices to the
Company (or to such other address as a party is directed pursuant to written
notice from the other party). Any notice given by the Company to you at your
last directed address shall be effective to bind any other person who shall
acquire rights hereunder.
12. Assignment. This Agreement may not be assigned by you but may be
assigned by the Company.
13. Entire Agreement; Waiver. This instrument contains the entire
Agreement of the parties relating to the subject matter hereof, supersedes and
replaces in its entirety the letter agreement between the Company and you,
dated March 9, 1997, as it relates to your employment with the Company or any
of its subsidiaries, as well as any other existing employment agreements,
whether oral or in writing, and may not be waived, changed, modified, extended
or discharged orally but only by agreement in writing signed by you and the
Chairman. The waiver by the Company of a breach of any provision of this
Agreement by you shall not operate or be construed as a wavier of a breach of
any other provision of this Agreement or of any subsequent breach by you.
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14. Survival of Terms. Any termination of this Agreement shall not affect
the ongoing provisions of this Agreement, which shall survive such termination
in accordance with their respective terms.
15. Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Michigan.
16. Headings. The headings of the sections are for convenience only and
shall not control or affect the meaning or construction or limit the scope or
intent of any of the provisions of this Agreement.
17. Validity. If for any reason any provision hereof shall be determined
to be invalid or unenforceable, the validity and effect of the other provisions
hereof shall not be affected thereby.
18. Severability. Whenever possible, each provision of this Agreement
will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, but this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.
19. Arbitration. Except as expressly set forth in Section 8 of this
Agreement, it is mutually agreed between the parties that arbitration shall be
the sole and exclusive remedy to redress any dispute, claim or controversy
(hereinafter referred to as "grievance") involving the negotiation, execution,
performance or termination of this Agreement. It is the intention of the
parties that the arbitration award will be final and binding and that judgment
on the award may be entered in any court of competent jurisdiction and
enforcement may be had according to its terms. Arbitration may be initiated by
either party by filing a claim for arbitration with the American Arbitration
Association. Any claim must be filed within 6 months of the act or omission
giving rise to the claim.
The arbitrator shall be chosen in accordance with the Voluntary Labor
Arbitration rules of the American Arbitration Association and the expenses of
the arbitration shall be shared equally by the Company and you. The place of
the arbitration shall be the offices of the American Arbitration Association in
Southfield, Michigan. The arbitrator shall not have jurisdiction or authority
to change any of the provisions of this Agreement by alterations, additions to
or subtractions from the terms thereof. The arbitrator's sole authority shall
be to interpret or apply any clause or clauses of this Agreement.
The parties stipulate that the provisions hereof, and the decision of
the arbitrator with respect to any grievance, shall be the sole and exclusive
remedy for any alleged breach of this Agreement or any controversy involving
the negotiation, execution, performance or termination of this Agreement. The
parties hereby acknowledge that since arbitration is the exclusive remedy,
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neither party has the right to resort to any federal, state or local court or
administrative agency and that the decision of the arbitrator shall be a
complete defense to any suit, action or proceeding instituted in any federal,
state or local court or before any administrative agency with respect to any
grievance which is arbitrable as herein set forth. The arbitration provisions
hereof shall, with respect to any grievance, survive the termination or
expiration of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
/s/ Steven M. Abelman
-------------------------------------
Steven M. Abelman
OXFORD AUTOMOTIVE, INC.,
a Michigan corporation
By:/s/ Selwyn Isakow
---------------------------------
Selwyn Isakow, Chairman
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EXHIBIT 10.4
EMPLOYMENT AND NONCOMPETITION AGREEMENT
This Agreement is dated as of July 21, 1997, and is between Donald C.
Campion (the "Employee") and Oxford Automotive, Inc., a Michigan corporation
(the "Company").
In consideration of the premises herein contained, the parties agree as
follows:
1. Employment. The Company employs you, the Employee, as Senior Vice
President - Chief Financial Officer of the Company, and you accept such
employment, upon the terms and conditions set forth in this Agreement.
2. Duties During Employment Period. You shall perform and discharge well
and faithfully such duties for the Company and any of its subsidiaries as may
be assigned to you from time to time by the Board of Directors (the "Board") or
Chairman of the Board (the "Chairman") of the Company and, in the absence of
such assignment, such services customary to such office as are necessary to the
operations of the Company. Such duties shall initially include: building the
financial organization of the Company, including financial reporting, audit,
treasury, forecasting, Securities and Exchange Commission reporting,
acquisition evaluation or other activities as directed by the Chief Executive
Officer. You shall initially report to the Chief Executive Officer and you
shall devote all of your business time, attention and energies to the business
of the Company and its subsidiaries.
3. Term. Your employment with the Company shall commence on the date
hereof and shall be terminable at will and you and the Company shall have the
right to terminate your employment with or without cause in accordance with
Section 9 below.
4. Employment Period Compensation.
(a) Base Salary. For all services to be rendered by you hereunder
(including services as director, officer, employee, member of any committee of
the Company or any subsidiary or division or otherwise), the Company shall pay
to you during the Employment Period an annual salary of $210,000 (payable in
equal bi-weekly installments or on the same basis as other executives). The
Board may, at its option, make such additional salary increases as they deem
appropriate in light of your performance and the Company's performance. All
payments shall be subject to all applicable taxes required to be withheld by
the Company pursuant to federal, state or local law.
(b) Other Benefits. The Company shall provide you with the fringe
benefits, perquisites, and other benefits of employment provided to executive
officers of the Company from time to time during the Employment Period, subject
to the generally applicable eligibility and other provisions of the various
plans and programs in effect from time to time. These benefits will be
adjusted from time to time as determined by the Board, as such benefits may be
adjusted for general application among all executive officers.
<PAGE> 2
(c) Automobile Allowance. The Company shall provide you with the use of a
an automobile or an automobile allowance during the Employment Period, in
connection with the services to be rendered by you hereunder, which shall be on
terms comparable to that provided to the other executive officers of the
Company.
(d) Contingent Bonus. After each fiscal year that ends during the
Employment Period, the Board will consider granting to you a bonus, in such
amount (if any) up to 50% of your annual base salary as the Board may determine
in its sole discretion.
(e) Vacation. You shall be entitled to four weeks paid vacation during
each calendar year of the Employment Period (provided that two weeks shall be
provided to you during the balance of 1997), to be taken at such times as shall
not, in the reasonable judgment of the Chief Executive Officer, materially
interfere with the fulfillment of your duties under this Agreement. Unused
vacation time may not be carried over to the following year. You shall also be
entitled to as many holidays and personal days as are in accordance with the
Company's policy then in effect for its employees generally, upon such terms as
may be provided for general application to all employees of the Company.
5. Confidential Information, Improvements, Etc.
(a) Disclosure of Information. You understand and agree that the
Confidential Information (as hereinafter defined) used in the business of the
Company or its affiliates is a valuable, special and unique asset of the
Company and shall be and remain the sole and exclusive property of the Company.
Accordingly, you agree that you will not, during or after your employment with
the Company, take from the Company's premises, or directly or indirectly
reproduce, use, disclose or reveal said Confidential Information to any person,
firm, corporation, association or other entity for any reason or purpose
whatsoever, except as required in connection with the performance of your
duties under this Agreement or as required by law or under court order or as
authorized in writing by the Company; and further agree that you will never use
any such Confidential Information for any purpose other than in fulfillment of
your employment duties with the Company. In the event of the termination of
your employment, you agree to immediately deliver to the Company all written
materials in your possession regarding said Confidential Information and not
retain or transfer any copies thereof.
(b) Confidential Information. "Confidential Information" as used herein,
means:
(i) the terms and conditions of any business transaction that the
Company or any of its subsidiaries has performed or has offered to perform with
any customer or prospective customer while you have been employed by the
Company or which you learned of while employed by the Company or any of its
subsidiaries;
(ii) any forms, business plans, manuals, operating procedures and
policies of the Company or any of its subsidiaries;
2
<PAGE> 3
(iii) any other facts or data that are treated as confidential
and proprietary by the Company or any of its subsidiaries and that are
disclosed to or learned by you during your employment with the Company;
(iv) any documents that relate to, refer to, are involved with,
summarize, embody or constitute the Confidential Information defined in this
paragraph (b) ("documents", as used herein means forms, manuals, compilations
of data, summaries, printouts, contracts, agreements, correspondence,
memoranda, notes, files, invoices, price lists, data bases and all copies
thereof, of any kind whatsoever, whether typewritten, handwritten or recorded
electronically).
(c) Improvements, Etc. You will treat as for the sole benefit of the
Company, and fully and promptly disclose and assign to the Company without
additional "future" compensation, all ideas, discoveries, inventions and
improvements, whether patentable or not, which relate to the business, or
activities of the Company or any of its subsidiaries or which result from or
relate to the subject matter of any work which you may do for, on the premises
of, at the expense of, or on behalf of the Company or any of its subsidiaries,
and which are or have been made, conceived or reduced to practice by you, alone
or jointly with others, during or after usual working hours, either on or off
your job, while you are employed by the Company.
At the Company's expense, at any time during or after such employment, you
will sign all papers and do such other reasonable acts as the Company deems
necessary or desirable or may reasonably require of you to assign and protect
the Company's or its nominee's rights to such ideas, discoveries, inventions
and improvements, including applying for, obtaining and enforcing patents,
trademarks or copyrights on such ideas, discoveries, inventions and
improvements in any and all countries of the world; provided, however, that the
Company shall promptly reimburse you for any out-of-pocket expenses incurred by
you in connection with the performance of your obligations under this
Subsection (c).
(d) Notice. This confidentiality covenant shall not in any way limit or
restrict you from obtaining or maintaining employment in the industry in which
the Company operates, it is specifically intended to restrict and prohibit you
from using Confidential Information obtained during your employment. The
Company is concerned that you might subsequently use Confidential Information
obtained during your employment, to the Company's or its officers, directors,
and shareholders' detriment. So that your subsequent employers are aware of
this confidentiality covenant, you agree that during the Restricted Period as
described in Subsection (e) below, you shall inform all future employers of
said covenant.
(e) Restricted Period. As used herein, the term "Restricted Period" shall
mean the period commencing with the date hereof and ending on the date that is
two years after the termination of your employment with the Company.
6. Business Relationships. You understand and agree that establishing
business relationships with representatives of the organizations served by the
Company is a demanding
3
<PAGE> 4
difficult procedure requiring a great deal of time, effort and money, and
requires the building of confidence and goodwill, and that the Company should
have the right to hold such established business relationships as its own. You
therefore agree that during the Restricted Period, except when acting on behalf
of the Company, you will not, directly or indirectly, request or advise any
client or identifiable prospective client of the Company to withhold, curtail
or cancel their business with the Company. In addition, you agree that with
respect to the Business Activities (defined below), you will not directly or
indirectly call on, or solicit any client or prospective client of the Company
whose identity as such client or prospective client, first became known to you
through your employment with the Company, whether before or after this
agreement is signed, whether the relationship was developed by you or not;
provided, however, that this provision shall not be construed to preclude or
otherwise prohibit any such client or prospective client from calling on or
soliciting you so long as you abide by the other provisions of this Agreement,
including Section 7 below.
7. Covenant Not To Compete.
(a) Noncompetition. You acknowledge that the services to be provided
hereunder are unique and that their loss would cause irreparable injury to the
Company. You also hereby acknowledge and recognize the highly competitive
nature of the Company's business and, accordingly, in consideration of your
employment by the Company, you agree to the following:
(i) That during the Restricted Period, you will not, directly or
indirectly (other than on behalf of the Company), engage in the design,
development, manufacture, sale, marketing or servicing of products or provision
of services which at any time heretofore or hereafter during your employment
with the Company were designed, developed, manufactured, sold, marketed,
serviced or provided by the Company; or engage in any activity which is in
competition with the activities of the Company (the "Business Activities")
whether such engagement is as an officer, director, proprietor, employee,
partner, investor (other than as a holder of less than 5% of the outstanding
capital stock of a publicly traded corporation), consultant, advisor, agent or
otherwise, in any geographic area in which at any time prior to or during your
employment with the Company the products or services of the Company were
distributed or provided by the Company or in which the Company has competed.
(ii) That during the Restricted Period, you will not, directly
or indirectly, engage in any Business Activities (other than on behalf of the
Company) by supplying products or providing services which at any time prior to
or during your employment with the Company were supplied or provided by the
Company to any customer, client or prospective client with whom the Company at
any time prior to or during your employment with the Company has done any
business, whether as an officer, director, proprietor, employee, partner,
investor (other than as a holder of less than 5% of the outstanding capital
stock of a publicly traded corporation), consultant, advisor, agent or
otherwise.
4
<PAGE> 5
(iii) During the Restricted Period you will not directly or
indirectly solicit, for your own account or for the account of any other person
or entity other than the Company, induce or influence any client, prospective
client, customer, supplier, lender, lessor or any other person which has a
business relationship with the Company at any time during the Restricted Period
to discontinue or reduce the extent of such relationship with the Company.
(iv) During the Restricted Period, you will not (A) directly
or indirectly recruit, solicit or otherwise induce or influence any employee or
sales agent of the Company to discontinue such employment or agency
relationship with the Company, or (B) employ or seek to employ, or cause or
permit any business which competes directly or indirectly with the Business
Activities (the "Competitive Business") to employ or seek to employ for any
Competitive Business, any person who is then (or was at any time within six
months prior to the date either you or the Competitive Business employs or
seeks to employ such person) employed by the Company.
8. Remedies. You acknowledge and agree that the Company's remedy at law
for a breach or threatened breach of any of the provisions of Sections 5, 6 or
7 would be inadequate. In recognition of this fact, in the event of a breach
by you of any of the provisions of Sections 5, 6 or 7, you agree that, in
addition to its remedy at law, all of your rights to payment or otherwise under
this Agreement and all amounts then or thereafter due to you from the Company
under this Agreement may be terminated (other than payments due upon the
exercise of the option under Section 10, except that the foregoing shall not
preclude the Company from offsetting from such payments under Section 10 any
amounts due from you to the Company as a result of such breach), upon a final
determination that there was such a breach in accordance with Section 19
hereof, provided, however, that the Company shall not be required to pay any
amount hereunder prior to such final determination, except upon receipt of an
agreement by you to repay such amount which you are ultimately determined not
to be entitled. In addition, the Company, without posting any bond, shall be
entitled to obtain equitable relief in the form of specific performance,
temporary restraining order, temporary or permanent injunction or any other
equitable remedy which may then be available. Nothing herein contained shall
be construed as prohibiting the Company from pursuing any other remedies
available to it for such breach or threatened breach.
9. Termination.
Employment. This Agreement shall terminate upon the first to occur of
(i) receipt by you from the Company of notice that the Company has in its
discretion elected to terminate your employment without cause, for any reason
or no reason, in which case, subject to the provisions of Section 10 of this
Agreement, you shall, for a period of six months from the date of such notice,
continue to receive the same health, dental and life insurance benefits
provided to other executive officers of the Company, and shall also receive
severance pay in an amount equal to one-half of your then annual base salary,
payable in equal monthly installments over a period of 6 months, and such
compensation and benefits in each such case shall be the only compensation or
benefits you shall be entitled to in connection with such termination (other
than any COBRA rights available to you
5
<PAGE> 6
on the date you cease to receive health insurance under this item (i)), (ii)
your death, (iii) at the option of the Company, your Disability, and for
purposes of this Agreement, the term "Disability" shall be deemed to have
occurred upon written notice to you (or your guardian or other person, if any,
who has then been placed in charge of your affairs) by the Company given at any
time that you shall have failed, because of illness or incapacity, for a period
of 90 consecutive days, or for an aggregate period of at least 120 days during
the preceding 12 month period, to render services of the character rendered by
you for the Company prior to such illness or incapacity (the date of such
Disability shall be deemed to be the fifth business day following the date of
such notice), (iv) receipt by the Company from you of notice that you have
elected to terminate your employment, or (v) your discharge by the Board for
cause. For purposes of this Agreement, an event or occurrence constituting
"cause" shall mean your dishonesty or insubordination, your repeated violation
of any Company policies after notice thereof, your conviction for any felony or
for a crime involving fraud or misrepresentation, your deliberate conduct,
engaged in without the prior approval of the Board, resulting in a material
loss to the Company or theft from the Company, your gross neglect or willful
misconduct in connection with the performance of your duties hereunder, or a
material violation by you of any of the provisions of this Agreement.
In the event of termination of employment for any reason specified in
paragraph (a)(ii), (iii), (iv) or (v) hereof, the Company shall no longer be
obligated to make any salary payments or other benefits of any kind whatsoever
to you or your estate other than any vested employee benefits required by law
to be provided by the Company. However, any salary payments earned but not yet
made shall be pro rated on a daily basis and made by the Company to you or your
estate. You recognize and understand that all oral representations, prior,
contemporaneous or subsequent to the execution of this Agreement are not to be
relied upon and that nothing contained in any document published or to be
published by the Company shall in any way modify the above terms regarding
termination.
10. Repurchase Option.
(a) Option. If your employment with the Company is terminated for
any reason, the Company has the option, at any time thereafter, to purchase all
or any portion of the shares of capital stock you then own in the Company or in
any successor to the Company (the "Shares"). The date of issuance or
acquisition of the Shares (the "Acquisition Date") may not be the same for all
Shares and, if that is the case, the purchase price for the Shares set forth
below shall be calculated with respect to each Share based upon each Share's
particular Acquisition Date. This option may be exercised by the Company at
any time upon ten days prior written notice of such election (an "Election
Notice"). The right of the Company to purchase your Shares may be assigned by
the Company to any successor to the Company, any affiliate of the Company or
any existing or subsequent shareholder of the Company.
(b) Purchase Price. The purchase price for the Shares shall be
the fair market value of the Shares as of the date of the Election Notice,
determined by an appraiser selected by the Company experienced in the appraisal
of companies engaged in the same business as the Company.
6
<PAGE> 7
The purchase price for the Shares shall be subject to a reduction ("Price
Reduction") (i) of 50%, if your employment is terminated for any reason before
the first anniversary of the applicable Acquisition Date, (ii) of 40% if your
employment is terminated for any reason thereafter but before the second
anniversary of the applicable Acquisition Date, (iii) of 30% if your employment
is terminated for any reason thereafter but before the third anniversary of the
applicable Acquisition Date, (iv) of 20% if your employment is terminated for
any reason thereafter but before the fourth anniversary of the applicable
Acquisition Date, and (v) of 10% if your employment is terminated for any
reason thereafter but before the fifth anniversary of the applicable
Acquisition Date. Notwithstanding the foregoing, the Price Reduction shall not
reduce the purchase price for the Shares below that amount of cash paid by you
for the Shares, up to and including the date of your termination (including the
principal payments made on any promissory note used to purchase any Shares).
Except as provided below, the purchase price for certain Shares shall not be
reduced if your employment is terminated for any reason after the fifth
anniversary of the applicable Acquisition Date. If the purchase price for the
Shares, after reduction based on the date of termination of employment
hereunder, if any, is greater than your cost basis in the Shares, the amount of
the purchase price in excess of your cost basis shall be offset by an amount
not to exceed the amount of any severance payments that the Company shall be
required to pay to you pursuant to Section 9 of this Agreement.
(c) Payment Terms. The purchase price shall be payable not later
than 90 days after the date of election and shall be paid through the set off
("Set Off") of any outstanding promissory notes provided by you as payment for
any of the Shares, with any excess paid in immediately available funds (the
"Excess Cash Payment"), subject to the following. The aggregate of the Set
Off and the Excess Cash Payment shall not exceed the amount you paid for the
Shares. In the event the purchase price to be paid to you for the Shares is
greater than the amount you paid for the Shares, the balance owed shall be paid
by the Company in the form of a promissory note. The note shall (a) be
subordinate to all other debt of the Company if the Company is the purchaser,
(b) be unsecured, (c) have a five-year term providing for annual payments of
principal equal to 20% of the unpaid purchase price, (d) permit prepayment, in
whole or in part, without penalty, and (e) be non-negotiable.
11. Notices. Any notice required or permitted to be given under this
Agreement shall be deemed properly given if in writing and if mailed by
registered or certified mail, postage prepaid with return receipt requested or
sent by express courier service, charges prepaid by shipper, to your residence
address as evidenced in the Company records, or to the principal offices of the
Company, to the attention of the Chairman, in the case of notices to the
Company (or to such other address as a party is directed pursuant to written
notice from the other party). Any notice given by the Company to you at your
last directed address shall be effective to bind any other person who shall
acquire rights hereunder.
12. Assignment. This Agreement may not be assigned by you but may be
assigned by the Company.
7
<PAGE> 8
13. Entire Agreement; Waiver. This instrument contains the entire
Agreement of the parties relating to the subject matter hereof, supersedes and
replaces in its entirety the letter agreement between the Company and you,
dated June 30, 1997, as it relates to your employment with the Company or any
of its subsidiaries, as well as any other existing employment agreements,
whether oral or in writing, and may not be waived, changed, modified, extended
or discharged orally but only by agreement in writing signed by you and the
Chairman. The waiver by the Company of a breach of any provision of this
Agreement by you shall not operate or be construed as a wavier of a breach of
any other provision of this Agreement or of any subsequent breach by you.
14. Survival of Terms. Any termination of this Agreement shall not affect
the ongoing provisions of this Agreement, which shall survive such termination
in accordance with their respective terms.
15. Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Michigan.
16. Headings. The headings of the sections are for convenience only and
shall not control or affect the meaning or construction or limit the scope or
intent of any of the provisions of this Agreement.
17. Validity. If for any reason any provision hereof shall be determined
to be invalid or unenforceable, the validity and effect of the other provisions
hereof shall not be affected thereby.
18. Severability. Whenever possible, each provision of this Agreement
will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, but this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.
19. Arbitration. Except as expressly set forth in Section 8 of this
Agreement, it is mutually agreed between the parties that arbitration shall be
the sole and exclusive remedy to redress any dispute, claim or controversy
(hereinafter referred to as "grievance") involving the negotiation, execution,
performance or termination of this Agreement. It is the intention of the
parties that the arbitration award will be final and binding and that judgment
on the award may be entered in any court of competent jurisdiction and
enforcement may be had according to its terms. Arbitration may be initiated by
either party by filing a claim for arbitration with the American Arbitration
Association. Any claim must be filed within 6 months of the act or omission
giving rise to the claim.
The arbitrator shall be chosen in accordance with the Voluntary Labor
Arbitration rules of the American Arbitration Association and the expenses of
the arbitration shall be shared equally by the Company and you. The place of
the arbitration shall be the offices of the American
8
<PAGE> 9
Arbitration Association in Southfield, Michigan. The arbitrator shall not have
jurisdiction or authority to change any of the provisions of this Agreement by
alterations, additions to or subtractions from the terms thereof. The
arbitrator's sole authority shall be to interpret or apply any clause or
clauses of this Agreement.
The parties stipulate that the provisions hereof, and the decision
of the arbitrator with respect to any grievance, shall be the sole and exclusive
remedy for any alleged breach of this Agreement or any controversy involving
the negotiation, execution, performance or termination of this Agreement. The
parties hereby acknowledge that since arbitration is the exclusive remedy,
neither party has the right to resort to any federal, state or local court or
administrative agency and that the decision of the arbitrator shall be a
complete defense to any suit, action or proceeding instituted in any federal,
state or local court or before any administrative agency with respect to any
grievance which is arbitrable as herein set forth. The arbitration provisions
hereof shall, with respect to any grievance, survive the termination or
expiration of this Agreement.
20. Attorneys' Fees. If any party to this Agreement brings suit or
commences arbitration against another party to this Agreement to recover sums
owed under this Agreement or otherwise to enforce compliance with the terms of
this Agreement, the prevailing party shall be entitled to receive from the
other party reasonable attorneys' fees and other costs and expenses incurred by
the prevailing party in connection with the suit regardless of whether
prosecuted to judgment. "Prevailing party" means, in the case of a claimant,
one who is successful in obtaining substantially all the relief sought, and in
the case of a defendant or respondent, one who is successful in denying
substantially all of the relief sought by the claimant.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
/s/ Donald C. Campion
----------------------------------
Donald C. Campion
OXFORD AUTOMOTIVE, INC.,
a Michigan corporation
By:
/s/ Selwyn Iskaow
---------------------------------
Selwyn Isakow, Chairman
9
<PAGE> 1
EXHIBIT 10.5
BMG NORTH AMERICA LIMITED
1574 Eagle Street North
Cambridge, Ontario Canada N3H 4S5
November 24, 1995
Mr. Larry C. Cornwall
2090 Kingsway Drive
Troy, MI 48098
Dear Larry:
Don Holton and I are pleased to extend you an offer for full time
employment at BMG North America Limited ("BMG") as Senior Vice President-Sales
and marketing, based in the Metro-Detroit area. The parameters of your
employment will be:
1. Position: Senior Vice President - Sales and Marketing. In this
position you will be a member of the Senior Executive Team
reporting directly to the President or other Senior Executive as
directed by the Board of Directors.
2. Responsibilities: You will be responsible for managing BMG's
existing sales activities regarding its current book of business,
obtaining additional business, and positioning BMG as a leader in
the automotive metal forming industry.
3. Compensation:
Base Salary: $120,000 per annum paid bi-weekly
Bonus Potential: Up to 50% of base salary determined by
the Board of Directors based upon
corporate objectives and agreed to
personal goals.
4. Equity Participation:
Stock Purchase: You shall be eligible to purchase
1,500 shares (equivalent to about
2% of Oxford's investors' equity
interest in BMG) at a price of
approximately $20,000. These shares
shall be subject to a shareholder
agreement and repurchase arrangements
with penalty clauses should you not be
part of BMG for five years.
Equity Participation: You shall be eligible for 138,937
units of the Equity Participation Plan
(equivalent to approximately 1% of
Oxford Investors' equity interest) at
no cost with a vesting
<PAGE> 2
period of two years subject to attainment of specific
corporate financial goals.
5. Benefits: You will be entitled to benefits similar to all
other employees, including health and dental
insurance and other benefit programs.
6. Vacation: You will be entitled to four weeks vacation with
no "carry-forward" provisions.
7. Severance: You will sign an At-Will Employment acknowledgment
and can be terminated at any time with or without
cause for any reason whatsoever and without
notice. Severance arrangements will reflect
Canadian law or three months pay, whichever is
longer.
8. Car: You will be entitled to a car allowance under the
BMG Employee Automobile Policy. This allowance
will include insurance costs, repairs, lease
payments, etc. and will total $700 per month.
Reimbursement for gas, etc. shall be in accordance
with BMG's Expense Policy.
Larry, we believe that, as our partner, you will build a leading-edge
sales and marketing organization for BMG and lead the company into the 21st
Century. You will be entering on the "ground floor", and as we and the company
grow and expand, so your responsibilities and value in the business should
grow. This is an opportunity for you to operate as an owner and direct a sales
force that will become the envy of the industry.
We look forward to working with you. Please sign below should you agree
to the above terms and fax a copy of this letter to (810) 540-7280. If you
have any questions, please call at (910) 540-0031. This letter shall terminate
if not executed by November 27, 1995.
Sincerely,
Selwyn Isakow
Chairman
I agree to the terms and content of this letter.
- ---------------------------
Larry C. Cornwall
<PAGE> 1
EXHIBIT 10.6
SHAREHOLDER AGREEMENT
The Parties to this agreement are Robert Burch, John Colaianne, Lawrence
R. Garon, Jay J. Hansen, Hilsel Investment Company Limited Partnership, Donald
Holton, Lawrence S. Lax, Steve Lord, Robert H. Orley, Gregg L. Orley, David T.
Provost, Anton Rizzardi, Thomas L. Saeli and Rex E. Schlaybaugh, Jr.
(individually a "Shareholder" and collectively the "Shareholders").
This agreement applies to all shares of the common stock in BMG-MI, Inc.,
a Michigan corporation (the "Corporation") that a Shareholder now owns or later
acquires (the "Shares").
1. Restriction on Transfer. A Shareholder may not transfer any Shares
without first complying with the provisions of this Agreement.
"Shareholder" includes a Shareholder's representative, executor or legal
guardian as necessary.
"transfer" is any sale, exchange or other disposition or encumbrance of a
Shareholder's Shares, whether absolute or as security, whether for a
valuable consideration or as a gift, whether voluntary or involuntary,
except that a "transfer" shall not be deemed to include a transfer of a
Shareholder's shares to a living trust of which Shareholder serves as the
sole trustee or a transfer pursuant to the Shareholder's last will and
testament, provided that the transferee shall execute a copy of this
Agreement as a condition precedent to the transfer of any Share on the
books of the Corporation and to recognition as a shareholder for any
purpose.
2. Restrictions on Transfer by Shareholder.
Except with the prior written consent of sixty percent (60%) in interest
of the Shares of the other Shareholders or in connection with a transaction
contemplated by paragraph 1 or paragraph 4 of this Agreement, a Shareholder
shall not transfer any of his Shares. Each of the certificates representing
the Shares shall contain the following legends:
ON THE FACE OF
THE CERTIFICATE: THIS CERTIFICATE IS SUBJECT TO TRANSFER RESTRICTIONS NOTED ON
THE REVERSE SIDE HEREOF.
ON THE BACK OF
THE CERTIFICATE: THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
CERTAIN RESTRICTIONS ON TRANSFER AND VOTING AGREEMENTS
CONTAINED IN A CERTAIN SHAREHOLDER AGREEMENT, DATED
, 1995, BY AND BETWEEN CERTAIN SHAREHOLDERS OF THE ISSUER.
<PAGE> 2
3. Redemption Upon Death. Upon the death of a Shareholder, the other
Shareholders may, subject to the provisions of this paragraph 3, purchase the
Shares of that Shareholder. Such election shall be in writing within thirty
(30) days of the date of death, and specify the number of shares to be
purchased. If the purchase election is exercised, the purchase shall be in
such proportions as the Shareholders (excluding the Shareholder whose shares
are being purchased ("Selling Shareholders")) shall agree upon jointly in
writing, or in the event that they fail to agree, then such purchase shall be
proportionate to the relative number of Shares in the Corporation held by each
Shareholder electing to participate in the purchase. The purchase price shall
be determined and payable as provided in paragraph 4.
4. Purchase Price. If a purchase price cannot be agreed upon by the
purchasing Shareholders and the Selling Shareholder within thirty (30) days of
the date of death, Selwyn Isakow or in the event Selwyn Isakow is no longer a
Shareholder or is considered the Selling Shareholder, a majority in number of
the purchasing Shareholders shall select an appraiser experienced in the
appraisal of companies which are engaged in the business of the Corporation to
appraise the Corporation as of the date of death. The appraisal shall be the
higher value of the Corporation (i) as a going concern, or (ii) on a
liquidation basis. The purchase price for the Shares to be purchased shall be
the pro rata portion of the value of the Corporation. The purchase price shall
be payable against receipt of the certificates representing the Shares, duly
endorsed for transfer not later than one hundred eighty (180) days subsequent
to death, as follows: (1) the lesser of twenty percent (20%) of the purchase
price or the original cost basis of the Shares shall be paid in cash, and (2)
the remaining unpaid balance, if any, by delivery of each purchasing
Shareholder's promissory note. The promissory note shall (i) be unsecured,
(ii) have a five-year term providing for annual payments of principal equal to
20% of the face amount, (iii) bear interest, payable quarterly, at the variable
interest rate announced from time to time by NBD Bank as its prime rate, (iv)
permit pre-payment in whole or in part, without penalty, at any time, (v) be
non-negotiable, and (vi) entitle the holder to declare the unpaid principal
amount and all interest accrued thereon immediately due and payable, after
customary notice and grace periods, upon the failure to pay any installment
when due.
5. Majority's Ability to Sell Corporation.
(A) All of the Shareholders agree to execute and deliver
to Selwyn Isakow an irrevocable proxy in the form of attachment
"A". Except as specifically provided in paragraph 5(B), Selwyn
Isakow may vote such proxies as he and he alone determines
appropriate and shall not be liable to any Shareholder in
connection with any matter with respect to which he votes the
Shares pursuant to such proxies.
(B) If the holders of the Shares having a majority in
interest of the Shares determine that it is in the best
interests of all of the Shareholders, taken as a whole, to sell
all or substantially all of the assets of the Corporation or to
cause the Corporation to merge or consolidate with or into
another corporation (the "Transaction"), Selwyn Isakow shall
exercise the proxies
2
<PAGE> 3
provided to him pursuant to paragraph 5(A) consistent with the
decision of a majority in interest of the Shares, provided,
however, such holders notify him in writing at least one (1)
business day prior to the date on which he is to vote or execute
a consent with respect to a Transaction, otherwise he shall be
entitled to vote such Shares as he and he alone determines
appropriate, as provided in subparagraph (A).
6. Miscellaneous. This Agreement shall be binding upon the parties and
their successors and assigns and may be specifically enforced. This Agreement
shall be governed by Michigan law. Each stock certificate representing Shares
shall bear an appropriate legend referring to this Agreement. If there exist
the requisite consents to a transfer, the transferees shall execute a copy of
this Agreement as a condition precedent to the registration of his ownership of
Shares on the books of the Corporation and to it recognition as a shareholder
for any purpose.
7. Notices. All notices or communications permitted or required hereunder
shall be given by express mail, certified mail or by personal service, with all
postage or fees prepaid addressed to the applicable party as follows:
For each of:
John Colaianne, Lawrence R. Garon, Jay J. Hansen, Hilsel Investment
Company Limited Partnership, Lawrence S. Lax, Steve Lord, Anton Rizzardi,
Robert H. Orley, Gregg L. Orley, and Thomas L. Saeli:
The Oxford Investment Group, Inc.
2000 N. Woodward Avenue, Ste. 130
Bloomfield Hills, Michigan 48304
David T. Provost
The Bank of Bloomfield Hills
505 N. Woodward Avenue, Ste. 1300
Bloomfield Hills, Michigan 48304
Robert Burch
The Bank of Bloomfield Hills
505 N. Woodward Avenue, Ste. 1300
Bloomfield Hills, Michigan 48304
Donald Holton
319 Neapolitan Way
Naples, Florida 33940
Rex E. Schlaybaugh, Jr.
3
<PAGE> 4
Dykema Gossett PLLC
1577 North Woodward Ave., Suite 300
Bloomfield Hills, MI 48304-2820
8. Additional Capital Contributions. The Shareholders understand that
additional paid in capital may be necessary for the Corporation's business. If
the Board of Directors determines to issue additional capital stock, warrants,
options or convertible securities, the Shareholders agree among themselves to
exercise the opportunity to purchase such additional securities in proportion
to their ownership interest existing at that time. Securities not purchased by
any Shareholder shall be offered to the other Shareholders in proportion to
their relative ownership interests not taking into account the interest of the
Shareholder who refused to purchase additional securities.
9. Complete Agreement. This Agreement contains the entire understanding
of the parties with respect to transactions contemplated by this Agreement. No
representations, inducement, agreement, amendment, promise or understanding
will have any force or effect unless the same is in writing and validly
executed by the parties hereto.
Effective: , 1995
---------------
-----------------
Robert Burch
-----------------
John Colaianne
-----------------
Lawrence R. Garon
-----------------
Jay J. Hansen
Hilsel Investment Company
Limited Partnership
4
<PAGE> 5
By: Tridec Management, Inc.,
General Partner
By:
------------------------
Selwyn Isakow, President
------------------------
Donald Holton
------------------------
Lawrence S. Lax
------------------------
Steve Lord
------------------------
Robert H. Orley
5
<PAGE> 6
------------------------
Gregg L. Orley
------------------------
David T. Provost
------------------------
Anton Rizzardi
------------------------
Thomas L. Salei
------------------------
Rex E. Schlaybaugh, Jr.
6
<PAGE> 7
7
<PAGE> 8
EXHIBIT A
IRREVOCABLE PROXY
I appoint Selwyn Isakow, my proxy, to vote all of my shares of common
stock of BMG-MI, Inc. that are entitled to vote at any meeting of the
Shareholders of BMG-MI, Inc. This proxy concerns all matters that may properly
come before any such meeting, and any adjournment thereof.
Date: , 1995
--------------- ----------------------
Certificate No.__
Number of Shares __
8
<PAGE> 1
EXHIBIT 10.7
OXFORD AUTOMOTIVE, INC.
Shareholder Agreement
This Shareholder Agreement (the "Agreement") is made as of the 10th
day of January, 1997, by and among Oxford Automotive, Inc., a Michigan
corporation formerly known as BMG-MI, Inc. (the "Company"), and the
shareholders set forth on Exhibit A to this Agreement (each individually a
"Shareholder" and collectively the "Shareholders") and applies to all shares of
the stock in the Company, of whatever class or series, that a Shareholder now
owns or later acquires (the "Shares").
Background
A. Certain other holders of shares of common stock of the Company
have executed Shareholder Agreements, one dated October 23,
1995, and the other dated February 26, 1996, that restrict the
rights of such holders to transfer such shares (the "Prior
Shareholder Agreements"). The parties to the Prior
Shareholder Agreements shall be referred to as the "Original
Shareholders" for the purposes of this Agreement. Copies of
the Prior Shareholder Agreements are attached to this
Agreement as Exhibits C and D.
B. The Shareholders were holders of shares of the common stock of
Lobdell Holdings, Inc., a Michigan corporation ("Holdings"),
prior to the merger of Holdings with and into the Company
pursuant to that certain Agreement and Plan of Merger between
Holdings and the Company dated January 8, 1997 (the "Holdings
Merger"). The Company is the surviving corporation after the
Holdings Merger, which was made effective on the same date as
this Agreement.
Agreement
1. Definitions. The following terms are defined for the purposes
of this Agreement:
(a) "Shareholder" includes a Shareholder's
representative, executor or legal guardian as necessary.
(b) "Transfer" is any sale, exchange or other disposition
or encumbrance of a Shareholder's Shares, whether absolute or as security,
whether for a valuable consideration or as a gift, whether voluntary or
involuntary, except that a "transfer" shall not be deemed to include a transfer
of a Shareholder's shares to a living trust of which Shareholder serves as the
sole trustee or a transfer pursuant to the Shareholder's last will and
testament, provided that the transferee shall execute a copy of this Agreement
as a condition precedent to the transfer of any Share on the books of the
Company and to recognition as a shareholder for any purpose.
<PAGE> 2
2. Restrictions on Transfer by Shareholder.
(a) A Shareholder may not transfer any Shares without
first complying with the provisions of this Agreement.
(b) Except with the prior written consent of sixty
percent (60%) in interest of the shares of common stock of the Company owned by
Shareholders and Original Shareholders other than the Shareholder seeking to
transfer his Shares or in connection with a transaction contemplated by Section
4, a Shareholder shall not transfer any of his Shares.
(c) Each of the certificates representing the Shares
shall contain the following legends:
ON THE FACE OF
THE CERTIFICATE: THIS CERTIFICATE IS SUBJECT TO TRANSFER RESTRICTIONS
NOTED ON THE REVERSE SIDE HEREOF.
ON THE BACK OF
THE CERTIFICATE: THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE
SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER AND
VOTING AGREEMENTS CONTAINED IN THAT CERTAIN
SHAREHOLDER AGREEMENT, DATED JANUARY 10, 1997, BY
AND AMONG THE COMPANY AND CERTAIN SHAREHOLDERS OF THE
ISSUER.
3. Redemption Upon Death. Upon the death of a Shareholder, the
other Shareholders and the Original Shareholders may, subject to the provisions
of this Section 3, purchase the Shares of that Shareholder. Such election
shall be in writing within thirty (30) days of the date of death, and specify
the number of shares to be purchased. If the purchase election is exercised,
the purchase shall be in such proportions as the Shareholders and the Original
Shareholders (excluding the Shareholder whose shares are being purchased (the
"Selling Shareholder")) shall agree upon jointly in writing, or in the event
that they fail to agree, then such purchase shall be proportionate to the
relative number of Shares in the Company held by each Shareholder and Original
Shareholder electing to participate in the purchase. The purchase price shall
be determined and payable as provided in Section 4.
4. Purchase Price. If a purchase price cannot be agreed upon by
the purchasing Shareholders and Original Shareholders and the Selling
Shareholder within thirty (30) days of the date of death, Selwyn Isakow or in
the event Selwyn Isakow, or an entity controlled by him, is no longer a holder
of Shares or is considered the Selling Shareholder, a majority in number of the
purchasing Shareholders and Original Shareholders shall select an appraiser
experienced in the appraisal of companies which are engaged in the business of
the Company to appraise the Company as of the date of death. The appraisal
shall be the higher value of the Company (i) as a going
2
<PAGE> 3
concern, or (ii) on a liquidation basis. The purchase price for the Shares to
be purchased shall be the pro rata portion of the value of the Company. The
purchase price shall be payable against receipt of the certificates
representing the Shares, duly endorsed for transfer not later than one hundred
eighty (180) days subsequent to death, as follows: (i) the lesser of
twenty percent (20%) of the purchase price or the original cost basis of the
Shares shall be paid in cash, and (ii) the remaining unpaid balance, if any, by
delivery of each purchasing Shareholder's and Original Shareholder's promissory
note. The promissory note shall (i) be unsecured, (ii) have a five-year term
providing for annual payments of principal equal to 20% of the face amount,
(iii) bear interest, payable quarterly, at the variable interest rate announced
from time to time by NBD Bank as its prime rate, (iv) permit pre-payment in
whole or in part, without penalty, at any time, (v) be non-negotiable, and (vi)
entitle the holder to declare the unpaid principal amount and all interest
accrued thereon immediately due and payable, after customary notice and grace
periods, upon the failure to pay any installment when due.
5. Majority's Ability to Sell the Company.
(a) All of the Shareholders agree to execute and deliver
to Selwyn Isakow an irrevocable proxy in the form of Exhibit B. Except as
specifically provided in Section 5(b), Selwyn Isakow may vote such proxies as
he and he alone determines appropriate and shall not be liable to any
Shareholder in connection with any matter with respect to which he votes the
Shares pursuant to such proxies.
(b) If the Original Shareholders and the Shareholders
having a majority in interest of the voting securities of the Company determine
that it is in the best interests of all of the Original Shareholders and the
Shareholders, taken as a whole, to sell all or substantially all of the assets
of the Company or to cause the Company to merge or consolidate with or into
another corporation or other entity (each, a "Transaction"), Selwyn Isakow
shall exercise the proxies provided to him pursuant to Section 5(a) consistent
with the decision of a majority in interest of the voting securities of the
Company held by the Original Shareholders and the Shareholders, provided,
however, such holders notify him in writing at least one (1) business day prior
to the date on which he is to vote or execute a consent with respect to a
Transaction, otherwise he shall be entitled to vote such Shares as he and he
alone determines appropriate, as provided in Section 5(a).
6. Notices. All notices or communications permitted or required
under this Agreement shall be given by express mail, certified mail or by
personal service, with all postage or fees prepaid addressed to the applicable
party as set forth on Exhibit A.
7. Additional Capital Contributions. The Shareholders understand
that additional paid in capital may be necessary for the Company's business.
If the Board of Directors of the Company determines to issue additional capital
stock, warrants, options or convertible securities, the Shareholders agree
among themselves to exercise the opportunity to purchase such additional
securities in proportion to their ownership interest existing at that time.
Securities not purchased by any Shareholder shall be offered to the Original
Shareholders and the other Shareholders in
3
<PAGE> 4
proportion to their relative ownership interests not taking into account the
interest of the Shareholder who refused to purchase additional securities.
8. Complete Agreement. This Agreement contains the entire
understanding of the parties with respect to transactions contemplated by this
Agreement. No representations, inducement, agreement, amendment, promise or
understanding will have any force or effect unless the same is in writing and
validly executed by the parties to this Agreement. Notwithstanding the
preceding sentence, the Company may modify Exhibit A from time to time to
reflect new persons to whom Shares have been issued or to delete Shareholders
who no longer own Shares.
9. Successors. This Agreement shall be binding upon the parties
and their successors and assigns and may be specifically enforced.
10. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which shall
constitute one instrument. The Company shall have custody of counterparts
executed in the aggregate by all Shareholders.
11. Miscellaneous. This Agreement shall be governed by and
construed in accordance with the laws of the State of Michigan, without regard
to its rules regarding choice of law. Each stock certificate representing
Shares shall bear an appropriate legend referring to this Agreement. If there
exist the requisite consents to a transfer, the transferees shall execute a
copy of this Agreement as a condition precedent to the registration of his
ownership of Shares on the books of the Company and to it recognition as a
shareholder for any purpose.
OXFORD AUTOMOTIVE, INC.
----------------------------
Selwyn Isakow, President
4
<PAGE> 5
Exhibit A
1. Patrick T. Flynn
The Oxford Investment Group, Inc.
2000 N. Woodward Avenue, Suite 130
Bloomfield Hills, Michigan 48304
2. Charles L. Dardas
Oxford Automotive, Inc.
2000 N. Woodward Avenue, Suite 130
Bloomfield Hills, Michigan 48304
3. Jeffrey J. Mason
Oxford Automotive, Inc.
2000 N. Woodward Avenue, Suite 130
Bloomfield Hills, Michigan 48304
4. John H. Ferguson
Oxford Automotive, Inc.
1574 Eagle Street North
Cambridge, Ontario N3H 4S5
Canada
5. Richard Kaspers
Packaging Concepts + Design, Inc.
800 Mandoline
Madison Heights, Michigan 48071
6. Selwyn Isakow
The Oxford Investment Group, Inc.
2000 N. Woodward Avenue, Suite 130
Bloomfield Hills, Michigan 48304
7. Steven M. Abelman
Oxford Automotive, Inc.
2000 N. Woodward Avenue, Suite 130
Bloomfield Hills, Michigan 48304
A-1
<PAGE> 6
8. Larry C. Cornwall
Oxford Automotive, Inc.
2000 N. Woodward Avenue, Suite 130
Bloomfield Hills, Michigan 48304
9. Donald C. Campion
Oxford Automotive, Inc.
2000 N. Woodward Avenue, Suite 130
Bloomfield Hills, Michigan 48304
10. Manfred Walt
Suite 4440 BCE Place
181 Bay Street
Toronto, Ontario M5J 2T3
Canada
A-2
<PAGE> 7
Exhibit B
IRREVOCABLE PROXY
I appoint Selwyn Isakow, my proxy, to vote all of my shares of common
stock of Oxford Automotive, Inc. that are entitled to vote at any meeting of
the Shareholders of Oxford Automotive, Inc. This proxy concerns all matters
that may properly come before any such meeting, and any adjournment thereof.
Date: January 8, 1997
--------------------------
[Name]
Certificate No.
----------
Number of Shares
----------
<PAGE> 8
SIGNATURE PAGE
The undersigned hereby executes the Shareholder Agreement (the
"Agreement") of Oxford Automotive, Inc., a Michigan corporation, dated as of
January 10, 1997, and hereby agrees to all of the terms and provisions thereof.
The undersigned hereby joins and executes the Agreement and hereby authorizes
this Signature Page to be attached thereto.
Dated: January 8, 1997
--------------------------------
<PAGE> 1
EXHIBIT 10.8
MANAGEMENT AND CONSULTING AGREEMENT
This Management and Consulting Agreement ("Agreement") is made this 24th
day of June, 1997, and is between Oxford Automotive, Inc., a Michigan
corporation (the "Company"), and The Oxford Investment Group, Inc., a Michigan
corporation ("Consultant").
BACKGROUND
A. Consultant currently provides consulting and management services to
BMG North America Limited ("BMG") pursuant to a Management and Consulting
Agreement dated October 25, 1995 (the "BMG Agreement") and to Lobdell Emery
Corporation ("Lobdell") pursuant to a Management and Consulting Agreement dated
January 10, 1997 (the "Lobdell Agreement" and together with the BMG Agreement
the "Subsidiary Agreements"). Each of BMG and Lobdell are subsidiaries of the
Company.
B. The Company desires to terminate the Subsidiary Agreements and to
enter into an agreement directly with Consultant to receive various consulting
and management services from Consultant for a period of at least five (5) years
beginning on and after the date hereof, and Consultant is willing to terminate
the Subsidiary Agreements and to provide such services to the Company.
C. Consultant is the owner of the trademarks (the "Marks") and the
federal registrations (and applications therefor) thereof listed in Schedule A,
attached to this Agreement and the Company desires to use these Marks in
connection with its business. Consultant will permit the Company to use the
Marks subject to the terms and conditions stated below.
NOW, THEREFORE, in consideration of the foregoing premises and the
respective agreements hereinafter set forth, the Company and Consultant agree
as follows:
SECTION 1. Services to be Rendered.
Consultant will perform various consulting, management and advisory
services on behalf of the Company with respect to all matters relating to or
affecting the Company's business at its facilities at such reasonable times as
the Company may request. Consultant will perform the following specific
services (the "Consulting Services") upon request:
(a) Consultant will meet with the Company's officers and/or
managers regarding operations and productivity and will review
treasury aspects of the Company's business;
(b) Consultant will attend meetings with the Company's customers;
<PAGE> 2
(c) Consultant will review with members of management of the
Company the Company's financial plans and assist in analyzing the
Company's strategic plans and business alternatives;
(d) Consultant will advise and assist the Company from time to
time in identifying potential Subject Companies (as defined below)
and will advise and assist the Company in connection with any
Acquisition Transaction (as defined below) with a potential Subject
Company; and
(e) Consultant will render such other management and advisory
services as may from time to time be agreed upon by Consultant and
the Company.
Provided, however, that in the performance of the Consulting Services,
Consultant is not obligated to make available to the Company any investment or
business opportunities that Consultant (including its directors, officers and
employees) becomes aware of in the ordinary course of its business or as a
result of Consultant's affiliation with certain other entities, regardless of
whether any of these entities is in the same line of business as the Company.
The Company recognizes that Consultant is a merchant banking and business
development company and receives substantial numbers of proposed acquisition
transactions each month. The Company acknowledges the right of and consents to
Consultant consummating any such transactions, in any ownership structure as
Consultant deems appropriate, including offering such transaction to any
affiliate, including the Company, if Consultant, in its sole and complete
discretion, determines such decision is appropriate or desirable.
For purposes of this Agreement, the term "Acquisition Transaction" means
any acquisition (by merger, stock purchase, tender offer or otherwise) by the
Company (or a subsidiary of the Company) of another company or companies (each,
a "Subject Company") or the purchase by the Company (or a subsidiary of the
Company) of all or a portion of the assets, or more that 20% of the equity
securities, of one or more Subject Companies; provided however, that in no
event shall the term Acquisition Transaction mean any acquisition by the
Company of any Subject Company for Aggregate Consideration (as defined below)
of less than $2,500,000.
SECTION 2. Location of Services.
It is understood that Consultant's services will be rendered largely at
Bloomfield Hills, Michigan, but that Consultant will, on reasonable request,
render such Consulting Services at such other places as mutually agreed upon by
the Company and Consultant.
SECTION 3. Fees.
The Company shall pay Consultant for the Consulting Services hereunder and
the License referred to in Section 5, the following cash fees:
2
<PAGE> 3
(a) The Company shall pay Consultant a base management fee ("Base
Management Fee") of $1,000,000 annually, payable in equal monthly
installments of $83,334 on or before the first (1st) day of each
month on account of the prior month (with the payment for any
partial month pro rated accordingly).
(b) In addition to the Base Management Fee, the Company shall pay
to Consultant the following investment banking fees:
(i) A fee equal to 1.0% of the Aggregate Consideration (as
defined below) with respect to any Acquisition Transaction
consummated with a Subject Company located in North America,
such fee to be contingent upon consummation of the
Acquisition Transaction and payable at the closing of such
transaction; and
(ii) A fee equal to 1.25% of the Aggregate Consideration with
respect to any Acquisition Transaction consummated with a
Subject Company located outside of North America, such fee
to be contingent upon consummation of the Acquisition
Transaction and payable at the closing of such transaction;
provided, however, that in no event shall either fee described in
Sections 3b(i) or (ii) above be less than $200,000.
(c) The Company and Consultant acknowledge that the Base Management Fee
has been determined based upon the Company's current operations and
both parties agree that such Base Management Fee shall be adjusted
from time to time, as mutually acceptable to the Company and
Consultant, to reflect the increased size and complexity of the
Company's operations as a result of any Acquisition Transactions or
any other transactions affecting the Company's operations.
"Aggregate Consideration" shall mean, with respect to any Acquisition
Transaction, the total proceeds and other consideration paid and to be paid
(which shall be deemed to include amounts paid and to be paid into escrow) by
the Company to a Subject Company (including any of its affiliates or holders of
its securities), including, without limitation: (i) cash; (ii) notes,
securities and other property valued at the fair market value thereof; (iii)
payments made in installments; (iv) amounts paid or payable under consulting
agreements, agreements not to compete or similar arrangements; (v) any possible
contingent payments, including payments determined by reference to the future
sales, earnings or other results of the Company or the Subject Company; and
(vi) the book value of all funded debt of the Subject Company or its
affiliates, the payment of which is assumed by the Company. For purposes
hereof, (i) any such consideration in the form of securities which are publicly
traded prior to the closing (the "Closing") of the Acquisition Transaction
shall be valued at the average of their closing price for the twenty (20)
trading days prior to the Closing, (ii) any such consideration in the form of
securities which are not publicly traded prior to the Closing, but become
publicly traded after the Closing, shall be valued at the quoted when issued
price of such securities on the day prior to the Closing (if such quotes are
available), and (iii) any
3
<PAGE> 4
other consideration shall be valued at the fair market value thereof as
determined in good faith by the Company and Consultant, or in the absence of
agreement, by an independent arbiter mutually satisfactory to both parties. In
determining the Aggregate Consideration involving deferred payments or other
consideration, such consideration shall be valued at its fair market value on
the date of Closing and the fee attributable thereto shall be paid at Closing.
No fee payable to any other financial advisor or other person by the
Company in connection with the subject matter of this Agreement shall reduce or
otherwise affect any fee payable to Consultant hereunder.
SECTION 4. Expenses.
In addition to any fees that may be payable to Consultant hereunder, the
Company agrees, from time to time upon request, to reimburse Consultant for
Consultant's out-of-pocket expenses incurred in connection with providing the
Consulting Services hereunder, including reasonable fees and disbursements of
Consultant's attorneys.
SECTION 5. Trademark License.
Consultant hereby grants to the Company a limited-term, non-exclusive,
non-transferable license ("License") to use the Marks in connection with the
goods and services identified in the federal registrations (and applications
therefor) referred to in Schedule A. This License is granted in accordance
with the following:
(a) This License is granted for the term of this Agreement, but
may be terminated by either party upon reasonable written notice.
(b) The Company acknowledges that Consultant is the sole and
lawful owner of the Marks and their corresponding federal
registrations (and applications therefor) and agrees that it will
not challenge or contest Consultant's rights in and to the Marks
during the term of this Agreement or at any time thereafter.
(c) The Company agrees that all of its use of the Marks, pursuant
to this Agreement, shall inure directly and solely to the benefit of
Consultant as the owner of the Marks and as licensor.
(d) The Company agrees that, for purposes of this Agreement, the
method of manufacture of the products sold under the Marks, the
quality of the products sold under the Marks, the quality of the
services sold under the marks, and the display of the Marks shall
conform to standards set by and be under the control of Consultant.
The Company, as licensee, further agrees that it will not depart
from the standards of quality for products and services sold under
the Marks during the term of this Agreement.
4
<PAGE> 5
(e) The Company acknowledges that Consultant, as licensor, is
entitled to inspect its manufacturing and business facilities during
business hours and upon reasonable notice, during the term of this
Agreement, for the sole purpose of determining whether standards of
quality for the products and services are being maintained in a
manner that is consistent and in keeping with the terms of this
Agreement.
(f) The Company agrees that it will not at any time apply for any
registration of any copyright, trademark, service mark or other
designation which would affect the ownership of the Marks licensed
herein, or file any document with any governmental authority or take
any action which would affect the ownership of the Marks licensed
herein or aid or abet anyone in doing so.
(g) The Company will manufacture, promote, distribute and sell
products and services pursuant to this Agreement in a legal and
ethical manner, in accordance with industry practices and custom,
and in accordance with the intent of this Agreement.
(h) Upon termination of this Agreement, the Company agrees to
discontinue immediately all use of the Marks and shall, at the
discretion of Consultant, either destroy or turn over to Consultant
any materials, including brochures, containers, labels or other
materials bearing the Marks.
SECTION 6. Indemnification.
The Company shall and hereby agrees to indemnify, defend and hold harmless
Consultant and its affiliates, the respective directors, officers, agents and
employees of Consultant and its affiliates and each other person, if any,
controlling Consultant or any of its affiliates, to the full extent lawful,
from and against any and all liabilities or claims arising out of or in
connection with Consultant's performance of its duties and obligations
hereunder, and will reimburse Consultant and any other party entitled to be
indemnified hereunder for all expenses (including attorneys' fees) as they are
incurred by Consultant or any other such indemnified party in connection with
investigating, preparing or defending any such action or claim. The Company
will not, however, be responsible for any liabilities or claims which are
finally judicially or otherwise determined to have resulted primarily from
Consultant's willful misconduct or gross negligence. The foregoing provisions
shall be in addition to any rights that Consultant or any indemnified party may
have at common law or otherwise, including, but not limited to, any right to
contribution.
The Company further agrees that it will not, without the prior written
consent of the indemnified parties, settle or compromise or consent to the
entry of any judgment in any pending or threatened claim, action, suit or
proceeding in respect of which indemnification may be sought hereunder (whether
or not Consultant or any indemnified party is an actual or potential party to
such claim, action, suit or proceeding) unless such settlement, compromise or
consent includes an unconditional release of Consultant and each other
indemnified party hereunder from all liability arising out of such claim,
action, suit or proceeding.
5
<PAGE> 6
The provisions of this Section 6 shall survive the termination of this
Agreement.
SECTION 7. Term.
This Agreement will be for the period commencing on the date hereof and
terminating on December 31, 2001 ("Terminate Date"), provided, however, that
either party shall have given written notice to the other, not later than six
(6) months prior to the Termination Date, of its intention to terminate,
otherwise this Agreement will continue for additional one (1) year periods
thereafter. A party shall give notice of intent to terminate, during any such
one (1) year period, not later than December 1 of each such year in which event
this Agreement will terminate on December 31 of such year.
SECTION 8. Status of Consultant.
This contract calls for the performance of the services of Consultant as
an independent contractor with control over and responsibility for its own
operations and employees, and neither Consultant nor its employees will be
considered officers, employees or agents of the Company for any purpose.
SECTION 9. Confidentiality.
During the term of this Agreement, Consultant shall not and shall not
permit any of its agents or employees to use or disclose to any person or
organization, except as required by law or under court order, any trade secrets
or other confidential information relating to the Company that Consultant may
acquire during the performance of its services without the prior written
consent of the Company. However, the foregoing restrictions shall not apply to
the extent that such information (i) is publicly available or became publicly
available through an action or fault of Consultant, (ii) was already in
Consultant's possession or known to Consultant prior to being disclosed or
provided to Consultant by the Company, or (iii) was or is obtained by the
Company from a third party which is not otherwise bound by a contractual, legal
or fiduciary obligation of confidentiality to the Company with respect to such
information.
SECTION 10. Disputes.
Any dispute or claim involving this Agreement shall be exclusively
resolved by arbitration conducted in accordance with the Rules of the American
Arbitration Association ("AAA") as specified below. Any dispute or claim shall
be deemed waived unless arbitration is demanded within ninety (90) days of the
occurrence giving rise to the dispute or claim. All arbitrations shall be
conducted by a single arbitrator selected from the commercial panel of the
Detroit office of AAA. Arbitrations shall be conducted in Oakland County,
Michigan, unless the Company and Consultant otherwise agree in writing. All
arbitrations shall comply with the following procedures:
6
<PAGE> 7
(a) The arbitration proceeding shall be limited to presentations
by each party of written argument and exhibits of not more than
thirty (30) pages. Each party shall have two (2) hours to present
its position, and the arbitrator shall render his or her written
decision within fifteen (15) days of the conclusion of the
proceeding;
(b) Any arbitration proceeding shall be commenced within thirty
(30) days of the date in which a party files a claim for arbitration
with AAA. Each party shall serve copies of all correspondence,
filings or submissions upon all other parties at the same time
originally made;
(c) The arbitrator shall have no authority to change any
provision of this Agreement; the arbitrator's sole authority shall
be to interpret or apply the provisions of this Agreement; and
(d) The decision of the arbitrator shall be final and binding,
and judgment shall enter on the arbitrator's findings in a court of
competent jurisdiction in accordance with MCLA Section 600.5001, et
seq., MSA Section 27A.5001, et seq.
SECTION 11. Miscellaneous.
(a) Notices. All notices or other communications required or permitted
hereunder shall be in writing and shall be by personal delivery or by mail,
addressed to the Company, at 2365 Franklin Road, Bloomfield Hills, Michigan
48203-0333 and addressed to Consultant at 2000 North Woodward Avenue, Suite
130, Bloomfield Hills, Michigan 48304. The addresses so indicated for any
party may be changed by similar written notice.
(b) Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be treated as an original but all of which,
collectively, shall constitute a single instrument.
(c) Construction. This Agreement shall be construed in accordance with
the laws of the State of Michigan without regard to its rules regarding choice
of law. The titles of the Sections have been inserted as a matter of
convenience and reference only and shall not control or affect the meaning or
construction of this Agreement.
(d) Entire Agreement. This Agreement constitutes the entire agreement
between the parties and supersedes all other agreements or arrangements, oral
and written, between the parties hereto relating to the matters set forth
herein.
(e) Assignment. This Agreement may not be assigned by any party hereto
without the written consent of the other party.
[this space intentionally left blank]
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IN WITNESS WHEREOF, the parties have executed this Agreement on the date
first written above.
OXFORD AUTOMOTIVE, INC.
By:______________________________
Its:_____________________________
THE OXFORD INVESTMENT GROUP, INC.
By:______________________________
Its:_____________________________
8
<PAGE> 1
EXHIBIT 10.9
SETTLEMENT AGREEMENT & MUTUAL RELEASE
This Settlement Agreement & Mutual Release ("Settlement Agreement") is
effective this 15th day of July, 1997, and is between D. Kennedy Fesenmyer
("Agent"), whose address is 270 Woodwind Drive, P.O. Box 952, Bloomfield Hills,
Michigan 48303-0952, as Agent for all of the Series A and Series B Preferred
shareholders (the "Preferred Shareholders") of Lobdell Emery Corporation
("Lobdell"); Oxford Automotive, Inc., formerly known as BMG-MI, Inc.
("Oxford"), a Michigan corporation with its principal place of business at 2365
Franklin Road, Bloomfield Hills, Michigan 48203; and Lobdell, a Michigan
corporation with its principal place of business at 1325 East Superior Street,
Alma, Michigan 48801.
RECITALS
A. The following agreements exist among or involve Agent, Oxford and
Lobdell with respect to the outstanding shares of Lobdell preferred stock
issued in connection with the acquisition of Lobdell by Oxford: (i) Agreement
and Plan of Merger ("Merger Agreement"), dated as of November 14, 1996, as
amended December 27, 1996, among Lobdell, the former common shareholders of
Lobdell, Lobdell Holdings, Inc. ("Parent"), Oxford, L-E Acquisition, Inc.
("Newco") and Agent, as Agent for the former common shareholders of Lobdell;
and (ii) Escrow Agreement ("Escrow Agreement"), dated January 10, 1997, among
Lobdell, Agent, as Agent for the former common shareholders of Lobdell, and
Citizens Bank (the "Escrow Agent").
B. The parties disagree on the amount of the Shareholders' Equity
Adjustment Amount as defined in Section 1.06 of the Merger Agreement. Lobdell
calculated the Shareholders' Equity Adjustment Amount in its favor to be in
excess of $10.0 million. There are currently 100,000 shares of Lobdell's
Series A $3.00 Cumulative Preferred Stock ("Series A Shares") held in escrow
pursuant to the terms of the Escrow Agreement (the "Series A Escrow Shares")
which are available to satisfy the Shareholders' Equity Adjustment Amount
obligations pursuant to Section 1.06(f) of the Merger Agreement. Pursuant to
the terms of this Settlement Agreement, the parties have agreed that the 49,938
outstanding shares of Lobdell Series B Preferred Stock ("Series B Shares") are
also available to satisfy the Shareholders' Equity Adjustment Amount
obligations and shall be deemed to be shares subject to escrow by Lobdell for
such purpose (the "Series B Escrow Shares"). On June 24, 1997, Lobdell and
Oxford, through their counsel, commenced an arbitration to resolve the parties'
disagreements on the Shareholders' Equity Adjustment Amount (the
"Arbitration"). On June 27, 1997, the Agent, through his counsel, asserted
objections to both the amount of the adjustment and to arbitration as the forum
for resolving the parties' disagreements.
C. Pursuant to Section 7.11 of the Merger Agreement and Section 10 of the
Escrow Agreement, Agent has been authorized by each Preferred Shareholder as
the agent of such Preferred Shareholder for all purposes relating to or in
connection with any transaction contemplated by or relating to the Merger
Agreement and to be carried out prior to, at or after the Closing (as defined
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<PAGE> 2
in the Merger Agreement), including, without limitation, approving any
modifications or amendments to the Merger Agreement and the appointment of the
Escrow Agent and execution and delivery of the Escrow Agreement, and each
Preferred Shareholder has authorized Parent, Oxford, Newco and Lobdell to rely
upon the agency created thereby and has released Parent, Oxford, Newco and
Lobdell from any and all liability to such Preferred Shareholder of whatever
nature arising out of or relating to such agency, to the same extent as though
any act committed or omitted by Agent pursuant to such agency had been
committed or omitted by such Preferred Shareholder.
D. As part of effecting the purchase price adjustment contemplated by the
final Shareholders' Equity Adjustment Amount, the parties have agreed to cancel
60,000 of the Series A Escrow Shares and to provide that the Series B Escrow
Shares shall also be available to satisfy the Shareholders' Equity Adjustment
Amount obligations. The parties have also agreed to provide a mechanism
whereby each of the Preferred Shareholders shall have the opportunity to elect
to have either his or her Series B Escrow Shares or remaining Series A Escrow
Shares, after certain of these Series A Escrow Shares are canceled as described
below, used to satisfy the balance of the Shareholders' Equity Adjustment
Amount obligations.
E. The parties wish to compromise and settle various disputes, including
those arising out of the Merger Agreement and the determination of the
Shareholders' Equity Adjustment Amount, and mutually and voluntarily release
each other and related persons from all existing claims without admitting
wrongdoing or liability on any claim, all on the terms stated below.
TERMS OF AGREEMENT
In consideration of the mutual obligations stated below, and in the
recitals which are deemed substantive terms of this Settlement Agreement, the
undersigned agree as follows:
1. SHAREHOLDERS' EQUITY ADJUSTMENT AMOUNT.
a. The parties agree that the Shareholders' Equity Adjustment Amount
obligations may be satisfied by means of the cancellation of either all of the
Series A Escrow Shares or, depending on the number of Preferred Shareholders
who elect to have their Series B Escrow Shares used for purposes of this
settlement, up to 49,938 Series B Escrow Shares plus the 60,000 Series A Escrow
Shares to be canceled immediately following the execution of this Settlement
Agreement. The parties agree that pursuant to Section 1.06(b) of the Merger
Agreement and Section 3(a) of the Escrow Agreement, the Escrow Agent shall
return to Lobdell all of the Series A Escrow Shares, valued at $100 per share.
Lobdell shall immediately cancel and retire 60,000 Series A Escrow Shares, pro
rata for each Preferred Shareholder. Lobdell shall retain, pro rata for each
Preferred Shareholder, 40,000 of such Series A Escrow Shares (the "Retained
Shares"), with any dividends payable with respect to such shares also retained
by Lobdell, and these Retained Shares shall be available to satisfy the balance
of the Shareholders' Equity Adjustment Amount obligations.
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<PAGE> 3
Agent agrees, on behalf of the Preferred Shareholders, that no dividends
(whether or not declared or accrued prior to the date hereof) shall be payable
with respect to the 60,000 Series A Escrow Shares to be returned to Lobdell and
canceled. Lobdell agrees to declare and pay the regular semi-annual dividend
on the Retained Shares (which it will hold) on or about July 15 as well as on
the Series A Shares not subject to the Escrow Agreement.
b. In order to satisfy the remainder of the Shareholders' Equity
Adjustment Amount obligations not satisfied by the cancellation of the 60,000
Series A Escrow Shares, the parties agree that each of the Preferred
Shareholders shall have the right to elect (the "Election") to have the balance
of the Shareholders' Equity Adjustment Amount satisfied by the cancellation of
their Retained Shares or their Series B Escrow Shares. The terms of the
Election procedure are as follows:
(i) Lobdell or its agent shall accept the surrendered Series B
Escrow Shares which are properly tendered on or prior to the Expiration Date.
As used herein, the term "Expiration Date" means 5:00 p.m., Detroit time, on
August 31, 1997; provided, however, that if Lobdell has extended the period of
time for which the Election period is open, the term "Expiration Date" means
the latest time and date to which the Election period is extended.
(ii) Lobdell, in its sole discretion, shall have the right, at any
time or from time to time, to extend the period of time during which the
Election period is open. During any such extension, all Series B Shares
previously surrendered will remain subject to the election of the surrendering
Preferred Shareholders and may be accepted for cancellation by Lobdell or its
agent. Any Series B Share not accepted for cancellation for any reason will be
returned without expense to the surrendering holder thereof as promptly as
practicable after the expiration or termination of the Election period. If the
Expiration Date is extended, such extension shall not delay the distribution of
Retained Shares to Preferred Shareholders who have previously surrendered their
Series B Escrow Shares.
(iii) The surrender to Lobdell or its agent of Series B Escrow Shares
by a holder thereof and the acceptance thereof by Lobdell or its agent will
constitute a binding agreement between the surrendering holder, Lobdell and
Oxford upon the terms and subject to the conditions set forth herein. All
questions as to the validity, form, eligibility (including time of receipt) and
acceptance of Series B Escrow Shares surrendered will be determined by Lobdell
in its reasonable discretion, which determination shall be final and binding.
Lobdell reserves the right to reasonably reject any and all tenders of any
particular Series B Escrow Shares not properly surrendered or to not accept any
particular Series B Escrow Shares which acceptance might, in the judgment of
Lobdell or its counsel, be unlawful. The interpretation of the terms and
conditions of the Election as to any particular Series B Escrow Shares either
before or after the Expiration Date by Lobdell shall be final and binding on
all parties. The conditions set forth in this subsection (iii) and subsections
(i) and (ii) above are for the sole benefit of Lobdell and may be asserted by
Lobdell regardless of the circumstances giving rise to any such condition or
may be waived by Lobdell in whole or in part at any time and from time to time
in its reasonable discretion. The failure by Lobdell
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<PAGE> 4
at any time to exercise any of the foregoing rights shall not be deemed a
waiver of such right and each such right shall be deemed an ongoing right which
may be asserted at any time and from time to time.
(iv) For the Series B Escrow Shares surrendered, Lobdell shall release
and the holder of such Series B Escrow Shares shall receive .80099 of a
Retained Share, plus the amount of any accrued dividends, without interest,
with respect to such Retained Shares. The accrued dividends with respect to
the Retained Shares shall be payable to the Agent, who shall pay all reasonable
costs and expenses, including attorneys and accounting fees, incurred with
respect to resolving the Shareholders' Equity Adjustment Amount. Thereafter,
the Agent shall cause to be remitted the remainder of the accrued dividend, if
any, to each holder of a Retained Share entitled to such accrued dividend.
Payment of the accrued dividends to the Agent with respect to the Retained
Shares shall satisfy in all respects the obligations of Lobdell to pay such
dividend. No fractional Series A Shares shall be issued in connection with the
Election. In lieu of any fractional share, each Preferred Shareholder entitled
to a fractional share shall be issued the appropriate whole number of Retained
Shares determined by rounding down any fraction of 0.5 or less to the nearest
whole number and by rounding up any fraction greater than 0.5. In all cases,
delivery of any Retained Shares to those Preferred Shareholders electing to
have Series B Escrow Shares used to satisfy the Shareholders' Equity Adjustment
Amount will be made only after timely receipt by Lobdell or its agent of
certificates for such Series B Escrow Shares, a Transmittal Letter
substantially in the form attached hereto as Exhibit A, and all other required
documents. If any surrendered Series B Escrow Shares are not accepted, such
unaccepted Series B Escrow Shares will be released to the tendering holder
thereof as promptly as practicable after the Expiration Date. If a Preferred
Shareholder does not surrender his or her Series B Escrow Shares by the
Expiration Date, it shall be deemed to be an election by such Preferred
Shareholder to have his or her Retained Shares used to satisfy the remainder of
the Shareholders' Equity Adjustment Amount obligations.
(v) Retained Shares not released by the Expiration Date, pursuant to
the Election, shall be canceled. Series B Escrow Shares surrendered to Lobdell
or its agent pursuant to the Election and accepted shall be canceled. Series B
Escrow Shares not surrendered pursuant to the Election will be deemed to be
outstanding in accordance with their terms and no longer subject to the escrow
described herein. Neither Lobdell nor Oxford shall have any obligation to
accept any Series B Escrow Shares or release any Retained Shares nor shall they
have any liability with respect to the Election after the Expiration Date. The
Preferred Shareholders shall not have any rights to surrender their Series B
Escrow Shares nor shall they have any other rights in connection with the
Election after the Expiration Date.
(vi) The Agent, on behalf of the Preferred Shareholders, does hereby
irrevocably constitute and appoint the Secretary or any other officer of
Lobdell attorney to cancel and retire 60,000 of the Series A Escrow Shares, pro
rata for each Preferred Shareholder, to cancel the Series B Escrow Shares
surrendered pursuant to the Election, to cancel any Retained Shares not
released by the Expiration Date, and to take such actions as are necessary to
reflect the terms of this Settlement Agreement and the Election on the books of
Lobdell with full power of substitution.
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c. Agent, on behalf of the Preferred Shareholders, agrees to execute an
Amendment to the Escrow Agreement, substantially in the form attached hereto as
Exhibit B, and to sign such other documents and take such other actions
reasonably necessary to facilitate the terms and agreements contained in this
Settlement Agreement.
2. INDEMNIFICATION CLAIMS. Lobdell and Oxford agree that they shall not
seek any indemnification from the Preferred Shareholders pursuant to the terms
of Section 6.01 of the Merger Agreement with respect to any claims arising out
of and pursuant to the terms of the Merger Agreement, save and except for
indemnification claims arising from a breach of Section 5.01, the first
sentence of Section 5.02(a), all but the last sentence of Section 5.02(b) or
Section 5.02 (c). Agent, on behalf of the Preferred Shareholders, agrees that
the Preferred Shareholders shall not seek any indemnification from Oxford, on
behalf of itself and as successor to Parent, or Lobdell, on behalf of itself
and as successor to Newco, pursuant to the terms of Section 6.02 of the Merger
Agreement with respect to any claims arising out of and pursuant to the terms
of the Merger Agreement.
3. RELEASE BY AGENT. Except for claims asserting breach of this
Settlement Agreement or rights expressly reserved by this Settlement Agreement
or the exception described in the last sentence of this paragraph, Agent for
himself, for the Preferred Shareholders, and for all their representatives,
successors and assigns, hereby releases and forever discharges Oxford on behalf
of itself and as successor to Parent, and Lobdell on behalf of itself and as
successor to Newco, and all of their present and former officers, directors,
employees, shareholders, agents, attorneys, accountants, suppliers, lenders,
representatives, predecessors, successors and assigns, from all claims, demands
or causes of action that any of the releasing parties may now have, have had,
or may hereafter have on account of any facts, known or unknown, foreseen or
unforeseen, existing as of the date hereof, directly or indirectly arising out
of or relating in any way to the Merger Agreement, transactions which are the
subject of the Merger Agreement, the Shareholders' Equity Adjustment Amount,
the underlying transactions and occurrences which gave rise to claimed
adjustments asserted during efforts to resolve disagreements on the
Shareholders' Equity Adjustment Amount, claims as preferred or common Lobdell
shareholders based on facts existing as of the date of this Settlement
Agreement, and the matters covered by this Settlement Agreement, including
claims based on breach of fiduciary duty, fraud including fraud in inducing the
Merger Agreement or this Settlement Agreement, promissory estoppel, any
statutory or other legal rights, any tortious conduct, oppression, shareholder
or other derivative rights, contribution, or claims or adjustments that were or
could have been asserted in the Arbitration or that relate in any way to
matters raised in connection with the Arbitration. The foregoing does not
release, and expressly excepts and preserves, any and all claims that the Agent
or any of the Preferred Shareholders may have against any person who was an
officer or shareholder or director of Lobdell at the time of the merger which
is the subject of the Merger Agreement, to the extent such person would have no
right to indemnification from Lobdell or Oxford; however, the Agent and each of
the Preferred Shareholders, jointly and severally, agree to indemnify and
defend Oxford, Lobdell, and their current shareholders, directors, officers,
and employees against any indemnity, contribution or other claims that may be
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asserted or costs that may be incurred arising out of or relating to claims
excepted or preserved by this sentence.
4. RELEASE OF PREFERRED SHAREHOLDERS. Except for claims asserting breach
of this Settlement Agreement or rights expressly reserved by this Settlement
Agreement, Oxford and Lobdell for themselves and for all successors and
assigns, hereby release and forever discharge the Preferred Shareholders and
all of their agents, attorneys, accountants, representatives, predecessors,
successors and assigns, from all claims, demands or causes of action that any
of the releasing parties may now have, have had, or may hereafter have on
account of any facts, known or unknown, foreseen or unforeseen, existing as of
the date hereof, directly or indirectly arising out of or relating in any way
to the Merger Agreement, transactions which are the subject of the Merger
Agreement, the Shareholders' Equity Adjustment Amount, the underlying
transactions and occurrences which gave rise to claimed adjustments asserted
during efforts to resolve disagreements on the Shareholders' Equity Adjustment
Amount, claims against Lobdell shareholders in their capacity as shareholders,
and the matters covered by this Settlement Agreement, including claims based on
fraud including fraud in inducing the Merger Agreement or this Settlement
Agreement, promissory estoppel, any statutory or other legal rights, any
tortious conduct, oppression, contribution, or claims or adjustments that were
or could have been asserted in the Arbitration or that relate in any way to
matters raised in connection with the Arbitration.
5. NON-ADMISSION OF LIABILITY & RESOLUTION OF ALL CLAIMS. Nothing herein
shall be construed as an admission by any party of wrongdoing or liability to
the other or to any other person on any claim. The parties are entering into
this Settlement Agreement in order amicably to resolve any disputes they may
have with respect to the matters set forth in this Settlement Agreement to the
full literal extent of the releases above. The parties recognize that there
can be no more claims relating to such matters between them for any reason,
other than a claim arising out of facts which occur hereafter and which
constitute a breach of or violation of rights expressly reserved by this
Settlement Agreement.
6. DISMISSAL OF ARBITRATION. Contemporaneous with execution of this
Settlement Agreement, the parties direct their respective counsel to dismiss
the Arbitration with prejudice and without any award of costs or attorney fees.
7. EFFECT ON AGREEMENTS. Except to the extent expressly modified above,
the Merger Agreement is retained, reserved, reaffirmed and remains effective.
The Escrow Agreement shall terminate upon the return of the Escrow Shares to
Lobdell.
8. GOVERNING LAW. This Settlement Agreement is governed by Michigan law.
9. MISCELLANEOUS. This Settlement Agreement constitutes the entire
agreement between the parties regarding its subject matter. Neither party has
made any other promises to the other, and each has consulted with separate
counsel concerning this Settlement Agreement. This Settlement Agreement has
been the subject of substantial arm's-length negotiations, shall not be
construed
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against any party on the grounds that such party was the drafter, and instead
shall be construed as though drafted equally by both parties. Headings are not
to be considered in construing the terms of this Settlement Agreement. Upon
request by a party, the other party agrees to sign such other documents as may
be reasonably necessary to implement this Settlement Agreement. The parties
are signing this Settlement Agreement voluntarily, with a full understanding of
its terms, and without coercion, duress, intimidation or threat. This
Settlement Agreement cannot be modified other than in a writing signed by the
parties. This Settlement Agreement is binding upon and inures to the benefit
of the Preferred Shareholders' heirs and assigns. Each person who signs below
represents that he is fully authorized to sign on behalf of each party and
person for whom he purports to sign and is fully authorized to bind all
releasing parties and persons to the full literal scope of the release above,
and agrees to indemnify and defend the other parties against any claims that
the signatory did not have the authority he represented himself to have. All
executed copies of this Settlement Agreement are duplicate originals. This
Settlement Agreement may be executed in counterparts, each of which shall be
deemed an original, but all of which constitute one and the same instrument.
Facsimile execution pages may be accepted as originals.
IN WITNESS WHEREOF, the parties have executed this Settlement Agreement as
of the date first written above.
D. KENNEDY FESENMYER, as Preferred
Shareholders' Agent
------------------------------------
OXFORD AUTOMOTIVE, INC.
By:
--------------------------------
Rex E. Schlaybaugh, Jr.
Its: Vice Chairman
LOBDELL EMERY CORPORATION
By:
--------------------------------
Rex E. Schlaybaugh, Jr.
Its: Secretary
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EXHIBIT 10.10
EXECUTION COPY
AGREEMENT AND PLAN OF MERGER
AMONG
LOBDELL EMERY CORPORATION,
CERTAIN SHAREHOLDERS OF
LOBDELL EMERY CORPORATION,
BMG-MI, INC.
AND
L-E ACQUISITION, INC.,
A CORPORATION WHOLLY-OWNED BY
BMG-MI, INC.
<PAGE> 2
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER dated as of November 14, 1996, by and
between Lobdell Emery Corporation ("Lobdell"), a Michigan corporation, BMG-MI,
Inc. ("Parent"), a Michigan corporation, L-E Acquisition, Inc. ("Newco"), a
Michigan corporation, the parties named as Shareholders on the signature page
of this Agreement (the "Shareholders"), and D. Kennedy Fesenmyer, as
Shareholders' Agent.
WHEREAS, the Shareholders own all or substantially all of the
outstanding shares of Class A common stock and Class B common stock of Lobdell;
WHEREAS, all of the outstanding shares of capital stock of Parent
are owned directly or indirectly by certain individual shareholders affiliated
with The Oxford Investment Group, Inc. ("Oxford"), and all of the outstanding
shares of capital stock of Newco are owned by Parent; and
WHEREAS, the respective Boards of Directors of each of the
Constituent Corporations deem it advisable and generally to the welfare and
advantage of each, and of all the several and respective holders of their
shares, for Newco to be merged into Lobdell and for all the stock of Lobdell
then outstanding to be converted in the merger into preferred stock of the
Surviving Corporation (as defined below) Parent, pursuant to this Agreement and
the applicable laws of the State of Michigan, in a reorganization as defined by
Sections 368(a)(1)(E) of the United States Internal Revenue Code of 1986, as
amended.
Certain terms used herein are defined, for all purposes of this
Agreement, in Article VIII.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements, provisions and covenants herein contained, and intending to be
legally bound, the parties hereby agree as follows:
I. THE PLAN OF MERGER
1.01 Merger, Surviving Corporation, Directors and Officers.
Pursuant to the Michigan Business Corporation Act (the "MBCA"), Newco shall be
merged with and into Lobdell. Lobdell shall be the surviving corporation after
the merger. Newco and Lobdell, in their capacities as parties to the merger,
are hereinafter sometimes called the "Constituent Corporations," and Lobdell in
its capacity as such surviving corporation is hereinafter sometimes called the
"Surviving Corporation." The directors of Newco immediately prior to the
Effective Date shall be the initial directors of the Surviving Corporation,
each to hold office in accordance with the Articles of Incorporation and Bylaws
of the Surviving Corporation, and the officers of Newco immediately prior to
the Effective Date shall be the initial officers of the Surviving Corporation,
in each case until their respective successors are duly elected or appointed
and qualified.
<PAGE> 3
1.02 Articles of Incorporation. The articles of incorporation
of Newco as in effect on the Effective Date shall from and after the Effective
Date be the Articles of Incorporation of the Surviving Corporation, until
amended as provided by law.
1.03 Bylaws. The bylaws of Newco as in effect on the Effective
Date shall from and after the Effective Date be the bylaws of the Surviving
Corporation, until amended as provided therein or by law.
1.04 The Closing; Effective Date.
(a) The Closing. Delivery of the various instruments and
documents which this Agreement contemplates shall be delivered prior to or on
the Effective Date and shall constitute the Closing. The parties intend that
the Closing shall take place at the offices of Dykema Gossett PLLC, 1577 North
Woodward Avenue, Bloomfield Hills, Michigan at 10:00 a.m. Eastern Standard time
on December 31, 1996, but not later than January 17, 1997, or at such other
time or place or on such other date as shall be mutually agreed by the
Shareholders' Agent and Parent. The date when the Closing takes place is
herein called the "Closing Date."
(b) Michigan Filing. If this Agreement has been approved
by the shareholders of Newco and Lobdell as required by Section 703a of the
MBCA, and if all of the conditions precedent to the obligations of each of the
parties hereto, as hereinafter set forth, shall have been satisfied or waived,
a certificate of merger complying in form and substance with Section 707 of the
MBCA shall be delivered to the office of the Michigan Department of Consumer
and Industry Services for filing on the Closing Date.
(c) Effective Date. The merger contemplated hereby (the
"Merger") shall become effective at 11:59 p.m., Eastern Standard time, on the
date on which the filing referred to in Section 1.04(b) is completed. The date
upon which the merger becomes effective is herein referred to as the "Effective
Date."
1.05 Status and conversion of shares.
(a) Lobdell common stock. Each share of Lobdell Class A
common stock and Class B common stock outstanding on the Effective Date (except
shares held in the treasury of Lobdell, which shall be canceled) shall be
converted by the merger into .116452 shares of fully paid and non-assessable
Series A Preferred Stock of the Surviving Corporation ("Series A Preferred
Stock") and .020578 shares of fully paid and non-assessable Series B Preferred
Stock of the Surviving Corporation ("Series B Preferred Stock" and together
with the Series A Preferred Stock the "Preferred Stock"). The relative rights,
preferences and limitations of the Series A and Series B Preferred Stock shall
be as set forth in Exhibit A hereto. Notwithstanding the foregoing, no
fractional shares of Series A or Series B Preferred Stock or certificates
therefor or scrip shall be issued in the Merger, but in lieu thereof each
record holder of Lobdell Class A common stock or
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Class B common stock who would otherwise be entitled to a fraction of a share
of Preferred Stock shall be paid by Newco an amount in cash equal to (i) such
fraction times (ii) $100.00.
(b) Common stock of Newco. Each share of common stock of
Newco, whether issued or unissued, outstanding or held as treasury stock, shall
be converted by the merger into one share of fully paid and non-assessable
common stock of the Surviving Corporation.
(c) Surrender of Lobdell stock certificates. After the
Effective Date, each holder of an outstanding certificate or certificates
theretofore representing shares of Lobdell Class A common stock or Class B
common stock shall surrender such certificate or certificates to the Surviving
Corporation or its designated agent and shall receive in exchange therefor
(subject to Section 1.06) certificates representing the number of shares of
Preferred Stock into which the shares of Lobdell Class A common stock or Class
B common stock theretofore represented by such surrendered certificate or
certificates have been converted in the merger. Until so surrendered, each
outstanding certificate theretofore representing shares of Lobdell Class A
common stock or Class B common stock shall be deemed for all purposes, other
than the payment of dividends or other distributions, if any, to holders of
Preferred Stock, to represent the number of whole shares of Preferred Stock
into which the shares of Lobdell Class A common stock or Class B common stock
theretofore represented by such certificate or certificates have been
converted. No dividend or other distribution, if any, payable to holders of
record of shares of Preferred Stock shall be paid to the holders of such
outstanding certificates theretofore representing shares of Lobdell Class A
common stock or Class B common stock; provided, however, that upon surrender of
such outstanding certificates there shall be paid to the record holders of the
certificates issued in exchange therefor the amount, without interest thereon,
of dividends and other distributions, if any, which theretofore has been
declared and become payable with respect to the number of shares of Preferred
Stock represented thereby.
1.06 Escrow; Post-Closing Adjustment.
(a) On the Effective Date, the certificates evidencing an
aggregate of $13,000,000 (to the nearest whole share) of the Series A Preferred
Stock, with the Series A Preferred Stock valued at $100 per share for such
purposes, into which each Shareholder's Class A common stock and Class B common
stock of Lobdell has been converted in the Merger (the "Escrow Shares"), shall
be delivered by the Surviving Corporation to Citizens Bank, as escrow agent
(the "Escrow Agent") under an Escrow Agreement among the Surviving Corporation,
the Shareholders' Agent and the Escrow Agent in the form annexed hereto as
Exhibit B (the "Escrow Agreement"). Each of the Lobdell shareholders shall
deposit his pro-rata share of the Escrow Shares (rounded to the nearest whole
number) determined by multiplying 130,000 times a fraction the numerator of
which is the number of shares of Series A Preferred Stock issuable to such
shareholder under Section 1.05(a) and the denominator of which is the total
number of shares of Series A Preferred Stock issuable pursuant to the Merger.
The Escrow Shares shall be held in escrow under the Escrow Agreement and shall
be distributed to the Shareholders, or returned to Parent or the Surviving
Corporation, pursuant to the terms of the Escrow Agreement.
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(b) The "Shareholders' Equity Adjustment Amount" shall be
determined by subtracting (i) $42.6 million from (ii) Lobdell's shareholders'
equity as of the Closing Date. If the Shareholders' Equity Adjustment Amount
is a negative number, the Escrow Agent shall return to the Surviving
Corporation that number of shares of Preferred Stock (to the nearest whole
share) equal in value to such difference, with the Preferred Stock to be valued
for such purpose at $100.00 per share. The Shareholders, Lobdell, Parent and
Newco agree that to the extent that there is any limitation in the deductions
allowed to either Lobdell or the Surviving Corporation, to the extent of any
"excess parachute payments" (as defined under Section 280G of the Code), the
amount of such limitation shall also result in an adjustment hereunder and the
Escrow Agent shall return to the Surviving Corporation that number of shares of
Preferred Stock (to the nearest whole share) equal in value to such limitation,
with the Preferred Stock to be valued for such purpose at $100.00 per share.
(c) In order to determine the Shareholders' Equity
Adjustment Amount, the Surviving Corporation shall cause Price Waterhouse LLP
to prepare, and to deliver to the Surviving Corporation and the Shareholders'
Agent not later than forty-five days after the Closing Date, an audited
consolidated balance sheet of Lobdell as of the Closing Date (the "Closing Date
Balance Sheet"), prepared in accordance with GAAP applied on a basis consistent
with the 1995 Company Balance Sheet and in accordance with the Agreed
Accounting Principles annexed hereto as Exhibit C. The date when such delivery
is completed is herein called the "Balance Sheet Delivery Date."
(d) Not later than 30 days after the Balance Sheet
Delivery Date, the Shareholders' Agent shall notify Parent and the Surviving
Corporation, and Parent and the Surviving Corporation shall notify the
Shareholders' Agent, of agreement or disagreement that Lobdell's shareholders'
equity as of the Closing Date was as shown on the Closing Date Balance Sheet.
If no such notice is delivered, the party from which such notice was due shall
be deemed to have agreed with the Closing Date Balance Sheet and any related
Shareholders' Equity Adjustment Amount. Parent, the Surviving Corporation and
the Shareholders' Agent shall attempt to resolve any such disagreement on a
mutually acceptable basis. To the extent that any such disagreement is not so
resolved within 40 days after the Balance Sheet Delivery Date, the questions
giving rise to such disagreement shall be submitted as soon as practicable
(and, in any event, not later than 60 days after the Balance Sheet Delivery
Date) to Coopers & Lybrand (Detroit office) (the "Reviewing Accountants") for
final determination of Lobdell's shareholders' equity as of the Closing Date.
The Reviewing Accountants shall receive such submissions from the Shareholders'
Agent, Parent, the Surviving Corporation or other persons, hear such testimony,
make such independent investigation, and otherwise follow such positions as the
Reviewing Accountants deem appropriate in their sole discretion. The Reviewing
Accountants shall finally determine the amount of Lobdell's shareholders'
equity as of the Closing Date as soon as practicable, and such determination
shall be binding upon Parent, the Surviving Corporation and the Shareholders
for all purposes of this Agreement and the Escrow Agreement.
(e) Subject to Section 7.02, the Surviving Corporation
shall pay the cost of the preparation and audit of the Closing Date Balance
Sheet and one-half of such cost shall be
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considered the expenses of Lobdell for purposes of Sections 5.02(z) and 7.02.
The Shareholders and the Surviving Corporation shall each pay one-half of the
fees and expenses of the Reviewing Accountants in connection with such
determination. Other expenses incurred in connection with such determination
shall be borne by the party or parties incurring such expenses.
(f) The procedures and determination specified in this
Section 1.06 shall be the sole and the exclusive remedy available to Parent,
the Surviving Corporation and the Shareholders with respect to the
calculations, valuations and determinations in connection with the adjustments
provided for in this Section 1.06, but shall not in any way affect or impair
Parent's or the Surviving Corporation's rights and remedies in respect of
Lobdell or the Shareholders' covenants, representations or warranties.
1.07 Effects of merger. Upon the merger becoming effective,
the Constituent Corporations shall be a single corporation which shall be the
Surviving Corporation. The separate existence of the Constituent Corporations
shall cease, except that of the Surviving Corporation. The title to all real
estate and other property and rights owned by each of the Constituent
Corporations shall be vested in the Surviving Corporation without reversion or
impairment. The Surviving Corporation may use the corporate name and the
assumed names of either or both of the Constituent Corporations, upon complying
with Section 217 of the MBCA. The Surviving Corporation shall have all
liabilities of each of the Constituent Corporations. A proceeding pending
against either of the Constituent Corporations may be continued as if the
merger did not occur or the Surviving Corporation may be substituted in the
proceeding for either of the Constituent Corporations.
II. CONDITIONS TO OBLIGATIONS TO CLOSE
2.01 Conditions to the Obligations of Parent and Newco. The
obligations of Parent and Newco to consummate the Merger and to take the other
actions to be taken by Parent and Newco at or after the Closing pursuant to
this Agreement, is subject to the satisfaction, prior to or on the Closing
Date, of the following conditions precedent:
(a) Accuracy of Representations and Warranties;
Performance of Covenants. The representations and warranties of the
Shareholders in Section 5.01 and the Shareholders and Lobdell in Section 5.02
shall have been true in all material respects when made and, in addition, shall
be true in all material respects on and as of the Closing Date with the same
force and effect as though made on and as of the Closing Date, except as
affected by transactions contemplated hereby and except to the extent that any
such representations and warranties are made as of another date as set forth in
the applicable representation or warranty, in which case such representations
and warranties shall have been true in all material respects as of such other
date. The covenants of the Shareholders and Lobdell in Article III shall have
been performed and complied with in all material respects. Parent and Newco
shall have received a certificate dated the Closing Date signed on behalf of
each Shareholder by the Shareholders' Agent and on behalf of Lobdell by its
President certifying, in such
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detail as Parent or Newco may reasonably request, to the satisfaction of the
conditions in this Section 2.01(a).
(b) Litigation. No action, suit or proceeding shall be
pending before any court, agency, department or commission wherein an
unfavorable injunction, judgment, order, decree, ruling or charge would (i)
prevent consummation of the Merger or any of the other transactions
contemplated by this Agreement, (ii) cause the Merger or any of such
transactions to be rescinded after their consummation, (iii) adversely affect
Lobdell's right to own its properties and to conduct its business, or (iv)
impose limitations on the ability of the Parent to exercise full ownership of
the Surviving Corporation after the Merger contemplated hereby and thereby to
control the assets and business of the Surviving Corporation. No such
injunction, judgment, order, decree or ruling shall be in effect, whether or
not final or appealable. No person shall have notified Parent, Lobdell or the
Shareholders' Agent that such person intends to institute any such action, suit
or proceeding.
(c) Material Adverse Change. Since the date of this
Agreement Lobdell shall not have suffered any change in its condition
(financial or otherwise) or in its assets, liabilities or business, except
changes which have not, individually or in the aggregate, had a Material
Adverse Effect.
(d) Legal Opinion. Parent shall have received from Reed
Smith Shaw & McClay, counsel for Lobdell and the Shareholders, an opinion dated
the Closing Date, in form and substance reasonably satisfactory to Parent and
its counsel.
(e) Corporate action. The Merger contemplated hereby
shall have been duly approved by the shareholders of Lobdell as required by the
MBCA.
(f) Dissenters. The shares of Lobdell Class A common
stock and Class B common stock held by persons who dissent from the Merger
contemplated hereby and demand payment in cash for such shares shall not exceed
3% of the total number of shares of such Class A common stock and Class B
common stock, in the aggregate, outstanding on the Closing Date.
(g) Governmental consents and similar matters. All
authorizations, consents and approvals of Governmental Bodies necessary or
advisable, including those relating to any applicable securities or blue sky
laws and regulations, or necessary or advisable in order to satisfy the
conditions in Sections 2.01(a) and 2.01(b) shall have been obtained and
executed copies thereof delivered to Parent. All applicable waiting periods,
and any extensions thereof, under the Hart-Scott-Rodino Act, if applicable,
shall have expired or otherwise have been terminated.
(h) Good Standing. Parent shall have received
certificates from appropriate authorities as to the good standing of Lobdell
and each of the Subsidiaries in its jurisdiction of incorporation.
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(i) Approvals. Parent and Lobdell, respectively, shall
have obtained any and all consents or waivers from other parties to licenses,
franchises, permits, indentures, agreements and other instruments that are
required for the consummation of the transactions contemplated by this
Agreement to occur on or after the Closing Date without any termination,
violation or breach thereof or default (or event which, with notice or lapse of
time or both, would constitute a default) occurring thereunder which would have
a Material Adverse Effect.
(j) Resignations and Release. Parent shall have
received, in form and substance reasonably satisfactory to Parent and its
counsel, (i) resignations from all the officers and directors of Lobdell and
any trustee under any of Lobdell's employee benefit plans who is not an
employee of Lobdell or a third party which is independent of Lobdell and (ii)
general releases of all claims which the officers and directors of Lobdell may
have against Lobdell, except for accrued employee benefits and current salary
and such claims as may be disclosed in Section 2.01(j) of the Disclosure
Schedule.
(k) Real Property. The Survey and the title insurance
commitments required by Section 3.18 shall have been delivered to Parent.
(l) The covenants of the Shareholders and Lobdell in, and
the events described by, Sections 3.21, 3.22, 3.23, 3.24 and 3.25 shall have
been performed and complied with to the satisfaction of Parent.
2.02 Conditions to the Obligation of Lobdell and the
Shareholders. The obligations of Lobdell and the Shareholders to consummate
the Merger contemplated hereby and to take the other actions to be taken by
Lobdell and the Shareholders at or after the Closing pursuant to this Agreement
is subject to the satisfaction, prior to or on the Closing Date, of the
following conditions precedent:
(a) Accuracy of Representations and Warranties;
Performance of Covenants. The representations and warranties of Parent and
Newco in Section 5.03 shall have been true in all material respects when made
and, in addition, shall be true in all material respects on and as of the
Closing Date with the same force and effect as though made on and as of the
Closing Date, except as affected by transactions contemplated hereby and except
to the extent that any such representations and warranties are made as of
another date as set forth in the applicable representation or warranty, in
which case such representations and warranties shall have been true in all
material respects as of such other date. The covenants of Parent and Newco in
Article III shall have been performed and complied with in all material
respects. The Shareholders' Agent shall have received a certificate dated the
Closing Date signed by Parent certifying, in such detail as the Shareholders'
Agent may reasonably request, to the satisfaction of the conditions in this
Section 2.02(a).
(b) Litigation. No action, suit or proceeding shall be
pending before any court, agency, department or commission wherein an
unfavorable injunction, judgment, order, decree,
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ruling or charge would (i) prevent consummation of the merger or any of the
other transactions contemplated by this Agreement, (ii) cause the Merger or any
of such transactions to be rescinded after their consummation, or (iii)
adversely affect any Shareholder's right to own Preferred Stock. No such
injunction, judgment, order, decree or ruling shall be in effect, whether or
not final or appealable. No person shall have notified Oxford, Parent, Lobdell
or any Shareholder that such person intends to institute any such action, suit
or proceeding.
(c) Legal Opinion. The Shareholders' Agent shall have
received from Dykema Gossett PLLC, counsel for Parent and Newco, an opinion
dated the Closing Date, in form and substance reasonably satisfactory to
Shareholder's Agent and his counsel.
III. PRE-CLOSING COVENANTS
Until the Closing:
3.01 Best Efforts to Close. Parent, Newco, Lobdell and the
Shareholders shall use their respective best efforts to take all actions
necessary or advisable in order to consummate and make effective the
transactions contemplated by this Agreement (including satisfaction, but not
waiver, of the closing conditions set forth in Article II). Prior to the
Closing Date, Lobdell and the Shareholders shall give any notices to third
parties, and shall use their respective best efforts to obtain any third-party
consents and approvals, as may be required in order to enable them to perform
their respective obligations under this Agreement, keeping Parent apprised of
the status of all discussions with such third parties. To the extent that any
notices to, filings with or authorizations, consents or approvals from any
Governmental Bodies are necessary or advisable in connection with such
transactions, Parent, Newco, Lobdell and the Shareholders shall give any such
notices, make any such filings and use their respective best efforts to obtain
any such authorizations, consents and approvals. If the Hart-Scott-Rodino Act
is applicable to such transactions, Parent, Newco, Lobdell and the Shareholders
shall make all filings and provide all documents and information to
Governmental Bodies which are required by said Act and use their respective
best efforts to obtain an early termination of the applicable waiting period
under said Act.
3.02 Access to Premises and Information. Lobdell shall permit
Parent and its authorized representatives to have reasonable access to the
premises, officers, directors, employees and books and records of Lobdell as
Parent or Newco may request, all as provided by, and subject to the terms and
conditions of, the Confidentiality Agreement. No investigation or inquiry made
by Parent or Newco pursuant to this Section 3.02, or made heretofore, and
nothing contained in the Descriptive Memorandum concerning Lobdell provided to
Parent by the Business Advisory Services division of Merrill Lynch, shall in
any way enlarge, diminish or otherwise affect the representations and
warranties made by the Shareholders in this Agreement.
3.03 Exclusivity. None of the Shareholders shall, and Lobdell,
its directors, officers or agents shall not, (i) other than as contemplated by
this Agreement, solicit, initiate or encourage
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the submission of any proposal or offer from any person relating to the
acquisition of any capital stock or other voting securities, or any substantial
portion of the assets of, Lobdell (including any acquisition structured as a
merger, consolidation or share exchange) ("Acquisition Proposal") or (ii)
participate in any discussions or negotiations regarding, furnish any
information with respect to, assist or participate in, facilitate, agree to,
approve or recommend any effort or attempt by any person relating to any
Acquisition Proposal, except to the extent otherwise required by the fiduciary
duties of directors of Lobdell. None of the Shareholders shall vote their
shares of Lobdell capital stock in favor of any Acquisition Proposal and
neither Lobdell nor any of the Shareholders shall directly or indirectly agree
to approve or recommend any Acquisition Proposal. The Shareholders shall
notify Parent immediately if any person makes any Acquisition Proposal or any
inquiry or contact with respect to any Acquisition Proposal.
3.04 Charter or bylaw amendment. Lobdell shall not amend its
articles of incorporation or bylaws.
3.05 Sale of securities. Lobdell shall not authorize for
issuance, issue, sell, deliver or agree or commit to issue, sell or deliver
(whether through the issuance or granting of options, warrants, commitments,
subscriptions, rights to purchase or otherwise) any Lobdell stock of any class
or securities convertible into shares of Lobdell stock of any class, except
pursuant to agreements existing on the date of this Agreement and listed in
Section 3.05 of the Disclosure Schedule.
3.06 Splits, dividends, redemptions, etc. Lobdell shall not
split, combine or reclassify any shares of its capital stock, declare, set
aside or pay any dividend or other distribution (whether in cash, stock or
property or any combination thereof) in respect of its capital stock (except
for the cash dividends of $0.03 per share declared on November 5, 1996), or
redeem or otherwise acquire any shares of capital stock of Lobdell (except as
may be required by the redemption agreement between Lobdell and the Estate of
Elizabeth E. Fesenmyer referred to in the Disclosure Schedule as contemplated
by Section 3.22 hereof).
3.07 Debt. Lobdell shall not (i) create, incur or assume any
long-term debt (including obligations in respect of capital leases) or increase
by more than $250,000 any existing debt to any financial institution; (ii) make
any unscheduled principal repayments of any debt; (iii) enter into any
agreements requiring the maintenance of a specific net worth; (iv) assume,
guarantee, endorse or otherwise become liable or responsible (whether directly,
contingently or otherwise) for the obligation of any other individual, firm or
corporation, or (v) make any loans, advances or capital contributions to, or
investments in, any other individual, firm or corporation.
3.08 Employment, etc. Lobdell shall not (i) terminate the
employment of any officer or significant employee of Lobdell; (ii) enter into
any employment agreement; (iii) pay or agree to pay any bonuses not required by
agreements in existence on the date of this Agreement, or make or agree to make
any increase in the rate of wages, salaries or other remuneration of any of its
officers or salaried employees, other than in the Ordinary Course of Business;
(iv) pay or agree to pay any
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pension, retirement allowance or other employee benefit not required by any
existing plan, agreement or arrangement to any such director, officer or
employee, whether past or present; or (v) commit itself to any additional
pension, profit-sharing, bonus, incentive, deferred compensation, stock
purchase, stock option, stock appreciation right, group insurance, severance
pay, retirement or other employee benefit plan, agreement or arrangement, or to
any employment or consulting agreement with or for the benefit of any person,
or terminate or amend any of such plans or any of such agreements in existence
on the date of this Agreement.
3.09 Sale or encumbrance of assets. Lobdell shall not sell,
transfer, mortgage or otherwise dispose of, or encumber, or agree to sell,
transfer, mortgage or otherwise dispose of or encumber, any properties, real,
personal or mixed, except in the Ordinary Course of Business and which are not,
individually or in the aggregate, material to the business of Lobdell.
3.10 Material contracts. Except in the Ordinary Course of
Business, Lobdell shall not (i) enter into any other material obligation,
agreement, commitment or contract, or make any further additions to its
property or further purchases of machinery or equipment, except agreements,
commitments or contracts for the purchase, sale or lease of goods or services
consistent with past practice and not in excess of current requirements, (ii)
modify or change any contract, purchase order, license, agreement, lease or
undertaking referred to in the Disclosure Schedule or (iii) otherwise make any
material change in the conduct of its business or operations.
3.11 Maintenance of business. Lobdell shall use its best
efforts to keep available the services of its officers and employees and
maintain satisfactory relationships with licensors, suppliers, distributors,
customers and others having business relations with Lobdell, maintain all of
its properties and assets in proper repair, order and condition, and maintain
insurance upon all of its properties and assets and with respect to the conduct
of its business in amounts and kinds comparable to that in effect on the date
of this Agreement.
3.12 Compliance with agreements. Lobdell shall comply with,
and shall not default in the payment of its obligations under, or in the
performance of any material covenant or obligation to be performed by it
pursuant to, any material contract, lease, agreement, plan or arrangement,
regardless of Lobdell's ordinary and usual course of business.
3.13 Books and records; legal compliance. Lobdell shall
maintain its books, accounts and records in the usual, regular and ordinary
manner, on a basis consistent with prior years. Lobdell shall comply in all
material respects with all laws applicable to it and to the conduct of its
business, the enforcement of which, if Lobdell was not in compliance, would
have a Material Adverse Effect.
3.14 Permits, etc. Lobdell shall keep and maintain in full
force and effect all approvals, authorizations, consents, licenses, operating
authorities, certificates of public convenience, orders and other permits whose
loss, individually or in the aggregate, would have a Material Adverse Effect;
shall continue its business pursuant to such approvals, authorizations,
consents, licenses, operating authorities, certificates of public convenience,
orders and other permits;
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and shall take all steps necessary to meet requirements on pending applications
for such approvals, authorizations, consents, licenses, operating authorities,
certificates of public convenience, orders and permits.
3.15 Capital expenditures, loans and other transactions.
Lobdell shall not (i) cancel any debts or waive any claims or rights, except in
the Ordinary Course of Business; (ii) make any capital expenditures or
commitments exceeding $50,000 in any one instance or $250,000 in the aggregate;
or (iii) make any loan to, or enter into any business transaction, agreement,
arrangement or understanding of any other nature with, any officer or director
or any associate of any such officer or director except as disclosed in Section
3.15 of the Disclosure Schedule.
3.16 Transactions with Affiliates. Lobdell shall not engage in
any transaction with any of its shareholders or Affiliates, except as
consistent with past practices or as disclosed in Section 3.16 of the
Disclosure Schedule.
3.17 Operation and Preservation of Business. Lobdell shall
not, without the prior written consent of Parent, engage in or permit any
practice, transaction or act (i) outside the Ordinary Course of Business or
(ii) which, if it had otherwise been engaged in or permitted, would have
rendered untrue any of the representations and warranties of the Shareholders
and Lobdell contained in Section 5.02. The Shareholders' Agent shall promptly
notify Parent of the occurrence of any matter or event which, to his knowledge,
is material to the business, operations, properties, assets or financial
condition of Lobdell.
3.18 Title to Real Property. Lobdell shall obtain the
following to be delivered to Parent and Newco not less than fifteen (15) days
prior to Closing:
(a) with respect to each parcel of real estate that
Lobdell owns (as disclosed in the Disclosure Schedule), a commitment from a
title insurer satisfactory to Parent for an ALTA Owner's Policy of Title
Insurance Form B-1987 (or an equivalent policy acceptable to Parent with
respect to real property located in a state in which an ALTA Owner's Policy of
Title Insurance Form B-1987 is not available), in such amount as Parent may
determine to be the fair market value of such real property (including all
improvements located thereon), insuring title to such real property to be in
Lobdell as of the Closing subject only to Permitted Liens and Exceptions;
(b) with respect to each parcel of real estate that
Lobdell leases or subleases, a commitment from a title insurer satisfactory to
Parent for an ALTA Leasehold Owner's Policy of Title Insurance-1987 (or an
equivalent policy acceptable to Parent with respect to real property located in
a state in which an ALTA Leasehold Owner's Policy of Title Insurance-1987 is
not available) in such amount as Parent may determine to be the fair market
value of such leasehold or subleasehold estate, insuring title to such estate
to be in Lobdell as of the Closing subject only to Permitted Liens and
Exceptions; and
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(c) with respect to each parcel of real estate that
Lobdell owns, leases or subleases, and as to which a title insurance commitment
is to be procured pursuant to this Section 3.18, a current survey ("Survey") of
such parcel (i) certified to Parent, (ii) prepared by a licensed surveyor,
(iii) conforming to current ALTA Minimum Detail Requirements for Land Title
Surveys, (iv) disclosing the location of all improvements, easements, party
walls, sidewalks, roadways, utility lines and other matters shown customarily
on such surveys and (v) showing access affirmatively to public streets and
roads. The Survey shall not disclose any survey defect or encroachment from or
onto the real property which has not been cured or insured over prior to the
Closing.
(d) Each title insurance commitment delivered pursuant to
Sections 3.18(a) or 3.18(b) shall be for a policy which (i) insures title to
the real property and all recorded easements benefitting such real property,
(ii) contains an "extended coverage endorsement" insuring over the general
exceptions contained customarily in such policies, (iii) contains an ALTA
Zoning Endorsement 3.1 (or equivalent), (iv) contains an endorsement insuring
that the real property described in the policy is the same real estate as shown
on the Survey delivered with respect to such property, (v) contains an
endorsement insuring that each street adjacent to the real property is a public
street and that there is direct and unencumbered pedestrian and vehicular
access to such street from the real property, (vi) contains an inflation
endorsement providing for annual adjustments in the amount of coverage
corresponding to the annual percentage increase, if any, in the United States
Department of Commerce Composite Construction Cost Index (with the Base Year
being the calendar year immediately before the year in which this Agreement is
executed), (vii) if the real property consists of more than one record parcel,
contains a "contiguity" endorsement insuring that all of the record parcels are
contiguous to one another, and (viii) contains a "non-imputation" endorsement
to the effect that title defects known to the officers, directors and
shareholders of the owner prior to the Closing shall not be deemed "facts known
to the insured" for purposes of the policy.
3.19 Corporate action.
(a) Action by Lobdell and the Shareholders. Lobdell
shall take all corporate action necessary to consummate the transactions
contemplated by this Agreement. As soon as practicable after the execution and
delivery of this Agreement, Lobdell shall call a meeting of the holders of its
Class A common stock and Class B common stock for the purpose of considering
and acting upon the Merger contemplated hereby, or alternatively obtain an
effective consent resolution. Such meeting shall be duly convened and held,
after notice thereof duly given, and at such meeting a vote of such holders
upon the Merger contemplated hereby shall be taken, all in accordance with the
MBCA. At such meeting all of the shares of Lobdell capital stock held by the
Shareholders shall be voted in favor of the Merger, which shall be sufficient
to approve the Merger under the MBCA and none of the Shareholders shall attempt
to exercise any dissenters' rights with respect to such merger under the MBCA.
(b) Action by Parent and Newco. As soon as practicable
after the execution and delivery of this Agreement, Newco shall call a meeting
of the holders of its outstanding common
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stock for the purpose of considering and acting upon the merger contemplated
hereby. Such meeting shall be duly convened and held, after notice thereof
duly given, and at such meeting a vote of such holders upon the Merger
contemplated hereby shall be taken, all in accordance with the MBCA. At such
meeting all of the shares of such common stock held by Parent shall be voted in
favor of the Merger. In lieu of such meeting, Newco may act by the written
consent of its stockholders as provided by the MBCA, and in that event Parent
shall unconditionally execute and deliver such consent.
3.20 Deposit. On the day when this Agreement is fully executed
and delivered by all of the parties hereto, Parent shall pay to Braun Kendrick
Finkbeiner P.L.C., for the benefit of the Shareholders' Agent, a deposit of
$100,000. Such deposit shall be held by Braun Kendrick Finkbeiner P.L.C., for
the benefit of the Shareholders' Agent until the Effective Date or, if the
Merger contemplated hereby does not become effective, until the date when this
Agreement is terminated. If this Agreement is terminated by the Shareholders
pursuant to Section 7.09(a)(4), the Shareholders' Agent shall distribute such
amount among the Shareholders in proportion to their holdings of Lobdell
capital stock (without regard to whether such stock is Class A common stock or
Class B common stock). If this Agreement is terminated by Parent, Newco or the
Shareholders pursuant to clauses (1), (2), (3), (5) or (6) of Section 7.09(a),
or if the Merger becomes effective, the Shareholders' Agent shall return said
amount to Parent.
3.21 Disclosure Schedule. (A) Lobdell shall, within twenty
(20) business days of the date hereof, furnish to Parent a Disclosure Schedule
as required by Section 5.02 of this Agreement. Within twenty (20) business
days of the date of receipt of the Disclosure Schedule, Parent or Newco may
elect to terminate this Agreement, without liability or expense, by giving
notice to Lobdell of its election to terminate pursuant to Section 7.09(a)(6)
of this Agreement. In the event Parent or Newco elects to terminate this
Agreement pursuant to Section 7.09(a)(6), the deposit of Parent, delivered in
accordance with Section 3.20, shall be immediately refunded to it. (B) The
decision of Parent or Newco not to terminate this Agreement after receipt of
the Disclosure Schedule shall in no way limit, modify or restrict the right of
Parent or Newco to assert any claim for indemnification pursuant to Section
6.02 of this Agreement. (C) Lobdell shall promptly disclose to Parent or Newco
any information contained in its representations, warranties or the Disclosure
Schedule which, because of an event occurring after the date hereof, is
incomplete or is no longer correct as of all times after the date hereof until
the Closing Date; provided, however, that none of such disclosures shall be
deemed to modify, amend, or supplement the representations and warranties of
Lobdell or the Shareholders, or the Disclosure Schedule hereto for purposes of
Section 5.02 hereof, unless Parent or Newco shall have consented thereto in
writing.
3.22 Estate of Elizabeth E. Fesenmyer Redemption Agreement.
Lobdell and the Estate of Elizabeth E. Fesenmyer (the "Estate") entered into a
Redemption Agreement on December 15, 1988, as amended (the "Redemption
Agreement"), wherein Lobdell agreed to redeem in cash at the time specified in
the Redemption Agreement certain Class A voting common stock and Class B
non-voting common stock of Lobdell owned by the Estate. Lobdell shall enter
into a First Amendment to the Redemption Agreement to cause the redemption by
Lobdell on the Closing Date of that
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number of shares of Class A and Class B common stock of Lobdell which may be
redeemed, consistent with the value of such shares as set forth in Section
1.05, for an aggregate purchase price not in excess of $1.6 Million and
providing that, upon completion of the Merger, the Redemption Agreement as
amended shall terminate and Lobdell shall be released and discharged from any
further obligation thereunder.
3.23 Lobdell Stock Options. At or immediately prior to the
Effective Date, each outstanding employee stock option to purchase shares of
Class A common stock and Class B common stock of Lobdell (an "Option") granted
under (i) the Lobdell-Emery Manufacturing Company 1990 Stock Incentive Plan, as
amended (the "1990 Option Plan"), and (ii) any other stock option plan or
arrangement of Lobdell or any Subsidiary (such plans or arrangements, together
with the 1990 Option Plan, are hereinafter collectively referred to as the
"Option Plans"), shall be canceled, and each holder of any such Option, whether
or not then vested or exercisable, shall be paid by Lobdell, at or immediately
prior to the Effective Date for each such Option, in consideration therefor an
amount in cash determined by multiplying (i) the excess, if any, of $13.64 per
share of Class A common stock and Class B common stock over the applicable
exercise price of such Option by (ii) the number of shares of Class A common
stock and Class B common stock such holder could have purchased (assuming full
vesting of all Options) had such holder exercised such Option in full
immediately prior to the Effective Date. In addition, each holder of such
Options shall be entitled to receive the "cash payment rights" granted in
conjunction with such Options, which in aggregate will not exceed $502,923,
including payments currently due to Mr. Regina. The amount of payment relating
to the Options and any cash payment right is set forth in Section 3.23 of the
Disclosure Schedule. Lobdell shall use all reasonable efforts to effectuate
the foregoing, including without limitation amending the Option Plans and
obtaining any necessary consents from Option holders; provided, however, that
prior to the Closing Date, the Board of Directors of Lobdell shall adopt such
resolutions or take such other actions as are permitted and required to adjust,
effective immediately prior to the Effective Date, the terms of each
outstanding Option under the 1990 Option Plan as to which any such consent is
not obtained prior to the Effective Date to provide that such Option shall be
converted into the right, upon exercise of such Option at any time after the
Effective Date, to receive an amount in cash equal to $13.64 for each share of
Class A common stock and Class B common stock subject to such Option, plus the
amount of the applicable cash payment rights, or, alternatively, upon the
surrender and cancellation of such Option at any time after the Effective Date
to receive an amount in cash determined by multiplying (i) the excess, if any,
of $13.64 per share of Class A common stock and Class B common stock over the
applicable exercise price of such Option by (ii) the number of shares of Class
A common stock and Class B common stock subject to such Option, plus the amount
of the applicable cash payment rights, in either case without interest or any
other adjustment thereto.
3.24 Regina Payment. Lobdell shall have entered into an
agreement with Michael Regina ("Regina") whereby Regina has (i) resigned any
and all positions he holds with Lobdell, whether as a director, officer,
employee or trustee, (ii) released any and all claims he has against Lobdell or
any of the Subsidiaries, other than claims for accrued employment benefits, and
(iii) providing for termination of his SERP which shall be replaced with an
annuity. The cost of settling
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or terminating the SERP or any payment with respect to the purchase of an
annuity for Mike Regina shall be a cost for which the Surviving Corporation
shall be considered to have suffered an Adverse Consequence for which
indemnification is required. The actual amount of any such Adverse Consequence
shall be paid to the Surviving Corporation from the Escrow Shares without
reduction, notwithstanding the provisions of Section 6.02. The agreement shall
provide a maximum compensation payment to Regina of not more than $1 Million
and shall be acceptable in all respects to the Parent.
3.25 Minority Shareholder Redemption. Lobdell shall enter into
redemption agreements with certain of the minority shareholders of the Class A
common stock and Class B common stock of Lobdell, each of whom is identified in
Section 3.25 of the Disclosure Schedule with the applicable number of shares
and amount of the redemption payment set forth opposite each shareholder's
name, to redeem shares of Class A common stock and Class B common stock for an
aggregate amount not in excess of $597,191.
IV. P0ST-CLOSING COVENANTS
After the Closing:
4.01 Further Assurances. Lobdell, the Shareholders and Parent
shall take all action and execute all documents, instruments or conveyances of
any kind which may be requested by any party to this Agreement, in order to
carry out any of the provisions hereof and to consummate the Merger and the
other transactions contemplated hereby, all at the sole cost and expense of the
requesting party (unless the requesting party is or would be entitled to
indemnification therefor under Article VI). The Shareholders' Agent, or any
Shareholder, shall be entitled, subject to Section 4.04, to inspect and copy,
during normal business hours and upon reasonable notice, the books and records
of the Surviving Corporation solely with respect to the fulfillment of any
post-closing obligations of Shareholders under this Agreement or for tax
purposes, and neither Parent nor the Surviving Corporation shall destroy or
otherwise dispose of any of such materials before December 31, 2000 without
first notifying the Shareholders' Agent and, if so requested by the
Shareholders' Agent, delivering such materials to the Shareholders' Agent.
4.02 Transition. The Shareholders shall take any reasonable
action requested by Parent or Newco that is designed or intended to have the
effect of encouraging any lessor, licensor, customer, supplier or other
business associate of Lobdell to maintain the same business relationships with
the Surviving Corporation after the Closing as it maintained with Lobdell prior
to the Closing.
4.03 Litigation Support. In the event and for so long as
Lobdell, Parent or any Shareholder is contesting or defending against any
action, suit, proceeding, hearing, investigation, charge, complaint, claim or
demand in connection with (i) any transaction contemplated by this Agreement or
(ii) any fact, situation, circumstance, status, condition, activity, practice,
plan, occurrence, event, incident, action, failure to act or transaction
relating to Lobdell and occurring on
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or prior to the Closing Date involving Newco, Parent, Lobdell or the
Shareholders, respectively, the Surviving Corporation, Parent and the
Shareholders shall cooperate with the contesting or defending party and such
party's counsel in such contest or defense, shall make available their
personnel, and shall provide such testimony and access to their books and
records as shall be necessary or advisable in connection with such contest or
defense, all at the sole cost and expense of the contesting or defending party
(unless the contesting or defending party is entitled to indemnification
therefor under Article VI).
4.04 Confidentiality. Each Shareholder shall treat as
confidential all of the Confidential Information, shall not use any of the
Confidential Information except in connection with this Agreement, and shall
deliver promptly to Parent or destroy, at the request of Parent, all tangible
embodiments, including all copies thereof, of the Confidential Information
which are within the possession or control of such Shareholder. If any
Shareholder is requested or required (by oral question or request for
information or documents in any legal proceeding, interrogatory, subpoena,
civil investigative demand or similar process) to disclose any Confidential
Information, such Shareholder shall immediately notify Parent of such request
or requirement so that Parent or Newco may seek an appropriate protective order
or waive compliance with the provisions of this Section 4.04. If, in the
absence of such a protective order or waiver, any of the Shareholders is, on
the advice of counsel, compelled to disclose any Confidential Information to
any tribunal or else be liable for contempt, such Shareholder may disclose such
Confidential Information to such tribunal; provided, however, that the
disclosing Shareholder shall use such Shareholder's best efforts to obtain, at
the request and expense of Parent, an order or other assurance that
confidential treatment will be accorded to such portion of the Confidential
Information required to be disclosed as Parent shall designate.
4.05 The Preferred Stock. Each certificate representing any of
the Preferred Stock will bear legends substantially in the following forms:
The authorized capital stock of the Surviving Corporation consists of
common stock and preferred stock. Upon request, the Surviving Corporation
will provide to any shareholder without charge a full statement of the
designations, relative rights, preferences and limitations of the shares of
each class authorized to be issued.
The issuance of the shares represented by this certificate has not been
registered under the Securities Act of 1933. Such shares may not be
transferred except in compliance with said Act, with the Articles of
Incorporation of the Surviving Corporation and the Agreement and Plan of Merger
dated as of November 14, 1996 to which the issuer and certain shareholders of
Lobdell Emery Corporation, among others, are parties.
Each holder of such a certificate who wishes to transfer
any of the Preferred Stock represented thereby first must furnish the Surviving
Corporation with (i) an opinion satisfactory in form and substance to the
Surviving Corporation, from counsel satisfactory to the Surviving Corporation,
to the effect that such holder may transfer such shares without registration
under the
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Securities Act and (ii) an undertaking executed by the desired transferee, in
form and substance satisfactory to the Surviving Corporation, agreeing to be
bound by the restrictions on transfer contained herein.
No holder shall transfer, sell or assign any Preferred
Stock prior to February 1, 1999, except transfers or assignments to an inter
vivos trust or by bequest. After February 1, 1999, each holder of Preferred
Stock who proposes to sell, transfer or assign (other than a transfer to an
inter vivos trust or transfer by gift or bequest) any Preferred Stock shall
first give written notice to the Surviving Corporation of the proposed
transfer, stating the name of the proposed purchaser, the number of shares to
be transferred, the price per share, and all of the other material terms of the
proposed transfer. For thirty days after such notice, the Surviving
Corporation shall have a first option to purchase all (but not less than all)
of the Preferred Stock to be transferred, at the price of the proposed transfer
and on the other material terms of the proposed transfer. If the Surviving
Corporation fails to purchase all such shares, they may be transferred to the
purchaser designated in such notice, at the price and on the terms described in
such notice, within fifteen days after the expiration of the thirty-day option
period. After the expiration of such fifteen-day period, no Preferred Stock
may be transferred to any person without again complying with this Section
4.05. The closing of any sale of Preferred Stock to the Surviving Corporation
pursuant to this Section 4.05 shall take place at the principal business office
of the Surviving Corporation. Upon tender of the purchase price, the holder of
such Preferred Stock shall endorse and deliver to the Surviving Corporation all
certificates representing the purchased shares, together with all other
documents that may be necessary or desirable to accomplish a complete transfer
of such shares. If such holder fails to deliver any certificate, notice, or
other document required by this Section 4.05, the Surviving Corporation may set
aside the purchase price, to be held for such holder without interest and
without any fiduciary obligation, and such holder shall have no further rights
with respect to the shares to be purchased, including but not limited to the
right to receive any distribution with respect to such shares.
4.06 Parent Agreement to Exchange Shares.
(a) (i) For the purposes of this Section 4.06, the term
"Initial Public Offering" shall mean the first offering of the common stock
of the Parent (the "Parent Common Stock") to the public which is (X)
exclusively for cash consideration, (Y) subject to an effective
registration statement filed with the Securities and Exchange Commission
under the Securities Act of 1933, as amended, and (Z) underwritten on a
firm commitment basis by one or more underwriters. The Initial Public
Offering will be deemed to have commenced when such registration statement
first becomes effective.
(ii) The term "Initial Public Offering Price" shall mean
the price per share to the public of Parent Common Stock specified in the
prospectus included as part of the registration statement referred to above
at the time such registration statement first becomes effective.
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(iii) The term "Exchange Ratio" shall mean a number equal
to (X) the redemption value of a share of the Series A Preferred Stock,
divided by (Y) the Initial Public Offering Price.
(b) The Parent or the Surviving Corporation shall give
written notice to each registered holder of the Series A Preferred Stock not
later than thirty (30) days following the Initial Public Offering. During the
period beginning on the 60th day after the effective date of the Initial Public
Offering and ending at the end of the 30th day thereafter, each holder of
Series A Preferred Stock may elect in writing (the "Exchange Notice") to
exchange up to 50% or some lesser portion of his shares of Series A Preferred
Stock (the "Election Amount") for a number of shares of Parent Common Stock (or
any other class of capital stock into which such common shares have been
converted pursuant to any reclassification or reorganization) equal to (i) the
Election Amount, multiplied by (ii) the Exchange Ratio; provided, however,
that, in the aggregate, holders of Series A Preferred Stock may not receive
more than 25.0% of the number of shares of Parent Common Stock registered
pursuant to the Initial Public Offering (the "Maximum Exchange Amount"). If
the holders of Series A Preferred Stock make elections that would result in
such holders collectively exceeding the Maximum Exchange Amount, each holder of
Series A Preferred Stock making such an election will receive shares of Parent
Common Stock equal to the number resulting from multiplying his Election Amount
by the Exchange Ratio, then multiplying that result by a fraction, the
denominator of which is the total number of shares of Parent Common Stock which
has been requested as a result of the Exchange Notices and the numerator of
which is the Maximum Exchange Amount. Any holder of Series A Preferred Stock
who does not make an election to exchange his Series A Preferred Stock as
provided herein shall cease to have any rights thereafter to exchange such
shares and the Parent shall have no responsibility or liability to any such
holder with respect to any such exchange.
(c) Before any holder of Series A Preferred Stock shall
be entitled to exchange such stock for shares of Parent Common Stock, he shall
(i) surrender the certificate or certificates for his shares of Series A
Preferred Stock, duly endorsed for transfer, with signatures guaranteed by a
national or state bank, and (ii) give written instructions to the Parent (in
such form as the Parent may reasonably request) that he elects to convert the
same and shall state therein the name or names in which he wishes the
certificate or certificates for shares of Parent Common Stock to be issued.
The Parent shall, as soon as practicable thereafter, issue and deliver to such
holder of Series A Preferred Stock, a certificate or certificates for the whole
number of shares of Parent Common Stock to which he shall be entitled.
(d) The exchange set forth in this Section 4.06 shall be
deemed to have been made immediately prior to the close of business on the date
of surrender of the shares of Series A Preferred Stock to be exchanged, and
the person or persons entitled to receive the shares of Parent Common Stock
issuable upon such exchange shall be treated for all purposes as the record
holder or holders of such shares of Parent Common Stock on such date. The
conversion may, at the option of any holder tendering shares of Series A
Preferred Stock for exchange, be conditioned upon the closing with the
underwriters of the sale of securities pursuant to the Initial Public Offering,
in which
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event the person(s) entitled to receive the Parent Common Stock upon exchange
of the Series A Preferred Stock shall not be deemed to have exchanged such
Series A Preferred Stock until immediately prior to the day of closing of such
sale of securities.
(e) No fractional share shall be issued upon the exchange
of any share or shares of Series A Preferred Stock. All shares of Parent
Common Stock (including fractions thereof) issuable upon exchange of more than
one share of Series A Preferred Stock by a holder thereof shall be aggregated
for purposes of determining whether the exchange would result in the issuance
of any fractional share. If, after the aforementioned aggregation, the
exchange would result in the issuance of a fraction of a share of Common Stock,
the Company shall, in lieu of issuing any fractional share, pay the holder
otherwise entitled to such fraction a sum in cash equal to the market value of
such fraction on the date of exchange, based on the Initial Public Offering
Price.
V. REPRESENTATIONS AND WARRANTIES
5.01 Representations and warranties of the Shareholders
severally and not jointly. Each Shareholder, severally and not jointly,
represents and warrants to Parent as follows:
(a) Ownership of shares. Each Shareholder owns of record
the number of shares of Lobdell's Class A common stock and Class B common stock
and is a resident of the state set forth opposite the name of such Shareholder
on Exhibit D annexed hereto. The shares of Lobdell capital stock referred to
in Exhibit D opposite the name of each Shareholder have been duly authorized
and validly issued, are fully paid and nonassessable, and are not subject to
any liens, charges, encumbrances or restrictions on transfer other than those
imposed by applicable securities laws or by this Agreement or as disclosed in
the Disclosure Schedule. Such Shareholder does not own of record or
beneficially any options, warrants or other rights to acquire any equity
securities of Lobdell except as otherwise disclosed in the Disclosure Schedule.
(b) Due Authorization of Agreement; No Conflict With
Other Instruments. Such Shareholder has full power and authority and has taken
all necessary action to execute, deliver and consummate this Agreement and to
perform all the terms and conditions hereof to be performed by such
Shareholder. This Agreement is a valid and binding obligation of such
Shareholder enforceable against such Shareholder in accordance with its terms,
except as the enforceability hereof may be limited by bankruptcy, insolvency or
other laws of general application relating to or affecting the enforcement of
creditors' rights or by general principles of equity limiting the availability
of equitable remedies. Except as disclosed in the Disclosure Schedule, the
execution and delivery by such Shareholder of this Agreement, the consummation
by such Shareholder of the transactions which this Agreement contemplates will
be consummated by such Shareholder, and such Shareholder's fulfillment of and
compliance with the terms and provisions hereof applicable to such Shareholder,
do not and will not (i) violate any law applicable to such Shareholder, (ii)
conflict with, result in a
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breach of or constitute a default under Lobdell's articles of incorporation or
bylaws, (iii) conflict with, result in a breach of, constitute a default under
or accelerate or permit the acceleration of the performance required by, any
agreement or instrument to which Lobdell or such Shareholder is a party or by
which Lobdell or such Shareholder is bound, (iv) result in the creation of any
lien, charge or encumbrance upon any of the assets of Lobdell under any such
agreement or instrument or (v) terminate or give any party thereto the right to
terminate any such agreement or instrument.
5.02 Representations and Warranties of Lobdell and the
Shareholders jointly and severally. Lobdell and the Shareholders, jointly and
severally, represent and warrant to Parent and Newco as follows, except for
specific references to the written disclosure schedule delivered pursuant to
Section 3.21 of this Agreement by Lobdell and the Shareholders to Parent and
Newco, that is arranged in paragraphs corresponding to the paragraphs contained
in this Section 5.02 and other applicable Sections of this Agreement (the
"Disclosure Schedule"):
(a) Incorporation, Qualification, etc. Lobdell is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Michigan, with all necessary corporate power to own and
lease its properties and to carry on its business as and where such properties
are now owned or leased and such business is now being carried on. Lobdell is
duly qualified to do business as a foreign corporation and is in good standing
in the State of Indiana, and in each other jurisdiction where the failure so to
qualify would have a Material Adverse Effect. The copies of Lobdell's Articles
of Incorporation and Bylaws and the articles of incorporation and bylaws, or
equivalent organizational documents, of each Subsidiary (the "Subsidiary
Documents") which have previously been delivered to Parent, are complete and
correct. Lobdell's Articles of Incorporation and Bylaws and the Subsidiary
Documents have not been amended during 1996.
(b) Due Authorization of Agreement; No Conflict With
Other Instruments. Lobdell has all necessary corporate power and authority to
execute and deliver this Agreement and to perform its obligations under this
Agreement and to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement by Lobdell and the consummation by
Lobdell of the transactions contemplated by this Agreement have been duly and
validly authorized by all necessary corporate action, and no other corporate
proceedings on the part of Lobdell are necessary to authorize this Agreement or
to consummate the transactions so contemplated (other than the approval of this
Agreement by the holders of at least a majority of the outstanding shares of
Class A and Class B common stock of Lobdell entitled to vote in accordance with
the MBCA and Lobdell's Articles of Incorporation and Bylaws). The Board of
Directors of Lobdell has determined that it is advisable and in the best
interest of the Lobdell shareholders for Lobdell to enter into a business
combination with Newco upon the terms and subject to the conditions of this
Agreement, and has unanimously recommended that the Lobdell shareholders
approve and adopt this Agreement and the Merger. This Agreement has been duly
and validly executed and delivered by Lobdell and, assuming the due
authorization, execution and delivery by Parent and Newco constitutes a legal,
valid and binding obligation of Lobdell enforceable against Lobdell in
accordance with its terms, except as the enforceability hereof may be limited
by bankruptcy, insolvency or other laws of general application relating to or
affecting the enforcement of creditors' rights or by general principles of
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equity limiting the availability of equitable remedies. Except as disclosed in
the Disclosure Schedule, the execution and delivery by Lobdell of this
Agreement, the consummation by Lobdell of the transactions which this Agreement
contemplates will be consummated by Lobdell, and Lobdell's fulfillment of and
compliance with the terms and provisions hereof applicable to Lobdell, do not
and will not (i) violate any law applicable to Lobdell, (ii) conflict with,
result in a breach of or constitute a default under Lobdell's articles of
incorporation or bylaws, (iii) conflict with, result in a breach of, constitute
a default under or accelerate or permit the acceleration of the performance
required by, any agreement or instrument to which Lobdell is a party or by
which Lobdell is bound, (iv) result in the creation of any lien, charge or
encumbrance upon any of the assets of Lobdell under any such agreement or
instrument or (v) terminate or give any party thereto the right to terminate
any such agreement or instrument.
(c) Capitalization; Subsidiaries and Affiliates.
(1) The entire authorized capital stock of Lobdell
consists of 540,000 shares of Class A voting common stock and 5,400,000
shares of Class B non-voting common stock, of which 478,255 shares of Class
A common stock and 3,567,735 shares of Class B common stock are issued and
outstanding. The persons named in Exhibit D attached hereto are all of the
shareholders of Lobdell and each is the record owner of the number of
shares of Lobdell's Class A common stock and Class B common stock as set
forth in Exhibit D. The shares set forth in Exhibit D represent all of the
issued and outstanding equity securities of Lobdell. The shares of Lobdell
stock referred to in Exhibit D have been duly authorized and validly
issued, are fully paid and nonassessable, and are not subject to any liens,
charges, encumbrances or restrictions on transfer other than those imposed
by applicable securities laws or by this Agreement or as disclosed in the
Disclosure Schedule. Each shareholder listed in Exhibit D is a resident of
the state set forth opposite such shareholder's name on Exhibit D. If not
appended to this Agreement at the time of execution, Exhibit D shall be
delivered to the Parent not later than the date on which the Disclosure
Schedule is required to be delivered to the Parent pursuant to Section
3.21. Except as disclosed in the Disclosure Schedule, there are no
outstanding securities convertible or exchangeable into equity securities
of Lobdell and there are no options, contracts, warrants or rights,
contractual or otherwise, outstanding for the purchase or other acquisition
from Lobdell by any person of any equity securities of Lobdell.
(2) Set forth in the Disclosure Schedule is a list of all
of Lobdell's Subsidiaries, together with the jurisdiction of incorporation
or organization of each Subsidiary, the authorized capitalization of each
Subsidiary and the percentage of each Subsidiary's outstanding capital
stock or membership interests owned by Lobdell or another Subsidiary. Each
Subsidiary is a corporation or limited liability company duly organized,
validly existing and in good standing under the laws of the jurisdiction of
its incorporation or organization (as set forth in the Disclosure
Schedule), with all necessary corporate power to own and lease its
properties and to carry on its business as and where such properties are
now owned or leased and such business is now being conducted. Each
Subsidiary is duly qualified to do business as a foreign
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corporation and is in good standing in the jurisdictions listed in the
Disclosure Schedule, which are all the jurisdictions where the failure so
to qualify would have a Material Adverse Effect. All of the outstanding
shares of capital stock, or membership interests, of each Subsidiary have
been duly authorized and validly issued, are fully paid and nonassessable,
and are owned, of record and beneficially, by Lobdell or another
Subsidiary, free and clear of all liens, encumbrances, equities, options or
claims whatsoever. No shares of capital stock or membership interests of
any Subsidiary are reserved for issuance and there are no outstanding
options, warrants, rights, subscriptions, claims of any character,
agreements, obligations, convertible or exchangeable securities or other
commitments, contingent or otherwise, relating to the capital stock or
membership interests of any Subsidiary, pursuant to which any Subsidiary is
or may become obligated to issue or exchange any membership interests or
shares of capital stock. Neither Lobdell nor any Subsidiary owns, directly
or indirectly, any capital stock or other equity or ownership or
proprietary interest in any corporation, partnership, association, trust,
joint venture or other entity except as set forth in the Disclosure
Schedule.
(d) Financial Information. The consolidated balance
sheets of Lobdell and its Subsidiaries at December 31, 1994 and 1995 and the
related consolidated statements of income, changes in shareholders' equity and
cash flows for the years then ended, as certified by Andrews Hooper & Pavlik
P.L.C., independent certified public accountants, and the notes thereto, copies
of which have been furnished to Parent, (i) are correct and complete in all
material respects, (ii) have been prepared in accordance with generally
accepted accounting principles consistently applied and (iii) present fairly,
in all material respects, the consolidated financial position of Lobdell and
its Subsidiaries at those dates and the consolidated results of its operations
and cash flows for the years then ended. The Current Financial Information is
correct and complete, has been prepared in accordance with generally accepted
accounting principles applied consistently with those applied in the
preparation of such audited financial statements, fairly presents the results
of the operations of Lobdell and its Subsidiaries during the periods covered
thereby and the financial condition of Lobdell and its Subsidiaries at the end
of each such period, subject to normal audit adjustments which are not expected
to be material in amount. The Current Financial Information has been reviewed
by Andrews Hooper & Pavlik P.L.C., and reflects any recommendations made by
Andrews Hooper & Pavlik P.L.C. in such reviews. Such audited financial
statements and the Current Financial Information (x) reflect as liabilities the
arrangements with Lobdell Emery Capital Corporation, and the Saturn tooling
contract, which are off-balance sheet tooling contracts for the benefit of Ford
Motor Company and Saturn Corporation and are not expected to result in net
outflows of cash from Lobdell, (y) do not reflect as an asset the alternative
minimum tax credits which Lobdell has available for carryforward to future
years, and (z) reflect FAS 106 estimated costs without any offset for the tax
deductibility of any such costs which are actually incurred in the future.
(e) Liabilities. Except for liabilities arising under
this Agreement or disclosed in the Disclosure Schedule, there are no material
liabilities of any nature of Lobdell or its Subsidiaries, whether or not
accrued or contingent and whether or not determined or determinable, including,
without limitation, Tax liabilities due or to become due and contingent
liabilities for the
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performance of any obligation by other persons, other than liabilities set
forth or reflected in the 1995 Company Balance Sheet or the Current Financial
Information or non-material liabilities incurred since December 31, 1995 in the
Ordinary Course of Business and not reflected on the Company Balance Sheet or
Current Financial Information whose existence would not cause or constitute a
breach of Section 5.02(r) if incurred after December 31, 1995. Neither Lobdell
nor any of its Subsidiaries is currently indebted and immediately after the
Closing, neither Lobdell nor any of its Subsidiaries will be indebted to any
shareholder of Lobdell, or any other officer or director of Lobdell or any
Subsidiary, or any member of their respective families, except for normal
compensation and vacation pay and except as disclosed in the Disclosure
Schedule.
(f) Taxes. All Taxes required to be withheld by or on
behalf of Lobdell and its Subsidiaries have been withheld and either paid to
the proper Governmental Bodies or set aside for such payment. Lobdell and its
Subsidiaries have properly completed and filed when due, and in the manner
prescribed by law, all Tax returns which they have been legally required to
file and have paid when due all such Taxes. Neither Lobdell nor any of its
Subsidiaries have any liability for any other Taxes, whether fixed, accrued or
contingent, except for Taxes whose payment is not yet due and for which
adequate reserves or accruals are maintained or established, and except as
disclosed in the Disclosure Schedule. The accruals and reserves for Taxes
(including deferred taxes) reflected in the 1995 Company Balance Sheet and
Current Financial Information are adequate to cover all Taxes required to be
accrued through the date thereof (including interest and penalties, if any,
thereon and Taxes being contested) in accordance with generally accepted
accounting principles. The Federal income tax returns of Lobdell and its
Subsidiaries for each year to and including the year ended December 31, 1991
have been examined by the Internal Revenue Service and any asserted
deficiencies as a result of such examinations have been fully paid. There are
no outstanding deficiencies asserted or assessments made of Taxes and there are
no outstanding liens for Taxes except for statutory liens for current Taxes not
yet due or delinquent, and there is no audit threatened or currently in
progress with respect to any Tax return of Lobdell or any of its Subsidiaries.
Neither Lobdell nor any of its Subsidiaries is presently the beneficiary of any
waiver of any statute of limitations or any extension of time with respect to
Taxes.
Except as disclosed in the Disclosure Schedule (which
disclosure shall not be deemed to modify or supplement this representation and
warranty but rather shall be utilized for purposes of Section 1.06(b)), there
is no contract, agreement plan or arrangement, including but not limited to the
provisions of the Agreement, covering any employee or former employee of
Lobdell or any of its Subsidiaries that, individually or collectively, could
give rise to the payment of any amount that would not be deductible pursuant to
Section 280G or subject to the excise tax pursuant to Section 4999 of the Code;
neither Lobdell nor any of its Subsidiaries is a party to or bound by any tax
indemnity, tax sharing or tax allocation agreements. Neither Lobdell nor any
of its Subsidiaries has filed any consent agreement under Section 341(f) of the
Code or agreed to have Section 341(f)(2) of the Code apply to any disposition
of a subsection (f) asset (as defined in Section 341(f)(4) of the Code) owned
by Lobdell or any of its Subsidiaries and except for the group of which Lobdell
and the Subsidiaries are now presently members, neither Lobdell nor any of its
Subsidiaries has ever
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been a member of an affiliated group of corporations within the meaning of
Section 1504 of the Code.
(g) Title to Properties; Liens; Condition of Properties.
(1) All of the real property owned by Lobdell and
each of its Subsidiaries, including legal descriptions thereof, and all
leases by Lobdell and each of its Subsidiaries of real or material personal
property, are disclosed in the Disclosure Schedule. Except as otherwise
disclosed in the Disclosure Schedule and except for Permitted Liens,
Lobdell and each of its Subsidiaries has good and marketable title in fee
simple to all such real property, with permanent and adequate rights of
egress and ingress, and all such leases are valid and existing and no
default by Lobdell or any of its Subsidiaries exists under any thereof.
Except as disclosed in the Disclosure Schedule, the Shareholders have no
knowledge of any default by any third party under such leases. Lobdell and
each of its Subsidiaries owns all other property and assets reflected in
the 1995 Company Balance Sheet and Current Financial Information except
personal property transferred, conveyed or otherwise disposed of in the
Ordinary Course of Business since December 31, 1995 and reflected in the
Current Financial Information. None of such real or personal property, and
none of such leasehold interests, is subject to any mortgage, pledge, lien,
conditional sale agreement, security title, encumbrance or other charge or
restriction upon its use or disposition except as disclosed in the
Disclosure Schedule and except Permitted Liens. There are no outstanding
options or rights in any person to acquire any of such real, leased or
other property or assets or any interest therein, except, with respect to
such personal property, for contracts of sale or lease entered into in the
Ordinary Course of Business.
(2) Neither Lobdell nor any of its Subsidiaries
occupies or uses, and they do not anticipate the use of, any property of
others except under valid and enforceable leases, contracts or other
arrangements. All buildings, machinery and equipment of Lobdell and each of
its Subsidiaries are in operating condition and in a good state of repair
and have been well maintained, and (except as disclosed in the Disclosure
Schedule) substantially conform with all applicable ordinances, regulations
and zoning or other laws (including but not limited to laws, regulations
and ordinances relating to environmental protection or health and safety)
and do not encroach on property of others, and such machinery and equipment
is in good working order. As of the date hereof there is no pending or to
the knowledge of the Shareholders, Lobdell or any of its Subsidiaries
threatened change of any such ordinance, regulation or zoning or other law
which might have a Material Adverse Effect and there is no pending or
threatened condemnation of any of Lobdell's or its Subsidiaries' real or
material personal properties.
(h) Inventories. The inventories of Lobdell and its
Subsidiaries shown on the 1995 Company Balance Sheet and in the Current
Financial Information consisted and will consist of items of a quality and
quantity usable or saleable in the Ordinary Course of Business, except for
obsolete items and items of below-standard quality with a recorded value
written down to realizable market value or for which adequate reserves are
provided. The values at which inventories are carried on the 1995 Company
Balance Sheet and in the Current Financial Information and on the
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books of Lobdell and its Subsidiaries at the Closing Date reflected and will
reflect the present valuation policy of Lobdell and its Subsidiaries of valuing
inventory (other than "roll and hold" materials) at the lower of cost (on a
last-in, first-out basis) or estimated realizable amounts, all in accordance
with generally accepted accounting principles consistently applied.
(i) Intellectual Property. The Disclosure Schedule sets
forth and completely identifies and describes all patents, patent applications,
trademarks, service marks, trade names, copyrights and all applications,
registrations and renewals in connection therewith and all licenses,
sublicenses or other agreements pertaining to any of the foregoing to which
Lobdell or any of its Subsidiaries is a party. Lobdell and each of its
Subsidiaries owns or has the valid right to use all Intellectual Property
necessary for the conduct of its business as presently conducted. No
proceeding charging Lobdell or any of its Subsidiaries with infringement of any
Intellectual Property has been filed or is threatened to be filed, and neither
Lobdell nor any of its Subsidiaries has knowledge (i) of any unexpired patent
with claims relating to products of Lobdell or any of its Subsidiaries or to
any apparatus, methods or designs employed by Lobdell or any of its
Subsidiaries in manufacturing such products or (ii) of any patent or
application therefor or invention which would in Lobdell's opinion adversely
affect any such product, apparatus, method or design.
(j) Environmental Matters. Except as disclosed in the
Disclosure Schedule:
(1) Neither Lobdell nor any of its Subsidiaries
is in violation of any judgment, decree, order, arbitration award, law,
rule, regulation, license, permit or other authorization pertaining to
environmental matters or pollution or contamination of any type, including,
without limitation, those arising under the Resource Conservation and
Recovery Act, the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, the Superfund Amendments and
Reauthorization Act of 1986, the Federal Water Pollution Control Act, the
Federal Clean Air Act or the Toxic Substances Control Act or any federal,
state or local health, safety or environmental law ("Environmental Law"),
including those otherwise relating to the manufacture, generation,
processing, use, distribution, treatment, storage, disposal,
transportation, or handling of toxic or hazardous substances, solid or
hazardous waste, or other pollutants or contaminants.
(2) Neither Lobdell nor any of its Subsidiaries has
received notice and neither Lobdell nor any of its Subsidiaries has
knowledge that Lobdell or any of its Subsidiaries is a potentially
responsible party under any Environmental Law.
(k) Labor and Employment Matters.
(1) The Disclosure Schedule lists the name, date of
hire and/or appointment and current annual salary, commission rate,
allowance or wage rate payable by Lobdell and each of its Subsidiaries,
along with any arrangement to increase such annual salary, commission rate,
allowance or wage rate, with estimated annual or prior year data where
current annual data is unknown or unobtainable, of (i) each present officer
or director of Lobdell, and
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each of its Subsidiaries regardless of the level of his or her compensation,
and (ii) each employee of Lobdell and each of its Subsidiaries whose
compensation is expected to exceed $75,000 during 1996, together with a
statement of the full amount paid or payable to each such person for services
rendered during 1995 and the nature of the services rendered.
(2) Except as disclosed in the Disclosure Schedule:
(A) Neither Lobdell nor any of its
Subsidiaries is a party to any collective bargaining agreement or
other contract or agreement with any labor organization or other
representative of any of the employees of Lobdell or any of its
Subsidiaries nor is any such contract or agreement presently being
negotiated;
(B) Neither Lobdell nor any of its
Subsidiaries is a party to any employment agreement or consulting
agreement with any person or entity, nor is any such contract or
agreement presently being negotiated; and there is no unfair labor
practice charge or complaint pending or, to the knowledge of any
Shareholder or Lobdell, threatened against or otherwise affecting
Lobdell or any of its Subsidiaries;
(C) no action, suit, complaint, charge,
arbitration, inquiry, proceeding or investigation, by or before any
court, governmental agency, administrative agency or commission,
brought by or on behalf of any employee, prospective employee, former
employee, retiree, labor organization or other representative of the
employees of Lobdell or any of its Subsidiaries, is pending or, to the
knowledge of Lobdell, threatened against Lobdell or any of its
Subsidiaries and no grievance is pending or, to the knowledge of
Lobdell, threatened;
(D) Neither Lobdell nor any of its
Subsidiaries is a party to or otherwise bound by any consent decree
with, or citation by, any government agency relating to employees or
employment practices, wages, hours, and terms and conditions of
employment;
(E) Lobdell and each of its Subsidiaries has
paid in full to, or accrued in its financial books and records, all
wages, salaries, commissions, bonuses, and other compensation due to
all employees of Lobdell and each of its Subsidiaries or otherwise
arising under any policy, practice, agreement, plan, program, statute
or other law; neither Lobdell nor any of its Subsidiaries is liable
for any severance pay or other payments to any employee or former
employee arising from Lobdell's or any of its Subsidiaries'
termination of such employment prior to the Closing Date; and neither
Lobdell nor any of its Subsidiaries will have any liability under any
benefit or severance policy, practice, agreement, plan or program
which exists or arises, or may be deemed to exist or arise, under any
applicable law or otherwise, as a result of or in connection with the
transactions contemplated by this Agreement or as a result of the
termination
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by Lobdell or any of its Subsidiaries of any persons employed by
Lobdell or any of its Subsidiaries prior to the Closing Date;
(F) Neither Lobdell nor any of its
Subsidiaries has closed any plant or facility, effectuated any layoffs
of employees or implemented any general early retirement or separation
program within the past five years, nor has Lobdell or any of its
Subsidiaries planned or announced any such action or program for the
future, and Lobdell and each of its Subsidiaries is in compliance with
its obligations pursuant to the Worker Adjustment and Retraining
Notification Act of 1988 and all other notification and bargaining
obligations arising under any collective bargaining agreement, statute
or otherwise;
(G) Notwithstanding that the Surviving
Corporation may elect to enter into employment agreements with certain
employees of Lobdell or its Subsidiaries, neither Parent, the
Surviving Corporation nor Lobdell will incur any liability resulting
from the termination by Lobdell or any of its Subsidiaries of any
employment agreement between Lobdell, any of its Subsidiaries and an
employee of Lobdell or any of its Subsidiaries on or prior to the
Closing Date; and
(H) Since January 1, 1991 there have not
been any strikes, lockouts, demands for union recognition or
certification, formal or informal attempts to organize employees of
Lobdell or any of its Subsidiaries into a union, or charges or claims
by any person that either Lobdell or any of its Subsidiaries has
discriminated against any of its employees on the basis of race, sex,
age, religion, handicapped status or any other reason.
(l) Employee Benefit Plans.
(1) The Disclosure Schedule discloses each plan,
fund or program, and each "employee benefit plan" as defined in Section
3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), which provides medical, health, hospitalization, life,
disability or other insurance, vacation, deferred compensation, pension,
bonus or other employee benefits to present or former employees of Lobdell
and each of its Subsidiaries and which is or was maintained or sponsored by
Lobdell or any of its Subsidiaries or to which Lobdell or any of its
Subsidiaries contributes or has or had an obligation to contribute, now or
at any time during the five-year period ending on the Closing Date (the
"Benefit Plans"). Each Benefit Plan (and each related trust and insurance
contract) complies in all material respects with all applicable laws, and
Lobdell has made or will make all contributions due thereunder prior to or
as of the Closing Date. Neither Lobdell nor any affiliated entity under
common control with Lobdell and each of its Subsidiaries has ever
contributed to, or been under any obligation to contribute to, any
multiemployer plan as defined in Section 3(37) of ERISA. With respect to
each Benefit Plan that is intended to qualify under Section 401(a) of the
Code, (i) a favorable
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determination letter has been received covering the period from its
adoption through the Closing Date, or an application for such qualification
for such period has been made, (ii) neither Lobdell nor any of its
Subsidiaries has received notice that the Internal Revenue Service has
rejected such application or denied such qualification and (iii) Lobdell
does not know of any fact or circumstance which would adversely affect such
determination letter or application for qualification.
(2) Except as set forth in the Disclosure
Schedule, (i) there has been no termination (whether partial or otherwise)
of any "employee pension benefit plan" (as defined in Section 3(2) of
ERISA) under which Lobdell (or any person or entity which is or was under
common control with Lobdell within the meaning of ERISA Section 4001), has
or had any obligation to make a contribution; (ii) no proceedings to
terminate any such plan have been initiated, and no event described in
ERISA Sections 4062, 4063 or 4069 has occurred or will occur with respect
to any such plan, any of which resulted or could result at any time within
five years of the Closing Date in an insufficiency of such plan's assets
necessary to satisfy all benefit liabilities under such plan (within the
meaning of ERISA Section 4041(b)); and (iii) Lobdell has delivered to
Parent true and complete copies of the following: the current plan
document (including a written description of all oral plans), any
amendments thereto, and the related summary plan description, if any; each
trust or custodial agreement and each deposit administration, group
annuity, insurance or other funding agreement associated with each such
plan, for the last three plan years, the financial information or reports
(including any FASB required reports, if applicable), valuation reports,
and/or actuarial reports relating to each such plan; all Internal Revenue
Service and other governmental agency rulings relating thereto, and all
applications for such rulings; and all filing and reports (including the
Annual Report Form 5500 series, if applicable) filed with any governmental
agency at any time during the three year period ending on the Closing Date,
along with all schedules and reports filed therewith.
(3) (i) Neither any such plan nor any other
person or entity has engaged in a "prohibited transaction" (as defined in
ERISA Section 406 or Code Section 4975) with respect to such plan, for
which no individual or class exemption exists; (ii) each such plan which is
a "group health plan" (as defined in Code Section 5000(b)(1)) has complied
and will comply at all times (whether before, on, or after the Closing
Date) in all respects with the applicable requirements of ERISA Sections
601 and 602, Code Section 162(k) (through December 31, 1988) and Code
Section 4980B (commencing on January 1, 1989); (iii) all disclosures to
employees and all filings and other reports relating to each such plan and
required (under ERISA, the Code, other applicable law, including federal
and state securities laws, and all regulations thereunder) to have been
made or filed on or before the Closing Date have been or will be duly and
timely made or filed by that date; (iv) there is no litigation, disputed
claim (other than routine claims for benefits), governmental proceeding,
audit, inquiry or investigation pending or, to the knowledge of Lobdell
threatened with respect to any such plan, its related assets or trusts,
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or any fiduciary, administrator or sponsor of such plan; (v) no event has
occurred and no condition exists relating to any such plan that would
subject Lobdell, any of its Subsidiaries, Parent or the Surviving
Corporation to any tax under Code Sections 4972 or 4979, or to any
liability under ERISA Section 502; (vi) to the extent applicable, no such
plan has experienced any "accumulated funding deficiency" (as defined in
Code Section 412), whether or not waived, at any time;
(4) With respect to each plan which is subject
to Title IV of ERISA: (i) such plan's assets are sufficient to satisfy all
benefit liabilities (within the meaning of ERISA Section 4041(b)) under
such plan, such that the termination of or withdrawal from the plan
(whether partial or otherwise) at any time before the Closing Date would
not subject Lobdell, any of its Subsidiaries, Parent or the Surviving
Corporation to any liability to the Pension Benefit Guaranty Corporation or
any other person or entity; (ii) to the knowledge of Lobdell, no events
have occurred or are expected to occur with respect to any such plan that
would result in a material decrease in the net fair market value of such
plan's assets or a material increase in the net present value of benefit
liabilities under such plan; (iii) no such plan has been terminated, nor
have any proceedings been initiated to terminate or reorganize any such
plan (whether partially or otherwise); (iv) no event described in ERISA
Section 4043 has occurred, whether or not such event must be reported to
any governmental agency; and (v) there has been no amendment to any such
plan which required or could require Lobdell, any of its Subsidiaries,
Parent or the Surviving Corporation to provide security to such plan under
Code Section 401(a)(29).
(5) with respect to each plan which is an
"employee welfare benefit plan" (as defined in ERISA Section 3(1)) that
provides benefits to or on behalf of any person following retirement or
other termination of employment (other than to the extent required by Code
Section 4980B): (i) there is no "disqualified benefit" (as defined in Code
Section 4976(b)) that would subject Lobdell, any of its Subsidiaries,
Parent or the Surviving Corporation to any tax under Code Section 4976(a);
and (ii) under the terms of each such plan, the benefits provided to such
retired or terminated persons under the plan may be modified or terminated
by Lobdell, Parent or the Surviving Corporation at any time on or after the
Closing Date.
(m) Customers and Suppliers. The Disclosure Schedule
discloses each of the customers and suppliers of Lobdell and each of its
Subsidiaries whose purchases from or sales to Lobdell and any of its
Subsidiaries constituted five percent or more of Lobdell's consolidated net
sales or net purchases, respectively, of products or services during the year
ended December 31, 1995 and during the first nine months of the year ending
December 31, 1996, showing, with respect to each, the name, dollar volume and
nature of the relationship (including the principal categories of products or
services bought or sold). Except as disclosed in the Disclosure Schedule,
neither Lobdell nor any of its Subsidiaries has received, since December 31,
1995, written notice of intent to terminate any material contract or agreement
for the purchase of the products of Lobdell or any
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of its Subsidiaries nor does Lobdell have any knowledge of any circumstances
which are likely to result in Lobdell's five largest customers (based upon
sales in Lobdell's last fiscal year) materially decreasing their purchases of
Lobdell's products during the twelve months immediately following the Closing
Date.
(n) Insurance. Lobdell and each of its Subsidiaries
maintains policies of insurance with coverages and limits customary in its
respective business, has not received notice of default under or cancellation
of any of such policies nor is it in default under any such policies, and has
paid or will pay all premiums due thereon covering all periods up to and
including the Closing Date. No coverage under any such insurance policies is
being disputed, and all claims which Lobdell or any of its Subsidiaries
currently has under such insurance policies have been filed in a timely
fashion. To the knowledge of any Shareholder or Lobdell, no accident, loss or
other event or circumstance has occurred in connection with the business and
affairs of Lobdell or any of its Subsidiaries that might result in any material
premium adjustment or any material adverse modification of any policy terms or
conditions with respect to any insurance policies in effect on the date of this
Agreement. Neither Lobdell nor any of its Subsidiaries has received any notice
or other communication from any of its insurance brokers or carriers that such
broker or carrier will not be willing or able to renew such insurance coverage
on substantially similar terms and at substantially equivalent premiums as are
currently in effect.
(o) Contracts, Agreements and Plans. Except for this
Agreement and the contracts, agreements, plans and commitments which are
disclosed in the Disclosure Schedule, neither Lobdell nor any of its
Subsidiaries is a party to or subject to any of the following ("Material
Contracts"):
(1) Any management or employment contract or
contract for personal services between Lobdell or any of its Subsidiaries
and any officer, consultant, agent, director or employee which is not by
its terms terminable at will without penalty, or any contract under which
any person (other than sales personnel) receives commissions in varying
amounts depending on sales or other activities;
(2) Any plan, contract or arrangement under
which Lobdell or any of its Subsidiaries provides or may provide insurance
for or a loan to and any other agreement with any officer, shareholder,
consultant, agent, director, employee or member of their families;
(3) Any contract or agreement between Lobdell
or any of its Subsidiaries and any labor union;
(4) Any contract, commitment or agreement which
involves capital expenditures or other similar purchases or sales by
Lobdell or any of its Subsidiaries after January 1, 1997 of more than
$250,000 or which together with all other such contracts in the aggregate
involve capital expenditures by Lobdell or any of its Subsidiaries after
January 1, 1997 of more than $2 million;
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(5) Any contract or agreement containing
covenants by Lobdell or any of its Subsidiaries or any of their employees
not to compete in any line of business with any person other than Lobdell
or any of its Subsidiaries, or not to disclose to any person other than
Lobdell or any of its Subsidiaries any Confidential Information, or to
render services to any person other than Lobdell or any of its
Subsidiaries;
(6) Any contract under which Lobdell or any of
its Subsidiaries has outstanding indebtedness for borrowed money or has the
right to borrow money, or any conditional sales contracts, chattel
mortgages, equipment lease agreements or other security arrangements with
respect to personal property with an obligation in excess of $25,000
annually;
(7) Any tax sharing agreements or any licenses
with respect to Intellectual Property; or
(8) Any other contract or agreement of Lobdell
or any of its Subsidiaries not made in the Ordinary Course of Business or,
to the knowledge of Lobdell, in violation of any law, including any
contract involving an obligation in excess of $25,000 annually.
Copies of the written Material Contracts have been made
available to Parent prior to the Closing Date and such copies are true and
correct copies of such Material Contracts. All of the Material Contracts are
valid and legally binding obligations of Lobdell or one of its Subsidiaries
enforceable against it in accordance with their respective terms, subject to
the qualifications that such enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally, by general equitable principles
(regardless of whether such enforceability is considered in a proceeding in
equity or at law) or by an implied covenant of good faith and fair dealing, and
are in full force and effect. Except as disclosed in the Disclosure Schedule,
neither Lobdell nor any of its Subsidiaries is in default in the payment or
performance of its obligations under any Material Contract and there is no
express provision in any Material Contract as the result of which the rights of
Lobdell or any of its Subsidiaries under such Material Contract will be
materially impaired by the transactions provided for in this Agreement. To the
knowledge of any Shareholder, no party with whom Lobdell or any of its
Subsidiaries has a contractual relationship under a Material Contract is in
default in the payment of any obligation involving $15,000 or more under, or in
the performance of any material covenant or obligation to be performed by such
party under, such Material Contract.
(p) Compliance with Law. The business of Lobdell and
each of its Subsidiaries has been conducted in all material respects in
compliance with all applicable laws, ordinances and regulations. Lobdell and
each of its Subsidiaries has all permits from any Governmental Bodies necessary
to conduct its business as presently conducted.
(q) Litigation. Except as disclosed in the Disclosure
Schedule, on the date of this Agreement there are no actions, suits or legal or
administrative proceedings, whether or not covered by insurance, instituted or
pending or, to the knowledge of Lobdell, threatened against Lobdell or
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any of its Subsidiaries which, if adversely determined, would individually or
in the aggregate have a Material Adverse Effect.
(r) Absence of Material Changes. Except for this
Agreement or as otherwise disclosed in the Disclosure Schedule, without the
approval of Parent neither Lobdell nor any of its Subsidiaries has since
January 1, 1996:
(1) issued or sold any of its bonds, debentures,
notes or other securities or issued, sold or granted any option, warrant
or right to purchase any thereof, or borrowed any money from any Person or
guaranteed the payment or performance of any obligation of any Person;
(2) except in the Ordinary Course of Business,
sold, leased, disposed of, mortgaged, pledged or subjected to any lien or
encumbrance (other than Permitted Liens), or waived any substantial rights
relating to, any of its material property or assets, tangible or
intangible;
(3) suffered any damage, destruction or loss
(whether or not covered by insurance) which had or could have a Material
Adverse Effect;
(4) except in the Ordinary Course of Business,
terminated or amended or suffered the termination or amendment of or failed
to perform all its obligations or suffered or permitted any default to
exist under any Material Contract;
(5) suffered any change in its condition
(financial or otherwise) or in its assets, liabilities or business, except
changes which have not, individually or in the aggregate, had a Material
Adverse Effect;
(6) changed its accounting principles or its
accounting methods or practices followed, including any change in
depreciation or amortization policies or rates;
(7) to the date of this Agreement, declared any
dividends or paid any distribution in respect of its capital stock, or
redeemed, retired, purchased or otherwise acquired any such capital stock;
(8) entered into any contract or commitment to
purchase or make any capital expenditure in excess of $250,000;
(9) to the date of this Agreement, experienced
any "extraordinary loss" as such term is defined in Section I-17 of the
current text of Accounting Statements of the Financial Accounting Standards
Board, whether or not such loss was covered by insurance; or
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(10) engaged in any merger with or into another
person, a consolidation with another person or any acquisition (by
purchase, merger, consolidation, stock acquisition or otherwise) of
substantially all the assets of another person.
(s) Liability for Finder's Fees. No liability for
brokerage fees, finder's fees, agent's commissions or other similar forms of
compensation in connection with this Agreement or any transaction contemplated
hereby has been incurred by Lobdell except with respect to the fee payable to
Merrill Lynch.
(t) Investment. Each Shareholder (i) understands that
the Preferred Stock has not been, and will not be, registered under the
Securities Act or under any state securities law, that no federal or state
agency has reviewed or passed upon the fairness of the terms of the Merger or
the merits or risks of an investment in the Preferred Stock and that the
Preferred Stock is being offered and sold in reliance upon federal and state
exemptions for transactions not involving any public offering, (ii) is
acquiring Preferred Stock for investment purposes only and not with a view to
the distribution thereof, (iii) is a sophisticated investor with knowledge and
experience in business and financial matters as to be capable of evaluating the
merits and risks of the Merger and of an investment in the Preferred Stock,
(iv) has received sufficient information concerning Parent and Newco and has
had the opportunity to obtain additional information as desired in order to
evaluate the merits and the risks inherent in holding Preferred Stock, (v) is
able to bear the economic risk and lack of liquidity inherent in holding
Preferred Stock, (vi) is an accredited investor within the meaning of the
regulations under the Securities Act and (vii) understands that the right to
transfer the Preferred Stock is restricted pursuant to the terms of this
Agreement and the Articles of Incorporation of the Surviving Corporation.
(u) Bank Accounts and Powers of Attorney. The Disclosure
Schedule lists (i) the name of each bank in which Lobdell or any of its
Subsidiaries has an account or safe deposit box, the names of all persons
authorized to draw on such accounts or to have access to such safe deposit
boxes, and any contract, instrument, agreement, license, arrangement,
commitment or understanding relating to such accounts and safe deposit boxes,
and (ii) the names of all persons holding powers of attorney for Lobdell or any
of its Subsidiaries and a statement of the terms of each such power of
attorney.
(v) Absence of Certain Payments. Neither Lobdell nor any
of its Subsidiaries nor any director, officer, agent, employee, consultant or
other person associated with or acting on behalf of Lobdell or any of its
Subsidiaries, has (i) used any corporate funds for contributions, gifts,
entertainment or other expenses relating to political activity, in violation of
the laws of the United States or any jurisdiction of the United States, or in
violation of the laws of any other jurisdiction, (ii) made any direct or
indirect payments to government officials or others from corporate funds, or
established or maintained any unrecorded funds, in violation of the laws of the
United States or any jurisdiction of the United States, or in violation of the
laws of any other jurisdiction, (iii) violated any provisions of the Foreign
Corrupt Practices Act of 1977, or any rules or regulations promulgated
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thereunder, or (iv) violated any of the anti-boycott provisions of 15 C.F.R.
369, or any rules or regulations promulgated thereunder.
(w) OSHA. All of Lobdell's and each of its Subsidiaries'
facilities are maintained and operated in material compliance with OSHA and any
similar state statute and the rules and regulations promulgated thereunder.
Except as disclosed in the Disclosure Schedule, neither Lobdell nor any of its
Subsidiaries is and has not been since January 1, 1991 subject to an
investigation by the Department of Labor, litigation over compliance with such
rules and regulations or any fine, penalty or citation, relating to or arising
out of a violation or alleged violation of OSHA or any similar state statute
and such rules and regulations.
(x) Change of Control Payments. Except as disclosed in
the Disclosure Schedule, neither Lobdell nor any of its Subsidiaries have any
plans, programs or agreements to which it is a party, or to which it is
subject, pursuant to which payments may be required or acceleration of benefits
may be required upon a change of control of Lobdell.
(y) Accounts Receivable. The accounts receivable of
Lobdell and each of its Subsidiaries as set forth on the 1995 Company Balance
Sheet or arising since the date thereof are valid and genuine; have arisen
solely out of bona fide sales and deliveries of goods, performance of services
and other business transactions in the ordinary course of business consistent
with past practice; are, to the knowledge of Lobdell, not subject to valid
defenses, set-offs or counterclaims; and to the knowledge of Lobdell are
collectible within 90 days after billing at the full recorded amount thereof
less, in the case of accounts receivable appearing on the 1995 Company Balance
Sheet, the recorded allowance for collection losses on the 1995 Company Balance
Sheet or on the Current Financial Information. The allowance for collection
losses on the 1995 Company Balance Sheet or on the Current Financial
Information has been determined in accordance with generally accepted
accounting principles consistent with past practice.
(z) Transaction Expenses. All of the transaction expenses as
contemplated by Section 7.02 incurred prior to Closing by Shareholders or
Lobdell (whether paid or not) in connection with the transactions contemplated
by this Agreement, which have been paid by Lobdell or are payable by Lobdell do
not exceed $2.0 Million. Neither the Shareholders nor Lobdell have incurred
any other expenses related to or required for the consummation of the
transactions contemplated by this Agreement (including by way of example
expenses relating to legal, accounting, environmental, property survey and
appraisal services obtained by Lobdell and financial adviser services) which
have been paid by Lobdell or are payable by Lobdell.
(aa) Additional Payments. The aggregate option "cash payment
rights," as described in Section 3.23 do not exceed $502,969. The aggregate
payments to Michael E. Regina, as described in Section 3.24, do not exceed $1
Million. The aggregate payments to be made to certain minority shareholders,
as described in Section 3.25, do not exceed $597,191.
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5.03 Representations and Warranties of Parent and Newco.
Parent and Newco represent and warrant to the Shareholders as follows:
(a) Incorporation, qualification, etc. Each of Parent
and Newco is a corporation duly organized, validly existing and in good
standing under the laws of Michigan, with all necessary power to own and lease
its properties and to carry on its business as and where such properties are
now owned or leased and such business is now being carried on. The articles of
incorporation and bylaws of Parent and Newco, which have previously been
delivered or will be delivered to the Shareholders' Agent prior to the Closing
Date, are or will be when delivered complete and correct. As of the date
hereof, 100 shares of Newco common stock are issued and outstanding.
(b) Due Authorization of Agreement; No Conflict With
Other Instruments. Parent and Newco have full power and authority and have
taken all necessary action to execute, deliver and consummate this Agreement
and to perform all the terms and conditions hereof to be performed by Parent
and Newco, respectively, except that the corporate action referred to in
Section 3.19(b) has not yet been taken. When such corporate action has been
taken, this Agreement will be a valid and binding obligation of Parent and
Newco, enforceable against Parent and Newco in accordance with its terms,
except as the enforceability hereof may be limited by bankruptcy, insolvency or
other laws of general application relating to or affecting the enforcement of
creditors' rights or by general principles of equity limiting the availability
of equitable remedies. The execution and delivery by Parent and Newco of this
Agreement, the consummation by Parent and Newco of the transactions which this
Agreement contemplates will be consummated by Parent and Newco, and Parent's
and Newco's fulfillment of and compliance with the terms and provisions hereof
applicable to Parent and Newco, do not and will not (i) violate any law
applicable to Parent or Newco, or (ii) conflict with, result in a breach of,
constitute a default under or accelerate or permit the acceleration of the
performance required by, any agreement or instrument to which Parent or Newco
is a party or by which Parent or Newco is bound.
(c) The Preferred Stock. The Preferred Stock, when
issued and delivered pursuant to this Agreement, will be duly authorized and
validly issued, fully paid and nonassessable, and not subject to any liens,
charges, encumbrances or restrictions on transfer other than those imposed by
applicable securities laws or by this Agreement.
(d) Liability for Finder's Fees. No liability for
brokerage fees, finder's fees, agent's commissions or other similar forms of
compensation in connection with this Agreement or any transaction contemplated
hereby has been incurred by Parent or Newco.
VI. REMEDIES FOR BREACHES OF THIS AGREEMENT
6.01 Survival of Representations, Warranties and Covenants.
The representations and warranties made by the Shareholders and Lobdell in this
Agreement or in any Schedule, Exhibit, certificate or other document delivered
by or on behalf of the Shareholders or Lobdell pursuant to
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this Agreement shall be deemed to be continuing and shall survive for a period
of three years from the Closing Date, unless a specific claim in writing with
respect to any such representation and warranty shall have been made, or an
action at law or in equity shall have been commenced or filed, prior to such
expiration date, in which case such period shall be extended; provided however,
that the representations and warranties of the Shareholders and Lobdell set
forth in:
(a) Section 5.01, the first sentence of Section 5.02(a),
and Sections 5.02(b), 5.02(c) and 5.02(g)(1) shall survive indefinitely; and
(b) Section 5.02(f) shall survive for the longer of the
applicable statute of limitations under which claims may be asserted against
Lobdell or three years from the Closing Date.
6.02 Indemnification Provisions for Benefit of Parent and the
Surviving Corporation. If there is any breach or inaccuracy of any of the
representations, warranties or covenants of any Shareholder or Lobdell
contained herein or in any Schedule, Exhibit, certificate or other document
delivered by or on behalf of the Shareholders or Lobdell pursuant to this
Agreement, or if any third party alleges facts that, if true, would mean that
such a breach or inaccuracy existed, and provided that within the applicable
time periods specified in Section 6.01 Parent or the Surviving Corporation
delivers to the Shareholders' Agent pursuant to Section 6.04 a claim for
indemnification with respect to such alleged breach or inaccuracy, then the
shareholders of Lobdell as to whom such claim may then be brought pursuant to
Section 6.01 (either severally or jointly and severally, as provided in Section
7.10(b)), shall indemnify Parent, the Surviving Corporation and their
Affiliates and each of their respective officers, directors, employees, agents,
successors and permitted assigns from and against all Adverse Consequences that
they have suffered or may suffer caused by, resulting from, arising out of or
relating to such breach or inaccuracy through and after the date of such claim;
provided however, that (i) the Shareholders shall not have any obligation to
indemnify any person under this Section 6.02 unless the amount of Adverse
Consequences suffered by such person by reason of all such breaches or
inaccuracies exceeds $50,000 in the aggregate, at which point the Shareholders
shall be obligated to indemnify such person from and against all such Adverse
Consequences, without any deductible amount, and (ii) in no event shall the
Shareholders have any obligation to indemnify such persons under this Section
6.02 for an amount, in the aggregate in excess of $13 million with respect to
claims for indemnification made during the first eighteen months following the
Closing Date and, with respect to claims made after the expiration of such
18-month period, such amount shall be reduced to $6.5 million.
6.03 Indemnification Provisions for Benefit of the
Shareholders. If there is any breach or inaccuracy of any of the
representations, warranties or covenants of Parent or Newco contained herein or
in any Schedule, Exhibit, certificate or other document delivered by or on
behalf of Parent or Newco pursuant to this Agreement, or if any third party
alleges facts that, if true, would mean that such a breach or inaccuracy
existed, then Parent or Newco shall indemnify the Shareholders and their
respective successors and permitted assigns from and against all Adverse
Consequences that they have suffered or may suffer caused by, resulting from,
arising out of or relating to such breach or inaccuracy through and after the
date of such claim; provided however, that (i) Parent or Newco shall
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not have any obligation to indemnify the Shareholders under this Section 6.03
unless the amount of Adverse Consequences suffered by the Shareholders by
reason of all such breaches or inaccuracies exceeds $50,000 in the aggregate,
at which point Parent or Newco shall be obligated to indemnify the Shareholders
from and against all such Adverse Consequences, without any deductible amount,
and (ii) in no event shall Parent or Newco have any obligation to indemnify the
Shareholders under this Section 6.03 for an amount, in the aggregate in excess
of $13 million with respect to claims for indemnification made during the first
eighteen months following the Closing Date and, with respect to claims made
after the expiration of such 18-month period, such amount shall be reduced to
$6.5 million.
6.04 Notice of Claim for Indemnification. No claim for
indemnification hereunder shall be valid unless notice of such claim is
delivered to Parent (in the case of a claim by any Shareholder) or to the
Shareholders' Agent (in the case of a claim by Parent or the Surviving
Corporation) within the period during which the representation, warranty or
covenant upon which such claim is based survives pursuant to Section 6.01. Any
such notice shall set forth in reasonable detail, to the extent known by the
person giving such notice, the facts on which such claim is based and the
estimated amount of Adverse Consequences resulting therefrom.
6.05 Matters Involving Third Parties.
(a) If Parent or the Surviving Corporation or any
Shareholder receives notice or acquires knowledge of any matter which may give
rise to a claim by another person and which may then result in a claim for
indemnification under this Article VI, then (i) if such notice or knowledge is
received or acquired by Parent or the Surviving Corporation, Parent or the
Surviving Corporation shall promptly notify the Shareholders' Agent thereof,
and (ii) if such notice or knowledge is received or acquired by any
Shareholder, such Shareholder shall promptly notify Parent or the Surviving
Corporation and the Shareholders' Agent thereof; except that no delay in giving
such notice shall diminish any obligation under this Article VI to provide
indemnification unless (and then solely to the extent) the party from whom such
indemnification is sought is prejudiced.
(b) Any party from whom such indemnification is sought
(the "Indemnifying Party") shall have the right to defend, at the Indemnifying
Party's cost, risk and expense, the party seeking such indemnification (the
"Indemnified Party") against any such claim by another person (the "Third Party
Claim") with counsel of the Indemnifying Party's choice (subject to the
Indemnified Party's written consent) reasonably satisfactory to the Indemnified
Party so long as (i) within 15 days after the Indemnified Party has given
notice of the Third Party Claim to the Indemnifying Party, the Indemnifying
Party notifies the Indemnified Party that the Indemnifying Party will indemnify
the Indemnified Party from and against all Adverse Consequences the Indemnified
Party may suffer caused by, resulting from, arising out of or relating to such
Third Party Claim, (ii) the Indemnifying Party provides the Indemnified Party
with evidence reasonably satisfactory to the Indemnified Party that the
Indemnifying Party has the financial resources necessary to defend against the
Third Party Claim and fulfill its indemnification obligations thereunder, (iii)
the Third Party Claim seeks only money damages and not an injunction or other
equitable relief, (iv) settlement of,
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or an adverse judgment with respect to, the Third Party Claim is not, in the
good faith judgment of the Indemnified Party, likely to establish a precedent,
custom or practice adverse to the continuing business interests of the
Indemnified Party, and (v) the Indemnifying Party conducts the defense of the
Third Party Claim actively and diligently.
(c) So long as the Indemnifying Party is conducting the
defense of the Third Party Claim in accordance with Section 6.05(b), (i) the
Indemnified Party may retain separate co-counsel at its sole cost and expense
and participate in the defense of the Third Party Claim, (ii) the Indemnified
Party shall not consent to the entry of any judgment or enter into any
settlement with respect to the Third Party Claim without the prior consent of
the Indemnifying Party, and (iii) the Indemnifying Party shall not consent to
the entry of any judgment or enter into any settlement with respect to the
Third Party Claim without the prior consent of the Indemnified Party.
(d) If any of the conditions specified in Section 6.05(b)
is or becomes unsatisfied, however, (i) the Indemnified Party may defend
against, and consent to the entry of any judgment or enter into any settlement
with respect to, the Third Party Claim in any manner it may deem advisable (and
the Indemnified Party need not consult with, or obtain any consent from, any
Indemnifying Party in connection therewith), (ii) the Indemnifying Parties
shall reimburse the Indemnified Party promptly and periodically for the costs
of defending against the Third Party Claim (including attorneys' and
accountants' fees and expenses), and (iii) the Indemnifying Party shall remain
responsible for any Adverse Consequences the Indemnified Party may suffer
caused by, resulting from, arising out of or relating to such Third Party Claim
to the extent provided in this Article VI.
6.06 Claims Against Escrow Fund and Shareholders. Any
liability of the Shareholders to Parent, or the Surviving Corporation or any
other person pursuant to Section 6.02 shall be satisfied first from the assets
held by the Escrow Agent pursuant to the Escrow Agreement, and only if such
assets are exhausted without fully satisfying such liability, or if the Escrow
Agreement has terminated, shall any attempt be made by Parent or the Surviving
Corporation to satisfy such liability from any other source. Any liability of
the Shareholders to Parent or the Surviving Corporation or any other person
pursuant to Section 6.02, after the assets held by the Escrow Agent are
exhausted or the Escrow Agreement is terminated, shall be satisfied by the
Shareholders by means of the return of that number of shares of Series A
Preferred Stock equal to the number determined by dividing the aggregate dollar
amount of the Adverse Consequences incurred by Parent, the Surviving
Corporation or any person pursuant to Section 6.02 by $100.00. Any such shares
of Series A Preferred Stock delivered to the Surviving Corporation shall be
canceled.
6.07 Other Indemnification Provisions. The indemnification
provisions in this Article VI are in lieu of any statutory, equitable or common
law remedy any party may have for breach of representation, warranty or
covenant, except for any claims relating to fraudulent misrepresentation and
any injunctive relief or specific performance available to such party for any
breach of Articles III, IV, VI or VII. No Shareholder shall make any claim for
indemnification against Lobdell by reason of the fact that such Shareholder was
a director, officer, employee or agent of Lobdell or was serving at the request
of Lobdell as a partner, trustee, director, officer, employee or agent of
another
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entity (whether such claim is for judgments, damages, penalties, fines, costs,
amounts paid in settlement, losses, expenses or otherwise and whether such
claim is pursuant to any statute, charter document, bylaw, agreement or
otherwise) with respect to any action, suit, proceeding, complaint, claim or
demand brought by Parent or the Surviving Corporation against such Shareholder.
VII. MISCELLANEOUS
7.01 Further Assurances. On and after the Closing Date, the
Shareholders, Lobdell, Parent and Newco shall take all appropriate action and
execute all documents, instruments or conveyances of any kind which may be
necessary or advisable to carry out any of the provisions hereof and to
consummate the transactions contemplated hereby.
7.02 Expenses.
(a) Except as otherwise provided in Section 1.06(e) or
Section 7.02(b), each party hereto shall bear all expenses incurred by such
party in connection with the negotiation, preparation, execution and
performance of this Agreement, except that Lobdell shall bear and pay (i) the
fees and expenses of Merrill Lynch, Reed Smith Shaw & McClay, Braun Kendrick
Finkbeiner P.L.C., and Andrews Hooper & Pavlik, P.L.C., (ii) the fees and
expenses relating to the title insurance and Survey required by Section 3.18,
(iii) one-half of any filing fees paid by Lobdell and Parent in connection with
any filings by them under the Hart-Scott-Rodino Act in connection with the
transactions contemplated hereby, and (iv) all other expenses relating to
actions taken by Lobdell, whether at the request of the Shareholders or
otherwise, which are required by this Agreement; provided that the total amount
of such expenses borne by Lobdell shall not exceed $2,000,000.
(b) Lobdell shall pay Parent a fee of $5,000,000 plus
actual out-of-pocket expenses of Parent relating to the transactions
contemplated by this Agreement (including, but not limited to, fees and
expenses of Parent's counsel and financial advisers) upon the (i) withdrawal,
modification or change by the Board of Directors of Lobdell of its
recommendation or approval of the Merger in a manner adverse to Parent (ii)
upon the recommendation by the Board of Directors of Lobdell to the
shareholders of Lobdell of an Acquisition Proposal, or (iii) unless this
Agreement has been terminated by Parent or Newco, the consummation of any other
Acquisition Proposal except as contemplated by this Agreement within twelve
(12) months of the date hereof.
7.03 Press Releases and Public Announcements. Except as
otherwise required by law or by applicable rules of any securities exchange or
association of securities dealers, prior to or after the Closing no party to
this Agreement shall issue any press release, make any public announcement or
otherwise disclose any information for the purpose of publication by any print,
broadcast or other public media, relating to the transactions contemplated by
this Agreement, without the prior approval of Parent and the Shareholders'
Agent.
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7.04 Notices. All notices, demands, claims, requests,
undertakings, consents, opinions and other communications which may or are
required to be given hereunder or with respect hereto shall be in writing,
shall be given either by personal delivery or by mail, facsimile transmission,
telegraph, telex or similar means of communication, and shall be deemed to have
been given or made when personally delivered, when delivered to the telegraph
or telephone company, charges prepaid, and otherwise when received, addressed
to the respective parties as follows:
(a) If to Parent or Newco:
BMG-MI, Inc.
2000 North Woodward, Ste. 130
Bloomfield Hills, Michigan 48304
Attention: Selwyn Isakow, President
With copy to:
Dykema Gossett PLLC
1577 North Woodward Avenue, Suite 300
Bloomfield Hills, Michigan 48304
Attention: Rex E. Schlaybaugh, Jr., Esq.
or to such other address as Parent or Newco may from time to time designate by
notice to Lobdell and the Shareholders' Agent with respect to future notices,
demands and other communications to Parent or Newco;
(b) if to the Shareholders' Agent or any Shareholder:
D. Kennedy Fesenmyer, Shareholders' Agent
270 Woodwind Drive
P.O. Box 952
Bloomfield Hills, Michigan 48303-0952
With copy to:
Harry H. Weil, Esq.
Reed Smith Shaw & McClay
1301 K Street, N.W.
Washington, D.C. 20005
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and to:
Mike Sauer, Esq.
Braun Kendrick Finkbeiner P.L.C.
101 N. Washington, Suite 812
Saginaw, Michigan 48607
or to such other address as any Shareholder or the Shareholders' Agent may from
time to time designate by notice to Lobdell, Parent and Newco with respect to
future notices, demands and other communications to such Shareholder or the
Shareholders' Agent, respectively; and
(c) if to Lobdell:
Lobdell Emery Corporation
1325 East Superior Street
P.O. Box 129
Alma, Michigan 48801
With copy to:
Harry H. Weil, Esq.
Reed Smith Shaw & McClay
1301 K Street, N.W.
Washington, D.C. 20005
and to:
Mike Sauer, Esq.
Braun Kendrick Finkbeiner P.L.C.
101 N. Washington, Suite 812
Saginaw, Michigan 48607
or to such other address as Lobdell may from time to time designate by notice
to Parent, Newco and the Shareholders' Agent with respect to future notices,
demands and other communications to Lobdell.
7.05 No Third-Party Beneficiaries. This Agreement shall not
confer any rights or remedies upon any person other than the parties to this
Agreement and their respective successors and permitted assigns. All
discussions and negotiations by Parent, Newco, or any person on behalf of
Parent or Newco, with any person pertaining to the subject matter of this
Agreement shall not be deemed to be on behalf of any person in his individual
capacity or as a representative or agent for Oxford, but rather shall be deemed
to be solely on behalf of Parent or Newco.
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7.06 Governing law; jurisdiction.
(a) Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of Michigan without
giving effect to any choice or conflict of law provision or rule (whether of
the State of Michigan or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State of Michigan.
(b) Submission to Jurisdiction. Parent, Newco, Lobdell,
each Shareholder and the Shareholders' Agent submit to the jurisdiction of any
state court sitting in Oakland County or Bay County, Michigan, in any action or
proceeding arising out of or relating to this Agreement and agree that all
claims in respect of the action or proceeding shall be heard and determined
exclusively in any such court. Parent, Newco, Lobdell, each Shareholder and
the Shareholders' Agent waive any defense of inconvenient forum to the
maintenance of any action or proceeding so brought and waive any bond, surety,
or other security that might be required of any other party with respect
thereto. Each Shareholder appoints the Shareholders' Agent as such
Shareholder's agent to receive on such Shareholder's behalf service of copies
of the summons and complaint and any other process that might be served in such
action or proceeding.
7.07 Amendments and Waivers. No amendment of any provision of
this Agreement, and no postponement or waiver of any such provision or of any
default, misrepresentation, or breach of warranty or covenant hereunder,
whether intentional or not, shall be valid unless such amendment, postponement
or waiver is in writing and signed by or on behalf of Parent, Newco, Lobdell
and the Shareholders acting through the Shareholders' Agent. No such
amendment, postponement or waiver shall be deemed to extend to any prior or
subsequent matter, whether or not similar to the subject-matter of such
amendment, postponement or waiver. No failure or delay on the part of Parent,
Newco, Lobdell, the Shareholders or the Shareholders' Agent in exercising any
right, power or privilege under this Agreement shall operate as a waiver
thereof nor shall any single or partial exercise of any right, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, power or privilege.
7.08 Succession and Assignment. This Agreement shall be
binding upon and inure to the benefit of the parties named herein and their
respective successors and permitted assigns. No party may assign this
Agreement or any of such party's rights, interests or obligations hereunder
without the prior approval of the other parties hereto, except that all (but
not less than all) of the rights, interests and obligations of any Shareholder
may be assigned pursuant to the will of such Shareholder or the laws of
intestate succession, and except that Parent may (i) assign any or all of its
rights and interests hereunder to one or more of its Affiliates and (ii)
designate one or more of its Affiliates to perform its obligations hereunder
(other than its obligations with respect to the Preferred Stock); except that
in any event Parent shall remain responsible for the performance, by itself or
its assignee, of all of its obligations hereunder.
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7.09 Termination.
(a) Termination of Agreement. Parent or the
Shareholders, acting by the Shareholders' Agent, may terminate this Agreement
as provided below in this Section 7.09(a):
(1) the Shareholders and Parent may terminate this
Agreement by mutual consent at any time prior to the Closing;
(2) either the Shareholders or Parent may terminate
this Agreement if a court of competent jurisdiction or Governmental
Body shall have issued an order, decree or ruling or taken any other
action, in each case permanently restraining, enjoining or otherwise
prohibiting the transactions contemplated by this Agreement and such
order, decree, ruling or other action shall have become final and
nonappealable;
(3) Parent may terminate this Agreement if on the
Closing Date any of the conditions specified in Section 2.01 shall not
have been satisfied and such failure of condition shall not have been
waived by Parent;
(4) the Shareholders, acting by the Shareholders'
Agent, may terminate this Agreement if on the Closing Date any of the
conditions specified in Section 2.02 shall not have been satisfied and
such failure of condition shall not have been waived by the
Shareholders; or
(5) either the Shareholders or Parent may terminate
this Agreement if the Closing has not taken place by February 17, 1997
for any reason other than as specified above in clauses (3) and (4) of
this Section 7.09(a).
(6) either Parent or Newco may terminate this
Agreement if, in its sole discretion, it determines that the
Disclosure Schedule is not acceptable and provides such notice in
accordance with Section 3.21.
(b) Effect of Termination. If this Agreement is terminated
pursuant to Section 7.09(a), all rights and obligations of the parties
hereunder shall terminate without any liability of any party to any other party
(except as set forth in Section 7.02 and except for any liability of any party
then in breach). In addition, it is expressly agreed and understood that
nothing in this Agreement shall preclude any party from seeking any remedies
available to it, involving the payment of monetary damages or any equitable
remedy, in the event of any breach or violation of any provision of this
Agreement by the other party (whether or not the Agreement is terminated as a
result of such breach or violation).
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7.10 Matters of Construction, Interpretation and the Like.
(a) Construction. Parent, Newco, Lobdell and the
Shareholders have participated jointly in the negotiation and drafting of this
Agreement. If an ambiguity or question of intent or interpretation arises,
this Agreement shall be construed as if drafted jointly by all the parties
hereto and no presumption or burden of proof shall arise favoring or
disfavoring any party because of the authorship of any of the provisions of
this Agreement. Any reference to any law shall be deemed also to refer to all
rules, regulations, orders or decrees promulgated thereunder, unless the
context requires otherwise. The word "including" shall mean including without
limitation. Each representation, warranty and covenant contained herein shall
have independent significance. If Parent or the Shareholders breach in any
respect any representation, warranty, covenant or other obligation contained
herein or created hereby, the fact that there exists another representation,
warranty covenant or obligation relating to the same subject matter (regardless
of the relative levels of specificity) which has not been breached shall not
detract from or mitigate the consequences of such breach. The rights and
remedies expressly specified in this Agreement are cumulative and are not
exclusive of any rights or remedies which any party would otherwise have. The
Exhibits specified in this Agreement are incorporated herein by reference and
made a part hereof. The article and section headings hereof are for
convenience only and shall not affect the meaning or interpretation of this
Agreement.
(b) Nature of the Shareholders' Obligations. The
representations and warranties of each Shareholder in Section 5.01 are several
and not joint, so that if any Shareholder breaches such representations or
warranties, no other Shareholder will be responsible to Parent or any other
party hereto for the consequences of such breach by the breaching Shareholder.
The remainder of the obligations of the shareholders of Lobdell and Lobdell
created by this Agreement are joint and several obligations, so that each party
will be responsible to Parent and the other parties hereto to the extent
provided in Article VI for all Adverse Consequences which Parent or such other
parties may suffer as a result of any breach of such obligations.
(c) Severability. The invalidity or
unenforceability of one or more of the provisions of this Agreement in any
situation in any jurisdiction shall not affect the validity or enforceability
of any other provision hereof or the validity or enforceability of the
offending provision in any other situation or jurisdiction.
(d) Entire Agreement; Counterparts. This Agreement
(including the Confidentiality Agreement and the other documents referred to
herein) constitutes the entire agreement among the parties and supersedes any
prior understandings, agreements or representations by or among the parties,
written or oral, to the extent they relate to the subject matter hereof. This
Agreement may be executed in one or more counterparts, each of which shall be
deemed an original but all of which together shall constitute one and the same
instrument. It shall not be necessary in making proof of this Agreement to
produce or account for more than one such counterpart.
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<PAGE> 46
7.11 Agency. Each shareholder of Lobdell hereby
irrevocably appoints D. Kennedy Fesenmyer as the agent of such Shareholder for
all purposes relating to or in connection with any transaction contemplated by
or relating to this Agreement and to be carried out prior to, at or after the
Closing (including, without limitation, approving any modifications or
amendments to this Agreement and the appointment of the Escrow Agent and
execution and delivery of the Escrow Agreement), and each shareholder of
Lobdell hereby authorizes Parent, Newco and Lobdell to rely upon the agency
created hereby and releases Parent, Newco and Lobdell from any and all
liability to such shareholder of whatever nature arising out of or relating to
such agency, to the same extent as though any act committed or omitted by D.
Kennedy Fesenmyer pursuant to such agency had been committed or omitted by such
shareholder.
7.12 Shareholder Signatures. The shareholders of Lobdell
shall join and execute this Agreement and agree to all of the terms and
provisions hereof by means of separate signature pages. Such signature pages
shall also include the agreement of each shareholder to vote his or her shares
in favor of the Merger and shall provide for the consent of each shareholder to
the Merger.
7.13 Valuation. The parties hereto determine and agree
that the aggregate fair market value of the Class A and Class B common stock of
Lobdell to be surrendered by the shareholders of Lobdell in this transaction is
not less than the face amount of the Preferred Stock to be issued in exchange
therefor pursuant to this Agreement and that they shall treat the transaction
in all respects consistent with this determination and agreement.
VIII. DEFINITIONS
The terms defined in this Article VIII shall, for all purposes
of this Agreement, have the meanings specified or referred to in this Article
VIII.
"Acquisition Proposal" is defined in Section 3.03.
"Adverse Consequences" means all actions, suits, proceedings,
hearings, investigations, charges, complaints, claims, demands, injunctions,
judgments, orders, decrees, rulings, damages, dues, penalties, fines, costs,
amounts paid in settlement, Liabilities, obligations, Taxes, liens, losses,
expenses, and fees, including court costs and attorneys' and accountants' fees
and expenses.
"Affiliate" has the meaning set forth in Rule 12b-2 of the
regulations promulgated under the Securities Exchange Act of 1934.
"Agreement" or "this Agreement" means this instrument as
originally executed and delivered, or, if amended or supplemented, as so
amended or supplemented.
"Balance Sheet Delivery Date" is defined in Section 1.06(c).
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<PAGE> 47
"Benefit Plans" is defined in Section 5.02(l).
"Closing" is defined in Section 1.04(a).
"Closing Date" means the date on which the Closing is
completed.
"Closing Date Balance Sheet" is defined in Section 1.06(c).
"Code" means the Internal Revenue Code of 1986, as amended.
"Confidential Information" means any information related to
the business and affairs of Lobdell that is not already generally available to
the public.
"Confidentiality Agreement" means the letter agreement between
Lobdell and Oxford.
"Constituent Corporations" is defined in Section 1.01.
"Current Financial Information" means the unaudited interim
financial statements prepared by Lobdell for the first three quarters of 1996
and for the month of October, 1996, which have been furnished by Lobdell to
Parent.
"Disclosure Schedule" means the written materials furnished to
Parent by Lobdell or the Shareholders which are specifically designated as the
"Disclosure Schedule" and attached to this Agreement, or other written
materials furnished in accordance with Section 3.21 of this Agreement which are
specifically identified as the "Disclosure Schedule."
"Effective Date" is defined in Section 1.04(c).
"Environmental Law" is defined in Section 5.02(j).
"ERISA" means the Employment Retirement Income Security Act of
1974, as amended, and the rules and regulations promulgated thereunder.
"Escrow Agent" means at any particular time the person serving
as the escrow agent under the Escrow Agreement.
"Escrow Agreement" means the agreement of that name between
the Shareholders' Agent, the Surviving Corporation and the Escrow Agent, in the
form annexed hereto as Exhibit B.
"Escrow Shares" is defined in Section 1.06.
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<PAGE> 48
"GAAP" means generally accepted accounting principles set
forth in the opinions and pronouncements of the Financial Accounting Standards
Board, applied on a consistent basis with past practices.
"Governmental Body" means any United States, state, county,
city, municipal, regional or local organ of government within the United
States, including all courts, boards and agencies of any thereof.
"Hart-Scott-Rodino" Act" means the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended.
"Indemnified Party" is defined in Section 6.05(b).
"Indemnifying Party" is defined in Section 6.05(b).
"Intellectual Property" means:
(a) all inventions (whether patentable or
unpatentable and whether or not reduced to practice), all improvements thereto,
and all patents, patent applications, and patent disclosures, together with all
reissuances, continuations, continuations-in-part, revisions, extensions, and
reexaminations thereof,
(b) all trademarks, service marks, trade dress,
logos, trade names, and corporate names, together with all translations,
adaptations, derivations, and combinations thereof and including all goodwill
associated therewith, and all applications, registrations, and renewals in
connection therewith,
(c) all copyrightable works, all copyrights, and all
applications, registrations, and renewals in connection therewith,
(d) all mask works and all applications,
registrations, and renewals in connection therewith
(e) all trade secrets and confidential business
information (including ideas, research and development, know-how, formulas,
compositions, manufacturing and production processes and techniques, technical
data, designs, drawings, specifications, customer and supplier lists, pricing
and cost information, and business and marketing plans and proposals),
(f) all computer software (including data and
related documentation),
(g) all other proprietary rights, and
(h) all copies and tangible embodiments thereof (in
whatever form or medium).
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<PAGE> 49
"Knowledge," whether or not capitalized, means actual
knowledge after due inquiry, which (i) in the case of Lobdell means knowledge
of any officer or director of Lobdell Emery Corporation, (ii) in the case of
any Shareholder means knowledge of such Shareholder, and (iii) in the case of
Parent means knowledge of Selwyn Isakow or Jay Hansen.
"Law," whether or not capitalized, means statutes, rules,
regulations, codes, plans, injunctions, judgments, orders, decrees and rulings
of any Governmental Body.
"Liability," whether or not capitalized, means any liability
(whether known or unknown, whether asserted or unasserted, whether absolute or
contingent, whether accrued or unaccrued, whether liquidated or unliquidated,
and whether due or to become due), including any liability for Taxes.
"Lobdell" means Lobdell Emery Corporation, a Michigan
corporation.
"Material Adverse Effect" means any change, effect or
circumstance that, individually or when taken together with all other such
changes, effects or circumstances that have occurred prior to the date of
determination of the occurrence of the Material Adverse Effect, (i) is or is
reasonably likely to be materially adverse to the business, assets (including
intangible assets), financial condition or results of operations of Lobdell
taken as a whole, or (ii) will or is reasonably likely to prevent the
consummation of the transactions contemplated by this Agreement.
"Material Contracts" is defined in Section 5.02(o).
"MBCA" means the Michigan Business Corporation Act.
"Merrill Lynch" means Merrill Lynch, Pierce, Fenner & Smith,
Inc.
"Newco" means L-E Acquisition, Inc., a Michigan corporation.
"1995 Company Balance Sheet" means the audited consolidated
balance sheet of Lobdell at December 31, 1995 referred to in Section 5.02(d),
together with the related notes.
"Ordinary Course of Business," whether or not capitalized,
means the ordinary course of business of Lobdell consistent with Lobdell's past
custom and practice.
"OSHA" means the Occupational Safety and Health Act of 1970,
as amended.
"Oxford" means The Oxford Investment Group, Inc., a Michigan
corporation.
"Parent" means BMG-MI, Inc., a Michigan corporation.
"Permitted Liens and Exceptions" means as of any given time.
48
<PAGE> 50
(1) liens and charges for then current state, county,
city, school or other municipal taxes, levies or assessments not then due and
payable or which remain payable without interest or penalty,
(2) easements, rights of way, title exceptions and
reservations, restrictions, zoning ordinances and other encumbrances which do
not adversely affect the use of the properties subject thereto by Lobdell in
the Ordinary Course of Business,
(3) obligations and duties of Lobdell, not
interfering with the Ordinary Course of Business, as tenant or subtenant under
any leases of real or personal property wherever situated, and
(4) customary and immaterial exceptions and
exclusions from any title insurance policy obtained pursuant to Section 3.05.
"Person," whether or not capitalized, means an individual,
corporation, partnership, limited liability company or partnership,
unincorporated organization, voluntary association, joint stock company, trust,
joint venture or Governmental Body.
"Reviewing Accountants" is defined in Section 1.06(d).
"Securities Act" means the Securities Act of 1933, as amended.
"Series A Preferred Stock" means the Series A Preferred Stock
of the Surviving Corporation.
"Series B Preferred Stock" means the Series B Preferred Stock
of the Surviving Corporation.
"Shareholders" means the persons designated as Shareholders on
the signature page of this Agreement.
"Shareholders' Agent" means D. Kennedy Fesenmyer, acting as
agent for the Shareholders pursuant to Section 7.11.
"Shareholders' Equity Adjustment Amount" is defined in Section
1.06(b).
"Subsidiaries" means the corporations or limited liability
companies in which Lobdell or another Subsidiary owns at least a majority of
the outstanding voting stock or membership interests.
"Subsidiary Documents" has the meaning set forth in Section
5.02(a).
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<PAGE> 51
"Survey" has the meaning set forth in Section 3.18(c).
"Surviving Corporation" is defined in Section 1.01.
"Tax" and "Taxes" means any federal, state, local, or foreign
income, gross receipts, license, payroll, employment, excise, severance, stamp,
occupation, premium, windfall profits, environmental (including taxes under
Code Sec. 59A), customs duties, capital stock, franchise, profits, withholding,
social security (or similar), unemployment, disability, real property, personal
property, sales, use, transfer, registration, value added, alternative or
add-on minimum, estimated, or other tax of any kind whatsoever, including any
interest, penalty, or addition thereto, whether disputed or not.
"Third-Party Claim" has the meaning set forth in Section
6.05(b).
[This space intentionally left blank.]
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WITNESS the due execution of this Agreement and Plan of Merger
as of the day and year first above written.
BMG-MI, Inc. LOBDELL EMERY CORPORATION
By: By
--------------------------- ----------------------------------------
Selwyn Isakow, President D. Kennedy Fesenmyer
Chairman of Chief Executive Officer
L-E ACQUISITION, INC.
By:
--------------------------- ------------------------------------------
Selwyn Isakow, President D. Kennedy Fesenmyer, as
Shareholders' Agent
51
<PAGE> 53
SHAREHOLDER
SIGNATURE PAGE
TO
AGREEMENT AND PLAN OF MERGER
The undersigned hereby execute the Agreement and Plan of Merger (the
"Merger Agreement") dated as of November 14, 1996, by and between Lobdell Emery
Corporation, a Michigan corporation, BMG-MI, Inc., a Michigan corporation, L-E
Acquisition, Inc., a Michigan corporation, the parties named as Shareholders on
the signature page of the Merger Agreement, and D. Kennedy Fesenmyer, as
Shareholders' Agent.
1. The undersigned hereby agree to all of the terms and provisions of
the Merger Agreement and join and execute the Merger Agreement and hereby
authorize this Signature Page to be attached thereto.
2. The undersigned hereby agree to vote any and all shares of capital
stock of Lobdell Emery Corporation ("Lobdell") held by the undersigned in favor
of the merger contemplated by the Merger Agreement and in favor of the Merger
Agreement, at any meeting of the shareholders of Lobdell that may be called for
purposes of such approvals or otherwise, if such approvals are not obtained
through effective shareholder consents.
3. The undersigned hereby waive notice of and the holding of a
special meeting of the shareholders of Lobdell to consider and act upon the
approval of the Merger Agreement and, in accordance with Section 407 of the
Michigan Business Corporation Act and the Articles of Incorporation of Lobdell,
hereby adopt and approve the Merger Agreement and any and all transactions
necessary, desirable or convenient to effect and complete the merger pursuant
to the Merger Agreement.
Date:
------------------- -------------------------------
<PAGE> 1
EXHIBIT 10.11
EXECUTION COPY
AMENDMENT
TO
AGREEMENT AND PLAN OF MERGER
AMENDMENT TO AGREEMENT AND PLAN OF MERGER (this "AMENDMENT") made this
27th day of December, 1996 by and among Lobdell Emery Corporation ("LOBDELL"),
a Michigan corporation, BMG-MI, Inc. ("BMG"), a Michigan corporation, L-E
Acquisition, Inc. ("NEWCO"), a Michigan corporation, D. Kennedy Fesenmyer, as
"SHAREHOLDERS' AGENT" and Lobdell Holdings, Inc. ("LOBDELL HOLDINGS"), a
Michigan corporation.
WHEREAS, Lobdell, BMG, Newco, Shareholders' Agent and certain
shareholders of Lobdell entered into an Agreement and Plan of Merger dated as
of November 14, 1996 (the "AGREEMENT") for the merger of Newco with and into
Lobdell, in accordance with the terms and conditions contained in the
Agreement; and
WHEREAS, since entering into the Agreement, the parties negotiated and
agreed to certain changes to the Agreement set forth herein.
NOW, THEREFORE, Lobdell, BMG, Newco and Shareholders' Agent, on behalf of
the shareholders of Lobdell in accordance with Section 7.11 of the Agreement,
in consideration of the premises, agreements and covenants contained herein
(the receipt and sufficiency whereof are hereby acknowledged) and subject to
the satisfaction of the conditions set forth herein, hereby agree to the
following modifications of the Agreement:
1. All references to capitalized terms contained herein which are not
otherwise defined in this Amendment shall have the meanings ascribed to them in
the Agreement.
2. The first paragraph on page one of the Agreement is amended by
replacing "BMG-MI, Inc. ("Parent"), a Michigan corporation" with "Lobdell
Holdings, Inc. ("Parent"), a Michigan corporation, BMG-MI, Inc. ("BMG"), a
Michigan corporation," and is restated as follows:
"AGREEMENT AND PLAN OF MERGER dated as of November 14, 1996, by and
between Lobdell Emery Corporation ("Lobdell"), a Michigan corporation,
Lobdell Holdings, Inc. ("Parent"), a Michigan corporation, BMG-MI, Inc.
("BMG"), a Michigan corporation, L-E Acquisition, Inc. ("Newco"), a
Michigan corporation, the parties named as Shareholders on the signature
page of this Agreement (the "Shareholders"), and D. Kennedy Fesenmyer, as
Shareholders' Agent."
3. The fourth paragraph on page one of the Agreement is amended by
deleting "Parent" after the parenthetical and is restated as follows:
<PAGE> 2
"WHEREAS, the respective Boards of Directors of each of the Constituent
Corporations deem it advisable and generally to the welfare and advantage
of each, and of all the several and respective holders of their shares,
for Newco to be merged into Lobdell and for all the stock of Lobdell then
outstanding to be converted in the merger into preferred stock of the
Surviving Corporation (as defined below), pursuant to this Agreement and
the applicable laws of the State of Michigan, in a reorganization as
defined by Sections 368(a)(1)(E) of the United States Internal Revenue
Code of 1986, as amended."
4. Section 1.04(c) of the Agreement is amended by adding "or such other
time as shall be mutually agreed to by the Shareholders' Agent and Parent, as
set forth in the certificate of merger," after the word "time," in the second
line and is restated as follows:
"(c) Effective Date. The merger contemplated hereby (the "Merger")
shall become effective at 11:59 p.m., Eastern Standard time, or such
other time as shall be mutually agreed to by the Shareholders' Agent and
Parent, as set forth in the certificate of merger, on the date on which
the filing referred to in Section 1.04(b) is completed. The date upon
which the merger becomes effective is herein referred to as the
"Effective Date.".
5. Section 1.05(a) of the Agreement is amended to restate the conversion
ratios and is restated as follows:
"(a) Lobdell common stock. Each share of Lobdell Class A common stock
and Class B common stock outstanding on the Effective Date (except shares
held in the treasury of Lobdell, which shall be canceled) shall be
converted by the merger into 0.118340 shares of fully paid and
non-assessable Series A Preferred Stock of the Surviving Corporation
("Series A Preferred Stock") and 0.012923 shares of fully paid and
non-assessable Series B Preferred Stock of the Surviving Corporation
("Series B Preferred Stock" and together with the Series A Preferred
Stock the "Preferred Stock"). The relative rights, preferences and
limitations of the Series A and Series B Preferred Stock shall be as set
forth in Exhibit A hereto. Notwithstanding the foregoing, no fractional
shares of Series A or Series B Preferred Stock or certificates therefor
or scrip shall be issued in the Merger, but in lieu thereof each record
holder of Lobdell Class A common stock or Class B common stock who would
otherwise be entitled to a fraction of a share of Preferred Stock shall
be paid by Newco an amount in cash equal to (i) such fraction times (ii)
$100.00."
6. Section 1.06(a) of the Agreement is amended by replacing $13,000,000
and 130,000 with $10,000,000 and 100,000, respectively and is restated as
follows:
"(a) On the Effective Date, the certificates evidencing an aggregate of
$10,000,000 (to the nearest whole share) of the Series A Preferred Stock,
with the Series A Preferred Stock valued at $100 per share for such
purposes, into which each Shareholder's Class A common
2
<PAGE> 3
stock and Class B common stock of Lobdell has been converted in the
Merger (the "Escrow Shares"), shall be delivered by the Surviving
Corporation to Citizens Bank, as escrow agent (the "Escrow Agent") under
an Escrow Agreement among the Surviving Corporation, the Shareholders'
Agent and the Escrow Agent in the form annexed hereto as Exhibit B (the
"Escrow Agreement"). Each of the Lobdell shareholders shall deposit his
pro-rata share of the Escrow Shares (rounded to the nearest whole number)
determined by multiplying 100,000 times a fraction the numerator of which
is the number of shares of Series A Preferred Stock issuable to such
shareholder under Section 1.05(a) and the denominator of which is the
total number of shares of Series A Preferred Stock issuable pursuant to
the Merger. The Escrow Shares shall be held in escrow under the Escrow
Agreement and shall be distributed to the Shareholders, or returned to
Parent or the Surviving Corporation, pursuant to the terms of the Escrow
Agreement."
7. Section 3.23 of the Agreement is amended to restate the amount of the
payment to be made to the option holders and is restated as follows:
"3.23 Lobdell Stock Options. At or immediately prior to the Effective
Date, each outstanding employee stock option to purchase shares of Class
A common stock and Class B common stock of Lobdell (an "Option") granted
under (i) the Lobdell-Emery Manufacturing Company 1990 Stock Incentive
Plan, as amended (the "1990 Option Plan"), and (ii) any other stock
option plan or arrangement of Lobdell or any Subsidiary (such plans or
arrangements, together with the 1990 Option Plan, are hereinafter
collectively referred to as the "Option Plans"), shall be canceled, and
each holder of any such Option, whether or not then vested or
exercisable, shall be paid by Lobdell, at or immediately prior to the
Effective Date for each such Option, in consideration therefor an amount
in cash determined by multiplying (i) the excess, if any, of $12.994 per
share of Class A common stock and Class B common stock over the
applicable exercise price of such Option by (ii) the number of shares of
Class A common stock and Class B common stock such holder could have
purchased (assuming full vesting of all Options) had such holder
exercised such Option in full immediately prior to the Effective Date.
In addition, each holder of such Options shall be entitled to receive the
"cash payment rights" granted in conjunction with such Options, which in
aggregate will not exceed $502,923, including payments currently due to
Mr. Regina. The amount of payment relating to the Options and any cash
payment right is set forth in Section 3.23 of the Disclosure Schedule.
Lobdell shall use all reasonable efforts to effectuate the foregoing,
including without limitation amending the Option Plans and obtaining any
necessary consents from Option holders; provided, however, that prior to
the Closing Date, the Board of Directors of Lobdell shall adopt such
resolutions or take such other actions as are permitted and required to
adjust, effective immediately prior to the Effective Date, the terms of
each outstanding Option under the 1990 Option Plan as to which any such
consent is not obtained prior to the Effective Date to provide that such
Option shall be converted into the right, upon exercise of such Option at
any time after the Effective Date,
3
<PAGE> 4
to receive an amount in cash equal to $12.994 for each share of Class A
common stock and Class B common stock subject to such Option, plus the
amount of the applicable cash payment rights, or, alternatively, upon the
surrender and cancellation of such Option at any time after the Effective
Date to receive an amount in cash determined by multiplying (i) the
excess, if any, of $12.994 per share of Class A common stock and Class B
common stock over the applicable exercise price of such Option by (ii)
the number of shares of Class A common stock and Class B common stock
subject to such Option, plus the amount of the applicable cash payment
rights, in either case without interest or any other adjustment thereto."
8. Section 2.01 of the Agreement is amended by adding subsection (m) as
follows:
"(m) Grace Emery Sales Corporation. Parent shall have received, in form
and substance reasonably satisfactory to Parent and its counsel, evidence of
the termination of any and all agreements and arrangements between Lobdell and
Grace Emery Sales Corporation ("GESC") along with general releases of any and
all claims which GESC may have against Lobdell."
9. The last sentence of Section 3.01 of the Agreement is amended by
replacing "Parent" with "Parent, BMG" and is restated as follows:
"If the Hart-Scott-Rodino Act is applicable to such transactions, Parent,
BMG, Newco, Lobdell and the Shareholders shall make all filings and
provide all documents and information to Governmental Bodies which are
required by said Act and use their respective best efforts to obtain an
early termination of the applicable waiting period under said Act..
10. Section 3.20 of the Agreement is amended by replacing "Parent" in the
first line and as the last word in the Section with "Parent or its Affiliate"
and is restated as follows:
"3.20 Deposit. On the day when this Agreement is fully executed and
delivered by all of the parties hereto, Parent or its Affiliate shall pay
to Braun Kendrick Finkbeiner P.L.C., for the benefit of the Shareholders'
Agent, a deposit of $100,000. Such deposit shall be held by Braun
Kendrick Finkbeiner P.L.C., for the benefit of the Shareholders' Agent
until the Effective Date or, if the Merger contemplated hereby does not
become effective, until the date when this Agreement is terminated. If
this Agreement is terminated by the Shareholders pursuant to Section
7.09(a)(4), the Shareholders' Agent shall distribute such amount among
the Shareholders in proportion to their holdings of Lobdell capital stock
(without regard to whether such stock is Class A common stock or Class B
common stock). If this Agreement is terminated by Parent, Newco or the
Shareholders pursuant to clauses (1), (2), (3), (5) or (6) of Section
7.09(a), or if the Merger becomes effective, the Shareholders' Agent
shall return said amount to Parent or its Affiliate."
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<PAGE> 5
11. The second sentence of Section 3.21 of the Agreement is amended by
replacing "the deposit of Parent" with "the deposit of Parent or its Affiliate"
and is restated as follows:
"In the event Parent or Newco elects to terminate this Agreement pursuant
to Section 7.09(a)(6), the deposit of Parent or its Affiliate, delivered
in accordance with Section 3.20, shall be immediately refunded to it."
12. Section 3.22 of the Agreement is amended by increasing the redemption
amount from $1.6 million to $1.8 million and is restated as follows:
"3.22 Estate of Elizabeth E. Fesenmyer Redemption Agreement. Lobdell and
the Estate of Elizabeth E. Fesenmyer (the "Estate") entered into a
Redemption Agreement on December 15, 1988, as amended (the "Redemption
Agreement"), wherein Lobdell agreed to redeem in cash at the time
specified in the Redemption Agreement certain Class A voting common stock
and Class B non-voting common stock of Lobdell owned by the Estate.
Lobdell shall enter into a First Amendment to the Redemption Agreement to
cause the redemption by Lobdell on the Closing Date of that number of
shares of Class A and Class B common stock of Lobdell which may be
redeemed, consistent with the value of such shares as set forth in
Section 1.05, for an aggregate purchase price not in excess of $1.8
Million and providing that, upon completion of the Merger, the Redemption
Agreement as amended shall terminate and Lobdell shall be released and
discharged from any further obligation thereunder."
13. Section 3.24 of the Agreement is amended to reflect the recent
agreement reached with Mr. Regina and is restated as follows:
"3.24 Regina Payment. Lobdell shall have entered into an agreement with
Michael Regina ("Regina") whereby Regina has (i) resigned any and all
positions he holds with Lobdell, whether as a director, officer, employee
or trustee as of the Effective Date, (ii) released any and all claims he
has against Lobdell or any of the Subsidiaries, other than claims for
accrued employment benefits, and (iii) providing for termination of his
SERP. The cost of settling or terminating the SERP or any payment with
respect thereto shall be a cost for which the Surviving Corporation shall
be considered to have suffered an Adverse Consequence for which
indemnification is required. The actual amount of any such Adverse
Consequence shall be paid to the Surviving Corporation from the Escrow
Shares without reduction, notwithstanding the provisions of Section 6.02.
The agreement shall provide a maximum compensation payment to Regina of
not more than $1 Million.
14. Section 4.06 of the Agreement is amended by replacing "Parent" and
"the Parent" throughout the Section with "BMG" and is restated as follows:
"4.06 BMG Agreement to Exchange Shares.
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<PAGE> 6
(a) (i) For the purposes of this Section 4.06, the term "Initial
Public Offering" shall mean the first offering of the common stock of BMG
(the "BMG Common Stock") to the public which is (X) exclusively for cash
consideration, (Y) subject to an effective registration statement filed
with the Securities and Exchange Commission under the Securities Act of
1933, as amended, and (Z) underwritten on a firm commitment basis by one
or more underwriters. The Initial Public Offering will be deemed to have
commenced when such registration statement first becomes effective.
(ii) The term "Initial Public Offering Price" shall mean the
price per share to the public of BMG Common Stock specified in the
prospectus included as part of the registration statement referred to
above at the time such registration statement first becomes effective.
(iii) The term "Exchange Ratio" shall mean a number equal to (X)
the redemption value of a share of the Series A Preferred Stock, divided
by (Y) the Initial Public Offering Price.
(b) BMG or the Surviving Corporation shall give written notice to
each registered holder of the Series A Preferred Stock not later than thirty
(30) days following the Initial Public Offering. During the period beginning
on the 60th day after the effective date of the Initial Public Offering and
ending at the end of the 30th day thereafter, each holder of Series A Preferred
Stock may elect in writing (the "Exchange Notice") to exchange up to 50% or
some lesser portion of his shares of Series A Preferred Stock (the "Election
Amount") for a number of shares of BMG Common Stock (or any other class of
capital stock into which such common shares have been converted pursuant to any
reclassification or reorganization) equal to (i) the Election Amount,
multiplied by (ii) the Exchange Ratio; provided, however, that, in the
aggregate, holders of Series A Preferred Stock may not receive more than 25.0%
of the number of shares of BMG Common Stock registered pursuant to the Initial
Public Offering (the "Maximum Exchange Amount"). If the holders of Series A
Preferred Stock make elections that would result in such holders collectively
exceeding the Maximum Exchange Amount, each holder of Series A Preferred Stock
making such an election will receive shares of BMG Common Stock equal to the
number resulting from multiplying his Election Amount by the Exchange Ratio,
then multiplying that result by a fraction, the denominator of which is the
total number of shares of BMG Common Stock which has been requested as a result
of the Exchange Notices and the numerator of which is the Maximum Exchange
Amount. Any holder of Series A Preferred Stock who does not make an election
to exchange his Series A Preferred Stock as provided herein shall cease to have
any rights thereafter to exchange such shares and BMG shall have no
responsibility or liability to any such holder with respect to any such
exchange.
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<PAGE> 7
(c) Before any holder of Series A Preferred Stock shall be entitled to
exchange such stock for shares of BMG Common Stock, he shall (i) surrender the
certificate or certificates for his shares of Series A Preferred Stock, duly
endorsed for transfer, with signatures guaranteed by a national or state bank,
and (ii) give written instructions to BMG (in such form as BMG may reasonably
request) that he elects to convert the same and shall state therein the name or
names in which he wishes the certificate or certificates for shares of BMG
Common Stock to be issued. BMG shall, as soon as practicable thereafter, issue
and deliver to such holder of Series A Preferred Stock, a certificate or
certificates for the whole number of shares of BMG Common Stock to which he
shall be entitled.
(d) The exchange set forth in this Section 4.06 shall be deemed to have
been made immediately prior to the close of business on the date of surrender
of the shares of Series A Preferred Stock to be exchanged, and the person or
persons entitled to receive the shares of BMG Common Stock issuable upon such
exchange shall be treated for all purposes as the record holder or holders of
such shares of BMG Common Stock on such date. The conversion may, at the
option of any holder tendering shares of Series A Preferred Stock for exchange,
be conditioned upon the closing with the underwriters of the sale of securities
pursuant to the Initial Public Offering, in which event the person(s) entitled
to receive BMG Common Stock upon exchange of the Series A Preferred Stock shall
not be deemed to have exchanged such Series A Preferred Stock until immediately
prior to the day of closing of such sale of securities.
(e) No fractional share shall be issued upon the exchange of any share or
shares of Series A Preferred Stock. All shares of BMG Common Stock (including
fractions thereof) issuable upon exchange of more than one share of Series A
Preferred Stock by a holder thereof shall be aggregated for purposes of
determining whether the exchange would result in the issuance of any fractional
share. If, after the aforementioned aggregation, the exchange would result in
the issuance of a fraction of a share of Common Stock, the Company shall, in
lieu of issuing any fractional share, pay the holder otherwise entitled to such
fraction a sum in cash equal to the market value of such fraction on the date
of exchange, based on the Initial Public Offering Price."
15. Section 6.02 of the Agreement is amended by adding "except with
respect to any Adverse Consequences suffered as a result of a breach or
inaccuracy of the representations set forth in Sections 5.02(z) and 5.02(aa),"
after the phrase "exceeds $50,000 in the aggregate," and by reducing the
indemnification amounts from $13 million and $6.5 million to $10 million and $5
million, respectively, and is restated as follows:
"6.02 Indemnification Provisions for Benefit of Parent and the Surviving
Corporation. If there is any breach or inaccuracy of any of the
representations, warranties or covenants of any Shareholder or Lobdell
contained herein or in any Schedule, Exhibit, certificate or other
document delivered by or on behalf of the Shareholders or Lobdell
pursuant to this Agreement, or if any third party alleges facts that, if
true, would mean that such a breach or
7
<PAGE> 8
inaccuracy existed, and provided that within the applicable time periods
specified in Section 6.01 Parent or the Surviving Corporation delivers
to the Shareholders' Agent pursuant to Section 6.04 a claim for
indemnification with respect to such alleged breach or inaccuracy, then
the shareholders of Lobdell as to whom such claim may then be brought
pursuant to Section 6.01 (either severally or jointly and severally, as
provided in Section 7.10(b)), shall indemnify Parent, the Surviving
Corporation and their Affiliates and each of their respective officers,
directors, employees, agents, successors and permitted assigns from and
against all Adverse Consequences that they have suffered or may suffer
caused by, resulting from, arising out of or relating to such breach or
inaccuracy through and after the date of such claim; provided however,
that (i) the Shareholders shall not have any obligation to indemnify any
person under this Section 6.02 unless the amount of Adverse Consequences
suffered by such person by reason of all such breaches or inaccuracies
exceeds $50,000 in the aggregate, except with respect to any Adverse
Consequences suffered as a result of a breach or inaccuracy of the
representations set forth in Sections 5.02(z) and 5.02(aa), at which
point the Shareholders shall be obligated to indemnify such person from
and against all such Adverse Consequences, without any deductible amount,
and (ii) in no event shall the Shareholders have any obligation to
indemnify such persons under this Section 6.02 for an amount, in the
aggregate in excess of $10 million with respect to claims for
indemnification made during the first eighteen months following the
Closing Date and, with respect to claims made after the expiration of
such 18-month period, such amount shall be reduced to $5 million."
16. Section 6.03 of the Agreement is amended by reducing the
indemnification amounts from $13 million and $6.5 million to $10 million and $5
million, respectively, and is restated as follows:
"6.03 Indemnification Provisions for Benefit of the Shareholders. If
there is any breach or inaccuracy of any of the representations,
warranties or covenants of Parent or Newco contained herein or in any
Schedule, Exhibit, certificate or other document delivered by or on
behalf of Parent or Newco pursuant to this Agreement, or if any third
party alleges facts that, if true, would mean that such a breach or
inaccuracy existed, then Parent or Newco shall indemnify the Shareholders
and their respective successors and permitted assigns from and against
all Adverse Consequences that they have suffered or may suffer caused by,
resulting from, arising out of or relating to such breach or inaccuracy
through and after the date of such claim; provided however, that (i)
Parent or Newco shall not have any obligation to indemnify the
Shareholders under this Section 6.03 unless the amount of Adverse
Consequences suffered by the Shareholders by reason of all such breaches
or inaccuracies exceeds $50,000 in the aggregate, at which point Parent
or Newco shall be obligated to indemnify the Shareholders from and
against all such Adverse Consequences, without any deductible amount, and
(ii) in no event shall Parent or Newco have any obligation to indemnify
the Shareholders under this Section 6.03 for an amount, in the aggregate
in excess
8
<PAGE> 9
of $10 million with respect to claims for indemnification made during the
first eighteen months following the Closing Date and, with respect to
claims made after the expiration of such 18-month period, such amount
shall be reduced to $5 million.
17. Sections 7.04(a), 7.05, 7.07 and 7.11 of the Agreement are amended by
replacing "Parent" throughout each Section with "Parent, BMG" and each Section
is restated as follows:
"7.04 Notices. All notices, demands, claims, requests, undertakings,
consents, opinions and other communications which may or are required to
be given hereunder or with respect hereto shall be in writing, shall be
given either by personal delivery or by mail, facsimile transmission,
telegraph, telex or similar means of communication, and shall be deemed
to have been given or made when personally delivered, when delivered to
the telegraph or telephone company, charges prepaid, and otherwise when
received, addressed to the respective parties as follows:
(a) If to Parent, BMG or Newco:
BMG-MI, Inc.
2000 North Woodward, Ste. 130
Bloomfield Hills, Michigan 48304
Attention: Selwyn Isakow, President
With copy to:
Dykema Gossett PLLC
1577 North Woodward Avenue, Suite 300
Bloomfield Hills, Michigan 48304
Attention: Rex E. Schlaybaugh, Jr., Esq.
or to such other address as Parent, BMG or Newco may from time to time
designate by notice to Lobdell and the Shareholders' Agent with respect
to future notices, demands and other communications to Parent, BMG or
Newco;"
"7.05 No Third-Party Beneficiaries. This Agreement shall not confer any
rights or remedies upon any person other than the parties to this
Agreement and their respective successors and permitted assigns. All
discussions and negotiations by Parent, BMG, Newco, or any person on
behalf of Parent, BMG or Newco, with any person pertaining to the subject
matter of this Agreement shall not be deemed to be on behalf of any
person in his individual capacity or as a representative or agent for
Oxford, but rather shall be deemed to be solely on behalf of Parent, BMG
or Newco."
9
<PAGE> 10
"7.07 Amendments and Waivers. No amendment of any provision of this
Agreement, and no postponement or waiver of any such provision or of any
default, misrepresentation, or breach of warranty or covenant hereunder,
whether intentional or not, shall be valid unless such amendment,
postponement or waiver is in writing and signed by or on behalf of
Parent, BMG, Newco, Lobdell and the Shareholders acting through the
Shareholders' Agent. No such amendment, postponement or waiver shall be
deemed to extend to any prior or subsequent matter, whether or not
similar to the subject-matter of such amendment, postponement or waiver.
No failure or delay on the part of Parent, BMG, Newco, Lobdell, the
Shareholders or the Shareholders' Agent in exercising any right, power or
privilege under this Agreement shall operate as a waiver thereof nor
shall any single or partial exercise of any right, power or privilege
hereunder preclude any other or further exercise thereof or the exercise
of any other right, power or privilege."
"7.11 Agency. Each shareholder of Lobdell hereby irrevocably appoints D.
Kennedy Fesenmyer as the agent of such Shareholder for all purposes
relating to or in connection with any transaction contemplated by or
relating to this Agreement and to be carried out prior to, at or after
the Closing (including, without limitation, approving any modifications
or amendments to this Agreement and the appointment of the Escrow Agent
and execution and delivery of the Escrow Agreement), and each shareholder
of Lobdell hereby authorizes Parent, BMG, Newco and Lobdell to rely upon
the agency created hereby and releases Parent, BMG, Newco and Lobdell
from any and all liability to such shareholder of whatever nature arising
out of or relating to such agency, to the same extent as though any act
committed or omitted by D. Kennedy Fesenmyer pursuant to such agency had
been committed or omitted by such shareholder."
18. Section 7.08 of the Agreement is amended by deleting "(other than its
obligations with respect to the Preferred Stock)" and is restated as follows:
"7.08 Succession and Assignment. This Agreement shall be binding upon
and inure to the benefit of the parties named herein and their respective
successors and permitted assigns. No party may assign this Agreement or
any of such party's rights, interests or obligations hereunder without
the prior approval of the other parties hereto, except that all (but not
less than all) of the rights, interests and obligations of any
Shareholder may be assigned pursuant to the will of such Shareholder or
the laws of intestate succession, and except that Parent may (i) assign
any or all of its rights and interests hereunder to one or more of its
Affiliates and (ii) designate one or more of its Affiliates to perform
its obligations hereunder; except that in any event Parent shall remain
responsible for the performance, by itself or its assignee, of all of its
obligations hereunder."
19. Article VII of the Agreement is amended by adding a new Section 7.14
as follows:
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<PAGE> 11
"Section 7.14 Parent Merger with BMG. Parent and BMG have agreed,
pursuant to the terms of the Agreement and Plan of Merger between Parent
and BMG (the form of which is attached hereto as Exhibit E), to
consummate a business combination immediately following and conditioned
upon the consummation of the Merger, whereby Parent will merge with and
into BMG, the separate corporate existence of Parent will cease and BMG
will continue as the surviving corporation."
20. Article VIII of the Agreement is amended by deleting the definition of
"Parent" and by adding the following definitions:
" "BMG" means BMG-MI Inc., a Michigan corporation.
"Parent" means Lobdell Holdings, Inc, a Michigan corporation."
21. The reference to "Newco Preferred Stock" in the first recital of the
Escrow Agreement attached as Exhibit B to the Agreement, and each reference
throughout the Escrow Agreement, is amended to change such references to
"Lobdell Preferred Stock" and the recital is amended and restated as follows:
"WHEREAS, pursuant to an Agreement and Plan of merger dated as of
November 14, 1996 to which Newco, the Shareholders and the Shareholders'
Agent are parties (the "Merger Agreement"), Newco is to be merged with
and into Lobdell and in the merger the Class A common stock and Class B
common stock of Lobdell held by the Shareholders is to be converted into
Series A and Series B Preferred Stock of Lobdell (the "Lobdell Preferred
Stock"); and"
22. Section 7 of the Escrow Agreement is amended to allow for the payment
of dividends on the escrowed shares to the holders of the Lobdell Preferred
Stock, and is amended and restated as follows:
"7. All cash dividends paid upon the Lobdell Preferred Stock in the
Escrow Fund shall be paid to the registered holder of the Lobdell
Preferred Stock. Such Shareholders shall be entitled to vote such
Lobdell Preferred Stock upon all matters submitted to the holders of
Lobdell Preferred Stock for their vote. All non-cash distributions upon
such Lobdell Preferred Stock shall be held by the Escrow Agent as part of
the Escrow Fund."
23. The first sentence of Exhibit C to the Agreement is restated as
follows:
"Related to Section 1.06(c), if any item has not been accounted under
GAAP that item shall be adjusted in the closing balance sheet without
regard to consistency or materiality, except that with respect to
materiality, no such item shall be adjusted until the aggregate of all
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<PAGE> 12
adjustments equal or exceed $100,000, and then the adjustment shall only
be the amount in excess of $100,000."
24. The fourth full paragraph on page 2 of Exhibit C is restated as
follows:
"Fixed assets exclude obsolete or other unusable property or equipment.
A fixed asset inventory of all items will be completed on the Closing
Date, as may be appropriate to verify such fixed assets. All unlocated
items will be removed from the property ledger. Fixed asset lives are as
follows:
Buildings 30 years Furniture 5.0 years
Machinery 9.5 years Computers 5.0 years
Equipment 9.5 years"
25. Section 5.02(b) of the Agreement is amended to delete in its entirety
the sentence, "The Current Financial Information has been reviewed by Andrews
Hooper and Pavlik P.L.C. and reflects any recommendations made by Andrews
Hooper and Pavlik P.L.C. in such reviews."
26. Except as specifically amended by this Amendment, all provisions of
the Purchase Agreement shall remain in full force and effect. This Amendment
shall govern in the event that there is a conflict between the Purchase
Agreement and this Amendment.
[This space intentionally left blank]
12
<PAGE> 13
IN WITNESS WHEREOF, the parties hereto have executed this Amendment on the
day and year first above written.
LOBDELL EMERY CORPORATION
By:
------------------------------------------
Name: D. Kennedy Fesenmyer
Title: Chairman & Chief Executive Officer
BMG-MI, INC.
By:
------------------------------------------
Name: Rex E. Schlaybaugh, Jr.
Title: Secretary
L-E ACQUISITION, INC.
By:
------------------------------------------
Name: Rex E. Schlaybaugh, Jr.
Title: Secretary
LOBDELL HOLDINGS, INC.
By:
------------------------------------------
Name: Rex E. Schlaybaugh, Jr.
Title: Secretary
---------------------------------------------
D. Kennedy Fesenmyer, as Shareholders' Agent
13
<PAGE> 1
EXHIBIT 10.12
EXECUTION COPY
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
LOBDELL HOLDINGS, INC
and
BMG-MI, INC.
Dated as of January 8, 1997
<PAGE> 2
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of January 8, 1997 (this
"AGREEMENT"), among Lobdell Holdings, Inc., a Michigan corporation ("LOBDELL
HOLDINGS"), and BMG-MI, Inc., a Michigan corporation ("BMG").
WHEREAS, the Boards of Directors of Lobdell Holdings and BMG have each
determined that it is advisable and in the best interests of their respective
shareholders for Lobdell Holdings to enter into a business combination with BMG
upon the terms and subject to the conditions set forth herein;
WHEREAS, in furtherance of such combination, the Boards of Directors of
Lobdell Holdings and BMG have each approved the merger of Lobdell Holdings
with and into BMG (the "MERGER") in accordance with the applicable provisions
of the Michigan Business Corporation Act (the "MBCA"), and upon the terms and
subject to the conditions set forth herein;
WHEREAS, Lobdell Holdings has approved the merger (the "LOBDELL MERGER")
of L-E Acquisition, Inc., a Michigan corporation ("L-E ACQUISITION") and
wholly-owned subsidiary of Lobdell Holdings, with and into Lobdell Emery
Corporation, a Michigan corporation ("LOBDELL") in accordance with the
applicable provisions of the MBCA, upon the terms and subject to the conditions
set forth in the Agreement and Plan of Merger dated as of November 14, 1996, as
amended,(the "LOBDELL AGREEMENT") among Lobdell, certain shareholders of
Lobdell, BMG, Lobdell Holdings and L-E Acquisition, and the parties thereto
have executed and delivered the Lobdell Agreement; and
WHEREAS, pursuant to the Merger, each outstanding share (a "SHARE") of
common stock of Lobdell Holdings (the "LOBDELL HOLDINGS COMMON STOCK") shall be
converted into the right to receive the Merger Consideration (as defined in
Section 1.7(a) ), upon the terms and subject to the conditions set forth
herein.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements herein contained, and intending to be legally bound hereby, BMG
and Lobdell Holdings hereby agree as follows:
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<PAGE> 3
ARTICLE I
THE MERGER
SECTION 1.1 The Merger.
(a) Effective Time. At the Effective Time (as defined in Section 1.2),
and subject to and upon the terms and conditions of this Agreement, and the
MBCA, Lobdell Holdings shall be merged with and into BMG, the separate
corporate existence of Lobdell Holdings shall cease, and BMG shall continue as
the surviving corporation. BMG as the surviving corporation after the Merger
is hereinafter sometimes referred to as the "SURVIVING CORPORATION."
(b) Closing. Unless this Agreement shall have been terminated and the
transactions herein contemplated shall have been abandoned pursuant to Section
6.1 and subject to the satisfaction or waiver of the conditions set forth in
Article V, the consummation of the Merger will take place as promptly as
practicable after satisfaction or waiver of the conditions set forth in Article
V, at the offices of Dykema Gossett PLLC, 1577 North Woodward Avenue, Suite
300, Bloomfield Hills, Michigan, unless another date, time or place is agreed
to in writing by the parties hereto.
SECTION 1.2 Effective Time. As promptly as practicable after the
satisfaction or waiver of the conditions set forth in Article V, the parties
hereto shall cause the Merger to be consummated by filing a certificate of
merger as contemplated by the MBCA (the "CERTIFICATE OF MERGER"), together with
any required related certificates, with the Michigan Department of Consumer and
Industry Services, in such form as required by, and executed in accordance with
the relevant provisions of the MBCA (the time of such filing being the
"EFFECTIVE TIME").
SECTION 1.3 Effect of the Merger. At the Effective Time, the effect of
the Merger shall be as provided in this Agreement, the Certificate of Merger
and the applicable provisions of the MBCA. Without limiting the generality of
the foregoing, and subject thereto, at the Effective Time all the property,
rights, privileges, powers and franchises of Lobdell Holdings and BMG shall
vest in the Surviving Corporation, and all debts, liabilities and duties of
Lobdell Holdings and BMG shall become the debts, liabilities and duties of the
Surviving Corporation.
SECTION 1.4 Articles of Incorporation, By-Laws.
(a) Articles of Incorporation. Unless otherwise determined by BMG prior
to the Effective Time, at the Effective Time the Articles of Incorporation of
BMG as in effect immediately prior to the Effective Time, shall be the Articles
of Incorporation of the Surviving Corporation until thereafter amended in
accordance with the MBCA and such Articles of Incorporation.
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<PAGE> 4
(b) By-Laws. Unless otherwise determined by BMG prior to the Effective
Time, the By-Laws of BMG as in effect immediately prior to the Effective Time,
shall be the By-Laws of the Surviving Corporation until thereafter amended in
accordance with the MBCA, the Articles of Incorporation of the Surviving
Corporation and such By-Laws.
SECTION 1.5 Directors and Officers. The Board of Directors of BMG
immediately prior to the Effective Time shall be the initial Board of Directors
of the Surviving Corporation, each member to hold office in accordance with the
Articles of Incorporation and By-Laws of the Surviving Corporation, and the
officers of BMG immediately prior to the Effective Time shall be the initial
officers of the Surviving Corporation, in each case until their respective
successors are duly elected or appointed and qualified.
SECTION 1.6 Effect on Lobdell Holdings Common Stock. At the Effective
Time, by virtue of the Merger and without any action on the part of BMG,
Lobdell Holdings or their respective shareholders:
(a) Conversion of Lobdell Holdings Common Stock. Each Share issued and
outstanding immediately prior to the Effective Time (excluding any Shares to be
canceled pursuant to Section 1.6(b)) shall be converted into the right to
receive 3.12 shares (the "EXCHANGE RATIO") of validly issued, fully paid and
nonassessable shares ("BMG SHARES") of the Common Stock of BMG ("BMG COMMON
STOCK").
(b) Cancellation. Each Share held in the treasury of Lobdell Holdings and
each Share owned by BMG immediately prior to the Effective Time shall, by
virtue of the Merger and without any action on the part of the holder thereof,
cease to be outstanding, be canceled and retired without payment of any
consideration therefor and cease to exist.
(c) Capital Stock of BMG. Each share of BMG Common Stock issued and
outstanding immediately prior to the Effective Time shall remain outstanding.
(d) Fractional Shares. No certificates or scrip representing less than
one BMG Share shall be issued upon the exchange of any Interests. In lieu of
any such fractional share, each holder of Shares who would otherwise have been
entitled to a fraction of a BMG Share upon exchange of such Shares shall be
issued the appropriate whole number of BMG Shares determined by rounding down
any fraction of 0.5 or less to the nearest whole number of BMG Shares and by
rounding up any fraction greater than 0.5 to the nearest whole number of BMG
Shares.
(e) Adjustments to Share Consideration. The Exchange Ratio shall be
equitably adjusted to reflect fully the effect of any reclassification, stock
split, reverse split, stock dividend, reorganization or recapitalization or
other like change with respect to BMG Common Stock occurring after the date
hereof and prior to the Effective Time.
3
<PAGE> 5
SECTION 1.7 Exchange of Shares.
(a) Exchange Procedures. Immediately after the Effective Time, the Shares
shall be surrendered to BMG. Upon surrender of a certificate representing the
Shares ("CERTIFICATE") to BMG for cancellation together with such other
customary documents as may be required, the holder of such Certificate shall be
entitled to receive in exchange therefor (A) certificates evidencing that
number of whole BMG Shares which such holder has the right to receive in
accordance with the Exchange Ratio in respect of the Shares formerly evidenced
by such Certificate, and (B) any dividends or other distributions to which such
holder is entitled (the BMG Shares, dividends and distributions being,
collectively, the "MERGER CONSIDERATION"), and the Certificate so surrendered
shall forthwith be canceled. Until so surrendered, each outstanding
Certificate that, prior to the Effective Time, represented Shares of Lobdell
Holdings Common Stock will be deemed from and after the Effective Time, for all
corporate purposes, to evidence the ownership of the number of full BMG Shares
into which such shares of Lobdell Holdings Common Stock shall have been so
converted. BMG Shares issued in the Merger shall be issued as of and deemed to
be outstanding as of the Effective Time. BMG shall cause all such BMG shares
issued in accordance with the Merger to be duly authorized, validly issued,
fully paid and nonassessable.
(b) No Liability. Neither BMG nor Lobdell Holdings shall be liable to any
shareholder for any Merger Consideration delivered to a public official
pursuant to any applicable abandoned property, escheat or similar law.
(c) Withholding Rights. BMG shall be entitled to deduct and withhold from
the Merger Consideration otherwise payable pursuant to this Agreement to any
holder of Lobdell Holdings Common Stock such amounts as BMG is required to
deduct and withhold with respect to the making of such payment under the Code,
or any provision of state, local or foreign tax law. To the extent that
amounts are so withheld by BMG, such withheld amounts shall be treated for all
purposes of this Agreement as having been paid to the holder of the Shares in
respect of which such deduction and withholding was made by BMG.
SECTION 1.8 No Further Ownership Rights in Lobdell Holdings Common Stock.
The Merger Consideration delivered upon the exchange of Shares in accordance
with the terms hereof shall be deemed to have been issued in full satisfaction
of all rights pertaining to such Shares, and there shall be no further
registration of transfers on the records of the Surviving Corporation of Shares
which were outstanding immediately prior to the Effective Time. If after the
Effective Time, Certificates are presented to the Surviving Corporation for any
reason, they shall be canceled and exchanged as provided in this Article I.
SECTION 1.9 Tax and Accounting Consequences. It is intended by the parties
hereto that the Merger shall constitute a reorganization within the meaning of
Section 368(a) of the Code.
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<PAGE> 6
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF LOBDELL HOLDINGS
Lobdell Holdings hereby represents and warrants to BMG that:
SECTION 2.1 Organization and Qualification. Lobdell Holdings is a
corporation duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation and has the requisite corporate
power and authority necessary to own, lease and operate the properties it
purports to own, operate or lease and to carry on its business as it is now
being conducted.
SECTION 2.2 Articles of Incorporation and By-Laws. The Articles of
Incorporation and By-Laws of Lobdell Holdings are in full force and effect.
Lobdell Holdings is not in violation of any of the provisions of its Articles
of Incorporation or By-Laws.
SECTION 2.3 Capitalization. The authorized capital stock of Lobdell
Holdings consists of 100,000 shares of Lobdell Holdings Common Stock, of which
75,000 shares are issued and outstanding. All of the outstanding shares of
Lobdell Holdings Common Stock are duly authorized, validly issued, fully paid
and nonassessable, free and clear of all security interests, liens, claims,
pledges, agreements, limitations in Lobdell Holdings' voting rights, charges or
other encumbrances of any nature whatsoever.
SECTION 2.4 Authority Relative to this Agreement and the Lobdell
Agreement. Lobdell Holdings has all necessary corporate power and authority to
execute and deliver this Agreement and the Lobdell Agreement and to perform its
obligations under each agreement and to consummate the transactions
contemplated by each agreement. The execution and delivery of this Agreement
and the Lobdell Agreement by Lobdell Holdings and the consummation by Lobdell
Holdings of the transactions contemplated by each agreement have been duly and
validly authorized by all necessary corporate action, and no other corporate
proceedings on the part of Lobdell Holdings are necessary to authorize this
Agreement or the Lobdell Agreement or to consummate the transactions so
contemplated (other than any required shareholder approval). The Board of
Directors of Lobdell Holdings has determined that it is advisable and in the
best interest of its shareholders for Lobdell Holdings to enter into a business
combination with BMG upon the terms and subject to the conditions of this
Agreement, and have unanimously recommended that shareholders approve and
adopt, as required, the Lobdell Agreement, Lobdell Merger, this Agreement and
the Merger. This Agreement has been duly and validly executed and delivered by
Lobdell Holdings (subject to shareholder approval) and, assuming the due
authorization, execution and delivery by BMG constitutes a legal, valid and
binding obligation of Lobdell Holdings enforceable against it in accordance
with its terms. The Lobdell Agreement has been
5
<PAGE> 7
duly and validly executed and delivered by Lobdell Holdings and constitutes a
legal, valid and binding obligation of Lobdell Holdings enforceable against it
in accordance with its terms.
SECTION 2.5 Formation of Lobdell Holdings; No Prior Activities.
(a) Lobdell Holdings was formed solely for the purpose of engaging in the
transactions contemplated by the Lobdell Agreement and this Agreement.
(b) As of the date hereof and the Effective Time, except for obligations
or liabilities incurred in connection with its incorporation or organization
and the transactions contemplated by the Lobdell Merger and this Agreement,
Lobdell Holdings has not and will not have incurred, directly or indirectly,
through any subsidiary or affiliate, any material obligations or liabilities or
engaged in any business activities of any type or kind whatsoever or entered
into any agreements or arrangements with any person.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BMG
BMG hereby represents and warrants to Lobdell Holdings that:
SECTION 3.1 Organization and Qualification; Subsidiaries. BMG is a
corporation duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation and has the requisite corporate
power and authority to own, lease and operate the properties it purports to
own, operate or lease and to carry on its business as it is now being
conducted.
SECTION 3.2 Articles and By-Laws. BMG'S Articles of Incorporation and
By-Laws are in full force and effect. BMG is not in violation of any of the
provisions of its Articles of Incorporation or By-Laws.
SECTION 3.3 Capitalization. The authorized capital stock of BMG consists
of 100,000 shares of BMG Common Stock of which 78,000 shares are issued and
outstanding, all of which are validly issued, fully paid and nonassessable and
the authorized capital stock of BMG prior to the Merger will consist of 400,000
shares of BMG Common Stock.
SECTION 3.4 Authority Relative to this Agreement and the Lobdell
Agreement. BMG has all necessary corporate power and authority to execute and
deliver this Agreement and the Lobdell Agreement and to perform its obligations
under each agreement and to consummate the transactions contemplated by each
agreement. The execution and delivery of this Agreement and the Lobdell
Agreement by BMG and the consummation by BMG of the transactions contemplated
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<PAGE> 8
by each agreement have been duly and validly authorized by all necessary
corporate action, and no other corporate proceedings on the part of BMG are
necessary to authorize this Agreement or the Lobdell Agreement or to consummate
the transactions so contemplated (other than any required shareholder
approval). The Board of Directors of BMG has determined that it is advisable
and in the best interest of its shareholders for BMG to enter into a business
combination with Lobdell Holdings upon the terms and subject to the conditions
of this Agreement, and have unanimously recommended that shareholders approve
and adopt, this Agreement and the Merger. This Agreement has been duly and
validly executed and delivered by BMG (subject to shareholder approval) and,
assuming the due authorization, execution and delivery by Lobdell Holdings,
constitutes a legal, valid and binding obligation of BMG enforceable against it
in accordance with its terms. The Lobdell Agreement has been duly and validly
executed and delivered by BMG and constitutes a legal, valid and binding
obligation of BMG enforceable against it in accordance with its terms.
ARTICLE IV
ADDITIONAL AGREEMENTS
SECTION 4.1 Lobdell Merger. BMG and Lobdell Holdings agree to take all
such reasonable and lawful actions as may be necessary or appropriate in order
to effectuate the Lobdell Merger in accordance with the Lobdell Agreement as
promptly as practicable.
SECTION 4.2 Shareholder Approval. Lobdell Holdings and BMG shall call and
hold shareholder meetings or shall obtain the required written consents of
their respective shareholders, as required under the MBCA, prior to the
Effective Time and in accordance with applicable laws for the purpose of voting
upon the approval of the Merger and the Lobdell Merger.
SECTION 4.3 Consents; Approvals. Lobdell Holdings and BMG shall each use
their reasonable best efforts to obtain all consents, waivers, approvals,
authorizations or orders, and Lobdell Holdings and BMG shall make all filings
required in connection with the authorization, execution and delivery of this
Agreement by Lobdell Holdings and BMG and the consummation by them of the
transactions contemplated hereby, in each case as promptly as practicable.
SECTION 4.4 Loan to BMG North America. At the Effective Time, as a result
of the Merger and such other consideration as the parties have deemed
appropriate and sufficient, Lobdell Holdings shall or shall cause an affiliate
to loan up to $5,000,000 to BMG North America Limited, an affiliate of BMG.
The terms of such loan shall be as reasonably negotiated between the parties,
but in no event shall the rate of interest charged be greater than the rate
paid by Lobdell Holdings or its affiliate on its revolving credit facilities or
the prime rate of NBD Bank, in the event there are no revolving credit
facilities. The loan shall be unsecured and due upon
7
<PAGE> 9
demand. BMG and Lobdell Holdings agree to take all such reasonable and lawful
actions as may be necessary or appropriate in order to effectuate this loan
transaction at the Effective Time.
ARTICLE V
CONDITIONS TO THE MERGER
SECTION 5.1 Conditions to Obligation of Each Party to Effect the Merger.
The respective obligations of each party to effect the Merger shall be subject
to the satisfaction at or prior to the Effective Time of the following
conditions:
(a) Lobdell Merger. The Lobdell Merger shall have been consummated in
accordance with all applicable laws, and with evidence of the foregoing
provided to BMG and Lobdell Holdings. No temporary restraining order,
preliminary or permanent injunction or other order issued by any court of
competent jurisdiction or other legal restraint or prohibition preventing the
consummation of the Lobdell Merger shall be in effect, nor shall any proceeding
brought by any administrative agency or commission or other governmental
authority or instrumentality, domestic or foreign, seeking any of the foregoing
be pending; and there shall not be any action taken, or any statute, rule,
regulation or order enacted, entered, enforced or deemed applicable to the
Lobdell Merger, which makes the consummation of the Lobdell Merger illegal;
(b) Approval. This Agreement and the Merger shall have been approved and
adopted by the affirmative vote of the holders of a majority of the outstanding
shares of Lobdell Holdings Common Stock and the holders of a majority of the
outstanding shares of BMG Common Stock or appropriate consents of such
shareholders shall have been obtained by each of Lobdell Holdings and BMG;
(c) No Injunctions or Restraints; Illegality. No temporary restraining
order, preliminary or permanent injunction or other order issued by any court
of competent jurisdiction or other legal restraint or prohibition preventing
the consummation of the Merger shall be in effect, nor shall any proceeding
brought by any administrative agency or commission or other governmental
authority or instrumentality, domestic or foreign, seeking any of the foregoing
be pending; and there shall not be any action taken, or any statute, rule,
regulation or order enacted, entered, enforced or deemed applicable to the
Merger, which makes the consummation of the Merger illegal;
(d) Governmental Consents. All authorizations, consents and approvals of
any governmental authority or administrative agency necessary or advisable
shall have been obtained and all applicable waiting periods, and any extensions
thereof, under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended shall have expired or otherwise have been terminated; and
8
<PAGE> 10
(e) Governmental Actions. There shall not have been instituted, pending
or threatened any action or proceeding (or any investigation or other inquiry
that might result in such an action or proceeding) by any governmental
authority or administrative agency before any governmental authority,
administrative agency or court of competent jurisdiction, nor shall there be in
effect any judgment, decree or order of any governmental authority,
administrative agency or court of competent jurisdiction, in either case,
seeking to prohibit or limit BMG, as the Surviving Corporation, from exercising
all material rights and privileges pertaining to the ownership or operation by
BMG or any of its subsidiaries of all or a material portion of the business or
assets of the Surviving Corporation or any of its subsidiaries, or seeking to
compel BMG or any of its subsidiaries to dispose of or hold separate all or any
material portion of the business or assets of the Surviving Corporation or any
of its subsidiaries, as a result of the Merger or the transactions contemplated
by this Agreement.
SECTION 5.2 Additional Conditions to Obligations of BMG. The obligations
of BMG to effect the Merger are also subject to the following conditions:
(a) Representations and Warranties. The representations and warranties of
Lobdell Holdings contained in this Agreement shall be true and correct in all
material respects at and as of the Effective Time;
(b) Agreements and Covenants. Lobdell Holdings shall have performed or
complied in all material respects with all agreements and covenants required by
this Agreement to be performed or complied with by it at or prior to the
Effective Time; and
(c) Consents Obtained. All material consents, waivers, approvals,
authorizations or orders required to be obtained, and all filings required to
be made, by Lobdell Holdings for the due authorization, execution and delivery
of this Agreement and the consummation by it of the transactions contemplated
hereby and by the Lobdell Agreement shall have been obtained and made by
Lobdell Holdings.
(d) Opinion of Financial Advisor. BMG shall have received the advice of
its financial advisor, McDonald & Company Securities, Inc., that in its
opinion, the Exchange Ratio set forth herein is fair to the holders of BMG
Common Stock from a financial point of view.
SECTION 5.3 Additional Conditions to Obligation of Lobdell Holdings. The
obligation of Lobdell Holdings to effect the Merger is also subject to the
following conditions:
(a) Representations and Warranties. The representations and warranties of
BMG contained in this Agreement shall be true and correct in all material
respects on and as of the Effective Time;
9
<PAGE> 11
(b) Agreements and Covenants. BMG shall have performed or complied in all
material respects with all agreements and covenants required by this Agreement
to be performed or complied with by it on or prior to the Effective Time; and
(c) Consents Obtained. All material consents, waivers, approvals,
authorizations or orders required to be obtained, and all filings required to
be made, by BMG for the authorization, execution and delivery of this Agreement
and the consummation by them of the transactions contemplated hereby and by the
Lobdell Agreement shall have been obtained and made by BMG.
ARTICLE VI
TERMINATION
SECTION 6.1 Termination. This Agreement may be terminated at any time
prior to the Effective Time by mutual written consent of BMG and Lobdell
Holdings.
SECTION 6.2 Effect of Termination. In the event of the termination of
this Agreement pursuant to Section 6.1, this Agreement shall forthwith become
void and there shall be no liability on the part of any party hereto or any of
its affiliates, directors, officers or shareholders.
SECTION 6.3 Fees and Expenses. All fees and expenses incurred in
connection with this Agreement and the transactions contemplated hereby shall
be paid by the party incurring such expenses, whether or not the Merger is
consummated.
ARTICLE VII
GENERAL PROVISIONS
SECTION 7.1 Amendment. This Agreement may be amended by the parties
hereto by action taken by or on behalf of their respective Boards of Directors
at any time prior to the Effective Time; provided, however, that, after
approval of the Merger by the shareholders of Lobdell Holdings and BMG, as
applicable, no amendment may be made which by law requires further approval by
such shareholders without such further approval. This Agreement may not be
amended except by an instrument in writing signed by the parties hereto.
SECTION 7.2 Waiver. At any time prior to the Effective Time, any party
hereto may with respect to any other party hereto (a) extend the time for the
performance of any of the obligations or other acts, (b) waive any inaccuracies
in the representations and warranties contained herein or in any document
delivered pursuant hereto, or (c) waive compliance with any
10
<PAGE> 12
of the agreements or conditions contained herein. Any such extension or waiver
shall be valid only if set forth in an instrument in writing signed by the
party or parties to be bound thereby.
SECTION 7.3 Headings. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
SECTION 7.4 Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of
law, or public policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the economic or
legal substance of the transactions contemplated hereby is not affected in any
manner adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties
hereto shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as possible in an acceptable
manner to the end that the transactions contemplated hereby are fulfilled to
the fullest extent possible.
SECTION 7.5 Entire Agreement. This Agreement constitutes the entire
agreement and supersedes all prior agreements and undertakings, both written
and oral, among the parties, or any of them, with respect to the subject matter
hereof.
SECTION 7.6 Assignment. No party may assign this Agreement or any of such
party's rights, interests or obligations hereunder without the prior approval
of the other party hereto.
SECTION 7.7 Parties in Interest. This Agreement shall be binding upon
and inure solely to the benefit of each party hereto, and nothing in this
Agreement, express or implied, is intended to or shall confer upon any other
person any right, benefit or remedy of any nature whatsoever under or by
reason of this Agreement, including, without limitation, by way of subrogation.
SECTION 7.8 Failure or Indulgence Not Waiver; Remedies Cumulative. No
failure or delay on the part of any party hereto in the exercise of any right
hereunder shall impair such right or be construed to be a waiver of, or
acquiescence in, any breach of any representation, warranty or agreement
herein, nor shall any single or partial exercise of any such right preclude any
other or further exercise thereof or of any other right. All rights and
remedies existing under this Agreement are cumulative to, and not exclusive of,
any rights or remedies otherwise available.
SECTION 7.9 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the internal laws of the State of Michigan
applicable to contracts executed and fully performed within the State of
Michigan.
SECTION 7.10 Counterparts. This Agreement may be executed in one or more
counterparts, and by the different parties hereto in separate counterparts,
each of which when
11
<PAGE> 13
executed shall be deemed to be an original but all of which taken together
shall constitute one and the same agreement.
[This space intentionally left blank.]
12
<PAGE> 14
IN WITNESS WHEREOF, BMG and Lobdell Holdings have caused this Agreement
to be executed as of the date first written above by their respective officers
thereunto duly authorized.
BMG-MI, INC.
By:
---------------------------
Name: Selwyn Isakow
Title: President
LOBDELL HOLDINGS, INC.
By:
---------------------------
Name: Selwyn Isakow
Title: President
13
<PAGE> 1
EXHIBIT 12
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
10/28/95- 4/1/95 -
3/31/97 3/31/97 10/27/95 3/31/95 3/31/94 3/31/93
------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Income (loss) before income taxes $2,614 $ 617 ($2,822) ($1,615) $2,133 $2,177
ADD:
Portion of rents
representative of interest factor 440 54 73 143 105 107
Interest on indebtedness 3,388 1,096 1,048 1,267 1,658 1,904
------ ------ -------- ------- ------- ------
$6,442 $1,767 ($1,701) ($205) $3,896 $4,188
====== ====== ======== ======= ======= =======
FIXED CHARGES
Portion of rents
representative of interest factor 440 54 73 143 105 107
Interest on indebtedness 3,388 1,096 1,048 1,267 1,658 1,904
------ ------ -------- ------- ------- ------
$3,828 $1,150 $1,121 $1,410 $1,763 $2,011
====== ====== ======== ======= ======= ======
Ratio of Earnings to Fixed Charges 1.7 1.5 -- -- 2.2 2.1
====== ====== ======== ======= ======= ======
Deficiency of Earnings over fixed charges ($2,822) ($1,615)
======== =======
</TABLE>
<PAGE> 1
EXHIBIT 21
Subsidiaries of the Registrant
1. Lobdell Emery Corporation
2. Parallel Group International, Inc.
3. Lewis Emery Capital Corporation
4. Concept Management Corporation
5. Creative Fabrication Corporation
6. Laserweld International, L.L.C.
7. Winchester Fabrication Corporation
8. BMG Holdings, Inc.
9. BMG North America Limited
10. 829500 Ontario Limited
11. 976459 Ontario Limited
12. HI Acquisition, Inc.
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in the Prospectus constituting part of this
Registration Statement on Form S-4 of Oxford Automotive, Inc. of our report
dated May 19, 1997, except as to Notes 3 and 12 which are as of July 15, 1997,
relating to the financial statements of Oxford Automotive, Inc., as of and for
the year ended March 31, 1997, which appears in such Prospectus. We also
consent to the application of such report to the Financial Statement Schedule
for the year ended March 31, 1997 listed under Item 21 of this Registration
Statement when such schedule is read in conjunction with the financial
statements referred to in our report. The audit referred to in such report
also included this schedule. We also consent to the references to us under the
headings "Experts" and "Selected Consolidated Historical Financial Data" in
such Prospectus. However, it should be noted that Price Waterhouse LLP has not
prepared or certified such "Selected Consolidated Historical Financial Data."
PRICE WATERHOUSE LLP
Detroit, Michigan
July 31, 1997
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in the Prospectus constituting part of this
Registration Statement on Form S-4 of Oxford Automotive, Inc. of our report
dated May 19, 1997 relating to the financial statements of Lobdell Emery
Corporation, as of December 31, 1996 and 1995 and for each year in the
three-year period ended December 31, 1996, which appears in such Prospectus.
We also consent to the reference to us under the heading "Experts" in such
Prospectus.
PRICE WATERHOUSE LLP
Detroit, Michigan
July 31, 1997
<PAGE> 1
EXHIBIT 23.3
[DELOITTE & TOUCHE LETTERHEAD]
CONSENT OF INDEPENDENT AUDITORS
We consent to the use in this Registration Statement on Form S-4 of Oxford
Automotive, Inc. of our report dated May 21, 1996, appearing in the Prospectus,
which is a part of this Registration Statement, and to the references to us
under the headings "Experts" and "Selected Consolidated Historical Financial
Data" in such Prospectus.
Our audits of the financial statements referred to in our aforementioned report
also include the financial statement schedule of Oxford Automotive, Inc. and
BMG North America Limited, for the periods October 28, 1995 to March 31, 1996
and April 1, 1995 to October 27, 1995 and for the year ended March 31, 1995
listed in Item 21. This financial statement schedule is the responsibility of
the Corporation's management. Our responsibility is to express an opinion
based on our audits. In our opinion, such financial statement schedule, when
considered in relation to the basic financial statements taken as a whole,
present fairly in all material respects the information set forth therein.
DELOITTE & TOUCHE
Chartered Accountants
Kitchener, Ontario
July 29, 1997
<PAGE> 1
EXHIBIT 25
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION
305(B)(2)
----------------------
FIRST TRUST
NATIONAL ASSOCIATION
(EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS CHARTER)
36-4046888
(I.R.S. EMPLOYER
IDENTIFICATION NO.)
535 GRISWOLD STREET SUITE 740
BUHL BUILDING
DETROIT, MICHIGAN 48226
(ADDRESS OF PRINCIPAL EXECUTIVE (ZIP CODE)
OFFICES)
----------------------
NAN L. PACKARD
FIRST TRUST NATIONAL ASSOCIATION
BUHL BUILDING
535 GRISWOLD, STE. 740
DETROIT, MI 48226
(NAME, ADDRESS, AND TELEPHONE NUMBER OF AGENT FOR SERVICE)
----------------------
OXFORD AUTOMOTIVE, INC.
(EXACT NAME OF OBLIGOR AS SPECIFIED IN ITS CHARTER)
MICHIGAN 38-3262809
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
2365 FRANKLIN ROAD
BLOOMFIELD HILLS, MI 48203 48203
(ADDRESS OF PRINCIPAL EXECUTIVE (ZIP CODE)
OFFICES)
10 1/8% SENIOR SUBORDINATED NOTES DUE 2007
(TITLE OF INDENTURE SECURITIES)
===============================================================================
<PAGE> 2
ITEM 1. GENERAL INFORMATION.
FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:
(A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH IT
IS SUBJECT.
Comptroller of the Currency, Washington, D.C.
(B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Yes.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH AFFILIATION.
The obligor is not an affiliate of the trustee.
ITEM 3. VOTING SECURITIES OF THE TRUSTEE.
FURNISH THE FOLLOWING INFORMATION AS TO EACH CLASS OF VOTING SECURITIES OF
THE TRUSTEE:
AS OF APRIL 24, 1997
<TABLE>
<CAPTION>
COL. B
COL. A AMOUNT
TITLE OF CLASS OUTSTANDING
-------------- -----------
<S> <C>
</TABLE>
Not applicable by virtue of response to Item 13.
ITEM 4. TRUSTEESHIPS UNDER OTHER INDENTURES.
IF THE TRUSTEE IS A TRUSTEE UNDER ANOTHER INDENTURE UNDER WHICH ANY OTHER
SECURITIES, OR CERTIFICATES OF INTEREST OR PARTICIPATION, IN ANY OTHER
SECURITIES, OF THE OBLIGOR ARE OUTSTANDING, FURNISH THE FOLLOWING INFORMATION:
(A) TITLE OF THE SECURITIES OUTSTANDING UNDER EACH SUCH OTHER INDENTURE.
Not applicable by virtue of response to Item 13.
(B) A BRIEF STATEMENT OF THE FACTS RELIED UPON AS A BASIS FOR THE CLAIM THAT
NO CONFLICTING INTEREST WITHIN THE MEANING OF SECTION 310(B)(1) OF THE
ACT ARISES AS A RESULT OF THE TRUSTEESHIP UNDER ANY SUCH OTHER
INDENTURE, INCLUDING A STATEMENT AS TO HOW THE INDENTURE SECURITIES WILL
RANK AS COMPARED WITH THE SECURITIES ISSUED UNDER SUCH OTHER INDENTURE.
Not applicable by virtue of response item 13.
ITEM 5. INTERLOCKING DIRECTORATES AND SIMILAR RELATIONSHIPS WITH THE OBLIGOR OR
UNDERWRITERS.
IF THE TRUSTEE OR ANY OF THE DIRECTORS OR EXECUTIVE OFFICERS OF THE TRUSTEE
IS A DIRECTOR, OFFICER, PARTNER, EMPLOYEE, APPOINTEE OR REPRESENTATIVE OF THE
OBLIGOR OR OF ANY UNDERWRITER FOR THE OBLIGOR, IDENTIFY EACH SUCH PERSON HAVING
ANY SUCH CONNECTION AND STATE THE NATURE OF EACH SUCH CONNECTION.
Not applicable by virtue of response to Item 13.
1
<PAGE> 3
FURNISH THE FOLLOWING INFORMATION AS TO THE VOTING SECURITIES OF THE
TRUSTEE OWNED BENEFICIALLY BY THE OBLIGOR AND EACH DIRECTOR, PARTNER AND
EXECUTIVE OFFICER OF THE OBLIGOR.
AS OF APRIL 24, 1997
<TABLE>
<CAPTION>
COL. A COL. B COL. C COL. D
PERCENTAGE
OF VOTING
SECURITIES
REPRESENTED
BY AMOUNT
NAME OF TITLE OF AMOUNT OWNED GIVEN
OWNER CLASS BENEFICIALLY IN COL. C
- -------- -------- ------------ ------------
<S> <C> <C> <C>
</TABLE>
Not applicable by virtue of response to Item 13.
ITEM 7. VOTING SECURITIES OF THE TRUSTEE OWNED BY UNDERWRITERS OR THEIR
OFFICIALS.
FURNISH THE FOLLOWING INFORMATION AS TO THE VOTING SECURITIES OF THE
TRUSTEE OWNED BENEFICIALLY BY EACH UNDERWRITER FOR THE OBLIGOR AND EACH
DIRECTOR, PARTNER, AND EXECUTIVE OFFICER OF EACH SUCH UNDERWRITER.
AS OF APRIL 24, 1997
<TABLE>
<CAPTION>
COL. A COL. B COL. C COL. D
PERCENTAGE
OF VOTING
SECURITIES
REPRESENTED
BY AMOUNT
NAME OF TITLE OF AMOUNT OWNED GIVEN
OWNER CLASS BENEFICIALLY IN COL. C
- -------- -------- ------------ ------------
<S> <C> <C> <C>
</TABLE>
Not applicable by virtue of response to Item 13.
ITEM 8. SECURITIES OF THE OBLIGOR OWNED OR HELD BY THE TRUSTEE.
FURNISH THE FOLLOWING INFORMATION AS TO SECURITIES OF THE OBLIGOR OWNED
BENEFICIALLY OR HELD AS COLLATERAL SECURITY FOR OBLIGATIONS IN DEFAULT BY THE
TRUSTEE:
AS OF APRIL 24, 1997
<TABLE>
<CAPTION>
COL. A COL. B COL. C COL. D
WHETHER
THE
SECURITIES
ARE VOTING
OR AMOUNT OWNED BENEFICIALLY OR PERCENT OF CLASS
TITLE OF NONVOTING HELD AS COLLATERAL SECURITY REPRESENTED BY AMOUNT
CLASS SECURITIES FOR OBLIGATIONS IN DEFAULT GIVEN IN COL. C
- -------- ---------- --------------------------- ---------------------
<S> <C> <C> <C>
</TABLE>
Not applicable by virtue of response to Item 13.
2
<PAGE> 4
ITEM 9. SECURITIES OF UNDERWRITERS OWNED OR HELD BY THE TRUSTEE.
IF THE TRUSTEE OWNS BENEFICIALLY OR HOLDS AS COLLATERAL SECURITY FOR
OBLIGATIONS IN DEFAULT ANY SECURITIES OF AN UNDERWRITER FOR THE OBLIGOR,
FURNISH THE FOLLOWING INFORMATION AS TO EACH CLASS OF SECURITIES OF SUCH
UNDERWRITER ANY OF WHICH ARE SO OWNED OR HELD BY THE TRUSTEE.
AS OF APRIL 24, 1997
<TABLE>
<CAPTION>
COL. A COL. B COL. C COL. D
AMOUNT OWNED
BENEFICIALLY OR HELD PERCENT OF CLASS
NAME OF ISSUER AS COLLATERAL SECURITY REPRESENTED BY
AND TITLE OF AMOUNT FOR OBLIGATIONS IN AMOUNT GIVEN IN
CLASS OUTSTANDING DEFAULT BY TRUSTEE COL. C
- ----------------- --------------- ---------------------- -----------------
<S> <C> <C> <C>
</TABLE>
Not applicable by virtue of response to Item 13.
ITEM 10. OWNERSHIP OR HOLDINGS BY THE TRUSTEE OF VOTING SECURITIES OF CERTAIN
AFFILIATES OR SECURITY HOLDERS OF THE OBLIGOR.
IF THE TRUSTEE OWNS BENEFICIALLY OR HOLDS AS COLLATERAL SECURITY FOR
OBLIGATIONS IN DEFAULT VOTING SECURITIES OF A PERSON WHO, TO THE KNOWLEDGE OF
THE TRUSTEE (1) OWNS 10 PERCENT OR MORE OF THE VOTING SECURITIES OF THE OBLIGOR
OR (2) IS AN AFFILIATE, OTHER THAN A SUBSIDIARY, OF THE OBLIGOR, FURNISH THE
FOLLOWING INFORMATION AS TO THE VOTING SECURITIES OF SUCH PERSON.
AS OF APRIL 24, 1997
<TABLE>
<CAPTION>
COL. A COL. B COL. C COL. D
AMOUNT OWNED
BENEFICIALLY OR HELD PERCENT OF CLASS
NAME OF ISSUER AS COLLATERAL SECURITY REPRESENTED BY
AND TITLE OF AMOUNT FOR OBLIGATIONS IN AMOUNT GIVEN IN
CLASS OUTSTANDING DEFAULT BY TRUSTEE COL. C
- ----------------- --------------- ---------------------- -----------------
<S> <C> <C> <C>
</TABLE>
Not applicable by virtue of response to Item 13.
ITEM 11. OWNERSHIP OF HOLDINGS BY THE TRUSTEE OR ANY SECURITIES OR A PERSON
OWING 50 PERCENT OR MORE OF THE VOTING SECURITIES OF THE OBLIGOR.
IF THE TRUSTEE OWNS BENEFICIALLY OR HOLDS AS COLLATERAL SECURITY FOR
OBLIGATIONS IN DEFAULT ANY SECURITIES OR A PERSON WHO, TO THE KNOWLEDGE OF THE
TRUSTEE, OWNS 50 PERCENT OR MORE OF THE VOTING SECURITIES OF THE OBLIGOR,
FURNISH THE FOLLOWING INFORMATION AS TO EACH CLASS OF SECURITIES OF SUCH PERSON
ANY OF WHICH ARE SO OWNED OR HELD BY THE TRUSTEE.
AS OF APRIL 24, 1997
<TABLE>
<CAPTION>
COL. A COL. B COL. C COL. D
AMOUNT OWNED
BENEFICIALLY OR HELD PERCENT OF CLASS
NAME OF ISSUER AS COLLATERAL SECURITY REPRESENTED BY
AND TITLE OF AMOUNT FOR OBLIGATIONS IN AMOUNT GIVEN IN
CLASS OUTSTANDING DEFAULT BY TRUSTEE COL. C
- ----------------- --------------- ---------------------- -----------------
<S> <C> <C> <C>
</TABLE>
Not applicable by virtue of response to Item 13.
3
<PAGE> 5
ITEM 12. INDEBTEDNESS OF THE OBLIGOR TO THE TRUSTEE.
EXCEPT AS NOTED IN THE INSTRUCTIONS, IF THE OBLIGOR IS INDEBTED TO THE
TRUSTEE, FURNISH THE FOLLOWING INFORMATION:
AS OF APRIL 24, 1997
<TABLE>
<CAPTION>
COL. A COL. B COL. C
NATURE OF INDEBTEDNESS AMOUNT OUTSTANDING DATE DUE
- ---------------------- ------------------ --------
<S> <C> <C>
Not applicable by virtue of response to Item 13.
</TABLE>
ITEM 13. DEFAULTS BY THE OBLIGOR.
(A) STATE WHETHER THERE IS OR HAS BEEN A DEFAULT WITH RESPECT TO THE
SECURITIES UNDER THIS INDENTURE. EXPLAIN THE NATURE OF ANY SUCH DEFAULT.
There is not nor has there been a default with respect to the
securities under this indenture.
(B) IF THE TRUSTEE IS A TRUSTEE UNDER ANOTHER INDENTURE UNDER WHICH ANY
OTHER SECURITIES; OR CERTIFICATES OF INTEREST OR PARTICIPATION IN ANY OTHER
SECURITIES, OF THE OBLIGOR ARE OUTSTANDING, OR IS TRUSTEE FOR MORE THAN ONE
OUTSTANDING SERIES OF SECURITIES UNDER THE INDENTURE, STATE WHETHER THERE HAS
BEEN A DEFAULT UNDER ANY SUCH INDENTURE OR SERIES. IDENTIFY THE INDENTURE OR
SERIES AFFECTED, AND EXPLAIN THE NATURE OR ANY SUCH DEFAULT.
There is not nor has there been a default with respect to the
securities under this indenture. The trustee is not a trustee under other
indentures under which securities issued by the obligor are outstanding.
ITEM 14. AFFILIATIONS WITH UNDERWRITERS.
IF ANY UNDERWRITER IS AN AFFILIATE OF THE TRUSTEE OR THE TRUSTEES, DESCRIBE
EACH SUCH AFFILIATION.
Not applicable by virtue of response to Item 13.
ITEM 15. FOREIGN TRUSTEE.
IDENTIFY THE ORDER OR RULE PURSUANT TO WHICH THE FOREIGN TRUSTEE IS
AUTHORIZED TO ACT AS SOLE TRUSTEE UNDER INDENTURES QUALIFIED OR TO BE QUALIFIED
UNDER THE ACT.
Not applicable.
ITEM 16. LIST OF EXHIBITS.
LIST BELOW ALL EXHIBITS FILED AS A PART OF THIS STATEMENT OF ELIGIBILITY.
1. A copy of the Articles of Association of First Trust National
Association as now in effect, incorporated herein by reference to
Exhibit 1 to T-1; Registration No. 333-19025.
2. A copy of the certificate of authority to commence business,
incorporated herein by reference to Exhibit 2 to T-1, Registration No.
33-64175.
3. A copy of the certificate of authority to exercise corporate trust
powers, incorporated herein by reference to Exhibit 3 to T-1.
Registration No. 33-64175.
4. A copy of the existing By-Laws of First Trust National Association
as now in effect incorporated by reference to Exhibit 4 to T-1;
Registration No. 333-26727.
4
<PAGE> 6
5. Not applicable by virtue of response to Item 13.
6. The consent of the trustee required by Section 321(b) of the
Trust Indenture Act of 1939, incorporated herein by reference of Exhibit 6 to
T-1; Registration No. 33-64175.
7. A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its supervising or examining
authority, filed herewith.
8. Not applicable.
9. Not applicable.
SIGNATURE
PURSUANT TO THE REQUIREMENTS OF THE TRUST INDENTURE ACT OF 1939, THE
TRUSTEE, FIRST TRUST NATIONAL ASSOCIATION, A NATIONAL BANKING ASSOCIATION
ORGANIZED AND EXISTING UNDER THE LAWS OF THE UNITED STATES OF AMERICA, HAS DULY
CAUSED THIS STATEMENT OF ELIGIBILITY TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED, THEREUNTO DULY AUTHORIZED, ALL IN THE CITY OF DETROIT, AND STATE
OF MICHIGAN, AS OF THE 24TH DAY OF APRIL, 1997.
First Trust National Association
By /s/ Nan L. Packard
-----------------------------------
Nan L. Packard
Assistant Vice President
<PAGE> 7
EXHIBIT 7
Consolidated Report of Condition for Insured Commercial and State-Chartered
Savings Banks for March 31, 1997
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding as of the last business day of the
quarter.
Schedule RC - Balance Sheet
<TABLE>
Dollar Amounts in Thousands
- ------------------------------------------------------------------------------------------------------------------------------
ASSETS
<S> <C> <C> <C> <C>
1. Cash and balances due from depository institutions (from Schedule RC-A): RCON
a. Noninterest-bearing balances and currency and coin (1) ________________________ 0081 . . 54,767 1.a
b. Interest-bearing balances (2) _________________________________________________ 0071 . . 0 1.b
2. Securities:
a. Held-to-maturity securities (from Schedule RC-B, column A) ____________________ 1754 . . 0 2.a
b. Available-for-sale securities (from Schedule RC-B, column D) __________________ 1773 . . 3,205 2.b
3. Federal funds sold and securities purchased under agreements to resell ___________ 1350 . . 0 3.
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income RCON
(from Schedule RC-C) _____________________________ 2122 . . 0 . . . . . . . 4.a
b. LESS: Allowance for loan and lease losses _______ 3123 . . 0 . . . . . . . 4.b
c. LESS: Allocated transfer risk reserve ___________ 3128 . . 0 . . . . . . . 4.c
d. Loans and leases, net of unearned income,
allowance, and reserve (item 4.a minus 4.b and 4.c) ____________________________ 2125 . . 0 4.d
5. Trading assets ____________________________________________________________________ 3545 . . 0 5.
6. Premises and fixed assets (including capitalized leases) __________________________ 2145 . . 126 6.
7. Other real estate owned (from Schedule RC-M) ______________________________________ 2150 . . 0 7.
8. Investments in unconsolidated subsidiaries and associated companies (from
Schedule RC-M) ____________________________________________________________________ 2130 . . 0 8.
9. Customers' liability to this bank on acceptances outstanding ______________________ 2155 . . 0 9.
10. Intangible assets (from Schedule RC-M) ____________________________________________ 2143 . . 48,568 10.
11. Other assets (from Schedule RC-F) _________________________________________________ 2160 . . 2,720 11.
12. Total assets (sum of items 1 through 11) __________________________________________ 2170 . . 109,386 12.
</TABLE>
______________
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
<TABLE>
Schedule RC - Continued
Dollar Amounts in Thousands
- -------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
<S> <C> <C> <C> <C>
13. Deposits:
a. In domestic offices (sum of totals of RCON
columns A and C from Schedule RC-E) ___________________________________________________ 2200 . . 0 13.a
RCON
(1) Noninterest-bearing (1) _________________ 6631 . . 0 . . . . . . 13.a.1
(2) Interest-bearing ________________________ 6636 . . 0 . . . . . . 13.a.2
b. In foreign offices, Edge and Agreement subsidiaries, and IBFs _________________________ . . . . . .
(1) Noninterest-bearing _______________________________________________________________ . . . . . .
(2) Interest-bearing __________________________________________________________________ . . . . . .
14. Federal funds purchased and securities sold under agreement to repurchase ________________ 2800 . . 0 14.
15. a. Demand notes issued to the U.S. Treasury ______________________________________________ 2840 . . 0 15.a
b. Trading liabilities ___________________________________________________________________ 3548 . . 0 15.b
16. Other borrowed money (includes mortgage indebtedness and obligations under
capitalized leases):
a. With a remaining maturity of one year or less _________________________________________ 2332 . . 0 16.a
b. With a remaining maturity of more than one year _______________________________________ 2333 . . 0 16.b
17. Not applicable
18. Bank's liability on acceptances executed and outstanding _________________________________ 2920 . . 0 18.
19. Subordinated notes and debentures (2) ____________________________________________________ 3200 . . 0 19.
20. Other liabilities (from Schedule RC-G) ___________________________________________________ 2930 . . 2,216 20.
21. Total liabilities (sum of items 13 through 20) ___________________________________________ 2948 . . 2,216 21.
22. Not applicable
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus ____________________________________________ 3838 . . 0 23.
24. Common stock _____________________________________________________________________________ 3230 . . 1,000 24.
25. Surplus (exclude all surplus related to preferred stock) _________________________________ 3839 . . 106,712 25.
26. a. Undivided profits and capital reserves ________________________________________________ 3632 . . ( 542) 26.a
b. Net unrealized holding gains (losses) on available-for-sale securities ________________ 8434 . . 0 26.b
27. Cumulative foreign currency translation adjustments ______________________________________ . . . . .
28. Total equity capital (sum of items 23 through 27) ________________________________________ 3210 . . 107,170 28.
29. Total liabilities, limited-life preferred stock, and equity capital (sum of
items 21 and 28) _________________________________________________________________________ 3300 . . 109,386 29.
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below that
best describes the most comprehensive level of auditing work performed for
the bank by independent external auditors as of any date during 1996 _______________________________________ 6724 . .2 M.1
1 = Independent audit of the bank conducted in accordance 4 = Directors' examination of the bank performed by other
with generally accepted auditing standards by a certified external auditors (may be required by state chartering
public accounting firm which submits a report on the bank authority)
2 = Independent audit of the bank's parent holding company 5 = Review of the bank's financial statements by external
conducted in accordance with generally accepted auditing auditors
standards by a certified public accounting firm which 6 = Compilation of the bank's financial statements by
submits a report on the consolidated holding company (but external auditors
not on the bank separately) 7 = Other audit procedures (excluding tax preparation work)
3 = Directors' examination of the bank conducted in accordance 8 = No external audit work
with generally accepted auditing standards by a certified
public accounting firm (may be required by state chartering
authority)
</TABLE>
_______
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
(2) Includes limited life preferred stock and related surplus.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S AUDITED FINANCIAL STATEMENTS AS OF AND FOR THE PERIOD ENDING MARCH 31,
1997, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
</LEGEND>
<CIK> 0001040475
<NAME> OXFORD AUTOMOTIVE, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> MAR-31-1997
<PERIOD-START> MAR-31-1996
<PERIOD-END> MAR-31-1997
<CASH> 9,671
<SECURITIES> 0
<RECEIVABLES> 47,626
<ALLOWANCES> 1,272
<INVENTORY> 13,411
<CURRENT-ASSETS> 83,304
<PP&E> 149,545
<DEPRECIATION> 4,920
<TOTAL-ASSETS> 246,461
<CURRENT-LIABILITIES> 76,771
<BONDS> 0
39,300
0
<COMMON> 1,050
<OTHER-SE> 1,291
<TOTAL-LIABILITY-AND-EQUITY> 246,461
<SALES> 136,861
<TOTAL-REVENUES> 139,062
<CGS> 125,375
<TOTAL-COSTS> 133,060
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,388
<INCOME-PRETAX> 2,614
<INCOME-TAX> 1,065
<INCOME-CONTINUING> 1,549
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,549
<EPS-PRIMARY> 9.37
<EPS-DILUTED> 9.37
</TABLE>
<PAGE> 1
EXHIBIT 99.1
OXFORD AUTOMOTIVE, INC.
LETTER OF TRANSMITTAL
10 1/8% SENIOR SUBORDINATED NOTES DUE 2007
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON _________,
1997, UNLESS EXTENDED (THE "EXPIRATION DATE"). OLD NOTES TENDERED IN
THE EXCHANGE OFFER MAY BE WITHDRAWN AT ANY TIME PRIOR TO THE EXPIRATION DATE.
Deliver to the Exchange Agent:
FIRST TRUST NATIONAL ASSOCIATION
<TABLE>
<S><C>
By Hand (New York depository only): By Hand (all others):
First Trust of New York
100 Wall Street, 20th Floor First Trust National Association
New York, NY 10005 Fourth Floor - Bond Drop Window
Attention: Cathy Donohue 180 East Fifth Street
St. Paul, MN 55101
By Registered, Certified or Overnight Mail: By First Class Mail:
First Trust National Association First Trust National Association
Attn: Specialized Finance P. O. Box 64485
180 East Fifth Street St. Paul, MN 55101
St. Paul, MN 55101
</TABLE>
By Facsimile:
(For Eligible Institutions Only)
(612) 244-1537
Telephone Number
(800) 934-6802 Bondholder Services
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR
TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER THAN THE ONE LISTED
ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. THE INSTRUCTIONS ACCOMPANYING THIS
LETTER OF TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF
TRANSMITTAL IS COMPLETED.
HOLDERS WHO WISH TO BE ELIGIBLE TO RECEIVE NEW NOTES FOR THEIR OLD NOTES
PURSUANT TO THE EXCHANGE OFFER MUST VALIDLY TENDER (AND NOT WITHDRAW) THEIR OLD
NOTES TO THE EXCHANGE AGENT PRIOR TO THE EXPIRATION DATE.
The undersigned hereby acknowledges receipt and review of the Prospectus
dated ___________, 1997 (the "Prospectus") of Oxford Automotive, Inc., a
Michigan corporation (the "Company") and this Letter of Transmittal (the
"Letter of Transmittal"), which together describe the Company's offer (the
"Exchange Offer") to exchange its 10 1/8% Senior Subordinated Notes Due 2007
(the "New Notes"), which have been registered under the Securities Act of 1933,
as amended (the "Securities Act"), pursuant to a Registration Statement of
which the Prospectus is a part, for a like principal amount of its issued and
outstanding 10 1/8% Senior Subordinated Notes Due 2007 (the "Old Notes").
Capitalized terms used but not defined herein have the respective meaning given
to them in the Prospectus.
Interest on the New Notes will accrue from the last interest payment date
on which interest was paid on the Old Notes surrendered in exchange or, if no
interest has been paid on the Old Notes, from the date of original issue of the
Old Notes. The Company reserves the right, at any time or from time to time,
to extend the Exchange Offer at its discretion, in which event the term
"Expiration Date" shall mean the latest time and date in which the Exchange
Offer is extended. The Company shall notify the holders of the Old Notes of
any extension by written notice no later than 9:00 A.M., New York City time, on
the next business day after the previously scheduled Expiration Date.
This Letter of Transmittal is to be used by a Holder either if original
Old Notes are to be forwarded herewith or if delivery of Old Notes, if
available, is to be made by book-entry transfer to the account maintained by
the Exchange Agent at The Depository Trust Company ("DTC") pursuant to the
procedures set forth in the Prospectus under the caption "The Exchange Offer --
Book-Entry Transfer." Holders of Old Notes whose Old Notes are not immediately
available, or who are unable to deliver their Old Notes and all other documents
required by this Letter of Transmittal to the Exchange Agent on or prior to the
Expiration Date, or who are unable to complete the procedure for book entry
transfer on a timely basis, must tender their Old Notes according to the
guaranteed delivery procedures set forth in the Prospectus under the caption
"The Exchange Offer -- Guaranteed Delivery Procedures." See Instruction 1.
DELIVERY OF DOCUMENTS TO DTC DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE
AGENT.
The term "Holder" with respect to the Exchange Offer means any person (i)
in whose name Old Notes are registered on the books of the Company or any other
person who has obtained a properly completed bond power from the registered
Holder, or (ii) whose Old Notes are held of record by DTC who desires to
deliver such Old Notes by book-entry transfer at DTC. The undersigned has
completed, executed and delivered this Letter of Transmittal to
<PAGE> 2
indicate the action the undersigned desires to take with respect to the
Exchange Offer. HOLDERS WHO WISH TO TENDER THEIR OLD NOTES MUST COMPLETE THIS
LETTER OF TRANSMITTAL IN ITS ENTIRETY.
The undersigned has checked the appropriate boxes below and signed this
Letter of Transmittal to indicate the action the undersigned desires to take
with respect to the Exchange Offer.
PLEASE READ THE ENTIRE LETTER OF TRANSMITTAL AND THE PROSPECTUS CAREFULLY
BEFORE CHECKING ANY BOX BELOW.
THE INSTRUCTIONS INCLUDED WITH THIS LETTER OF TRANSMITTAL MUST BE
FOLLOWED. QUESTIONS AND REQUESTS FOR ASSISTANCE OR FOR ADDITIONAL COPIES OF
THE PROSPECTUS AND THIS LETTER OF TRANSMITTAL MAY BE DIRECTED TO THE EXCHANGE
AGENT.
List below the Old Notes to which this Letter of Transmittal relates. If
the space below is inadequate, list the registered numbers and principal
amounts on a separate signed schedule and affix the list to this Letter of
Transmittal.
DESCRIPTION OF OLD NOTES TENDERED
<TABLE>
<S> <C> <C> <C>
AGGREGATE
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S) PRINCIPAL AMOUNT PRINCIPAL AMOUNT
EXACTLY AS NAME(S) APPEAR(S) ON NOTE(S) REGISTERED REPRESENTED BY TENDERED**
(PLEASE FILL IN, IF BLANK) NUMBER(S)* NOTE(S) (IF LESS THAN ALL)
- -------------------------------------------- -------------- ------------- -----------------
-------------- ------------- -----------------
-------------- ------------- -----------------
-------------- ------------- -----------------
TOTAL
-------------- ------------- -----------------
</TABLE>
* Need not be completed by book-entry Holders.
** Unless otherwise indicated, any tendering Holder of Old Notes will be
deemed to have tendered the entire aggregate principal amount represented by
such Old Notes. If the space provided is inadequate, list the certificate
numbers and principal amounts on a separate signed schedule and affix the
list to this Letter of Transmittal. All tenders must be in integral
multiples of $1,000.
/ / CHECK HERE IF TENDERED OLD NOTES ARE ENCLOSED HEREWITH.
/ / CHECK HERE IF TENDERED OLD NOTES ARE BEING DELIVERED BY BOOK ENTRY
TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH DTC
AND COMPLETE THE FOLLOWING (FOR USE BY ELIGIBLE INSTITUTIONS ONLY):
Name of Tendering Institution:
-----------------------------------------------
Account Number:
-----------------------------------------------
Transaction Code Number:
-----------------------------------------------
/ / CHECK HERE IF TENDERED OLD NOTES ARE BEING DELIVERED PURSUANT TO A
NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND
COMPLETE THE FOLLOWING (FOR USE BY ELIGIBLE INSTITUTIONS ONLY):
<TABLE>
<S><C>
Name(s) of Registered Holder(s) of Old Notes:
---------------------------------------------
Date of Execution of Notice of Guaranteed Delivery:
---------------------------------------------
Window Ticket Number (if available):
---------------------------------------------
Name of Eligible Institution that Guaranteed Delivery:
---------------------------------------------
Account Number (if delivered by book-entry transfer):
---------------------------------------------
</TABLE>
2
<PAGE> 3
PLEASE SIGN HERE WHETHER OR NOT
OLD NOTES ARE BEING PHYSICALLY TENDERED HEREBY
(COMPLETE ACCOMPANYING SUBSTITUTE FORM W-9)
X____________________________________________________________________________
Date
X____________________________________________________________________________
Signature(s) of Registered Holder(s) or Authorized Signatory Date
Area Code and Telephone Number: __________________________
The above lines must be signed by the registered Holder(s) of Old Notes as
name(s) appear(s) on the Old Notes or on a security position listing, or by
person(s) authorized to become registered Holder(s) by a properly completed
bond power from the registered Holder(s), a copy of which must be transmitted
with this Letter of Transmittal. If the Old Notes to which this Letter of
Transmittal relate are held of record by two or more joint Holders, then all
such Holders must sign this Letter of Transmittal. If signature is by a
trustee, executor, administrator, guardian, attorney-in-fact, officer of a
corporation or other person acting in a fiduciary or representative capacity,
then such person must (i) set forth his or her full title below, and (ii)
unless waived by the Company, submit evidence satisfactory to the Company of
such person's authority so to act. See Instruction 5 regarding the completion
of this Letter of Transmittal, printed below.
Name(s): ___________________________________________
___________________________________________
(Please Type or Print)
Capacity: ___________________________________________
Address: ___________________________________________
(Include Zip Code)
SIGNATURE GUARANTEE
(If Required by Instruction 5)
Certain signatures must be Guaranteed by an Eligible Institution.
Signature(s) Guaranteed by an Eligible Institution:
___________________________________________
Authorized Signature
___________________________________________
Title
___________________________________________
Name of Firm
___________________________________________
Address, Include Zip Code
___________________________________________
Area Code and Telephone Number
3
<PAGE> 4
SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
Subject to the terms and conditions of the Exchange Offer, the undersigned
hereby tenders to the Company for exchange the principal amount of Old Notes
indicated above. Subject to and effective upon the acceptance for exchange of
the principal amount of Old Notes tendered in accordance with this Letter of
Transmittal, the undersigned hereby exchanges, assigns and transfers to the
Company all right, title and interest in and to the Old Notes tendered for
exchange hereby. The undersigned hereby irrevocably constitutes and appoints
the Exchange Agent, the agent and attorney-in-fact of the undersigned (with
full knowledge that the Exchange Agent also acts as the agent of the Company in
connection with the Exchange Offer) with respect to the tendered Old Notes with
full power of substitution to (i) deliver such Old Notes, or transfer ownership
of such Old Notes on the account books maintained by DTC, to the Company and
deliver all accompanying evidences of transfer and authenticity, and (ii)
present such Old Notes for transfer on the books of the Company and receive all
benefits and otherwise exercise all rights of beneficial ownership of such Old
Notes, all in accordance with the terms of the Exchange Offer. The power of
attorney granted in this paragraph shall be deemed to be irrevocable and
coupled with an interest.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, exchange, assign and transfer the Old Notes
tendered hereby and to acquire the New Notes issuable upon the exchange of such
tendered Old Notes, and that the Company will acquire good and unencumbered
title thereto, free and clear of all liens, restrictions, charges and
encumbrances and not subject to any adverse claim, when the same are accepted
for exchange by the Company. The undersigned hereby further represents to the
Company that (i) any New Notes acquired in exchange for Old Notes tendered
hereby are being acquired in the ordinary course of business of the person
receiving such New Notes, (ii) neither the undersigned nor any such other
person is engaging in or intends to engage in a distribution of the New Notes,
(iii) neither the undersigned nor any such other person has an arrangement or
understanding with any person to participate in the distribution of such New
Notes, and (iv) neither the Holder nor any such other person is an "affiliate,"
as defined in Rule 405 under the Securities Act, of the Company or any of its
subsidiaries.
The undersigned also acknowledges that this Exchange Offer is being made
in reliance upon interpretations contained in no-action letters issued to third
parties by the staff of the Securities and Exchange Commission (the
"Commission") that the New Notes issued in exchange for the Old Notes pursuant
to the Exchange Offer may be offered for resale, resold and otherwise
transferred by Holders thereof (other than any such Holder that is an
"affiliate" of the Company within the meaning of Rule 405 under the Securities
Act), without compliance with the registration and prospectus delivery
provisions of the Securities Act, provided that such New Notes are acquired in
the ordinary course of such Holders' business and such Holders are not engaging
in and do not intend to engage in a distribution of the New Notes and have no
arrangement or understanding with any person to participate in a distribution
of such New Notes. If the undersigned or the person receiving the New Notes is
a broker-dealer that is receiving 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, the undersigned acknowledges that it or such other person
will deliver a prospectus in connection with any resale of such New Notes;
however, by so acknowledging and by delivering a prospectus, the undersigned
will not be deemed to admit that the undersigned or such other person is an
"underwriter" within the meaning of the Securities Act. The undersigned
acknowledges that if the undersigned is participating in the Exchange Offer for
the purpose of distributing the New Notes (i) the undersigned cannot rely on
the position of the staff of the Commission in certain no-action letters and,
in the absence of an exemption therefrom, must comply with the registration and
prospectus delivery requirements of the Securities Act in connection with a
secondary resale transaction of the New Notes, in which case the registration
statement must contain the information required by the Securities Act, and (ii)
failure to comply with such requirements in such instance could result in the
undersigned incurring liability under the Securities Act for which the
undersigned is not indemnified by the Company.
If the undersigned or the person receiving the New Notes is an "affiliate"
(as defined in Rule 405 under the Securities Act), the undersigned represents
to the Company that the undersigned understands and acknowledges that the New
Notes may not be offered for resale, resold or otherwise transferred by the
undersigned or such other person without registration under the Securities Act
or an exemption therefrom.
The undersigned will, upon request, execute and deliver any additional
documents deemed by the Exchange Agent or the Company to be necessary or
desirable to complete the exchange, assignment and transfer of the Old Notes
tendered hereby, including the transfer of such Old Notes on the account books
maintained by DTC. All authority conferred or agreed to be conferred by this
Letter of Transmittal shall survive the death, incapacity or dissolution of the
undersigned, and every obligation of the undersigned under this Letter of
Transmittal shall be binding upon the undersigned's heirs, personal
representatives, successors and assigns. This Letter of Transmittal may be
withdrawn only in accordance with the provisions set forth in the "Exchange
Offer -- Withdrawal Rights" section of the Prospectus.
For purposes of the Exchange Offer, the Company shall be deemed to have
accepted for exchange validly tendered Old Notes when, as and if the Company
gives oral or written notice thereof to the Exchange Agent. Any tendered Old
Notes that are not accepted for exchange pursuant to the Exchange Offer for any
reason will be returned, without expense, to the undersigned at the address
shown below or at a different address as may be indicated herein under "Special
Delivery Instructions" as promptly as practicable after the Expiration Date
The undersigned acknowledges that the Company's acceptance of properly
tendered Old Notes pursuant to the procedures described under the caption "The
Exchange Offer -- Procedures for Tendering Old Notes" in the Prospectus and in
the instructions hereto will constitute a binding agreement between the
undersigned and the Company upon the terms and subject to the conditions of the
Exchange Offer.
Unless otherwise indicated under "Special Issuance Instructions," please
issue the New Notes issued in exchange for the Old Notes accepted for exchange
and return any Old Notes not tendered or not exchanged, in the
<PAGE> 5
name(s) of the undersigned (or, in either such event, in the case of the Old
Notes tendered by DTC, by credit to the undersigned's account at DTC).
Similarly, unless otherwise indicated under "Special Delivery Instructions,"
please mail or deliver the New Notes issued in exchange for the Old Notes
accepted for exchange and any Old Notes not tendered or not exchanged (and
accompanying documents, as appropriate) to the undersigned at the address shown
below the undersigned's signature(s). In the event that both "Special Issuance
Instructions" and "Special Delivery Instructions" are completed, please issue
the New Notes issued in exchange for the Old Notes accepted for exchange in the
name(s) of, and return any Old Notes not tendered or not exchanged to, the
person(s) so indicated. The undersigned recognizes that the Company has no
obligation pursuant to the "Special Issuance Instructions" and "Special
Delivery Instructions" to transfer any Old Notes from the name of the
registered holder(s) thereof if the Company does not accept for exchange any of
the Old Notes so tendered for exchange.
<TABLE>
<S><C>
SPECIAL ISSUANCE INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 4, 5 AND 6) (SEE INSTRUCTIONS 4, 5 AND 6)
To be completed ONLY (i) if Old Notes in a To be completed ONLY if Old Notes in a
principal amount not tendered, or New principal amount not tendered, or New Notes
Notes issued in exchange for Old Notes issued in exchange for Old Notes accepted for
accepted for exchange, are to be issued in exchange, are to be mailed or delivered to
the name of someone other than the someone other than the undersigned, or to the
undersigned, or (ii) if Old Notes tendered undersigned at an address other than that
by book-entry transfer which are not shown below the undersigned's signature.
exchanged are to be returned by credit to
an account maintained by DTC.
Issue New Notes and/or Old Notes to: Mail or deliver New Notes and/or Old Notes to:
Name(s):________________________________ Name: _____________________________
(Please Type or Print) (Please Type or Print)
Address:________________________________ Address:_____________________________
_______________________________________ ____________________________________
(Include Zip Code) (Include Zip Code)
_______________________________________
(Tax Identification or Social Security No.)
(Complete Substitute Form W-9)
</TABLE>
2
<PAGE> 6
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER
1. Delivery of this Letter of Transmittal and Old Notes or Book-Entry
Confirmations. All physically delivered Old Notes or any confirmation of a
book-entry transfer to the Exchange Agent's account at DTC of Old Notes
tendered by book-entry transfer (a "Book-Entry Confirmation"), as well as a
properly completed and duly executed copy of this Letter of Transmittal or
facsimile hereof, and any other documents required by this Letter of
Transmittal, must be received by the Exchange Agent at its address set forth
herein prior to 5:00 p.m., New York City time, on the Expiration Date. The
method of delivery of the tendered Old Notes, this Letter of Transmittal and
all other required documents to the Exchange Agent is at the election and risk
of the Holder and, except as otherwise provided below, the delivery will be
deemed made only when actually received or confirmed by the Exchange Agent. If
such delivery is by mail, it is recommended that registered mail, properly
insured, with return receipt requested, be used. In all cases, sufficient time
should be allowed to assure delivery to the Exchange Agent before the
Expiration Date. No Letter of Transmittal or Old Notes should be sent to the
Company. See "The Exchange Offer" section of the Prospectus.
2. Guaranteed Delivery Procedures. Holders who wish to tender their Old
Notes and (i) whose Old Notes are not immediately available, or (ii) who cannot
deliver their Old Notes, this Letter of Transmittal or any other documents
required hereby to the Exchange Agent prior to the Expiration Date, or (iii)
who are unable to complete the procedure for book-entry transfer on a timely
basis, must tender their Old Notes according to the guaranteed delivery
procedures set forth in the Prospectus. Pursuant to such procedures: (i) such
tender must be made by or through a firm which is a member of a registered
national securities exchange or of the National Association of Securities
Dealers Inc. or a commercial bank or a trust company having an office or
correspondent in the United States (an "Eligible Institution"); (ii) prior to
the Expiration Date, the Exchange Agent must have received from the 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 of the Old Notes, the registration number(s) of
such Old Notes and the principal amount of Old Notes tendered, stating that the
tender is being made thereby and guaranteeing that this Letter of Transmittal
(or facsimile hereof) and all other documents required by this Letter, together
with certificates for the Old Notes, in proper form for transfer (or a Book
entry Confirmation) in proper form for transfer, will be received by the
Exchange Agent within three (3) New York Stock Exchange trading days after the
Expiration Date.
Any Holder of Old Notes who wishes to tender Old Notes pursuant to the
guaranteed delivery procedures described above must ensure that the Exchange
Agent receives the Notice of Guaranteed Delivery prior to 5:00 p.m., New York
City time, on the Expiration Date. Upon request of 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.
See "The Exchange Offer - Guaranteed Delivery Procedures" section of
the Prospectus.
3. Tender by Holder. Only a Holder of Old Notes may tender such Old Notes
in the Exchange Offer. Any beneficial Holder of Old Notes who is not the
registered Holder and who wishes to tender should arrange with the registered
Holder to execute and deliver this Letter of Transmittal on his behalf or must,
prior to completing and executing this Letter of Transmittal and delivering his
Old Notes, either make appropriate arrangements to register ownership of the
Old Notes in such Holder's name or obtain a properly completed bond power from
the registered Holder.
4. Partial Tenders. Tenders of Old Notes will be accepted only in
integral multiples of $1,000. If less than the entire principal amount of any
Old Notes is tendered, the tendering Holder should fill in the principal amount
tendered in the fourth column, entitled "Principal Amount Tendered," of the box
entitled "Description of Old Notes Tendered" above. The entire principal
amount of Old Notes delivered to the Exchange Agent will be deemed to have been
tendered unless otherwise indicated. If the entire principal amount of all Old
Notes is not tendered, then Old Notes for the principal amount of Old Notes not
tendered and New Notes issued in exchange for any Old Notes accepted will be
sent to the Holder at his or her registered address, unless a different address
is provided in the appropriate box on this Letter of Transmittal, promptly
after the Old Notes are accepted for exchange.
5. Signatures on This Letter of Transmittal; Bond Powers and Endorsements;
Guarantee of Signatures. If this Letter of Transmittal (or facsimile hereof)
is signed by the record Holder(s) of the Old Notes tendered hereby, the
signature must correspond with the name(s) as written on the face of the Old
Notes without alteration, enlargement or any change whatsoever. If this Letter
of Transmittal is signed by a participant in DTC, the signature must correspond
with the name as it appears on the security position listing as the Holder of
the Old Notes. If any tendered Old Notes are owned of record by two or more
joint owners, all such owners must sign this Letter of Transmittal.
If this Letter of Transmittal (or facsimile hereof) is signed by the
registered Holder or Holders of Old Notes listed and tendered hereby and the
New Notes issued in exchange therefor are to be issued (or any untendered
principal amount of Old Notes is to be reissued) to the registered Holder, the
said Holder need not and should not endorse any tendered Old Notes, nor provide
a separate bond power. In any other case, such Holder must either properly
endorse the Old Notes tendered or transmit a properly completed separate bond
power with this Letter of Transmittal, with the signatures on the endorsement
or bond power guaranteed by an Eligible Institution.
If this Letter of Transmittal (or facsimile hereof) is signed by a
person other than the registered Holder or Holders of any Old Notes listed,
such Old Notes must be endorsed or accompanied by appropriate bond powers, in
each case signed as the name of the registered Holder or Holders appears on
the Old Notes.
If this Letter of Transmittal (or facsimile hereof) or any Old Notes or
bond powers are signed by trustees, executors, administrators, guardians,
attorneys-in-fact, or officers of corporations or others acting in a fiduciary
or representative capacity, such persons should so indicate when signing, and,
unless waived by the Company, evidence satisfactory to the Company of their
authority so to act must be submitted with this Letter of Transmittal.
1
<PAGE> 7
Endorsements on Old Notes or signatures on bond powers required by this
Instruction 5 must be guaranteed by an Eligible Institution.
No signature guarantee is required if (i) this Letter of Transmittal is
signed by the registered holder(s) of the Old Notes tendered herewith (or by a
participant in DTC whose name appears on a security position listing as the
owner of the tendered Old Notes) and the issuance of New Notes (and any Old
Notes not tendered or not accepted) are to be issued directly to such
registered holder(s) (or, if signed by a participant in DTC, any New Notes or
Old Notes not tendered or not accepted are to be deposited to such
participant's account at DTC) and neither the box entitled "Special Delivery
Instructions" nor the box entitled "Special Issuance Instructions" has been
completed, or (ii) such Old Notes are tendered for the account of an Eligible
Institution. In all other cases, all signatures on this Letter of Transmittal
must be guaranteed by an Eligible Institution.
6. Special Issuance and Delivery Instructions. Tendering holders should
indicate, in the applicable box or boxes, the name and address (or account at
DTC) to which New Notes or substitute Old Notes for principal amounts not
tendered or not accepted for exchange are to be issued or sent, if different
from the name and address of the person signing this Letter of Transmittal. In
the case of issuance in a different name, the taxpayer identification or social
security number of the person named must also be indicated.
7. Transfer Taxes. The Company will pay all transfer taxes, if any,
applicable to the exchange of Old Notes pursuant to the Exchange Offer. If,
however, New Notes or Old Notes for principal amounts not tendered or accepted
for exchange are to be delivered to, or are to be registered or issued in the
name of, any person other than the registered Holder of the Old Notes tendered
hereby, or if tendered Old Notes are registered in the name of any person other
than the person signing this Letter of Transmittal, or if a transfer tax is
imposed for any reason other than the exchange of 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 this Letter of Transmittal, the amount of such
transfer taxes will be billed directly to such tendering Holder.
Except as provided in this Instruction 7, it will not be necessary for transfer
tax stamps to be affixed to the Old Notes listed in this Letter of Transmittal.
8. Tax Identification Number. Federal income tax law requires that a
holder of any Old Notes which are accepted for exchange must provide the
Company (as payor) with his, her or its correct taxpayer identification number
("TIN"), which, in the case of a Holder who is an individual is his or her
social security number. If the Company is not provided with the correct TIN or
an adequate basis for exemption, the Holder may be subject to a $50 penalty
imposed by Internal Revenue Service (the "IRS") and payments made with respect
to Old Notes purchased pursuant to the exchange may be subject to backup
withholding at a 31% rate. If withholding results in an over-payment of taxes,
a refund may be obtained. Certain holders (including, among others, all
corporations and certain foreign individuals) are not subject to these backup
withholding and reporting requirements. See the enclosed "Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9" for
additional instructions.
To prevent backup withholding, each exchanging Holder must provide such
Holder's correct TIN by completing the Substitute Form W-9 attached to this
Letter of Transmittal, certifying that (i) the TIN provided is correct (or that
such Holder is awaiting a TIN), and (ii) the Holder is not subject to backup
withholding because (A) the Holder is exempt from backup withholding, (B) the
Holder has not been notified by the IRS that such Holder is subject to backup
withholding as a result of failure to report all interest or dividends, or (C)
the IRS has notified the Holder that such Holder is no longer subject to backup
withholding. If the Old Notes are registered in more than one name or are not
in the name of the actual owner, see the enclosed "Guidelines for Certification
of Taxpayer Identification Number on Substitute Form W-9" for information on
which TIN to report.
The Company reserves the right in its sole discretion to take whatever
steps are necessary to comply with the Company's obligation regarding backup
withholding.
9. Validity of Tenders. All questions as to the validity, form,
eligibility (including time of receipt), and acceptance of tendered Old Notes
will be determined by the Company, in its sole discretion, which determination
will be final and binding. The Company reserves the right to reject any and
all Old Notes not validly tendered or any Old Notes, the Company's acceptance
of which would, in the opinion of the Company or its counsel, be unlawful. The
Company also reserves the right to waive any conditions of the Exchange Offer
or defects or irregularities in tenders of Old Notes as to any ineligibility of
any Holder who seeks to tender Old Notes in the Exchange Offer. The
interpretation of the terms and conditions of the Exchange Offer (including
this Letter of Transmittal and the instructions hereto) by the Company shall be
final and binding on all parties. Unless waived, any defects or irregularities
in connection with tenders of Old Notes must be cured within such reasonable
period of time as the Company shall determine. The Company will use reasonable
efforts to give notification of defects or irregularities with respect to
tenders of Old Notes, but not be under any duty to give such notification nor
shall it incur any liability for failure to give such notification.
10. Waiver of Conditions. The Company reserves the absolute right to
waive, in whole or part, any of the conditions to the Exchange Offer set forth
in the Prospectus.
11. No Conditional Tender. No alternative, conditional, irregular or
contingent tender of Old Notes or transmittal of this Letter of Transmittal
will be accepted. All tendering Holders, by execution of this Letter of
Transmittal, shall waive any right to receive notice of acceptance of their
Old Notes for exchange.
12. Mutilated, Lost, Stolen or Destroyed Old Notes. Any Holder whose Old
Notes have been mutilated, lost, stolen or destroyed should contact the
Exchange Agent at the address indicated above for further instructions.
2
<PAGE> 8
13. Requests for Assistance or Additional Copies. Requests for assistance
or for additional copies of the Prospectus or this Letter of Transmittal may be
directed to the Exchange Agent at the address or telephone number set forth on
the cover page of this Letter of Transmittal. Holders may also contact their
broker, dealer, commercial bank, trust company or other nominee for assistance
concerning the Exchange Offer.
14. Acceptance of Tendered Old Notes and Issuance of New Notes; Return of
Old Notes. Subject to the terms and conditions of the Exchange Offer, the
Company will accept for exchange all validly tendered Old Notes as soon as
practicable after the Expiration Date and will issue New Notes therefor as soon
as practicable thereafter. For purposes of the Exchange Offer, the Company
shall be deemed to have accepted tendered Old Notes when, as and if the Company
has given written and oral notice thereof to the Exchange Agent. If any
tendered Old Notes are not exchanged pursuant to the Exchange Offer for any
reason, such unexchanged Old Notes will be returned, without expense, to the
undersigned at the address shown above (or credited to the undersigned's
account at DTC designated above) or at a different address as may be indicated
under the box entitled "Special Delivery Instructions."
15. Withdrawal. Tenders may be withdrawn only pursuant to the limited
withdrawal rights set forth in the Prospectus under the caption "The Exchange
Offer - Withdrawal Rights."
IMPORTANT: THIS LETTER OF TRANSMITTAL OR A MANUALLY SIGNED FACSIMILE
HEREOF, TOGETHER WITH THE OLD NOTES (WHICH MUST BE DELIVERED BY BOOK-ENTRY
TRANSFER OR IN ORIGINAL HARD COPY FORM) OR THE NOTICE OF GUARANTEED DELIVERY
MUST BE RECEIVED BY THE EXCHANGE AGENT PRIOR TO THE EXPIRATION DATE.
IMPORTANT TAX INFORMATION
Under U.S. Federal income tax law, a holder of Old Notes whose Old Notes
are accepted for exchange may be subject to backup withholding unless the
holder provides the Exchange Agent with either (a) (i) such holder's correct
taxpayer identification number ("TIN") on Substitute Form W-9 attached to this
Letter of Transmittal, certifying that the TIN provided on Substitute Form W-9
is correct (or that such holder of Old Notes is awaiting a TIN), or (ii) the
Holder is not subject to backup withholding because (A) the Holder is exempt
from backup withholding, (B) the Holder has not been notified by the IRS that
such Holder is subject to backup withholding as a result of failure to report
all interest or dividends, or (C) the IRS has notified the Holder that such
Holder is no longer subject to backup withholding, or (b) another adequate
basis for exception from backup withholding. If such holder of Old Notes is an
individual, the TIN is such holder's social security member. If the Exchange
Agent is not provided with the correct TIN, the holder of Old Notes may be
subject to certain penalties imposed by the Internal Revenue Service (the
"IRS").
Certain holders of Old Notes (including, among others, all corporations
and certain foreign individuals) are not subject to these backup withholding
and reporting requirements. Exempt holders of Old Notes should indicate their
exempt status on Substitute Form W-9. In order for a foreign individual to
qualify as an exempt recipient, the holder must submit a Form W-8, signed under
penalties of perjury, attesting to that individual's exempt status. A Form W-8
can be obtained from the Exchange Agent. See the enclosed "Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9" for
more instructions.
If backup withholding applies, the Exchange Agent is required to withhold
31% of any such payments made to the holder of Old Notes or other payers.
Backup withholding is not an additional tax. Rather, the tax liability of
persons subject to backup withholding will be reduced by the amount of tax
withheld. If withholding results in an overpayment of taxes, a refund may be
obtained from the IRS.
The box in Part 3 of the Substitute Form W-9 may be checked if the
surrendering holder of Old Notes has not been issued a TIN and has applied for
a TIN or intends to apply for a TIN in the near future. If the box in Part 3
is checked, the holder of Old Notes or other payee must also complete the
Certificate of Awaiting Taxpayer Identification Number below in order to avoid
backup withholding. Notwithstanding that the box in Part 3 is checked and the
Certificate of Awaiting Taxpayer Identification Number is completed, the
Exchange Agent will withhold 31% of all payments made prior to the time a
properly certified TIN is provided to the Exchange Agent.
The holder of Old Notes is required to give the Exchange Agent the TIN
(e.g., social security number or employer identification number) of the record
owner of the Old Notes. If the Old Notes are in more than one name or are not
in the name of the actual owner, consult the enclosed "Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9" for
additional guidance on which number to report.
3
<PAGE> 9
(TO BE COMPLETED BY ALL TENDERING HOLDERS (SEE INSTRUCTION 8))
PAYOR'S NAME: FIRST TRUST NATIONAL ASSOCIATION, AS PAYING AGENT
<TABLE>
<S><C>
SUBSTITUTE PART 1 - PLEASE PROVIDE YOUR TIN IN THE SPACE AT SOCIAL SECURITY NUMBER(S) OR
RIGHT AND CERTIFY BY SIGNING AND DATING BELOW. EMPLOYER IDENTIFICATION
NUMBER(S)
_______________________
FORM W-9 __________________________________________________________________________________________________
DEPARTMENT OF THE
TREASURY PART 2 - FOR PAYEES EXEMPT FROM BACKUP WITHHOLDING, SEE THE ENCLOSED GUIDELINES FOR CERTIFICATION OF
INTERNAL REVENUE TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 AND THEREIN COMPLETE AS INSTRUCTED.
SERVICE ("IRS") ______________________________________________________________________________
PART 3 - AWAITING TIN / /
PAYOR'S REQUEST FOR ______________________________________________________________________________
TAXPAYER IDENTIFICATION
NUMBER ("TIN") CERTIFICATION - UNDER PENALTIES OF PERJURY, I CERTIFY THAT:
(1) THE NUMBER SHOWN ON THIS FORM IS MY CORRECT TAXPAYER IDENTIFICATION NUMBER (OR I AM WAITING FOR A
NUMBER TO BE ISSUED TO ME), AND
(2) I AM NOT SUBJECT TO BACKUP WITHHOLDING BECAUSE (A) I AM EXEMPT FROM BACKUP WITHHOLDING,
OR (B) I HAVE NOT BEEN NOTIFIED BY THE IRS THAT I AM SUBJECT TO BACKUP WITHHOLDING AS A RESULT OF
A FAILURE TO REPORT ALL INTEREST OR DIVIDENDS, OR (C) THE IRS HAS NOTIFIED ME THAT I AM
NO LONGER SUBJECT TO BACKUP WITHHOLDING.
CERTIFICATION RESTRICTIONS - YOU MUST CROSS OUT ITEM (2) ABOVE IF YOU HAVE BEEN NOTIFIED BY THE
IRS THAT YOU ARE CURRENTLY SUBJECT TO BACKUP WITHHOLDING BECAUSE OF UNDERREPORTING INTEREST OR
DIVIDENDS ON YOUR TAX RETURN.
Signature__________________________
Date______________________________
</TABLE>
<PAGE> 1
EXHIBIT 99.2
NOTICE OF GUARANTEED DELIVERY
FOR
10 1/8% SENIOR SUBORDINATED NOTES DUE 2007
OF
OXFORD AUTOMOTIVE, INC.
As set forth in the Prospectus dated __________, 1997 (the "Prospectus"),
of OXFORD AUTOMOTIVE, INC. (the "Company") and in the accompanying Letter of
Transmittal and instructions thereto (the "Letter of Transmittal"), this form
or one substantially equivalent hereto must be used to accept the Company's
Exchange Offer (the "Exchange Offer") to exchange all of its outstanding 10
1/8% Senior Subordinated Notes Due 2007 (the "Old Notes") for its 10 1/8%
Senior Subordinated Notes Due 2007, which have been registered under the
Securities Act of 1933, as amended, if certificates for the Old Notes are not
immediately available or if the Old Notes, the Letter of Transmittal or any
other documents required thereby cannot be delivered to the Exchange Agent, or
the procedure for book-entry transfer cannot be completed, prior to 5:00 P.M.,
New York City time, on the Expiration Date (as defined below). This form may
be delivered by an Eligible Institution by hand or transmitted by facsimile
transmission, overnight courier or mail to the Exchange Agent as set forth
below prior to the Expiration Date. Capitalized terms used but not defined
herein have the meaning given to them in the Prospectus or the Letter of
Transmittal.
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON
______________, 1997, UNLESS THE OFFER IS EXTENDED (THE "EXPIRATION DATE").
TENDERS OF OLD NOTES MAY BE WITHDRAWN AT ANY TIME PRIOR TO 5:00 P.M. NEW YORK
CITY TIME ON THE BUSINESS DAY PRIOR TO THE EXPIRATION DATE.
The Exchange Agent for the Exchange Offer is:
FIRST TRUST NATIONAL ASSOCIATION
By Hand (New York depository only): By Hand (all others):
First Trust of New York
100 Wall Street, 20th Floor First Trust National Association
New York, NY 10005 Fourth Floor - Bond Drop Window
Attention: Cathy Donohue 180 East Fifth Street
St. Paul, MN 55101
By Registered, Certified or Overnight Mail: By First Class Mail:
First Trust National Association First Trust National Association
Attn: Specialized Finance P. O. Box 64485
180 East Fifth Street St. Paul, MN 55101
St. Paul, MN 55101
By Facsimile:
(For Eligible Institutions Only)
(612) 244-1537
Telephone Number
(800) 934-6802 Bondholder Services
<PAGE> 2
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS, OR TRANSMISSION
OF INSTRUCTIONS VIA A FACSIMILE, OTHER THAN AS SET FORTH ABOVE, WILL NOT
CONSTITUTE A VALID DELIVERY.
THIS FORM IS NOT TO BE USED TO GUARANTEE SIGNATURES. IF A SIGNATURE ON
THE LETTER OF TRANSMITTAL TO BE USED TO TENDER OLD NOTES IS REQUIRED TO BE
GUARANTEED BY AN "ELIGIBLE INSTITUTION" UNDER THE INSTRUCTIONS THERETO, SUCH
SIGNATURE GUARANTEE MUST APPEAR IN THE APPLICABLE SPACE PROVIDED IN THE LETTER
OF TRANSMITTAL.
<PAGE> 3
Ladies and Gentlemen:
The undersigned hereby tenders to OXFORD AUTOMOTIVE, INC., a Michigan
corporation (the "Company"), upon the terms and subject to the conditions set
forth in the Prospectus and the Letter of Transmittal (which together
constitute the "Exchange Offer"), receipt of which is hereby acknowledged, the
principal amount of Old Notes set forth below pursuant to the guaranteed
delivery procedures set forth in Instruction 2 of the Letter of Transmittal.
The undersigned understands that tenders of Old Notes will be accepted
only in principal amounts equal to $1,000 or integral multiples thereof. The
undersigned understands that tenders of Old Notes pursuant to the Exchange
Offer may not be withdrawn after 5:00 p.m., New York City time, on the business
day prior to the Expiration Date.
All authority herein conferred or agreed to be conferred by this Notice of
Guaranteed Delivery shall survive the death, incapacity or dissolution of the
undersigned and every obligation of the undersigned under this Notice of
Guaranteed Delivery shall be binding upon the heirs, personal representatives,
executors, administrators, successors, assigns, trustees in bankruptcy and
other legal representatives of the undersigned.
NOTE: SIGNATURES MUST BE PROVIDED WHERE INDICATED BELOW.
<TABLE>
<S><C>
Certificate No(s). for Old Notes (if available) Principal Amount
or Account Number at Book-Entry Facility Represented By Old Notes
___________________________________ _____________________________
___________________________________ _____________________________
</TABLE>
PLEASE SIGN AND COMPLETE
<TABLE>
<S><C>
Signatures of Registered Holder(s) or Date: ______________________
Authorized Signatory: Address: ______________________
_______________________________ ______________________
_______________________________
_______________________________ Area Code and
Name(s) of Registered Holder(s): Telephone No. ______________________
_______________________________
_______________________________
</TABLE>
<PAGE> 4
This Notice of Guaranteed Delivery must be signed by the registered
holder(s) of Old Notes exactly as its (their) name(s) appear on certificates
for Old Notes or on a security position listing as the owner of Old Notes, or
by person(s) authorized to become registered holder(s) by endorsements and
documents transmitted with this Notice of Guaranteed Delivery. If signature is
by a trustee, executor, administrator, guardian, attorney-in-fact, officer or
other person acting in a fiduciary or representative capacity, such person must
provide the following information:
Please print name(s) and address(es)
Name(s): __________________________________
__________________________________
__________________________________
Capacity: __________________________________
Address(es): __________________________________
<PAGE> 5
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a member firm of a registered national securities
exchange or of the National Association of Securities Dealers, Inc., or 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 Securities Exchange Act of 1934, as amended (the "Exchange
Act"), hereby (a) represents that the above named person(s) "own(s)" the Old
Notes tendered hereby within the meaning of Rule 14e-4 under the Exchange Act,
(b) represents that such tender of Old Notes complies with Rule 14e-4 under the
Exchange Act, and (c) guarantees that delivery to the Exchange Agent of
certificates for the Old Notes tendered hereby, in proper form for transfer (or
confirmation of the book-entry transfer of such Old Notes into the Exchange
Agent's Account at the Depository Trust Company, pursuant to the procedures for
book-entry transfer set forth in the Prospectus), with delivery of a properly
completed and duly executed Letter of Transmittal (or manually signed facsimile
thereof) with any required signatures and any other required documents, will be
received by the Exchange Agent at one of its addresses set forth above within
three New York Stock Exchange trading days after the Expiration Date.
THE UNDERSIGNED ACKNOWLEDGES THAT IT MUST DELIVER THE LETTER OF
TRANSMITTAL AND OLD NOTES TENDERED HEREBY TO THE EXCHANGE AGENT WITHIN THE TIME
PERIOD SET FORTH AND THAT FAILURE TO DO SO COULD RESULT IN FINANCIAL LOSS TO
THE UNDERSIGNED.
Name of Firm:________________________________________________________________
Address:_____________________________________________________________________
(Include Zip Code)
Area Code and Telephone Number:______________________________________________
Authorized Signature:________________________________________________________
Name:________________________________________________________________________
Title:_______________________________________________________________________
(Please Type or Print)
Date:_____________________, 1997
DO NOT SEND OLD NOTES WITH THIS FORM; OLD NOTES SHOULD BE SENT WITH YOUR LETTER
OF TRANSMITTAL SO THAT THEY ARE RECEIVED BY THE EXCHANGE AGENT WITHIN THREE NEW
YORK STOCK EXCHANGE TRADING DAYS AFTER THE EXPIRATION DATE.
<PAGE> 6
INSTRUCTIONS FOR NOTICE OF GUARANTEED DELIVERY
1. DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY. A properly completed
and duly executed copy of this Notice of Guaranteed Delivery and any other
documents required by this Notice of Guaranteed Delivery must be received by
the Exchange Agent at its address set forth herein prior to the Expiration
Date. The method of delivery of this Notice of Guaranteed Delivery and any
other required documents to the Exchange Agent is at the election and sole risk
of the holder, and the delivery will be deemed made only when actually received
by the Exchange Agent. If delivery is by mail, registered mail with return
receipt requested, properly insured, is recommended. As an alternative to
delivery by mail the holders may wish to consider using an overnight or hand
delivery service. In all cases, sufficient time should be allowed to assure
timely delivery. For a description of the guaranteed delivery procedures, see
Instruction 2 of the Letter of Transmittal.
2. SIGNATURES ON THIS NOTICE OF GUARANTEED DELIVERY. If this Notice of
Guaranteed Delivery is signed by the registered holder(s) of the Old Notes, the
signature must correspond with the name(s) written on the face of the Old Notes
without alteration, enlargement, or any change whatsoever. If this Notice of
Guaranteed Delivery is signed by a participant of the Book-Entry Transfer
Facility whose name appears on a security position listing as the owner of the
Old Notes, the signature must correspond with the name shown on the security
position listing as the owner of the Old Notes.
If this Notice of Guaranteed Delivery is signed by a person other than
the registered holder(s) of any Old Notes listed or a participant of the
Book-Entry Transfer Facility, this Notice of Guaranteed Delivery must be
accompanied by appropriate bond powers, signed as the name of the registered
holder(s) appears on the Old Notes or signed as the name of the participant
shown on the Book-Entry Transfer Facility's security position listing.
If this Notice of Guaranteed Delivery is signed by a trustee, executor,
administrator, guardian, attorney-in-fact, officer of a corporation, or other
person acting in a fiduciary or representative capacity, such person should so
indicate when signing and submit with the Letter of Transmittal evidence
satisfactory to the Company of such person's authority to so act.
3. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions and requests
for assistance and requests for additional copies of the Prospectus may be
directed to the Exchange Agent at the address specified in the Prospectus.
Holders may also contact their broker, dealer, commercial bank, trust company,
or other nominee for assistance concerning the Exchange Offer.
