<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 September 30, 1999
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 333-75849
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) (ZipCode)
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 October 31, 1999
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PART I. FINANCIAL INFORMATION
OXFORD AUTOMOTIVE, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
Three Months Three Months Six Months Six Months
Ended Ended Ended Ended
September 30, September 30, September 30, September 30,
1999 1998 1999 1998
<S> <C> <C> <C> <C>
Net sales $201,086 $118,508 $407,447 $258,410
Cost of sales 177,349 109,296 362,381 237,559
-------------------- -------------------- -------------------- ---------------------
Gross profit 23,737 9,212 45,066 20,851
Selling, general and
administrative expenses 11,279 7,007 23,802 14,806
Restructuring reserve 1,176 1,176
Loss (gain) on sale of equipment 208 (297)
-------------------- -------------------- -------------------- ---------------------
Operating income 12,250 1,029 21,561 4,869
Other income (expense):
Interest expense (8,126) (4,724) (15,241) (9,137)
Other (183) 71 132 394
-------------------- -------------------- -------------------- ---------------------
Income (loss) before income taxes 3,941 (3,624) 6,452 (3,874)
Income taxes (1,668) 1,450 (2,757) 1,550
-------------------- -------------------- -------------------- ---------------------
Net income (loss) 2,273 (2,174) 3,695 (2,324)
Accrued dividends and accretion on
redeemable preferred stock 330 330 660 660
-------------------- -------------------- -------------------- ---------------------
Net income (loss) applicable to
common stock $1,943 ($2,504) $3,035 ($2,984)
==================== ==================== ==================== =====================
Net income (loss) per share
(basic and diluted) $6.27 ($8.08) 9.80 ($9.63)
==================== ==================== ==================== =====================
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>
September 30, March 31,
1999 1999
(unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 24,932 $ 19,008
Accounts receivable, trade 138,140 152,281
Inventory 55,406 48,104
Reimbursable tooling 27,849 23,201
Deferred income taxes 2,262 3,669
Prepaid expenses and other
current assets 20,340 18,225
------------------- --------------------
Total Current Assets 268,929 264,488
Other noncurrent assets 27,788 29,677
Deferred income taxes 25,684 25,366
Property, plant and equipment, net 260,578 223,399
------------------- --------------------
Total Assets $582,979 $542,930
=================== ====================
LIABILITIES SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $117,357 $109,343
Restructuring reserve 8,832 8,747
Other current liabilities 51,816 54,444
Current portion of long-term debt 11,233 11,504
------------------- --------------------
Total Current Liabilities 189,238 184,038
LONG TERM LIABILITIES
Pension liability 9,697 7,069
Post retirement medical benefits 44,355 42,703
Deferred taxes 9,994 11,867
Other noncurrent 7,461 3,648
Long term debt 276,883 252,358
------------------- --------------------
Total Liabilities 537,628 501,683
</TABLE>
3
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OXFORD AUTOMOTIVE, INC.
CONSOLIDATED BALANCE SHEETS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
September 30, March 31,
1999 1999
(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
September 30, 1999, and
March 31, 1999 40,383 40,319
SHAREHOLDERS' EQUITY
Common stock 1,050 1,050
Accumulated other
comprehensive income (loss) (5,700) (6,705)
Retained earnings 9,618 6,583
------------ -------------
4,968 928
------------ -------------
Total liabilities &
shareholders' equity $582,979 $542,930
============ =============
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
4
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OXFORD AUTOMOTIVE, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
For the Six For the Six
Months Ended Months Ended
September 30, September 30,
1999 1998
(unaudited) (unaudited)
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 3,695 ($ 2,324)
Adjustments to reconcile net income
to net cash provided by (used in)
operating activities
Depreciation and amortization 15,784 13,169
Deferred income taxes (553) (1,916)
Gain on sale of equipment (297)
Changes in operating assets and
liabilities affecting cash
Accounts receivable, trade 21,608 (1,920)
Inventories (200) (1,476)
Reimbursable tooling (4,680) (3,580)
Prepaid expenses and other assets (8,793) (1,806)
Accounts payable 4,369 (8,853)
Restructuring reserve (3,602) (1,053)
Accrued expenses and other liabilities (7,794) 818
Income taxes payable/refundable (787)
Other noncurrent liabilities 3,073 890
------------ ------------
Net cash provided by (used in) operating
activities 22,610 (8,838)
------------ ------------
INVESTING ACTIVITIES
Purchase of business, net of cash acquired 59 (53,465)
Purchase of property, plant
and equipment (19,770) (15,291)
Proceeds from sale of equipment 3,743
Purchase of marketable securities (887)
------------ ------------
Net cash used in investing activities (15,968) (69,643)
------------ ------------
FINANCING ACTIVITIES
Net proceeds (payments) on borrowings (50) 28,178
Proceeds from borrowing arrangements 37,044
Debt financing costs (647)
Payment of preferred dividends (596) (596)
------------ ------------
Net cash provided by (used in) financing activities (646) 63,979
------------ ------------
</TABLE>
5
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OXFORD AUTOMOTIVE, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
For the Six For the Six
Months Ended Months Ended
September 30, September 30,
1999 1998
(unaudited) (unaudited)
<S> <C> <C>
Effect of exchange rate
changes on cash (72) (398)
---------------- ----------------
Net increase (decrease) in cash
and cash equivalents 5,924 (14,900)
Cash and cash equivalents
at beginning of period 19,008 18,321
---------------- ----------------
Cash and cash equivalents
at end of period $24,932 $ 3,421
================ ================
</TABLE>
See accompanying notes of Consolidated Financial Statements.
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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, 1999.
2. INVENTORIES (Dollars in thousands)
<TABLE>
<CAPTION>
September 30, March 31,
1999 1999
<S> <C> <C>
Raw materials $26,015 $23,154
Finished goods and work-in-process 33,327 28,646
---------------- ----------------
59,342 51,800
LIFO and other reserves (3,936) (3,696)
---------------- ----------------
$55,406 $48,104
================ ================
</TABLE>
The Company does not separately identify finished goods from work-in-process.
3. SENIOR SUBORDINATED NOTES
On April 1, 1998 we issued $35.0 million of unsecured 10 1/8% Senior
Subordinated Notes due 2007, Series B (the "Series B Notes"). On December 8,
1998, we 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
us 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. We have optional redemption rights beginning June 15, 2002. The
Notes are limited to $250.0 million aggregate principal amount.
On June 9, 1999 we completed an exchange offer for our outstanding Notes.
Pursuant to the exchange offer, all of the Series C Notes and $159.6 million
aggregate principal amount of the Series A and Series B Notes were exchanged for
our registered 10 1/8% Senior Subordinated Notes due 2007, Series D, which are
substantially identical to, and rank pari passu in right of payment with the
Notes.
4. ACQUISITION
On June 28, 1999 we acquired, through a wholly owned, indirect subsidiary, 100%
of the shares of Gebr. Wackenhut GmbH Karosserie-und Fahrzeugfabrik
("Wackenhut"). Wackenhut is a supplier of complex pressings, welded assemblies,
complete truck cabs, cataphoretic coatings and finish paint applications and
operates three facilities in Germany located in the Nagold area near Stuttgart.
Wackenhut is an unrestricted subsidiary under our debt agreements. Pursuant to
the terms of the acquisition, we agreed to pay DM 1 for the Wackenhut shares,
provide DM 5 million in additional paid in capital, restructure approximately DM
63.4 million in
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<PAGE> 8
bank debt, and purchase approximately DM 18.6 million in bank and shareholder
debt for DM 1. The acquisition agreement provides for the restructuring of
Wackenhut's credit facilities and provides additional financing of
approximately DM 16.6 million under a line of credit and up to DM 45.0
million to fund capital expenditures to support plant expansion and
modernization. The purchase price plus direct cost of the acquisition will be
allocated to the assets acquired and liabilities assumed based on their
estimated fair market 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. SHAREHOLDERS' EQUITY (In Thousands, Except Per Share Amounts)
<TABLE>
<CAPTION>
Accumulated
Other
Common Comprehensive Retained
Stock Income Earnings Total
------------ -------------------- --------------- --------------
<S> <C> <C> <C> <C>
Balances at March 31, 1999 $1,050 ($6,705) $6,583 $ 928
Net income 3,695 3,695
Foreign currency
translation adjustments 1,005 1,005
Accrued dividends and
accretion of redeemable
preferred stock (660) (660)
------------ -------------------- --------------- --------------
Balances at September 30, 1999 $1,050 ($5,700) $9,618 $4,968
============ ==================== =============== ==============
</TABLE>
6. COMPREHENSIVE INCOME
The Company's total comprehensive income was as follows:
8
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<TABLE>
<CAPTION>
Three Months Three months Six Months Six Months
Ended Ended Ended Ended
September 30, September 30, September 30, September 30,
1999 1998 1999 1998
<S> <C> <C> <C> <C>
Net income (loss) $2,273 ($2,174) 3,695 (2,324)
-------------- -------------- -------------- --------------
Other comprehensive income
(loss), net of tax:
Foreign currency translation adjustment (1,240) (2,983) 1,005 (5,249)
Net unrealized loss on marketable securities 0 (488) (2,406)
-------------- -------------- -------------- --------------
Other comprehensive
income (loss) (1,240) (3,471) 1,005 (7,655)
-------------- -------------- -------------- --------------
Total comprehensive income (loss) $1,033 ($5,645) 3,278 (9,979)
============== ============== ============== ==============
</TABLE>
7. CONDENSED CONSOLIDATING INFORMATION
The Notes are guaranteed by certain of our 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 September 30, 1999 the Notes were not guaranteed by
certain of our other consolidated subsidiaries, including Oxford Automotive
Europe, Oxford Automotriz de Mexico S.A. de C.V., Oxford Automotive France,
Cofimeta S.A. and Wackenhut (the "Non-Guarantor Subsidiaries"). As of September
30, 1998 the Notes were not guaranteed by Oxford Automotriz de Mexico S.A. de
C.V. Cofimeta was acquired in February 1999, therefore, while it is included in
the consolidated balance sheet ended March 31, 1999, it is excluded from the
reporting for the six and three months ended September 30, 1998. Wackenhut was
acquired June 28,1999, therefore it is excluded from the reporting for the
period ended March 31, 1999 and is included only for the period post acquisition
for the six months ended September 30, 1999.
The guarantee of the Notes by the Guarantor Subsidiaries is full and
unconditional, joint and several. 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 Subsidiaries. Management does not believe that separate financial
statements of the Guarantor Subsidiaries are material to investors in the Notes.
9
<PAGE> 10
CONDENSED CONSOLIDATING BALANCE SHEETS
SEPTEMBER 30, 1999
(DOLLAR AMOUNTS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
Non-Guarantor Guarantor
Parent Subsidiaries Subsidiaries Eliminations Consolidated
<S> <C> <C> <C> <C> <C>
ASSETS
Current Assets
Cash and cash
equivalents $12,941 $9,994 $1,997 $ $24,932
Receivables (net) 81 41,773 96,286 138,140
Inventories 20,194 35,212 55,406
Reimbursable tooling 13,970 8,720 5,159 27,849
Deferred income taxes 536 1,726 2,262
Prepaid expenses and
other current assets 1,051 15,023 4,266 20,340
--------------- ----------------- --------------- ---------------- --------------
Total current assets 28,579 95,704 144,646 0 268,929
Other noncurrent assets 10,349 (3,237) 14,693 21,805
Deferred taxes 830 10,602 14,252 25,684
Property, plant and
equipment, net 5,367 67,036 188,175 260,578
Investment in
subsidiaries 93,559 51,149 (138,725) 5,983
--------------- ----------------- --------------- ---------------- --------------
Total assets $138,684 $170,105 $412,915 ($138,725) $582,979
=============== ================= =============== ================ ==============
LIABILITIES AND
SHAREHOLDERS' EQUITY
Current Liabilities
Trade accounts payable 5,130 28,282 83,945 117,357
Intercompany accounts (108,849) (806) 109,655
Restructuring reserve 8,464 368 8,832
Accrued expenses and
other current
liabilities (678) 31,845 20,649 51,816
Current portion
of borrowings 3,250 6,236 1,747 11,233
--------------- ----------------- --------------- ---------------- --------------
Total current liabilities (101,147) 74,021 216,364 0 189,238
</TABLE>
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CONDENSED CONSOLIDATING BALANCE SHEETS (CONTINUED)
SEPTEMBER 30, 1999
(DOLLAR AMOUNTS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
Non-Guarantor Guarantor
Parent Subsidiaries Subsidiaries Eliminations Consolidated
<S> <C> <C> <C> <C> <C>
Pension liability 2,491 7,206 9,697
Post retirement 44,355 44,355
medical benefits
liability
Deferred income taxes 9,994 9,994
Other non-current
liabilities (10) 5,826 1,645 7,461
Long-term borrowings
less current portion 229,173 47,282 428 276,883
--------------- ------------- --------------- -------------- ---------------
Total liabilities 128,016 129,620 279,992 537,628
Redeemable preferred
stock 40,383 40,383
Shareholder's equity
common stock 1,050 39,882 91,002 (130,884) 1,050
Accumulated other
comprehensive
income (loss) (2,308) (3,392) (5,700)
Retained earnings 9,618 2,911 4,930 (7,841) 9,618
--------------- ------------- --------------- -------------- ---------------
Total shareholders' equity 10,668 40,485 92,540 (138,725) 4,968
Total liabilities and
shareholder's equity $138,684 $170,105 $412,915 ($138,725) $582,979
=============== ============= =============== ============== ===============
</TABLE>
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<PAGE> 12
CONDENSED CONSOLIDATING BALANCE SHEETS
MARCH 31, 1999
(DOLLAR AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
Non-guarantor Guarantor
Parent Subsidiaries Subsidiaries Eliminations Consolidated
<S> <C> <C> <C> <C> <C>
ASSETS
Current assets
Cash and cash
equivalents $9,741 $9,158 $109 $ $19,008
Receivables (net) 114 45,345 106,822 152,281
Inventories 14,402 33,702 48,104
Reimbursable tooling 3,010 8,766 11,425 23,201
Deferred income taxes 536 3,133 3,669
Prepaid expenses and
other current assets 2,151 13,174 2,900 18,225
--------------- ----------------- --------------- ---------------- --------------
Total current assets 15,552 90,845 158,091 0 264,488
Other noncurrent assets 10,898 13,572 30,573 55,043
Property, plant and
equipment, net 4,003 28,259 191,137 223,399
Investment in
consolidation
subsidiaries 87,546 45,166 (132,712) 0
--------------- ----------------- --------------- ---------------- --------------
Total assets $117,999 $132,676 $424,967 ($132,712) $542,930
=============== ================= =============== ================ ==============
LIABILITIES AND
SHAREHOLDERS' EQUITY
Current Liabilities
Trade accounts payable 2,046 34,906 72,391 109,343
Intercompany accounts (130,223) 4,573 125,650 0
Restructuring reserve 6,676 2,071 8,747
Accrued expenses and
other current
liabilities 5,432 24,596 24,416 54,444
Current portion
of borrowings 1,877 6,301 3,326 11,504
--------------- ----------------- --------------- ---------------- --------------
Total current liabilities (120,868) 77,052 227,854 0 184,038
</TABLE>
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CONDENSED CONSOLIDATING BALANCE SHEETS (CONTINUED)
MARCH 31, 1999
(DOLLAR AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
Non-guarantor Guarantor
Parent Subsidiaries Subsidiaries Eliminations Consolidated
<S> <C> <C> <C> <C> <C>
Pension liability 7,069 7,069
Post retirement
medical benefits
liability 42,703 42,703
Deferred income taxes and other 1,975 13,540 15,515
Long-term borrowings
less current portion 231,234 20,070 1,054 252,358
--------------- ------------- --------------- -------------- ---------------
Total liabilities 110,366 99,097 292,220 501,683
Redeemable preferred
stock 40,319 40,319
Shareholder's equity
common stock 1,050 37,045 91,002 (128,047) 1,050
Accumulated other
comprehensive 0
income (loss) (1,955) (4,750) (6,705)
Retained earnings 6,583 (1,511) 6,176 (4,665) 6,583
--------------- ------------- --------------- -------------- ---------------
Total shareholders' equity 7,633 33,579 92,428 (132,712) 928
Total liabilities and
shareholder's equity $117,999 $132,676 $424,967 ($132,712) $542,930
=============== ============= =============== ============== ===============
</TABLE>
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CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1999
(DOLLAR AMOUNTS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
Non-Guarantor Guarantor
Parent Subsidiaries Subsidiaries Eliminations Consolidated
<S> <C> <C> <C> <C> <C>
Sales $ $57,942 $143,144 $201,086
Cost of sales 48,016 129,333 177,349
-------------- -------------------- ---------------- ------------------ ------------------
9,926 13,811 23,737
Gross profit
Selling, general and
administrative
expenses (1,554) 3,380 9,453 11,279
Gain on sale of assets 23 185 208
-------------- -------------------- ---------------- ------------------ ------------------
Operating income 1,554 6,523 4,173 0 12,250
Other income
(expense) 58 (12) (229) (183)
Interest expense (1,292) (1,375) (5,459) (8,126)
-------------- -------------------- ---------------- ------------------ ------------------
Income before
income taxes 320 5,136 (1,515) 0 3,941
Income taxes (128) (2,035) 495 (1,668)
-------------- -------------------- ---------------- ------------------ ------------------
Income before equity
in income of
consolidated
subsidiaries 192 3,101 (1,020) 0 2,273
Equity in income of
consolidated
subsidiaries 2,081 (2,081)
-------------- -------------------- ---------------- ------------------ ------------------
Net income $2,273 $3,101 ($1,020) ($2,081) $2,273
============== ==================== ================ ================== ==================
</TABLE>
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CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1999
(DOLLAR AMOUNTS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
Non-Guarantor Guarantor
Parent Subsidiaries Subsidiaries Eliminations Consolidated
<S> <C> <C> <C> <C> <C>
Sales $ $112,431 $295,016 $407,447
Cost of sales 95,792 266,589 362,381
-------------- -------------------- ---------------- ------------------ ------------------
16,639 28,427 45,066
Gross profit
Selling, general and
administrative
expenses (2,276) 7,306 18,772 23,802
Gain on sale of assets (482) 185 (297)
-------------- -------------------- ---------------- ------------------ ------------------
Operating income 2,276 9,815 9,470 0 21,561
Other income
(expense) 58 16 58 132
Interest expense (2,569) (2,468) (10,204) (15,241)
-------------- -------------------- ---------------- ------------------ ------------------
Income before
income taxes (235) 7,363 (676) 0 6,452
Income taxes 94 (2,941) 90 (2,757)
-------------- -------------------- ---------------- ------------------ ------------------
Income before equity
in income of
consolidated
subsidiaries (141) 4,422 (586) 0 3,695
Equity in income of
consolidated
subsidiaries 3,836 (3,836) 0
-------------- -------------------- ---------------- ------------------ ------------------
Net income $3,695 $4,422 ($586) ($3,836) $3,695
============== ==================== ================ ================== ==================
</TABLE>
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CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1998
(DOLLAR AMOUNTS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
Non-Guarantor Guarantor
Parent Subsidiary Subsidiaries Eliminations Consolidated
<S> <C> <C> <C> <C> <C>
Sales $ $2,319 $116,189 $118,508
Cost of sales 2,420 106,876 109,296
-------------- -------------------- ---------------- ------------------ ------------------
(101) 9,313 9,212
Gross profit
Selling, general and
administrative
expenses (1,104) 8,111 7,007
Restructuring provision 1,176 1,176
Gain on sale of assets 0 0
-------------- -------------------- ---------------- ------------------ ------------------
Operating income 1,104 (101) 26 0 1,029
Other income
(expense) 257 (78) (108) 71
Interest expense (1) (4,723) (4,724)
-------------- -------------------- ---------------- ------------------ ------------------
Income before
income taxes 1,361 (180) (4,805) 0 (3,624)
Income taxes (544) 72 1,922 1,450
-------------- -------------------- ---------------- ------------------ ------------------
Income before equity
in income of
consolidated
subsidiaries 817 (108) (2,883) 0 (2,174)
Equity in income of
consolidated
subsidiaries (2,991) 2,991 0
-------------- -------------------- ---------------- ------------------ ------------------
Net income ($2,174) ($108) ($2,883) $2,991 ($2,174)
============== ==================== ================ ================== ==================
</TABLE>
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CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1998
(DOLLAR AMOUNTS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
Non-Guarantor Guarantor
Parent Subsidiary Subsidiaries Eliminations Consolidated
<S> <C> <C> <C> <C> <C>
Sales $ $2,650 $255,760 $258,410
Cost of sales 3,175 234,384 237,559
-------------- -------------------- ---------------- ------------------ ------------------
(525) 21,376 20,851
Gross profit
Selling, general and
administrative
expenses (1,286) 16,092 14,806
Restructuring provision 1,176 1,176
Gain on sale of assets 0 0
-------------- -------------------- ---------------- ------------------ ------------------
Operating income 1,286 (525) 4,108 0 4,869
Other income
(expense) 257 (69) 206 394
Interest expense (1) (9,136) (9,137)
-------------- -------------------- ---------------- ------------------ ------------------
Income before
income taxes 1,543 (595) (4,822) 0 (3,874)
Income taxes (617) 213 1,954 1,550
-------------- -------------------- ---------------- ------------------ ------------------
Income before equity
in income of
consolidated
subsidiaries 926 (382) (2,868) 0 (2,324)
Equity in income of
consolidated
subsidiaries (3,250) 3,250 0
-------------- -------------------- ---------------- ------------------ ------------------
Net income ($2,324) ($382) ($2,868) $3,250 ($2,324)
============== ==================== ================ ================== ==================
</TABLE>
17
<PAGE> 18
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1999
(DOLLAR AMOUNTS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
Non Guarantor Guarantor
Parent Subsidiaries Subsidiaries Consolidated
<S> <C> <C> <C> <C>
Net cash provided by
(used in)
operating activities $5,516 $5,185 $11,909 $22,610
--------------- -------------------- ------------------- -------------------
INVESTING ACTIVITIES
Purchase of businesses,
net of cash acquired 59 59
Purchase of property,
plant and equipment (1,628) (7,950) (10,192) (19,770)
Proceeds from sale
of equipment 744 2,999 3,743
--------------- -------------------- ------------------- -------------------
Net cash used in
investing activities (1,628) (7,147) (7,193) (15,968)
--------------- -------------------- ------------------- -------------------
FINANCING ACTIVITIES
Net proceeds (payments)
on borrowings (688) 2,883 (2,245) (50)
Payment of preferred stock dividends (596) (596)
--------------- -------------------- ------------------- -------------------
Net cash provided by
(used in)
financing activities (688) 2,883 (2,841) (646)
--------------- -------------------- ------------------- -------------------
Effect of foreign
currency rate
fluctuation on cash (85) 13 (72)
--------------- -------------------- ------------------- -------------------
Net increase (decrease)
in cash 3,200 836 1,888 5,924
Cash at beginning
of period 9,741 9,158 109 19,008
--------------- -------------------- ------------------- -------------------
Cash at end of period $12,941 $9,994 $1,997 $24,932
=============== ==================== =================== ===================
</TABLE>
18
<PAGE> 19
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1998
(DOLLAR AMOUNTS 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 ($18,756) $1,018 $8,900 ($8,838)
---------------- -------------------- -------------------- --------------------
INVESTING ACTIVITIES
Purchase of businesses,
net of cash acquired (53,465) (53,465)
Purchase of property,
plant and equipment (1,434) (961) (12,896) (15,291)
Purchase of Marketable Securities (887) (887)
---------------- -------------------- -------------------- --------------------
Net cash used in
investing activities (55,786) (961) (12,896) (69,643)
---------------- -------------------- -------------------- --------------------
FINANCING ACTIVITIES
Net proceeds (payments)
on borrowings 27,124 1,054 28,178
Principal repayments
on borrowing
arrangements 37,044 37,044
Payment of deferred dividend (596) (596)
Debt financing costs (647) (647)
---------------- -------------------- -------------------- --------------------
Net cash provided by
financing activities 62,925 0 1,054 63,979
---------------- -------------------- -------------------- --------------------
Effect of foreign
currency rate
fluctuation on cash (332) (66) (398)
---------------- -------------------- -------------------- --------------------
Net increase (decrease)
in cash (11,617) (275) (3,008) (14,900)
Cash at beginning
of period 13,673 322 4,326 18,321
---------------- -------------------- -------------------- --------------------
Cash at end of period $2,056 $47 $1,318 $3,421
================ ==================== ==================== ====================
</TABLE>
8. RECLASSIFICATIONS Certain amounts in the prior periods' statements have been
reclassified to conform to the current periods' presentation.
19
<PAGE> 20
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Three and six months ended September 30, 1999
As compared to the three and six months ended September 30, 1998
Results of Operations
The three and six months ended September 30, 1999 statements of operations for
Oxford Automotive, Inc. (the "Company") include the results of operations for
substantially all subsidiaries, including the following 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"), Cofimeta S.A. ("Cofimeta"),and Wackenhut GmbH ("Wackenhut"). Lobdell
was acquired on January 10, 1997, Howell was acquired August 13, 1997, RPIH was
acquired on November 25, 1997, the Suspension Division was acquired on April 1,
1998, Cofimeta was acquired on February 5, 1999 and Wackenhut GmbH was acquired
on June 28, 1999. Each was accounted for using the purchase method of
accounting. Based on its acquisition date, the six month statement of operations
for the period ended September 30, 1999 includes operating results for Wackenhut
only for the period following the acquisition. In addition, the three and six
month statement of operations for the period ended September 30, 1998 does not
include the operating results of Cofimeta or Wackenhut.
The following table sets forth, for the periods indicated, certain accounts from
the Company's statement 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 Six Months Six Months
Ended Ended Ended Ended
Sept 30, 1999 Sept 30, 1998 Sept 30, 1999 Sept 30, 1998
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net sales $201.1 100.0% $118.5 100.0% 407.4 100.0% $258.4 100.0%
Gross profit 23.7 11.8% 9.2 7.8% 45.1 11.1% 20.9 8.1%
Selling, general
and administrative 11.3 5.6% 7.0 5.9% 23.8 5.8% 14.8 5.7%
Operating income 12.3 6.1% 1.0 0.8% 21.6 5.3% 4.9 1.9%
Net interest expense 8.1 4.0% 4.7 4.0% 15.2 3.7% 9.1 3.5%
Net income (loss) 2.3 1.1% (2.2) (1.9)% 3.7 0.9% (2.3) (0.9%)
Memo: EBITDA 20.3 10.1% 7.7 6.5% 37.5 9.2% 18.4 7.1%
</TABLE>
NET SALES -- Net sales for the three months ended September 30, 1999 were $201.1
million. This represents an increase of $82.6 million as compared to net sales
for the three months ended September 30, 1998 of $118.5 million. The overall
increase is primarily the result of the European acquisitions made since the
prior year ($53.0 million). The balance of the increase is a result of the start
up of the Saturn LS program, the Windstar mini-van full production schedule, the
continued production strength of the industry-wide light truck and sport utility
20
<PAGE> 21
vehicle platforms including strong suspension component sales for the full size
vans. A portion of the increase is due to the negative impact on net sales for
the three months ended September 30, 1998 resulting from the General Motors
strike ($9.6 million). European sales were strong on multi-platform vehicles
such as the Renault Megane and Laguna.
For the year to date period, net sales were $407.4 million, an increase of
$149.0 million as compared to $258.4 million for the same period last year.
Again, the increase is primarily related to the European acquisitions made
during the period ($103.4 million), the impact of the General Motors strike
($18.3 million) and strength of the sport utility, light truck and van segments
of the industry.
GROSS PROFIT -- For the three months ended September 30, 1999, gross profit
increased to $23.7 million or 11.8% of net sales as compared to $9.2 million or
7.8% of net sales for the prior year. The gross profit and gross margin
increases are related to successful product launches, higher achieved gross
margins on value-added product mix, fixed cost reductions achieved as a result
of plant rationalization and gross profit related to the European acquisitions.
In addition, the increase includes the profit impact of the General Motors sales
rebound from the prior year strike. The gross profit and gross margin increases
also reflect the year over year reduction in launch costs and other productivity
improvement efforts such as automation, quick die change and press utilization
improvements.
For the year to date period, gross profit was $45.1 million, an increase of
$24.2 million as compared to $20.9 million for the same period last year. As
explained above, the increase is primarily a result of productivity
improvements, plant fixed cost reduction, incremental profit related to
acquisitions and recovery from the impact of the General Motors strike.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES ("SG&A") -- For the three months
ended September 30, 1999, SG&A expenses increased to $11.3 million (5.6% of net
sales), compared to $7.0 million (5.9% of net sales) for the prior year. The
increase in spending can be directly associated with the recent European
acquisitions, including the establishment and staffing of a European technical
center. In addition, we continue to support ongoing and new customer program
launches. Although expenditures have risen, as a percentage of sales they have
declined. This is a reflection of our ability to utilize global engineering
support staff to meet our customers worldwide needs.
For the year to date period, SG&A expenses increased to $23.8 million or 5.8% of
net sales as compared to $14.8 million or 5.7% of net sales for the prior year.
As explained above, the increase is primarily related to the European
acquisitions and global support for customer programs.
OPERATING INCOME - For the three months ended September 30, 1999, operating
income increased to $12.3 million or 6.1% of net sales as compared to $1.0
million or 0.8% of net sales for the prior year. For the year to date period,
operating income was $21.6 million, an increase of $16.7 million as compared to
$4.9 million for the same period last year. The increase is a result of
operating income related to gross margin improvements, SG&A variances as
explained above as well as acquisitions made during the period.
INTEREST EXPENSE - For the three months ended September 30, 1999, net interest
expense was $8.1 million, an increase of $3.4 million, as compared to $4.7
million for the same period last year. The increase can be attributed to
acquisitions during the period, the Series C Senior Subordinated Notes due 2007,
which were issued in December 1998, and the interim financing of customer
tooling.
For the year to date period, net interest expense was $15.2 million, an increase
of $6.1 million as compared to the same period last year. Similar to the three
month period ended September 30, the increase can be attributed to acquisitions
during the period, the Series C Senior Subordinated Notes due 2007 and the
interim financing of customer tooling and new and ongoing customer program
launches.
NET INCOME - For the three months ended September 30, 1999, the Company reported
net income of $2.3 million, an increase of $4.5 million as compared to a prior
year net loss of $2.2 million. The increase in earnings was the result of
overall plant profitability initiatives, the impact of the prior year
General Motors strike and net income generated by acquisitions.
For the year to date period, the Company reported net income of $3.7 million, an
increase of $6.0 million as compared to the prior year. As explained above, the
increase relates primarily to plant operational improvements, net income related
to acquisitions and the impact of the prior year General Motors strike.
LIQUIDITY, CAPITAL RESOURCES AND FINANCIAL CONDITION
21
<PAGE> 22
Net income adjusted for non-cash charges (depreciation and amortization and
deferred taxes) generated approximately $18.9 million of cash for the six months
ended September 30, 1999. Cash increased by $21.1 million during the period
based on a decrease in accounts receivable, inventories and reimbursable
tooling, as well as an increase in accounts payable. The cash increase was
offset by an overall decrease ($17.4 million) in accrued expenses and other
liabilities, gain on sale of equipment, other assets and cash payments related
to restructuring reserves. During the six months ended September 30, 1999, the
Company used approximately $16.0 million for investing activities, including the
acquisition of Wackenhut. These investing activities were supported
substantially by operating cash flows. The cash used in financing activities was
for payments of line of credit borrowings and preferred shareholder dividends.
At September 30, 1999 we had approximately $140.8 million available under our
credit facility with Bank One on behalf of itself and as agent for a syndicate
of other lenders (the "Senior Credit Facility"). At September 30, 1999, we had
no amount outstanding under the line of credit and $4.2 million in outstanding
letters of credit to support certain Industrial Development Revenue Bonds and
workers compensation commitments. The remaining amount of Industrial Revenue
Bonds of $1.4 million will be redeemed in November 1999.
As of the date of its acquisition, Wackenhut carried indebtedness with a face
value of DM 63.4 million. The debt includes a DM 40.0 million term note and a DM
35.0 million revolving line of credit ( DM 23.4 million outstanding at close).
The term note calls for semi-annual principal payments of DM 2.5 million
beginning in March 2004 and has been discounted at a market rate of 10%. For
US GAAP purposes, Wackenhut had outstanding indebtedness of US $24.2 million at
acquisition. We have also secured DM 45.0 million of additional financing to
assist with capital expenditures and future growth. This indebtedness is
nonrecourse with respect to the Company.
We believe the application of the proceeds from our 10 1/8% Senior Subordinated
Notes due 2007 has enhanced our ability to meet our growth and business
objectives. However, interest payments on the notes will represent a significant
liquidity requirement for us. We 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 $19.8 million, or 4.9% of net sales for the six months
ended September 30, 1999 as compared to $15.3 million or 5.9% of net sales for
the six months ended September 30, 1998. The increase of $4.5 million was due
primarily to support customer programs and cost reduction and productivity
improvement projects. Other capital expenditures included health and safety
items, computer and network upgrades and Y2K support.
For fiscal 2000, our capital expenditures are expected to be $39.6 million,
consisting of $24.3 million to support new business and increase capacity, $12.3
million for maintenance, rebuilds and improvements and $3.0 million in other
expenditures, including health, safety and environmental.
We believe that cash generated from operations, together with amounts available
under the Senior Credit Facility will be adequate to meet our debt service
requirements, capital expenditures and working capital needs for the foreseeable
future, although no assurance can be given in this regard. Our future operating
performance and ability to service or refinance our 10 1/8% Senior Subordinated
Notes due 2007 and to extend or refinance our other indebtedness will be subject
to future economic conditions and to financial, business and other factors that
are beyond our control.
RAMOS ARIZPE - MEXICO FACILITY
On March 31, 1999, we entered into a cross-border asset usage facility through a
wholly-owned Mexican subsidiary for the acquisition of new equipment for and
construction of a new facility being built in Ramos Arizpe, Mexico. Under U.S.
Generally Accepted Accounting Principles, this transaction is classified as an
operating lease. The approximately 330,000 sq. ft. facility will support a
General Motors hood, door and underbody assembly program (SUV/ Hybrid vehicle)
slated to begin production in April 2000. The program is expected to generate
approximately $90.0 million of annual sales when in full production. We were
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. The lease payments for the facility will be approximately
$6 million per year. The award of the program is in line with our expected
growth into Mexico and is seen as key to our future success in that country.
YEAR 2000
We are aware of the potential impact of the millennium change on business. In
response, we have 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
22
<PAGE> 23
level with support from senior management. Key individuals at the facility level
are executing the Year 2000 efforts. We have also employed some external Year
2000 contractors to assist with compliance in some areas. We are following the
Year 2000 guidelines set forth by the Automotive Industry Action Group ("AIAG")
and are reporting Year 2000 status quarterly to the AIAG.
We have 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, we
do not have dedicated product-testing facilities nor do our products contain any
computer chips. We have completed Year 2000 remediation in North America and
Europe. We will continue Year 2000 compliance testing throughout 1999 to ensure
that regression does not occur.
We have completed a thorough assessment of all manufacturing, administrative and
management software. We have begun to upgrade certain software modules and/or
code to comply with AIAG Year 2000 guidelines and timing. At the same time, we
are implementing new software in North America and Europe where compliance
through upgrade could not be achieved in either a timely or cost effective
manner. Further, we initiated the move to a common software system as we
continue the implementation effort across all facilities. We recently completed
Year 2000 compliance testing for all of our North American and European
software.
We continue to assess the Year 2000 readiness of our external suppliers,
business partners, and service providers to ensure that business associations
will not be negatively impacted by the Year 2000 date. We will use alternate
sourcing and contingency planning in situations that threaten our ability to
deliver products or conduct business. Since these other companies are in various
stages of Year 2000 readiness, we 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 our internal staff, we are using external resources to
complete the project. The cost of external resources for fiscal 1998 totaled
$0.3 million and the total capital spending for fiscal 1998 was $1.4 million, of
which approximately $0.4 million relates to software projects. In fiscal 1999,
the external costs were $0.4 million, which related to remediation activities
derived from Year 2000 testing, and capital expenditures were $0.5 million. For
the year ending March 31, 2000, the external costs for Europe will approximate
$0.5 million, which will relate to any remediation activities derived from Year
2000 testing, and the remaining capital expenditures will approximate $0.5
million.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
In the normal course of business, we are exposed to market risk
associated with fluctuations in foreign exchange rates and interest rates. We
conservatively manage these risks through the use of derivative financial
instruments in accordance with management's guidelines.
We enter into all hedging transactions for periods consistent with the
underlying exposures. We do not enter into derivative instruments for trading
purposes.
Foreign Exchange. We enter into foreign currency forward contracts to
protect ourselves from adverse currency rate fluctuations on foreign currency
commitments. These commitments are generally for terms of less than one year.
The foreign currency contracts are executed with banks that we believe are
creditworthy and are denominated in currencies of major industrialized
countries. The gains and losses relating to the foreign currency forward and
option contracts are deferred and included in the measurement of the foreign
currency transaction subject to the hedge. We believe that any gain or loss
incurred on foreign currency forward contracts is offset by the direct effects
of currency movements on the underlying transactions.
We have performed a quantitative analysis of our overall currency rate
exposure at September 30, 1999. Based on this analysis, a 10% change in currency
rates would not have a material effect on our earnings.
Interest Rates. We generally manage risk associated with interest rate
movements through the use of or combination of variable and fixed rate debt. Our
exposure as a result of variable interest rates relates primarily to outstanding
floating rate debt instruments that are indexed to U.S. or European Monetary
Union short-term money market rates.
We have performed a quantitative analysis of our overall interest rate
exposure at September 30, 1999. Based on this analysis, a 10% change in the
average cost of our variable rate debt would not have a material effect on our
earnings.
23
<PAGE> 24
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 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.
PART II. OTHER INFORMATION
Item 4. Submission of Matters to Vote of Security Holders.
Pursuant to a shareholder consent, dated August 9, 1999, in lieu of an
annual shareholder meeting, the existing board of directors of the
registrant was re-elected in its entirety. The written consents of
shareholders holding 239,284 of the registrant's 309,750 shares of
common stock outstanding were received and voted in favor of each
member of the board.
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 September 30, 1999
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: November 5, 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
4.1 Form of Amended and Restated Pledge Agreement and Irrevocable Proxy in
favor of NBD Bank (now known as Bank One, Michigan)
4.2 Form of Amended and Restated Security Agreement in favor of NBD Bank
(now known as Bank One, Michigan)
4.3 Form of Amended and Restated Security Agreement in favor of First Chicago
NBD Bank, Canada
4.4 Form of Amended and Restated Guaranty Agreement in favor of NBD Bank
(now known as Bank One, Michigan)
4.5 Form of Amended and Restated Guarantee in favor of NBD Bank (now known as
Bank One, Michigan)
27 Financial Data Schedule
<PAGE> 1
EXHIBIT 4.1
Form of Amended and Restated Pledge Agreement and Irrevocable Proxy
The following document is the form of Amended and Restated Pledge
Agreement and Irrevocable Proxy in favor of NBD Bank (now known as Bank One,
Michigan) executed by the Registrant and the following subsidiaries of the
Registrant: Concept Management Corporation, Lobdell Emery Corporation, RPI
Holdings, Inc., and BMG Holdings, Inc. The agreements are substantially the same
in all material respects except as to the identity of the parties thereto and
the shares pledged. The agreements provide for the pledge of 100% of the shares
of the following subsidiaries, as applicable, of the parties: Creative
Fabrication Corporation, Concept Management Corporation, Lobdell Emery
Corporation, OASP, Inc., OASP II, Inc., Winchester Fabrication Corporation,
Parallel Group International, Inc., Laserweld International, L.L.C., Lewis Emery
Capital Corporation, RPI Holdings, Inc., RPI, Inc., Prudenville Manufacturing,
Inc. Oxford Suspension, Inc., Howell Industries, Inc., BMG North America
Limited, and BMG Holdings Inc. The agreement executed by OASP, Inc., also a
subsidiary of the Registrant, is substantially the same in all material respects
as the other agreements, except that it is dated June 28, 1999 and relates to
the pledge of only 65% of the shares of Oxford Automotive Europe ApS.
<PAGE> 2
AMENDED AND RESTATED PLEDGE AGREEMENT
AND IRREVOCABLE PROXY
THIS AMENDED AND RESTATED PLEDGE AGREEMENT dated as of May 14, 1999
(this "Pledge Agreement"), is given by OXFORD AUTOMOTIVE, INC., a Michigan
corporation (the "Company"), in favor of NBD Bank, a Michigan banking
corporation, as agent (in such capacity, the "Agent") for the benefit of itself
and the lenders (the "Lenders") now or hereafter parties to the Credit Agreement
described below.
RECITALS
A. The Company (also occasionally referred to as the
"Borrower") has entered into a Pledge Agreement and Irrevocable Proxy dated as
of June 24, 1997 in favor of the Agent for the benefit of the Lenders in
connection with that certain Credit Agreement dated as of June 24, 1997 and a
Pledge Agreement and Irrevocable Proxy dated as of February 4, 1999 in favor of
the Agent for the benefit of the Lenders (the "Prior Pledge Agreements"), in
connection with that certain Amended and Restated Credit Agreement dated as of
February 4, 1999 (the Credit Agreement dated as of June 24, 1997 and the Amended
and Restated Credit Agreement dated as of February 4, 1999 being referred to
collectively as the "Prior Credit Agreements") both Prior Credit Agreements
being among the Borrower and the Borrowing Subsidiaries identified from time to
time therein (the "Borrowing Subsidiaries" and collectively with the Borrower,
the "Borrowers") with the Lenders parties thereto and the Agent pursuant to
which the Lenders may make Advances (as therein defined) to the Borrower and the
Borrowing Subsidiaries.
B. The Borrowers have entered into an Amended and Restated Credit
Agreement of even date herewith (as amended or modified from time to time,
including any agreement entered into in substitution therefor, the "Credit
Agreement"), with the Lenders parties thereto and the Agent pursuant to which
the Lenders may make Advances (as therein defined) to the Borrower and the
Borrowing Subsidiaries.
C. As a condition precedent to the effectiveness of the Lenders'
obligations under the Credit Agreement, the Company has agreed to pledge to the
Agent, for the benefit of the Lenders, and grant a first-priority security
interest to the Agent, for the benefit of the Lenders, in and to the collateral
described herein and to execute this Pledge Agreement.
For value received and pursuant to the Credit Agreement, the Company
hereby grants a first-priority security interest to the Agent, for the benefit
of the Lenders, in and to all of the outstanding capital stock of the companies
listed on the schedule attached hereto as Schedule 1 (the "Pledged
Subsidiaries", and said shares of stock, together with any other shares and
securities from time to time receivable or otherwise distributed in respect of
or in exchange for any or all of such shares, being called the "Pledged Stock"),
to secure: ((a) the prompt and complete payment of all indebtedness and other
obligations of the Borrower and the Borrowing Subsidiaries now or hereafter
owing to the Lenders or the Agent under or on account of the Credit Agreement,
any Security Document or any Letter of Credit, notes or other instruments issued
to the Agent or any Lender pursuant thereto, or any other Loan Document, (b) the
prompt and complete payment of all Hedging Obligations of any Borrower or
Guarantor owing to any Lender or any Affiliate of any Lender and (c) the prompt
and complete payment
AMENDED AND RESTATED PLEDGE AGREEMENT
AND IRREVOCABLE PROXY
-1-
<PAGE> 3
of all indebtedness and obligations of the Borrower pursuant to the
Mexican Facility Tranche A Guaranty, and (d) the prompt and complete
payment of all indebtedness of the Company and any other guarantor
under any Guaranty, in all cases, of any kind or nature, howsoever
created or evidenced and whether now or hereafter existing, direct or
indirect (including without limitation any participation interest
acquired by any Lender in any such indebtedness, obligations or
liabilities of the Borrower or any Borrowing Subsidiary to any other
person), absolute or contingent, joint and/or several, secured or
unsecured, arising by operation of law or otherwise, and whether
incurred by the Borrower or any Borrowing Subsidiary as principal,
surety, endorser, guarantor, accommodation party or otherwise,
including without limitation all principal and all interest (including
any interest accruing subsequent to any petition filed by or against
the Borrower or any Borrowing Subsidiary under the U.S. Bankruptcy
Code), indemnity and reimbursement obligations, charges, expenses,
fees, attorneys' fees and disbursements and any other amounts owing
thereunder (all of the aforesaid indebtedness, obligations and
liabilities of the Company and its Subsidiaries being herein called the
"Secured Obligations", and all of the documents, agreements and
instruments among the Company, the Subsidiaries, the Agent, the
Lenders, or any of them, evidencing or securing the repayment of, or
otherwise pertaining to, the Secured Obligations being herein
collectively called the "Operative Documents"). The Company herewith is
delivering to the Agent for the benefit of the Lenders originals of all
stock certificates of the Pledged Stock or is taking such other action
acceptable to the Agent and the Required Lenders to perfect the
security interest in the Pledged Stock granted hereby.
The Company further represents and warrants to, and agrees with,
the Agent for the benefit of the Lenders as follows:
1. Representations and Warranties. The Company represents and warrants
that the Pledged Stock is represented by the stock certificate or
certificates or shares described on Schedule 1 hereto, and that such
stock certificate or certificates, accompanied by an instrument of
assignment or transfer duly executed in blank by the Company as the
owner named in such stock certificate or certificates, have been
delivered to the Agent by the Company. The Company further represents
and warrants that (a) the Pledged Stock is duly authorized and validly
issued, fully paid and nonassessable and constitutes 100% of all of the
issued and outstanding shares of the capital stock of each Pledged
Subsidiary (except with respect to Lobdell Emery Corporation which has
Preferred Stock outstanding), (b) the Company is the legal and
beneficial owner of the Pledged Stock, free and clear of all Liens
other than the Lien of Agent hereunder, with requisite right and power
to deliver, pledge and assign the Pledged Stock to the Agent hereunder,
and (c) the pledge of the Pledged Stock pursuant to this Pledge
Agreement creates in favor of the Agent a valid and perfected
first-priority security interest in the Pledged Stock enforceable
against the Company and all third parties and securing the payment of
the Secured Obligations.
2. Title; Stock Rights, Dividends, Etc. The Company will warrant and
defend the Agent's title to the Pledged Stock, and the security
interest herein created, against all claims of all persons, and will
maintain and preserve such security interest. It is understood and
agreed that the collateral hereunder includes any stock rights, stock
dividends, liquidating dividends, new securities, payments,
distributions and proceeds (including cash dividends and sale proceeds)
and other property to which the Company may become entitled by reason
of the ownership of the Pledged Stock during the existence of this
Pledge Agreement, and any such property received by the Company shall
be held in trust and forthwith delivered to the Agent to be held
hereunder in accordance with the terms of this Pledge Agreement.
AMENDED AND RESTATED PLEDGE AGREEMENT
AND IRREVOCABLE PROXY
-2-
<PAGE> 4
3. Registration Rights. If any Pledged Subsidiary at any time or from time
to time proposes to register any of its securities under the Securities
Act of 1933, the Company will at each such time give notice to the
Agent of such Pledged Subsidiary's intentions so to do. Upon the
request of the Agent given 30 days after receipt of such notice, the
Company will cause all Pledged Stock of such Pledged Subsidiary to be
included in the registration statement proposed to be filed, all to the
extent requisite to permit the public sale or other public disposition
of such Pledged Stock so registered by the holders thereof. The costs
and expenses of all such registrations and qualifications under said
Act shall be paid by the Company or such Pledged Subsidiary, except
that underwriting discounts and commissions in respect of any Pledged
Stock sold pursuant to any such registration statement shall be borne
by the sellers thereof. As expeditiously as possible after the
effective date of any such registration statement, the Company will
deliver in exchange for any certificates representing shares of Pledged
Stock so registered pursuant to such registration, which bear any
restrictive legend, new Pledged Stock certificates not bearing such
legend or any similar legend. In the event of any such registration,
the Company hereby agrees to indemnify and hold harmless the Agent and
the Lenders as pledgee of the Pledged Stock against any losses, claims,
damages or liabilities to which the Agent and the Lenders may become
subject to the extent that such losses, claims, damages or liabilities
arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in any such registration
statement, and any preliminary prospectus or filed prospectus, or in
any amendment or supplement thereto, or arise out of or are based upon
the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse the Agent and the Lenders
for any legal or other expenses reasonably incurred by the Agent and
the Lenders in connection with investigating or defending any such
loss, claim, damage or liability. The indemnifications contained in
this paragraph shall include each person, if any, who controls the
Agent or any Lender.
4. Events of Default; Remedies.
(a) Upon the occurrence of any Event of Default under the Credit Agreement,
which has not been remedied by the Company, the Borrower, or any
Borrowing Subsidiary within fifteen (15) days after the Borrower or any
Borrowing Subsidiary receives written notice of such occurrence from
the Agent (the "Cure Period"), an Event of Default shall be deemed to
have occurred hereunder and the Agent shall have all of the rights,
remedies and responsibilities provided by law and/or by this Pledge
Agreement, including but not limited to all of the rights, remedies and
responsibilities of a secured party under the Michigan Uniform
Commercial Code, and the Company hereby authorizes the Agent, in
accordance with the Michigan Uniform Commercial Code, to sell all or
any part of the Pledged Stock at public or private sale and to apply
the proceeds of such sale to the costs and expenses thereof (including
the reasonable attorneys' fees and disbursements incurred by the Agent)
and then to the payment of the other Secured Obligations. Any
requirement of reasonable notice in connection with such sale shall be
met if the Agent sends such notice to the Company, by registered or
certified mail, at least 5 days prior to the date of sale, disposition
or other event giving rise to the required notice. The Agent or any
Lender may be the purchaser at any such sale. The Agent shall be under
no obligation to preserve rights against prior parties.
(b) The Company hereby waives as to the Agent and the Lenders any right of
subrogation or marshalling of such stock and other collateral for
indebtedness or other obligations owed to the Agent and the Lenders. To
this end, the Company hereby expressly agrees that any such collateral
or other security of the Company or any other party which the Agent or
any Lender may hold, or which may come to any of their possession, may
be dealt with in all respects and particulars as though this Pledge
Agreement were not in existence. The Company agrees and acknowledges
that because of applicable securities laws, the Agent may not be able
to effect a public sale of the Pledged Stock and sales at a private
sale may be on terms
AMENDED AND RESTATED PLEDGE AGREEMENT
AND IRREVOCABLE PROXY
-3-
<PAGE> 5
less favorable than if such securities were sold at a public sale and
may be at a price less favorable than a public sale.
(c) The Company irrevocably designates, makes, constitutes and appoints the
Agent (and all persons designated by the Agent) as its true and lawful
attorney (and agent-in-fact) and the Agent, or the Agent's agent, may,
upon and after an Event of Default hereunder which has not been waived,
with notice to the Company if the Secured Obligations have not been
accelerated and without notice if the Secured Obligations have been
accelerated, take any action as the Agent reasonably deems necessary
under the circumstances to enforce or otherwise take action in respect
to the Pledged Stock as required hereby, or to carry out any other
obligation or duty of the Company under this Agreement.
(d) Notwithstanding the foregoing, the Agent, on behalf of the
Lenders, agrees that it shall not exercise any remedy hereunder,
including the remedies set forth in Section 5, until such time as Agent
has exercised its remedies under the Company Security Agreement and
Guarantor Security Agreement and has realized upon substantially all of
the assets subject thereto to the extent permitted by law; provided
that the Agent and the Lenders may exercise all rights and remedies
hereunder immediately upon the occurrence of, and nothing in this
Section 4(d) shall limit or otherwise impair any of the Agent's and the
Lenders' interests, rights and remedies in, any bankruptcy, insolvency
or similar proceeding.
5. Additional Remedies; Irrevocable Proxy.
(a) After satisfaction of the sale provisions of Section 4 but subject to
Section 4(d) herein, the Agent may transfer into its name, or into the
name of its nominee or nominees, any or all of the Pledged Stock and
may vote any or all of the Pledged Stock (whether or not so
transferred) and may otherwise act with respect thereto as though it
were the outright owner thereof, the Company hereby irrevocably
constituting and appointing the Agent as the proxy and attorney-in-fact
of the Company, with full power of substitution, to do so.
(b) Upon the occurrence of the events described in Section 5(a) above, the
Agent may vote the Pledged Stock to remove the directors and officers
of any Pledged Subsidiary, and to elect new directors and officers of
any Pledged Subsidiary, who thereafter shall manage the affairs of such
Pledged Subsidiary, operate its properties and carry on its business
and otherwise take any action with respect to the business, properties
and affairs of such Pledged Subsidiary which such new directors shall
deem necessary or appropriate, including, but not limited to, the
maintenance, repair, renewal or alteration of any or all of the
properties of such Pledged Subsidiary, the leasing, subleasing, sale or
other disposition of any or all of such properties, the borrowing of
money on the credit of such Pledged Subsidiary, and the employment of
attorneys, agents or other employees deemed by such new directors to be
necessary for the proper operation, conduct, winding up or liquidation
of the business, properties and affairs of such Pledged Subsidiary, and
all revenues from the operation, conduct, winding up or liquidation of
the business, properties and affairs of such Pledged Subsidiary after
the payment of expenses thereof shall be applied to the payment of the
Secured Obligations.
(c) The Company agrees that the proxy granted in this paragraph 5 is
coupled with an interest and is and shall be both valid and irrevocable
so long as the Pledged Stock is subject to this Pledge Agreement. The
Company further acknowledges that the term of said proxy may exceed
three years from the date hereof.
6. Remedies Cumulative. No right or remedy conferred upon or reserved to
the Agent and the Lenders under any
AMENDED AND RESTATED PLEDGE AGREEMENT
AND IRREVOCABLE PROXY
-4-
<PAGE> 6
Operative Document is intended to be exclusive of any other right or
remedy, and every right and remedy shall be cumulative in addition to
every other right or remedy given hereunder or now or hereafter
existing under any applicable law. Every right and remedy of the Agent
and the Lenders under any Operative Document or under applicable law
may be exercised from time to time and as often as may be deemed
expedient by the Agent and the Lenders. To the extent that it lawfully
may, the Company agrees that it will not at any time insist upon,
plead, or in any manner whatever claim or take any benefit or advantage
of any applicable present or future stay, extension or moratorium law,
which may affect observance or performance of any provisions of any
Operative Document; nor will it claim, take or insist upon any benefit
or advantage of any present or future law providing for the valuation
or appraisal of any security for its obligations under any Operative
Document prior to any sale or sales thereof which may be made under or
by virtue of any instrument governing the same; nor will it, after any
such sale or sales, claim or exercise any right, under any applicable
law to redeem any portion of such security so sold.
7. Conduct No Waiver. No waiver of default shall be effective unless in
writing executed by the Agent and waiver of any default or forbearance
on the part of the Agent in enforcing any of its rights under this
Pledge Agreement shall not operate as a waiver of any other default or
of the same default on a future occasion or of such right.
8. Governing Law; Definitions. This Pledge Agreement is a contract made
under, and shall be governed by and construed in accordance with, the
law of the State of Michigan applicable to contracts made and to be
performed entirely within such State and without giving effect to
choice of law principles of such State. The Company agrees that any
legal action or proceeding with respect to this Pledge Agreement or the
transactions contemplated hereby may be brought in any court of the
State of Michigan, or in any court of the United States of America
sitting in Michigan, and the Company hereby submits to and accepts
generally and unconditionally the jurisdiction of those courts with
respect to its person and property, and irrevocably appoints the Chief
Financial Officer of the Company, at the Company's address set forth in
the Credit Agreement, as its agent for service of process and
irrevocably consents to the service of process in connection with any
such action or proceeding by personal delivery to such agent or to the
Company or by the mailing thereof by registered or certified mail,
postage prepaid to the Company at its address set forth in the Credit
Agreement. Nothing in this paragraph shall affect the right of the
Agent to serve process in any other manner permitted by law or limit
the right of the Agent to bring any such action or proceeding against
the Company or its property in the courts of any other jurisdiction.
The Company hereby irrevocably waives any objection to the laying of
venue of any such suit or proceeding in the above described courts.
Terms used but not defined herein shall have the respective meanings
ascribed thereto in the Credit Agreement. Unless otherwise defined
herein or in the Credit Agreement, terms used in Article 9 of the
Uniform Commercial Code in the State of Michigan are used herein as
therein defined on the date hereof. The headings of the various
subdivisions hereof are for convenience of reference only and shall in
no way modify any of the terms or provisions hereof.
9. Notices. All notices, demands, requests, consents and other
communications hereunder shall be delivered in the manner described in
the Credit Agreement.
10. Rights Not Construed as Duties. The Agent neither assumes nor shall it
have any duty of performance or other responsibility under any
contracts in which the Agent has or obtains a security interest
hereunder. If the Company fails to perform any agreement contained
herein, the Agent may but is in no way obligated to itself perform, or
cause performance of, such agreement, and the reasonable expenses of
the Agent incurred in connection therewith shall be payable by the
Company under paragraph 13. The powers
AMENDED AND RESTATED PLEDGE AGREEMENT
AND IRREVOCABLE PROXY
-5-
<PAGE> 7
conferred on the Agent hereunder are solely to protect its interests in
the Pledged Stock and shall not impose any duty upon it to exercise any
such powers. Except for the safe custody of any Pledged Stock in its
possession and accounting for monies actually received by it hereunder,
the Agent shall have no duty as to any Pledged Stock or as to the
taking of any necessary steps to preserve rights against prior parties
or any other rights pertaining to any Pledged Stock.
11. Effect of Agreement. This Pledge Agreement and the security
afforded hereby is in addition to and not in substitution for any other
security now or hereafter held by Agent and is, and is intended to be,
a continuing Pledge Agreement and shall remain in full force and effect
until the Secured Obligations have been paid and satisfied in full.
12. Amendments. None of the terms and provisions of this Pledge
Agreement may be modified or amended in any way except by an instrument
in writing executed by each of the parties hereto.
13. Severability. If any one or more provisions of this Pledge
Agreement should be invalid, illegal or unenforceable in any respect
under any applicable law, the validity, legality and enforceability of
the remaining provisions contained herein shall not in any way be
affected, impaired or prejudiced thereby.
14. Expenses.
(a) The Company agrees to indemnify the Agent from and against any and all
claims, losses and liabilities growing out of or resulting from this
Pledge Agreement (including, without limitation, enforcement of this
Pledge Agreement), except claims, losses or liabilities resulting from
the Agent's gross negligence or willful misconduct.
(b) The Company will, upon written demand, pay to the Agent an amount of
any and all reasonable and documented expenses, including the
reasonable fees and disbursements of its counsel and of any experts and
agents, which the Agent may incur in connection with (i) the
administration of this Pledge Agreement, (ii) the custody,
preservation, use or operation of, or the sale of, collection from or
other realization upon, any of the Pledged Stock, (iii) the exercise or
enforcement of any of the rights of the Agent hereunder or under the
Operative Documents, or (iv) the failure of the Company to perform or
observe any of the provisions hereof.
15. Successors and Assigns; Termination. This Pledge Agreement
shall create a continuing security interest in the Pledged Stock and
shall be binding upon the Company, its successors and assigns, and
inure, together with the rights and remedies of the Agent hereunder, to
the benefit of the Agent and its successors, transferees and assigns.
Upon the payment in full in immediately available funds of all of the
Secured Obligations and the termination of all commitments to lend
under the Operative Documents, the security interest granted hereunder
shall terminate and upon such termination the Agent shall assign,
transfer and deliver without recourse and without warranty the Pledged
Stock to the Company (and any property received in respect thereof) as
has not theretofore been sold or otherwise applied pursuant to the
provisions of this Pledge Agreement.
16. Waiver of Jury Trial. The Agent and the Lenders, in accepting
this Pledge Agreement, and the Company, after consulting or having had
the opportunity to consult with counsel, knowingly, voluntarily and
intentionally waive any right any of them may have to a trial by jury
in any litigation
AMENDED AND RESTATED PLEDGE AGREEMENT
AND IRREVOCABLE PROXY
-6-
<PAGE> 8
based upon or arising out of this Pledge Agreement or any related
instrument or agreement or any of the transactions contemplated by this
Pledge Agreement or any course of conduct, dealing, statements (whether
oral or written) or actions of any of them. Neither the Agent, the
Lenders, nor the Company shall seek to consolidate, by counterclaim or
otherwise, any such action in which a jury trial has been waived with
any other action in which a jury trial cannot be or has not been
waived. These provisions shall not be deemed to have been modified in
any respect or relinquished by either the Agent and the Lenders or the
Company except by a written instrument executed by all of them.
IN WITNESS WHEREOF, the Company has caused this Pledge Agreement
to be duly executed as of the day and year first above written.
OXFORD AUTOMOTIVE, INC.
By:
Its:
Accepted and Agreed:
NBD BANK, as Agent
By:
Its:
AMENDED AND RESTATED PLEDGE AGREEMENT
AND IRREVOCABLE PROXY
-7-
<PAGE> 9
SCHEDULE 1
<TABLE>
<CAPTION>
PERCENTAGE
OF TOTAL COMMON
JURISDICTION NUMBER NUMBER OF SHARES OF
NAME OF OF OF ISSUED STOCK PLEDGED PERCENTAGE
SUBSIDIARY INCORPORATION SHARES CERTIFICATES SUBSIDIARY OWNED
<S> <C> <C> <C> <C> <C>
Lobdell Emery Corp. Michigan 100 No. 2 100% 100%
BMG Holdings, Inc. Ontario 100 No. 1 100% 100%
RPI Holdings, Inc. Michigan 736.8 No. 32 100% 100%
Oxford Suspension, Michigan 100 No. 1 100% 100%
Inc.
Howell Industries, Inc. Michigan 1,000 No. 1 100% 100%
(survivor by merger w/HI Acquisition, Inc.)
OASP, Inc. Michigan 1,000 No. 1 100% 100%
OASP II, Inc. Michigan 1,000 No. 1 100% 100%
</TABLE>
AMENDED AND RESTATED PLEDGE AGREEMENT
AND IRREVOCABLE PROXY
-8-
<PAGE> 1
EXHIBIT 4.2
Form of Amended and Restated Security Agreement
The following document is the form of Amended and Restated Security
Agreement in favor of NBD Bank (now known as Bank One, Michigan) executed by the
Registrant and the following subsidiaries of the Registrant: Creative
Fabrication Corporation, Concept Management Corporation, Lobdell Emery
Corporation, OASP, Inc., OASP II, Inc., Winchester Fabrication Corporation,
Parallel Group International, Inc., Laserweld International, L.L.C., Lewis Emery
Capital Corporation, RPI Holdings, Inc., RPI, Inc., Prudenville Manufacturing,
Inc. Oxford Suspension, Inc., and Howell Industries, Inc. The agreements are
substantially the same in all material respects except as to the identity of the
parties thereto.
<PAGE> 2
AMENDED AND RESTATED COMPANY SECURITY AGREEMENT
THIS AMENDED AND RESTATED SECURITY AGREEMENT, dated as of May 14, 1999
(this "Security Agreement"), is made by OXFORD AUTOMOTIVE, INC., a Michigan
corporation, (the "Debtor"), in favor of NBD BANK, a Michigan banking
corporation, as agent (in such capacity, the "Agent") for the benefit of itself
and the lenders (the "Lenders") now or hereafter parties to the Credit Agreement
described below.
RECITALS
A. The Debtor has entered into a Security Agreement dated as of June
24, 1997 in favor of the Agent for the benefit of the Lenders (the "Prior
Security Agreement"), in connection with that certain Credit Agreement among the
Debtor and the Borrowing Subsidiaries identified from time to time therein (the
"Borrowing Subsidiaries" and collectively with the Debtor, the "Borrowers") with
the Lenders party thereto and the Agent, dated as of June 24, 1997.
B. The Borrowers have entered into an Amended and Restated Credit
Agreement of even date herewith (as amended or modified from time to time,
including any agreement entered into in substitution therefor, the "Credit
Agreement"), with the Lenders party thereto and the Agent pursuant to which the
Lenders may make Advances (as therein defined) to the Debtor and the Borrowing
Subsidiaries.
C. Under the terms of the Credit Agreement, the Debtor has agreed to
grant to the Agent, for the benefit of itself and the Lenders, a first-priority
security interest, subject only to security interests expressly permitted by the
Credit Agreement, in and to the Collateral hereinafter described.
AGREEMENTS
To secure (a) the prompt and complete payment of all indebtedness and
other obligations of the Debtor and the Borrowing Subsidiaries now or hereafter
owing to the Lenders or the Agent under or on account of the Credit Agreement,
any Security Document or any Letter of Credit,
SECURITY AGREEMENT
-1-
<PAGE> 3
notes or other instruments issued to the Agent or any Lender pursuant thereto,
or any other Loan Document, (b) the prompt and complete payment of all Hedging
Obligations of any Debtor, Borrowing Subsidiary or Guarantor owing to any Lender
or any Affiliate of any Lender and (c) the prompt and complete payment of all
indebtedness and obligations of the Debtor pursuant to the Mexican Facility
Tranche A Guaranty, and (d) the prompt and complete payment of all indebtedness
of the Debtor and any other guarantor under any Guaranty, in all cases, of any
kind or nature, howsoever created or evidenced and whether now or hereafter
existing, direct or indirect (including without limitation any participation
interest acquired by any Lender in any such indebtedness, obligations or
liabilities of the Debtor or any Borrowing Subsidiary to any other person),
absolute or contingent, joint and/or several, secured or unsecured, arising by
operation of law or otherwise, and whether incurred by the Debtor or any
Borrowing Subsidiary as principal, surety, endorser, guarantor, accommodation
party or otherwise, including without limitation all principal and all interest
(including any interest accruing subsequent to any petition filed by or against
the Debtor or any Borrowing Subsidiary under the U.S. Bankruptcy Code),
indemnity and reimbursement obligations, charges, expenses, fees, attorneys'
fees and disbursements and any other amounts owing thereunder (all of the
aforesaid indebtedness, obligations and liabilities of the Company and its
Subsidiaries being herein called the "Secured Obligations", and all of the
documents, agreements and instruments among the Company, the Subsidiaries, the
Agent, the Lenders, or any of them, evidencing or securing the repayment of, or
otherwise pertaining to, the Secured Obligations being herein collectively
called the "Operative Documents") for value received and pursuant to the Credit
Agreement, the Debtor hereby grants, assigns and transfers to the Agent for the
benefit of the Lenders a first-priority security interest, subject only to
Permitted Liens, in and to the following described property whether now owned or
existing or hereafter acquired or arising and wherever located (all of which is
herein collectively called the "Collateral"):
(a) All of the Debtor's present and future accounts, documents,
instruments, general intangibles and chattel paper, including, but without
limitation, all accounts receivable, all contract rights, all deposit accounts
and all monies and claims for money due or to become due to the Debtor, all
security held or granted to the Debtor, and all assets described in clause (d)
below;
(b) All of the Debtor's furniture, fixtures, machinery and equipment,
whether now owned or hereafter acquired, and wherever located, and whether used
by the Debtor or any other person, or leased by the Debtor to any person and
whether the interest of the Debtor is as owner, lessee or otherwise;
(c) All of the Debtor's present and future inventory of every type,
wherever located, including but not limited to raw materials, work in process,
finished goods and all inventory that is available for leasing or leased to
others by the Debtor;
SECURITY AGREEMENT
-2-
<PAGE> 4
(d) All other present and future assets of the Debtor (whether
tangible or intangible), including but not limited to all trademarks, trade
names, patents, industrial designs, masks, trade secrets, copyrights,
franchises, customer lists, computer programs, software, tax refund claims,
licenses and permits, and the good will associated therewith and all federal,
state, foreign and other applications and registrations therefor, all reissues,
divisions, continuations, renewals, extensions and continuations-in-part thereof
now or hereafter in effect, all income, license royalties, damages and payments
now and hereafter due or payable under and with respect thereto, including,
without limitation, any damages, proceeds or payments for past or future
infringements thereof and all income, royalties, damages and payments under all
licenses thereof, the right to sue for past, present and future infringements
thereof, all right, title and interest of the Debtor as licensor under any of
the foregoing whether now owned and existing or hereafter arising, and all other
rights and other interests corresponding thereto throughout the world (all of
the assets described in this clause (d) collectively referred to as the
"Intellectual Property");
(e) All books, records, files, correspondence, computer programs,
tapes, disks, cards, accounting information and other data of the Debtor related
in any way to the Collateral described in clauses (a), (b), (c) and (d) above,
including but not limited to any of the foregoing necessary to administer, sell
or dispose of any of the Collateral;
(f) All substitutions and replacements for, and all additions and
accessions to, any and all of the foregoing; and
(g) All products and all proceeds of any and all of the foregoing,
and, to the extent not otherwise included, all payments under insurance (whether
or not the Agent is the loss payee thereof), and any indemnity, warranty or
guaranty, payable by reason of loss or damage to or otherwise with respect to
any of the foregoing.
1. Representations, Warranties, Covenants and Agreements. The Debtor
further represents and warrants to and covenants and agrees with the Agent for
the benefit of the Lenders as follows:
(a) Ownership of Collateral; Security Interest Priority. At the
time any Collateral becomes subject to a security interest of the Agent
hereunder, unless the Agent shall otherwise consent, the Debtor shall be deemed
to have represented and warranted that (i) the Debtor is the lawful owner of
such Collateral and has the right and authority to subject the same to the
security interest of the Agent hereunder; (ii) other than Permitted Liens (as
defined in the Credit Agreement) and lessors' interest with respect to any
security interest in any property leased by the Debtor as lessee, none of the
Collateral is subject to any Lien other than that in
SECURITY AGREEMENT
-3-
<PAGE> 5
favor of the Agent for the benefit of the Lenders and there is no effective
financing statement or other filing covering any of the Collateral on file in
any public office, other than in favor of the Agent for the benefit of the
Lenders. This Security Agreement creates in favor of the Agent for the benefit
of the Lenders a valid first-priority security interest, subject only to
Permitted Liens, in the Collateral enforceable against the Debtor and all third
parties and securing the payment of the Secured Obligations. All financing
statements necessary to perfect such security interest in the Collateral have
been delivered by the Debtor to the Agent for filing.
(b) Location of Offices, Records and Facilities. The Debtor's
chief executive office and chief place of business and the office where the
Debtor keeps its records concerning its accounts, contract rights, chattel
paper, instruments, general intangibles and other obligations arising out of or
in connection with the sale or lease of goods or the rendering of services or
otherwise ("Receivables"), and all originals of all leases and other chattel
paper which evidence Receivables, is at the location listed on Schedule 1(b)(i)
hereto. The Debtor will provide the Agent with prior written notice of any
proposed change in the location of its chief executive office. The Debtor's only
other offices and facilities are at the locations set forth in Schedule 1(b)(ii)
hereto. The Debtor will provide the Agent with prior written notice of any
change in the locations of its other offices and the facilities at which any
assets of the Debtor are located. The tax identification number of the Debtor is
set forth on Schedule 1(b)(i). The name of the Debtor is correctly set forth on
the signature pages hereof, and the Debtor operates under no other names. The
Debtor shall not change its name without the prior written consent of the Agent.
(c) Location of Inventory, Fixtures, Machinery and Equipment.
(i) All Collateral consisting of inventory is, and will be, located at the
locations listed on Schedule 1(c)(i) hereto, and at no other locations without
the prior written consent of the Agent. (ii) All Collateral consisting of
fixtures, machinery or equipment, is, and will be, located at the locations
listed on Schedule 1(c)(ii) hereto, and at no other locations without the prior
written consent of the Agent. If the Collateral described in clauses (i) or (ii)
is kept at leased locations or warehoused, the Debtor has obtained appropriate
landlord's lien waivers or appropriate warehousemen's notices have been sent,
each satisfactory to the Agent, unless waived by the Agent.
(d) Liens, Etc. The Debtor will keep the Collateral free at all
times from any and all liens, security interests or encumbrances other than
those described in paragraph 1(a)(ii) and those consented to in writing by the
Required Lenders. The Debtor will not, without the prior written consent of the
Agent, sell, lease, license, transfer, assign or otherwise dispose of, or permit
or suffer to be sold, leased, licensed, transferred, assigned or otherwise
disposed of, any of the Collateral, except for, prior to an Event of Default
only (notwithstanding any other
SECURITY AGREEMENT
-4-
<PAGE> 6
agreement), the following: inventory sold in the ordinary course of business and
other assets permitted to be sold, leased, licensed, transferred, assigned or
otherwise disposed under Section 5.2(f) of the Credit Agreement. The Agent or
its attorneys may at any and all reasonable times inspect the Collateral and for
such purpose may enter upon any and all premises where the Collateral is or
might be kept or located.
(e) Insurance. The Debtor shall keep the tangible Collateral
insured at all times against loss by theft, fire and other casualties. Said
insurance shall be issued by a company rated A or better by A.M. Best and shall
be in amounts sufficient to protect the Agent and the Lenders against any and
all loss or damage to the Collateral. The policy or policies which evidence said
insurance shall be delivered to the Agent upon request, shall contain a lender
loss payable clause in favor of the Agent for the benefit of the Lenders, shall
name the Agent for the benefit of the Lenders as an additional insured, as its
interest may appear, shall not permit amendment, cancellation or termination
without giving the Agent at least 30 days' prior written notice thereof, and
shall otherwise be in form and substance satisfactory to the Agent.
Reimbursement under any liability insurance maintained by the Debtor pursuant to
this paragraph 1(e) may be paid directly to the person who shall have incurred
liability covered by such insurance, provided that if there is no Default or
Event of Default (whether before or after any event which caused any
reimbursement under any liability insurance) the Debtor may use the proceeds of
such insurance solely to repair or replace the property damaged if the insurance
proceeds are less than $500,000 and if there is any Event of Default or Default,
and if such reimbursement is greater than $500,000 or there is any Default or
Event of Default such amounts shall be paid to the Agent for application to the
Secured Obligations.
(f) Taxes, Etc. The Debtor will pay promptly, and within the time
that they can be paid without interest or penalty, any taxes, assessments and
similar imposts and charges, not being contested in good faith, which are now or
hereafter may become a Lien upon any of the Collateral. If the Debtor fails to
pay any such taxes, assessments or other imposts or charges in accordance with
this paragraph, the Agent shall have the option to do so and the Debtor agrees
to repay forthwith all amounts so expended by the Agent with interest at the
Overdue Rate.
(g) Further Assurances. The Debtor will do all acts and things
and will execute all financing statements and writings reasonably requested by
the Agent to establish, maintain and continue a perfected and valid security
interest of the Agent for the benefit of the Lenders in the Collateral, and will
promptly on demand pay all reasonable costs and expenses of filing and recording
all instruments, including the costs of any searches deemed necessary by the
Agent, to establish and determine the validity and the priority of the Agent's
security interests for the benefit of the Lenders. A carbon, photographic or
other reproduction of this Security Agreement or any financing statement
covering the Collateral shall be sufficient as a financing statement.
SECURITY AGREEMENT
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<PAGE> 7
(h) List of Patents, Copyrights, Mask Works and Trademarks.
Attached hereto as Schedule 1(h)(i) is a list of all patents and patent
applications owned by the Debtor. Attached hereto as Schedule 1(h)(ii) is a list
of all registered copyrights and all mask works and applications therefor owned
by the Debtor. Attached hereto as Schedule 1(h)(iii) is a list of all trademarks
and service marks owned by the Debtor. If the Debtor at any time owns any
additional patents, copyrights, mask works, trademarks, service marks or any
applications therefor not listed on such schedules, the Debtor shall give the
Agent prompt written notice thereof and hereby authorizes the Agent to modify
this Agreement by amending Schedules 1(h)(i), 1(h)(ii) and 1(h)(iii) hereto to
include all future patents, copyrights, mask works, trademarks, service marks
and applications therefor and agrees to execute all further instruments and
agreements, if any, if requested by the Agent to evidence the Agent's interest
for the benefit of the Lenders therein.
(i) Maintenance of Tangible Collateral. The Debtor will cause
the tangible Collateral material to the conduct of its business to be maintained
and preserved in the same condition, repair and working order as when new,
ordinary wear and tear excepted, and in accordance with any manufacturer's
manual, and shall forthwith, or, in the case of any loss or damage to any of the
tangible Collateral as quickly as practicable after the occurrence thereof, make
or cause to be made all repairs, replacements, and other improvements which are
necessary or desirable to such end. The Debtor shall promptly furnish to the
Agent a statement respecting any loss or damage to any of the tangible
Collateral.
(j) Special Rights Regarding Receivables. The Agent or any of its
agents may, at any time and from time to time in its sole discretion and
irrespective of the existence of any Event of Default under this Security
Agreement, verify, directly with each person (collectively, the "Obligors")
which owes any Receivables to the Debtor, the Receivables in any manner. The
Agent or any of its agents may, at any time from time to time after and during
the continuance of an Event of Default under this Security Agreement, notify the
Obligors of the security interest of the Agent for the benefit of the Lenders in
the Collateral and/or direct such Obligors that all payments in connection with
such obligations and the Collateral be made directly to the Agent in the Agent's
name. If the Agent or any of its agents shall collect such obligations directly
from the Obligors, the Agent or any of its agents shall have the right to
resolve any disputes relating to returned goods directly with the Obligors in
such manner and on such terms as the Agent or any of its agents shall deem
appropriate. The Debtor directs and authorizes any and all of its present and
future account debtors to comply with requests for information from the Agent,
the Agent's designees and agents and/or auditors, relating to any and all
business transactions between the Debtor and the Obligors. The Debtor further
directs and authorizes all of its Obligors upon receiving a notice or request
sent by the Agent or the Agent's
SECURITY AGREEMENT
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agents or designees to pay directly to the Agent any and all sums of money or
proceeds now or hereafter owing by the Obligors to the Debtor, as provided in
this paragraph 1(j) and any such payment shall act as a discharge of any debt of
such Obligor to the Debtor in the same manner as if such payment had been made
directly to the Debtor. The Debtor agrees to take any and all action as the
Agent may reasonably request to assist the Agent in exercising the rights
described in this paragraph 1(j).
(k) Maintenance of Intellectual Property and Other Intangible
Collateral. The Debtor shall preserve and maintain all rights of the Debtor and
the Agent for the benefit of the Lenders in all material Intellectual Property
and all other material intangible Collateral, including without limitation the
payment of all maintenance fees and filing fees and the taking of all
appropriate action at the Debtor's expense to halt the infringement of any of
the Intellectual Property or other Collateral, provided that, with respect to
halting the infringement of any Intellectual Property or other Collateral, the
Debtor does not need to take all such appropriate action if the Debtor has, or
after Event of Default the Agent has, reasonably determined that it is not in
its best interest to demand or enforce cessation of such infringement or other
conduct because it is either not material or because the adverse consequences to
the Debtor would outweigh the benefits gained by such demand or enforcement.
2. Events of Default. The occurrence of any Event of Default shall be
deemed an Event of Default under this Security Agreement.
3. Remedies. Upon the occurrence of any Event of Default, the Agent
shall have and may exercise any one or more of the rights and remedies provided
to it under this Security Agreement or any of the other Operative Documents or
provided by law, including but not limited to all of the rights and remedies of
a secured party under the Uniform Commercial Code, and the Debtor hereby agrees
to assemble the Collateral and make it available to the Agent at a place to be
designated by the Agent which is reasonably convenient to both parties,
authorizes the Agent to take possession of the Collateral with or without demand
and with or without process of law and to sell and dispose of the same at public
or private sale and to apply the proceeds of such sale to the costs and expenses
thereof (including reasonable attorneys' fees and disbursements, incurred by the
Agent) and then to the payment and satisfaction of the Secured Obligations. Any
requirement of reasonable notice shall be met if the Agent sends such notice to
the Debtor, by registered or certified mail, at least 10 days prior to the date
of sale, disposition or other event giving rise to a required notice. The Agent
may be the purchaser at any such sale. The Debtor expressly authorizes such sale
or sales of the Collateral in advance of and to the exclusion of any sale or
sales of or other realization upon any other collateral securing the Secured
Obligations. The Agent shall have no obligation to preserve rights against prior
parties.
SECURITY AGREEMENT
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<PAGE> 9
The Debtor hereby waives as to the Agent and each Lender any right of
subrogation or marshalling of such Collateral and any other collateral for the
Secured Obligations. To this end, the Debtor hereby expressly agrees that any
such collateral or other security of the Debtor or any other party which the
Agent or any Lender may hold, or which may come to the Agent or any Lender's
possession, may be dealt with in all respects and particulars as though this
Security Agreement were not in existence. The parties hereto further agree that
public sale of the Collateral by auction conducted in any county in which any
Collateral is located or in which the Agent or the Debtor does business after
advertisement of the time and place thereof shall, among other manners of public
and private sale, be deemed to be a commercially reasonable disposition of the
Collateral. The Debtor shall be liable for any deficiency remaining after
disposition of the Collateral. Such sale shall be on such terms as the Agent may
determine, for cash or credit or against future delivery in the discretion of
the Agent.
4. Special Remedies Concerning Certain Collateral.
(a) Upon the occurrence of any Event of Default, the Debtor
shall, if requested to do so in writing, and to the extent so requested (i)
promptly collect and enforce payment of all amounts due the Debtor on account
of, in payment of, or in connection with, any of the Collateral, (ii) hold all
payments in the form received by the Debtor as trustee for the Agent and the
Lenders, without commingling with any funds belonging to the Debtor, and (iii)
forthwith deliver all such payments to the Agent with endorsement to the Agent's
order of any checks or similar instruments.
(b) Upon the occurrence of any Event of Default, the Debtor
shall, if requested to do so, and to the extent so requested, notify all
Obligors and other persons with obligations to the Debtor on account of or in
connection with any of the Collateral of the security interest of the Agent for
the benefit of the Lenders in the Collateral and direct such account debtors and
other persons that all payments in connection with such obligations and the
Collateral be made directly to the Agent. The Agent itself may, upon the
occurrence of an Event of Default, so notify and direct any such account debtor
or other person that such payments are to be made directly to the Agent.
(c) Upon the occurrence of any Event of Default, for purposes of
assisting the Agent in exercising its rights and remedies provided to it under
this Security Agreement, the Debtor (i) hereby irrevocably constitutes and
appoints the Agent its true and lawful attorney, for and in the Debtor's name,
place and stead, to collect, demand, receive, sue for, compromise, and give good
and sufficient releases for, any monies due or to become due on account of, in
payment of, or in connection with the Collateral, (ii) hereby irrevocably
authorizes the Agent to endorse the name of the Debtor, upon any checks, drafts,
or similar items which are received in
SECURITY AGREEMENT
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<PAGE> 10
payment of, or in connection with, any of the Collateral, and to do all things
necessary in order to reduce the same to money, (iii) with respect to any
Collateral, hereby irrevocably assents to all extensions or postponements of the
time of payment thereof or any other indulgence in connection therewith, to each
substitution, exchange or release of Collateral, to the addition or release of
any party primarily or secondarily liable, to the acceptance of partial payments
thereon and the settlement, compromise or adjustment (including adjustment of
insurance payments) thereof, all in such manner and at such time or times as the
Agent shall deem advisable and (iv) hereby irrevocably authorizes the Agent to
notify the post office authorities to change the address for delivery of the
Debtor's mail to an address designated by the Agent, and the Agent may receive,
open and dispose of all mail addressed to the Debtor. Notwithstanding any other
provisions of this Security Agreement, it is expressly understood and agreed
that the Agent shall have no duty, and shall not be obligated in any manner, to
make any demand or to make any inquiry as to the nature or sufficiency of any
payments received by it or to present or file any claim or take any other action
to collect or enforce the payment of any amounts due or to become due on account
of or in connection with any of the Collateral.
5. Remedies Cumulative. No right or remedy conferred upon or reserved
to the Agent under any Operative Document is intended to be exclusive of any
other right or remedy, and every right and remedy shall be cumulative and in
addition to every other right or remedy given hereunder or now or hereafter
existing under any applicable law. Every right and remedy of the Agent under any
Operative Document or under applicable law may be exercised from time to time
and as often as may be deemed expedient by the Agent. To the extent that it
lawfully may, the Debtor agrees that it will not at any time insist upon, plead,
or in any manner whatever claim or take any benefit or advantage of any
applicable present or future stay, extension or moratorium law, which may affect
observance or performance of any provisions of any Operative Document; nor will
it claim, take or insist upon any benefit or advantage of any present or future
law providing for the valuation or appraisal of any security for its obligations
under any Operative Document prior to any sale or sales thereof which may be
made under or by virtue of any instrument governing the same; nor will the
Debtor, after any such sale or sales, claim or exercise any right, under any
applicable law to redeem any portion of such security so sold.
6. Conduct No Waiver. No waiver shall be effective unless in writing
executed by the Agent and any waiver or forbearance on the part of the Agent in
enforcing any of its rights under this Security Agreement shall not operate as a
waiver of any other default or of the same default on a future occasion or of
such right.
7. Governing Law; Consent to Jurisdiction; Definitions. This Security
Agreement is a contract made under, and shall be governed by and construed in
accordance with, the law of the
SECURITY AGREEMENT
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<PAGE> 11
State of Michigan applicable to contracts made and to be performed entirely
within such State and without giving effect to choice of law principles of such
State. The Debtor agrees that any legal action or proceeding with respect to
this Security Agreement or the transactions contemplated hereby may be brought
in any court of the State of Michigan, or in any court of the United States of
America sitting in Michigan, and the Debtor hereby submits to and accepts
generally and unconditionally the jurisdiction of those courts with respect to
its person and property, and irrevocably appoints the President of the Debtor,
at the Debtor's address set forth in the Credit Agreement, as its agent for
service of process and irrevocably consents to the service of process in
connection with any such action or proceeding by personal delivery to such agent
or to the Debtor or by the mailing thereof by registered or certified mail,
postage prepaid to the Debtor at its address set forth in the Credit Agreement.
Nothing in this paragraph shall affect the right of the Agent to serve process
in any other manner permitted by law or limit the right of the Agent to bring
any such action or proceeding against the Debtor or its property in the courts
of any other jurisdiction. The Debtor hereby irrevocably waives any objection to
the laying of venue of any such suit or proceeding in the above described
courts. Terms used but not defined herein shall have the respective meanings
ascribed thereto in the Credit Agreement. Unless otherwise defined herein or in
the Credit Agreement, terms used in Article 9 of the Uniform Commercial Code in
the State of Michigan are used herein as therein defined on the date hereof. The
headings of the various subdivisions hereof are for convenience of reference
only and shall in no way modify any of the terms or provisions hereof.
8. Notices. All notices, demands, requests, consents and other
communications hereunder shall be delivered in the manner described in the
Credit Agreement.
9. Rights Not Construed as Duties. The Agent and the Lenders neither
assume nor shall any of them have any duty of performance or other
responsibility under any contracts in which the Agent has or obtains, for the
benefit of the Lenders, a security interest hereunder. If the Debtor fails to
perform any agreement contained herein, the Agent may but is in no way obligated
to itself perform, or cause performance of, such agreement, and the reasonable
expenses of the Agent incurred in connection therewith shall be payable by the
Debtor under paragraph 12 hereof. The powers conferred on the Agent hereunder
are solely to protect its interests for the benefit of the Lenders in the
Collateral and shall not impose any duty upon it to exercise any such powers.
Except for the safe custody of any Collateral in its possession and accounting
for monies actually received by it hereunder, the Agent shall have no duty as to
any Collateral or as to the taking of any necessary steps to preserve rights
against prior parties or any other rights pertaining to any Collateral.
10. Effect of Agreement. This Security Agreement and the security
afforded hereby is in addition to and not in substitution for any other security
now or hereafter held by Secured Party and is, and is intended to be, a
continuing Security Agreement and shall remain in full
SECURITY AGREEMENT
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<PAGE> 12
force and effect until the Obligations have been paid and satisfied in full.
11. Amendments. This Security Agreement may be amended from time to
time any provision hereof may be waived in accordance with the requirements of
Section 8.1 of the Credit Agreement. No such amendment or waiver of any
provision of this Guaranty nor consent to any departure by any Gurantor
therefrom shall in any event e effective unless the same shall be in writing and
signed by the Required Lenders or all of the Lenders, as the case may be, and,
to the extent any rights or duties of the Agent may be affected, the Agent, and
then such amendment, waiver of consent shall be effective only in the specific
instance and for the specific purpose of which given.
12. Severability. If any one or more provisions of this Security
Agreement should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected, impaired or prejudiced thereby.
13. Expenses. (a) The Debtor agrees to indemnify the Agent and the
Lenders from and against any and all claims, losses and liabilities growing out
of or resulting from this Security Agreement (including, without limitation,
enforcement of this Security Agreement), except claims, losses or liabilities
resulting from the Agent's or any Lender's gross negligence or willful
misconduct.
(b) The Debtor will, upon demand, pay to the Agent an amount of
any and all reasonable expenses, including the reasonable fees and disbursements
of its counsel and of any experts and agents, which the Agent may incur in
connection with (i) the administration of this Security Agreement, (ii) the
custody, preservation, use or operation of, or the sale of, collection from or
other realization upon, any of the Collateral, (iii) the exercise or enforcement
of any of the rights of the Agent hereunder or under the Operative Documents, or
(iv) the failure of the Debtor to perform or observe any of the provisions
hereof.
14. Successors and Assigns; Termination. This Security Agreement shall
create a continuing security interest in the Collateral and shall be binding
upon the Debtor, its successors and assigns, and inure, together with the rights
and remedies of the Agent hereunder, to the benefit of the Agent, the Lenders
and their respective successors, transferees and assigns. The Debtor cannot
assign any of its obligations hereunder without the consent of the Lender. Upon
the payment in full in immediately available funds of all of the Secured
Obligations and the termination of all commitments to lend under the Operative
Documents, the security interest granted hereunder shall terminate and all
rights to the Collateral shall revert to the Debtor.
SECURITY AGREEMENT
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15. Waiver of Jury Trial. The Agent and the Lenders, in accepting this
Security Agreement, and the Debtor, after consulting or having had the
opportunity to consult with counsel, knowingly, voluntarily and intentionally
waive any right any of them may have to a trial by jury in any litigation based
upon or arising out of this Security Agreement or any related instrument or
agreement or any of the transactions contemplated by this Security Agreement or
any course of conduct, dealing, statements (whether oral or written) or actions
of any of them. Neither the Agent, the Lenders nor the Debtor shall seek to
consolidate, by counterclaim or otherwise, any such action in which a jury trial
has been waived with any other action in which a jury trial cannot be or has not
been waived. These provisions shall not be deemed to have been modified in any
respect or relinquished by the Agent, any Lender or the Debtor except by a
written instrument executed by each of them.
(space intentionally left blank)
SECURITY AGREEMENT
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<PAGE> 14
IN WITNESS WHEREOF, the Debtor has caused this Security Agreement to be
duly executed as of the day and year first set forth above.
OXFORD AUTOMOTIVE, INC.
By:
Its:
Accepted and Agreed:
NBD BANK, as Agent on behalf
of the Lenders
By:
Its:
SECURITY AGREEMENT
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<PAGE> 1
EXHIBIT 4.3
Form of Amended and Restated Security Agreement
The following document is the form of Amended and Restated Security
Agreement in favor of First Chicago NBD Bank, Canada executed by the following
subsidiaries of the Registrant: BMG North America Limited, BMG Holdings Inc.,
976459 Ontario Limited, 829500 Ontario Limited, and Oxford Suspension Ltd. The
agreements are substantially the same in all material respects except as to the
identity of the parties thereto.
<PAGE> 2
AMENDED AND RESTATED GUARANTOR SECURITY AGREEMENT
This AMENDED AND RESTATED GUARANTOR SECURITY AGREEMENT, dated as of May
14, 1999 (this "Security Agreement"), is by BMG NORTH AMERICA LIMITED, a
corporation organized under the laws of the Province of Ontario (the "Debtor")
in favor of FIRST CHICAGO NBD BANK, CANADA, in its capacity as the Affiliate
designated by NBD Bank, a Michigan banking corporation, to make Canadian
Advances and as collateral agent for the Lenders for the purpose of holding this
security as specified in the Credit Agreement referred to below (the "Secured
Party").
1. CREATION OF SECURITY INTEREST
(1) For value received, Debtor hereby grants to Secured Party a
security interest (the "Security Interest") in the undertaking of Debtor and in
all Goods (including all parts, accessories, attachments, special tools,
additions and accessions thereto), Chattel Paper, Documents of Title (whether
negotiable or not), Instruments, Intangibles and Securities now owned or
hereafter owned or acquired by or on behalf of Debtor (including such as may be
returned to or repossessed by Debtor) and in all proceeds and renewals thereof,
accretions thereto and substitutions therefor (hereinafter collectively called
"Collateral"), including, without limitation, all of the following now owned or
hereafter owned or acquired by or on behalf of Debtor:
(i) all inventory of whatever kind and wherever situated
("Inventory");
(ii) all equipment (other than Inventory) of whatever kind and
wherever situate, including, without limitation, all
machinery, tools, apparatus, plant, furniture, fixtures and
vehicles of whatsoever nature or kind;
(iii) all book accounts and book debts and generally all accounts,
debts, dues, claims, choses in action and demands of every
nature and kind howsoever arising or secured including
letters of credit and advices of credit, which are now due,
owing or accruing or growing due to or owned by or which may
hereafter become due, owing or accruing or growing due to or
owned by Debtor ("Debts");
(iv) all deeds, documents, writings, papers, books of account and
other books relating to or being records of Debts, Chattel
Paper or Documents
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of Title or by which such are or may hereafter be secured,
evidenced, acknowledged or made payable;
(v) all contractual rights and insurance claims and all goodwill,
patents, trademarks, copyrights, and other industrial
property;
(vi) all monies other than trust monies lawfully belonging to
others; and
(vii) all property described in any schedule now or hereafter
annexed hereto.
(2) The Security Interest granted hereby shall not extend or apply to
and Collateral shall not include the last day of the term of any lease or
agreement therefor but upon the enforcement of the Security Interest Debtor
shall stand possessed of such last day in trust to assign the same to any person
acquiring such term.
(3) The terms "Goods", "Chattel Paper", "Documents of Title",
"Instruments", "Intangibles", "Securities", "proceeds", "inventory" and
"accession" whenever used herein shall be interpreted pursuant to their
respective meanings when used in the Personal Property Security Act of Ontario,
as amended from time to time, which Act, including amendments thereto and any
Act substituted therefor and amendments thereto is herein referred to as the
"P.P.S.A." Provided always that the term "Goods" when used herein shall not
include "consumer goods" of Debtor as that term is defined in the P.P.S.A., and
the term "Inventory" when used herein shall include livestock and the young
thereof after conception and crops that become such within the year of execution
of this Security Agreement. Any reference herein to "Collateral" shall, unless
the context otherwise requires, be deemed a reference to "Collateral or any part
thereof".
(4) As used herein, the term "Credit Agreement" means the Amended and
Restated Credit Agreement dated as of the date hereof among Oxford Automotive,
Inc., a corporation incorporated under the laws of the State of Michigan (the
"Company"), each of the Subsidiaries designated under Section 1.1 of the Credit
Agreement as a "Borrowing Subsidiary", the lenders party thereto from time to
time ( the "Lenders") and the Agent, as amended or modified from time to time.
Capitalized terms used but not defined herein shall have the meanings ascribed
thereto in the Credit Agreement.
2. OBLIGATIONS SECURED
The Security Interest granted hereby secures payment and satisfaction of any and
all of the following (the "Obligations"): (a) the prompt and complete payment of
all indebtedness and other obligations of the Company and the Borrowing
Subsidiaries now or hereafter owing to the Lenders or the Agent under or on
account of the Credit Agreement, any Security Document or any Letter of Credit,
notes or other instruments issued to the Agent or any Lender pursuant thereto,
or any other Loan Document, (b) the prompt and complete payment of all Hedging
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Obligations of any Company, Borrowing Subsidiary or Guarantor owing to any
Lender or any Affiliate of any Lender and (c) the prompt and complete payment of
all indebtedness and obligations of the Company pursuant to the Mexican Facility
Tranche A Guaranty, and (d) the prompt and complete payment of all indebtedness
of the Debtor and any other guarantor under any Guaranty, in all cases, of any
kind or nature, howsoever created or evidenced and whether now or hereafter
existing, direct or indirect (including without limitation any participation
interest acquired by any Lender in any such indebtedness, obligations or
liabilities of the Company or any Borrowing Subsidiary to any other person),
absolute or contingent, joint and/or several, secured or unsecured, arising by
operation of law or otherwise, and whether incurred by the Company or any
Borrowing Subsidiary as principal, surety, endorser, guarantor, accommodation
party or otherwise, including without limitation all principal and all interest
(including any interest accruing subsequent to any petition filed by or against
the Company or any Borrowing Subsidiary under the U.S. Bankruptcy Code),
indemnity and reimbursement obligations, charges, expenses, fees, attorneys'
fees and disbursements and any other amounts owing thereunder (all of the
documents, agreements and instruments among the Company, the Subsidiaries, the
Agent, the Lenders, or any of them, evidencing or securing the repayment of, or
otherwise pertaining to, the Obligations being herein collectively called the
"Loan Documents"). The Obligations secured by this Agreement are continuing in
nature and include those Obligations secured by the Guarantor Security Agreement
dated February 11, 1997 and the Guarantor Security Agreement dated June 24, 1997
by the Debtor in favor of the Secured Party.
3. REPRESENTATIONS AND WARRANTIES OF DEBTOR
Debtor represents and warrants and so long as this Security Agreement
remains in effect shall be deemed to continuously represent and warrant that:
(1) the Collateral is genuine and owned by Debtor free of all security
interests, mortgages, liens, claims, charges or other encumbrances (hereinafter
collectively called "Liens"), save for the Security Interest and Permitted
Liens;
(2) to the best of the Debtor's knowledge, other than as disclosed in
writing by the Debtor to the Secured Party, each Debt, Chattel Paper and
Instrument constituting Collateral is enforceable in accordance with its terms
against the party obligated to pay the same (the "Account Debtor"), and the
amount represented by Debtor to Secured Party from time to time as owing by each
Account Debtor or by all Account Debtors will be the correct amount actually and
unconditionally owing by such Account Debtor or Account Debtors, except for
normal cash discounts where applicable, and no Account Debtor will have any
defence, set off, claim or counterclaim against Debtor which can be asserted
against Secured Party, whether in any proceeding to enforce Collateral or
otherwise; and
(3) the locations specified in Schedule "A" hereto as to business
operations and
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records are accurate and complete and, with respect to Goods (including
Inventory) constituting Collateral, the locations specified in Schedule "A"
hereto are accurate and complete save for Goods in transit to such locations and
Inventory on lease or consignment; and all fixtures or Goods about to become
fixtures and all crops and all oil, gas or other minerals to be extracted and
all timber to be cut which forms part of the Collateral will be situate at one
of such locations.
4. USE OF COLLATERAL BY DEBTOR AND CONFIRMATION OF COLLATERAL BY SECURED
PARTY
Subject to compliance with Debtor's covenants contained herein, Debtor
may, until default, possess, operate, collect, use and enjoy and deal with
Collateral in the ordinary course of Debtor's business in any manner not
inconsistent with the provisions hereof; provided always that Secured Party
shall have the right at any time and from time to time to confirm the existence
and state of the Collateral in any manner Secured Party may consider appropriate
and Debtor agrees to furnish all assistance and information and to perform all
such acts as Secured Party may reasonably request in connection therewith and to
all places where Collateral may be located and to all premises occupied by
Debtor.
5. RECEIPTS OF INCOME FROM AND INTEREST ON COLLATERAL
(1) Until default, Debtor shall have the right to receive any monies
constituting income from or interest on Collateral and if Secured Party receives
any such monies prior to default, Secured Party shall either credit the same to
the account of Debtor or pay the same promptly to Debtor.
(2) After default, Debtor will not request or receive any monies
constituting income from or interest on Collateral and if Debtor receives any
such monies, Debtor will receive the same in trust for and promptly pay the same
to Secured Party.
6. INCREASES, PROFITS, PAYMENTS OR DISTRIBUTIONS REGARDING COLLATERAL
(1) Whether or not default has occurred, Debtor authorizes Secured
Party
(i) to receive any increase in or profits on Collateral (other
than money) and to hold the same as part of Collateral; money
so received shall be treated as income for the purposes of
Clause 5 hereof and dealt with accordingly; and
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(ii) to receive any payment or distribution upon redemption or
retirement or upon dissolution and liquidation of the issuer
of Collateral; to surrender Collateral in exchange therefor;
and to hold any such payment or distribution as part of the
Collateral.
(2) If Debtor receives any such increase or profits (other than money)
or payments or distributions, Debtor will receive the same in trust for and
deliver the same promptly to Secured Party to be held by Secured Party as herein
provided.
7. SECURITIES FORMING PART OF COLLATERAL
If Collateral at any time includes Securities, Debtor authorizes
Secured Party to transfer the same or any part thereof into its own name or that
of its nominee(s) so that Secured Party or its nominee(s) may appear of record
as the sole owner thereof; provided that, until default, Secured Party shall
deliver promptly to Debtor all notices or other communications received by it or
its nominee(s) as such registered owner and, upon demand and receipt of payment
of any necessary expenses thereof, shall issue to Debtor or its order a proxy to
vote and take all action with respect to such Securities. After enforcement of
remedies hereunder, Debtor waives all rights to receive any notices or
communications received by Secured Party or its nominee(s) as such registered
owner and agrees that no proxy issued by Secured Party to Debtor or its order as
aforesaid shall thereafter be effective.
8. COLLECTION OF DEBTS FORMING PART OF COLLATERAL
After default, Secured Party may notify all or any Account Debtors of
the Security Interest and may also direct such Account Debtors to make all
payments on Collateral to Secured Party. Debtor acknowledges that any payments
on or other proceeds of Collateral received by Debtor from Account Debtors,
before or after notification of this Security Interest to Account Debtors, if
received after default, shall be received and held by Debtor in trust for
Secured Party and shall be turned over to Secured Party upon request.
9. COVENANTS OF THE DEBTOR
So long as this Security Agreement remains in effect, Debtor covenants
and agrees:
(1) to defend the Collateral against the claims and demands of all
other parties claiming the same or an interest therein; to keep the Collateral
free from all Liens, except for the Security Interest and Permitted Liens or
hereafter approved in writing, prior to their creation or assumption, by Secured
Party; and not to sell, exchange, transfer, assign, lease, or otherwise dispose
of Collateral or any interest therein without the prior written consent of
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<PAGE> 7
Secured Party, except to the extent permitted under the Credit Agreement;
provided always that, until default, Debtor may, in the ordinary course of
Debtor's business, sell or lease Inventory and, subject to Clause 8 hereof, use
monies available to Debtor;
(2) to notify Secured Party promptly of:
(i) any change in the information contained herein or in the
Schedules hereto relating to Debtor, Debtor's business or
Collateral; and
(ii) any material loss of or damage to Collateral;
(3) to keep the Collateral in good order, condition and repair and not
to use Collateral in violation of the provisions of this Security Agreement or
any other agreement relating to Collateral or any policy insuring Collateral or
any applicable statute, law, by-law, rule, regulation or ordinance;
(4) to do, execute, acknowledge and deliver such financing statements
and further assignments, transfers, documents, acts, matters and things
(including further schedules hereto) as may be reasonably requested by Secured
Party of or with respect to Collateral in order to give effect to these presents
and to pay all costs for searches and filings in connection therewith;
(5) to pay all taxes, rates, levies, assessments and other charges of
every nature which may be lawfully levied, assessed or imposed against or in
respect of Debtor or Collateral as and when the same become due and payable;
(6) to insure the Collateral for such periods, in such amounts, on such
terms and against loss or damage by fire and such other risks as Secured Party
shall reasonably direct with loss payable to Secured Party and Debtor, as
insured, as their respective interests may appear, and to pay all premiums
therefor;
(7) to prevent Collateral, save Inventory sold or leased as permitted
hereby, from being or becoming an accession to other property not covered by
this Security Agreement;
(8) to carry on and conduct the business of Debtor in a proper and
efficient manner and so as to protect and preserve the Collateral and to keep,
in accordance with generally accepted accounting principles, consistently
applied, proper books of account for Debtor's business as well as accurate and
complete records concerning Collateral, and mark any and all such records and
Collateral as Secured Party's request so as to indicate the Security Interest;
and
(9) to deliver to Secured Party from time to time promptly upon
request:
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(i) any Documents of Title, Instruments, Securities and Chattel
Paper constituting, representing or relating to Collateral;
(ii) all books of account and all records, ledgers, reports,
correspondence, schedules, documents, statements, lists and
other writing relating to Collateral for the purpose of
inspecting, auditing or copying the same;
(iii) all financial statements prepared by or for Debtor regarding
Debtor's business;
(iv) all policies and certificates of insurance relating to
Collateral; and
(v) such information concerning Collateral, Debtor and Debtor's
business and affairs as Secured Party may reasonably request.
10. EVENTS OF DEFAULT
The happening of any of the following events or conditions shall
constitute default hereunder which is herein referred to as "default":
(1) the nonpayment when due, whether by acceleration or otherwise, of
any principal or interest forming part of the Obligations or the failure of
Debtor to observe or perform any obligation, covenant, term, provision or
condition contained in this Security Agreement; or
(2) any Event of Default under the Credit Agreement;
11. ACCELERATION
Secured Party, in its sole discretion, may declare all or any part of
the Obligations not payable on demand to be immediately due and payable, without
demand or notice of any kind, in the event of default. The provisions of this
clause are not intended in any way to affect any rights of Secured Party with
respect to Obligations which may now or hereafter be payable on demand.
12. REMEDIES
(1) Upon default, Secured Party may appoint or reappoint by instrument
in writing,
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any person or persons, whether an officer or officers or an employee or
employees of Secured Party or not, to be a receiver or receivers (hereinafter
called a "Receiver", which term when used herein shall include a receiver and
manager) of Collateral (including any interest, income or profits therefrom) and
may remove any Receiver so appointed and appoint another in his stead. Any such
Receiver shall, so far as concerns responsibility for his acts, be deemed the
agent of Debtor and not Secured Party, and Secured Party shall not be in any way
responsible for any misconduct, negligence or nonfeasance on the part of any
such Receiver, his servants, agents or employees. Subject to the provisions of
the instrument appointing him, any such Receiver shall have power to take
possession of Collateral, to preserve Collateral or its value, to carry on or
concur in carrying on all or any part of the business of Debtor and to sell,
lease or otherwise dispose of or concur in selling, leasing or otherwise
disposing of Collateral. To facilitate the foregoing powers, any such Receiver
may, to the exclusion of all others, including Debtor, enter upon, use and
occupy all premises owned or occupied by Debtor wherein Collateral may be
situate, maintain Collateral upon such premises, borrow money on a secured or
unsecured basis and use Collateral directly in carrying on Debtor's business or
otherwise, as such Receiver shall, in his discretion, determine. Except as may
be otherwise directed by Secured Party, all monies received from time to time by
such Receiver in carrying out his appointment shall be received in trust for and
paid over to Secured Party. Every such Receiver may, in the discretion of
Secured Party, be vested with all or any of the rights and powers of Secured
Party.
(2) Upon default, Secured Party may, either directly or through its
agents or nominees, exercise all the powers and rights given to a Receiver by
virtue of the foregoing subclause (1).
(3) Secured Party may take possession of, collect, demand, sue on,
enforce, recover and receive Collateral and give valid and binding receipts and
discharges therefor and in respect thereof and, upon default, Secured Party may
sell, lease or otherwise dispose of Collateral in such manner, at such time or
otherwise dispose of Collateral in such manner, at such time or times and place
or places, for such consideration and upon such terms and conditions as to
Secured Party may seem reasonable.
(4) In addition to those rights granted herein and in any other
agreement now or hereafter in effect between Debtor and Secured Party and in
addition to any other rights Secured Party may have at law or in equity, Secured
Party shall have, both before and after default, all rights and remedies of a
secured party under the P.P.S.A. Provided always that Secured Party shall not be
liable or accountable for any failure to exercise its remedies, take possession
of, collect, enforce, realize, sell, lease or otherwise dispose of Collateral or
to institute proceedings for such purposes. Furthermore, Secured Party shall
have no obligation to take any steps to preserve rights against prior parties to
any Instrument or Chattel Paper, whether Collateral or proceeds and whether or
not in Secured Party's possession and shall not be liable or accountable for
failure to do so.
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<PAGE> 10
(5) Debtor acknowledges that Secured Party or any Receiver appointed by
it may take possession of Collateral wherever it may be located and by any
method permitted by law and Debtor agrees upon request from Secured Party or any
such Receiver to assemble and deliver possession of Collateral at such place or
places as directed.
(6) Debtor agrees to pay all costs, charges and expenses reasonably
incurred by Secured Party or any Receiver appointed by it, whether directly or
for services rendered (including reasonable solicitors' and auditors' costs and
other legal expenses and Receiver remuneration), in operating Debtor's accounts,
in preparing or enforcing this Security Agreement, taking custody of,
preserving, repairing, processing, preparing for disposition and disposing of
Collateral and in enforcing or collecting Obligations and all such costs,
charges and expenses together with any monies owing as a result of any borrowing
by Secured Party or any Receiver appointed by it, as permitted hereby, shall be
a first charge on the proceeds of realization, collection or disposition of
Collateral and shall be secured hereby.
(7) Unless the Collateral in question is perishable or unless Secured
Party believes on reasonable grounds that the Collateral in question will
decline speedily in value, Secured Party will give Debtor such notice of the
date, time and place of any public sale or of the date after which any private
disposition of Collateral is to be made, as may be required by the P.P.S.A.
13. DISPOSITION OF MONIES
Subject to any applicable requirements of the P.P.S.A., all monies
collected or received by Secured Party pursuant to or in exercise of any right
it possesses with respect to Collateral shall be applied on account of the
Obligations in such manner as described in the Credit Agreement or, at the
option of Secured Party, may be held unappropriated in a collateral account or
released to Debtor, all without prejudice to the liability of Debtor or the
rights of Secured Party hereunder. Debtor hereby acknowledges that if the
disposition of all or any Collateral by Secured Party or a Receiver pursuant
hereto does not give rise to sufficient funds to pay all Obligations secured
hereby Debtor shall remain liable for any deficiency until all Obligations have
been paid or satisfied in full. Any surplus shall be accounted for as required
by law.
14. MISCELLANEOUS
(1) Debtor hereby authorizes Secured Party to file such financing
statements and other documents and do such acts, matters and things (including
completing and adding schedules hereto identifying Collateral or any Permitted
Liens affecting Collateral or identifying the locations at which Debtor's
business is carried on and Collateral and records
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relating thereto are situate) as Secured Party may deem appropriate to perfect
and continue the Security Interest, to protect and preserve Collateral and its
Security Interest in the Collateral and to realize upon the Security Interest
and Debtor hereby irrevocably constitutes and appoints each Vice-President from
time to time of Secured Party the true and lawful attorney of Debtor, with full
power of substitution, to do any of the foregoing in the name of Debtor whenever
and wherever it may be deemed necessary or expedient.
(2) Without limiting any other right of Secured Party, whenever the
Obligations are immediately due and payable or Secured Party has the right to
declare the Obligations to be immediately due and payable (whether or not it has
so declared), Secured Party may, in its sole discretion, set off against the
Obligations any and all monies then owed to Debtor by Secured Party in any
capacity, whether or not due, and Secured Party shall be deemed to have
exercised such right of set off immediately at the time of making its decision
to do so even though any charge therefor is made or entered on Secured Party's
records subsequent thereto.
(3) Upon Debtor's failure to perform any of its duties hereunder,
Secured Party may, but shall not be obligated to, perform any or all of such
duties, and Debtor shall pay to Secured Party, forthwith upon written demand
therefor, an amount equal to the expense incurred by Secured Party in so doing
plus interest thereon from the date such expense is incurred until it is paid at
the Overdue Rate.
(4) After default, Secured Party may grant extensions of time and other
indulgences, take and give up security, accept compositions, compound, comprise,
settle, grant releases and discharges and otherwise deal with Debtor, debtors of
Debtor, sureties and others and with Collateral and other security as Secured
Party may see fit without prejudice to the liability of Debtor or Secured
Party's right to hold and realize the Security Interest. Furthermore, Secured
Party may, after default, demand, collect and sue on Collateral in either
Debtor's or Secured Party's name, at Secured Party's option, and may endorse
Debtor's name on any and all cheques, commercial paper and any other Instruments
pertaining to or constituting Collateral.
(5) No delay or omission by Secured Party in exercising any right or
remedy hereunder or with respect to any Obligations shall operate as a waiver
thereof or of any other right or remedy, and no single or partial exercise
thereof shall preclude any other or further exercise thereof or the exercise of
any other right or remedy. Furthermore, Secured Party may remedy any default by
Debtor hereunder or with respect to any Obligations in any reasonable manner
without waiving the default remedied and without waiving any other prior or
subsequent default by Debtor. All rights and remedies of Secured Party granted
or recognized herein are cumulative and may be exercised at any time and from
time to time independently or in combination.
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(6) Debtor waives protest of any Instrument constituting Collateral at
any time held by Secured Party on which Debtor is in any way liable and, subject
to Clause 12(7), notice of any other action taken by Secured Party.
(7) This Security Agreement shall enure to the benefit of and be
binding upon the parties hereto and their respective heirs, executors,
administrators, successors and assigns. In any action brought by an assignee of
this Security Agreement and the Security Interest or any part thereof to enforce
any rights hereunder, Debtor shall not assert against the assignee any claim or
defence which Debtor now has or hereafter may have against Secured Party.
(8) Save for any schedules which may be added hereto pursuant to the
provisions hereof, no modification, variation or amendment of any provision of
this Security Agreement shall be made except by a written agreement executed by
the parties hereto and no waiver of any provision hereof shall be effective
unless in writing.
(9) This Security Agreement and the transactions evidenced hereby shall
be governed by and construed in accordance with the laws of the Province of
Ontario as the same may from time to time be in effect, including, where
applicable, the P.P.S.A.
(10) Subject to the requirements of Clauses 12(7) and 14(11) hereof,
whenever either party hereto is required or entitled to notify or direct the
other or to make a demand or request upon the other, such notice, direction,
demand or request shall be in writing shall be sufficiently given only if
delivered to the party for whom it is intended at the principal address of such
party herein set forth or as changed pursuant hereto or if sent by prepaid
registered mail addressed to the party for whom it is intended at the principal
address of such party herein set forth or as changed pursuant hereto. Either
party may notify the other pursuant hereto of any change in such party's
principal address to be used for the purposes hereof.
(11) This Security Agreement and the security afforded hereby is in
addition to and not in substitution for any other security now or hereafter held
by Secured Party and is, and is intended to be, a continuing Security Agreement
and shall remain in full force and effect until the Obligations have been paid
and satisfied in full.
(12) The headings used in this Security Agreement are for convenience
only and are not to be considered a part of this Security Agreement and do not
in any way limit or amplify the terms and provisions of this Security Agreement.
(13) When the context so requires, the singular number shall be read as
if the plural were expressed and the provisions hereof shall be read with all
grammatical changes necessary dependent upon the person referred to being a
male, female, firm or corporation.
(14) If any provisions of this Security Agreement, as amended from time
to time, shall be deemed invalid or void, in whole or in part, by any court of
competent jurisdiction,
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the remaining terms and provisions of this Security Agreement shall remain in
full force and effect.
(15) Nothing herein contained shall in any way obligate Secured Party
to grant, continue, renew, extend time for payment of or accept anything which
constitutes or would constitute Obligations.
(16) The Security Interest created hereby is intended to attach when
this Security Agreement is signed by Debtor and delivered to Secured Party.
15. COPY OF AGREEMENT
Debtor hereby acknowledges receipt of a copy of this Security
Agreement.
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IN WITNESS WHEREOF Debtor has executed this Security Agreement this
14th day of May, 1999.
BMG NORTH AMERICA LIMITED
By:
-----------------------------------
Name:
Title:
Agreed to and Accepted by:
FIRST CHICAGO NBD BANK, CANADA, as
the Affiliate designated by NBD Bank
to make Canadian Advances and as
collateral agent for the Lenders for
the purpose of holding this security
as specified in the Credit Agreement
By:
Its:
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EXHIBIT 4.4
Form of Amended and Restated Guaranty Agreement
The following document is the form of Amended and Restated Guaranty
Agreement in favor of NBD Bank (now known as Bank One, Michigan) executed by the
following subsidiaries of the Registrant: Creative Fabrication Corporation,
Concept Management Corporation, Lobdell Emery Corporation, OASP, Inc., OASP II,
Inc., Winchester Fabrication Corporation, Parallel Group International, Inc.,
Laserweld International, L.L.C., Lewis Emery Capital Corporation, RPI Holdings,
Inc., RPI, Inc., Prudenville Manufacturing, Inc. Oxford Suspension, Inc., and
Howell Industries, Inc. The agreements are substantially the same in all
material respects except as to the identity of the parties thereto.
<PAGE> 2
AMENDED AND RESTATED GUARANTY AGREEMENT
THIS AMENDED AND RESTATED GUARANTY AGREEMENT, dated as of May 14, 1999
(this "Guaranty"), is made by LOBDELL EMERY CORPORATION, a Michigan corporation,
WINCHESTER FABRICATION CORPORATION, a Michigan corporation, CREATIVE FABRICATION
CORPORATION, a Tennessee corporation, PARALLEL GROUP INTERNATIONAL, INC., an
Indiana corporation, LASERWELD INTERNATIONAL, L.L.C., an Indiana limited
liability company, CONCEPT MANAGEMENT CORPORATION, a Michigan corporation, LEWIS
EMERY CAPITAL CORPORATION, a Michigan corporation, OASP, INC., a Michigan
corporation, and OASP II, Inc., a Michigan corporation, RPI Holdings, Inc., a
Michigan corporation, RPI, Inc., a Michigan corporation, Prudenville
Manufacturing, Inc., a Michigan corporation, Oxford Suspension, Inc., a Michigan
corporation and Howell Industries, Inc., a Michigan corporation, (the foregoing
are hereinafter sometimes referred to individually as a "Guarantor" and
collectively as the "Guarantors"), in favor of the lenders (the "Lenders") which
are parties to the Credit Agreement hereinafter defined and NBD BANK, a Michigan
banking corporation, as agent (in such capacity, the "Agent") for such Lenders
under the Credit Agreement.
RECITALS
A. Certain of the Guarantors have entered into a Guaranty Agreement
dated as of June 24, 1997, as amended, in favor of the Agent for the benefit of
the Agent and the Lenders (as amended or modified or modified from time to time,
the "Prior Guaranty"), in connection with that certain Credit Agreement among
Oxford Automotive, Inc., a Michigan corporation (the "Borrower") and the
Borrowing Subsidiaries identified from time to time therein (the "Borrowing
Subsidiaries" and collectively with the Borrower, the "Borrowers") with the
Lenders party thereto and the Agent, dated as of June 24, 1997.
B. The Borrowers have entered into an Amended and Restated Credit
Agreement of even date herewith (as amended or modified from time to time,
including any agreement entered into in substitution therefor, the "Credit
Agreement"), with the Lenders parties thereto and the Agent pursuant to which
the Lenders may make Advances (as therein defined) to the Borrower and the
Borrowing Subsidiaries.
C. As a condition to the effectiveness of the obligations of the
Lenders under the Credit Agreement, each Guarantor is required to guarantee,
among other things, the obligations of the Borrower and the Borrowing Subsidiary
in respect of the Advances and other obligations of the Borrower and the
Borrowing Subsidiary under the Operative Documents (as hereinafter defined).
D. Each Guarantor has reviewed the Credit Agreement, the Notes, the
Letters of
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Credit and all other documents, agreements, instruments and certificates
furnished by or on behalf of the Borrower and the Borrowing Subsidiary in
connection therewith, including without limitation all interest rate swap, cap
and similar agreements with any Lender (collectively, the "Swap Documents") (all
of the foregoing, as amended or modified from time to time and together with any
agreements or instruments in replacement thereof, being herein collectively
referred to as the "Operative Documents"), and each Guarantor has determined
that it is in its interest and to its financial benefit that the parties to the
Operative Documents enter into the transactions contemplated thereby.
AGREEMENTS
For valuable consideration, the receipt and sufficiency of which are
hereby acknowledged and as further consideration, and as an inducement to the
Lenders and the Agent to maintain the credit facilities established by the
Operative Documents, each Guarantor agrees with the Lenders and the Agent as
follows:
1. Guarantee of Obligations. (a) Each Guarantor hereby (i) guarantees,
as principal obligor and not as surety only, the prompt and complete payment of
all indebtedness and other obligations of the Borrower and the Borrowing
Subsidiaries now or hereafter owing to the Lenders or the Agent under or on
account of the Credit Agreement, any Security Document or any Letter of Credit,
notes or other instruments issued to the Agent or any Lender pursuant thereto,
or any other Loan Document, (ii) the prompt and complete payment of all Hedging
Obligations of any Borrower or Guarantor owing to any Lender or any Affiliate of
any Lender and (iii) the prompt and complete payment of all indebtedness and
obligations of the Borrower pursuant to the Mexican Facility Tranche A Guaranty,
(iv) the prompt and complete payment of all indebtedness of the Company and any
other Guarantor under any Guaranty, in all cases, of any kind or nature,
howsoever created or evidenced and whether now or hereafter existing, direct or
indirect (including without limitation any participation interest acquired by
any Lender in any such indebtedness, obligations or liabilities of the Borrower
or any Borrowing Subsidiary to any other person), absolute or contingent, joint
and/or several, secured or unsecured, arising by operation of law or otherwise,
and whether incurred by the Borrower or any Borrowing Subsidiary as principal,
surety, endorser, guarantor, accommodation party or otherwise, including without
limitation all principal and all interest (including any interest accruing
subsequent to any petition filed by or against the Borrower or any Borrowing
Subsidiary under the U.S. Bankruptcy Code), indemnity and reimbursement
obligations, charges, expenses, fees, attorneys' fees and disbursements and any
other amounts owing thereunder (all of the aforesaid indebtedness, obligations
and liabilities of the Company and its Subsidiaries being herein called the
"Secured Obligations", and all of the documents, agreements and instruments
among the Company, the Subsidiaries, the Agent, the Lenders, or any of them,
evidencing or securing the repayment of, or otherwise pertaining to, the Secured
Obligations being herein collectively called the "Operative Documents"); and (v)
agrees to make prompt payment, on demand, of any and all reasonable costs and
expenses incurred by the Lenders or the Agent in connection with enforcing the
obligations of any Guarantor hereunder, including, without limitation, the
reasonable fees and disbursements of counsel (all of the foregoing being
collectively referred to as the "Guaranteed Obligations").
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(b) If for any reason any duty, agreement or obligation of the
Borrower or the Borrowing Subsidiary contained in any Operative Document shall
not be performed or observed by the Borrower or the Borrowing Subsidiary as
provided therein, or if any amount payable under or in connection with any
Operative Document shall not be paid in full when the same becomes due and
payable, each Guarantor undertakes, but without duplication, to perform or cause
to be performed promptly each of such duties, agreements and obligations and to
pay forthwith each such amount to the Agent for the account of the Lenders
regardless of any defense or setoff or counterclaim which the Borrower or the
Borrowing Subsidiary or the Guarantor may have or assert, and regardless of any
other condition or contingency.
2. Nature of Guaranty. This Guaranty is an absolute and unconditional
and irrevocable guaranty of payment and not a guaranty of collection and is
wholly independent of and in addition to other rights and remedies of the
Lenders and the Agent and is not contingent upon the pursuit by the Lenders and
the Agent of any such rights and remedies, such pursuit being hereby waived by
each Guarantor.
3. Waivers and Other Agreements. Each Guarantor hereby unconditionally
(a) waives any requirement that the Lenders or the Agent, upon the occurrence of
an Event of Default first make demand upon, or seek to enforce remedies against
the Borrower or the Borrowing Subsidiary before demanding payment under or
seeking to enforce this Guaranty, (b) covenants that this Guaranty will not be
discharged except by complete performance of all obligations of the Borrower or
the Borrowing Subsidiary contained in the Operative Documents, (c) agrees that
this Guaranty shall remain in full force and effect without regard to, and shall
not be affected or impaired, without limitation, by any invalidity, irregularity
or unenforceability in whole or in part of any of the Operative Documents or any
of the Guaranteed Obligations, or any limitation on the liability of the
Borrower or the Borrowing Subsidiary thereunder, or any limitation on the method
or terms of payment thereunder which may or hereafter be caused or imposed in
any manner whatsoever (including, without limitation, usury laws), (d) waives
diligence, presentment and protest with respect to, and any notice of default or
dishonor in the payment of any amount at any time payable by the Borrower or the
Borrowing Subsidiary under or in connection with any of the Operative Documents,
and further waives notice of any of the matters referred to in paragraph 4
below, and further waives all notices which may be required by statute, rule of
law or otherwise to preserve any rights of the Lenders or the Agent, including
without limitation any requirement of notice of acceptance of, or other
formality relating to this Guaranty and (e) agrees that the Guaranteed
Obligations shall include any amounts paid by the Borrower or the Borrowing
Subsidiary to the Lenders or the Agent which may be required to be returned to
the Borrower or the Borrowing Subsidiary or to its representative or to a
trustee, custodian or receiver for the Borrower or the Borrowing Subsidiary.
4. Obligations Absolute. The obligations, covenants, agreements and
duties of any Guarantor under this Guaranty shall not be released, affected or
impaired by any of the following whether or not undertaken with notice to or
consent of any Guarantor: (a) an assignment or transfer, in whole or in part, of
any of the Guaranteed Obligations or any of the Operative Documents although
made without notice to or consent of any Guarantor, or (b) any waiver by
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<PAGE> 5
any Lender or the Agent or by any other person, of the performance or observance
by the Borrower or the Borrowing Subsidiary of any of the agreements, covenants,
terms or conditions contained in any of the Operative Documents, or (c) any
indulgence in or the extension of the time for payment by the Borrower or the
Borrowing Subsidiary of any amounts payable under or in connection with any of
the Operative Documents, or of the time for performance by the Borrower or the
Borrowing Subsidiary of any other obligations under or arising out of any of the
Operative Documents, or the extension or renewal thereof, or (d) the
modification, amendment or waiver (whether material or otherwise) of any duty,
agreement or obligation of the Borrower or the Borrowing Subsidiary set forth in
any of the Operative Documents (the modification, amendment or waiver from time
to time of any of the Operative Documents to which the Borrower or the Borrowing
Subsidiary is a party being expressly authorized without further notice to or
consent of any Guarantor), or (e) the voluntary or involuntary liquidation, sale
or other disposition of all or substantially all of the assets of the Borrower
or the Borrowing Subsidiary or any receivership, insolvency, bankruptcy,
reorganization, or other similar proceedings, affecting the Borrower or any of
its assets or the Borrowing Subsidiary or any of its assets, or (f) the merger
or consolidation of the Borrower or the Borrowing Subsidiary with or into any
other person or any transfer or other disposition of any shares of capital stock
of the Borrower or the Borrowing Subsidiary by the holder thereof, or (g) the
release of discharge of the Borrower, the Borrowing Subsidiary or any other
obligor from the performance or observance of any agreement, covenant, term or
condition contained in any Operative Document, by operation of law, (h) the
release of any security, if any, for the obligations of the Borrower or the
Borrowing Subsidiary under any of the Operative Documents, or the impairment of
or failure to perfect an interest in any such security, or (i) the running of
any limitations period otherwise applicable, or (j) any exercise or non-exercise
of any right, remedy, power or privilege in respect of this Guaranty or any of
the Operative Documents, including without limitation the release, discharge, or
variance of the liability of any Guarantor, or (k) any other cause whether
similar or dissimilar to the foregoing which would release, affect or impair the
obligations, covenants, agreements or duties of the Guarantor hereunder.
5. Joint and Several Obligations. The obligations of the Guarantors
hereunder shall be several and also joint each with all or with any one or more
of the other parties now or hereafter guaranteeing any of the Guaranteed
Obligations, and such obligations of the Guarantors may be enforced against each
Guarantor separately or against any two or more jointly, or against some
separately and some jointly.
6. No Investigation by Lenders or Agent. Each of the Guarantors hereby
waives unconditionally any obligation which, in the absence of such provision,
the Lenders or the Agent might otherwise have to investigate or to assure that
there has been compliance with the law of any jurisdiction with respect to the
Guaranteed Obligations recognizing that, to save both time and expense, each
Guarantor has requested that the Lenders and the Agent not undertake such
investigation. Each Guarantor hereby expressly confirms that the obligations of
such Guarantor hereunder shall remain in full force and effect without regard to
compliance or noncompliance with any such law and irrespective of any
investigation or knowledge of any Lender or the Agent of any such law.
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<PAGE> 6
7. Indemnity. As a separate, additional and continuing obligation, each
Guarantor unconditionally and irrevocably undertakes and agrees with the Lenders
and the Agent that, should the Guaranteed Obligations not be recoverable from
any Guarantor under paragraph 1 hereof for any reason whatsoever (including,
without limitation, by reason of any provision of the Operative Document being
or becoming void, unenforceable, or otherwise invalid under any applicable law)
then, notwithstanding any knowledge thereof by any Lender or the Agent at any
time, each Guarantor as sole, original and independent obligor, upon demand by
the Agent, will make payment to the Agent for the account of the Lenders and the
Agent of the Guaranteed Obligations by way of a full indemnity in such currency
and otherwise in such manner as is provided in the Operative Documents.
8. Subordination. Each Guarantor agrees that any present or future
indebtedness, obligations or liabilities of the Borrower and the Borrowing
Subsidiary to such Guarantor shall be fully subordinate and junior in right and
priority of payment to any present or future indebtedness, obligations or
liabilities of the Borrower and the Borrowing Subsidiary to the Lenders and the
Agent. Each Guarantor waives any right of subrogation to the rights of any
Lender or the Agent against any Borrower or any Borrowing Subsidiary or any
other person obligated for payment of the Guaranteed Obligations and any right
of reimbursement or indemnity whatsoever arising or accruing out of any payment
which such Guarantor may make pursuant to this Guaranty and the Notes, and any
right of recourse to security for the debts and obligations of each Borrower and
any Borrowing Subsidiary, unless and until the entire principal balance of and
interest on the Guaranteed Obligations shall have been paid in full.
9. Representations, Warranties and Other Agreements. Each Guarantor
represents and warrants that (a) the execution, delivery and performance by such
Guarantor of this Guaranty are within its corporate powers, have been duly
authorized by all necessary corporate action, require no action by or in respect
of, or filing with, any governmental body, and do not contravene, or constitute
a default under, any provision of applicable law or regulation or of the
articles of incorporation or other charter documents or bylaws of such
Guarantor, or of any agreement, judgment, injunction, order, decree or other
instrument binding upon such Guarantor or its property; (b) this Guaranty has
been duly executed and constitutes a legal, valid and binding obligation of such
Guarantor, enforceable against such Guarantor in accordance with its terms,
except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to creditors' rights
and except that the remedy of specific performance and injunctive and other
forms of equitable relief are subject to equitable defenses and to the
discretion of the court for which any proceedings may be brought; and (c) as of
the date hereof, each of the following is true and correct for such Guarantor:
(i) the fair saleable value and the fair valuation of such Guarantor's property
is greater than the total amount of its liabilities (including contingent
liabilities) and greater than the amount that would be required to pay its
probable aggregate liability on its existing debts as they become absolute and
matured, (ii) such Guarantor's capital is not unreasonably small in relation to
its current and/or contemplated business or other undertaken transactions, and
(iii) such Guarantor does not intend to incur, or believe that it will incur,
debt beyond its ability to pay such debts as they become due; and (d) each of
the representations and warranties set forth in Article IV of the Credit
Agreement are true and correct with respect to such Guarantor.
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<PAGE> 7
10. Remedies. (a) Upon the occurrence and during the continuance of any
Event of Default, the Lenders, or the Agent on behalf of the Lenders, may, in
addition to the remedies provided in the Operative Documents, enforce its rights
either by suit in equity, or by action at law, or by other appropriate
proceedings, whether for the specific performance (to the extent permitted by
law) of any covenant or agreement contained in this Guaranty or in aid of the
exercise of any power granted in this Guaranty and may enforce payment under
this Guaranty and any of its other rights available at law or in equity.
(b) Upon the occurrence and during the continuance of any Event of
Default hereunder, the Lenders are hereby authorized at any time and from time
to time, without notice to any Guarantor (any requirement for such notice being
expressly waived by each Guarantor) to set off and apply against any and all of
the obligations of the Guarantors now or hereafter existing under this Guaranty
any and all deposits (general or special, time or demand, provisional or final)
at any time held and other indebtedness at any time owing by the Lenders to or
for the credit or the account of the Guarantors and any property of the
Guarantors from time to time in possession of the Lenders, irrespective of
whether or not the Lenders shall have made any demand hereunder and although
such obligations may be contingent and unmatured. The rights of the Lenders
under this paragraph 10(b) are in addition to other rights and remedies
(including, without limitation, other rights of setoff) which the Lenders may
have.
(c) To the extent that it lawfully may, each Guarantor agrees that
it will not at any time insist upon or plead, or in any manner whatever claim or
take any benefit or advantage of any applicable present or future stay,
extension or moratorium law, which may affect observance or performance of the
provisions of this Guaranty, or any of the Operative Documents nor will it
claim, take or insist upon any benefit or advantage of any present or future law
providing for the evaluation or appraisal of any security for its obligations
hereunder or the obligations of the Borrower and the Borrowing Subsidiary under
the Operative Documents prior to any sale or sales thereof which may be made
under or by virtue of any instrument governing the same.
11. Amendments, Etc. This Guaranty may be amended from time to time
and any provision hereof may be waived in accordance with the requirements of
Section 8.1 of the Credit Agreement. No such amendment or waiver of any
provision of this Guaranty nor consent to any departure by any Guarantor
therefrom shall in any event be effective unless the same shall be in writing
and signed by the Required Lenders or all of the Lenders, as the case may be,
and, to the extent any rights or duties of the Agent may be affected, the Agent,
and then such amendment, waiver of consent shall be effective only in the
specific instance and for the specific purpose for which given.
12. Effect of Agreement. This Guaranty Agreement and the guaranty
afforded hereby is in addition to and not in substitution for any other guaranty
now or hereafter held by Agent and is, and is intended to be, a continuing
Guaranty Agreement and shall remain in full force and effect until the
Guaranteed Obligations have been paid and satisfied in full.
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<PAGE> 8
13. Notices. All notices, demands, requests, consents and other
communications hereunder shall be in writing and shall be delivered or sent to
all or any of the Guarantors and to the Lenders and the Agent at the respective
addresses for notice set forth in Section 8.2 of the Credit Agreement or to such
other address as may be designated by the Guarantors, the Agent or any Lender by
notice to the other parties hereto. All notices and other communications shall
be made in accordance with Section 8.2 of the Credit Agreement.
14. Conduct No Waiver; Remedies Cumulative. The obligations of each
Guarantor under this Guaranty are continuing obligations and a separate and
independent cause of action shall arise in respect of each enforcement hereunder
and default hereunder or under the Credit Agreement. No course of dealing on the
part of any Lender or the Agent, nor any delay or failure on the part of any
Lender or the Agent in exercising any right, power or privilege hereunder shall
operate as a waiver of such right, power or privilege or otherwise prejudice the
rights and remedies of the Lenders and the Agent hereunder; nor shall any single
or partial exercise thereof preclude any further exercise thereof or the
exercise of any other right, power or privilege. No right or remedy conferred
upon or reserved to the Lenders or the Agent under this Guaranty is intended to
be exclusive of any other right or remedy, and every right and remedy shall be
cumulative and in addition to every other right or remedy given hereunder or now
or hereafter existing under any applicable law. Every right and remedy given by
this Guaranty or by applicable law to the Lenders or the Agent may be exercised
from time to time and as often as may be deemed expedient by them.
15. Reliance on and Survival of Various Provisions. All terms,
covenants, agreements, representations and warranties of each Guarantor made
herein or in any certificate or other document delivered pursuant hereto shall
be deemed to be material and to have been relied upon by the Lenders and the
Agent, notwithstanding any investigation heretofore or hereafter made by any
Lender or the Agent or on its behalf.
16. Successors and Assigns. The rights and remedies of the Lenders and
the Agent hereunder shall inure to the benefit of the Lenders and the Agent and
their respective successors and assigns, and the duties and obligations of each
Guarantor hereunder shall be binding upon such Guarantor and its successors and
assigns. No assignment of this Guaranty by any Guarantor shall be permitted
unless the prior written consent of the Lenders is obtained.
17. Survival of Lenders' Rights and Remedies. Notwithstanding any
provision of this Guaranty to the contrary, the execution and delivery by the
Guarantors of this Guaranty, and the Lenders' and the Agent's acceptance
thereof, shall not be deemed to (a) be a consent to any action, whether
heretofore or hereafter taken, by the Borrower or the Borrowing Subsidiary in
violation of any provision of any Operative Document, (b) be a waiver of any
provision of any Operative Document or (c) prejudice any rights or remedies
which the Lenders and the Agent may now have or have in the future under or in
connection with any Operative Document, including without limitation any such
rights or remedies with respect to any Event of Default or event causing or
permitting acceleration under any Operative Document which may heretofore have
occurred and be continuing or may hereafter occur.
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<PAGE> 9
18. Governing Law; Consent to Jurisdiction. This Guaranty is a contract
made under, and the rights and obligations of the parties hereunder, shall be
governed by and construed in accordance with, the laws of the State of Michigan
applicable to contracts to be made and to be performed entirely with such State.
Each Guarantor further agrees that any legal action or proceeding brought with
respect to this Guaranty or the transactions contemplated hereby may be brought
in any court of the State of Michigan, or any court of the United States of
America sitting in Michigan, and each Guarantor hereby irrevocably submits to
and accepts generally and unconditionally the jurisdiction and venue of those
courts with respect to its person and property.
19. Definitions; Headings. Terms used but not defined herein shall have
the respective meanings ascribed thereto in the Credit Agreement. The headings
of the various subdivisions hereof are for convenience of reference only and
shall in no way modify any of the terms or provisions hereof.
20. Integration; Severability; Enforceability. This Guaranty embodies
the entire agreement and understanding among the Guarantors, the Lenders and the
Agent, and supersedes all prior agreements and understandings, relating to the
subject matter hereof. If any one or more provisions of this Guaranty should be
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein shall not in any way
be affected, impaired, prejudiced or disturbed thereby. If at any time any
portion of the obligations of any Guarantor under this Guaranty shall be
determined by a court of competent jurisdiction to be invalid, unenforceable or
avoidable, the remaining portion of the obligations of such Guarantor and each
other Guarantor under this Guaranty shall not in any way be affected, impaired,
prejudiced or disturbed thereby and shall remain valid and enforceable to the
fullest extent permitted by applicable law. If at any time all or any portion of
the obligations of any Guarantor under this Guaranty would otherwise be
determined by a court of competent jurisdiction to be invalid, unenforceable or
avoidable under Section 548 of the federal Bankruptcy Code or under a similar
applicable law of any jurisdiction, then notwithstanding any other provisions of
this Guaranty to the contrary such obligation or portion thereof of such
Guarantor under this Guaranty shall be limited to the greatest of (i) the value
of any quantifiable economic benefits accruing to such Guarantor as a result of
this Guaranty, (ii) an amount equal to 95% of the excess on the date the
relevant Guaranteed Obligations were incurred of the present fair saleable value
of the assets of such Guarantor over the amount of all liabilities of such
Guarantor, contingent or otherwise, other than under this Guaranty and (iii) the
maximum amount for which this Guaranty is determined to be enforceable.
21. Reinstatement. This Guaranty shall remain in full force and effect
and continue to be effective in the event any petition be filed by or against
the Borrower, the Borrowing Subsidiary or any Guarantor for liquidation or
reorganization, in the event the Borrower, the Borrowing Subsidiary or any
Guarantor becomes insolvent or makes an assignment for the benefit of creditors
or in the event a receiver or trustee be appointed for all or any significant
part of any Borrower's, any Borrowing Subsidiary's or any Guarantor's assets,
and shall continue to be effective or be reinstated, as the case may be, if at
any time payment and performance of the Guaranteed Obligations, or any part
thereof, is, pursuant to applicable law, rescinded or reduced
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<PAGE> 10
in amount, or must otherwise be restored or returned by the Agent or any Lender,
whether as a "voidable preference", "fraudulent conveyance", or otherwise, all
as though such payment or performance had not been made. In the event that any
payment, or any part thereof, is rescinded, reduced, restored or returned, the
Guaranteed Obligations shall be reinstated and deemed reduced only by such
amount paid and not so rescinded, reduced, restored or returned.
22. Counterpart Execution. This Guaranty may be signed upon any number
of counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument. This Guaranty
shall become effective as to each Guarantor when a counterpart hereof shall have
been signed by such Guarantor.
23. Waiver of Jury Trial. The Agent, the Lenders and each of the
Guarantors, after consulting or having had the opportunity to consult with
counsel, knowingly, voluntarily and intentionally waive any right any of them
may have to a trial by jury in any litigation based upon or arising out of this
Guaranty or any related instrument or agreement or any of the transactions
contemplated by this Guaranty. Neither the Agent, any Lender nor any Guarantor
shall seek to consolidate, by counterclaim or otherwise, any such action in
which a jury trial has been waived with any other action in which a jury trial
cannot be or has not been waived. These provisions shall not be deemed to have
been modified in any respect or relinquished by the Agent, any Lender or any
Guarantor except by a written instrument executed by all of them.
IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be duly
executed and delivered as of the day and year first above written.
LOBDELL EMERY CORPORATION
By:
Its:
WINCHESTER FABRICATION CORPORATION
By:
Its:
CREATIVE FABRICATION CORPORATION
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<PAGE> 11
By:
Its:
PARALLEL GROUP INTERNATIONAL, INC.
By:
Its:
LASERWELD INTERNATIONAL, L.L.C.
By: Lobdell Emery Corporation, its sole member
By:
Its:
CONCEPT MANAGEMENT CORPORATION
By:
Its:
LEWIS EMERY CAPITAL CORPORATION
By:
Its:
OASP, INC.
By:
Its:
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<PAGE> 12
OASP II, INC.
By:
Its:
RPI HOLDINGS, INC.
By:
Its:
RPI, INC.
By:
Its:
PRUDENVILLE MANUFACTURING, INC.
By:
Its:
OXFORD SUSPENSION, INC.
By:
Its:
HOWELL INDUSTRIES, INC.
By:
Its:
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<PAGE> 1
EXHIBIT 4.5
Form of Amended and Restated Guarantee
The following document is the form of Amended and Restated Guarantee in
favor of NBD Bank (now known as Bank One, Michigan) executed by the following
subsidiaries of the Registrant: BMG North America Limited, BMG Holdings Inc.,
976459 Ontario Limited, 829500 Ontario Limited, and Oxford Suspension Ltd. The
agreements are substantially the same in all material respects except as to the
identity of the parties thereto.
<PAGE> 2
AMENDED AND RESTATED GUARANTEE
This Amended and Restated Agreement of Guarantee, dated the
14th day of May, 1999 is by 976459 Ontario Limited, a corporation incorporated
pursuant to the laws of the Province of Ontario, 829500 Ontario Limited, a
corporation incorporated pursuant to the laws of the Province of Ontario, and
BMG Holdings, Inc., a corporation incorporated pursuant to the laws of the
Province of Ontario (individually a "Guarantor", and collectively the
"Guarantors") in favour of the Lenders (as defined below) and NBD Bank, as Agent
for the Lenders (in such capacity, the "Agent").
RECITALS
A. Oxford Automotive, Inc., a corporation incorporated
pursuant to the laws of the State of Michigan (the "Company") and BMG North
America Limited, a corporation incorporated pursuant to the laws of the Province
of Ontario or any other subsidiary designated as a Borrowing Subsidiary (the
"Borrowing Subsidiary") have entered into an Amended and Restated Credit
Agreement dated as of the date hereof (as amended or modified from time to time,
the "Credit Agreement") among the lenders party thereto from time to time (the
"Lenders") and the Agent.
B. Each of the Guarantors have reviewed the Credit Agreement,
the Notes, the Security Documents and all other documents, agreements,
instruments and certificates furnished by or on behalf of the Company in
connection therewith at any time, including without limitation all Hedging
Agreements and together with any other documents, agreements, instruments and
certificates evidencing or otherwise pertaining to the Obligations (as
hereinafter defined) (collectively, the "Loan Documents"), and each of the
Guarantors has determined that it is in its interest and to its financial
benefit that the parties to the Loan Documents enter into the transactions
contemplated hereby.
C. It is a condition to the Credit Agreement that the
Guarantors enter into this Agreement in order to assist the Company and the
Borrowing Subsidiary, for the benefit of the Company, the Borrowing Subsidiary
and the Guarantors.
In consideration of the premises hereof, the Guarantors
covenant and agree with the Agent and the Lenders as follows:
1. Guarantee
Each of the Guarantors, for good and valuable consideration
received, hereby absolutely, irrevocably and unconditionally binds and obliges
itself solidarily with the Company and the Borrowing Subsidiary in favour of
each of the Lenders and the Agent, for the fulfilment when due, whether at
stated maturity, by acceleration or otherwise, and (i) guarantees, as
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<PAGE> 3
principal obligor and not as surety only, the prompt and complete payment of all
indebtedness and other obligations of the Company and the Borrowing Subsidiaries
now or hereafter owing to the Lenders or the Agent under or on account of the
Credit Agreement, any Security Document or any Letter of Credit, notes or other
instruments issued to the Agent or any Lender pursuant thereto, or any other
Loan Document, (ii) the prompt and complete payment of all Hedging Obligations
of the Company, any Borrowing Subsidiary or Guarantor owing to any Lender or any
Affiliate of any Lender and (iii) the prompt and complete payment of all
indebtedness and obligations of the Company pursuant to the Mexican Facility
Tranche A Guaranty, (iv) the prompt and complete payment of all indebtedness of
that Guarantor and any other Guarantor under any Guaranty, in all cases, of any
kind or nature, howsoever created or evidenced and whether now or hereafter
existing, direct or indirect (including without limitation any participation
interest acquired by any Lender in any such indebtedness, obligations or
liabilities of the Company or any Borrowing Subsidiary to any other person),
absolute or contingent, joint and/or several, secured or unsecured, arising by
operation of law or otherwise, and whether incurred by the Company or any
Borrowing Subsidiary as principal, surety, endorser, guarantor, accommodation
party or otherwise, including without limitation all principal and all interest
(including any interest accruing subsequent to any petition filed by or against
the Company or any Borrowing Subsidiary under the U.S. Bankruptcy Code),
indemnity and reimbursement obligations, charges, expenses, fees, attorneys'
fees and disbursements and any other amounts owing thereunder (all such
indebtedness, obligations and liabilities being herein collectively called the
"Obligations"). Each of the Guarantors shall be considered as primarily liable
to the Lenders and the Agent, and shall not be released nor its liability
hereunder limited or lessened by any variation or departure from the provisions
of this Agreement nor by the Lenders or the Agent's granting time, taking or
giving up securities, accepting compositions, granting releases or discharges,
or otherwise dealing with any Person, nor by any other thing whatsoever, either
of a like nature to the foregoing or otherwise whereby as guarantor only, a
Guarantor would or might be released, and none of the Lenders or the Agent shall
be bound to exhaust its recourses against the Company, the Borrowing Subsidiary
or any other Person or any security it may hold before being entitled to payment
from each of the Guarantors. Each of the Guarantors hereby expressly waives all
of its rights to the benefits of division and of discussion. The Guarantors
covenant and agree that until such time as each of the Lenders and the Agent
shall have been indefeasibly paid in full all Obligations, no payment will be
taken, demanded, received or accepted by a Guarantor of or on account of the
principal amount of or interest of any indebtedness incurred by a Guarantor in
fulfilment of its obligations under this Agreement or on any other indebtedness
payable by the Company or the Borrowing Subsidiary, each of the Guarantors
agreeing that this said indebtedness shall, at all times, be fully subordinated
to and rank in time and right of payment junior to the Obligations, and each of
the Guarantors hereby renounces any rights of compensation and/or set-off and/or
counterclaim. Each of the Guarantors hereby expressly postpones all of its
rights to the benefit of subrogation until full repayment of the Obligations and
the termination of all Letters of Credit, Acceptances and Commitments. Each of
the Guarantors hereby determines and agrees that the execution, delivery and
performance of this Agreement by such Guarantor is necessary and convenient to
the conduct, promotion or attainment of the business of the Company, the
Borrowing Subsidiary and the Guarantor and in furtherance of the corporate
purposes of the Guarantor.
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<PAGE> 4
2. Guarantee Absolute
Each of the Guarantors guarantees that the Obligations will be
paid strictly in accordance with the terms of this Agreement, regardless of any
Law, regulation, or order now or hereafter in effect in any jurisdiction
affecting any of such terms or the rights of the Agent or the Lenders with
respect thereto. The liability of each of the Guarantors under this Agreement
shall be absolute and unconditional irrespective of:
(i) any lack of validity or enforceability of any provisions
of any Loan Document or any other agreement or instrument
relating to this Agreement;
(ii) any change in the time, manner or place of payment of or
in any other term of, all or any of the Obligations or any
other amendment, restatement or waiver of or any consent to
departure from this Agreement;
(iii) any exchange, release or non-perfection of any
collateral or any release or amendment or waiver of or consent
to departure from any other guarantee, for all or any of the
Obligations;
(iv) the reconstruction, reorganization, consolidation,
amalgamation or merger of the Company or the Borrowing
Subsidiary with or into any other Person, or the transfer,
sale, lease or other disposition by the Company or the
Borrowing Subsidiary of all or substantially all of its assets
or business to any other Person, whether or not affected in
compliance with the provisions of this Agreement; or
(v) any other circumstance which might otherwise constitute a
defence available to, or a discharge of, the Company, the
Borrowing Subsidiary or a guarantor.
The liability of each of the Guarantors under this Agreement
shall continue to be effective or be reinstated, as the case may be, if at any
time any payment of any of the Obligations is rescinded or must otherwise be
returned by the Agent or any Lender upon the insolvency, bankruptcy or
reorganization or otherwise of the Company or the Borrowing Subsidiary, all as
though such payment had not been made.
3. Waiver
Each of the Guarantors hereby waives promptness, diligence,
notice of acceptance and any other notice with respect to any of the Obligations
and its liability hereunder and any requirement that the Agent or any Lender
protect, secure, perfect or insure any Lien, if any, or any property subject
thereto or exhaust any right or take any action against the Company or the
Borrowing Subsidiary or any other Person or any collateral.
4. Continuing Guarantee
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<PAGE> 5
The obligations of each of the Guarantors under this Article
Agreement shall be a continuing guarantee and shall:
(i) remain in full force and effect until payment in full of
the Obligations and all other amounts payable under this
Agreement;
(ii) be binding upon each of the Guarantors, their successors
and assigns; and
(iii) enure to the benefit of and be enforceable by the
Lenders, the Agent and their respective successors,
transferees and assigns.
Without limiting the generality of the foregoing clause (iii),
upon any assignment by any Lender of all or any part of any interest in this
Agreement by it to any other Person in accordance with the terms of the Loan
Documents, such other Person shall thereupon become vested with all the rights
in respect thereof granted to such Lender herein or otherwise.
5. Miscellaneous
(a) This Agreement shall be construed in accordance with and
governed by the laws of the Province of Ontario.
(b) Each payment to be made by the Guarantors under this
Agreement in respect of the Obligations shall be made without set-off or
counterclaim and regardless of any other condition or contingency.
(c) If any one or more provisions of this Agreement should be
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein shall not in any way
be affected, impaired, prejudiced or disturbed thereby. If at any time any
portion of the obligations of any Guarantor under this Agreement shall be
determined by a court of competent jurisdiction to be invalid, unenforceable or
avoidable, the remaining portion of the obligations of such Guarantor under this
Agreement shall not in any way be affected, impaired, prejudiced or disturbed
thereby and shall remain valid and enforceable to the fullest extent permitted
by applicable law.
(d) The amounts payable under this Agreement are payable free
and clear and without deduction for any and all present and future taxes,
levies, imposts, deductions, charges and withholdings of any federal,
provincial, local, foreign or other governmental authority. Any such amount
deducted or withheld from such payment shall not be deemed a realization of any
amount due hereunder. Each Guarantor agrees to pay to the Agent and the Lenders,
upon demand, additional amounts sufficient to compensate each of them for such
amounts deducted or withheld. A detailed statement as to the amounts deducted or
withheld, prepared in good faith and submitted by the Agent or any Lender to the
Guarantor, shall be conclusive and binding for all purposes, absent manifest
error in computation.
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<PAGE> 6
(e) As a separate, additional and continuing obligation, each
Guarantor unconditionally and irrevocably undertakes and agrees with the Agent
and the Lenders that, should the Obligations not be recoverable from the
Guarantor under Section 1 for any reason whatsoever (including, without
limitation, by reason of any provision of any Loan Document being or becoming
void, unenforceable, or otherwise invalid under any applicable law) then,
notwithstanding any knowledge thereof by the Agent or any of the Lenders at any
time, each Guarantor as sole, original and independent obligor, upon demand by
the Agent, will make payment to the Agent of the Obligations by way of a full
indemnity in such currency and otherwise in such manner as is provided in the
Credit Agreement or such other agreement or instrument, as the case may be.
(f) Each of the Guarantors, after consulting or after having
the opportunity to consult with counsel, knowingly, voluntarily and
intentionally waives any right any of them may have to a trial by jury in any
litigation based upon or arising out of this Agreement or any related instrument
or agreement or any of the transactions contemplated by this Agreement or any
course of conduct, dealing, statements or actions of any of them. Guarantors
shall not seek to consolidate, by counterclaim or otherwise, any such action in
which a jury trial has been waived with any other action in which a jury trial
cannot be or has not been waived.
(g) No amendment or waiver of any provision of this Agreement
or consent to any departure by any Guarantor therefrom shall be effective unless
the same shall be in writing and signed by the Guarantor, the Required Lenders
and the Agent, and then such amendment, waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given.
(h) Each Guarantor agrees to be bound by all covenants and
other agreements applicable to such Guarantor contained in the Credit Agreement
or any other Loan Document, and hereby agrees with and makes all representations
and warranties made by the Company in the Credit Agreement with respect to such
Guarantor. Capitalized terms used but not defined herein shall have the meaning
ascribed thereto in the Credit Agreement.
976459 ONTARIO LIMITED
By:
Name:
Title:
829500 ONTARIO LIMITED
By:
Name:
Title:
BMG HOLDINGS, INC.
By:
Name:
Title
-5-
<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
SEPTEMBER 30, 1999, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAR-31-2000
<PERIOD-END> SEP-30-1999
<CASH> 24,932
<SECURITIES> 0
<RECEIVABLES> 138,140
<ALLOWANCES> 4,506
<INVENTORY> 55,406
<CURRENT-ASSETS> 268,929
<PP&E> 260,578
<DEPRECIATION> 59,232
<TOTAL-ASSETS> 582,979
<CURRENT-LIABILITIES> 189,238
<BONDS> 202,923
0
40,383
<COMMON> 1,050
<OTHER-SE> 3,918
<TOTAL-LIABILITY-AND-EQUITY> 582,979
<SALES> 407,447
<TOTAL-REVENUES> 407,447
<CGS> 362,381
<TOTAL-COSTS> 362,381
<OTHER-EXPENSES> 23,802
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 15,241
<INCOME-PRETAX> 6,452
<INCOME-TAX> 2,757
<INCOME-CONTINUING> 3,695
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,695
<EPS-BASIC> 9.80
<EPS-DILUTED> 9.80
</TABLE>
