<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 27, 1999
REGISTRATION NO. 333-53491
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 9
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
AMERICAN AXLE & MANUFACTURING
HOLDINGS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
DELAWARE 3714 38-3161171
(STATE OR OTHER (PRIMARY STANDARD (I.R.S. EMPLOYER
JURISDICTION OF INDUSTRIAL IDENTIFICATION NUMBER)
INCORPORATION) CLASSIFICATION CODE NUMBER)
</TABLE>
------------------------
1840 HOLBROOK AVENUE
DETROIT, MICHIGAN 48212
(313) 974-2000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
PATRICK S. LANCASTER
AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
1840 HOLBROOK AVENUE
DETROIT, MICHIGAN 48212
(313) 974-2333
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
------------------------
Copies of all correspondence to:
<TABLE>
<S> <C>
WILSON S. NEELY MICHAEL A. CAMPBELL
SIMPSON THACHER & BARTLETT MAYER, BROWN & PLATT
425 LEXINGTON AVENUE 190 SOUTH LASALLE STREET
NEW YORK, NEW YORK 10017 CHICAGO, ILLINOIS 60603-3441
(212) 455-2000 (312) 782-0600
</TABLE>
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. / /
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to
Rule 462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to
Rule 462(d) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the fees and expenses in connection with the
issuance and distribution of the securities being registered hereunder. Except
for the SEC registration fee and the NASD filing fee, all amounts are estimates.
SEC registration fee........................................ $ 42,237
NASD filing fee............................................. 14,990
NYSE filing fee............................................. 203,600
Accounting fees and expenses................................ 500,000
Legal fees and expenses..................................... 500,000
Blue Sky fees and expenses (including counsel fees)......... 5,000
Printing and engraving expenses............................. 535,000
Transfer agent's and registrar's fees and expenses.......... 20,000
Miscellaneous Expenses...................................... 29,173
----------
Total.................................................. $1,850,000
----------
----------
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the General Corporation Law of the State of Delaware (the
"Delaware Law") authorizes the Registrant to indemnify the officers and
directors of the Company, under certain circumstances and subject to certain
conditions and limitations as stated therein, against all expenses and
liabilities incurred by or imposed upon them as a result of actions, suits and
proceedings, civil or criminal, brought against them as such officers and
directors if they acted in good faith and in a manner they reasonably believed
to be in or not opposed to the best interests of the Registrant and, with
respect to any criminal action or proceeding, had no reasonable cause to believe
their conduct was unlawful.
Reference is hereby made to Article VI of the Registrant's By-laws, a copy
of which is filed as Exhibit 3.02, which provides for indemnification of
officers and directors of the Registrant to the full extent authorized by
Section 145 of the Delaware Law. Section 7 of Article VI of the Bylaws
authorizes the Registrant to purchase and maintain insurance on behalf of any
officer, director, employee, trustee or agent of the Registrant or its
subsidiaries against any liability asserted against or incurred by them in such
capacity or arising out of their status as such, whether or not the Registrant
would have the power to indemnify such officer, director, employee, trustee or
agent against such liability under the provisions of such Article or Delaware
law.
The Registrant maintains a directors' and officers' insurance policy which
insures the officers and directors of the Registrant from any claim arising out
of an alleged wrongful act by such persons in their respective capacities as
officers and directors of the Registrant.
Section 102(b)(7) of the Delaware Law permits corporations to eliminate or
limit the personal liability of a director to the corporation or its
stockholders for monetary damages for breach of a fiduciary duty of care as a
director. Reference is made to Article Sixth of the Registrant's Certificate of
Incorporation, a copy of which is filed as Exhibit 3.01, which limits a
director's liability in accordance with such Section.
Reference is made to Section 6 of the U.S. Purchase Agreement and the
International Purchase Agreement, copies of which are filed as Exhibit 1.01 and
1.02, respectively, for information concerning indemnification arrangements
among the Registrant and the Underwriters.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.
In connection with the Recapitalization, the Company issued 72,039,645,
5,870,160 and 5,144,280 shares of Common Stock to Jupiter, Richard E. Dauch and
Morton E. Harris, respectively, in a one-for-one exchange for AAM, Inc. common
stock held by each of the above pursuant to a private placement. In addition,
the Company
II-1
<PAGE>
privately issued 94,680 shares of Common Stock to Michael D. Alexander pursuant
to a Management Common Stock Subscription Agreement. Mr. Alexander purchased his
shares in October 1997 for approximately $400,000. The Company issued 71,010
shares of Common Stock to Gary J. Witosky pursuant to Mr. Witosky's exercise of
options under a Nonqualified Stock Option Agreement. Mr. Witosky exercised his
options in March 1998 for approximately $302,600. Share amounts have been
adjusted to reflect the stock split.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits
The following exhibits are filed herewith unless otherwise indicated.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ----------- -------------------------------------------------------------------------------------------------------
<S> <C>
1.01 -- Form of U.S. Purchase Agreement
1.02 -- Form of International Purchase Agreement
2.01 -- Agreement and Plan of Merger, dated January 22, 1999, between the Company and American Axle &
Manufacturing, Inc. ("AAM, Inc.").
3.01 -- Certificate of Incorporation of the Company
3.02 -- Bylaws of the Company
*4.01 -- Specimen Stock Certificate
5.01 -- Opinion of Simpson Thacher & Bartlett as to the legality of the Common Stock being registered
*10.01 -- Asset Purchase Agreement, dated February 18, 1994, between AAM, Inc. and General Motors
Corporation ("GM"), and all amendments thereto
+*10.02 -- Component Supply Agreement, dated February 28, 1994, between AAM, Inc. and GM
*10.02(a) -- Amendment No. 1 to Component Supply Agreement, dated February 28, 1994, between AAM, Inc. and GM
+*10.02(b) -- Amendment No. 2 to Component Supply Agreement, dated February 7, 1996, between AAM, Inc. and GM
+*10.02(c) -- Letter of Intent dated February 21, 1996, by G.M.T.G., GMT-800 PGM Worldwide Purchasing
("G.M.T.G") (re: front & rear axles)
+*10.02(d) -- Letter of Intent dated February 21, 1996, by G.M.T.G. (re: front & rear propeller shafts)
+*10.02(e) -- Letter Agreement dated June 25, 1997, between AAM, Inc. and GM
+*10.02(f) -- Amended and Restated Memorandum of Understanding, dated September 2, 1997, between AAM, Inc. and
GM
*10.02(g) -- MOU Extension Agreement, dated September 22, 1997, between AAM, Inc. and GM
+*10.03 -- GMCL Purchase Order Agreement dated February 17, 1994 by and between AAM, Inc. and General Motors
of Canada Limited ("GMCL")
+*10.04 -- AAM/GMCL Supply Agreement dated February 17, 1994 ("AAM/GMCL Supply Agreement") by and between
AAM, Inc. and GMCL
*10.04(a) -- Amending Agreement dated as of September 5, 1996, between AAM, Inc. and GMCL
*10.04(b) -- Amending Agreement dated as of October 7, 1996, between AAM, Inc. and GMCL
*10.04(c) -- Amendment No. 1 to AAM/GMCL Supply Agreement dated February 17, 1994, between AAM, Inc. and GMCL
+*10.05 -- Agreement dated February 17, 1997, between AAM, Inc. and GM
+*10.05(a) -- Letter dated December 13, 1996, by AAM, Inc.
*10.06 -- Lease dated September 30, 1994, by and between AAM, Inc., as lessee, and First Industrial, L.P.,
as lessor (Technical Center)
*10.07 -- 1997 American Axle & Manufacturing of Michigan, Inc. Replacement Plan
*10.08 -- The Amended and Restated American Axle & Manufacturing of Michigan, Inc. Management Stock Option
Plan
</TABLE>
II-2
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ----------- -------------------------------------------------------------------------------------------------------
<S> <C>
*10.09 -- Nonqualified Stock Option Agreement, dated October 30, 1997, between AAM, Inc. and Dauch
*10.10 -- Indemnification Agreement, dated February 28, 1994, between AAM, Inc. and GM
*10.11 -- Employment Agreement, dated November 6, 1997, by and between the Company and Dauch
*10.11(a) -- Letter Agreement, dated August 18, 1997, between AAM Acquisition, Inc. and Dauch
*10.12 -- Recapitalization Agreement, dated as of September 19, 1997, among AAM, Inc., the Company, Jupiter
Capital Corporation ("Jupiter"), Richard E. Dauch ("Dauch"), Morton E. Harris ("Harris") and AAM
Acquisition, Inc.
*10.13 -- Stockholders' Agreement, dated as October 29, 1997, among Blackstone Capital Partners II Merchant
Banking Fund L.P., Blackstone Offshore Capital Partners II L.P., Blackstone Family Investment
Partnership II L.P., Jupiter, Dauch, Harris and American Axle & Manufacturing of Michigan, Inc.
*10.13(a) -- Disposition Agreement, dated as of December 10, 1998, between American Axle & Manufacturing of
Michigan, Inc. and Dauch
*10.14 -- Monitoring Agreement, dated as of October 29, 1997, between the Company and Blackstone Management
Partners L.P.
*10.15 -- Credit Agreement, dated as of October 27, 1997 (the "Credit Agreement"), among the Company, AAM,
Inc., the lenders named therein, The Chase Manhattan Bank, as administrative agent and collateral
agent, and Chase Manhattan Bank Delaware, as fronting bank
*10.15(a) -- Amendment No. 1, Waiver and Agreement, dated as of September 30, 1998, to the Credit Agreement
10.15(b) -- Amendment No. 2, Waiver and Agreement, dated as of January 11, 1999, to the Credit Agreement.
*10.16 -- AAM Master Trust Pooling Agreement, dated as of October 29, 1997, among AAM Receivables
Corp.("AAM Receivables"), the Company, as Servicer, and The Chase Manhattan Bank, as Trustee
*10.16(a) -- AAM Master Trust Series 1997-A Supplement to Pooling Agreement, dated as of October 29, 1997
("Series 1997-A Supplement"), among AAM Receivables, the Company, as Servicer, and The Chase
Manhattan Bank, as Trustee
*10.16(b) -- Amendment No. 1 to Series 1997-A Supplement, dated July 17, 1998
*10.16(c) -- Amendment No. 2 to Series 1997-A Supplement, dated September 30, 1998
*10.17 -- Receivables Sale Agreement, dated as of October 29, 1997, between AAM Receivables, as purchaser,
and the Company, as Seller and Servicer
*10.18 -- Servicing Agreement, dated as of October 29, 1997, among AAM Receivables, the Company, as
Servicer, and The Chase Manhattan Bank, as Trustee
*10.19 -- Agreement for Information Technology Services, dated March 1, 1998, between AAM, Inc. and
Electronic Data Systems Corporation
10.20 -- 1999 Stock Incentive Plan
*10.21 -- Nonqualified Stock Option Agreement, dated October 29, 1997, between the Company and Gary J.
Witosky
+*10.22(a) -- Lifetime Program Contract for GMT-325 Products, between GM and AAM, Inc.
+*10.22(b) -- Lifetime Program Contract for GMT-330 Products, between GM and AAM, Inc.
+*10.22(c) -- Lifetime Program Contract for New M-SUV Products, between GM and AAM, Inc.
+*10.22(d) -- Lifetime Program Contract for GMT-400 Products, between GM and AAM, Inc.
+*10.22(e) -- Lifetime Program Contract for GMT-800 Products, between GM and AAM, Inc.
10.23 -- Senior Secured Promissory Note dated August 14, 1998, made by Dauch in favor of AAM, Inc.
+*10.24 -- Nomination Letter, dated August 8, 1998 between Isuzu/GM Joint Purchasing Team and AAM, Inc.
*16 -- Letter re: Change in Certifying Accountants
</TABLE>
II-3
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ----------- -------------------------------------------------------------------------------------------------------
<S> <C>
*21 -- Subsidiaries of the Registrant
23.01 -- Consent of Simpson Thacher & Bartlett (contained in Exhibit 5.01)
*23.02 -- Consent of Ernst & Young LLP
*24.01 -- Power of Attorney
*27 -- Financial Data Schedules (For SEC use only)
</TABLE>
- ------------------
* Previously filed
+ Certain portions of the identified Exhibit have been omitted and separately
filed with the Commission based upon a request for confidential treatment.
(b) Financial Statement Schedules:
Schedule II--American Axle & Manufacturing of Michigan, Inc.--Allowance for
Doubtful Accounts
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes to provide to the Underwriters
at the closing specified in the Underwriting Agreement certificates in such
denominations and registered in such names as required by the Underwriters to
permit prompt delivery to each purchaser.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act, the
information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this Registration
Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act,
each post-effective amendment that contains a form of prospectus shall be deemed
to be a new registration statement relating to the securities offered therein,
and the Offerings of such securities at that time shall be deemed to be the
initial bona fide International Manager thereof.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
registrant has duly caused this Amendment No. 9 to the Registration Statement to
be signed on its behalf by the undersigned, thereunto duly authorized in the
City of Detroit, State of Michigan, on the 27th day of January, 1999.
AMERICAN AXLE & MANUFACTURING
HOLDINGS, INC.
BY: /S/ PATRICK S. LANCASTER
----------------------------------
TITLE: SECRETARY
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Amendment No. 9 to the Registration Statement has been signed below by the
following persons in the capacities indicated on the 27th day of January, 1999.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- -------------------------------------------- -------------------------------------------- -----------------
<S> <C> <C>
*Richard E. Dauch Chairman of the Board of Directors; January 27, 1999
- -------------------------------------------- President and Chief Executive Officer
Richard E. Dauch
*Gary J. Witosky Vice President--Finance and Chief Financial January 27, 1999
- -------------------------------------------- Officer
Gary J. Witosky
*Robert A. Krause Treasurer January 27, 1999
- --------------------------------------------
Robert A. Krause
*B. G. Mathis Director; Executive Vice President and Chief January 27, 1999
- -------------------------------------------- Administrative Officer
B. G. Mathis
*Glenn H. Hutchins Director January 27, 1999
- --------------------------------------------
Glenn H. Hutchins
*Bret D. Pearlman Director January 27, 1999
- --------------------------------------------
Bret D. Pearlman
*David A. Stockman Director January 27, 1999
- --------------------------------------------
David A. Stockman
*By: /s/ Patrick S. Lancaster
---------------------------------
Patrick S. Lancaster
Attorney-in-Fact
</TABLE>
II-5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT SEQUENTIAL
NUMBER DESCRIPTION PAGE NO.
- ----------- ------------------------------------------------------------------------------------------- ----------
<S> <C> <C>
1.01 -- Form of U.S. Purchase Agreement
1.02 -- Form of International Purchase Agreement
2.01 -- Agreement and Plan of Merger, dated January 22, 1999, between the Company and
American Axle & Manufacturing, Inc. ("AAM, Inc.")
3.01 -- Certificate of Incorporation of the Company
3.02 -- Bylaws of the Company
*4.01 -- Specimen Stock Certificate
5.01 -- Opinion of Simpson Thacher & Bartlett as to the legality of the Common Stock being
registered
*10.01 -- Asset Purchase Agreement, dated February 18, 1994, between AAM, Inc. and General
Motors Corporation ("GM"), and all amendments thereto
+*10.02 -- Component Supply Agreement, dated February 28, 1994, between AAM, Inc. and GM
*10.02(a) -- Amendment No. 1 to Component Supply Agreement, dated February 28, 1994, between AAM,
Inc. and GM
+*10.02(b) -- Amendment No. 2 to Component Supply Agreement, dated February 7, 1996, between AAM,
Inc. and GM
+*10.02(c) -- Letter of Intent dated February 21, 1996, by G.M.T.G., GMT-800 PGM Worldwide
Purchasing ("G.M.T.G") (re: front & rear axles)
+*10.02(d) -- Letter of Intent dated February 21, 1996, by G.M.T.G. (re: front & rear propeller
shafts)
+*10.02(e) -- Letter Agreement dated June 25, 1997, between AAM, Inc. and GM
+*10.02(f) -- Amended and Restated Memorandum of Understanding, dated September 2, 1997, between
AAM, Inc. and GM
*10.02(g) -- MOU Extension Agreement, dated September 22, 1997, between AAM, Inc. and GM
+*10.03 -- GMCL Purchase Order Agreement dated February 17, 1994 by and between AAM, Inc. and
General Motors of Canada Limited ("GMCL")
+*10.04 -- AAM/GMCL Supply Agreement dated February 17, 1994 ("AAM/GMCL Supply Agreement") by
and between AAM, Inc. and GMCL
*10.04(a) -- Amending Agreement dated as of September 5, 1996, between AAM, Inc. and GMCL
*10.04(b) -- Amending Agreement dated as of October 7, 1996, between AAM, Inc. and GMCL
*10.04(c) -- Amendment No. 1 to AAM/GMCL Supply Agreement dated February 17, 1994, between AAM,
Inc. and GMCL
+*10.05 -- Agreement dated February 17, 1997, between AAM, Inc. and GM
+*10.05(a) -- Letter dated December 13, 1996, by AAM, Inc.
*10.06 -- Lease dated September 30, 1994, by and between AAM, Inc., as lessee, and First
Industrial, L.P., as lessor (Technical Center)
*10.07 -- 1997 American Axle & Manufacturing of Michigan, Inc. Replacement Plan
*10.08 -- The Amended and Restated American Axle & Manufacturing of Michigan, Inc. Management
Stock Option Plan
*10.09 -- Nonqualified Stock Option Agreement, dated October 30, 1997, between AAM, Inc. and
Dauch
*10.10 -- Indemnification Agreement, dated February 28, 1994, between AAM, Inc. and GM
*10.11 -- Employment Agreement, dated November 6, 1997, by and between the Company and Dauch
*10.11(a) -- Letter Agreement, dated August 18, 1997, between AAM Acquisition, Inc. and Dauch
*10.12 -- Recapitalization Agreement, dated as of September 19, 1997, among AAM, Inc., the
Company, Jupiter Capital Corporation ("Jupiter"), Richard E. Dauch ("Dauch"), Morton
E. Harris ("Harris") and AAM Acquisition, Inc.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT SEQUENTIAL
NUMBER DESCRIPTION PAGE NO.
- ----------- ------------------------------------------------------------------------------------------- ----------
<S> <C> <C>
*10.13 -- Stockholders' Agreement, dated as October 29, 1997, among Blackstone Capital Partners
II Merchant Banking Fund L.P., Blackstone Offshore Capital Partners II L.P.,
Blackstone Family Investment Partnership II L.P., Jupiter, Dauch, Harris and American
Axle & Manufacturing of Michigan, Inc.
*10.13(a) -- Disposition Agreement, dated as of December 10, 1998, between American Axle &
Manufacturing of Michigan, Inc. and Dauch
*10.14 -- Monitoring Agreement, dated as of October 29, 1997, between the Company and
Blackstone Management Partners L.P.
*10.15 -- Credit Agreement, dated as of October 27, 1997 (the "Credit Agreement"), among the
Company, AAM, Inc., the lenders named therein, The Chase Manhattan Bank, as
administrative agent and collateral agent, and Chase Manhattan Bank Delaware, as
fronting bank
*10.15(a) -- Amendment No. 1, Waiver and Agreement, dated as of September 30, 1998, to the Credit
Agreement
10.15(b) -- Amendment No. 2, Waiver and Agreement, dated as of January 11, 1999, to the Credit
Agreement
*10.16 -- AAM Master Trust Pooling Agreement, dated as of October 29, 1997, among AAM
Receivables Corp.("AAM Receivables"), the Company, as Servicer, and The Chase
Manhattan Bank, as Trustee
*10.16(a) -- AAM Master Trust Series 1997-A Supplement to Pooling Agreement, dated as of
October 29, 1997 ("Series 1997-A Supplement"), among AAM Receivables, the Company, as
Servicer, and The Chase Manhattan Bank, as Trustee
*10.16(b) -- Amendment No. 1 to Series 1997-A Supplement, dated as of July 17, 1998
*10.16(c) -- Amendment No. 2 to Series 1997-A Supplement, dated as of September 30, 1998
*10.17 -- Receivables Sale Agreement, dated as of October 29, 1997, between AAM Receivables, as
purchaser, and the Company, as Seller and Servicer
*10.18 -- Servicing Agreement, dated as of October 29, 1997, among AAM Receivables, the
Company, as Servicer, and The Chase Manhattan Bank, as Trustee
*10.19 -- Agreement for Information Technology Services, dated March 1, 1998, between AAM, Inc.
and Electronic Data Systems Corporation
10.20 -- 1999 Stock Incentive Plan
*10.21 -- Nonqualified Stock Option Agreement, dated October 29, 1997, between the Company and
Gary J. Witosky
+*10.22(a) -- Lifetime Program Contract for GMT-325 Products, between GM and AAM, Inc.
+*10.22(b) -- Lifetime Program Contract for GMT-330 Products, between GM and AAM, Inc.
+*10.22(c) -- Lifetime Program Contract for New M-SUV Products, between GM and AAM, Inc.
+*10.22(d) -- Lifetime Program Contract for GMT-400 Products, between GM and AAM, Inc.
+*10.22(e) -- Lifetime Program Contract for GMT-800 Products, between GM and AAM, Inc.
10.23 -- Senior Secured Promissory Note dated August 14, 1998, made by Dauch in favor of AAM,
Inc.
+*10.24 -- Nomination Letter, dated August 8, 1998, between Isuzu/GM Joint Purchasing Team and
AAM, Inc.
*16 -- Letter re: Change in Certifying Accountants
*21 -- Subsidiaries of the Registrant
23.01 -- Consent of Simpson Thacher & Bartlett (contained in Exhibit 5.01)
*23.02 -- Consent of Ernst & Young LLP
*24.01 -- Power of Attorney
*27 -- Financial Data Schedules (For SEC use only)
</TABLE>
- ------------------
* Previously filed
+ Certain portions of the identified Exhibit have been omitted and separately
filed with the Commission based upon a request for confidential treatment.
<PAGE>
==============================================================================
==============================================================================
FORM OF
AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
(a Delaware corporation)
5,600,000 Shares of Common Stock
U.S. PURCHASE AGREEMENT
Dated: January __, 1999
==============================================================================
==============================================================================
<PAGE>
Table of Contents
U.S. PURCHASE AGREEMENT.......................................................1
SECTION 1. Representations and Warranties...............................4
(i) Compliance with Registration Requirements...............4
(ii) Independent Accountants................................5
(iii) Financial Statements..................................5
(iv) No Material Adverse Change in Business.................6
(v) Good Standing of the Company............................6
(vi) Good Standing of Subsidiaries..........................6
(vii) Capitalization........................................7
(viii) Authorization of Agreement...........................7
(ix) Authorization and Description of Securities............7
(x) Absence of Defaults and Conflicts.......................8
(xi) Absence of Labor Dispute...............................8
(xii) Absence of Proceedings................................9
(xiii) Accuracy of Exhibits.................................9
(xiv) Possession of Intellectual Property...................9
(xv) Absence of Further Requirements.......................10
(xvi) Possession of Licenses and Permits...................10
(xvii) Title to Property...................................10
(xviii) Compliance with Cuba Act...........................11
(xix) Investment Company Act...............................11
(xx) Environmental Laws....................................11
(xxi) Registration Rights..................................12
(xxii) Taxes...............................................12
(xxiii) Maintenance of Adequate Insurance..................12
(xxiv) Merger...............................................12
SECTION 2. Sale and Delivery to U.S. Underwriters; Closing.............13
(a) Initial U.S. Securities...................................13
(b) U.S. Option Securities....................................13
(c) Payment...................................................14
(d) Denominations; Registration...............................15
SECTION 3. Covenants of the Company....................................15
(a) Compliance with Securities Regulations
and Commission Requests.............................15
(b) Filing of Amendments......................................15
-i-
<PAGE>
(c) Delivery of Registration Statements.......................16
(d) Delivery of Prospectuses..................................16
(e) Continued Compliance with Securities Laws.................16
(f) Blue Sky Qualifications...................................17
(g) Rule 158..................................................17
(h) Use of Proceeds...........................................17
(i) Listing...................................................17
(j) Restriction on Sale of Securities.........................17
(k) Reporting Requirements....................................18
(l) Compliance with Rule 463..................................18
(m) Compliance with NASD Rules................................18
SECTION 4. Payment of Expenses.........................................19
(a) Expenses..................................................19
(b) Termination of Agreement..................................19
SECTION 5. Conditions of U.S. Underwriters' Obligations................19
(a) Effectiveness of Registration Statement...................20
(b) Opinion of Counsel for Company............................20
(c) Opinion of Counsel for the U.S. Underwriters..............20
(d) Officers' Certificate.....................................21
(e) Accountants' Comfort Letter...............................21
(f) Bring-down Comfort Letter.................................21
(g) Approval of Listing.......................................21
(h) No Objection..............................................21
(i) Lock-up Agreements........................................21
(j) Purchase of Initial International Securities..............22
(k) Conditions to Purchase of U.S. Option Securities..........22
(i) Officers' Certificate..................................22
(ii) Opinion of Counsel for Company........................22
(iii) Opinion of Counsel for the U.S. Underwriters.........22
(iv) Bring-down Comfort Letter.............................22
(l) Additional Documents......................................23
(m) Termination of Agreement..................................23
SECTION 6. Indemnification.............................................23
(a) Indemnification of U.S. Underwriters......................23
(b) Indemnification of Company, Directors
and Officers........................................24
(c) Actions against Parties; Notification.....................25
-ii-
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(d) Settlement without Consent if Failure
to Reimburse........................................25
(e) Indemnification for Reserved Securities...................26
SECTION 7. Contribution................................................26
SECTION 8. Representations, Warranties and
Agreements to Survive Delivery.................28
SECTION 9. Termination of Agreement....................................28
(a) Termination; General......................................28
(b) Liabilities...............................................28
SECTION 10. Default by One or More of the
U.S. Underwriters..............................29
SECTION 11. Default by the Company.....................................29
SECTION 12. Notices....................................................30
SECTION 13. Parties....................................................30
SECTION 14. GOVERNING LAW AND TIME.....................................30
SECTION 15. Effect of Headings.........................................30
SCHEDULES
Schedule A - List of Underwriters..................................Sch A-1
Schedule B - Pricing Information...................................Sch B-1
Schedule C - List of Persons Subject to Lock-up....................Sch C-1
EXHIBITS
Exhibit A - Form of Opinion of Company's Counsel.......................A-1
Exhibit B - Form of Lock-up Letter.....................................B-1
ANNEXES
Annex A - Form of Comfort Letter.......................................A-1
-iii-
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AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
(a Delaware corporation)
5,600,000 Shares of Common Stock
(Par Value $0.01 Per Share)
U.S. PURCHASE AGREEMENT
January __, 1999
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
CREDIT SUISSE FIRST BOSTON CORPORATION
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION
MORGAN STANLEY & CO. INCORPORATED
PAINEWEBBER INCORPORATED
as Representatives of the several U.S. Underwriters
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
Ladies and Gentlemen:
American Axle & Manufacturing Holdings, Inc., a Delaware corporation
(the "Company") confirms its agreement with Merrill Lynch & Co., Merrill
Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch") and each of the
other U.S. Underwriters named in Schedule A hereto (collectively, the "U.S.
Underwriters", which term shall also include any underwriter substituted as
hereinafter provided in Section 10 hereof), for whom Merrill Lynch, Credit
Suisse First Boston Corporation, Donaldson, Lufkin & Jenrette Securities
Corporation, Morgan Stanley & Co. Incorporated and PaineWebber Incorporated
are acting as representatives (in such
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capacity, the "U.S. Representatives"), with respect to (i) the sale by the
Company and the purchase by the U.S. Underwriters, acting severally and not
jointly, of the respective numbers of shares of Common Stock, par value $0.01
per share, of the Company ("Common Stock") set forth in Schedule A hereto and
(ii) the grant by the Company to the U.S. Underwriters, acting severally and
not jointly, of the option described in Section 2(b) hereof to purchase all or
any part of 840,000 additional shares of Common Stock to cover
over-allotments, if any. The aforesaid 5,600,000 shares of Common Stock (the
"Initial U.S. Securities") to be purchased by the U.S. Underwriters and all or
any part of the 840,000 shares of Common Stock subject to the option described
in Section 2(b) hereof (the "U.S. Option Securities") are hereinafter called,
collectively, the "U.S. Securities".
It is understood that the Company is concurrently entering into an
agreement dated the date hereof (the "International Purchase Agreement")
providing for the offering by the Company of an aggregate of 1,400,000 shares
of Common Stock (the "Initial International Securities") through arrangements
with certain underwriters outside the United States and Canada (the
"International Managers") for whom Merrill Lynch International, Credit Suisse
First Boston Corporation, Donaldson, Lufkin & Jenrette International, Morgan
Stanley & Co. International Limited and PaineWebber International (U.K.) Ltd.
are acting as lead managers (the "Lead Managers") and the grant by the Company
to the International Managers, acting severally and not jointly, of an option
to purchase all or any part of the International Managers' pro rata portion of
up to 210,000 additional shares of Common Stock solely to cover over
allotments, if any (the "International Option Securities" and, together with
the U.S. Option Securities, the "Option Securities"). The Initial
International Securities and the International Option Securities are
hereinafter called the "International Securities." It is understood that (a)
the Company is not obligated to sell, and the U.S. Underwriters are not
obligated to purchase, any Initial U.S. Securities unless all of the Initial
International Securities are contemporaneously purchased by the International
Managers, and (b) the Company is not obligated to sell, and the International
Managers are not obligated to purchase, any Initial International Securities
unless all of the Initial U.S. Securities are contemporaneously purchased by
the U.S. Underwriters.
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<PAGE>
The U.S. Underwriters and the International Managers are hereinafter
collectively called the "Underwriters," the Initial U.S. Securities and the
Initial International Securities are hereinafter collectively called the
"Initial Securities," and the U.S. Securities, and the International
Securities are hereinafter collectively called the "Securities."
The Underwriters will concurrently enter into an Intersyndicate
Agreement of even date herewith (the "Intersyndicate Agreement") providing for
the coordination of certain transactions among the Underwriters under the
direction of Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated (in such capacity, the "Global Coordinator").
The Company understands that the U.S. Underwriters propose to make a
public offering of the U.S. Securities as soon as the U.S. Representatives
deem advisable after this Agreement has been executed and delivered.
The Company and the Underwriters agree that up to 700,000 shares of
Securities to be purchased by the Underwriters (the "Reserved Securities")
shall be reserved for sale by the Underwriters to certain eligible employees
and persons having business relationships with the Company, as part of the
distribution of the Securities by the Underwriters, subject to the terms of
this Agreement, the applicable rules, regulations and interpretations of the
National Association of Securities Dealers, Inc. (the "NASD") and all other
applicable laws, rules and regulations. To the extent that such Reserved
Securities are not orally confirmed for purchase by such eligible employees
and persons having business relationships with the Company by the first
business day after the date of this Agreement, such Reserved Securities may be
offered to the public as part of the public offering contemplated hereby.
The Company has filed with the Securities and Exchange Commission
(the "Commission") a registration statement on Form S-1 (No. 333-53491)
covering the registration of the Securities under the Securities Act of 1933,
as amended (the "1933 Act"), including the related preliminary prospectus or
prospectuses. Promptly after execution and delivery of this Agreement, the
Company will either (i) prepare and file a prospectus in accordance with the
provisions of Rule 430A ("Rule 430A") of the rules and regulations of the
Commission under the 1933 Act (the "1933 Act Regulations") and
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<PAGE>
paragraph (b) of Rule 424 ("Rule 424(b)") of the 1933 Act Regulations or (ii)
if the Company has elected to rely upon Rule 434 ("Rule 434") of the 1933 Act
Regulations, prepare and file a term sheet (a "Term Sheet") in accordance with
the provisions of Rule 434 and Rule 424(b). Two forms of prospectuses are to
be used in connection with the offering and sale of the Securities: one
relating to the U.S. Securities (the "Form of U.S. Prospectus") and one
relating to the International Securities (the "Form of International
Prospectus"). The Form of International Prospectus is identical to the Form of
U.S. Prospectus, except for the front cover and back cover pages and the
information under the caption "Underwriting". The information included in such
prospectus or in such Term Sheet, as the case may be, that was omitted from
such registration statement at the time it became effective but that is deemed
to be part of such registration statement at the time it became effective (a)
pursuant to paragraph (b) of Rule 430A is referred to as "Rule 430A
Information" or (b) pursuant to paragraph (d) of Rule 434 is referred to as
"Rule 434 Information." The Form of U.S. Prospectus and Form of International
Prospectus used before such registration statement became effective, and any
prospectus that omitted, as applicable, the Rule 430A Information or the Rule
434 Information, that was used after such effectiveness and prior to the
execution and delivery of this Agreement, is herein called a "preliminary
prospectus." Such registration statement, including the exhibits thereto and
schedules thereto at the time it became effective and including the Rule 430A
Information and the Rule 434 Information, as applicable, is herein called the
"Registration Statement." Any registration statement filed pursuant to Rule
462(b) of the 1933 Act Regulations is herein referred to as the "Rule 462(b)
Registration Statement," and after such filing the term "Registration
Statement" shall include the Rule 462(b) Registration Statement. The final
Form of U.S. Prospectus and the final Form of International Prospectus in the
forms first furnished to the Underwriters for use in connection with the
offering of the Securities are herein called the "U.S. Prospectus" and the
"International Prospectus" respectively, and collectively the "Prospectuses."
If Rule 434 is relied on, the terms "U.S. Prospectus" and "International
Prospectus" shall refer to the preliminary U.S. Prospectus dated January 8,
1999 and preliminary International Prospectus dated January 8, 1999,
respectively, each together with the applicable Term Sheet, and all references
in this Agreement to the date of the Prospectuses shall mean the date of the
Term Sheet. For purposes of this Agreement, all references to
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<PAGE>
the Registration Statement, any preliminary prospectus, the U.S. Prospectus,
the International Prospectus or any Term Sheet or any amendment or supplement
to any of the foregoing shall be deemed to include the copy filed with the
Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval
system ("EDGAR").
SECTION 1. Representations and Warranties. The Company represents and
warrants to each U.S. Underwriter as of the date hereof, as of the Closing
Time referred to in Section 2(c) hereof, and as of each Date of Delivery (if
any) referred to in Section 2(b) hereof, and agrees with each U.S.
Underwriter, as follows:
(i) Compliance with Registration Requirements. Each of the
Registration Statement and any Rule 462(b) Registration Statement has
become effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b)
Registration Statement has been issued under the 1933 Act and no
proceedings for that purpose have been instituted or are pending or,
to the knowledge of the Company, are contemplated by the Commission,
and any request on the part of the Commission for additional
information has been complied with.
At the respective times the Registration Statement, any Rule
462(b) Registration Statement and any post-effective amendments
thereto became effective and at the Closing Time (and, if any U.S.
Option Securities are purchased, at the Date of Delivery), the
Registration Statement, the Rule 462(b) Registration Statement and
any amendments and supplements thereto complied and will comply in
all material respects with the requirements of the 1933 Act and the
1933 Act Regulations and did not and will not contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading. Neither of the Prospectuses nor any amendments or
supplements thereto, at the time the Prospectuses or any amendments or
supplements were issued and at the Closing Time (and, if any U.S.
Option Securities are purchased, at the Date of Delivery), included or
will include an untrue statement of a material fact or omitted or will
omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading. If Rule 434 is used, the Company will comply with the
5
<PAGE>
requirements of Rule 434 and the Prospectuses shall not be "materially
different", as such term is used in Rule 434, from the prospectuses
included in the Registration Statement at the time it became effective.
The representations and warranties in this subsection shall not apply
to statements in or omissions from the Registration Statement or the
U.S. Prospectus made in reliance upon and in conformity with
information furnished to the Company in writing by any U.S. Underwriter
through the U.S. Representatives expressly for use in the Registration
Statement or the U.S. Prospectus.
Each preliminary prospectus and the prospectuses filed as
part of the Registration Statement as originally filed or as part of
any amendment thereto, or filed pursuant to Rule 424 under the 1933
Act, complied when so filed in all material respects with the 1933
Act Regulations and each preliminary prospectus and each of the
Prospectuses delivered to the Underwriters for use in connection with
this offering was identical to the electronically transmitted copy
thereof filed with the Commission pursuant to EDGAR, except to the
extent permitted by Regulation S-T.
(ii) Independent Accountants. The accountants who certified
the financial statements and supporting schedule included in the
Registration Statement are independent public accountants as required
by the 1933 Act and the 1933 Act Regulations.
(iii) Financial Statements. The financial statements
included in the Registration Statement and the Prospectuses, together
with the related schedule and notes, present fairly in all material
respects the financial position of the Company and its consolidated
subsidiaries at the dates indicated and the respective statement of
income, shareholders' equity and cash flows of the Company and its
consolidated subsidiaries for the periods specified; said financial
statements have been prepared in conformity with generally accepted
accounting principles ("GAAP") applied on a consistent basis
throughout the periods involved. The supporting schedule included in
the Registration Statement presents fairly in all material
6
<PAGE>
respects in accordance with GAAP the information required to be
stated therein. The selected financial data and the summary financial
information included in the Prospectuses present fairly in all
material respects the information shown therein and have been
compiled on a basis consistent with that of the audited financial
statements included in the Registration Statement. The pro forma
financial statement and the related notes thereto included in the
Registration Statement and the Prospectuses present fairly in all
material respects the information shown therein, have been prepared
and presented in accordance with the Commission's rules and
guidelines with respect to pro forma financial statements and have
been properly compiled on the bases described therein, and the
assumptions used in the preparation thereof are reasonable and the
adjustments used therein are appropriate to give effect to the
transactions and circumstances referred to therein.
(iv) No Material Adverse Change in Business. Since the
respective dates as of which information is given in the Registration
Statement and the Prospectuses, except as otherwise stated therein,
(A) there has been no material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries (taken as a
whole), whether or not arising in the ordinary course of business (a
"Material Adverse Effect"), (B) there have been no transactions
entered into by the Company or any of its subsidiaries, other than
those in the ordinary course of business, which are material with
respect to the Company and its subsidiaries (taken as a whole), and
(C) there has been no dividend or distribution of any kind declared,
paid or made by the Company on any class of its capital stock.
(v) Good Standing of the Company. The Company has been duly
organized and is validly existing as a corporation in good standing
under the laws of the State of Delaware and has corporate power and
authority to own, lease and operate its properties and to conduct its
business as described in the Prospectuses and to enter into and
perform its obligations under this Agreement and under the
International Purchase Agreement; and the Company is duly qualified
as a foreign corporation to transact business and is in good standing
in each other jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure so to qualify or to be
in good standing would not result in a Material Adverse Effect.
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<PAGE>
(vi) Good Standing of Subsidiaries. Each "significant
subsidiary" of the Company (as such term is defined in Rule 1-02 of
Regulation S-X) (each a "Subsidiary" and, collectively, the
"Subsidiaries") has been duly organized and is validly existing as a
corporation in good standing under the laws of the jurisdiction of
its incorporation, has corporate power and authority to own, lease
and operate its properties and to conduct its business as described
in the Prospectuses and is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction in
which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except
where the failure so to qualify or to be in good standing would not
result in a Material Adverse Effect; except as otherwise disclosed in
the Registration Statement, all of the issued and outstanding capital
stock of each such Subsidiary has been duly authorized and validly
issued, is fully paid and non-assessable and is owned by the Company,
directly or through subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity; none
of the outstanding shares of capital stock of any Subsidiary was
issued in violation of the preemptive or similar rights of any
securityholder of such Subsidiary. The only Subsidiaries of the
Company are the Subsidiaries listed on Exhibit 21 to the Registration
Statement.
(vii) Capitalization. The authorized, issued and outstanding
capital stock of the Company is as set forth in the Prospectuses in
the column entitled "Historical" under the caption "Capitalization"
(except for subsequent issuances, if any, pursuant to this Agreement
or the International Purchase Agreement, pursuant to reservations,
agreements or employee benefit plans referred to in the Prospectuses
or pursuant to the exercise of convertible securities or options
referred to in the Prospectuses). The shares of issued and
outstanding capital stock have been duly authorized and validly
issued and are fully paid and non-assessable; none of the outstanding
shares of capital stock was issued in violation of the preemptive or
other similar rights of any securityholder of the Company.
(viii) Authorization of Agreement. This Agreement and the
International Purchase Agreement have been duly authorized, executed
and delivered by the Company.
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<PAGE>
(ix) Authorization and Description of Securities. The
Securities to be purchased by the U.S. Underwriters and the
International Managers from the Company have been duly authorized for
issuance and sale to the U.S. Underwriters pursuant to this Agreement
and to the International Managers pursuant to the International
Purchase Agreement and, when issued and delivered by the Company
pursuant to this Agreement and the International Purchase Agreement,
respectively, against payment of the consideration set forth herein
and therein, will be validly issued and fully paid and
non-assessable; the Common Stock conforms to all statements relating
thereto contained in the Prospectuses and such description conforms
to the rights set forth in the instruments defining the same; no
holder of the Securities will be subject to personal liability by
reason of being such a holder; and the issuance of the Securities is
not subject to the preemptive or other similar rights of any
securityholder of the Company.
(x) Absence of Defaults and Conflicts. Neither the Company
nor any of its subsidiaries is in violation of its charter or by-laws
or in default, or, to the Company's knowledge, alleged by any other
party to be in default, in the performance or observance of any
obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, deed of trust, loan or credit
agreement, note, lease or other agreement or instrument to which the
Company or any of its subsidiaries is a party or by which it or any
of them may be bound, or to which any of the property or assets of
the Company or any subsidiary is subject (collectively, "Agreements
and Instruments") except for such defaults that would not result in a
Material Adverse Effect; and the execution, delivery and performance
of this Agreement and the International Purchase Agreement and the
consummation of the transactions contemplated herein and therein and
the use of the proceeds from the sale of the Securities as described
in the Prospectuses under the caption "Use of Proceeds" and
compliance by the Company with its obligations under this Agreement
and the International Purchase Agreement have been duly authorized by
all necessary corporate action and do not and will not, whether with
or without the giving of notice or passage of time or both, conflict
with or constitute a breach of, or default or Repayment Event (as
defined below) under, or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of
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<PAGE>
the Company or any subsidiary pursuant to, the Agreements and
Instruments (except for such conflicts, breaches or defaults or liens,
charges or encumbrances that would not result in a Material Adverse
Effect), nor will such action result in any violation of the provisions
of the charter or by-laws of the Company or any subsidiary or any
applicable law, statute, rule, regulation, judgment, order, writ or
decree of any government, government instrumentality or court, domestic
or foreign, having jurisdiction over the Company or any subsidiary or
any of their assets, properties or operations. As used herein, a
"Repayment Event" means any event or condition which gives the holder
of any note, debenture or other evidence of indebtedness (or any person
acting on such holder's behalf) the right to require the repurchase,
redemption or repayment of all or a portion of such indebtedness by the
Company or any subsidiary.
(xi) Absence of Labor Dispute. No labor dispute with the
employees of the Company or any subsidiary exists or, to the
knowledge of the Company, is imminent, and the Company is not aware
of any existing or imminent labor disturbance by the employees of any
of its or any subsidiary's principal suppliers, manufacturers,
customers or contractors, which, in either case, may reasonably be
expected to result in a Material Adverse Effect.
(xii) Absence of Proceedings. There is no action, suit,
proceeding, inquiry or investigation before or brought by any court
or governmental agency or body, domestic or foreign, now pending, or,
to the knowledge of the Company, threatened, against or affecting the
Company or any subsidiary, which is required to be disclosed in the
Registration Statement (other than as disclosed therein), or which
might reasonably be expected to result in a Material Adverse Effect,
or which might reasonably be expected to materially and adversely
affect the properties or assets thereof or the consummation of the
transactions contemplated in this Agreement or the International
Purchase Agreement or the performance by the Company of its
obligations hereunder and thereunder; the aggregate of all pending
legal or governmental proceedings to which the Company or any
subsidiary is a party or of which any of their respective property or
assets is the subject which are not described in the Registration
Statement, including ordinary routine litigation
10
<PAGE>
incidental to the business, could not reasonably be expected to
result in a Material Adverse Effect.
(xiii) Accuracy of Exhibits. There are no contracts or
documents which are required to be described in the Registration
Statement or the Prospectuses or to be filed as exhibits thereto
which have not been so described and filed as required, and the
descriptions of all such contracts and documents in the Prospectuses
are complete and accurate in all material respects.
(xiv) Possession of Intellectual Property. The Company and
its subsidiaries own or possess, or can acquire on reasonable terms,
adequate patents, patent rights, licenses, inventions, copyrights,
know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks, trade names or other
intellectual property (collectively, "Intellectual Property")
necessary to carry on the business now operated by them, and neither
the Company nor any of its subsidiaries has received any notice or is
otherwise aware of any infringement of or conflict with asserted
rights of others with respect to any Intellectual Property or of any
facts or circumstances which would render any Intellectual Property
invalid or inadequate to protect the interest of the Company or any
of its subsidiaries therein, and which infringement or conflict (if
the subject of any unfavorable decision, ruling or finding) or
invalidity or inadequacy, singly or in the aggregate, would result in
a Material Adverse Effect.
(xv) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or
agency is necessary or required for the performance by the Company of
its obligations under this Agreement or the International Purchase
Agreement, in connection with the offering, issuance or sale of the
Securities hereunder or thereunder or the consummation of the
transactions contemplated by this Agreement or the International
Purchase Agreement, except such as have been already obtained or as
may be required under the 1933 Act or the 1933 Act Regulations or
state or foreign securities laws.
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(xvi) Possession of Licenses and Permits. The Company and
its subsidiaries possess such permits, licenses, approvals, consents
and other authorizations (collectively, "Governmental Licenses")
issued by the appropriate federal, state, local or foreign regulatory
agencies or bodies necessary to conduct the business now operated by
them, except where the failure to possess would not, singly or in the
aggregate, have a Material Adverse Effect; the Company and its
subsidiaries are in compliance with the terms and conditions of all
such Governmental Licenses, except where the failure so to comply
would not, singly or in the aggregate, have a Material Adverse
Effect; all of the Governmental Licenses are valid and in full force
and effect, except when the invalidity of such Governmental Licenses
or the failure of such Governmental Licenses to be in full force and
effect would not have a Material Adverse Effect; and neither the
Company nor any of its subsidiaries has received any notice of
proceedings relating to the revocation or modification of any such
Governmental Licenses which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would result
in a Material Adverse Effect.
(xvii) Title to Property. The Company and its subsidiaries
have good and marketable title to all real property owned by the
Company and its subsidiaries and good title to all other properties
owned by them, in each case, free and clear of all mortgages,
pledges, liens, security interests, claims, restrictions or
encumbrances of any kind except such as (a) are described in the
Prospectuses or (b) do not, singly or in the aggregate, materially
affect the value of such property and do not interfere with the use
made and proposed to be made of such property by the Company or any
of its subsidiaries; and all of the leases and subleases material to
the business of the Company and its subsidiaries, considered as one
enterprise, and under which the Company or any of its subsidiaries
holds properties described in the Prospectuses, are in full force and
effect, and neither the Company nor any subsidiary has any notice of
any material claim of any sort that has been asserted by anyone
adverse to the rights of the Company or any subsidiary under any of
the leases or subleases mentioned above, or affecting or questioning
the rights of the Company or such subsidiary to the continued
possession of the leased or subleased premises under any such lease
or sublease.
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(xviii) Compliance with Cuba Act. The Company has complied
with, and is and will be in compliance with, the provisions of that
certain Florida act relating to disclosure of doing business with
Cuba, codified as Section 517.075 of the Florida statutes, and the
rules and regulations thereunder or is exempt therefrom.
(xix) Investment Company Act. The Company is not, and upon
the issuance and sale of the Securities as herein contemplated and
the application of the net proceeds therefrom as described in the
Prospectuses will not be, an "investment company" or an entity
"controlled" by an "investment company" as such terms are defined in
the Investment Company Act of 1940, as amended (the "1940 Act").
(xx) Environmental Laws. Except as described in the
Registration Statement and except as would not, singly or in the
aggregate, result in a Material Adverse Effect, (A) neither the Company
nor any of its subsidiaries is in violation of any federal, state,
local or foreign statute, law, rule, regulation, ordinance, code,
legally binding policy or rule of common law or any judicial or legally
binding administrative interpretation thereof, including any judicial
or legally binding administrative order, consent, decree or judgment,
relating to pollution or protection of human health, the environment
(including, without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata) or wildlife,
including, without limitation, laws and regulations relating to the
release or threatened release of chemicals, pollutants, contaminants,
wastes, toxic substances, hazardous substances, petroleum or petroleum
products (collectively, "Hazardous Materials") or to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport
or handling of Hazardous Materials (collectively, "Environmental
Laws"), (B) the Company and its subsidiaries have all permits,
authorizations and approvals required under any applicable
Environmental Laws (except for such permits, authorizations and
approvals the absence of which would not result in a Material Adverse
Effect) and are each in compliance with their requirements, (C) there
are no pending or, to the knowledge of the Company, threatened
administrative, regulatory or judicial actions, suits, demands, demand
letters, claims, liens, notices of noncompliance or violation,
investigation or proceedings relating to any Environmental Law against
the
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Company or any of its subsidiaries and (D) there are no events or
circumstances that might reasonably be expected to form the basis of
an order for clean-up or remediation, or an action, suit or
proceeding by any private party or governmental body or agency,
against or affecting the Company or any of its subsidiaries relating
to Hazardous Materials or any Environmental Laws.
(xxi) Registration Rights. There are no persons with
registration rights or other similar rights to have any securities
registered pursuant to the Registration Statement or otherwise
registered by the Company under the 1933 Act except as described in
the Prospectuses. All applicable "piggy-back" registration rights
otherwise applicable and entitling the persons holding such rights to
have any securities so registered have been duly and validly waived
or otherwise relinquished in respect of the Registration Statement
and the transactions contemplated thereby.
(xxii) Taxes. The Company and each of its subsidiaries have
filed all necessary federal, state, local and foreign income, payroll,
franchise and other tax returns (after giving effect to extensions) and
have paid all taxes shown as due thereon or with respect to any of its
properties, except for taxes being contested in good faith for which
adequate reserves have been provided, and there is no tax deficiency
that has been, or to the knowledge of the Company is likely to be,
asserted against the Company, any of its subsidiaries or any of their
properties or assets that would result in a Material Adverse Effect.
(xxiii) Maintenance of Adequate Insurance. The Company and
each of its subsidiaries is insured by insurers of recognized
financial responsibility against such losses and risks and in such
amounts as is reasonably prudent in the business in which it is
engaged or proposed to engage after giving effect to the transactions
described in the Prospectuses; and the Company does not have any
reason to believe that it will not be able to renew its existing
insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to
continue its business at a cost that would not result in a Material
Adverse Effect.
(xxiv) Merger. The Company and American Axle & Manufacturing
of Michigan, Inc., a Michigan corporation
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("AAMM"), had all corporate power and authority to carry out the
merger of AAMM into the Company (the "Merger"), and the Company, AAMM
and their respective stockholders have taken all action required by
law and their respective charters and bylaws or otherwise to approve
the Merger; the consummation of the Merger did not contravene any
provision of applicable law or the respective charters or bylaws of
the Company and AAMM or any provision of any material agreement or
other material instrument binding upon the Company or AAMM or any
order, writ, injunction or decree of any jurisdiction, court or
governmental body, and no consent, approval, authorization or order
of any court or governmental agency or body was required for the
consummation of the Merger, except such as were obtained; the Merger
became effective on January 22, 1999, in accordance with the laws of
Michigan and Delaware; and the Merger will not result in the
recognition of any material liability under the Internal Revenue Code
of 1986, as amended (the "Code") or otherwise for taxes for the
Company or any of its subsidiaries.
Any certificate signed by any officer of the Company or any of its
subsidiaries delivered to the U.S. Representatives or to counsel for the U.S.
Underwriters and the International Managers shall be deemed a representation
and warranty by the Company to each U.S. Underwriter and each International
Manager as to the matters covered thereby.
SECTION 2. Sale and Delivery to U.S. Underwriters; Closing.
(a) Initial U.S. Securities. On the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Company agrees to sell to each U.S. Underwriter, severally and not
jointly, and each U.S. Underwriter, severally and not jointly, agrees to
purchase from the Company, at the price per share set forth in Schedule B,
that number of Initial U.S. Securities set forth in Schedule A opposite the
name of such U.S. Underwriter, plus any additional number of Initial U.S.
Securities which such U.S. Underwriter may become obligated to purchase
pursuant to the provisions of Section 10 hereof, subject, in each case, to
such adjustments among the U.S. Underwriters as the U.S. Representatives in
their sole discretion shall make to eliminate any sales or purchases of
fractional securities.
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(b) U.S. Option Securities. In addition, on the basis of the
representations and warranties herein contained and subject to the terms and
conditions herein set forth, the Company hereby grants an option to the U.S.
Underwriters, severally and not jointly, to purchase up to an additional
840,000 shares of Common Stock, at the price per share set forth in Schedule
B, less an amount per share equal to any dividends or distributions declared
by the Company and payable on the Initial U.S. Securities but not payable on
the U.S. Option Securities. The option hereby granted will expire 30 days
after the date hereof and may be exercised in whole or in part from time to
time only for the purpose of covering over-allotments which may be made in
connection with the offering and distribution of the Initial U.S. Securities
upon notice by the Global Coordinator to the Company setting forth the number
of U.S. Option Securities as to which the several U.S. Underwriters are then
exercising the option and the time and date of payment and delivery for such
U.S. Option Securities. Any such time and date of delivery (a "Date of
Delivery") shall be determined by the Global Coordinator, but shall not be
later than seven full business days after the exercise of said option, nor in
any event prior to the Closing Time, as hereinafter defined. If the option is
exercised as to all or any portion of the U.S. Option Securities, each of the
U.S. Underwriters, acting severally and not jointly, will purchase that
proportion of the total number of U.S. Option Securities then being purchased
which the number of Initial U.S. Securities set forth in Schedule A opposite
the name of such U.S. Underwriter bears to the total number of Initial U.S.
Securities, and the Company shall sell such number of U.S. Option Securities,
subject in each case to such adjustments as the Global Coordinator in its
discretion shall make to eliminate any sales or purchases of fractional
shares.
(c) Payment. Payment of the purchase price for, and delivery of
certificates for, the Initial U.S. Securities shall be made at the offices of
Mayer Brown & Platt, 190 South LaSalle Street, Chicago, Illinois, or at such
other place as shall be agreed upon by the Global Coordinator and the Company,
at 9:00 A.M. (Eastern time) on the third (fourth, if the pricing occurs after
4:30 P.M. (Eastern time) on any given day) business day after the date hereof
(unless postponed in accordance with the provisions of Section 10), or such
other time not later than ten business days after such date as shall be agreed
upon by the Global Coordinator and the Company (such time and date of payment
and delivery being herein called "Closing Time").
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In addition, in the event that any or all of the U.S. Option
Securities are purchased by the U.S. Underwriters, payment of the purchase
price for, and delivery of certificates for, such U.S. Option Securities shall
be made at the above-mentioned offices, or at such other place as shall be
agreed upon by the Global Coordinator and the Company, on each Date of
Delivery as specified in the notice from the Global Coordinator to the
Company.
Payment shall be made to the Company by wire transfer of immediately
available funds to bank accounts designated by the Company, against delivery
to the U.S. Representatives for the respective accounts of the U.S.
Underwriters of certificates for the U.S. Securities to be purchased by them.
It is understood that each U.S. Underwriter has authorized the U.S.
Representatives, for its account, to accept delivery of, receipt for, and make
payment of the purchase price for, the Initial U.S. Securities and the U.S.
Option Securities, if any, which it has agreed to purchase. Merrill Lynch,
individually and not as representative of the U.S. Underwriters, may (but
shall not be obligated to) make payment of the purchase price for the Initial
U.S. Securities or the U.S. Option Securities, if any, to be purchased by any
U.S. Underwriter whose funds have not been received by the Closing Time or the
relevant Date of Delivery, as the case may be, but such payment shall not
relieve such U.S. Underwriter from its obligations hereunder.
(d) Denominations; Registration. Certificates for the Initial U.S.
Securities and the U.S. Option Securities, if any, shall be in such
denominations and registered in such names as the U.S. Representatives may
request in writing at least one full business day before the Closing Time or
the relevant Date of Delivery, as the case may be. The certificates for the
Initial U.S. Securities and the U.S. Option Securities, if any, will be made
available for examination and packaging by the U.S. Representatives in The
City of New York not later than 10:00 A.M. (Eastern time) on the business day
prior to the Closing Time or the relevant Date of Delivery, as the case may
be.
SECTION 3. Covenants of the Company. The Company covenants with each
U.S. Underwriter as follows:
(a) Compliance with Securities Regulations and Commission Requests.
The Company, subject to Section 3(b), will comply with
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the requirements of Rule 430A or Rule 434, as applicable, and will notify the
Global Coordinator immediately, and confirm the notice in writing, (i) when
any post-effective amendment to the Registration Statement shall become
effective, or any supplement to the Prospectuses or any amended Prospectuses
shall have been filed, (ii) of the receipt of any comments from the
Commission, (iii) of any request by the Commission for any amendment to the
Registration Statement or any amendment or supplement to the Prospectuses or
for additional information, and (iv) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement or of
any order preventing or suspending the use of any preliminary prospectus, or
of the suspension of the qualification of the Securities for offering or sale
in any jurisdiction, or of the initiation or threatening of any proceedings
for any of such purposes. The Company will promptly effect the filings
necessary pursuant to Rule 424(b) and will take such steps as it deems
necessary to ascertain promptly whether the form of prospectus transmitted for
filing under Rule 424(b) was received for filing by the Commission and, in the
event that it was not, it will promptly file such prospectus. The Company will
make every reasonable effort to prevent the issuance of any stop order and, if
any stop order is issued, to obtain the lifting thereof at the earliest
possible moment.
(b) Filing of Amendments. The Company will give the Global
Coordinator notice of its intention to file or prepare any amendment to the
Registration Statement (including any filing under Rule 462(b)), any Term
Sheet or any amendment, supplement or revision to either the prospectus
included in the Registration Statement at the time it became effective or to
the Prospectuses, will furnish the Global Coordinator with copies of any such
documents a reasonable amount of time prior to such proposed filing or use, as
the case may be, and will not file or use any such document to which the
Global Coordinator or counsel for the U.S. Underwriters shall reasonably
object in writing within a reasonable period of time.
(c) Delivery of Registration Statements. The Company has furnished or
will deliver to the U.S. Representatives and counsel for the U.S.
Underwriters, without charge, signed copies of the Registration Statement as
originally filed and of each amendment thereto (including exhibits filed
therewith or incorporated by reference therein) and signed copies of all
consents and
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certificates of experts, and will also deliver to the U.S. Representatives,
without charge, a conformed copy of the Registration Statement as originally
filed and of each amendment thereto (without exhibits) for each of the U.S.
Underwriters. The copies of the Registration Statement and each amendment
thereto furnished to the U.S. Underwriters will be identical to the
electronically transmitted copies thereof filed with the Commission pursuant
to EDGAR, except to the extent permitted by Regulation S-T.
(d) Delivery of Prospectuses. The Company has delivered to each U.S.
Underwriter, without charge, as many copies of each preliminary prospectus as
such U.S. Underwriter reasonably requested, and the Company hereby consents to
the use of such copies for purposes permitted by the 1933 Act. The Company
will furnish to each U.S. Underwriter, without charge, during the period when
the U.S. Prospectus is required to be delivered under the 1933 Act or the
Securities Exchange Act of 1934 (the "1934 Act"), such number of copies of the
U.S. Prospectus (as amended or supplemented) as such U.S. Underwriter may
reasonably request. The U.S. Prospectus and any amendments or supplements
thereto furnished to the U.S. Underwriters will be identical to the
electronically transmitted copies thereof filed with the Commission pursuant
to EDGAR, except to the extent permitted by Regulation S-T.
(e) Continued Compliance with Securities Laws. The Company will
comply with the 1933 Act and the 1933 Act Regulations so as to permit the
completion of the distribution of the Securities as contemplated in this
Agreement, the International Purchase Agreement and in the Prospectuses. If at
any time when a prospectus is required by the 1933 Act to be delivered in
connection with sales of the Securities, any event shall occur or condition
shall exist as a result of which it is necessary, in the opinion of counsel
for the U.S. Underwriters or for the Company, to amend the Registration
Statement or amend or supplement the Prospectuses in order that the
Prospectuses will not include any untrue statements of a material fact or omit
to state a material fact necessary in order to make the statements therein not
misleading in the light of the circumstances existing at the time it is
delivered to a purchaser, or if it shall be necessary, in the opinion of such
counsel, at any such time to amend the Registration Statement or amend or
supplement the Prospectuses in order to comply with the requirements of the
1933 Act or the 1933 Act
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Regulations, the Company will promptly prepare and file with the Commission,
subject to Section 3(b), such amendment or supplement as may be necessary to
correct such statement or omission or to make the Registration Statement or
the Prospectuses comply with such requirements, and the Company will furnish
to the U.S. Underwriters such number of copies of such amendment or supplement
as the U.S. Underwriters may reasonably request.
(f) Blue Sky Qualifications. The Company will use its best efforts,
in cooperation with the U.S. Underwriters, to qualify the Securities for
offering and sale under the applicable securities laws of such states and
other jurisdictions (domestic or foreign) as the Global Coordinator may
designate and to maintain such qualifications in effect for a period of not
less than one year from the later of the effective date of the Registration
Statement and any Rule 462(b) Registration Statement; provided, however, that
the Company shall not be obligated to file any general consent to service of
process or to qualify as a foreign corporation or as a dealer in securities in
any jurisdiction in which it is not so qualified or to subject itself to
taxation in respect of doing business in any jurisdiction in which it is not
otherwise so subject. In each jurisdiction in which the Securities have been
so qualified, the Company will file such statements and reports as may be
required by the laws of such jurisdiction to continue such qualification in
effect for a period of not less than one year from the later of the effective
date of the Registration Statement and any Rule 462(b) Registration Statement.
(g) Rule 158. The Company will timely file such reports pursuant to
the 1934 Act as are necessary in order to make generally available to its
securityholders as soon as practicable an earnings statement for the purposes
of, and to provide the benefits contemplated by, the last paragraph of Section
11(a) of the 1933 Act.
(h) Use of Proceeds. The Company will use the net proceeds received
by it from the sale of the Securities in the manner specified in the
Prospectuses under "Use of Proceeds."
(i) Listing. The Company will use its best efforts to effect and
maintain the listing of the Securities on the New York Stock Exchange and will
file with the New York Stock Exchange all
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documents and notices required by the New York Stock Exchange of companies
that have securities listed thereon.
(j) Restriction on Sale of Securities. During a period of 180 days
from the date of the Prospectuses, the Company will not, without the prior
written consent of Merrill Lynch, (i) directly or indirectly, offer, pledge,
sell, contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant to purchase or
otherwise transfer or dispose of any share of Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock or file any
registration statement under the 1933 Act with respect to any of the foregoing
or (ii) enter into any swap or any other agreement or any transaction that
transfers, in whole or in part, directly or indirectly, the economic
consequence of ownership of the Common Stock, whether any such swap or
transaction described in clause (i) or (ii) above is to be settled by delivery
of Common Stock or such other securities, in cash or otherwise. The foregoing
sentence shall not apply to (A) the Securities to be sold hereunder or under
the International Purchase Agreement, (B) grants of stock options and other
awards pursuant to the terms of the Company's stock option plans in effect on
the date hereof and described in the Prospectuses, (C) any shares of Common
Stock issued by the Company upon the exercise of an option or warrant or the
conversion of a security outstanding on the date hereof and referred to in the
Prospectuses or (D) offers, sales and issuances of shares of Common Stock,
options, rights or warrants to purchase or any securities convertible into or
exercisable or exchangeable for Common Stock in connection with acquisitions
of businesses, companies or assets by the Company so long as the recipients of
such shares, options, rights, warrants or convertible securities are subject
to the restrictions of this Section 3(j) until the expiration of such 180 day
period.
(k) Reporting Requirements. The Company, during the period when the
Prospectuses are required to be delivered under the 1933 Act or the 1934 Act,
will file all documents required to be filed with the Commission pursuant to
the 1934 Act within the time periods required by the 1934 Act and the rules
and regulations of the Commission thereunder.
(l) Compliance with Rule 463. The Company will comply with the
reporting requirements of Rule 463 of the 1933 Act Regulations.
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(m) Compliance with NASD Rules. The Company hereby agrees that it
will ensure that the Reserved Securities will be restricted as required by the
NASD or the NASD rules from sale, transfer, assignment, pledge or
hypothecation for a period of three months following the date of effectiveness
of the Registration Statement. The Underwriters will notify the Company as to
which persons will need to be so restricted. At the request of the
Underwriters, the Company will direct the transfer agent to place a stop
transfer restriction upon such securities for such period of time. Should the
Company release, or seek to release, from such restrictions any of the
Reserved Securities, the Company agrees to reimburse the Underwriters for any
reasonable expenses including, without limitation, legal expenses they incur
in connection with such release.
SECTION 4. Payment of Expenses.
(a) Expenses. The Company will pay or cause to be paid all expenses
incident to the performance of its obligations under this Agreement, including
(i) the preparation, printing and filing of the Registration Statement
(including financial statements and exhibits) as originally filed and of each
amendment thereto, (ii) the preparation, issuance and delivery of the
certificates for the Securities to the U.S. Underwriters, including any stock or
other transfer taxes and any stamp or other duties payable upon the sale,
issuance or delivery of the Securities to the U.S. Underwriters, (iii) the fees
and disbursements of the Company's counsel, accountants and other advisors, (iv)
the qualification of the Securities under securities laws in accordance with the
provisions of Section 3(f) hereof, including filing fees and the reasonable fees
and disbursements of counsel for the Underwriters in connection therewith and in
connection with the preparation, printing and delivery of the Blue Sky Survey
and any supplement thereto, (v) the printing and delivery to the Underwriters of
copies of each preliminary prospectus, any Term Sheets and of the Prospectuses
and any amendments or supplements thereto, (vi) the fees and expenses of any
transfer agent or registrar for the Securities, (vii) the filing fees incident
to, and the reasonable fees and disbursements of counsel to the Underwriters in
connection with, the review by
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the NASD of the terms of the sale of the Securities, (viii) the fees and
expenses incurred in connection with the listing of the Securities on the New
York Stock Exchange and (ix) all costs and expenses of the Underwriters,
including the fees and disbursements of counsel for the Underwriters, in
connection with matters related to the Reserved Securities which are designated
by the Company for sale to employees and others having a business relationship
with the Company. It is understood, however, that except as provided in this
Section or Sections 6, 7 or 9 hereof, the Underwriters shall pay their own costs
and expenses, including the fees and disbursements of their counsel, stock
transfer taxes due upon resale of any of the Securities by them and any
advertising expenses incurred in connection with any offers they may make.
(b) Termination of Agreement. If this Agreement is terminated by the
U.S. Representatives in accordance with the provisions of Section 5 (other
than as a result of the failure to satisfy the condition set forth in Section
5(h)), Section 9(a)(i) or Section 11 hereof, the Company shall reimburse the
U.S. Underwriters for all of their out-of-pocket expenses, including the
reasonable fees and disbursements of counsel for the U.S. Underwriters.
SECTION 5. Conditions of U.S. Underwriters' Obligations. The
obligations of the several U.S. Underwriters hereunder are subject to the
accuracy of the representations and warranties of the Company contained in
Section 1 hereof or in certificates of any officer of the Company or any
subsidiary of the Company delivered pursuant to the provisions hereof, to the
performance by the Company of its covenants and other obligations hereunder,
and to the following further conditions:
(a) Effectiveness of Registration Statement. The Registration
Statement, including any Rule 462(b) Registration Statement, has become
effective and at Closing Time no stop order suspending the effectiveness of
the Registration Statement shall have been issued under the 1933 Act or
proceedings therefor initiated or threatened by the Commission, and any
request on the part of the Commission for additional information shall have
been complied with to the reasonable satisfaction of counsel to the U.S.
Underwriters. A prospectus containing the Rule 430A Information shall have
been filed with the Commission in accordance with Rule 424(b) (or a
post-effective amendment providing such information shall have been filed and
declared effective in accordance with the requirements of Rule 430A) or, if
the Company has elected to rely upon Rule 434, a Term Sheet shall have been
filed with the Commission in accordance with Rule 424(b).
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(b) Opinion of Counsel for Company. At Closing Time, the U.S.
Representatives shall have received the favorable opinion, dated as of Closing
Time, of Simpson Thacher & Bartlett, counsel for the Company, and Patrick S.
Lancaster, Esq., General Counsel of the Company, in form and substance
satisfactory to counsel for the U.S. Underwriters, together with signed or
reproduced copies of such letter for each of the other U.S. Underwriters to
the effect set forth in Exhibits A-1 and A-2 hereto and to such further effect
as counsel to the U.S. Underwriters may reasonably request.
(c) Opinion of Counsel for the U.S. Underwriters. At Closing Time,
the U.S. Representatives shall have received the favorable opinion, dated as
of Closing Time, of Mayer, Brown & Platt, counsel for the U.S. Underwriters,
together with signed or reproduced copies of such letter for each of the other
U.S. Underwriters with respect to the matters set forth in clauses (i) (solely
as to the valid existence and good standing and corporate power and authority
of the Company), (ii) (solely as to the Securities), (iii) (solely as to
preemptive or other similar rights arising by operation of law or under the
charter or by-laws of the Company), (iv) through (vi), inclusive, (vii)
(solely as to the information in the Prospectus under "Description of Capital
Stock--Common Stock"), (xvi) and the penultimate paragraph of Exhibit A-1
hereto. In giving such opinion such counsel may rely, as to all matters
governed by the laws of jurisdictions other than the law of the State of New
York, the federal law of the United States and the General Corporation Law of
the State of Delaware, upon the opinions of counsel satisfactory to the U.S.
Representatives. Such counsel may also state that, insofar as such opinion
involves factual matters, they have relied, to the extent they deem proper,
upon certificates of officers of the Company and its subsidiaries and
certificates of public officials.
(d) Officers' Certificate. At Closing Time, there shall not have
been, since the date hereof or since the respective dates as of which
information is given in the Prospectuses, any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company or any of its subsidiaries whether or not
arising in the ordinary course of business, and the U.S. Representatives shall
have received a certificate of the President or a Vice President of the
Company and of the chief financial or chief accounting officer of the Company,
dated as of Closing Time, to the effect that (i) there
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has been no such material adverse change, (ii) the representations and
warranties in Section 1(a) hereof are true and correct with the same force and
effect as though expressly made at and as of Closing Time, (iii) the Company
has complied with all agreements and satisfied all conditions on its part to
be performed or satisfied at or prior to Closing Time, and (iv) no stop order
suspending the effectiveness of the Registration Statement has been issued and
no proceedings for that purpose have been instituted or are pending or are
contemplated by the Commission.
(e) Accountants' Comfort Letter. At the time of the execution of this
Agreement, the U.S. Representatives shall have received from each of Deloitte
& Touche LLP and Ernst & Young LLP a letter dated such date, in form and
substance satisfactory to the U.S. Representatives, together with signed or
reproduced copies of such letter for each of the other U.S. Underwriters to
the effect set forth in Annex A hereto and otherwise containing statements and
information of the type ordinarily included in accountants' "comfort letters"
to underwriters with respect to the financial statements and certain financial
information contained in the Registration Statement and the Prospectuses.
(f) Bring-down Comfort Letter. At Closing Time, the U.S.
Representatives shall have received from each of Deloitte & Touche LLP and
Ernst & Young LLP a letter, dated as of Closing Time, to the effect that they
reaffirm the statements made in the letter furnished pursuant to subsection
(e) of this Section, except that the specified date referred to shall be a
date not more than three business days prior to Closing Time.
(g) Approval of Listing. At Closing Time, the Securities shall have
been approved for listing on the New York Stock Exchange, subject only to
official notice of issuance.
(h) No Objection. The NASD shall have confirmed that it has not
raised any objection with respect to the fairness and reasonableness of the
underwriting terms and arrangements.
(i) Lock-up Agreements. At the date of this Agreement, the U.S.
Representatives shall have received an agreement substantially in the form of
Exhibit B hereto signed by the persons listed on Schedule C hereto.
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(j) Purchase of Initial International Securities. Contemporaneously
with the purchase by the U.S. Underwriters of the Initial U.S. Securities
under this Agreement, the International Managers shall have purchased the
Initial International Securities under the International Purchase Agreement.
(k) Conditions to Purchase of U.S. Option Securities. In the event
that the U.S. Underwriters exercise their option provided in Section 2(b)
hereof to purchase all or any portion of the U.S. Option Securities, the
representations and warranties of the Company contained herein and the
statements in any certificates furnished by the Company and any subsidiary of
the Company shall be true and correct as of each Date of Delivery and, at the
relevant Date of Delivery, the U.S. Representatives shall have received:
(i) Officers' Certificate. A certificate, dated such Date of
Delivery, of the President or a Vice President of the Company and of
the chief financial or chief accounting officer of the Company
confirming that the certificate delivered at the Closing Time
pursuant to Section 5(d) hereof remains true and correct as of such
Date of Delivery.
(ii) Opinion of Counsel for Company. The favorable opinion
of Simpson Thacher & Bartlett, counsel for the Company, and Patrick
S. Lancaster, General Counsel for the Company, in form and substance
satisfactory to counsel for the U.S. Underwriters, dated such Date of
Delivery, relating to the U.S. Option Securities to be purchased on
such Date of Delivery and otherwise to the same effect as the opinion
required by Section 5(b) hereof.
(iii) Opinion of Counsel for the U.S. Underwriters. The
favorable opinion of Mayer, Brown & Platt, counsel for the U.S.
Underwriters, dated such Date of Delivery, relating to the U.S.
Option Securities to be purchased on such Date of Delivery and
otherwise to the same effect as the opinion required by Section 5(c)
hereof.
(iv) Bring-down Comfort Letter. A letter from each of
Deloitte & Touche LLP and Ernst & Young LLP, in form and substance
satisfactory to the U.S. Representatives and dated such Date of
Delivery, substantially in the same form and substance as the letter
furnished to the U.S. Representatives
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pursuant to Section 5(f) hereof, except that the "specified date" in
the letter furnished pursuant to this paragraph shall be a date not
more than five days prior to such Date of Delivery.
(l) Additional Documents. At Closing Time and at each Date of
Delivery, counsel for the U.S. Underwriters shall have been furnished with
such documents and opinions as they may require for the purpose of enabling
them to pass upon the issuance and sale of the Securities as herein
contemplated, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the conditions,
herein contained; and all proceedings taken by the Company in connection with
the issuance and sale of the Securities as herein contemplated shall be
satisfactory in form and substance to the U.S. Representatives and counsel for
the U.S. Underwriters.
(m) Termination of Agreement. If any condition specified in this
Section shall not have been fulfilled when and as required to be fulfilled,
this Agreement, or, in the case of any condition to the purchase of U.S.
Option Securities on a Date of Delivery which is after the Closing Time, the
obligations of the several U.S. Underwriters to purchase the relevant U.S.
Option Securities, may be terminated by the U.S. Representatives by notice to
the Company at any time at or prior to Closing Time or such Date of Delivery,
as the case may be, and such termination shall be without liability of any
party to any other party except as provided in Section 4 and except that
Sections 1, 6, 7 and 8 shall survive any such termination and remain in full
force and effect.
SECTION 6. Indemnification.
(a) Indemnification of U.S. Underwriters. The Company agrees to
indemnify and hold harmless each U.S. Underwriter and each person, if any, who
controls any U.S. Underwriter within the meaning of Section 15 of the 1933 Act
or Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement
or alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), including the Rule
430A Information and the Rule 434
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Information, if applicable, or the omission or alleged omission
therefrom of a material fact required to be stated therein or
necessary to make the statements therein not misleading or arising
out of any untrue statement or alleged untrue statement of a material
fact included in any preliminary prospectus or the Prospectuses (or
any amendment or supplement thereto), or the omission or alleged
omission therefrom of a material fact necessary in order to make the
statements therein, in the light of the circumstances under which
they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate
amount paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or
threatened, or of any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or
omission; provided that (subject to Section 6(d) below) any such
settlement is effected with the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by Merrill
Lynch), reasonably incurred in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, to the extent that any
such expense is not paid under (i) or (ii) above;
provided, however, that (A) this indemnity agreement shall not apply to any
loss, liability, claim, damage or expense to the extent arising out of any
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with written information furnished to the
Company by any U.S. Underwriter through the U.S. Representatives expressly for
use in the Registration Statement (or any amendment thereto), including the
Rule 430A Information and the Rule 434 Information, if applicable, or any
preliminary prospectus or the U.S. Prospectus (or any amendment or supplement
thereto) and (B) as to any preliminary prospectus, this indemnity agreement
shall not inure to the benefit of any U.S. Underwriter or any person, if any,
who controls any U.S. Underwriter within the meaning of Section 15 of
28
<PAGE>
the 1933 Act or Section 20 of the 1934 Act on account of any loss, liability,
claim, damage or expense arising from the fact that such U.S. Underwriter sold
Securities to a person to whom there was not sent or given, at or prior to the
written confirmation of such sale, a copy of the U.S. Prospectus (as then
amended or supplemented) in any case where such delivery is required by the
1933 Act if the Company has previously furnished copies thereof to such U.S.
Underwriter in the quantities requested and the loss, liability, claim, damage
or expense of such U.S. Underwriter results from an untrue statement or
omission of a material fact contained in such preliminary prospectus which the
Company has sustained the burden of proving was corrected in the U.S.
Prospectus (as then amended or supplemented).
(b) Indemnification of Company, Directors and Officers. Each U.S.
Underwriter severally agrees to indemnify and hold harmless the Company, its
directors, each of its officers who signed the Registration Statement, and
each person, if any, who controls the Company within the meaning of Section 15
of the 1933 Act or Section 20 of the 1934 Act, against any and all loss,
liability, claim, damage and expense described in the indemnity contained in
subsection (a) of this Section, as incurred, but only with respect to untrue
statements or omissions, or alleged untrue statements or omissions, made in
the Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information, if applicable, or any preliminary
prospectus or the U.S. Prospectus (or any amendment or supplement thereto) in
reliance upon and in conformity with written information furnished to the
Company by such U.S. Underwriter through the U.S. Representatives expressly
for use in the Registration Statement (or any amendment thereto) or such
preliminary prospectus or the U.S. Prospectus (or any amendment or supplement
thereto).
(c) Actions against Parties; Notification. Each indemnified party
shall give notice as promptly as reasonably practicable to each indemnifying
party of any action commenced against it in respect of which indemnity may be
sought hereunder, but failure to so notify an indemnifying party shall not
relieve such indemnifying party from any liability hereunder to the extent it
is not materially prejudiced as a result thereof and in any event shall not
relieve it from any liability which it may have otherwise than on account of
this indemnity agreement. In the case of parties indemnified pursuant to
Section 6(a) above, counsel to the
29
<PAGE>
indemnified parties shall be selected by Merrill Lynch; and, in the case of
parties indemnified pursuant to Section 6(b) above, counsel to the indemnified
parties shall be selected by the Company. An indemnifying party may
participate at its own expense in the defense of any such action; provided,
however, that counsel to the indemnifying party shall not (except with the
consent of the indemnified party) also be counsel to the indemnified party. In
no event shall the indemnifying parties be liable for fees and expenses of
more than one counsel (in addition to any local counsel) separate from their
own counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out
of the same general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 6 or
Section 7 hereof (whether or not the indemnified parties are actual or
potential parties thereto), unless such settlement, compromise or consent (i)
includes an unconditional release of each indemnified party from all liability
arising out of such litigation, investigation, proceeding or claim and (ii)
does not include a statement as to or an admission of fault, culpability or a
failure to act by or on behalf of any indemnified party.
(d) Settlement without Consent if Failure to Reimburse. If at any
time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel which are
reimbursable under this Section 6 or Section 7, such indemnifying party agrees
that it shall be liable for any settlement of the nature contemplated by
Section 6(a)(ii) effected without its written consent if (i) such settlement
is entered into more than 45 days after receipt by such indemnifying party of
the aforesaid request, (ii) such indemnifying party shall have received notice
of the terms of such settlement, which notice shall include a statement by the
indemnified party that it proposes to enter into such settlement on such terms
to the extent permitted by this Section 6(d), at least 30 days prior to such
settlement being entered into and (iii) such indemnifying party shall not have
reimbursed such indemnified party in accordance with such request prior to the
date of such settlement.
30
<PAGE>
(e) Indemnification for Reserved Securities. In connection with the
offer and sale of the Reserved Securities, the Company agrees to indemnify and
hold harmless the Underwriters from and against any and all losses, expenses
and liabilities incurred by them as a result of (i) the failure of the
designated employees or other persons to pay for and accept delivery of shares
which, immediately following the effectiveness of the Registration Statement,
were subject to a properly confirmed agreement to purchase and (ii) the
violation of any securities laws of foreign jurisdictions where Reserved
Securities have been offered.
SECTION 7. Contribution. If the indemnification provided for in
Section 6 hereof is for any reason unavailable to or insufficient to hold
harmless an indemnified party in respect of any losses, liabilities, claims,
damages or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount of such losses, liabilities, claims,
damages and expenses incurred by such indemnified party, as incurred, (i) in
such proportion as is appropriate to reflect the relative benefits received by
the Company on the one hand and the U.S. Underwriters on the other hand from
the offering of the U.S. Securities pursuant to this Agreement or (ii) if the
allocation provided by clause (i) is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company on
the one hand and of the U.S. Underwriters on the other hand in connection with
the statements or omissions which resulted in such losses, liabilities,
claims, damages or expenses, as well as any other relevant equitable
considerations.
The relative benefits received by the Company on the one hand and the
U.S. Underwriters on the other hand in connection with the offering of the
U.S. Securities pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of the U.S.
Securities pursuant to this Agreement (before deducting expenses) received by
the Company and the total underwriting discount received by the U.S.
Underwriters, in each case as set forth on the cover of the U.S. Prospectus,
or, if Rule 434 is used, the corresponding location on the Term Sheet, bear to
the aggregate initial public offering price of the U.S. Securities as set
forth on such cover.
31
<PAGE>
The relative fault of the Company on the one hand and the U.S.
Underwriters on the other hand shall be determined by reference to, among
other things, whether any such untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Company or by the U.S. Underwriters and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
The Company and the U.S. Underwriters agree that it would not be just
and equitable if contribution pursuant to this Section 7 were determined by
pro rata allocation (even if the U.S. Underwriters were treated as one entity
for such purpose) or by any other method of allocation which does not take
account of the equitable considerations referred to above in this Section 7.
The aggregate amount of losses, liabilities, claims, damages and expenses
incurred by an indemnified party and referred to above in this Section 7 shall
be deemed to include any legal or other expenses reasonably incurred by such
indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no U.S. Underwriter
shall be required to contribute any amount in excess of the amount by which
the total price at which the U.S. Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such U.S. Underwriter has otherwise been required to pay by
reason of any such untrue or alleged untrue statement or omission or alleged
omission.
No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the 1933 Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls a
U.S. Underwriter within the meaning of Section 15 of the 1933 Act or Section
20 of the 1934 Act shall have the same rights to contribution as such U.S.
Underwriter, and each director of the Company, each officer of the Company who
signed the Registration
32
<PAGE>
Statement, and each person, if any, who controls the Company within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have
the same rights to contribution as the Company. The U.S. Underwriters'
respective obligations to contribute pursuant to this Section 7 are several in
proportion to the number of Initial U.S. Securities set forth opposite their
respective names in Schedule A hereto and not joint.
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company or any of its
subsidiaries submitted pursuant hereto shall remain operative and in full
force and effect, regardless of any investigation made by or on behalf of any
U.S. Underwriter or controlling person, or by or on behalf of the Company, and
shall survive delivery of the Securities to the U.S. Underwriters.
SECTION 9. Termination of Agreement.
(a) Termination; General. The U.S. Representatives may terminate this
Agreement, by notice to the Company, at any time at or prior to Closing Time
(i) if there has been, since the time of execution of this Agreement or since
the respective dates as of which information is given in the U.S. Prospectus,
any material adverse change in the condition, financial or otherwise, or in
the earnings, business affairs or business prospects of the Company or any of
its subsidiaries, whether or not arising in the ordinary course of business,
or (ii) if there has occurred any material adverse change in the financial
markets in the United States or the international financial markets, any
outbreak of hostilities or escalation thereof or other calamity or crisis or
any change or development involving a prospective change in national or
international political, financial or economic conditions, in each case the
effect of which is such as to make it, in the judgment of the U.S.
Representatives, impracticable to market the Securities or to enforce
contracts for the sale of the Securities, or (iii) if trading in any
securities of the Company has been suspended or materially limited by the
Commission or the New York Stock Exchange, or if trading generally on the New
York Stock Exchange has been suspended or materially limited, or minimum or
maximum prices for trading have been fixed, or maximum ranges for prices have
been required, by the New York Stock Exchange or by order of the Commission,
the NASD or any other governmental authority, or
33
<PAGE>
(iv) if a banking moratorium has been declared by Federal or New York
authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that
Sections 1, 6, 7 and 8 shall survive such termination and remain in full force
and effect.
SECTION 10. Default by One or More of the U.S. Underwriters. If one or
more of the U.S. Underwriters shall fail at Closing Time or a Date of Delivery
to purchase the U.S. Securities which it or they are obligated to purchase
under this Agreement (the "Defaulted Securities"), the U.S. Representatives
shall have the right, within 24 hours thereafter, to make arrangements for one
or more of the non-defaulting U.S. Underwriters, or any other underwriters, to
purchase all, but not less than all, of the Defaulted Securities in such
amounts as may be agreed upon and upon the terms herein set forth. If, however,
the U.S. Representatives shall not have completed such arrangements within such
24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10% of the
number of U.S. Securities to be purchased on such date, each of the
non-defaulting U.S. Underwriters shall be obligated, severally and not jointly,
to purchase the full amount thereof in the proportions that their respective
underwriting obligations hereunder bear to the underwriting obligations of all
non-defaulting U.S. Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the number of
U.S. Securities to be purchased on such date, this Agreement or, with respect
to any Date of Delivery which occurs after the Closing Time, the obligation of
the U.S. Underwriters to purchase and of the Company to sell the U.S. Option
Securities to be purchased and sold on such Date of Delivery, shall terminate
without liability on the part of any non-defaulting U.S. Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
U.S. Underwriter from liability in respect of its default.
34
<PAGE>
In the event of any such default which does not result in a
termination of this Agreement or, in the case of a Date of Delivery which is
after the Closing Time, which does not result in a termination of the
obligation of the U.S. Underwriters to purchase and the Company to sell the
relevant U.S. Option Securities, as the case may be, either (i) the U.S.
Representatives or (ii) the Company shall have the right to postpone the
Closing Time or the relevant Date of Delivery, as the case may be, for a period
not exceeding seven days in order to effect any required changes in the
Registration Statement or Prospectuses or in any other documents or
arrangements. As used herein, the term "U.S. Underwriter" includes any person
substituted for a U.S. Underwriter under this Section 10.
SECTION 11. Default by the Company. If the Company shall fail at
Closing Time or at the Date of Delivery to sell the number of U.S. Securities
that it is obligated to sell hereunder, then this Agreement shall terminate
without any liability on the part of any nondefaulting party; provided,
however, that the provisions of Sections 1, 4, 6, 7 and 8 shall remain in full
force and effect. No action taken pursuant to this Section shall relieve the
Company from liability, if any, in respect of such default.
SECTION 12. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the U.S.
Underwriters shall be directed to the U.S. Representatives at Merrill Lynch,
Sears Tower Building, Suite 5500, Chicago, Illinois 60606, attention of Michael
O'Grady; and notices to the Company shall be directed to it at 1840 Holbrook
Avenue, Detroit, Michigan 48212, attention of Patrick S. Lancaster, Esq.
SECTION 13. Parties. This Agreement shall inure to the benefit of and
be binding upon the U.S. Underwriters, the Company and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the U.S.
Underwriters, the Company and their respective successors and the controlling
persons and officers and directors referred to in Sections 6 and 7 and their
heirs and legal representatives, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision herein contained. This
Agreement and all conditions and
35
<PAGE>
provisions hereof are intended to be for the sole and exclusive benefit of the
U.S. Underwriters, the Company and their respective successors, and said
controlling persons and officers and directors and their heirs and legal
representatives, and for the benefit of no other person, firm or corporation.
No purchaser of Securities from any U.S. Underwriter shall be deemed to be a
successor by reason merely of such purchase.
SECTION 14. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. EXCEPT
AS OTHERWISE SET FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY
TIME.
SECTION 15. Effect of Headings. The Article and Section headings
herein and the Table of Contents are for convenience only and shall not affect
the construction hereof.
36
<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof,
whereupon this instrument, along with all counterparts, will become a binding
agreement among the U.S. Underwriters and the Company in accordance with its
terms.
Very truly yours,
AMERICAN AXLE & MANUFACTURING
HOLDINGS, INC.
By:
-----------------------------------
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
CREDIT SUISSE FIRST BOSTON CORPORATION
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION
MORGAN STANLEY & CO. INCORPORATED
PAINEWEBBER INCORPORATED
By: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By
-----------------------------------------
Authorized Signatory
For themselves and as U.S. Representatives of the other U.S. Underwriters named
in Schedule A hereto.
37
<PAGE>
SCHEDULE A
Number of
Initial U.S.
Name of U.S. Underwriter Securities
Merrill Lynch, Pierce, Fenner & Smith
Incorporated............................
Credit Suisse First Boston Corporation.......................
Donaldson, Lufkin & Jenrette
Securities Corporation....................................
Morgan Stanley & Co. Incorporated............................
PaineWebber Incorporated.....................................
-----------
Total................................................... 5,600,000
===========
Sch A-1
<PAGE>
SCHEDULE B
AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
5,600,000 Shares of Common Stock
(Par Value $0.01 Per Share)
1. The initial public offering price per share for the Securities,
determined as provided in Section 2, shall be $_________.
2. The purchase price per share for the U.S. Securities to be paid by the
several U.S. Underwriters shall be $____________, being an amount
equal to the initial public offering price set forth above less
$_________ per share; provided that the purchase price per share for
any U.S. Option Securities purchased upon the exercise of the
over-allotment option described in Section 2(b) shall be reduced by an
amount per share equal to any dividends or distributions declared by
the Company and payable on the Initial U.S. Securities but not payable
on the U.S. Option Securities.
Sch B-1
<PAGE>
SCHEDULE C
PERSONS SUBJECT TO LOCK-UP
Blackstone Capital Partners II Merchant Banking Fund L.P.
Blackstone Offshore Capital Partners II L.P.
Blackstone Family Investment Partnership II L.P.
Blackstone Management Associates II L.L.C.
Jupiter Capital Corporation
Richard E. Dauch
B.G. Mathis
Michael D. Alexander
Joel D. Robinson
Marion A. Cumo, Sr.
David C. Dauch
Richard F. Dauch
George J. Dellas
David J. Demos
Patrick S. Lancaster
Allan R. Monich
Daniel V. Sagady, P.E.
Michael D. Straney
Gary J. Witosky
Robert A. Krause
Glenn H. Hutchins
Bret D. Pearlman
David A. Stockman
Sch C-1
<PAGE>
Exhibit A-1
FORM OF OPINION OF SIMPSON THACHER & BARTLETT,
COUNSEL TO THE COMPANY,
TO BE DELIVERED PURSUANT TO SECTION 5(b)
(i) The Company has been duly incorporated and is validly
existing and in good standing as a corporation under the laws
of the State of Delaware and has full corporate power and
authority to own, lease and operate its properties and to
conduct its business as described in the Registration
Statement and Prospectuses and to enter into and perform its
obligations under the U.S. Purchase Agreement and the
International Purchase Agreement.
(ii) All outstanding shares of the Company's Common Stock and the
Securities have been duly authorized, and all outstanding
shares of the Company's Common Stock have been and, upon
payment and delivery in accordance with the Purchase
Agreements, the Securities will be, validly issued, fully
paid and nonassessable.
(iii) There are no preemptive rights under federal law, under the
Delaware General Corporation Law or under any agreement or
other instrument known to us to subscribe for or purchase the
Securities. There are no preemptive or other rights to
subscribe for or to purchase, nor any restriction upon the
voting or transfer of, any shares of the Company's capital
stock pursuant to the Company's charter or by-laws or, except
as otherwise disclosed in the Registration Statement and
except for restrictions on transfer applicable to parties to
the Stockholders' Agreement or shares of the Company's Common
Stock issued under the Option Plan or the Replacement Plan
(as such terms are defined in the Registration Statement), any
agreement or other instrument.
(iv) Each of the U.S. Purchase Agreement and the International
Purchase Agreement has been duly authorized, executed and
delivered by the Company.
(v) The Registration Statement[, including any Rule 462(b)
Registration Statement,] has become effective under the 1933
Act, and the Prospectuses were timely filed on ___________,
1999 pursuant to Rule 424(b) and, to such
A-1-1
<PAGE>
counsel's knowledge, no stop order suspending the
effectiveness of the Registration Statement [or any Rule
462(b) Registration Statement] has been issued or proceeding
for that purpose has been instituted or threatened by the
Commission.
(vi) The form of certificate used to evidence the Common Stock
complies in all material respects with all applicable
statutory requirements, with any applicable requirements of
the charter and by-laws of the Company and the requirements
of the New York Stock Exchange.
(vii) The statements made in the Prospectuses under the caption
"Description of Capital Stock," insofar as they purport to
constitute summaries of the terms of the Company's Common
Stock (including the Securities), constitute accurate
summaries of the terms of such Common Stock in all material
respects.
(viii) The statements made in the Prospectuses under the captions
"Prospectus Summary -- The Company -- The 1994 Acquisition,"
"-- The Recapitalization" and "-- Business Strategy -- Pursue
Selected Acquisition Opportunities"; "Risk Factors -- Reliance
on GM," "-- Transition from CSA to MOU and LPCs," "-- Labor
Relations," "-- Leverage," "-- Debt Covenants," "-- Inventory
Management, Reliance on Single Source Suppliers," "-- Control
by Principal Stockholder" and "-- Shares Eligible for Future
Sale"; "The Recapitalization"; "Use of Proceeds"; "Dividend
Policy"; "Management's Discussion and Analysis of Financial
Condition and Results of Operations -- Company Overview,"
"-- Liquidity and Capital Resources," "-- Financial
Instruments Market Risk" and "-- Litigation and Environmental
Regulations"; "Business -- The 1994 Acquisition," "-- Business
Strategy -- Pursue Selected Acquisition Opportunities,"
"-- Contractual Arrangements with GM," "-- Associates," and
"-- Environmental Matters"; "Management -- Stock Options,"
"-- Indemnification of Officers and Directors" and
"-- Employment Agreement"; "Certain Transactions";
"Description of Certain Indebtedness" and "Shares Eligible for
Future Sale," insofar as they purport to constitute summaries
of the terms of contracts and other documents, constitute
accurate summaries of the terms of such contracts and other
documents in all material respects; and, to such counsel's
knowledge, there are no contracts, instruments or other
documents of a character required to be described in the
Registration Statement or Prospectuses or to be filed as
exhibits to the Registration Statement which are not described
and filed as required.
(ix) The statements made in the Prospectuses under the caption
"Management's Discussion and Analysis of Financial Condition
and Results of Operations -- Litigation and Environmental
Regulations," "Business -- Environmental Matters,"
"Description of Capital Stock," and in the Registration
Statement under
A-1-2
<PAGE>
Item 14, insofar as they purport to constitute summaries of
the terms of New York or federal statutes or the Delaware
General Corporation Law, rules and regulations thereunder,
legal proceedings or legal conclusions, or the Company's
charter and bylaws, constitute accurate summaries thereof in
all material respects.
(x) The statements made in the Prospectuses under the caption
"Certain United States Federal Tax Consequences to Non- U.S.
Holders of Common Stock," insofar as they purport to
constitute summaries of matters of United States federal tax
law and regulations or legal conclusions with respect
thereto, constitute accurate summaries of the matters
described therein in all material respects.
(xi) No filing, consent, approval, authorization, registration or
qualification of or with any federal or New York governmental
agency or body or any Delaware governmental agency or body
acting pursuant to the Delaware General Corporation Law or,
to such counsel's knowledge, any federal or New York court or
any Delaware court acting pursuant to the Delaware General
Corporation Law is required for the issue and sale of the
Securities by the Company and the compliance by the Company
with all of the provisions of the U.S. Purchase Agreement and
the International Purchase Agreement, except for the
registration under the 1933 Act of the Securities, and such
consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or
Blue Sky laws in connection with the purchase and
distribution of the Securities by the Underwriters.
(xii) The issue and sale of the Securities by the Company, the
execution and delivery by the Company of the U.S. Purchase
Agreement and International Purchase Agreement, the
consummation of the transactions provided for in the U.S.
Purchase Agreement and the International Purchase Agreement,
the compliance by the Company with all of the provisions of
the U.S. Purchase Agreement and the International Purchase
Agreement and the use of the proceeds from the sale of the
Securities as described in the Prospectuses under the caption
"Use of Proceeds" do not and will not, whether with or
without the giving of
A-1-3
<PAGE>
notice or lapse of time or both, conflict with, breach or
result in a default or, except as contemplated under "Use of
Proceeds" in the Registration Statement, a Repayment Event (as
defined in Section 1(x) of the U.S. Purchase Agreement) under,
or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any
subsidiary pursuant to, any indenture, mortgage, deed of
trust, loan or credit agreement, note, lease or any other
agreement or instrument filed as an exhibit to the
Registration Statement (except for such conflicts, breaches or
defaults or liens, charges or encumbrances that would not have
a Material Adverse Effect), nor will such action result in a
violation of the charter or bylaws of the Company or any
subsidiary, or any federal or New York statute or the Delaware
General Corporation Law or any rule or regulation that has
been issued pursuant to any federal or New York statute or the
Delaware General Corporation Law or any judgment, order, writ
or decree known to us issued pursuant to any federal or New
York statute or the Delaware General Corporation Law by any
court or governmental agency or body or court having
jurisdiction over the Company or any of its subsidiaries or
any of their properties, assets or operations.
(xiii) To such counsel's knowledge, there are no contracts or
agreements between the Company or any subsidiary and any
person granting such person the right (other than rights
which have been waived) to require the Company to include any
securities of the Company owned or to be owned by such person
in the securities registered pursuant to the Registration
Statement.
(xiv) The Company is not an "investment company" within the meaning
of and subject to regulation under the Investment Company Act
of 1940, as amended.
(xv) The Company had all corporate power and authority to carry
out the merger of and American Axle & Manufacturing of
Michigan, Inc., a Michigan corporation ("AAMM") into the
Company (the "Merger"), and the Company and its stockholders
have taken all action required by law and the Company's
charter and bylaws or otherwise to approve the Merger; the
consummation of the Merger did not contravene
A-1-4
<PAGE>
any provision of applicable law or the charter or bylaws of
the Company or, to such counsel's knowledge, any provision of
any material agreement or other material instrument binding
upon the Company or any order, writ, injunction or decree of
any jurisdiction, court or governmental body, and no consent,
approval, authorization or order of any court or governmental
agency or body was required for the consummation of the
Merger, except such as were obtained; the Merger became
effective on January 22, 1999, in accordance with the laws of
Delaware; and the Merger will not result in the recognition
of any material liability under the Internal Revenue Code of
1986, as amended, or otherwise for taxes for the Company or
any of its subsidiaries.
In addition, such counsel shall state that they have participated in
conferences with officers and other representatives of the Company, counsel
employed by the Company, representatives of the independent public accountants
for the Company, representatives of the Underwriters and counsel for the
Underwriters, at which conferences the contents of the Registration Statement
and Prospectuses and related matters were discussed and, although such counsel
are not passing upon, and do not assume any responsibility for, the accuracy,
completeness or fairness of the statements contained in the Registration
Statement or the Prospectuses except as set forth in paragraphs (vii), (viii),
(ix) and (x) above and have not made any independent check or verification
thereof, on the basis of the foregoing, (i) in such counsel's opinion, the
Registration Statement or any amendment thereto[, including any Rule 462(b)
Registration Statement,] the Rule 430A Information and the Rule 434 Information
(if applicable), as the time such Registration Statement or any such amendment
became effective, and the Prospectuses, as of ____________, 1999, complied as to
form in all material respects with the requirements of the 1933 Act and the
applicable rules and regulations of the Commission thereunder, except that such
counsel need express no opinion with respect to the financial statements or
other financial data contained in the Registration Statement or the Prospectuses
and (ii) such counsel has no reason to believe that either the Registration
Statement or any amendment thereto, including the Rule 430A Information and Rule
434 Information (if applicable), at the time such Registration Statement or any
such
A-1-5
<PAGE>
amendment became effective, contained an untrue statement of a material fact or
omitted to state any material fact required to be stated therein or necessary
to make the statements therein not misleading, or the Prospectuses or any
amendment or supplement thereto, at the time the Prospectuses were issued, at
the time any such amended or supplemented prospectus was issued or at the
Closing Time, included or includes an untrue statement of a material fact or
omitted or omits to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, except that such counsel need express no
opinion with respect to the financial statements or other financial data
contained in the Registration Statement or the Prospectuses.
In rendering such opinion, such counsel may rely as to matters of
fact, to the extent such counsel deems proper, on certificates of responsible
officers of the Company and public officials which are furnished to the
Representatives. In addition, such counsel may state their opinion is limited
to matters governed by the laws of the State of New York, the corporate law of
State of Delaware and the federal law of the United States.
A-1-6
<PAGE>
Exhibit A-2
FORM OF OPINION OF PATRICK S. LANCASTER, ESQ.,
GENERAL COUNSEL OF THE COMPANY,
TO BE DELIVERED PURSUANT TO SECTION 5(b)
(i) The Company is duly qualified as a foreign corporation to
transact business and is in good standing in each
jurisdiction in which such qualification is required, whether
by reason of the ownership or leasing of property or the
conduct of business, except where the failure so to qualify
or to be in good standing would not result in a Material
Adverse Effect.
(ii) Each Subsidiary has been duly incorporated and is validly
existing as a corporation in good standing under the laws of
the jurisdiction of its incorporation, and each such
Subsidiary has corporate power and authority to conduct its
business as described in the Registration Statement and the
Prospectuses, and is duly qualified as a foreign corporation
to transact business and is in good standing in each
jurisdiction where such qualification is required, whether by
reason of the ownership or leasing of property or the conduct
of business, except where the failure to so qualify or to be
in good standing would not result in a Material Adverse
Effect; except as otherwise disclosed in the Registration
Statement, all of the issued and outstanding capital of each
Subsidiary has been duly authorized and validly issued, is
fully paid and non assessable and, to such counsel's
knowledge, is owned by the Company, directly or through
subsidiaries, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity; none of
the outstanding shares of capital stock of any Subsidiary was
issued in violation of the preemptive or similar rights of
any securityholder of such Subsidiary.
(iii) To such counsel's knowledge, neither the Company nor any
subsidiary is in violation of its charter or by-laws and no
default by the Company or any subsidiary exists in the due
performance or observance of any material obligation,
agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other
agreement or instrument that is described or referred to in
the Registration Statement or the Prospectuses or filed as an
exhibit to the Registration
A-2-1
<PAGE>
Statement, except for such defaults that would not result in
a Material Adverse Effect.
(iv) To such counsel's knowledge, there is not pending or
threatened any action, suit, proceeding, inquiry or
investigation, to which the Company or any subsidiary is a
party, or to which the property of the Company or any
subsidiary is subject, before or brought by any court or
governmental agency or body, domestic or foreign, which might
reasonably be expected to result in a Material Adverse
Effect, or which might reasonably be expected to materially
and adversely affect the properties or assets thereof or the
consummation of the transactions contemplated in the U.S.
Purchase Agreement and the International Purchase Agreement
or the performance by the Company of its obligations
thereunder.
(v) To such counsel's knowledge, no filing, consent, approval,
authorization, registration or qualification of or with any
governmental agency or body or any court, is required for the
issue and sale of the Shares by the Company and the
compliance by the Company with all of the provisions of the
U.S. Purchase Agreement and International Purchase Agreement,
except for the registration under the 1933 Act of the Shares,
and such consents, approvals, authorizations, registrations
or qualifications as may be required under state or foreign
securities or Blue Sky laws in connection with the purchase
and distribution of the Shares by the Underwriters.
(vi) The authorized, issued and outstanding capital stock of the
Company is as set forth in the Prospectuses in the column
entitled "Historical" under the caption "Capitalization"
(except for subsequent issuances, if any, pursuant to the
U.S. Purchase Agreement and the International Purchase
Agreement or pursuant to reservations, agreements or employee
benefit plans referred to in the Prospectuses or pursuant to
the exercise of convertible securities or options referred to
in the Prospectuses).
(vii) None of the outstanding shares of Common Stock of the Company
was issued in violation of the preemptive or other similar
rights of any securityholder of the Company; and the issuance
and sale of the Securities by the Company is not subject to
the preemptive or other similar rights of any securityholder
of the Company.
A-2-2
<PAGE>
(viii) The issue and sale of the Securities by the Company, the
execution, delivery and performance by the Company of the
U.S. Purchase Agreement and the International Purchase
Agreement, the compliance by the Company with all of the
provisions thereof and the consummation of the transactions
contemplated in the U.S. Purchase Agreement and the
International Purchase Agreement and in the Registration
Statement (including the use of the proceeds from the sale of
the Securities as described in the Prospectuses under the
caption "Use of Proceeds") do not and will not, whether with
or without the giving of notice or lapse of time or both,
conflict with, breach or result in a default or Repayment
Event (as defined in Section 1(x) of the U.S. Purchase
Agreement) under, or result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets
of the Company or any subsidiary pursuant to, any contract,
indenture, mortgage, deed of trust, loan or credit agreement,
note, lease or any other agreement or instrument, known to
such counsel, to which the Company or any subsidiary is a
party or by which it or any of them may be bound, or to which
any of the property or assets of the Company or any
subsidiary is subject (except for such conflicts, breaches or
defaults or liens, charges or encumbrances that would not
have a Material Adverse Effect), nor will such action result
in a violation of the charter or bylaws of the Company or any
subsidiary, or any applicable law, statute, rule, regulation,
judgement, order, writ or decree, known to such counsel, of
any government, government instrumentality or court, domestic
or foreign, having jurisdiction over the Company or any
subsidiary or any of their respective properties, assets or
operations.
(ix) To such counsel's knowledge, the Company and its subsidiaries
own or possess, or can acquire on reasonable terms, adequate
patents, patent rights, licenses, inventions, copyrights,
know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems
or procedures), trademarks, service marks, trade names or
other intellectual property (collectively, "Intellectual
Property") necessary to carry on the business now operated by
them, and to such counsel's knowledge, neither the Company
nor any of its subsidiaries has received any notice or is
otherwise aware of any infringement of or conflict with
asserted rights of others with respect to any Intellectual
Property or of any facts or circumstances
A-2-3
<PAGE>
which would render any Intellectual Property invalid or
inadequate to protect the interest of the Company or any of
its subsidiaries therein, and which infringement or conflict
(if the subject of any unfavorable decision, ruling or
finding) or invalidity or inadequacy, singly or in the
aggregate, would result in a Material Adverse Effect.
(x) There are no statutes or regulations material to the Company
or its operations or, to such counsel's knowledge, pending or
threatened legal or governmental proceedings required to be
described in the Prospectuses which are not described as
required, or any contracts, instruments or other documents of
a character required to be described in the Registration
Statement or Prospectuses or to be filed as exhibits to the
Registration Statement which are not described and filed as
required; and all descriptions in the Registration Statement
of contracts and other agreements to which the Company or its
subsidiaries are a party are complete and accurate in all
material respects.
(xi) American Axle & Manufacturing of Michigan, Inc., a Michigan
corporation ("AAMM"), had all corporate power and authority
to carry out the merger of AAMM into the Company (the
"Merger"), and AAMM and its stockholders have taken all
action required by law and its charter and bylaws or
otherwise to approve the Merger; the consummation of the
Merger did not contravene any provision of applicable law or
the charter or bylaws of AAMM or any provision of any
material agreement or other material instrument binding upon
the Company or AAMM or any order, writ, injunction or decree
of any jurisdiction, court or governmental body, and no
consent, approval, authorization or order of any court or
governmental agency or body was required for the consummation
of the Merger, except such as were obtained; the Merger
became effective on January __, 1999, in accordance with the
laws of Michigan; and the Merger will not result in the
recognition of any material liability under the Internal
Revenue Code of 1986, as amended, or otherwise for taxes for
the Company or any of its subsidiaries.
In addition, such counsel shall state that they have participated in
conferences with officers and other representatives of the Company, counsel to
the Company, representatives of the independent public accountants for the
Company, representatives of the Underwriters and counsel for the Underwriters,
at which conferences the contents of the Registration Statement and
Prospectuses and related matters were discussed and, although such counsel is
not passing upon, and does not assume any responsibility for, the accuracy,
completeness or fairness of the statements
A-2-4
<PAGE>
contained in the Registration Statement or the Prospectuses except as set forth
in paragraph (vi) above and has not made any independent check or verification
thereof, on the basis of the foregoing, nothing has come to such counsel's
attention that leads him to believe that either the Registration Statement or
any amendment thereto, including the Rule 430A Information and Rule 434
Information (if applicable), at the time such Registration Statement or any
such amendment became effective or at the Closing Time, contained an untrue
statement of a material fact or omitted to state any material fact required to
be stated therein or necessary to make the statements therein not misleading,
or the Prospectuses or any amendment or supplement thereto, at the time the
Prospectuses were issued, at the time any such amended or supplemented
prospectus was issued or at the Closing Time, included or includes an untrue
statement of a material fact or omitted or omits to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading, except
that such counsel need express no opinion with respect to the financial
statements or other financial data contained in the Registration Statement or
the Prospectuses.
A-2-5
<PAGE>
Exhibit B
FORM OF LOCK-UP FROM DIRECTORS, OFFICERS OR
OTHER STOCKHOLDERS PURSUANT TO SECTION 5(i)
January __, 1999
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated,
CREDIT SUISSE FIRST BOSTON CORPORATION
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION
MORGAN STANLEY & CO. INCORPORATED
PAINEWEBBER INCORPORATED
as Representatives of the several
U.S. Underwriters to be named in the
within-mentioned U.S. Purchase Agreement
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
Re: Proposed Public Offering by American Axle & Manufacturing
Holdings, Inc.
Dear Sirs:
The undersigned, a stockholder [and an officer and/or director] of
American Axle & Manufacturing Holdings, Inc., a Delaware corporation (the
"Company"), understands that Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner
& Smith Incorporated ("Merrill Lynch") and Credit Suisse First Boston
Corporation, Donaldson, Lufkin & Jenrette Securities Corporation, Morgan
Stanley & Co. Incorporated and PaineWebber Incorporated propose to enter into a
U.S. Purchase Agreement (the "U.S. Purchase Agreement") with the Company
providing for the public offering of shares (the "Securities") of the Company's
common stock, par value $0.01 per share (the "Common Stock"). In recognition of
the benefit that such an offering will confer upon the undersigned as a
stockholder [and an officer and/or director] of the Company, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the undersigned agrees with each underwriter to be named in the
U.S. Purchase Agreement that, during
B-1
<PAGE>
a period of 180 days from the date of the U.S. Purchase Agreement, the
undersigned will not, without the prior written consent of Merrill Lynch,
directly or indirectly, (i) offer, pledge, sell, contract to sell, sell any
option or contract to purchase, purchase any option or contract to sell, grant
any option, right or warrant for the sale of, or otherwise dispose of or
transfer any shares of the Company's Common Stock or any securities convertible
into or exchangeable or exercisable for Common Stock, whether now owned or
hereafter acquired by the undersigned or with respect to which the undersigned
has or hereafter acquires the power of disposition, or cause the Company to
file any registration statement under the Securities Act of 1933, as amended,
with respect to any of the foregoing or (ii) enter into any swap or any other
agreement or any transaction that transfers, in whole or in part, directly or
indirectly, the economic consequence of ownership of the Common Stock, whether
any such swap or transaction is to be settled by delivery of Common Stock or
other securities, in cash or otherwise.
Very truly yours,
Signature:
------------------------
Print Name:
-----------------------
B-2
<PAGE>
Annex A
FORM OF ACCOUNTANTS' COMFORT LETTER PURSUANT TO SECTION 5(e)
We are independent public accountants with respect to the Company within the
meaning of the 1933 Act and the applicable published 1933 Act Regulations
(i) in our opinion, the audited financial statements and the related
financial statement schedules included in the Registration Statement
and the Prospectus comply as to form in all material respects with the
applicable accounting requirements of the 1933 Act and the published
rules and regulations thereunder;
(ii) on the basis of procedures (but not an examination in accordance with
generally accepted auditing standards) consisting of a reading of the
unaudited interim consolidated financial statements of the Company for
the three month periods ended March 31, 1997 and March 31, 1998
included in the Registration Statement and the Prospectus
(collectively, the "Quarterly Financials"), a reading of the latest
available unaudited interim consolidated financial statements of the
Company, a reading of the minutes of all meetings of the stockholders
and directors of the Company and its subsidiaries and the ____________
and ____________ Committees of the Board of Directors of the Company
and any subsidiary committees since January 1, 1998, inquiries of
certain officials of the Company and its subsidiaries responsible for
financial and accounting matters, a review of interim financial
information in accordance with standards established by the American
Institute of Certified Public Accountants in Statement on Auditing
Standards No. 71, Interim Financial Information ("SAS 71"), with
respect to the three-month periods ended March 31, 1997 and March 31,
1998 and such other inquiries and procedures as may be specified in
such letter, nothing came to our attention that caused us to believe
that:
(A) the Quarterly Financials included in the Registration Statement
and the Prospectus do not comply as to form in all material respects
with the applicable accounting requirements of the 1933 Act and the
1933 Act Regulations or any material modifications should be made to
the unaudited consolidated financial statements included in the
Registration Statement and the
A-1
<PAGE>
Prospectus for them to be in conformity with generally accepted
accounting principles;
(B) at [_________, 19___ and at] a specified date not more than five
days prior to the date of this Agreement, there was any change in the
___________ of the Company and its subsidiaries or any decrease in the
__________ of the Company and its subsidiaries or any increase in the
__________ of the Company and its subsidiaries, in each case as
compared with amounts shown in the latest balance sheet included in
the Registration Statement, except in each case for changes, decreases
or increases that the Registration Statement discloses have occurred
or may occur; or
(C) [for the period from _________, 19___ to _________, 19___ and ]
for the period from _________, 19___ to a specified date not more than
five days prior to the date of this Agreement, there was any decrease
in _________, __________ or ___________, in each case as compared with
the comparable period in the preceding year, except in each case for
any decreases that the Registration Statement discloses have occurred
or may occur;
(iii) based upon the procedures set forth in clause (ii) above and a reading
of the Selected Financial Data included in the Registration Statement
and a reading of the financial statements from which such data were
derived, nothing came to our attention that caused us to believe that
the Selected Financial Data included in the Registration Statement do
not comply as to form in all material respects with the disclosure
requirements of Item 301 of Regulation S-K of the 1933 Act, that the
amounts included in the Selected Financial Data are not in agreement
with the corresponding amounts in the audited consolidated financial
statements for the respective periods or that the financial statements
not included in the Registration Statement from which certain of such
data were derived are not in conformity with generally accepted
accounting principles;
(iv) we have compared the information in the Registration Statement under
selected captions with the disclosure requirements of Regulation S-K
of the 1933 Act and on the basis of limited procedures specified
herein nothing came to our attention that caused us to believe that
this information does not comply as to form in all material
A-2
<PAGE>
respects with the disclosure requirements of Items 302, 402 and
503(d), respectively, of Regulation S-K;
(v) based upon the procedures set forth in clause (ii) above, a reading of
the unaudited financial statements of the Company for [the most recent
period] that have not been included in the Registration Statement and
a review of such financial statements in accordance with SAS 71,
nothing came to our attention that caused us to believe that the
unaudited amounts for _____________ for the [most recent period] do
not agree with the amounts set forth in the unaudited consolidated
financial statements for those periods or that such unaudited amounts
were not determined on a basis substantially consistent with that of
the corresponding amounts in the audited consolidated financial
statements;
(vi) we are unable to and do not express any opinion on the Pro Forma
Condensed Consolidated Financial Data (the "Pro Forma Statements)
included in the Registration Statement or on the pro forma adjustments
applied to the historical amounts included in the Pro Forma
Statements; however, for purposes of this letter we have:
(A) read the Pro Forma Statements;
(B) performed [an audit] [a review in accordance with SAS 71] of
the financial statements to which the pro forma adjustments
were applied;
(C) made inquiries of certain officials of the Company who have
responsibility for financial and accounting matters about the
basis for their determination of the pro forma adjustments
and whether the Pro Forma Statements comply as to form in all
material respects with the applicable accounting requirements
of Rule 11-02 of Regulation S-X; and
(D) proved the arithmetic accuracy of the application of the pro
forma adjustments to the historical amounts in the Pro Forma
Statements; and on the basis of such procedures and such
other inquiries and procedures as specified herein, nothing
came to our attention that caused us to believe that the Pro
Forma Statements included in the Registration Statement do
not comply as to form in all material respects with the
applicable requirements of Rule 11-02 of Regulation
A-3
<PAGE>
S-X or that the pro forma adjustments have not been properly
applied to the historical amounts in the compilation of those
statements; and
(vii) in addition to the procedures referred to in clause (ii) above, we
have performed other procedures, not constituting an audit, with
respect to certain amounts, percentages, numerical data and financial
information appearing in the Registration Statement, which are
specified herein, and have compared certain of such items with, and
have found such items to be in agreement with, the accounting and
financial records of the Company.
A-4
<PAGE>
===============================================================================
===============================================================================
FORM OF
AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
(a Delaware corporation)
1,400,000 Shares of Common Stock
INTERNATIONAL PURCHASE AGREEMENT
Dated: January __, 1999
===============================================================================
===============================================================================
<PAGE>
Table of Contents
INTERNATIONAL PURCHASE AGREEMENT..............................................1
SECTION 1. Representations and Warranties...............................4
(i) Compliance with Registration Requirements...............4
(ii) Independent Accountants................................5
(iii) Financial Statements..................................5
(iv) No Material Adverse Change in Business.................6
(v) Good Standing of the Company............................6
(vi) Good Standing of Subsidiaries..........................6
(vii) Capitalization........................................7
(viii) Authorization of Agreement...........................7
(ix) Authorization and Description of Securities............7
(x) Absence of Defaults and Conflicts.......................8
(xi) Absence of Labor Dispute...............................8
(xii) Absence of Proceedings................................9
(xiii) Accuracy of Exhibits.................................9
(xiv) Possession of Intellectual Property...................9
(xv) Absence of Further Requirements........................9
(xvi) Possession of Licenses and Permits...................10
(xvii) Title to Property...................................10
(xviii) Compliance with Cuba Act...........................11
(xix) Investment Company Act...............................11
(xx) Environmental Laws....................................11
(xxi) Registration Rights..................................12
(xxii) Taxes...............................................12
(xxiii) Maintenance of Adequate Insurance..................12
(xxiv) Merger...............................................12
SECTION 2. Sale and Delivery to International
Managers; Closing..............................13
(a) Initial International Securities..........................13
(b) International Option Securities...........................13
(c) Payment...................................................14
(d) Denominations; Registration...............................15
SECTION 3. Covenants of the Company....................................15
(a) Compliance with Securities Regulations and
Commission Requests.................................15
(b) Filing of Amendments......................................15
(c) Delivery of Registration Statements.......................16
(d) Delivery of Prospectuses..................................16
(e) Continued Compliance with Securities Laws.................16
(f) Blue Sky Qualifications...................................17
(g) Rule 158..................................................17
(h) Use of Proceeds...........................................17
-i-
<PAGE>
(i) Listing...................................................17
(j) Restriction on Sale of Securities.........................17
(k) Reporting Requirements....................................18
(l) Compliance with Rule 463..................................18
(m) Compliance with NASD Rules................................18
SECTION 4. Payment of Expenses.........................................19
(a) Expenses..................................................19
(b) Termination of Agreement..................................19
SECTION 5. Conditions of International
Managers' Obligations..........................19
(a) Effectiveness of Registration Statement...................20
(b) Opinion of Counsel for Company............................20
(c) Opinion of Counsel for the International Managers.........20
(d) Officers' Certificate.....................................21
(e) Accountants' Comfort Letter...............................21
(f) Bring-down Comfort Letter.................................21
(g) Approval of Listing.......................................21
(h) No Objection..............................................22
(i) Lock-up Agreements........................................22
(j) Purchase of Initial U.S. Securities.......................22
(k) Conditions to Purchase of International
Option Securities...................................22
(i) Officers' Certificate..................................22
(ii) Opinion of Counsel for Company........................22
(iii) Opinion of Counsel for the International
Managers.......................................22
(iv) Bring-down Comfort Letter.............................22
(l) Additional Documents......................................23
(m) Termination of Agreement..................................23
SECTION 6. Indemnification.............................................23
(a) Indemnification of International Managers.................23
(b) Indemnification of Company, Directors and
Officers............................................25
(c) Actions against Parties; Notification.....................25
(d) Settlement without Consent if Failure to
Reimburse...........................................26
(e) Indemnification for Reserved Securities...................26
SECTION 7. Contribution................................................26
SECTION 8. Representations, Warranties and
Agreements to Survive Delivery.................28
-ii-
<PAGE>
SECTION 9. Termination of Agreement....................................28
(a) Termination; General......................................28
(b) Liabilities...............................................29
SECTION 10. Default by One or More of
the International Managers.....................29
SECTION 11. Default by the Company.....................................30
SECTION 12. Notices....................................................30
SECTION 13. Parties....................................................30
SECTION 14. GOVERNING LAW AND TIME.....................................30
SECTION 15. Effect of Headings.........................................31
SCHEDULES
Schedule A - List of Underwriters..................................Sch A-1
Schedule B - Pricing Information................................Sch B-1
Schedule C - List of Persons Subject to Lock-up....................Sch C-1
EXHIBITS
Exhibit A - Form of Opinion of Company's Counsel.......................A-1
Exhibit B - Form of Lock-up Letter.....................................B-1
ANNEXES
Annex A - Form of Comfort Letter.......................................A-1
-iii-
<PAGE>
AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
(a Delaware corporation)
1,400,000 Shares of Common Stock
(Par Value $0.01 Per Share)
INTERNATIONAL PURCHASE AGREEMENT
January __, 1999
MERRILL LYNCH INTERNATIONAL
CREDIT SUISSE FIRST BOSTON CORPORATION
DONALDSON, LUFKIN & JENRETTE INTERNATIONAL
MORGAN STANLEY & CO. INTERNATIONAL LIMITED
PAINEWEBBER INTERNATIONAL (U.K.) LTD.
as Lead Managers of the several International Managers
c/o Merrill Lynch International
20 Farringdon Road
London EC1M 3NH
England
Ladies and Gentlemen:
American Axle & Manufacturing Holdings, Inc., a Delaware corporation
(the "Company") confirms its agreement with Merrill Lynch International
("Merrill Lynch") and each of the other International Managers named in
Schedule A hereto (collectively, the "International Managers", which term shall
also include any underwriter substituted as hereinafter provided in Section 10
hereof), for whom Merrill Lynch, Credit Suisse First Boston Corporation,
Donaldson, Lufkin & Jenrette International, Morgan Stanley & Co. International
Limited and PaineWebber International (U.K.) Limited are acting as lead
managers (in such capacity, the "Lead Managers"), with respect to (i) the sale
by the Company and the purchase by the International Managers, acting severally
and not jointly, of the respective numbers of shares of Common Stock, par value
$0.01 per share, of the Company ("Common Stock") set forth in Schedule A hereto
and (ii) the grant by the Company to the Lead Managers, acting severally and
not jointly, of the option described in Section 2(b) hereof to purchase all or
any part of 210,000 additional shares of Common Stock to cover over-allotments,
if any. The aforesaid 1,400,000 shares of Common Stock (the "Initial
International Securities") to be purchased by the International Managers and all
or any part of the 210,000 shares of Common Stock subject to the option
described in Section 2(b) hereof
1
<PAGE>
(the "International Option Securities") are hereinafter called, collectively,
the "International Securities".
It is understood that the Company is concurrently entering into an
agreement dated the date hereof (the "U.S. Purchase Agreement") providing for
the offering by the Company of an aggregate of 5,600,000 shares of Common Stock
(the "Initial U.S. Securities") through arrangements with certain underwriters
inside the United States and Canada (the "U.S. Underwriters") for whom Merrill
Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Credit Suisse
First Boston Corporation, Donaldson, Lufkin & Jenrette Securities Corporation,
Morgan Stanley & Co. Incorporated and PaineWebber Incorporated are acting as
representatives (the "Representatives") and the grant by the Company to the
U.S. Underwriters, acting severally and not jointly, of an option to purchase
all or any part of the U.S. Underwriters' pro rata portion of up to 840,000
additional shares of Common Stock solely to cover over allotments, if any (the
"U.S. Option Securities" and, together with the International Option
Securities, the "Option Securities"). The Initial U.S. Securities and the U.S.
Option Securities are hereinafter called the "U.S. Securities." It is
understood that (a) the Company is not obligated to sell, and the International
Managers are not obligated to purchase, any Initial International Securities
unless all of the Initial U.S. Securities are contemporaneously purchased by
the U.S. Underwriters and (b) the Company is not obligated to sell, and the
U.S. Underwriters are not obligated to purchase, any Initial U.S. Securities
unless all of the Initial International Securities are contemporaneously
purchased by the International Managers.
The International Mangers and the U.S. Underwriters are hereinafter
collectively called the "Underwriters," the Initial International Securities
and the Initial U.S. Securities are hereinafter collectively called the
"Initial Securities," and the International Securities, and the U.S. Securities
are hereinafter collectively called the "Securities."
The Underwriters will concurrently enter into an Intersyndicate
Agreement of even date herewith (the "Intersyndicate Agreement") providing for
the coordination of certain transactions among the Underwriters under the
direction of Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated (in such capacity, the "Global Coordinator").
The Company understands that the International Managers propose to
make a public offering of the International Securities as soon as the Lead
Managers deem advisable after this Agreement has been executed and delivered.
The Company and the International Managers understand that up to
700,000 shares of the Initial U.S. Securities to be purchased by
2
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the U.S. Underwriters (the "Reserved Securities") shall be reserved for sale by
the U.S. Underwriters to certain eligible employees and persons having business
relationships with the Company, as part of the distribution of the Initial U.S.
Securities by the U.S. Underwriters, subject to the terms of this Agreement,
the applicable rules, regulations and interpretations of the National
Association of Securities Dealers, Inc. (the "NASD") and all other applicable
laws, rules and regulations. To the extent that such Reserved Securities are
not orally confirmed for purchase by such eligible employees and persons having
business relationships with the Company by the first business day after the
date of this Agreement, such Reserved Securities may be offered to the public
as part of the public offering contemplated hereby.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (No. 333-53491) covering the
registration of the Securities under the Securities Act of 1933, as amended
(the "1933 Act"), including the related preliminary prospectus or prospectuses.
Promptly after execution and delivery of this Agreement, the Company will
either (i) prepare and file a prospectus in accordance with the provisions of
Rule 430A ("Rule 430A") of the rules and regulations of the Commission under
the 1933 Act (the "1933 Act Regulations") and paragraph (b) of Rule 424 ("Rule
424(b)") of the 1933 Act Regulations or (ii) if the Company has elected to rely
upon Rule 434 ("Rule 434") of the 1933 Act Regulations, prepare and file a term
sheet (a "Term Sheet") in accordance with the provisions of Rule 434 and Rule
424(b). Two forms of prospectuses are to be used in connection with the
offering and sale of the Securities: one relating to the International
Securities (the "Form of International Prospectus") and one relating to the
U.S. Securities (the "Form of U.S. Prospectus"). The Form of U.S. Prospectus is
identical to the Form of International Prospectus, except for the front cover
and back cover pages and the information under the caption "Underwriting". The
information included in such prospectus or in such Term Sheet, as the case may
be, that was omitted from such registration statement at the time it became
effective but that is deemed to be part of such registration statement at the
time it became effective (a) pursuant to paragraph (b) of Rule 430A is referred
to as "Rule 430A Information" or (b) pursuant to paragraph (d) of Rule 434 is
referred to as "Rule 434 Information." The Form of International Prospectus and
Form of U.S. Prospectus used before such registration statement became
effective, and any prospectus that omitted, as applicable, the Rule 430A
Information or the Rule 434 Information, that was used after such effectiveness
and prior to the execution and delivery of this Agreement, is herein called a
"preliminary prospectus." Such registration statement, including the exhibits
thereto and schedules thereto at the time it became effective and including the
Rule 430A Information and the Rule 434 Information, as applicable, is herein
called the "Registration Statement." Any registration
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statement filed pursuant to Rule 462(b) of the 1933 Act Regulations is herein
referred to as the "Rule 462(b) Registration Statement," and after such filing
the term "Registration Statement" shall include the Rule 462(b) Registration
Statement. The final Form of International Prospectus and the final Form of
U.S. Prospectus in the forms first furnished to the Underwriters for use in
connection with the offering of the Securities are herein called the
"International Prospectus" and the "U.S. Prospectus" respectively, and
collectively the "Prospectuses." If Rule 434 is relied on, the terms
"International Prospectus" and "U.S. Prospectus" shall refer to the preliminary
International Prospectus dated January 8, 1999 and preliminary U.S. Prospectus
dated January 8, 1999, respectively, each together with the applicable Term
Sheet, and all references in this Agreement to the date of the Prospectuses
shall mean the date of the Term Sheet. For purposes of this Agreement, all
references to the Registration Statement, any preliminary prospectus, the
International Prospectus, the U.S. Prospectus or any Term Sheet or any
amendment or supplement to any of the foregoing shall be deemed to include the
copy filed with the Commission pursuant to its Electronic Data Gathering,
Analysis and Retrieval system ("EDGAR").
SECTION 1. Representations and Warranties. The Company represents and
warrants to each International Manager as of the date hereof, as of the Closing
Time referred to in Section 2(c) hereof, and as of each Date of Delivery (if
any) referred to in Section 2(b) hereof, and agrees with each International
Manager as follows:
(i) Compliance with Registration Requirements. Each of the
Registration Statement and any Rule 462(b) Registration Statement has
become effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b)
Registration Statement has been issued under the 1933 Act and no
proceedings for that purpose have been instituted or are pending or,
to the knowledge of the Company, are contemplated by the Commission,
and any request on the part of the Commission for additional
information has been complied with.
At the respective times the Registration Statement, any Rule
462(b) Registration Statement and any post-effective amendments
thereto became effective and at the Closing Time (and, if any
International Option Securities are purchased, at the Date of
Delivery), the Registration Statement, the Rule 462(b) Registration
Statement and any amendments and supplements thereto complied and will
comply in all material respects with the requirements of the 1933 Act
and the 1933 Act Regulations and did not and will not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not
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misleading. Neither of the Prospectuses nor any amendments or
supplements thereto, at the time the Prospectuses or any amendments or
supplements were issued and at the Closing Time (and, if any
International Option Securities are purchased, at the Date of
Delivery), included or will include an untrue statement of a material
fact or omitted or will omit to state a material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. If Rule 434
is used, the Company will comply with the requirements of Rule 434 and
the Prospectuses shall not be "materially different", as such term is
used in Rule 434, from the prospectuses included in the Registration
Statement at the time it became effective. The representations and
warranties in this subsection shall not apply to statements in or
omissions from the Registration Statement or the International
Prospectus made in reliance upon and in conformity with information
furnished to the Company in writing by any International Manager
through the Lead Managers expressly for use in the Registration
Statement or the International Prospectus.
Each preliminary prospectus and the prospectuses filed as
part of the Registration Statement as originally filed or as part of
any amendment thereto, or filed pursuant to Rule 424 under the 1933
Act, complied when so filed in all material respects with the 1933 Act
Regulations and each preliminary prospectus and each of the
Prospectuses delivered to the Underwriters for use in connection with
this offering was identical to the electronically transmitted copy
thereof filed with the Commission pursuant to EDGAR, except to the
extent permitted by Regulation S-T.
(ii) Independent Accountants. The accountants who certified
the financial statements and supporting schedule included in the
Registration Statement are independent public accountants as required
by the 1933 Act and the 1933 Act Regulations.
(iii) Financial Statements. The financial statements included
in the Registration Statement and the Prospectuses, together with the
related schedule and notes, present fairly in all material respects
the financial position of the Company and its consolidated
subsidiaries at the dates indicated and the respective statement of
income, shareholders' equity and cash flows of the Company and its
consolidated subsidiaries for the periods specified; said financial
statements have been prepared in conformity with generally accepted
accounting principles ("GAAP") applied on a consistent basis
throughout the periods involved. The supporting schedule included in
the Registration Statement presents fairly in all material respects in
accordance with GAAP the information required to be stated therein.
The
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selected financial data and the summary financial information included
in the Prospectuses present fairly in all material respects the
information shown therein and have been compiled on a basis consistent
with that of the audited financial statements included in the
Registration Statement. The pro forma financial statement and the
related notes thereto included in the Registration Statement and the
Prospectuses present fairly in all material respects the information
shown therein, have been prepared and presented in accordance with the
Commission's rules and guidelines with respect to pro forma financial
statements and have been properly compiled on the bases described
therein, and the assumptions used in the preparation thereof are
reasonable and the adjustments used therein are appropriate to give
effect to the transactions and circumstances referred to therein.
(iv) No Material Adverse Change in Business. Since the
respective dates as of which information is given in the Registration
Statement and the Prospectuses, except as otherwise stated therein,
(A) there has been no material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries (taken as a
whole), whether or not arising in the ordinary course of business (a
"Material Adverse Effect"), (B) there have been no transactions
entered into by the Company or any of its subsidiaries, other than
those in the ordinary course of business, which are material with
respect to the Company and its subsidiaries (taken as a whole), and
(C) there has been no dividend or distribution of any kind declared,
paid or made by the Company on any class of its capital stock.
(v) Good Standing of the Company. The Company has been duly
organized and is validly existing as a corporation in good standing
under the laws of the State of Delaware and has corporate power and
authority to own, lease and operate its properties and to conduct its
business as described in the Prospectuses and to enter into and
perform its obligations under this Agreement and under the U.S.
Purchase Agreement; and the Company is duly qualified as a foreign
corporation to transact business and is in good standing in each other
jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of
business, except where the failure so to qualify or to be in good
standing would not result in a Material Adverse Effect.
(vi) Good Standing of Subsidiaries. Each "significant
subsidiary" of the Company (as such term is defined in Rule 1-02 of
Regulation S-X) (each a "Subsidiary" and, collectively, the
"Subsidiaries") has been duly organized and is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has corporate power and
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authority to own, lease and operate its properties and to conduct its
business as described in the Prospectuses and is duly qualified as a
foreign corporation to transact business and is in good standing in
each jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of
business, except where the failure so to qualify or to be in good
standing would not result in a Material Adverse Effect; except as
otherwise disclosed in the Registration Statement, all of the issued
and outstanding capital stock of each such Subsidiary has been duly
authorized and validly issued, is fully paid and non-assessable and is
owned by the Company, directly or through subsidiaries, free and clear
of any security interest, mortgage, pledge, lien, encumbrance, claim
or equity; none of the outstanding shares of capital stock of any
Subsidiary was issued in violation of the preemptive or similar rights
of any securityholder of such Subsidiary. The only Subsidiaries of the
Company are the Subsidiaries listed on Exhibit 21 to the Registration
Statement.
(vii) Capitalization. The authorized, issued and outstanding
capital stock of the Company is as set forth in the Prospectuses in
the column entitled "Historical" under the caption "Capitalization"
(except for subsequent issuances, if any, pursuant to this Agreement
or the International Purchase Agreement, pursuant to reservations,
agreements or employee benefit plans referred to in the Prospectuses
or pursuant to the exercise of convertible securities or options
referred to in the Prospectuses). The shares of issued and outstanding
capital stock have been duly authorized and validly issued and are
fully paid and non-assessable; none of the outstanding shares of
capital stock was issued in violation of the preemptive or other
similar rights of any securityholder of the Company.
(viii) Authorization of Agreement. This Agreement and the
U.S. Purchase Agreement have been duly authorized, executed and
delivered by the Company.
(ix) Authorization and Description of Securities. The
Securities to be purchased by the International Managers and the U.S.
Underwriters from the Company have been duly authorized for issuance
and sale to the International Managers pursuant to this Agreement and
to the U.S. Underwriters pursuant to the U.S. Purchase Agreement and,
when issued and delivered by the Company pursuant to this Agreement
and the U.S. Purchase Agreement, respectively, against payment of the
consideration set forth herein and therein, will be validly issued and
fully paid and non-assessable; the Common Stock conforms to all
statements relating thereto contained in the Prospectuses and such
description conforms to the rights set forth in the instruments
defining the same; no holder of the Securities will be subject to
personal liability by reason of being such a holder; and the
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issuance of the Securities is not subject to the preemptive or other
similar rights of any securityholder of the Company.
(x) Absence of Defaults and Conflicts. Neither the Company
nor any of its subsidiaries is in violation of its charter or by-laws
or in default, or, to the Company's knowledge, alleged by any other
party to be in default, in the performance or observance of any
obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, deed of trust, loan or credit
agreement, note, lease or other agreement or instrument to which the
Company or any of its subsidiaries is a party or by which it or any of
them may be bound, or to which any of the property or assets of the
Company or any subsidiary is subject (collectively, "Agreements and
Instruments") except for such defaults that would not result in a
Material Adverse Effect; and the execution, delivery and performance
of this Agreement and the U.S. Purchase Agreement and the consummation
of the transactions contemplated herein and therein and the use of the
proceeds from the sale of the Securities as described in the
Prospectuses under the caption "Use of Proceeds" and compliance by the
Company with its obligations under this Agreement and the U.S.
Purchase Agreement have been duly authorized by all necessary
corporate action and do not and will not, whether with or without the
giving of notice or passage of time or both, conflict with or
constitute a breach of, or default or Repayment Event (as defined
below) under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or
any subsidiary pursuant to, the Agreements and Instruments (except for
such conflicts, breaches or defaults or liens, charges or encumbrances
that would not result in a Material Adverse Effect), nor will such
action result in any violation of the provisions of the charter or
by-laws of the Company or any subsidiary or any applicable law,
statute, rule, regulation, judgment, order, writ or decree of any
government, government instrumentality or court, domestic or foreign,
having jurisdiction over the Company or any subsidiary or any of their
assets, properties or operations. As used herein, a "Repayment Event"
means any event or condition which gives the holder of any note,
debenture or other evidence of indebtedness (or any person acting on
such holder's behalf) the right to require the repurchase, redemption
or repayment of all or a portion of such indebtedness by the Company
or any subsidiary.
(xi) Absence of Labor Dispute. No labor dispute with the
employees of the Company or any subsidiary exists or, to the knowledge
of the Company, is imminent, and the Company is not aware of any
existing or imminent labor disturbance by the employees of any of its
or any subsidiary's principal suppliers, manufacturers, customers or
contractors, which, in either case,
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may reasonably be expected to result in a Material Adverse Effect.
(xii) Absence of Proceedings. There is no action, suit,
proceeding, inquiry or investigation before or brought by any court or
governmental agency or body, domestic or foreign, now pending, or, to
the knowledge of the Company, threatened, against or affecting the
Company or any subsidiary, which is required to be disclosed in the
Registration Statement (other than as disclosed therein), or which
might reasonably be expected to result in a Material Adverse Effect,
or which might reasonably be expected to materially and adversely
affect the properties or assets thereof or the consummation of the
transactions contemplated in this Agreement or the U.S. Purchase
Agreement or the performance by the Company of its obligations
hereunder and thereunder; the aggregate of all pending legal or
governmental proceedings to which the Company or any subsidiary is a
party or of which any of their respective property or assets is the
subject which are not described in the Registration Statement,
including ordinary routine litigation incidental to the business,
could not reasonably be expected to result in a Material Adverse
Effect.
(xiii) Accuracy of Exhibits. There are no contracts or
documents which are required to be described in the Registration
Statement or the Prospectuses or to be filed as exhibits thereto which
have not been so described and filed as required, and the descriptions
of all such contracts and documents in the Prospectuses are complete
and accurate in all material respects.
(xiv) Possession of Intellectual Property. The Company and
its subsidiaries own or possess, or can acquire on reasonable terms,
adequate patents, patent rights, licenses, inventions, copyrights,
know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks, trade names or other
intellectual property (collectively, "Intellectual Property")
necessary to carry on the business now operated by them, and neither
the Company nor any of its subsidiaries has received any notice or is
otherwise aware of any infringement of or conflict with asserted
rights of others with respect to any Intellectual Property or of any
facts or circumstances which would render any Intellectual Property
invalid or inadequate to protect the interest of the Company or any of
its subsidiaries therein, and which infringement or conflict (if the
subject of any unfavorable decision, ruling or finding) or invalidity
or inadequacy, singly or in the aggregate, would result in a Material
Adverse Effect.
(xv) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration,
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qualification or decree of, any court or governmental authority or
agency is necessary or required for the performance by the Company of
its obligations under this Agreement or the U.S. Purchase Agreement,
in connection with the offering, issuance or sale of the Securities
hereunder or thereunder or the consummation of the transactions
contemplated by this Agreement or the U.S. Purchase Agreement, except
such as have been already obtained or as may be required under the
1933 Act or the 1933 Act Regulations or state or foreign securities
laws.
(xvi) Possession of Licenses and Permits. The Company and its
subsidiaries possess such permits, licenses, approvals, consents and
other authorizations (collectively, "Governmental Licenses") issued by
the appropriate federal, state, local or foreign regulatory agencies
or bodies necessary to conduct the business now operated by them,
except where the failure to possess would not, singly or in the
aggregate, have a Material Adverse Effect; the Company and its
subsidiaries are in compliance with the terms and conditions of all
such Governmental Licenses, except where the failure so to comply
would not, singly or in the aggregate, have a Material Adverse Effect;
all of the Governmental Licenses are valid and in full force and
effect, except when the invalidity of such Governmental Licenses or
the failure of such Governmental Licenses to be in full force and
effect would not have a Material Adverse Effect; and neither the
Company nor any of its subsidiaries has received any notice of
proceedings relating to the revocation or modification of any such
Governmental Licenses which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would result in
a Material Adverse Effect.
(xvii) Title to Property. The Company and its subsidiaries
have good and marketable title to all real property owned by the
Company and its subsidiaries and good title to all other properties
owned by them, in each case, free and clear of all mortgages, pledges,
liens, security interests, claims, restrictions or encumbrances of any
kind except such as (a) are described in the Prospectuses or (b) do
not, singly or in the aggregate, materially affect the value of such
property and do not interfere with the use made and proposed to be
made of such property by the Company or any of its subsidiaries; and
all of the leases and subleases material to the business of the
Company and its subsidiaries, considered as one enterprise, and under
which the Company or any of its subsidiaries holds properties
described in the Prospectuses, are in full force and effect, and
neither the Company nor any subsidiary has any notice of any material
claim of any sort that has been asserted by anyone adverse to the
rights of the Company or any subsidiary under any of the leases or
subleases mentioned above, or affecting or questioning the rights of
the Company or such subsidiary to the
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continued possession of the leased or subleased premises under any
such lease or sublease.
(xviii) Compliance with Cuba Act. The Company has complied
with, and is and will be in compliance with, the provisions of that
certain Florida act relating to disclosure of doing business with
Cuba, codified as Section 517.075 of the Florida statutes, and the
rules and regulations thereunder or is exempt therefrom.
(xix) Investment Company Act. The Company is not, and upon
the issuance and sale of the Securities as herein contemplated and the
application of the net proceeds therefrom as described in the
Prospectuses will not be, an "investment company" or an entity
"controlled" by an "investment company" as such terms are defined in
the Investment Company Act of 1940, as amended (the "1940 Act").
(xx) Environmental Laws. Except as described in the
Registration Statement and except as would not, singly or in the
aggregate, result in a Material Adverse Effect, (A) neither the
Company nor any of its subsidiaries is in violation of any federal,
state, local or foreign statute, law, rule, regulation, ordinance,
code, legally binding policy or rule of common law or any judicial or
legally binding administrative interpretation thereof, including any
judicial or administrative order, consent, decree or judgment, relating
to pollution or protection of human health, the environment (including,
without limitation, ambient air, surface water, groundwater, land
surface or subsurface strata) or wildlife, including, without
limitation, laws and regulations relating to the release or threatened
release of chemicals, pollutants, contaminants, wastes, toxic
substances, hazardous substances, petroleum or petroleum products
(collectively, "Hazardous Materials") or to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport
or handling of Hazardous Materials (collectively, "Environmental
Laws"), (B) the Company and its subsidiaries have all permits,
authorizations and approvals required under any applicable
Environmental Laws (except for such permits, authorizations and
approvals the absence of which would not result in a Material Adverse
Effect) and are each in compliance with their requirements, (C) there
are no pending or, to the knowledge of the Company, threatened
administrative, regulatory or judicial actions, suits, demands, demand
letters, claims, liens, notices of noncompliance or violation,
investigation or proceedings relating to any Environmental Law against
the Company or any of its subsidiaries and (D) there are no events or
circumstances that might reasonably be expected to form the basis of an
order for clean-up or remediation, or an action, suit or proceeding by
any private party or governmental body or agency, against or affecting
the Company or any of its
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subsidiaries relating to Hazardous Materials or any Environmental
Laws.
(xxi) Registration Rights. There are no persons with
registration rights or other similar rights to have any securities
registered pursuant to the Registration Statement or otherwise
registered by the Company under the 1933 Act except as described in
the Prospectuses. All applicable "piggy-back" registration rights
otherwise applicable and entitling the persons holding such rights to
have any securities so registered have been duly and validly waived or
otherwise relinquished in respect of the Registration Statement and
the transactions contemplated thereby.
(xxii) Taxes. The Company and each of its subsidiaries have
filed all necessary federal, state, local and foreign income, payroll,
franchise and other tax returns (after giving effect to extensions) and
have paid all taxes shown as due thereon or with respect to any of its
properties, except for taxes being contested in good faith for which
adequate reserves have been provided, and there is no tax deficiency
that has been, or to the knowledge of the Company is likely to be,
asserted against the Company, any of its subsidiaries or any of their
properties or assets that would result in a Material Adverse Effect.
(xxiii) Maintenance of Adequate Insurance. The Company and
each of its subsidiaries is insured by insurers of recognized
financial responsibility against such losses and risks and in such
amounts as is reasonably prudent in the business in which it is
engaged or proposed to engage after giving effect to the transactions
described in the Prospectuses; and the Company does not have any
reason to believe that it will not be able to renew its existing
insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue
its business at a cost that would not result in a Material Adverse
Effect.
(xxiv) Merger. The Company and American Axle & Manufacturing
of Michigan, Inc., a Michigan corporation ("AAMM"), had all corporate
power and authority to carry out the merger of AAMM into the Company
(the "Merger"), and the Company, AAMM and their respective
stockholders have taken all action required by law and their
respective charters and bylaws or otherwise to approve the Merger; the
consummation of the Merger did not contravene any provision of
applicable law or the respective charters or bylaws of the Company and
AAMM or any provision of any material agreement or other material
instrument binding upon the Company or AAMM or any order, writ,
injunction or decree of any jurisdiction, court or governmental body,
and no consent, approval, authorization or order of any court or
governmental agency or body was required for the consummation of the
Merger, except such as were obtained; the Merger became
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effective on January 22, 1999, in accordance with the laws of Michigan
and Delaware; and the Merger will not result in the recognition of any
material liability under the Internal Revenue Code of 1986, as amended
(the "Code") or otherwise for taxes for the Company or any of its
subsidiaries.
Any certificate signed by any officer of the Company or any of its
subsidiaries delivered to the Lead Managers or to counsel for the International
Managers and the U.S. Underwriters shall be deemed a representation and
warranty by the Company to each International Manager and each U.S. Underwriter
as to the matters covered thereby.
SECTION 2. Sale and Delivery to International Managers; Closing.
(a) Initial International Securities. On the basis of the
representations and warranties herein contained and subject to the terms and
conditions herein set forth, the Company agrees to sell to each International
Manager, severally and not jointly, and each International Manager, severally
and not jointly, agrees to purchase from the Company, at the price per share
set forth in Schedule B, that number of Initial International Securities set
forth in Schedule A opposite the name of such International Manager, plus any
additional number of Initial International Securities which such International
Manager may become obligated to purchase pursuant to the provisions of Section
10 hereof, subject, in each case, to such adjustments among the International
Managers as the Lead Managers in their sole discretion shall make to eliminate
any sales or purchases of fractional securities.
(b) International Option Securities. In addition, on the basis of the
representations and warranties herein contained and subject to the terms and
conditions herein set forth, the Company hereby grants an option to the
International Managers, severally and not jointly, to purchase up to an
additional 210,000 shares of Common Stock, at the price per share set forth in
Schedule B, less an amount per share equal to any dividends or distributions
declared by the Company and payable on the Initial International Securities but
not payable on the International Option Securities. The option hereby granted
will expire 30 days after the date hereof and may be exercised in whole or in
part from time to time only for the purpose of covering over-allotments which
may be made in connection with the offering and distribution of the Initial
International Securities upon notice by the Global Coordinator to the Company
setting forth the number of International Option Securities as to which the
several International Managers are then exercising the option and the time and
date of payment and delivery for such International Option Securities. Any such
time and date of delivery (a "Date of Delivery") shall be determined by the
Global Coordinator, but shall not be later than seven full business days
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after the exercise of said option, nor in any event prior to the Closing Time,
as hereinafter defined. If the option is exercised as to all or any portion of
the International Option Securities, each of the International Managers, acting
severally and not jointly, will purchase that proportion of the total number of
International Option Securities then being purchased which the number of
Initial International Securities set forth in Schedule A opposite the name of
such International Underwriter bears to the total number of Initial
International Securities, and the Company shall sell such number of
International Option Securities, subject in each case to such adjustments as
the Global Coordinator in its discretion shall make to eliminate any sales or
purchases of fractional shares.
(c) Payment. Payment of the purchase price for, and delivery of
certificates for, the Initial International Securities shall be made at the
offices of Mayer Brown & Platt, 190 South LaSalle Street, Chicago, Illinois, or
at such other place as shall be agreed upon by the Global Coordinator and the
Company, at 9:00 A.M. (Eastern time) on the third (fourth, if the pricing
occurs after 4:30 P.M. (Eastern time) on any given day) business day after the
date hereof (unless postponed in accordance with the provisions of Section 10),
or such other time not later than ten business days after such date as shall be
agreed upon by the Global Coordinator and the Company (such time and date of
payment and delivery being herein called "Closing Time").
In addition, in the event that any or all of the International Option
Securities are purchased by the International Managers, payment of the purchase
price for, and delivery of certificates for, such International Option
Securities shall be made at the above-mentioned offices, or at such other place
as shall be agreed upon by the Global Coordinator and the Company, on each Date
of Delivery as specified in the notice from the Global Coordinator to the
Company.
Payment shall be made to the Company by wire transfer of immediately
available funds to bank accounts designated by the Company, against delivery to
the Lead Managers for the respective accounts of the International Managers of
certificates for the International Securities to be purchased by them. It is
understood that each International Manager has authorized the Lead Managers,
for its account, to accept delivery of, receipt for, and make payment of the
purchase price for, the Initial International Securities and the International
Option Securities, if any, which it has agreed to purchase. Merrill Lynch,
individually and not as representative of the International Managers, may (but
shall not be obligated to) make payment of the purchase price for the Initial
International Securities or the International Option Securities, if any, to be
purchased by any International Manager whose funds have not been received by
the Closing Time or the relevant Date of
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Delivery, as the case may be, but such payment shall not relieve such
International Manager from its obligations hereunder.
(d) Denominations; Registration. Certificates for the Initial
International Securities and the International Option Securities, if any, shall
be in such denominations and registered in such names as the Lead Managers may
request in writing at least one full business day before the Closing Time or
the relevant Date of Delivery, as the case may be. The certificates for the
Initial International Securities and the International Option Securities, if
any, will be made available for examination and packaging by the Lead Managers
in The City of New York not later than 10:00 A.M. (Eastern time) on the
business day prior to the Closing Time or the relevant Date of Delivery, as the
case may be.
SECTION 3. Covenants of the Company. The Company covenants with each
International Manager as follows:
(a) Compliance with Securities Regulations and Commission Requests.
The Company, subject to Section 3(b), will comply with the requirements of Rule
430A or Rule 434, as applicable, and will notify the Global Coordinator
immediately, and confirm the notice in writing, (i) when any post-effective
amendment to the Registration Statement shall become effective, or any
supplement to the Prospectuses or any amended Prospectuses shall have been
filed, (ii) of the receipt of any comments from the Commission, (iii) of any
request by the Commission for any amendment to the Registration Statement or
any amendment or supplement to the Prospectuses or for additional information,
and (iv) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of any order preventing or
suspending the use of any preliminary prospectus, or of the suspension of the
qualification of the Securities for offering or sale in any jurisdiction, or of
the initiation or threatening of any proceedings for any of such purposes. The
Company will promptly effect the filings necessary pursuant to Rule 424(b) and
will take such steps as it deems necessary to ascertain promptly whether the
form of prospectus transmitted for filing under Rule 424(b) was received for
filing by the Commission and, in the event that it was not, it will promptly
file such prospectus. The Company will make every reasonable effort to prevent
the issuance of any stop order and, if any stop order is issued, to obtain the
lifting thereof at the earliest possible moment.
(b) Filing of Amendments. The Company will give the Global Coordinator
notice of its intention to file or prepare any amendment to the Registration
Statement (including any filing under Rule 462(b)), any Term Sheet or any
amendment, supplement or revision to either the prospectus included in the
Registration Statement at the time it became effective or to the Prospectuses,
will furnish the Global Coordinator with copies of any such
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documents a reasonable amount of time prior to such proposed filing or use, as
the case may be, and will not file or use any such document to which the Global
Coordinator or counsel for the International Managers shall reasonably object
in writing within a reasonable period of time.
(c) Delivery of Registration Statements. The Company has furnished or
will deliver to the Lead Managers and counsel for the International Managers,
without charge, signed copies of the Registration Statement as originally filed
and of each amendment thereto (including exhibits filed therewith or
incorporated by reference therein) and signed copies of all consents and
certificates of experts, and will also deliver to the Lead Manager without
charge, a conformed copy of the Registration Statement as originally filed and
of each amendment thereto (without exhibits) for each of the International
Managers. The copies of the Registration Statement and each amendment thereto
furnished to the International Managers will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to EDGAR, except
to the extent permitted by Regulation S-T.
(d) Delivery of Prospectuses. The Company has delivered to each
International Manager, without charge, as many copies of each preliminary
prospectus as such International Manager reasonably requested, and the Company
hereby consents to the use of such copies for purposes permitted by the 1933
Act. The Company will furnish to each International Manager, without charge,
during the period when the International Prospectus is required to be delivered
under the 1933 Act or the Securities Exchange Act of 1934 (the "1934 Act"),
such number of copies of the International Prospectus (as amended or
supplemented) as such International Manager may reasonably request. The
International Prospectus and any amendments or supplements thereto furnished to
the International Managers will be identical to the electronically transmitted
copies thereof filed with the Commission pursuant to EDGAR, except to the
extent permitted by Regulation S-T.
(e) Continued Compliance with Securities Laws. The Company will comply
with the 1933 Act and the 1933 Act Regulations so as to permit the completion
of the distribution of the Securities as contemplated in this Agreement, the
U.S. Purchase Agreement and in the Prospectuses. If at any time when a
prospectus is required by the 1933 Act to be delivered in connection with sales
of the Securities, any event shall occur or condition shall exist as a result
of which it is necessary, in the opinion of counsel for the International
Managers or for the Company, to amend the Registration Statement or amend or
supplement the Prospectuses in order that the Prospectuses will not include any
untrue statements of a material fact or omit to state a material fact necessary
in order to make the statements therein not misleading in the light of the
circumstances existing at the time it is delivered to a
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purchaser, or if it shall be necessary, in the opinion of such counsel, at any
such time to amend the Registration Statement or amend or supplement the
Prospectuses in order to comply with the requirements of the 1933 Act or the
1933 Act Regulations, the Company will promptly prepare and file with the
Commission, subject to Section 3(b), such amendment or supplement as may be
necessary to correct such statement or omission or to make the Registration
Statement or the Prospectuses comply with such requirements, and the Company
will furnish to the International Managers such number of copies of such
amendment or supplement as the International Managers may reasonably request.
(f) Blue Sky Qualifications. The Company will use its best efforts, in
cooperation with the International Managers to qualify the Securities for
offering and sale under the applicable securities laws of such states and other
jurisdictions (domestic or foreign) as the Global Coordinator may designate and
to maintain such qualifications in effect for a period of not less than one
year from the later of the effective date of the Registration Statement and any
Rule 462(b) Registration Statement; provided, however, that the Company shall
not be obligated to file any general consent to service of process or to
qualify as a foreign corporation or as a dealer in securities in any
jurisdiction in which it is not so qualified or to subject itself to taxation
in respect of doing business in any jurisdiction in which it is not otherwise
so subject. In each jurisdiction in which the Securities have been so
qualified, the Company will file such statements and reports as may be required
by the laws of such jurisdiction to continue such qualification in effect for a
period of not less than one year from the later of the effective date of the
Registration Statement and any Rule 462(b) Registration Statement.
(g) Rule 158. The Company will timely file such reports pursuant to
the 1934 Act as are necessary in order to make generally available to its
securityholders as soon as practicable an earnings statement for the purposes
of, and to provide the benefits contemplated by, the last paragraph of Section
11(a) of the 1933 Act.
(h) Use of Proceeds. The Company will use the net proceeds received by
it from the sale of the Securities in the manner specified in the Prospectuses
under "Use of Proceeds."
(i) Listing. The Company will use its best efforts to effect and
maintain the listing of the Securities on the New York Stock Exchange and will
file with the New York Stock Exchange all documents and notices required by the
New York Stock Exchange of companies that have securities listed thereon.
(j) Restriction on Sale of Securities. During a period of 180 days
from the date of the Prospectuses, the Company will not,
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without the prior written consent of Merrill Lynch, (i) directly or indirectly,
offer, pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase or otherwise transfer or dispose of any share of Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock or
file any registration statement under the 1933 Act with respect to any of the
foregoing or (ii) enter into any swap or any other agreement or any transaction
that transfers, in whole or in part, directly or indirectly, the economic
consequence of ownership of the Common Stock, whether any such swap or
transaction described in clause (i) or (ii) above is to be settled by delivery
of Common Stock or such other securities, in cash or otherwise. The foregoing
sentence shall not apply to (A) the Securities to be sold hereunder or under
the U.S. Purchase Agreement, (B) grants of stock options and other awards
pursuant to the terms of the Company's stock option plans in effect on the date
hereof and described in the Prospectuses, (C) any shares of Common Stock issued
by the Company upon the exercise of an option or warrant or the conversion of a
security outstanding on the date hereof and referred to in the Prospectuses or
(D) offers, sales and issuances of shares of Common Stock, options, rights or
warrants to purchase or any securities convertible into or exercisable or
exchangeable for Common Stock in connection with acquisitions of businesses,
companies or assets by the Company so long as the recipients of such shares,
options, rights, warrants or convertible securities are subject to the
restrictions of this Section 3(j) until the expiration of such 180 day period.
(k) Reporting Requirements. The Company, during the period when the
Prospectuses are required to be delivered under the 1933 Act or the 1934 Act,
will file all documents required to be filed with the Commission pursuant to
the 1934 Act within the time periods required by the 1934 Act and the rules and
regulations of the Commission thereunder.
(l) Compliance with Rule 463. The Company will comply with the
reporting requirements of Rule 463 of the 1933 Act Regulations.
(m) Compliance with NASD Rules. The Company hereby agrees that it will
ensure that the Reserved Securities will be restricted as required by the NASD
or the NASD rules from sale, transfer, assignment, pledge or hypothecation for
a period of three months following the date of effectiveness of the
Registration Statement. The Underwriters will notify the Company as to which
persons will need to be so restricted. At the request of the Underwriters, the
Company will direct the transfer agent to place a stop transfer restriction
upon such securities for such period of time. Should the Company release, or
seek to release, from such restrictions any of the Reserved Securities, the
Company agrees to reimburse the Underwriters for any reasonable expenses
including, without
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limitation, legal expenses they incur in connection with such release.
SECTION 4. Payment of Expenses.
(a) Expenses. The Company will pay or cause to be paid all expenses
incident to the performance of its obligations under this Agreement, including
(i) the preparation, printing and filing of the Registration Statement
(including financial statements and exhibits) as originally filed and of each
amendment thereto, (ii) the preparation, issuance and delivery of the
certificates for the Securities to the International Managers, including any
stock or other transfer taxes and any stamp or other duties payable upon the
sale, issuance or delivery of the Securities to the International Managers,
(iii) the fees and disbursements of the Company's counsel, accountants and other
advisors, (iv) the qualification of the Securities under securities laws in
accordance with the provisions of Section 3(f) hereof, including filing fees and
the reasonable fees and disbursements of counsel for the Underwriters in
connection therewith and in connection with the preparation, printing and
delivery of the Blue Sky Survey and any supplement thereto, (v) the printing and
delivery to the Underwriters of copies of each preliminary prospectus, any Term
Sheets and of the Prospectuses and any amendments or supplements thereto, (vi)
the fees and expenses of any transfer agent or registrar for the Securities,
(vii)the filing fees incident to, and the reasonable fees and disbursements of
counsel to the Underwriters in connection with, the review by the NASD of the
terms of the sale of the Securities, (viii) the fees and expenses incurred in
connection with the listing of the Securities on the New York Stock Exchange and
(ix) all costs and expenses of the Underwriters, including the fees and
disbursements of counsel for the Underwriters, in connection with matters
related to the Reserved Securities which are designated by the Company for sale
to employees and others having a business relationship with the Company. It is
understood, however, that except as provided in this Section or Sections 6, 7 or
9 hereof, the Underwriters shall pay their own costs and expenses, including the
fees and disbursements of their counsel, stock transfer taxes due upon resale of
any of the Securities by them and any advertising expenses incurred in
connection with any offers they may make.
(b) Termination of Agreement. If this Agreement is terminated by the
Lead Managers in accordance with the provisions of Section 5 (other than as a
result of the failure to satisfy the condition set forth in Section 5(h)),
Section 9(a)(i) or Section 11 hereof, the Company shall reimburse the
International Managers for all of their out-of-pocket expenses, including the
reasonable fees and disbursements of counsel for the International Managers.
SECTION 5. Conditions of International Managers' Obligations. The
obligations of the several International Managers hereunder are subject to the
accuracy of the representations and warranties of
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the Company contained in Section 1 hereof or in certificates of any officer of
the Company or any subsidiary of the Company delivered pursuant to the
provisions hereof, to the performance by the Company of its covenants and other
obligations hereunder, and to the following further conditions:
(a) Effectiveness of Registration Statement. The Registration
Statement, including any Rule 462(b) Registration Statement, has become
effective and at Closing Time no stop order suspending the effectiveness of the
Registration Statement shall have been issued under the 1933 Act or proceedings
therefor initiated or threatened by the Commission, and any request on the part
of the Commission for additional information shall have been complied with to
the reasonable satisfaction of counsel to the International Managers. A
prospectus containing the Rule 430A Information shall have been filed with the
Commission in accordance with Rule 424(b) (or a post-effective amendment
providing such information shall have been filed and declared effective in
accordance with the requirements of Rule 430A) or, if the Company has elected
to rely upon Rule 434, a Term Sheet shall have been filed with the Commission
in accordance with Rule 424(b).
(b) Opinion of Counsel for Company. At Closing Time, the Lead Managers
shall have received the favorable opinion, dated as of Closing Time, of Simpson
Thacher & Bartlett, counsel for the Company, and Patrick S. Lancaster, Esq.,
General Counsel of the Company, in form and substance satisfactory to counsel
for the International Managers, together with signed or reproduced copies of
such letter for each of the other International Managers to the effect set
forth in Exhibits A-1 and A-2 hereto and to such further effect as counsel to
the International Managers may reasonably request.
(c) Opinion of Counsel for the International Managers. At Closing
Time, the Lead Managers shall have received the favorable opinion, dated as of
Closing Time, of Mayer, Brown & Platt, counsel for the International Managers,
together with signed or reproduced copies of such letter for each of the other
International Underwriters with respect to the matters set forth in clauses (i)
(solely as to the valid existence and good standing and corporate power and
authority of the Company), (ii) (solely as to the Securities), (iii) (solely as
to preemptive or other similar rights arising by operation of law or under the
charter or by-laws of the Company), (iv) through (vi), inclusive, (vii) (solely
as to the information in the Prospectus under "Description of Capital
Stock--Common Stock"), (xvi) and the penultimate paragraph of Exhibit A-1
hereto. In giving such opinion such counsel may rely, as to all matters
governed by the laws of jurisdictions other than the law of the State of New
York, the federal law of the United States and the General Corporation Law of
the State of Delaware, upon the opinions of counsel satisfactory to the Lead
Managers.
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Such counsel may also state that, insofar as such opinion involves factual
matters, they have relied, to the extent they deem proper, upon certificates of
officers of the Company and its subsidiaries and certificates of public
officials.
(d) Officers' Certificate. At Closing Time, there shall not have been,
since the date hereof or since the respective dates as of which information is
given in the Prospectuses, any material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of the Company or any of its subsidiaries whether or not arising in
the ordinary course of business, and the Lead Managers shall have received a
certificate of the President or a Vice President of the Company and of the
chief financial or chief accounting officer of the Company, dated as of Closing
Time, to the effect that (i) there has been no such material adverse change,
(ii) the representations and warranties in Section 1(a) hereof are true and
correct with the same force and effect as though expressly made at and as of
Closing Time, (iii) the Company has complied with all agreements and satisfied
all conditions on its part to be performed or satisfied at or prior to Closing
Time, and (iv) no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
instituted or are pending or are contemplated by the Commission.
(e) Accountants' Comfort Letter. At the time of the execution of this
Agreement, the Lead Managers shall have received from each of Deloitte & Touche
LLP and Ernst & Young LLP a letter dated such date, in form and substance
satisfactory to the Lead Managers together with signed or reproduced copies of
such letter for each of the other International Managers to the effect set
forth in Annex A hereto and otherwise containing statements and information of
the type ordinarily included in accountants' "comfort letters" to underwriters
with respect to the financial statements and certain financial information
contained in the Registration Statement and the Prospectuses.
(f) Bring-down Comfort Letter. At Closing Time, the Lead Managers
shall have received from each of Deloitte & Touche LLP and Ernst & Young LLP a
letter, dated as of Closing Time, to the effect that they reaffirm the
statements made in the letter furnished pursuant to subsection (e) of this
Section, except that the specified date referred to shall be a date not more
than three business days prior to Closing Time.
(g) Approval of Listing. At Closing Time, the Securities shall have
been approved for listing on the New York Stock Exchange, subject only to
official notice of issuance.
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(h) No Objection. The NASD shall have confirmed that it has not raised
any objection with respect to the fairness and reasonableness of the
underwriting terms and arrangements.
(i) Lock-up Agreements. At the date of this Agreement, the Lead
Managers shall have received an agreement substantially in the form of Exhibit
B hereto signed by the persons listed on Schedule C hereto.
(j) Purchase of Initial U.S. Securities. Contemporaneously with the
purchase by the International Managers of the Initial International Securities
under this Agreement, the U.S. Underwriters shall have purchased the Initial
U.S. Securities under the U.S. Purchase Agreement.
(k) Conditions to Purchase of International Option Securities. In the
event that the International Managers exercise their option provided in Section
2(b) hereof to purchase all or any portion of the International Option
Securities, the representations and warranties of the Company contained herein
and the statements in any certificates furnished by the Company and any
subsidiary of the Company shall be true and correct as of each Date of Delivery
and, at the relevant Date of Delivery, the Lead Managers shall have received:
(i) Officers' Certificate. A certificate, dated such Date of
Delivery, of the President or a Vice President of the Company and of
the chief financial or chief accounting officer of the Company
confirming that the certificate delivered at the Closing Time pursuant
to Section 5(d) hereof remains true and correct as of such Date of
Delivery.
(ii) Opinion of Counsel for Company. The favorable opinion of
Simpson Thacher & Bartlett, counsel for the Company, and Patrick S.
Lancaster, General Counsel for the Company, in form and substance
satisfactory to counsel for the International Managers, dated such
Date of Delivery, relating to the International Option Securities to
be purchased on such Date of Delivery and otherwise to the same effect
as the opinion required by Section 5(b) hereof.
(iii) Opinion of Counsel for the International Managers. The
favorable opinion of Mayer, Brown & Platt, counsel for the
International Managers, dated such Date of Delivery, relating to the
International Option Securities to be purchased on such Date of
Delivery and otherwise to the same effect as the opinion required by
Section 5(c) hereof.
(iv) Bring-down Comfort Letter. A letter from each of
Deloitte & Touche LLP and Ernst & Young LLP, in form and substance
satisfactory to the Lead Managers and dated such Date
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of Delivery, substantially in the same form and substance as the
letter furnished to the Lead Managers pursuant to Section 5(f) hereof,
except that the "specified date" in the letter furnished pursuant to
this paragraph shall be a date not more than five days prior to such
Date of Delivery.
(l) Additional Documents. At Closing Time and at each Date of
Delivery, counsel for the International Managers shall have been furnished with
such documents and opinions as they may require for the purpose of enabling
them to pass upon the issuance and sale of the Securities as herein
contemplated, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the conditions,
herein contained; and all proceedings taken by the Company in connection with
the issuance and sale of the Securities as herein contemplated shall be
satisfactory in form and substance to the Lead Managers and counsel for the
International Managers.
(m) Termination of Agreement. If any condition specified in this
Section shall not have been fulfilled when and as required to be fulfilled,
this Agreement, or, in the case of any condition to the purchase of
International Option Securities on a Date of Delivery which is after the
Closing Time, the obligations of the several International Managers to purchase
the relevant International Option Securities, may be terminated by the Lead
Managers by notice to the Company at any time at or prior to Closing Time or
such Date of Delivery, as the case may be, and such termination shall be
without liability of any party to any other party except as provided in Section
4 and except that Sections 1, 6, 7 and 8 shall survive any such termination and
remain in full force and effect.
SECTION 6. Indemnification.
(a) Indemnification of International Managers. The Company agrees to
indemnify and hold harmless each International Manager and each person, if any,
who controls any International Manager within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement
or alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), including the Rule
430A Information and the Rule 434 Information, if applicable, or the
omission or alleged omission therefrom of a material fact required to
be stated therein or necessary to make the statements therein not
misleading or arising out of any untrue statement or alleged untrue
statement of a material fact included in any preliminary prospectus or
the Prospectuses (or any amendment or supplement thereto), or the
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omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or
threatened, or of any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or
omission; provided that (subject to Section 6(d) below) any such
settlement is effected with the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by Merrill
Lynch), reasonably incurred in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, to the extent that any such
expense is not paid under (i) or (ii) above;
provided, however, that (A) this indemnity agreement shall not apply to any
loss, liability, claim, damage or expense to the extent arising out of any
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with written information furnished to the
Company by any International Manager through the Lead Managers expressly for
use in the Registration Statement (or any amendment thereto), including the
Rule 430A Information and the Rule 434 Information, if applicable, or any
preliminary prospectus or the International Prospectus (or any amendment or
supplement thereto) and (B) as to any preliminary prospectus, this indemnity
agreement shall not inure to the benefit of any International Manager or any
person, if any, who controls any International Manager within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act on account of any
loss, liability, claim, damage or expense arising from the fact that such
International Manager sold Securities to a person to whom there was not sent or
given, at or prior to the written confirmation of such sale, a copy of the
International Prospectus (as then amended or supplemented) in any case where
such delivery is required by the 1933 Act if the Company has previously
furnished copies thereof to such International Manager in the quantities
requested and the loss, liability, claim, damage or expense of such
International Manager results from an untrue statement or omission of a
material fact contained in such preliminary prospectus which the Company has
sustained the burden of proving was corrected in the International Prospectus
(as then amended or supplemented).
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(b) Indemnification of Company, Directors and Officers. Each
International Manager severally agrees to indemnify and hold harmless the
Company, its directors, each of its officers who signed the Registration
Statement, and each person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act, against any and
all loss, liability, claim, damage and expense described in the indemnity
contained in subsection (a) of this Section, as incurred, but only with respect
to untrue statements or omissions, or alleged untrue statements or omissions,
made in the Registration Statement (or any amendment thereto), including the
Rule 430A Information and the Rule 434 Information, if applicable, or any
preliminary prospectus or the International Prospectus (or any amendment or
supplement thereto) in reliance upon and in conformity with written information
furnished to the Company by such International Manager through the Lead
Managers expressly for use in the Registration Statement (or any amendment
thereto) or such preliminary prospectus or the International Prospectus (or any
amendment or supplement thereto).
(c) Actions against Parties; Notification. Each indemnified party
shall give notice as promptly as reasonably practicable to each indemnifying
party of any action commenced against it in respect of which indemnity may be
sought hereunder, but failure to so notify an indemnifying party shall not
relieve such indemnifying party from any liability hereunder to the extent it
is not materially prejudiced as a result thereof and in any event shall not
relieve it from any liability which it may have otherwise than on account of
this indemnity agreement. In the case of parties indemnified pursuant to
Section 6(a) above, counsel to the indemnified parties shall be selected by
Merrill Lynch; and, in the case of parties indemnified pursuant to Section 6(b)
above, counsel to the indemnified parties shall be selected by the Company. An
indemnifying party may participate at its own expense in the defense of any
such action; provided, however, that counsel to the indemnifying party shall
not (except with the consent of the indemnified party) also be counsel to the
indemnified party. In no event shall the indemnifying parties be liable for
fees and expenses of more than one counsel (in addition to any local counsel)
separate from their own counsel for all indemnified parties in connection with
any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances. No
indemnifying party shall, without the prior written consent of the indemnified
parties, settle or compromise or consent to the entry of any judgment with
respect to any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever
in respect of which indemnification or contribution could be sought under this
Section 6 or Section 7 hereof (whether or not the indemnified parties are
actual or potential parties thereto), unless such settlement, compromise or
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consent (i) includes an unconditional release of each indemnified party from
all liability arising out of such litigation, investigation, proceeding or
claim and (ii) does not include a statement as to or an admission of fault,
culpability or a failure to act by or on behalf of any indemnified party.
(d) Settlement without Consent if Failure to Reimburse. If at any time
an indemnified party shall have requested an indemnifying party to reimburse
the indemnified party for fees and expenses of counsel which are reimbursable
under this Section 6 or Section 7, such indemnifying party agrees that it shall
be liable for any settlement of the nature contemplated by Section 6(a)(ii)
effected without its written consent if (i) such settlement is entered into
more than 45 days after receipt by such indemnifying party of the aforesaid
request, (ii) such indemnifying party shall have received notice of the terms
of such settlement, which notice shall include a statement by the indemnified
party that it proposes to enter into such settlement on such terms to the
extent permitted by this Section 6(d), at least 30 days prior to such
settlement being entered into and (iii) such indemnifying party shall not have
reimbursed such indemnified party in accordance with such request prior to the
date of such settlement.
(e) Indemnification for Reserved Securities. In connection with the
offer and sale of the Reserved Securities, the Company agrees to indemnify and
hold harmless the Underwriters from and against any and all losses, expenses
and liabilities incurred by them as a result of (i) the failure of the
designated employees or other persons to pay for and accept delivery of shares
which, immediately following the effectiveness of the Registration Statement,
were subject to a properly confirmed agreement to purchase and (ii) the
violation of any securities laws of foreign jurisdictions where Reserved
Securities have been offered.
SECTION 7. Contribution. If the indemnification provided for in
Section 6 hereof is for any reason unavailable to or insufficient to hold
harmless an indemnified party in respect of any losses, liabilities, claims,
damages or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount of such losses, liabilities, claims, damages
and expenses incurred by such indemnified party, as incurred, (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and the International Managers on the other hand from
the offering of the International Securities pursuant to this Agreement or (ii)
if the allocation provided by clause (i) is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company on
the one hand and of the International Managers on the other hand in connection
with the statements or omissions which resulted in such losses, liabilities,
claims,
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damages or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company on the one hand and the
International Managers on the other hand in connection with the offering of the
International Securities pursuant to this Agreement shall be deemed to be in
the same respective proportions as the total net proceeds from the offering of
the International Securities pursuant to this Agreement (before deducting
expenses) received by the Company and the total underwriting discount received
by the International Managers, in each case as set forth on the cover of the
International Prospectus, or, if Rule 434 is used, the corresponding location
on the Term Sheet, bear to the aggregate initial public offering price of the
International Securities as set forth on such cover.
The relative fault of the Company on the one hand and the
International Managers on the other hand shall be determined by reference to,
among other things, whether any such untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Company or by the International Managers and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
The Company and the International Managers agree that it would not be
just and equitable if contribution pursuant to this Section 7 were determined
by pro rata allocation (even if the International Managers were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above in this Section
7. The aggregate amount of losses, liabilities, claims, damages and expenses
incurred by an indemnified party and referred to above in this Section 7 shall
be deemed to include any legal or other expenses reasonably incurred by such
indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no International
Manager shall be required to contribute any amount in excess of the amount by
which the total price at which the International Securities underwritten by it
and distributed to the public were offered to the public exceeds the amount of
any damages which such International Manager has otherwise been required to pay
by reason of any such untrue or alleged untrue statement or omission or alleged
omission.
27
<PAGE>
No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the 1933 Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
International Managers within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act shall have the same rights to contribution as such
International Manager, and each director of the Company, each officer of the
Company who signed the Registration Statement, and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act shall have the same rights to contribution as the
Company. The International Managers' respective obligations to contribute
pursuant to this Section 7 are several in proportion to the number of Initial
International Securities set forth opposite their respective names in Schedule
A hereto and not joint.
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company or any of its
subsidiaries submitted pursuant hereto shall remain operative and in full force
and effect, regardless of any investigation made by or on behalf of any
International Manager or controlling person, or by or on behalf of the Company,
and shall survive delivery of the Securities to the International Managers.
SECTION 9. Termination of Agreement.
(a) Termination; General. The Lead Managers may terminate this
Agreement, by notice to the Company, at any time at or prior to Closing Time
(i) if there has been, since the time of execution of this Agreement or since
the respective dates as of which information is given in the International
Prospectus, any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Company or any of its subsidiaries, whether or not arising in the ordinary
course of business, or (ii) if there has occurred any material adverse change
in the financial markets in the United States or the international financial
markets, any outbreak of hostilities or escalation thereof or other calamity or
crisis or any change or development involving a prospective change in national
or international political, financial or economic conditions, in each case the
effect of which is such as to make it, in the judgment of the Lead Managers,
impracticable to market the Securities or to enforce contracts for the sale of
the Securities, or (iii) if trading in any securities of the Company has been
suspended or materially limited by the Commission or the New York Stock
Exchange, or if trading generally on the New York Stock Exchange has been
suspended or materially limited, or minimum or maximum prices for trading have
been fixed, or maximum ranges for prices
28
<PAGE>
have been required, by the New York Stock Exchange or by order of the
Commission, the NASD or any other governmental authority, or (iv) if a banking
moratorium has been declared by Federal or New York authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that
Sections 1, 6, 7 and 8 shall survive such termination and remain in full force
and effect.
SECTION 10. Default by One or More of the International Managers. If
one or more of the International Managers shall fail at Closing Time or a Date
of Delivery to purchase the International Securities which it or they are
obligated to purchase under this Agreement (the "Defaulted Securities"), the
Lead Managers shall have the right, within 24 hours thereafter, to make
arrangements for one or more of the non-defaulting International Managers, or
any other underwriters, to purchase all, but not less than all, of the
Defaulted Securities in such amounts as may be agreed upon and upon the terms
herein set forth. If, however, the Lead Manager shall not have completed such
arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10% of the
number of International Securities to be purchased on such date, each of the
non-defaulting International Managers shall be obligated, severally and not
jointly, to purchase the full amount thereof in the proportions that their
respective underwriting obligations hereunder bear to the underwriting
obligations of all non-defaulting International Managers, or
(b) if the number of Defaulted Securities exceeds 10% of the number of
International Securities to be purchased on such date, this Agreement or, with
respect to any Date of Delivery which occurs after the Closing Time, the
obligation of the International Managers to purchase and of the Company to sell
the International Option Securities to be purchased and sold on such Date of
Delivery, shall terminate without liability on the part of any non-defaulting
International Manager.
No action taken pursuant to this Section shall relieve any defaulting
International Manager from liability in respect of its default.
In the event of any such default which does not result in a
termination of this Agreement or, in the case of a Date of Delivery which is
after the Closing Time, which does not result in a termination of the
obligation of the International Managers to purchase and the Company to sell
the relevant International Option Securities, as the case may be, either (i)
the Lead Managers or
29
<PAGE>
(ii) the Company shall have the right to postpone the Closing Time or the
relevant Date of Delivery, as the case may be, for a period not exceeding seven
days in order to effect any required changes in the Registration Statement or
Prospectuses or in any other documents or arrangements. As used herein, the
term "International Manager" includes any person substituted for a
International Manager under this Section 10.
SECTION 11. Default by the Company. If the Company shall fail at
Closing Time or at the Date of Delivery to sell the number of International
Securities that it is obligated to sell hereunder, then this Agreement shall
terminate without any liability on the part of any nondefaulting party;
provided, however, that the provisions of Sections 1, 4, 6, 7 and 8 shall
remain in full force and effect. No action taken pursuant to this Section shall
relieve the Company from liability, if any, in respect of such default.
SECTION 12. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
International Managers shall be directed to the Lead Managers at Merrill Lynch,
Sears Tower Building, Suite 5500, Chicago, Illinois 60606, attention of Michael
O'Grady; and notices to the Company shall be directed to it at 1840 Holbrook
Avenue, Detroit, Michigan 48212, attention of Patrick S. Lancaster, Esq.
SECTION 13. Parties. This Agreement shall inure to the benefit of and
be binding upon the International Managers, the Company and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
International Managers the Company and their respective successors and the
controlling persons and officers and directors referred to in Sections 6 and 7
and their heirs and legal representatives, any legal or equitable right, remedy
or claim under or in respect of this Agreement or any provision herein
contained. This Agreement and all conditions and provisions hereof are intended
to be for the sole and exclusive benefit of the International Managers, the
Company and their respective successors, and said controlling persons and
officers and directors and their heirs and legal representatives, and for the
benefit of no other person, firm or corporation. No purchaser of Securities
from any International Manager shall be deemed to be a successor by reason
merely of such purchase.
SECTION 14. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. EXCEPT
AS OTHERWISE SET FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY
TIME.
30
<PAGE>
SECTION 15. Effect of Headings. The Article and Section headings
herein and the Table of Contents are for convenience only and shall not affect
the construction hereof.
31
<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof,
whereupon this instrument, along with all counterparts, will become a binding
agreement among the International Managers and the Company in accordance with
its terms.
Very truly yours,
AMERICAN AXLE & MANUFACTURING
HOLDINGS, INC.
By:
----------------------------------
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH INTERNATIONAL
CREDIT SUISSE FIRST BOSTON CORPORATION
DONALDSON, LUFKIN & JENRETTE INTERNATIONAL
MORGAN STANLEY & CO. INTERNATIONAL LIMITED
PAINEWEBBER INTERNATIONAL (U.K.) LIMITED
By: MERRILL LYNCH INTERNATIONAL
By ---------------------------------------------
Authorized Signatory
For themselves and as Lead Manager of the other International Managers named in
Schedule A hereto.
32
<PAGE>
SCHEDULE A
Number of
Initial
Name of International Manager International
Securities
Merrill Lynch International...........................
Credit Suisse First Boston Corporation................
Donaldson, Lufkin & Jenrette International............
Morgan Stanley & Co. International Limited............
PaineWebber International (U.K.) Limited..............
-------------
Total............................................. 1,400,000
=============
Sch A-1
<PAGE>
SCHEDULE B
AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
1,400,000 Shares of Common Stock
(Par Value $0.01 Per Share)
1. The initial public offering price per share for the Securities,
determined as provided in Section 2, shall be $-----.
2. The purchase price per share for the International Securities to be
paid by the several International Managers shall be $____________,
being an amount equal to the initial public offering price set forth
above less $_________ per share; provided that the purchase price per
share for any International Option Securities purchased upon the
exercise of the over-allotment option described in Section 2(b) shall
be reduced by an amount per share equal to any dividends or
distributions declared by the Company and payable on the Initial
International Securities but not payable on the International Option
Securities.
Sch B-1
<PAGE>
SCHEDULE C
PERSONS SUBJECT TO LOCK-UP
Blackstone Capital Partners II Merchant Banking Fund L.P.
Blackstone Offshore Capital Partners II L.P.
Blackstone Family Investment Partnership II L.P.
Blackstone Management Associates II L.L.C.
Jupiter Capital Corporation
Richard E. Dauch
B.G. Mathis
Michael D. Alexander
Joel D. Robinson
Marion A. Cumo, Sr.
David C. Dauch
Richard F. Dauch
George J. Dellas
David J. Demos
Patrick S. Lancaster
Allan R. Monich
Daniel V. Sagady, P.E.
Michael D. Straney
Gary J. Witosky
Robert A. Krause
Glenn H. Hutchins
Bret D. Pearlman
David A. Stockman
Sch C-1
<PAGE>
Exhibit A-1
FORM OF OPINION OF SIMPSON THACHER & BARTLETT,
COUNSEL TO THE COMPANY,
TO BE DELIVERED PURSUANT TO SECTION 5(b)
(i) The Company has been duly incorporated and is validly
existing and in good standing as a corporation under the laws
of the State of Delaware and has full corporate power and
authority to own, lease and operate its properties and to
conduct its business as described in the Registration
Statement and Prospectuses and to enter into and perform its
obligations under the U.S. Purchase Agreement and the
International Purchase Agreement.
(ii) All outstanding shares of the Company's Common Stock and the
Securities have been duly authorized, and all outstanding
shares of the Company's Common Stock have been and, upon
payment and delivery in accordance with the Purchase
Agreements, the Securities will be, validly issued, fully
paid and nonassessable.
(iii) There are no preemptive rights under federal law, under the
Delaware General Corporation Law or under any agreement or
other instrument known to us to subscribe for or purchase the
Securities. There are no preemptive or other rights to
subscribe for or to purchase, nor any restriction upon the
voting or transfer of, any shares of the Company's capital
stock pursuant to the Company's charter or by-laws or, except
as otherwise disclosed in the Registration Statement and
except for restrictions on transfer applicable to parties to
the Stockholders' Agreement or shares of the Company's Common
Stock issued under the Option Plan or the Replacement Plan (as
such terms are defined in the Registration Statement), any
agreement or other instrument.
(iv) Each of the U.S. Purchase Agreement and the International
Purchase Agreement has been duly authorized, executed and
delivered by the Company.
(v) The Registration Statement [, including any Rule 462(b)
Registration Statement,] has become effective under the 1933
Act, and the Prospectuses were timely filed on ___________,
1999 pursuant to Rule 424(b) and, to such counsel's
knowledge, no stop order suspending the effectiveness of the
Registration Statement [or any Rule 462(b) Registration
Statement] has been issued or proceeding for that purpose has
been instituted or threatened by the Commission.
(vi) The form of certificate used to evidence the Common Stock
complies in all material respects with all applicable
A-1-1
<PAGE>
statutory requirements, with any applicable requirements of
the charter and by-laws of the Company and the requirements
of the New York Stock Exchange.
(vii) The statements made in the Prospectuses under the caption
"Description of Capital Stock," insofar as they purport to
constitute summaries of the terms of the Company's Common
Stock (including the Securities), constitute accurate
summaries of the terms of such Common Stock in all material
respects.
(viii) The statements made in the Prospectuses under the captions
"Prospectus Summary -- The Company -- The 1994 Acquisition,"
"-- The Recapitalization" and "-- Business Strategy -- Pursue
Selected Acquisition Opportunities"; "Risk Factors -- Reliance
on GM," "-- Transition from CSA to MOU and LPCs," "-- Labor
Relations," "-- Leverage," "-- Debt Covenants," "-- Inventory
Management; Reliance on Single Source Suppliers," "-- Control
by Principal Stockholder" and "-- Shares Eligible for Future
Sale"; "The Recapitalization"; "Use of Proceeds"; "Dividend
Policy"; "Management's Discussion and Analysis of Financial
Condition and Results of Operations -- Company Overview,"
"-- Liquidity and Capital Resources," "-- Financial
Instruments Market Risk" and "-- Litigation and Environmental
Regulations"; "Business -- The 1994 Acquisition," "-- Business
Strategy -- Pursue Selected Acquisition Opportunities,"
"-- Contractual Arrangements with GM," "--Associates," and
"-- Environmental Matters"; "Management -- Stock Options,"
"-- Indemnification of Officers and Directors" and
"-- Employment Agreement"; "Certain Transactions";
"Description of Certain Indebtedness," and "Shares Eligible
for Future Sale," insofar as they purport to constitute
summaries of the terms of contracts and other documents,
constitute accurate summaries of the terms of such contracts
and other documents in all material respects; and, to such
counsel's knowledge, there are no contracts, instruments or
other documents of a character required to be described in the
Registration Statement or Prospectuses or to be filed as
exhibits to the Registration Statement which are not described
and filed as required.
(ix) The statements made in the Prospectuses under the caption
"Management's Discussion and Analysis of Financial Condition
and Results of Operations -- Litigation and Environmental
Regulations," "Business -- Environmental Matters,"
"Description of Capital Stock," and in the Registration
Statement under Item 14, insofar as they purport to
constitute summaries of the terms of New York or federal
statutes or the Delaware General Corporation Law, rules and
regulations thereunder, legal proceedings or legal
conclusions, or the Company's charter and bylaws, constitute
accurate summaries thereof in all material respects.
(x) The statements made in the Prospectuses under the caption
"Certain United States Federal Tax Consequences to Non- U.S.
Holders of Common Stock," insofar as they purport to
constitute summaries of matters of United States federal tax
law and regulations or legal conclusions with respect
thereto, constitute accurate summaries of the matters
described therein in all material respects.
A-1-2
<PAGE>
(xi) No filing, consent, approval, authorization, registration or
qualification of or with any federal or New York governmental
agency or body or any Delaware governmental agency or body
acting pursuant to the Delaware General Corporation Law or,
to such counsel's knowledge, any federal or New York court or
any Delaware court acting pursuant to the Delaware General
Corporation Law is required for the issue and sale of the
Securities by the Company and the compliance by the Company
with all of the provisions of the U.S. Purchase Agreement and
the International Purchase Agreement, except for the
registration under the 1933 Act of the Securities, and such
consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or
Blue Sky laws in connection with the purchase and
distribution of the Securities by the Underwriters.
(xii) The issue and sale of the Securities by the Company, the
execution and delivery by the Company of the U.S. Purchase
Agreement and International Purchase Agreement, the
consummation of the transactions provided for in the U.S.
Purchase Agreement and the International Purchase Agreement,
the compliance by the Company with all of the provisions of
the U.S. Purchase Agreement and the International Purchase
Agreement and the use of the proceeds from the sale of the
Securities as described in the Prospectuses under the caption
"Use of Proceeds" do not and will not, whether with or
without the giving of notice or lapse of time or both,
conflict with, breach or result in a default or, except as
contemplated under "Use of Proceeds" in the Registration
Statement, a Repayment Event (as defined in Section 1(x) of
the U.S. Purchase Agreement) under, or result in the creation
or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any subsidiary pursuant
to, any indenture, mortgage, deed of trust, loan or credit
agreement, note, lease or any other agreement or instrument
filed as an exhibit to the Registration Statement (except for
such conflicts, breaches or defaults or liens, charges or
encumbrances that would not have a Material Adverse Effect),
nor will such action result in a violation of the charter or
bylaws of the Company or any subsidiary, or any federal or New
York statute or the Delaware General Corporation Law or any
rule or regulation that has been issued pursuant to any
federal or New York statute or the Delaware General
Corporation Law or any judgment, order, writ or decree known
to us issued pursuant to any federal or New York statute or
the Delaware General Corporation Law by any court or
governmental agency or body or court having jurisdiction over
the Company or any of its subsidiaries or any of their
properties, assets or operations.
A-1-3
<PAGE>
(xiii) To such counsel's knowledge, there are no contracts or
agreements between the Company or any subsidiary and any
person granting such person the right (other than rights
which have been waived) to require the Company to include any
securities of the Company owned or to be owned by such person
in the securities registered pursuant to the Registration
Statement.
(xiv) The Company is not an "investment company" within the meaning
of and subject to regulation under the Investment Company Act
of 1940, as amended.
(xv) The Company had all corporate power and authority to carry
out the merger of and American Axle & Manufacturing of
Michigan, Inc., a Michigan corporation ("AAMM") into the
Company (the "Merger"), and the Company and its stockholders
have taken all action required by law and the Company's
charter and bylaws or otherwise to approve the Merger; the
consummation of the Merger did not contravene any provision
of applicable law or the charter or bylaws of the Company or,
to such counsel's knowledge, any provision of any material
agreement or other material instrument binding upon the
Company or any order, writ, injunction or decree of any
jurisdiction, court or governmental body, and no consent,
approval, authorization or order of any court or governmental
agency or body was required for the consummation of the
Merger, except such as were obtained; the Merger became
effective on January 22, 1999, in accordance with the laws of
Delaware; and the Merger will not result in the recognition of
any material liability under the Internal Revenue Code of
1986, as amended, or otherwise for taxes for the Company or
any of its subsidiaries.
In addition, such counsel shall state that they have participated in
conferences with officers and other representatives of the Company, counsel
employed by the Company, representatives of the independent public accountants
for the Company, representatives
A-1-4
<PAGE>
of the Underwriters and counsel for the Underwriters, at which conferences the
contents of the Registration Statement and Prospectuses and related matters
were discussed and, although such counsel are not passing upon, and do not
assume any responsibility for, the accuracy, completeness or fairness of the
statements contained in the Registration Statement or the Prospectuses except as
set forth in paragraphs (vii), (viii), (ix) and (x) above and have not made any
independent check or verification thereof, on the basis of the foregoing, (i) in
such counsel's opinion, the Registration Statement or any amendment thereto,
[including any Rule 462(b) Registration Statement,] the Rule 430A Information
and the Rule 434 Information (if applicable), as the time such Registration
Statement or any such amendment became effective, and the Prospectuses, as of
____________, 1999, complied as to form in all material respects with the
requirements of the 1933 Act and the applicable rules and regulations of the
Commission thereunder, except that such counsel need express no opinion with
respect to the financial statements or other financial data contained in the
Registration Statement or the Prospectuses and (ii) such counsel has no reason
to believe that either the Registration Statement or any amendment thereto,
including the Rule 430A Information and Rule 434 Information (if applicable), at
the time such Registration Statement or any such amendment became effective,
contained an untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading, or the Prospectuses or any amendment or supplement
thereto, at the time the Prospectuses were issued, at the time any such amended
or supplemented prospectus was issued or at the Closing Time, included or
includes an untrue statement of a material fact or omitted or omits to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, except that such counsel need express no opinion with respect to the
financial statements or other financial data contained in the Registration
Statement or the Prospectuses.
In rendering such opinion, such counsel may rely as to matters of
fact, to the extent such counsel deems proper, on certificates of responsible
officers of the Company and public officials which are furnished to the
Representatives. In addition, such counsel may state their opinion is limited
to matters governed by the laws of the State of New York, the corporate law of
State of Delaware and the federal law of the United States.
A-1-5
<PAGE>
Exhibit A-2
FORM OF OPINION OF PATRICK S. LANCASTER, ESQ.,
GENERAL COUNSEL OF THE COMPANY,
TO BE DELIVERED PURSUANT TO SECTION 5(b)
(i) The Company is duly qualified as a foreign corporation to
transact business and is in good standing in each
jurisdiction in which such qualification is required, whether
by reason of the ownership or leasing of property or the
conduct of business, except where the failure so to qualify
or to be in good standing would not result in a Material
Adverse Effect.
(ii) Each Subsidiary has been duly incorporated and is validly
existing as a corporation in good standing under the laws of
the jurisdiction of its incorporation, and each such
Subsidiary has corporate power and authority to conduct its
business as described in the Registration Statement and the
Prospectuses, and is duly qualified as a foreign corporation
to transact business and is in good standing in each
jurisdiction where such qualification is required, whether by
reason of the ownership or leasing of property or the conduct
of business, except where the failure to so qualify or to be
in good standing would not result in a Material Adverse
Effect; except as otherwise disclosed in the Registration
Statement, all of the issued and outstanding capital of each
Subsidiary has been duly authorized and validly issued, is
fully paid and non assessable and, to such counsel's
knowledge, is owned by the Company, directly or through
subsidiaries, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity; none of
the outstanding shares of capital stock of any Subsidiary was
issued in violation of the preemptive or similar rights of
any securityholder of such Subsidiary.
(iii) To such counsel's knowledge, neither the Company nor any
subsidiary is in violation of its charter or by-laws and no
default by the Company or any subsidiary exists in the due
performance or observance of any material obligation,
agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other
agreement or instrument that is described or referred to in
the Registration Statement or the Prospectuses or filed as an
exhibit to the Registration Statement, except for such
defaults that would not result in a Material Adverse Effect.
(iv) To such counsel's knowledge, there is not pending or
threatened any action, suit, proceeding, inquiry or
investigation, to which the Company or any subsidiary is a
party, or to which the property of the Company or any
subsidiary is subject, before or brought by any court or
governmental agency or body, domestic or foreign, which
might reasonably be expected to result in a Material
A-2-1
<PAGE>
Adverse Effect, or which might reasonably be expected to
materially and adversely affect the properties or assets
thereof or the consummation of the transactions contemplated
in the U.S. Purchase Agreement and the International Purchase
Agreement or the performance by the Company of its
obligations thereunder.
(v) To such counsel's knowledge, no filing, consent, approval,
authorization, registration or qualification of or with any
governmental agency or body or any court, is required for the
issue and sale of the Shares by the Company and the
compliance by the Company with all of the provisions of the
U.S. Purchase Agreement and International Purchase Agreement,
except for the registration under the 1933 Act of the Shares,
and such consents, approvals, authorizations, registrations
or qualifications as may be required under state or foreign
securities or Blue Sky laws in connection with the purchase
and distribution of the Shares by the Underwriters.
(vi) The authorized, issued and outstanding capital stock of the
Company is as set forth in the Prospectuses in the column
entitled "Historical" under the caption "Capitalization"
(except for subsequent issuances, if any, pursuant to the
U.S. Purchase Agreement and the International Purchase
Agreement or pursuant to reservations, agreements or employee
benefit plans referred to in the Prospectuses or pursuant to
the exercise of convertible securities or options referred to
in the Prospectuses).
(vii) None of the outstanding shares of Common Stock of the Company
was issued in violation of the preemptive or other similar
rights of any securityholder of the Company; and the issuance
and sale of the Securities by the Company is not subject to
the preemptive or other similar rights of any securityholder
of the Company.
(viii) The issue and sale of the Securities by the Company, the
execution, delivery and performance by the Company of the
U.S. Purchase Agreement and the International Purchase
Agreement, the compliance by the Company with all of the
provisions thereof and the consummation of the transactions
contemplated in the U.S. Purchase Agreement and the
International Purchase Agreement and in the Registration
Statement (including the use of the proceeds from the sale of
the Securities as described in the Prospectuses under the
caption "Use of Proceeds") do not and will not, whether with
or without the giving of notice or lapse of time or both,
conflict with, breach or result in a default or Repayment
Event (as defined in Section 1(x) of the U.S. Purchase
Agreement) under, or result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets
of the Company or any subsidiary pursuant to, any contract,
indenture, mortgage, deed of trust, loan or credit agreement,
note,
A-2-2
<PAGE>
lease or any other agreement or instrument, known to such
counsel, to which the Company or any subsidiary is a party or
by which it or any of them may be bound, or to which any of
the property or assets of the Company or any subsidiary is
subject (except for such conflicts, breaches or defaults or
liens, charges or encumbrances that would not have a Material
Adverse Effect), nor will such action result in a violation
of the charter or bylaws of the Company or any subsidiary, or
any applicable law, statute, rule, regulation, judgement,
order, writ or decree, known to such counsel, of any
government, government instrumentality or court, domestic or
foreign, having jurisdiction over the Company or any
subsidiary or any of their respective properties, assets or
operations.
(ix) To such counsel's knowledge, the Company and its subsidiaries
own or possess, or can acquire on reasonable terms, adequate
patents, patent rights, licenses, inventions, copyrights,
know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems
or procedures), trademarks, service marks, trade names or
other intellectual property (collectively, "Intellectual
Property") necessary to carry on the business now operated by
them, and to such counsel's knowledge, neither the Company
nor any of its subsidiaries has received any notice or is
otherwise aware of any infringement of or conflict with
asserted rights of others with respect to any Intellectual
Property or of any facts or circumstances which would render
any Intellectual Property invalid or inadequate to protect
the interest of the Company or any of its subsidiaries
therein, and which infringement or conflict (if the subject of
any unfavorable decision, ruling or finding) or invalidity or
inadequacy, singly or in the aggregate, would result in a
Material Adverse Effect.
(x) There are no statutes or regulations material to the Company
or its operations or, to such counsel's knowledge, pending or
threatened legal or governmental proceedings required to be
described in the Prospectuses which are not described as
required, or any contracts, instruments or other documents of
a character required to be described in the Registration
Statement or Prospectuses or to be filed as exhibits to the
Registration Statement which are not described and filed as
required; and all descriptions in the Registration Statement
of contracts and other agreements to which the Company or its
subsidiaries are a party are complete and accurate in all
material respects.
(xi) American Axle & Manufacturing of Michigan, Inc., a Michigan
corporation ("AAMM"), had all corporate power and authority
to carry out the merger of AAMM into the Company (the
"Merger"), and AAMM and its stockholders have taken all
action required by law and its charter and bylaws or
otherwise to approve the Merger; the consummation of the
Merger did not contravene any provision of applicable law or
the charter or bylaws of AAMM or any provision of any
material agreement or other material instrument binding upon
the Company or AAMM or any order, writ, injunction or
A-2-3
<PAGE>
decree of any jurisdiction, court or governmental body, and
no consent, approval, authorization or order of any court or
governmental agency or body was required for the consummation
of the Merger, except such as were obtained; the Merger
became effective on January __, 1999, in accordance with the
laws of Michigan; and the Merger will not result in the
recognition of any material liability under the Internal
Revenue Code of 1986, as amended, or otherwise for taxes for
the Company or any of its subsidiaries.
In addition, such counsel shall state that they have participated in
conferences with officers and other representatives of the Company, counsel to
the Company, representatives of the independent public accountants for the
Company, representatives of the Underwriters and counsel for the Underwriters,
at which conferences the contents of the Registration Statement and
Prospectuses and related matters were discussed and, although such counsel is
not passing upon, and does not assume any responsibility for, the accuracy,
completeness or fairness of the statements contained in the Registration
Statement or the Prospectuses except as set forth in paragraph (vi) above and
has not made any independent check or verification thereof, on the basis of the
foregoing, nothing has come to such counsel's attention that leads him to
believe that either the Registration Statement or any amendment thereto,
including the Rule 430A Information and Rule 434 Information (if applicable),
at the time such Registration Statement or any such amendment became effective
or at the Closing Time, contained an untrue statement of a material fact or
omitted to state any material fact required to be stated therein or necessary
to make the statements therein not misleading, or the Prospectuses or any
amendment or supplement thereto, at the time the Prospectuses were issued, at
the time any such amended or supplemented prospectus was issued or at the
Closing Time, included or includes an untrue statement of a material fact or
omitted or omits to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, except that such counsel need express no
opinion with respect to the financial statements or other financial data
contained in the Registration Statement or the Prospectuses.
A-2-4
<PAGE>
Exhibit B
FORM OF LOCK-UP FROM DIRECTORS, OFFICERS OR
OTHER STOCKHOLDERS PURSUANT TO SECTION 5(i)
January __, 1999
MERRILL LYNCH INTERNATIONAL
CREDIT SUISSE FIRST BOSTON CORPORATION
DONALDSON, LUFKIN & JENRETTE INTERNATIONAL
MORGAN STANLEY & CO. INTERNATIONAL LIMITED
PAINEWEBBER INTERNATIONAL (U.K.) LTD.
as Lead Managers of the several International Managers to be named in the
within mentioned International Purchase Agreement c/o Merrill Lynch
International 20 Farringdon Road
London EC1M 3NH
England
Re: Proposed Public Offering by American Axle & Manufacturing
Holdings, Inc.
Dear Sirs:
The undersigned, a stockholder [and an officer and/or director] of
American Axle & Manufacturing Holdings, Inc., a Delaware corporation (the
"Company"), understands that Merrill Lynch International ("Merrill Lynch") and
Credit Suisse First Boston Corporation, Donaldson, Lufkin & Jenrette
International, Morgan Stanley & Co. International Limited and PaineWebber
International (U.K.) Ltd. propose to enter into a International Purchase
Agreement (the "International Purchase Agreement") with the Company providing
for the public offering of shares (the "Securities") of the Company's common
stock, par value $0.01 per share (the "Common Stock"). In recognition of the
benefit that such an offering will confer upon the undersigned as a stockholder
[and an officer and/or director] of the Company, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the undersigned agrees with each underwriter to be named in the
International Purchase Agreement that, during a period of 180 days from the
date of the International Purchase Agreement, the undersigned will not, without
the prior written consent of Merrill Lynch, directly or indirectly, (i) offer,
pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant for
the sale of, or otherwise dispose of or transfer any shares of the Company's
Common Stock or any securities convertible into or exchangeable or exercisable
for Common Stock, whether now owned or hereafter acquired by the undersigned or
with respect to which the undersigned has or hereafter acquires the power of
disposition, or cause the Company to file any registration statement under the
Securities Act of 1933, as amended, with respect to any of the foregoing or
(ii) enter into any swap or any other agreement or any transaction that
transfers, in whole or in part, directly or
B-1
<PAGE>
indirectly, the economic consequence of ownership of the Common Stock, whether
any such swap or transaction is to be settled by delivery of Common Stock or
other securities, in cash or otherwise.
Very truly yours,
Signature:
------------------------------
Print Name:
----------------------------
B-2
<PAGE>
Annex A
FORM OF ACCOUNTANTS' COMFORT LETTER PURSUANT TO SECTION 5(e)
We are independent public accountants with respect to the Company within the
meaning of the 1933 Act and the applicable published 1933 Act Regulations
(i) in our opinion, the audited financial statements and the related
financial statement schedules included in the Registration Statement
and the Prospectus comply as to form in all material respects with the
applicable accounting requirements of the 1933 Act and the published
rules and regulations thereunder;
(ii) on the basis of procedures (but not an examination in accordance with
generally accepted auditing standards) consisting of a reading of the
unaudited interim consolidated financial statements of the Company for
the three month periods ended March 31, 1997 and March 31, 1998
included in the Registration Statement and the Prospectus
(collectively, the "Quarterly Financials"), a reading of the latest
available unaudited interim consolidated financial statements of the
Company, a reading of the minutes of all meetings of the stockholders
and directors of the Company and its subsidiaries and the ____________
and ____________ Committees of the Board of Directors of the Company
and any subsidiary committees since January 1, 1998, inquiries of
certain officials of the Company and its subsidiaries responsible for
financial and accounting matters, a review of interim financial
information in accordance with standards established by the American
Institute of Certified Public Accountants in Statement on Auditing
Standards No. 71, Interim Financial Information ("SAS 71"), with
respect to the three-month periods ended March 31, 1997 and March 31,
1998 and such other inquiries and procedures as may be specified in
such letter, nothing came to our attention that caused us to believe
that:
(A) the Quarterly Financials included in the Registration Statement
and the Prospectus do not comply as to form in all material respects
with the applicable accounting requirements of the 1933 Act and the
1933 Act Regulations or any material modifications should be made to
the unaudited consolidated financial statements included in the
Registration Statement and the Prospectus for them to be in conformity
with generally accepted accounting principles;
(B) at [_________, 19___ and at] a specified date not more than five
days prior to the date of this Agreement, there was any change in the
___________ of the Company and its subsidiaries or any decrease in the
__________ of the Company and its subsidiaries or any increase in the
__________ of the Company and its subsidiaries, in
A-1
<PAGE>
each case as compared with amounts shown in the latest balance sheet
included in the Registration Statement, except in each case for
changes, decreases or increases that the Registration Statement
discloses have occurred or may occur; or
(C) [for the period from _________, 19___ to _________, 19___ and ]
for the period from _________, 19___ to a specified date not more than
five days prior to the date of this Agreement, there was any decrease
in _________, __________ or ___________, in each case as compared with
the comparable period in the preceding year, except in each case for
any decreases that the Registration Statement discloses have occurred
or may occur;
(iii) based upon the procedures set forth in clause (ii) above and a reading
of the Selected Financial Data included in the Registration Statement
and a reading of the financial statements from which such data were
derived, nothing came to our attention that caused us to believe that
the Selected Financial Data included in the Registration Statement do
not comply as to form in all material respects with the disclosure
requirements of Item 301 of Regulation S-K of the 1933 Act, that the
amounts included in the Selected Financial Data are not in agreement
with the corresponding amounts in the audited consolidated financial
statements for the respective periods or that the financial statements
not included in the Registration Statement from which certain of such
data were derived are not in conformity with generally accepted
accounting principles;
(iv) we have compared the information in the Registration Statement under
selected captions with the disclosure requirements of Regulation S-K
of the 1933 Act and on the basis of limited procedures specified
herein nothing came to our attention that caused us to believe that
this information does not comply as to form in all material respects
with the disclosure requirements of Items 302, 402 and 503(d),
respectively, of Regulation S-K;
(v) based upon the procedures set forth in clause (ii) above, a reading of
the unaudited financial statements of the Company for [the most recent
period] that have not been included in the Registration Statement and
a review of such financial statements in accordance with SAS 71,
nothing came to our attention that caused us to believe that the
unaudited amounts for _____________ for the [most recent period] do
not agree with the amounts set forth in the unaudited consolidated
financial statements for those periods or that such unaudited amounts
were not determined on a basis substantially consistent with that of
the corresponding amounts in the audited consolidated financial
statements;
A-2
<PAGE>
(vi) we are unable to and do not express any opinion on the Pro Forma
Condensed Consolidated Financial Data (the "Pro Forma Statements)
included in the Registration Statement or on the pro forma adjustments
applied to the historical amounts included in the Pro Forma
Statements; however, for purposes of this letter we have:
(A) read the Pro Forma Statements;
(B) performed [an audit] [a review in accordance with SAS 71] of
the financial statements to which the pro forma adjustments
were applied;
(C) made inquiries of certain officials of the Company who have
responsibility for financial and accounting matters about the
basis for their determination of the pro forma adjustments
and whether the Pro Forma Statements comply as to form in all
material respects with the applicable accounting requirements
of Rule 11-02 of Regulation S-X; and
(D) proved the arithmetic accuracy of the application of the pro
forma adjustments to the historical amounts in the Pro Forma
Statements; and on the basis of such procedures and such
other inquiries and procedures as specified herein, nothing
came to our attention that caused us to believe that the Pro
Forma Statements included in the Registration Statement do
not comply as to form in all material respects with the
applicable requirements of Rule 11-02 of Regulation S-X or
that the pro forma adjustments have not been properly applied
to the historical amounts in the compilation of those
statements; and
(vii) in addition to the procedures referred to in clause (ii) above, we
have performed other procedures, not constituting an audit, with
respect to certain amounts, percentages, numerical data and financial
information appearing in the Registration Statement, which are
specified herein, and have compared certain of such items with, and
have found such items to be in agreement with, the accounting and
financial records of the Company.
A-3
<PAGE>
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, made and entered into as of
January 22, 1999, by and between AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.,
a Delaware corporation ("Axle Delaware"), and AMERICAN AXLE & MANUFACTURING OF
MICHIGAN, INC., a Michigan corporation ("Axle Michigan"). Axle Delaware and
Axle Michigan are the "Constituent Corporations" to the Merger described below.
WHEREAS, the respective boards of directors of Axle Michigan
and Axle Delaware have approved the merger of Axle Michigan with and into Axle
Delaware (the "Merger") pursuant to the applicable provisions of the Michigan
Business Corporation Act (the "MBCA") and the Delaware General Corporation Law
(the "DGCL") on the terms hereinafter set forth and have approved this
Agreement and Plan of Merger and authorized the execution hereof and
recommended this Agreement and Plan of Merger to the shareholders of Axle
Michigan and Axle Delaware, respectively;
NOW, THEREFORE, in consideration of the mutual covenants
contained herein, the parties hereto agree as follows:
SECTION 1. The Merger; Outstanding Shares. (a) Upon the terms
and subject to the conditions set forth in this Agreement, in accordance with
the DGCL and the MBCA, the Merger will be effected and pursuant thereto Axle
Michigan will be merged with and into Axle Delaware. At the Effective Time (as
defined below), the separate corporate existence of Axle Michigan will cease
and Axle Delaware will continue as the surviving corporation. After giving
effect to the Merger and as the context requires, Axle Delaware is sometimes
hereinafter referred to as the "Surviving Corporation".
(b) The authorized capital stock of Axle Michigan consists of
100,000 common shares, par value $.01 per share ("Axle Michigan Common Stock"),
of which 8,227.15 shares are issued and outstanding on the date hereof, and
100,000 preferred shares, none of which are issued and outstanding. Each share
of Axle Michigan Common Stock is entitled to vote. The number of shares of Axle
Michigan Common Stock is subject to change before the Effective Time as a
result of the issuance of such shares upon the exercise of stock options
currently outstanding.
(c) The authorized capital stock of Axle Delaware consists of
100 shares of common stock, par value $.01 per share ("Axle Delaware Common
Stock"), of which one share is issued and outstanding on the date hereof. Such
share is entitled to vote. The number of outstanding shares of Axle Delaware
will not change before the Effective Time.
SECTION 2. Closing; Effective Time. Unless this Agreement
shall have been terminated and the transaction herein contemplated shall have
been abandoned pursuant to Section 8, and subject to the satisfaction of the
conditions set forth in Section 7, the parties hereto will cause the Merger to
be consummated by filing (i) this Agreement or a certificate of merger (the
"Delaware Certificate of Merger") with the Secretary of State of the State of
Delaware, as
<PAGE>
2
provided in the DGCL, and (ii) a certificate of merger (the "Michigan
Certificate of Merger") with the Administrator, as provided in the MBCA, as
early as possible after the satisfaction of the conditions set forth in Section
7. The Merger will become effective upon the later of the filing of the
Delaware Certificate of Merger or the Michigan Certificate of Merger or at such
later time as is provided in the Delaware Certificate of Merger and the
Michigan Certificate of Merger as the parties hereto shall agree.
SECTION 3. Effects of the Merger.
(a) The Merger will have the effects as set forth in the
applicable provisions of the DGCL and the MBCA.
(b) At the Effective Time, the certificate of incorporation
shall be in the form of Exhibit A attached hereto and the bylaws shall be in
the form attached to this Agreement.
(c) The officers and directors of Axle Michigan immediately
prior to the Effective Time will, from and after the Effective Time, be the
officers and directors of the Surviving Corporation. Each of such officers and
directors shall hold office in accordance with the Surviving Corporation's
certificate of incorporation and bylaws.
SECTION 4. Effect on Capital Stock. At the Effective Time, by
virtue of the Merger and without any action on the part of any holder of shares
of Axle Michigan Common Stock or Axle Delaware Common Stock:
(a) Each share of Axle Michigan Common Stock issued and
outstanding immediately prior to the Effective Time shall be converted
into and become the right to receive 3,945 shares of Common Stock, par
value $.01 per share ("Surviving Corporation Common Stock"), of the
Surviving Corporation. As of the Effective Time, all such shares of
Axle Michigan Common Stock shall no longer be outstanding and shall
automatically be canceled and retired and shall cease to exist, and
each holder of a certificate representing any such shares of Axle
Michigan Common Stock shall cease to have any rights with respect
thereto, except the right to receive shares of Surviving Corporation
Common Stock to be issued in consideration therefor as herein
provided.
(b) Each share of Axle Delaware Common Stock issued and
outstanding immediately prior to the Effective Time shall be canceled
and retired without any consideration being payable in respect
thereof.
SECTION 5. Stock Options; Stock Option Plans and Agreements.
(a) Each stock option granted by Axle Michigan (under or
subject to any stock option plan or stock option agreement of Axle
Michigan) and outstanding immediately prior to the Effective Time
shall, by virtue of the Merger and without any action on the part of
the holder thereof, be converted into and become a stock option to
purchase, upon the same terms and conditions, the number of shares of
the Surviving Corporation's Common Stock (subject to further
adjustments as provided in the
<PAGE>
3
governing stock option plan) which is equal to the number of shares of
Axle Michigan Common Stock which the holder thereof would have
received had such holder exercised the option in full immediately
prior to the Effective Time (whether or not such option was then
exercisable), multiplied by 3,945. The price per share payable upon
exercise under each of said options shall (subject to future
adjustments as provided in the governing stock option plan) be
adjusted by dividing the exercise price of each option on the date
immediately prior to the Effective Time by 3,945.
(b) All of Axle Michigan's stock option plans and stock
option agreements, and all outstanding stock options thereunder, shall
immediately prior to the Effective Time of the Merger be automatically
amended to the extent necessary to permit continuance of such stock
option plans and agreements and continuance and conversion of said
stock options into those of the Surviving Corporation following the
Merger, notwithstanding any provisions heretofore contained in such
stock option plans or agreements providing for termination in the event
of a merger in which American Axle & Manufacturing of Michigan, Inc. is
not the Surviving Corporation. As of the Effective Time, Axle Delaware
adopts and assumes each such plan and agreement as its own.
SECTION 6. Benefit and Incentive Plans. At the Effective
Time, each employee benefit plan and incentive compensation plan to which Axle
Michigan is then a party and all liabilities and obligations thereunder shall
be assumed and adopted by, and continue to be the plan of, the Surviving
Corporation. To the extent any employee benefit plan or incentive compensation
plan of Axle Michigan or any of its subsidiaries provides for the issuance or
purchase of, or otherwise relates to, Axle Michigan Common Stock, after the
Effective Time such plan shall be deemed to provide for the issuance or
purchase of, or otherwise relate to, the Surviving Corporation's Common Stock
upon the same terms and conditions.
SECTION 7. Stockholder Approval Condition. This Agreement and
Plan of Merger shall be submitted to the stockholders of Axle Michigan and Axle
Delaware in accordance with the applicable provisions of the MBCA and DGCL,
respectively, and the consummation of this Agreement and Plan of Merger and the
Merger herein provided for are conditioned upon the approval and adoption
hereof by the affirmative vote of the stockholders of Axle Michigan and Axle
Delaware in accordance with applicable law.
SECTION 8. Abandonment; Termination. This Plan of Merger and
the Merger herein contemplated may be abandoned upon the mutual agreement of
the parties at any time prior to the Effective Time (before or after
shareholder approval). This Agreement may be amended, modified or supplemented
at any time (before or after shareholder approval) prior to the Effective Time
of the Merger with the mutual consent of the Boards of Directors of Axle
Michigan and Axle Delaware.
<PAGE>
4
IN WITNESS WHEREOF, the parties have caused this Agreement
and Plan of Merger to be executed by their duly authorized officers, all as of
the day and year first above written.
AMERICAN AXLE & MANUFACTURING
HOLDINGS, INC., a Delaware corporation
By: /s/ Richard E. Dauch
-------------------------------------------
Richard E. Dauch
Chairman of the Board, Chief Executive
Officer and President
AMERICAN AXLE & MANUFACTURING
OF MICHIGAN, INC., a Michigan corporation
By: /s/ Richard E. Dauch
-------------------------------------------
Richard E. Dauch
Chairman of the Board, Chief Executive
Officer and President
<PAGE>
CERTIFICATE OF INCORPORATION
OF
AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
FIRST: The name of the corporation is American Axle &
Manufacturing Holdings, Inc.
SECOND: The registered office of the corporation in the State
of Delaware is located at No. 1209 Orange Street, in the City of Wilmington,
County of New Castle; and the name of its registered agent at such address is
The Corporation Trust Company.
THIRD: The purposes of the corporation are to engage in any
lawful act or activity for which corporations may be organized under the
General Corporation Law of the State of Delaware.
FOURTH: (1) The total number of shares of all classes of
stock which the corporation shall have authority to issue is 200,000,000,
consisting of (1) 10,000,000 shares of Preferred Stock, par value $.01 per
share ("Preferred Stock"), (2) 150,000,000 shares of Common Stock, par value
$.01 per share ("Common Stock"), and (3) 40,000,000 shares of Series Common
Stock, par value $.01 per share ("Series Common Stock"). The number of
authorized shares of any of the Preferred Stock, the Common Stock or the Series
Common Stock may be increased or decreased (but not below the number of shares
thereof then outstanding) by the affirmative vote of the holders of a majority
in voting power of the stock of the corporation entitled to vote thereon
irrespective of the provisions of Section 242(b)(2) of the General Corporation
Law of the State of Delaware (or any successor provision thereto), and no vote
of the holders of any of the Preferred Stock, the Common Stock or the Series
Common Stock voting separately as a class shall be required therefor.
(2) The Board of Directors is hereby expressly authorized, by
resolution or resolutions, to provide, out of the unissued shares of Preferred
Stock, for series of Preferred Stock and, with respect to each such series, to
fix the number of shares constituting such series and the designation of such
series, the voting powers (if any) of the shares of such series, and the
preferences and relative, participating, optional or other special rights, if
any, and any qualifications, limitations or restrictions thereof, of the shares
of such series. The powers, preferences and relative, participating, optional
and other special rights of each series of Preferred Stock, and the
qualifications, limitations or restrictions thereof, if any, may differ from
those of any and all other series at any time outstanding.
(3) The Board of Directors is hereby expressly authorized, by
resolution or resolutions, to provide, out of the unissued shares of Series
Common Stock, for series of Series Common Stock and, with respect to each such
series, to fix the number of shares constituting such series and the
designation of such series, the voting powers (if any) of the shares of such
series, and the preferences and relative, participating, optional or other
special rights, if any, and any qualifications, limitations or restrictions
thereof, of the shares of such series. The powers,
<PAGE>
2
preferences and relative, participating, optional and other special rights of
each series of Series Common Stock, and the qualifications, limitations or
restrictions thereof, if any, may differ from those of any and all other series
at any time outstanding.
(4) (a) Each holder of Common Stock, as such, shall be entitled to one
vote for each share of Common Stock held of record by such holder on all
matters on which stockholders generally are entitled to vote; provided,
however, that, except as otherwise required by law, holders of Common Stock, as
such, shall not be entitled to vote on any amendment to this Restated
Certificate of Incorporation (including any certificate of designations
relating to any series of Preferred Stock or Series Common Stock) that relates
solely to the terms of one or more outstanding series of Preferred Stock or
Series Common Stock if the holders of such affected series are entitled, either
separately or together with the holders of one or more other such series, to
vote thereon pursuant to this Certificate of Incorporation (including any
certificate of designations relating to any series of Preferred Stock or Series
Common Stock) or pursuant to the General Corporation Law of the State of
Delaware.
(b) Except as otherwise required by law, holders of a series of
Preferred Stock or Series Common Stock, as such, shall be entitled only to such
voting rights, if any, as shall expressly be granted thereto by this
Certificate of Incorporation (including any certificate of designations
relating to such series).
(c) Subject to applicable law and the rights, if any, of the holders
of any outstanding series of Preferred Stock or Series Common Stock or any
class or series of stock having a preference over or the right to participate
with the Common Stock with respect to the payment of dividends, dividends may
be declared and paid on the Common Stock at such times and in such amounts as
the Board of Directors in its discretion shall determine.
(d) Upon the dissolution, liquidation or winding up of the
corporation, subject to the rights, if any, of the holders of any outstanding
series of Preferred Stock or Series Common Stock or any class or series of
stock having a preference over or the right to participate with the Common
Stock with respect to the distribution of assets of the corporation upon such
dissolution, liquidation or winding up of the corporation, the holders of the
Common Stock, as such, shall be entitled to receive the assets of the
corporation available for distribution to its stockholders ratably in
proportion to the number of shares held by them.
FIFTH: The Board of Directors shall be authorized to make, amend,
alter, change, add to or repeal the By-Laws of the corporation in any manner
not inconsistent with the laws of the State of Delaware, subject to the power
of the stockholders to amend, alter, change, add to or repeal the By-Laws made
by the Board of Directors. Notwithstanding anything contained in this
Certificate of Incorporation to the contrary, the affirmative vote of the
holders of at least 75 percent in voting power of all the shares of the
corporation entitled to vote generally in the election of directors, voting
together as a single class, shall be required in order for the stockholders to
alter, amend or repeal any provision of the By-laws which is to the same effect
as Article Fifth, Article Seventh, and Article Eighth of this Certificate of
Incorporation or to adopt any provision inconsistent therewith.
<PAGE>
3
SIXTH: (1) To the fullest extent permitted by the laws of the State of
Delaware:
(a) The corporation shall indemnify any person (and such person's
heirs, executors or administrators) who was or is a party or is threatened to
be made a party to any threatened, pending or completed action, suit or
proceeding (brought in the right of the corporation or otherwise), whether
civil, criminal, administrative or investigative, and whether formal or
informal, including appeals, by reason of the fact that such person is or was a
director or officer of the corporation or, while a director or officer of the
corporation, is or was serving at the request of the corporation as a director,
officer, partner, trustee, employee or agent of another corporation,
partnership, joint venture, trust, limited liability company or other
enterprise, for and against all expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably
incurred by such person or such heirs, executors or administrators in
connection with such action, suit or proceeding, including appeals.
Notwithstanding the preceding sentence, the corporation shall be required to
indemnify a person described in such sentence in connection with any action,
suit or proceeding (or part thereof) commenced by such person only if the
commencement of such action, suit or proceeding (or part thereof) by such
person was authorized by the Board of Directors of the corporation. The
corporation may indemnify any person (and such person's heirs, executors or
administrators) who was or is a party or is threatened to be made a party to
any threatened, pending or completed action, suit or proceeding (brought in the
right of the corporation or otherwise), whether civil, criminal, administrative
or investigative, and whether formal or informal, including appeals, by reason
of the fact that such person is or was an employee or agent of the corporation
or is or was serving at the request of the corporation as a director, officer,
partner, trustee, employee or agent of another corporation, partnership, joint
venture, trust, limited liability company or other enterprise, for and against
all expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by such person or such heirs,
executors or administrators in connection with such action, suit or proceeding,
including appeals.
(b) The corporation shall promptly pay expenses incurred by any person
described in the first sentence of subsection (a) of this Article Sixth,
Section (1) in defending any action, suit or proceeding in advance of the final
disposition of such action, suit or proceeding, including appeals, upon
presentation of appropriate documentation.
(c) The corporation may purchase and maintain insurance on behalf of
any person described in subsection (a) of this Article Sixth, Section (1)
against any liability asserted against such person, whether or not the
corporation would have the power to indemnify such person against such
liability under the provisions of this Article Sixth, Section (1) or otherwise.
(d) The provisions of this Article Sixth, Section (1) shall be
applicable to all actions, claims, suits or proceedings made or commenced after
the adoption hereof, whether arising from acts or omissions to act occurring
before or after its adoption. The provisions of this Article Sixth, Section (1)
shall be deemed to be a contract between the corporation and each director or
officer who serves in such capacity at any time while this Article Sixth,
Section (1) and the relevant provisions of the laws of the State of Delaware
and other applicable law, if any, are in effect, and any repeal or modification
hereof shall not affect any rights or obligations then
<PAGE>
4
existing with respect to any state of facts or any action, suit or proceeding
then or theretofore existing, or any action, suit or proceeding thereafter
brought or threatened based in whole or in part on any such state of facts. If
any provision of this Article Sixth, Section (1) shall be found to be invalid
or limited in application by reason of any law or regulation, it shall not
affect the validity of the remaining provisions hereof. The rights of
indemnification provided in this Article Sixth, Section (1) shall neither be
exclusive of, nor be deemed in limitation of, any rights to which an officer,
director, employee or agent may otherwise be entitled or permitted by contract,
this Restated Certificate of Incorporation, vote of stockholders or directors
or otherwise, or as a matter of law, both as to actions in such person's
official capacity and actions in any other capacity while holding such office,
it being the policy of the corporation that indemnification of any person whom
the corporation is obligated to indemnify pursuant to the first sentence of
subsection (a) of this Article Sixth, Section (1) shall be made to the fullest
extent permitted by law.
(e) For purposes of this Article Sixth, references to "other
enterprises" shall include employee benefit plans; references to "fines" shall
include any excise taxes assessed on a person with respect to an employee
benefit plan; and references to "serving at the request of the corporation"
shall include any service as a director, officer, employee or agent of the
corporation which imposes duties on, or involves services by, such director,
officer, employee, or agent with respect to an employee benefit plan, its
participants, or beneficiaries.
(2) A director of the corporation shall not be liable to the
corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except to the extent such exemption from liability or
limitation thereof is not permitted under the General Corporation Law of the
State of Delaware as the same exists or may hereafter be amended. Any
amendment, modification or repeal of the foregoing sentence shall not adversely
affect any right or protection of a director of the corporation hereunder in
respect of any act or omission occurring prior to the time of such amendment,
modification or repeal.
SEVENTH: (1) The business and affairs of the corporation shall be
managed by or under the direction of a Board of Directors consisting of not
less than three directors, the exact number of directors to be determined from
time to time by resolution adopted by affirmative vote of a majority of the
Board of Directors. The directors shall be divided into three classes
designated Class I, Class II and Class III. Each class shall consist, as nearly
as possible, of one-third of the total number of directors constituting the
entire Board of Directors. Class I directors shall be originally elected for a
term expiring at the succeeding annual meeting of stockholders, Class II
directors shall be originally elected for a term expiring at the second
succeeding annual meeting of stockholders, and Class III directors shall be
originally elected for a term expiring at the third succeeding annual meeting
of stockholders. At each succeeding annual meeting of stockholders following
1999, successors to the class of directors whose term expires at that annual
meeting shall be elected for a term expiring at the third succeeding annual
meeting. If the number of directors is changed, any increase or decrease shall
be apportioned among the classes so as to maintain the number of directors in
each class as nearly equal as possible, and any additional director of any
class elected to fill a newly created directorship resulting from an increase
in such class shall hold office for a term that shall coincide with the
<PAGE>
5
remaining term of that class, but in no case shall a decrease in the number of
directors remove or shorten the term of any incumbent director. A director
shall hold office until the annual meeting for the year in which his term
expires and until his successor shall be elected and shall qualify, subject,
however, to prior death, resignation, retirement, disqualification or removal
from office. Any newly created directorship on the Board of Directors that
results from an increase in the number of directors and any vacancy occurring
in the Board of Directors shall be filled only by a majority of the directors
then in office, although less than a quorum, or by a sole remaining director.
If any applicable provision of the General Corporation Law of the State of
Delaware expressly confers power on stockholders to fill such a directorship at
a special meeting of stockholders, such a directorship may be filled at such
meeting only by the affirmative vote of at least 75 percent of the voting power
of all shares of the corporation entitled to vote generally in the election of
directors voting as a single class. Any director elected to fill a vacancy not
resulting from an increase in the number of directors shall have the same
remaining term as that of his predecessor. Directors may be removed only for
cause, and only by the affirmative vote of at least 75 percent in voting power
of all shares of the corporation entitled to vote generally in the election of
directors, voting as a single class.
(2) Notwithstanding the foregoing, whenever the holders of any one or
more series of Preferred Stock or Series Common Stock issued by the corporation
shall have the right, voting separately as a series or separately as a class
with one or more such other series, to elect directors at an annual or special
meeting of stockholders, the election, term of office, removal, filling of
vacancies and other features of such directorships shall be governed by the
terms of this Certificate of Incorporation (including any certificate of
designations relating to any series of Preferred Stock or Series Common Stock)
applicable thereto, and such directors so elected shall not be divided into
classes pursuant to this Article Seventh unless expressly provided by such
terms.
EIGHTH: Any action required or permitted to be taken by the holders of
the Common Stock of the corporation must be effected at a duly called annual or
special meeting of such holders and may not be effected by any consent in
writing by such holders. Except as otherwise required by law and subject to the
rights of the holders of any series of Preferred Stock or Series Common Stock,
special meetings of stockholders of the corporation may be called only by the
Chief Executive Officer of the corporation or by the Board of Directors
pursuant to a resolution approved by the Board of Directors.
NINTH: Notwithstanding anything contained in this Certificate of
Incorporation to the contrary, the affirmative vote of the holders of at least
75 percent in voting power of all the shares of the corporation entitled to
vote generally in the election of directors, voting together as a single class,
shall be required to alter, amend or repeal Article Fifth, Article Seventh,
Article Eighth or this Article Ninth or to adopt any provision inconsistent
therewith.
* * *
<PAGE>
6
IN WITNESS WHEREOF, AMERICAN AXLE & MANUFACTURING HOLDINGS,
INC. has caused its corporate seal to be hereunto affixed and this certificate
to be signed by Richard E. Dauch, its Chairman of the Board, Chief Executive
Officer and President, this 22nd day of January, 1999.
AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
By: /s/ Richard E. Dauch
--------------------------------------------------------
Name: Richard E. Dauch
Titl: Chairman of the Board, Chief Executive Officer and
President
<PAGE>
BY-LAWS
OF
AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
(dated January 22, 1999)
------------
ARTICLE I.
STOCKHOLDERS
Section 1. The annual meeting of the stockholders of the
corporation for the purpose of electing directors and for the transaction of
such other business as may properly be brought before the meeting shall be held
on such date, and at such time and place within or without the State of
Delaware as may be designated from time to time by the Board of Directors.
Section 2. Special meetings of the stockholders shall be
called at any time by the Secretary or any other officer, whenever directed by
the Board of Directors or by the Chief Executive Officer. The purpose or
purposes of the proposed meeting shall be included in the notice setting forth
such call.
Section 3. Except as otherwise provided by law, notice of the
time, place and, in the case of a special meeting, the purpose or purposes of
the meeting of stockholders shall be delivered personally or mailed not earlier
than sixty, nor less than ten days previous thereto, to each stockholder of
record entitled to vote at the meeting at such address as appears on the
records of the corporation.
Section 4. The holders of a majority in voting power of the
stock issued and outstanding and entitled to vote thereat, present in person or
represented by proxy, shall constitute a quorum at all meetings of the
stockholders for the transaction of business, except as otherwise provided by
statute or by the Certificate of Incorporation; but if at any regularly called
meeting of stockholders there be less than a quorum present, the stockholders
present may adjourn the meeting from time to time without further notice other
than announcement at the meeting until a quorum shall be present or
represented. At such adjourned meeting at which a quorum shall be present or
represented any business may be transacted which might have been transacted at
the original meeting. If the adjournment is for more than 30 days, or if, after
the adjournment, a new record date is fixed for the adjourned meeting, a notice
of the adjourned meeting shall be given to each stockholder of record entitled
to vote at the meeting.
Section 5. The Chairman of the Board, or in the Chairman's
absence or at the Chairman's direction, the President, or in the President's
absence or at the President's direction, any officer of the corporation shall
call all meetings of the stockholders to order and shall act as Chairman of
such meeting. The Secretary of the corporation or, in such officer's absence,
an
<PAGE>
2
Assistant Secretary shall act as secretary of the meeting. If neither the
Secretary nor an Assistant Secretary is present, the Chairman of the meeting
shall appoint a secretary of the meeting. Unless otherwise determined by the
Board of Directors prior to the meeting, the Chairman of the meeting shall
determine the order of business and shall have the authority in his or her
discretion to regulate the conduct of any such meeting, including, without
limitation, by imposing restrictions on the persons (other than stockholders of
the corporation or their duly appointed proxies) who may attend any such
meeting, whether any stockholder or stockholders' proxy may be excluded from
any meeting of stockholders based upon any determination by the Chairman, in
his or her sole discretion, that any such person has unduly disrupted or is
likely to disrupt the proceedings thereat, and the circumstances in which any
person may make a statement or ask questions at any meeting of stockholders.
The Chairman of the meeting shall have authority to adjourn any meeting of
stockholders.
Section 6. At all meetings of stockholders, any stockholder
entitled to vote thereat shall be entitled to vote in person or by proxy, but
no proxy shall be voted after three years from its date, unless such proxy
provides for a longer period. Without limiting the manner in which a
stockholder may authorize another person or persons to act for the stockholder
as proxy pursuant to the General Corporation Law of the State of Delaware, the
following shall constitute a valid means by which a stockholder may grant such
authority: (1) a stockholder may execute a writing authorizing another person
or persons to act for the stockholder as proxy, and execution of the writing
may be accomplished by the stockholder or the stockholder's authorized officer,
director, employee or agent signing such writing or causing his or her
signature to be affixed to such writing by any reasonable means including, but
not limited to, by facsimile signature; or (2) a stockholder may authorize
another person or persons to act for the stockholder as proxy by transmitting
or authorizing the transmission of a telegram, cablegram, or other means of
electronic transmission to the person who will be the holder of the proxy or to
a proxy solicitation firm, proxy support service organization or like agent
duly authorized by the person who will be the holder of the proxy to receive
such transmission, provided that any such telegram, cablegram or other means of
electronic transmission must either set forth or be submitted with information
from which it can be determined that the telegram, cablegram or other
electronic transmission was authorized by the stockholder. If it is determined
that such telegrams, cablegrams or other electronic transmissions are valid,
the judge or judges of stockholder votes or, if there are no such judges, such
other persons making that determination shall specify the information upon
which they relied.
Any copy, facsimile telecommunication or other reliable
reproduction of the writing or transmission created pursuant to the preceding
paragraph of this Section 6 may be substituted or used in lieu of the original
writing or transmission for any and all purposes for which the original writing
or transmission could be used, provided that such copy, facsimile
telecommunication or other reproduction shall be a complete reproduction of the
entire original writing or transmission.
Proxies shall be filed with the Secretary of the meeting
prior to or at the commencement of the meeting to which they relate.
Section 7. When a quorum is present at any meeting, the vote
of the holders of a majority in voting power of the stock present in person or
represented by proxy and entitled to vote on the matter shall decide any
question brought before such meeting, unless the question is one upon
<PAGE>
3
which by express provision of statute or of the Certificate of Incorporation or
these By-Laws, a different vote is required, in which case such express
provision shall govern and control the decision of such question.
Section 8. In order that the corporation may determine the
stockholders (a) entitled to notice of or to vote at any meeting of
stockholders or any adjournment thereof, or (b) entitled to consent to
corporate action in writing without a meeting, or (c) entitled to receive
payment of any dividend or other distribution or allotment of any rights, or
entitled to exercise any rights in respect of any change, conversion or
exchange of stock or for the purpose of any other lawful action, the Board of
Directors may fix a record date, which record date shall not precede the date
upon which the resolution fixing the record date is adopted, and which record
date (i) in the case of clause (a) above, shall not be more than sixty nor less
than ten days before the date of such meeting, (ii) in the case of clause (b)
above, shall not be more than ten days after the date upon which the resolution
fixing the record date is adopted by the board of directors, and (iii) in the
case of clause (c) above, shall not be more than sixty days prior to such
action. If for any reason the Board of Directors shall not have fixed a record
date for any such purpose, the record date for such purpose shall be determined
as provided by law. Only those stockholders of record on the date so fixed or
determined shall be entitled to any of the foregoing rights, notwithstanding
the transfer of any such stock on the books of the corporation after any such
record date so fixed or determined.
Section 9. The officer who has charge of the stock ledger of
the corporation shall prepare and make at least ten days before every meeting
of stockholders, a complete list of the stockholders entitled to vote at the
meeting, arranged in alphabetical order, and showing the address of each
stockholder and the number of shares registered in the name of each
stockholder. Such list shall be open to the examination of any stockholder, for
any purpose germane to the meeting, during ordinary business hours, for a
period of at least ten days prior to the meeting, either at a place within the
city where the meeting is to be held, which place shall be specified in the
notice of meeting, or, if not so specified, at the place where the meeting is
to be held. The list shall also be produced at the time and kept at the place
of the meeting during the whole time thereof, and may be inspected by any
stockholder who is present.
Section 10. The Board of Directors, in advance of all
meetings of the stockholders, shall appoint one or more judges of stockholder
votes, who may be stockholders or their proxies, but not directors of the
corporation or candidates for office. In the event that the Board of Directors
fails to so appoint judges of stockholder votes or, in the event that one or
more judges of stockholder votes previously designated by the Board of
Directors fails to appear or act at the meeting of stockholders, the Chairman
of the meeting may appoint one or more judges of stockholder votes to fill such
vacancy or vacancies. Judges of stockholder votes appointed to act at any
meeting of the stockholders, before entering upon the discharge of their
duties, shall be sworn faithfully to execute the duties of judge of stockholder
votes with strict impartiality and according to the best of their ability and
the oath so taken shall be subscribed by them. Judges of stockholder votes
shall, subject to the power of the Chairman of the meeting to open and close
the polls, take charge of the polls, and, after the voting, shall make a
certificate of the result of the vote taken.
<PAGE>
4
Section 11. (A) Annual Meetings of Stockholders. (1)
Nominations of persons for election to the Board of Directors of the
corporation and the proposal of business to be considered by the stockholders
may be made at an annual meeting of stockholders (a) pursuant to the
corporation's notice of meeting delivered pursuant to Article 1, Section 3 of
these By-Laws, (b) by or at the direction of the Chairman of the Board or (c)
by any stockholder of the corporation who is entitled to vote at the meeting,
who complied with the notice procedures set forth in subparagraphs (2) and (3)
of this paragraph (A) of this By-Law and who was a stockholder of record at the
time such notice is delivered to the Secretary of the corporation.
(2) For nominations or other business to be properly brought
before an annual meeting by a stockholder pursuant to clause (c) of paragraph
(A)(1) of this By-Law, the stockholder must have given timely notice thereof in
writing to the Secretary of the corporation, and, in the case of business other
than nominations, such other business must be a proper matter for stockholder
action. To be timely, a stockholder's notice shall be delivered to the
Secretary at the principal executive offices of the corporation not less than
seventy days nor more than ninety days prior to the first anniversary of the
preceding year's annual meeting; provided, however, that in the event that the
date of the annual meeting is advanced by more than twenty days, or delayed by
more than seventy days, from such anniversary date, notice by the stockholder
to be timely must be so delivered not earlier than the ninetieth day prior to
such annual meeting and not later than the close of business on the later of
the seventieth day prior to such annual meeting or the tenth day following the
day on which public announcement of the date of such meeting is first made.
Such stockholder's notice shall set forth (a) as to each person whom the
stockholder proposes to nominate for election or re-election as a director all
information relating to such person that is required to be disclosed in
solicitations of proxies for election of directors, or is otherwise required,
in each case pursuant to Regulation 14A under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), including such person's written consent
to being named in the proxy statement as a nominee and to serving as a director
if elected; (b) as to any other business that the stockholder proposes to bring
before the meeting, a brief description of the business desired to be brought
before the meeting, the reasons for conducting such business at the meeting and
any material interest in such business of such stockholder and the beneficial
owner, if any, on whose behalf the proposal is made; and (c) as to the
stockholder giving the notice and the beneficial owner, if any, on whose behalf
the nomination or proposal is made (i) the name and address of such
stockholder, as they appear on the corporation's books, and of such beneficial
owner and (ii) the class and number of shares of the corporation which are
owned beneficially and of record by such stockholder and such beneficial owner.
(3) Notwithstanding anything in the second sentence of
paragraph (A)(2) of this By-Law to the contrary, in the event that the number
of directors to be elected to the Board of Directors of the corporation is
increased and there is no public announcement naming all of the nominees for
director or specifying the size of the increased Board of Directors made by the
corporation at least eighty days prior to the first anniversary of the
preceding year's annual meeting, a stockholder's notice required by this By-Law
shall also be considered timely, but only with respect to nominees for any new
positions created by such increase, if it shall be delivered to the Secretary
at the principal executive offices of the corporation not later than the close
of business on the tenth day following the day on which such public
announcement is first made by the corporation.
<PAGE>
5
(B) Special Meetings of Stockholders. Only such business
shall be conducted at a special meeting of stockholders as shall have been
brought before the meeting pursuant to the corporation's notice of meeting
pursuant to Article I, Section 2 of these By-Laws. Nominations of persons for
election to the Board of Directors may be made at a special meeting of
stockholders at which directors are to be elected pursuant to the corporation's
notice of meeting (a) by or at the direction of the Board of Directors or (b)
by any stockholder of the corporation who is entitled to vote at the meeting,
who complies with the notice procedures set forth in this By-Law and who is a
stockholder of record at the time such notice is delivered to the Secretary of
the corporation. Nominations by stockholders of persons for election to the
Board of Directors may be made at such a special meeting of stockholders if the
stockholder's notice as required by paragraph (A)(2) of this By-Law shall be
delivered to the Secretary at the principal executive offices of the
corporation not earlier than the ninetieth day prior to such special meeting
and not later than the close of business on the later of the seventieth day
prior to such special meeting or the tenth day following the day on which
public announcement is first made of the date of the special meeting and of the
nominees proposed by the Board of Directors to be elected at such meeting.
(C) General. (1) Only persons who are nominated in accordance
with the procedures set forth in this By-Law shall be eligible to serve as
directors and only such business shall be conducted at a meeting of
stockholders as shall have been brought before the meeting in accordance with
the procedures set forth in this By-Law. Except as otherwise provided by law,
the Certificate of Incorporation or these By-Laws, the Chairman of the meeting
shall have the power and duty to determine whether a nomination or any business
proposed to be brought before the meeting was made in accordance with the
procedures set forth in this By-Law and, if any proposed nomination or business
is not in compliance with this By-Law, to declare that such defective
nomination shall be disregarded or that such proposed business shall not be
transacted.
(2) For purposes of this By-Law, "public announcement" shall
mean disclosure in a press release reported by the Dow Jones News Service,
Associated Press or comparable national news service or in a document publicly
filed by the corporation with the Securities and Exchange Commission pursuant
to Section 13, 14 or 15(d) of the Exchange Act.
(3) For purposes of this By-Law, no adjournment nor notice of
adjournment of any meeting shall be deemed to constitute a new notice of such
meeting for purposes of this Section 11, and in order for any notification
required to be delivered by a stockholder pursuant to this Section 11 to be
timely, such notification must be delivered within the periods set forth above
with respect to the originally scheduled meeting.
(4) Notwithstanding the foregoing provisions of this By-Law,
a stockholder shall also comply with all applicable requirements of the
Exchange Act and the rules and regulations thereunder with respect to the
matters set forth in this By-Law. Nothing in this By-Law shall be deemed to
affect any rights of stockholders to request inclusion of proposals in the
corporation's proxy statement pursuant to Rule 14a-8 under the Exchange Act.
<PAGE>
6
ARTICLE II.
BOARD OF DIRECTORS
Section 1. The Board of Directors of the corporation shall
consist of such number of directors, not less than three, as shall from time to
time be fixed exclusively by resolution of the Board of Directors. The
directors shall be divided into three classes in the manner set forth in the
Certificate of Incorporation of the corporation, each class to be elected for
the term set forth therein. Directors shall (except as hereinafter provided for
the filling of vacancies and newly created directorships) be elected by the
holders of a plurality of the voting power present in person or represented by
proxy and entitled to vote. A majority of the total number of directors then in
office (but not less than one-third of the number of directors constituting the
entire Board of Directors) shall constitute a quorum for the transaction of
business and, except as otherwise provided by law or by the corporation's
Certificate of Incorporation, the act of a majority of the directors present at
any meeting at which there is a quorum shall be the act of the Board of
Directors. Directors need not be stockholders.
Section 2. Newly created directorships in the Board of
Directors that result from an increase in the number of directors and any
vacancy occurring in the Board of Directors shall be filled only by a majority
of the directors then in office, although less than a quorum, or by a sole
remaining director; and the directors so chosen shall hold office for a term as
set forth in the Certificate of Incorporation of the corporation. If any
applicable provision of the General Corporation Law of the State of Delaware
expressly confers power on stockholders to fill such a directorship at a
special meeting of stockholders, such a directorship may be filled at such
meeting only by the affirmative vote of at least 75 percent in voting power of
all shares of the corporation entitled to vote generally in the election of
directors, voting as a single class.
Section 3. Meetings of the Board of Directors shall be held
at such place within or without the State of Delaware as may from time to time
be fixed by resolution of the Board or as may be specified in the notice of any
meeting. Regular meetings of the Board of Directors shall be held at such times
as may from time to time be fixed by resolution of the Board and special
meetings may be held at any time upon the call of the Chairman of the Board,
the President or a majority of the directors, by oral, or written notice
including, telegraph, telex or transmission of a telecopy, e-mail or other
means of transmission, duly served on or sent or mailed to each director to
such director's address or telecopy number as shown on the books of the
corporation not less than one day before the meeting. The notice of any meeting
need not specify the purposes thereof. A meeting of the Board may be held
without notice immediately after the annual meeting of stockholders at the same
place at which such meeting is held. Notice need not be given of regular
meetings of the Board held at times fixed by resolution of the Board. Notice of
any meeting need not be given to any director who shall attend such meeting in
person (except when the director attends a meeting for the express purpose of
objecting at the beginning of the meeting, to the transaction of any business
because the meeting is not lawfully called or convened), or who shall waive
notice thereof, before or after such meeting, in writing.
Section 4. Notwithstanding the foregoing, whenever the
holders of any one or more series of Preferred Stock or Series Common Stock
issued by the corporation shall have the right,
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7
voting separately by series, to elect directors at an annual or special meeting
of stockholders, the election, term of office, removal, filling of vacancies
and other features of such directorships shall be governed by the terms of the
Certificate of Incorporation applicable thereto, and such directors so elected
shall not be divided into classes pursuant to Article SEVENTH of the
Certificate of Incorporation unless expressly provided by such terms. The
number of directors that may be elected by the holders of any such series of
Preferred Stock or Series Common Stock shall be in addition to the number fixed
by or pursuant to the By-Laws. Except as otherwise expressly provided in the
terms of such series, the number of directors that may be so elected by the
holders of any such series of stock shall be elected for terms expiring at the
next annual meeting of stockholders and without regard to the classification of
the members of the Board of Directors as set forth in Section 1 hereof, and
vacancies among directors so elected by the separate vote of the holders of any
such series of Preferred Stock or Series Common Stock shall be filled by the
affirmative vote of a majority of the remaining directors elected by such
series, or, if there are no such remaining directors, by the holders of such
series in the same manner in which such series initially elected a director.
Section 5. If at any meeting for the election of directors,
the corporation has outstanding more than one class of stock, and one or more
such classes or series thereof are entitled to vote separately as a class, and
there shall be a quorum of only one such class or series of stock, that class
or series of stock shall be entitled to elect its quota of directors
notwithstanding absence of a quorum of the other class or series of stock.
Section 6. The Board of Directors may designate three or more
directors to constitute an executive committee, one of whom shall be designated
Chairman of such committee. The members of such committee shall hold such
office until the next election of the Board of Directors and until their
successors are elected and qualify. Any vacancy occurring in the committee
shall be filled by the Board of Directors. Regular meetings of the committee
shall be held at such times and on such notice and at such places as it may
from time to time determine. The committee shall act, advise with and aid the
officers of the corporation in all matters concerning its interest and the
management of its business, and shall generally perform such duties and
exercise such powers as may from time to time be delegated to it by the Board
of Directors, and shall have authority to exercise all the powers of the Board
of Directors, so far as may be permitted by law, in the management of the
business and the affairs of the corporation whenever the Board of Directors is
not in session or whenever a quorum of the Board of Directors fails to attend
any regular or special meeting of such Board. The committee shall have power to
authorize the seal of the corporation to be affixed to all papers which are
required by the Delaware General Corporation Law to have the seal affixed
thereto. The fact that the executive committee has acted shall be conclusive
evidence that the Board of Directors was not in session at such time or that a
quorum of the Board had failed to attend the regular or special meeting
thereof.
The executive committee shall keep regular minutes of its
transactions and shall cause them to be recorded in a book kept in the office
of the corporation designated for that purpose, and shall report the same to
the Board of Directors at their regular meeting. The committee shall make and
adopt its own rules for the government thereof and shall elect its own
officers.
Section 7. The Board of Directors may from time to time
establish such other committees to serve at the pleasure of the Board which
shall be comprised of such members of the
<PAGE>
8
Board and have such duties as the Board shall from time to time establish. Any
director may belong to any number of committees of the Board. The Board may
also establish such other committees with such members (whether or not
directors) and such duties as the Board may from time to time determine.
Section 8. Unless otherwise restricted by the Certificate of
Incorporation or these By-Laws, any action required or permitted to be taken at
any meeting of the Board of Directors or of any committee thereof may be taken
without a meeting if all members of the Board or committee, as the case may be,
consent thereto in writing, and the writing or writings are filed with the
minutes of proceedings of the Board of Directors.
Section 9. The members of the Board of Directors or any
committee thereof may participate in a meeting of such Board or committee, as
the case may be, by means of conference telephone or similar communications
equipment by means of which all persons participating in the meeting can hear
each other, and participation in a meeting pursuant to this subsection shall
constitute presence in person at such a meeting.
Section 10. The Board of Directors may establish policies for
the compensation of directors and for the reimbursement of the expenses of
directors, in each case, in connection with services provided by directors to
the corporation.
ARTICLE III.
OFFICERS
Section 1. The Board of Directors, as soon as may be after
each annual meeting of the stockholders, shall elect officers of the
corporation, including a Chairman of the Board or President, a Chief Financial
Officer and a Secretary. The Board of Directors may also from time to time
elect such other officers (including one or more Vice Presidents, a Treasurer,
one or more Assistant Vice Presidents, one or more Assistant Secretaries and
one or more Assistant Treasurers) as it may deem proper or may delegate to any
elected officer of the corporation the power to appoint and remove any such
other officers and to prescribe their respective terms of office, authorities
and duties. Any Vice President may be designated Executive, Senior or
Corporate, or may be given such other designation or combination of
designations as the Board of Directors may determine. Any two or more offices
may be held by the same person.
Section 2. All officers of the corporation elected by the
Board of Directors shall hold office for such term as may be determined by the
Board of Directors or until their respective successors are chosen and
qualified. Any officer may be removed from office at any time either with or
without cause by the affirmative vote of a majority of the members of the Board
then in office, or, in the case of appointed officers, by any elected officer
upon whom such power of removal shall have been conferred by the Board of
Directors.
Section 3. Each of the officers of the corporation elected by
the Board of Directors or appointed by an officer in accordance with these
By-laws shall have the powers and duties
<PAGE>
9
prescribed by law, by the By-Laws or by the Board of Directors and, in the case
of appointed officers, the powers and duties prescribed by the appointing
officer, and, unless otherwise prescribed by the By-Laws or by the Board of
Directors or such appointing officer, shall have such further powers and duties
as ordinarily pertain to that office. The Chairman of the Board or the
President, as determined by the Board of Directors, shall be the Chief
Executive Officer and shall have the general direction of the affairs of the
corporation.
Section 4. Unless otherwise provided in these By-Laws, in the
absence or disability of any officer of the corporation, the Board of Directors
may, during such period, delegate such officer's powers and duties to any other
officer or to any director and the person to whom such powers and duties are
delegated shall, for the time being, hold such office.
ARTICLE IV.
CERTIFICATES OF STOCK
Section 1. The shares of stock of the corporation shall be
represented by certificates, provided that the Board of Directors may provide
by resolution or resolutions that some or all of any or all classes or series
of the corporation's stock shall be uncertificated shares. Any such resolution
shall not apply to shares represented by a certificate until such certificate
is surrendered to the corporation. Notwithstanding the adoption of such a
resolution by the Board of Directors, every holder of stock represented by
certificates and upon request every holder of uncertificated shares shall be
entitled to have a certificate signed by, or in the name of the corporation by
the Chairman of the Board of Directors, or the President or a Vice President,
and by the Treasurer or an Assistant Treasurer or the Secretary or an Assistant
Secretary of the corporation, or as otherwise permitted by law, representing
the number of shares registered in certificate form. Any or all the signatures
on the certificate may be a facsimile.
Section 2. Transfers of stock shall be made on the books of
the corporation by the holder of the shares in person or by such holder's
attorney upon surrender and cancellation of certificates for a like number of
shares, or as otherwise provided by law with respect to uncertificated shares.
Section 3. No certificate for shares of stock in the
corporation shall be issued in place of any certificate alleged to have been
lost, stolen or destroyed, except upon production of such evidence of such
loss, theft or destruction and upon delivery to the corporation of a bond of
indemnity in such amount, upon such terms and secured by such surety, as the
Board of Directors in its discretion may require.
<PAGE>
10
ARTICLE V.
CORPORATE BOOKS
The books of the corporation may be kept outside of the State
of Delaware at such place or places as the Board of Directors may from time to
time determine.
ARTICLE VI.
CHECKS, NOTES, PROXIES, ETC.
All checks and drafts on the corporation's bank accounts and
all bills of exchange and promissory notes, and all acceptances, obligations
and other instruments for the payment of money, shall be signed by such officer
or officers or agent or agents as shall be hereunto authorized from time to
time by the Board of Directors. Proxies to vote and consents with respect to
securities of other corporations owned by or standing in the name of the
corporation may be executed and delivered from time to time on behalf of the
corporation by the Chairman of the Board, the President, or by such officers as
the Board of Directors may from time to time determine.
ARTICLE VII.
FISCAL YEAR
The fiscal year of the corporation shall begin on the first
day of January in each year and shall end on the thirty-first day of December
following.
ARTICLE VIII.
CORPORATE SEAL
The corporate seal shall have inscribed thereon the name of
the corporation. In lieu of the corporate seal, when so authorized by the Board
of Directors or a duly empowered committee thereof, a facsimile thereof may be
impressed or affixed or reproduced.
ARTICLE IX.
AMENDMENTS
These By-Laws may be amended, added to, rescinded or repealed
at any meeting of the Board of Directors or of the stockholders, provided
notice of the proposed change was given in the notice of the meeting of the
stockholders or, in the case of a meeting of the Board of Directors, in a
notice given not less than two days prior to the meeting; provided, however,
that,
<PAGE>
11
notwithstanding any other provisions of these By-Laws or any provision of
law which might otherwise permit a lesser vote of the stockholders, the
affirmative vote of the holders of at least 75 percent in voting power of all
shares of the corporation entitled to vote generally in the election of
directors, voting together as a single class, shall be required in order for
the stockholders to alter, amend or repeal Section 2 and Section 11 of Article
I, Sections 1 and 2 of Article II or this proviso to this Article IX of these
By-Laws or to adopt any provision inconsistent with any of such Sections or
with this proviso.
<PAGE>
EXHIBIT 5.1
[LETTERHEAD OF SIMPSON THACHER & BARTLETT]
January 27, 1999
Re: Registration Statement on Form S-1 (File No. 333-53491)
relating to Common Stock, par value $.01, of
American Axle & Manufacturing Holdings, Inc.
American Axle & Manufacturing
Holdings, Inc.
1840 Holbrook Avenue
Detroit, Michigan 48212
Ladies and Gentlemen:
We have acted as special counsel to American Axle &
Manufacturing Holdings, Inc., a Delaware corporation (the "Company"), in
connection with the Registration Statement on Form S-1 (the "Registration
Statement") filed by the Company with the Securities and Exchange Commission
(the "Commission") under the Securities Act of 1933, as amended, relating to
the issuance by the Company of an aggregate of 8,050,000 shares of common
stock, par value $.01 per share (the "Shares").
We have examined the Registration Statement and a form of the share
certificate which has been filed with the Commission as an exhibit to the
Registration Statement. We also have examined the originals, or duplicates or
certified or conformed copies, of such records, agreements, instruments and
other documents and have made such other and further investigations as we have
deemed relevant and necessary in connection
<PAGE>
American Axle & Manufacturing
Holdings, Inc. -2- January 27, 1999
with the opinions expressed herein. As to questions of fact material to this
opinion, we have relied upon certificates of public officials and of officers
and representatives of the Company.
In such examination, we have assumed the genuineness of all
signatures, the legal capacity of natural persons, the authenticity of all
documents submitted to us as originals, the conformity to original documents
of all documents submitted to us as duplicates or certified or conformed
copies, and the authenticity of the originals of such latter documents.
Based upon the foregoing, and subject to the qualifications and
limitations stated herein, we are of the opinion that (a) when the Board of
Directors of the Company (the "Board") has taken all necessary corporate
action to authorize and approve the issuance of the Shares and (b) upon
payment and delivery in accordance with the applicable definitive underwriting
agreement approved by the Board and otherwise in accordance with such
agreement, the Shares will be validly issued, fully paid and nonassessable.
We are members of the Bar of the State of New York and we do not
express any opinion herein concerning any law other than the Delaware General
Corporation Law.
<PAGE>
American Axle & Manufacturing
Holdings, Inc. -3- January 27, 1999
We hereby consent to the filing of this opinion letter as Exhibit 5
to the Registration Statement and to the use of our name under the caption
"Legal Matters" in the Prospectus included in the Registration Statement.
Very truly yours,
/s/ SIMPSON THACHER & BARTLETT
--------------------------------
SIMPSON THACHER & BARTLETT
<PAGE>
AMENDMENT NO. 2, WAIVER AND AGREEMENT
dated as of January 11, 1999 (this "Amendment"), to
the Credit Agreement dated as of October 27, 1997,
as amended by Amendment No. 1, Waiver and Agreement
("Amendment No. 1"), dated as of September 30, 1998
(the "Credit Agreement"), among American Axle &
Manufacturing of Michigan, Inc. ("AAMM"), American
Axle & Manufacturing, Inc., a Delaware corporation
(the "Borrower"), the lenders party thereto (the
"Lenders"), The Chase Manhattan Bank, a New York
banking corporation, as administrative agent (the
"Administrative Agent"), and Chase Manhattan Bank
Delaware, as fronting bank (the "Fronting Bank").
A. Pursuant to the Credit Agreement, the Lenders and the
Fronting Bank have extended credit to the Borrower, and have agreed to extend
credit to the Borrower, in each case pursuant to the terms and subject to the
conditions set forth therein.
B. The Borrower has requested that the Required Lenders
agree to amend or waive certain provisions of the Credit Agreement (a) to
permit the issuance of certain subordinated indebtedness, (b) to increase the
flexibility of the Borrower and the Subsidiaries to effect Permitted Business
Acquisitions and (c) to effect certain other changes as provided herein.
C. The Required Lenders are willing so to amend the Credit
Agreement and to grant such waivers, in each case pursuant to the terms and
subject to the conditions set forth herein.
D. Capitalized terms used and not otherwise defined herein
shall have the meanings assigned thereto in the Credit Agreement.
In consideration of the premises and the agreements,
provisions and covenants herein contained, the parties hereto hereby agree, on
the terms and subject to the conditions set forth herein, as follows:
SECTION 1. Amendment.
(a) Section 1.01 of the Credit Agreement is hereby amended as
follows:
(i) by adding the following definitions in the appropriate
alphabetical order:
"Acquired EBITDA" shall mean, with respect to any Acquired
Entity or Business or any Sold Entity or Business for any period, the
consolidated net income or loss of such Acquired Entity or Business or Sold
Entity or Business for such period, plus the pro forma increase or decrease in
the consolidated net income or loss of the Borrower and its Subsidiaries (after
giving effect to such acquisition or sale) determined by the Borrower, in good
faith and in accordance with Regulation S-X of the Securities and Exchange
Commission as in effect on the date hereof, as a result of reasonably
identifiable and supportable net cost savings or additional net cost, as the
case may be, realizable during such period by combining with, or separating
from, the operations of such Acquired Entity or Business or Sold Entity or
Business the operations of the
<PAGE>
2
Borrower and its Subsidiaries, provided that any such pro forma increase or
decrease shall be without duplication for net cost savings or additional net
costs actually realized during such period and already included in the Borrower
and its Subsidiaries' consolidated net income, plus, to the extent deducted in
computing the consolidated net income or loss of such Acquired Entity or
Business or Sold Entity or Business, without duplication, the sum of (a) income
tax expense, (b) gross interest expense (including interest-equivalent costs
associated with any receivables financings, whether accounted for as interest
expense or loss on the sale of receivables), (c) depreciation and amortization
expense, (d) any special charges (including any fees or expenses incurred in
connection with the applicable acquisition) and any extraordinary or
nonrecurring losses and (e) other non-cash items reducing consolidated net
income (including any non-cash items resulting from purchase accounting
adjustments), minus, to the extent added in computing the consolidated net
income of such Acquired Entity or Business or Sold Entity or Business for such
period, without duplication, (i) interest income, (ii) extraordinary or
nonrecurring gains and (iii) other noncash items increasing consolidated net
income.
"Acquired Entity or Business" has the meaning assigned to
such term in the definition of the term Adjusted EBITDA.
"Adjusted EBITDA" shall mean, for any period, EBITDA for
such period, calculated by (a) including in the determination thereof the
Acquired EBITDA of any Person, property, business or asset in the Borrower's
or any Subsidiary's line of business acquired pursuant to a transaction
permitted under Section 6.04 and not subsequently sold, transferred or
otherwise disposed of (but not including the Acquired EBITDA of any related
person, property, business or assets to the extent not so acquired) by the
Borrower or any Subsidiary during such period (each such Person, property,
business or asset in the Borrower's or any Subsidiary's line of business
acquired and not subsequently so disposed of, an "Acquired Entity or
Business"), based on the actual Acquired EBITDA of such Acquired Entity or
Business for such period (including the portion thereof occurring prior to
such acquisition) and (b) excluding in the determination thereof the Acquired
EBITDA of any Person, property, business or asset sold, transferred or
otherwise disposed of by the Borrower or any Subsidiary during such period
(each such Person, property, business or asset so sold or disposed of, a "Sold
Entity or Business") based on the actual Acquired EBITDA of such Sold Entity
or Business for such period (including the portion thereof occurring prior to
such sale, transfer or disposition)." Notwithstanding the foregoing, for
purposes of determining compliance with Section 6.11, Adjusted EBITDA shall
not include the Acquired EBITDA (including any pro forma adjustment to the
consolidated net income or loss of the Borrower and its Subsidiaries included
therein) of any Acquired Entity or Business for any period prior to the fiscal
quarter of the Borrower in which such Acquired Entity or Business was
acquired.
"Adjusted Net Leverage Ratio" shall mean, on any date, the
ratio of (a) Total Net Debt as of such date to (b) Adjusted EBITDA for the
period of four consecutive fiscal quarters of the Borrower most recently ended
as of such date, all determined on a consolidated basis in accordance with GAAP
provided that, solely for purposes of determining whether the Adjusted Net
Leverage Ratio as of the end of any four fiscal-quarter period that includes
the fiscal quarter ended September 30, 1998, is in compliance with Section
6.12, there shall be added to the amount determined pursuant to clause (b), in
the case of any such four fiscal-quarter period ending on or before March 31,
1999, an
<PAGE>
3
additional $71,192,000, and, in the case of the four fiscal-quarter period
ending on June 30, 1999, an additional $42,018,000.
"Permitted Subordinated Debt" means Indebtedness of the
Borrower (and Guarantees of such Indebtedness by AAMM and the Subsidiaries)
that contains subordination and subsidiary guarantee release provisions
substantially in the form of Exhibit L, provided that (a) such Permitted
Subordinated Debt accrues interest at a fixed rate determined in good faith by
the Board of Directors of the Borrower to be a market rate of interest for
such Permitted Subordinated Debt at the time of issuance thereof or, in the
case of a bridge loan, at a floating rate determined based on a formula with a
base rate, spreads and interest rate step-ups that are determined in good
faith by the Board of Directors of the Borrower to be market rates of interest
and interest rate step-up levels for such Permitted Subordinated Debt at the
time of issuance thereof, (b) such Permitted Subordinated Debt is created
under agreements or instruments (i) imposing covenants on AAMM, the Borrower
and the Subsidiaries, (ii) containing a definition of change of control and
(iii) containing events of default and other provisions not materially more
restrictive than the covenants imposed in, the change of control definition
used in and the events of default and other provisions contained in this
Agreement, (c) no scheduled principal payments are due, or, if due, are not
automatically extended if unpaid, on such Permitted Subordinated Debt on a
date that is earlier than six months after the Tranche B Maturity Date, (d)
such Permitted Subordinated Debt is unsecured, (e) neither AAMM nor any
Subsidiary shall Guarantee such Permitted Subordinated Debt unless (i) AAMM or
such Subsidiary also has Guaranteed the Obligations and (ii) such Guarantee of
such Permitted Subordinated Debt is subordinated to such Guarantee of the
Obligations on terms no less favorable to the Lenders than the subordination
provisions of the Permitted Subordinated Debt, (f) the terms of such Permitted
Subordinated Debt do not require the maintenance or achievement of any
financial performance standards other than as a condition to the taking of
specified actions and (g) such Permitted Subordinated Debt contains other
customary provisions that are reasonably satisfactory to the Administrative
Agent.
"Sold Entity or Business" has the meaning assigned to such
term in the definition of the term Adjusted EBITDA.;
(ii) by inserting immediately before the period at the end
of the definition of the term "Cash Interest Expense" the following
text: ", provided that there shall be included or excluded, as
applicable, in determining Cash Interest Expense for any period the
cash interest expense (calculated in the same manner as Cash Interest
Expense is calculated) of any Acquired Entity or Business or Sold
Entity or Business acquired or sold, as applicable, during such
period for the period commencing on the first day of the fiscal
quarter of the Borrower in which such Acquired Entity or Business was
acquired through the end of the applicable test period (or, in the
case of the sale of any Sold Entity or Business, for the applicable
test period) assuming any Indebtedness incurred or repaid in
connection with the acquisition or sale had been incurred or repaid
on such first day (or, in the case of any such sale, on the first day
of such test period)".
(iii) by inserting immediately after the words "("Employee
Equity Sales") and (ii)" in clause (c) of the definition of the term
"Net Proceeds" the words "other sales and issuances of Capital Stock
of AAMM, provided that the aggregate cash
<PAGE>
4
proceeds from such other sales and issuances does not exceed in the
aggregate $175,000,000 and (iii)"; and
(iv) by amending and restating the definition of the term
"Permitted Business Acquisition" in its entirety as follows:
"Permitted Business Acquisition" shall mean any acquisition
of all or substantially all the assets of, or shares or other equity interests
in, a person or division or line of business of a person that is engaged in a
reasonably related (ancillary or complementary) line of business or lines of
business (or any subsequent investment made in a previously acquired Permitted
Business Acquisition) that was not preceded by an unsolicited tender offer for
such person if immediately after giving effect thereto: (a) no Default or
Event of Default shall have occurred and be continuing or would result
therefrom, (b) all transactions related thereto shall be consummated in
accordance with applicable laws, (c) at least 90% of the Capital Stock of any
acquired or newly formed corporation, partnership, association or other
business entity are owned directly by the Borrower or a domestic Wholly Owned
Subsidiary (unless there is a material tax or legal or other economic
disadvantage in not have a foreign Subsidiary hold such Capital Stock, in
which case such Capital Stock may be held directly by a foreign Subsidiary)
and all actions required to be taken, if any, with respect to such acquired or
newly formed subsidiary under Section 5.11 shall have been taken, and (d)(i)
AAMM, the Borrower and the Subsidiaries shall be in compliance, on a pro forma
basis after giving effect to such acquisition or formation, with the covenants
contained in Sections 6.11, 6.12 and 6.13 recomputed as at the last day of the
most recently ended fiscal quarter of AAMM, the Borrower and the Subsidiaries
as if such acquisition had occurred on the first day of each relevant period
for testing such compliance, and the Borrower shall have delivered to the
Administrative Agent an officers' certificate to such effect, together with
all relevant financial information for such subsidiary or assets and (ii) any
acquired or newly formed subsidiary shall not be liable for any Indebtedness
(except for Indebtedness permitted by 6.01).
(b) Section 2.12(d) of the Credit Agreement is hereby
amended by replacing the words "the ABR Margin and the LIBOR Margin are
determined by reference to Level 4, Level 5 or Level 6 as set forth on
Schedule B, the Borrower shall be required to apply only 50%" after the phrase
"provided that if, at the time of such prepayment" with the words "the Net
Leverage Ratio as of the end of the most recently completed four fiscal
quarter period for which financial statements have been delivered pursuant to
Section 5.04 is less than or equal to 2.00 to 1.00, the Borrower shall be
required to apply only 50%".
(c) Section 6.01 of the Credit Agreement is hereby amended
by (i) deleting the word "and" immediately after the semicolon in paragraph
(q) thereof, (ii) replacing the phrase "clauses (a) through (q)" in paragraph
(r) thereof with the phrase "clauses (a) through (r)", (iii) redesignating
paragraph (r) as paragraph (s) and (iv) adding a new paragraph (r) as follows:
"(r) Permitted Subordinated Debt in an aggregate principal amount at
any time outstanding not in excess of $350,000,000; and".
<PAGE>
5
(d) Section 6.04 of the Credit Agreement is hereby amended
(i) by deleting the word "and" after paragraph (l) thereof and (ii) by adding
the following new paragraph (n) immediately before the period at the end
thereof:
"(n) investments in Permitted Business Acquisitions
in an aggregate amount not to exceed $290,000,000 to the
extent made with proceeds of (i) the issuance of Permitted
Subordinated Debt (to the extent not previously used to
prepay Indebtedness (other than Revolving Loans or Swingline
Loans), make any investment or capital expenditure or
otherwise for any purpose resulting in a deduction to Excess
Cash Flow in any fiscal year) or (ii) up to $25,000,000 in
aggregate principal amount during the term of this Agreement
of Revolving Loans, provided that all such Revolving Loans
are repaid no later than June 30, 1999, with the proceeds of
(A) the issuance of Permitted Subordinated Debt or (B) the
issuance or the sale by AAMM of any equity security of AAMM
(other than Employee Equity Sales) (in each case to the
extent such proceeds were not previously used to prepay
Indebtedness (other than Revolving Loans or Swingline
Loans), make any investment or capital expenditure or
otherwise for any purpose resulting in a deduction to Excess
Cash Flow in any fiscal year), provided that no investments
under this clause (n) will be permitted unless the aggregate
gross cash proceeds from the issuance or the sale by AAMM of
any equity security of AAMM (other than Employee Equity
Sales) are greater than or equal to $110,000,000 prior to
the date of such investments."
(e) Section 6.04(m) of the Credit Agreement is hereby
amended by (i) replacing the phrase "not to exceed $100,000,000" with the
phrase "not to exceed $200,000,000", (ii) replacing the phrase "at least 80%"
in clause (i) of the proviso thereto with the phrase "at least 50%" and (iii)
inserting in clause (ii) of the proviso thereto after the phrase "other costs
and expenses" the phrase "(and fund working capital needs)".
(f) Section 6.09 of the Credit Agreement is hereby amended
by:
(i) inserting in clause (a) immediately after the words "or
grant any waiver or release under, any" the words " instruments,
agreements or documents evidencing or related to any Permitted
Subordinated Debt in any manner materially adverse to the Lenders,
any";
(ii) inserting a new paragraph (b) as follows:
"(b)(i) Directly or indirectly make any payment,
retirement, repurchase or redemption on account of the principal of
any Permitted Subordinated Debt or directly or indirectly prepay or
defease any such Permitted Subordinated Debt prior to the stated
maturity date of such Permitted Subordinated Debt, (ii) make any
payment or prepayment of any such Permitted Subordinated Debt that
would violate the terms of this Agreement or of such Permitted
Subordinated Debt, any agreement or document evidencing, related to
or securing the payment or performance of such Permitted Subordinated
Debt or any subordination agreement or provision applicable to such
Permitted Subordinated Debt or (iii) pay in cash any amount in
respect of such Permitted
<PAGE>
6
Subordinated Debt that may at the Borrower's option be paid in kind
thereunder; provided, however, that (a) subordinated notes or
debentures of the Borrower may be issued in exchange for, and in
satisfaction of, Permitted Subordinated Debt issued in the form of a
bridge loan, (b) subordinated notes or debentures of the Borrower may
be issued in exchange for other Permitted Subordinated Debt issued on
terms substantially identical to the terms of such subordinated notes
or debentures and (c) the proceeds of fixed rate Permitted
Subordinated Debt may be applied to repay or prepay outstanding
Permitted Subordinated Debt issued in the form of a bridge loan or
issued in exchange for Permitted Subordinated Debt issued in the form
of a bridge loan."; and
(iii) redesignating paragraphs (b), (c), (d) and (e) as
paragraphs (c), (d), (e) and (f), respectively.
(g) Section 6.11 of the Credit Agreement is hereby amended
by inserting in clause (a) thereof immediately before the word
"EBITDA" the word "Adjusted".
(h) Section 6.12 of the Credit Agreement is hereby amended
by inserting immediately after the words "Permit the" the word
"Adjusted".
(i) The table contained in Schedule B to the Credit
Agreement is hereby amended and restated in its entirety as follows:
<TABLE>
<CAPTION>
LIBOR Margin for ABR Margin for
Revolving Loans LIBOR Margin Revolving Loans ABR Margin
Net Leverage and Tranche A for Tranche B and Tranche A for Tranche B Commitment
Level Ratio Term Loans Term Loans Term Loans Term Loans Fee
<S> <C> <C> <C> <C> <C> <C>
Greater than
1 3.50 to 1.00 2.25% 2.50% 1.25% 1.50% 0.50%
Greater than
2 2.50 to 1.00 2.00% 2.25% 1.00% 1.25% 0.50%
Less than or
3 equal to 2.50 1.50% 1.75% 0.50% 0.75% 0.375%
to 1.00
</TABLE>
(j) the Credit Agreement is hereby amended by adding Exhibit
L in the form of Exhibit A hereto.
SECTION 2. Waiver. (a) The Required Lenders hereby waive
compliance by AAMM with Section 6.05 to the extent, and only to the extent,
necessary to permit the merger (the "Merger") of AAMM with and into American
Axle & Manufacturing Holdings, Inc. ("Holdings") on the terms previously
disclosed to the Administrative Agent, provided that, (i) immediately prior to
the Merger, Holdings has no liabilities, (ii) simultaneously with the Merger,
Holdings expressly acknowledges, pursuant to a
<PAGE>
7
document reasonably satisfactory to the Administrative Agent, its assumption of
all obligations of AAMM under the Pledge Agreement and the Parent Guarantee
Agreement and (iii) Holdings will take all other actions reasonably requested
by the Administrative Agent to effect such assumption.
(b) The Required Lenders hereby waive the requirement in
Section 2(a) of Amendment No. 1 that the Dollar equivalent of the amount of
the Excess Purchase Price (as defined in Amendment No. 1) be considered a use
in that amount of the investments that AAMM, the Borrower and the Subsidiaries
are permitted to make pursuant to Section 6.04(l) of the Credit Agreement.
SECTION 3. Representations and Warranties. The Borrower and
AAMM each represents and warrants to the Administrative Agent and the Lenders
that:
(a) This Amendment has been duly executed and delivered by
it and constitutes its legal, valid and binding obligation
enforceable against it in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, moratorium,
reorganization or other similar laws affecting creditors' rights
generally and except as enforceability may be limited by general
principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
(b) Before and after giving effect to this Amendment, the
representations and warranties set forth in Article III of the Credit
Agreement are true and correct in all material respects with the same
effect as if made on the date hereof, except to the extent such
representations and warranties expressly relate to an earlier date.
(c) After giving effect to this Amendment, no Default or
Event of Default shall have occurred and be continuing.
SECTION 4. Conditions to Effectiveness. This Amendment
(other than Sections 1(e) and 2(a) hereof) shall become effective as of the
date first above written (the "Effective Date") when (a) the representations
and warranties set forth in Section 3 of this Amendment shall be true and
correct, (b) the Administrative Agent shall have received counterparts of this
Amendment that, when taken together, bear the signatures of AAMM, the Borrower
and the Required Lenders, (c) AAMM has received gross cash proceeds from the
issuance or the sale by AAMM of any equity securities of AAMM (other than
Employee Equity Sales) in an aggregate amount of greater than or equal to
$110,000,000 and (d) the Agent shall have received all fees relating to this
Amendment. Sections 1(e) and 2(a) hereof shall become effective as of the
Effective Date upon satisfaction of (a) and (b) above. This Amendment (other
than Section 1(e)) shall terminate on March 1, 1999, unless all conditions set
forth in this section shall have been satisfied at or before 5 p.m., New York
City time, on that date.
SECTION 5. Effect of Amendment. Except as expressly set
forth herein, this Amendment shall not by implication or otherwise limit,
impair, constitute a waiver of, or otherwise affect the rights and remedies of
the Administrative Agent or the Lenders under the Credit Agreement, and shall
not alter, modify, amend or in any way affect the terms, conditions,
obligations, covenants or agreements contained in the Credit
<PAGE>
8
Agreement, all of which are ratified and affirmed in all respects and shall
continue in full force and effect. Nothing herein shall be deemed to entitle
AAMM or the Borrower to a consent to, or a waiver, amendment, modification or
other change of, any terms, conditions, obligations, covenants or agreements
contained in the Credit Agreement in similar or different circumstances. This
Amendment shall apply and be effective only with respect to the provisions of
the Credit Agreement specifically referred to herein.
SECTION 6. Credit Agreement. Except as specifically amended
or waived hereby, the Credit Agreement shall continue in full force and effect
in accordance with the provisions thereof as in existence on the date hereof.
After the date hereof, any reference to the Credit Agreement shall mean the
Credit Agreement as amended and waived hereby. This Amendment shall constitute
a Loan Document for all purposes under the Credit Agreement.
SECTION 7. Applicable Law. THIS AMENDMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF NEW YORK.
SECTION 8. Counterparts. This Amendment may be executed in
two or more counterparts, each of which shall constitute an original but all
of which when taken together shall constitute but one contract. Delivery of an
executed signature page of this Amendment by facsimile transmission shall be
effective as delivery of a manually executed counterpart hereof.
<PAGE>
9
SECTION 9. Headings. The Section headings used herein are
for convenience of reference only, are not part of this Amendment and are not
to affect the construction of, or to be taken into consideration in
interpreting, this Amendment.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed by their respective authorized officers as of
the day and year first written above.
AMERICAN AXLE & MANUFACTURING
OF MICHIGAN, INC.,
by
/s/ Robert Krause
------------------------------
Name: Robert Krause
Title: Treasurer
AMERICAN AXLE & MANUFACTURING,
INC.,
by
/s/ Robert A. Krause
------------------------------
Name: Robert A. Krause
Title: Treasurer
THE CHASE MANHATTAN BANK,
by
/s/ Rosemary Bradley
------------------------------
Name: Rosemary Bradley
Title: Vice President
<PAGE>
10
SIGNATURE PAGE TO
AMENDMENT NO. 2,
AND AGREEMENT
dated January 11, 1999
To approve Amendment No. 2, Waiver and Agreement:
Name of Institution Aeries Finance, Ltd.
by
/s/ Andrew Ian Wignall
----------------------------
Name: Andrew Ian Wignall
Title: Director
<PAGE>
11
SIGNATURE PAGE TO
AMENDMENT NO. 2,
AND AGREEMENT
dated January 11, 1999
To approve Amendment No. 2, Waiver and Agreement:
Name of Institution: Alliance Investments Ltd.
by
/s/ Sherryl Rothman
---------------------------
Name: Sherryl Rothman
Title: Authorized Signatory
<PAGE>
12
SIGNATURE PAGE TO
AMENDMENT NO. 2,
AND AGREEMENT
dated January 11, 1999
To approve Amendment No. 2, Waiver and Agreement:
Name of Institution Amsouth Bank
by
/s/ Therese M. Sheehy
---------------------------
Name: Therese M. Sheehy
Title: Vice President
<PAGE>
13
SIGNATURE PAGE TO
AMENDMENT NO. 2,
AND AGREEMENT
dated January 11, 1999
To approve Amendment No. 2, Waiver and Agreement:
Name of Institution BankBoston, N.A.
by
/s/ Jack M. Harcourt
----------------------------------------------
Name: Jack M. Harcourt
Title: Authorized Officer
<PAGE>
14
SIGNATURE PAGE TO
AMENDMENT NO. 2,
AND AGREEMENT
dated January 11, 1999
To approve Amendment No. 2, Waiver and Agreement:
Name of Institution: The Bank of New York
by
/s/ William Barnum
---------------------
Name: William Barnum
Title: Vice President
<PAGE> 15
SIGNATURE PAGE TO
AMENDMENT NO. 2,
AND AGREEMENT
dated January 11, 1999
To approve Amendment No. 2, Waiver and Agreement:
Name of Institution Aeries Finance, Ltd.
by
/s/ F.C.H. Ashby
-------------------------
Name: F.C.H. Ashby
Title: Senior Manager Loan Operations
<PAGE>
16
SIGNATURE PAGE TO
AMENDMENT NO. 2,
AND AGREEMENT
dated January 11, 1999
To approve Amendment No. 2, Waiver and Agreement:
Name of Institution Banque Nationale De Paris
by
/s/ Arnaud Collin du Bocage
--------------------------------------
Name: Arnaud Collin du Bocage
Title: Executive Vice President and General Manager
<PAGE>
17
SIGNATURE PAGE TO
AMENDMENT NO. 2,
AND AGREEMENT
dated January 11, 1999
To approve Amendment No. 2, Waiver and Agreement:
Name of Institution Bank of America
by
/s/ Lynne W. Stetson
-----------------------------
Name: Lynne W. Stetson
Title: Managing Director
<PAGE>
18
SIGNATURE PAGE TO
AMENDMENT NO. 2,
AND AGREEMENT
dated January 11, 1999
To approve Amendment No. 2, Waiver and Agreement:
Name of Institution Bank of Scotland
by
/s/ Annie Chin Tat
--------------------------------
Name: Annie Chin Tat
Title: Senior Vice President
<PAGE>
19
SIGNATURE PAGE TO
AMENDMENT NO. 2,
AND AGREEMENT
dated January 11, 1999
To approve Amendment No. 2, Waiver and Agreement:
Name of Institution: BHF Bank Aktiengesellschaft acting as attorney-in-fact for
Balanced High Yield Fund I
by
/s/ Evon M. Contos
--------------------------
Name: Evon M. Contos
Title: Vice President
/s/ Peter D. Leibman
--------------------------
Name: Peter D. Leibman
Title: Assistant Treasurer
<PAGE>
20
SIGNATURE PAGE TO
AMENDMENT NO. 2,
AND AGREEMENT
dated January 11, 1999
To approve Amendment No. 2, Waiver and Agreement:
Name of Institution Captiva Finance Ltd.
by
/s/ John H. Cullinane
--------------------------
Name: John H. Cullinane
Title: Director
<PAGE>
21
SIGNATURE PAGE TO
AMENDMENT NO. 2,
AND AGREEMENT
dated January 11, 1999
To approve Amendment No. 2, Waiver and Agreement:
Name of Institution Captiva III Finance Ltd.,
as advised by Pacific Investment Management Company
by
/s/ John H. Cullinane
-------------------------
Name: John H. Cullinane
Title: Director
<PAGE>
22
SIGNATURE PAGE TO
AMENDMENT NO. 2,
AND AGREEMENT
dated January 11, 1999
To approve Amendment No. 2, Waiver and Agreement:
Name of Institution Credit Agricole Indosuez
by
/s/ David Bouhl
-----------------------------------------
Name: David Bouhl
Title: Head of Corporate Banking, Chicago
/s/ Ktherine L. Abbot
----------------------------------------
Name: Katherine L. Abbot
Title: First Vice President
<PAGE>
23
SIGNATURE PAGE TO
AMENDMENT NO. 2,
AND AGREEMENT
dated January 11, 1999
To approve Amendment No. 2, Waiver and Agreement:
Name of Institution Credit Lyonnais New York Branch
by
/s/ Attila Koc
-------------------------------
Name: Attila Koc
Title: Senior Vice President
<PAGE>
24
SIGNATURE PAGE TO
AMENDMENT NO. 2,
AND AGREEMENT
dated January 11, 1999
To approve Amendment No. 2, Waiver and Agreement:
Name of Institution Credit Suisse First Boston
by
/s/ J. Glodowski
---------------------------
Name: J. Glodowski
Title: Managing Director
/s/ Kristin Lepri
--------------------------
Name: Kristin Lepri
Title: Assosciate
<PAGE>
25
SIGNATURE PAGE TO
AMENDMENT NO. 2,
AND AGREEMENT
dated January 11, 1999
To approve Amendment No. 2, Waiver and Agreement:
Name of Institution Comerica Bank
by
/s/ Michael T. Shea
---------------------------
Name: Michael T. Shea
Title: Vice President
<PAGE>
26
SIGNATURE PAGE TO
AMENDMENT NO. 2,
AND AGREEMENT
dated January 11, 1999
To approve Amendment No. 2, Waiver and Agreement:
Name of Institution CypressTree Investment Fund, LLC
By: CypressTree Investment Management Company, Inc.
its Managing Member
by
/s/ Timothy M. Barns
---------------------------------
Name: Timothy M. Barns
Title: Managing Director
<PAGE>
27
SIGNATURE PAGE TO
AMENDMENT NO. 2,
AND AGREEMENT
dated January 11, 1999
To approve Amendment No. 2, Waiver and Agreement:
Name of Institution CypressTree InvestmentPartners I, Ltd.
By: CypressTree Investment Management Company, Inc.
its Portfolio Manager
by
/s/ Timothy M. Barns
---------------------------
Name: Timothy M. Barns
Title: Managing Director
<PAGE>
28
SIGNATURE PAGE TO
AMENDMENT NO. 2,
AND AGREEMENT
dated January 11, 1999
To approve Amendment No. 2, Waiver and Agreement:
Name of Institution Dresdner Bank AG New York and Grand Cayman Branches
by
/s/ Beverly G. Cason
-------------------------
Name: Beverly G. Cason
Title: Vice President
/s/ John W. Sweeney
---------------------------------
Name: John W. Sweeney
Title: Assistant Vice President
<PAGE>
29
SIGNATURE PAGE TO
AMENDMENT NO. 2,
AND AGREEMENT
dated January 11, 1999
To approve Amendment No. 2, Waiver and Agreement:
Name of Institution ELC Cayman Ltd.
by
/s/ Thomas M. Finke
---------------------------
Name: Thomas M. Finke
Title: Managing Director
<PAGE>
30
SIGNATURE PAGE TO
AMENDMENT NO. 2,
AND AGREEMENT
dated January 11, 1999
To approve Amendment No. 2, Waiver and Agreement:
Name of Institution The First National Bank of Chicago
by
/s/ Kenneth A. Selle
-------------------------
Name: Kenneth A. Selle
Title: First Vice President
<PAGE>
31
SIGNATURE PAGE TO
AMENDMENT NO. 2,
AND AGREEMENT
dated January 11, 1999
To approve Amendment No. 2, Waiver and Agreement:
Name of Institution ELC Cayman Ltd.
by
/s/ Thomas M. Finke
---------------------------
Name: Thomas M. Finke
Title: Managing Director
<PAGE>
32
SIGNATURE PAGE TO
AMENDMENT NO. 2,
AND AGREEMENT
dated January 11, 1999
To approve Amendment No. 2, Waiver and Agreement:
Name of Institution Firstrust Bank
by
/s/ R.E. Meyers
------------------------------------
Name: R.E. Meyers
Title: Executive Vice President
<PAGE>
33
SIGNATURE PAGE TO
AMENDMENT NO. 2,
AND AGREEMENT
dated January 11, 1999
To approve Amendment No. 2, Waiver and Agreement:
Name of Institution First Union National Bank
by
/s/ Charles B. Edmondson
---------------------------------
Name: Charles B. Edmondson
Title: Assistant Vice President
<PAGE>
34
SIGNATURE PAGE TO
AMENDMENT NO. 2,
AND AGREEMENT
dated January 11, 1999
To approve Amendment No. 2, Waiver and Agreement:
Name of Institution The Fuji Bank, Limited
by
/s/ Tetsuo Kamatsu
------------------------------
Name: Tetsuo Kamatsu
Title: Joint General Manager
<PAGE>
35
SIGNATURE PAGE TO
AMENDMENT NO. 2,
AND AGREEMENT
dated January 11, 1999
To approve Amendment No. 2, Waiver and Agreement:
Name of Institution Goldman Sachs Credit Partners L.P.
by
/s/ Stephen B. King
---------------------------
Name: Stephen B. King
Title: Authorized Signatory
<PAGE>
36
SIGNATURE PAGE TO
AMENDMENT NO. 2,
AND AGREEMENT
dated January 11, 1999
To approve Amendment No. 2, Waiver and Agreement:
Name of Institution IBJ Whitehall Bank & Trust Company
by
/s/ Charles B. Pears
------------------------
Name: Charles B. Pears
Title: Director
<PAGE>
37
SIGNATURE PAGE TO
AMENDMENT NO. 2,
AND AGREEMENT
dated January 11, 1999
To approve Amendment No. 2, Waiver and Agreement:
Name of Institution Industrial Bank of Japan
by
/s/ Masahasi Sakai
---------------------------
Name: Masahasi Sakai
Title: General Manager
<PAGE>
38
SIGNATURE PAGE TO
AMENDMENT NO. 2,
AND AGREEMENT
dated January 11, 1999
To approve Amendment No. 2, Waiver and Agreement:
Name of Institution Indosuez Capital Funding III Ltd.
By: Indosuez Capital as Portfolio Advisor
by
/s/ Francoise Berthelot
----------------------------
Name: Francoise Berthelot
Title: Vice President
<PAGE>
39
SIGNATURE PAGE TO
AMENDMENT NO. 2,
AND AGREEMENT
dated January 11, 1999
To approve Amendment No. 2, Waiver and Agreement:
Name of Institution Keybank National Association
by
/s/ J.T. Taylor
-------------------------
Name: J.T. Taylor
Title: Vice President
<PAGE>
40
SIGNATURE PAGE TO
AMENDMENT NO. 2,
AND AGREEMENT
dated January 11, 1999
To approve Amendment No. 2, Waiver and Agreement:
Name of Institution KZH III LLC
by
/s/ Virginia Conway
---------------------------
Name: Virginia Conway
Title: Authorized Agent
<PAGE>
41
SIGNATURE PAGE TO
AMENDMENT NO. 2,
AND AGREEMENT
dated January 11, 1999
To approve Amendment No. 2, Waiver and Agreement:
Name of Institution KZH Crescent LLC
by
/s/ Virginia Conway
---------------------------
Name: Virginia Conway
Title: Authorized Agent
<PAGE>
42
SIGNATURE PAGE TO
AMENDMENT NO. 2,
AND AGREEMENT
dated January 11, 1999
To approve Amendment No. 2, Waiver and Agreement:
Name of Institution KZH Crescent-3 LLC
by
/s/ Virginia Conway
---------------------------
Name: Virginia Conway
Title: Authorized Agent
<PAGE>
43
SIGNATURE PAGE TO
AMENDMENT NO. 2,
AND AGREEMENT
dated January 11, 1999
To approve Amendment No. 2, Waiver and Agreement:
Name of Institution KZH CNC LLC
by
/s/ Virginia Conway
---------------------------
Name: Virginia Conway
Title: Authorized Agent
<PAGE>
44
SIGNATURE PAGE TO
AMENDMENT NO. 2,
AND AGREEMENT
dated January 11, 1999
To approve Amendment No. 2, Waiver and Agreement:
Name of Institution KZH Highland-2 LLC
by
/s/ Virginia Conway
--------------------------
Name: Virginia Conway
Title: Authorized Agent
<PAGE>
45
SIGNATURE PAGE TO
AMENDMENT NO. 2,
AND AGREEMENT
dated January 11, 1999
To approve Amendment No. 2, Waiver and Agreement:
Name of Institution KZH ING-2 LLC
by
/s/ Virginia Conway
--------------------------
Name: Virginia Conway
Title: Authorized Agent
<PAGE>
46
SIGNATURE PAGE TO
AMENDMENT NO. 2,
AND AGREEMENT
dated January 11, 1999
To approve Amendment No. 2, Waiver and Agreement:
Name of Institution KZH ING-3 LLC
by
/s/ Virginia Conway
--------------------------
Name: Virginia Conway
Title: Authorized Agent
<PAGE>
47
SIGNATURE PAGE TO
AMENDMENT NO. 2,
AND AGREEMENT
dated January 11, 1999
To approve Amendment No. 2, Waiver and Agreement:
Name of Institution KZH Langdale LLC
by
/s/ Virginia Conway
------------------------
Name: Virginia Conway
Title: Authorized Agent
<PAGE>
48
SIGNATURE PAGE TO
AMENDMENT NO. 2,
AND AGREEMENT
dated January 11, 1999
To approve Amendment No. 2, Waiver and Agreement:
Name of Institution KZH Pamco LLC
by
/s/ Virginia Conway
--------------------------
Name: Virginia Conway
Title: Authorized Agent
<PAGE>
49
SIGNATURE PAGE TO
AMENDMENT NO. 2,
AND AGREEMENT
dated January 11, 1999
To approve Amendment No. 2, Waiver and Agreement:
Name of Institution KZH Soleil LLC
by
/s/ Virginia Conway
-----------------------------
Name: Virginia Conway
Title: Authorized Agent
<PAGE>
50
SIGNATURE PAGE
AMENDMENT NO. 2,
AND AGREEMENT
dated January 11, 1999
To approve Amendment No. 2, Waiver and Agreement:
Name of Institution KZH Sterling LLC
by
/s/ Virginia Conway
------------------------------
Name: Virginia Conway
Title: Authorized Agent
<PAGE>
51
SIGNATURE PAGE TO
AMENDMENT NO. 2,
AND AGREEMENT
dated January 11, 1999
To approve Amendment No. 2, Waiver and Agreement:
Name of Institution The Long Term Credit Bank of Japan, Limited, New York
Branch
by
/s/ Shuichi Tajima
------------------------------
Name: Shuichi Tajima
Title: General Manager
<PAGE>
52
SIGNATURE PAGE TO
AMENDMENT NO. 2,
AND AGREEMENT
dated January 11, 1999
To approve Amendment No. 2, Waiver and Agreement:
Name of Institution Manufacturers & Traders Trust Company
by
/s/ Kevin B. Quinn
------------------------------
Name: Kevin B. Quinn
Title: Assistant Vice President
<PAGE>
53
SIGNATURE PAGE TO
AMENDMENT NO. 2,
AND AGREEMENT
dated January 11, 1999
To approve Amendment No. 2, Waiver and Agreement:
Name of Institution Marine Midland Bank
by
/s/ Christopher French
------------------------------
Name: Christopher French
Title: Authorized Signatory
<PAGE>
54
SIGNATURE PAGE TO
AMENDMENT NO. 2,
AND AGREEMENT
dated January 11, 1999
To approve Amendment No. 2, Waiver and Agreement:
Name of Institution Mellon Bank, N.A.
by
/s/ Richard J. Schaich
------------------------------
Name: Richard J. Schaich
Title: Assistant Vice President
<PAGE>
55
SIGNATURE PAGE TO
AMENDMENT NO. 2,
AND AGREEMENT
dated January 11, 1999
To approve Amendment No. 2, Waiver and Agreement:
Name of Institution Merrill Lynch Prime Rate Portfolio
By: Merrill Lynch Asset Management, L.P.
as Investment Advisor
by
/s/ Paul Travers
------------------------------
Name: Paul Travers
Title: Authorized Signatory
<PAGE>
56
SIGNATURE PAGE TO
AMENDMENT NO. 2,
AND AGREEMENT
dated January 11, 1999
To approve Amendment No. 2, Waiver and Agreement:
Name of Institution Merrill Lynch Global Investment Series:
Income Strategies Portfolio
By: Merrill Lynch Asset Management, L.P.,
as Investment Advisor
by
/s/ Paul Travers
------------------------------
Name: Paul Travers
Title: Authorized Signatory
<PAGE>
57
SIGNATURE PAGE TO
AMENDMENT NO. 2,
AND AGREEMENT
dated January 11, 1999
To approve Amendment No. 2, Waiver and Agreement:
Name of Institution Merrill Lynch Senior Floating Rate Fund, Inc.
by
/s/ Paul Travers
------------------------------
Name: Paul Travers
Title: Authorized Signatory
<PAGE>
58
SIGNATURE PAGE TO
AMENDMENT NO. 2,
AND AGREEMENT
dated January 11, 1999
To approve Amendment No. 2, Waiver and Agreement:
Name of Institution Michigan National Bank
by
/s/ Teresa L. Irland
------------------------------
Name: Teresa L. Irland
Title: Group Manager
<PAGE>
59
SIGNATURE PAGE TO
AMENDMENT NO. 2,
AND AGREEMENT
dated January 11, 1999
To approve Amendment No. 2, Waiver and Agreement:
Name of Institution The Mitsubishi Trust & Banking Corporation
by
/s/ Beatrice E. Kossodo
------------------------------
Name: Beatrice E. Kossodo
Title: Senior Vice President
<PAGE>
60
SIGNATURE PAGE TO
AMENDMENT NO. 2,
AND AGREEMENT
dated January 11, 1999
To approve Amendment No. 2, Waiver and Agreement:
Name of Institution ML CLO XII Pilgrim America (Cayman) Ltd.
By: Pilgrim Investments as its Investment Manager
by
/s/ Jason T. Groom
------------------------------
Name: Jason T. Groom
Title: Assistant Vice President
<PAGE>
61
SIGNATURE PAGE TO
AMENDMENT NO. 2,
AND AGREEMENT
dated January 11, 1999
To approve Amendment No. 2, Waiver and Agreement:
Name of Institution ML CLO XIX Sterling (Cayman) Ltd.
By: Sterling Asset Management as its Investment Advisor
by
/s/ Louis Pistecchia
------------------------------
Name: Louis Pistecchia
Title: EVP
<PAGE>
62
SIGNATURE PAGE TO
AMENDMENT NO. 2,
AND AGREEMENT
dated January 11, 1999
To approve Amendment No. 2, Waiver and Agreement:
Name of Institution Morgan Stanley Dean Witter Prime Income Trust
by
/s/ Peter Gewirtz
------------------------------
Name: Peter Gewirtz
Title: Authorized Signatory
<PAGE>
63
SIGNATURE PAGE TO
AMENDMENT NO. 2,
AND AGREEMENT
dated January 11, 1999
To approve Amendment No. 2, Waiver and Agreement:
Name of Institution National City Bank
by
/s/ Joshua R. Sosland
------------------------------
Name: Joshua R. Sosland
Title: Account Officer
<PAGE>
64
SIGNATURE PAGE TO
AMENDMENT NO. 2,
AND AGREEMENT
dated January 11, 1999
To approve Amendment No. 2, Waiver and Agreement:
Name of Institution NBD Bank
by
/s/ Mark L. McClure
------------------------------
Name: Mark L. McClure
Title: Vice President
<PAGE>
65
SIGNATURE PAGE TO
AMENDMENT NO. 2,
AND AGREEMENT
dated January 11, 1999
To approve Amendment No. 2, Waiver and Agreement:
Name of Institution Orix USA Corporation
by
/s/ Hiroyuki Hiyauchi
------------------------------
Name: Hiroyuki Hiyauchi
Title: Executive Vice President
<PAGE>
66
SIGNATURE PAGE TO
AMENDMENT NO. 2,
AND AGREEMENT
dated January 11, 1999
To approve Amendment No. 2, Waiver and Agreement:
Name of Institution PAM Capital Funding
By: Highland Capital Management, L.P.
as Collateral Manager
by
/s/ Mark K. Okada
------------------------------
Name: Mark K. Okada
Title: Executive Vice President
<PAGE>
67
SIGNATURE PAGE TO
AMENDMENT NO. 2,
AND AGREEMENT
dated January 11, 1999
To approve Amendment No. 2, Waiver and Agreement:
Name of Institution Paribas
by
/s/ RGM
------------------------------
Name: RGM
Title:
<PAGE>
68
SIGNATURE PAGE TO
AMENDMENT NO. 2,
AND AGREEMENT
dated January 11, 1999
To approve Amendment No. 2, Waiver and Agreement:
Name of Institution Pilgrim America High Income Investments, Inc.
By: Pilgrim Investments, Inc.
as its Investment Manager
by
/s/ Jason T. Groom
------------------------------
Name: Jason T. Groom
Title: Assistant Vice President
<PAGE>
69
SIGNATURE PAGE TO
AMENDMENT NO. 2,
AND AGREEMENT
dated January 11, 1999
To approve Amendment No. 2, Waiver and Agreement:
Name of Institution Senior High Income Portfolio, Inc.
by
/s/ Paul Travers
------------------------------
Name: Paul Travers
Title: Authorized Signatory
<PAGE>
70
SIGNATURE PAGE TO
AMENDMENT NO. 2,
AND AGREEMENT
dated January 11, 1999
To approve Amendment No. 2, Waiver and Agreement:
Name of Institution Toronto Dominion (Texas), Inc.
by
/s/ Alva J. Jones
------------------------------
Name: Alva J. Jones
Title: Vice President
<PAGE>
71
SIGNATURE PAGE TO
AMENDMENT NO. 2,
AND AGREEMENT
dated January 11, 1999
To approve Amendment No. 2, Waiver and Agreement:
Name of Institution The Travelers Insurance Company
by
/s/ John W. Petchler
------------------------------
Name: John W. Petchler
Title: Second Vice President
<PAGE>
72
SIGNATURE PAGE TO
AMENDMENT NO. 2,
AND AGREEMENT
dated January 11, 1999
To approve Amendment No. 2, Waiver and Agreement:
Name of Institution The Travelers Corporation Loan Fund
By: Travelers Asset Management International Corporation
by
/s/ John W. Petchler
------------------------------
Name: John W. Petchler
Title: Second Vice President
<PAGE>
73
SIGNATURE PAGE TO
AMENDMENT NO. 2,
AND AGREEMENT
dated January 11, 1999
To approve Amendment No. 2, Waiver and Agreement:
Name of Institution Van Kampen Prime Rate Income Trust
by
/s/ Jeffrey W. Maillet
------------------------------
Name: Jeffrey W. Maillet
Title: Senior Vice President & Director
<PAGE>
74
SIGNATURE PAGE TO
AMENDMENT NO. 2,
AND AGREEMENT
dated January 11, 1999
To approve Amendment No. 2, Waiver and Agreement:
Name of Institution Van Kampen CLO I, Limited
By: Van Kamoen Management Inc.,
as Collateral Manager
by
/s/ Jeffrey W. Maillet
------------------------------
Name: Jeffrey W. Maillet
Title: Senior Vice President & Director
<PAGE>
1999 AMERICAN AXLE & MANUFACTURING OF MICHIGAN, INC.
STOCK INCENTIVE PLAN
1. Purpose of the Plan
The purpose of the Plan is to aid the Company and its
Subsidiaries in recruiting and retaining key individuals of outstanding ability
and to motivate such individuals to exert their best efforts on behalf of the
Company and its Subsidiaries by providing incentives through the granting of
Awards. The Company expects that it will benefit from the added interest which
such key individuals will have in the welfare of the Company as a result of
their proprietary interest in the Company's success.
2. Definitions
The following capitalized terms used in the Plan have the
respective meanings set forth in this Section:
(a) Act: The Securities Exchange Act of 1934, as
amended, or any successor thereto.
(b) Award: An Option, Stock Appreciation Right or Other
Stock-Based Award granted pursuant to the Plan.
(c) Beneficial Owner: A "beneficial owner", as such term
is defined in Rule 13d-3 under the Act (or any
successor rule thereto).
(d) Board: The Board of Directors of the Company.
(e) Change in Control: The purchase or other acquisition
by any person, entity or group of persons, within
the meaning of section 13(d) or 14(d) of the
Exchange Act, or any comparable successor
provisions, other than Blackstone, employees or
directors of the Company or their respective
Affiliates, of ownership of fifty percent (50%) or
more of the combined voting power of the Company's
then outstanding voting securities entitled to vote
generally.
(f) Code: The Internal Revenue Code of 1986, as amended,
or any successor thereto.
(g) Committee: The Compensation Committee of the Board.
(h) Company: American Axle & Manufacturing of Michigan,
Inc., a Delaware corporation.
(i) Disability: Inability of a Participant to perform in
all material respects his duties and
responsibilities to the Company, or any Subsidiary
of the
<PAGE>
2
Company, by reason of a physical or mental
disability or infirmity which inability is
reasonably expected to be permanent and has
continued (i) for a period of six consecutive months
or (ii) such shorter period as the Board may
reasonably determine in good faith. The Disability
determination shall be in the sole discretion of the
Board and a Participant (or his representative)
shall furnish the Board with medical evidence
documenting the Participant's disability or
infirmity which is satisfactory to the Board.
(j) Effective Date: January 8, 1999
(k) Fair Market Value: On a given date, the arithmetic
mean of the high and low prices of the Shares as
reported on such date on the Composite Tape of the
principal national securities exchange on which such
Shares are listed or admitted to trading, or, if no
Composite Tape exists for such national securities
exchange on such date, then on the principal
national securities exchange on which such Shares
are listed or admitted to trading, or, if the Shares
are not listed or admitted on a national securities
exchange, the arithmetic mean of the per Share
closing bid price and per Share closing asked price
on such date as quoted on the National Association
of Securities Dealers Automated Quotation System (or
such market in which such prices are regularly
quoted), or, if there is no market on which the
Shares are regularly quoted, the Fair Market Value
shall be the value established by the Committee in
good faith. If no sale of Shares shall have been
reported on such Composite Tape or such national
securities exchange on such date or quoted on the
National Association of Securities Dealer Automated
Quotation System on such date, then the immediately
preceding date on which sales of the Shares have
been so reported or quoted shall be used.
(l) ISO: An Option that is also an incentive stock
option granted pursuant to Section 6(d) of the Plan.
(m) LSAR: A limited stock appreciation right granted
pursuant to Section 7(d) of the Plan.
(n) Other Stock-Based Awards: Awards granted pursuant to
Section 8 of the Plan.
(o) Option: A stock option granted pursuant to Section 6
of the Plan.
(p) Option Price: The purchase price per Share of an
Option, as determined pursuant to Section 6(a) of
the Plan.
(q) Participant: An individual who is selected by the
Committee to participate in the Plan.
<PAGE>
3
(r) Performance-Based Awards: Certain Other Stock-Based
Awards granted pursuant to Section 8(b) of the Plan.
(s) Person: A "person", as such term is used for
purposes of Section 13(d) or 14(d) of the Act (or
any successor section thereto).
(t) Plan: The 1999 American Axle & Manufacturing of
Michigan, Inc. Stock Incentive Plan.
(u) Shares: Shares of common stock of the Company.
(v) Stock Appreciation Right: A stock appreciation right
granted pursuant to Section 7 of the Plan.
(w) Subsidiary: A subsidiary corporation, as defined in
Section 424(f) of the Code (or any successor section
thereto).
3. Shares Subject to the Plan
The total number of Shares which may be issued under the Plan
is 887.199(1). The maximum number of Shares for which Options or Stock
Appreciation Rights may be granted during a calendar year to any Participant
shall be 380.2282(2). The Shares may consist, in whole or in part, of unissued
Shares or treasury Shares. The issuance of Shares or the payment of cash upon
the exercise of an Award shall reduce the total number of Shares available
under the Plan, as applicable. Shares which are subject to Awards which
terminate or lapse may be granted again under the Plan.
4. Administration
The Plan shall be administered by the Committee, which may
delegate its duties and powers in whole or in part to any subcommittee thereof
consisting solely of at least two individuals who are each "non-employee
directors" within the meaning of Rule 16b-3 under the Act (or any successor
rule thereto) and "outside directors" within the meaning of Section 162(m) of
the Code (or any successor section thereto). The Committee is authorized to
interpret the Plan, to establish, amend and rescind any rules and regulations
relating to the Plan, and to make any other determinations that it deems
necessary or desirable for the administration of the Plan. The Committee may
correct any defect or supply any omission or reconcile any inconsistency in
- --------
1. Pursuant to Section 9(a) of the Plan, the number of Shares to equal
3,500,000 after the conversion of Shares pursuant to the proposed merger of the
Company into American Axle & Manufacturing Holdings, Inc.
2. Pursuant to Section 9(a) of the Plan, the number of Shares to equal
1,500,000 after the conversion of Shares pursuant to the proposed merger of the
Company into American Axle & Manufacturing Holdings, Inc.
<PAGE>
4
the Plan in the manner and to the extent the Committee deems necessary or
desirable. Any decision of the Committee in the interpretation and
administration of the Plan, as described herein, shall lie within its sole and
absolute discretion and shall be final, conclusive and binding on all parties
concerned (including, but not limited to, Participants and their beneficiaries
or successors). The Committee shall require payment of any amount it may
determine to be necessary to withhold for federal, state, local or other taxes
as a result of the exercise of an Award. Unless the Committee specifies
otherwise, the Participant may elect to pay a portion or all of such
withholding taxes by (a) delivery in Shares or (b) having Shares withheld by
the Company from any Shares that would have otherwise been received by the
Participant.
5. Limitations
No Award may be granted under the Plan after the tenth
anniversary of the Effective Date, but Awards theretofore granted may extend
beyond that date.
6. Terms and Conditions of Options
Options granted under the Plan shall be, as determined by the
Committee, non-qualified or incentive stock options for federal income tax
purposes, as evidenced by the related Award agreements, and shall be subject to
the foregoing and the following terms and conditions and to such other terms
and conditions, not inconsistent therewith, as the Committee shall determine:
(a) Option Price. The Option Price per Share shall be
determined by the Committee, but shall not be less than 100% of the Fair Market
Value of the Shares on the date an Option is granted.
(b) Exercisability. Options granted under the Plan shall be
exercisable at such time and upon such terms and conditions as may be
determined by the Committee, but in no event shall an Option be exercisable
more than ten years after the date it is granted.
(c) Exercise of Options. Except as otherwise provided in the
Plan or in an Award agreement, an Option may be exercised for all, or from time
to time any part, of the Shares for which it is then exercisable. For purposes
of Section 6 of the Plan, the exercise date of an Option shall be the later of
the date a notice of exercise is received by the Company and, if applicable,
the date payment is received by the Company pursuant to clauses (i), (ii) or
(iii) in the following sentence. The purchase price for the Shares as to which
an Option is exercised shall be paid to the Company in full at the time of
exercise at the election of the Participant (i) in cash, (ii) in Shares having
a Fair Market Value equal to the aggregate Option Price for the Shares being
purchased and satisfying such other requirements as may be imposed by the
Committee; provided, that such Shares have been held by the Participant for no
less than six months, (iii) partly in cash and partly in such Shares or (iv)
through the delivery of irrevocable instruments to a broker to deliver promptly
to the Company an amount equal to the aggregate option price for the shares
being purchased. No Participant shall have any rights to dividends or other
rights of a stockholder with respect to Shares subject to an Option until the
Participant has given written
<PAGE>
5
notice of exercise of the Option, paid in full for such Shares and, if
applicable, has satisfied any other conditions imposed by the Committee
pursuant to the Plan.
(d) ISOs. The Committee may grant Options under the Plan that
are intended to be ISOs. Such ISOs shall comply with the requirements of
Section 422 of the Code (or any successor section thereto). No ISO may be
granted to any Participant who at the time of such grant, owns more than ten
percent of the total combined voting power of all classes of stock of the
Company or of any Subsidiary, unless (i) the Option Price for such ISO is at
least 110% of the Fair Market Value of a Share on the date the ISO is granted
and (ii) the date on which such ISO terminates is a date not later than the day
preceding the fifth anniversary of the date on which the ISO is granted. Any
Participant who disposes of Shares acquired upon the exercise of an ISO either
(i) within two years after the date of grant of such ISO or (ii) within one
year after the transfer of such Shares to the Participant, shall notify the
Company of such disposition and of the amount realized upon such disposition.
7. Terms and Conditions of Stock Appreciation Rights
(a) Grants. The Committee also may grant (i) a Stock
Appreciation Right independent of an Option or (ii) a Stock Appreciation Right
in connection with an Option, or a portion thereof. A Stock Appreciation Right
granted pursuant to clause (ii) of the preceding sentence (A) may be granted at
the time the related Option is granted or at any time prior to the exercise or
cancellation of the related Option, (B) shall cover the same Shares covered by
an Option (or such lesser number of Shares as the Committee may determine) and
(C) shall be subject to the same terms and conditions as such Option except for
such additional limitations as are contemplated by this Section 8 (or such
additional limitations as may be included in an Award agreement).
(b) Terms. The exercise price per Share of a Stock
Appreciation Right shall be an amount determined by the Committee but in no
event shall such amount be less than the greater of (i) the Fair Market Value
of a Share on the date the Stock Appreciation Right is granted or, in the case
of a Stock Appreciation Right granted in conjunction with an Option, or a
portion thereof, the Option Price of the related Option and (ii) an amount
permitted by applicable laws, rules, by-laws or policies of regulatory
authorities or stock exchanges. Each Stock Appreciation Right granted
independent of an Option shall entitle a Participant upon exercise to an amount
equal to (i) the excess of (A) the Fair Market Value on the exercise date of
one Share over (B) the exercise price per Share, times (ii) the number of
Shares covered by the Stock Appreciation Right. Each Stock Appreciation Right
granted in conjunction with an Option, or a portion thereof, shall entitle a
Participant to surrender to the Company the unexercised Option, or any portion
thereof, and to receive from the Company in exchange therefor an amount equal
to (i) the excess of (A) the Fair Market Value on the exercise date of one
Share over (B) the Option Price per Share, times (ii) the number of Shares
covered by the Option, or portion thereof, which is surrendered. The date a
notice of exercise is received by the Company shall be the exercise date.
Payment shall be made in Shares or in cash, or partly in Shares and partly in
cash (any such Shares valued at such Fair Market Value), all as shall be
determined by the Committee. Stock Appreciation Rights may be exercised from
time to time upon actual receipt by the Company of
<PAGE>
6
written notice of exercise stating the number of Shares with respect to which
the Stock Appreciation Right is being exercised. No fractional Shares will be
issued in payment for Stock Appreciation Rights, but instead cash will be paid
for a fraction or, if the Committee should so determine, the number of Shares
will be rounded downward to the next whole Share.
(c) Limitations. The Committee may impose, in its discretion,
such conditions upon the exercisability or transferability of Stock
Appreciation Rights as it may deem fit.
(d) Limited Stock Appreciation Rights. The Committee may
grant LSARs that are exercisable upon the occurrence of specified contingent
events. Such LSARs may provide for a different method of determining
appreciation, may specify that payment will be made only in cash and may
provide that any related Awards are not exercisable while such LSARs are
exercisable. Unless the context otherwise requires, whenever the term "Stock
Appreciation Right" is used in the Plan, such term shall include LSARs.
8. Other Stock-Based Awards
(a) Generally. The Committee, in its sole discretion, may
grant Awards of Shares, Awards of restricted Shares and Awards that are valued
in whole or in part by reference to, or are otherwise based on the Fair Market
Value of, Shares ("Other Stock-Based Awards"). Such Other Stock-Based Awards
shall be in such form, and dependent on such conditions, as the Committee shall
determine, including, without limitation, the right to receive one or more
Shares (or the equivalent cash value of such Shares) upon the completion of a
specified period of service, the occurrence of an event and/or the attainment
of performance objectives. Other Stock-Based Awards may be granted alone or in
addition to any other Awards granted under the Plan. Subject to the provisions
of the Plan, the Committee shall determine to whom and when Other Stock-Based
Awards will be made, the number of Shares to be awarded under (or otherwise
related to) such Other Stock-Based Awards; whether such Other Stock-Based
Awards shall be settled in cash, Shares or a combination of cash and Shares;
and all other terms and conditions of such Awards (including, without
limitation, the vesting provisions thereof and provisions ensuring that all
Shares so awarded and issued shall be fully paid and non-assessable).
(b) Performance-Based Awards. Notwithstanding anything to the
contrary herein, certain Other Stock-Based Awards granted under this Section 8
may be granted in a manner which is deductible by the Company under Section
162(m) of the Code (or any successor section thereto) ("Performance-Based
Awards"). A Participant's Performance-Based Award shall be determined based on
the attainment of written performance goals approved by the Committee for a
performance period established by the Committee (i) while the outcome for that
performance period is substantially uncertain and (ii) no more than 90 days
after the commencement of the performance period to which the performance goal
relates or, if less, the number of days which is equal to 25 percent of the
relevant performance period. The performance goals, which must be objective,
shall be based upon one or more of the following criteria: (i) consolidated
earnings before or after taxes (including earnings before interest, taxes,
depreciation and amortization); (ii) net income; (iii) operating income; (iv)
earnings per Share; (v) book value per Share; (vi) return on shareholders'
equity; (vii) expense management; (viii)
<PAGE>
7
return on investment; (ix) improvements in capital structure; (x) profitability
of an identifiable business unit or product; (xi) maintenance or improvement of
profit margins; (xii) stock price; (xiii) market share; (xiv) revenues or
sales; (xv) costs; (xvi) cash flow; (xvii) working capital and (xviii) return
on assets. The foregoing criteria may relate to the Company, one or more of its
Subsidiaries or one or more of its divisions or units, or any combination of
the foregoing, and may be applied on an absolute basis and/or be relative to
one or more peer group companies or indices, or any combination thereof, all as
the Committee shall determine. In addition, to the degree consistent with
Section 162(m) of the Code (or any successor section thereto), the performance
goals may be calculated without regard to extraordinary items. The maximum
amount of a Performance-Based Award during a calendar year to any Participant
shall be $5,000,000. The Committee shall determine whether, with respect to a
performance period, the applicable performance goals have been met with respect
to a given Participant and, if they have, to so certify and ascertain the
amount of the applicable Performance-Based Award. No Performance-Based Awards
will be paid for such performance period until such certification is made by
the Committee. The amount of the Performance-Based Award actually paid to a
given Participant may be less than the amount determined by the applicable
performance goal formula, at the discretion of the Committee. The amount of the
Performance-Based Award determined by the Committee for a performance period
shall be paid to the Participant at such time as determined by the Committee in
its sole discretion after the end of such performance period; provided,
however, that a Participant may, if and to the extent permitted by the
Committee and consistent with the provisions of Section 162(m) of the Code,
elect to defer payment of a Performance-Based Award.
9. Adjustments Upon Certain Events
Notwithstanding any other provisions in the Plan to the
contrary, the following provisions shall apply to all Awards granted under the
Plan:
(a) Generally. In the event of any change in the outstanding
Shares after the Effective Date by reason of any Share dividend or split,
reorganization, recapitalization, merger, consolidation, spin-off, combination
or exchange of Shares or other corporate exchange, any distribution to
shareholders of Shares other than regular cash dividends or any other similar
event, the Committee in its sole discretion and without liability to any person
may make such substitution or adjustment, if any, as it deems to be equitable,
as to (i) the number or kind of Shares or other securities issued or reserved
for issuance pursuant to the Plan or pursuant to outstanding Awards, (ii) the
maximum number of Shares for which Options or Stock Appreciation Rights may be
granted during a calendar year to any Participant, (iii) the Option Price
and/or (iv) any other affected terms of such Awards; provided, however, that
the number of Shares issued or reserved for issuance pursuant to the Plan and
the maximum number of Shares for which Options or Stock Appreciation Rights may
be granted during a calendar year to any Participant shall automatically be
adjusted by multiplying such number of Shares by 3,945 to reflect the
conversion of Shares pursuant to the proposed merger of the Company into
American Axle & Manufacturing Holdings, Inc.
<PAGE>
8
(b) Change in Control. Except as otherwise provided in an
Award agreement, in the event of a Change in Control, the Committee in its sole
discretion and without liability to any person may take such actions, if any,
as it deems necessary or desirable with respect to any Award (including,
without limitation, (i) the acceleration of an Award, (ii) the payment of a
cash amount in exchange for the cancellation of an Award and/or (iii) the
requiring of the issuance of substitute Awards that will substantially preserve
the value, rights and benefits of any affected Awards previously granted
hereunder) as of the date of the consummation of the Change in Control.
10. No Right to Employment
The granting of an Award under the Plan shall impose no
obligation on the Company or any Subsidiary to continue the employment of a
Participant and shall not lessen or affect the Company's or Subsidiary's right
to terminate the employment of such Participant.
11. Successors and Assigns
The Plan shall be binding on all successors and assigns of
the Company and a Participant, including without limitation, the estate of such
Participant and the executor, administrator or trustee of such estate, or any
receiver or trustee in bankruptcy or representative of the Participant's
creditors.
12. Nontransferability of Awards
Unless otherwise determined by the Committee, an Award shall
not be transferable or assignable by the Participant otherwise than by will or
by the laws of descent and distribution. An Award exercisable after the death
of a Participant may be exercised by the legatees, personal representatives or
distributees of the Participant.
13. Amendments or Termination
The Board may amend, alter or discontinue the Plan, but no
amendment, alteration or discontinuation shall be made which, (a) without the
approval of the shareholders of the Company, would (except as is provided in
Section 9 of the Plan), increase the total number of Shares reserved for the
purposes of the Plan or change the maximum number of Shares for which Awards
may be granted to any Participant or (b) without the consent of a Participant,
would impair any of the rights or obligations under any Award theretofore
granted to such Participant under the Plan; provided, however, that the
Committee may amend the Plan in such manner as it deems necessary to permit the
granting of Awards meeting the requirements of the Code or other applicable
laws. Notwithstanding anything to the contrary herein, the Board may not amend,
alter or discontinue the provisions relating to Section 9(b) of the Plan after
the occurrence of a Change in Control.
<PAGE>
9
14. International Participants
With respect to Participants who reside or work outside the
United States of America and who are not (and who are not expected to be)
"covered employees" within the meaning of Section 162(m) of the Code, the
Committee may, in its sole discretion, amend the terms of the Plan or Awards
with respect to such Participants in order to conform such terms with the
requirements of local law.
15. Choice of Law
The Plan shall be governed by and construed in accordance
with the laws of the State of Delaware, without regard to the conflicts of laws
principles thereof.
16. Effectiveness of the Plan
The Plan shall be effective as of the Effective Date.
<PAGE>
SENIOR SECURED
PROMISSORY NOTE
$15,000,000 August 14, 1998
New York, New York
FOR VALUE RECEIVED, Richard E. Dauch (the "Payor") promises to pay to
the order of American Axle & Manufacturing of Michigan, Inc., a Michigan
corporation (the "Company"), in lawful money of the United States of America and
in immediately available funds, the principal amount of Fifteen Million Dollars
($15,000,000) ("Maximum Amount") or such lesser amount as may be outstanding
from time to time from the Payor to the Company hereunder (the "Loan") on August
14, 2003 (or on such earlier date on which the then unpaid principal amount of
the Loan becomes due and payable pursuant to the terms of this Senior Secured
Promissory Note (the "Note")). Payments in respect of this Note shall be made by
the Payor to the Company at the Company's office at 1840 Holbrook Avenue,
Detroit, MI 48212 or at such other place as the Company may designate in writing
from time to time.
The Loan to be repaid by the Payor pursuant hereto shall be made on the
date hereof by the Company to the Payor to pay taxes due by the Payor in respect
of options issued to the Payor in respect of the capital stock of the Company
and, thereafter, on each Interest Payment Date, the Payor may borrow from the
Company the interest due on such Interest Payment Date from the Payor to the
Company so long as at no time shall the aggregate principal amount due hereunder
exceed the Maximum Amount.
The Loan shall bear interest (calculated on the basis of a 360 day year
for actual days elapsed) during each Interest Period with respect thereto at a
rate per annum equal to the Eurodollar Rate applicable to such Interest Period
plus 2.00%; provided that the Payor may request the Company to fix the interest
rate paid hereunder by fixing the cost to the Company of the funds borrowed
hereunder pursuant to an interest rate hedging agreement on terms and conditions
reasonable to the Company and to the Pledgor. Interest shall be payable in
arrears on each Interest Payment Date.
For purposes hereof, the following definitions shall apply:
"Business Day": a day other than a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law to
close; provided that the term "Business Day" shall also exclude any day on which
banks are not open for dealings in U.S. dollar deposits in the London interbank
market.
"Eurodollar Rate": with respect to each Interest Period, the rate of
interest determined on the basis of the rate for deposits in U.S. dollars for a
period of six months commencing on the first day of such Interest Period
appearing on Page 3750 of the Telerate Service as of 11:00 A.M., London time,
two Business Days prior to the beginning of such Interest Period. In the event
that such rate does not appear on Page 3750 of the Telerate Service (or
otherwise on such service), the "Eurodollar Base Rate" shall be determined by
reference to such other
<PAGE>
publicly available service for displaying eurodollar rates as may be determined
by the Company.
"Interest Payment Date": the last day of each Interest Period.
"Interest Period": initially, the period beginning on the date hereof
and ending six months thereafter, and thereafter each period commencing on the
last day of the preceding Interest Period and ending six months thereafter;
provided that if any Interest Period would otherwise end on a day that is not a
Business Day such Interest Period shall be extended to the next succeeding
Business Day, unless the result of such extension would be to carry such
Interest Period into another calendar month in which event such Interest Period
shall end on the immediately preceding Business Day.
If any principal or interest or other amount hereunder is not paid when
due (whether as stated, by acceleration or otherwise) the unpaid principal
hereof and any such overdue interest or other amount shall bear interest during
the period from and including the due date to the date of payment in full
thereof at the rate per annum equal to 2.00% above the rate otherwise in effect
on such date.
The Payor may at his option prepay the principal due under this Note at
any time, in whole or in part, without premium, penalty or breakage costs. The
Payor shall prepay the principal due under this Note to the extent of the cash
proceeds (net of taxes and reasonable transaction expenses) of the sale,
assignment or other disposition of any "Options" or "Shares" (in each case as
defined in the Nonqualified Stock Option Agreement made as of October 30, 1997
by and between the Company and the Payor). Any prepayment hereunder shall be
applied first to accrued and unpaid interest and then to principal.
This Note is secured by the Pledge Agreement (the "Pledge Agreement"),
dated as of the date hereof, and made by the undersigned.
If any of the following events (any such event, an "Event of Default")
shall occur and be continuing:
(a) The Payor shall fail to pay any principal of this Note
within five days after such principal is due in accordance with the
terms hereof, or the Payor shall fail to pay interest on this Note, or
any fees or other amounts with respect to this Note, within five days
after any such interest, fee or other amount becomes due in accordance
with the terms hereof; or
(b) Any representation or warranty made by the Payor in
connection with this Note or the Pledge Agreement, or in any report,
certificate, financial statement or other instrument furnished by or on
behalf of the Payor in connection therewith, shall
<PAGE>
prove to have been incorrect in any material respect on or as of the
date made or deemed made; or
(c) The Payor shall default in the due observance or
performance of any covenants or conditions or agreements contained in
this Note or the Pledge Agreement or the Pledge Agreement shall fail to
be in full force and effect; or
(d) The Payor voluntarily terminates his employment with the
Company or such employment has been terminated for "Cause" (as defined
in the Employment Agreement between Payor and the Company dated as of
November 6, 1997);
then, and in any such event, the Company may by notice to the Payor, declare the
Loan (with accrued interest thereon) and all other amounts owed by the Payor in
connection therewith to be due and payable forthwith, whereupon the same shall
immediately become due and payable. Except as expressly provided above in this
paragraph, presentment, demand, protest and all other notices of any kind are
hereby expressly waived.
The Payor and every indorser agrees that if an attorney is used to
enforce or collect any principal of, interest on or other amount in respect of
this Note a reasonable attorney's fee shall be payable by each of them against
whom such principal, interest or other amounts or rights hereunder are enforced
or declared. The Company and the Payor and each indorser, in any legal action or
proceeding (relating to this Note or any agreement executed in connection
herewith) irrevocably and unconditionally waive trial by jury, and the Payor and
each indorser waives the right to interpose any set-off or counterclaim of any
nature or description.
Time for payment extended by law shall be included in the computation
of interest.
All notices under this Note or the Pledge Agreement shall be in writing
and sent to each party at their address as they shall notify the other party.
All notices will be deemed delivered (i) as of the date of delivery if delivered
in person or by courier, or (ii) three (3) days after being deposited in the
United States mail, postage paid.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK.
/s/ Richard E. Dauch
-----------------------------------
Richard E. Dauch
<PAGE>
STATE OF MICHIGAN )
) ss:
COUNTY OF WAYNE )
On this 17th day of August, 1998, before me personally
appeared Richard E. Dauch to me known, and known to me to be the individual(s)
described in and who executed the foregoing instrument and who duly acknowledged
to me having executed the same.
/s/ Janice A. Washo
-----------------------------------
Notary Public
