<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark one)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934.
For the quarterly period ended December 31, 1998
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934.
For the transition period from ____________ to ____________
Commission file number 333-58131
OXFORD AUTOMOTIVE, INC.
(Exact name of Registrant as specified in its charter)
MICHIGAN 38-3262809
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1250 STEPHENSON HIGHWAY, TROY MICHIGAN 48083
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (248) 577-1400
Former Name, Former Address and Former Fiscal Year, if changed Since Last
Report:
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
309,750 shares of the registrant's Common Stock
were outstanding as of January 31, 1999.
<PAGE> 2
PART I. FINANCIAL INFORMATION
Oxford Automotive, Inc.
Consolidated Statements of Operations
(Dollars in thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months Three Months Nine Months Nine Months
Ended Ended Ended Ended
December 31, December 31, December 31, December 31,
1998 1997 1998 1997
(unaudited) (unaudited) (unaudited) (unaudited)
<S> <C> <C> <C> <C>
Net sales $ 149,734 $ 109,998 $ 408,144 $ 295,530
Cost of sales 135,053 100,150 372,612 267,180
--------- --------- --------- ---------
Gross profit 14,681 9,848 35,532 28,350
Selling, general and
administrative expenses 7,429 5,668 22,235 13,587
Restructuring Provision - - 1,176 -
--------- --------- --------- ---------
Operating income 7,252 4,180 12,121 14,763
Other income (expense):
Interest income 121 335 194 1,016
Interest expense (5,239) (3,494) (14,449) (8,937)
Other income (expense) 555 263 949 531
--------- --------- --------- ---------
Income before
income taxes 2,689 1,284 (1,185) 7,373
Income taxes 1,075 552 (475) 2,949
--------- --------- --------- ---------
Net income (loss) $ 1,614 $ 732 $ (710) $ 4,424
Accrued dividends and
accretion on
redeemable
preferred stock 330 330 990 1,002
--------- --------- --------- ---------
Net income (loss)
applicable to
common stock $ 1,284 $ 402 $ (1,700) $ 3,422
========= ========= ========= =========
Net income (loss)
Per share
(basic and diluted) $ 4.15 $ 1.30 $ (5.49) $ 11.05
========= ========= ========= =========
Weighted average shares
outstanding 309,750 309,750 309,750 309,750
========= ========= ========= =========
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
2
<PAGE> 3
Oxford Automotive, Inc.
Consolidated Balance Sheets
(Dollars in thousands, except per share amounts)
<TABLE>
<CAPTION>
December 31, March 31,
1998 1998
(unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 318 $ 18,321
Accounts receivable, trade 86,336 65,273
Reimbursable tooling 40,237 13,315
Inventory 33,911 21,305
Unexpended bond proceeds 6 4,159
Deferred income taxes 4,399 4,399
Refundable income taxes 0 1,601
Prepaid expenses and other
current assets 3,630 2,803
-------- --------
Total Current Assets 168,837 131,176
Property, plant and equipment, net 191,446 163,708
Marketable securities 8,092 8,627
Other noncurrent assets 36,269 10,116
Deferred income taxes 7,918 6,405
-------- --------
Total Assets $412,562 $320,032
======== ========
LIABILITIES SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 54,428 $ 52,214
Restructuring reserve 3,019 6,363
Employee compensation 10,918 4,808
Other current liabilities 10,000 12,242
Current portion of long-term debt 3,411 10,965
-------- --------
Total Current Liabilities 81,776 86,592
LONG TERM LIABILITIES
Pension liability 5,470 4,727
Post retirement medical benefits 41,427 35,992
Deferred taxes 13,962 15,332
Other non current 3,870 2,596
Long term debt 227,549 128,483
-------- --------
Total Liabilities $374,054 $273,722
</TABLE>
3
<PAGE> 4
Oxford Automotive, Inc.
Consolidated Balance Sheets (continued)
(Dollars in thousands, except per share amounts)
<TABLE>
<CAPTION>
December 31, March 31,
1998 1998
(unaudited)
<S> <C> <C>
Redeemable Series A $3.00
Cumulative preferred stock,
$100 stated value - 457,541
shares authorized, 397,539 shares
issued and outstanding at
December 31, 1998, and
March 31, 1998 $ 40,586 $ 40,192
SHAREHOLDERS' EQUITY
Common stock 1,050 1,050
Retained earnings 3,050 4,750
Accumulated other
comprehensive income (loss) (6,178) 318
--------- ---------
(2,078) 6,118
--------- ---------
Total Liabilities &
Shareholders' Equity $ 412,562 $ 320,032
========= =========
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
4
<PAGE> 5
Oxford Automotive, Inc.
Consolidated Statement of Cash Flows
(Dollars in thousands, except per share amounts)
<TABLE>
<CAPTION>
Nine Months Nine Months
Ended Ended
December 31, December 31,
1998 1997
(unaudited) (unaudited)
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ (710) $ 4,424
Adjustments to reconcile net income
to net cash provided by (used in)
operating activities
Depreciation and amortization 19,552 14,580
Deferred income taxes (2,968) (3,759)
Loss on sale of equipment 52
Provision for post retirement medical 1,942 1,769
Changes in operating assets and
liabilities affecting cash
Accounts receivable, trade (11,162) 9,435
Reimbursable tooling (27,237) (909)
Inventories (1,853) 2,832
Prepaid expenses and other assets 3,396 (2,334)
Accounts payable (3,772) (7,948)
Restructuring reserve (3,272) (1,392)
Accrued expenses and other liabilities 1,448 (1,143)
Other noncurrent liabilities (6,531) (364)
--------- ---------
Net cash provided by (used in) operating
activities (31,167) 15,243
--------- ---------
INVESTING ACTIVITIES
Purchase of business, net of cash acquired (53,886) (24,145)
Net purchase of property, plant
and equipment (20,369) (11,418)
Proceeds from sale of equipment 0 1,050
Purchases of marketable
securities (892) 0
--------- ---------
Net cash used in investing activities (75,147) (34,513)
--------- ---------
FINANCING ACTIVITIES
Net proceeds (payments) on borrowings 13,541 (92,245)
Proceeds from borrowing arrangements 78,544 124,814
Debt financing costs (2,621)
Payment of preferred dividends (596) (597)
--------- ---------
Net cash provided by financing activities 88,868 31,972
--------- ---------
</TABLE>
5
<PAGE> 6
Oxford Automotive, Inc.
Consolidated Statement of Cash Flows (continued)
(Dollars in thousands, except per share amounts)
<TABLE>
<CAPTION>
Nine Months Nine Months
Ended Ended
December 31, December 31,
1998 1997
(unaudited) (unaudited)
<S> <C> <C>
Effect of exchange rate
changes on cash (557) (2,818)
Net increase (decrease) in cash
and cash equivalents (18,003) 9,884
Cash and cash equivalents
at beginning of period 18,321 9,671
-------- --------
Cash and cash equivalents
at end of period $ 318 $ 19,555
======== ========
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
6
<PAGE> 7
Oxford Automotive, Inc.
Notes to Consolidated Financial Statements
1. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements of Oxford
Automotive, Inc. (the "Company") have been prepared in accordance with Rule
10-01 of Regulation S-X and do not include all the information and notes
required by generally accepted accounting principles for complete financial
statements. All adjustments, which include only normal recurring adjustments
that are, in the opinion of management, necessary for a fair presentation of the
results of the interim periods have been made. The results of operations for
such interim periods are not necessarily indicative of results of operations for
a full year. The unaudited condensed financial statements should be read in
conjunction with the Company's consolidated audited financial statements and
notes thereto for the year ended March 31, 1998.
2. INVENTORIES
(Dollars in thousands)
<TABLE>
<CAPTION>
December 31, March 31,
1998 1998
<S> <C> <C>
Raw materials $ 13,252 $ 6,737
Finished goods and work-in-progress 21,378 15,135
-------- --------
34,630 21,872
LIFO and other reserves (719) (567)
-------- --------
$ 33,911 $ 21,305
======== ========
</TABLE>
The Company does not separately identify finished goods from work-in-process.
3. SENIOR SUBORDINATED NOTES
On April 1, 1998 the Company issued $35.0 million of unsecured 10 1/8% Senior
Subordinated Notes due 2007, Series B (the "Series B Notes"). On December 8,
1998, the Company issued $40.0 million of unsecured 10 1/8% Senior Subordinated
Notes due 2007, Series C (the "Series C Notes"). The Series B Notes and Series C
Notes are substantially identical to and rank pari passu in right of payment
with the $125.0 million of unsecured 10 1/8% Senior Subordinated Notes due 2007
issued by the Company on June 24, 1997 (the "Series A Notes"). The Series A
Notes, the Series B Notes and the Series C Notes are collectively referred to as
the "Notes". The Notes pay interest semi-annually on June 15 and December 15.
The Notes provide for certain covenants, including limitations on: indebtedness,
restricted payments, distributions, sale of assets, affiliate transactions and
merger and consolidation. The Company has optional redemption rights beginning
June 15, 2002.
The Notes are limited to $250.0 million aggregate principal amount. The net
proceeds to the Company from the sale of the Series B Notes were approximately
$37.6 million (after the inclusion of approximately $2.0 million in premium and
accrued interest of approximately $1.0 million paid by
7
<PAGE> 8
the initial purchaser of the Series B Notes and the deduction of estimated
expenses of approximately $0.4 million). The Company used all of the net
proceeds in connection with the acquisition of the Suspension Division of Eaton
Corporation (the "Suspension Division"). See Note 4.
The Company filed a Registration Statement on Form S-4 ("Registration
Statement") with the Securities and Exchange Commission in order to effect the
exchange of the Series B Notes for new Series B Notes, with substantially the
same terms as the Series B Notes except with respect to certain transfer
restrictions and registration rights. On July 9, 1998, the Registration
Statement was declared effective by the Securities and Exchange Commission and
the exchange offer was completed on August 13, 1998.
The net proceeds to the Company from the sale of Series C Notes were
approximately $40.8 million (after inclusion of approximately $1.5 million in
premium and the deduction of expenses of approximately $0.7 million). The
Company used the net proceeds to repay borrowings under the Company's Senior
Credit Facility and for working capital and other general corporate purposes.
4. ACQUISITION
On April 1, 1998, the Company purchased the assets of the Suspension Division of
Eaton Corporation (the "Suspension Division") for cash of approximately $53.9
million, including the investment in the Metalcar joint venture. The acquisition
was financed through the proceeds of the Notes described in Note 3, including
the issuance of the Series B Notes and cash on hand. The acquisition was
recorded in accordance with the purchase method of accounting. Accordingly,
results of operations are included only for the periods subsequent to
acquisition. The purchase price plus direct cost of the acquisition will be
allocated to the assets acquired and liabilities assumed based on their
estimated fair values at the date of acquisition. The unaudited financial
statements reflect the preliminary allocation of purchase price, as the
allocation has not been finalized.
5. STATEMENT OF RETAINED EARNINGS
(Dollars in thousands, except per share amounts)
<TABLE>
<CAPTION>
Foreign Net Unrealized
Currency Retained gain/(loss) on
Common Translation Earnings Marketable
Stock Adjustment (Deficit) Securities Total
<S> <C> <C> <C> <C> <C>
Balances at
March 31, 1998 $ 1,050 ($651) $ 4,750 $ 969 $ 6,118
Net Income (710) (710)
Foreign Currency
translation adjustments (5,481) (5,481)
Accrued dividends and
accretion of redeemable
preferred stock (990) (990)
Unrealized loss on
marketable securities (1,015) (1,015)
------- ------- ------- ------- -------
Balances at
December 31, 1998 $ 1,050 $(6,132) $ 3,050 $(46) ($2,078)
------- ------- ------- ------- -------
</TABLE>
8
<PAGE> 9
6. Effective April 1, 1998, the Company adopted Statement of Financial
Accounting Standards No. 130, ("SFAS 130"), "Reporting Comprehensive
Income." SFAS 130 requires the presentation of "comprehensive income" in a
separate financial statement. Comprehensive income includes net income or
loss and "other comprehensive income," which comprises such items as foreign
currency translation adjustments, minimum pension liability adjustments, and
unrealized gains and losses on marketable securities classified as
available-for-sale. SFAS 130 does not change the accounting for these items;
rather, it promulgates the presentation of comprehensive income, which was
not previously presented. The Company's total comprehensive income was as
follows:
<TABLE>
<CAPTION>
(Dollars in thousands)
Three Months Three Months Nine Months Nine Months
Ended Ended Ended Ended
December 31, December 31, December 31, December 31,
1998 1997 1998 1997
<S> <C> <C> <C> <C>
Net income (loss) $ 1,614 $ 732 $ (710) $ 4,424
------------ ------------ ------------ ------------
Other comprehensive income
(loss), net of tax:
Foreign currency
translation adjustment (232) (2,666) (5,481) (2,818)
Net unrealized loss on
marketable securities 1,391 (1,015)
------------ ------------ ------------ ------------
Other comprehensive
income (loss) 1,159 (2,666) (6,496) (2,818)
------------ ------------ ------------ ------------
Total comprehensive
income (loss) $ 2,773 $ (1,934) $ (7,206) $ 1,606
============ ============ ============ ============
</TABLE>
7. CONDENSED CONSOLIDATING INFORMATION
The Notes are guaranteed by certain of the Company's wholly-owned
subsidiaries, including BMG Holdings Inc., Howell Industries, Inc., Lobdell
Emery Corporation, Oxford Suspension, Inc., Oxford Suspension Ltd., and RPI
Holdings, Inc. (the "Guarantor Subsidiaries"). As of December 31, 1998 the
Notes were not guaranteed by the Company's other consolidated subsidiary,
Oxford Automotriz de Mexico S.A. de C.V. (the "Non-guarantor Subsidiary").
The guarantee of the Notes by the Company and the Guarantor Subsidiaries is
full and unconditional. The following unaudited condensed consolidated
financial information presents the financial position, results of operations
and cash flows of (i) the Company as if it accounted for its subsidiaries on
the equity method, (ii) the Guarantor Subsidiaries on a combined basis and
(iii) the Non-guarantor Subsidiary.
9
<PAGE> 10
Condensed consolidated financial information for the interim periods prior to
December 31, 1998 are not presented because the non-guarantors during those
periods were inconsequential, individually and in the aggregate, to the
consolidated financial statements, and management has determined that they would
not be material to investors
Condensed Consolidating Balance Sheets
December 31, 1998
(Dollars in thousands)
(Unaudited)
<TABLE>
<CAPTION>
Non-guarantor Guarantor Eliminations/
Parent subsidiary subsidiaries adjustments Consolidated
<S> <C> <C> <C> <C> <C>
ASSETS
Current assets
Cash and cash
equivalents $ 44 $ 71 $ 203 $ 318
Receivables (net) (1,553) (8,192) 112,300 (16,219) 86,336
Inventories 1,352 32,559 33,911
Reimbursable Tooling 1,400 83 38,754 40,237
Deferred income taxes 92 4,307 4,399
Unexpended bond
proceeds 6 6
Prepaid expenses and
other current assets 632 510 2,488 3,630
--------- --------- --------- --------- ---------
Total Current Assets $ 615 ($ 6,176) $ 190,617 ($ 16,219) $ 168,837
Marketable securities $ 8,092 $ $ $ 8,092
Other noncurrent assets 7,671 5,212 23,386 36,269
Deferred income taxes 7,918 7,918
Property, plant and
equipment, net 3,839 5,550 182,057 191,446
Investment in
consolidation
subsidiaries 44,033 (44,033)
--------- --------- --------- --------- ---------
Total Assets $ 64,250 $ 4,586 $ 403,978 ($ 60,252) $ 412,562
========= ========= ========= ========= =========
LIABILITIES AND
SHAREHOLDERS' EQUITY
Current Liabilities
Trade accounts payable $ 862 $ 7,156 $ 46,410 $ 54,428
Employee compensation 1,115 167 9,636 10,918
Intercompany accounts 16,219 (16,219)
Restructuring reserve 8 3,011 3,019
Accrued expenses and
other current
liabilities (2,342) 12,342 10,000
Current portion
of borrowings 3,411 3,411
--------- --------- --------- --------- ---------
Total Current Liabilities ($357) $ 7,323 $ 91,029 ($16,219) $ 81,776
</TABLE>
10
<PAGE> 11
Condensed Consolidating Balance Sheets (continued)
December 31, 1998
(Dollars in thousands)
(Unaudited)
<TABLE>
<CAPTION>
Non-guarantor Guarantor Eliminations/
Parent subsidiary subsidiaries adjustments Consolidated
<S> <C> <C> <C> <C> <C>
Pension liability $ 35 $ $ 5,435 $ 5,470
Post retirement
Medical benefits
liability 41,427 41,427
Deferred income taxes 279 (956) 14,639 13,962
Other non-current
liabilities (147,791) 151,661 3,870
Long-term borrowings
less current portion 208,030 19,519 227,549
--------- --------- --------- --------- ---------
Total liabilities $ 60,196 $ 6,367 $ 323,710 ($ 16,219) $ 374,054
Redeemable preferred
stock $ $ $ 40,586 $ 40,586
Shareholder's equity
common stock 1,050 41,371 (41,371) 1,050
Accumulated other
comprehensive
income (loss) (46) (92) (6,040) (6,178)
Retained earnings 3,050 (1,689) 4,351 (2,662) 3,050
--------- --------- --------- --------- ---------
4,054 (1,781) 39,682 (44,033) (2,078)
--------- --------- --------- --------- ---------
Total Liabilities &
Shareholder's Equity $ 64,250 $ 4,586 $ 403,978 ($60,252) $ 412,562
========= ========= ========= ========= =========
</TABLE>
11
<PAGE> 12
Condensed Consolidating Statement of Operations
For the Three Months ended December 31, 1998
(Dollars in thousands)
(Unaudited)
<TABLE>
<CAPTION>
Non-guarantor Guarantor Eliminations/
Parent Subsidiary Subsidiaries adjustments Consolidated
<S> <C> <C> <C> <C> <C>
Sales $ 4,449 145,285 $ 149,734
Cost of sales 4,850 130,203 135,053
------ ------------- ------------ ------------- ------------
Gross profit (401) 15,082 14,681
Selling, general and
administrative
expenses (571) 9 7,991 7,429
------ ------------- ------------ ------------- ------------
Operating income 571 (410) 7,091 7,252
Interest income 3,570 161 (3,610) 121
Interest expense (4,859) 1 (3,991) 3,610 (5,239)
Other income
(expense) 82 55 418 555
------ ------------- ------------ ------------- ------------
Income before
income taxes (636) (354) 3,679 2,689
Income taxes (254) (142) 1,471 1,075
------ ------------- ------------ ------------- ------------
Income before equity
in income of
consolidated
subsidiaries (382) (212) 2,208 1,614
Equity in income of
consolidated
subsidiaries 1,996 (1,996)
------ ------------- ------------ ------------- ------------
Net income $1,614 $ (212) $ 2,208 $(1,996) $ 1,614
====== ============= ============ ============= ============
</TABLE>
12
<PAGE> 13
Condensed Consolidating Statement of Operations
For the Nine Months ended December 31, 1998
(Dollars in thousands)
(Unaudited)
<TABLE>
<CAPTION>
Non-guarantor Guarantor Eliminations/
Parent Subsidiary Subsidiaries adjustments Consolidated
<S> <C> <C> <C> <C> <C>
Sales $ 7,099 401,045 $ 408,144
Cost of sales 8,025 364,587 372,612
------------ ------------- ------------ ------------- ------------
Gross profit (926) 36,458 35,532
Selling, general and
administrative
expenses $(1,857) 9 24,083 22,235
Restructuring Provision 1,176 1,176
------------ ------------- ------------ ------------- ------------
Operating income 1,857 (935) 11,199 12,121
Interest income 12,629 160 (12,595) 194
Interest expense (13,725) (13,319) 12,595 (14,449)
Other income
(expense) 226 (14) 737 949
------------ ------------- ------------ ------------- ------------
Income before 987 (949) (1,223) (1,185)
income taxes 395 (380) (490) (475)
Income taxes ------------ -------------- ----------- ------------- ------------
Income before equity
in income of
consolidated
subsidiaries 592 (569) (733) (710)
Equity in income of
consolidated
subsidiaries (1,302) 1,302
------------ ------------- ------------ ------------- ------------
Net income $ (710) $ (569) $ (733) $ 1,302 ($710)
============ ============= ============ ============= ============
</TABLE>
13
<PAGE> 14
Condensed Consolidating Statement of Cash Flows
For the Nine Months Ended December 31, 1998
(Dollars in thousands)
(Unaudited)
<TABLE>
<CAPTION>
Non guarantor Guarantor
Parent subsidiary subsidiaries Consolidated
<S> <C> <C> <C> <C>
Net cash provided by
(used in)
operating activities (38,174) $2,199 $4,808 ($31,167)
------- ------ ------ --------
INVESTING ACTIVITIES
Purchase of businesses,
net of cash acquired (53,886) (53,886)
Purchase of property,
plant and equipment (1,962) (2,210) (16,197) (20,369)
Purchase of Marketable
Securities (892) (892)
------- ------ ------ --------
Net cash used in
investing activities (56,740) (2,210) (16,197) (75,147)
FINANCING ACTIVITIES
Net proceeds (payments)
on borrowings 4,659 8,882 13,541
Proceeds from borrowing
arrangements 78,544 78,544
Payment of
preferred dividends (596) (596)
Debt financing costs (1,918) (703) (2,621)
------- ------ ------ --------
Net cash provided by
(used in)
financing activities 81,285 0 7,583 88,868
Effect of foreign
currency rate
fluctuation on cash (240) (317) (557)
Net increase (decrease)
in cash (13,629) (251) (4,123) (18,003)
Cash at beginning
of period 13,673 322 4,326 18,321
------- ------ ------ --------
Cash at end of period $44 $71 $203 $318
======== ====== ====== ========
</TABLE>
14
<PAGE> 15
8. RECLASSIFICATIONS
Certain amounts in the prior periods' statements have been reclassified
to conform to the current periods' presentation.
9. SUBSEQUENT EVENTS
On February 4, 1999 the Company entered into a $175.0 million amended
and restated Credit Agreement with NBD Bank, as Agent. The agreement
consists of a $35.0 million revolving credit facility to finance
customer tooling, a $30.0 million term loan and a $110.0 million
revolving credit facility for working capital and other general
corporate purposes, which may include acquisitions. The Credit
Agreement matures on July 31, 2004.
On February 5, 1999, (the "Closing Date") pursuant to a Share and Debt
Purchase and Sale Agreement, dated as of December 15, 1998 (the
"Purchase Agreement"), between Oxford Automotive France SAS
("OAF"), a wholly owned, indirect subsidiary of Oxford Automotive, Inc.
(the "Company"), and Groupe Valfond S.A., OAF acquired (the
"Acquisition") 100% of the shares of Cofimeta S.A. and approximately
99% of the shares of its four subsidiaries: Somenor S.A.; Aubry S.A.;
Ecrim S.A.; and Socori Technologies S.A., ("Cofimeta"). With respect to
the purchase of the shares, OAF paid to Groupe Valfond FF 80,000,000 in
immediately available funds and agreed to make deferred payments over
three years on each annual anniversary of the Closing Date in the
amounts of FF 27,000,000, FF 27,000,000 and FF 36,000,000,
respectively. Deferred payments will bear interest at the rate of 3%.
In addition, OAF acquired at various discount levels from Groupe
Valfond and other third parties, trade payables and other obligations
of Cofimeta pursuant to and as provided in the Purchase Agreement. The
acquisition was financed from the Company's available cash and
credit facility with NBD Bank.
15
<PAGE> 16
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Three and nine months ended December 31, 1998
versus three and nine months ended December 31, 1997
Results of Operations
The three and nine months ended December 31, 1998 statements of operations for
Oxford Automotive, Inc.(the "Company") include the results of operations for all
subsidiaries, including its principal operating subsidiaries, BMG North America
Limited, Lobdell Emery Corporation ("Lobdell"), Howell Industries, Inc.
("Howell"), RPI Holdings, Inc. ("RPIH"), and Oxford Suspension, Inc. and Oxford
Suspension Ltd. (collectively the "Suspension Division"). Lobdell was acquired
on January 10, 1997, Howell was acquired August 13, 1997, RPIH was acquired on
November 25, 1997, and the Suspension Division was acquired on April 1, 1998.
Each was accounted for using the purchase method of accounting. Therefore, the
three and nine month statements of operations for the period ended December 31,
1997 include only a portion of the operating results of Howell and RPIH, and do
not include the operating results of the Suspension Division.
The following table sets forth, for the periods indicated, certain accounts from
the Company's statements of operations and should be read in conjunction with
the unaudited condensed consolidated financial statements and related notes
included elsewhere herein.
(Dollars in millions)
<TABLE>
<CAPTION>
Three Months Three Months Nine Months Nine Months
Ended Ended Ended Ended
Dec. 31, 1998 Dec. 31, 1997 Dec. 31, 1998 Dec. 31, 1997
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Sales $149.7 100.0% $110.0 100.0% $408.1 100.0% $295.5 100.0%
Gross Profit 14.7 9.8% 9.8 8.9% 35.5 8.7% 28.3 9.6%
Selling, general
and administrative 7.4 4.9% 5.7 5.2% 22.2 5.4% 13.6 4.6%
Operating
Income 7.3 4.9% 4.2 3.8% 12.1 3.0% 14.8 5.0%
Net Interest
Expense 5.1 3.4% 3.2 2.9% 14.3 3.5% 7.9 2.7%
Net income (loss) 1.6 1.1% 0.7 0.6% (0.7) (0.2%) 4.4 1.5%
Memo: EBITDA 14.2 9.5% 10.0 9.1% 32.6 8.0% 29.8 10.1%
</TABLE>
NET SALES -- Net sales for the three months ended December 31, 1998 were $149.7
million. This represents an increase of $39.7 million as compared to net sales
for the three months ended December 31, 1997 of $110.0 million. The overall
increase is primarily the result of the acquisitions made since the prior year
($35.5 million). The quarter also reflected an incremental increase in the
portion of sales that were lost during the prior quarter General Motors strike
($5.6 million) as described below.
16
<PAGE> 17
For the year to date period, net sales were $408.1 million, an increase of
$112.6 million as compared to $295.5 million for the same period last year.
Again, the overall increase is primarily the result of the acquisitions made
since the prior year ($132.5 million) offset by the year to date net impact of
the GM strike ($12.7 million) and similar factors as described below.
GROSS PROFIT -- For the three months ended December 31, 1998, gross profit
increased to $14.7 million or 9.8% of net sales as compared to $9.8 million or
8.9% of net sales for the prior year. The gross profit increase is related to
the incremental sales resulting from acquisitions and the profit impact of
the GM sales rebound from the summer strike ($1.3 million), offset by the
reduced market price for process scrap ($2.1 million) on normal yield
experience.
For the year to date period, gross profit was $35.5 million, an increase of $7.2
million as compared to $28.3 million for the same period last year. As explained
above, the increase is primarily the result of profit on incremental sales
resulting from acquisitions, offset by the net impact of the General Motors
strike ($5.2 million) and by the reduced market price for processed scrap ($2.9
million) on normal yield experience.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES ("SG&A") -- For the three months
ended December 31, 1998, SG&A expenses increased to $7.4 million but decreased
to 4.9% of net sales as compared to $5.7 million or 5.2% of net sales for the
prior year. The increase in expenditure levels is primarily due to the support
of current program launches ( CAMI, Saturn and Ford) as well as the resources
necessary to support the newly awarded programs for General Motors (closure
panels and rear underbody components for a new platform to be assembled solely
in Mexico and chassis components for the North American production of global
platforms). The Company intends to invest in the necessary resources to support
customer engineering requirements and global program management needs.
For the year to date period, SG&A expenses increased to $22.2 million or 5.4% of
net sales as compared to $13.6 million or 4.6% of net sales for the prior year.
As explained above, the increases are primarily related to program awards and
customer support initiatives.
OPERATING INCOME - For the three months ended December 31, 1998, operating
income increased to $7.3 million or 4.9% of net sales as compared to $4.2
million or 3.8% of net sales for the prior year. For the year to date period,
operating income was $12.1 million, a decrease of $2.7 million as compared to
$14.8 million for the same period last year. The decrease on a year to date
basis is primarily the result of the net impact of the General Motors strike and
decreasing scrap recovery prices on normal yield experience partially offset by
the profit on incremental sales generated by acquisitions.
INTEREST EXPENSE For the three months ended December 31, 1998, net interest
expense was $5.1 million, an increase of $1.9 million, as compared to $3.2
million for the same period last year. For the year to date period, net interest
expense was $14.3 million, an increase of $6.4 million as compared
17
<PAGE> 18
to $7.9 million for the same period last year. The increase in expense was due
primarily to the issuance of $35.0 million of 10 1/8% Senior Subordinated Notes
due 2007, Series B (the "Series B Notes") on April 1, 1998, and the issuance of
$40.0 million of 10 1/8% Senior Subordinated Notes due 2007, Series C (the
"Series C Notes") on December 8, 1998. The Series B Notes and Series C Notes
represent incremental borrowings issued at effective interest rates of
approximately 9.25% and 9.685% respectively. The balance of the increase can be
attributed to the impact of the General Motors strike on operating cash flow and
the interim financing of customer tooling for current program launches.
NET INCOME For the three months ended December 31, 1998, the Company reported
net income of $1.6 million, an increase of $0.9 million as compared to a prior
year net income of $0.7 million. The increase in earnings was primarily a result
of profit generated by acquisitions and the General Motors strike sales rebound.
The increase was offset by the net impact of the lower scrap sales pricing and
the increased interest expense.
For the year to date period, the Company reported a net loss of $0.7 million, a
decrease of $5.1 million as compared to the prior year. As explained above, the
decrease relates primarily to increased interest expense ($3.8 million), the
impact of the General Motors strike ($3.1 million) and the impact of the lower
scrap sales pricing ($1.7 million).
EBITDA Earnings Before Interest, Taxes and Depreciation and Amortization
(EBITDA) for the three months ended December 31, 1998 was $14.2 million, an
increase of $4.2 million as compared to $10.0 million for the same period last
year. For the year to date period, EBITDA was $32.6 million as compared to $29.8
million for the same period last year. In both periods, the increase is the
result of the incremental EBITDA for businesses acquired and productivity
improvements implemented during the periods partially offset by the impact of
the scrap sales pricing and the General Motors strike.
LIQUIDITY, CAPITAL RESOURCES AND FINANCIAL CONDITION
Net income adjusted for non-cash charges (depreciation and amortization and
deferred taxes) generated approximately $15.9 million of cash for the nine
months ended December 31, 1998. Cash decreased by $36.9 million during the
period based on an overall increase in accounts receivable, inventories, and
reimbursable tooling, offset slightly by a decrease in other assets. During the
nine months ended December 31, 1998, the Company used approximately $75.1
million for investing activities, including the acquisitions of the Suspension
Division ($53.9 million). These investing activities were supported
substantially by the issuance of the Series B Notes as described below and line
of credit borrowings. The cash generated by financing activities was made up
primarily of $78.5 million of proceeds from the Series B Notes and Series C
Notes.
18
<PAGE> 19
At December 31, 1998 the Company had approximately $82.5 million available under
its Senior Credit Facility with NBD Bank on behalf of itself and as agent for a
syndicate of other lenders (the "Senior Credit Facility"). At December 31, 1998,
the Company had $ 22.7 million outstanding under the line of credit and $4.8
million in outstanding letters of credit to support certain Industrial
Development Revenue Bonds and workers compensation commitments. See subsequent
events for discussion of amended and restated Credit Agreement.
During the three months ended December 31, 1998, the Company received net
proceeds of $40.8 million from the offering of its Series C Notes, after the
inclusion of approximately $1.5 million in premium and after the payment of $0.7
million in issuance costs. The Series C Notes were issued December 8, 1998 and
are substantially identical to, and rank pari passu in right of payment with the
Series A Notes and Series B Notes.
The Company used the net proceeds from the Series C Notes to repay borrowings
under the Company's Senior Credit Facility and for working capital and other
general corporate purposes.
The Company believes its application of the proceeds from the Series B Notes,
the Series C Notes, and the $125.0 million of 10 1/8% Senior Subordinated Debt,
Series A Notes due June 15, 2007 (collectively "the Notes") has enhanced its
ability to meet its growth and business objectives. However, interest payments
on the Notes will represent a significant liquidity requirement for the Company.
The Company will be required to make scheduled semi-annual interest payments on
the Notes of approximately $10.1 million on June 15 and December 15 each year
until their maturity on June 15, 2007 or until the Notes are redeemed.
Capital expenditures were $20.4 million, or 5.0% of net sales for the nine
months ended December 31, 1998 as compared to $11.4 million or 3.9% of net sales
for the nine months ended December 31, 1997. The increase of $9.0 million was
due primarily to customer programs (the 1999 model year Saturn LS) and press
equipment and automation upgrades. Other capital expenditures included health
and safety items, computer and network upgrades and Y2K support.
For fiscal 1999, the Company's capital expenditures are expected to be $34.9
million, consisting of a $14.0 million investment to support new business and
increase capacity; $11.0 million for press automation, rebuilds and
improvements; $2.5 million in computer system and network upgrades and $7.4
million in other expenditures, including health, safety, environmental, cost
reduction and maintenance items.
The Company believes that cash generated from operations, together with amounts
available under the Senior Credit Facility 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.
19
<PAGE> 20
RAMOS ARIZPE - MEXICO FACILITY
The Company is currently in the process of having a new facility built in Ramos
Arizpe, Mexico. The approximately 320,000 sq. ft. facility will support the
General Motors GMT 250/257 program (SUV/ Hybrid vehicle) slated to begin
production in April 2000. The GMT 250/257 program is expected to generate
approximately $90.0 million of sales when in full production. The Company was
awarded substantially all closure panels and rear underbody components for the
program. Plant rationalization has allowed for the transfer of equipment already
owned to the facility. In addition, approximately $30.0 million will be spent
to equip the facility. The award of the program is in line with the expected
growth of the Company into Mexico and is seen as key to the Company's future
success in that country.
SUSPENSION DIVISION
The Company believes that the operations of the Suspension Division will enhance
the Company's ability to develop key suspension components. The Company believes
that the acquisition of the Suspension Division will have a positive impact on
the Company's results of operations for the fiscal year ending March 31, 1999
and thereafter.
SHAREHOLDERS' EQUITY
For the nine months ended December 31, 1998, the fluctuation in shareholders'
equity for foreign currency adjustments of ($5.5 million) is due to the
Company's long-term investment in Canada. This adjustment reflects the relative
weakening of the Canadian dollar, and has no impact on cash flow.
For the nine months ended December 31, 1998, the reduction in shareholders'
equity for holdings of marketable securities of ($1.0 million) is due to stock
price fluctuation of the Company's strategic investment in a synergistic
company.
IMPACT OF GENERAL MOTORS STRIKE
During a portion of the nine months ended December 31, 1998, substantially all
of General Motors vehicle production was shut down due to two local strikes in
Flint, Michigan. General Motors is a significant customer of the Company and the
prolonged shutdown had an adverse effect on the Company's results of operations
for the nine months ended December 31, 1998. The Company took all steps
necessary to lessen the overall impact. A portion of the sales lost during the
strike were made up in the three months ended December 31, 1998. The effect of
the strike on these periods was as follows:
<TABLE>
<CAPTION>
Three Months Nine Months
Ended Ended
Dec. 31, 1998 Dec. 31, 1998
(Dollars in millions)
<S> <C> <C>
Sales $5.6 $(12.7)
Gross Profit 1.3 (5.2)
Net Income 0.8 (3.1)
EBITDA 1.3 (5.2)
</TABLE>
20
<PAGE> 21
YEAR 2000
The Company is aware of the potential impacts of the millennium change on
business. In response, it has created a Year 2000 project team to perform
inventory, remediation, and testing of possibly affected systems. The Year 2000
project team is coordinated at the corporate level with support from senior
management. Key individuals at the facility level are executing the Year 2000
efforts. The Company has also employed some external Year 2000 contractors to
assist with compliance in some areas. The Company is following the Year 2000
guidelines set forth by the Automotive Industry Action Group ("AIAG") and is
reporting Year 2000 status quarterly to the AIAG.
The Company has broken the Year 2000 program into the following assessment
areas: business computer systems, desktop computing, network infrastructure,
voice systems, shop floor systems, non-information technology items, and
suppliers/business partners. As it relates to the AIAG areas for evaluation, the
Company does not have dedicated product-testing facilities nor do its products
contain any computer chips. The Company has completed a significant portion of
Year 2000 remediation with the remainder to be finalized by July 31, 1999. In
addition, it is committed to complete Year 2000 testing between March 31, 1999
and September 31, 1999. Year 2000 compliance testing will continue throughout
1999 to ensure that regression does not occur.
A thorough assessment of all manufacturing, administrative and management
software has been completed by the Company. Efforts are underway which will
upgrade certain software modules and/or code to comply with AIAG Year 2000
guidelines and timing. At the same time, the implementation of new software is
taking place where compliance through upgrade could not be achieved in either a
timely or cost effective manner. The Company is on target and expects to achieve
Year 2000 compliance for all of its software by July 31, 1999. Further, the
Company initiated the move to a common software system as it continues the
implementation effort across all facilities.
The Company is assessing the Year 2000 readiness of its external suppliers,
business partners, and service providers to ensure that business associations
will not be negatively impacted by the Year 2000 date. Alternate sourcing and
contingency planning will be used in situations that threaten the Company's
ability to deliver products or conduct business. Since these other companies are
in various stages of Year 2000 readiness, the Company will be monitoring their
progress throughout 1999, assessing associated risks, and taking a course of
action to ensure business continuity.
In addition to efforts of the internal staff, external resources are being used
to complete the project. The cost of external resources for 1998 totaled $0.3
million and the total capital spending for 1998 was $1.4 million of which,
approximately $0.4 million relates to software projects. In 1999, the external
costs will approximate $0.1 million, which will relate to any remediation
activities derived from Year 2000 testing, and the remaining capital
expenditures will approximate $0.2 million.
FORWARD-LOOKING STATEMENTS
This report contains statements relating to such matters as anticipated
financial performance, business prospects, year 2000 issues and other matters
that may be construed as forward-looking statements within the meaning of
Section 21E of the Securities Exchange Act of 1934, as amended. In addition, the
Company may from time to time publish or communicate other statements
21
<PAGE> 22
that could also be construed to be forward-looking statements. These statements
are, or will be, based on the Company's estimates, assumptions and projections,
and are subject to risks and uncertainties, including those specifically listed
below, that could cause actual results to differ materially from those included
in the forward-looking statements.
The risks and uncertainties that may affect the operations, performance,
development and results of operations of the Company include the following: (1)
the original equipment manufacturer ("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; (2) future price reductions, increased
quality standards or additional engineering capabilities may be required by the
OEMs, which are able to exert considerable pressure on their suppliers; (3) the
OEMs may decide to in-source some of the work currently performed by the
Company; (4) work stoppages and slowdowns may be experienced by OEMs and their
Tier 1 suppliers, as a result of labor disputes; (5) there may be 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 major customers;
(6)increased competition could arise in the OEM supplier industry; (7) changing
federal, state, local and foreign laws, regulations and ordinances relating to
environmental matters could affect the Company's operations; and (8) there may
be unfavorable currency exchange rates relative to the U.S. dollar, which could
impact the Company's operations.
22
<PAGE> 23
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) A list of Exhibits included as part of this report is set forth in
the Exhibit Index which immediately precedes such exhibits and is incorporated
herein by reference.
(b) No reports on Form 8-K were filed by the registrant during the three
months ended December 31, 1998.
23
<PAGE> 24
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Dated: February 15, 1999 OXFORD AUTOMOTIVE, INC.
By: /s/ AURELIAN BUKATKO
Aurelian Bukatko
Senior Vice President and
Chief Financial Officer
(Principal Accounting and
Financial Officer)
24
<PAGE> 25
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
2.1 Share and Debt Purchase and Sale Agreement
(the "Purchase Agreement") between Oxford Automotive
France SAS and Groupe Valfond SA, dated December
15, 1998. The Purchase Agreement does not include
certain exhibits and schedules described in the
Purchase Agreement. The registrant will furnish a
copy of the omitted material to the Commission upon
request.
4.1 Indenture, dated as of December 1, 1998, by and among
the Registrant, the Subsidiary Guarantors and U.S.
Bank Trust National Association, as Trustee
(including form of the 10 1/8% Senior Subordinated
Notes Due 2007, Series C, form of Guaranty, and form
of Supplemental Indenture)
4.2 Registration Rights Agreement dated December 8, 1998
by and Among the Registrant, the Subsidiary
Guarantors and the Initial Purchaser's of the 10 1/8%
Senior Subordinated Notes Due 2007, Series C
10.1 Purchase Agreement among the Registrant and the
Initial Purchaser's of the 10 1/8% Senior
Subordinated Notes Due 2007, Series C, dated December
1, 1998
27 Financial Data Schedule
25
<PAGE> 1
EXHIBIT 2.1
SHARE AND DEBT PURCHASE AND SALE AGREEMENT
This Share and Debt Purchase and Sale Agreement (together with the Exhibits and
Schedules hereto, this "Agreement") is made on December 15, 1998, in Paris,
France.
BETWEEN
1. Groupe Valfond, a societe anonyme organized and existing under the laws of
France, whose registered office is located at 100/102 rue de Villiers, 92309
Levallois Perret, France, registered with the Commercial Registry of Nanterre
under the number B 542 104 849 (hereinafter "Valfond" or the "Seller"),
represented by Mr. Herve Guillaume, its President, duly authorized;
AND
2. Oxford Automotive France SAS, a French societe par actions simplifiee, in the
process of being formed under the laws of France, having its registered office
at 2, place Boieldieu, 75002 Paris France (hereinafter "OAF" or the
"Purchaser"), represented by Mr. Hubert Mauroy, its President, duly authorized;
(The Seller and the Purchaser are referred to hereinafter individually as a
"Party" and collectively as the "Parties".)
WITNESSETH
WHEREAS:
A. 251,133 shares (the "Shares") representing 100% of the share capital of
Cofimeta, a societe anonyme organized and existing under the laws of
France with a nominal share capital of FF 25,113,300 divided into 251,133
shares of a nominal value of FF 100 each having its registered office
located at 68 rue de Villiers, 92309 Levallois Perret, France, registered
with the Commercial Registry of Nanterre under the number B 334 924 677
(hereinafter "Cofimeta"), are owned as follows at the date hereof:
(i) 199,552 shares, representing 79.46% of the share capital, are owned
by Valfond; and
(ii) 32,811 shares, representing 13.06% of the share capital, are owned
by Arbel Industrie, a societe anonyme organized and existing under
the laws of France, whose registered office is located at 68 rue de
Villiers, 92300 Levallois-Perret, France (hereinafter "Arbel"); and
(iii) 18,770 shares, representing 7.8% of the share capital, are owned by
PSB Participations, a societe anonyme organized and existing under
the laws of France, whose registered office is located at 68 rue de
Villiers, 92300 Levallois-Perret, France (hereinafter "PSB").
<PAGE> 2
At the Closing Valfond will transfer or cause to be transferred to the
Purchaser 251,133 shares in Cofimeta representing 100% of the Shares.
B. Cofimeta owns directly or indirectly 100% of the shares of the capital
stock of each of the following companies, as set forth below and as more
fully described in EXHIBIT I hereto (with the exception of the 5 shares
also identified on EXHIBIT I (the "Delayed Shares")):
(i) 150,000 shares in Aubry S.A., a French societe anonyme with a
nominal share capital of FF 15,000,000 divided into 150,000 shares
of FF 100 each, having its registered office at Avenue Jean Jaures,
18400 Saint Florentin sur Cher, and registered with the Registry of
Commerce and Companies of Bourges under the number B 572 175 701
(hereinafter "Aubry"); and
(ii) 17,999 shares in Ecrim S.A., a French societe anonyme with a
nominal share capital of FF 3,600,000 divided into 18,000 shares of
FF 200 each, having its registered office at Chemin de Chambrais,
La Vespiere, 14290 Orbec, and registered with the Registry of
Commerce and Companies of Lisieux under the number B 300 759 412
(hereinafter "Ecrim"); and
(iii) 438,951 shares in Somenor S.A., a French societe anonyme with a
nominal share capital of FF 43,895,200 divided into 438,952 shares
of FF 100 each, having its registered office at 194 Bld Faidherbe,
59500 Douai, and registered with the Registry of Commerce and
Companies of Douai under the number B 337 853 337 (hereinafter
"Somenor"); and
(iv) 10,252 shares in Socori Technologies S.A., a French societe anonyme
with a nominal share capital of FF 1,025,500 divided into 10,255
shares of FF 100 each, having its registered office at 515, avenue
Roland Garros, 78530 Buc, and registered with the Registry of
Commerce and Companies of Versailles under the number B 340 086 339
(hereinafter "Socori Technologies").
(Cofimeta and the above mentioned companies are referred to
hereinafter individually as a "Company" and collectively as the
"Companies".)
C. By judgment dated January 29, 1997, the Commercial Court of Douai
opened a bankruptcy restructuring procedure ("redressement judiciaire")
against the Companies.
On April 25 and 28, 1997 Valfond filed with the Commercial Court of Douai
a restructuring plan to continue the activity ("plan de redressement par
voie de continuation") of the Companies (hereafter referred to as the
"Plans") that were accepted by the Commercial Court of Douai by judgments
rendered on June 26, 1997.
The Plans and the judgments are attached in EXHIBIT II to the Agreement.
D. Cofimeta has a FF 50,000,000 debt (the "Cofimeta Debt") to Valfond
corresponding to a shareholder's loan granted by Valfond pursuant to the
Plans.
2
<PAGE> 3
E. As of September 30, 1998, Arbel has an aggregate FF 43,210,300 debt plus
any incremental debts owing by Arbel to any of the Companies (the "Arbel
Debt") to Cofimeta, corresponding to the following obligations:
- FF 35,000,000 corresponding to a loan granted by Cofimeta to Arbel; and
- FF 8,210,300 corresponding to an intercompany operation with Arbel.
F. Within the scope of the Plans, Valfond purchased from third parties for a
price equal to FF 58,553,456 trade debts of Cofimeta the nominal value of
which is equal to FF 128,470,271 as further described in Section 4.12
hereto.
G. Since December 29, 1997 the Seller holds 199,548 shares in Cofimeta
representing approximately 79.46 % of its share capital.
Prior to such date, the Seller held no shares in Cofimeta nor any other
securities whatsoever in any of the Companies, nor did it take any part in
the management of the Companies. The share capital of Cofimeta, which
amounted to FF 5,909,000 divided into 59,090 shares of FF 100 each, was
then divided as follows:
Arbel 32,812 shares
PSB 18,770 shares
Sollac 7,501 shares
Individuals 7 shares
--------------
TOTAL 59,090 SHARES
H. The Seller desires to sell to the Purchaser and the Purchaser desires to
purchase from the Seller the Shares and purchase or caused to be purchased
the Trade Debts (as defined in Section 5.23) in accordance with the terms
and conditions set forth herein.
NOW, THEREFORE, the Parties hereto agree as follows:
ARTICLE 0
DEFINITIONS
In addition to such terms as are defined elsewhere in this Agreement (including
in the Exhibits and Schedules hereto), in this Agreement :
_ "1997 Financial Statements": has the meaning assigned to such term in
Section 4.5 hereof;
_ "1998 Debts": has the meaning assigned to such term in Section 5.23
hereof;
3
<PAGE> 4
_ "Affiliate": when used with reference to a specified Person, means any
Person that directly or indirectly through one or more intermediaries
controls, is controlled by or is under common control with the specified
Person. For such purposes, the term "control" (including the terms
"controlling", "controlled by" and "under common control with") means
the possession, direct or indirect, of the power to direct or cause the
direction of the management and policies of a Person, whether through
the ownership of voting securities, by contract or otherwise;
_ "Arbel Debt" has the meaning assigned to such term in the recitals
hereof;
_ "Business Day": means any day except Saturday, Sunday and any day which
is in Paris or New York a legal holiday or a day on which banking
institutions are authorized or required by law or other government
action to close;
_ "Cofimeta Debt" has the meaning assigned to such term in the recitals
hereof;
_ "Company" and "Companies" have the meaning assigned to such terms in the
recitals hereof;
_ "Consent": means any consent, waiver, authorization or approval of or
notice to any governmental or regulatory authority, or of any other
person, firm or corporation, including the prior consultation with or
the provision of information to any work council or employee related
bodies, or any declaration to or filing or registration with any such
governmental or regulatory authority;
_ "Financial Statements": has the meaning assigned to such term in Section
5.5 hereof;
_ "Judgment": means any judgments, orders, rulings or awards of any court,
arbitrator or other judicial authority or any governmental,
administrative or regulatory authority;
_ "June 30, 1998 Financial Statements": has the meaning assigned to such
term in Section 5.5 hereof;
_ "Laws": means any applicable laws, rules or regulations of any
governmental, administrative or regulatory authority ;
_ "Liens": means any and all liens, mortgages, charges, security
interests, preemptive rights, burdens, encumbrances or other limitations
of any nature whatsoever;
_ "Material Adverse Effect" : means any loss, liability, claim, demand,
penalty, cost, expense or tax against or in respect of the assets,
properties, business, operations, prospects or financial condition of
one or more of the Companies which individually or in the aggregate is
in excess of FF 1,000,000;
_ "Person" means a natural person, company, partnership, trust or
unincorporated organization, or a government or any agency or political
subdivision thereof;
4
<PAGE> 5
_ "PIBOR": means the average Paris Interbank Offered Rate published by the
French
Association of Banks and displayed on the Telerate system at 11 a.m. on
the Business Day next preceding the Closing Date and each anniversary
date thereof with respect to 1-month French Franc deposits;
_ "Purchased But Not Funded Debts": has the meaning assigned to such term
in Section 5.23 hereof;
_ "Remaining Debts ": has the meaning assigned to such term in Section
5.23 hereof;
_ "Restricted Business": means metal stamping, welding and assembling of
stamped automotive parts relative to body and chassis for original
equipment manufacturers or suppliers to original equipment
manufacturers;
_ "Shares" has the meaning assigned to such term in the recitals hereof;
_ "Taxes": has the meaning assigned to such term in Section 5.7 hereof;
_ "Trade Debts" has the meaning assigned to such term in Section 5.23
hereof.
ARTICLE I
SALE AND PURCHASE
1.1 PURCHASE AND SALE OF THE SHARES, THE TRADE DEBTS, THE 1998 DEBTS, THE
PURCHASED BUT NOT FUNDED DEBTS AND THE REMAINING DEBTS ACQUIRED BY THE SELLER IN
ACCORDANCE WITH SECTION 4.12.
Upon the terms and subject to the conditions set forth in this
Agreement, at the Closing (used in this Agreement as defined in Section
1.3(a) below), the Seller shall sell to the Purchaser and the Purchaser
shall purchase from the Seller the Shares and shall purchase or caused
to be purchased from the Seller the Trade Debts, the 1998 Debts, the
Purchased But Not Funded Debts and the Remaining Debts acquired pursuant
to Section 4.12.
The Parties undertake hereby to cooperate in good faith with a view to
performing the transactions contemplated in this Agreement in accordance
with their respective rights and obligations as defined herein and
applicable Laws.
1.2 PURCHASE PRICE.
1.2.1. Purchase Price for the Shares
(a) The aggregate consideration for the Shares shall be
equal to one hundred and seventy million French Francs
(FF 170,000,000) (the "Shares Purchase Price").
The unpaid principal of the Shares Purchase Price shall
bear interest at an annual rate equal to three percent
(3%) payable in arrears by the Purchaser to the Seller
at the anniversaries of the Closing Date.
5
<PAGE> 6
(b) The Shares Purchase Price shall be paid by the Purchaser
to the Seller in four installments as follows, in
accordance with and subject to the terms and conditions
of this Agreement:
(i) eighty million French Francs (FF 80,000,000) at
Closing (the "Shares Closing Payment");
(ii) twenty-seven million French Francs (FF
27,000,000) increased by an amount of two
million seven hundred thousand French Francs (FF
2,700,000) for the accrued interest on the first
anniversary of the Closing Date (used in this
Agreement as defined in Section 1.3(a) below)
(the "First Deferred Payment");
(iii) twenty-seven million French Francs (FF
27,000,000) increased by an amount of one
million eight hundred ninety thousand French
Francs (FF 1,890,000) for the accrued interest
on the second anniversary of the Closing Date
(the "Second Deferred Payment"); and
(iv) thirty-six million French Francs (FF 36,000,000)
increased by an amount of one million eighty
thousand French Francs (FF 1,080,000) for the
accrued interest on the third anniversary of the
Closing Date (the "Third Deferred Payment").
(c) In guarantee of the payment of the First Deferred
Payment, the Second Deferred Payment and the Third
Deferred Payment, the Purchaser shall deliver, at the
Closing, a guarantee from Oxford Automotive Inc., the
text of which will be the same as the text attached in
EXHIBIT III to this Agreement and a legal opinion from
the lawfirm Dykema Gossett which shall be substantially
the same as the model also attached as EXHIBIT III
hereto.
(d) The Purchaser shall also deliver, at the Closing, three
promissory notes, the texts of which will be the same as
the texts attached in EXHIBIT IV to this Agreement.
1.2.2. Purchase Price for the Trade Debts
The aggregate consideration for the Trade Debts (the "Trade
Debts Purchase Price") shall be equal to fifty eight million
five hundred fifty-three thousand four hundred fifty-six French
Francs (FF 58,553,456).
The unpaid principal of the Trade Debts Purchase Price shall
bear interest at an annual rate equal to two percent (2%)
payable in arrears by the Purchaser to Valfond at the
anniversaries of the Closing Date. The Purchaser shall deliver
to the Seller at Closing 3 promissory notes in the form of
EXHIBIT V for the unpaid principal of the Trade Debts.
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The Trade Debts Purchase Price and interest accrued
thereon which shall be paid by the Purchaser to the
Seller in four installments as follows, in
accordance with and subject to the terms and
conditions of this Agreement:
(a) eighteen million five hundred fifty
three thousand four hundred fifty-six
French Francs (FF 18,553,456) at Closing
(the "Trade Debts Closing Payment");
(b) thirteen million French Francs (FF
13,000,000) increased by an amount of
eight hundred thousand French Francs (FF
800,000) for the accrued interest on the
first anniversary of the Closing Date;
(c) thirteen million French Francs (FF
13,000,000) increased by an amount of
five hundred forty thousand French
Francs (FF 540,000) for the accrued
interest on the second anniversary of
the Closing Date;
(d) fourteen million French Francs (FF
14,000,000) increased by an amount of
two hundred eighty thousand French
Francs (FF 280,000) for the accrued
interest on the third anniversary of the
Closing Date.
The Purchaser irrevocably undertakes hereby to
notify to the Companies the sale of the Trade Debts
in accordance with the terms of Article 1690 of the
Civil Code to the extent required by French law.
1.2.3. Purchase Price for the 1998 Debts, the
Purchased But Not Funded Debts and the Remaining
Debts the Seller acquired pursuant to Section 4.12
hereof
The aggregate consideration for the 1998 Debts (the
"1998 Debts Purchase Price") shall be equal to
thirty-nine million forty eight thousand French
Francs (FF 39,048,000).
The aggregate consideration for the Purchased But
Not Funded Debts (the "Purchased But Not Funded
Debts Purchase Price") and the aggregate
consideration for the Remaining Debts acquired by
the Seller pursuant to Section 4.12 (the "Purchased
Remaining Debts Purchase Price") shall be
calculated in accordance with the formula set forth
on EXHIBIT A hereto.
The 1998 Debts Purchase Price, the Purchased But
Not Funded Debts Purchase Price and the Purchased
Remaining Debts Purchase Price shall be paid by the
Purchaser to the Seller at Closing.
1.3 CLOSING.
(a) Provided that all of the respective conditions of the parties
set forth in Articles II and III have been satisfied or waived,
the consummation of the sale and purchase of the Shares, the
Trade Debts, the 1998 Debts, the Purchased but Not Funded Debts
and the Remaining Debts acquired by the Seller in accordance
with Section 4.12 hereof (the "Closing") shall be held at the
offices of Salans Hertzfeld & Heilbronn, 9 rue
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Boissy d'Anglas, 75008 Paris, France, or such other location as
shall be mutually agreed by the parties, at 9 a.m. (Paris time)
first Business Day which is at least fifteen (15) Business Days
after the fulfillment of the condition precedent set forth in
Article II (such date and time being referred to herein as the
"Closing Date").
(b) At the Closing, the Seller shall deliver or cause to be
delivered to the Purchaser (i) duly executed share transfer
orders (ordres de mouvements) for all of the Shares ; (ii) a
duly executed Trade Debts transfer agreement in the form
attached in EXHIBIT VI hereto for all of the Trade Debts ; (iii)
a duly executed 1998 Debts transfer agreement in the form
attached in EXHIBIT VI hereto for all of the 1998 Debts; (iv)
duly executed Purchased But Non Funded Debts transfer agreements
in the form attached in EXHIBIT VI hereto for all of the
Purchased But Not Funded Debts; (v) duly executed Remaining
Debts (which have been acquired by the Seller in accordance with
Section 4.12) transfer agreements in the form attached in
EXHIBIT VI hereto for all of the Remaining Debts (which have
been acquired by the Seller in accordance with Section 4.12) and
(vi) the certificates and other documents required to be
delivered pursuant to Section 3.1 and listed in EXHIBIT VII. At
the Closing, the Purchaser shall deliver or cause to be
delivered to the Seller the certificates and the documents
required to delivered pursuant to Section 3.2 and listed in
EXHIBIT VII.
(c) On the Closing Date, the Purchaser shall pay to the Seller, by
wire transfer of immediately available funds to the bank account
of the Seller notified to the Purchaser in writing at least five
(5) Business Days prior to the Closing Date, (i) an amount of FF
98,553,456 corresponding to the sum of the Shares Closing
Payment and the Trade Debts Closing Payment, (ii) an amount
equal to the net balance of the Cofimeta Debt after its set-off
against the Arbel Debt (less the interest accrued on the Arbel
Debt and unpaid by Arbel to Cofimeta on the Closing Date), which
amount shall not be materially different than FF 6,789,700,
(iii) an amount equal to the sum of (x) the purchase price paid
by the Seller for the 1998 Debts transferred to the Purchaser
and (y) the purchase price paid by the Seller for the Purchased
But Not Funded Debts and the Remaining Debts acquired in
accordance with Section 4.12 and transferred to the Purchaser.
Moreover, the Purchaser shall deliver on the Closing Date (i)
the promissory notes referred to in Section 1.2.1(c) hereof,
(ii) the promissory notes in the amount of the unpaid principal
of the Trade Debts (as defined in Section 4.12 of this
Agreement) as provided in Section 1.2.2 hereof, and (iii) the
guarantee referred to in Section 1.2.1(d) hereof.
1.4 RIGHTS IN RESPECT OF SHARES.
As from the Closing, neither the Seller nor Arbel nor PSB nor any
of their Affiliates (other than the Companies) shall have any
rights in respect of the Shares (including without limitation any
right to receive dividends from the Companies on or after
Closing).
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ARTICLE II
CONDITION TO CLOSING RELATING TO COURT OF DOUAI; PROCEDURE
2.1 COURT OF DOUAI CONDITION.
The obligations of the Parties to consummate the transactions
contemplated by this Agreement are subject to the satisfaction at
or prior to Closing of the following condition in its entirety:
The Commercial Court of Douai shall have, by a definitive
judgment, (a) ordered Cofimeta Defeasance to bear the financial
undertakings and obligations (i) to repay in accordance with the
Plans the Remaining Debts which are not acquired by the Purchaser
pursuant to Section 4.12 (the "Unpurchased Remaining Debts")
(which undertakings and obligations shall be secured by a
guarantee from the Purchaser in favor of the creditors of the
Unpurchased Remaining Debts) and (ii) to pay the fees and
expenses of the officials appointed by the court in connection
with the Plans which remain due; (b) terminated the Plans
completely in respect of the Companies and, in all respects other
than as described in clause (a) above, in respect of Cofimeta
Defeasance, it being understood that the maturity dates for the
repayment of the debt pursuant to the Plans shall remain
unchanged; (c) confirmed that the Plans have been fully complied
with in all respects through the date of the judgment and that
Valfond is released from all of its obligations under the Plans;
(d) approved the transactions contemplated by this Agreement, in
each case without exception or qualification; and (e) not imposed
any obligations, restrictions or conditions on the Purchaser, the
Seller or any of the Companies other than in accordance with the
other clauses of this Section 2.1 and in particular and without
limiting the foregoing, the Purchaser shall not be obliged to
accept any request for funding above the level which the
Purchaser would have independently and in its sole discretion
decided to furnish to the Companies.
2.2 PROCEDURE IN RESPECT OF THE COURT OF DOUAI.
Valfond will, in consultation with the Purchaser, file all
necessary petitions before the Commercial Court of Douai in order
to obtain all necessary approvals for the implementation of the
operations contemplated in this Agreement, including any requests
for amendments or termination of the Plans which the Purchaser
may propose and which will be acceptable to Valfond in its sole
discretion. Valfond will cooperate in good faith with the
Purchaser in connection with such procedure. The Seller agrees
and shall cause its advisers, the Companies and their advisers,
(i) not to meet with the Commercial Court of Douai or any members
thereof or the commissaire a l'execution du plan or any other
official related to such court, (a) without the prior written
approval of the Purchaser or (b) without its presence, and (ii)
not to submit any document or information or file any petition to
the Commercial Court of Douai before they have been reviewed and
approved by the Purchaser.
The Purchaser will cooperate with Valfond with this
procedure and will review and cooperate to the extent it deems
reasonable with requests for any necessary documents, information
or warranties from the Commercial Court of Douai in order for the
Purchaser to be substituted
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<PAGE> 10
for Valfond in the performance of the terms and conditions of the Plans
as they may be amended in accordance with this Section 2.2.
The fees related to the proceeding before the Commercial Court of Douai
(except the legal fees and other expenses incurred in that connection by
the Purchaser) shall be borne by Valfond.
ARTICLE III
OTHER CONDITIONS TO CLOSING
3.1 CONDITIONS PRECEDENT TO OBLIGATIONS OF THE PURCHASER.
The obligations of the Purchaser to consummate the transactions
contemplated by this Agreement are also subject to the satisfaction at
or prior to Closing of each of the following conditions, any one or more
of which may be waived by the Purchaser in its sole discretion:
(i) all representations and warranties and covenants made by the
Seller in this Agreement shall be true and correct and shall
have been performed in all material respects (in the case of
representations and warranties) and in all respects (in the case
of covenants) on and as of the date hereof and the Closing Date
as though restated on and as of such date (except in the case of
any representation or warranty that by its terms is made as of a
date specified therein, which shall be accurate as of such
date), and the Seller shall provide a certificate to the
Purchaser at Closing in the form of EXHIBIT VIII confirming that
fact;
(ii) the Persons listed on EXHIBIT IX shall have tendered their
resignations from their respective offices;
(iii) the Seller shall have made available to the Purchaser for its
review at least ten (10) full Business Days prior to the Closing
Date and at Closing the share registers and other statutory
books of the Companies, and shall have delivered to the
Purchaser in reasonably satisfactory form evidence of compliance
by the Seller, Arbel and PSB with all preemptive or similar
rights contained in the statuts of the Companies or in any
shareholders' agreement of the Companies;
(iv) no Judgment or Law issued or enacted by any court or
governmental or regulatory authority, which declares this
Agreement invalid in any material respect or prevents the
consummation of the transactions contemplated hereby shall be in
effect; and no action or proceeding before any court or
governmental or regulatory authority, shall have been instituted
or by any Person (other than the Purchaser or any of its
Affiliates) which seeks to prevent or delay the consummation of
the transactions contemplated by this Agreement or which
challenges the validity or enforceability of this Agreement
(other than a frivolous or vexatious application);
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(v) during the period from July 1st, 1998, to the Closing Date,
there shall not have been any change in the assets, properties,
business, operations, prospects or financial condition of any of
the Companies which individually or in the aggregate would
constitute a Material Adverse Effect;
(vi) Valfond shall have purchased at par value the Arbel Debt from
Cofimeta and set off the amount of the Arbel Debt against the
Cofimeta Debt pursuant to a debt transfer and set-off agreement
in the form attached in EXHIBIT X hereto;
(vii) at Closing Jean-Francois Constant and Patrick Sermesant shall
have remained employed by the Companies;
(viii) Valfond shall have delivered signed non-competition agreements
in the form of EXHIBIT XI between the Purchaser and each of
Groupe Valois and Arbel Industrie, all in respect of the
Restricted Business;
(ix) the Seller shall have provided to the Purchaser for its review
at least thirty (30) full Business Days prior to the Closing
Date (i) a certified copy of the duly adopted resolutions of the
Board of Directors of Arbel and PSB approving the transfer of
the Shares held at the date hereof by Arbel and PSB in Cofimeta
and (ii) a certified copy of extracts of the promises to sell
(promesses de vente)<-1- 95>for all of the Shares held by PSB
and Arbel at the date hereof evidencing that the Seller has an
irrevocable right to acquire good and marketable title to all of
the Shares held by Arbel and PSB as from the date hereof; such
certification shall be signed by the President of the Seller and
shall contain a confirmation that there is nothing in the rest
of such promises to sell or in any other agreement which would
affect such right.
(x) The offices rental agreements between Cofimeta and
Etablissements Arbel dated October 30, 1997 and between Cofimeta
and Waeles Gestion dated June 15, 1998 shall have been amended
in accordance with EXHIBIT XII hereof, providing for a term
expiring on December 31, 1999 (with a right of earlier
termination upon 120 days' notice) and for rent equal to the
same rent per square meter as paid by Cofimeta to Etablissements
Arbel and Waeles Gestion per square meter in accordance with the
lease agreements in its current form ;
(xi) (a) (i) The consolidated financial statements (including the
balance sheet, the profit and loss statement and annexes thereto
of the Companies as of and for the period ended on September 30,
1998, (the "September 30, 1998 Financial Statements") shall have
been audited by PricewaterhouseCoopers at the latest within one
month after the latter of (x) the date of this Agreement and (y)
the date on which the Seller provides to the Purchaser
consolidated financial statements of the Companies with
appropriate footnotes as at September 30, 1998, and (ii) such
September 30, 1998 Financial Statements as audited by
PricewaterhouseCoopers shall not show any material discrepancy
with the consolidated June 30, 1998 Financial Statements;
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(b) Should PricewaterhouseCoopers not have audited the September
30, 1998 Financial Statements by the deadline set forth in
Section 3.1(xi)(a)(i) hereof, the September 30, 1998 Financial
Statements shall be deemed not to show any material discrepancy
with the consolidated June 30, 1998 Financial Statements. The
effectiveness of this subsection (b) is specifically conditioned
on the following obligations of the Seller: (i) to cooperate,
and to cause the Companies to cooperate, fully and in good faith
with the Purchaser and PricewaterhouseCoopers in order to enable
PricewaterhouseCoopers to furnish its audit of the September 30,
1998 Financial Statements by such deadline; (ii) to afford, and
to cause the Companies to afford, to the Purchaser and to
PricewaterhouseCoopers access to the Companies' properties,
books, contracts, commitments, records and information to the
same extent as they would in connection with a full audit of the
annual financial statements of the Companies under French
generally accepted accounting principles; (iii) to cause the
Companies to assign adequate personnel to support and facilitate
the audit process; (iv) to provide on a timely basis such
information to PricewaterhouseCoopers as the latter may
reasonably request and which would be required for a full audit
of the annual financial statements of the Companies under French
generally accepted accounting principles; and (v) to cause the
management of the Companies to deliver any and all certification
or representation letters PricewaterhouseCoopers may require in
connection with such audit in the form of EXHIBIT XIII hereof;
provided that the Purchaser shall exercise the same discretion
in connection with the foregoing as it is required to exercise
pursuant to Section 4.2.
(c) For the purpose of Section 3.1(xi)(a), material discrepancy
shall mean a negative difference between the consolidated net
worth of the Companies as at September 30, 1998 and the
consolidated net worth of the Companies as at June 30, 1998
greater than an amount of FF 1,000,000. To achieve an
appropriate comparison earnings or losses from operations in the
ordinary course of business between June 30, 1998 and September
30, 1998 shall be excluded in the preparation of the September
30, 1998 Financial Statements for purposes of this Section.
(xii) The Seller shall have obtained a letter in the form of EXHIBIT
XIV signed by Arbel waiving any and all rights of Arbel towards
the Companies in respect of management fees;
(xiii) (a) Dames & Moore (or such other environmental consulting firm
as the Parties may agree upon in writing) shall have conducted a
Phase II environmental survey on all the sites of Somenor (or at
the Purchaser's option a lesser environmental survey) (together
with an "Evaluation Simplifiee des Risques" as referred to in
the Arretes dated September 4, 1998 of the Prefet du Nord) and
shall have delivered their final report thereon; and
(b) Dames & Moore's report shall not contain findings which
would result in a Material Adverse Effect.
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(xiv) The Renegotiated Debt (as defined in Section 4.12 hereof) shall
not exceed FF 152,000,000;
3.2 CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SELLER.
The obligations of the Seller to consummate the transactions
contemplated by this Agreement are subject to the satisfaction at or
prior to the Closing of each of the following conditions, any one or
more of which may be waived by the Seller in its sole discretion:
(i) the Purchaser shall have performed and complied with, all
agreements required by this Agreement to be performed or
complied with by it prior to or at Closing;
(ii) the Purchaser shall have tendered to the Seller the Shares
Closing Payment and the Trade Debts Closing Payment;
(iii) no Judgment or Law issued or enacted by any court or other
governmental or regulatory authority, which declares this
Agreement invalid in any material respect or which prevents the
consummation of the transactions contemplated hereby shall be in
effect; and
(iv) the Purchaser shall have tendered to the Seller the guarantee
referred to in Section 1.2.1(c) and the promissory notes
referred to in Sections 1.2.1(d) and 1.2.2 hereof.
ARTICLE IV
COVENANTS OF THE SELLER
4.1 ORDINARY COURSE OF BUSINESS
(a) During the period from the date of this Agreement through
Closing (or the earlier termination of this Agreement pursuant
to Section 8.3 hereof), the Seller will ensure that the
Companies will conduct their business solely "en bon pere de
famille" and in the ordinary course consistent with past
practices and, without limiting the foregoing, without the prior
written consent of the Purchaser, the Seller will not, except as
required or permitted pursuant to the terms of this Agreement,
permit any of the Companies (taken individually or collectively)
to:
(i) make any change in the conduct of their business or
operations or enter into any transaction other than in
the ordinary course of business consistent with past
practices and this Agreement or be involved in any
transaction in any kind which results or will result in
a Material Adverse Effect on the Companies;
(ii) make any change in their statuts or issue any additional
shares of capital stock or other interest in their
capital, grant any option, warrant or right to acquire
any capital stock or interest in their capital, or issue
any security convertible into or exchangeable for their
capital stocks or interests in their capital or
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make any change in their outstanding shares of capital
stock or other interests in their capital;
(iii) incur, assume or guarantee any indebtedness for borrowed
money, except pursuant to transactions in the ordinary
course of business consistent with past practices and on
commercially reasonable terms and in an aggregate amount
not in excess of FF 500,000;
(iv) redeem or purchase any shares of their capital stock or
declare, set aside, make or pay (in cash or otherwise)
any dividend or other distribution in respect of their
capital stock or any form of profit participation or any
special payment;
(v) make any change in their methods of accounting or make
any material change in any sales procedures or policies
or in its practices for the collection of accounts
receivables;
(vi) acquire or form any corporation, partnership,
association or other business organization;
(vii) make any sale, assignment, transfer, abandonment or
other conveyance of any of its assets or any part
thereof, except transactions pursuant to existing
contracts expressly referenced in the Exhibits or
Schedules hereto and dispositions of inventory for fair
or reasonable value in the ordinary course of business
consistent with past practices, or enter into any
agreement (whether verbal or written) with any customer
providing for any new rebate or discount or modifying
any existing rebate or discount listed in Schedule 5.17;
(viii) acquire any items of real property; acquire any items of
equipment or machinery having an individual value in
excess of the amount provided for such item in the
original approved budget for 1998 (the "Budget"), a copy
of which is attached in EXHIBIT XV hereto, or dispose of
any item of equipment or machinery for a price less than
its book value, or make any capital expenditure in the
aggregate in excess of 10% of the original value
provided for in the Budget;
(ix) make any loan, advance or capital contribution to or
investment in any Person, except loans or advances with
respect to salaries, goods or services pursuant to
transactions in the ordinary course of business
consistent with past practices and on commercially
reasonable terms;
(x) notwithstanding clause (ix) make any change in their
long-term debt;
(xi) pay, lend or advance any amount to, or sell, transfer or
lease any properties or assets to, or incur any
obligations in respect of, any of the Companies, the
Seller, Arbel, PSB or their Affiliates or their
shareholders, managers,
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employees or consultants or family members thereof,
except transactions pursuant to existing contracts
expressly referenced in the Exhibits and Schedules
hereto and for amounts and under conditions consistent
with past practices, or enter into any new agreement or
arrangement with any of the aforementioned Companies,
Affiliates or Persons;
(xii) appoint or hire any additional managers, employees or
consultants other than temporary employees hired
pursuant to contracts of fixed duration (contrats a
duree determinee) of not more than six (6) months or in
conditions consistent with past practices, or increase
remuneration or benefits of managers, employees or
consultants;
(xiii) take any action that would have the direct consequence
of causing any of the representations and warranties
made by the Seller in this Agreement not to remain true
and correct;
(xiv) incur or grant liens on any property or enter into any
Contract (as this term is defined in Section 5.10 below)
; or
(xv) enter into any new purchase orders individually in
excess of FF 1,000,000 or in the aggregate in excess of
FF 5,000,000;
(xvi) discount any of their current debts or make any
prepayments thereof, other than (i) factoring of
accounts receivable consistent with past practice or
(ii) discounting debt in accordance with Section 4.12
(it being understood that the Companies are authorized,
as an exception to this clause, to prepay to the Seller
the interest accrued through the Closing on the 1998
Debts and the Purchased But Not Funded Debts purchased
in accordance with Section 4.12 at the rate specified in
the Plan); and
(xvii) commit itself to do any of the foregoing.
(b) During the period from the date of this Agreement through
Closing (or the earlier termination of this Agreement pursuant
to Section 8.3 hereof), the Seller will cause the Companies to
keep the Purchaser regularly informed in writing of (i) any
discounting or write-offs of any notes or accounts receivable or
portions thereof where the amounts of such discounting or
write-offs involved are individually or in the aggregate in
excess of FF 1,000,000, (ii) any issue or problem faced by the
Companies in connection with the collection of any receivables
and (iii) any proposals to customers for new purchase orders.
(c) During the period as from the date of this Agreement through
Closing (or the earlier termination of this Agreement pursuant
to Section 8.3 hereof), the Seller shall make its best efforts
to preserve the business and goodwill of the Companies and in
particular shall not authorize or permit any of the Companies to
transfer any employee of the Companies other than Mr. Fernandes
and Mr. Jean-Michel Guichon to the Seller, to Arbel, to PSB or
to any Affiliates or business units thereof without
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the Purchaser's prior written approval. Moreover, the Seller
shall not authorize and/or permit any purchase orders or
requests for proposals to be directly or indirectly transferred
or directed by the Companies to the Seller, Arbel, PSB or to any
Affiliates or business units thereof without the Purchaser's
prior written approval.
(d) The Purchaser covenants, when required by the Seller to consent
to any action for which the Purchaser's agreement is required
pursuant to Section 4.1 hereof, to promptly notify the
Purchaser's answer to the Seller, which answer shall be in the
sole discretion of the Purchaser. The Purchaser further agrees
that if no answer has been notified by the Purchaser within ten
(10) Business Days after receipt by the Purchaser of the
Seller's request for such consent, such absence of answer shall
be deemed to be a consent to the Seller's request.
4.2 ACCESS
The Seller shall afford, and shall cause the Companies to afford, to the
Purchaser and its representatives and legal, financial and environmental
advisers access during normal business hours throughout the period from the
date hereof through the Closing Date (or the earlier termination of this
Agreement pursuant to Section 8.3 hereof) to the Companies' properties,
books, contracts, commitments and records and, during such periods, shall
furnish promptly to the Purchaser all other information and certificate
concerning the Companies' business, properties and personnel as the
Purchaser may reasonably request in order to conduct and complete its due
diligence review of the business, assets, liabilities and accounting and
financial condition of the Companies, provided that the Purchaser shall, to
the extent consistent with the performance of a complete due diligence
review of the Companies, exercise discretion in its inquiries of the
Companies' personnel and third parties.
4.3 LIMITATIONS ON SOLICITATION
Each Party agrees that for a period of two (2) years from the date hereof,
neither itself nor any member of its group shall directly or indirectly
solicit any management or technical person now employed by any companies of
the other Party's group without the consent of the relevant Party.
4.4 EXCLUSIVITY
From the date hereof through Closing (or termination of this Agreement
pursuant of Section 8.3 hereof if earlier), neither the Seller nor Arbel nor
PSB nor any of their Affiliates, nor the Companies, nor the Companies'
officers or directors nor anyone acting on behalf of the Seller, of Arbel,
of PSB or of their Affiliates or of such Persons shall, directly or
indirectly, encourage, continue, solicit, engage in discussions or
negotiations, or enter into any agreement, with any Person (other than the
Purchaser or its representatives), or provide any information to any
potential purchaser (other than the Purchaser or its representatives),
concerning any purchase or sale of shares, merger, consolidation,
liquidation, sale of substantially all of the assets or similar transaction
involving the Companies or their assets, or encourage any third party to
initiate unsolicited actions to accomplish any of the
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foregoing. The Seller shall notify the Purchaser immediately in writing
of the details of any indications of interest from any Persons with
respect to the foregoing of which the Seller or Arbel or PSB or their
Affiliates or the Companies become aware.
4.5 SHAREHOLDERS MEETING
The Seller shall cause a special meeting of the shareholders of the
Companies to be validly called for the Closing Date, the agenda of which
shall include the matters listed on EXHIBIT XVI hereto.
4.6 FURTHER ACTIONS
Subject to the terms and conditions herein provided, the Seller and the
Purchaser shall use their best efforts, to take, or cause to be taken,
all such further actions and to do, or cause to be done, all such
additional things necessary, proper or advisable consistent with all
applicable Laws to consummate and make effective the transactions
contemplated by this Agreement, including obtaining by the Seller and
the Purchaser as applicable, of any Consents to consummate the
transactions contemplated by this Agreement. In particular, the Seller
and the Purchaser shall keep each other regularly informed of their
actions in connection with the satisfaction of the conditions set forth
in Articles II and III.
Moreover, consistent with applicable Laws, the Seller shall procure (se
porte fort) from the Companies and from Arbel, PSB and their Affiliates
full cooperation in order to give effect to this Agreement.
4.7 UNDERTAKINGS NOT TO COMPETE
In consideration of the purchase of the Shares and the Trade Debts and
in order to guarantee the transfer to the Purchaser of the full value of
the Shares, the Seller undertakes with the Purchaser that it will not:
(a) for a period of five (5) years from the Closing Date within the
territory of the French Republic hereto carry on or be engaged
in any Restricted Business;
(b) at any time after Closing disclose or use for any purpose any
information concerning the Companies or their business affairs,
except_:
(i) to the extent required by Law;
(ii) to its professional advisers under circumstances of
confidentiality, or
(iii) to the extent that such information is at the date
hereof or hereafter becomes public knowledge otherwise
than through improper disclosure by any Person.
4.8 DELAYED SHARES
The Seller shall use its best efforts to obtain that the Delayed Shares
are transferred to the Purchaser within ninety days of the Closing and
without any cost to the Purchaser. The Seller covenants that upon
transfer of the Delayed Shares to the Purchaser, the Delayed Shares
shall be fully negotiable and free from any option rights, claims,
privileges, liens, security
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interests, collateral, encumbrances, charges or restrictions of any kind
whatsoever.
4.9 MANAGEMENT INFORMATION SYSTEM
The Seller shall not permit any of the Companies to acquire or implement
or incur any costs in connection with of any new management information
system (i) which would not be operationally independent of any and all
management information system of the Seller, Arbel or PSB or their
Affiliates as from the Closing and (ii) without the prior written
approval of the Purchaser.
4.10 COFIMETA DEFEASANCE
Prior to December 31, 1998, the Seller shall cause Cofimeta (or one of
its subsidiaries at the Purchaser's option) to form and register
Cofimeta Defeasance under French law in a form and manner acceptable to
the Purchaser ("Cofimeta Defeasance").
4.11 VENDOR'S NUMBERS
If and to the extent any customer vendor numbers used in respect of
sales by the Companies to such customers are not in the name of one of
the Companies, the Seller shall cause all such customer vendor numbers
to be transferred to the relevant Companies prior to the Closing.
4.12 RENEGOTIATION OF THE COMPANIES' DEBTS
The Seller hereby covenants as follows:
(i) As from the date hereof through the Closing Date, the
Seller, with the support of Cofimeta and the Purchaser, will
pursue the renegotiation of the Remaining Debts. The Seller
hereby undertakes to use its best efforts to acquire from
creditors of the Companies an amount of Remaining Debts to
ensure that the sum of (i) the price paid by the Seller to
acquire the 1998 Debts, (ii) the price to be paid by the Seller
(or the Purchaser, if the rights to purchase the Purchased But
Not Funded Debts have been assigned by the Seller to the
Purchaser at Closing) to acquire the Purchased But Not Funded
Debts, (iii) the purchase price of the Remaining Debts acquired
by the Seller between the date hereof and the Closing Date in
accordance with this Section and (iv) the balance of the
Remaining Debts as of the Closing Date, (together the
"Renegotiated Debt"), shall not in the aggregate exceed FF
152,000,000 (the "Target Amount"). At the date hereof, the
Renegotiated Debt is equal to FF 149,530,138.
(ii) In connection with the purchase of the Remaining Debts
contemplated by Section 4.12(b)(i) to achieve the Target Amount,
the Seller covenants not to acquire or enter into any agreement
with any creditor in respect of the purchase of the Remaining
Debts which would represent a discounted purchase price higher
than 55% of the face value of each of the interest bearing
Remaining Debts and 45% of the face value of each of the non
interest bearing Remaining Debts.
(iii) Should the Seller succeed in achieving the Target Amount,
prior to the Closing Date, the Seller shall use its best efforts
to acquire additional Remaining
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Debts at a purchase price which is not higher than 50% of the
face value of each of the interest bearing Remaining Debts and
40% of the face value of each of the non interest bearing
Remaining Debts. The Seller undertakes not to acquire or enter
into any agreement with any creditor for the acquisition of any
additional Remaining Debts other than as set forth in the
immediately preceding sentence without the prior written
approval of the Purchaser.
The Purchaser agrees that if no answer has been notified by the
Purchaser within ten (10) Business Days after receipt by the
Purchaser of the Seller's request for such consent, such absence
of answer shall be deemed to be a consent to the Seller's
request.
(iv) As from the date hereof through the Closing Date (or the
earlier termination of this Agreement pursuant to Section 8.3
hereof), the Seller shall keep the Purchaser regularly informed
of the status of the renegotiation of the Companies debts
referred to herein. Such information shall include weekly
written reports to the Purchaser on (i) the amounts purchased,
(ii) the creditor concerned, (iii) the acquisition value, (iv)
the amounts which are the subject of the negotiations underway
and timely furnishing to the Purchaser of copies of (x) all
draft agreements to be entered into in connection with this
renegotiation before they are actually executed and (y) of all
agreements once they have been executed and any other
information the Purchaser may require in its sole discretion
with respect to this renegotiation.
(v) At Closing, the Seller shall transfer to the Purchaser the
1998 Debts, the Purchased But Not Funded Debts and the Remaining
Debts it acquired in accordance with Section 4.12 hereof and
assign to the Purchaser its rights to acquire the Purchased But
Not Funded Debts and the Remaining Debts subject to a written
agreement to acquire but which have not been effectively
acquired by the Seller prior to Closing.
ARTICLE V
REPRESENTATIONS AND WARRANTIES GIVEN BY THE SELLER
In order to ensure the complete information of the Purchaser, the Seller has
disclosed to it as well as to its advisers the documents and information (texts
of questions and texts of responses together with photocopies of all documents)
set forth in Exhibit XVII (hereafter referred to as the "Audit Information"),
and which include, among others, legal, financial accounting and commercial
matters; the Purchaser has, in addition, met the statutory auditors of the
Companies and, with the consent of the Seller, has consulted their files and has
also caused its advisors to perform an accounting and financial audit, a legal
audit and an environmental audit on the different sites operated by the
Companies.
The Purchaser is aware that the management of the Companies was not carried out
by the Seller before June 26, 1997.
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The Purchaser, being a professional and having full knowledge of the industrial
sector of the Companies' activities, (i) has accepted that none of the documents
contained in the Audit Information or the Schedules hereto shall give right to
indemnification by the Seller except as provided in Article VII hereto and (ii)
to limit its contractual rights to indemnification by the Seller to those set
forth in Article VII.
However, independently of and notwithstanding the foregoing paragraphs of this
Article V, the Seller hereby makes the representations and warranties set forth
below with respect to the Companies and acknowledges that the Purchaser has
agreed to enter into this Agreement on the basis of such representations and
warranties and is relying on them to the extent provided in Article VII. The
Seller hereby confirms that such representations and warranties are true,
complete and not misleading.
5.1 CORPORATE MATTERS ; AUTHORIZATION AND VALIDITY
(a) Each Company has been duly organized in conformity with the laws
of France. Except as set forth in Schedule 5.1(a), the Companies
have obtained all permits, licenses, authorizations and
approvals (governmental or otherwise) necessary to own and
operate their assets and to carry out their business as is now
being conducted. Since June 26, 1997, the Companies have
accurately and diligently accomplished, on or prior to the
applicable deadlines, all formalities that are required to
validly continue their existence.
(b) There has been no request for the annulment or the dissolution
of any of Company, nor any bankruptcy restructuring procedure
("redressement judiciaire"), except for the procedure which
resulted in the Plans, or judicial liquidation, nor any
equivalent procedure; none of the Companies are insolvent ("etat
de cessation de paiements"). There are no grounds upon which a
third party could require the dissolution or winding up of the
affairs of any Company.
(c) A complete, up-to-date, certified copy of the statuts of the
Companies, as well as an original excerpt ("Extrait K-bis") from
the Registry of Commerce and Companies for the Companies are
attached hereto in Schedule 5.1(c)(i). No resolution has been
approved that results or will result in the amendment of the
attached by-laws or the dissolution or winding up of the affairs
of any Company. Since June 26, 1997, all of the corporate books
and registries of the Companies have been properly maintained in
all material respects in accordance with applicable law. The
corporate books and registries of the Companies accurately
reflect, in all material respects in accordance with applicable
law, their activities since June 26, 1997. A copy of the last
board of directors minutes of each Company, as well as the
minutes of the last shareholders' meeting, are attached hereto
as Schedule 5.1(c)(ii).
(d) Other than the Companies, the Companies do not have any
subsidiaries and do not directly or indirectly hold shares or
other securities or interests in any company, entity or other
Person, whether French or foreign. Neither of the Companies is
part of any group or association with third parties nor of any
organization to which it
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could be obligated to contribute additional capital or the
liabilities of which it could be required to pay or guarantee.
Except as set forth in Schedule 5.1(d) hereto, none of the
Companies acts as a member of the board of directors of any
other company. No contract exists whose stated purpose is to
give to a third party (i) influence over the control or the
management of the Companies or their respective business or (ii)
a right to claim a part of the profits of the Companies.
(e) The execution of this Agreement by the Seller and the
performance by the Seller of the transactions contemplated
herein have been duly authorized by all actions (including any
corporate actions) on behalf of the Seller. This Agreement has
been duly executed by the Seller and, assuming the due
authorization and execution of this Agreement by the Purchaser,
constitutes a valid and binding obligation of the Seller,
enforceable against it in accordance with its terms. Except for
the consent of the Commercial Court of Douai, no consent of any
third party (whether governmental or otherwise) is required by
the Seller to consummate the transactions contemplated by this
Agreement. Neither the execution of this Agreement nor the
performance of the transactions contemplated herein will violate
or constitute a default under any material contract to which the
Seller or Arbel or PSB or any of their Affiliates is a party or
by which their assets or property are bound or any law or any
order, judgment or rule of any governmental authority which is
applicable to the Seller or Arbel or PSB or any of their
Affiliates or any of their assets or property.
(f) The Shares represent 100% of the shares in Cofimeta. All of the
shares in the Companies other than the Shares are owned by
Cofimeta (or, in the case of the Delayed Shares, the Persons
identified in EXHIBIT I hereto) (such shares, together with the
Shares, the "COMPANIES' SHARES").
5.2 CAPITAL STRUCTURE
(a) The Companies' Shares are fully paid-in. The Companies have not
issued shares or rights of any kind whatsoever, other than the
Companies' Shares, which may give rise, directly or upon
conversion, exchange, reimbursement or exercise, to an increase
of its capital or an issuance of securities which entitle their
owners to a share of the profits or to voting rights of the
Companies.
(b) The Seller has full legal right, power and authority to sell the
Shares and have obtained all requisite permits and Consents for
such sale. Except as set forth in Schedule 5.2(b) in respect of
the Delayed Shares, the Companies' Shares are fully negotiable
and free from any option rights, claims, privileges, liens,
security interests, collateral, encumbrances, charges or
restrictions of any kind whatsoever.
5.3 EFFECT OF THE SALE
Except as set forth in Schedule 5.3 hereto, the sale of the
Shares to the Purchaser and the other transactions contemplated
hereby will not:
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(a) conflict with or violate the statuts of any Company or conflict
with or violate any legal or regulatory disposition, or any
judgment or decision that has been notified to any Company,
whether judicial or regulatory; or
(b) result in a Material Adverse Effect.
5.4 POTENTIAL CONFLICTS OF INTEREST/AFFILIATES
(a) Schedule 5.4(a) sets forth a list of any and all agreements
entered into by one or more of the Companies with the Seller,
Arbel, PSB or their Affiliates. Except as set forth in Schedule
5.4(a) hereto, neither the Seller, nor Arbel, nor PSB, nor any
of their Affiliates:
(i) holds, or has the option to acquire, directly or
indirectly, a participation in a company or business
which conducts business with the Companies as a
supplier, purchaser, lessor, provider of services or in
any other manner; or
(ii) holds, or has the option to acquire, directly or
indirectly, in whole or part, any assets or rights used
by any Company for purposes of conducting its activities
or which are necessary for the conduct of the business
of any Company; or
(iii) receives any remuneration from persons who provide goods
or services to any Company, or from persons who purchase
goods or services from any Company; or
(iv) has made, or intends to make, a claim against any
Company whether by virtue of a contract or by operation
of law ; or
(v) is owed any amounts by any Company by reason of a loan
or for any reason; or
(vi) employs or otherwise remunerates any person who is
employed or otherwise remunerated by the Companies.
(b) None of the Companies or their managers or employees have any
liability in respect of Arbel Ingenierie, including without
limitation in connection with its bankruptcy.
(c) Other than pursuant to the agreements identified in Schedule
5.4(c), as from the Closing Date, the Companies will no longer
be a party to or be bound by, or have any continuing obligations
or owe any sums or amounts under, any contract or commitments
with or in favor of the Seller, Arbel, PSB or any of their
Affiliates, in particular in connection with the contracts
listed in Schedule 5.4(a) hereto, such contracts having been
terminated as of Closing without any indemnity, expenses or
other sums whatsoever having been paid, and without any
liability or further obligations of any kind, by the Companies
and/or the Purchaser.
(d) As at Closing, the Seller and/or Arbel and/or PSB and/or their
Affiliates have paid to the Companies in full any and all
outstanding amounts owed by Seller and/or Arbel and/or PSB
and/or their Affiliates to the Companies. Anything in the
foregoing or in
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the agreements listed in Schedule 5.4(a) to the contrary
notwithstanding, as from January 1, 1998 until the Closing Date,
(i) management fees paid to the Seller, Arbel, PSB or any
Affiliates in respect of the Companies are equal in the
aggregate to 1.75% of the consolidated turnover (chiffre
d'affaires) of Cofimeta (excluding taxes) during such period;
and (ii) the total amount of fees Cofimeta has billed to and
received from Valfond in respect of services rendered by the
Cofimeta sales department during such period is equal to two
million French francs (FF 2,000,000) (excluding taxes) (x)
multiplied by the number of months of the calendar year 1998
lapsed or started on the Closing Date and (y) divided by 12. If
and to the extent the Seller, Arbel, PSB or their Affiliates
together received more than the amount in (i) above in
management fees from the Companies prior to Closing, the Seller
reimbursed or caused to be reimbursed to Cofimeta the amount of
such excess at the latest at the Closing.
5.5 FINANCIAL SITUATION
(a) The Seller has delivered to the Purchaser a complete copy of (i)
the audited financial statements (including the balance sheet,
the profit and loss statements and annexes thereto) of each of
the Companies and the unaudited consolidated financial
statements (including the balance sheet, the profit and loss
statements and annexes thereto) of the Companies reviewed by the
auditors of the Companies, each as of and for the year ended on
December_31, 1997 (hereinafter together the "1997
Financial Statements"), and (ii) the unaudited financial
statements (including the balance sheet, the profit and loss
statements and the annexes thereto) of each of the Companies and
the unaudited consolidated financial statements (including the
balance sheet, the profit and loss statements and the annexes
thereto) of the Companies, as of and for the period ended on
June 30, 1998 (hereinafter together the "June 30, 1998 Financial
Statements", and collectively with the 1997 Financial
Statements, the "Financial Statements"). The 1997 Financial
Statements and the June 30, 1998 Financial Statements are
attached hereto as Schedule 5.5 (a).
(b) The Financial Statements have been prepared according to the
accounting principles and methods generally accepted in France
applied on a consistent basis.
5.6 CURRENT OPERATIONS
Each of the Companies has since July 1st, 1998, been managed in the
ordinary course of business and "en bon pere de famille" and none of the
Companies has made any material change in the conduct of its business or
operations, nor entered into any transaction other than in the ordinary
course of business consistent with past practices. Except as set forth
in Schedule 5.6 hereto, since July 1st, 1998 each of the Companies have
fully respected the covenants set forth in Section 4.1, as if Section
4.1 applied as from July 1, 1998.
5.7 TAX, SOCIAL SECURITY AND CUSTOMS
In respect of the period prior to June 26, 1997, the Companies do not
have any liabilities for Taxes (as defined below) except as set forth in
Schedule 5.7. In respect of the period starting
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on June 26, 1997, except as set forth in Schedule 5.7, all tax returns,
reports, declarations of estimated tax and forms required to be filed on
or before the Closing Date by or on behalf of the Companies with respect
to any income, properties or operations of the Companies with any
taxing, customs, welfare, social security or other social authority have
been filed through the date hereof, or will be filed on or before the
Closing Date in accordance with all applicable laws, and all taxes
(including transfer, property, sales, withholding, income, value-added
or customs, business, ad valorem, social security fees, governmental
charges, welfare charges, or assessments, or social, welfare and other
contributions, governmental insurance fees, governmental pension plan
contributions, duties, charges, levies, contributions, penalties,
interest and other charges) (collectively "TAXES" and each individually
a "TAX") due under applicable law, whether or not reported or reflected
on such returns, reports, declarations, and forms have been paid or
reserved for in the Financial Statements. All Taxes that the Companies
were required by law to withhold or collect have been duly withheld or
collected, and, to the extent required, have been paid to the proper
authority. Except as set forth in Schedule 5.7, there is no action,
suit, proceeding, investigation, audit, examination or claim pending as
of the date hereof against any of the Companies or, with respect to any
Tax, nor has any claim for additional Tax been asserted by any such
authority relating to the Taxes of the Companies.
5.8 COMPLIANCE WITH THE PLANS; LITIGATION
(a) Without limiting Section 5.9, the Companies and the Seller have
always complied with and are currently in compliance with all of
the terms and conditions of the Plans.
(b) Except for those items described in Schedule 5.8(b) hereto, none
of the Companies is a party to any administrative, judicial or
arbitration procedures. Schedule 5.8(b) also sets forth, as a
matter of information only, the reserves in the Financial
Statements for liabilities which may arise as a result of any
procedures to which the Companies are a party, it being
understood that the Seller does not make any representation
whatsoever as to the accuracy of the amount of such reserves.
Except as set forth in Schedule 5.8(b), none of the Companies is
the subject of any written claim. None of the Companies has
received any written notification of a proceeding or
administrative investigation.
5.9 COMPLIANCE WITH LAWS
The Companies have acted and currently act in conformity with
the laws and binding decisions of competent authorities that are
applicable to them or that relate to their assets or activities,
except where such non-conformity has no Material Adverse Effect
in respect of any of them.
5.10 CONTRACTS; NO CONFLICT
(a) Schedule 5.10(a) hereto enumerates all of the contracts
and agreements, to which any Company is a party or which
are otherwise applicable to any Company and which
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were disclosed to the Purchaser (the "Contracts")
divided into the categories referred to on the cover
page of such schedule. No Company is a party to any
other contracts or agreements which would require
payment or receipt of payment in excess of FF 100,000.
Copies of all of the Contracts have been delivered to
the Purchaser and all such copies are true and complete.
(b) All of the Contracts are valid and enforceable.
(c) No Contract is in violation of any Laws which are
applicable thereto.
(d) None of the Companies is in breach of the obligations
contained in, or in default under, any of the Contracts
and to the best of Seller's knowledge no other party to
the Contracts is in breach of the obligations contained
therein thus giving a third party a right to terminate
or to require payment of an indemnity in excess of
FF_100,000. No event has occurred which may, with
due notice or the passage of time, or both, constitute a
breach or default under any of the Contracts.
5.11 REAL PROPERTY FIXTURES; PERSONAL PROPERTY AND EQUIPMENT
(a) Real Property and Fixtures. Schedule 5.11(a) sets forth
a true and complete list of all real properties which
the Companies own, lease (including under "contrats de
credits-bails"), use or have agreed or are obligated to
purchase, sell or lease, which specifies in each case,
if the concerned Company owns, leases, uses or has
agreed or is obligated to purchase, sell or lease, such
real property. The Companies have good and marketable
title to all real properties shown in such Schedule as
owned by them and good and transferable right to occupy
and use all real estate shown in such Schedule as leased
by them.
(b) Technical Installations, Personal Property and
Equipment. Schedule 5.11(b) sets forth a true and
complete list of all personal property and equipments
owned, leased or used by each of the Companies as at
June 30, 1998 together with all changes in that list
since that date. The Companies have good and marketable
title to all personal property and equipment shown in
such Schedule or owned by them and good and transferable
rights to use all personal property and equipment shown
in such Schedule or leased by them.
(c) Sufficiency. The assets which are owned, leased or used
by the Companies, currently and upon Closing, are
sufficient to operate the business of the Companies as
currently conducted.
5.12 ENVIRONMENTAL MATTERS
Except for matters described in the three environmental audit
reports attached in Schedule 5.12,
(a) the Companies and their respective operations have
obtained and maintained in effect and currently hold all
licenses, permits and other authorizations required
under all applicable laws, regulations and other
requirements of governmental or regulatory
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authorities relating to pollution or to the protection
of the environment and to health and safety
("Environmental Laws") and have carried out all the
formalities required under all Environmental Laws. The
Companies have been operated in and are currently in
compliance with all Environmental Laws and with all such
licenses, permits and authorizations. None of the
Companies has been subject to any inquiry, order, claim,
injunction, complaint, sanction or penalty in connection
with any Environmental Laws or any such license, permit
or authorization. None of the Companies has performed or
suffered any act which could give rise to, or has
otherwise incurred, liability to any person
(governmental or not) under any Environmental Laws, nor
have any of the Companies received notice of such
liability or any claim therefor or submitted notice to
any governmental agency with respect to any of their
respective assets;
(b) there is no prohibition, injunction, restriction or
limitation whatsoever, whether administrative or
judicial, with regard to any Environmental Law, limiting
the free disposal of the Companies' tangible personal or
real property. There is no fact or circumstance likely
to constitute the basis of such a prohibition,
injunction, restriction or limitation;
(c) except as set forth in Schedule 5.12(c) hereto, none of
the Companies owns or operates any classified
installation (installations classees) or any
installation that may be subject to an authorization
from the relevant administrative authorities, whether
national or local;
(d) except as set forth in Schedule 5.12(c), none of the
property of the Companies has been used to treat or
store any waste or substance on it and, in particular,
no underground storage tanks have ever been located on
any such property;
(e) none of the Companies has transported, or caused to be
transported, waste in a place or to a destination which
might incur its liability or that of the beneficiary, or
which might result in clean-up or refurbishment expenses
of the sites or which, more generally, might result in
damage to the environment or injury to persons;
(f) none of the Companies has exposed any person or assets
to hazardous materials, nor caused or allowed the
emission, dispersion, discharge or deposit of any solid,
liquid or gaseous substance causing a nuisance or
pollution to the atmosphere, water, ground and subsoil,
and to the fauna and flora nor the production of odors,
noise, vibrations, waves, radiation or temperature
variations;
(g) none of the Companies is the subject of any complaint or
of any judicial action or any judgment in the matter of
damage to the environment currently pending or
threatened before French, European Community and
international courts, whether civil, administrative or
criminal;
(h) there are no polychlorinated biphenyls ("PCB's") in or
at any property owned, leased, controlled or operated by
the Companies;
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(i) none of the real properties owned, leased, controlled or
operated by the Companies has had any friable asbestos
or asbestos containing material in or on it;
(j) except as listed in Schedule 5.12(j), there exist no
environmental audits, reports, investigations or
inspections nor do there exist any studies, analyses,
surveys or tests carried out by or in the possession of
the Companies or the Seller, PSB or Arbel or any of
their Affiliates or their advisers or of which the
Seller, PSB or Arbel or any of their Affiliates or the
Companies or their advisers are aware pertaining to any
matters covered by Section 5.12;
provided that, in respect of the period prior to
June 26, 1997, the foregoing representations in this Section 5.12
are given to the best knowledge of the Seller.
5.13 RECALLS
Except as set forth in Schedule 5.13 hereto, none of the
Companies has decided to recall or modify, for any alleged
material hazard or alleged defect in design, manufacture or
workmanship, any product which has been assembled or manufactured
by any of the Companies before the present date and no customer
has announced any recall or modification of any products
involving any products manufactured or assembled by any of the
Companies. Neither the Seller nor the Companies has any knowledge
of a warranty claim, default or recall by a customer or any basis
therefor.
5.14 INTANGIBLE PROPERTY RIGHTS
(a) Business ("Fonds de Commerce"). The "fonds de commerce"
operated by each of the Companies are fully owned by
them. Each such "fonds de commerce" has been lawfully
and validly created, purchased or contributed and,
except as set forth in Schedule 5.14(a) hereof, is free
from any pledge, security, privilege or any other
similar third party rights of any kind. None of the
Companies has leased any business pursuant to a
"location gerance".
(b) Intellectual Property Rights. (i) All patents, patent
applications, trademarks, trademark applications and
registered copyrights ("IP Rights") which are owned by
or licensed to each of the Companies are listed in
Schedule 5.14(b)(1). (ii) The IP Rights owned by each of
the Companies are valid in the countries where
registered and have been duly registered with the
offices as identified in Schedule 5.14(b)(1) and have
been properly maintained and renewed in accordance with
all provisions of applicable law and regulations. (iii)
Each of the Companies owns or has a valid license (for
the territory stated in the license) to use the IP
Rights needed to conduct their business as currently
conducted. (iv) There are no claims or demands which
have been asserted in writing by any third party to any
of the Companies with respect to the IP Rights. (v)
Except as described in Schedule 5.14(b)(2), none of the
Companies has any obligation to pay royalties or other
fees to third parties with respect to such IP Rights.
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5.15 OWNERSHIP AND LIENS
Except as set forth in Schedule 5.15 hereto, all of the
inventory and assets of the Companies reflected in the Financial
Statements are free from any options or Liens, and the Companies
have full ownership rights over them.
5.16 BANK ACCOUNTS
Schedule 5.16(b) contains a complete list of the name and
address of all financial institutions with which the Companies
have a line of credit or an account, indicating in each case the
persons having the authority to draw on these lines of credit or
use the accounts.
5.17 SUPPLIERS AND CUSTOMERS
Except (i) as set forth in Schedule 5.17 or (ii) in the ordinary
course of business consistent with past practice, neither the
Seller, nor Arbel nor PSB nor their Affiliates, nor any of the
Companies has granted or committed itself, whether orally or in
writing, to grant any discounts or rebates to any customers of
the Companies which would be required to be paid by any of the
Companies after June 30, 1998.
5.18 LABOR AND EMPLOYMENT MATTERS
(a) Except as set forth in Schedule 5.18(a), to the best
knowledge of the Seller, the Companies conducted their
business through June 26, 1997 in accordance with all
applicable labor and employment Laws. Since June 26,
1997, the Companies have conducted and currently conduct
their business in accordance with all applicable labor
and employment Laws.
(b) Schedule 5.8(b) contains a true and complete list of all
Collective Bargaining Agreements (conventions
collectives et accords d'entreprises ou conventions
d'usages) by which the members of the personnel of the
Companies are governed. Other than as set forth on
Schedule 5.18(b), no collective dismissals of the
personnel have been notified to any of the employees of
the Companies.
(c) Schedule 5.18(c) sets forth the name and total
remuneration (including in-kind benefits) of the ten
(10) most highly remunerated managers, employees and
representatives ("VRP") of each Company. None of these
persons has threatened in writing to end his or her
position or relationship with the one of the Companies,
and the Seller has no knowledge of any reason that could
warrant the revocation of these managers for misconduct
or termination of these employees or representatives for
"faute grave" or "faute lourde".
5.19 SUBSIDIES AND GOVERNMENTAL ASSISTANCE
Except as set forth in Schedule 5.19 hereto, the Companies do
not have or benefit from any governmental subsidies, be it
national, regional, departmental or other that the Companies
could be required to reimburse in whole or in part for any
reason whatsoever and none of the Companies will be required to
pay any indemnity or penalty of any nature whatsoever in
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connection therewith. Schedule 5.19 lists all of the amounts
which have been, and all of the amounts which are to be,
reimbursed by a governmental authority in respect of salaries
paid by the Companies; all such amounts are the property of the
Companies.
5.20 INSURANCE
(a) Except as set forth in Schedule 5.20 hereto, there is no
claim by the Companies pending under the policies of
title, liability, fire, casualty, business interruption,
and other forms of insurance insuring the properties,
assets and operations of business of the Companies as to
which coverage has been questioned, denied or disputed
by the underwriters of such policies. The coverage which
the policies insure is normal and prudent in the
industry relating to the specific activities exercised
by the Companies.
(b) The broker agreement dated April 16, 1997, between the
Company and Cabinet Girardclos & Bry has been terminated
at no cost to any of the Companies.
5.21 CONTINGENT CLAIMS OR LIABILITIES
There are no contingent claims or liabilities of any kind or
nature against the Companies other than as set forth in the
Financial Statements and the Schedules hereto.
5.22 BROKERS
All negotiations pertaining to the sale of the Shares and the
agreements relating to such sale have been carried on in such a
manner that no broker or other person acting on behalf of the
Seller, Arbel, PSB, or their Affiliates shall have a valid claim
against any of the Companies or against Purchaser and its
shareholders for any broker's fee or finder's fee or similar
compensation.
5.23 COMPANIES DEBTS / PLAN INFORMATION
(a)(i) Continuation Plans Creditors.
Attached in Schedule 5.23(a)(i) hereto is a true and
complete list of each creditor of the Companies which is
subject to the Plans and for each such creditor (i) its
name, (ii) its category (intercompany, bank, supplier or
public authority), (iii) the repayment option applicable
under the Plans, (iv) the principal amount payable (plus
applicable interest rate if any) by the Companies to
such creditor under the Plans as of December 31, 1997,
(v) any payment made to such creditor by the Companies
and the date of such payment as well as any payment due
which is to be made, (vi) any adjustment approved by the
Commercial Court of Douai in the amount payable by the
Companies to such creditor, (vii) the current balance of
the amount payable by the Companies to such creditor,
(viii) the next payment due and the date thereof and
(ix) indicating whether or not the amount set forth in
(vii) has been challenged (conteste). All amounts and
information contained in Schedule 5.23(a)(i) are true
and accurate and none of the Companies has creditors
subject to the Plans other than those listed in Schedule
5.23(a)(i) hereto.
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(a)(ii) Trade Debts (Valfond Purchase 1).
Attached in Schedule 5.23(a)(ii) hereto is a true and
complete list of each creditor of the Companies whose
debts (the "Trade Debts") were purchased by the Seller
in 1997 and for each such creditor (i) its name, (ii)
its category (intercompany, bank, supplier or public
authority), (iii) the repayment option applicable under
the Plans, (iv) the principal amount payable (plus
applicable interest rate if any) by the Companies to
such creditor under the Plans as of December 31, 1997,
(v) any payment made to such creditor by the Companies
and the date of such payment as well as any payment due
which is to be made, (vi) any adjustment approved by the
Commercial Court of Douai on the amount payable by the
Companies to such creditor, (vii) the current balance of
the amount payable by the Companies to such creditor,
(viii) the next payment due and the date thereof and
(ix) the purchase price paid by the Seller to acquire
the Trade Debts. All amounts and information contained
in Schedule 5.23(a)(ii) are true and accurate. The
Seller has good and marketable title to the Trade Debts
and warrant their existence. The Seller is fully
subrogated in the rights of the original creditor in
respect of the Trade Debts. The Trade Debts have been
duly approved (admises) for their entire amount by the
Commercial Court of Douai and have not been challenged
(contestees). The acquisition of the Trade Debts by the
Seller was duly notified to the Companies in accordance
with Article 1690 of the French Civil Code. None of such
creditors is owed any amount by the Seller by reason of
such transfer.
(a)(iii) Purchased and Funded Debts (Valfond Purchase 2).
Attached in Schedule 5.23(a)(iii) hereto is a true and
complete list of each creditor of the Companies subject
to the Plans whose debts (the "1998 Debts") were
purchased and paid for by the Seller in 1998 and for
each such creditor (i) its name, (ii) its category
(intercompany, bank, supplier or public authority),
(iii) the repayment option applicable under the Plans,
(iv) the principal amount payable (plus applicable
interest rate if any) by the Companies to such creditor
under the Plans as of December 31, 1997, (v) any payment
made to such creditor by the Companies and the date of
such payment as well as any payment due which is to be
made, (vi) any adjustment approved by the Commercial
Court of Douai on the amount payable by the Companies to
such creditor, (vii) the current balance of the amount
payable by the Companies to such creditor, (viii) the
next payment due and the date thereof and (ix) the
purchase price paid by the Seller to acquire the 1998
Debts. All amounts and information contained in Schedule
5.23(a)(iii) are true and accurate. The Seller has good
and marketable title to the 1998 Debts and warrant their
existence. The Seller is fully subrogated in the rights
of the original creditor in respect of the 1998 Debts.
The 1998 Debts have been duly approved (admises) for
their entire amount by the Commercial Court of Douai and
have not been challenged (contestees). The acquisition
of the 1998 Debts by the Seller was duly notified to the
Companies in
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accordance with Article 1690 of the French Civil Code.
None of such creditors is owed any amount by the Seller
by reason of such transfer.
(a)(iv) Purchased Debts Subject to Funding.
Attached in Schedule 5.23(a)(iv) hereto is a true and
complete list of each creditors of the Companies subject
to the Plans with whom the Seller has, at the date of
this Agreement, entered into a binding agreement for the
acquisition of their debts but not paid them yet (the
"Purchased But Not Funded Debts") and for each such
creditor (i) its name, (ii) its category (intercompany,
bank, supplier or public authority), (iii) the repayment
option applicable under the Plans, (iv) the principal
amount payable (plus applicable interest rate if any) by
the Companies to such creditor under the Plans as of
December 31, 1997, (v) any payment made to such creditor
by the Companies and the date of such payment as well as
any payment due which is to be made, (vi) any adjustment
approved by the Commercial Court of Douai on the amount
payable by the Companies to such creditor, (vii) the
current balance of the amount payable by the Companies
to such creditor, (viii) the next payment due and the
date thereof, (ix) the purchase price to be paid for the
acquisition of the Purchased But Not Funded Debts, the
date the purchase price payment thereof is to be made
being set forth in EXHIBIT A. When such Purchased But
Not Funded Debts are paid, the Seller (or the Purchaser,
after the assignment to the Purchaser by the Seller of
its right to purchase the Purchased But Not Funded
Debts), will have good and marketable title to the
Purchased But Not Funded Debts and will be fully
subrogated in the rights of the original creditor in
respect of the Purchased But Not Funded Debts. All
amounts and information contained in Schedule
5.23(a)(iv) are true and accurate. The Purchased But Not
Funded Debts have been duly approved (admises) for their
entire amount by the Commercial Court of Douai and have
not been challenged (contestees). Attached to Schedule
5.23(a)(iv) hereto are true and complete copies of all
the transfer agreements entered into by the Seller with
respect to the Purchased But Not Funded Debts with the
applicable creditors.
(a)(v) Remaining Debts.
Attached in Schedule 5.23(a)(v) hereto is a true and
complete list of each creditor of the Companies subject
to the Plans whose debts (the "Remaining Debts") are not
included in the Trade Debts, the 1998 Debts and the
Purchased But Not Funded Debts and for each such
creditor (i) its name, (ii) its category (intercompany,
bank, supplier or public authority), (iii) the repayment
option applicable under the Plans, (iv) the principal
amount payable (plus applicable interest rate if any) by
the Companies to such creditor under the Plans, (v) any
payment made to such creditor by the Companies and the
date of such payment as well as any payment due which is
to be made, (vi) any adjustment approved by the
Commercial Court of Douai on the amount payable by the
Companies to such creditor, (vii) the current balance of
the amount payable by the Companies to such creditor,
(viii) the next payment due
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and the date thereof. All amounts and information contained in Schedule
5.23(a)(v) are true and accurate.
5.24 AUDIT INFORMATION
The Seller represents that the Audit Information, other than the
Financial Statements, is true, correct and not misleading. The Seller
hereby confirms that no information has been withheld and that all
information which is known to the Seller (after appropriate inquiry of
the managers (cadres) of the Companies) and which may be material to a
purchaser for value of the shares of the Companies has been disclosed in
the Audit Information. Any such information which may be material to a
purchaser for value of the shares of the Companies arising on or before
the Closing Date will forthwith be disclosed in writing to the
Purchaser.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to the Seller as follows:
6.1 ORGANIZATION
Purchaser is a corporation in the process of being formed under the laws
of France and has all requisite corporate power and authority to enter
into this Agreement and to perform its obligations hereunder.
6.2 AUTHORIZATION AND VALIDITY
The execution and delivery of this Agreement by the Purchaser and the
performance by Purchaser of the transactions contemplated herein have
been duly authorized by all corporate actions on behalf of the
Purchaser. This Agreement has been duly executed and delivered by
Purchaser and, assuming the due authorization, execution and delivery of
this Agreement by the Seller, constitutes a valid and binding obligation
of the Purchaser, enforceable against it in accordance with its terms.
Except for the consent of the Commercial Court of Douai, no consent of
any third party (whether governmental or otherwise) is required by the
Purchaser to consummate the transactions contemplated by this Agreement.
6.3 NO CONFLICT OR VIOLATION
Neither the execution of this Agreement nor the performance of the
transactions contemplated herein will (i) violate or conflict with the
statuts of the Purchaser or (ii) violate or constitute a default under
any material contract to which the Purchaser is a party or by which its
assets or property are bound or any law or any order, judgment or rule
of any governmental authority which is applicable to the Purchaser or
its assets or property.
6.4 BROKERS
All negotiations pertaining to the sale of the Shares and the agreements
relating to such sale have been carried on in such a manner that no
broker or other person acting on behalf of the
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Purchaser shall have a valid claim against the Seller for any broker's
fee or finder's fee or similar compensation.
ARTICLE VII
INDEMNIFICATION AGREEMENT
The Seller hereby undertakes to indemnify and hold harmless the Purchaser as set
forth below.
7.1 INDEMNIFICATION
(a) The parties agree that the Purchaser shall have no contractual
rights to indemnification after Closing for any representation
and warranty made by the Seller under any Section of Article V
of this Agreement which is not referred to in Section 7.1(b)(i)
or (ii).
(b) The Seller undertakes to indemnify the Purchaser against and
agrees to hold the Purchaser harmless from any and all damages,
losses, liabilities or claims (collectively "Damages") incurred
by the Companies and/or the Purchaser arising from:
(i) any violation, contravention or breach of any covenants
of the Seller set forth in Sections 4.3, 4.7 and 4.12 of
this Agreement; or
(ii) to the extent provided in Section 7.3 and 7.5 hereof,
any incorrectness in, or breach of, any representation
or warranty made by the Seller in Sections 5.1, 5.2,
5.3, 5.4, 5.6, 5.7, 5.8, 5.10, 5.11(c), 5.13, 5.15,
5.17, 5.18, 5.20(b), 5.22, 5.23 and 5.24, the Exhibits
and the Schedules annexed hereto in respect of such
Sections or in any certificate or other document
delivered or given pursuant to this Agreement.
7.2 CLAIM PROCEDURE
All claims by the Purchaser under this Article VII shall be asserted as
follows:
(a) in the event that (A) any claim, demand or proceeding is
asserted or instituted by any party other than the Purchaser
hereto which could give rise to Damages for which the Seller
would be liable to the Purchaser hereunder (such claim, demand
or proceeding, a "Third Party Claim"), or (B) the Purchaser
shall have a claim to be indemnified by the Seller which does
not involve a Third Party Claim, the Purchaser shall (x) in the
case of a Third Party Claim, within fifteen (15) days of the
Companies' receiving actual notice of such Third Party Claim
(unless failure to notify the Seller within such period would
not materially prejudice the Seller's interests, in which case,
the Purchaser shall with reasonable promptness), and (y) in the
case of any other claim, with reasonable promptness, send to the
Seller a written notice the nature of such claim or demand and
the amount or estimated amount (which estimate shall not be
conclusive of the final amount of such claim or demand) (a
"Claim Notice").
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(b) In the event of a Third Party Claim:
(i) the Seller shall have the right, if it so notifies the
Purchaser with sufficient promptness after the sending
of the Claim Notice in order not to compromise the
position of the Purchaser or the Companies, to defend
the action or to pursue the claim.
(ii) If the Seller has notified the Purchaser that it wishes
to defend the action or to pursue the Third Party Claim,
it will pursue the defense and claim reasonably and
prudently and be assisted by counsel reasonably
acceptable to the Purchaser. The Seller will regularly
inform the Purchaser of the progress of such defense or
such claim and, on request, shall provide it with all
information or documentation as is necessary to enable
it to consider the position. From and after the delivery
of a Claim Notice hereunder, at the reasonable request
of the Seller, the Purchaser shall grant the Seller and
its representatives reasonable access to the books,
records and properties of the Companies to the extent
related to the matters to which the Claim Notice
relates. The Seller will not, and shall require that its
representatives do not, use or disclose to any third
person other than its representatives (except in
connection with such Claim Notice) any information
obtained pursuant to this Section 7.2 which is
designated as confidential by the Purchaser. If the
Seller has notified the Purchaser that it will defend
the action or pursue the claim, the Seller shall bear
all costs and fees (including without limitation
attorney's fees and expenses) it shall incur in respect
of such defense or such claim.
(iii) If the Seller notifies the Purchaser that the Seller
does not wish to defend the action or pursue the claim
or fails to do so in accordance with Section 7.2(b)(i)
above, the Purchaser shall defend the action or pursue
the claim on its own and shall pursue the defense or
claim reasonably and prudently and be assisted by
counsel reasonably acceptable to the Seller; the Seller
shall bear all attorney's fees and expenses in respect
of such defense or such claim.
(iv) The Seller or the Purchaser, depending on which of them
defends the action or pursues the claim, shall allow the
other Party and its counsel to participate in the
elaboration of the arguments which may need to be put
forward and in the negotiations which may take place to
reach an out-of-court settlement, it being understood
that such other Party shall bear all fees and expenses
of such additional counsel.
(v) No compromise or settlement of a Third Party Claim shall
be made without the prior written consent of both the
Purchaser and the Seller, such consent not being
unreasonably refused or delayed.
(c) The liability of the Seller to the Purchaser in respect of
Damages resulting from a Third Party Claim shall be indemnified
pursuant to Section 7.1 regardless of which Party defends the
action or pursues the claim.
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(d) In the event of a claim between the Parties which does not
involve a Third Party Claim, the Party against which a
definitive judgment is rendered in connection with such claim
shall bear all costs and expenses of counsel of both Parties
incurred in connection with such claim.
7.3 LIMITATIONS ON RELEVANT CLAIMS
(a) No claim for indemnification under Section 7.1(b)(ii) (any such
claim, a "Relevant Claim") may be made by the Purchaser against
the Seller, and no payment in respect thereof shall be required,
unless and only to the extent that:
(i) the amount of Damages in respect of which the Seller is
obligated to indemnify the Purchaser in respect of any
such Relevant Claim exceeds FF 200,000 (the "Minimum
Claim Amount") (it being understood that if the amount
of such Damages shall exceed FF 200,000, the Seller's
obligation to indemnify the Purchaser shall extend to
the entire amount of such Damages, including the amount
up to FF 200,000 subject however to clause (ii) below),
and
(ii) the cumulative and aggregate amount of all Damages in
respect of which the Seller is obligated to indemnify
the Purchaser under Section 7.3(a)(i) shall exceed the
sum of FF 2,000,000 in the aggregate (it being
understood that if the amount of such Damages shall
exceed FF 2,000,000, the Seller's obligations to
indemnify the Purchaser shall extend to the entire
amount of such Damages, including the amount of FF
2,000,000);
provided, however, that for the purposes of Section
7.3(a)(i) above, in the event of a series of related
claims based on the same or a similar set of facts or
circumstances, the aggregate total of the Damages
resulting from such series of claims shall be used only
one time to determine whether the Minimum Claim Amount
has been exceeded, whether or not the Damages resulting
from an individual Relevant Claim would be less than the
Minimum Claim Amount.
(b) Notwithstanding any other provisions of this Agreement (but
subject to Section 7.3(f) hereof), the maximum amount of Damages
for which the Seller may be liable under this Agreement in
respect of Relevant Claims shall not exceed FF 90,000,000.
(c) Any Relevant Claims made under Section 5.7 hereof shall be
reduced by taking into account any loss carry-forwards available
to the Companies, provided that they do not relate to any
management fees paid by any of the Companies for any reason
whatsoever and provided further that they will be taken into
account for their full amount for the application of Sections
7.3(a)(i) and 7.3.(a)(ii) hereof but shall not be taken into
account for the application of Section 7.3. (b).
(d) Except for representations and warranties made and given under
Sections 5.1., 5.4., 5.7, 5.8, 5.18, 5.23 and 5.24 which are
essential for the Purchaser and for which the Seller represents
that they are true and accurate in all respects irrespective of
any
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information contained in the Audit Information, no Relevant
Claim may be made by the Purchaser against the Seller, and no
payment in respect thereof shall be required in respect of facts
contained in the Audit Information, provided that such facts are
clearly disclosed in the documents contained in the Audit
Information.
(e) Damages at the level of a subsidiary of Cofimeta will not be
counted a second time at the level of Cofimeta.
(f) Notwithstanding the provisions of Sections 7.3(a) and 7.3(b),
such Sections 7.3(a) and 7.3(b) shall not apply in the case of
claims made in respect of Section 5.4.
7.4 INDEMNITY PAYMENT
Subject to Section 7.8, any indemnity set forth in this Article VII will
(subject to the next paragraph) be due and payable by the Seller within
thirty days after the Purchaser has sent a Claim Notice, provided that,
in the event of a Third Party Claim, the indemnity will be due and
payable as soon as any Company is obligated to pay under the terms of
the contract, applicable legislation or of a judgment.
In the case of disagreement between the Parties hereto, the indemnity
will be due by the Seller as soon as the liability has (i) been agreed
in writing by the Parties or (ii) has been determined by a court
decision in accordance with Section 8.14 hereof and the judgment
provides for immediate execution.
Any payment of an indemnity hereunder shall give rise to an interest
charge computed at a rate of one month PIBOR plus 5% as from the later
of (i) 30 days after the date the Claim Notice was received by the
Seller or (ii) the date on which the Damages giving rise to the
indemnity was incurred.
7.5 SURVIVAL
(a) The representations and warranties of the parties hereto
contained in the Sections of this Agreement which are not
referred to in Sections 7.5(b)(i) or 7.5(b)(ii) below shall not
survive the Closing.
(b) The other representations and warranties of the parties hereto
contained in this Agreement or in any certificate or other
writing delivered pursuant hereto or in connection herewith
shall survive the Closing until:
(i) 36 months after the Closing or, if longer, the
expiration date of the statute of limitations, for any
indemnified liability with respect to the
representations and warranties contained in Sections
5.1, 5.4, 5.7, 5.8(a), 5.18, 5.23 and 5.24 hereof ; and
(ii) 15 months after the Closing Date for any indemnified
liability with respect to the representations and
warranties contained in Sections 5.2, 5.3, 5.6, 5.8(b),
5.10, 5.11(c), 5.13, 5.15, 5.17, 5.20 (b) and 5.22
hereof.
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(c) The covenants of the parties hereto contained in Sections 4.3,
4.7, and 4.12 and the agreements contained in Sections 7.7 and
7.8 of this Agreement shall survive until the fifth anniversary
of the Closing Date.
(d) The specific indemnity obligation of the Seller pursuant to
Section 7.6 shall survive the Closing until the expiration date
of the statute of limitations of the subject matter thereof.
7.6 SPECIFIC INDEMNITY
The Seller hereby indemnifies the Purchaser and the Companies against
and agrees to hold the Purchaser and the Companies harmless from any and
all action, claim, demand, cause of action, judgment, loss, liability or
commitment by or in respect of Arbel or PSB or any Affiliates thereof or
any personnel of Arbel or PSB or their Affiliates, including without
limitation in connection with the Arbel Debt, the repayment and/or the
setting off thereof pursuant to the debt transfer and set-off agreement
referred to in Section 3.1(vi) and/or any other payment by Arbel or its
Affiliates to the Companies and with the uncollectability of any
receivable due from Arbel or PSB or any of their Affiliates to any of
the Companies and/or with any transfer by Arbel and/or PSB of their
shares in Cofimeta to the Seller prior to or at the Closing; this
indemnity also includes, any damage, loss, liability and expenses
incurred by the Companies and/or the Purchaser (including attorney's
fees and expenses in connection with any action, suit or proceeding to
the same extent as provided in Section 7.2(b)) in connection with the
foregoing. None of the limitations set forth in Sections 7.3(a) and
7.3(b) shall apply to this Section.
7.7 GUARANTEE
The Seller hereby covenants to deliver to the Purchaser, within five
days of any notification of default sent to the Seller under the FF
275,000,000 Term Loan Agreement dated April 30, 1997, among the Seller
(as Borrower), Merrill Lynch International (as Arranger), Merrill Lynch
Capital Markets Bank Limited (as Original Lender), Bankers Trust Company
(as Agent) and Banque Arjil et Cie (as Arranger and Financial Adviser to
Borrower), a guarantee from a reputable French bank reasonably
acceptable to the Purchaser in a maximum amount of FF 90,000,000 in the
form of EXHIBIT XVIII in favor of Purchaser in order to secure the
Seller's obligations to the Purchaser.
7.8. OTHER GUARANTEES
As soon as possible following the sending of any Notice of Claim, the
Purchaser shall furnish to the Seller the information in its possession
(the "Information") which permitted the Purchaser to estimate the amount
of the indemnification claim. In connection with each such
indemnification claim, the Seller agrees to furnish to the Purchaser a
bank guarantee (the "Guarantee") from a reputable French bank in the
form of EXHIBIT XVIII mutatis mutandis in accordance with the following
procedure.
The Parties shall consult each other in order to establish by common
agreement the amount of such estimate, which will be the subject of the
Guarantee. In the absence of an agreement
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between the Parties on such estimate within fifteen Business Days of the
sending of the Information by the Purchaser, the Guarantee furnished
shall be in the amount of the estimate furnished by the Purchaser,
reduced by any payment by the Seller to the Purchaser in connection with
such indemnification claim. The Seller agrees in any event to furnish
the Guarantee within twenty Business Days from the sending of the
Information by the Purchaser. The total of the Guarantees pursuant to
this Section 7.8 and the guarantee issued pursuant to Section 7.7 shall
not exceed FF 90,000,000.
In the event of failure by the Seller to perform the obligations under
the foregoing clauses of this Section 7.8, the Purchaser shall not be
obligated to make the part of the Third Deferred Payment corresponding
to the amount of the Guarantee which shall not have been furnished by
the Seller pursuant to the foregoing clauses of this Section 7.8, as
long as the said Guarantee is not furnished to the Purchaser.
ARTICLE VIII
MISCELLANEOUS PROVISIONS
8.1 AGREEMENT INTEGRATION
The present Agreement constitutes the entire agreement between the
Parties and their respective groups concerning the subject matter hereof
and supersedes all prior agreements, undertakings, negotiations,
discussions or representations of any kind whatsoever, whether oral or
written, of the Parties and their respective groups and the
representatives thereof. The present Agreement may not be modified
except by written agreement which carries a date subsequent to the date
of the present Agreement and is duly signed by the parties hereto.
Any and all information disclosed in any Schedule to this Agreement
other than Schedules 5.1(a), 5.1(c)(i), 5.1.(c)(ii), 5.1(d), 5.4(a),
5.4(c), 5.7, 5.8, 5.18(a), 5.18(b), 5.18(c) 5.23(a)(i), 5.23(a)(ii),
5.23(a)(iii) and 5.23(a)(iv), shall be deemed made and disclosed with
respect to each and every representation other than those contained in
Sections 5.1, 5.4, 5.7, 5.8, 5.18 and 5.23.
8.2 NOTICES
All notices and other communications given or made pursuant hereto shall
be in writing and shall be deemed to have been given or made if
delivered personally or sent by registered mail return receipt requested
or by telegram or by facsimile transmission confirmed by registered mail
return receipt requested to the parties at the following addresses:
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(a) If to the Seller: Groupe Valfond
100/102 rue de Villiers
92309 Levallois-Perret Cedex
France
Attention: President
Fax: 01 47 58 27 50
with a copy to: Stibbe Simont Monahan Duhot & Giroux
154 rue de l'Universite
75007 Paris
France
Attention: Christian Nouel, Esq.
Fax: 00 33 1 40 62 20 62
(b) If to the Purchaser: Oxford Automotive France
c/o Oxford Automotive, Inc.
2000 North Woodward Ave., Suite 130
Bloomfield Hills, Michigan, 48304-2254
USA
Attention: Vice Chairman
Fax: 00 1 248 540 7501
with a copy to: Salans Hertzfeld & Heilbronn
9, rue Boissy d'Anglas
75008 Paris, France
Attention: John G. Speers, Esq.
Fax: (33) 1.42.68.15.45
or to such other persons or at such other addresses as shall be furnished
by any party by like notice to the others. No change in any of such
addresses shall be effective insofar as notice under this Section 8.2 are
concerned unless notice of such changes shall have been given to such other
parties hereto as provided in this Section 8.2.
8.3 TERMINATION
(a) This Agreement may be terminated at any time prior to the
Closing:
(i) by either Party if the Closing shall not have been
consummated on or before January 15, 1999 and such
failure to consummate is not the result of a breach of
this Agreement by the terminating party or the failure
of the terminating party to fulfill a condition to
Closing; or
(ii) by either the Seller or the Purchaser if there shall be
any law that makes consummation of the transactions
contemplated hereby illegal or otherwise
39
<PAGE> 40
prohibited or if consummation of the transactions
contemplated hereby would violate any non
appealable final order, decree or judgment of any
court or governmental body having competent
jurisdiction.
The Party desiring to terminate this Agreement pursuant
to clauses 8.3(a) shall give notice to the other Party.
(b) Neither Party nor their respective groups shall have any
liability to the other as a result of termination of
this Agreement pursuant to this Section 8.3, except any
such liability resulting from a breach of a
representation, warranty or covenant by either Party
pursuant to this Agreement which is applicable to such
Party prior to Closing.
8.4 COSTS AND EXPENSES
Each party shall pay its own costs and expenses (including without
limitation any and all taxes, professional fees and expenses) in
relation to the negotiation, preparation, execution and carrying into
effect of this Agreement (whether or not the transactions contemplated
hereunder are consummated) and any other agreements relating to the sale
of the Shares and the Trade Debts (whether or not the transactions
contemplated hereunder are consummated), and shall not seek or be
entitled to reimbursement of any such costs and expenses from the other
party. In its capacity as selling shareholder, the Seller has borne all
costs and fees incurred in relation with the transactions contemplated
by this Agreement which would normally be borne by a selling shareholder
(including without limitation any and all fees and expenses of legal and
accounting advisers which are not acting for the Purchaser, fees and
expenses in connection with the renegotiation of the Renegotiated Debts
and any similar expenses). In the event that any of these costs or fees
have been paid by the Companies as from July 2, 1998, the Seller shall
reimburse the Companies without delay for any and all such amounts so
advanced by the Companies. The cost of all environmental studies
undertaken in connection with the transactions contemplated by this
Agreement shall be shared equally by the Seller and the Purchaser.
Notwithstanding the foregoing, any transfer or registration tax of any
kind required in connection with the consummation of the transactions
contemplated by this Agreement shall be borne by the Purchaser.
8.5 ASSIGNMENT; AMENDMENT
(a) Assignment. This Agreement may not be assigned by either
party hereto without the prior written consent of the
other party; provided, however, that this Agreement
(including one or more of the other agreements
contemplated hereby) may be assigned, in whole or in
part, by Purchaser without the prior written consent of
Seller to a majority-owned subsidiary of Purchaser
(including in the case of the purchase of the Trade
Debts, Cofimeta), provided that Purchaser shall continue
to be jointly and severally bound by all the obligations
hereunder as if such assignment had not occurred and
perform such obligations to the extent that such
subsidiary fails to do so. This Agreement shall be
binding upon, and, subject to the terms of
40
<PAGE> 41
the foregoing sentence, inure to the benefit of, the parties, their
successors, legal representatives and assigns.
(b) Amendments. Any assignment in violation of this Article<-1- 95>8.5 shall
be null and void. No alteration of, amendment to or waiver of any of the
provisions of the Agreement shall be binding on any of the Parties
unless it is written and executed by a duly authorized representative of
each of the Parties.
8.6 POST CLOSING COOPERATION
(a) Collection of Debts. As from the Closing Date, the Parties shall use
their best efforts to take, or cause to be taken, all such further
actions and to do, or cause to be done, all such additional things
necessary, proper or advisable consistent with all applicable Laws to
ensure that any sums due to the Companies by any customer and collected
by the Seller, Arbel, PSB or their Affiliates are remitted to the
Companies in question without delay. As from the Closing Date, any sums
due to the Companies and collected by the Seller, Arbel, PSB or their
Affiliates shall bear interest payable to the Companies and computed at
a rate of one month PIBOR plus three percent (3%) as from their date of
collection by the Seller, Arbel, PSB or their Affiliates through their
date of remittance to the Companies. In connection therewith, the
Purchaser and the Purchaser's accountants shall at all time have
reasonable access to the accounting and other records, and to the
personnel employed by or others working on behalf of the Seller, Arbel,
PSB or their Affiliates and to the work papers of the accountants
thereof in order to audit and verify that any and all amounts due to the
Companies and collected by the Seller Arbel, PSB or their Affiliates are
remitted to the Companies in compliance with the provisions of this
Section. In addition, the Seller shall upon Closing cause all customers
to be informed that all payments due to the Companies should be remitted
directly to the relevant Companies as from the Closing Date.
(b) Document, Data and Access. After the Closing, the Seller shall cause all
business, accounting, legal, financing, technical documents and
information or data pertaining to the Companies in its possession or in
the possession of Arbel, PSB or their Affiliates and which have not
already been delivered to the Purchaser or the Companies to be delivered
to the Purchaser or the Companies upon request of the Purchaser or the
Companies. In connection therewith, the Seller shall ensure that the
Purchaser and the Companies shall at all time have reasonable access to
the records of the Seller, Arbel, PSB and their Affiliates and to the
personnel employed by or others working on behalf of such companies to
obtain such information, documents or data.
8.7 PREAMBLE
The provisions contained in the Recitals hereto form an integral part of
this Agreement.
8.8 WAIVER
No refusal or delay on the part of one party to exercise its rights
under this Agreement shall be considered to be a waiver of such rights
or other rights in the future.
41
<PAGE> 42
8.9 CONFIDENTIALITY
During the period from the date hereof through the Closing Date (or in
the event of termination of this Agreement pursuant to Section 8.3, then
through April 15, 2000), the Parties (together with, in the case of the
Seller, Arbel, PSB and their Affiliates) and their respective advisers
shall maintain confidential the non public information communicated
between them in connection with this Agreement.
If any disclosure of such information is required by applicable Laws,
the Party required to make the disclosure will notify the other
immediately and the Parties will consult in good faith as to the steps
which may be taken to prevent or limit the effects of such disclosure.
Notwithstanding the foregoing, each Party will have the right to
disclose and any such information obtained by such Party in connection
herewith, in connection with its defense of its interests in any
litigation with the other Party under this Agreement.
8.10 STOCK EXCHANGE AUTHORITIES
Except as required by law or regulation in the U.S. or France, the
Parties agree that any announcement with respect to the transactions
contemplated in this Agreement shall be mutually agreed upon between the
Parties before issuance.
8.11 BOARD OF DIRECTORS OF COFIMETA
The Parties will consult as to whether it serves the interests of the
Companies to have a representative of the Seller sit on the Board of
Directors of Cofimeta as from Closing for a period to be determined; if
the Parties agree that it does, Valfond will nominate such a
representative acceptable to the Purchaser for that period.
8.12 VALIDITY
The terms and conditions of this Agreement reflect the intentions of the
Parties hereto in respect of the subject matter hereof. The invalidity,
illegality or unenforceability of any provision of this Agreement shall
not affect or impair the continuation in force of the remainder of this
Agreement. Furthermore, in lieu of any such invalid, illegal or
unenforceable term or provision, the Parties hereto intend that there
shall be added as a part of this Agreement a provision as similar in
terms to such invalid, illegal or unenforceable provision as may be
possible and be valid, legal and enforceable. Without limiting the
foregoing, if any covenants contained in this Agreement, or any part
thereof, is held to be invalid, illegal or unenforceable because of the
duration of such provision or the area covered thereby, the parties
agree that the court making such determination shall have the power to
reduce the duration and/or geographic area of such provision and, in its
reduced form, said provision shall then be valid, legal and enforceable.
8.13 LANGUAGE
This Agreement has been entered into in the French language, which is
the definitive version. An English version has been prepared for the
convenience of the Parties.
42
<PAGE> 43
8.14 GOVERNING LAW; LITIGATION
This Agreement shall be governed by French law.
All disagreement or difficulties arising between the parties relative to
the validity, interpretation or execution of the Agreement shall be
submitted to the commercial courts of Paris, France.
Signed in two originals
In Paris,
on [_____________]
THE SELLER THE PURCHASER
GROUPE VALFOND S.A. OXFORD AUTOMOTIVE FRANCE SAS
- ----------------------- -------------------------
By: Mr. Herve Guillaume By: Mr. Hubert Mauroy
43
<PAGE> 44
LIST OF EXHIBITS
<TABLE>
<S> <C>
EXHIBIT I: Ownership of Shares
EXHIBIT II: Plans and Judgments
EXHIBIT III: Form of the Guarantee by the Purchaser
EXHIBIT IV: Forms of promissory notes for the First, Second and Third Deferred
Payments
EXHIBIT V: Form of promissory notes for the unpaid principal of the Trade Debts
EXHIBIT A: Method of calculating the Purchased But Not Funded Debts Purchase
Price and the Purchased Remaining Debts Purchase Price
EXHIBIT VI: Form of Trade Debts transfer agreement
EXHIBIT VII: Closing Deliveries
EXHIBIT VIII: Seller's Certificate (Representations and warranties)
EXHIBIT IX: Resigning Persons
EXHIBIT X: Cofimeta Debt transfer and set-off agreement
EXHIBIT XI: Non-competition agreement forms
EXHIBIT XII: Amendments to the offices sub-lease agreements
EXHIBIT XIII: Form of representation letters
EXHIBIT XIV: Form of Waiver in respect of the Arbel management fees
EXHIBIT XV: Original approved budget for 1998
EXHIBIT XVI: Agenda of the shareholders' meetings
EXHIBIT XVII: Documents and information constituting the Audit Information
EXHIBIT XVIII: Form of the Guarantee by the Seller.
</TABLE>
44
<PAGE> 1
EXHIBIT 4.1
=========================================
OXFORD AUTOMOTIVE, INC.,
as Company,
THE SUBSIDIARY GUARANTORS named herein
and
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Trustee
$90,000,000
10 1/8% Senior Subordinated Notes Due 2007, Series C
$250,000,000
10 1/8% Senior Subordinated Notes Due 2007, Series D
--------------------
INDENTURE
Dated as of December 1, 1998
--------------------
=========================================
<PAGE> 2
CROSS-REFERENCE TABLE
<TABLE>
<CAPTION>
TIA Section Indenture Section
- ----------- -----------------
<S> <C>
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
</TABLE>
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
<TABLE>
<CAPTION>
Page
----
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
<S> <C> <C>
SECTION 1.1. Definitions...........................................................................1
SECTION 1.2. Other Definitions....................................................................24
SECTION 1.3. Incorporation by Reference Of Trust Indenture Act....................................25
SECTION 1.4. Rules of Construction................................................................25
ARTICLE 2
THE SECURITIES
SECTION 2.1. Form and Dating 26...................................................................26
SECTION 2.2. Execution and Authentication.........................................................27
SECTION 2.3. Registrar and Paying Agent...........................................................28
SECTION 2.4. Paying Agent To Hold Money in Trust..................................................28
SECTION 2.5. Securityholder Lists.................................................................29
SECTION 2.6. Transfer and Exchange................................................................29
SECTION 2.7. Replacement Securities...............................................................32
SECTION 2.8. Outstanding Securities...............................................................33
SECTION 2.9. Temporary Securities.................................................................33
SECTION 2.10. Cancellation.........................................................................34
SECTION 2.11. Defaulted Interest...................................................................34
SECTION 2.12. CUSIP Numbers........................................................................34
SECTION 2.13. Restrictive Legends..................................................................34
SECTION 2.14. Special Transfer Provisions..........................................................37
ARTICLE 3
REDEMPTION
SECTION 3.1. Optional Redemption..................................................................40
SECTION 3.2. Notices to Trustee...................................................................41
SECTION 3.3. Selection of Securities To Be Redeemed...............................................41
SECTION 3.4. Notice of Redemption.................................................................41
SECTION 3.5. Effect of Notice of Redemption.......................................................42
SECTION 3.6. Deposit of Redemption Price..........................................................43
SECTION 3.7. Securities Redeemed in Part..........................................................43
</TABLE>
i
<PAGE> 4
ARTICLE 4
COVENANTS
<TABLE>
<S> <C> <C>
SECTION 4.1. Payment of Securities................................................................43
SECTION 4.2. SEC Reports..........................................................................44
SECTION 4.3. Limitation on Indebtedness...........................................................44
SECTION 4.4. Limitation on Restricted Payments....................................................47
SECTION 4.5. Limitation on Restrictions on Distributions from
Restricted Subsidiaries...............................................50
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....................................................................57
SECTION 4.9. Compliance Certificate...............................................................58
SECTION 4.10. Further Instruments and Acts.........................................................58
SECTION 4.11. Limitation on Liens..................................................................59
SECTION 4.12. Limitation on Issuance or Sale of Capital Stock of
Restricted Subsidiaries...............................................59
SECTION 4.13. Payment of Taxes and Other Claims....................................................60
SECTION 4.14. Future Guarantors....................................................................60
SECTION 4.15. Maintenance of Office or Agency......................................................60
SECTION 4.16. Corporate Existence..................................................................61
ARTICLE 5
SUCCESSOR COMPANY
SECTION 5.1. Merger, Consolidation and Sale of Assets.............................................61
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.1. Events of Default....................................................................63
SECTION 6.2. Acceleration.........................................................................66
SECTION 6.3. Other Remedies.......................................................................66
SECTION 6.4. Waiver of Past Defaults..............................................................66
SECTION 6.5. Control by Majority..................................................................67
SECTION 6.6. Limitation on Suits..................................................................67
SECTION 6.7. Rights of Holders to Receive Payment.................................................68
SECTION 6.8. Collection Suit by Trustee...........................................................68
SECTION 6.9. Trustee May File Proofs of Claim.....................................................68
SECTION 6.10. Priorities...........................................................................68
</TABLE>
ii
<PAGE> 5
<TABLE>
<S> <C> <C>
SECTION 6.11. Undertaking for Costs................................................................69
SECTION 6.12. Waiver of Stay or Extension Laws.....................................................69
ARTICLE 7
TRUSTEE
SECTION 7.1. Duties of Trustee....................................................................70
SECTION 7.2. Rights of Trustee....................................................................71
SECTION 7.3. Individual Rights of Trustee.........................................................72
SECTION 7.4. Trustee's Disclaimer.................................................................72
SECTION 7.5. Notice of Defaults...................................................................73
SECTION 7.6. Reports by Trustee to Holders........................................................73
SECTION 7.7. Compensation and Indemnity...........................................................73
SECTION 7.8. Replacement of Trustee...............................................................74
SECTION 7.9. Successor Trustee by Merger..........................................................75
SECTION 7.10. Eligibility; Disqualification........................................................76
SECTION 7.11. Preferential Collection of Claims Against Company....................................76
ARTICLE 8
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.1. Discharge of Liability on Securities; Defeasance.....................................77
SECTION 8.2. Conditions to Defeasance.............................................................78
SECTION 8.3. Application of Trust Money...........................................................80
SECTION 8.4. Repayment to Company.................................................................80
SECTION 8.5. Indemnity for Government Obligations.................................................80
SECTION 8.6. Reinstatement........................................................................80
ARTICLE 9
AMENDMENTS
SECTION 9.1. Without Consent of Holders...........................................................81
SECTION 9.2. With Consent of Holders..............................................................82
SECTION 9.3. Compliance with Trust Indenture Act..................................................83
SECTION 9.4. Revocation and Effect of Consents and Waivers........................................83
SECTION 9.5. Notation on or Exchange of Securities................................................84
SECTION 9.6. Trustee to Sign Amendments...........................................................84
</TABLE>
iii
<PAGE> 6
ARTICLE 10
SUBORDINATION OF THE SECURITIES
<TABLE>
<S> <C> <C>
SECTION 10.1. Agreement To Subordinate.............................................................84
SECTION 10.2. Liquidation; Dissolution; Bankruptcy.................................................85
SECTION 10.3. Default on Senior Indebtedness.......................................................87
SECTION 10.4. Payment of Subordinated Debt Permitted if No Default.................................89
SECTION 10.5. When Subordinated Debt Must Be Paid Over.............................................89
SECTION 10.6. Notices by the Company...............................................................89
SECTION 10.7. Subrogation..........................................................................89
SECTION 10.8. Relative Rights......................................................................90
SECTION 10.9. Subordination May Not Be Impaired by the Company.....................................90
SECTION 10.10. Distribution of Notice to Representative.............................................91
SECTION 10.11. Rights of Trustee and Paying Agent...................................................91
SECTION 10.12. Consent of Holders of Specified Senior Indebtedness..................................92
SECTION 10.13. Contractual Subordination............................................................92
ARTICLE 11
SUBSIDIARY GUARANTIES
SECTION 11.1. Guaranties...........................................................................92
SECTION 11.2. Limitation on Liability..............................................................95
SECTION 11.3. Successors and Assigns...............................................................95
SECTION 11.4. No Waiver............................................................................95
SECTION 11.5. Modification.........................................................................96
SECTION 11.6. Release of Subsidiary Guarantor......................................................96
SECTION 11.7. Execution of Supplemental Indenture for Future Subsidiary Guarantors.................96
ARTICLE 12
SUBORDINATION OF SUBSIDIARY GUARANTIES
SECTION 12.1. Agreement to Subordinate.............................................................97
SECTION 12.2. Liquidation; Dissolution; Bankruptcy.................................................98
SECTION 12.3. Default on Subsidiary Guarantor Senior Indebtedness..................................99
SECTION 12.4. Payments of Subordinated Debt Permitted if No Default...............................101
SECTION 12.5. When Subordinated Debt Must Be Paid Over............................................101
SECTION 12.6. Notices by a Subsidiary Guarantor...................................................101
SECTION 12.7. Subrogation.........................................................................102
SECTION 12.8. Relative Rights.....................................................................102
SECTION 12.9. Subordination May Not Be Impaired by the Subsidiary Guarantor.......................102
</TABLE>
iv
<PAGE> 7
<TABLE>
<S> <C> <C>
SECTION 12.10. Distribution or Notice to Representative............................................103
SECTION 12.11. Rights of Trustee and Paying Agent..................................................103
SECTION 12.12. Consent of Holders of Senior Indebtedness...........................................104
SECTION 12.13. Contractual Subordination...........................................................104
ARTICLE 13
MISCELLANEOUS
SECTION 13.1. Trust Indenture Act Controls........................................................104
SECTION 13.2. Notices.............................................................................105
SECTION 13.3. Communication by Holders with Other Holders.........................................106
SECTION 13.4. Certificate and Opinion as to Conditions Precedent..................................106
SECTION 13.5. Statements Required in Certificate or Opinion.......................................106
SECTION 13.6. When Securities Disregarded.........................................................107
SECTION 13.7. Rules by Trustee, Paying Agent and Registrar........................................107
SECTION 13.8. Legal Holidays......................................................................107
SECTION 13.9. Governing Law.......................................................................107
SECTION 13.10. No Recourse Against Others..........................................................108
SECTION 13.11. Successors..........................................................................108
SECTION 13.12. Multiple Originals..................................................................108
SECTION 13.13. Table of Contents; Headings.........................................................108
SECTION 13.14. Severability Clause.................................................................108
Signatures..........................................................................................100
Exhibit A - Form of Security........................................................................A-1
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
</TABLE>
v
<PAGE> 8
Note: This Table of Contents shall not, for any purpose, be deemed to be part of
the Indenture.
vi
<PAGE> 9
1
INDENTURE dated as of December 1, 1998, 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 U.S. BANK TRUST NATIONAL
ASSOCIATION, a national banking association, 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, Series C and the Company's 10 1/8%
Senior Subordinated Notes due 2007, Series D to be issued in exchange for (i)
the Initial Securities (as defined herein) and (ii) the Series A/B Securities
(as defined herein) pursuant to the Registration Agreement (as defined herein):
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, 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
<PAGE> 10
2
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 (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
<PAGE> 11
3
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 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
<PAGE> 12
4
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 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 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
<PAGE> 13
5
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 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
<PAGE> 14
6
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 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.
"Depository" means The Depository Trust Company, its nominees
and their respective successors.
"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.
"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)
<PAGE> 15
7
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 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, Series D to be issued only in exchange for (i) the Initial
Securities pursuant to the Registration Agreement, (ii) any Series A/B
Securities pursuant to the Registration Agreement or (iii) Initial Securities
issued under this Indenture subsequent to the Issue Date pursuant to Section
2.2, pursuant to a registration agreement substantially identical to the
Registration Agreement.
"Existing Indenture" means the Indenture, dated as of June 15,
1997, among the Company, the Subsidiary Guarantors and First Trust National
Association (now known as U.S. Bank Trust National Association), as Trustee
relating to the Series A/B Securities.
"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 Series A/B
Issue Date, as the terms of such preferred stock shall exist as of the Series
A/B Issue Date.
"GAAP" means generally accepted accounting principles in the
United States of America as in effect as of the Series A/B 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> 16
8
"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; (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
<PAGE> 17
9
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.
"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.
"Initial Purchasers" means, collectively, Bear, Stearns & Co.
Inc., BT Alex. Brown Incorporated and Morgan Stanley & Co. Incorporated.
"Initial Securities" means, collectively, (i)the Company's 10
1/8% Senior Subordinated Notes due 2007, Series C issued on the Issue Date and
(ii) one or more issuances of 10 1/8% Senior Subordinated Notes due 2007, Series
C 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.
"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.
"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.
<PAGE> 18
10
"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 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 December 8, 1998.
"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 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
<PAGE> 19
11
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 of 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).
"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
<PAGE> 20
12
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 Investment is
received in exchange for the transfer to such Person of the assets owned as of
the Series A/B 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.
<PAGE> 21
13
"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 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
Series A/B Issue Date or Incurred in compliance with the Existing 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.
<PAGE> 22
14
"Regulation S" means Regulation S under the Securities Act.
"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 Series A/B
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, 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 Security Restricted Security.
"Restricted Subsidiary" means any Subsidiary of the Company
that is not an Unrestricted Subsidiary.
"Rule 144A" means Rule 144A under the Securities Act.
<PAGE> 23
15
"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.
"Securities" shall mean the Initial Securities and the
Exchange Securities treated as a single class of securities, as amended or
supplemented from time to time in accordance with the terms hereof, that are
issued pursuant to this Indenture.
"Senior Credit Facility" means the credit agreement dated as
of June 24, 1997, 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 Series A/B 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 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, (6) that portion of any
Indebtedness which at the time of Incurrence is Incurred in violation
<PAGE> 24
16
of this Indenture or (7) the Securities or the Series A/B Securities. "Senior
Indebtedness" of any Subsidiary Guarantor has a correlative meaning.
"Senior Subordinated Indebtedness" of the Company means the
Securities, the Series A/B Securities and any other Obligations under or in
connection with the Securities, the Series A/B Securities, this Indenture, the
Existing 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.
"Series A Securities" means the $125 million aggregate
principal amount of 10 1/8% Senior Subordinated Notes due 2007 issued by the
Company on June 24, 1997 under the Existing Indenture.
"Series A/B Issue Date" means June 24, 1997.
"Series A/B Securities" means the Series A Securities and the
Series B Securities.
"Series B Securities" means the $35 million aggregate
principal amount of 10 1/8% Senior Subordinated Notes due 2007 issued by the
Company on April 1, 1998 under the Existing Indenture.
"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 Securities and the Series A/B
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
<PAGE> 25
17
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 and/or the
Series A/B 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, (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.
"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.
"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.
"Trust Officer" means the Chairman of the Board, the President
or any other officer
<PAGE> 26
18
or assistant officer of the Trustee assigned by the Trustee to administer its
corporate trust matters.
"Trustee" means the party named as such in this Indenture
until a successor replaces it and, thereafter, means the successor.
"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 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.
<TABLE>
<CAPTION>
Term Defined in Section
- ---- ------------------
<S> <C>
</TABLE>
<PAGE> 27
19
<TABLE>
<S> <C>
"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
"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
"Series A/B Asset Sale Offer" 4.6(a)
"Successor Company" 5.1
</TABLE>
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.
<PAGE> 28
20
"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.
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
<PAGE> 29
21
from each of the Subsidiary Guarantors.
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 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 on the Issue
Date in an aggregate principal amount of $40,000,000, (ii) Initial Securities
for original issue after the Issue Date in an aggregate principal amount not to
exceed $50,000,000 which may be issued only in accordance with Section 4.3(a),
and (iii) Exchange Securities from time to time for issue and authentication
only in exchange for the cancellation of up to $90,000,000 of the Initial
Securities and no more than $160,000,000 in exchange for the cancellation of the
Series A/B Securities, in each case, upon a written order of the Company signed
by an Officer of the Company. Such order shall specify the
<PAGE> 30
22
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 $250,000,000 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 Neither the Company nor any of its Affiliates 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 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
<PAGE> 31
23
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 Securities 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
<PAGE> 32
24
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 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 sufficient 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
<PAGE> 33
25
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, 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
<PAGE> 34
26
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.
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
<PAGE> 35
27
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.
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 date such Security was originally issued 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 WHO 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
<PAGE> 36
28
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.
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
<PAGE> 37
29
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.
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 date such Security was originally issued
(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 date
such Security was originally issued) 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 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):
<PAGE> 38
30
(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 transfer is after the
second anniversary of the date such Security was originally issued (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 date such Security was originally issued),
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
<PAGE> 39
31
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 date such Security was originally
issued, 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).
<PAGE> 40
32
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:
<TABLE>
<CAPTION>
Year Percentage
- ---- ----------
<S> <C>
2002................................................................105.063%
2003................................................................103.375%
2004................................................................101.688%
2005 and thereafter.................................................100.000%
</TABLE>
(b) At any time and from time to time, 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 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 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
<PAGE> 41
33
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;
(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; and
(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
<PAGE> 42
34
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.
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. 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,
<PAGE> 43
35
the Company shall file with the SEC and provide the 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 on the
Issue Date, the Exchange Securities and the Series A/B Securities;
(iii) Indebtedness outstanding on the Series A/B Issue Date
(other than Indebtedness described in clause (i) of this Section
4.3(b)), including, without limitation, the Existing Preferred Stock
and Indebtedness incurred after the Series A/B Issue Date in compliance
with the Existing Indenture;
(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 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 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
<PAGE> 44
36
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;
(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
<PAGE> 45
37
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, the Series A/B 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, the Series A/B 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 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 Series A/B 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 Series A Securities were 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);
<PAGE> 46
38
(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 Series A/B 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 Series A/B 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 Series A/B 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 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;
<PAGE> 47
39
(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 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.
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
<PAGE> 48
40
entered into on the Series A/B 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 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.
<PAGE> 49
41
With respect to any Asset Disposition occurring on or after
the Series A/B 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 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 (a "Series A/B Excess Proceeds Offer"), first, to purchase Series A/B
Securities, if any are outstanding, in accordance with the Existing Indenture
(as in effect on the Issue Date) and, second, in the event that any Excess
Proceeds are not applied to a Series A/B Excess Proceeds Offer, offer to
purchase from the Holders on a pro rata basis an aggregate principal amount of
Securities equal to any remaining 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 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.
<PAGE> 50
42
(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 5:00 p.m., New
York City time, on 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 acquired); (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
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43
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 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
<PAGE> 52
44
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.
(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 purchase 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
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45
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.
(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
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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 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, (a) all taxes,
assessments and governmental charges levied or imposed upon its or its
Subsidiaries' income, profits or property and (b) all lawful claims for labor,
materials and supplies which, if unpaid, might by law become a Lien upon its
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.
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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
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 the loss thereof is not adverse in any material respect to the
Holders.
ARTICLE 5
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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.
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
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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.
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
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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;
(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.
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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.
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 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
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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;
(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 outstanding 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.
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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 Trustee
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
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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 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:
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(1) this paragraph does not limit the effect of paragraph (b)
of this Section;
(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 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.
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(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 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.
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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 promptly 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 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.
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SECTION 7.8. Replacement of Trustee. The Trustee may resign at
any time upon 30 days notice to the Company by so notifying the Company. The
Holders of a majority in principal amount of the Securities then outstanding may
remove the Trustee by so notifying the 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.
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).
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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.
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)
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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 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
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specified in Section 6.1(vi) or (vii) with respect to the Company
occurs which is continuing at the end of the period;
(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.
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
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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 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;
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(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
(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;
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(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 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
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for the Security shall issue 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 bankruptcy, 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.
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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.
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.
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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 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
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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 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 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 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.
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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
(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
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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. 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.
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
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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 Holders 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.
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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, 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 liquidation 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.
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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 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.
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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 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.
(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
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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 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
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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 Indebtedness 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).
<PAGE> 87
79
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 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.
<PAGE> 88
80
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.
1250 Stephenson Highway
Troy, MI 48083
Attention: Donald C. Campion
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:
U.S. Bank Trust National Association
One Illinois Center
111 East Wacker Drive, Suite 3000
Chicago, IL 60601
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 appears on the registration books of the
Registrar and shall be sufficiently given if so sent within the time prescribed.
<PAGE> 89
81
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;
(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
<PAGE> 90
82
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 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.
<PAGE> 91
83
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> 92
84
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:_____________________________________
Name:
Title:
SUBSIDIARY GUARANTORS:
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:
<PAGE> 93
85
PARALLEL GROUP INTERNATIONAL, INC.
By:_____________________________________
Name:
Title:
CONCEPT MANAGEMENT CORPORATION
By:_____________________________________
Name:
Title:
LEWIS EMERY CAPITAL CORPORATION
By:_____________________________________
Name:
Title:
LASERWELD INTERNATIONAL, L.L.C.
By: Lobdell Emery Corporation,
Sole Member
By:_____________________________________
Name:
Title:
BMG HOLDINGS INC.
By:_____________________________________
Name:
Title:
<PAGE> 94
86
OXFORD SUSPENSION, INC.
By:_____________________________________
Name:
Title:
RPI, INC.
By:_____________________________________
Name:
Title:
PRUDENVILLE MANUFACTURING, INC.
By:_____________________________________
Name:
Title:
OXFORD SUSPENSION LTD.
By:_____________________________________
Name:
Title:
RPI HOLDINGS, INC.
By:_____________________________________
Name:
Title:
<PAGE> 95
87
HOWELL INDUSTRIES, INC.
By:_____________________________________
Name:
Title:
TRUSTEE:
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Trustee
By:_____________________________________
Name:
Title:
<PAGE> 96
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 PERIOD" (WITHIN THE MEANING OF
RULE 903(c)(3) OF REGULATION S
A-1
<PAGE> 97
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, 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,
A-2
<PAGE> 98
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.
A-3
<PAGE> 99
No.
$
10 1/8% Senior Subordinated Notes Due 2007, Series C
CUSIP No.
OXFORD AUTOMOTIVE, INC., a Michigan corporation, promises to pay to Cede &
Co., or registered assigns, the principal sum of ______________ 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:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
U.S. Bank Trust National Association, as Trustee, certifies that this is one of
the Securities referred to in the within-mentioned Indenture.
By: U.S. BANK TRUST NATIONAL
ASSOCIATION, as Trustee
------------------------------------
Authorized Signatory
Date of Authentication:
A-4
<PAGE> 100
REVERSE OF SECURITY
10 1/8% SENIOR SUBORDINATED SECURITY DUE 2007, SERIES C
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, 1998. 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, December 8, 1998. 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, U.S. Bank Trust National Association, a national banking
association ("Trustee"), will act as Paying 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 December
1, 1998 (the "Indenture"), among the Company, the Subsidiary Guarantors and the
Trustee. This Security
A-5
<PAGE> 101
is one of a duly authorized issue of Initial Securities of the Company
designated as its 10 1/8% Senior Subordinated Notes due 2007, Series C (the
"Initial Securities"). The Securities include the Initial Securities and the
Exchange Securities. The Initial Securities and the Exchange 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 $250,000,000 aggregate principal amount (subject to Section 2.7 of
the Indenture); provided, however, that (i) no more than $90,000,000 in
aggregate principal amount of Exchange Securities may be authenticated in
exchange for up to $90,000,000 of aggregate principal amount of Initial
Securities, and no more than (ii) $160,000,000 in Exchange Securities shall be
reserved and may be authenticated in exchange for up to $160,000,000 of the
Series A/B Securities. 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 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:
A-6
<PAGE> 102
<TABLE>
<CAPTION>
Period Percentage
------ ----------
<S> <C>
2002 105.063%
2003 103.375%
2004 101.688%
2005 and thereafter 100.000%
</TABLE>
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.
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 may 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.
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8. The Registration Agreement
The holder of this Security is entitled to the benefits of a Registration
Agreement, dated as of December 8, 1998, 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 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 120
days after the Closing Date, (ii) the Exchange Offer Registration Statement has
not been declared effective within 180 days after the Closing Date, (iii)
neither the Registered Exchange Offer has been consummated nor the Shelf
Registration Statement has been declared effective within 210 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.
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
A-8
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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 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,
A-9
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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 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
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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 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:
If to the Company:
Oxford Automotive, Inc.
1250 Stephenson Highway
Troy, Michigan 48083
Attention: Secretary
A-11
<PAGE> 107
If to the Trustee:
U.S. Bank Trust National Association
One Illinois Center
111 East Wacker Drive, Suite 3000
Chicago, Illinois 60601
Attention: Corporate Trust Trustee Administration
A-12
<PAGE> 108
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 Securities 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
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<PAGE> 109
(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
registration set forth herein and in Section 2.14 of the Indenture shall have
been satisfied.
Date: Signed:
----------- ---------------------------------------
Sign exactly as your name appears on the
other side of this Security.
Signature Guarantee:
------------------------------------------
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<PAGE> 110
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
A-15
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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)
A-16
<PAGE> 112
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 TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN
SECTION 2.14 OF THE INDENTURE.
B-1
<PAGE> 113
No.
$
10 1/8% Senior Subordinated Notes Due 2007, Series D
CUSIP No.
OXFORD AUTOMOTIVE, INC., a Michigan corporation, promises to pay to Cede &
Co., or registered assigns, the principal sum of [ ] 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:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
U.S. Bank Trust National Association, as Trustee, certifies that this is one of
the Securities referred to in the within-mentioned Indenture.
By: U.S. BANK TRUST NATIONAL
ASSOCIATION, as Trustee
----------------------------------------
Authorized Signatory
Date of Authentication:
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<PAGE> 114
REVERSE OF SECURITY
10 1/8% SENIOR SUBORDINATED NOTE DUE 2007, SERIES D
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, 1998. 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, December 8, 1998. 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, U.S. Bank Trust National Association, a national banking
association ("Trustee"), will act as Paying 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 December
1, 1998 (the "Indenture"), among the Company, the Subsidiary Guarantors and the
Trustee. This Security
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<PAGE> 115
is one of a duly authorized issue of unrestricted Securities of the Company
designated as its 10 1/8% Senior Subordinated Notes due 2007, Series D (the
"Unrestricted Securities"). The Securities include the Initial Securities and
the Exchange Securities. The Initial Securities and the Exchange 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 $250,000,000 aggregate principal amount (subject to Section 2.7 of
the Indenture), provided, however, that no more than $90,000,000 in aggregate
principal amount of Exchange Securities may be authenticated in exchange for up
to $90,000,000 in aggregate principal amount of Initial Securities, and no more
than (ii) $160,000,000 in Exchange Securities shall be reserved and may be
authenticated in exchange for up to $160,000,000 of the Series A/B Securities.
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 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:
B-4
<PAGE> 116
<TABLE>
<CAPTION>
Period Percentage
------ ----------
<S> <C>
2002 105.063%
2003 103.375%
2004 101.688%
2005 and thereafter 100.000%
</TABLE>
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.
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 may 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.
B-5
<PAGE> 117
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 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.
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.
13. Amendment, Waiver
B-6
<PAGE> 118
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 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 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
B-7
<PAGE> 119
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 obligations 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
B-8
<PAGE> 120
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:
If to the Company:
Oxford Automotive, Inc.
1250 Stephenson Highway
Troy, Michigan 48083
Attention: Secretary
If to the Trustee:
U.S. Bank Trust National Association
One Illinois Center
111 East Wacker Drive, Suite 3000
Chicago, IL 60601
Attention: Corporate Trust Trustee Administration
B-9
<PAGE> 121
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)
B-10
<PAGE> 122
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)
B-11
<PAGE> 123
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 December 1, 1998, 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 hereinafter
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
C-1
<PAGE> 124
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> 125
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> 126
EXHIBIT D
Form of Certificate To Be Delivered
in Connection with Transfers
Pursuant to Regulation S
[ ], [ ]
[ ]
[ ]
[ ]
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
(5) we have advised the transferee of the transfer restrictions applicable
to the Securities.
D-1
<PAGE> 127
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> 128
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
December 1, 1998, among Oxford Automotive, Inc., a Michigan corporation, as
issuer (the "Company"), each of the Subsidiary Guarantors named therein and U.S.
Bank 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> 129
IN WITNESS WHEREOF, each Guarantor has caused its Guarantee to be duly
executed.
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:
PARALLEL GROUP INTERNATIONAL, INC.
By:
-------------------------------------
Name:
Title:
E-2
<PAGE> 130
CONCEPT MANAGEMENT CORPORATION
By:
-------------------------------------
Name:
Title:
LEWIS EMERY CAPITAL CORPORATION
By:
-------------------------------------
Name:
Title:
LASERWELD INTERNATIONAL, L.L.C.
By:
-------------------------------------
Name:
Title:
BMG HOLDINGS INC.
By:
-------------------------------------
Name:
Title:
OXFORD SUSPENSION, INC.
By:
-------------------------------------
Name:
Title:
E-3
<PAGE> 131
RPI, INC.
By:
-------------------------------------
Name:
Title:
PRUDENVILLE MANUFACTURING, INC.
By:
-------------------------------------
Name:
Title:
RPI HOLDINGS, INC.
By:
-------------------------------------
Name:
Title:
HOWELL INDUSTRIES, INC.
By:
-------------------------------------
Name:
Title:
OXFORD SUSPENSION LTD.
By:
-------------------------------------
Name:
Title:
E-4
<PAGE> 132
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 U.S. BANK TRUST NATIONAL ASSOCIATION, a national banking association, 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 December 1, 1998, providing for the issuance of an aggregate principal amount
of up to $250,000,000 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:
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.
F-1
<PAGE> 133
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 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-2
<PAGE> 134
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:
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Trustee
By:
-------------------------------------
Name:
Title:
F-3
<PAGE> 1
EXHIBIT 4.2
OXFORD AUTOMOTIVE, INC.
$40,000,000
10 1/8% SENIOR SUBORDINATED NOTES DUE 2007, SERIES C
REGISTRATION RIGHTS AGREEMENT
New York, New York
December 8, 1998
Bear, Stearns & Co. Inc.
BT Alex. Brown Incorporated
Morgan Stanley & Co. Incorporated
c/o Bear, Stearns & Co. Inc.
245 Park Avenue
New York, New York 10167
Ladies and Gentlemen:
Oxford Automotive, Inc., a Michigan corporation (the "Company"),
proposes to issue and sell to Bear, Stearns & Co. Inc., BT Alex. Brown
Incorporated and Morgan Stanley & Co. Incorporated (each an "Initial Purchaser"
and collectively the "Initial Purchasers"), upon the terms set forth in a
purchase agreement of even date herewith (the "Purchase Agreement"), $40,000,000
principal amount of its 10 1/8% Senior Subordinated Notes due 2007, Series C
(the "Securities"), to be guaranteed on a senior subordinated basis (the
"Subsidiary Guarantees") 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, L.L.C., an
Indiana corporation; Concept Management Corporation, a Michigan corporation,
Lewis Emery Capital Corporation, a Michigan corporation; RPI Holdings, Inc., a
Michigan corporation;
<PAGE> 2
-2-
Howell Industries, Inc., a Michigan corporation; Oxford Suspension, Inc., a
Michigan corporation; RPI, Inc., a Michigan corporation; Prudenville
Manufacturing, Inc., a Michigan corporation; and Oxford Suspension Ltd., an
Ontario 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 Initial 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 (ii) for the benefit of the
holders from time to time of the Securities (including you) as follows:
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
<PAGE> 3
-3-
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 Initial
Purchasers) or any holder of Series A/B Securities that is a broker-dealer,
electing to exchange Securities or, if applicable, Series A/B Securities
acquired for its own account as a result of market-making activities or other
trading activities, for New Securities.
"Final Memorandum" means the Offering Memorandum dated December 1, 1998
including and any documents incorporated by reference therein.
"Holder" means any holder of Securities.
"Indenture" means the Indenture relating to the Securities and the New
Securities dated as of December 1, 1998 between the Company, the Subsidiary
Guarantors and U.S. Bank 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 up to $250,000,000 of the 10 1/8% Senior
Subordinated Notes due 2007, Series D, to be offered and issued under the
Indenture in exchange for the Securities and the Series A/B Securities.
"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).
<PAGE> 4
-4-
"New Securities Trustee" means a bank or trust company reasonably
satisfactory to the Initial Purchasers, 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 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 and
the holders of the Series A/B Securities to issue and deliver to such Holders
and holders of the Series A/B Securities, in exchange for the Securities and the
Series A/B Securities, as the case may be, 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.
Series A/B Securities: The Issuer's 10 1/8% Senior Subordinated Notes
due 2007 in the aggregate principal amount of $160,000,000 issued pursuant to
the Indenture dated as of June 15, 1997 among the Issuers and First Trust
National Association (now known as U.S. Bank Trust National Association).
"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
<PAGE> 5
-5-
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 120
days following the Closing Date, shall file with the Commission the Exchange
Offer Registration Statement with respect to the Registered Exchange Offer. The
Issuers shall cause the Exchange Offer Registration Statement to become
effective under the Act within 180 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 or holder of
Series A/B Securities, as the case may be, electing to exchange Securities or
Series A/B Securities for New Securities (assuming that such Holder or holder of
Series A/B Securities, as the case may be, 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 or holder's of the Series A/B Securities, as the case
may be, 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 or holder of Series A/B Securities, as
the case may be, 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
<PAGE> 6
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more than 45 days after the date that notice thereof is mailed to the
Holders or holders of Series A/B Securities (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 and all Series A/B
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
(iii) cause the Trustee or the New Securities Trustee, as the
case may be, promptly to authenticate and deliver to each Holder of
Securities or holder of Series A/B Securities, New Securities equal in
principal amount to the Securities of such Holder or the Series A/B
Securities of such holder of Series A/B Securities so accepted for
exchange.
(e) The Initial 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 or Series A/B 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
<PAGE> 7
-7-
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 Initial 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 Initial Purchaser, the Issuers shall issue and deliver to such
Initial Purchaser or the party purchasing New Securities registered under a
Shelf Registration Statement as contemplated by Section 3 hereof from such
Initial 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.
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) for any
other reason the Registered Exchange Offer is not consummated within 180 days of
the date hereof, or (iii) any Initial Purchaser so requests with respect to
Securities held by it following consummation of the Registered Exchange Offer,
or (iv) any Holder of Securities (other than an Initial Purchaser) is not
eligible to participate in the Registered Exchange Offer or (v) in the case of
any Initial Purchaser that participates in the Registered Exchange Offer or
acquires New Securities pursuant to Section 2(f) hereof, such Initial 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 an Initial 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:
<PAGE> 8
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(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 of Securities
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 an Initial 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 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 of Securities for a period of two
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 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 and the Holders, 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,
<PAGE> 9
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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
material 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 Holders or
their representatives, 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,
Holders or their representatives or any 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;
<PAGE> 10
-10-
(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
(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).
(h) The Issuers shall, during the Exchange Offer Registration Period,
promptly
<PAGE> 11
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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 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
<PAGE> 12
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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 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
<PAGE> 13
-13-
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 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
<PAGE> 14
-14-
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 Initial Purchaser, (i) make
reasonably available for inspection by such Initial Purchaser, and any attorney,
accountant or other agent retained by such Initial 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
Initial 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 confidential by such Initial 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 Initial 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 Initial Purchaser and its counsel, addressed to
such Initial 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 Initial 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 Initial 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 Initial Purchaser or its counsel; and
(vi) deliver such documents and certificates as may be reasonably requested by
such Initial 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.
<PAGE> 15
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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 Initial 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 the
Initial Purchasers 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 of
Securities (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
<PAGE> 16
-16-
nonappealable judgment that (x) the Issuers had previously furnished copies of
the Prospectus to such Holder, (y) the untrue 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 Initial Purchasers and the
selling Holders of Securities provided in this Section 6(a) and shall, if
requested by any Holder of Securities, 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 Initial 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 appoint counsel of the
indemnifying party's choice at the indemnifying party's expense to represent the
indemnified
<PAGE> 17
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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
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 Initial 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
<PAGE> 18
-18-
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 the 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 Initial 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 of Securities 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 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 of
Securities or the Issuers or any of the officers, directors or controlling
persons referred to in Section 6 hereof, and will survive the sale
<PAGE> 19
-19-
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 of Securities 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
Initial Purchaser hereunder, the Issuers shall obtain the written consent of
each such Initial 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 of Securities whose securities are being sold pursuant to a
Registration Statement and that does not directly or indirectly affect the
rights of other Holders of Securities may be given by the Majority Holders,
determined on the 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 of Securities, 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 such
Holder, the address of such Holder maintained by the Registrar under the
Indenture, with a copy in like manner to Bear, Stearns & Co. Inc.;
(2) if to you, initially at the respective addresses set forth in
the Purchase Agreement; and
<PAGE> 20
-20-
(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 Initial 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 including holders of New Securities issued
in exchange for the Securities. The Issuers hereby agree to extend the benefits
of this Agreement to any Holder of Securities and/or New Securities issued in
exchange for the 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.
(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.
<PAGE> 21
-21-
(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.
<PAGE> 22
-S1-
Please confirm that the foregoing correctly sets forth the agreement
between the Issuers and you.
Very truly yours,
OXFORD AUTOMOTIVE, INC.
By:_______________________________________
Name:
Title:
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:
<PAGE> 23
-S2-
BMG HOLDINGS INC.
By:_______________________________________
Name:
Title:
LASERWELD INTERNATIONAL, L.L.C.
By:_______________________________________
Name:
Title:
PARALLEL GROUP INTERNATIONAL, INC.
By:________________________________________
Name:
Title:
CONCEPT MANAGEMENT CORPORATION
By:_______________________________________
Name:
Title:
LEWIS EMERY CAPITAL CORPORATION
By:_______________________________________
Name:
Title:
RPI HOLDINGS, INC.
By:_______________________________________
Name:
Title:
<PAGE> 24
-S3-
HOWELL INDUSTRIES, INC.
By:_______________________________________
Name:
Title:
OXFORD SUSPENSION, INC.
By:_______________________________________
Name:
Title:
RPI, INC.
By:_______________________________________
Name:
Title:
PRUDENVILLE MANUFACTURING, INC.
By:_______________________________________
Name:
Title:
OXFORD SUSPENSION LTD.
By:_______________________________________
Name:
Title:
<PAGE> 25
-S4-
Accepted December 8, 1998
BEAR, STEARNS & CO. INC.
BT ALEX. BROWN INCORPORATED
MORGAN STANLEY & CO. INCORPORATED
By: BEAR, STEARNS & CO. INC.
By: ____________________________
Name:
Title:
<PAGE> 26
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> 27
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> 28
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
incident 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
<PAGE> 29
liabilities, including liabilities under the Securities Act.
If applicable, add information required by Regulation S-K Items 507 and/or
508.
<PAGE> 30
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
EXHIBIT 10.1
OXFORD AUTOMOTIVE, INC.
$40,000,000
10-1/8% SENIOR SUBORDINATED NOTES DUE 2007
PURCHASE AGREEMENT
New York, New York
December 1, 1998
Bear, Stearns & Co. Inc.
BT Alex. Brown Incorporated
Morgan Stanley & Co. Incorporated
c/o Bear, Stearns & Co. Inc.
245 Park Avenue
New York, New York 10167
Ladies and Gentlemen:
Oxford Automotive, Inc., a Michigan corporation (the "Company"),
proposes to issue and sell to Bear, Stearns & Co. Inc., BT Alex. Brown
Incorporated and Morgan Stanley & Co. Incorporated (collectively, the "Initial
Purchasers") $40,000,000 principal amount of its 10-1/8% Senior Subordinated
Notes Due 2007 (the "Securities"), to be guaranteed on a senior subordinated
basis (the "Subsidiary Guarantees") 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; Lewis Emery Capital Corporation, a Michigan corporation;
RPI Holdings, Inc., a Michigan corporation; Howell Industries, Inc., a Michigan
corporation; Oxford Suspension, Inc., a Michigan corporation; RPI, Inc., a
Michigan corporation; Prudenville Manufacturing, Inc., a Michigan corporation;
and Oxford Suspension Ltd., an Ontario corporation (each a "Subsidiary
Guarantor" and collectively the "Subsidiary Guarantors"), and to be issued under
an indenture (the "Indenture") dated as of December 1, 1998 between the Company,
the Subsidiary Guarantors and U.S. Bank Trust National Association, as trustee
(the "Trustee").
The sale of the Securities to the Initial Purchasers will be made
without registration of the Securities under the Securities Act of 1933, as
amended (the "Securities Act"), in reliance upon exemptions from the
registration requirements of the Securities Act. You have advised the Company
that the Initial Purchasers will offer and sell the Securities purchased
hereunder in accordance with Section 4 hereof as soon as you deem advisable.
In connection with the sale of the Securities, the Company has prepared
a final offering
<PAGE> 2
-2-
memorandum, dated December 1, 1998 (including any and all exhibits thereto and
any information or documents incorporated by reference therein, the "Final
Memorandum"). The Final Memorandum sets forth certain information concerning the
Company, the Subsidiary Guarantors and the Securities. The Company and the
Subsidiary Guarantors, jointly and severally, hereby confirm that they have
authorized the use of the Final Memorandum, and any amendment or supplement
thereto, in connection with the offer and sale of the Securities by the Initial
Purchasers. Unless stated to the contrary, all references herein to the Final
Memorandum are to the Final Memorandum at the Execution Time (as defined below),
including any Exchange Act (as defined below) documents included in such Final
Memorandum, but such references are not meant to include any amendment or
supplement or any information incorporated by reference therein subsequent to
the Execution Time and any references herein to the terms "amend," "amendment"
or "supplement" with respect to the Final Memorandum shall be deemed to refer to
and include any information filed under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), subsequent to the Execution Time which is
incorporated by reference therein.
The holders of the Securities will be entitled to the benefits of the
Registration Agreement dated the date hereof, among the Company, the Subsidiary
Guarantors and the Initial Purchasers (the "Registration Agreement").
Capitalized terms used herein without definitions have the respective
meanings assigned to them in the Final Memorandum.
1. Representations and Warranties. The Company and the Subsidiary
Guarantors, jointly and severally, represent and warrant to and agree with the
Initial Purchasers as set forth below in this Section 1.
(a) Each of the Company, the Subsidiary Guarantors and their
respective subsidiaries is a corporation, a limited liability company or
a partnership, duly incorporated or formed, and is validly existing as a
corporation, a limited liability company or a partnership in good
standing under the laws of the jurisdiction in which it is chartered,
organized or formed and is duly qualified to do business as a foreign
corporation, limited liability company or partnership and is in good
standing under the laws of each jurisdiction which requires such
qualification wherein it owns or leases material properties or conducts
material business, except in such jurisdictions in which the failure to
so qualify would not have a material adverse effect on the Company, the
Subsidiary Guarantors and their respective subsidiaries taken as a
whole.
(b) Each of the Company, the Subsidiary Guarantors and their
respective subsidiaries has full power (corporate and other) to own or
lease its properties and conduct its business as described in the Final
Memorandum; and each of the Company and the Subsidiary Guarantors has
full power (corporate and other) to issue the Securities and to enter
into this Agreement, the Indenture, the Subsidiary Guarantees and the
Registration Agreement (collectively, the "Transaction Documents") to
which it is a party and to carry out all the terms and provisions hereof
and thereof to be carried out by it,
<PAGE> 3
-3-
including, without limitation, the issuance, sale and delivery of the
Securities.
(c) The issued shares of capital stock of each of the Company's
subsidiaries have been duly authorized and validly issued, are fully
paid and nonassessable and, except as otherwise set forth in the Final
Memorandum, are owned beneficially, directly or indirectly, by the
Company free and clear of any security interests, liens, encumbrances,
preemptive rights or claims.
(d) The Company's authorized capital stock consists of 400,000
shares of common stock, of which 309,750 shares are issued and
outstanding. Except as set forth in the Final Memorandum, no holders of
outstanding shares of capital stock of the Company are entitled as such
to any preemptive or other rights to subscribe for any of the
Securities.
(e) The consolidated financial statements and schedules of the
Company and its consolidated subsidiaries included in the Final
Memorandum present fairly in all material respects the financial
position of the Company and its consolidated subsidiaries and the
results of operations and changes in financial condition as of the dates
and periods therein specified. Such financial statements and schedules
have been prepared in accordance with generally accepted accounting
principles consistently applied throughout the periods involved (except
as otherwise noted therein). The pro forma financial statements of the
Company and its subsidiaries and the related notes thereto included in
the Final Memorandum have been properly compiled on the bases described
therein, and the assumptions used in the preparation thereof are
reasonable and the adjustments used therein are appropriate to give
effect to the transactions and circumstances referred to therein and to
the knowledge of the Company such pro forma financial statements and the
related notes thereto have been prepared in accordance with the
Securities and Exchange Commission's (the "Commission") rules and
guidelines with respect to pro forma financial statements. The selected
financial data set forth in the Final Memorandum under the headings
"Selected Financial Data" in the Form 10-K dated March 31, 1998;
"Unaudited Pro Forma Combined Financial Data" in the Form 8-K dated
April 1, 1998; and "Condensed Consolidating Information" in the Form
10-Q dated June 30, 1998, present fairly in all material respects, on
the basis stated in the Final Memorandum, the information included
therein.
(f) Each of PricewaterhouseCoopers LLP, who have certified
certain financial statements of the Company and its consolidated
subsidiaries, and Deloitte & Touche, who have certified certain
financial statements of BMG North America Limited and delivered their
respective reports with respect to the audited consolidated financial
statements and schedules included in or incorporated by reference in the
Final Memorandum, are independent public accountants within the meaning
of the Securities Act and the applicable rules and regulations
thereunder.
(g) The execution, delivery and performance of this Agreement
has been duly
<PAGE> 4
-4-
authorized by the Company and the Subsidiary Guarantors, this Agreement
has been duly executed and delivered by the Company and the Subsidiary
Guarantors and, upon the due execution and delivery by the other parties
hereto, this Agreement will constitute a legal, valid and binding
obligation of the Company and the Subsidiary Guarantors, enforceable in
accordance with its terms, subject to the effects of bankruptcy,
insolvency, fraudulent conveyance, moratorium, reorganization or other
similar laws or court decisions relating to or affecting the rights of
creditors generally or of general principles of equity (whether
considered in a proceeding in equity or at law) and the unenforceability
under certain circumstances under law or court decisions of provisions
providing for the indemnification of or contribution to a party with
respect to a liability where such indemnification or contribution is
contrary to public policy. This Agreement conforms in all material
respects to the description thereof contained in the Final Memorandum.
(h) No legal or governmental proceedings are pending to which the
Company or any of its subsidiaries is a party or to which the property
of the Company or any of its subsidiaries is subject that are not
described in the Final Memorandum, and no such proceedings have been
threatened against the Company or any of its subsidiaries or with
respect to any of their respective properties, except in each case for
such proceedings that, if the subject of an unfavorable decision, ruling
or finding, would not, individually or in the aggregate, result in a
material adverse effect on the condition (financial or otherwise),
business prospects, net worth or results of operations of the Company
and its subsidiaries, taken as a whole (a "Material Adverse Effect"), or
have a Material Adverse Effect on the ability of the Company or any
Subsidiary Guarantor to perform its obligations under any of the
Transaction Documents.
(i) The issuance, offering and sale of the Securities to the
Initial Purchasers by the Company and the Subsidiary Guarantors pursuant
to this Agreement, the compliance by the Company and the Subsidiary
Guarantors with the other provisions of this Agreement and the
authorization, execution and delivery by the Company and the Subsidiary
Guarantors of this Agreement and the other Transaction Documents to
which it is a party and the consummation of the other transactions
contemplated herein and therein do not (i) require the consent,
approval, authorization, registration or qualification of or with any
governmental authority, except such as have been obtained and such as
may be required under state securities or blue sky laws or, with respect
to the obligations under the Registration Agreement, except such as may
be required under the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act"), or as may be required to register the Securities
under the Securities Act or (ii) conflict with or result in a breach or
violation of any of the terms and provisions of, or constitute a default
under, (A) any indenture, mortgage, deed of trust, lease or other
agreement or instrument to which the Company or any of its subsidiaries
is a party or by which the Company or any of its subsidiaries or any of
their respective properties are bound, or (B) the charter documents or
bylaws of the Company or any of its subsidiaries or (C) any statute or
any judgment, decree, order, rule or regulation of any court or other
governmental authority or any arbitrator applicable to the Company or
any of its subsidiaries, except in each case for
<PAGE> 5
-5-
such conflicts, breaches or violations that would not, individually or
in the aggregate, result in a Material Adverse Effect.
(j) The Company and each of its subsidiaries have good and
marketable title to all items of real property and good title to all
material personal property owned by each of them, in each case free and
clear of any security interests, liens, encumbrances, equities, claims
and other defects, except such as do not materially and adversely affect
the value of such property and do not interfere with the use made or
proposed to be made of such property by the Company or its subsidiaries,
and the Company and its subsidiaries have valid, subsisting and
enforceable leases for the properties described in the Final Memorandum
as leased by them, with exceptions in each case as are not material and
do not interfere with the business of the Company and its subsidiaries,
taken as a whole, in each case except as described in or contemplated by
the Final Memorandum.
(k) No labor dispute with the employees of the Company or any of
its subsidiaries exists or, to the knowledge of the Company or any of
its Subsidiary Guarantors, is threatened or imminent that would result
in a Material Adverse Effect, except as described in or contemplated by
the Final Memorandum.
(l) The Company and each of its subsidiaries are insured by
insurers of recognized financial responsibility against such losses and
risks and in such amounts as are prudent and customary in the businesses
in which they are engaged; and neither the Company nor any of its
subsidiaries has any reason to believe that it will not be able to renew
its existing insurance coverage as and when such coverage expires or to
obtain similar coverage from similar insurers as may be necessary to
continue its business at a cost that would not result in a Material
Adverse Effect, except as described in or contemplated by the Final
Memorandum.
(m) No subsidiary of the Company is currently prohibited,
directly or indirectly, from paying any dividends to the Company, from
making any other distribution on such subsidiary's capital stock, from
repaying to the Company any loans or advances to such subsidiary from
the Company or from transferring any of such subsidiary's property or
assets to the Company, except as described in the Final Memorandum.
(n) The Company and its subsidiaries possess all certificates,
authorizations and permits issued by the appropriate federal, state or
foreign regulatory authorities required to conduct their respective
businesses except for those the failure to possess which, individually
or in the aggregate, would not have a Material Adverse Effect, and
neither the Company nor any of its subsidiaries has received any notice
of proceedings relating to the revocation or modification of any such
certificate, authorization or permit which, singly or in the aggregate,
if the subject of an unfavorable decision, ruling or finding, would
result in a Material Adverse Effect, except as described in or
contemplated by the Final Memorandum.
<PAGE> 6
-6-
(o) The Company and its subsidiaries have filed all foreign,
federal, state and local tax returns that are required to be filed
through the date hereof or have requested extensions thereof and have
paid all taxes (other than immaterial amounts of franchise taxes with
respect to immaterial subsidiaries and immaterial amounts of severance
taxes) required to be paid by them and any other assessment, fine or
penalty levied against them, to the extent that any of the foregoing is
due and payable, except where the failure to pay such assessment, fine
or penalty levied against them would not singly or in the aggregate have
a Material Adverse Effect and except for any such assessment, fine or
penalty that is currently being contested in good faith or as described
in or contemplated by the Final Memorandum.
(p) Neither the Company nor any of its subsidiaries is in
violation of any federal or state law or regulation relating to
occupational safety and health or to the storage, handling or
transportation of hazardous or toxic materials, and the Company and its
subsidiaries have received all permits, licenses or other approvals
required of them under applicable federal and state occupational safety
and health and environmental laws and regulations to conduct their
respective businesses, and the Company and its subsidiaries are in
compliance with all terms and conditions of any such permit, license or
approval, except any such violation of law or regulation, failure to
receive required permits, licenses or other approvals or failure to
comply with the terms and conditions of such permits, licenses or
approvals which would not, singly or in the aggregate, result in a
Material Adverse Effect, except as described in or contemplated by the
Final Memorandum.
(q) The Company and each of its subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurance
that (i) transactions are executed in accordance with management's
general or specific authorizations; (ii) transactions are recorded as
necessary to permit preparation of financial statements in conformity
with generally accepted accounting principles and to maintain asset
accountability; (iii) access to assets is permitted only in accordance
with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with the existing assets
at reasonable intervals and appropriate action is taken with respect to
any differences.
(r) No default exists, and no event has occurred which, with
notice or lapse of time or both, would constitute a default in the due
performance and observance of any terms, covenant or condition of any
indenture, mortgage, deed of trust, lease or other agreement or
instrument to which the Company or any of its subsidiaries is a party or
by which the Company or any of its subsidiaries or any of their
respective properties is bound or may be affected in any material
adverse respect with regard to property, business or operations of the
Company and its subsidiaries, taken as a whole, except for such defaults
that would not result in a Material Adverse Effect.
(s) The Indenture has been duly and validly authorized and the
Registration
<PAGE> 7
-7-
Agreement, the Securities and the Subsidiary Guarantees have been duly
and validly authorized and, in the case of the Indenture and the
Registration Agreement, when duly executed and delivered by the parties
thereto and, in the case of the Securities, when duly issued,
authenticated and delivered in accordance with the terms of the
Indenture, endorsed by each Subsidiary Guarantor and paid for in
accordance with the terms of this Agreement, (A) the Securities will be
validly issued and outstanding and will constitute valid and binding
obligations of the Company enforceable against the Company in accordance
with their terms and entitled to the benefits of the Indenture and the
Registration Agreement and (B) the Subsidiary Guarantees will constitute
valid and binding obligations of the Subsidiary Guarantors enforceable
against the Subsidiary Guarantors in accordance with their terms,
subject to the effects of bankruptcy, insolvency, fraudulent conveyance,
moratorium, reorganization or other similar laws or court decisions
relating to or affecting the rights of creditors generally or of general
principles of equity (whether considered in a proceeding in equity or at
law). The Securities, the Subsidiary Guarantees, the Indenture and the
Registration Agreement conform in all material respects to the
description thereof contained in the Final Memorandum.
(t) Except as may otherwise be disclosed in the Final Memorandum,
the Company and its subsidiaries conduct their business in compliance
with all applicable laws, rules and regulations of the jurisdictions in
which they are conducting business, except where the failure to be so in
compliance would not have a Material Adverse Effect.
(u) The Final Memorandum, at the date hereof, does not, and at
the Closing Date (as defined below) will not (and any amendment or
supplement thereto, at the date thereof and at the Closing Date, will
not), contain any untrue statement of a material fact or omit to state
any material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading;
provided, however, that no representation or warranty is made by the
Company and its subsidiaries with respect to the information contained
in or omitted from the Final Memorandum, or any amendment or supplement
thereto, in reliance upon and in conformity with information furnished
in writing to the Company or the Subsidiary Guarantors by or on behalf
of the Initial Purchasers specifically for inclusion therein.
(v) Neither the Company, the Subsidiary Guarantors nor any of
their respective Affiliates (as defined in Rule 501(b) of Regulation D
under the Securities Act ("Regulation D")), nor any person acting on its
or their behalf (provided that no representation is made as to the
Initial Purchasers or any person acting on its behalf), has, directly or
indirectly, (i) sold, offered for sale, solicited offers to buy or
otherwise negotiated in respect of any security (as defined in the
Securities Act) which is or will be integrated with the sale of the
Securities and requires registration of the Securities under the
Securities Act or (ii) engaged in any form of general solicitation or
general advertising (within the meaning of Regulation D) in connection
with the offering of the Securities.
<PAGE> 8
-8-
(w) Assuming the Securities are issued, sold and delivered as
contemplated by the Final Memorandum and this Agreement; that each of
the representations, warranties and covenants of the Initial Purchasers
contained in this Agreement are true, correct and complete; and that the
Initial Purchasers comply with the covenants in this Agreement, it is
not necessary in connection with the offer and sale and delivery of the
Securities in the manner contemplated by this Agreement and the Final
Memorandum to register the Securities or the Subsidiary Guarantees under
the Securities Act or to qualify the Indenture under the Trust Indenture
Act.
(x) The Securities satisfy the eligibility requirements of Rule
144A(d)(3) under the Securities Act.
(y) The Company has been advised by the National Association of
Securities Dealers, Inc. PORTAL Market that the Initial Purchasers will
have the Securities designated PORTAL eligible securities in accordance
with the rules and regulations of the National Association of Securities
Dealers, Inc.
(z) Neither the Company nor any Subsidiary Guarantor is an
"investment company" within the meaning of the Investment Company Act of
1940, as amended (the "Investment Company Act"), without taking account
of any exemption arising out of the number of holders of the Company's
or the Subsidiary Guarantors' securities.
(aa) Neither the Company nor any Subsidiary Guarantor has paid or
agreed to pay to any person any compensation for soliciting another to
purchase any securities of the Company or the Subsidiary Guarantors
(except as contemplated by this Agreement).
(bb) The information provided by the Company pursuant to Section
5(h) hereof will not, at the date thereof, contain any untrue statement
of a material fact or omit to state any material fact necessary to make
the statements therein, in the light of the circumstances under which
they were made, not misleading.
(cc) To the knowledge of the Company and each of the Subsidiary
Guarantors, except as described in the Final Memorandum and except as
would not reasonably be expected to result in a Material Adverse Effect,
(A) neither the Company nor any of its subsidiaries is in violation of,
or has received any notice that it is subject to liability under, any
federal, state, local or foreign statute, law, rule, regulation,
ordinance, code or rule of common law or any judicial or administrative
interpretation thereof, including any judicial or administrative order,
decree, judgment or injunction relating to pollution or protection of
human health or the environment (including, without limitation, ambient
air, indoor air, surface water, groundwater, land surface or subsurface
strata and natural resources), including, without limitation, those
relating to the release or threatened release of chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous substances or
constituents, petroleum or petroleum products (collectively, "Hazardous
Materials") or to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or
<PAGE> 9
-9-
handling of Hazardous Materials (collectively, "Environmental Laws"),
(B) the Company and its subsidiaries have all permits, licenses,
authorizations and approvals required under any applicable Environmental
Laws, all of which are in full force and effect, and are each in
compliance with any applicable Environmental Laws, (C) neither the
Company nor any subsidiary has received notice that there are any
pending or threatened administrative, regulatory or judicial actions,
suits, demands, demand letters, claims, liens, notices of noncompliance,
violation or potential responsibility or liability, investigation or
proceedings pursuant to any Environmental Laws against the Company or
any of its subsidiaries, or any of their respective
predecessors-in-interest for which the Company or any of its
subsidiaries is liable and (D) neither the Company nor any subsidiary
has received notice that there are any past or present events,
conditions or circumstances which have been alleged to form the basis of
an order to conduct responsive or corrective action, or an action, suit
or proceeding by any private party or governmental agency, against or
affecting, or requiring capital or operating expenditures by, the
Company or any of the subsidiaries pursuant to any Environmental Laws.
2. Purchase and Sale. Subject to the terms and conditions and in
reliance upon the representations and warranties herein set forth, the Company
agrees to sell to each Initial Purchaser, and each Initial Purchaser agrees,
severally and not jointly, to purchase from the Company, at a purchase price of
102.00% of the principal amount thereof, the principal amount of Securities set
forth opposite such Initial Purchaser's name in Schedule II hereto.
3. Delivery and Payment. Delivery of and payment for the Securities
shall be made at 10:00 AM, New York City time, on December 8, 1998, or such
later date as the Initial Purchasers shall designate, which date and time may be
postponed by agreement between the Initial Purchasers and the Company (such date
and time of delivery and payment for the Securities being herein called the
"Closing Date"). Delivery of the Securities shall be made to the Initial
Purchasers against payment by the Initial Purchasers of the purchase price
thereof to or upon the order of the Company by wire transfer in federal
(same-day) funds or such other manner of payment as may be agreed by the Company
and the Initial Purchasers. Delivery of the Securities shall be made at such
location as the Initial Purchasers shall reasonably designate at least one
business day in advance of the Closing Date and payment for the Securities shall
be made at the office of Cahill Gordon & Reindel ("Counsel for the Initial
Purchasers"), 80 Pine Street, New York, New York or such other place as the
parties may otherwise agree. Certificates for the Securities shall be registered
in such names and in such denominations as the Initial Purchasers may request
not less than three full business days in advance of the Closing Date.
The Company agrees to have the Securities available for inspection,
checking and packaging by the Initial Purchasers in New York, New York, not
later than 1:00 PM, New York City time, on the business day prior to the Closing
Date.
4. Offering of Securities. Each Initial Purchaser represents and
warrants to and agrees with the Company that:
<PAGE> 10
-10-
(a) It has not offered or sold, and will not offer or sell, any
Securities except to those it reasonably believes to be qualified
institutional buyers (as defined in Rule 144A under the
Securities Act) and that, in connection with each such sale, it has
taken or will take reasonable steps to ensure that the purchaser of such
Securities is aware that such sale is being made in reliance on
Rule 144A.
(b) Neither it nor any person acting on its behalf has made or
will make offers or sales of the Securities in the United States by
means of any form of general solicitation or general advertising within
the meaning of Regulation D in the United States.
5. Agreements. The Company and each of the Subsidiary Guarantors agrees
with each Initial Purchaser that:
(a) The Company will furnish to each Initial Purchaser and to
Counsel for the Initial Purchasers, without charge, during the period
referred to in paragraph (c) below, as many copies of the Final
Memorandum (including any documents incorporated by reference therein)
and any amendments and supplements thereto as they may reasonably
request. The Company will pay the expenses of printing or other
production of all documents relating to the offering.
(b) The Company will not amend or supplement the Final Memorandum
without the prior written consent of the Initial Purchasers.
(c) If at any time prior to the completion of the sale of the
Securities by the Initial Purchasers, any event occurs as a result of
which the Final Memorandum, as then amended or supplemented, would
include any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading, or if it
should be necessary to amend or supplement the Final Memorandum to
comply with applicable law, the Company will promptly notify the Initial
Purchasers of the same and, subject to the requirements of paragraph (b)
of this Section 5, will prepare and provide to the Initial Purchasers
pursuant to paragraph (a) of this Section 5 an amendment or supplement
which will correct such statement or omission or effect such compliance.
(d) The Company will arrange for the qualification of the
Securities for sale by the Initial Purchasers under the laws of such
jurisdictions as the Initial Purchasers may designate and will maintain
such qualifications in effect so long as required for the sale of the
Securities. Each of the Company and the Subsidiary Guarantors will
promptly advise the Initial Purchasers of the receipt by the Company of
any notification with respect to the suspension of the qualification of
the Securities for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose.
(e) The Company and the Subsidiary Guarantors will not, and will
not permit any of their respective Affiliates to, resell any Securities
which constitute "restricted
<PAGE> 11
-11-
securities" under Rule 144 that have been acquired by any of them.
(f) Neither the Company, nor any of its Affiliates, nor any
person acting on its or their behalf will, directly or indirectly, make
offers or sales of any security, or solicit offers to buy any security,
under circumstances the offering of which security will be integrated
with the sale of the Securities in a manner that would require the
registration of the Securities under the Securities Act.
(g) Neither the Company, nor any of its Affiliates, nor any
person acting on its or their behalf will engage in any form of general
solicitation or general advertising (within the meaning of Regulation D)
in connection with any offer or sale of the Securities in the United
States.
(h) So long as any of the Securities are "restricted securities"
within the meaning of Rule 144(a)(3) under the Securities Act, the
Company will, during any period in which it is not subject to and in
compliance with Section 13 or 15(d) of the Exchange Act, provide to each
holder of such restricted securities and to each prospective purchaser
(as designated by such holder) of such restricted securities, upon the
request of such holder or prospective purchaser, any information
required to be provided by Rule 144A(d)(4) under the Securities Act.
This covenant is intended to be for the benefit of the holders, and the
prospective purchasers designated by such holders, from time to time of
such restricted securities.
(i) Neither the Company, nor any of its Affiliates, nor any
person acting on its or their behalf will engage in any directed selling
efforts with respect to the Securities, and each of them will comply
with the offering restrictions requirement of Regulation S. Terms used
in this paragraph have the meanings given to them by Regulation S.
(j) The Company will cooperate with the Initial Purchasers and
use its best efforts to permit the Securities to be eligible for
clearance and settlement through The Depository Trust Company.
(k) The Company will not, until 90 days following the Closing
Date, without the prior written consent of the Initial Purchasers,
offer, sell or contract to sell, or otherwise dispose of, directly or
indirectly, or announce the offering of, any debt securities issued or
guaranteed by the Company or any of its subsidiaries (other than the
Securities and the Exchange Notes (as defined in the Final Memorandum));
provided, however, that the foregoing will not apply to borrowings from
banks under bank credit facilities or to the issuance of debt securities
to the seller of assets or businesses acquired by the Company or
subsidiaries as part of the purchase price therefor provided that each
seller agrees not to resell such debt securities for a period of 90 days
following the Closing Date.
(l) The Company will apply the net proceeds from the sale of the
Securities
<PAGE> 12
-12-
sold by it substantially in accordance with its statements under the
caption "Use of Proceeds" in the Final Memorandum.
6. Conditions to the Obligations of the Initial Purchasers. The
obligations of the Initial Purchasers to purchase the Securities shall be
subject to the accuracy, in all material respects, of the representations and
warranties on the part of the Company and the Subsidiary Guarantors contained
herein at the date and time that this Agreement is executed and delivered by the
parties hereto (the "Execution Time") and the Closing Date, to the accuracy of
the statements of the Company and the Subsidiary Guarantors made in any
certificates pursuant to the provisions hereof, to the performance by the
Company and the Subsidiary Guarantors of their obligations hereunder and to the
following additional conditions:
(a) The Company shall have furnished to the Initial Purchasers
the opinion of Dykema Gossett PLLC, counsel for the Company and the
Subsidiary Guarantors, dated the Closing Date, to the effect that
(i) each of the Company and the Subsidiary Guarantors has
been duly incorporated or organized and is validly existing as a
corporation or limited liability company in good standing under
the laws of the jurisdiction in which it is chartered or
organized, with full corporate power and authority to own its
properties and conduct its business as described in the Final
Memorandum, and is duly qualified to do business as a foreign
corporation or limited liability company and is in good standing
under the laws of each jurisdiction listed on Schedule I hereto;
(ii) the Indenture has been duly authorized, executed and
delivered, and constitutes a legal, valid and binding instrument
enforceable against the Company and the Subsidiary Guarantors in
accordance with its terms (subject, as to the enforcement of
remedies, to applicable bankruptcy, reorganization, insolvency,
moratorium or other laws affecting creditors' rights generally
from time to time in effect) except that such counsel shall
express no opinion concerning the enforceability of waivers or
defenses therein; the Securities and the Subsidiary Guarantees
are in the form contemplated by the Indenture and have been duly
and validly authorized and, when the Securities are executed and
authenticated in accordance with the provisions of the Indenture
and delivered to and paid for by the Initial Purchasers pursuant
to this Agreement, will constitute legal, valid and binding
obligations of the Company and the Subsidiary Guarantors entitled
to the benefits of the Indenture, subject to the effects of
bankruptcy, insolvency, fraudulent conveyance, moratorium,
reorganization or other similar laws or court decisions relating
to or affecting the rights of creditors generally or of general
principles of equity (whether considered in a proceeding in
equity or at law);
(iii) insofar as the Final Memorandum contains a
discussion of specific
<PAGE> 13
-13-
legal proceedings or regulatory matters, including the
information set forth in the Final Memorandum under the headings
"Business - Regulatory Matters" and "Legal Proceedings," each in
the Form 10-K dated March 31, 1998, and "Description of Certain
Indebtedness," to such counsel's knowledge such discussion fairly
summarizes the matters therein described;
(iv) this Agreement has been duly authorized, executed and
delivered by the Company and the Subsidiary Guarantors;
(v) to such counsel's knowledge, no consent, approval,
authorization or order of any court or governmental agency or
body is required for the consummation of the transactions
contemplated herein, except such as may be required under the
blue sky or securities laws of any jurisdiction in connection
with the purchase and sale of the Securities by the Initial
Purchasers;
(vi) none of the issue and sale of the Securities, the
execution and delivery of the Indenture, the issuance of the
Subsidiary Guarantees, the consummation of any other of the
transactions herein or therein contemplated nor the fulfillment
of the terms hereof or thereof will conflict with, result in a
breach or violation of, or constitute a default under any Law
applicable to the Company or the charter or by-laws of the
Company or the Subsidiary Guarantors or the terms of any
indenture or other agreement or instrument known to such counsel
and to which the Company or any of its subsidiaries is a party or
bound or any judgment, order or decree known to such counsel to
be applicable to the Company or any of its subsidiaries of any
court, regulatory body, administrative agency, governmental body
or arbitrator having jurisdiction over the Company or any of its
subsidiaries except to the extent any such breach, violation or
default will not have a Material Adverse Effect;
(vii) assuming the accuracy of the representations and
warranties and compliance with the agreements contained herein,
no registration of the Securities or the Subsidiary Guarantees
under the Securities Act is required, and no qualification of the
Indenture or the Subsidiary Guarantees under the Trust Indenture
Act is necessary, for the offer and sale by the Initial
Purchasers of the Securities in the manner contemplated by this
Agreement;
(viii) neither the Company nor any of the Subsidiary
Guarantors is an "investment company" within the meaning of the
Investment Company Act without taking account of any exemption
arising out of the number of holders of the Company's or the
Subsidiary Guarantors' securities; and
(ix) to the best of such counsel's knowledge, there are no
legal or governmental actions, suits or proceedings pending or
threatened to which the Company or any of its subsidiaries is or
is threatened to be made a party or of
<PAGE> 14
-14-
which property owned or leased by the Company or any of its
subsidiaries is or is threatened to be made the subject, which
actions, suits or proceedings could, individually or in the
aggregate, prevent or adversely affect the transactions
contemplated by the Transaction Documents or the Securities or
result in a Material Adverse Effect in the condition (financial
or otherwise) of the Company; and except as may otherwise be
described in the Final Memorandum, neither the Company nor any of
its subsidiaries is a party or subject to the provisions of any
injunction, judgment, decree or order of any court, regulatory
body, administrative agency or other governmental body which
could have a Material Adverse Effect on the condition (financial
or otherwise) of the Company.
Such counsel shall also state that although such counsel has not
undertaken, except as otherwise indicated in their opinion, to determine
independently, and does not assume any responsibility for, the accuracy,
completeness or fairness of the statements contained or incorporated by
reference in the Final Memorandum, such counsel has participated in the
preparation of the Final Memorandum, including review and discussion of
the contents thereof, and nothing has come to the attention of such
counsel that has caused them to believe that at the Execution Time the
Final Memorandum, including the documents incorporated by reference
therein, contained an untrue statement of material fact or omitted to
state a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they
were made, not misleading or that any amendment or supplement to the
Final Memorandum, as of its respective date, and as of the Closing Date
contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which
they were made, not misleading (it being understood that such counsel
need express no opinion with respect to the financial statements and the
notes thereto and the schedules and other financial and statistical data
included or incorporated by reference in the Final Memorandum).
In rendering such opinion, such counsel may rely (A) as to
matters involving the application of laws of any jurisdiction other than
the State of New York, the State of Michigan or the United States, to
the extent they deem proper and specified in such opinion, upon the
opinion of other counsel of good standing whom they reasonably believe
to be reliable and who are satisfactory to counsel for the Initial
Purchasers and (B) as to matters of fact, to the extent they deem
proper, on certificates of responsible officers of the Company and
public officials.
All references in this Section 6(a) to the Final Memorandum shall be
deemed to include any amendment or supplement thereto at the Closing Date.
(b) The Initial Purchasers shall have received from Counsel for
the Initial Purchasers such opinion or opinions, dated the Closing Date,
with respect to the issuance and sale of the Securities, the Final
Memorandum (as amended or supplemented at the
<PAGE> 15
-15-
Closing Date) and other related matters as the Initial Purchasers may
reasonably require, and the Company shall have furnished to such counsel
such documents as they request for the purpose of enabling them to pass
upon such matters.
(c) The Company shall have furnished to the Initial Purchasers a
certificate of the Company, signed by the Chairman of the Board or the
President and the principal financial or accounting officer of the
Company, dated the Closing Date, to the effect that the signers of such
certificate have carefully examined the Final Memorandum, any amendment
or supplement to the Final Memorandum and this Agreement and that:
(i) the representations and warranties of the Company and
the Subsidiary Guarantors in this Agreement are true and correct
in all material respects on and as of the Closing Date with the
same effect as if made on the Closing Date, and the Company and
the Subsidiary Guarantors have complied with all the agreements
and satisfied all the conditions on its part to be performed or
satisfied hereunder at or prior to the Closing Date; and
(ii) since the date of the most recent financial
statements included in the Final Memorandum, there has been no
material adverse change in the condition (financial or other),
earnings, business or properties of the Company and its
subsidiaries, whether or not arising from transactions in the
ordinary course of business, except at set forth in or
contemplated by the Final Memorandum (exclusive of any amendment
or supplement thereto).
(d) At the Closing Date, PricewaterhouseCoopers LLP shall have furnished
to the Initial Purchasers a letter or letters dated as of the Closing
Date, in form and substance satisfactory to the Initial Purchasers.
(e) The Company shall have furnished to the Initial Purchasers the
opinion of Fasken Campbell Godfrey, special Canadian counsel for the
Company and the Subsidiary Guarantors incorporated in Ontario, dated the
Closing Date, substantially in the form of Exhibit A hereto.
(f) On or prior to the Closing Date, the Company and the Subsidiary
Guarantors shall have furnished to the Initial Purchasers such further
information, certificates and documents as the Initial Purchasers may
reasonably request.
(g) On or prior to the Closing Date, the Registration Agreement shall
have been executed substantially in the form hereto delivered to you and
shall have been delivered to you and the Trustee.
If any of the conditions specified in this Section 6 shall not have been
fulfilled in all material respects when and as provided in this Agreement, or if
any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects
<PAGE> 16
-16-
reasonably satisfactory in form and substance to the Initial Purchasers and
Counsel for the Initial Purchasers, this Agreement and all obligations of the
Initial Purchasers hereunder may be canceled at, or at any time prior to, the
Closing Date by the Initial Purchasers. Notice of such cancellation shall be
given to the Company in writing or by telephone or telegraph confirmed in
writing.
The documents required to be delivered by this Section 6 will be
delivered at the office of Counsel for the Initial Purchasers, at 80 Pine
Street, New York, New York, on the Closing Date.
7. Reimbursement of Expenses. If the sale of the Securities provided for
herein is not consummated because any condition to the obligations of the
Initial Purchasers set forth in Section 6 hereof is not satisfied, because of
any termination pursuant to Section 10 hereof or because of any refusal,
inability or failure on the part of the Company or the Subsidiary Guarantors to
perform any agreement herein or comply with any provision hereof other than by
reason of a default by the Initial Purchasers in payment for the Securities on
the Closing Date, the Company and the Subsidiary Guarantors will, jointly and
severally, reimburse the Initial Purchasers severally upon demand for all
reasonable out-of-pocket expenses (including reasonable fees and disbursements
of Cahill Gordon & Reindel) that shall have been incurred by them in connection
with the proposed purchase and sale of the Securities.
8. Indemnification and Contribution. (a) The Company and the Subsidiary
Guarantors, jointly and severally, agree to indemnify and hold harmless each
Initial Purchaser, the directors, officers, employees and agents of each Initial
Purchaser and each person who controls any Initial Purchaser within the meaning
of either the Securities 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 Securities 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 Final Memorandum or any information provided
by the Company to any holder or prospective purchaser of the Securities pursuant
to Section 5(h) hereof, 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 the 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 neither the Company nor the
Subsidiary Guarantors will be liable in any such 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 in the Final Memorandum, or in any amendment thereof or supplement thereto,
in reliance upon and in conformity with written information furnished to the
Company by or on behalf of the Initial Purchasers specifically for inclusion
therein.
(b) Each Initial Purchaser severally and not jointly agrees to indemnify
and hold
<PAGE> 17
-17-
harmless each of the Company and the Subsidiary Guarantors, their respective
directors, officers and each person who controls the Company or a Subsidiary
Guarantor within the meaning of either the Securities Act or the Exchange Act,
to the same extent as the foregoing indemnity from the Company and the
Subsidiary Guarantors to each Initial Purchaser, but only with reference to
written information relating to such Initial Purchaser furnished to the Company
by or on behalf of the Initial Purchasers specifically for inclusion in the
Final Memorandum (or in any amendment or supplement thereto). This indemnity
agreement will be in addition to any liability which any Initial Purchaser may
otherwise have. The Company and the Subsidiary Guarantors acknowledge that the
statements set forth in the last paragraph of the cover page and under the
heading "Plan of Distribution" in the Final Memorandum constitute the only
information furnished in writing by or on behalf of the Initial Purchasers for
inclusion in the Final Memorandum (or in any amendment or supplement thereto).
(c) Promptly after receipt by an indemnified party under this Section 8
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 8, 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 appoint 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 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 the indemnified party shall
have reasonably concluded on the advice of counsel that there may be legal
defenses available to it 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
<PAGE> 18
-18-
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 8 is unavailable to or insufficient to hold harmless an indemnified
party for any reason, the Company and the Subsidiary Guarantors on the one hand
and the Initial Purchasers on the other hand agree 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 the Company and the Subsidiary Guarantors or
the Initial Purchasers, as applicable, may be subject in such proportion as is
appropriate to reflect the relative benefits received by the Company and the
Subsidiary Guarantors on the one hand or the Initial Purchasers on the other
hand from the offering of the Securities. If the allocation provided by the
immediately preceding sentence is unavailable for any reason, the Company and
the Subsidiary Guarantors on one hand and the Initial Purchasers on the other
hand shall contribute in such proportion as is appropriate to reflect not only
such relative benefits but also the relative fault of the Company and the
Subsidiary Guarantors or the Initial Purchasers, as applicable, in connection
with the statements or omissions which resulted in such Losses as well as any
other relevant equitable considerations. Benefits received by the Company and
the Subsidiary Guarantors shall be deemed to be equal to the proceeds from the
offering net of purchase discounts and commissions (before deducting expenses),
and benefits received by the Initial Purchasers shall be deemed to be equal to
the total purchase discounts and commissions received by the Initial Purchasers
from the Company in connection with the purchase of the Securities hereunder.
Relative fault shall be determined by reference to whether any alleged untrue
statement or omission relates to information provided by the Company, the
Subsidiary Guarantors or the Initial Purchasers. The Company, the Subsidiary
Guarantors and the Initial Purchasers 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), (i) in
no case shall any Initial Purchaser be responsible for any amount in excess of
the purchase discount or commission applicable to the Securities purchased by
such Initial Purchaser hereunder and (ii) no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 8, each person who
controls the Initial Purchasers within the meaning of either the Securities Act
or the Exchange Act and each director, officer, employee and agent of the
Initial Purchasers shall have the same rights to contribution as the Initial
Purchasers, and each person who controls the Company or the Subsidiary
Guarantors within the meaning of either the Securities Act or the Exchange Act
and each officer and director of the Company or the Subsidiary Guarantors shall
have the same rights to contribution as the Company and the Subsidiary
Guarantors, subject in each case to the applicable terms and conditions of this
paragraph (d).
9. Default by an Initial Purchaser. If any one or more Initial
Purchasers shall fail to purchase and pay for any of the Securities agreed to be
purchased by such Initial Purchaser hereunder and such failure to purchase shall
constitute a default in the performance of its or their
<PAGE> 19
-19-
obligations under this Agreement, the remaining Initial Purchasers shall be
obligated severally to take up and pay for (in the respective proportions which
the principal amount of Securities set forth opposite their names in Schedule II
hereto bears to the aggregate principal amount of Securities set forth opposite
the names of all the remaining Initial Purchasers) the Securities which the
defaulting Initial Purchaser or Initial Purchasers agreed but failed to
purchase; provided, however, that in the event that the aggregate principal
amount of Securities which the defaulting Initial Purchaser or Initial
Purchasers agreed but failed to purchase shall exceed 10% of the aggregate
principal amount of Securities set forth in Schedule II hereto, the remaining
Initial Purchasers shall have the right to purchase all, but shall not be under
any obligation to purchase any, of the Securities, and if such non-defaulting
Initial Purchasers do not purchase all the Securities, this Agreement will
terminate without liability to any non-defaulting Initial Purchaser or the
Company. In the event of a default by any Initial Purchaser as set forth in this
Section 9, the Closing Date shall be postponed for such period, not exceeding
seven days, as the Initial Purchasers shall determine in order that the required
changes in the Final Memorandum or in any other documents or arrangements may be
effected. Nothing contained in this Agreement shall relieve any defaulting
Initial Purchaser of its liability, if any, to the Company or any non-defaulting
Initial Purchaser for damages occasioned by its default hereunder.
10. Termination. Termination. This Agreement shall be subject to
termination in the absolute discretion of the Initial Purchasers, by notice
given to the Company prior to delivery of and payment for the Securities, if
prior to such time (i) any of the Company's securities shall have been suspended
by the Commission or trading in securities generally on the New York Stock
Exchange or the NASDAQ National Market shall have been suspended or limited or
minimum prices shall have been established on either of such exchanges, (ii) a
banking moratorium shall have been declared either by Federal or New York State
authorities or (iii) there shall have occurred any outbreak or escalation of
hostilities, declaration by the United States of a national emergency or war or
other calamity or crisis the effect of which on financial markets is such as to
make it, in the judgment of the Initial Purchasers, impracticable or inadvisable
to proceed with the offering or delivery of the Securities as contemplated by
the Final Memorandum.
11. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Company, the Subsidiary Guarantors or their respective officers and of the
Initial Purchasers set forth in or made pursuant to this Agreement will remain
in full force and effect, regardless of any investigation made by or on behalf
of the Initial Purchasers or the Company, the Subsidiary Guarantors or any of
their respective officers, directors or controlling persons referred to in
Section 8 hereof, and will survive delivery of and payment for the Securities.
The provisions of Sections 7 and 8 hereof shall survive the termination or
cancellation of this Agreement.
12. Notices. All communications hereunder will be in writing and
effective only on receipt, and, if sent to the Initial Purchasers, will be
mailed, delivered or telegraphed and confirmed to them, care of Bear, Stearns &
Co. Inc., 245 Park Avenue, New York, New York 10167; or, if sent to the Company,
will be mailed, delivered or telegraphed and confirmed to it at Oxford
Automotive, Inc., 1250 Stephenson Highway, Troy, Michigan 48083.
<PAGE> 20
-20-
13. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 8 hereof, and,
except as expressly set forth in Section 5(h) hereof, no other person will have
any right or obligation hereunder.
14. Applicable Law. This Agreement will be governed by and construed in
accordance with the laws of the State of New York without regard to principles
of conflicts of law thereof.
15. Business Day. For purposes of this Agreement, "business day" means
each Monday, Tuesday, Wednesday, Thursday and Friday that is not a day on which
banking institutions in the City of New York, New York are authorized or
obligated by law, executive order or regulation to close.
16. Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original, but all such
counterparts will together constitute one and the same instrument.
<PAGE> 21
-21-
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this Agreement and your acceptance shall represent a binding agreement among the
Company, the Subsidiary Guarantors and the Initial Purchasers.
Very truly yours,
OXFORD AUTOMOTIVE, INC.
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
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:
--------------------------------
<PAGE> 22
-22-
BMG HOLDINGS INC.
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
LASERWELD INTERNATIONAL, L.L.C.
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
PARALLEL GROUP INTERNATIONAL,
INC.
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
CONCEPT MANAGEMENT CORPORATION
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
LEWIS EMERY CAPITAL CORPORATION
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
RPI HOLDINGS, INC.
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
<PAGE> 23
-23-
HOWELL INDUSTRIES, INC.
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
OXFORD SUSPENSION, INC.
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
RPI, INC.
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
PRUDENVILLE MANUFACTURING, INC.
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
OXFORD SUSPENSION LTD.
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
<PAGE> 24
-24-
The foregoing Agreement is hereby confirmed and accepted as of the date
first above written.
BEAR, STEARNS & CO. INC.
BT ALEX. BROWN INCORPORATED
MORGAN STANLEY & CO. INCORPORATED
By: BEAR, STEARNS & CO. INC.
--------------------------------------
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
<PAGE> 25
-25-
SCHEDULE I
1. Lobdell Emery Corporation, a Michigan corporation, is authorized to
transact business in the State of Indiana.
2. Howell Industries, Inc., a Michigan corporation, is authorized to
transact business in the State of Ohio.
<PAGE> 26
-26-
SCHEDULE II
Principal Amount of
Securities to Be
Initial Purchasers Purchased
Bear, Stearns & Co. Inc. $22,000,000
BT Alex. Brown Incorporated 14,000,000
Morgan Stanley & Co. Incorporated 4,000,000
-----------
$40,000,000
===========
<PAGE> 27
-27-
Annex 1
[BEAR, STEARNS & CO. INC. LETTERHEAD]
December 1, 1998
PricewaterhouseCoopers LLP
Suite 200
2050 N. Woodward Ave.
Bloomfield Hills, MI 48304-2260
Ladies and Gentlemen:
The undersigned, as initial purchasers (the "Initial Purchasers") of
10-1/8% Senior Subordinated Notes Due 2007 of Oxford Automotive, Inc. (the
"Company"), have reviewed and will be reviewing certain information relating to
the Company that will be included in the Company's Final Memorandum, which may
be delivered to investors and utilized by them as a basis for their investment
decision. This review process, applied to the information relating to the
Company, is substantially consistent with the due diligence review process that
we would perform if this placement of securities were being registered pursuant
to the Securities Act of 1933, as amended, and we are knowledgeable of such due
diligence review process. It is recognized that what is "substantially
consistent" may vary from situation to situation and may not be the same as that
done in a registered offering of the same securities for the same issuer;
whether the procedures being, or to be, followed, will be "substantially
consistent" will be determined by Bear Stearns & Co. Inc. on behalf of the
Initial Purchasers. We hereby request that you deliver to us a "comfort" letter
concerning the financial statements of the issuer and certain statistical and
other data included in the Company's Final Memorandum. We will contact you to
identify the procedures we wish you to follow and the form we wish the comfort
letter to take.
Very truly yours,
BEAR, STEARNS & CO. INC.
BT ALEX. BROWN INCORPORATED
MORGAN STANLEY & CO. INCORPORATED
By:
BEAR, STEARNS & CO. INC.
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
<PAGE> 28
-28-
EXHIBIT A
[FASKEN CAMPBELL GODFREY LETTERHEAD]
December 1, 1998
Bear, Stearns & Co. Inc.
BT Alex. Brown Incorporated
Morgan Stanley & Co. Incorporated
c/o Bear, Stearns & Co. Inc.
245 Park Avenue
New York, New York 10167
Ladies and Gentlemen:
Subject to the assumptions and qualifications outlined below, we are of
the opinion that:
1. Each Subsidiary Guarantor was incorporated under the OBCA and has not
been dissolved under the OBCA.
2. Each Subsidiary Guarantor has the capacity of a natural person and the
corporate power and authority under the OBCA and its Articles and
By-laws to own its property and conduct its business (as such business
is described in the Final Memorandum dated December 1, 1998 relating to
the Securities and to execute, deliver, give the guarantee contemplated
by and perform its obligations under the Transaction Documents to which
it is party.
3. Each Subsidiary Guarantor has taken all necessary corporate action to
authorize the execution, delivery, the giving of the guarantee
contemplated by, and performance of its obligations under, the
Transaction Documents to which it is party and has duly executed and
delivered those Transaction Documents.
4. The execution and delivery of the Transaction Documents to which it is a
party by each Subsidiary Guarantor and the guarantee by each Subsidiary
Guarantor under its Subsidiary Guarantee:
(i) do not contravene or constitute a default under the OBCA or the
Articles or By-laws of any Subsidiary Guarantor; and
(ii) do not contravene any applicable Ontario Law.
5. No consent, license, approval, acknowledgment, order, registration,
filing, notice, exemption or other action is required to be obtained
from any government department or
<PAGE> 29
-29-
agency or other regulatory body or authority under Ontario Law to permit
each Subsidiary Guarantor to execute and deliver the Transaction
Documents to which it is party or to permit each Subsidiary Guarantor to
guarantee under its Subsidiary Guarantee, other than those which been
obtained and remain effective.
6. Without having made any enquiries other than those disclosed, we do not
have any conscious awareness of any existing litigation or other legal
proceedings against any of the Subsidiary Guarantors, except as
otherwise disclosed.
7. No financing statements have been registered under the Personal Property
Security Act (Ontario) against the current names of either Oxford
Automotive or Holdings which could perfect by registration a security
interest in the shares in Holdings or BMG respectively other than the
registrations disclosed in Certificates of Search with a file currency
date of December [ ], 1998 issued by the Ontario Ministry
of Consumer and Commercial Relations, details of which are disclosed.
FASKEN CAMPBELL GODFREY
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S UNAUDITED FINANCIAL STATEMENTS AS OF AND FOR THE PERIOD ENDING
DECEMBER 31, 1998, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAR-31-1999
<PERIOD-END> DEC-31-1998
<CASH> 318
<SECURITIES> 8,092
<RECEIVABLES> 86,336
<ALLOWANCES> 328
<INVENTORY> 33,911
<CURRENT-ASSETS> 168,837
<PP&E> 191,446
<DEPRECIATION> 41,164
<TOTAL-ASSETS> 412,562
<CURRENT-LIABILITIES> 81,776
<BONDS> 203,205
0
40,586
<COMMON> 1,050
<OTHER-SE> (2,078)
<TOTAL-LIABILITY-AND-EQUITY> 412,562
<SALES> 408,144
<TOTAL-REVENUES> 408,144
<CGS> 372,612
<TOTAL-COSTS> 372,612
<OTHER-EXPENSES> 22,235
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 14,449
<INCOME-PRETAX> (1,185)
<INCOME-TAX> (475)
<INCOME-CONTINUING> (710)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (710)
<EPS-PRIMARY> (5.49)
<EPS-DILUTED> (5.49)
</TABLE>
