<PAGE> 1
As filed with the Securities and Exchange Commission on April 7, 1999
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
OXFORD AUTOMOTIVE, INC.
(Exact Name of Registrant as Specified in its Charter)
MICHIGAN 3465 38-3262809
(State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation or Organization) Classification Code Number) Identification No.)
1250 STEPHENSON HIGHWAY
TROY, MICHIGAN 48083
248-577-1400
(Address, Including Zip Code, and Telephone Number,
Including Area Code, of Registrant's Principal Executive Offices)
REX E. SCHLAYBAUGH, JR.
OXFORD AUTOMOTIVE, INC.
1250 STEPHENSON HIGHWAY
TROY, MICHIGAN 48083
248-577-1400
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent for Service)
COPIES TO:
Gerald T. Lievois
Dykema Gossett PLLC
1577 North Woodward Avenue, Suite 300
Bloomfield Hills, MI 48304-2820
(248) 203-0866
Approximate date of commencement of the proposed sale of the securities
to the public: As soon as practicable after the effective date of this
Registration Statement.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
CALCULATION OF REGISTRATION FEE
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Title Of Each Class Of Amount To Proposed Maximum Proposed Maximum Amount Of
Securities Be Offering Price Per Aggregate Offering Price Registration
To Be Registered Registered Unit(1) (1) Fee
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
101/8% Senior Subordinated $ 200,000,000 100% $ 200,000,000 $ 55,600
Notes Due 2007, Series D
- ----------------------------------------------------------------------------------------------------------------------
Guarantees of 101/8% Senior (2) (2) (2) (2)
Subordinated Notes Due 2007,
Series D
- ----------------------------------------------------------------------------------------------------------------------
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(1) Estimated pursuant to Rule 457(f) solely for the purposes of
calculating the registration fee.
(2) Pursuant to Rule 457(n), no registration fee is required with respect
to the Guarantees of the Senior Subordinated Notes registered hereby.
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATES AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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TABLE OF ADDITIONAL REGISTRANTS
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Exact Name of Guarantor Registrant Jurisdiction of IRS Employer Identification No. Primary Standard Industrial
as Specified in its Charter Incorporation Classification Code Number
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Lobdell Emery Corporation Michigan 38-0768460 3465
- -------------------------------------------------------------------------------------------------------------------------
BMG North America Limited Ontario 98-0113060 3465
- -------------------------------------------------------------------------------------------------------------------------
BMG Holdings Inc. Ontario 00-0000000 3465
- -------------------------------------------------------------------------------------------------------------------------
Winchester Fabrication Corporation Michigan 38-3209840 3465
- -------------------------------------------------------------------------------------------------------------------------
Creative Fabrication Corporation Tennessee 62-1613148 3465
- -------------------------------------------------------------------------------------------------------------------------
Parallel Group International, Inc. Indiana 35-1971190 3465
- -------------------------------------------------------------------------------------------------------------------------
Laserweld International, L.L.C. Indiana 35-1969204 3465
- -------------------------------------------------------------------------------------------------------------------------
Concept Management Corporation Michigan 38-3209841 3465
- -------------------------------------------------------------------------------------------------------------------------
Lewis Emery Capital Corporation Michigan 38-6602578 3465
- -------------------------------------------------------------------------------------------------------------------------
Howell Industries, Inc. Michigan 38-0479830 3465
- -------------------------------------------------------------------------------------------------------------------------
RPI Holdings, Inc. Michigan 38-3134115 3465
- -------------------------------------------------------------------------------------------------------------------------
RPI, Inc. Michigan 38-2492117 3465
- -------------------------------------------------------------------------------------------------------------------------
Prudenville Manufacturing, Inc. Michigan 38-3168721 3465
- -------------------------------------------------------------------------------------------------------------------------
Oxford Suspension, Inc. Michigan 38-3401332 3465
- -------------------------------------------------------------------------------------------------------------------------
Oxford Suspension Ltd. Ontario 00-0000000 3465
- -------------------------------------------------------------------------------------------------------------------------
OASP, Inc. Michigan 38-3453670 3465
- -------------------------------------------------------------------------------------------------------------------------
OASP II, Inc. Michigan 38-3453671 3465
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 3
PROSPECTUS
OFFER FOR ALL OUTSTANDING
10 1/8% SENIOR SUBORDINATED NOTES DUE 2007,
SERIES A, B & C IN EXCHANGE FOR 10 1/8% SENIOR
SUBORDINATED NOTES DUE 2007, SERIES D OF
OXFORD AUTOMOTIVE, INC. LOGO
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON ________, 1999, UNLESS EXTENDED.
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- - EXCHANGE OFFER - MATURITY
Offer to exchange an aggregate principal amount of up to The Series D Notes will mature on June 15, 2007.
$200 million of 10 1/8% Senior Subordinated Notes Due
2007, Series D for a like principal amount of 10 1/8% - REDEMPTION
Senior Subordinated Notes Due 2007, Series A, 10 1/8%
Senior Subordinated Notes Due 2007, Series B and 10 We may redeem the Series D Notes at any time after
1/8% Senior Subordinated Notes Due 2007, Series C. June 15, 2002. Before June 15, 2000, we may redeem up
to 35% of the Series D Notes with the proceeds of
We will not receive any proceeds from this Exchange certain types of public equity offerings.
Offer. Tenders of Series A, B or C Notes pursuant to this
Exchange Offer may be withdrawn at any time prior to - MANDATORY OFFER TO REPURCHASE
the expiration date. In the event we terminate this
Exchange Offer and do not accept for exchange any If we sell certain assets or experience certain kinds of
Series A, B, or C Notes with respect to this Exchange changes in control, we must offer to repurchase the
Offer, we will promptly return such notes to the Series D Notes.
appropriate holders.
- GUARANTIES
- - EXPIRATION OF EXCHANGE OFFER If we cannot make payments on the Series D Notes when
due, our guarantor subsidiaries must make them instead.
The Exchange Offer will expire at 5:00 p.m., New Not all of our subsidiaries will be guarantors.
York City time, on ____________, 1999, or if extended,
no later than __________, 1999. The Exchange Offer is - RANKING
not conditioned upon any minimum principal amount of
Series A, Series B or Series C Notes being tendered The Series D Notes and the subsidiary guaranties are
for exchange. subordinated to all of our and our guarantor subsidiaries'
Senior Indebtedness.
- - INDENTURE
- INTEREST
The Series D Notes will be issued pursuant to, and
entitled to the benefits of, the Indenture governing the The Series D Notes will bear interest at
Series C Notes. 10 1/8% from and including the date of
consummation of this Exchange Offer.
Interest will be paid every six months on
June 15 and December 15 of each year.
</TABLE>
THE NOTES AND THE EXCHANGE OFFER INVOLVE RISKS. SEE "RISK FACTORS" BEGINNING ON
PAGE 14.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if
this Prospectus is truthful or complete. Any representation to the contrary
is a criminal offense.
The date of this Prospectus is ______, 1999.
<PAGE> 4
Where You Can Find More Information
This Prospectus incorporates important business and financial information
about us that is not included in or delivered with the Prospectus. This
information is available without charge upon written or oral request to:
Secretary, Oxford Automotive, Inc., 1250 Stephenson Highway, Troy, Michigan
48083, (telephone 248-577-1400). In order to ensure timely delivery of any
documents, any request should be made no later than five business days prior to
the Expiration Date of ______________, 1999.
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SUMMARY
The following summary is qualified in its entirety by the more detailed
information and financial statements and related notes appearing elsewhere in
this Prospectus. For purposes of this Prospectus, the "Company," "our," "we,"
and "us" shall refer to Oxford Automotive, Inc. ("Oxford Automotive") and all of
its consolidated subsidiaries, unless the context otherwise requires.
THE COMPANY
GENERAL
We are a leading Tier 1 or direct supplier of high-quality, engineered
metal components, assemblies and modules used by original equipment automotive
manufacturers, commonly referred to as "OEMs". Our core products are complex,
high value-added products, primarily assemblies containing multiple stamped
parts forgings and various welded, hemmed or fastened components. These products
which include large structural stampings and assemblies, including exposed
Class A surfaces, leaf springs and smaller complex welded assemblies, are used
in manufacturing a variety of sport utility vehicles, light and medium
trucks, mini-vans, vans and passenger cars. We are the sole source supplier of
these products to our customers.
On February 5, 1999, a wholly-owned subsidiary of the Company acquired 100%
of the shares of Cofimeta S.A. and approximately 99% of the shares of its four
subsidiaries: Somenor S.A.; Aubry S.A.; Ecrim S.A.; and Socori Technologies S.A.
Cofimeta S.A. and its four subsidiaries are collectively referred to as
"Cofimeta." Cofimeta is a leading supplier of closure panels, floor pans, deck
lids, structured pillars, cross members, radiator surrounds and front ends and
Class A surfaces. Cofimeta is headquartered in a suburb of Paris and operates
five facilities in France.
Our seven largest customers, based on proforma net sales for the nine
months ended December 31, 1998, assuming the acquisition of Cofimeta had
occurred on April 1, 1998 are GM, Ford, Renault, Peugeot Citroen,
DaimlerChrysler, CAMI (a joint venture of GM and Suzuki Motor Corporation) and
Saturn. For the nine months ended December 31, 1998, approximately 72% of our
pro forma net sales were derived from sales of our products manufactured for
sport utility vehicles, mini-vans, vans and light trucks.
We currently operate 21 manufacturing facilities which offer the latest
technologies in metal stamping, forging, welding and assembly production
equipment, including fully-automated hydraulic and wide-bed press lines (up to
180 inches), robotic welding cells, robotic hemming, autophoretic corrosion
resistant coating, and a patented eye forming process. Our diverse line of over
500 presses that range up to 3,000 tons including both conventional and transfer
technology and state-of-the-art robotic weld assembly and hemming equipment are
capable of manufacturing a broad assortment of parts and assemblies ranging from
simple stampings to full-size, exposed door and closure panels. We are one of a
few independent suppliers that have the ability to produce large, complex
stampings, as well as the technical expertise and automated assembly
capabilities to provide high value-added modules such as door apertures and
assemblies, A-pillars, exposed surface products and control arms, and multiple
leaf and parabolic leaf springs.
On a pro forma basis, assuming the acquisitions of Howell Industries, Inc.,
a Michigan corporation, RPI Holdings, Inc., a Michigan corporation and the
Suspension Division of Eaton Corporation, each described below, and Cofimeta had
occurred on April 1, 1997, we would have had net sales of $765.2 million and
EBITDA of $40.8 million for the fiscal year ended March 31, 1998. For the nine
months ended December 31, 1998, on a pro forma basis assuming the acquisition of
Cofimeta had occurred on April 1, 1998 we would have had net sales of
$555.3 million and EBITDA of $41.6 million.
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<PAGE> 6
Our principal executive office is located at 1250 Stephenson Highway, Troy,
Michigan 48083, and its telephone number is (248) 577-1400.
BUSINESS STRATEGY
Our principal objective is to be a leading, full-service, global Tier 1
supplier of integrated systems based on metal forming and related manufacturing
technologies. We believe that we are well positioned to benefit from two
significant trends in the stamping and metal forming segments of the automotive
industry, outsourcing and consolidation. Outsourcing of metal stamping has
increased in response to competitive pressures on OEMs to improve quality and
reduce capital requirements, labor costs, overhead and inventory. Consolidation
among automotive industry suppliers has occurred as OEMs have more frequently
awarded long-term sole source contracts to the most capable global suppliers.
In addition, OEMs are increasingly seeking systems suppliers who can
provide a complete package of design, engineering, manufacturing and project
management support for an integrated system (such as a front-end system). We
intend to capitalize on these trends through internal development and strategic
acquisitions. The key elements of our strategy include the following:
- provide full-service program capability,
- supply complex, high value-added systems,
- focus on high growth vehicle categories,
- establish a global presence, and
- pursue strategic acquisitions.
RECENT DEVELOPMENTS
On February 5, 1999, as described above, we acquired Cofimeta. On April 1,
1998, we acquired the Suspension Division of Eaton Corporation. The Suspension
Division is a leading Tier 1 North American supplier of leaf spring suspension
systems for automotive applications. Products of the Suspension Division include
multiple leaf, parabolic (long taper) multiple leaf, and single leaf long taper
suspension systems. The Suspension Division is held through two of the Company's
subsidiaries, Oxford Suspension, Inc. and Oxford Suspension Ltd.
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THE EXCHANGE OFFER
Securities Offered .............................. Up to $200.0 million aggregate principal amount of 10 1/8%
Senior Subordinated Notes Due 2007, Series D. The terms of
the Series D Notes are identical in all material respects, except
for certain transfer restrictions, registration rights and certain
interest rate step-up provisions, to the $40 million aggregate
principal amount of 10 1/8% Senior Subordinated Notes Due
2007, Series C issued by the Company on December 8, 1998.
The terms of the Series D Notes are also identical in all material
respects to the $125 million aggregate principal amount of
10 1/8% Senior Subordinated Notes Due 2007, Series A issued
by the Company on June 24, 1997 and the $35 million
aggregate principal amount of 10 1/8% Senior Subordinated
Notes Due 2007, Series B issued by the Company on April 1,
1998. The Series A Notes, Series B Notes and Series C Notes
are referred to as the "Existing Notes". The Series A Notes and
the Series B Notes were both issued under the same Indenture
dated as of June 15, 1997. The Existing Notes and the Series D
Notes are sometimes referred to collectively as the "Notes."
See "The Series D Notes" and "The Exchange Offer."
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<S> <C>
The Exchange Offer ......................... The Series D Notes are being offered in exchange (the
"Exchange Offer") for a like principal amount of Existing
Notes. You may exchange Existing Notes only in integral
multiples of $1,000. The issuance of the Series D Notes is
intended to satisfy obligations of the Company and certain of its
subsidiaries (the "Subsidiary Guarantors") that have fully and
unconditionally guaranteed (the "Subsidiary Guaranties"), on a
joint and several basis, and on an unsecured, senior
subordinated basis the Notes, contained in the Registration
Rights Agreement dated December 8, 1998, among the
Company, certain of the Subsidiary Guarantors and Bear,
Stearns & Co. Inc., BT Alex.Brown Incorporated, and Morgan
Stanley & Co. Incorporated, relating to the Series C Notes (the
"Registration Agreement").
The objective of the Exchange Offer is to create a single series of debt
securities having a total outstanding principal amount which is larger than
that of any of the Existing Notes as separate series. This may create greater
liquidity for the Series D Notes. However, see "Risk Factors -- Dilution of
Interest."
Expiration Date; Withdrawal of Tender........... The Exchange Offer will expire at 5:00 p.m. New York City
time, on __________, 1999, unless we extend the offer to a
date not later than __________, 1999. You may withdraw the
tender of Existing Notes pursuant to the Exchange Offer at any
time prior to the Expiration Date. Any Existing Notes not
accepted for exchange for any reason will be returned without
expense to the tendering holder of such Existing Note as
promptly as practicable after the expiration or termination of
the Exchange Offer. We will provide written notice of any
extension, amendment, non-acceptance or termination to the
holders of Existing Notes, including those holders who have
previously tendered their Existing Notes. See "The Exchange
Offer -- Terms of the Exchange Offer; Period for Tendering
Existing Notes" and "-- Withdrawal Rights."
Certain Conditions to the Exchange Offer........ Our obligation to accept for exchange, or to issue Series D
Notes in exchange for, any Existing Notes is subject to certain
customary conditions relating to compliance with any
applicable law, or order of any governmental agency or any
applicable interpretation by the Staff of the SEC, which we may
waive in our reasonable discretion. We currently expect that
each of the conditions will be satisfied and that no waivers will
be necessary. See "The Exchange Offer -- Certain Conditions
to the Exchange Offer."
Procedures for Tendering Existing Notes..... If you wish to accept the Exchange Offer, you must complete,
sign and date the accompanying Letter of Transmittal, or a
facsimile thereof, in accordance with the instructions contained
in such letter and in this Prospectus, and mail or otherwise
deliver such Letter of Transmittal, or such facsimile, together
with such Existing Notes and any other required
documentation, to the Exchange Agent at the address set forth
in this Prospectus. See "The Exchange Offer -- Procedures for
Tendering Existing Notes."
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<S> <C>
Special Procedures for Beneficial Owners ......... Any beneficial owner whose Existing Notes are registered in
the name of a broker, dealer, commercial bank, trust company
or other nominee and who wishes to tender such Existing Notes
in the Exchange Offer should contact such registered holder
promptly and instruct such registered holder to tender on such
beneficial owner's behalf. If such beneficial owner wishes to
tender on such owner's own behalf, such owner must, prior to
completing and executing the Letter of Transmittal and
delivering its Existing Notes, either make appropriate
arrangements to register ownership of the Existing Notes in
such owner's name or obtain a properly completed bond power
from the registered holder. The transfer of registered
ownership may take considerable time and may not be
completed prior to the Expiration Date.
Guaranteed Delivery Procedures................ If you wish to tender your Existing Notes and they are not
immediately available or you cannot deliver your Existing Notes,
the Letter of Transmittal or any other documents required by the
Letter of Transmittal to the Exchange Agent, prior to the Expiration
Date, you must tender your Existing Notes according to the guaranteed
delivery procedures set forth in "The Exchange Offer -- Guaranteed
Delivery Procedures
Use of Proceeds.................................. We will not receive any proceeds from the exchange of Series
D Notes pursuant to the Exchange Offer.
Exchange Agent................................... U.S. Bank Trust National Association is serving as the
Exchange Agent in connection with the Exchange Offer.
Federal Income Tax Consequences.................. We believe that the exchange of Existing Notes pursuant to the
Exchange Offer will not be a taxable event for federal income
tax purposes. See "Certain Federal Income Tax
Considerations."
</TABLE>
CONSEQUENCES OF EXCHANGING EXISTING NOTES PURSUANT TO THE EXCHANGE OFFER
Based on certain interpretive letters issued by the Staff of the SEC to
third parties in unrelated transactions, we are of the view that holders, other
than any holder who is an "affiliate" of the Company within the meaning of Rule
405 under the Securities Act, who exchange their Existing Notes for Series D
Notes pursuant to the Exchange Offer generally may offer such Series D Notes for
resale, resell such Series D Notes, and otherwise
transfer such Series D Notes without compliance with the registration and
prospectus delivery provisions of the Securities Act, provided such Series D
Notes are acquired in the ordinary course of the holders' business and such
holders have no arrangement with any person to participate in a distribution of
such Series D Notes. Any holder who tenders in the Exchange Offer with the
intention or for the purpose of participating in a distribution of the Series D
Notes cannot rely on such interpretation by the Staff of the SEC and must comply
with the registration and prospectus delivery requirements of the Securities Act
in connection with a secondary resale transaction. Unless an exemption from
registration is otherwise available, any such resale transaction should be
covered by an effective registration statement containing the information
required by the Securities Act.
This Prospectus may be used for an offer to resell, resale or other
retransfer of Series D Notes only as specifically set forth in this Prospectus.
Each broker-dealer that receives Series D Notes for its own account in exchange
for Existing Notes, where such Existing Notes were acquired by such
broker-dealer as a result of market-making activities, must acknowledge that it
will deliver a prospectus in connection with any resale of such Series D Notes.
See "Plan of
4
<PAGE> 9
Distribution." In addition, to comply with the securities laws of certain
jurisdictions, if applicable, the Series D Notes may not be offered or sold
unless they have been registered or qualified for sale in such jurisdiction or
in compliance with an available exemption from registration or qualification. We
have agreed, pursuant to the Registration Agreement, to register or qualify the
Series D Notes for offer or sale under the securities or blue sky laws of such
jurisdictions as any holder of the Series C Notes reasonably requests in
writing.
CONSEQUENCES OF NOT EXCHANGING EXISTING NOTES
Holders of Series C Notes who do not exchange their Series C Notes for
Series D Notes pursuant to the Exchange Offer will continue to be subject to
restrictions on transfer. Generally, Series C Notes may not be offered or sold,
unless registered under the Securities Act, except pursuant to an exemption
from, or in a transaction not subject to, the Securities Act and applicable
state securities laws.
If you do not exchange your Existing Notes for Series D Notes, you will not
be able to take advantage of the increased liquidity that may be afforded by the
Series D Notes. The Series D Notes would have a total aggregate principal amount
of $200.0 million as opposed to $160.0 million for the Series A and Series B
Notes, which were issued under one indenture, and $40.0 million for the Series C
Notes, which were issued under a different indenture. See "Risk Factors --
Consequences of Failure to Exchange" and "The Exchange Offer -- Consequences of
Failure to Exchange; Resales of Series D Notes."
Holders of Series A Notes and Series B Notes who do not exchange their
Series A Notes and Series B Notes will continue to be subject to the Indenture
dated June 15, 1997 under which such notes were issued. This Indenture is
substantially the same as the Indenture governing the Series D Notes except for
the treatment of proceeds from certain asset sales. See "Description of the
Notes -- General; and -- Certain Covenants."
THE SERIES D NOTES
The terms of the Series D Notes are identical in all material respects to
the Series C Notes, except for certain transfer restrictions, registration
rights and certain interest rate step-up provisions. The terms of the Series D
Notes are also identical in all material respects to the Series A Notes and the
Series B Notes.
Unlike the Series A Notes, the Series B Notes and the Series D Notes, the
Series C Notes were not registered under the Securities Act and were offered in
a transaction not involving any public offering within the meaning of the
Securities Act, and are therefore subject to certain transfer restrictions under
the Securities Act.
The Series C Notes also included certain registration rights relating to
the Registration Agreement that are not applicable to the Series D Notes.
Pursuant to the Registration Agreement, we agreed to:
- not later than 120 days after the closing of the sale of the
Series C Notes on December 8, 1998 (the "Closing Date"), file
with the SEC a Registration Statement on Form S-4 relating to
the Exchange Offer (the " Exchange Offer Registration
Statement," which term shall encompass all related amendments,
exhibits, annexes and schedules) and
- cause the Exchange Offer Registration Statement to be declared
effective under the Securities Act not later than 180 days
after the Closing Date.
The Exchange Offer Registration Statement also provides for the exchange of
the Series A Notes and the Series B Notes for Series D Notes having terms
substantially identical in all material respects to the Existing Notes.
In addition, we have agreed to file a shelf registration statement ("Shelf
Registration Statement") covering resales of the Series C Notes or those Series
D Notes to be exchanged for Series C Notes, to use our best efforts to cause the
Shelf
5
<PAGE> 10
Registration Statement to be declared effective under the Securities Act,
and to keep the Shelf Registration Statement effective until two years after its
effective date, or shorter period that will terminate when all Series C Notes or
those Series D Notes to be exchanged for Series C Notes, covered by the Shelf
Registration Statement have been sold pursuant to the Shelf Registration
Statement, if:
- applicable interpretations of the Staff of the SEC do not
permit us to effect the Exchange Offer, or if for any other
reason the Exchange Offer is not consummated within 210 days
after the Closing Date,
- Bear, Stearns & Co. Inc., BT Alex. Brown Incorporated and
Morgan Stanley & Co., Incorporated (the "Initial Purchasers")
request, with respect to Series C Notes not eligible to be
exchanged for Series D Notes in the Exchange Offer, or
- any holder of Series C Notes is not eligible to participate in
the Exchange Offer or participates in but does not receive
freely tradeable, except for prospectus delivery requirements,
Series D Notes in the Exchange Offer.
The Series C Notes have interest rate step-up provisions which primarily
become effective in the event certain registration requirements are not
satisfied by specified dates. The interest rate step-up provisions provide in
part that additional interest ("Special Interest") will accrue on the Series C
Notes and certain Series D Notes, if any of the following "Registration
Defaults" occur:
- if within 180 days after the Closing Date, the Exchange Offer
Registration Statement has not been declared effective;
- if within 210 days after the Closing Date, neither the
Exchange Offer has been consummated nor the Shelf Registration
Statement has been declared effective; or
- if after either the Exchange Offer Registration Statement or
the Shelf Registration Statement has been declared effective,
such Registration Statement thereafter ceases to be effective
or usable, subject to certain exceptions, in connection with
resales of Series C Notes or those Series D Notes to be
exchanged for the Series C Notes.
Special Interest will accrue at a rate of 0.25% per annum during the 90-day
period immediately following the occurrence of any Registration Default and
shall increase by 0.25% per annum at the end of each subsequent 90- day period,
but in no event shall such rate exceed 1.00% per annum. The interest rate
step-up provisions do not apply to the Series A Notes, the Series B Notes, or
the Series D Notes to be exchanged for the Series A Notes and Series B Notes.
<TABLE>
<CAPTION>
<S> <C>
Issuer ..................................... Oxford Automotive, Inc.
Series D Notes ............................. $200.0 million in aggregate principal amount of 10 1/8% Senior
Subordinated Notes Due 2007, Series D.
Maturity ................................... June 15, 2007.
Interest Payment Dates ..................... Each June 15 and December 15.
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<PAGE> 11
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Subsidiary Guaranties .................... Like the Existing Notes, the Series D Notes will be fully and
unconditionally guaranteed on a joint and several basis, and on a
senior subordinated basis by each Restricted Subsidiary of the
Company, other than certain foreign subsidiaries, that is an obligor or
guarantor of any Bank Credit Agreement (the "Subsidiary
Guaranties"). See "Description of the Notes -- Subsidiary
Guaranties."
Subordination of Series D Notes and
Subsidiary Guaranties..................... Like the Existing Notes, the Series D Notes and the Subsidiary
Guaranties will be general unsecured senior subordinated obligations
of the Company and the Subsidiary Guarantors, as applicable. The
Series D Notes and the Subsidiary Guaranties will be subordinated in
right of payment to the prior payment in full of all existing and future
Senior Indebtedness and will rank pari passu with or senior to all
present and future subordinated indebtedness of the Company or the
relevant Subsidiary Guarantors, as applicable. As of December 31,
1998, the Company had $30.0 million outstanding Senior
Indebtedness and the Subsidiary Guarantors' outstanding Senior
Indebtedness was approximately $3.0 million. See "Description of
the Notes -- Subordination."
Trustee .................................. U.S. Bank Trust National Association.
Sinking Fund ............................. None
Optional Redemption ...................... Like the Existing Notes, the Series D Notes will be redeemable at our
option in whole or in part at any time on or after June 15, 2002, at the
redemption prices set forth in this Prospectus plus accrued and unpaid
interest, if any, to the redemption date. In addition, at any time prior
to June 15, 2000, we may redeem, at our option, up to an aggregate
amount of 35% of the original principal amount of the Notes with the
proceeds of one or more Public Equity Offerings following which
there is a Public Market at a redemption price of 110.125% of the
principal amount thereof plus accrued and unpaid interest, if any, to
the redemption date, provided that at least 65% of the original
aggregate principal amount of the Notes remains outstanding after
each such redemption. See "Description of the Notes -- Optional
Redemption."
Change of Control ........................ Upon the occurrence of a Change of Control, each holder of Notes,
including the Series D Notes, will have the right to require us to
purchase all or a portion of such holder's Notes at a price in cash
equal to 101% of the aggregate principal amount thereof plus accrued
and unpaid interest, if any, to the date of purchase. In the event of a
Change of Control, we cannot assure that we will have the financial
resources or be permitted under the terms of our other indebtedness to
repurchase or redeem the Notes. See "Description of the Notes --
Change of Control."
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Certain Covenants; Defaults ................ The Indenture governing the Series C Notes and the Series D Notes
(the "Indenture"), among other things, limits the ability of the Company and its
Restricted Subsidiaries to:
- incur additional indebtedness,
- pay dividends or make other distributions with respect to capital
stock of the Company and its Restricted Subsidiaries,
- create certain liens,
- sell material assets of the Company or its Restricted
Subsidiaries,
- enter into certain mergers and consolidations, and
- make capital expenditures.
The Indenture also contains certain events of default including payment defaults
and a default arising upon an acceleration by the holders of certain other
Indebtedness, including the Senior Credit Facility, because of a default. See
"Description of the Notes -- Certain Covenants and -- Defaults."
Risk Factors ............................... See "Risk Factors" for a discussion of certain factors that should be
considered in connection with the Exchange Offer.
</TABLE>
SENIOR CREDIT FACILITY
On February 4, 1999, we entered into an amended and restated credit
agreement with NBD Bank, on behalf of itself and as agent for a syndicate of
other lenders, providing for a $35.0 million revolving credit facility to
finance customer tooling, a $30.0 million term loan and a $110.0 million
revolving credit facility (the "Senior Credit Facility"). On March 31, 1999, we
further amended the Senior Credit Facility to accommodate our lease transaction
with respect to our manufacturing operations in Ramos Arizpe, Mexico.
Approximately $80.3 million was available under the revolver at March 1, 1999,
reduced for the effect of a Letter of Credit issued for certain Industrial
Revenue Bonds and approximately $5.0 million was available under the revolver
available for customer tooling. The obligations under the Senior Credit Facility
are secured by substantially all the assets of the Subsidiary Guarantors and the
Company.
The Senior Credit Facility contains certain customary covenants, including
reporting and other affirmative covenants, financial covenants, and negative
covenants, as well as customary events of default, including non-payment of
principal, violation of covenants, and cross-defaults to certain other
indebtedness, including the indebtedness evidenced by the Notes. See
"Description of Certain Indebtedness and Preferred Stock -- Senior Credit
Facility."
As of March 1, 1999, there were borrowings of $89.7 million under the
Senior Credit Facility. See "Capitalization" and "Description of Certain
Indebtedness and Preferred Stock."
8
<PAGE> 13
SUMMARY CONSOLIDATED HISTORICAL AND PRO FORMA FINANCIAL DATA
The following table sets forth (i) summary historical financial data of BMG
North America Limited ("BMG" or the "Predecessor") for the period from April 1,
1995 through October 27, 1995, (ii) summary historical financial data of the
Company from October 28, 1995 through March 31, 1996, for the years ended March
31, 1997 and 1998, and (iii) summary pro forma financial data for the year ended
March 31, 1998 and the nine months ended December 31, 1998. The summary
historical financial data for the period April 1, 1995 through October 27, 1995
and the period October 28, 1995 through March 31, 1996 was derived from the
audited consolidated financial statements of the Predecessor and the Company,
which are included elsewhere in this Prospectus, together with the report of
Deloitte & Touche LLP, independent accountants. The summary historical financial
data for the years ended March 31, 1997 and 1998 was derived from the audited
consolidated financial statements of the Company, which are included elsewhere
in this Prospectus, together with the report of a predecessor of
PricewaterhouseCoopers LLP (Price Waterhouse LLP), independent accountants.
The summary pro forma statement of operations data and other financial data
for the fiscal year ended March 31, 1998 were prepared to illustrate the effect
of the offering of the Series A Notes (the "Series A Offering") the offering
of the Series B Notes (the "Series B Offering"), the offering of the Series C
Notes (the "Series C Offering"), and the acquisitions of Howell Industries, Inc.
("Howell"), RPI Holdings, Inc. ("RPIH"), the Suspension Division of Eaton
Corporation (the "Suspension Division") and Cofimeta, as if each had occurred on
April 1, 1997.
The summary pro forma statement of operations data and other financial data
for the nine months ended December 31, 1998 were prepared to illustrate the
effect of the Series C Offering and the acquisition of Cofimeta, as if each had
occurred April 1, 1998. The summary pro forma balance sheet data at December 31,
1998 was prepared to illustrate the effect of the acquisition of Cofimeta, as if
it had occurred on December 31, 1998.
The pro forma data does not purport to be indicative of the results of
operations or the financial position of the Company that would have been
obtained if the acquisitions and the offerings had in fact been completed as of
such dates or to project the results of operations or the financial position of
the Company for any future date or period. The following table should be read in
conjunction with the "Selected Consolidated Historical Financial Data,"
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," "Pro Forma Combined Financial Data," and the Consolidated Financial
Statements of the Company and the related notes and other financial information
presented elsewhere in this Prospectus.
9
<PAGE> 14
<TABLE>
<CAPTION>
HISTORICAL PRO FORMA
--------------------------------------------------------------------- -----------
COMPANY
PREDECESSOR ------------------------------------------------------------------
PERIOD PERIOD FISCAL YEAR FISCAL YEAR FISCAL YEAR
APR. 1, 1995 - OCT. 28, 1995 - ENDED ENDED ENDED
OCT. 27, 1995 MAR. 31, 1996 MAR. 31, 1997 MAR. 31, 1998 MAR. 31, 1998
-------------- ------------- ------------- ------------- -------------
AUDITED AUDITED AUDITED AUDITED UNAUDITED
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Net sales ......................... $ 49,043 $ 35,572 $ 136,861 $ 410,321 $ 765,194
Gross profit ........................... 2,148 3,948 11,486 41,901 57,442
Operating income (loss) ................ (1,774) 1,713 3,801 20,054 4,085
Interest expense ....................... 1,048 1,096 3,388 10,710 24,262
Other income (expense) ................. -- -- 2,201 321 1,151
Income (loss) before income taxes ...... (2,822) 617 2,614 9,665 (19,026)
Provision (benefit) for income
taxes ................................ (938) 202 1,065 4,074 (7,329)
Net income (loss) ...................... $ (1,884) $ 415 $ 1,549 $ 5,591 ($11,697)
BALANCE SHEET DATA
(END OF PERIOD):
Cash and cash equivalents .............. $ -- $ -- $ 9,671 $ 18,321
Trade accounts receivable, net ......... 13,312 8,338 47,626 65,273
Inventories ............................ 4,429 3,719 13,411 21,305
Total assets ........................... 59,770 49,200 243,694 320,032
Total debt ............................. 23,233 26,758 99,829 139,448
Redeemable preferred stock ............. -- -- 39,300 40,192
Total shareholders' equity ............. 9,329 935 2,341 6,118
FINANCIAL RATIOS AND OTHER DATA:
Depreciation and amortization .......... $ 919 $ 687 $ 5,041 $ 20,279
Capital expenditures ................... 5,111 3,466 3,326 16,723
Ratio of earnings to fixed
charges (a)........................... -- 1.5x 1.7x 1.7x
EBITDA(b) .............................. $ (855) $ 2,400 $ 11,043 $ 40,654
Gross margin (c)........................ 4.38% 11.10% 8.60% 10.21%
EBITDA margin(d) ....................... NM 6.75% 8.07% 9.91%
Ratio of EBITDA to
interest expense(e).................. NM 2.2x 3.3x 3.8x
Ratio of net debt to
EBITDA(f) ........................... NM 4.7x 8.2x 3.0x
</TABLE>
See accompanying Notes to Summary Consolidated Historical and Pro Forma
Financial Data.
10
<PAGE> 15
<TABLE>
<CAPTION>
HISTORICAL PRO FORMA
------------------------------------- -----------------
NINE MONTHS NINE MONTHS NINE MONTHS
ENDED ENDED ENDED
DECEMBER 31, 1997 DECEMBER 31, 1998 DECEMBER 31, 1998
----------------- ----------------- -----------------
UNAUDITED UNAUDITED UNAUDITED
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Net Sales ......................................... $ 295,530 $ 408,144 $ 555,251
Gross Profit ...................................... 28,350 35,532 46,284
Operating income (loss) ........................... 14,763 12,121 14,472
Interest expense .................................. 7,921 14,255 18,568
Other income (expense) ............................ 531 949 962
Income (loss) before income taxes ................. 7,373 (1,185) (3,134)
Provision (benefit) for income taxes .............. 2,949 (475) (1,254)
Net income (loss) ................................. 4,424 (710) (1,880)
BALANCE SHEET DATA (END OF PERIOD):
Cash and cash equivalents ......................... 19,555 318 8,621
Trade accounts receivable, net .................... 51,375 86,336 111,707
Inventories ....................................... 20,158 33,911 51,959
Total assets ...................................... 290,312 412,562 540,151
Total debt ........................................ 138,517 230,960 294,273
Redeemable preferred stock ........................ 40,458 40,586 40,586
Total shareholders' equity ........................ 1,377 (2,078) (2,078)
FINANCIAL RATIOS AND OTHER DATA:
Depreciation and amortization ..................... 14,580 19,552 26,159
Capital expenditures .............................. 11,418 20,369 24,099
Ratio of earnings to fixed charges(a) 1.7x -- --
EBITDA(b) ......................................... 29,874 32,622 41,593
Gross margin(c) ................................... 9.59% 8.71% 8.33%
EBITDA margin(d)................................... 10.11% 7.99% 7.49%
Ratio of EBITDA to interest expense(e)............. 3.8x 2.3x 2.2x
Ratio of net debt to EBITDA(f)..................... 3.0x 5.3x 5.2x
</TABLE>
See accompanying Notes to Summary Consolidated Historical and Pro Forma
Financial Data.
11
<PAGE> 16
(a) For purposes of this computation, earnings consist of income (loss)
before income taxes plus fixed charges. Fixed charges consist of
interest on indebtedness plus that portion of rental expense
representative of the interest factor. For fiscal 1994, the Company's
ratio of earnings to fixed charges was 2.2x. For fiscal 1995, the
Company's earnings were insufficient to cover fixed charges by $1.6
million. For the period April 1, 1995 to October 27, 1995, the
Company's earnings were insufficient to cover fixed charges by $2.8
million. For the nine months ended December 31, 1998, the Company's
earnings were insufficient to cover fixed charges by $1.2 million. For
the nine months ended December 31, 1998 on a pro forma basis for the
Cofimeta acquisition, the Company's earnings were insufficient to
cover fixed charges by $3.1 million.
(b) EBITDA is defined as income (loss) before interest, income taxes,
depreciation and amortization. EBITDA should not be construed as a
substitute for income from operations, net income or cash flow from
operating activities for the purpose of analyzing the Company's
operating performance, financial position and cash flows.
(c) Gross margin is defined as gross profit as a percent of net sales for
each of the applicable periods.
(d) EBITDA margin is defined as EBITDA as a percent of net sales for each
of the applicable periods.
(e) Defined as the ratio of EBITDA to net interest expense.
(f) Defined as the ratio of net debt to EBITDA with net debt consisting of
total debt less cash and cash equivalents and unexpended bond proceeds.
12
<PAGE> 17
RISK FACTORS
This Prospectus contains forward-looking statements within the meaning of
Section 27A of the Securities Act, as amended. Discussions containing such
forward-looking statements may be found in the material set forth under
"Summary," "Management's Discussion and Analysis of Financial Condition and
Results of Operations" and "Business," as well as within the Prospectus
generally. Actual results could differ materially from those projected in the
forward-looking statements as a result of the risk factors set forth below and
the matters set forth in the Prospectus generally. We caution you, however, that
this list of factors may not be exhaustive. In evaluating the Exchange Offer,
you should carefully consider the following risk factors, as well as the other
information set forth elsewhere in this Prospectus. The risk factors set forth
below are generally applicable to the Existing Notes as well as the Series D
Notes.
SUBSTANTIAL LEVERAGE - OUR SUBSTANTIAL INDEBTEDNESS COULD ADVERSELY AFFECT THE
FINANCIAL HEALTH OF THE COMPANY AND PREVENT US FROM FULFILLING OUR OBLIGATIONS
UNDER THESE NOTES.
We have now and, after the Exchange Offer, will continue to have a
significant amount of indebtedness. The following chart shows certain important
credit data for your review:
<TABLE>
<CAPTION>
Pro Forma
December 31, 1998
-----------------
<S> <C>
Total debt ................................. $294,273
Preferred stock ............................ 40,586
Shareholders' equity ....................... (2,078)
</TABLE>
Our total indebtedness does not include unused commitments under the Senior
Credit Facility of approximately $85.3 million. In addition, if we are required
to incur or assume additional indebtedness in connection with our acquisition
strategy, our interest and debt service requirements will increase. See "Risk
Relating to Acquisitions."
Our substantial indebtedness could have important consequences to you. For
example, it could:
- impair our ability to obtain additional financing for working
capital, capital expenditures, acquisitions or general
corporate purposes;
- reduce the funds available to us for purposes other than the
payment of interest on the Existing Notes, the Series D Notes,
the Senior Credit Facility and our other existing indebtedness;
- limit, along with the restrictive financial and operating
covenants in our long-term indebtedness, our ability to borrow
additional funds;
- cause us to be vulnerable to increases in interest rates, due
to the variable interest rates applicable to certain
indebtedness under the Senior Credit Facility;
- make it more difficult for us to satisfy our obligations with
respect to the Series D Notes, as all of the indebtedness
outstanding under the Senior Credit Facility is secured by
substantially all the assets of the Subsidiary Guarantors and
the Company and will become due prior to the time the principal
on the Series D Notes will become due;
13
<PAGE> 18
- hinder our ability to adjust rapidly to changing market
conditions; and
- increase our vulnerability to general economic and industry
conditions.
ABILITY TO SERVICE DEBT - TO SERVICE OUR INDEBTEDNESS, WE WILL REQUIRE A
SIGNIFICANT AMOUNT OF CASH. OUR ABILITY TO GENERATE CASH DEPENDS ON MANY FACTORS
BEYOND OUR CONTROL.
The Indenture permits the Company and the Subsidiary Guarantors to incur
additional indebtedness, including Senior Indebtedness and indebtedness that
will rank pari passu with the Series D Notes.
Our ability to pay interest on the Series D Notes and to satisfy our other
obligations will depend upon our future operating performance. This performance
will be affected by prevailing economic conditions and financial, business and
other factors, many of which are beyond our control. We anticipate that our
operating cash flow, together with available borrowings under the Senior Credit
Facility, will be sufficient to meet our operating expenses, to service interest
requirements on our debt obligations and to implement our business strategy. We
cannot assure you, however, that our business will generate sufficient cash flow
from operations or that future borrowings will be available in an amount
sufficient to enable us to service our indebtedness, including the Series D
Notes, or to fund our other liquidity needs.
Also, we are required to redeem certain preferred stock prior to the time
the principal on the Series D Notes will become due. The maximum aggregate
redemption price for such preferred stock, assuming we do not commence a public
offering of our common stock prior to June 30, 2000, is $40.9 million, plus any
accrued and unpaid dividends to the date of redemption.
The following is important earnings data for your review:
- For the nine months ended December 31, 1998, we experienced a
net loss of $0.7 million and our earnings were insufficient to
cover fixed charges by $1.2 million.
- Our predecessor experienced a net loss of $1.3 million for the
year ended March 31, 1995, and experienced a net loss of $1.9
million during the period from April 1, 1995 through October
27, 1995. In addition, for fiscal 1995, our earnings were
insufficient to cover fixed charges by $1.6 million. For the
period April 1, 1995 to October 27, 1995, our earnings were
insufficient to cover fixed charges by $2.8 million.
See "Management's Discussion and Analysis of Financial Condition and
Results of Operations -- Liquidity, Capital Resources and Financial Condition"
and "Description of Certain Indebtedness and Preferred Stock."
The Senior Credit Facility contains certain customary covenants, including
reporting and other affirmative covenants; financial covenants, including ratio
of total debt to EBITDA, net worth, fixed charge coverage ratio, interest
coverage ratio (each as defined in and calculated pursuant to the Senior Credit
Facility); and negative covenants, including restrictions on incurrence of other
indebtedness, payment of cash dividends and other distributions to shareholders,
liens in favor of parties other than the lenders under the Senior Credit
Facility, certain guaranties of obligations of or advances to others, sales of
material assets not in the ordinary course of business, restrictions on mergers
and acquisitions, and capital expenditures. We cannot assure you that these
requirements will be met in the future. If they are not, the holders of the
indebtedness under the Senior Credit Facility would be entitled to declare such
indebtedness immediately due and payable or, if we were unable to repay such
indebtedness, such holders could proceed against the collateral securing the
Senior Credit Facility. This collateral consists of substantially all of the
14
<PAGE> 19
assets of the Company and the Subsidiary Guarantors. In addition, the Senior
Credit Facility contains customary events of default including non-payment of
principal, violation of covenants and cross-defaults to certain other
indebtedness, including the indebtedness evidenced by the Series D Notes. See
"Description of Certain Indebtedness and Preferred Stock -- Senior Credit
Facility."
SUBORDINATION - YOUR RIGHT TO RECEIVE PAYMENTS ON THESE NOTES IS JUNIOR TO
CERTAIN OF OUR EXISTING INDEBTEDNESS AND POSSIBLY FUTURE INDEBTEDNESS. THE
GUARANTEES OF THE NOTES ARE ALSO JUNIOR TO THE GUARANTORS' EXISTING INDEBTEDNESS
AND POSSIBLY FUTURE INDEBTEDNESS.
Like the Existing Notes, the Series D Notes will be subordinated in right
of payment to all present and future Senior Indebtedness of the Company and the
Subsidiary Guarantors, including the principal, premium (if any) and interest
with respect to the obligations outstanding under the Senior Credit Facility. In
addition, the Subsidiary Guaranties will be subordinated in right of payment to
all existing and future Senior Indebtedness of the Subsidiary Guarantors.
As of December 31, 1998, we had $30.0 million of Senior Indebtedness
outstanding (excluding unused commitments under the Senior Credit Facility) and
the Subsidiary Guarantors had approximately $3.0 million of Senior Indebtedness
outstanding. Consequently, in the event of a bankruptcy, liquidation,
dissolution, reorganization or similar proceeding with respect to the Company or
any Subsidiary Guarantor, assets of the Company or such Subsidiary Guarantor
will be available to pay obligations of the Notes only after all Senior
Indebtedness of the Company or such Subsidiary Guarantor has been paid in full.
We cannot assure that there will be sufficient assets to pay amounts due on all
or any of the Notes. See "Description of the Notes -- Subordination."
ASSET ENCUMBRANCES - THE NOTES ARE UNSECURED AND WILL BE SUBORDINATED TO ANY
SECURED INDEBTEDNESS.
Like the Existing Notes, the Series D Notes are unsecured and will be
effectively subordinated to any secured indebtedness of the Company or any
Subsidiary Guarantor. The indebtedness outstanding under the Senior Credit
Facility is secured by liens on substantially all of the assets of the
Subsidiary Guarantors and the Company. Our ability to comply with the provisions
of the Senior Credit Facility may be affected by events beyond our control. Our
breach of any such provisions could result in a default under the Senior Credit
Facility, in which case, depending upon the actions taken by the lenders
thereunder or their successors or assignees, such lenders could elect to declare
all amounts borrowed under the Senior Credit Facility, together with accrued
interest, to be due and payable, and we could be prohibited from making payments
of interest and principal on the Notes until the default is cured or all Senior
Indebtedness is paid or satisfied in full. If we were unable to repay such
borrowings, such lenders could proceed against the collateral. If the
indebtedness under the Senior Credit Facility were accelerated, we cannot assure
you that the assets of the Company and the Subsidiary Guarantors would be
sufficient to repay in full such indebtedness and our other indebtedness,
including the Notes. See "Description of Certain Indebtedness and Preferred
Stock -- Senior Credit Facility" and "Description of the Notes --
Subordination."
HOLDING COMPANY STRUCTURE - WE RELY ON DIVIDENDS AND OTHER PAYMENTS FROM OUR
SUBSIDIARIES AND THAT COULD IMPAIR OUR ABILITY TO PAY OUR OBLIGATIONS.
Oxford Automotive is a holding company and derives all of its operating
income from its subsidiaries. The holders of the Series D Notes will have no
direct claim against such subsidiaries other than the claim created by the
Subsidiary Guaranties, which may be subject to legal challenge in the event of
the bankruptcy of a subsidiary. See "Risk Factors -- Fraudulent Conveyance." If
such a challenge were upheld with respect to any such Subsidiary Guarantee, such
Subsidiary Guarantee would be invalidated and unenforceable. To the extent that
the Subsidiary Guarantee is not enforceable, the rights of holders of the Series
D Notes to participate in any distribution of assets of the Subsidiary Guarantor
upon liquidation, bankruptcy, reorganization or otherwise may, as is the case
with our other unsecured creditors, be subject to
15
<PAGE> 20
prior claims of creditors of that Subsidiary Guarantor. We must rely on
dividends and other payments from our subsidiaries to generate the funds
necessary to meet our obligations, including the payment of principal and
interest on the Series D Notes. The Indenture contains covenants that restrict
the ability of our subsidiaries to enter into any agreement limiting
distributions and transfers, including dividends to us. In addition, the ability
of our subsidiaries to pay dividends and make other payments are, and may in the
future be, subject to certain statutory, contractual and other restrictions. See
"Description of Certain Indebtedness and Preferred Stock."
THE OEM SUPPLIER INDUSTRY - WE ARE DEPENDENT ON A GROUP OF CUSTOMERS WHOSE NEEDS
ARE CYCLICAL AND SUBJECT TO LABOR DISPUTES.
The OEM supplier industry is highly cyclical and impacted by the strength
of the economy generally, by prevailing interest rates and by other factors
which may have an effect on the level of sales of automotive vehicles. The
automotive industry for which we supply components may experience downturns in
the future. An economic recession may impact substantially leveraged companies,
such as ours, more than similarly situated companies with less leverage. Also, a
significant percentage of our net sales are derived from sales of our products
manufactured for SUVs, mini- vans, vans and light trucks. A decrease in overall
consumer demand for these products could have a material adverse effect on our
business, financial condition, results of operations, and prospects.
The automotive industry is characterized by a small number of OEMs that are
able to exert considerable pressure on component and system suppliers to reduce
costs, improve quality and provide additional design and engineering
capabilities. In the past, OEMs have generally demanded and received price
reductions and measurable increases in quality by implementing competitive
selection processes, rating programs and various other arrangements. Also,
through increased partnering on platform work, OEMs have generally required
component and system suppliers to provide more design engineering input at
earlier stages of the product development process, the costs of which have, in
some cases, been absorbed by the suppliers.
The following requirements of the OEMs may have a material adverse effect
on our business, financial condition, results of operations, or prospects:
- future price reductions,
- increased quality standards, or
- additional engineering capabilities.
Many OEMs and their Tier 1 suppliers are unionized. Work stoppages and
slowdowns experienced by OEMs and their Tier 1 suppliers, as a result of labor
disputes, could have a material adverse effect on our business, financial
condition, results of operations, or prospects.
GM recently experienced a strike at certain of its production facilities
due to a labor dispute between GM and the International Union, United
Automobile, Aerospace and Agricultural Implement Workers of America ("UAW"). Our
results of operations for the nine month period ended December 31, 1998, were
adversely affected by the GM strike, resulting in a reduction in sales of
approximately $12.7 million and reduced EBITDA of $5.2 million.
16
<PAGE> 21
DEPENDENCE ON PRINCIPAL CUSTOMERS - WE ARE DEPENDENT ON A SMALL GROUP OF
PRINCIPAL CUSTOMERS.
Substantially all of our sales for the nine months ended December 31, 1998,
on a pro forma basis assuming the acquisition of Cofimeta had occurred on April
1, 1998, were to the following customers:
- GM (34%)
- Ford (25%)
- Renault (15%)
- DaimlerChrysler (10%)
- Peugeot Citroen (5%)
We cannot assure you that sales to these customers will continue at the
same level. Also, continuation of these relationships is dependent upon our
customers' satisfaction with the price, quality and delivery of our products.
Our agreements to produce parts are assigned to specific models or product
lines of our customers. Accordingly, our business, and estimates for future
business, are dependent upon consumer demand for the specific models and product
lines that incorporate our parts. Our arrangements with the OEMs are typically
in the form of purchase orders that may be canceled by the OEMs. The following
factors would have a material adverse effect on our business, financial
condition, results of operations, and prospects:
- a significant decrease in sales of vehicles using our products;
- our loss of the right to supply any of our products to our
customers;
- our loss of GM, Ford, Renault, Peugeot Citroen or
DaimlerChrysler as a customer; or
- the delay or cancellation of material orders from, or design,
development, delivery or product projects at any of these
customers.
UNIONIZED WORKFORCE - OUR WORKFORCE IS SUBSTANTIALLY UNIONIZED AND WE ARE
SUBJECT TO WORK STOPPAGES.
Substantially all of our employees are covered by collective bargaining
agreements with various local unions. Strikes or work stoppages and the
resultant adverse impact on our relationship with the OEMs could have a material
adverse effect on our business, financial condition, results of operations, and
prospects. We recently negotiated new agreements at the Chatham, Greencastle,
and Corydon facilities which will expire in February 2002, February 2004, and
January 2005. Our agreements at the Masury and Lapeer facilities will expire in
the first fiscal quarter of 2000. While the outcome, including the terms of the
new contracts and their impact on our future results of operations cannot be
predicted, management does not believe that the financial terms of the new
contracts will have a material adverse effect on our business, financial
condition, results of operations, and prospects. However, there can be no
assurance that we will be successful in our contract negotiations.
RISKS RELATING TO ACQUISITIONS - WE MAY NOT RECEIVE THE DESIRED BENEFITS OF
ACQUISITIONS.
A significant component of our historical sales and earnings growth has
been the acquisition of other automotive parts manufacturers in an effort to
expand our markets and capitalize on the consolidation trend in the automotive
17
<PAGE> 22
industry. We may not be able to identify appropriate acquisitions in the future
or negotiate and consummate proposed or future acquisitions, and such
acquisitions may have an adverse effect upon our business, financial condition,
results of operations, or prospects. We are continuously evaluating possible
acquisition opportunities. Identifying, proposing, negotiating and consummating
acquisitions can be a lengthy and costly process and we cannot assure you that
proposed transactions can be consummated. Also, we anticipate that the
integration of acquired companies will require significant management attention.
We will be required to implement and improve our operations, financial and
management information systems and motivate and effectively manage an increasing
number of employees due to acquisitions. Accordingly, our operating results may
be adversely affected for several fiscal quarters following the consummation of
such acquisitions while the operations of the acquired businesses are integrated
into our operations and our costing and other management information systems are
implemented at the newly acquired facilities. There may be substantial
unanticipated costs or problems associated with the integration effort. We have
historically focused, and expect to continue to focus, on acquiring
under-performing companies which provide the opportunity for significant
operating improvements under our ownership. We may not be able to realize
improvements in the financial results of these acquisitions. The acquisition,
operation and integration of an acquired business may involve a number of risks,
including an increase in our indebtedness and substantial capital expenditures
for additional equipment and technology.
In addition to the foregoing, we are pursuing additional acquisitions and
strategic alliances in Europe and intend to pursue such acquisitions and
alliances in South America, Asia and other geographic markets. Other than the
acquisition of Cofimeta in February 1999, we have not previously consummated any
material acquisitions outside North America. Operations outside the United
States are subject to a number of risks in addition to those described above,
including:
- currency exchange rate fluctuations,
- trade barriers,
- exchange controls,
- risk of governmental expropriation or other regulation,
- political risk, and - risk of tax increases.
RISKS RELATED TO INTERNATIONAL OPERATIONS - OUR INTERNATIONAL OPERATIONS EXPOSE
US TO ADDITIONAL RISKS.
We have experienced fluctuations in our shareholders equity for foreign
currency adjustments due to our long-term investment in Canada. Although such
adjustments do not have an immediate impact on cash flow, they can adversely
impact our balance sheet and may have an impact on cash flow if we remitted
earnings from such foreign operations to the United States. Our exposure to such
exchange rate adjustments may increase in connection with the acquisition of
additional assets outside the United States. Additional problems inherent in
international operations include market differences which may impact
competition, pricing and relationships with our customers, as well as
differences in workforce, language and culture. Such factors which could
adversely affect the success of our potential future international acquisitions
could in turn have a material adverse effect on our business, financial
condition, results of operations, or prospects. See "Substantial Leverage and
Debt Service Obligations."
FRAUDULENT CONVEYANCE - FEDERAL AND STATE STATUTES ALLOW COURTS, UNDER
SPECIFIC CIRCUMSTANCES, TO VOID NOTES AND GUARANTEES AND REQUIRE NOTEHOLDERS
TO RETURN PAYMENTS RECEIVED FROM US.
Under relevant federal or state fraudulent conveyance statutes, a court
could void our obligations under the Series D Notes, recover payments made under
the Series D Notes, subordinate the Series D Notes to our other indebtedness or
18
<PAGE> 23
take other action detrimental to the holders of the Series D Notes if such court
were to find that:
- we did not receive fair consideration or reasonably equivalent
value for incurring the indebtedness, including the Series D
Notes; and, at the time of such incurrence we:
- were insolvent; or rendered insolvent by reason of
such incurrence or grant; or
- were engaged in a business or transaction for which
our remaining assets constituted unreasonably small
capital; or
- intended to incur, or believed that we would incur,
debts beyond our ability to pay such debts as they
matured.
The measure of insolvency for these purposes will depend upon the governing
law of the relevant jurisdiction. Generally, however, a company will be
considered insolvent for these purposes if:
- the sum of its debts were greater than the fair value of all of
that company's property, or
- the present fair salable value of its assets were less than the
amount that would be required to pay its probable liability on
its existing debts as they become absolute and mature, or
- it could not pay its debts as they become due.
Regardless of solvency, a court could void an incurrence of indebtedness,
including the Series D Notes, if it determined that such transaction was made
with the intent to hinder, delay or defraud creditors. In addition, a court
could subordinate the indebtedness, including the Series D Notes, to the claims
of all existing and future creditors on similar grounds. We believe that, after
giving effect to the Series D Offering, we;
- have not been rendered insolvent by the incurrence of
indebtedness in connection with the Series D Offering,
- are in possession of sufficient capital to run our business
effectively, and
- are incurring debts within our ability to pay as the same
mature or become due.
We cannot assure you as to what standard a court would apply in order to
determine whether we were "insolvent" upon the sale of the Existing Notes or
that a court would determine that we were not insolvent upon consummation of the
sale of the Existing Notes.
In addition, the Subsidiary Guaranties may be subject to review under
relevant federal and state fraudulent conveyance and similar statutes in a
bankruptcy or reorganization case or a lawsuit brought by or on behalf of
creditors of any of the Subsidiary Guarantors. In such a case, the analysis set
forth above would generally apply, except that the Subsidiary Guaranties could
also be subject to the claim that, since the Subsidiary Guaranties were incurred
for the benefit of the Company (and only indirectly for the benefit of the
Subsidiary Guarantors), the obligations of the Subsidiary Guarantors were
incurred for less than reasonably equivalent value or fair consideration. A
court could:
- void the Subsidiary Guarantors' obligation under the Subsidiary
Guaranties,
- recover payments made under the Subsidiary Guaranties,
19
<PAGE> 24
- subordinate the Subsidiary Guaranties to other indebtedness of a
Subsidiary Guarantor, or
- take other action detrimental to the holders of the Notes.
CONTROL BY PRINCIPAL SHAREHOLDER - OUR PRINCIPAL SHAREHOLDER MAY HAVE INTERESTS
THAT CONFLICT WITH THE HOLDERS OF THE NOTES.
Selwyn Isakow (the "Principal Shareholder") beneficially owns 53% of the
Company's outstanding shares and exercises voting control over those shares not
owned by him, including shares held by the directors and officers of the
Company. Circumstances may occur in which the interests of the Principal
Shareholder could be in conflict with the interests of the holders of the Series
D Notes. For example, if we encounter financial difficulties or are unable to
pay certain of our debts as they mature, the interests of the Principal
Shareholder might conflict with those of the holders of the Series D Notes. In
addition, the Principal Shareholder may have an interest in pursuing
acquisitions, divestitures or other transactions that, in his judgment, could
enhance his equity investment, even though such transactions might involve risks
to the holders of the Series D Notes. See "Principal Shareholders."
COMPETITION - WE MAY NOT CONTINUE TO PERFORM SUCCESSFULLY IN OUR HIGHLY
COMPETITIVE INDUSTRY.
The motor vehicle parts industry in which we operate is fragmented and
competitive. Our competitors include divisions or subsidiaries of companies that
are larger and have substantially greater resources than we do, as well as
divisions of OEMs with internal stamping and assembly operations. We cannot
assure you that our products will be able to compete successfully with those of
our competitors. See "Business -- Competition."
ENVIRONMENTAL RISKS - WE MAY BE ADVERSELY AFFECTED BY ENVIRONMENTAL CLAIMS
RESULTING FROM OUR OPERATIONS.
Our operations and properties are subject to federal, state, local and
foreign laws, regulations and ordinances relating to the use, storage, handling,
generation, treatment, emission, release, discharge and disposal of certain
materials, substances and wastes. In many jurisdictions these laws are complex
and change frequently. Such laws, including but not limited to the Comprehensive
Environmental Response, Compensation & Liability Act ("CERCLA" or "Superfund")
may impose joint and several liability and apply to remediation of contamination
at properties presently or formerly owned or operated by an entity or its
predecessors, as well as to conditions at properties at which wastes or other
contamination attributable to an entity or its predecessors have been sent or
otherwise come to be located. The nature of our operations exposes us to the
risk of liabilities or claims with respect to environmental matters, including
off-site disposal matters, and material costs may be incurred in connection with
such liabilities or claims.
Based upon our experience to date, we believe that the future cost of
compliance with existing environmental laws, regulations and ordinances (or
liability for known environmental claims) will not have a material adverse
effect on our business, financial condition and results of operations. However,
future events, such as changes in existing laws and regulations or their
interpretation, may give rise to additional compliance costs or liabilities that
could have a material adverse effect on our business, financial condition and
results of operations. We may be required to make additional material
expenditure in order to comply with more stringent laws or regulations, as well
as more vigorous enforcement policies of regulatory agencies or stricter or
different interpretations of existing laws. See "Business -- Regulatory Matters"
and -- "Legal Proceedings."
CHANGE OF CONTROL - WE MAY NOT HAVE THE ABILITY TO RAISE THE FUNDS NECESSARY TO
FINANCE THE CHANGE OF CONTROL OFFER REQUIRED BY THE INDENTURE.
Upon the occurrence of certain types of change of control events, we may be
required to repurchase all or any part of the Existing Notes and Series D Notes.
Such repurchase would be at a price equal to 101% of the principal amount,
20
<PAGE> 25
plus accrued and unpaid interest, to the date of repurchase. The occurrence of a
Change of Control may constitute a default under the Senior Credit Facility. In
addition, the Senior Credit Facility will prohibit the purchase of the Existing
Notes and the Series D Notes by us in the event of a default under the Senior
Credit Facility, unless and until such time as the indebtedness under the Senior
Credit Facility is repaid in full. Our failure to purchase the Existing Notes
and the Series D Notes would result in a default under the Indenture and under
the indenture pursuant to which the Series A and Series B Notes were issued. The
inability to repay the indebtedness under the Senior Credit Facility, if
accelerated, would also constitute an event of default under the Indenture,
which could have adverse consequences for the Company and the holders of the
Notes. It is possible that we will not have sufficient funds at the time of a
change of control to make the required purchase of Notes or that restrictions in
the Senior Credit Facility will not allow such repurchases. In addition, we
could engage in a highly leveraged transaction, with certain adverse
consequences to holders of the Notes, which would not constitute a Change of
Control. See "Description of the Notes -- Change of Control" and "Description of
Certain Indebtedness and Preferred Stock -- Senior Credit Facility."
YEAR 2000 - WE CANNOT ASSURE YOU THAT WE, OR OUR CUSTOMERS AND SUPPLIERS, WILL
BE YEAR 2000 COMPLIANT. PROBLEMS ASSOCIATED WITH THE YEAR 2000 MAY ADVERSELY
AFFECT OUR OPERATIONS.
We cannot assure you that our computer systems or software products or
those of our suppliers and customers will accept input of, store, manipulate and
output dates prior to the Year 2000 or thereafter without error or interruption.
We are assessing the issues related to the Year 2000 problem, and we have
implemented a readiness program to mitigate the problem of business interruption
or other risks. We are also requesting assurances from our significant suppliers
and customers that their systems are Year 2000 compliant or that they are
identifying and addressing problems to ready themselves for the Year 2000. We
cannot assure you that we will identify all Year 2000 problems in advance of
their occurrence, or that we will be able to successfully remedy problems that
are discovered. The expense of our efforts to identify and address such
problems, or the expenses or liabilities to which we may become subject to as a
result of such problems, could have a material adverse effect on the Company.
CONSEQUENCES OF FAILURE TO EXCHANGE - IF YOU DO NOT EXCHANGE YOUR NOTES, YOU MAY
BE SUBJECT TO TRANSFER RESTRICTIONS OR A TRADING MARKET THAT IS LESS LIQUID.
Holders of Series C Notes who do not exchange their Series C Notes for
Series D Notes pursuant to the Exchange Offer will continue to be subject to the
restrictions on transfer of such Series C Notes. These restrictions are a
consequence of the issuance of the Series C Notes pursuant to exemption from, or
in transactions not subject to, the registration requirements of the Securities
Act and applicable state laws. Subject to our obligation to file a shelf
registration statement covering resales of Series C Notes in certain limited
circumstances, we do not intend to register the Series C Notes under the
Securities Act and, after consummation of the Exchange Offer, will not be
obligated to do so. In addition, any holder of Series C Notes who tenders in the
Exchange Offer for the purpose of participating in a distribution of the Series
D Notes may be deemed to have received restricted securities and, if so, will be
required to comply with the registration and prospectus delivery requirements of
the Securities Act in connection with any resale transaction.
In addition, as a result of the Exchange Offer, it is expected that a
substantial decrease in the aggregate principal amount of Series C Notes
outstanding will occur. As a result, it is unlikely that a liquid trading market
will exist for the Series C Notes at any time. This lack of liquidity will make
transactions more difficult and may reduce the trading price of the Series C
Notes. Also, holders of Existing Notes who do not exchange their Existing Notes
for Series D Notes will not be able to take advantage of any increased liquidity
afforded by the Series D Notes. The Series D Notes would have an aggregate
principal amount of $200 million as opposed to $160 million for the Series A and
Series B Notes and $40 million for the Series C Notes. See "The Exchange Offer."
21
<PAGE> 26
ABSENCE OF PUBLIC MARKET FOR THE SERIES D NOTES - YOU CANNOT BE SURE THAT AN
ACTIVE TRADING MARKET WILL DEVELOP FOR THE NOTES.
The Series D Notes are new securities and there is currently no established
market for the Series D Notes. Future trading prices of the Series D Notes will
depend on many factors, including, among other things, prevailing interest
rates, our operating results and the market for similar securities.
Historically, the market for securities similar to the Series D Notes, including
non-investment grade debt, has been subject to disruptions that have caused
substantial volatility in the prices of such securities. It is possible that any
market for the Series D Notes, if such market develops, will be subject to
similar disruptions. The Initial Purchasers have advised us that they currently
intend to make a market in the Series D Notes offered hereby. However, the
Initial Purchasers are not obligated to do so and any market making may be
discontinued at any time without notice. The Company and the Subsidiary
Guarantors do not intend to apply for listing of the Series D Notes on any
national securities exchange or for their quotation through the National
Association of Securities Dealers Automated Quotation System. The Exchange Offer
is not conditioned upon any minimum or maximum aggregate principal amount of the
Existing Notes being tendered for exchange.
There may be a lack of liquidity for the Series D Notes or, in the case of
non-tendering holders of Existing Notes, the trading market for the Existing
Notes following the Exchange Offer. We are offering to accept all Existing Notes
in exchange for Series D Notes in order to increase the liquidity of all series.
However, it is possible that not all of the Existing Notes will participate in
the exchange, in which case the Series A Notes and Series B Notes will together
continue as a separate series of notes under a separate indenture.
DILUTION OF INTEREST - BY EXCHANGING YOUR NOTES, YOUR INDIVIDUAL VOTING
INTERESTS WILL BE DILUTED.
If all of the Existing Notes are exchanged for Series D Notes, $200.0
million aggregate principal amount of Series D Notes will be outstanding
following consummation of the Exchange Offer and the Series D Notes will be
deemed to be a single series of notes outstanding under the Indenture. In such
case, any actions requiring the consent of each holder or the holders of a
majority of outstanding principal amount of Notes under the Indenture will
require the consent of each holder of Series D Notes or the holders of a
majority in aggregate principal amount of such outstanding Series D Notes, and
the individual voting interest of each holder will be diluted. In addition,
issuances of additional notes under the Indenture, to the extent permitted by
the debt incurrence limitations of the Indenture, may result in further dilution
of the individual voting interests of the holders of the Series D Notes.
USE OF PROCEEDS
The Exchange Offer is intended to satisfy certain of the Company's and the
Subsidiary Guarantors' obligations under the Registration Agreement. We will not
receive any cash proceeds from the issuance of the Series D Notes in the
Exchange Offer. In consideration for issuing the Series D Notes as contemplated
in this Prospectus, we will receive Existing Notes in like principal amount. The
form and terms of the Series D Notes are identical in all material respects to
the form and terms of the Existing Notes, except, with respect to the Series C
Notes, for certain transfer restrictions and registration rights relating to the
Series C Notes and except for certain provisions providing for an increase in
the interest rate on the Series C Notes under certain circumstances relating to
the timing of the Exchange Offer. The Existing Notes surrendered in exchange for
the Series D Notes will be retired and canceled and cannot be reissued.
Accordingly, issuance of the Series D Notes will not result in any increase in
our outstanding debt. Our net proceeds from the sale of the Series C Notes were
approximately $40.8 million (after the inclusion of approximately $1.5 million
in premium and the deduction of estimated expenses incurred in connection with
the Series C Offering and related transactions of approximately $0.7 million).
We used the net proceeds from the offering to repay borrowings under the Senior
Credit Facility and for working capital and other general corporate purposes.
See "Management's Discussion
22
<PAGE> 27
and Analysis of Financial Condition and Results of Operations -- Liquidity,
Capital Resources and Financial Condition."
CAPITALIZATION
The following table sets forth our capitalization as of December 31, 1998
and as adjusted to give effect to the acquisition of Cofimeta. This table should
be read in conjunction with the unaudited "Pro Forma Combined Consolidated
Financial Data," "Selected Consolidated Historical Financial Data,"
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and the Consolidated Financial Statements and related notes thereto
included elsewhere in this Prospectus. See also "Description of Certain
Indebtedness and Preferred Stock."
<TABLE>
<CAPTION>
DECEMBER 31, 1998
-----------------
AS
ACTUAL ADJUSTED
------ --------
(IN THOUSANDS)
<S> <C> <C>
Cash and cash equivalents ................................................... $ 318 $ 8,621
======== =========
Long-term debt (including current portion):
Senior Credit Facility (a)
Term Loan ............................................................... -- 30,000
Revolving Credit Facilities ............................................. 22,694 30,319
Industrial Revenue Bonds .................................................. 2,495 2,495
EDC Tooling ............................................................... 2,026 2,026
Cofimeta Deferred Purchase Price .......................................... -- 19,452
Continuation Plan ......................................................... -- 6,236
Other Debt (b) ........................................................... 540 540
10 1/8% Senior Subordinated Notes Due 2007, Series A ........................ 124,841 124,841
10 1/8% Senior Subordinated Notes Due 2007, Series B ........................ 36,878 36,878
10 1/8% Senior Subordinated Notes Due 2007, Series C ........................ 41,486 41,486
Total debt .............................................................. 230,960 294,273
Redeemable preferred stock (c)
Series A .................................................................. 40,586 40,856
Shareholders' equity:
Common stock (400,000 shares authorized; 309,750
issued and outstanding) ............................................... 1,050 1,050
Accumulated other comprehensive loss ...................................... (3,128) (3,128)
--------- ---------
Total shareholders' equity .............................................. (2,078) (2,078)
Total capitalization ........................................................ $ 269,468 $ 333,051
========= =========
</TABLE>
(a) On December 31, 1998, the Company had $30.0 million of borrowings under
the Senior Credit Facility and availability was approximately $80.0
million. On February 4, 1999, the Company entered into the amended and
restated Senior Credit Facility which provides for a $35.0 million
revolving credit facility to finance customer tooling, a $30.0 million
term loan and a $110.0 million revolving credit facility.
(b) Consists of debt of RPIH and certain other debt of the Company. Certain
of the RPIH debt is secured by the assets of RPI.
(c) See "Description of Certain Indebtedness and Preferred Stock -
Preferred Stock of Lobdell."
23
<PAGE> 28
PRO FORMA COMBINED FINANCIAL DATA
(Unaudited)
(Dollars in thousands)
The unaudited pro forma combined balance sheet as of December 31, 1998 (the
"Unaudited Pro Forma Balance Sheet") gives pro forma effect to the acquisition
of Cofimeta as if it had occurred on December 31, 1998. The acquisition of
Cofimeta is accounted for by the purchase method of accounting pursuant to which
the purchase price is allocated among the acquired tangible and intangible
assets and assumed liabilities in accordance with estimates of their fair values
on the date of acquisition. The pro forma adjustments represent management's
preliminary determination of purchase accounting adjustments and are based upon
available information and certain assumptions that the Company believes to be
reasonable under the circumstances. Consequently, the amounts reflected in the
Unaudited Pro Forma Balance Sheet are subject to change and the final values may
differ substantially from these amounts. Management does not expect that
differences between the preliminary and final purchase price allocation will
have a material impact on the Company's financial position. The Unaudited Pro
Forma Balance Sheet does not purport to be indicative of the financial position
of the Company had such transaction actually been completed as of the assumed
date and for the period presented, or which may be obtained in the future.
The unaudited pro forma combined statement of operations for the year ended
March 31, 1998 gives pro forma effect to the Series A Offering, the Series B
Offering, the Series C Offering, and the acquisitions of Cofimeta, Howell, RPIH
and the Suspension Division as if they had occurred on April 1, 1997. The
unaudited pro forma combined statement of operations for the nine months ended
December 31, 1998 gives pro forma effect to the Series C Offering and the
acquisition of Cofimeta, as if each had occurred April 1, 1998. The unaudited
pro forma combined statements of operations for the year ended March 31, 1998
and for the nine months ended December 31, 1998 are collectively referred to as
the "Unaudited Pro Forma Statements of Operations." The Unaudited Pro Forma
Statements of Operations do not purport to be indicative of the results of
operations of the Company had such transactions actually been completed as of
the assumed dates and for the periods presented, or which may be obtained in the
future.
24
<PAGE> 29
UNAUDITED PRO FORMA COMBINED BALANCE SHEET AS OF DECEMBER 31, 1998
<TABLE>
<CAPTION>
Company Cofimeta Pro Forma Pro Forma
Dec. 31, 1998 Sep. 30, 1998(a) Adjustments Combined
------------- ---------------- ----------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
Cash and cash equivalents................ $ 318 $ 8,303 $ $ 8,621
Trade accounts receivable, net .......... 86,336 26,240 (869)(c) 111,707
Inventories ............................. 33,911 18,917 (869)(c) 51,959
Reimbursable tooling .................... 40,237 -- -- 40,237
Unexpended bond proceeds ................ 6 -- -- 6
Prepaid expenses and other current
assets ................................ 3,630 48,239 (8,336)(c) 43,533
Deferred income taxes ................... 4,399 4,399
--------- --------- --------- ---------
Total current assets ............... 168,837 101,699 (10,074) 260,462
Deferred income taxes ................... 7,918 -- 12,176 20,094
Property, plant and equipment,
net ................................... 191,446 24,534 (1,199)(c) 214,781
Marketable Securities ................... 8,092 -- -- 8,092
Other noncurrent assets ................. 36,269 453 -- 36,722
--------- --------- --------- ---------
Total assets ....................... $ 412,562 $ 126,686 $ 903 $ 540,151
========= ========= ========= =========
Trade accounts payable .................. $ 54,428 $ 29,177 $ 173 (c) $ 83,778
Accrued expenses and other
liabilities........................... 20,918 13,348 -- 34,266
Restructuring reserve ................... 3,019 1,423 13,781 (c) 18,223
Current portion of long-term debt ....... 3,411 -- 6,568 (b) 9,979
--------- --------- --------- ---------
Total current liabilities .......... 81,776 43,948 20,522 146,246
Deferred income taxes ................... 13,962 -- -- 13,962
Pension liability ....................... 5,470 2,740 8,210
Postretirement medical benefits ......... 41,427 -- -- 41,427
Other noncurrent liabilities ............ 3,870 12,928 (9,294)(c) 7,504
Long-term debt .......................... 227,549 67,190 (10,445)(b) 284,294
--------- --------- --------- ---------
Total liabilities .................. 374,054 126,806 783 501,643
--------- --------- --------- ---------
Redeemable Series A preferred
stock ................................. 40,586 -- -- 40,586
Total shareholders' equity ......... (2,078) (120) 120 (c) (2,078)
--------- --------- --------- ---------
Total liabilities and
shareholders' equity .............. $ 412,562 $ 126,686 $ 903 $ 540,151
========= ========= ========= =========
</TABLE>
See accompanying Notes to Unaudited Pro Forma Combined Balance Sheet.
25
<PAGE> 30
NOTES TO UNAUDITED PRO FORMA COMBINED BALANCE SHEET
(Dollars in thousands)
<TABLE>
<S> <C>
(a) Represents the balance sheet of Cofimeta at September 30, 1998. The
September 30, 1998 balance sheet for Cofimeta was derived from
Cofimeta's audited financial statements.
(b) Reflects the following estimated sources and uses of funds for the
acquisition of Cofimeta as if it had occurred on December 31, 1998:
Purchase price paid at closing (including estimated closing costs) $37,625
Deferred share price and debt purchase - recorded at
net present value as of the closing date 19,452
Reduction of face value of indebtedness as a part of acquisition
and in conjunction with the Continuation Plan (60,954)
-------
Net reduction in debt $(3,877)
=======
(c) The acquisition of Cofimeta will be accounted for by the purchase
method of accounting, pursuant to which the purchase price is allocated
among the acquired tangible and intangible assets and assumed
liabilities in accordance with their estimated fair market values on
the date of acquisition. The estimated purchase price and preliminary
adjustments to historical book value of Cofimeta as a result of the
transaction are as follows:
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
Reserves recorded to conform accounting policies of the
Company with those of Cofimeta
Allowance for bad debt reserve........................... (869)
Inventory obsolescence reserve........................... (869) (1,738)
----
Elimination of inter-company receivable, settled as a part
of acquisition price.............................. (8,336)
Recording of deferred tax asset on net operating losses
acquired.......................................... 12,176
Write-down of property plant and equipment for capital
portion of restructuring reserves................. (1,199)
------
Net increase in assets................................... $903
====
Elimination of inter-company payable, settled as a part of
acquisition price................................. (9,294)
Reserves recorded to conform accounting policies of the
Company with those of Cofimeta
Accounts payable unrecorded liability reserve............ 173
Increase in restructuring reserve
Plant restructuring and closure.......................... 10,689
Other reserves........................................... 3,092 13,781
-----
Net reduction of indebtedness as a part of acquisition... (3,877)
Elimination of retained earnings as a result of purchase
accounting........... ............................ 120
---
Net increase in liabilities and shareholders equity..... $903
====
</TABLE>
26
<PAGE> 31
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
COMPANY HOWELL RPIH
COMPANY(a) PRO FORMA PRO FORMA(e) PRO FORMA (f)
---------- --------- ------------ -------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
MAR. 31, 1998 MAR. 31, 1998 MAR. 31,1998 MAR. 31, 1998
------------- ------------- ------------ -------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
Net sales .................... $410,321 $ - $ 34,329 $ 9,035
Cost of sales ................ 368,420 - 31,189 10,642
--------- --------- --------- ---------
Gross profit ................. 41,901 - 3,140 (1,607)
Selling, general and
administrative expenses .... 21,839 37 (b) 1,651 177
Reorganization cost........... - - - -
Restructuring provision ...... 1,610 - - -
Gain on sale of equipment .... (1,602) - - -
--------- --------- --------- ---------
Income (loss) from
Operations ................. 20,054 (37) 1,489 (1,784)
Interest expense, net ........ 10,710 (431) (c) 858 432
Other income (expense) ....... 321 - - (35)
--------- --------- --------- ---------
Income (loss) before income
taxes ...................... 9,665 394 631 (2,251)
Provision (benefit) for income
taxes ...................... 4,074 158 (d) 269 (846)
--------- --------- --------- ---------
Net income (loss) ............ 5,591 $ 236 $ 362 $ (1,405)
========= ========= ========= =========
FINANCIAL RATIOS AND
OTHER DATA:
Depreciation and
amortization ............... $20,279 $ 37 $ 769 $ 296
Capital expenditures ......... 16,723 - 728 119
Ratio of earnings to fixed
charges (i) ................ 1.7x
EBITDA(j) .................... 40,654 - 2,258 (1,523)
Ratio of EBITDA to
interest expense(k) ........ 3.8x
Ratio of net debt to
EBITDA(l) .................. 3.0x
</TABLE>
<TABLE>
<CAPTION>
SUSPENSION COFIMETA
DIVISION PRO PRO FORMA
PRO FORMA (g) FORMA (h) COMBINED
------------- --------- --------
YEAR ENDED YEAR ENDED YEAR ENDED
MAR. 31, 1998 DEC. 31, 1997 MAR. 31, 1998
------------- ------------- -------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Net sales .................... $ 122,478 $ 189,031 $ 765,194
Cost of sales ................ 114,721 182,780 707,752
--------- --------- ---------
Gross profit ................. 7,757 6,251 57,442
Selling, general and
administrative expenses .... 7,545 14,789 46,038
Reorganization cost........... - 1,158 1,158
Restructuring provision ...... - 6,153 7,763
Gain on sale of equipment .... - (1,602)
--------- --------- ---------
Income (loss) from Operations 212 (15,849) 4,085
Interest expense, net ........ 5,108 7,585 24,262
Other income (expense) ....... 860 5 1,151
--------- --------- ---------
Income (loss) before income
taxes ...................... (4,036) (23,429) (19,026)
Provision (benefit) for income
taxes ...................... (1,612) (9,372) (7,329)
--------- --------- ---------
Net income (loss) ............ $ (2,424) (14,057) $ (11,697)
========= ========= =========
[Net income (loss) per share]
FINANCIAL RATIOS AND
OTHER DATA:
Depreciation and amortization $ 4,641 9,535 $ 35,557
Capital expenditures ......... 5,761 1,884 25,215
Ratio of earnings to fixed
charges (i) ................
EBITDA (j) ................ 5,713 (6,309) 40,793
Ratio of EBITDA to
interest expense(k) ........ 1.7x
Ratio of net debt to
EBITDA(l) ..................
</TABLE>
See accompanying Notes to Unaudited Pro Forma Combined Statement of Operations.
27
<PAGE> 32
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
COMPANY COFIMETA PRO FORMA
COMPANY PRO FORMA PRO FORMA (o) COMBINED
------- --------- --------- --------
NINE MONTHS NINE MONTHS NINE MONTHS NINE MONTHS
ENDED ENDED ENDED ENDED
DEC. 31, 1998 DEC. 31,1998 SEP. 30, 1998 DEC. 31, 1998
------------- ------------ ------------- -------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
Net sales $408,144 $ $147,107 $ 555,251
Cost of sales 372,612 136,355 508,967
--------- -------- -------- ---------
Gross profit 35,532 10,752 46,284
Selling, general and
administrative expenses 22,235 9,656 31,891
Reorganization costs - - (1,350) (1,350)
Restructuring provision 1,176 95 1,271
Gain on sale of equipment --
-------- -------- -------- ---------
Income (loss) from Operations 12,121 2,351 14,472
Interest expense, net 14,255 (422)(m) 4,735 18,568
Other income (expense) 949 13 962
-------- -------- -------- ---------
Income (loss) before income
taxes (1,185) 422 (2,371) (3,134)
Provision (benefit) for income
taxes (475) 169(n) (948) (1,254)
---------- -------- -------- ---------
Net income (loss) $ (710) $ 253 $ (1,423) $ (1,880)
========= ======== ======== =========
FINANCIAL RATIOS AND
OTHER DATA:
Depreciation and amortization $ 19,552 $ $ 6,607 $ 26,159
Capital expenditures
Ratio of earnings to fixed
charges (i) -- --
EBITDA (j) 32,622 8,971 41,593
Ratio of EBITDA to
interest expense(k) 2.3x 2.2x
Ratio of net debt to 5.3x 5.2x
EBITDA(l)
</TABLE>
See accompanying Notes to Unaudited Pro Forma Combined Statements of Operations
28
<PAGE> 33
NOTES TO UNAUDITED PRO FORMA COMBINED STATEMENTS OF OPERATIONS
(a) Statement of Operations Data for the Company for the year ended March
31, 1998 includes operating data for Howell and RPIH for the periods
subsequent to acquisition (Howell - August 14, 1997 to March 31, 1998
and RPIH - November 26, 1997 to March 31, 1998).
(b) Represents amortization of bond acquisition fees associated with the
Series A Notes.
(c) Represents the net effect on interest expense as a result of (1) the
elimination of historical interest expense after the repayment of the
existing senior bank credit facilities and other outstanding debt,
using proceeds from the Series A Offering and (2) the Series A, Series
B and Series C Offerings, using an interest rate of 10.125% per annum
for the Series A Notes and 9.25% per annum for the Series B Notes and
9.685% for the Series C Notes. This amount excludes interest on the
portion of the proceeds of the Series A, Series B and Series C
Offerings used for the Howell, RPIH, Suspension Division and Cofimeta
acquisitions as follows:
<TABLE>
<S> <C>
Interest differential historical versus Offerings $8,507
Acquisition of:
Howell (884)
RPI (169)
Suspension (4,075)
Cofimeta (3,810)
------
$ (431)
======
See Notes (e)(4), (f)(4), (g)(3) and (h)(4).
</TABLE>
(d) Represents the estimated income tax effect of the pro forma adjustments
using an effective tax rate of 40%.
(e) The Howell Pro Forma information includes Statement of Operations data
for Howell as if the Company had acquired Howell on April 1, 1997:
<TABLE>
<CAPTION>
PRO FORMA HOWELL
HOWELL(1) ADJUSTMENTS PRO FORMA
--------- ----------- ---------
PERIOD FROM PERIOD FROM PERIOD FROM
APRIL 1, 1997 APRIL 1, 1997 APRIL 1, 1997
THROUGH THROUGH THROUGH
AUGUST 13, 1997 AUGUST 13, 1997 AUGUST 13, 1997
--------------- --------------- ---------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Net sales $34,329 $ - $34,329
Cost of sales 31,070 119 (2) 31,189
------- ------- -------
Gross profit 3,259 (119) 3,140
Selling, general and administrative expenses 1,626 25 (3) 1,651
Reorganization cost - - -
Restructuring provision - - -
Gain on sale of equipment - - -
------- ------- -------
Income (loss) from operations 1,633 (144) 1,489
Interest expense, net (26) 884 (4) 858
Other income (expense) - - -
------- ------- -------
Income (loss) before income taxes 1,659 (1,028) 631
Provision (benefit) for income taxes 680 (411) (5) 269
------- ------- -------
Net income (loss) $ 979 $ (617) $ 362
======= ======= =======
</TABLE>
29
<PAGE> 34
(1) Statement of Operations data for Howell for the period prior
to acquisition by the Company (April 1, 1997 - August 13,
1997). The information was derived from Howell's unaudited
internal financial statements.
(2) Represents increased depreciation expense as a result of the
write up of property, plant and equipment to fair market value
as a part of the purchase accounting related to the
acquisition of Howell.
(3) Represents amortization of acquisition expenses related to the
Howell acquisition.
(4) Represents the net effect on interest expense as a result of
the use of proceeds from the Series A Offering for the
acquisition of Howell of $23,245. Interest expense is
calculated using an interest rate of 10.125% per annum. See
Note (c).
(5) Represents the estimated income tax effect of the pro forma
adjustments using an effective tax rate of 40%.
(f) The RPIH Pro Forma information includes Statement of Operations data as
if the Company had acquired RPIH on April 1, 1997:
<TABLE>
<CAPTION>
PRO FORMA RPIH
RPIH(1) ADJUSTMENTS PRO FORMA
----------------- ----------------- -----------------
PERIOD FROM PERIOD FROM PERIOD FROM
APRIL 1, 1997 APRIL 1, 1997 APRIL 1, 1997
THROUGH THROUGH THROUGH
NOVEMBER 25, 1997 NOVEMBER 25, 1997 NOVEMBER 25, 1997
----------------- ----------------- -----------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Net sales $ 9,035 $ - $ 9,035
Cost of sales 10,602 40 (2) 10,642
-------- ------- --------
Gross profit (1,567) (40) (1,607)
Selling, general and administrative expenses 127 50 (3) 177
Reorganization cost - - -
Restructuring provision - - -
Gain on sale of equipment - - -
-------- ------- --------
Income (loss) from operations (1,694) (90) (1,784)
Interest expense, net 263 169 (4) 432
Other income (expense) (35) - (35)
-------- ------- --------
Income (loss) before income taxes (1,992) (259) (2,251)
Provision (benefit) for income taxes (742) (104) (5) (846)
-------- ------- --------
Net income (loss) $ (1,250) $ (155) $ (1,405)
======== ======= ========
</TABLE>
(1) Statement of Operations data for RPIH for the period prior to
acquisition by the Company (April 1, 1997 to November 25,
1997). The information was derived from RPIH's unaudited
internal financial statements.
(2) Represents increased depreciation expense as a result of the
write up of property, plant and equipment to fair market value
as a part of the purchase accounting related to the
acquisition of RPIH.
(3) Represents amortization of acquisition expenses and goodwill
related to the RPIH acquisition.
30
<PAGE> 35
(4) Represents the net effect on interest expense as a result of
the use of proceeds from the Series A Offering for the
acquisition of RPIH of $2,500. Interest expense is calculated
using an interest rate of 10.125% per annum. See Note (c).
(5) Represents the estimated income tax effect of the pro forma
adjustments using an effective tax rate of 40%.
(g) The Suspension Division Pro Forma information includes Statement of
Operations data as if the Company had acquired the Suspension Division
on April 1, 1997:
<TABLE>
<CAPTION>
SUSPENSION
SUSPENSION PRO FORMA DIVISION
DIVISION(1) ADJUSTMENTS PRO FORMA
------------- ------------- -------------
PERIOD FROM PERIOD FROM PERIOD FROM
APR. 1, 1997 - APR. 1, 1997 - APR. 1, 1997 -
MAR. 31, 1998 MAR. 31, 1998 MAR. 31, 1998
------------- ------------- -------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Net sales $ 122,478 $ - $ 122,478
Cost of sales 114,721 - 114,721
--------- ------------ ---------
Gross profit 7,757 - 7,757
Selling, general and administrative expenses 7,154 391 (2) 7,545
Reorganization cost - - -
Restructuring provision - - -
Gain on sale of equipment - - -
--------- ------------ ---------
Income (loss) from operations 603 (391) 212
Interest expense, net 1,033 4,075 (3) 5,108
Other income (expense) 860 - 860
--------- ------------ ---------
Income (loss) before income taxes 430 (4,466) (4,036)
Provision (benefit) for income taxes 174 (1,786) (4) (1,612)
--------- ------------ ---------
Net income (loss) $ 256 $ (2,680) $ (2,424)
========= =========== =========
</TABLE>
(1) Statement of Operations data for the Suspension Division for
the twelve months ended March 31, 1998 was derived from the
Suspension Division's unaudited internal financial statements.
(2) Represents amortization of acquisition expenses and goodwill
related to the Suspension Division acquisition.
(3) Represents the net effect on interest expense as a result of
the use of proceeds from the Series A and Series B Offerings
for the acquisition of the Suspension Division of $53,465.
Interest expense is calculated using an interest rate of
10.125% per annum for the Series A Notes and 9.25% per annum
for the Series B Notes. See Note (c).
(4) Represents the estimated income tax effect of the pro forma
adjustments using an effective tax rate of 40%.
31
<PAGE> 36
(h) The Cofimeta Pro Forma information includes Statement of Operations
data as if the Company had acquired Cofimeta on April 1, 1997:
<TABLE>
<CAPTION>
PRO FORMA COFIMETA
COFIMETA(1) ADJUSTMENTS PRO FORMA
----------- ----------- ---------
PERIOD FROM PERIOD FROM PERIOD FROM
JAN. 1, 1997 - JAN. 1, 1997 - JAN. 1, 1997 -
DEC. 31, 1997 DEC. 31, 1997 DEC. 31, 1997
------------- ------------- -------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Net sales $ 189,031 $ $ 189,031
Cost of sales 181,985 795(2) 182,780
------------ ----------- -----------
Gross profit 7,046 (795) 6,251
Selling, general and administrative expenses 14,697 92(3) 14,789
Reorganization cost 1,158 - 1,158
Restructuring provision 6,153 6,153
Gain on sale of equipment - -
------------ ----------- -----------
Income (loss) from operations (14,962) (887) (15,849)
Interest expense, net 2,505 5,080(4) 7,585
Other income (expense) 5 5
------------ ----------- -----------
Income (loss) before income taxes (17,462) (5,967) (23,429)
Provision (benefit) for income taxes 17 (9,389)(5) (9,372)
------------ ----------- -----------
Net income (loss) $ (17,479) $ 3,422 $ (14,057)
============ =========== ===========
</TABLE>
(1) Statement of Operations data for Cofimeta for the period
January 1 to December 31, 1997 were derived from Cofimeta
audited financial statements.
(2) Represents increased depreciation expense as a result of the
conformance of accounting policies and depreciable lives
between the Company and Cofimeta.
(3) Represents amortization of debt issuance cost related to the
Series C bond issuance.
(4) Represents the net effect on interest expense as a result of
the following:
<TABLE>
<S> <C> <C>
Use of proceeds from the Series C offering for the
acquisition of Cofimeta of $37,625. Interest expense
is calculated using an interest rate of 10.125% per
annum - See Note C $3,810
Interest on deferred share purchase price in accordance
with the acquisition. Interest is calculated using an
effective interest rate of 10% per annum 941
Net effect on interest expense as a result of revaluation
of indebtedness as a part of the acquisition.
Includes deferred debt payments as well as
Continuation Plan indebtedness. 329
------
$5,080
======
</TABLE>
(5) Represents the estimated income tax effect of the pro forma
adjustments and restatement of the historical provision to
reflect the recording of a deferred tax asset during purchase
accounting using an effective tax rate of 40%.
(i) For purposes of this computation, earnings consist of income (loss)
before income taxes plus fixed charges. Fixed charges consist of
interest on indebtedness plus that portion of rental expense
representative of the interest factor. For the fiscal year ended March
31, 1998, on a pro forma basis for the Howell, RPIH, Suspension
Division and Cofimeta acquisitions, earnings were insufficient to cover
fixed charges by $19.0 million. For the nine months ended December 31,
1998, earnings were insufficient to cover fixed charges by $1.2
million. For the nine months ended December 31, 1998 on a pro forma
basis for the Cofimeta acquisition, earnings were insufficient to cover
fixed charges by $3.1 million.
(j) EBITDA is defined as income (loss) before interest, income taxes,
depreciation and amortization. EBITDA should not be construed as a
substitute for income from operations, net income or cash flow from
operating activities for the purpose of analyzing the Company's
operating performance, financial position and cash flows.
(k) Defined as the ratio of EBITDA to net interest expense.
(l) Ratio of net debt to EBITDA with net debt consisting of total debt less
cash and cash equivalents and unexpended bond proceeds.
32
<PAGE> 37
(m) Represents the net effect on interest expense as a result of the
elimination of historical interest expense after the repayment of
existing senior bank credit facilities, the issuance of the Series C
Notes and the acquisition of Cofimeta as follows:
Interest differential historical versus Series C $ 2,434
Acquisition of Cofimeta (2,856)
-------
$ 422
=======
(n) Represents the estimated income tax effect of the pro forma adjustments
using an effective tax rate of 40%.
(O) The Cofimeta Pro Forma information includes Statement of Operations
data as if the Company had acquired Cofimeta on April 1, 1998:
<TABLE>
<CAPTION>
PRO FORMA COFIMETA
COFIMETA(1) ADJUSTMENTS PRO FORMA
----------- ----------- ---------
PERIOD FROM PERIOD FROM PERIOD FROM
JAN. 1, 1998 - JAN. 1, 1998 - JAN. 1, 1998 -
SEPTEMBER 30, 1998 SEPTEMBER 30, 1998 SEPTEMBER 30, 1998
------------------ ------------------ ------------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Net sales $ 147,107 $ $ 147,107
Cost of sales 135,773 582 136,355
--------- -------- ---------
Gross profit 11,334 (582) 10,752
Selling, general and administrative expenses 9,587 69 (3) 9,656
Reorganization Cost (1,350) - (1,350)
Restructuring provision 95 95
Gain on sale of equipment - -
--------- -------- ---------
Income (loss) from operations 3,002 (651) 2,351
Interest expense, net 980 3,755 (4) 4,735
Other income 13 - 13
--------- -------- ---------
Income (loss) before income taxes 2,035 (4,406) (2,371)
Provision (benefit) for income taxes 54 (1,002)(5) (948)
--------- -------- ---------
Net income (loss) $ 1,981 $ (3,404) $ (1,423)
========= ======== =========
</TABLE>
<TABLE>
<S> <C> <C>
(1) Statement of Operations data for Cofimeta for the period
January 1, 1998 to September 30, 1998 were derived from
Cofimeta Audited Financial Statements.
(2) Represents increased depreciation expense as a result of the
conformance of accounting policies and depreciation lives
between the Company and Cofimeta.
(3) Represents amortization of debt issue cost related to the
Series C Bond issuance.
(4) Represents the net effect on interest as result of following:
Use of proceeds from the Series C offering for the acquisition
of Cofimeta of $37,625. Interest expense is calculated using
an interest rate of 10.125% per annum - See Note C 2,856
Interest on deferred share purchase price in accordance with
the purchase agreement. Interest is calculated using an
effective interest rate of 10% per annum. 702
Net effect on interest expense as a result of revaluation of
indebtedness as a part of the acquisition. Includes deferred
debt payments as well as Continuation Plan indebtedness.
Interest expense is calculated using an effective interest
rate of 10% per annum. 197
------
$3,755
======
(5) Represents the estimated income tax effect of the pro forma
adjustments and restatement of the historical provision to
reflect the recording of a deferred tax asset during purchase
accounting using an effective rate of 40%.
</TABLE>
33
<PAGE> 38
SELECTED CONSOLIDATED HISTORICAL FINANCIAL DATA
The following table sets forth (i) the selected consolidated historical
financial data of the Predecessor for the years ended March 31, 1994 and 1995
which was derived from the audited consolidated financial statements of the
Predecessor, (ii) selected consolidated historical financial data of the
Predecessor for the period from April 1, 1995 through October 27, 1995, (iii)
selected consolidated historical financial data of the Company from October 28,
1995 through March 31, 1996 and the years ended March 31, 1997 and 1998, and
(iv) selected consolidated historical financial data of the Company for the nine
months ended December 31, 1997 and 1998. The selected consolidated historical
financial data for the period April 1, 1995 through October 27, 1995; and the
period October 28, 1995 through March 31, 1996 was derived from the audited
consolidated financial statements of the Predecessor and the Company, which are
included elsewhere in this Prospectus, together with the report of Deloitte &
Touche LLP, independent accountants. The selected consolidated historical
financial data for the years ended March 31, 1997 and 1998, was derived from the
audited consolidated financial statements of the Company, which are included
elsewhere in this Prospectus, together with the report of a predecessor of
PricewaterhouseCoopers LLP (Price Waterhouse LLP), independent accountants. The
selected consolidated historical financial data for the nine months ended
December 31, 1997 and 1998 were derived from unaudited interim financial
statements which, in the opinion of management, have been prepared on the same
basis as the audited financial statements and include all adjustments (all of
which are of a normal recurring nature) that are necessary for a fair
presentation of the results for the period. The following table should be read
in conjunction with "Management's Discussion and Analysis of Financial Condition
and Results of Operations," "Pro Forma Combined Financial Data," and the
Consolidated Financial Statements of the Company and the related notes and other
financial information presented elsewhere in this Prospectus.
<TABLE>
<CAPTION>
HISTORICAL
-----------------------------------------------------------------------
PREDECESSOR COMPANY
--------------------------------------------- --------------
Mar. 31, Mar. 31, Apr. 1, 1995- Oct. 28, 1995-
1994(a) 1995 Oct. 27, 1995 Mar. 31, 1996
------- -------- ------------- -------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
Statement of Operations Data:
Net sales $65,182 $ 75,097 $49,043 $ 35,572
Gross profit 5,955 4,206 2,148 3,948
Selling, general and
administrative 2,164 4,554 3,922 2,235
Restructuring provision -- -- -- --
Gain on sale of equipment -- -- -- --
------- --------- ------- --------
Operating income (loss) 3,791 (348) (1,774) 1,713
Interest expense 1,658 1,267 1,048 1,096
Other income (expense) -- -- -- --
Income (loss) before income ------- --------- ------- -------
taxes 2,133 (1,615) (2,822) 617
Provision (benefit) for income
taxes 706 (349) (938) 202
------- --------- ------- --------
Net income (loss) $ 1,427 $ (1,266) $(1,884) $ 415
======= ========= ======= ========
Net income (loss) per share -- -- -- $ 9.10
BALANCE SHEET DATA
(END OF PERIOD):
Cash and cash equivalents $ 4,261 $ -- $ -- $ --
Accounts receivable 7,936 9,835 13,312 8,338
Inventories 3,542 4,170 4,429 3,719
Total assets 36,127 41,523 59,770 49,200
Total debt 13,396 12,907 23,233 26,758
Redeemable preferred stock -- -- -- --
Total shareholders equity 12,406 10,833 9,329 935(c)
OTHER DATA:
Depreciation and amortization $ 1,747 $ 1,413 $ 919 $ 687
Capital expenditures 920 4,384 5,111 3,466
Ratio of earnings to fixed
charges(d) 2.2x -- -- 1.5x
EBITDA(e) $ 5,538 $ 1,065 $ (855) $ 2,400
Gross margin(f) 9.14% 5.60% 4.38% 11.10%
</TABLE>
<TABLE>
<CAPTION>
HISTORICAL
-------------------------------------------------------------
COMPANY
-------------------------------------------------------------
Mar. 31, Mar. 31, Nine Months Ended Dec. 31,
1997 1998 1997 1998
---- ---- ---- ----
UNAUDITED)
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
Statement of Operations Data:
Net sales $136,861 $410,321 $295,530 $408,144
Gross profit 11,486 41,901 28,350 35,532
Selling, general and
administrative 7,685 21,839 13,587 22,235
Restructuring provision -- 1,610 -- 1,176
Gain on sale of equipment -- (1,602) -- --
-------- -------- -------- --------
Operating income (loss) 3,801 20,054 14,763 12,121
Interest expense 3,388 10,710 7,921 14,255
Other income (expense) 2,201 321 531 949
Income (loss) before income -------- -------- -------- --------
taxes 2,614 9,665 7,373 (1,185)
Provision (benefit) for income
taxes 1,065 4,074 2,949 (475)
-------- -------- -------- --------
Net income (loss) $ 1,549 $ 5,591 $ 4,424 $ (710)
======== ======== ======= ========
Net income (loss) per share $ 9.37 $13.74 $ 11.05 $ (5.49)
BALANCE SHEET DATA
(END OF PERIOD):
Cash and cash equivalents $ 9,671 $ 18,321 19,555 $ 318
Accounts receivable 47,626 65,273 51,375 86,336
Inventories 13,411 21,305 20,158 33,911
Total assets 243,694 320,032 290,312 412,562
Total debt 99,829 139,448 128,517 374,054
Redeemable preferred stock 39,300 40,192 40,458 40,586
Total shareholders equity 2,341 6,118 1,377 (2,078)
OTHER DATA:
Depreciation and amortization $ 5,041 $ 20,279 $14,580 $ 19,552
Capital expenditures 3,326 16,723 11,418 20,369
Ratio of earnings to fixed
charges(d) 1.7x 1.7x
EBITDA(e) $ 11,043 $ 40,654 $29,874 $ 32,622
Gross margin(f) 8.60% 10.21% 9.59% 8.71%
</TABLE>
See Notes to Selected Consolidated Historical Financial Data.
34
<PAGE> 39
(a) Reflects the audited financial statements of the Predecessor prepared
in accordance with Canadian generally accepted accounting principals,
with Canadian dollars being converted to a U.S. dollar equivalent using
an average Canadian to U.S. foreign currency exchange rate of 1.3810,
for the period ended March 31, 1994.
(b) This provision includes income before taxes for the discontinuance of
Laserweld and Parallel. Management does not anticipate that these costs
will be a part of future operations.
(c) The reduction in equity of $8.4 million from October 27, 1995 to March
31, 1996, is primarily a result of the elimination of the Predecessor's
equity as a part of the purchase accounting adjustments made upon the
acquisition of the Predecessor on October 27, 1995.
(d) For purposes of this computation, earnings consist of income (loss)
before income taxes plus fixed charges. Fixed charges consist of
interest on indebtedness plus that portion of rental expense
representative of the interest factor. For fiscal 1995, the Company's
earnings were insufficient to cover fixed charges by $1.6 million. For
the period April 1, 1995 to October 27, 1995, the Company's earnings
were insufficient to cover fixed charges by $2.8 million. For the nine
months ended December 31, 1998, the Company's earnings were
insufficient to cover fixed charges by $1.2 million.
(e) EBITDA is defined as income (loss) before interest, income taxes,
depreciation and amortization. EBITDA should not be construed as a
substitute for income from operations, net income or cash flow from
operating activities for the purpose of analyzing the Company's
operating performance, financial position and cash flows.
(f) Gross margin is defined as gross profit as a percent of net sales for
each of the applicable periods.
35
<PAGE> 40
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
The following management's discussion and analysis of financial
condition and results of operations should be read in conjunction with our
"Pro Forma Combined Financial Data" and our Consolidated Financial
Statements and notes thereto included elsewhere in this Prospectus. The
historical information for the fiscal year ended March 31, 1997 includes the
Lobdell results of operations for the period subsequent to its acquisition.
For comparative purposes, the financial information for the fiscal year
ended March 31, 1996 represents the combination of the results of operations
for the Predecessor for the period from April 1, 1995 to October 27, 1995
together with our results of operations from October 28, 1995 through March
31, 1996 (the period subsequent to the acquisition of the Predecessor by the
Company). The financial statements of the Predecessor and the Company in the
two combined periods are not comparable in certain respects due to
differences between the cost basis of certain assets held by the Company
versus that of the Predecessor, resulting in reduced depreciation and
amortization charges subsequent to October 27, 1995, changes in accounting
policies and the recording of certain liabilities at the date of acquisition
in connection with the purchase of the Predecessor by the Company.
Accordingly, the combination of these two periods does not purport to
represent what the results of operations of the Company would have been on a
pro forma basis had it acquired the Predecessor on April 1, 1995.
The nine months ended December 31, 1998 statements of operations for
the Company include the results of operations for all subsidiaries,
including Lobdell, Howell, RPIH, and the Suspension Division. Lobdell was
acquired on January 10, 1997, Howell was acquired August 13, 1997, RPIH was
acquired on November 25, 1997, and the Suspension Division was acquired on
April 1, 1998. Each was accounted for using the purchase method of
accounting. Therefore, the nine month statements of operations for the
period ended December 31, 1997 includes only a portion of the operating
results of Howell and RPIH, and do not include the operating results of the
Suspension Division.
Nine Months Ended December 31, 1998 Compared to Nine Months Ended December
31, 1997
Net Sales -- Net sales for the nine months ended December 31, 1998 were
$408.1 million, an increase of $112.6 million as compared to $295.5 million
for the same period last year. The overall increase is primarily the result
of the acquisitions made since the prior year ($132.5 million) offset by the
year to date net impact of the GM strike ($12.7 million) and similar factors
as described below.
Gross Profit -- For the nine months ended December 31, 1998, gross
profit was $35.5 million, an increase of $7.2 million as compared to $28.3
million for the same period last year. The increase is primarily the result
of profit on incremental sales resulting from acquisitions, offset by the
net impact of the General Motors strike ($5.2 million) and by the reduced
market price for processed scrap ($2.9 million) on normal yield experience.
Selling, General and Administrative Expenses ("SG&A") -- For the nine
months ended December 31, 1998, SG&A expenses increased to $22.2 million or
5.4% of net sales as compared to $13.6 million or 4.6% of net sales for the
prior year. The increase in expenditure levels is primarily due to the
support of current program launches (CAMI, Saturn and Ford) as well as the
resources necessary to support the newly awarded programs for General Motors
(closure panels and rear underbody components for a new platform to be
assembled solely in Mexico and chassis components for the North American
production of global platforms). The Company intends to invest in the
necessary resources to support customer engineering requirements and global
program management needs.
36
<PAGE> 41
Operating Income -- For the nine months ended December 31, 1998,
operating income was $12.1 million, a decrease of $2.7 million as compared
to $14.8 million for the same period last year. The decrease is primarily
the result of the net impact of the General Motors strike and decreasing
scrap recovery prices on normal yield experience partially offset by the
profit on incremental sales generated by acquisitions.
Interest Expense -- For the nine months ended December 31, 1998, net
interest expense was $14.3 million, an increase of $6.4 million as compared
to $7.9 million for the same period last year. The increase in expense was
due primarily to the issuance of $35.0 million of 10 1/8% Senior
Subordinated Notes due 2007, Series B (the "Series B Notes") on April 1,
1998, and the issuance of $40.0 million of 10 1/8% Senior Subordinated Notes
due 2007, Series C (the "Series C Notes") on December 8, 1998. The Series B
Notes and Series C Notes represent incremental borrowings issued at
effective interest rates of approximately 9.25% and 9.685% respectively. The
balance of the increase can be attributed to the impact of the General
Motors strike on operating cash flow and the interim financing of customer
tooling for current program launches.
Net Income -- For the nine months ended December 31, 1998, we reported
a net loss of $0.7 million, a decrease of $5.1 million as compared to the
prior year. As explained above, the decrease relates primarily to increased
interest expense ($3.8 million), the impact of the General Motors strike
($3.1 million) and the impact of the lower scrap sales pricing ($1.7
million).
Fiscal Year Ended March 31, 1998 Compared to Fiscal Year Ended March 31,
1997
Net Sales -- Net sales for the year ended March 31, 1998 were $410.3
million. This represents an increase of $273.4 million as compared to net
sales for the fiscal year ended March 31, 1997 of $136.9 million. Net sales
for the fiscal year ended March 31, 1997 included net sales of Lobdell only
from the acquisition date of January 10, 1997 through March 31, 1997. The
increase for the year was due principally from the Lobdell, Howell and RPIH
acquisitions ($269.8 million). The balance of the increase related primarily
to the strength of light truck and sport utility vehicle production
partially offset by the discontinuance of certain customer platforms. On a
pro forma basis, had the net sales from all acquisitions been included for
the entire fiscal 1998, net sales would have been $453.7 million.
Gross Profit -- Gross profit was $41.9 million or 10.2% of net sales
for the year ended March 31, 1998 as compared to $11.8 million or 8.6% of
net sales for the year ended March 31, 1997. This represents an increase of
$30.1 million as compared to the prior year. The gross profit increase is
related to the incremental sales resulting from the acquisitions, combined
with operating improvements made throughout the year on existing as well as
acquired sales. The increase in gross margin is a result of operating
improvements through employment and cost reductions, productivity
improvements, increased capacity utilization, quality improvements and
production schedule attainment. The increased gross profit was partially
offset by costs associated with the conversion of Canadian operations to
transfer and robotic technology, startup of the Mexican operations and costs
associated with the launch of future platforms (Saturn LS, Windstar and Ford
heavy-duty pickup (PN131)).
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<PAGE> 42
Selling, General and Administrative Expenses ("SG&A") -- SG&A expenses
were $21.8 million or 5.3% of net sales as compared to $7.7 million or 5.6%
for the year ended March 31, 1997. The decrease as a percentage of net sales
was a result of the efficiencies derived through acquisition integration and
cost reduction programs. The financial and administrative functions were
consolidated into the Troy office, thereby allowing for the closure of the
Alma and Southfield administrative offices. The increase in expenditures is
primarily due to the overall growth of the organization during the year and
the need to provide the necessary resources to support customer engineering
support, global program management and the continued growth initiatives of
the organization.
Operating Income -- Income from operations was $20.1 million or 4.9% of
net sales for the year ended March 31, 1998 as compared to $3.8 million or
2.8% of net sales for the year ended March 31, 1997. For fiscal 1998,
operating income benefited from the growth in the light truck and SUV
programs as well acquisitions during the year. The increase in operating
margin reflects the continued improvement of operations, implementation of
cost saving programs and gain on the sale of equipment of the laser welding
operations. Partially offsetting the increase was the recording of
restructuring charges as a part of our overall plant rationalization
initiatives.
Other Income - Other income for the year ended March 31, 1998 was $0.3
million or 0.1% of net sales as compared to $2.2 million or 1.6% of net
sales for the year ended March 31, 1997. The decrease was due primarily to
foreign currency exchange transactions gains recorded in fiscal 1997 which
were not present in fiscal 1998.
Interest Expense - Interest expense for the year ended March 31, 1998
was $10.7 million or 2.6% of net sales as compared to $3.4 million or 2.5%
of net sales for the year ended March 31, 1997. While interest as a
percentage of net sales remained relatively flat, the overall increase in
expense was due primarily to the issuance of $125.0 million of 10 1/8%
Senior Subordinated Notes on June 24, 1997. The Notes represent both
incremental borrowing as well as increased interest rate as compared to
outstanding debt of the prior period. Proceeds of the Notes were used to pay
off existing debt and support acquisition activities. The increase in
interest expense was partially offset by interest income derived over the
year on unused bond proceeds available for short term investment.
Income Tax -- Income tax expense was $4.1 million or 1.0% of net sales
for the period ended March 31, 1998 as compared to $1.1 million or 0.8% of
net sales for the year ended March 31, 1997. The increased income tax of
$3.0 million is a result of the $7.1 million increase in income before taxes
for the year ended March 31, 1998 as compared to the previous year and an
increase in our overall effective tax rate.
Net Income - Net income was $5.6 million or 1.4% of net sales for the
year ended March 31, 1998 as compared to $1.5 million or 1.1% of net sales
for the year ended March 31, 1997. The improvement of $4.1 million was a
result of increased operating and other income of $14.4 million, offset by
the increase in interest expense of $7.3 million and income taxes of $3.0
million.
Fiscal Year Ended March 31, 1997 Compared to Fiscal Year Ended March 31,
1996
Net Sales -- Net sales for the year ended March 31, 1997 were $136.9
million, including the net sales of Lobdell from January 10, 1997 (the
"Acquisition Date") through March 31, 1997. This was an increase of $52.2
million or 61.7% as compared to net sales for the fiscal year ended March
31, 1996 of $84.6 million. The increase was due principally to the
acquisition of Lobdell and was partially offset by lower sales volume due to
model changeovers. On a pro forma basis, if Lobdell net sales were included
with that of the Company for the entire fiscal year ended March 31, 1997,
net sales would have been $330.2 million, an increase of $245.6 million as
compared to the prior year, and if Howell and RPIH net sales were also
included for fiscal 1997, net sales would have been $433.4 million, an
increase of $348.8 million as compared to the prior year.
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<PAGE> 43
Gross Profit -- Gross profit was $11.8 million or 8.6% of net sales for
the year ended March 31, 1997 as compared to $6.1 million or 7.2% of net
sales for the year ended March 31, 1996. This represents an increase of $5.7
million, or 93.4% as compared to the prior year. The increase was primarily
a result of higher margins on Lobdell sales for the eighty day period from
the Acquisition Date through March 31, 1997. Gross profit also increased due
to (i) workforce reductions, (ii) improved materials cost management which
resulted in lower raw material costs and (iii) strong sales in the light
truck and SUV markets, our largest sales segments and those which produce
its highest margins. The increased gross profit was partially offset by
costs associated with the production launch of the Saturn Coupe stampings.
Selling, General and Administrative Expenses ("SG&A") -- SG&A expenses
were $7.7 million or 5.6% of net sales for the year ended March 31, 1997 as
compared to $6.2 million or 7.3% of net sales for the year ended March 31,
1996. The decrease as a percentage of net sales was a result of efficiencies
and cost reduction programs undertaken by management. Specifically, the
reduction in SG&A expenses as a percentage of net sales resulted from a
restructuring of the sales and product engineering functions into customer
focused business units.
Operating Income -- Income from operations was $3.8 million or 2.8% of
net sales for the year ended March 31, 1997 as compared to a deficit of $0.1
million for the year ended March 31, 1996. The improvement of $3.9 million
was a result of improved gross profit of $5.7 million, partially offset by
increased SG&A expenses of $1.5 million.
Other Income -- Other income for the year ended March 31, 1997 was $2.2
million or 1.6% of net sales due primarily to foreign currency exchange
transactions. No significant other income was earned for the year ended
March 31, 1996.
Interest Expense -- Interest expense for the year ended March 31, 1997
was $3.4 million or 2.5% of net sales, an increase of $1.3 million over the
interest expense for the year ended March 31, 1996. While interest expense
for both periods remained constant at 2.5% of net sales, the increase of
$1.3 million was a result of variations in base lending rates and additional
borrowings resulting from the acquisition of Lobdell.
Income Tax -- Income tax expense was $1.1 million or 0.8% of net sales
for the period ended March 31, 1997 as compared to a benefit of $0.7 million
or 0.8% of net sales for the year ended March 31, 1996. The increased income
tax expense of $1.8 million is a result of the $4.8 million increase in
income before taxes for the year ended March 31, 1997 as compared to the
previous year.
Net Income -- Net income was $1.5 million or 1.1% of net sales for the
year ended March 31, 1997 as compared to a loss of $1.5 million or 1.8% of
net sales for the year ended March 31, 1996. The improvement of $3.0 million
was a result of improved operating income of $3.9 million and increased
other income of $2.2 million. The increase in net income was partially
offset by increased interest expense and income taxes of $1.3 million and
$1.8 million, respectively.
LIQUIDITY, CAPITAL RESOURCES AND FINANCIAL CONDITION
Net income adjusted for non-cash charges (depreciation and amortization
and deferred taxes) generated approximately $15.9 million of cash for the
nine months ended December 31, 1998 and generated approximately $24.4
million of cash for the year ended March 31, 1998. Cash decreased by $36.9
million during the nine months ended December 31, 1998 based on an overall
increase in accounts receivable, inventories, and reimbursable tooling,
offset slightly by a decrease in other assets. During the nine months ended
December 31, 1998, we used approximately $75.1 million for investing
activities, including the acquisitions of the Suspension Division ($53.9
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<PAGE> 44
million). These investing activities were supported substantially by the
issuance of the Series B Notes as described below and line of credit
borrowings. The cash generated by financing activities was made up primarily
of $78.5 million of proceeds from the Series B Notes and Series C Notes.
Cash increased during the year ended March 31, 1998 based on overall
increases in trade accounts payable of $11.4 million and refundable income
taxes of $2.9 million. Offsetting the increase in cash for fiscal 1998 was a
net increase in accounts receivable, customer tooling, and other working
capital requirements of $13.7 million. The increase in customer tooling is
primarily a result of progress payments made to tooling vendors to support
scheduled program launches set for fiscal 1999 (Saturn LS, Ford Windstar,
and CAMI J2). During the year, we used approximately $43.2 million for
investing activities, including the acquisitions of Howell and RPIH, as well
as the purchase of an equity interest in a publicly traded automotive
supplier. The overall cash requirements were funded by approximately $26.3
million of incremental borrowings.
At December 31, 1998 we had approximately $82.5 million available under
the Senior Credit Facility. At December 31, 1998, we had $ 22.7 million
outstanding under the line of credit and $4.8 million in outstanding letters
of credit to support certain IRBs and workers compensation commitments.
During the nine months ended December 31, 1998, we received net
proceeds of $40.8 million from the offering of the Series C Notes, after the
inclusion of approximately $1.5 million in premium and after the payment of
$0.7 million in issuance costs. We used the net proceeds from the Series C
Notes to repay borrowings under the Senior Credit Facility and for working
capital and other general corporate purposes.
During fiscal 1998, we received net proceeds of $37.6 million from our
offering of Series A Notes, after payment of approximately $83.1 million to
refinance existing indebtedness and approximately $4.3 million in issuance
costs. We used approximately $23.2 million and $2.5 million respectively
toward the acquisitions of Howell and RPIH and related expenses. The
remainder of the proceeds were used for general corporate purposes and in
part to fund the acquisition of the Suspension Division. The balance of the
Suspension Division acquisition was funded by the issuance of the Series B
Notes.
We believe our application of the proceeds from the Existing Notes has
enhanced our ability to meet our growth and business objectives. However,
interest payments on the Existing Notes will represent a significant
liquidity requirement for us. We will be required to make scheduled
semi-annual interest payments on the Existing Notes of approximately $10.1
million on June 15 and December 15 each year until their maturity on June
15, 2007 or until the Notes are redeemed.
Capital expenditures were $20.4 million, or 5.0% of net sales for the
nine months ended December 31, 1998 as compared to $11.4 million or 3.9% of
net sales for the nine months ended December 31, 1997. The increase of $9.0
million was due primarily to customer programs (the 1999 model year Saturn
LS) and press equipment and automation upgrades. Other capital expenditures
included health and safety items, computer and network upgrades and Y2K
support.
Capital expenditures were $16.7 million, or 4.1% of net sales for the
year ending March 31, 1998 as compared to $3.3 million, or 2.4% of net sales
for the year ended March 31, 1997. The increase of $13.4 million was due
primarily to the inclusion of acquisitions, the start up of two Mexican
operations ($3.7 million) and the development of a corporate Technical and
Administrative center ($1.3 million). Other capital expenditures included
investments to support new business (primarily the 1999 model year Saturn LS
(previously designated Innovate), and Ford's Windstar and CAMI's J2, each
due to launch during the summer of 1998), press equipment
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<PAGE> 45
and rebuilds, safety and maintenance equipment, automation and other
productivity improvement expenditures, and other items including computers
and welding equipment.
For fiscal 1999, our capital expenditures are expected to be $34.9
million, consisting of a $14.0 million investment to support new business
and increase capacity; $11.0 million for press automation, rebuilds and
improvements; $2.5 million in computer system and network upgrades and $7.4
million in other expenditures, including health, safety, environmental, cost
reduction and maintenance items.
We believe that cash generated from operations, together with amounts
available under the Senior Credit Facility will be adequate to meet our debt
service requirements, capital expenditures and working capital needs for the
foreseeable future, although no assurance can be given in this regard. Our
future operating performance and ability to service or refinance the
Existing Notes and to extend or refinance our other indebtedness will be
subject to future economic conditions and to financial, business and other
factors that are beyond our control.
RAMOS ARIZPE - MEXICO FACILITY
On March 31, 1999 we entered into a synthetic lease transaction through a
wholly-owned Mexican subsidiary for the acquisition of new equipment for and
construction of a new facility being built in Ramos Arizpe, Mexico. Under
U.S. Generally Accepted Accounting Principles, this transaction is
classified as an operating lease. The approximately 330,000 sq. ft. facility
will support the General Motors GMT 250/257 program (SUV/ Hybrid vehicle)
slated to begin production in April 2000. The GMT 250/257 program is
expected to generate approximately $90.0 million of sales when in full
production. We were awarded substantially all closure panels and rear
underbody components for the program. Plant rationalization has allowed for
the transfer of equipment already owned to the facility. The lease payments
for the facility will be approximately $6.0 million per year. The award of
the program is in line with our expected growth into Mexico and is seen as
key to our future success in that country.
ACQUISITIONS
We believe that the operations of the Suspension Division and Cofimeta
will enhance our ability to develop key suspension and structural
components. We believe that these acquisitions will have a positive
impact on our results of operations for the fiscal year ending March 31,
1999 and thereafter.
SHAREHOLDERS' EQUITY
For the nine months ended December 31, 1998, the fluctuation in
shareholders' equity for foreign currency adjustments of ($5.5 million) is
due to our long-term investment in Canada. This adjustment reflects the
relative weakening of the Canadian dollar, and has no impact on cash flow.
For the nine months ended December 31, 1998, the reduction in
shareholders' equity for holdings of marketable securities of ($1.0 million)
is due to stock price fluctuation of our strategic investment in a
synergistic company.
IMPACT OF GENERAL MOTORS STRIKE
During a portion of the nine months ended December 31, 1998,
substantially all of General Motors vehicle production was shut down due to
two local strikes in Flint, Michigan. General Motors is a significant
customer of ours and the prolonged shutdown had an adverse effect on our
results of operations for the nine months ended December 31, 1998. We took
all steps necessary to lessen the overall impact. A portion of the sales
lost during the
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<PAGE> 46
strike were made up in the three months ended December 31, 1998. The effect
of the strike on these periods was as follows:
<TABLE>
<CAPTION>
THREE MONTHS NINE MONTHS
ENDED ENDED
DEC. 31, 1998 DEC. 31, 1998
(DOLLARS IN MILLIONS)
<S> <C> <C>
Sales $ 5.6 $ (12.7)
Gross Profit 1.3 (5.2)
Net Income 0.8 (3.1)
EBITDA 1.3 (5.2)
</TABLE>
YEAR 2000
We are aware of the potential impacts of the millennium change on
business. In response, we have created a Year 2000 project team to perform
inventory, remediation, and testing of possibly affected systems. The Year
2000 project team is coordinated at the corporate level with support from
senior management. Key individuals at the facility level are executing the
Year 2000 efforts. We have also employed some external Year 2000 contractors
to assist with compliance in some areas. We are following the Year 2000
guidelines set forth by the Automotive Industry Action Group ("AIAG") and
are reporting Year 2000 status quarterly to the AIAG.
We have broken the Year 2000 program into the following assessment
areas: business computer systems, desktop computing, network infrastructure,
voice systems, shop floor systems, non-information technology items, and
suppliers/business partners. As it relates to the AIAG areas for evaluation,
we do not have dedicated product-testing facilities nor do its products
contain any computer chips. We have completed a significant portion of Year
2000 remediation with the remainder to be finalized by July 31, 1999. In
addition, we are committed to complete Year 2000 testing between March 31,
1999 and September 31, 1999. We will continue Year 2000 compliance testing
throughout 1999 to ensure that regression does not occur.
We have completed a thorough assessment of all manufacturing,
administrative and management software. We have begun to upgrade certain
software modules and/or code to comply with AIAG Year 2000 guidelines and
timing. At the same time, we are implementing new software where compliance
through upgrade could not be achieved in either a timely or cost effective
manner. We are on target and expect to achieve Year 2000 compliance for all
of our software by July 31, 1999. Further, we initiated the move to a common
software system as we continue the implementation effort across all
facilities.
We are assessing the Year 2000 readiness of our external suppliers,
business partners, and service providers to ensure that business
associations will not be negatively impacted by the Year 2000 date. We will
use alternate sourcing and contingency planning in situations that threaten
our ability to deliver products or conduct business. Since these other
companies are in various stages of Year 2000 readiness, we will be
monitoring their progress throughout 1999, assessing associated risks, and
taking a course of action to ensure business continuity.
In addition to efforts of the internal staff, we are using external
resources to complete the project. The cost of external resources for 1998
totaled $0.3 million and the total capital spending for 1998 was $1.4
million of which, approximately $0.4 million relates to software projects.
In 1999, the external costs will approximate $0.1 million, which will relate
to any remediation activities derived from Year 2000 testing, and the
remaining capital expenditures will approximate $0.2 million.
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<PAGE> 47
THE EXCHANGE OFFER
Pursuant to the Registration Agreement, we have agreed (i) to file a
registration statement with respect to a registered offer to exchange the
Series C Notes for the Series D Notes, which will have terms substantially
identical in all material respects to the Series C Notes (except that the
Series D Notes will not contain terms with respect to transfer restrictions,
certain registration rights and certain interest rate step-up provisions)
within 120 days after the date of original issuance of the Series C Notes,
and (ii) to use reasonable best efforts to cause such registration statement
to become effective under the Securities Act at the earliest possible time
but in any event no later than 180 days after issuance of the Series C
Notes. The Registration Agreement also provides for the exchange of the
Series A Notes and the Series B Notes for Series D Notes having
terms substantially identical in all material respects to the Series A Notes
and the Series B Notes. The interest rate step-up provisions provide that
special interest will accrue on the Series C Notes (in addition to the
stated interest on the Series C Notes) at a rate of 0.25% per annum during
the 90-day period immediately following the occurrence of any Registration
Default, and shall increase by 0.25% per annum at the end of each subsequent
90-day period, but in no event shall such rate exceed 1.00% per annum. See
"Summary -- The Series D Notes." In the event that applicable law or
interpretations of the Staff of the SEC do not permit us to file the
registration statement containing this Prospectus or to effect the Exchange
Offer, or if certain holders of the Series C Notes notify us that they are
prohibited by law or SEC policy from participating in the Exchange Offer, or
subject to other restrictions, we will use our reasonable best efforts to
cause to become effective a shelf registration statement with respect to the
resale of the Series C Notes only and to keep the shelf registration
statement effective until the earlier of two years following the date the
shelf registration statement is declared effective by the SEC and such time
as all the Series C Notes have been sold thereunder. Holders of Existing
Notes do not have any appraisal or dissenters' rights in connection with the
Exchange Offer. The interest rate step-up provisions do not apply to the
Series A Notes, the Series B Notes, or the Series D Notes to be exchanged
for the Series A Notes and Series B Notes.
TERMS OF THE EXCHANGE OFFER; PERIOD FOR TENDERING EXISTING NOTES
Upon the terms and subject to the conditions set forth in this
Prospectus and in the accompanying Letter of Transmittal (which together
constitute the Exchange Offer), we will accept for exchange Existing Notes
which are properly tendered on or prior to the Expiration Date and not
withdrawn as permitted below. As used herein, the term "Expiration Date"
means 5:00 p.m., New York City time, on ___________, 1999; provided,
however, that if we have extended the period of time for which the Exchange
Offer is open, which in no event shall be later than _________, 1999, the
term "Expiration Date" means the latest time and date to which the Exchange
Offer is extended.
As of the date of this Prospectus, $200.0 million aggregate principal
amount of Existing Notes are outstanding. This Prospectus, together with the
Letter of Transmittal, is first being sent on or about ____________, 1999 to
all holders of Existing Notes known to us. Our obligation to accept Existing
Notes for exchange pursuant to the Exchange Offer is subject to certain
conditions as set forth under "--Certain Conditions to the Exchange Offer"
below.
We expressly reserve the right, at any time or from time to time, to
extend the period of time during which the Exchange Offer is open, and
thereby delay acceptance for any exchange of any Existing Notes, by giving
written notice of such extension to the holders thereof, including those
holders who have previously tendered their Existing Notes. During any such
extension, all Existing Notes previously tendered will remain subject to the
Exchange Offer and may be accepted for exchange by us. Any Existing Notes
not accepted for exchange for any reason will be returned without expense to
the tendering holder thereof as promptly as practicable after the expiration
or termination of the Exchange Offer.
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<PAGE> 48
We expressly reserve the right to amend or terminate the Exchange
Offer, and not to accept for exchange any Existing Notes not previously
accepted for exchange, upon the occurrence of any of the conditions of the
Exchange Offer specified below under "--Certain Conditions to the Exchange
Offer." We will give written notice of any extension, amendment,
non-acceptance or termination to the holders of the Existing Notes,
including those holders who have previously tendered their Existing Notes,
as promptly as practicable, such notice in the case of any extension to be
issued no later than 9:00 a.m., New York City time, on the next business day
after the previously scheduled Expiration Date.
PROCEDURES FOR TENDERING EXISTING NOTES
The tender to us of Existing Notes by a holder of such notes as set
forth below and the acceptance of such notes by us will constitute a binding
agreement between the tendering holder and us upon the terms and subject to
the conditions set forth in this Prospectus and in the accompanying Letter
of Transmittal. Except as set forth below, a holder who wishes to tender
Existing Notes for exchange pursuant to the Exchange Offer must transmit a
properly completed and duly executed Letter of Transmittal, including all
other documents required by such Letter of Transmittal, to U.S. Bank Trust
National Association, (the "Exchange Agent") at one of the addresses set
forth below under "Exchange Agent" on or prior to the Expiration Date. In
addition, either (i) certificates for such Existing Notes must be received
by the Exchange Agent along with the Letter of Transmittal, or (ii) a timely
confirmation of a book-entry transfer (a "Book-Entry Confirmation") of such
Existing Notes, if such procedure is available, into the Exchange Agent's
account at The Depository Trust Company (the "Book-Entry Transfer
Facility") pursuant to the procedure for book-entry transfer described
below, must be received by the Exchange Agent prior to the Expiration Date,
or (iii) the holder must comply with the guaranteed delivery procedures
described below.
THE METHOD OF DELIVERY OF EXISTING NOTES, THE LETTER OF TRANSMITTAL AND
ALL OTHER REQUIRED DOCUMENTS IS AT THE ELECTION AND RISK OF THE HOLDER. IF
SUCH DELIVERY IS BY MAIL, IT IS RECOMMENDED THAT REGISTERED MAIL, PROPERLY
INSURED, WITH RETURN RECEIPT REQUESTED, BE USED. IN ALL CASES, SUFFICIENT
TIME SHOULD BE ALLOWED TO ASSURE TIMELY DELIVERY. NO LETTERS OF TRANSMITTAL
OR EXISTING NOTES SHOULD BE SENT TO US.
Any beneficial owner whose Existing Notes are registered in the name of
a broker, dealer, commercial bank, trust company or other nominee and who
wishes to tender should contact the registered holder promptly and instruct
such registered holder of Existing Notes to tender on such beneficial
owner's behalf. If such beneficial owner wishes to tender on such owner's
own behalf, such owner must, prior to completing and executing the Letter of
Transmittal and delivering such owner's Existing Notes, either make
appropriate arrangements to register ownership of the Existing Notes in such
owner's name or obtain a properly completed bond power from the registered
holder of Existing Notes. The transfer of registered ownership may take
considerable time and may not be able to be completed prior to the
Expiration Date.
Signatures on a Letter of Transmittal or a notice of withdrawal, as the
case may be, must be guaranteed unless the Existing Notes surrendered for
exchange pursuant thereto are tendered (i) by a registered holder of the
Existing Notes who has not completed the box entitled "Special Issuance
Instruction" or "Special Delivery Instructions" on the Letter of
Transmittal, or (ii) for the account of an Eligible Institution (as defined
below). In the event that signatures on a Letter of Transmittal or a notice
of withdrawal, as the case may be, are required to be guaranteed, such
guarantees must be by a firm which is a member of a registered national
securities exchange or a member of the National Association of Securities
Dealers, Inc. or by a commercial bank or trust company having an office or
correspondent in the United States or an eligible guarantor institution
within the meaning of Rule 17Ad-15 under the Securities Exchange Act of
1934, as amended (the "Exchange Act") which is a member of one of the
recognized signature guarantee programs identified in the Letter of
Transmittal (collectively, "Eligible
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<PAGE> 49
Institutions"). If Existing Notes are registered in the name of a person
other than a signer of the Letter of Transmittal, the Existing Notes
surrendered for exchange must be endorsed by, or be accompanied by a written
instrument or instruments of transfer or exchange, in satisfactory form as
determined by us in our sole discretion, duly executed by, the registered
holder with the signature thereon guaranteed by an Eligible Institution. If
the Letter of Transmittal or any Existing Notes or powers of attorney are
signed by trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity, such persons should so indicate when signing, and, unless waived
by us, proper evidence satisfactory to us of their authority to so act must
be submitted.
All questions as to the validity, form, eligibility (including time of
receipt) and acceptance of Existing Notes tendered for exchange will be
determined by us in our sole discretion, which determination shall be final
and binding. We reserve the absolute right to reject any and all tenders of
any particular Existing Notes not properly tendered or to not accept any
particular Existing Notes which acceptance might, in our judgment or the
judgment of our counsel, be unlawful. We also reserve the absolute right to
waive any defects or irregularities or conditions of the Exchange Offer as
to any particular Existing Notes either before or after the Expiration Date
(including the right to waive the ineligibility of any holder who seeks to
tender Existing Notes in the Exchange Offer). The interpretation of the
terms and conditions of the Exchange Offer as to any particular Existing
Notes either before or after the Expiration Date (including the Letter of
Transmittal and the instructions thereto) by us shall be final and binding
on all parties. Unless waived, any defects or irregularities in connection
with tenders of Existing Notes for exchange must be cured within such
reasonable period of time as we shall determine. Neither the Company, the
Exchange Agent nor any other person shall be under any duty to give
notification of any defect or irregularity with respect to any tender of
Existing Notes for exchange, nor shall any of them incur any liability for
failure to give such notification.
In connection with the tender of the Existing Notes, each broker-dealer
holder will represent to us in writing that, among other things, the Series
D Notes acquired pursuant to the Exchange Offer are being obtained in the
ordinary course of business of the holder and any beneficial holder, that
neither the holder nor any such beneficial holder has an arrangement or
understanding with any person to participate in the distribution of such
Series D Notes and that neither the holder nor any such other person is an
"affiliate," as defined under Rule 405 of the Securities Act, of the
Company. If the holder is not a broker-dealer, the holder must represent
that it is not engaged in nor does it intend to engage in a distribution of
the Series D Notes.
ACCEPTANCE OF EXISTING NOTES FOR EXCHANGE; DELIVERY OF SERIES D NOTES
For each Existing Note accepted for exchange, the holder of such
Existing Note will receive a Series D Note having a principal amount equal
to that of the surrendered Existing Note. For purposes of the Exchange
Offer, we shall be deemed to have accepted properly tendered Existing Notes
for exchange when, as and if we have given oral and written notice thereof
to the Exchange Agent.
In all cases, issuance of Series D Notes for Existing Notes that are
accepted for exchange pursuant to the Exchange Offer will be made only after
timely receipt by the Exchange Agent of certificates for such Existing Notes
or a timely Book-Entry Confirmation of such Existing Notes into the Exchange
Agent's account at the Book-Entry Transfer Facility, a properly completed
and duly executed Letter of Transmittal and all other required documents. If
any tendered Existing Notes are not accepted for any reason set forth in the
terms and conditions of the Exchange Offer or if Existing Notes are
submitted for a greater principal amount than the holder desires to
exchange, such unaccepted or non-exchanged Existing Notes will be returned
without expense to the tendering holder thereof (or, in the case of Existing
Notes tendered by book-entry transfer into the Exchange Agent's account at
the Book-Entry Transfer Facility pursuant to the book-entry transfer
procedures described below, such non-
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exchanged Existing Notes will be credited to an account maintained with such
Book-Entry Transfer Facility) as promptly as practicable after the
expiration of the Exchange Offer.
BOOK-ENTRY TRANSFER
Any financial institution that is a participant in the Book-Entry
Transfer Facility's systems may make book-entry delivery of Existing Notes
by causing the Book-Entry Transfer Facility to transfer such Existing Notes
into the Exchange Agent's account at the Book-Entry Transfer Facility in
accordance with such Book-Entry Transfer Facility's procedures for transfer.
However, although delivery of Existing Notes may be effected through
book-entry transfer at the Book-Entry Transfer Facility, the Letter of
Transmittal or facsimile thereof with any required signature guarantees and
any other required documents must, in any case, be transmitted to and
received by the Exchange Agent at one of the addresses set forth below under
"Exchange Agent" on or prior to the Expiration Date or the guaranteed
delivery procedures described below must be complied with.
GUARANTEED DELIVERY PROCEDURES
If a registered holder of the Existing Notes desires to tender such
Existing Notes and the Existing Notes are not immediately available, or time
will not permit such holder's Existing Notes or other required documents to
reach the Exchange Agent before the Expiration Date, or the procedure for
book-entry transfer cannot be completed on a timely basis, a tender may be
effected if (i) the tender is made through an Eligible Institution, and (ii)
prior to the Expiration Date, the Exchange Agent received from such Eligible
Institution a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form provided by us (by telegram, telex,
facsimile, mail or hand delivery), setting forth the name and address of the
holder of Existing Notes and the amount of Existing Notes tendered, stating
that the tender is being made thereby and guaranteeing that within three New
York Stock Exchange ("NYSE") trading days after the Expiration Date, the
certificates for all physically tendered Existing Notes, in proper form for
transfer, or a confirmation of book-entry transfer of such Existing Notes
into the Exchange Agent's account at the Book-Entry Transfer Facility (a
"Book-Entry Confirmation"), as the case may be, a properly completed and
duly executed Letter of Transmittal and any other documents required by the
Letter of Transmittal will be deposited by the Eligible Institution with the
Exchange Agent.
WITHDRAWAL RIGHTS
Tenders of Existing Notes may be withdrawn at any time prior to 5:00
p.m., New York City time, on the business day prior to the Expiration Date.
For a withdrawal to be effective, a written notice of withdrawal must be
received by the Exchange Agent at one of the addresses set forth below under
"Exchange Agent." Any such notice of withdrawal must specify the name of the
person having tendered the Existing Notes to be withdrawn, identify the
Existing Notes to be withdrawn (including the principal amount of such
Existing Notes), and (where certificates for Existing Notes have been
transmitted) specify the name in which such Existing Notes are registered,
if different from that of the withdrawing holder. If certificates for
Existing Notes have been delivered or otherwise identified to the Exchange
Agent, then, prior to the release of such certificates, the
withdrawing holder must also submit the serial numbers of the particular
certificates to be withdrawn and a signed notice of withdrawal with
signatures guaranteed by an Eligible Institution unless such holder is an
Eligible Institution. If Existing Notes have been tendered pursuant to the
procedure for book-entry transfer described above, any notice of withdrawal
must specify the name and number of the account at the Book-Entry Transfer
Facility to be credited with the withdrawn Existing Notes and otherwise
comply with the procedures of such facility. All questions as to the
validity, form and eligibility (including time of receipt) of such notices
will be determined by us, and our determination shall be final and binding
on all parties. Any Existing Notes so withdrawn will be deemed not to have
been validly tendered for exchange for purposes of the Exchange Offer. Any
Existing Notes which have been tendered for exchange but
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<PAGE> 51
which are not exchanged for any reason will be returned to the holder
thereof without cost to such holder (or, in the case of Existing Notes
tendered by book-entry transfer into the Exchange Agent's account at the
Book-Entry Transfer Facility pursuant to the book entry transfer described
above, such Existing Notes will be credited to an account maintained with
such Book-Entry Transfer Facility for the Existing Notes) as soon as
practicable after withdrawal, rejection of tender or termination of the
Exchange Offer. Properly withdrawn Existing Notes may be retendered by
following one of the procedures described under "-- Procedures for Tendering
Existing Notes" above at any time on or prior to the Expiration Date.
CERTAIN CONDITIONS TO THE EXCHANGE OFFER
Notwithstanding any other provision of the Exchange Offer, we shall not
be required to accept for exchange, or to issue Series D Notes in exchange
for, any Existing Notes and may terminate or amend the Exchange Offer if, at
any time before the acceptance of such Existing Notes for exchange or the
exchange of Series D Notes for such Existing Notes, we determine that the
Exchange Offer violates applicable law, any applicable interpretation of the
Staff of the SEC or any order of any governmental agency or court of
competent jurisdiction.
The foregoing conditions are for our sole benefit and may be asserted
by us regardless of the circumstances giving rise to any such condition or
may be waived by us in whole or in part at any time and from time to time in
its reasonable discretion. Our failure at any time to exercise any of the
foregoing rights shall not be deemed a waiver of such right and each such
right shall be deemed an ongoing right which may be asserted at any time and
from time to time.
In addition, we will not accept for exchange any Existing Notes
tendered, and no Series D Notes will be issued in exchange for any such
Existing Notes, if at such time any stop order shall be threatened or in
effect with respect to the Registration Statement of which this Prospectus
constitutes a part or the qualification of the Indenture under the Trust
Indenture Act of 1939, as amended (the "TIA"). In any such event we are
required to use every reasonable effort to obtain the withdrawal of any stop
order at the earliest possible time.
EXCHANGE AGENT
U.S. Bank Trust National Association, has been appointed as the Exchange
Agent for the Exchange Offer. All executed Letters of Transmittal should be
directed to the Exchange Agent at one of the addresses set forth below.
Questions and requests for assistance, requests for additional copies of
this Prospectus or of the Letter of Transmittal and requests for Notices of
Guaranteed Delivery should be directed to the Exchange Agent addressed as
follows.
<TABLE>
<CAPTION>
BY HAND (NEW YORK DEPOSITORY ONLY): BY HAND (ALL OTHERS):
----------------------------------- ---------------------
<S> <C>
U.S. Bank Trust National Association U.S. Bank Trust National Association
100 Wall Street, 20th Floor Fourth Floor - Bond Drop Window
New York, NY 10005 180 East Fifth Street
St. Paul, MN 55101
</TABLE>
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<TABLE>
<CAPTION>
By Registered, Certified or Overnight Mail: By First Class Mail:
------------------------------------------- --------------------
<S> <C>
U.S. Bank Trust National Association U.S. Bank Trust National Association
Attn.: Specialized Finance P.O. Box 64485
180 East Fifth Street St. Paul, MN 55164-9549
St. Paul, MN 55101
<CAPTION>
By Facsimile: By Telephone:
------------- -------------
<S> <C>
(612) 244-1537 (800) 934-6802 Bondholder Services
(For Eligible Institutions Only)
</TABLE>
DELIVERY OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
FEES AND EXPENSES
We will not make any payments to brokers, dealers or others soliciting
acceptances of the Exchange Offer. The principal solicitation is being made
by mail; however, our officers and employees may make additional
solicitations in person or by telephone.
We will pay the expenses to be incurred in connection with the Exchange
Offer. Such expenses include fees and expenses of the Exchange Agent and
Trustee, accounting and legal fees and printing costs, among others.
ACCOUNTING TREATMENT
We will record the Series D Notes at the same carrying value as the
Existing Notes, which is the principal amount as reflected in our accounting
records on the date of the exchange. Accordingly, we will not recognize any
gain or loss for accounting purposes. We will capitalize the expenses of the
Exchange Offer for accounting purposes.
TRANSFER TAXES
Holders who tender their Existing Notes for exchange will not be
obligated to pay any transfer taxes in connection therewith, except that
holders who instruct us to register Series D Notes in the name of, or
request that Existing Notes not tendered or not accepted in the Exchange
Offer be returned to, a person other than the registered tendering holder
will be responsible for the payment of any applicable transfer tax thereon.
CONSEQUENCES OF FAILURE TO EXCHANGE; RESALES OF SERIES D NOTES
Holders of Existing Notes who do not exchange their Existing Notes for
Series D Notes in the Exchange Offer will not be able to take advantage of
any increased liquidity afforded by the Series D Notes. The Series D Notes
would have an aggregate principal amount of $200.0 million as opposed to
$160.0 million for the Series A and B Notes and $40.0 million for the Series
C Notes.
In addition, holders of Series C Notes who do not exchange their Series
C Notes for Series D Notes pursuant to the Exchange Offer will continue to
be subject to the restrictions on transfer of such Series C Notes as set
forth in the legend thereon as a consequence of the issuance of the Series C
Notes pursuant to the exemptions from, or in transactions not subject to,
the registration requirements of, the Securities Act and applicable state
securities law. Series C Notes not exchanged pursuant to the Exchange Offer
will continue to accrue interest at 10 1/8% per
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annum and will otherwise remain outstanding in accordance with their terms.
In general, the Series C Notes may not be offered or sold unless registered
under the Securities Act, except pursuant to an exemption from, or in a
transaction not subject to, the Securities Act and applicable state
securities laws. We do not currently anticipate that we will register the
Series C Notes under the Securities Act. However if (i) the Initial
Purchasers so request with respect to Series C Notes held by them following
consummation of the Exchange Offer, or (ii) any holder of Series C Notes is
not eligible to participate in the Exchange Offer because, for example, such
holder is an affiliate of the Company, does not acquire the Series D Notes
in the ordinary course of business or has an arrangement to participate in
the distribution of the Series D Notes, or (iii) any holder of Series C
Notes that participates in the Exchange Offer does not receive freely
tradable Series D Notes in exchange for Series C Notes, we are obligated to
file a shelf registration statement on the appropriate form under the
Securities Act relating to the Notes held by such persons.
Based on certain interpretive letters issued by the staff of the SEC to
third parties in unrelated transactions, we are of the view that Series D
Notes issued pursuant to the Exchange Offer may be offered for resale,
resold or otherwise transferred by holders thereof (other than (i) any such
holder which is an "affiliate" of the Company within the meaning of Rule 405
under the Securities Act, or (ii) any broker-dealer that purchases Series D
Notes from the Company to resell pursuant to Rule 144A or any other
available exemption) without compliance with the registration and prospectus
delivery provisions of the Securities Act, provided that such Series D Notes
are acquired in the ordinary course of such holders' business and such
holders have no arrangement or understanding with any person to participate
in the distribution of such Series D Notes. If any holder has any
arrangement or understanding with respect to the distribution of the Series
D Notes to be acquired pursuant to the Exchange Offer, such holder (i) could
not rely on the applicable interpretations of the staff of the SEC, and (ii)
must comply with the registration and prospectus delivery requirements of
the Securities Act in connection with a secondary resale transaction. A
broker-dealer who holds Existing Notes that were acquired for its own
account as a result of market-making or other trading activities may be
deemed to be an "underwriter" within the meaning of the Securities Act and
must, therefore, deliver a prospectus meeting the requirements of the
Securities Act in connection with any resale of Series D Notes. Each such
broker-dealer that receives Series D Notes for its own account in exchange
for Existing Notes, where such Existing Notes were acquired by such
broker-dealer as a result of market-making activities or other trading
activities, must acknowledge in the Letter of Transmittal that it will
deliver a prospectus in connection with any resale of such Series D Notes.
See "Plan of Distribution."
In addition, to comply with the securities laws of certain
jurisdictions, if applicable, the Series D Notes may not be offered or sold
unless they have been registered or qualified for sale in such jurisdiction
or an exemption from registration or qualification is available and is
complied with. We have agreed, pursuant to the Registration Agreement and
subject to certain specified limitations therein, to register or qualify the
Series D Notes for offer or sale under the securities or blue sky laws of
such jurisdictions as any holder of the Notes reasonably requests in
writing.
BUSINESS
GENERAL
We are a leading Tier 1 or direct supplier of high-quality, engineered
metal components, assemblies and modules used by OEMs. Our core products are
complex, high value-added products, primarily assemblies containing multiple
stamped parts, forgings and various welded, hemmed or fastened components.
These products which include large structural stampings and assemblies,
including exposed "Class A" surfaces, leaf springs and smaller complex
welded assemblies, are used in the manufacturing of a variety of sport
utility vehicles ("SUVs"),
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light and medium trucks, mini-vans, vans and passenger cars. We are the sole
source supplier of these products to its customers. On a pro forma basis,
assuming the acquisitions of Howell, RPIH, the Suspension Division and
Cofimeta had occurred on April 1, 1997, we would have had net sales of
$765.2 million and EBITDA (as defined herein) of $40.8 million for the
fiscal year ended March 31, 1998. For the nine months ended December 31,
1998, on a pro forma basis for such period, assuming the acquisition of
Cofimeta had occurred on April 1, 1998, we would have had net sales of
$555.3 million and EBITDA of $41.6 million.
Our seven largest customers, based on pro forma net sales for the nine
months ended December 31, 1998, assuming the acquisition of Cofimeta had
occurred April 1, 1998 are: General Motors Corporation ("GM") (34%), Ford
Motor Company ("Ford") (25%), Renault S.A. (15%), DaimlerChrysler AG
("DaimlerChrysler") (10%), PSA Peugeot Citroen ("PSA") (5%), CAMI (1%), and
The Saturn Corporation ("Saturn") (1%). We have been providing products
directly to GM and Ford for more than 50 years and have earned outstanding
commercial ratings for our high-quality standards, including GM's Supplier
of the Year and Mark of Excellence Awards, Ford's Q1 Award and CAMI's
President's Award. We also sell our products to other Tier 1 suppliers. For
the fiscal year ended March 31, 1998, approximately 71% of our net sales, on
a pro forma basis assuming the acquisitions of Howell, RPIH, the Suspension
Division, and Cofimeta occurred on April 1, 1997, were derived from sales of
our products manufactured for SUVs, mini-vans, vans and light trucks. In
recent years, SUVs, mini-vans, vans and light trucks have experienced
stronger growth in vehicle production as compared to the passenger car
sector. This sector includes those platforms and models which have strong
consumer demand, such as GM's popular C/K platform (full-size pickups and
the Yukon/Tahoe/Suburban models), Ford's Ranger, Explorer and Windstar,
DaimlerChrysler's Ram pickup and mini-van, and Renault's Kangoo and Espace.
See Note 16 of the Oxford Automotive, Inc. Notes to Consolidated Financial
Statements for a description of the Company's domestic and export sales.
With the acquisition of Cofimeta, the description of future financial data
for geographic areas will include information for Europe.
Our recent acquisitions significantly strengthen our position as a
leading Tier 1 supplier of assemblies and modules to the OEMs. These
strategic combinations provide us with the critical mass and capabilities in
the areas of design and engineering, sales and marketing, and product
expertise which provide the basis for our strategy of becoming a
fully-integrated, global systems supplier. The Company has implemented a
successful, focused sales and marketing initiative. As a result, the Company
was awarded the door assemblies and the side panel package for the new
Saturn LS Program (the "LS Program"), the new vehicle which Saturn is
launching in 1999 based upon the current Opel Vectra. Management believes
these awards from Saturn will generate approximately $65.0 million of annual
net sales beginning with the 1999 model year. In addition, the Company was
recently awarded the door, hood, and underbody assemblies for the GMT
250/257 Program (Pontiac Recon, Buick Signia) (the "GMT 250 Program") and
chassis components for the North American production of a global platform
for GM. The GMT 250 Program, a new GM platform, will be produced solely in
Mexico and management believes will generate approximately $90.0 million of
annual net sales beginning in 1999. Management believes the other GM
program will generate approximately $158.0 million of annual net sales
beginning in 2002.
We currently operate 21 manufacturing facilities which offer the latest
technologies in metal stamping, forging, welding and assembly production
equipment, including fully-automated hydraulic and wide-bed press lines (up
to 180 inches), robotic welding cells, robotic hemming, autophoretic
corrosion resistant coating and a patented eye forming process. We also have
the world-wide exclusive rights (outside the CIS--formerly Soviet Union) to
the "MAZ" tapering process for our suspension applications. Since 1992, we
have invested in excess of $125.0 million in capital investments to support
sales growth, expand production capabilities and improve efficiency and
flexibility. Our diverse line of over 500 presses that range up to 3,000
tons including both conventional and transfer technology and
state-of-the-art robotic weld assembly and hemming equipment are capable of
manufacturing a broad assortment of parts and assemblies ranging from simple
stampings to full-size, Class A door
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and closure panels. We are one of a few independent suppliers that has the
ability to produce large, complex stampings, as well as the technical
expertise and automated assembly capabilities to provide high value-added
modules such as door apertures and assemblies, A-pillars, Class A surface
products and control arms, and multiple leaf and parabolic leaf springs.
We have entered into a lease transaction for a new 330,000 sq. ft.
facility in Ramos Arizpe, Mexico to support the GMT 250 Program and other
opportunities in the Mexican market.
BUSINESS STRATEGY
Our principal objective is to be a leading, full-service, global Tier 1
supplier of integrated systems based on metal forming and related
manufacturing technologies. We believe that we are well positioned to
benefit from two significant trends in the stamping and metal forming
segments of the automotive industry: outsourcing and consolidation.
Outsourcing of metal stamping has increased in response to competitive
pressures on OEMs to improve quality and reduce capital requirements, labor
costs, overhead and inventory. Consolidation among automotive industry
suppliers has occurred as OEMs have more frequently awarded long-term sole
source contracts to the most capable global suppliers. In addition, OEMs are
increasingly seeking systems suppliers who can provide a complete package of
design, engineering, manufacturing and project management support for an
integrated system (such as a front-end system). We intend to capitalize on
these trends through internal development and strategic acquisitions. The
key elements of our strategy include the following:
Provide Full-Service Program Capability. We are focused on developing
full-service program capabilities. We work with OEMs throughout the product
development process from concept and prototype development through the
design and implementation of manufacturing processes. We believe that our
ability to provide the package of design, engineering, prototyping, tooling,
blanking, stamping, forging, assembly, and corrosion resistant coating to
our customers creates a unique capability present in only a limited number
of suppliers. We believe this capability will enable us to manage large
programs, assist us in reducing customer program launch time, lower customer
costs and increase our margins.
Supply Complex, High Value-Added Systems. As a result of our technical
design and engineering capabilities and our reputation for highly-efficient
manufacturing operations, we are able to secure supply relationships for
complex, high value-added products, primarily assemblies and modules that
contain multiple stamped parts and various welded, hemmed or fastened
components. For example, we produce the rear door for GM's
Yukon/Tahoe/Suburban vehicles, the lower control arm for GM's four wheel
drive C/K vehicles, the control arm assemblies for Ford's F-Series pickups
and DaimlerChrysler's T- 300, the radiator support assembly for GM's W-car
(Grand Prix, Century, Lumina, Monte Carlo and Intrigue), and complex A-
pillar assemblies for the Ford Mustang and the Ford Ranger pickup, and
multiple leaf, parabolic (long taper) multiple leaf, and single leaf long
taper suspension systems for products ranging from Ford's F-Series pickups
to DaimlerChrysler's mini-vans. These complex products typically generate
higher dollar content per vehicle as well as higher margins for the Company
as compared to simple, individual stampings. We plan to capitalize on our
ability to develop and provide integrated modules and assemblies to deliver
to the OEMs an integrated product such as a complete door or front-end
system. In addition to doors, radiator supports and Class A surface
components, we believe we have unique expertise with respect to control arms
and leaf springs, which we will further develop as a fully integrated
suspension system.
Focus on High Growth Vehicle Categories. Our sales and marketing
efforts have been, and will continue to be, directed toward sectors of the
automotive market that have experienced strong consumer demand. For the
fiscal year ended March 31, 1998, approximately 71% of our net sales on a
pro forma basis for the acquisitions of Howell, RPIH, the Suspension
Division, and Cofimeta were derived from sales of products manufactured for
SUVs, mini-vans, vans and light trucks. Similarly, our sales to the
passenger car market have been, and will continue to be, directed to the
segments with stronger sales growth, including Saturn cars.
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Establish a Global Presence. The Company is actively pursuing
additional strategic acquisitions and joint-venture opportunities in Europe
and intends to pursue opportunities which will allow the Company to increase
its presence in South America, and establish a presence in Asia and other
markets in order to serve its customers on a global basis. Several OEMs have
announced certain models designed for the world automobile market ("World
Car"). As a result, the OEMs have encouraged their existing suppliers to
establish foreign production support for World Car programs. This
globalization provides access to new customers and technology, as well as
economic cycle diversification. We have operations in France and have
established a presence in Mexico and Venezuela and currently provide
components for OEMs doing business in Mexico and South America.
Pursue Strategic Acquisitions. In response to the trend in the OEM
market toward "systems suppliers," we are focused on making strategic
acquisitions that will enhance our ability to provide integrated systems
(such as a door or front end systems) or otherwise leverage our existing
business by providing additional product, manufacturing and service
capabilities. We also intend to pursue acquisitions which will expand our
customer base by providing an entree to new customers, including the North
American operations of Asian and European based OEMs. We believe that the
continuing supplier consolidation in the stamping and metal forming segments
may also provide attractive opportunities to acquire high-quality companies
at favorable prices, including businesses which can be improved financially
through overhead elimination, organizational restructuring, plant
reconfiguration, labor contract negotiations and management changes. We will
also pursue acquisitions that enable us to achieve a global presence.
RECENT DEVELOPMENTS
On April 1, 1998, we acquired the Suspension Division. The Suspension
Division is a leading Tier 1 North American supplier of leaf spring
suspension systems for automotive applications. Products of the Suspension
Division include multiple leaf, parabolic (long taper) multiple leaf, and
single leaf long taper suspension systems. The Suspension Division is held
through two of the Company's subsidiaries, Oxford Suspension, Inc. and
Oxford Suspension Ltd., both of which are Subsidiary Guarantors.
The Suspension Division is a major supplier to the traditional North
American light truck vehicle manufacturers, and also one Japanese automotive
transplant, one Japanese heavy truck manufacturer, and one European vehicle
program. The Suspension Division designs, manufactures and markets leaf
springs for original equipment vehicle markets with product applications in
light truck rear suspensions. The Suspension Division is focused on the
light truck market, where full-size pick-ups and vans, mini pick-ups and
vans, and sport utility vehicles are the major users of leaf springs,
primarily for rear suspension applications. The Suspension Division includes
a 49% interest in Metalcar, a Venezuelan manufacturer of conventional leaf
springs and coil springs for both light and heavy trucks. The Suspension
Division had net sales of $125.8 million for its fiscal year ended December
31, 1997. For its fiscal year ended December 31, 1997, the Suspension
Division had EBITDA of $7.4 million.
On February 5, 1999, we acquired the shares of Cofimeta for FF80
million (approximately $13.9 million) in immediately available funds and
deferred payments over three years in the amounts of FF27 million
(approximately $4.7 million, based upon the U.S. Dollar exchange rate on
February 2, 1999) for each of the first two years and FF36 million
(approximately $6.2 million, based upon the U.S. Dollar exchange rate on
February 2, 1999) for the third year. Cofimeta is a leading supplier of
closure panels, floor pans, deck lids, structural pillars, cross members,
radiator surrounds and front ends, and Class A surfaces. Cofimeta is
headquartered in a suburb of Paris and operates manufacturing facilities in
France located in Douai, St. Florent and Orbec. Cofimeta employs
approximately 1,600 persons and is a major supplier to Renault and PSA. For
the nine months ended September 30, 1998, Cofimeta had net sales of $147.1
million and EBITDA of $9.0 million. Amounts set forth in U.S. Dollars with
respect to Cofimeta for the nine months ended September 30, 1998 are based
upon the average published U.S. Dollar exchange rates for the period.
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Cofimeta had previously benefited from a final order, entered
approximately nineteen months ago, of the French Commercial Court in Douai,
France, approving a continuation plan for Cofimeta (the "Continuation
Plan"). The Continuation Plan authorized certain restructuring plans, which
included reductions in employment levels, capital increases by its prior
parent, and the rescheduling of payment of all trade payables and other
obligations over a ten year period. Pursuant to an application by Group
Valfond S.A., the prior owner of Cofimeta, to the Court of Douai, the court
by judgment dated January 7, 1999 authorized, inter alia, (i) the sale of
the Cofimeta shares to the Company, (ii) termination of the Continuation
Plan with respect to Cofimeta, and (iii) the establishment of Cofimeta
Defeasance S.A. by Cofimeta to which the payment obligations of Cofimeta
remaining under the Continuation Plan were transferred. Of the FF 372
million of original Continuation Plan obligations of Cofimeta, which were
transferred to Cofimeta Defeasance, S.A., approximately FF 305 million have
been acquired by the Company and FF 67 million remain payable to unrelated
third parties. Under the Continuation Plan, approximately 75% of the
scheduled repayment of all of the Continuation Plan obligations will occur
in the last five years of the ten year period.
Cofimeta is held as a subsidiary of Oxford Automotive France SAS which
is held by OASP, Inc. and OASP II, Inc., both wholly-owned subsidiaries of
Oxford Automotive and Subsidiary Guarantors.
In March 1999 the Company announced the closure of its Hamilton,
Indiana facility. The decision to close this facility was based on the
Company's rationalization of its current capacity and will result in fixed
cost reductions and improved productivity through reallocation of production
to other facilities during fiscal 2000. The costs associated with the
closure had been previously reserved for and will therefore have no adverse
impact on the financial results of the Company. The Company is currently
redeploying production assets from this and other previously closed
facilities to support recently awarded programs (e.g. GMT 250 Program).
On a pro forma basis for the fiscal year ended March 31, 1998, assuming
the acquisitions of Howell, RPIH, the Suspension Division, and Cofimeta had
occurred on April 1, 1997, (i) our net sales and EBITDA would have
been $765.2 million and $40.8 million, respectively, (ii) the SUV, mini-van,
van and light truck segment represented approximately 71% of net sales and
(iii) our net sales by major customers would have been approximately as
follows: Ford 30%; GM 29%; Renault 15%; DaimlerChrysler 10%; PSA 6%, CAMI
1%, and Saturn 1%.
INDUSTRY TRENDS
The OEM market to which we sell our products consists of the design,
engineering, development, production and sale of parts, components,
assemblies and modules or systems (several components assembled together)
for use in the manufacture of new motor vehicles. Our performance, growth
and strategic plan are directly related to certain trends within the OEM
market. Since the 1980s, DaimlerChrysler, Ford and GM have each been
substantially reducing the number of suppliers that may bid for awards and
outsourcing an increasing percentage of their production requirements. As a
result of these trends, the OEMs are focusing on the development of
long-term, sole source relationships with suppliers who can provide more
complex parts, as well as complete subassemblies and modules on a
just-in-time basis while at the same time meeting strict quality
requirements. These requirements are accelerating the trend toward
consolidation of the OEM's supplier base, as those suppliers who lack the
capital and production expertise to meet the OEM's needs, either cease to
operate or are merged with larger suppliers. OEMs benefit from outsourcing
because outside suppliers generally have significantly lower cost structures
and, as described below, suppliers can assist in shortening development
periods for new products.
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In addition to consolidation and outsourcing, suppliers are
participating earlier in the design and engineering process, providing
research, as well as product development, product testing/validation,
prototyping and tooling. OEMs generally expect Tier 1 suppliers to (i)
participate in the design and engineering of complex assemblies, (ii)
develop the required manufacturing process to deliver these assemblies on a
just-in-time basis, and (iii) assume responsibility for quality control.
This results in shorter development times for new products, as well as
higher quality and lower parts costs.
While the focus today by the OEMs is on quality, cost and service, we
believe that the focus for the future will be on global capabilities,
innovation and ability to provide value-added products and systems. The OEMs
have been very successful in making high-quality and low cost a minimum
requirement to remain in the industry, as opposed to a competitive advantage
for certain suppliers.
These evolving requirements can best be addressed by suppliers with
sufficient resources to meet such demands. For full-service suppliers such
as the Company, this environment provides an opportunity to grow by
obtaining business previously provided by other suppliers who can no longer
meet the current or future requirements and expectations of the OEMs and by
acquisitions that further enhance product manufacturing and service
capabilities. Although the requirements of the OEMs have already resulted in
significant consolidation of component suppliers in many product segments,
we believe that many opportunities exist for further consolidation within
our stamping and metal forming industry.
PRODUCTS
We generate the majority of our net sales from large, complex, high
value-added products, primarily assemblies that generally consist of
multiple parts, which we stamp and forge and combine with various welded or
fastened components. We are the sole source supplier of these complex
modules and assemblies. These products include unexposed components and
assemblies that are intrinsic to the structural integrity of the vehicle
such as A-pillars, radiator supports, floor pans, toe-to-dash panels, leaf
springs, frame and suspension components and reinforcements. In addition to
unexposed components and assemblies, we have the capability and expertise to
produce Class A surfaces such as door assemblies, door apertures, rocker
panels, fuel filler doors, and box side outers, which require virtually
flawless finishes and more stringent customer requirements than unexposed
assemblies. These products require superior engineering and automated
manufacturing and assembly capabilities due to their complexity and high
volume requirements.
While we have the capability to produce small stampings, such as
brackets and braces, we focus on more complex and larger components and
assemblies which typically generate higher dollar content per vehicle as
well as higher margins for the Company. These assemblies, such as the A, B
and C pillars, control arms, leaf springs, door assemblies, door apertures,
deck lids and radiator supports require larger, high tonnage, wide-bed,
fully-automated press capabilities, complex automated weld and hemming
assembly, autophoretic corrosion resistant coating, machining, and automated
assembly of purchased components.
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<PAGE> 59
The chart below details by major customer our major products, the type of
vehicle and the model/platform for which they are produced
<TABLE>
<CAPTION>
CUSTOMER TYPE MODEL/PLATFORM COMPONENTS SUPPLIED
- -------- ---- -------------- -------------------
<S> <C> <C> <C>
General Motors Sport Utility Suburban/Tahoe/Yukon Door Assemblies, Door Apertures,
Rocker Panels, Lower Control Arms,
Wheel Moldings
Sport Utility Blazer/Jimmy Leaf Springs, Seat Supports/Rails
Sport Utility Pontiac Recon/Buick Signia Door Assemblies, Tailgate Assemblies,
(2000 Launch) Hoods, Floor Assemblies, Rocker
Panels, Rail Assemblies
Light Truck S10/Sonoma Pickup Leaf Springs
Light Truck C/K Crew Cab Pickup Door Apertures, Wheel Moldings
Light Truck C/K Pick Up Lower Control Arms (4 Wheel Drive),
Rocker Panels, Wheel Moldings
Light Truck C/K Pick Up (Mexico) Class A Blanks
Mini-Van Astro/Safari Struts, Lower Control Arms (All Wheel
Drive), A Pillars, Leaf Springs
Vans Savanna/Express Leaf Springs, Pillar
Reinforcements, Latches, Supports
Medium Duty Commercial Chassis Leaf Springs, Toe-to-Dash Panel
Medium Duty Kodiak Floor Assembly, Fuel Tank Straps,
Raised Roof Panel
Passenger Car Saturn SC Deck Lid, Pillar Reinforcement, Inner
Doors, Window Frame Reinforcement
Passenger Car Saturn SC/SL/SW (1999 Launch) Underbody Rails
Passenger Car Saturn LS (1999 Launch) Body Side Inners, Door Assemblies,
Shelf Panel, Wheel House Inners,
Radiator Support, Heat Shield, Gas
Tank Shield
Passenger Car Grand Prix, Regal, Intrigue, Radiator Supports
Monte Carlo, Lumina
Passenger Car Corvette Floor Panels
Passenger Car EV1 Floor Panels, Wheel Houses
Passenger Car Malibu, Cutlass Sun Roof Assembly
Passenger Car Grand Am, Alero Door Beams
Passenger Car Park Avenue, Riviera, Aurora, Rocker Panels
Seville, Deville
Passenger Car Joy, Swing, Monza (Mexico) Class A Blanks, Floor Pan Assemblies
Passenger Car Cavalier/Sunfire (Mexico) Floor Pan Assemblies
Ford Sport Utility Explorer, Mountaineer Rear Floor Reinforcement, Center Body
Pillar, B-Pillar Assembly, Leaf Springs
Sport Utility Expedition, Navigator Control Arms
Light Truck F Series Pickup Control Arms, Load Floor, Leaf Springs
Light Truck Ranger, Mazda Pickup A Pillar, Upper/Lower Back Panel,
Roof Panel, Windshield Header, Box
Side Outer, Leaf Springs
Van Windstar Rear Floor Assembly, Dash Panel, Rear
Crossmembers, Cowl Sides, Radiator
Support
</TABLE>
55
<PAGE> 60
<TABLE>
<S> <C> <C> <C>
Van Econoline Roof Rails, A-Pillar, Floor Pan, Shock
Tower, Fuel Filler Doors, Leaf Springs,
Brackets, Latches
Passenger Car Contour/Mystique/Mondeo Front & Rear Control Arms, Rear Suspension
(Europe) Bar Assembly, Brackets
Passenger Car Cougar Front & Rear Control Arms, Rear
Suspension Bar Assembly, Brackets
Ford/Nissan Mini-Van Villager, Quest Leaf Springs
DaimlerChrysler Sport Utility Cherokee Control Arms
Light Truck Dakota Leaf Springs, Control Arms (1999
Launch)
Sport Utility Durango Skid Plates, Brackets, Control Arms
(1999 Launch)
Light Truck Ram Pickup Control Arms
Minivan Extended Voyager/Caravan, Leaf Springs
AWD Eurostar (Europe)
Isuzu Medium Duty NPR/W4 Truck Leaf Springs
CAMI Sport Utility Tracker/Sidekick Rear Bumper, Side Frame Member,
Door Inner Reinforcement, Floor
Bar, Underbody Components
Passenger Car Metro/Swift Rear Cross Members, Side Sill, Dash
Panel
Renault Passenger Car Megane Engine Cradle, Radiator Support, Pillar
Assemblies, Structural Supports
Gas Tank Heat Shield, Bulkhead Heat Shield,
Door Beam
Van Kangoo Longitudinal Body Rails, Structural Supports,
Engine Cradles, Structural
Crossmembers
Passenger Car X53 Hood Assembly, Crossmembers, Reinforcements
Van Express Pillar Reinforcements, Crossmembers
Van Master Pillar Reinforcements, Crossmembers
Passenger Car Clio Door Beam
Van Trafic Pillar Reinforcements, Crossmembers
Passenger Car Safrane Crossmembers, Structural Supports
Passenger Car X40 Crossmembers, Structural Supports
Heavy Truck Various Instrument Panel Assembly, Structural Pillar
Assemblies
Passenger Car Laguna Structural Crossmembers, Fender Support,
Reinforcements
Van Twingo Floor Reinforcements
PSA Van Monospace Pillar Reinforcements, Crossmembers
Passenger Car 205 Hood Outer, Hood Inner, Floor Extensions
Passenger Car ZX/306 Crossmembers
Passenger Car 405 Support, Crossmember, Inner Fender
Reinforcements
Passenger Car Xantia Heat Shield, Crossmember, Structural
Reinforcements
Passenger Car Various Clutch Pedal Assemblies
Passenger Car Z8 (606) Reinforcements, Crossmembers, Heat Shield, Tank
Shield
Matra Van Espace Floor Pan Assemblies, Pillar Assemblies
Nissan Passenger Car Micra Oil Pan, Heat Shield, Clutch Pedal
GM Passenger Car Astra Dash Panel Reinforcement, Structural
Crossmember, Brackets
Passenger Car Omega Radiator Support Stampings
Saab Passenger Car 900 Floor Crossmember, Reinforcements
VW Passenger Car Golf Heat Shield, Brackets, Reinforcements
SEAT Passenger Car Toledo Door Beams
Faurecia Passenger Car Audi B6 Crossmembers, Inserts For Instrument Panel
Passenger Car PSA Z8 (606) Seat Structure Crossmembers
Passenger Car PSA X4 Xantia Seat Structure Crossmembers
Van VW T5 Van Seat Structure Crossmembers
Sevel Nord Van U64 Trunk Lid Inner, Fender Inner, Floorpan Parts,
Fender Inner, Hood Panel
</TABLE>
The Company has received purchase orders for production commencing
after the current model year, which production typically continues through
the product's life cycle and is subject to the volume requirements of
customers, for the following major products: (i) the new Saturn LS Program,
which management believes will generate approximately $65.0 million of
annual net sales beginning with the 1999 model year, (ii) the GMT 250
Program, which management believes will generate approximately $90.0 million
of annual net sales beginning in 1999, (iii) the 2001 DaimlerChrysler
Durango/Dakota control arms, which management believes will generate
approximately $11.1 million of annual sales beginning in 2000 (iv) the GM
Blazer /Jimmy/ Bravada control arms, which management believes will generate
approximately $ 50.1 million of annual net sales beginning in 2001 and (V)
chassis components for the North American production of a GM global
platform, which management believes will generate approximately $158.0
million of annual sales beginning in 2002.
DESIGN AND ADVANCED ENGINEERING
We strive to maintain a technological advantage through investment in
product development and advanced engineering capabilities that utilize
structured program management techniques in an effort to exceed the
customer's expectations for value and service. Our engineering staff
encompasses such disciplines as program management, computer aided design
("CAD"), virtual prototyping, draw die and process simulation, advanced
engineering, manufacturing feasibility, and tooling and process development.
Responsibilities of our engineers include (i) design, (ii) initial prototype
development, (iii) design and implementation of manufacturing processes,
(iv) production feasibility and improvement, and (v) data management.
As our customers continue to outsource larger assembled systems which
must be designed at earlier stages of vehicle development rather than the
smaller parts which are attached to them, we are increasingly required to
utilize advanced engineering resources early in the planning process.
Advanced engineering resources create improved engineering design, CAD
feasibility studies, working prototypes and testing programs to meet
customer specifications. Given this increased demand for early involvement
in the design and engineering aspects of production development, we
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<PAGE> 61
established a new technical center which houses our engineering and design
group. We utilize structured program management based on the Automotive
Industry Action Group sanctioned Advanced Part Quality Planning principles
to ensure part quality in all phases of design and manufacturing. We have
established a data management and CAD department which is able to support
all major customer systems. We provide "gray box" engineering capabilities
in which the customer has principal design responsibility while our
engineers work closely with the customer in designing the specifications of
the product material, the part to be produced and the tooling required to
produce the finished product. We are also on-line with all major customers
which accelerates the process of design changes.
Our design and advanced engineering expertise is an important
differentiating factor in maintaining our relationships with and obtaining
new business from our customers and, in management's judgment, was an
essential factor in winning the new business described above.
CUSTOMERS AND MARKETING
We supply our products on a long-term preferred and sole source basis,
primarily to GM (34%), Ford (25%), Renault (15%), DaimlerChrysler (10%),
PSA (5%), CAMI (1%), and Saturn (1%) (percentages are approximates of net
sales for the nine months ended December 31, 1998 on a pro forma basis for
the acquisition of Cofimeta) with the remaining net sales comprised of sales
primarily to other automotive suppliers. We have been providing products
directly to GM and Ford for more than 50 years, and directly to
DaimlerChrysler, Renault, and PSA for more than 20 years. We currently have
locations in the United States, Canada, Mexico, France and Venezuela and
provide components for OEMs doing business in Europe, North America and
South America. We believe our presence in Europe and Mexico is strategically
important and has led to several significant new opportunities (e.g. GM 250
Program) with OEMs doing business in these locations. We also believe the
Venezuelan joint venture provides further entree into Latin and South
American markets. Metalcar's production capabilities and strong management
team will provide the Company the means to further penetrate these markets
not only for springs, but also metal stamping and other Company products. We
maintain very strong relationships with our customers and continually strive
to exceed customer expectations and anticipate customer needs. This approach
has enabled us to maintain our status as a long-term supplier with each of
our major customers and as part of a limited group of preferred suppliers
invited to bid for platform work.
With the efforts by the OEMs to reduce the product development cycle
time, top suppliers are increasingly included in the early design and
development stages. For example, we obtain many of our new orders through a
presourcing process by which the customer invites one or a few preferred
suppliers to manufacture and design a component, assembly or module that
meets certain price, timing and functional parameters. Upon selection at the
development stage, we typically agree with the customer to cooperate in
developing the product to meet the specified parameters. Upon completion of
the development stage and the award of the manufacturing business, we
receive a blanket purchase order for those components, assemblies or modules
for the life of a vehicle model or platform, which typically range from five
to seven years. Consequently, the key success factors for OEM suppliers now
include total program management that encompasses state-of-the-art design,
reduced launch cycle times, manufacture and delivery of high quality
products at competitive prices.
We believe that the advanced engineering and sales organization at our
technical center offers services few other suppliers have available for
their customers. The group's primary activities are: (i) Quoting/Cost
Estimating; (ii) Assembly/Automation; (iii) CAD Design and Data Control;
(iv) Virtual prototyping; (v) Draw die simulation; (vi) Tool Process/Design;
and (vii) Program Management. The sales group is divided into customer
oriented business units, each with a business unit manager responsible for
all facets of customer needs, as well as strategies for growing their
particular customer base. The entire group is dedicated to advanced
technical development and servicing a multitude of customers' needs as one
team.
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<PAGE> 62
MANUFACTURING AND FACILITIES
Our corporate headquarters, engineering, technical center and sales
offices are currently located in Troy, a suburb of Detroit, Michigan, close
to our core of automotive customers. Our manufacturing plants are
strategically located near OEM manufacturing sites.
We operate over 500 presses ranging from under 100 ton to 3,000 ton
capabilities. We are capable of producing components and assemblies from the
smallest brackets to full-size, Class A door and closure panels with our
unique wide-bed (180 inch), automated press lines. Production systems
include oil feeders, welding robots, pick and place robots and other
state-of-the-art automation, as well as autophoretic corrosion resistant
coating systems.
As OEMs have increased quality standards and implemented just-in-time
and sequenced delivery/inventory management methods, the consistency of
quality, as well as the timeliness and reliability of shipments by OEM
suppliers, have become crucial in meeting logistical demands of the OEMs and
reducing operating costs of the supplier. We have responded by developing
and adopting manufacturing practices that seek to maximize quality and
eliminate waste and inefficiency in our own operations and in those of our
customers. Our manufacturing and engineering capabilities enable us to
design and build high-quality, efficient manufacturing systems, processes
and equipment. We have invested heavily in our commitment to quality through
education of employees and implementation of cost management and control
systems from the plant floor up.
All suppliers are required to meet numerous quality standards in order
to qualify as a preferred and long-term supplier to the OEMs. The QS-9000
standards were developed by international and domestic automobile and truck
manufacturers to ensure that their suppliers meet consistent quality
standards that can be independently audited. The QS-9000 standards provide
for the standardization and documentation of a supplier's policies and
procedures to improve suppliers' efficiencies. The European automobile and
truck manufactures have developed similar standards to the QS-9000
standards (EAQF). We are QS-9000 certified and Cofimeta is EAQF certified.
In addition to the QS-9000 standard, each OEM maintains its own
certification or award system for preferred suppliers based on the
supplier's demonstrated quality, delivery and certain commercial
considerations. Ford requires that all suppliers receive its Q1 rating in
order to quote for new production business. GM's Supplier of the Year Award
provides certain competitive advantages to the recipients but is not a
requirement for current GM suppliers to bid on new business. DaimlerChrysler
allows suppliers who have received its Gold Pentastar Award to retain any
current business when it is replaced by a new model without competitive
bidding. Other OEMs maintain various award programs for their suppliers that
recognize outstanding performance by the supplier. We have received
DaimlerChrysler's Gold Pentastar Award for each of our facilities that have
DaimlerChrysler as a customer. We have the Q1 rating from Ford at all plants
that are required to have the Q1 rating.
A summary of our major facilities, including the facilities of our less
than majority owned affiliates is set forth below:
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<PAGE> 63
SIZE
FACILITY (SQ. FT.)
- -------- ---------
Alma, Michigan 389,000
Argos, Indiana 386,000
Corydon, Indiana 200,000
Greencastle, Indiana 214,000
Cambridge, Ontario 290,000
Delhi, Ontario 115,000
Athens, Tennessee 100,000
Masury, Ohio 150,000
Lapeer, Michigan 85,000
Prudenville, Michigan 76,000
Oscoda, Michigan 57,000
Hamilton, Indiana 85,000
Chatham, Ontario 190,000
Wallaceburg, Ontario 240,000
Saltillo, Mexico(1) 20,000
Silao, Mexico(1) 42,000
Troy, Michigan(1) 34,000
Douai, France 538,000
St. Florent, France 431,000
Orbec, France 188,000
Valencia, Venezuela(2) 122,000
- -----------------
(1) All properties above are owned, with the exception of the Silao and
Saltillo facilities and the Troy office. These properties are
leased with lease expiration dates ranging from December 1999 to June
2005.
(2) Owned by Metalurgica Carabobo, S.A., a Venezuelan joint venture of
which we have a 49% interest.
The Company has entered into a lease transaction for a new facility in Ramos
Arizpe, Mexico. The 330,000 sq. ft. facility will support the GMT 250 Program as
well as other customer opportunities.
RAW MATERIALS
The cost of raw materials represented approximately 51.3% of our net sales
for the fiscal year ended March 31, 1998 on a pro forma basis for the
acquisitions of Howell, RPIH, the Suspension Division, and Cofimeta. On an
annual basis, steel represents approximately 68% of total raw materials
purchases. We expect to purchase nearly 360,000 tons of steel in fiscal 1999 for
use in its production. The remaining 32% of raw materials purchases is
represented by various purchased parts such as forgings, bushings, ball joints,
isolators, corrosion resistant coating, and various fasteners.
We participate with respect to the majority of our platforms in steel
purchase programs through Ford, GM and DaimlerChrysler wherein the steel is
purchased by the OEM from the steel mill and sold to us at a negotiated price.
These purchase programs effectively neutralize the exposure to steel price
increases, as any price increases from the steel mills are either absorbed by
the OEM prior to our purchase of the steel or such increases are reflected in
our purchase of the steel and passed back to the OEM in the product pricing.
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<PAGE> 64
COMPETITION
The market for our products is characterized by strong competition from
both captive OEM suppliers and external, non-captive suppliers. We compete with
a limited number of competitors that have the physical assets and technical
resources to produce large bed stampings, complex parts and subassemblies of
multiple parts. Our largest competitors include The Budd Company, a subsidiary
of Thyssen AG; Magna International Inc.; Tower Automotive, Inc.; [Aetna
Industries, Inc.]; Ogihara America Corp., a subsidiary of Marubeni Corp.; Midway
Products Corporation; Active Tool & Manufacturing Co., Inc.; A.G. Simpson
Automotive, Inc.; Mayflower Vehicle Systems Inc.; L&W Engineering; National
Automotive Radiator Manufacturing Company; and divisions of OEMs with internal
stamping and assembly operations.
We compete for business at the beginning of the development for new model
platforms, as well as the redesign of current models. This process can begin
from two to five years prior to the introduction of the new model. After the
customer awards a program, that supplier is generally designated as the sole
source supplier for the life of that program, which typically lasts 4 to 5 years
for passenger cars and up to 10 years for trucks (particularly for unexposed
structural components and assemblies).
EMPLOYEES
At March 1, 1999, we employed approximately 4,900 persons in the United
States, Canada, Mexico, and France, approximately 1,100 of whom are employed on
a salaried basis and the balance of whom are hourly employees. Substantially all
of the hourly employees are represented by various local unions through
collective bargaining agreements. These individual agreements which are from
three to five years in length expire over the period April 1999 through February
2004.
In 1994, we experienced a two-week work stoppage at the Chatham, Ontario
facility. Other than this event, we have not experienced any organized work
stoppages at any time during the past ten years. At the present time, we believe
that our relations with our employees are good.
REGULATORY MATTERS
Our facilities and operations are subject to a wide variety of federal,
state, local, and foreign environmental laws, regulations, and ordinances,
including those related to air emissions, wastewater discharges, and chemical
and hazardous waste management and disposal ("Environmental Laws"). Our
operations also are governed by laws relating to workplace safety and worker
health, primarily the Occupational Safety and Health Act, and foreign
counterparts to such laws. In many jurisdictions, these laws are complex and
change frequently. The nature of our operations exposes us to risks of
liabilities or claims with respect to environmental and worker health and safety
matters. At March 31, 1998, we had a liability of approximately $1.7 million
recorded for estimated costs of known environmental matters. There can be no
assurance that material costs will not be incurred in connection with such
liabilities or claims. See Note 15 to Oxford Automotive, Inc. Notes to
Consolidated Financial Statements.
Based on our experience to date, we believe that the future cost of
compliance with existing Environmental Laws (or liability for known
environmental claims) will not have a material adverse effect on our business,
financial condition or results of operations. However, future events, such as
changes in existing Environmental Laws or their interpretation, may give rise to
additional compliance costs or liabilities that could have a material adverse
effect on the Company's business, financial condition or results of operations.
Compliance with more stringent Environmental Laws, as well as more vigorous
enforcement policies of regulatory agencies or stricter or different
interpretations of existing Environmental Laws, may require additional
expenditures by the Company that may be material.
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Certain Environmental Laws hold current owners or operators of land or
businesses liable for their own and for previous owners' or operators' releases
of hazardous or toxic substances, materials or wastes, pollutants or
contaminants, including petroleum and petroleum products ("Hazardous
Substances"). Certain laws, including but not limited to CERCLA, may impose
joint and several liability on responsible parties. Because of our operations,
the long history of industrial uses at some of its facilities, the operations of
predecessor owners or operators of certain of the businesses, and the use,
production, and releases of Hazardous Substances at these sites, we are affected
by such liability provisions of the Environmental Laws. Several of our
facilities have experienced some level of regulatory scrutiny in the past and
are or may be subject to further regulatory inspections, future requests for
investigation or liability for past disposal practices.
Our Alma, Michigan plant is listed on the Michigan Department of
Environmental Quality ("MDEQ") list of Michigan Sites of Environmental
Contamination. Based on filings with the MDEQ by the current owner of the
petroleum refinery which adjoins the Alma Plant property, the refinery has been
determined by the MDEQ to be the source of certain contamination existing in the
eastern area of the Alma plant property. While we are currently conducting
certain remedial activity at our Alma plant in connection with this
contamination, we may have claims against the refinery owner relating to this
contamination. While we do not expect to incur significant future costs in
connection with this matter, we cannot guarantee that such future costs will not
be material.
The Resource Conservation and Recovery Act and the regulations thereunder
("RCRA") regulates the generation, treatment and disposal of hazardous wastes.
In the mid-1980s, we entered into a Consent Agreement and Final Order, through
Lobdell, with the United States Environmental Protection Agency (the "EPA")
relating to the final closure of a surface water impoundment area at the Alma
plant under RCRA. We have remediated the impoundment soils and sediments and we
are now implementing a groundwater monitoring program with EPA approval under
RCRA. In addition, we are conducting groundwater monitoring in a separate
section of the Alma plant at which contaminants have been detected by our
consultants. Both of these programs may be affected by the suspected
contamination from the petroleum refinery described above. While future
groundwater remediation costs, if any, are not expected to be material, we
cannot predict such costs with certainty and no guarantee can be made that these
costs will not be material.
We have been named as a potentially responsible party, along with several
other companies, in connection with a former disposal facility located in the
St. Louis, Michigan area. We, along with certain other named parties, in
cooperation with the State of Michigan, currently are undertaking a remedy for
which we are sharing costs. Groundwater at the site is currently being monitored
and while the costs of groundwater remediation, if any, are not expected to be
material, we cannot accurately estimate such costs at this time. See "Risk
Factors -- Environmental Risks and -- Legal Proceedings."
On April 1, 1998, we acquired the Suspension Division and are in the
process of addressing certain environmental concerns. Eaton Corporation has
agreed to retain and reimburse us for all known environmental liabilities for
which claims are made prior to April 1, 2008 arising from the operation of the
acquired facilities prior to the acquisition of the Suspension Division,
including the present remediation efforts. Eaton Corporation has also agreed to
retain and reimburse us for all unknown environmental liabilities arising from
the operation of the acquired facilities prior to the acquisition of the
Suspension Division, for which claims are made prior to April 1, 2000, up to a
$1.5 million aggregate cap. While there can be no assurance that all costs
associated with such matters will ultimately be reimbursed by Eaton Corporation,
we do not currently believe that any liability associated with such matters will
be material.
LEGAL PROCEEDINGS
We are subject to various claims, lawsuits and administrative proceedings
related to matters arising in the normal course of business. In the opinion of
management, after reviewing the information which is currently available with
respect to such matters and consulting with legal counsel, any liability which
may ultimately be incurred with respect to these matters will not materially
affect our financial position.
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AVAILABLE INFORMATION
We are subject to the informational requirements of the Exchange Act, and
in accordance therewith file periodic reports and other information with the
SEC. We have, and the Subsidiary Guarantors have, filed with the SEC an Exchange
Offer Registration Statement pursuant to the Securities Act, and the rules and
regulations promulgated thereunder, covering the Series D Notes being offered
hereby. This Prospectus does not contain all the information set forth in the
Exchange Offer Registration Statement. For further information with respect to
the Company, the Subsidiary Guarantors and the Exchange Offer, reference is made
to the Exchange Offer Registration Statement. Statements made in this Prospectus
as to the contents of any contract, agreement or other document referred to
accurately describe the material terms so referred to, but are not necessarily a
complete description of the contents of any such contract, agreement or other
document. With respect to each such contract, agreement or other document filed
as an exhibit to the Exchange Offer Registration Statement, reference is made to
the exhibit for a more complete description of the document or matter involved,
and each such statement shall be deemed qualified in its entirety by such
reference. The Exchange Offer Registration Statement, including the exhibits
thereto, as well as the reports and other information filed by us with the SEC,
can be inspected and copied at the public reference facilities maintained by the
SEC at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the
Regional Offices of the SEC at Seven World Trade Center, Suite 1300, New York,
New York 10048 and at Northwestern Atrium Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60661. Copies of such materials can be obtained from the
Public Reference Section of the SEC at 450 Fifth Street, N.W., Washington, D.C.
20549, at prescribed rates. Information on the operation of the Public Reference
Room is available from the SEC at 1-800-SEC-0330. In addition, the SEC maintains
a Web site that contains reports, proxy and information statements and other
information regarding registrants that file electronically with the SEC. The
address of such Web site is: http://www.sec.gov.
In the event we cease to be subject to the informational requirements of
the Exchange Act, we will be required under the Indenture to continue to file
with the SEC the annual and quarterly reports, information, documents or other
reports, including, without limitation, reports on Forms 10-K, 10-Q and 8-K,
which would be required pursuant to the informational requirements of the
Exchange Act. We will also furnish such other reports as may be required by law.
In addition, for so long as any of the Series C Notes are restricted securities
within the meaning of Rule 144(a)(3) under the Securities Act, we have agreed to
make available to any prospective purchaser of the Series C Notes or beneficial
owner of the Series C Notes, in connection with any sale thereof, the
information required by Rule 144A(d)(4) under the Securities Act.
We are not required to send annual reports to security holders under the
SEC's proxy rules or regulations. We will provide the Trustee with reports,
including reports on Forms 10-K (including audited financial statements), 10- Q
and 8-K, pursuant to the terms of the Indenture.
MANAGEMENT
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth the name, age and position of each of the
directors and executive officers of Oxford Automotive. Each director of Oxford
Automotive will hold office until the next annual meeting of shareholders or
until his successor has been elected and qualified. Officers of Oxford
Automotive serve at the discretion of the Board of Directors.
<TABLE>
<CAPTION>
NAME AGE POSITIONS
- ---- --- ---------
<S> <C> <C>
Selwyn Isakow.................. 46 Chairman of the Board of Directors
Rex E. Schlaybaugh, Jr......... 50 Vice Chairman of the Board of Directors and Secretary
</TABLE>
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<TABLE>
<S> <C> <C>
Steven M. Abelman.............. 48 Director, President and Chief Executive Officer
Manfred J. Walt................ 46 Director
Dennis K. Pawley............... 57 Director
Aurelian Bukatko............... 48 Senior Vice President-Chief Financial Officer
Larry C. Cornwall.............. 51 Senior Vice President-Sales and Engineering
John H. Ferguson............... 50 Vice President-Financial Operations and Assistant Secretary
</TABLE>
Selwyn Isakow, Chairman of the Board of Directors. Mr. Isakow has been a
director of Oxford Automotive since its inception in 1995, was the President of
Oxford Automotive from 1995 to May 1997, and was appointed Chairman of the Board
in May 1997. Since 1985, Mr. Isakow has been the President of The Oxford
Investment Group, Inc. ("Oxford Investment"), a private investment and corporate
development company that acquires majority equity positions on behalf of its
principals in industrial products manufacturing, financial services, niche
distribution and other selected companies. Mr. Isakow generally serves as
Chairman of the Board and a director of all such portfolio companies. Mr. Isakow
is also a director of Champion Enterprises, Inc. and Ramco Gershenson Properties
Trust, and serves on the boards of numerous community organizations. From 1982
to 1985, Mr. Isakow was the Executive Vice President of Comerica Incorporated, a
regional bank holding company, and from 1978 to 1982, was a principal at Booz,
Allen and Hamilton, management consultants.
Rex E. Schlaybaugh, Jr., Vice Chairman of the Board of Directors and
Secretary. Mr. Schlaybaugh has been the Secretary and a director of Oxford
Automotive since its inception in 1995 and was appointed Vice Chairman of the
Board in May 1997. Mr. Schlaybaugh was appointed the Vice Chairman of Oxford
Investment in May 1997. Mr. Schlaybaugh has been a member of the firm of Dykema
Gossett PLLC since 1985. Mr. Schlaybaugh is also a director of certain other
portfolio companies of Oxford Investment. Mr. Schlaybaugh is also a member of
the Board of Directors of the Manufacturers Life Insurance Company (U.S.A.), the
Michigan State Chamber of Commerce and is a Trustee of Oakland University.
Steven M. Abelman, Director, President and Chief Executive Officer. Mr.
Abelman was appointed President and Chief Executive Officer of Oxford Automotive
in May 1997. Prior to joining Oxford Automotive, Mr. Abelman was Deputy Chief
Executive Officer of Bundy North America ("Bundy"), an automotive supplier of
brake and fuel delivery systems, from February 1996 until May 1997 and prior to
that he was President of Bundy from September 1995 until February 1996. From
December 1991 to September 1995, Mr. Abelman was Vice President and General
Manager of Augat Wiring Systems, a manufacturer of automotive wiring systems and
components.
Manfred J. Walt, Director. Mr. Walt has been a director of Oxford
Automotive since May 1997. Mr. Walt has been the Executive Vice President and
Chief Financial Officer of Central Park Lodges Ltd., a Canadian assisted living
company located in Toronto, Canada, since May 1998. From October 1997 to May
1998, Mr. Walt was the Sr. Vice President of Gentra, Inc., a Real Estate Company
based in Toronto, Canada. From 1989 to September 1997, Mr. Walt was the Managing
Partner-Financial Services of Edper Brascan Corporation ("Edper"), a diversified
natural resources, energy and property development company. Gentra, Inc. is an
affiliate of Edper. From 1980 to 1989, Mr. Walt served in various capacities
with Edper.
Dennis K. Pawley, Director. Mr. Pawley was appointed a director of Oxford
Automotive in January 1999. Mr. Pawley has been the President and Chief
Operating Officer of Performance Learning, a consulting company located in Las
Vegas, Nevada, since February 1999. From 1991 to 1998, Mr. Pawley served as the
Executive Vice President of Manufacturing for DaimlerChrysler in Auburn Hills,
Michigan.
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Aurelian Bukatko, Senior Vice President-Chief Financial Officer. Mr.
Bukatko was appointed Senior Vice President-Chief Financial Officer of Oxford
Automotive in February 1999. From December 1997 to February 1999, Mr. Bukatko
was Corporate Treasurer of Hayes-Lemmerz International, a worldwide manufacturer
of wheels, brake drums and rotors for motor vehicles. From August 1996 to
November 1997, Mr. Bukatko served as Director of Global Currency Management for
the Lear Corporation, a worldwide supplier of automotive interiors. From
September 1991 to July 1996, Mr. Bukatko was the Treasurer and Financial
Director, International for Lear Seating in Gustavsburg, Germany.
Larry C. Cornwall, Senior Vice President-Sales and Engineering. Mr.
Cornwall was appointed Vice President- Sales and Engineering of Oxford
Automotive in May 1997. From October 1995 to May 1997, Mr. Cornwall was the
Senior Vice President-Sales and Engineering at BMG. From 1991 to 1995, Mr.
Cornwall was Vice President of Sales and Engineering at Veltri International, an
automotive stamper.
John H. Ferguson, Vice President-Financial Operations and Assistant
Secretary. Mr. Ferguson was appointed as a Vice President-Financial Operations
and Assistant Secretary of Oxford Automotive in May 1997. Mr. Ferguson is also
the Chief Financial Officer of BMG, a position he has held since April 1996.
Prior to that time, Mr. Ferguson was with Bundy, where he acted as Group Plant
Manager from 1994 to 1996 and as Corporate Controller from 1992 to 1994. From
1984 to 1992, Mr. Ferguson held several positions with GenCorp. Inc., an
automotive tire supplier, including Controller of the Automotive Products Group.
Certain of the officers and directors of Oxford Automotive are also
directors or officers of Oxford Automotive subsidiaries.
Board Committees
The Board of Directors have established an Executive Committee, an Audit
Committee, and a Compensation Committee.
The Executive Committee is responsible for exercising all of the duties of
the Board of Directors that may lawfully be delegated to it by the Board of
Directors under Michigan Law. The Executive Committee consists of Messrs.
Isakow, Schlaybaugh and Abelman.
The Audit Committee is responsible for reviewing with management our
financial controls and accounting and reporting activities. The Audit Committee
reviews the qualifications of our independent auditors, make recommendations to
the Board of Directors regarding the selection of independent auditors, review
the scope, fees and results of any audit and review non-audit services and
related fees. The Audit Committee consists of Messrs. Schlaybaugh and Walt.
The Compensation Committee is responsible for the administration of all
salary and incentive compensation plans for our officers and key employees,
including bonuses. Salaries and bonuses will be reviewed by the Compensation
Committee and will be adjusted in light of our performance, the responsibilities
of each of our officers in meeting corporate performance objectives and other
factors, such as length of service and subjective assessments. The Compensation
Committee consists of Messrs. Isakow and Walt.
DIRECTOR COMPENSATION AND ARRANGEMENTS
We pay fees to our non-employee directors of up to $2,000 per meeting and
reimburse the out-of-pocket expenses related to directors' attendance at each
Board and committee meeting. In addition, we may elect to adopt a non-employee
director option plan or other similar plan to provide for grants of stock
options or other benefits as a means of attracting and retaining highly
qualified independent directors for the Company. Members of the Board of
Directors are elected pursuant
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<PAGE> 69
to certain shareholder agreements by and among the Company and certain of its
shareholders. See "Principal Shareholders -- Shareholder Agreements."
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
We did not have a Compensation Committee prior to August 4, 1997.
Accordingly, all determinations with respect to executive compensation were made
by the Board of Directors. Prior to August 4, 1997, Messrs. Isakow and
Schlaybaugh participated in deliberations of our Board of Directors concerning
executive officers compensation. On August 4, 1997 a Compensation Committee,
whose members are Selwyn Isakow and Manfred Walt, was appointed by the Board of
Directors. Mr. Isakow is our Chairman and was our President from our inception
in 1995 to May 1997. Pursuant to the terms of the indentures for the Existing
Notes, we are not permitted to enter into any transaction (including employee
compensation arrangements) with any Affiliate (as defined) unless the
transaction is arm's length and, if the transaction involves amounts in excess
of $1 million in any one year, the terms of the transaction are set forth in
writing and approved by a majority of the disinterested members of the Board of
Directors. For similar transactions in excess of $5 million in any one year, an
opinion of a recognized investment banking firm that such transaction is fair,
from a financial standpoint, is also required. See "Description of the Notes --
Certain Covenants." See "Certain Transactions."
Mr. Isakow controls Oxford Investment, a private investment and corporate
development company and Mr. Schlaybaugh is the Vice Chairman of Oxford
Investment. At the time we acquired Lobdell (January 10, 1997), Oxford
Investment entered into a management agreement with Lobdell (the "Lobdell
Agreement"). At the time we acquired BMG (October 25, 1995), Oxford Investment
entered into a management agreement with BMG (the "BMG Agreement"). The Lobdell
Agreement and the BMG Agreement were terminated on June 24, 1997. We entered
into a new management agreement with Oxford Investment upon the termination of
the Lobdell Agreement and the BMG Agreement. Pursuant to the terms of this
management agreement, Oxford Investment will perform various consulting,
management and financial advisory services on our behalf. We will pay Oxford
Investment a monthly management fee of $83,334 and will pay an investment
banking fee, for acquisitions of $2.5 million or more, of 1.0% or 1.25% (for
acquisitions outside of North America) of the aggregate acquisition cost for
advice and assistance in connection with such acquisition, with a minimum fee of
$200,000. No investment banking fee will be paid to Oxford Investment in
connection with acquisitions for aggregate consideration of less than $2.5
million. The initial term of the agreement will end on December 31, 2001, but
will automatically extend for additional one-year periods thereafter unless
either party terminates the agreement. In addition, pursuant to the management
agreement, Oxford Investment will license to us the name "Oxford Automotive"
which is owned by Oxford Investment.
During the fiscal years ended March 31, 1998, 1997 and 1996 we paid Oxford
Investment management fees of approximately $1.0 million, $275,000 and $71,000
respectively and investment banking fees during the fiscal years ended March 31,
1998, 1997 and 1996 of $230,000, $300,000 and $200,000 respectively. In
connection with the acquisition of the Suspension Division, we paid Oxford
Investment an investment banking fee of approximately $500,000 during the first
quarter of fiscal 1999. In connection with the acquisition of Cofimeta we paid
Oxford Investment an investment banking fee of $1.2 million during the fourth
quarter of fiscal 1999.
On November 25, 1997, we acquired all of the issued and outstanding shares
of the common stock of RPIH, the parent of RPI for approximately $2.5 million.
The shareholders of RPIH received approximately $2.5 million in the aggregate
for all outstanding RPIH shares. In addition, the shareholders of RPIH received
approximately $402,788 as payment of the principal and accrued interest on
certain outstanding loans to RPIH. Certain of our officers, directors, and
shareholders were also officers, directors, or shareholders of RPIH prior to the
transaction. Messrs. Isakow and Schlaybaugh were officers, directors and
shareholders of RPIH. Robert H. Orley was also an officer, director and
shareholder of RPIH and is a shareholder of the Company. Mr. Isakow, directly
and indirectly, received $753,150, which included the payment of $117,971 for
the principal and accrued interest on certain outstanding loans to RPIH. Mr.
Schlaybaugh received $91,296,
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which included the payment of $13,120 for the principal and accrued interest on
an outstanding loan to RPIH. Messrs. Robert H. and Gregg L. Orley, each
beneficial owners of more than 5% of the Company's outstanding Common Stock,
each received $252,248, which included the payment of $50,293 to each for the
principal and accrued interest on an outstanding loan to RPIH.
RPIH's wholly owned subsidiary, RPI, Inc. ("RPI"), a Michigan corporation,
issued various demand notes to Lobdell in the aggregate principal amount of $1.4
million during the year ended March 31, 1998, each bearing interest at the prime
rate plus 1.0% per annum. The notes were issued in connection with our ongoing
discussions with RPIH regarding a possible merger or other similar transaction
in consideration for which RPIH had agreed to deal exclusively with the Company
and its affiliates until December 31, 1997. This agreement to deal exclusively
with the Company allowed us to negotiate a transaction with RPIH without undue
interference from a third party.
EXECUTIVE COMPENSATION
The following table sets forth certain information as to the compensation
earned by our Chief Executive Officer and our four other most highly paid
officers (the "Named Executive Officers") for the last three fiscal years.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION (1)
---------------------------------------------------
OTHER ANNUAL ALL OTHER
NAME AND TITLE YEAR SALARY BONUS COMPENSATION COMPENSATION
-------------- ---- ------ ----- ------------ ------------
<S> <C> <C> <C> <C> <C>
Selwyn Isakow, Chairman (2) 1998 $ 95,577 $101,250 $ -- $ --
1997 -- -- -- --
Rex E. Schlaybaugh, Jr., 1998 $138,462 $101,250 $ -- $ --
Vice Chairman (3) 1997 -- -- -- --
Steven M. Abelman, President and 1998 $230,769 $150,000 $ -- $ --
Chief Executive Officer (4)
Donald C. Campion, Senior Vice 1998 $147,808 $ 52,500 $ -- $ --
President-Chief Financial Officer (5) 1997 -- -- -- --
Larry C. Cornwall, Senior Vice 1998 $161,846 $ 68,000 $ -- $ --
President-Sales and Engineering (6) 1997 124,196 36,000 -- --
1996 31,504 24,200 -- --
John H. Ferguson, Vice President- 1998 $131,500 $ 39,000 $ -- $ --
Financial Operations and Assistant 1997 101,250 -- -- --
Secretary (7)
- ----------
</TABLE>
(1) The Company was formed in October 1995 and executive officers of the
Company did not receive any compensation prior to 1997.
(2) Mr. Isakow was the President of the Company from its inception until
May 1997, for which he did not receive any compensation from the Company. Steven
M. Abelman was appointed President and Chief Executive Officer in May 1997. Mr.
Isakow received compensation during the last fiscal year in connection with his
position as Chairman of the Board of the Company.
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<PAGE> 71
(3) Mr. Schlaybaugh did not receive any compensation from the Company prior
to the last fiscal year.
(4) Mr. Abelman was appointed President and Chief Executive Officer in May
1997. See "-Employment Agreements."
(5) Mr. Campion was appointed Senior Vice President-Chief Financial Officer
of Oxford Automotive in July 1997. Mr. Campion resigned from his position with
Oxford Automotive on February 6, 1999. See "--Employment Agreements."
(6) Mr. Cornwall joined the Company in October 1995 and only received
compensation from the Company for a full fiscal year in 1997 and 1998.
(7) Mr. Ferguson joined the Company in April 1996 and only received
compensation from the Company for a full fiscal year in 1998.
EMPLOYMENT AGREEMENTS
As of May 1, 1997, Oxford Automotive and Steven M. Abelman entered into an
Employment and Noncompetition Agreement. The agreement provides that Mr. Abelman
will serve as President and Chief Executive Officer of Oxford Automotive on an
"at-will" basis. The agreement provides that Mr. Abelman will receive an annual
base salary, will be eligible to receive a bonus of up to 60% of his salary as
determined by the Board of Directors of Oxford Automotive, and will be entitled
to certain fringe benefits. Mr. Abelman has also agreed not to compete with the
Company during the period of his employment and for two years following the
termination of his employment. Upon the termination of his employment without
cause, Mr. Abelman is entitled to severance payments equal to (a) his annual
base salary, if such termination is prior to May 1, 1999 or (b) 1.5 times his
annual base salary, if such termination is after May 1, 1999.
On November 24, 1995, BMG and Larry C. Cornwall entered into an Employment
Agreement. The agreement provides that Mr. Cornwall will serve as Senior Vice
President-Sales and Marketing of BMG on an "at-will" basis. Mr. Cornwall has
subsequently been appointed as Senior Vice President-Sales and Engineering of
Oxford Automotive. The agreement provides that Mr. Cornwall will receive an
annual base salary, will be eligible to receive a bonus of up to 50% of his
salary as determined by the Board of Directors of BMG, will be eligible to
participate in the Company's profit sharing plan, and will be entitled to
certain fringe benefits. Upon the termination of the agreement, Mr. Cornwall
will be entitled to continue to receive his base salary for the longer of three
months or the Canadian statutory requirement.
As of July 21, 1997, Oxford Automotive and Donald C. Campion entered into
an Employment and Noncompetition Agreement. The agreement provided that Mr.
Campion would serve as Senior Vice President-Chief Financial Officer of Oxford
Automotive on an "at-will" basis. The agreement provided that Mr. Campion would
receive an annual base salary, would be eligible to receive a bonus of up to 50%
of his salary as determined by the Board of Directors of Oxford Automotive, and
would be entitled to certain fringe benefits. Mr. Campion also agreed not to
compete with the Company during the period of his employment and for two years
following the termination of his employment. Upon his resignation, Mr. Campion
agreed to certain severance arrangements with the Company, and his shares were
repurchased in accordance with his Employment and Noncompetition Agreement.
See also "Certain Transactions -- Management Agreements."
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PRINCIPAL SHAREHOLDERS
As of February 28, 1999, there were 309,750 issued and outstanding shares
of the Common Stock, without par value, of the Company (the "Common Stock"). The
following table sets forth information as of March 1, 1999 with respect to the
Common Stock beneficially owned by each of our directors, the Named Executive
Officers, all of our directors and executive officers as a group, and by other
holders known to us as having beneficial ownership of more than 5% of the Common
Stock. Selwyn Isakow and our other shareholders have entered into certain
agreements, each of which contain substantially identical terms, the result of
which gives Mr. Isakow voting control of 100% of the Common Stock, except under
certain circumstances. See "-- Shareholder Agreements." Unless otherwise
specified, the address for each person is 1250 Stephenson Highway, Troy,
Michigan 48083.
<TABLE>
<CAPTION>
NUMBER OF PERCENT
NAME AND ADDRESS OF BENEFICIAL OWNER SHARES OF CLASS
- ------------------------------------ ------ --------
<S> <C> <C>
Selwyn Isakow (1)...................................... 164,224 53.02%
2000 N. Woodward Avenue, Suite 130,
Bloomfield Hills, Michigan 48304
Rex E. Schlaybaugh, Jr................................. 20,900 6.75%
2000 N. Woodward Avenue, Suite 130,
Bloomfield Hills, Michigan 48304
Steven M. Abelman (2).................................. 12,326 3.98%
Manfred J. Walt........................................ 2,300 *
175 Boor St., E., S. Tower, Suite 601
Toronto, Ontario, Canada M4W 3R8
John H. Ferguson....................................... 6,180 2.0%
Larry C. Cornwall...................................... 7,000 2.26%
Robert H. Orley........................................ 20,600 6.65%
2000 N. Woodward Avenue, Suite 130,
Bloomfield Hills, Michigan 48304
Gregg L. Orley......................................... 20,600 6.65%
2000 N. Woodward Avenue, Suite 130,
Bloomfield Hills, Michigan 48304
All directors and officers as a group (8 persons) 212,930 68.84%
(1)(2)
</TABLE>
- -------------------
*Less than 1.0%
(1) Includes 140,124 shares owned by Hilsel Investment Company Limited
Partnership, of which Tridec Management, Inc. is General Partner. Mr. Isakow is
the President and a shareholder of Tridec Management, Inc. In addition, Mr.
Isakow may be deemed to be the beneficial owner of all of the outstanding shares
of Common Stock as a result of certain voting power over such shares pursuant to
the shareholder agreements described below and certain purchase options that may
be exercised by Mr. Isakow with respect to 47,900 outstanding shares of Common
Stock.
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<PAGE> 73
(2) Mr. Abelman's Employment and Noncompetition Agreement with Oxford
Automotive provides Oxford Automotive or its assigns with the right to
repurchase his shares of Common Stock if his employment is terminated for any
reason.
SHAREHOLDER AGREEMENTS
Each holder of Common Stock is a party to a shareholder agreement which
provides for certain restrictions on transfer by shareholders and grants certain
other shareholders the option to purchase the shares of a shareholder upon his
death. Each surviving shareholder has the right to exercise this option within
30 days of the death of a shareholder. The exercising shareholders will divide
the deceased shareholder's shares as they agree or, if they are not able to
agree, pro rata. If the exercising shareholders are not able to agree on a
purchase price with the estate of the deceased shareholder, then the per share
purchase price shall be the per share value of the Company based on the greater
of the value of the Company as a going concern or on a liquidation basis, as
determined by an independent appraisal. The purchase price shall be paid by an
initial cash payment of up to 20% of the purchase price with the balance paid
pursuant to a five-year, unsecured promissory note bearing interest at the prime
rate. The agreements also provide that each shareholder will grant a proxy to
Mr. Isakow to vote all of the shareholder's shares at any meeting of the
Company; provided, however, that if holders of shares having a majority in
interest of the shares of Common Stock determine that it is in the best interest
of all of the shareholders to sell all or substantially all of the assets of the
Company or to cause the Company to merge or consolidate with or into another
corporation, Mr. Isakow shall exercise the proxies provided to him consistent
with that decision. As a result, except as described above, Mr. Isakow has
voting control of 100% of the Common Stock.
CERTAIN TRANSACTIONS
As of March 31, 1997, Mr. Abelman issued a note to the Company in
connection with his acquisition of shares of the Common Stock. The principal
amount of the note was $130,000 and the note bears interest at the prime rate
plus 1.0%, which rate is adjusted on March 31 of each year to reflect the then
current prime rate. Principal and interest on the note is payable in equal
annual installments with interest on the unpaid principal, with the final
payment due May 31, 2002. As of February 28, 1999 the principal amount
outstanding of the note was $113,469.
As of March 31, 1997, the Company issued a subordinated demand note to Mr.
Robert H. Orley in connection with the redemption of certain shares of the
Company's Common Stock. The principal amount of the note was $108,203 and was
paid in full subsequent to March 31, 1997.
On February 1, 1999 we entered into a Consulting Services Agreement (the
"Consulting Agreement") with Performance Learning, Inc., a Nevada corporation,
("Performance Learning"). Dennis K. Pawley, a director of Oxford Automotive is
the President and Chief Operating Officer and a shareholder of Performance
Learning. Under the Consulting Agreement, Performance Learning has agreed to
provide consulting services to us for a one year period, which commenced on
February 15, 1999. As compensation for such consulting services we will pay
Performance Learning a $100,000 retainer, $5,000 per day for each day a
principal of Performance Learning performs consulting services for the Company,
and $1,000 per day for each day a non-principal of Performance Learning performs
consulting services for the Company. The retainer is payable in two equal
installments and the second installment will not be paid if we terminate the
agreement after six months. We will pay additional amounts to reimburse
Performance Learning for reasonable expenses it incurs in connection with
performing the consulting services.
See also "Management - Compensation Committee Interlocks and Insider
Participation."
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LEGAL
Rex E. Schlaybaugh, Jr. is a shareholder, the Vice Chairman of the Board
and a director of the Company. Dykema Gossett PLLC, of which Mr. Schlaybaugh is
a member, has performed legal services for the Company since its inception,
including services performed in connection with the Series C Offering and this
Exchange Offer. The Company expects to continue to retain the firm as general
counsel after the Exchange Offer.
DESCRIPTION OF CERTAIN
INDEBTEDNESS AND PREFERRED STOCK
SENIOR CREDIT FACILITY
General. We entered into the Senior Credit Facility, providing for up to
(a) $110.0 million of revolving credit availability (the "Revolving Line")
including the issuance of letters of credit, (b) $30.0 million pursuant to a
term loan (the "Term Loan"), and (c) $35.0 million of revolving credit
availability for tooling (the "Tooling Line"). We, along with certain principal
operating subsidiaries (the "Senior Credit Obligors") are parties to or
guarantors of the Senior Credit Facility. The obligations under the Senior
Credit Facility (the "Obligations") are secured by a first lien on substantially
all the assets of the Senior Credit Obligors. The Obligations and guaranties of
the Senior Credit Obligors (the "Senior Credit Guaranties") will rank senior to
all of our other indebtedness, including the Notes. Availability under the
Revolving Line at March 1, 1999 was approximately $80.3 million, reduced for the
effect of a Letter of Credit issued for the IRB's (as defined). Availability
under the Tooling Line at March 1, 1999 was approximately $5.0 million. Funds
under the Senior Credit Facility are available for general corporate purposes
(including acquisitions) and letters of credit. The Senior Credit Facility also
accommodates the lease transaction for the manufacturing operation in Ramos
Arizpe, Mexico.
Principal Payments. Unless otherwise required pursuant to the Senior Credit
Facility, we are required to pay amounts advanced under the Revolving Line and
the Tooling Line on July 31, 2004. We are required to pay the unpaid principal
amount of the Term Loan in twenty-two quarterly principal payments as follows:
QUARTERLY PAYMENT DATES PRINCIPAL INSTALLMENT
----------------------- ---------------------
July 31, 1999 to January 31, 2000 $500,000
April 30, 2000 to January 31, 2001 $1,250,000
April 30, 2001 to January 31, 2003 $1,500,000
April 30, 2003 to January 31, 2004 $1,875,000
April 30, 2004 to July 31, 2004 $2,250,000
Interest Rates. Interest on outstanding borrowings under the Senior
Credit Facility is payable monthly and accrues at an annual rate equal to (a)
the Applicable Margin (as defined in the Senior Credit Facility) plus either (i)
the higher of the Prime Rate (as defined in the Senior Credit Facility) or 0.5%
over the Federal Funds Rate or (ii) with respect to Canadian based borrowings,
the higher of the prime rate of First Chicago/NBD Bank, Canada or 0.5% over the
BA Rate (the one month bankers' acceptance rates, as further defined in the
Senior Credit Facility), or (b) the London Interbank Offered Rate plus the
Applicable Margin (a "LIBOR-based Rate") or, with respect to Canadian based
borrowings, the BA Rate. The Applicable Margin will be based upon the Company's
trailing four quarter Ratio of Total Covenant Obligations to Total Covenant
EBITDA (as defined in the Senior Credit Facility) as follows:
RATIO OF TOTAL
COVENANT OBLIGATIONS TO APPLICABLE MARGIN
TOTAL COVENANT EBITDA PRIME/LIBOR
----------------------- -----------------
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> 4.75 1.00% / 2.25%
4.01-- 4.75 0.75% / 2.00%
3.51-- 4.00 0.50% / 1.80%
3.01-- 3.50 0.125% / 1.375%
LESS THAN OR = 3.00 0.00% / 1.125%
Maturity and Optional Prepayments. Unless accelerated due to default, all
borrowings under the Senior Credit Facility mature on July 31, 2004, and the
aggregate principal amount outstanding may not exceed 175.0 million at any time.
Borrowings under the Senior Credit Facility may be prepaid at any time without
premium or penalty, except that any prepayment of a LIBOR-based Rate loan that
is made prior to the end of the applicable interest period shall be subject to
reimbursement of breakage costs.
Covenants. The Senior Credit Facility contains certain customary covenants,
including without limitation, reporting and other affirmative covenants;
financial covenants including: ratios of Total Covenant Obligations to Total
Covenant EBITDA beginning at not greater than 5.25 to 1.00 and decreasing to not
greater than 4.00 to 1.00 after December 31, 2003; net worth of not less than
$40.2 million plus a percentage of our net income plus any proceeds from the
issuance of capital stock; fixed charge coverage ratio beginning at not less
than 1.00 to 1.00 and increasing to not less than 1.10 to 1.00 after December
31, 2002; and interest coverage ratio beginning at not less than 2.00 to 1.00
and increasing to not less than 2.75 to 1.00 after December 31, 2002 (each as
defined in and calculated pursuant to the Senior Credit Facility); and negative
covenants, including: restrictions on incurrence of indebtedness (other than as
provided for in the Senior Credit Facility, purchase money debt, the Notes,
tooling debt, and guaranties of certain other debt not to exceed $30.0 million),
payment of cash dividends and other distributions to shareholders, liens in
favor of parties other than the lenders under the Senior Credit Facility,
certain guaranties of obligations of or advances to others, sales of material
assets not in the ordinary course of business, restrictions on mergers and
acquisitions, and capital expenditures (each as defined in and calculated
pursuant to the Senior Credit Facility). Certain covenants were amended to
reflect our obligations in connection with the Ramos Arizpe lease transaction.
We remained in compliance with our covenants following the acquisition of
Cofimeta.
Events of Default. The Senior Credit Facility contains customary events of
default including non-payment of principal, interest or fees; violation of
covenants; inaccuracy of representations or warranties; cross-defaults to
certain other indebtedness and the agreement relating to the Ramos Arizpe
lease, including the indebtedness evidenced by the Notes, and bankruptcy.
Fees. We will pay, on a quarterly basis, a per annum fee ranging from
0.375% to 0.50% of the Senior Credit Facility and letter of credit fees ranging
from 1.125% to 2.25%, in each case based on certain of our financial ratios.
OTHER INDEBTEDNESS
The Canadian Department of Regional Industrial Expansion has provided a
term loan (the "IRDP Loan") to BMG, bearing interest at 6% with a final maturity
date of September 1, 2002. The IRDP Loan is unsecured. As of March 1, 1999,
$0.3 million was outstanding with respect to the IRDP Loan.
The Export Development Corporation of Canada ("EDC") has provided a tooling
line facility to BMG (the "EDC Facility"), bearing interest at a fixed rate of
7.36%. The EDC Facility is secured by tooling at BMG relating to specific Saturn
contracts and has a final maturity of September 30, 1999. As of January 31,
1999, $1.9 million was outstanding with respect to the EDC Facility.
Lobdell, through its subsidiary Creative Fabrication Corporation
("Creative"), is financially obligated to the County of McMinn, Tennessee
pursuant to certain revenue bonds issued on behalf of Creative. On September 27,
1995, the Industrial Development Board of the County of McMinn issued $8.5
million of its Industrial Development Revenue
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Bonds ("IRBs") for the purpose of lending the proceeds from the sale of the IRBs
to Creative. The IRBs bear interest at a variable rate which was 3.3% at March
31, 1999. The IRBs are collateralized by a letter of credit issued by NBD Bank
for the benefit of the trustee under the indenture relating to the IRBs and by a
mortgage on the Creative facilities located in Tennessee and are guaranteed by
Lobdell. Creative is prohibited from paying, declaring or authorizing any
dividend if there is an event of default under the IRB documents. The IRBs
mature in September 2010. As of March 1, 1999, $2.5 million principal amount of
IRBs were outstanding.
RPIH, through its subsidiary has been provided with a $0.6 million loan
facility from the National Association of Credit Management-Great Lakes (the
"RPIH Loan"), bearing interest at 6.0% with a final maturity date of April 30,
1999. As of January 31, 1999, $0.4 million was outstanding with respect to the
RPIH Loan.
PREFERRED STOCK OF LOBDELL
In connection with our acquisition of Lobdell, Lobdell issued 457,541
shares of its Series A $3.00 Cumulative Preferred Stock ( the "Series A
Preferred Stock") and 49,938 shares of its Series B Preferred Stock (the "Series
B Preferred Stock" and together with the Series A Preferred Stock the "Lobdell
Preferred Stock"), each having a stated value of $100 per share, of which only
397,539 shares of Series A Preferred Stock are currently outstanding. All of the
Series B Preferred Stock has been cancelled, as described below. Generally,
except as required by law, the holders of Lobdell Preferred Stock have no voting
rights. However, the holders of Series A Preferred Stock, voting as a separate
class, are entitled to elect (i) one director of Lobdell, and (ii) if Lobdell
fails to pay three consecutive semi-annual dividend payments to the holders of
Series A Preferred Stock, one additional director until the payment default is
cured. Dividends on the Series A Preferred Stock accrue annually at the rate of
$3.00 per share and are cumulative, whether or not earned or declared. Lobdell
may not declare or pay any dividend or other distribution, other than in Lobdell
Common Stock or other stock junior to the Lobdell Preferred Stock ("Junior
Stock"), with respect to any Junior Stock unless all accrued, unpaid and current
dividends with respect to the Series A Preferred Stock have either been paid or
sufficient funds have been set apart for such payment. The Series A Preferred
Stock also has certain liquidation preferences.
The Series A Preferred Stock is mandatorily redeemable by Lobdell on
December 31, 2006 at a price per share of $100, plus accrued and unpaid
dividends to the date of redemption. However, if we do not commence a public
offering of our common stock pursuant to a firm commitment underwritten offering
prior to June 30, 2006, the payment for the shares of Series A Preferred Stock
to be redeemed will be $103 per share, plus accrued and unpaid dividends to the
date of redemption. In addition, at the option of the holders of Series A
Preferred Stock, if we do not commence such a public offering of our common
stock on or before December 31, 2001, Lobdell must redeem on December 31 of each
year commencing with 2002 up to 20% of the aggregate number of shares of Series
A Preferred Stock held by any such holder immediately prior to December 31,
2002. The Subsidiary Guaranty of Lobdell ranks senior to the Lobdell Preferred
Stock. See "Description of the Notes -- Subsidiary Guaranties."
In connection with our acquisition of Lobdell, we have agreed to exchange
our common stock for the shares of Series A Preferred Stock upon the initial
public offering ("Initial Public Offering") of our common stock to the public
which is exclusively for cash, subject to an effective registration statement
and underwritten on a firm commitment basis by one or more underwriters. The
holders of Series A Preferred Stock have the right to exchange up to 50% or some
lesser portion of their shares of Series A Preferred Stock (the "Election
Amount") for a number of shares of our common stock equal to (i) the Election
Amount, multiplied by (ii) the Exchange Ratio (the number equal to the
redemption value of a share of Series A Preferred Stock, divided by the price
per share to the public of Company common stock in the Initial Public Offering);
provided, however, that, in the aggregate, holders of Series A Preferred Stock
may not receive more than 25% of the number of shares of common stock registered
pursuant to the Initial Public Offering.
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Pursuant to the acquisition of Lobdell, we obtained various indemnities for
certain purchase price adjustments arising out of a closing balance sheet and
for claims relating to representations and warranties made by the former common
shareholders of Lobdell in connection with the acquisition. At the closing of
such acquisition, 100,000 shares of Series A Preferred Stock were placed with an
escrow agent to fund indemnification claims of the Company. The Company and the
preferred shareholders of Lobdell have settled certain purchase price
adjustments relating to the difference between the shareholder's equity
reflected on the closing balance sheet and the amount that had previously been
projected by Lobdell, which has resulted in the cancellation of 60,002 shares of
the escrowed Series A Preferred Stock and 49,938 shares of Series B Preferred
Stock, which represented all of the outstanding Series B Preferred Stock. The
remaining 39,998 shares of escrowed Series A Preferred Stock were released to
the preferred shareholders of Lobdell.
DESCRIPTION OF THE NOTES
GENERAL
The Series C Notes were issued under an Indenture (the "Indenture") dated as
of December 1, 1998, among the Company, the Subsidiary Guarantors and U.S. Bank
Trust National Association, as Trustee (the "Trustee"). The terms of the
Indenture apply to the Series C Notes and to the Series D Notes to be issued in
exchange for the Series A Notes, Series B Notes, and Series C Notes pursuant to
the Exchange Offer. The Series C Notes and the Series D Notes are collectively
referred to in this section as the "Notes."
The Indenture is substantially identical to the Indenture dated as of June
15, 1997 under which the Series A Notes and Series B Notes were issued. The
Series A Notes and Series B Notes are substantially identical to, and rank pari
passu in right of payment with the Series C Notes and Series D Notes. Generally,
the only difference between the Series A Notes and Series B Notes, on the one
hand, and the Series C Notes and Series D Notes, on the other, is the priority
of Series A Notes and Series B Notes, if any remain outstanding after this
Exchange Offer, with respect to the payment of any Excess Proceeds (as described
below under "Certain Covenants-Limitation on Sales of Assets and Subsidiary
Stock). However, if holders of Series A Notes and Series B Notes exchange all of
their notes for Series D Notes, all holders of Series D Notes will participate
pro rata in any Excess Proceeds Offer. The Series A Notes and Series B Notes are
collectively referred to in this section as the "Existing Senior Subordinated
Notes."
The following is a summary of certain provisions of the Indenture and the
Notes, a copy of which Indenture and the form of Notes is available upon request
to the Company. Due to the complexity of various negotiated provisions of the
Indenture and various cross-references contained in the Indenture, the
discussion below follows closely the general format of the Indenture. However,
the following summary of certain provisions of the Indenture is not complete. We
urge you to read all the provisions of the Indenture, including the definitions
of certain terms included in the Indenture, because the Indenture defines your
rights as holders of the Notes. Capitalized terms used herein and not otherwise
defined have the meanings set forth in the section "-- Certain Definitions." As
used in this section, the term "Company" refers to Oxford Automotive, Inc.
Principal of, premium, if any, and interest on the Notes will be payable,
and the Notes may be exchanged or transferred, at the office or agency of the
Company, which, unless otherwise provided by the Company, will be the offices of
the Trustee. At the option of the Company, payment of interest may be made by
check mailed to the addresses of the Holders as such addresses appear in the
Note register.
The Notes are issued only in fully registered form, without coupons, in
denominations of $1,000 and any integral multiple of $1,000. No service charge
will be made for any registration of transfer or exchange of Notes, but the
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Company may require payment of a sum sufficient to cover any transfer tax or
other similar governmental charge payable in connection therewith.
BRIEF DESCRIPTION OF THE NOTES AND GUARANTIES
The Notes
The Notes:
- are unsecured senior subordinated obligations of the Company;
- are subordinated in right of payment to all Senior Indebtedness of the
Company or the relevant Subsidiary Guarantor; and
- are irrevocably and unconditionally guaranteed by the Subsidiary
Guarantors.
The Guaranties
The Notes are guaranteed by the following subsidiaries of the Company:
Lobdell Emery Corporation Howell Industries, Inc.
BMG North America Limited RPI Holdings, Inc.
BMG Holdings, Inc. RPI, Inc.
Winchester Fabrication Corporation Prudenville Manufacturing, Inc.
Creative Fabrication Corporation Oxford Suspension, Inc.
Parallel Group International, Inc. Oxford Suspension, Ltd.
Laserweld International, L.L.C. OASP, Inc.
Concept Management Corporation OASP II, Inc.
Lewis Emery Capital Corporation
The Guaranties of the Notes:
- are general obligations of each Subsidiary Guarantor; and
- are subordinated in right of payment to all Senior Indebtedness of
each Subsidiary Guarantor.
As of December 31, 1998, the Company and the Subsidiary Guarantors had
total Senior Indebtedness of approximately $30 million (excluding unused
commitments under the Senior Credit Facility). As indicated above and as
discussed in detail below under "Subordination," payments on the Notes and under
the Subsidiary Guaranties will be subordinated to the payment of Senior
Indebtedness. The Indenture will permit the Company and the Subsidiary
Guarantors to incur additional Senior Indebtedness.
As of the date of the Indenture, all of the Company's operating
subsidiaries are "Restricted Subsidiaries." Unrestricted Subsidiaries will not
be subject to many of the restrictive covenants in the Indenture. Unrestricted
Subsidiaries will not guarantee the Notes.
Not all of the Company's "Restricted Subsidiaries" will guarantee the
Notes. The Subsidiary Guarantors generated 98.3% of the Company's consolidated
revenues in the nine-month period ended December 31, 1998 and held 97.9% of
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the Company's consolidated assets as of December 31, 1998. See Note 18 to the
Company's Consolidated Financial Statements included at the back of this
Prospectus for more detail about the division of the Company's consolidated
revenues and assets between guarantor and non-guarantor subsidiaries.
TERMS OF THE NOTES
The Notes are unsecured senior subordinated obligations of the Company,
limited to $250.0 million aggregate principal amount. Of this amount, $40.0
million were issued in the Series C Offering, $160.0 million are reserved for
issuance only in exchange for the Series A Notes and Series B Notes and $50.0
million are available for issuance in the future, only in accordance with
paragraph (a) of the covenant described under "Certain Covenants - Limitation on
Indebtedness." The Notes will mature on June 15, 2007. The Notes bear interest
at the rate per annum shown on the cover page hereof from December 8, 1998, or
from the most recent date to which interest has been paid or provided for,
payable semi-annually to Holders of record at the close of business on the June
1 or December 1 immediately preceding the interest payment date on June 15 and
December 15 of each year. The Company will pay interest on overdue principal at
1% per annum in excess of such rate, and it will pay interest on overdue
installments of interest at such higher rate to the extent lawful.
The interest rate on the Series C Notes is subject to increase in certain
circumstances if the Exchange Offer Registration Statement is not declared
effective on a timely basis or if certain other conditions are not satisfied, as
further described under "Summary-The Series D Notes." The interest rates on the
Series A Notes and the Series B Notes are not subject to such increases.
OPTIONAL REDEMPTION
Except as set forth in the following paragraph, the Notes are not
redeemable at the option of the Company prior to June 15, 2002. Thereafter, the
Notes are redeemable, at the Company's option, in whole or in part, at any time
or from time to time, upon not less than 30 nor more than 60 days' prior notice
mailed by first-class mail to each Holder's registered address, at the following
redemption prices (expressed in percentages of principal amount), plus accrued
and unpaid interest to the redemption date (subject to the right of Holders of
record on the relevant record date to receive interest due on the relevant
interest payment date), if redeemed during the 12-month period commencing on
June 15 of the years set forth below:
<TABLE>
<CAPTION>
REDEMPTION
PERIOD PRICE
------ -----
<S> <C>
2002........................ 105.063%
2003........................ 103.375
2004........................ 101.688
2005 and thereafter......... 100.000
</TABLE>
In addition, at any time and from time to time prior to June 15, 2000, the
Company may redeem in the aggregate up to 35% of the original principal amount
of the Notes with the proceeds of one or more Public Equity Offerings following
which there is a Public Market, at a redemption price (expressed as a percentage
of principal amount) of 110.125% plus accrued and unpaid interest, if any, to
the redemption date (subject to the right of Holders of record on the relevant
record date to receive interest due on the relevant interest payment date);
provided, however, that at least 65% of the original aggregate principal amount
of the Notes must remain outstanding after each such redemption.
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SELECTION
In the case of any partial redemption, selection of the Notes for
redemption will be made by the Trustee on a pro rata basis, by lot or by such
other method as the Trustee in its sole discretion shall deem to be fair and
appropriate, although no Note of $1,000 in original principal amount or less
will be redeemed in part. If any Note is to be redeemed in part only, the notice
of redemption relating to such Note shall state the portion of the principal
amount thereof to be redeemed. A new Note in principal amount equal to the
unredeemed portion thereof will be issued in the name of the Holder thereof upon
cancellation of the original Note.
SUBSIDIARY GUARANTIES
Each of the Company's Restricted Subsidiaries (other than certain foreign
subsidiaries) that, as of the Issue Date, were obligors or guarantors with
respect to the Senior Credit Facility irrevocably and unconditionally Guarantee,
as primary obligors and not merely as sureties, on an unsecured senior
subordinated basis the performance and punctual payment when due, whether at
Stated Maturity, by acceleration or otherwise, of all obligations of the Company
under the Indenture and the Notes, whether for payment of principal of or
interest on the Notes, expenses, indemnification or otherwise (all such
obligations guaranteed by the Subsidiary Guarantors being herein called the
"Guaranteed Obligations"). The Subsidiary Guarantors agree to pay, in addition
to the amount stated above, any and all expenses (including reasonable counsel
fees and expenses) incurred by the Trustee or the Holders in enforcing any
rights under the Subsidiary Guaranties. Each Subsidiary Guaranty will be limited
in amount to an amount not to exceed the maximum amount that can be Guaranteed
by the applicable Subsidiary Guarantor without rendering such Subsidiary
Guaranty voidable under applicable law relating to fraudulent conveyance or
fraudulent transfer or similar laws affecting the rights of creditors generally.
After the Issue Date, the Company will cause each Restricted Subsidiary that
becomes an obligor or guarantor with respect to any of the obligations under one
or more of the Bank Credit Agreements to execute and deliver to the Trustee a
supplemental indenture pursuant to which such Restricted Subsidiary will
Guarantee payment of the Notes. See "Certain Covenants -- Future Subsidiary
Guarantors" below.
Each Subsidiary Guaranty is a continuing guarantee and shall:
(a) remain in full force and effect until payment in full of all the
Guaranteed Obligations,
(b) be binding upon each Subsidiary Guarantor, and
(c) inure to the benefit of and be enforceable by the Trustee, the Holders
and their successors, transferees and assigns.
A Subsidiary Guaranty will be released upon the sale of all the capital
stock, or all or substantially all of the assets, of the applicable Subsidiary
Guarantor if such sale is made in compliance with the Indenture.
SUBORDINATION
The indebtedness evidenced by the Notes and the Subsidiary Guaranties
represents senior subordinated obligations of the Company and the Subsidiary
Guarantors, as the case may be. The payment of the principal of, premium, if
any, and interest on the Notes, the payment of any Subsidiary Guaranty and all
other Obligations under or in connection with the Notes, the Subsidiary
Guaranties, the Indenture and/or any related agreements, documents or
instruments are subordinate in right of payment, as set forth in the Indenture,
to the prior payment in full of all Senior Indebtedness of the Company or the
relevant Subsidiary Guarantor, as the case may be, whether outstanding on the
Issue Date or thereafter incurred, including all Obligations of the Company and
such Subsidiary Guarantor under the Senior Credit Facility. The Notes and the
Subsidiary Guaranties are also effectively subordinated to any Secured
Indebtedness of
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the Company and the Subsidiary Guarantors to the extent of the value of the
assets securing such Indebtedness and to any liabilities of Subsidiaries other
than the Subsidiary Guarantors.
As of December 31, 1998:
- The Company had $30.0 million outstanding Senior Indebtedness
(excluding unused commitments under the Senior Credit Facility), and
- Senior Indebtedness of the Subsidiary Guarantors was approximately $3.0
million.
Although the Indenture contains limitations on the amount of additional
Indebtedness that the Company and its Restricted Subsidiaries may incur, under
certain circumstances the amount of such Indebtedness could be substantial and,
in any case, such Indebtedness may be Senior Indebtedness. See "Certain
Covenants -- Limitation on Indebtedness."
Only Indebtedness of the Company or a Subsidiary Guarantor that is Senior
Indebtedness will rank senior to the Notes and the relevant Subsidiary Guaranty
in accordance with the provisions of the Indenture. The Notes and each
Subsidiary Guaranty will in all respects rank pari passu with all other senior
subordinated Indebtedness of the Company and the relevant Subsidiary Guarantor,
respectively. The Company and each Subsidiary Guarantor has agreed in the
Indenture that it will not Incur, directly or indirectly, any Indebtedness that
is subordinate or junior in ranking in right of payment to its Senior
Indebtedness unless such Indebtedness is pari passu with or is expressly
subordinated in right of payment to the Notes. Unsecured Indebtedness is not
deemed to be subordinated or junior merely because it is unsecured.
The Company may not pay, directly or indirectly, principal of, premium (if
any) or interest on, the Notes or any other Obligations under or in connection
with the Notes, the Indenture and/or any related agreements, documents or
instruments or make any deposit pursuant to the provisions described under
"-- Defeasance" below and may not repurchase, redeem or otherwise retire any
Notes (collectively, "pay the Subordinated Debt") if:
(1) any Senior Indebtedness is not paid when due or
(2) any other default on any such Senior Indebtedness occurs and the
maturity of such Senior Indebtedness is accelerated in accordance with
its terms
unless, in either case, the default has been cured or waived and any such
acceleration has been rescinded or such Senior Indebtedness has been paid in
full in cash. However, the Company may pay the Subordinated Debt without regard
to the foregoing if the Company and the Trustee receive written notice approving
such payment from the Representative of the Senior Indebtedness with respect to
which either of the events set forth in clause (1) or (2) of the immediately
preceding sentence has occurred and is continuing.
During the continuance of any default (other than a default described in
clauses (1) and (2) of the second preceding sentence) with respect to any Senior
Indebtedness pursuant to which the maturity thereof may be accelerated
immediately without further notice (except such notice as may be required to
effect such acceleration) or the expiration of any applicable grace periods, the
Company may not pay the Subordinated Debt for a period (a "Payment Blockage
Period") commencing upon the receipt by the Trustee (with a copy to the Company)
of written notice (a "Blockage Notice") of such default from the Representative
of the holders of such Designated Senior Indebtedness specifying an election to
effect a Payment Blockage Period and ending 180 days thereafter (or earlier if
such Payment Blockage Period is terminated:
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(1) by written notice to the Trustee and the Company from the Person or
Persons who gave such Blockage Notice,
(2) because the default giving rise to such Blockage Notice has been
waived in writing or
(3) because such Designated Senior Indebtedness has been repaid in full in
cash).
Notwithstanding the provisions described in the immediately preceding sentence,
unless the holders of such Designated Senior Indebtedness or the Representative
of such holders has accelerated the maturity of such Designated Senior
Indebtedness, the Company may resume payments on the Notes after the end of such
Payment Blockage Period. The Notes shall not be subject to more than one Payment
Blockage Period in any consecutive 360-day period, irrespective of the number of
such nonpayment defaults with respect to Designated Senior Indebtedness during
such period.
Upon any payment or distribution of the assets of the Company of any kind
or character, whether in cash, property or securities, to creditors upon a total
or partial liquidation or dissolution or reorganization of or similar proceeding
relating to the Company or its property or in a bankruptcy, reorganization,
insolvency, receivership or similar proceeding, the holders of Senior
Indebtedness will be entitled to receive payment in full in cash of such Senior
Indebtedness before the Noteholders are entitled to receive any payment, and,
until the Senior Indebtedness is paid in full in cash, any payment or
distribution to which Noteholders would be entitled but for the subordination
provisions of the Indenture will be made to holders of such Senior Indebtedness
as their interests may appear. If a payment or distribution is made to
Noteholders that, due to the subordination provisions, should not have been made
to them, such Noteholders are required to hold it in trust for the holders of
Senior Indebtedness and pay it over to them as their interests may appear.
The obligations of a Subsidiary Guarantor under its Subsidiary Guaranty are
senior subordinated obligations. As such, the rights of Noteholders to receive
payment by a Subsidiary Guarantor pursuant to its Subsidiary Guaranty will be
subordinated in right of payment to the rights of holders of Senior Indebtedness
of such Subsidiary Guarantor. The terms of the subordination provisions
described above with respect to the Company's obligations under the Notes apply
equally to a Subsidiary Guarantor and the obligations of such Subsidiary
Guarantor under its Subsidiary Guaranty.
By reason of the subordination provisions contained in the Indenture, in
the event of insolvency, creditors of the Company or a Subsidiary Guarantor who
are holders of Senior Indebtedness of the Company or a Subsidiary Guarantor, as
the case may be, may recover more, ratably, than the Noteholders, and creditors
of the Company who are not holders of Senior Indebtedness may recover less,
ratably, than holders of Senior Indebtedness and may recover more, ratably, than
the Noteholders.
The terms of the subordination provisions described above will not apply to
payments from money or the proceeds of U.S. Government Obligations held in trust
by the Trustee for the payment of principal of and interest on the Notes
pursuant to and in accordance with the provisions described under
"-- Defeasance."
CHANGE OF CONTROL
Upon the occurrence of a Change of Control, each Holder shall have the
right to require that the Company repurchase all or a portion of such holder's
Notes at a purchase price in cash equal to 101% of the principal amount thereof
plus accrued and unpaid interest, if any, to the date of repurchase (subject to
the right of Holders of record on the relevant record date to receive interest
due on the relevant interest payment date), in accordance with the provisions of
the next paragraph.
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Within 30 days following any Change of Control, the Company shall mail a
notice to each Holder with a copy to the Trustee stating:
(1) that a Change of Control has occurred and that such Holder has the
right to require the Company to purchase such Holder's Notes at a
purchase price in cash equal to 101% of the principal amount
outstanding at the repurchase date plus accrued and unpaid interest,
if any, to the date of repurchase (subject to the right of Holders of
record on the relevant record date to receive interest on the relevant
interest payment date);
(2) the circumstances and relevant facts and relevant financial
information regarding such Change of Control;
(3) the repurchase date (which shall be no earlier than 30 days nor later
than 60 days from the date such notice is mailed); and
(4) the instructions determined by the Company, consistent with the
covenant described hereunder, that a Holder must follow in order to
have its Notes repurchased.
The Company shall comply, to the extent applicable, with the requirements
of Section 14(e) of the Exchange Act and any other securities laws or
regulations in connection with the repurchase of Notes pursuant to the covenant
described hereunder. To the extent that the provisions of any securities laws or
regulations conflict with the provisions of the covenant described hereunder,
the Company shall comply with the applicable securities laws and regulations and
shall not be deemed to have breached its obligations under the covenant
described hereunder by virtue thereof.
The occurrence of certain of the events which would constitute a Change of
Control would constitute a default under the Senior Credit Facility. Future
Senior Indebtedness of the Company may contain prohibitions of certain events
which would constitute a Change of Control or require such Senior Indebtedness
to be repurchased upon a Change of Control. Moreover, the exercise by the
Holders of their right to require the Company to repurchase the Notes could
cause a default under such Senior Indebtedness, even if the Change of Control
itself does not, due to the financial effect of such repurchase on the Company.
Finally, the Company's ability to pay cash to the Holders upon a repurchase may
be limited by the Company's then existing financial resources. There can be no
assurance that sufficient funds will be available when necessary to make any
repurchases required in connection with a Change of Control. The Company's
failure to purchase the Notes in connection with a Change in Control would
result in a default under the Indenture which would, in turn, constitute a
default under the Senior Credit Facility. In such circumstances, the
subordination provisions in the Indenture would likely restrict payment to the
Holders of the Notes.
BOOK-ENTRY, DELIVERY AND FORM
Except as set forth in the next paragraph, the Notes sold will be issued in
the form of a Global Note. The Global Note will be deposited with, or on behalf
of, the Depository and registered in the name of the Depository or its nominee.
Except as set forth below, the Global Note may be transferred, in whole and not
in part, only to the Depository or another nominee of the Depository. Investors
may hold their beneficial interests in the Global Note directly through the
Depository if they have an account with the Depository or indirectly through
organizations which have accounts with the Depository.
Notes that are issued as described below under "-- Certificated Notes" will
be issued in definitive form. Upon the transfer of a Note in definitive form,
such Note will, unless the Global Note has previously been exchanged for Notes
in definitive form, be exchanged for an interest in the Global Note representing
the principal amount of Notes being, transferred.
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The Depository has advised the Company as follows: The Depository is a
limited-purpose trust company and organized under the laws of the State of New
York, a member of the Federal Reserve System, a "clearing corporation" within
the meaning of the New York Uniform Commercial Code, and "a clearing agency"
registered pursuant to the provisions of Section 17A of the Securities Exchange
Act of 1934 (the "Exchange Act"). The Depository was created to hold securities
of institutions that have accounts with the Depository ("participants") and to
facilitate the clearance and settlement of securities transactions among its
participants in such securities through electronic book-entry changes in
accounts of the participants, thereby eliminating the need for physical movement
of securities certificates. The Depository's participants include securities
brokers and dealers (which may include the Initial Purchasers), banks, trust
companies, clearing corporations and certain other organizations. Access to the
Depository's book-entry system is also available to others such as banks,
brokers, dealers and trust companies that clear through or maintain a custodial
relationship with a participant, whether directly or indirectly.
Upon the issuance of the Global Note, the Depository will credit, on its
book-entry registration and transfer system, the principal amount of the Notes
represented by such Global Note to the accounts of participants. The accounts to
be credited shall be designated by the Initial Purchasers of such Notes.
Ownership of beneficial interests in the Global Note will be limited to
participants or persons that may hold interests through participants. Ownership
of beneficial interests in the Global Note will be shown on, and the transfer of
those ownership interests will be effected only through, records maintained by
the Depository (with respect to participants' interest) and such participants
(with respect to the owners of beneficial interests in the Global Note other
than participants). The laws of some jurisdictions may require that certain
purchasers of securities take physical delivery of such securities in definitive
form. Such limits and laws may impair the ability to transfer or pledge
beneficial interests in the Global Note.
So long as the Depository, or its nominee, is the registered holder and
owner of the Global Note, the Depository or such nominee, as the case may be,
will be considered the sole legal owner and holder of the related Notes for all
purposes of such Notes and the Indenture. Except as set forth below, owners of
beneficial interests in the Global Note will not be entitled to have the Notes
represented by the Global Note registered in their names, will not receive or be
entitled to receive physical delivery of certificated Notes in definitive form
and will not be considered to be the owners or holders of any Notes under the
Global Note. The Company understands that under existing industry practice, in
the event an owner of a beneficial interest in the Global Note desires to take
any action that the Depository, as the holder of the Global Note, is entitled to
take, the Depository would authorize the participants to take such action, and
that the participants would authorize beneficial owners owning through such
participants to take such action or would otherwise act upon the instructions of
beneficial owners owning through them.
Payment of principal of and interest on Notes represented by the Global
Note registered in the name of and held by the Depository or its nominee will be
made to the Depository or its nominee, as the case may be, as the registered
owner and holder of the Global Note.
The Company expects that the Depository or its nominee, upon receipt of any
payment of principal of or interest on the Global Note, will credit
participants' accounts with payments in amounts proportionate to their
respective beneficial interests in the principal amount of the Global Note as
shown on the records of the Depository or its nominee. The Company also expects
that payments by participants to owners of beneficial interests in the Global
Note held through such participants will be governed by standing instructions
and customary practices and will be the responsibility of such participants. The
Company will not have any responsibility or liability for any aspect of the
records relating to, or payments made on account of, beneficial ownership
interests in the Global Note for any Note or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests or for any
other aspect of the relationship between the Depository and its participants or
the relationship between such participants and the owners of beneficial
interests in the Global Note owning through such participants.
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Unless and until it is exchanged in whole or in part for certificated Notes
in definitive form, the Global Note may not be transferred except as a whole by
the Depository to a nominee of such Depository or by a nominee of such
Depository to such Depository or another nominee of such Depository.
Although the Depository has agreed to the foregoing procedures in order to
facilitate transfers of interests in the Global Note among participants of the
Depository, it is under no obligation to perform or continue to perform such
procedures, and such procedures may be discontinued at any time. Neither the
Trustee nor the Company will have any responsibility for the performance by the
Depository or its participants or indirect participants of their respective
obligations under the rules and procedures governing their operations.
CERTIFICATED NOTES
The Notes represented by the Global Note are exchangeable for certificated
Notes in definitive form of like tenor as such Notes in denominations of
U.S.$1,000 and integral multiples thereof if:
(1) the Depository notifies the Company that it is unwilling or unable to
continue as Depository for the Global Note or if at any time the
Depository ceases to be a clearing agency registered under the
Exchange Act,
(2) the Company in its discretion at any time determines not to have all
of the Notes represented by the Global Note or
(3) a default entitling the holders of the Notes to accelerate the
maturity thereof has occurred and is continuing.
Any Note that is exchangeable pursuant to the preceding sentence is exchangeable
for certificated Notes issuable in authorized denominations and registered in
such names as the Depository shall direct. Subject to the foregoing, the Global
Note is not exchangeable, except for a Global Note of the same aggregate
denomination to be registered in the name of the Depository or its nominee.
CERTAIN COVENANTS
The Indenture contains covenants including, among others, the following:
Limitation on Indebtedness. (a) The Company shall not, and shall not permit
any Restricted Subsidiary to, Incur, directly or indirectly, any Indebtedness
unless, immediately after giving effect to such Incurrence, the Consolidated
Coverage Ratio exceeds 2.00 to 1 if such Indebtedness is Incurred prior to June
15, 1999 or 2.25 to 1 if such Indebtedness is Incurred thereafter.
(b) Notwithstanding the foregoing paragraph (a), the Company and its
Restricted Subsidiaries may Incur any or all of the following Indebtedness:
(1) Indebtedness and other Obligations Incurred pursuant to the Bank
Credit Agreements; provided, however, that, after giving effect to any
such Incurrence, the aggregate principal amount of such Indebtedness
and other Obligations then outstanding does not exceed the greater of
(i) $110 million and (ii) the sum of (x) 60% of the net book value of
the inventory of the Company and its Restricted Subsidiaries and (y)
90% of the net book value of the accounts receivable of the Company
and its Restricted Subsidiaries, in each case determined in accordance
with GAAP and (z) $70 million;
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(2) Indebtedness represented by the Notes issued on the Issue Date, the
Exchange Notes and the Existing Senior Subordinated Notes;
(3) Indebtedness outstanding on the Existing Senior Subordinated Note
Issue Date (other than Indebtedness described in clause (1) of this
paragraph), including, without limitation, the Existing Preferred
Stock and Indebtedness that was Incurred after the Existing Senior
Subordinated Issue Date in compliance with the Existing Indenture;
(4) Indebtedness of the Company owed to and held by any Wholly Owned
Subsidiary or Indebtedness of a Restricted Subsidiary owed to and held
by the Company or a Wholly Owned Subsidiary; provided, however, that
any subsequent issuance or transfer of any Capital Stock which results
in any such Wholly Owned Subsidiary ceasing to be a Wholly Owned
Subsidiary or any subsequent transfer of such Indebtedness (other than
to the Company or a Wholly Owned Subsidiary) shall be deemed, in each
case, to constitute the Incurrence of such Indebtedness by the issuer
thereof;
(5) Refinancing Indebtedness in respect of Indebtedness Incurred pursuant
to paragraph (a) or pursuant to clause (1), (2), (3) or this clause
(5);
(6) Indebtedness in respect of performance bonds, bankers' acceptances,
letters of credit and surety or appeal bonds entered into by the
Company and the Restricted Subsidiaries in the ordinary course of
their business;
(7) Hedging Obligations consisting of Interest Rate Agreements and
Currency Agreements entered into in the ordinary course of business
and not for the purpose of speculation; provided, however, that, in
the case of Currency Agreements and Interest Rate Agreements, such
Currency Agreements and Interest Rate Agreements do not increase the
Indebtedness of the Company outstanding at any time other than as a
result of fluctuations in foreign currency exchange rates or interest
rates or by reason of fees, indemnities and compensation payable
thereunder;
(8) Purchase Money Indebtedness and Capital Lease Obligations Incurred to
finance the acquisition or improvement by the Company or a Restricted
Subsidiary of any assets in the ordinary course of business and which
do not exceed $15 million in the aggregate at any time outstanding;
(9) Indebtedness and other Obligations represented by the Subsidiary
Guaranties and Guarantees of Indebtedness Incurred pursuant to the
Bank Credit Agreements;
(10) Indebtedness arising from the honoring by a bank or other financial
institution of a check, draft or similar instrument inadvertently
(except in the case of daylight overdrafts) drawn against insufficient
funds in the ordinary course of business, provided that such
Indebtedness is extinguished within five business days of Incurrence;
(11) Indebtedness of the Company and its Restricted Subsidiaries arising
from agreements providing for indemnification, adjustment of purchase
price or similar obligations, in any case Incurred in connection with
the disposition of any assets of the Company or any Restricted
Subsidiary (other than Guarantees of Indebtedness Incurred by any
Person acquiring all or any portion of such assets for the purpose of
financing such acquisition), in a principal amount not to exceed the
gross proceeds actually received by the Company or any Restricted
Subsidiary in connection with such disposition;
(12) Tooling Indebtedness; and
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(13) Indebtedness in an aggregate principal amount which, together with all
other Indebtedness of the Company and its Restricted Subsidiaries
outstanding on the date of such Incurrence (other than Indebtedness
permitted by clauses (1) through (12) above or paragraph (a)), does
not exceed $20 million.
(c) Notwithstanding the foregoing, the Company shall not, and shall not
permit any Restricted Subsidiary to, Incur any Indebtedness pursuant to the
foregoing paragraph (b) if the proceeds thereof are used, directly or
indirectly, to Refinance:
(i) any Subordinated Obligations unless such Indebtedness shall be
subordinated to the Notes, the Existing Senior Subordinated Notes and
the Subsidiary Guaranties, as applicable, to at least the same extent
as such Subordinated Obligations or
(ii) any Senior Subordinated Indebtedness unless such Indebtedness shall be
Senior Subordinated Indebtedness or shall be subordinated to the
Notes, the Existing Senior Subordinated Notes and the Subsidiary
Guaranties, as applicable.
(d) For purposes of determining compliance with the foregoing covenant,
(i) in the event that an item of Indebtedness meets the criteria of more
than one of the types of Indebtedness described above, the Company, in
its sole discretion, will classify such item of Indebtedness and only
be required to include the amount and type of such Indebtedness in one
of the above clauses and
(ii) an item of Indebtedness may be divided and classified in more than one
of the types of Indebtedness described above.
(e) Notwithstanding paragraphs (a) and (b) above, the Company shall not, and
shall not permit any Subsidiary Guarantor to, Incur:
(i) any Indebtedness if such Indebtedness is subordinate or junior in
ranking in any respect to any Senior Indebtedness of the Company or
such Subsidiary Guarantor, as applicable, unless such Indebtedness is
Senior Subordinated Indebtedness or is expressly subordinated in right
of payment to Senior Subordinated Indebtedness or
(ii) any Secured Indebtedness that is not Senior Indebtedness of the
Company or such Subsidiary Guarantor, as applicable, unless
contemporaneously therewith effective provision is made to secure the
Notes or the Subsidiary Guaranty, as applicable, equally and ratably
with such Secured Indebtedness for so long as such Secured
Indebtedness is secured by a Lien.
Limitation on Restricted Payments. (a) The Company shall not, and shall not
permit any Restricted Subsidiary, directly or indirectly, to make a Restricted
Payment if at the time the Company or such Restricted Subsidiary makes such
Restricted Payment:
(1) a Default shall have occurred and be continuing (or would result
therefrom);
(2) the Company is not able to Incur an additional $1.00 of Indebtedness
pursuant to paragraph (a) of the covenant described under
"-- Limitation on Indebtedness"; or
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(3) the aggregate amount of such Restricted Payment together with all other
Restricted Payments (the amount of any payments made in property other
than cash to be valued at the fair market value of such property, as
determined in good faith by the Board of Directors) declared or made
since the Existing Senior Subordinated Note Issue Date would exceed the
sum of:
(A) 50% of the Consolidated Net Income accrued during the period
(treated as one accounting period) from the beginning of the
fiscal quarter immediately following the fiscal quarter during
which the Series A Notes were originally issued to the end of
the most recent fiscal quarter prior to the date of such
Restricted Payment for which financial statements are
available (or, in case such Consolidated Net Income accrued
during such period (treated as one accounting period) shall be
a deficit, minus 100% of such deficit);
(B) the aggregate Net Cash Proceeds received by the Company from
the issuance or sale of its Capital Stock (other than
Disqualified Stock) subsequent to the Existing Senior
Subordinated Note Issue Date (other than an issuance or sale
to a Subsidiary of the Company);
(C) the amount by which Indebtedness of the Company or its
Restricted Subsidiaries is reduced on the Company's balance
sheet upon the conversion or exchange (other than by a
Subsidiary of the Company) subsequent to the Existing Senior
Subordinated Note Issue Date, of any Indebtedness of the
Company or its Restricted Subsidiaries convertible or
exchangeable for Capital Stock (other than Disqualified Stock)
of the Company (less the amount of any cash, or the fair value
of any other property, distributed by the Company or any
Restricted Subsidiary upon such conversion or exchange);
(D) an amount equal to the sum of (i) the net reduction in
Investments in Unrestricted Subsidiaries resulting from
dividends, repayments of loans or advances or other transfers
of assets subsequent to the Existing Senior Subordinated Note
Issue Date, in each case to the Company or any Restricted
Subsidiary from Unrestricted Subsidiaries, and (ii) the
portion (proportionate to the Company's equity interest in
such Subsidiary) of the fair market value of the net assets of
an Unrestricted Subsidiary at the time such Unrestricted
Subsidiary is designated a Restricted Subsidiary; provided,
however, that the foregoing sum shall not exceed, in the case
of any Unrestricted Subsidiary, the amount of Investments
previously made (and treated as a Restricted Payment) by the
Company or any Restricted Subsidiary in such Unrestricted
Subsidiary; and
(E) $5 million.
(b) The provisions of the foregoing paragraph (a) shall not prohibit:
(i) any purchase or redemption of Capital Stock or Subordinated
Obligations of the Company or any Restricted Subsidiary made
in exchange for, or out of the proceeds of the substantially
concurrent sale of, Capital Stock of the Company (other than
Disqualified Stock and other than Capital Stock issued or sold
to a Subsidiary of the Company); provided, however, that (A)
such purchase or redemption shall be excluded from the
calculation of the amount of Restricted Payments and (B) the
Net Cash Proceeds from such sale shall be excluded from the
calculation of amounts under clause (3)(B) of paragraph (a)
above;
(ii) any purchase or redemption of (A) Subordinated Obligations of
the Company made in exchange for, or out of the proceeds of
the substantially concurrent sale of, Indebtedness of the
Company which is
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permitted to be Incurred pursuant to paragraphs (b) and (c) of
the covenant described under "-Limitation on Indebtedness" or
(B) Subordinated Obligations of a Restricted Subsidiary made
in exchange for, or out of the proceeds of the substantially
concurrent sale of, Indebtedness of such Restricted Subsidiary
or the Company which is permitted to be Incurred pursuant to
paragraphs (b) and (c) of the covenant described under
"--Limitation on Indebtedness"; provided, however, that such
purchase or redemption shall be excluded from the calculation
of the amount of Restricted Payments;
(iii) any purchase or redemption of (A) Disqualified Stock of the
Company made in exchange for, or out of the proceeds of the
substantially concurrent sale of, Disqualified Stock of the
Company or (B) Disqualified Stock of a Restricted Subsidiary
made in exchange for, or out of the proceeds of the
substantially concurrent sale of, Disqualified Stock of such
Restricted Subsidiary or the Company; provided, however, that
(1) at the time of such exchange, no Default or Event of
Default shall have occurred and be continuing or would result
therefrom and (2) such purchase or redemption will be excluded
from the calculation of the amount of Restricted Payments;
(iv) dividends paid within 60 days after the date of declaration
thereof if at such date of declaration such dividend would
have complied with this covenant; provided, however, that at
the time of payment of such dividend, no other Default shall
have occurred and be continuing (or would result therefrom);
provided, further, however, that such dividend shall be
included in the calculation of the amount of Restricted
Payments;
(v) the repurchase of shares of, or options to purchase shares of,
Capital Stock of the Company or any of its Subsidiaries from
officers, former officers employees, former employees,
directors or former directors of the Company or any of its
Subsidiaries (or permitted transferees of such employees,
former employees, directors or former directors), pursuant to
the terms of the agreements (including employment agreements)
or plans (or amendments thereto) approved by the Board of
Directors under which such individuals purchase or sell, or
are granted the option to purchase or sell, shares of such
common stock; provided, however, that the aggregate amount of
such repurchases shall not exceed $2.5 million in any one year
and $5.0 million in the aggregate; provided, further, however,
that (1) at the time of such repurchase, no Default or Event
of Default shall have occurred and be continuing or would
result therefrom and (2) all such repurchases shall be
included in the calculation of the amount of Restricted
Payments; or
(vi) dividends and redemptions required to be made with respect to
the Existing Preferred Stock; provided, however, that (1) at
the time of any such dividend or redemption, no Default or
Event of Default shall have occurred and be continuing or
would result therefrom and (2) all such dividends and
redemptions shall be included in the calculation of the amount
of Restricted Payments.
Limitation on Restrictions on Distributions from Restricted Subsidiaries.
The Company shall not, and shall not permit any Restricted Subsidiary to, create
or otherwise cause or permit to exist or become effective any consensual
encumbrance or consensual restriction on the ability of any Restricted
Subsidiary:
(a) to pay dividends or make any other distributions on its Capital Stock
to the Company or a Restricted Subsidiary or pay any Indebtedness owed
to the Company,
(b) to make any loans or advances to the Company or
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(c) transfer any of its property or assets to the Company, except:
(i) any encumbrance or restriction pursuant to an agreement in
effect at or entered into on the Existing Senior Subordinated
Note Issue Date;
(ii) any encumbrance or restriction with respect to a Restricted
Subsidiary pursuant to an agreement relating to any
Indebtedness Incurred by such Restricted Subsidiary which was
entered into on or prior to the date on which such Restricted
Subsidiary was acquired by the Company (other than as
consideration in, or to provide all or any portion of the
funds or credit support utilized to consummate, the
transaction or series of related transactions pursuant to
which such Restricted Subsidiary became a Restricted
Subsidiary or was acquired by the Company) and outstanding on
such date;
(iii) any encumbrance or restriction pursuant to an agreement
effecting a Refinancing of Indebtedness Incurred pursuant to
an agreement referred to in clause (i) or (ii) of this
covenant (or effecting a Refinancing of such Refinancing
Indebtedness pursuant to this clause (iii)) or contained in
any amendment to an agreement referred to in clause (i) or
(ii) of this covenant or this clause (iii); provided, however,
that the encumbrances and restrictions with respect to such
Restricted Subsidiary contained in any such refinancing
agreement or amendment are no more restrictive in any material
respect than the encumbrances and restrictions with respect to
such Restricted Subsidiary contained in such agreements;
(iv) any such encumbrance or restriction consisting of customary
non-assignment provisions in leases governing leasehold
interests to the extent such provisions restrict the transfer
of the lease or the property leased thereunder;
(v) in the case of clause (c) above, restrictions contained in
security agreements or mortgages securing Indebtedness (other
than Tooling Indebtedness) of a Restricted Subsidiary to the
extent such restrictions restrict the transfer of the property
subject to such security agreements or mortgages;
(vi) any restriction with respect to a Restricted Subsidiary
imposed pursuant to an agreement entered into for the sale or
disposition of all or substantially all the Capital Stock or
assets of such Restricted Subsidiary pending the closing of
such sale or disposition; and
(vii) any restriction imposed by applicable law.
Limitation on Sales of Assets and Subsidiary Stock. The Company shall not,
and shall not permit any Restricted Subsidiary to, consummate any Asset
Disposition unless the Company or such Restricted Subsidiary receives
consideration at the time of such Asset Disposition at least equal to the fair
market value (including as to the value of all non-cash consideration), as
determined in good faith by the Board of Directors, of the shares and assets
subject to such Asset Disposition and at least 75% of the consideration therefor
received by the Company or such Restricted Subsidiary is in the form of cash or
cash equivalents. For the purposes of this covenant, the following are deemed to
be cash and cash equivalents: (1) the assumption of Indebtedness of the Company
or any Restricted Subsidiary and the release of the Company or such Restricted
Subsidiary from all liability on such Indebtedness in connection with such Asset
Disposition and (2) securities received by the Company or any Restricted
Subsidiary from the transferee that are immediately converted by the Company or
such Restricted Subsidiary into cash.
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With respect to any Asset Disposition occurring on or after the Existing
Senior Subordinated Note Issue Date from which the Company or any Restricted
Subsidiary receives Net Available Cash, the Company or such Restricted
Subsidiary shall:
(i) within 360 days after the date such Net Available Cash is received and
to the extent the Company or such Restricted Subsidiary elects (or is
required by the terms of any Senior Indebtedness) to (A) apply an
amount equal to such Net Available Cash to prepay, repay or purchase
Senior Indebtedness of the Company or such Restricted Subsidiary, in
each case owing to a Person other than the Company or any Affiliate of
the Company, or (B) invest an equal amount, or the amount not so
applied pursuant to clause (A), in Additional Assets (including by
means of an Investment in Additional Assets by a Restricted Subsidiary
with Net Available Cash received by the Company or another Restricted
Subsidiary) and
(ii) apply such excess Net Available Cash (to the extent not applied
pursuant to clause (i)) as provided in the following paragraphs of the
covenant described hereunder; provided, however, that in connection
with any prepayment, repayment or purchase of Senior Indebtedness
pursuant to clause (A) above, the Company or such Restricted Subsidiary
shall retire such Senior Indebtedness and shall cause the related loan
commitment (if any) to be permanently reduced in an amount equal to the
principal amount so prepaid, repaid or purchased.
The amount of Net Available Cash required to be applied pursuant to clause (ii)
above and not theretofore so applied shall constitute "Excess Proceeds." Pending
application of Net Available Cash pursuant to this provision, such Net Available
Cash shall be invested in Temporary Cash Investments.
If at any time the aggregate amount of Excess Proceeds not theretofore
subject to an Excess Proceeds Offer (as defined below) totals at least $5
million, the Company shall, not later than 30 days after the end of the period
during which the Company is required to apply such Excess Proceeds pursuant to
clause (i) of the immediately preceding paragraph (or, if the Company so elects,
at any time within such period), make an offer (an "Existing Note Excess
Proceeds Offer"), first, to purchase the Existing Senior Subordinated Notes, if
any are outstanding, in accordance with the Existing Indenture (as in effect on
the Issue Date) and, second, in the event that any Excess Proceeds are not
applied to an Existing Note Excess Proceeds Offer to purchase from the Holders
on a pro rata basis an aggregate principal amount of Notes equal to any
remaining Excess Proceeds (rounded down to the nearest multiple of $1,000) on
such date (an "Excess Proceeds Offer"), at a purchase price equal to 100% of the
principal amount of such Notes, plus, in each case, accrued interest (if any) to
the date of purchase (the "Excess Proceeds Payment"). Upon completion of an
Excess Proceeds Offer the amount of Excess Proceeds remaining after application
pursuant to such Excess Proceeds Offer, (including payment of the purchase price
for Notes duly tendered) may be used by the Company for any corporate purpose
(to the extent not otherwise prohibited by the Indenture).
The Company shall comply, to the extent applicable, with the requirements
of Section 14(e) of the Exchange Act and any other securities laws or
regulations thereunder in the event that such Excess Proceeds are received by
the Company under the covenant described hereunder and the Company is required
to repurchase the Notes as described above. To the extent that the provisions of
any securities laws or regulations conflict with the provisions of the covenant
described hereunder, the Company shall comply with the applicable securities
laws and regulations and shall not be deemed to have breached its obligations
under the covenant described hereunder by virtue thereof.
Limitation on Affiliate Transactions. (a) The Company shall not, and shall
not permit any Restricted Subsidiary to, enter into or permit to exist any
transaction or series of related transactions (including the purchase, sale,
lease or exchange of any property, employee compensation arrangements or the
rendering of any service) with any Affiliate of the Company (an "Affiliate
Transaction") unless the terms thereof:
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(1) are no less favorable to the Company or such Restricted
Subsidiary than those that could be obtained at the time of
such transaction in arm's-length dealings with a Person who is
not such an Affiliate,
(2) if such Affiliate Transaction (or series of related Affiliate
Transactions) involve aggregate payments in an amount in
excess of $1 million in any one year, (i) are set forth in
writing, (ii) comply with clause (1) and (iii) have been
approved by a majority of the disinterested members of the
Board of Directors and
(3) if such Affiliate Transaction (or series of related Affiliate
Transactions) involve aggregate payments in an amount in
excess of $5 million in any one year, (i) comply with clause
(2) and (ii) have been determined by a nationally recognized
investment banking firm to be fair, from a financial
standpoint, to the Company and its Restricted Subsidiaries.
(b) The provisions of the foregoing paragraph (a) shall not prohibit:
(i) any Restricted Payment permitted to be paid pursuant to the
covenant described under "-- Limitation on Restricted
Payments,"
(ii) any issuance of securities, or other payments, awards or
grants in cash, securities or otherwise, pursuant to, or the
funding of, employment arrangements, stock options and stock
ownership plans in the ordinary course of business and
approved by the Board of Directors,
(iii) the grant of stock options or similar rights to employees and
directors of the Company in the ordinary course of business
and pursuant to plans approved by the Board of Directors,
(iv) loans or advances to employees in the ordinary course of
business of the Company or its Restricted Subsidiaries,
(v) fees, compensation or employee benefit arrangements paid to
and indemnity provided for the benefit of directors, officers
or employees of the Company or any Subsidiary in the ordinary
course of business,
(vi) payments made to The Oxford Investment Group, Inc. for (x)
management and consulting services in an aggregate amount not
to exceed $1,000,000 in any one year and (y) investment
banking services in connection with acquisition of assets or
businesses, by the Company or any Subsidiary not to exceed the
greater of (A) 1.25% of the purchase price paid by the Company
or such Subsidiary for the assets or business acquired
(including Indebtedness assumed by the Company or such
Subsidiary as part of such acquisition) and (B) $200,000; or
(vii) any Affiliate Transaction between the Company and a Restricted
Subsidiary or between Restricted Subsidiaries in the ordinary
course of business (so long as the other stockholders of any
participating Restricted Subsidiaries which are not Wholly
Owned Restricted Subsidiaries are not themselves Affiliates of
the Company).
Limitation on the Issuance or Sale of Capital Stock of Restricted Subsidiaries.
The Company shall not:
(i) sell, pledge, hypothecate or otherwise dispose of any shares of Capital
Stock of a Restricted Subsidiary (other than pledges of Capital Stock
securing Senior Indebtedness) or
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(ii) permit any Restricted Subsidiary, directly or indirectly, to issue or
sell or otherwise dispose of any shares of its Capital Stock other
than:
(A) to the Company or a Wholly Owned Subsidiary,
(B) directors' qualifying shares,
(C) if, immediately after giving effect to such issuance or sale,
such Restricted Subsidiary would no longer constitute a
Restricted Subsidiary or
(D) the issuance of Preferred Stock by any Subsidiary Guarantor as
partial payment for the acquisition by such Subsidiary
Guarantor of Additional Assets.
Notwithstanding the foregoing, the Company may sell, and may permit a Restricted
Subsidiary to issue and sell, up to 20% of the outstanding Common Stock of a
Restricted Subsidiary to officers and employees of such Restricted Subsidiary.
The proceeds of any sale of such Capital Stock permitted hereby will be treated
as Net Available Cash from an Asset Disposition and must be applied in
accordance with the terms of the covenant described under "-- Limitation on
Sales of Assets and Subsidiary Stock."
Limitation on Liens. The Company shall not, and shall not permit any
Restricted Subsidiary to, directly or indirectly, Incur or permit to exist any
Lien of any nature whatsoever on any property of the Company or any Restricted
Subsidiary (including Capital Stock of a Restricted Subsidiary), whether owned
at the Issue Date or thereafter acquired, which secures Indebtedness that ranks
pari passu with or is subordinated to the Notes or the Subsidiary Guaranties
unless:
(i) if such Lien secures Indebtedness that ranks pari passu with the
Notes and the Subsidiary Guaranties, the Notes are secured on an
equal and ratable basis with the obligation so secured until such
time as such obligation is no longer secured by a Lien or
(ii) if such Lien secures Indebtedness that is subordinated to the Notes
and the Subsidiary Guaranties, such Lien shall be subordinated to a
Lien granted to the Holders on the same collateral as that securing
such Lien to the same extent as such subordinated Indebtedness is
subordinated to the Note and the Subsidiary Guaranties.
Merger and Consolidation. The Company shall not consolidate with or merge
with or into, or convey, transfer or lease, in one transaction or a series of
related transactions, all or substantially all its assets to, any Person,
unless:
(i) the resulting, surviving or transferee Person (the "Successor
Company") shall be a Person organized and existing under the laws of
the United States of America, any State thereof or the District of
Columbia and the Successor Company (if not the Company) shall
expressly assume, by an indenture supplemental thereto, executed and
delivered to the Trustee, in form satisfactory to the Trustee, all
the obligations of the Company under the Notes and the Indenture;
(ii) immediately after giving effect to such transaction on a pro forma
basis (and treating any Indebtedness which becomes an obligation of
the Successor Company or any Subsidiary as a result of such
transaction as having been Incurred by such Successor Company or such
Subsidiary at the time of such transaction), no Default shall have
occurred and be continuing;
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(iii) except in the case of a merger the sole purpose of which is to change
the Company's jurisdiction of incorporation, immediately after giving
effect to such transaction on a pro forma basis, the Successor
Company would be able to Incur an additional $1.00 of Indebtedness
pursuant to paragraph (a) of the covenant described under "--
Limitation on Indebtedness";
(iv) immediately after giving effect to such transaction on a pro forma
basis, the Successor Company shall have Consolidated Net Worth in an
amount that is not less than the Consolidated Net Worth of the
Company immediately prior to such transaction; and
(v) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger or transfer and such supplemental indenture (if
any) comply with the Indenture.
Notwithstanding the foregoing clauses (ii), (iii) and (iv), any Restricted
Subsidiary may consolidate with, merge into or transfer all or part of its
properties and assets to the Company.
The Successor Company shall be the successor to the Company and shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company under the Indenture, but the predecessor Company in the case of a
conveyance, transfer or lease shall not be released from the obligation to pay
the principal of and interest on the Notes.
The Company shall not permit any Subsidiary Guarantor to consolidate with
or merge with or into, or convey, transfer or lease, in one transaction or a
series of transactions, all or substantially all its assets to, any Person,
unless:
(i) the resulting, surviving or transferee Person (if not such
Subsidiary) shall be a Person organized and existing under the laws
of the United States of America, any State thereof or the District of
Columbia and the Successor Company (if not such Subsidiary) shall
expressly assume, by a Guaranty Agreement, in form satisfactory to
the Trustee, all the obligations of such Subsidiary under its
Subsidiary Guaranty;
(ii) immediately after giving effect to such transaction on a pro forma
basis (and treating any Indebtedness which becomes an obligation of
the resulting, surviving or transferee Person as a result of such
transaction as having been Incurred by such Person at the time of
such transaction), no Default shall have occurred and be continuing;
and
(iii) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger or transfer and such Guaranty Agreement comply
with the Indenture.
The provisions of clauses (i) and (iii) above shall not apply to any
transactions which constitute an Asset Disposition if the Company has complied
with the applicable provisions of the covenant described under "-- Limitation on
Sales of Assets and Subsidiary Stock" above.
Future Guarantors. The Company shall cause each Restricted Subsidiary that
at any time becomes an obligor or guarantor with respect to any obligations
under one or more Bank Credit Agreements to execute and deliver to the Trustee a
supplemental indenture pursuant to which such Restricted Subsidiary will
Guarantee payment of the Notes on the same terms and conditions as those set
forth in the Indenture. Each Subsidiary Guaranty will be limited in amount to an
amount not to exceed the maximum amount that can be Guaranteed by the applicable
Subsidiary Guarantor without rendering such Subsidiary Guaranty voidable under
applicable law relating to fraudulent conveyance or fraudulent transfer or
similar laws affecting the rights of creditors generally.
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SEC Reports. Notwithstanding that the Company may not be required to remain
subject to the reporting requirements of Section 13 or 15(d) of the Exchange
Act, the Company shall file with the SEC and provide the Trustee and Noteholders
and prospective Noteholders (upon request) with such annual reports and such
information, documents and other reports as are specified in such Sections and
applicable to a U.S. corporation subject to such Sections, such information,
documents and other reports to be so filed and provided at the times specified
for the filing of such information, documents and reports under such Sections;
provided, however, that the Company shall not be required to file any report,
document or other information with the SEC if the SEC does not permit such
filing.
DEFAULTS
An Event of Default is defined in the Indenture as:
(i) a default in the payment of interest on the Notes when due (whether
or not such payment is prohibited by the provisions described under
"Subordination" above), continued for 30 days,
(ii) a default in the payment of principal of any Note when due at its
Stated Maturity, upon optional redemption, upon required repurchase,
upon declaration or otherwise (whether or not such payment is
prohibited by the provisions described under "Subordination" above),
(iii) the failure by the Company, to comply for 30 days after notice with
any of its obligations under the covenants described under "--
Limitation on Indebtedness," "-- Limitation on Restricted Payments,"
"Limitation on Sales of Assets and Subsidiary Stock," and "Merger,
Consolidation and Sale of Assets",
(iv) the failure by the Company to comply for 60 days after notice with
its other agreements contained in the Indenture,
(v) Indebtedness of the Company or any Restricted Subsidiary is not paid
within any applicable grace period after final maturity or is
accelerated by the holders thereof because of a default and the total
amount of such Indebtedness unpaid or accelerated exceeds $5 million
(the "cross-acceleration provision"),
(vi) certain events of bankruptcy, insolvency or reorganization of the
Company or a Significant Subsidiary (the "bankruptcy provisions"),
(vii) any judgment or decree for the payment of money in excess of $5
million is rendered against the Company or a Restricted Subsidiary,
remains outstanding following such judgment and is not discharged,
waived or stayed within 60 days after entry of such judgment or
decree (the "judgment default provision"), or
(viii)a Subsidiary Guaranty ceases to be in full force and effect (other
than in accordance with the terms of such Subsidiary Guaranty) or a
Subsidiary Guarantor denies or disaffirms its obligations under its
Subsidiary Guaranty.
However, a default under clause (iii) or (iv) will not constitute an Event
of Default until the Trustee or the holders of 25% in principal amount of the
outstanding Notes notify the Company of the default and the Company does not
cure such default within the time specified in clauses (iii) and (iv) hereof
after receipt of such notice.
If an Event of Default occurs and is continuing, the Trustee or the Holders
of at least 25% in principal amount of the outstanding Notes may declare the
principal of and accrued but unpaid interest on all the Notes to be due and
payable. Upon such a declaration, such principal and interest shall be due and
payable immediately. If an Event of
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Default relating to certain events of bankruptcy, insolvency or reorganization
of the Company occurs and is continuing, the principal of and interest on all
the Notes will ipso facto become and be immediately due and payable without any
declaration or other act on the part of the Trustee or any Holders of the Notes.
Under certain circumstances, the Holders of a majority in principal amount of
the outstanding Notes may rescind any such acceleration with respect to the
Notes and its consequences.
Subject to the provisions of the Indenture relating to the duties of the
Trustee, in case an Event of Default occurs and is continuing, the Trustee will
be under no obligation to exercise any of the rights or powers under the
Indenture at the request or direction of any of the Holders unless such Holders
have offered to the Trustee reasonable indemnity or security against any loss,
liability or expense. Except to enforce the right to receive payment of
principal, premium (if any) or interest when due, no Holder may pursue any
remedy with respect to the Indenture or the Notes unless:
(i) such Holder has previously given the Trustee notice that an Event of
Default is continuing,
(ii) Holders of at least 25% in principal amount of the outstanding Notes
have requested the Trustee to pursue the remedy,
(iii) such Holders have offered the Trustee reasonable security or
indemnity against any loss, liability or expense,
(iv) the Trustee has not complied with such request within 60 days after
the receipt thereof and the offer of security or indemnity and
(v) the Holders of a majority in principal amount of the outstanding
Notes have not given the Trustee a direction inconsistent with such
request within such 60-day period.
Subject to certain restrictions, the Holders of a majority in principal
amount of the outstanding Notes are given the right to direct the time, method
and place of conducting any proceeding for any remedy available to the Trustee
or of exercising any trust or power conferred on the Trustee. The Trustee,
however, may refuse to follow any direction that conflicts with law or the
Indenture or that the Trustee determines is unduly prejudicial to the rights of
any other Holder or that would involve the Trustee in personal liability.
The Indenture provides that if a Default occurs and is continuing and is
known to the Trustee, the Trustee must mail to each Holder notice of the Default
within 90 days after it occurs. Except in the case of a Default in the payment
of principal of or interest on any Note, the Trustee may withhold notice if and
so long as a committee of its trust officers determines that withholding notice
is not opposed to the interest of the Holders. In addition, the Company is
required to deliver to the Trustee, within 120 days after the end of each fiscal
year, a certificate indicating whether the signers thereof know of any Default
that occurred during the previous year. The Company also is required to deliver
to the Trustee, within 30 days after the occurrence thereof, written notice of
any event which would constitute certain Defaults, their status and what action
the Company is taking or proposes to take in respect thereof.
AMENDMENTS AND WAIVERS
Subject to certain exceptions, the Indenture may be amended with the
consent of the Holders of a majority in principal amount of the Notes then
outstanding (including consents obtained in connection with a tender offer or
exchange for the Notes) and any past default or compliance with any provisions
may also be waived with the consent of the Holders of a majority in principal
amount of the Notes then outstanding. However, without the consent of each
Holder of an outstanding Note affected thereby, no amendment may, among other
things:
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(i) reduce the amount of Notes whose Holders must consent to an
amendment,
(ii) reduce the rate of or extend the time for payment of interest on any
Note,
(iii) reduce the principal of or extend the Stated Maturity of any Note,
(iv) reduce the premium payable upon the redemption of any Note or change
the time at which any Note may be redeemed as described under "--
Optional Redemption" above,
(v) make any Note payable in money other than that stated in the Note,
(vi) impair the right of any Holder to institute suit for the enforcement
of any payment on or with respect to such Holder's Notes or any
Subsidiary Guaranty,
(vii) make any change in the amendment provisions which require each
Holder's consent or in the waiver provisions or
(viii)make any change to the subordination provisions of the Indenture
that would adversely affect the Noteholders.
Without the consent of any Holder, the Company and Trustee may amend the
Indenture to cure any ambiguity, omission, defect or inconsistency, to provide
for the assumption by a successor corporation of the obligations of the Company
under the Indenture, to provide for uncertificated Notes in addition to or in
place of certificated Notes (provided that the uncertificated Notes are issued
in registered form for purposes of Section 163(f) of the Code, or in a manner
such that the uncertificated Notes are described in Section 163(f)(2)(B) of the
Code), to add guarantees with respect to the Notes, to release Subsidiary
Guarantors when permitted by the Indenture, to secure the Notes, to add to the
covenants of the Company for the benefit of the Holders or to surrender any
right or power conferred upon the Company, to make any change that does not
adversely affect the rights of any Holder or to comply with any requirement of
the SEC in connection with the qualification of the Indenture under the Trust
Indenture Act. However, no amendment may be made to the subordination provisions
of the Indenture that adversely affects the rights of any holder of Senior
Indebtedness then outstanding unless the holders of such Senior Indebtedness (or
their Representative) consents to such change.
The consent of the Holders is not necessary under the Indenture to approve
the particular form of any proposed amendment. It is sufficient if such consent
approves the substance of the proposed amendment.
After an amendment under the Indenture becomes effective, the Company is
required to mail to Holders a notice briefly describing such amendment. However,
the failure to give such notice to all Holders, or any defect therein, will not
impair or affect the validity of the amendment.
TRANSFER
Certificated Notes will be issued in registered form and will be
transferable only upon the surrender of the Notes being transferred for
registration of transfer. The Company may require payment of a sum sufficient to
cover any tax, assessment or other governmental charge payable in connection
with certain transfers and exchanges.
DEFEASANCE
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The Company at any time may terminate all its obligations under the Notes
and the Indenture ("legal defeasance"), except for certain obligations,
including those respecting the defeasance trust and obligations to register the
transfer or exchange of the Notes, to replace mutilated, destroyed, lost or
stolen Notes and to maintain a registrar and paying agent in respect of the
Notes. The Company at any time may terminate its obligations under "-- Change of
Control" and under the covenants described under "-- Certain Covenants" (other
than the covenant described under "-- Merger and Consolidation"), the operation
of the cross-acceleration provision, the bankruptcy provisions with respect to
Significant Subsidiaries and the judgment default provision described under "--
Defaults" above and the limitations contained in clauses (iii) and (iv) under
"Certain Covenants -- Merger and Consolidation" above ("covenant defeasance").
The Company may exercise its legal defeasance option notwithstanding its
prior exercise of its covenant defeasance option. If the Company exercises its
legal defeasance option, payment of the Notes may not be accelerated because of
an Event of Default with respect thereto. If the Company exercises its covenant
defeasance option, payment of the Notes may not be accelerated because of an
Event of Default specified in clause (iii), (iv), (v), (vi) (with respect only
to Significant Subsidiaries) or (vii) under "-- Defaults" above or because of
the failure of the Company to comply with clause (iii) or (iv) under "Certain
Covenants -- Merger and Consolidation" above. If the Company exercises its legal
defeasance option or its covenant defeasance option, each Subsidiary Guarantor
will be released from all of its obligations with respect to its Subsidiary
Guaranty.
In order to exercise either defeasance option:
(a) such defeasance must not result in a breach of, or otherwise
constitute a default under any agreement or investment with respect
to any Senior Indebtedness, and no default may exist under any
Indebtedness and
(b) the Company must irrevocably deposit in trust (the "defeasance
trust") with the Trustee money or U.S. Government Obligations for the
payment of principal and interest on the Notes to redemption or
maturity, as the case may be, and must comply with certain other
conditions, including delivery to the Trustee of an Opinion of
Counsel to the effect that holders of the Notes will not recognize
income, gain or loss for Federal income tax purposes as a result of
such deposit and defeasance and will be subject to Federal income tax
on the same amount and in the same manner and at the same times as
would have been the case if such deposit and defeasance had not
occurred.
CONCERNING THE TRUSTEE
U.S. Bank Trust National Association is the Trustee under the Indenture and
has been appointed by the Company as Registrar and Paying Agent with regard to
the Notes.
The Holders of a majority in principal amount of the outstanding Notes will
have the right to direct the time, method and place of conducting any proceeding
for exercising any remedy available to the Trustee, subject to certain
exceptions. The Indenture provides that if an Event of Default occurs (and is
not cured), the Trustee will be required, in the exercise of its power, to use
the degree of care of a prudent man in the conduct of his own affairs. Subject
to such provisions, the Trustee will be under no obligation to exercise any of
its rights or powers under the Indenture at the request of any Holder of Notes,
unless such Holder shall have offered to the Trustee security and indemnity
satisfactory to it against any loss, liability or expense and then only to the
extent required by the terms of the Indenture.
GOVERNING LAW
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The Indenture provides that it and the Notes are governed by, and construed
in accordance with, the laws of the State of New York without giving effect to
applicable principles of conflicts of law to the extent that the application of
the law of another jurisdiction would be required thereby.
CERTAIN DEFINITIONS
"Additional Assets" means:
(i) any property or assets (other than Indebtedness and Capital Stock) in
a Related Business; or
(ii) the Capital Stock of a Person that becomes a Restricted Subsidiary as
a result of the acquisition of such Capital Stock by the Company or
another Restricted Subsidiary; provided, however, that any such
Restricted Subsidiary is primarily engaged in a Related Business.
"Affiliate" of any specified Person means any other Person, directly or
indirectly, controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing. For
purposes of the provisions described under "Certain Covenants -- Limitation on
Restricted Payments," "Certain Covenants -- Limitation on Affiliate
Transactions" and "Certain Covenants -- Limitations on Sales of Assets and
Subsidiary Stock" only, "Affiliate" shall also mean any beneficial owner of
Capital Stock representing 10% or more of the total voting power of the Voting
Stock (on a fully diluted basis) of the Company or of rights or warrants to
purchase such Capital Stock (whether or not currently exercisable) and any
Person who would be an Affiliate of any such beneficial owner pursuant to the
first sentence hereof.
"Asset Disposition" means any sale, lease, transfer or other disposition (or
series of related sales, leases, transfers or dispositions) by the Company or
any Restricted Subsidiary, including any disposition by means of a merger,
consolidation or similar transaction (each referred to for the purposes of this
definition as a "disposition"), of:
(i) any shares of Capital Stock of a Restricted Subsidiary (other than
directors' qualifying shares and, to the extent required by local
ownership laws in foreign countries, shares owned by foreign
shareholders),
(ii) all or substantially all the assets of any division, business segment
or comparable line of business of the Company or any Restricted
Subsidiary or
(iii) any other assets of the Company or any Restricted Subsidiary outside
of the ordinary course of business of the Company or such Restricted
Subsidiary.
Notwithstanding the foregoing, the term "Asset Disposition" shall not include
(x) a disposition by a Restricted Subsidiary to the Company or by the Company or
a Restricted Subsidiary to a Wholly Owned Subsidiary, (y) for purposes of the
covenant described under "Certain Covenants -- Limitation on Sales of Assets and
Subsidiary Stock", a disposition that constitutes a Permitted Investment or a
Restricted Payment permitted by the covenant described under "Certain Covenants
- -- Limitation on Restricted Payments", and (z) a disposition of assets having a
fair market value of less than $1 million.
"Attributable Debt" in respect of a Sale/Leaseback Transaction means, as at the
time of determination, the present value (discounted at the interest rate borne
by the Notes, compounded annually) of the total obligations of the lessee
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for rental payments during the remaining term of the lease included in such
Sale/Leaseback Transaction (including any period for which such lease has been
extended).
"Average Life" means, as of the date of determination, with respect to any
Indebtedness or Preferred Stock, the quotient obtained by dividing (i) the sum
of the products of numbers of years from the date of determination to the dates
of each successive scheduled principal payment of such Indebtedness or
redemption or similar payment with respect to such Preferred Stock multiplied by
the amount of such payment by (ii) the sum of all such payments.
"Bank Credit Agreements" means the Senior Credit Facility and any other bank
credit agreement or similar facility entered into in the future by the Company
or any Restricted Subsidiary as any of the same may be amended, waived,
modified, Refinanced or replaced from time to time (except to the extent that
any such amendment, waiver, modification, replacement or Refinancing would be
prohibited by the terms of the Indenture).
"Bank Indebtedness" means any and all present and future amounts payable under
or in respect of the Bank Credit Agreements, including principal, premium (if
any), interest (including interest accruing on or after the filing of any
petition in bankruptcy or for reorganization, whether or not a claim for
post-filing interest is allowed in such proceedings), fees, charges, expenses,
reimbursement obligations, Guarantees and all other amounts and other
Obligations payable thereunder or in respect thereof at any time.
"Board of Directors" means the Board of Directors of the Company or any
committee thereof duly authorized to act on behalf of such Board.
"Business Day" means each day which is not a Legal Holiday.
"Capital Lease Obligations" means an obligation that is required to be
classified and accounted for as a capital lease for financial reporting purposes
in accordance with GAAP, and the amount of Indebtedness represented by such
obligation shall be the capitalized amount of such obligation determined in
accordance with GAAP; and the Stated Maturity thereof shall be the date of the
last payment of rent or any other amount due under such lease prior to the first
date upon which such lease may be terminated by the lessee without payment of a
penalty.
"Capital Stock" of any Person means any and all shares, interests, rights to
purchase, warrants, options, participations or other equivalents of or interests
in (however designated) equity of such Person, including any Preferred Stock,
but excluding any debt securities convertible into such equity.
"Change of Control" means the occurrence of any of the following events:
(i) any "person" or "group" (as such terms are used in Sections 13(d) and
14(d) of the Exchange Act), other than one or more Permitted Holders,
is or becomes the beneficial owner (as defined in Rules 13d-3 and
13d-5 under the Exchange Act, except that for purposes of this clause
such person or group shall be deemed to have "beneficial ownership"
of all shares that any such person or group has the right to acquire,
whether such right is exercisable immediately or only after the
passage of time), directly or indirectly, of more than 40% of the
total voting power of the Voting Stock of the Company; provided,
however, that such event shall not be deemed to be a Change of
Control so long as the Permitted Holders beneficially own, directly
or indirectly, in the aggregate a greater percentage of the total
voting power of the Voting Stock of the Company than such other
person or group;
(ii) after the first public offering of common stock of the Company,
during any period of two consecutive years, individuals who at the
beginning of such period constituted the Board of Directors (together
with any new
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directors whose election by such Board of Directors or whose
nomination for election by the shareholders of the Company was
approved by a majority vote of the directors of the Company then
still in office who were either directors at the beginning of such
period or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the Board
of Directors then in office; or
(iii) the merger or consolidation of the Company with or into another
Person or the merger of another Person with or into the Company, or
the sale of all or substantially all the assets of the Company to
another Person (other than a Person that is controlled by the
Permitted Holders), and, in the case of any such merger or
consolidation, the securities of the Company that are outstanding
immediately prior to such transaction and which represent 100% of the
aggregate voting power of the Voting Stock of the Company are changed
into or exchanged for cash, securities or property, unless pursuant
to such transaction such securities are changed into or exchanged
for, in addition to any other consideration, securities of the
surviving corporation that represent immediately after such
transaction, at least a majority of the aggregate voting power of the
Voting Stock of the surviving corporation.
"Code" means the Internal Revenue Code of 1986, as amended.
"Consolidated Coverage Ratio" as of any date of determination means the ratio of
(i) the aggregate amount of EBITDA for the period of the most recent four
consecutive fiscal quarters ending at least 45 days (or, if less, the number of
days after the end of such fiscal quarter as the consolidated financial
statements of the Company shall be available) prior to the date of such
determination to (ii) Consolidated Interest Expense for such four fiscal
quarters; provided, however, that:
(1) if the Company or any Restricted Subsidiary has Incurred any
Indebtedness since the beginning of such period that remains
outstanding on such date of determination or if the transaction
giving rise to the need to calculate the Consolidated Coverage Ratio
is an Incurrence of Indebtedness, or both, EBITDA and Consolidated
Interest Expense for such period shall be calculated after giving
effect on a pro forma basis to such Indebtedness as if such
Indebtedness had been Incurred on the first day of such period and
the discharge of any other Indebtedness repaid, repurchased, defeased
or otherwise discharged with the proceeds of such new Indebtedness as
if such discharge had occurred on the first day of such period
(except that, in the case of Indebtedness used to finance working
capital needs incurred under a revolving credit or similar
arrangement, the amount thereof shall be deemed to be the average
daily balance of such Indebtedness during such four-fiscal-quarter
period),
(2) if since the beginning of such period the Company or any Restricted
Subsidiary shall have made any Asset Disposition, the EBITDA for such
period shall be reduced by an amount equal to the EBITDA (if
positive) directly attributable to the assets which are the subject
of such Asset Disposition for such period, or increased by an amount
equal to the EBITDA (if negative) directly attributable thereto for
such period, and Consolidated Interest Expense for such period shall
be reduced by an amount equal to the Consolidated Interest Expense
directly attributable to any Indebtedness of the Company or any
Restricted Subsidiary repaid, repurchased, defeased, assumed by a
third person (to the extent the Company and its Restricted
Subsidiaries are no longer liable for such Indebtedness) or otherwise
discharged with respect to the Company and its continuing Restricted
Subsidiaries in connection with such Asset Disposition for such
period (or, if the Capital Stock of any Restricted Subsidiary is
sold, the Consolidated Interest Expense for such period directly
attributable to the Indebtedness of such Restricted Subsidiary to the
extent the Company and its continuing Restricted Subsidiaries are no
longer liable for such Indebtedness after such sale),
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(3) if since the beginning of such period the Company shall have
consummated a Public Equity Offering following which there is a
Public Market, Consolidated Interest Expense for such period shall be
reduced by an amount equal to the Consolidated Interest Expense
directly attributable to any Indebtedness of the Company or any
Restricted Subsidiary repaid, repurchased, defeased or otherwise
discharged with respect to the Company and its Restricted
Subsidiaries in connection with such Public Equity Offering for such
period,
(4) if since the beginning of such period the Company or any Restricted
Subsidiary (by merger or otherwise) shall have made an Investment in
any Restricted Subsidiary (or any Person which becomes a Restricted
Subsidiary) or an acquisition of assets, which acquisition
constitutes all or substantially all of an operating unit of a
business, including any such Investment or acquisition occurring in
connection with a transaction requiring a calculation to be made
hereunder, EBITDA and Consolidated Interest Expense for such period
shall be calculated after giving pro forma effect thereto (including
the Incurrence of any Indebtedness) as if such Investment or
acquisition occurred on the first day of such period and
(5) if since the beginning of such period any Person (that subsequently
became a Restricted Subsidiary or was merged with or into the Company
or any Restricted Subsidiary since the beginning of such period)
shall have made any Asset Disposition, any Investment or acquisition
of assets that would have required an adjustment pursuant to clause
(3) or (4) above if made by the Company or a Restricted Subsidiary
during such period, EBITDA and Consolidated Interest Expense for such
period shall be calculated after giving pro forma effect thereto as
if such Asset Disposition, Investment or acquisition occurred on the
first day of such period.
For purposes of this definition, whenever pro forma effect is to be given to an
acquisition of assets, the amount of income, earnings or expense relating
thereto and the amount of Consolidated Interest Expense associated with any
Indebtedness Incurred in connection therewith, the pro forma calculations shall
be prepared in accordance with Article 11 of Regulation S-X promulgated by the
Commission as determined in good faith by a responsible financial or accounting
Officer of the Company. If any Indebtedness bears a floating rate of interest
and is being given pro forma effect, the interest of such Indebtedness shall be
calculated as if the rate in effect on the date of determination had been the
applicable rate for the entire period (taking into account any Interest Rate
Agreement applicable to such Indebtedness if such Interest Rate Agreement has a
remaining term in excess of 12 months).
"Consolidated Interest Expense" means, for any period, the total interest
expense of the Company and its consolidated Restricted Subsidiaries, plus, to
the extent not included in such total interest expense, and to the extent
incurred by the Company or its Restricted Subsidiaries:
(i) interest expense attributable to Capital Lease Obligations,
(ii) amortization of debt discount,
(iii) capitalized interest,
(iv) non-cash interest expenses,
(v) commissions, discounts and other fees and charges owed with respect
to letters of credit and bankers' acceptance financing,
(vi) net costs associated with Hedging Obligations (including amortization
of fees),
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(vii) Preferred Stock dividends in respect of all Preferred Stock held by
Persons other than the Company or a Wholly Owned Subsidiary, and
(viii) interest actually paid on any Indebtedness of any other Person that
is Guaranteed by the Company or any Restricted Subsidiary.
Notwithstanding the foregoing, net interest expense attributable to Tooling
Indebtedness shall not be included in Consolidated Interest Expense except to
the extent such expense would be included in interest expense in accordance with
GAAP.
"Consolidated Net Income" means, for any period, the net income of the Company
and its consolidated Subsidiaries; provided, however, that there shall not be
included in such Consolidated Net Income:
(i) any net income (or loss) of any Person if such Person is not a
Restricted Subsidiary, except that subject to the exclusion contained
in clause (iv) below, the Company's equity in the net income of any
such Person for such period shall be included in such Consolidated
Net Income up to the aggregate amount of cash actually distributed by
such Person during such period to the Company or a Restricted
Subsidiary as a dividend or other distribution (subject, in the case
of a dividend or other distribution paid to a Restricted Subsidiary,
to the limitations contained in clause (iii) below);
(ii) for purposes of subclause (a)(3)(A) of the covenant described under
"Certain Covenants -- Limitation on Restricted Payments" only, any
net income (or loss) of any Person acquired by the Company or a
Subsidiary in a pooling of interests transaction for any period prior
to the date of such acquisition;
(iii) any net income of any Restricted Subsidiary if such Restricted
Subsidiary is subject to restrictions, directly or indirectly, on the
payment of dividends or the making of distributions by such
Restricted Subsidiary, directly or indirectly, to the Company, except
that (A) subject to the exclusion contained in clause (iv) below, the
Company's equity in the net income of any such Restricted Subsidiary
for such period shall be included in such Consolidated Net Income up
to the aggregate amount of cash that could have been distributed by
such Restricted Subsidiary consistent with such restriction during
such period to the Company or another Restricted Subsidiary as a
dividend or other distribution (subject, in the case of a dividend or
other distribution paid to another Restricted Subsidiary, to the
limitation contained in this clause) and (B) the Company's equity in
a net loss of any such Restricted Subsidiary for such period shall be
included in determining such Consolidated Net Income;
(iv) any gain (or loss) realized upon the sale or other disposition of any
assets of the Company or its consolidated Subsidiaries (including
pursuant to any sale-and-leaseback arrangement) which is not sold or
otherwise disposed of in the ordinary course of business and any gain
(or loss) realized upon the sale or other disposition of any Capital
Stock of any Person;
(v) extraordinary gains or losses; and
(vi) the cumulative effect of a change in accounting principles.
Notwithstanding the foregoing, for the purposes of the covenant described under
"Certain Covenants--Limitation on Restricted Payments" only, there shall be
excluded from Consolidated Net Income any dividends, repayments of loans or
advances or other transfers of assets from Unrestricted Subsidiaries to the
Company or a Restricted Subsidiary to
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the extent such dividends, repayments or transfers increase the amount of
Restricted Payments permitted under such covenant pursuant to clause (a)(3)(D)
thereof.
"Consolidated Net Worth" means the total of the amounts shown on the balance
sheet of the Company and its consolidated Subsidiaries, determined on a
consolidated basis in accordance with GAAP, as of the end of the most recent
fiscal quarter of the Company ending at least 45 days prior to the taking of any
action for the purpose of which the determination is being made, as:
(i) the par or stated value of all outstanding Capital Stock of the
Company plus
(ii) paid-in capital or capital surplus relating to such Capital Stock
plus
(iii) any retained earnings or earned surplus less (A) any accumulated
deficit and (B) any amounts attributable to Disqualified Stock.
"Currency Agreement" means, with respect to any Person, any foreign exchange
contract, currency swap agreement or other similar agreement to which such
Person is a party or a beneficiary.
"Default" means any event which is, or after notice or passage of time or both
would be, an Event of Default.
"Designated Senior Indebtedness" means:
(i) the Bank Indebtedness and
(ii) any other Senior Indebtedness of the Company which, at the date of
determination, has an aggregate principal amount outstanding of, or
under which, at the date of determination, the holders thereof are
committed to lend up to, at least $10 million and is specifically
designated by the Company in the instrument evidencing or governing
such Senior Indebtedness as "Designated Senior Indebtedness" for
purposes of the Indenture.
"Disqualified Stock" means, with respect to any Person, any Capital Stock which
by its terms (or by the terms of any security into which it is convertible or
for which it is exchangeable) or upon the happening of any event:
(i) matures or is mandatorily redeemable pursuant to a sinking fund
obligation or otherwise,
(ii) is convertible or exchangeable, at the option of the holder thereof,
for Indebtedness or Disqualified Stock or
(iii) is redeemable at the option of the holder thereof, in whole or in
part, in each case on or prior to the first anniversary of the Stated
Maturity of the Notes.
"EBITDA" for any period means the sum of Consolidated Net Income plus
Consolidated Interest Expense plus, without duplication, the following to the
extent deducted in calculating such Consolidated Net Income:
(i) income tax expense (including Michigan Single Business Tax expense),
(ii) depreciation expense,
(iii) amortization expense and
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(iv) all other non-cash items reducing Consolidated Net Income
(other than items that will require cash payments and for
which an accrual or reserve is, or is required by GAAP to be,
made), less all non-cash items increasing Consolidated Net
Income, in each case for such period.
Notwithstanding the foregoing, the provision for taxes based on the income or
profits of, and the depreciation and amortization of, a Subsidiary of the
Company shall be added to Consolidated Net Income to compute EBITDA only to the
extent (and in the same proportion) that the net income of such Subsidiary was
included in calculating Consolidated Net Income.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Existing Preferred Stock" means the Series A $3.00 cumulative Preferred Stock
issued by Lobdell and the Series B Preferred Stock issued by Lobdell in the
aggregate amount of $50.7 million, less any shares of such preferred stock
repurchased, redeemed or canceled subsequent to the Existing Senior Subordinated
Note Issue Date, as the terms of such preferred stock shall exist as of the
Existing Senior Subordinated Note Issue Date.
"Existing Indenture" means the Indenture, dated as of June 15, 1997, among the
Company, the Subsidiary Guarantors and First Trust National Association (now
known as U.S. Bank Trust National Association), as Trustee relating to the
Existing Senior Subordinated Notes.
"Existing Senior Subordinated Notes" means the Series A Notes and the Series B
Notes.
"Existing Senior Subordinated Note Issue Date" means June 24, 1997.
"GAAP" means generally accepted accounting principles in the United States of
America as in effect as of the Existing Senior Subordinated Note Issue Date,
including those set forth in:
(i) the opinions and pronouncements of the Accounting Principles
Board of the American Institute of Certified Public
Accountants,
(ii) statements and pronouncements of the Financial Accounting
Standards Board and
(iii) such other statements by such other entity as approved by a
significant segment of the accounting profession.
"Guarantee" means any obligation, contingent or otherwise, of any Person
directly or indirectly guaranteeing any Indebtedness or other obligation of any
Person and any obligation, direct or indirect, contingent or otherwise, of such
Person:
(i) to purchase or pay (or advance or supply funds for the
purchase or payment of) such Indebtedness or other obligation
of such Person (whether arising by virtue of partnership
arrangements, or by agreements to keep-well, to purchase
assets, goods, securities or services, to take-or-pay or to
maintain financial statement conditions or otherwise) or
(ii) entered into for the purpose of assuring in any other manner
the obligee of such Indebtedness or other obligation of the
payment thereof or to protect such obligee against loss in
respect thereof (in whole or in part); provided, however, that
the term "Guarantee" shall not include endorsements for
collection or deposit in the ordinary course of business.
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The term "Guarantee" used as a verb has a corresponding meaning. The term
"Guarantor" shall mean any Person Guaranteeing any obligation.
"Hedging Obligations" of any Person means the obligations of such Person
pursuant to any Interest Rate Agreement or Currency Agreement.
"Holder" or "Noteholder" means the Person in whose name a Note is registered on
the Registrar's books.
"Incur" means issue, assume, Guarantee, incur or otherwise become liable for;
provided, however, that any Indebtedness or Capital Stock of a Person existing
at the time such Person becomes a Subsidiary (whether by merger, consolidation,
acquisition or otherwise) shall be deemed to be Incurred by such Subsidiary at
the time it becomes a Subsidiary; provided, further, however, that in the case
of a discount security, neither the accrual of interest nor the accretion of
original issue discount shall be considered an Incurrence of Indebtedness, but
the entire face amount of such security shall be deemed Incurred upon the
issuance of such security. The term "Incurrence" when used as a noun shall have
a correlative meaning.
"Indebtedness" means, with respect to any Person on any date of determination
(without duplication):
(i) the principal of and premium (if any) in respect of (A)
indebtedness of such Person for money borrowed and (B)
indebtedness evidenced by notes, debentures, bonds or other
similar instruments for the payment of which such Person is
responsible or liable;
(ii) all Capital Lease Obligations of such Person and all
Attributable Debt in respect of Sale/Leaseback Transactions
entered into by such Person;
(iii) all obligations of such Person issued or assumed as the
deferred purchase price of property or services, all
conditional sale obligations of such Person and all
obligations of such Person under any title retention agreement
(but excluding trade accounts payables arising in the ordinary
course of business and which are not more than 90 days past
due and not in dispute), which purchase price or obligation is
due more than six months after the date of placing such
property in service or taking delivery and title thereto or
the completion of such services (provided that, in the case of
obligations of an acquired Person assumed in connection with
an acquisition of such Person, such obligations would
constitute Indebtedness of such Person);
(iv) all obligations of such Person for the reimbursement of any
obligor on any letter of credit, banker's acceptance or
similar credit transaction (other than obligations with
respect to letters of credit securing obligations (other than
obligations described in (i) through (iii) above) entered into
in the ordinary course of business of such Person to the
extent such letters of credit are not drawn upon or, if and to
the extent drawn upon, such drawing is reimbursed no later
than the tenth Business Day following receipt by such Person
of a demand for reimbursement following payment on the letter
of credit);
(v) the amount of all obligations of such Person with respect to
the redemption, repayment or other repurchase of any
Disqualified Stock or, with respect to any Subsidiary of such
Person, any Preferred Stock (but excluding, in each case, any
accrued dividends);
(vi) all obligations of the type referred to in clauses (i) through
(v) of other Persons and all dividends of other Persons for
the payment of which, in either case, such Person is
responsible or liable, directly or indirectly, as obligor,
guarantor or otherwise, including by means of any Guarantee;
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(vii) all obligations of the type referred to in clauses (i) through
(vi) of other Persons secured by any Lien on any property or
asset of such Person (whether or not such obligation is
assumed by such Person), the amount of such obligation being
deemed to be the lesser of the value of such property or
assets or the amount of the obligation so secured; and
(viii) to the extent not otherwise included in this definition,
Hedging Obligations of such Person.
The amount of Indebtedness of any Person at any date shall be the outstanding
balance at such date of all unconditional obligations as described above and the
maximum liability, upon the occurrence of the contingency giving rise to the
obligation, of any contingent obligations as described above at such date;
provided, however, that the amount outstanding at any time of any Indebtedness
issued with original issue discount shall be deemed to be the face amount of
such Indebtedness less the remaining unamortized portion of the original issue
discount of such Indebtedness at such time as determined in conformity with
GAAP.
"Interest Rate Agreement" means any interest rate swap agreement, interest rate
cap agreement or other financial agreement or arrangement designed to protect
the Company or any Restricted Subsidiary against fluctuations in interest rates.
"Investment" in any Person means any direct or indirect advance, loan (other
than advances to customers in the ordinary course of business that are recorded
as accounts receivable on the balance sheet of such Person) or other extensions
of credit (including by way of Guarantee or similar arrangement) or capital
contribution to (by means of any transfer of cash or other property to others or
any payment for property or services for the account or use of others), or any
purchase or acquisition of Capital Stock, Indebtedness or other similar
instruments issued by such Person. For purposes of the definition of
"Unrestricted Subsidiary," the definition of "Restricted Payment" and the
covenant described under "Certain Covenants - Limitation on Restricted
Payments,"
(i) "Investment" shall include the portion (proportionate to the
Company's equity interest in such Subsidiary) of the fair
market value of the net assets of any Subsidiary of the
Company at the time that such Subsidiary is designated an
Unrestricted Subsidiary; provided, however, that upon a
redesignation of such Subsidiary as a Restricted Subsidiary,
the Company shall be deemed to continue to have a permanent
"Investment" in an Unrestricted Subsidiary equal to an amount
(if positive) equal to (x) the Company's "Investment" in such
Subsidiary at the time of such redesignation less (y) the
portion (proportionate to the Company's equity interest in
such Subsidiary) of the fair market value of the net assets of
such Subsidiary at the time of such redesignation; and
(ii) any property transferred to or from an Unrestricted Subsidiary
shall be valued at its fair market value at the time of such
transfer, in each case as determined in good faith by the
Board of Directors.
"Issue Date" means December 8, 1998.
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions are not required to be open in the State of New York.
"Lien" means any mortgage, pledge, security interest, encumbrance, lien or
charge of any kind (including any conditional sale or other title retention
agreement or lease in the nature thereof).
"Net Available Cash" from an Asset Disposition means cash payments received by
the Company or any of its Subsidiaries therefrom (including any cash payments
received by way of deferred payment of principal pursuant to a
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note or installment receivable or otherwise, but only as and when received, but
excluding any other consideration received in the form of assumption by the
acquiring Person of Indebtedness or other obligations relating to such
properties or assets or received in any other noncash form) in each case net of:
(i) all legal, title and recording tax expenses, commissions and
other fees and expenses incurred, and all Federal, state,
provincial, foreign and local taxes required to be paid or
accrued as a liability under GAAP, as a consequence of such
Asset Disposition,
(ii) all payments made on any Indebtedness which is secured by any
assets subject to such Asset Disposition, in accordance with
the terms of any Lien upon or other security agreement of any
kind with respect to such assets, or which must by its terms,
or in order to obtain a necessary consent to such Asset
Disposition, or by applicable law, be repaid out of the
proceeds from such Asset Disposition,
(iii) all distributions and other payments required to be made to
minority interest holders in Subsidiaries or Joint Ventures as
a result of such Asset Disposition and
(iv) the deduction of appropriate amounts provided by the seller as
a reserve, in accordance with GAAP, against any liabilities
associated with the property or other assets disposed in such
Asset Disposition and retained by the Company or any
Restricted Subsidiary after such Asset Disposition, including
without limitation liabilities under any indemnification
obligations associated with such Asset Disposition.
"Net Cash Proceeds," with respect to any issuance or sale of Capital Stock,
means the cash proceeds of such issuance or sale net of attorneys fees,
accountants fees, underwriters' or placement agents' fees, discounts or
commissions and brokerage, consultant and other fees actually incurred in
connection with such issuance or sale and net of taxes paid or payable as a
result thereof.
"Obligations" means all present and future obligations for principal, premium,
interest (including, without limitation, any interest accruing subsequent to the
filing of a petition of bankruptcy at the rate provided for in the documentation
with respect thereto, whether or not such interest is an allowed claim under
applicable law), penalties, fees, indemnifications, reimbursements (including,
without limitation, all reimbursement and other obligation pursuant to any
letters of credit, bankers acceptances or similar instruments or documents),
damages and other liabilities payable under the documentation at any time
governing any indebtedness.
"Permitted Holders" means:
(i) any of Selwyn Isakow, his spouse and any of his lineal
descendants and their respective spouses (collectively, the
"Isakow Family") whether acting in their own name or as one or
as a majority of persons having the power to exercise the
voting rights attached to, or having investment power over,
shares held by others,
(ii) any controlled Affiliate of any member of the Isakow Family,
and
(iii) any trust solely for the benefit of one or more members of the
Isakow Family (whether or not any member of the Isakow Family
is a trustee of such trust).
"Permitted Investment" means an Investment by the Company or any Restricted
Subsidiary in:
(i) the Company,
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(ii) a Restricted Subsidiary or a Person that will, upon the making
of such Investment, become a Restricted Subsidiary; provided,
however, that the primary business of such Restricted
Subsidiary is a Related Business;
(iii) another Person if as a result of such Investment such other
Person is merged or consolidated with or into, or transfers or
conveys all or substantially all its assets to, the Company or
a Restricted Subsidiary; provided, however, that such Person's
primary business is a Related Business;
(iv) Temporary Cash Investments;
(v) receivables owing to the Company or any Restricted Subsidiary
if created or acquired in the ordinary course of business and
payable or dischargeable in accordance with customary trade
terms; provided, however, that such trade terms may include
such concessionaire trade terms as the Company or any such
Restricted Subsidiary deems reasonable under the
circumstances;
(vi) payroll, travel and similar advances to cover matters that are
expected at the time of such advances ultimately to be treated
as expenses for accounting purposes and that are made in the
ordinary course of business;
(vii) loans or advances to employees made in the ordinary course of
business consistent with past practices of the Company or such
Restricted Subsidiary;
(viii) stock, obligations or securities received in settlement of
debts created in the ordinary course of business and owing to
the Company or any Restricted Subsidiary or in satisfaction of
judgments;
(ix) Persons other than Restricted Subsidiaries that are primarily
engaged in a Related Business, in an aggregate amount not to
exceed $15 million (to the extent utilized for an Investment,
such amount will be reinstated to the extent that the Company
or any Restricted Subsidiary receives dividends, repayments of
loans or other transfers of assets as a return of such
Investment);
(x) any Person to the extent such Investment is received in
exchange for the transfer to such Person of the assets owned
as of the Existing Senior Subordinated Note Issue Date by
Laserweld International L.L.C.; and
(xi) any Person to the extent such Investment represents the
non-cash portion of the consideration received for an Asset
Disposition as permitted pursuant to the covenant described
under "Certain Covenants - Limitation on Sales of Assets and
Subsidiary Stock."
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization, government
or any agency or political subdivision thereof or any other entity.
"Preferred Stock," as applied to the Capital Stock of any corporation, means
Capital Stock of any class or classes (however designated) which is preferred as
to the payment of dividends, or as to the distribution of assets upon any
voluntary or involuntary liquidation or dissolution of such corporation, over
shares of Capital Stock of any other class of such corporation.
"Principal" of a Note means the principal of the Note, plus the premium, if any,
payable on the Note which is due or overdue or is to become due at the relevant
time.
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"Public Equity Offering" means an underwritten primary public offering of common
stock of the Company pursuant to an effective registration statement under the
Securities Act.
"Public Market" means any time after:
(i) a Public Equity Offering has been consummated and
(ii) at least 10% of the total issued and outstanding common stock
of the Company has been distributed by means of an effective
registration statement under the Securities Act or sales
pursuant to Rule 144 under the Securities Act.
"Purchase Money Indebtedness" mean Indebtedness:
(i) consisting of the deferred purchase price of property,
conditional sale obligations, obligations under any title
retention agreement, other purchase money obligations and
obligations in respect of industrial revenue bonds or similar
Indebtedness, in each case where the maturity of such
Indebtedness does not exceed the anticipated useful life of
the asset being financed, and
(ii) incurred to finance the acquisition by the Company or a
Restricted Subsidiary of such asset, including additions and
improvements; provided, however, that any Lien arising in
connection with any such Indebtedness shall be limited to the
specified asset being financed or, in the case of real
property or fixtures, including additions and improvements,
the real property on which such asset is attached; and
provided, further, however, that such Indebtedness is Incurred
within 90 days after such acquisition of such asset by the
Company or Restricted Subsidiary.
"Refinance" means, in respect of any Indebtedness, to refinance, extend, renew,
refund, repay, prepay, redeem, defease or retire, or to issue other Indebtedness
in exchange or replacement for, such Indebtedness. "Refinanced" and
"Refinancing" shall have correlative meanings.
"Refinancing Indebtedness" means Indebtedness that Refinances any Indebtedness
of the Company or any Restricted Subsidiary existing on the Existing Senior
Subordinated Note Issue Date or Incurred in compliance with the Existing
Indenture; provided, however, that:
(i) such Refinancing Indebtedness has a Stated Maturity no earlier
than the Stated Maturity of the Indebtedness being Refinanced,
(ii) such Refinancing Indebtedness has an Average Life at the time
such Refinancing Indebtedness is Incurred that is equal to or
greater than the Average Life of the Indebtedness being
Refinanced and
(iii) such Refinancing Indebtedness has an aggregate principal
amount (or if Incurred with original issue discount, an
aggregate issue price) that is equal to or less than the
aggregate principal amount (or if Incurred with original issue
discount, the aggregate accreted value) then outstanding or
committed (plus fees and expenses, including any premium and
defeasance costs) under the Indebtedness being Refinanced;
provided further, however, that Refinancing Indebtedness shall
not include (x) Indebtedness of a Subsidiary that Refinances
Indebtedness of the Company or (y) Indebtedness of the Company
or a Restricted Subsidiary that Refinances Indebtedness of an
Unrestricted Subsidiary.
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"Related Business" means any business related, ancillary or complementary (as
determined in good faith by the Board of Directors) to the businesses of the
Company and the Restricted Subsidiaries on the Series A/B Issue Date.
"Representative" means any trustee, agent or representative (if any) for an
issue of Senior Indebtedness of the Company.
"Restricted Payment" means, with respect to any Person:
(i) the declaration or payment of any dividends or any other
distributions on or in respect of its Capital Stock (including
any payment in connection with any merger or consolidation
involving such Person) or similar payment to the holders of
its Capital Stock, except dividends or distributions payable
solely in its Capital Stock (other than Disqualified Stock)
and except dividends or distributions payable solely to the
Company or a Restricted Subsidiary (and, if such Restricted
Subsidiary is not wholly owned, to its other shareholders on a
pro rata basis or on a basis that results in the receipt by
the Company or a Restricted Subsidiary of dividends or
distributions of greater value than it would receive on a pro
rata basis),
(ii) the purchase, redemption or other acquisition or retirement
for value of any Capital Stock of the Company held by any
Person or of any Capital Stock of a Restricted Subsidiary held
by any Affiliate of the Company (other than a Restricted
Subsidiary), including the exercise of any option to exchange
any Capital Stock (other than into Capital Stock of the
Company that is not Disqualified Stock),
(iii) the purchase, repurchase, redemption, defeasance or other
acquisition or retirement for value, prior to scheduled
maturity, scheduled repayment or scheduled sinking fund
payment of any Subordinated Obligations (other than the
purchase, repurchase or other acquisition of Subordinated
Obligations purchased in anticipation of satisfying a sinking
fund obligation, principal installment or final maturity, in
each case due within one year of the date of acquisition) or
(iv) the making of any Investment in any Person (other than a
Permitted Investment).
"Restricted Subsidiary" means any Subsidiary of the Company that is not an
Unrestricted Subsidiary.
"Sale/Leaseback Transaction" means an arrangement relating to property now owned
or hereafter acquired whereby the Company or a Restricted Subsidiary transfers
such property to a Person and the Company or a
Restricted Subsidiary leases it from such Person.
"SEC" means the Securities and Exchange Commission.
"Secured Indebtedness" means any Indebtedness of the Company secured by a Lien.
"Secured Indebtedness" of any Subsidiary Guarantor has a correlative meaning.
"Senior Credit Facility" means the credit agreement dated as of June 24, 1997,
between the Company, the lenders and other persons party thereto and NBD Bank,
as Agent, together with the related documents thereto executed at any time
(including, without limitation, any guarantee agreements, security agreements
and other collateral documents) and the credit facilities thereunder, in each
case as such documents may be amended (including, without limitation, any
amendment and restatement thereof), supplemented or otherwise modified from time
to time, including any agreement extending the maturity of, refinancing,
replacing or otherwise restructuring (including, without limitation, increasing
the amount of available borrowings thereunder (provided that such increase in
borrowings is permitted by the
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covenant described under "Certain Covenants - Limitation on Indebtedness")
or adding subsidiaries as additional borrowers or guarantors thereunder).
"Senior Indebtedness" of the Company means:
(i) all Bank Indebtedness of the Company, whether outstanding on
the Existing Senior Subordinated Note Issue Date or thereafter
Incurred, including the Guarantees by the Company of all Bank
Indebtedness, and
(ii) accrued and unpaid interest (including interest accruing on or
after the filing of any petition in bankruptcy or for
reorganization relating to the Company whether or not a claim
for post-filing interest is allowed in such proceeding) in
respect of (A) indebtedness of the Company for money borrowed
and (B) indebtedness evidenced by notes, debentures, bonds or
other similar instruments for the payment of which the Company
is responsible or liable unless, in the instrument creating or
evidencing the same or pursuant to which the same is
outstanding, it is provided that such obligations are
subordinate in right of payment to the Notes; provided,
however, that Senior Indebtedness shall not include (1) any
obligation of the Company to any Subsidiary, (2) any liability
for Federal, state, local or other taxes owed or owing by the
Company, (3) any accounts payable or other liability to trade
creditors arising in the ordinary course of business
(including guarantees thereof or instruments evidencing such
liabilities), (4) any Indebtedness of the Company (and any
accrued and unpaid interest in respect thereof) which is
subordinate or junior in any respect (other than as a result
of the Indebtedness being unsecured) to any other Indebtedness
or other obligation of the Company, including any Senior
Subordinated Indebtedness and any Subordinated Obligations,
(5) any obligations with respect to any Capital Stock, (6)
that portion of any Indebtedness which at the time of
Incurrence is Incurred in violation of the Indenture or (7)
the Notes or the Existing Senior Subordinated Notes. "Senior
Indebtedness" of any Subsidiary Guarantor has a correlative
meaning.
"Senior Subordinated Indebtedness" of the Company means the Notes, the Existing
Senior Subordinated Notes and any other Obligations under or in connection with
the Notes, the Existing Senior Subordinated Notes, the Indenture, the Existing
Indenture and/or any related agreements, documents or instruments, whether now
owing or hereafter incurred or owing and any other Indebtedness of the Company
that specifically provides that such Indebtedness is to rank pari passu with the
Notes in right of payment and is not subordinated by its terms in right of
payment to any Indebtedness or other obligation of the Company which is not
Senior Indebtedness. "Senior Subordinated Indebtedness" of any Subsidiary
Guarantor has a correlative meaning.
"Series A Notes: means the $125 million aggregate principal amount of 10 1/8%
Senior Subordinated Notes due 2007 issued by the Company on June 24, 1997 under
the Existing Indenture.
"Series B Notes" means the $35 million aggregate principal amount of 10 1/8%
Senior Subordinated Notes due 2007 issued by the Company on April 1, 1998 under
the Existing Indenture.
"Significant Subsidiary" means any Restricted Subsidiary that would be a
"Significant Subsidiary" of the Company within the meaning of Rule 1-02 under
Regulation S-X promulgated by the SEC.
"Stated Maturity" means, with respect to any security, the date specified in
such security as the fixed date on which the final payment of principal of such
security is due and payable, including pursuant to any mandatory redemption
provision (but excluding any provision providing for the repurchase of such
security at the option of the holder thereof upon the happening of any
contingency unless such contingency has occurred).
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"Subordinated Obligation" means any Indebtedness of the Company (whether
outstanding on the Issue Date or thereafter Incurred) which is subordinate or
junior in right of payment to the Notes and the Existing Senior Subordinated
Notes pursuant to a written agreement to that effect. "Subordinated Obligation"
of any Subsidiary Guarantor has a correlative meaning.
"Subsidiary" means, in respect of any Person, any corporation, association,
partnership or other business entity of which more than 50% of the total voting
power of shares of Capital Stock or other interests (including partnership
interests) entitled (without regard to the occurrence of any contingency) to
vote in the election of directors, managers or trustees thereof is at the time
owned or controlled, directly or indirectly, by
(i) such Person,
(ii) such Person and one or more Subsidiaries of such Person or
(iii) one or more Subsidiaries of such Person.
"Subsidiary Guaranty" means the Guarantee by a Subsidiary Guarantor of the
Company's obligations with respect to the Notes and/or the Existing Senior
Subordinated Notes.
"Subsidiary Guarantor" means each Subsidiary designated as such on the signature
pages of the Indenture and any other Subsidiary that has issued a Subsidiary
Guaranty.
"Temporary Cash Investments" means any of the following:
(i) any investment in direct obligations of the United States of
America or any agency thereof or obligations guaranteed by the
United States of America or any agency thereof,
(ii) investments in time deposit accounts, certificates of deposit
and money market deposits maturing within 180 days of the date
of acquisition thereof issued by a bank or trust company which
is organized under the laws of the United States of America,
any state thereof or any foreign country recognized by the
United States, and which bank or trust company has capital,
surplus and undivided profits aggregating in excess of
$50,000,000 (or the foreign currency equivalent thereof) and
has outstanding debt which is rated "A" (or such similar
equivalent rating) or higher by at least one nationally
recognized statistical rating organization (as defined in Rule
436 under the Securities Act) or any money-market fund
sponsored by an registered broker dealer or mutual fund
distributor,
(iii) repurchase obligations with a term of not more than 30 days
for underlying securities of the types described in clause (i)
above entered into with a bank meeting the qualifications
described in clause (ii) above,
(iv) investments in commercial paper, maturing not more than 90
days after the date of acquisition, issued by a corporation
(other than an Affiliate of the Company) organized and in
existence under the laws of the United States of America, any
State thereof or the District of Columbia or any foreign
country recognized by the United States of America with a
rating at the time as of which any investment therein is made
of "P-1" (or higher) according to Moody's Investors Service,
Inc. or "A-1" (or higher) according to Standard and Poor's
Ratings Group, and
(v) investments in securities with maturities of six months or
less from the date of acquisition issued or fully guaranteed
by any state, commonwealth or territory of the United States
of America, or by any political
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subdivision or taxing authority thereof, and rated at least
"A" by Standard & Poor's Ratings Group or "A" by Moody's
Investors Service, Inc.
"Tooling Indebtedness" means all present and future Indebtedness of the Company
or any Restricted Subsidiary the proceeds of which are utilized to finance dies,
molds, tooling and similar items (collectively "Tooling") for which the sales of
such Tooling is covered under specific written purchase orders or agreements
between the Company or any Restricted Subsidiary and the purchaser of such
Tooling.
"Unrestricted Subsidiary" means:
(i) any Subsidiary of the Company that at the time of
determination shall be designated an Unrestricted Subsidiary
by the Board of Directors in the manner provided below and
(ii) any Subsidiary of an Unrestricted Subsidiary.
The Board of Directors may designate any Subsidiary of the Company (including
any newly acquired or newly formed Subsidiary) to be an Unrestricted Subsidiary
unless such Subsidiary or any of its Subsidiaries owns any Capital Stock or
Indebtedness of, or holds any Lien on any property of, the Company or any other
Subsidiary of the Company that is not a Subsidiary of the Subsidiary to be so
designated; provided, however, that either (A) the Subsidiary to be so
designated has total assets of $1,000 or less or (B) if such Subsidiary has
assets greater than $1,000, such designation would be permitted under the
covenant described under "Certain Covenants - Limitation on Restricted
Payments." The Board of Directors may designate any Unrestricted Subsidiary to
be a Restricted Subsidiary; provided, however, that immediately after giving
effect to such designation (x) the Company could Incur $1.00 of additional
Indebtedness under paragraph (a) of the covenant described under "Certain
Covenants - Limitation on Indebtedness" and (y) no Default shall have occurred
and be continuing. Any such designation by the Board of Directors shall be
notified by the Company to the Trustee by promptly filing with the Trustee a
copy of the board resolution giving effect to such designation and an Officers'
Certificate certifying that such designation complied with the foregoing
provisions.
"U.S. Government Obligations" means direct obligations (or certificates
representing an ownership interest in such obligations) of the United States of
America (including any agency or instrumentality thereof) for the payment of
which the full faith and credit of the United States of America is pledged and
which are not callable at the issuer's option.
"Voting Stock" of a Person means all classes of Capital Stock or other interests
(including partnership interests) of such Person then outstanding and normally
entitled (without regard to the occurrence of any contingency) to vote in the
election of directors, managers or trustees thereof.
"Wholly Owned Subsidiary" means a Restricted Subsidiary all the Capital Stock of
which (other than directors' qualifying shares) is owned by the Company and/or
one or more Wholly Owned Subsidiaries.
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
The following discussion summarizes the certain United States federal
income tax consequences of the Exchange Offer to a holder of Existing Notes that
is an individual citizen or resident (within the meaning of Section 7701(b) of
the Internal Revenue Code of 1986, as amended to the date hereof (the "Code"))
of the United States or a United States corporation that purchased the Existing
Notes pursuant to their original issue (a "U.S. Holder"). It is based on the
Code, existing and proposed Treasury regulations, and judicial and
administrative determinations, all of which are
110
<PAGE> 115
subject to change at any time, possibly on a retroactive basis. The following
relates only to the Existing Notes, and the Series D Notes received therefor,
that are held as "capital assets" within the meaning of Section 1221 of the Code
by U.S. Holders. It does not discuss state, local, or foreign tax consequences,
nor does it discuss tax consequences to categories of holders that are subject
to special rules, such as foreign persons, tax-exempt organizations, insurance
companies, banks, and dealers in stocks and securities. Tax consequences may
vary depending on the particular status of an investor. No rulings will be
sought from the Internal Revenue Service with respect to the federal income tax
consequences of the Exchange Offer.
THIS SECTION DOES NOT PURPORT TO DEAL WITH ALL ASPECTS OF FEDERAL INCOME
TAXATION THAT MAY BE RELEVANT TO AN INVESTOR'S DECISION TO EXCHANGE EXISTING
NOTES FOR SERIES D NOTES. EACH INVESTOR SHOULD CONSULT WITH ITS OWN TAX ADVISOR
CONCERNING THE APPLICATION OF THE FEDERAL INCOME TAX LAWS AND OTHER TAX LAWS TO
ITS PARTICULAR SITUATION BEFORE DETERMINING WHETHER TO EXCHANGE EXISTING NOTES
FOR SERIES D NOTES.
ADDITIONALLY, THE COMPANY DOES NOT BELIEVE, BASED ON THE FACTS AND
CIRCUMSTANCES OF THE EXCHANGE, THE LEGAL RIGHTS OR OBLIGATIONS THAT ARE ALTERED
AND THE DEGREE TO WHICH THEY ARE ALTERED ARE ECONOMICALLY SIGNIFICANT.
ACCORDINGLY, THE COMPANY BELIEVES THAT THE EXCHANGE OF THE EXISTING NOTES FOR
SERIES D NOTES WOULD NOT BE CONSIDERED A SIGNIFICANT MODIFICATION UNDER TREAS.
REG. SECTION 1.1001-3. HOWEVER, NEITHER A LETTER RULING FROM THE INTERNAL
REVENUE SERVICE NOR AN OPINION OF COUNSEL HAS NOT BEEN REQUESTED. EACH INVESTOR
SHOULD CONSULT WITH ITS OWN TAX ADVISOR CONCERNING THE APPLICATION OF TREAS.
REG. SECTION 1.1001-3, AS WELL AS OTHER TAX LAWS TO ITS PARTICULAR SITUATION
BEFORE DETERMINING WHETHER TO EXCHANGE EXISTING NOTES FOR SERIES D NOTES.
THE EXCHANGE OFFER
The exchange of Existing Notes pursuant to the Exchange Offer should be
treated as a continuation of the corresponding Existing Notes because the terms
of the Series D Notes are not materially different from the terms of the
Existing Notes. Accordingly, it is the Company's belief that such exchange will
not constitute a taxable event to U.S. Holders and, therefore,
(i) no gain or loss should be realized by a U.S. Holder upon
receipt of a Series D Note,
(ii) the holding period of the Series D Note should include the
holding period of the Existing Note exchanged therefor and
(iii) the adjusted tax basis of the Series D Note should be the same
as the adjusted tax basis of the Existing Note exchanged
therefor immediately before the exchange.
STATED INTEREST
Stated interest on a Series D Note will be taxable to a U.S. Holder as
ordinary interest income at the time that such interest accrues or is received,
in accordance with the U.S. Holder's regular method of accounting for federal
income tax purposes. The Existing Notes are not considered to have been issued
with original issue discount for federal income tax purposes, and there will be
no original issue discount with respect to the Series D Notes.
PREMIUM
The Series B Notes and the Series C Notes were issued for an amount that,
at the time of issuance, was in excess of the amount payable at the maturity
date of the Series B Notes and the Series C Notes. Therefore, a U.S. Holder of
111
<PAGE> 116
Series D Notes received in exchange for Series B Notes or Series C Notes will be
treated as holding Series D Notes at a premium.
A U.S. Holder generally may elect to amortize the premium over the term of
the Series D Note on a constant yield method. The amount amortized in any year
will be treated as a reduction of the U.S. Holder's interest income from the
Series D Note. The U.S. Holder's adjusted tax basis in the Series D Note will be
reduced to the extent of the deduction of amortizable bond premium. Premium on a
Series D Note held by a U.S. Holder that does not make such an election to
amortize will decrease the gain or increase the loss otherwise recognized on
disposition of the Series D Note.
U.S. Holders otherwise permitted to report income under the "cash method"
of accounting should carefully consider the advisability of such an election to
amortize premium, since it would not permit them to report interest income from
the Series D Note using the cash method and, accordingly, it may result in an
acceleration of interest income from a Series D Note.
The election to amortize premium on a constant yield method, once made,
applies to all debt obligations held or subsequently acquired by the electing
U.S. Holder on or after the first day of the first taxable year to which the
election applies and may not be revoked without the consent of the Internal
Revenue Service.
MARKET DISCOUNT
A U.S. Holder of a Note, other than an initial Holder, will be treated as
holding the Note at a market discount (a "Market Discount Note") if the amount
for which such U.S. Holder purchased the Note is less than the Note's principal
amount, subject to a de minimis rule.
In general, any partial payment on, or gain recognized on the maturity or
disposition of, a Market Discount Note will be treated as ordinary income to the
extent that such gain does not exceed the accrued market discount on such Note.
Alternatively, a U.S. Holder of a Market Discount Note may elect to include
market discount in income currently over the life of the Market Discount Note.
Such an election applies to all debt instruments with market discount acquired
by the electing U.S. Holder on or after the first day of the first taxable year
to which the election applies and may not be revoked without the consent of the
Internal Revenue Service.
Market discount accrues on a straight-line basis, unless the U.S. Holder
elects to accrue such discount on a constant yield to maturity basis. Such an
election is applicable only to the Note with respect to which it is made and is
irrevocable. A U.S. Holder of a Market Discount Note that does not elect to
include market discount in income currently, generally will be required to defer
deductions for interest on borrowings allocable to such Note, in an amount not
exceeding the accrued market discount on such Note, until the maturity or
disposition of such Note.
SALE, EXCHANGE OR RETIREMENT OF THE NOTES
A U.S. Holder's tax basis in a Series D Note generally will be its cost. A
U.S. Holder generally will recognize gain or loss on the sale, exchange or
retirement of a Series D Note in an amount equal to the difference between the
amount realized on the sale, exchange or retirement and the tax basis of the
Series D Note. Gain or loss recognized on the sale, exchange or retirement of a
Series D Note (excluding amounts received in respect of accrued interest, which
will be taxable as ordinary interest income) generally will be capital gain or
loss and will be long-term capital gain or loss if the Series D Note was held
for more than one year.
112
<PAGE> 117
BACKUP WITHHOLDING
Under certain circumstances, a U.S. Holder of a Series D Note may be
subject to "backup withholding" at a 31% rate with respect to payments of
interest thereon or the gross proceeds from the disposition thereof. This
withholding generally applies if the U.S. Holder fails to furnish his or her
social security number or other taxpayer identification number in the specified
manner and in certain other circumstances. Any amount withheld from a payment to
a U.S. Holder under the backup withholding rules is allowable as a credit
against such U.S. Holder's federal income tax liability, provided that the
required information is furnished to the Internal Revenue Service. Corporations
and certain other entities described in the Code and Treasury regulations are
exempt from backup withholding if their exempt status is properly established.
PLAN OF DISTRIBUTION
Each broker-dealer that receives Series D Notes for its own account
pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such Series D Notes. This
Prospectus, as it may be amended or supplemented from time to time, may be used
by a broker-dealer in connection with resales of Series D Notes received in
exchange for Existing Notes where such Existing Notes were acquired as a result
of market-making activities or other trading activities. Each of the Company and
the Subsidiary Guarantors has agreed that, starting on the Expiration Date and
ending on the close of business on the first anniversary of the Expiration Date,
it will make this Prospectus, as amended or supplemented, available to any
broker-dealer for use in connection with any such resale. In addition, until
_____________, 1999 (90 days after the date of this Prospectus), all dealers
effecting transactions in the Series D Notes may be required to deliver a
prospectus.
Neither the Company nor any of the Subsidiary Guarantors will receive any
proceeds from any sale of Series D Notes by broker-dealers. Series D Notes
received by broker-dealers for their own account pursuant to the Exchange Offer
may be sold from time to time in one or more transactions in the
over-the-counter market, in negotiated transactions, through the writing of
options on the Series D Notes or a combination of such methods of resale, at
market prices prevailing at the time of resale, at prices related to such
prevailing market prices or negotiated prices. Any such resale may be made
directly to purchasers or to or through brokers or dealers who may receive
compensation in the form of commissions or concessions from any such
broker-dealer or the purchasers of any such Series D Notes. Any broker-dealer
that resells Series D Notes that were received by it for its own account
pursuant to the Exchange Offer and any broker or dealer that participates in a
distribution of such Series D Notes may be deemed to be an "underwriter" within
the meaning of the Securities Act and any profit on any such resale of Series D
Notes and any commissions or concessions received by any such persons may be
deemed to be underwriting compensation under the Securities Act. The Letter of
Transmittal states that, by acknowledging that it will deliver and by delivering
a prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
For a period of one year after the Expiration Date, the Company will
promptly send additional copies of this Prospectus and any amendment or
supplement to this Prospectus to any broker-dealer that requests such documents
in the Letter of Transmittal. The Company and each of the Subsidiary Guarantors
have agreed to pay all expenses incident to the Exchange Offer (including the
expenses of one counsel for the holders of the Series C Notes) other than
commissions or concessions of any brokers or dealers and will indemnify the
holders of the Series C Notes (including any broker-dealers) against certain
liabilities, including liabilities under the Securities Act.
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<PAGE> 118
LEGAL MATTERS
The validity of the Series D Notes offered hereby will be passed upon for
the Company by Dykema Gossett PLLC, Bloomfield Hills, Michigan. Rex E.
Schlaybaugh, Jr. is a shareholder, the Vice Chairman of the Board and a director
of the Company. Mr. Schlaybaugh is a member of Dykema Gossett PLLC. Certain
matters relating to the Subsidiary Guaranties and the application of Ontario law
to them will be passed upon for the Company by Fasken Campbell Godfrey, Toronto,
Ontario.
EXPERTS
On March 28, 1997, PricewaterhouseCoopers LLP, independent accountants, was
selected by the Board of Directors of Oxford Automotive, Inc. to audit the
financial statements of Oxford Automotive, Inc. for the fiscal year ended March
31, 1997. The consolidated financial statements of the Company as of and for the
years ended March 31, 1998 and 1997 included in this Prospectus have been so
included in reliance on the report of a predecessor of PricewaterhouseCoopers
LLP (Price Waterhouse LLP), independent accountants, given on the authority of
said firm as experts in auditing and accounting.
The consolidated financial statements of the Company as of March 31, 1996
and for the period from October 28, 1995 through March 31, 1996 appearing in
this Prospectus and the related financial statement schedule included in the
Exchange Offer Registration Statement have been audited by Deloitte & Touche
LLP, independent auditors, as stated in their report appearing herein, and are
included in reliance upon the report of such firm given upon their authority as
experts in accounting and auditing.
The consolidated financial statements of BMG North America Limited
(Predecessor) for the period from April 1, 1995 through October 27, 1995
appearing in this Prospectus and the related financial statement schedule
included in the Exchange Offer Registration Statement have been audited by
Deloitte & Touche LLP, independent auditors, as stated in their report appearing
herein, and are included in reliance upon the report of such firm given upon
their authority as experts in accounting and auditing.
The consolidated financial statements of Lobdell Emery Corporation as of
December 31, 1996 and 1995 and for each year in the three-year period ended
December 31, 1996 included in this Prospectus have been so included in reliance
on the report of a predecessor of PricewaterhouseCoopers LLP (Price Waterhouse
LLP), independent accountants, given on the authority of said firm as experts in
auditing and accounting.
The financial statements of Howell Industries, Inc. as of and for the
year ended July 31, 1997 included in this Prospectus have been so included in
reliance on the report of a predecessor of PricewaterhouseCoopers LLP (Price
Waterhouse LLP), independent accountants, given on the authority of said firm as
experts in auditing and accounting.
The consolidated financial statements of RPI Holdings, Inc. as of March
31, 1997 and June 30, 1996 and for the nine and twelve month periods then ended,
respectively included in this Prospectus, have been so included in reliance on
the report of predecessors of PricewaterhouseCoopers LLP (Price Waterhouse LLP
and Coopers & Lybrand L.L.P., respectively) independent accountants, given on
the authority of said firms as experts in auditing and accounting.
The combined financial statements of the Suspension Division as of
December 31, 1997 and for the year ended December 31, 1997 included in this
Prospectus have been so included in reliance on the report of a predecessor of
PricewaterhouseCoopers LLP (Price Waterhouse LLP), independent accountants,
given on the authority of said firm as experts in auditing and accounting.
114
<PAGE> 119
The financial statements of Cofimeta S.A. and its subsidiaries as of and
for the nine months ended September 30, 1998 and as of and for the years ended
December 31, 1997 and 1996 included in this Prospectus have been so included in
reliance on the report Coopers & Lybrand Audit, independent accountants, given
on the authority of said firm as experts in auditing and accounting.
115
<PAGE> 120
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
Page
<S> <C>
OXFORD AUTOMOTIVE, INC.
Report of Independent Accountants ........................................................................... F-3
Independent Auditors' Report ................................................................................ F-4
Consolidated Balance Sheets as of March 31, 1998, 1997 and 1996 and December 31, 1998 (unaudited) ........... F-5
Consolidated Statements of Operations for the years ended March 31, 1998 and 1997, the period from
October 28, 1995 through March 31, 1996 and the nine months ended December
31, 1998 and 1997 (unaudited) for the Company; and for the period from
April 1, 1995 through October 27, 1995 for the Predecessor ............................................. F-6
Consolidated Statements of Changes in Shareholders' Equity for the years ended
March 31, 1998 and 1997, the period from October 28, 1995 through March
31, 1996 and the nine months ended December 31, 1998 (unaudited) for the
Company; and for the period from April 1, 1995 through October 27, 1995 for
the Predecessor ........................................................................................ F-7
Consolidated Statements of Cash Flows for the years ended March 31, 1998 and 1997, the period from
October 28, 1995 through March 31, 1996 and the nine months ended December
31, 1998 and 1997 (unaudited) for the Company; and for the period from
April 1, 1995 through October 27, 1995 for the Predecessor ............................................. F-8
Notes to Consolidated Financial Statements .................................................................. F-9
OXFORD AUTOMOTIVE, INC.
Condensed consolidating financial information as of and for the nine months ended December 31, 1998 ......... F-33
LOBDELL EMERY CORPORATION
Report of Independent Accountants ........................................................................... F-38
Consolidated Balance Sheets as of December 31, 1996 and 1995 ................................................ F-39
Consolidated Statements of Operations for the years ended December 31, 1996, 1995 and 1994 .................. F-40
Consolidated Statement of Changes in Shareholders' Equity for the years ended December 31, 1996, 1995 and
1994 ............................................................................................... F-41
Consolidated Statements of Cash Flows for the years ended December 31, 1996, 1995 and 1994 .................. F-42
Notes to Consolidated Financial Statements .................................................................. F-43
HOWELL INDUSTRIES, INC.
Report of Independent Accountants ........................................................................... F-54
Consolidated Balance Sheet as of July 31, 1997 .............................................................. F-55
Statement of Operations for the year ended July 31, 1997 .................................................... F-56
Statement of Shareholders' Equity for the year ended July 31, 1997 .......................................... F-57
Statement of Cash Flows for the year ended July 31, 1997 .................................................... F-58
Notes to Consolidated Financial Statements .................................................................. F-59
RPI HOLDINGS, INC.
Report of Independent Accountants ........................................................................... F-65
Report of Independent Accountants ........................................................................... F-66
Consolidated Balance Sheets as of March 31, 1997, June 30, 1996 and September 30, 1997 (unaudited) ........ F-67
Consolidated Statements of Operations for the period from July 1, 1996 to March 31, 1997, for the year ended
June 30, 1996, and the six months ended September 30, 1997 and 1996 (unaudited) .................... F-68
Consolidated Statement of Changes in Shareholders' Equity for the period from July 1, 1996 to March 31, 1997,
the period from July 1, 1995 to June 30, 1996, and for the six months ended September 30, 1997
(unaudited) ........................................................................................ F-69
Consolidated Statements of Cash Flows for period from July 1, 1996 to March 31, 1997, for the year ended
June 30, 1996, and the six months ended September 30, 1997 and 1996 (unaudited) ................... F-70
Notes to Consolidated Financial Statements .................................................................. F-71
</TABLE>
F-1
<PAGE> 121
<TABLE>
<CAPTION>
<S> <C>
SUSPENSION DIVISION OF EATON CORPORATION
Report of Independent Accountants ........................................................................... F-78
Combined Balance Sheets as of December 31, 1997 and March 31, 1998 (unaudited) .............................. F-79
Combined Statements of Operations for the year ended December 31, 1997, and for the three months
ended March 31, 1998 and 1997 (unaudited) .......................................................... F-80
Combined Statements of Cash Flows for the year ended December 31, 1997, and for the three months
ended March 31, 1998 and 1997 (unaudited) .......................................................... F-81
Notes to Combined Financial Statements ...................................................................... F-82
Cofimeta S.A.
Independent Auditors Report ................................................................................. F-94
Consolidated Assets as of September 30, 1998 and December 31, 1997 .......................................... F-95
Consolidated Liabilities as of September 30, 1998 and December 31, 1997 ..................................... F-96
Consolidated Income Statements for the nine months ended September 30, 1998
and the years ended December 31, 1997 and 1996 ........................................................ F-97
Consolidated Cash Flow Statements for the nine months ended September 30, 1998 and
the years ended December 31, 1997 and 1996 ............................................................ F-98
Notes to Consolidated Financial Statements .................................................................. F-99
</TABLE>
F-2
<PAGE> 122
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors
and Shareholders of
Oxford Automotive, Inc.
In our opinion, the accompanying consolidated balance sheets and the related
consolidated statements of operations, of changes in shareholders' equity and
of cash flows present fairly, in all material respects, the financial position
of Oxford Automotive, Inc. and its subsidiaries (the Company) at March 31, 1998
and 1997 and the results of their operations and their cash flows for the years
ended March 31, 1998 and 1997 in conformity with generally accepted accounting
principles. These financial statements are the responsibility of the Company's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these statements in
accordance with generally accepted auditing standards which require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for the opinion expressed above.
The financial statements of the Company as of March 31, 1996 and for the period
from October 28, 1995 through March 31, 1996 and the financial statements of
BMG North America Limited (the Predecessor) for the period from April 1, 1995
through October 27, 1995 were audited by other independent accountants whose
report dated May 21, 1996 expressed an unqualified opinion on those statements.
PRICE WATERHOUSE LLP
Bloomfield Hills, Michigan
June 22, 1998
F-3
<PAGE> 123
INDEPENDENT AUDITORS' REPORT
To the Directors of
Oxford Automotive, Inc. and BMG North America Limited
We have audited the consolidated balance sheet of Oxford Automotive, Inc. as at
March 31, 1996 and the consolidated statements of operations, changes in
shareholders' equity and cash flows for the period from October 28, 1995 to
March 31, 1996 for Oxford Automotive, Inc. and the consolidated statements of
operations, changes in shareholders' equity and cash flows for the period from
April 1, 1995 to October 27, 1995 for BMG North America Limited. These
financial statements are the responsibility of the management of Oxford
Automotive, Inc. and BMG North America Limited. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform an audit to obtain
reasonable assurance whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, these consolidated financial statements present fairly, in all
material respects, the financial position of Oxford Automotive, Inc., as at
March 30, 1996 and the results of its operations and its cash flows for the
period from October 28, 1995 to March 31, 1996 and the results of BMG North
America Limited's operations and its cash flows for the period from April 1,
1995 to October 27, 1995 in accordance with U.S. generally accepted accounting
principles.
DELOITTE & TOUCHE LLP
Chartered Accountants
Kitchener, Ontario
May 21, 1996
F-4
<PAGE> 124
OXFORD AUTOMOTIVE, INC.
CONSOLIDATED BALANCE SHEETS
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE-RELATED DATA)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
December 31, MARCH 31,
1998 1998 1997 1996
ASSETS (unaudited)
<S> <C> <C> <C> <C>
Current assets
Cash and cash equivalents $ 318 $ 18,321 $ 9,671 $ -
Trade receivables, net 86,336 65,273 47,626 8,338
Inventories 33,911 21,305 13,411 3,719
Refundable income taxes 1,601 1,641
Reimbursable tooling 40,237 13,315 4,968 3,298
Deferred income taxes 4,399 4,399 4,633
Unexpended bond proceeds 6 4,159
Prepaid expenses and other current assets 3,630 2,803 1,354 1,181
-------- ---------- -------- ----------
TOTAL CURRENT ASSETS 168,837 131,176 83,304 16,536
Unexpended bond proceeds 3,937
Marketable securities 8,092 8,627
Other noncurrent assets 36,269 10,116 4,588 6,734
Deferred income taxes 7,918 6,405 5,087 6,139
Property, plant and equipment, net 191,446 163,708 146,778 19,791
-------- ---------- -------- ----------
TOTAL ASSETS $412,562 $ 320,032 $243,694 $ 49,200
======== ========== ======== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Trade accounts payable $ 54,428 $ 52,214 $ 31,421 $ 14,570
Employee compensation 10,918 4,808 4,986 1,883
Restructuring reserve 3,019 6,363 7,050 608
Accrued expenses and other current liabilities 10,000 12,242 9,040 3,299
Current portion of borrowings 3,411 10,965 24,274 11,258
-------- ---------- -------- ----------
TOTAL CURRENT LIABILITIES 81,766 86,592 76,771 31,618
Pension liability 5,470 4,727 3,631 1,080
Postretirement medical benefits liability 41,427 35,992 33,467
Deferred income taxes 13,962 15,332 10,442
Other noncurrent liabilities 3,870 2,596 2,187 67
Long-term borrowings -- less current portion 227,549 128,483 75,555 15,500
-------- ---------- -------- ----------
TOTAL LIABILITIES 374,054 273,722 202,053 48,265
-------- ---------- -------- ----------
Commitments and contingent liabilities (Note 15)
Redeemable Series A $3.00 Cumulative Preferred Stock, $100 stated
value -- 457,541 shares authorized, 397,539 shares issued and
outstanding in 1998 and 457,541 shares issued and outstanding in
1997 (Notes 3 and 13) 40,586 40,192 36,012
-------- ---------- --------
Redeemable Series B Preferred Stock, $100 stated value -- 49,938
shares authorized, no shares issued and outstanding in 1998 and
49,938 shares issued and outstanding in 1997 (Notes 3 and 13) 3,288
-------- ---------- --------
SHAREHOLDERS' EQUITY
Common stock, 400,000 shares authorized; 309,750
shares issued and outstanding at March 31, 1998 and 1997 and
75,000 shares issued and outstanding at March 31, 1996 1,050 1,050 1,050 750
Foreign currency translation adjustment (6,132) (651) (28) 5
Retained earnings 3,050 4,750 1,572 415
Net unrealized gain on marketable securities (46) 969
Equity adjustment for minimum pension liability (253) (235)
-------- ---------- -------- ----------
(2,078) 6,118 2,341 935
-------- ---------- -------- ----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 412,562 $ 320,032 $ 243,694 $ 49,200
========= ========== ========= ==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-5
<PAGE> 125
OXFORD AUTOMOTIVE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE-RELATED DATA)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMPANY
------------------------------------------------------------------------------------------
PERIOD FROM
NINE MONTHS ENDED NINE MONTHS ENDED YEAR ENDED YEAR ENDED OCTOBER 28, 1995
DECEMBER 31, DECEMBER 31, MARCH 31, MARCH 31, THROUGH
1998 1997 1998 1997 MARCH 31, 1996
(unaudited) (unaudited)
<S> <C> <C> <C> <C> <C>
Net sales $ 408,144 $ 295,530 $ 410,321 $ 136,861 $ 35,572
Cost of sales 372,612 267,180 368,420 125,375 31,624
----------- ---------- ----------- ---------- ----------
GROSS PROFIT 35,532 28,350 41,901 11,486 3,948
Selling, general and administrative 22,235 13,587 21,839 7,685 2,235
Restructuring provision 1,176 1,610
Gain on sale of equipment ----------- ----------- (1,602)
----------- ---------- ----------
OPERATING INCOME 12,121 14,763 20,054 3,801 1,713
Other income (expense)
Interest expense (14,255) (7,921) (10,710) (3,388) (1,096)
Other 949 531 321 2,201
----------- ---------- ----------- ----------
INCOME BEFORE BENEFIT (PROVISION) FOR
INCOME TAXES (1,185) 7,373 9,665 2,614 617
Benefit (provision) for income taxes 475 (2,949) (4,074) (1,065) (202)
----------- ---------- ----------- ---------- ----------
NET INCOME (710) 4,424 5,591 1,549 415
Accrued dividends and accretion on
Redeemable preferred stock 990 1,002 1,334 300
----------- ---------- ----------- ---------- ----------
NET INCOME APPLICABLE TO COMMON STOCK $ (1,700) $ 3,422 $ 4,257 $ 1,249 $ 415
=========== ========== =========== ========== ==========
NET INCOME PER SHARE (BASIC AND DILUTED) $ (5.49) $ 11.05 $ 13.74 $ 9.37 $ 9.10
=========== ========== =========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
PREDECESSOR
----------------
PERIOD FROM
APRIL 1, 1995
THROUGH
OCTOBER 27, 1995
<S> <C>
Net sales $ 49,043
Cost of sales 46,895
----------
GROSS PROFIT 2,148
Selling, general and administrative 3,922
Restructuring provision
Gain on sale of equipment
----------
OPERATING INCOME (1,774)
Other income (expense)
Interest expense (1,048)
Other
INCOME BEFORE BENEFIT (PROVISION) FOR ----------
INCOME TAXES (2,822)
Benefit (provision) for income taxes 938
----------
NET INCOME $ (1,884)
===========
Accrued dividends and accretion on
Redeemable preferred stock
NET INCOME APPLICABLE TO COMMON STOCK
NET INCOME PER SHARE (BASIC AND DILUTED)
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-6
<PAGE> 126
OXFORD AUTOMOTIVE, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(DOLLAR AMOUNTS IN THOUSANDS)
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PREDECESSOR
------------------------------------------------------------------------------------
FOREIGN NET EQUITY
CURRENCY RETAINED UNREALIZED GAIN ADJUSTMENT FOR
COMMON TRANSLATION EARNINGS ON MARKETABLE MINIMUM PENSION
STOCK ADJUSTMENT (DEFICIT) SECURITIES LIABILITY TOTAL
<S> <C> <C> <C> <C> <C> <C>
BALANCES AT APRIL 1, 1995 $ 14,262 $ 40 $ (3,469) $ - $ - $ 10,833
Net loss (1,884) (1,884)
Foreign currency translation
adjustments 575 (155) 420
Issuance of common stock, net
of redemptions (40) (40)
--------- ------- --------- ----- ----- ---------
BALANCES AT OCTOBER 27, 1995 $ 14,797 $ (115) $ (5,353) $ - $ - $ 9,329
======== ======== ========== ===== ===== =========
<CAPTION>
COMPANY
---------------------------------------------------------------------------- --------
FOREIGN NET EQUITY
CURRENCY UNREALIZED GAIN ADJUSTMENT FOR
COMMON TRANSLATION RETAINED ON MARKETABLE MINIMUM PENSION
STOCK ADJUSTMENT EARNINGS SECURITIES LIABILITY TOTAL
<S> <C> <C> <C> <C> <C> <C>
BALANCES AT OCTOBER 28, 1995 $ 750 $ - $ - $ - $ - $ 750
Net income 415 415
Foreign currency translation
adjustments 5 5
Equity adjustment for
Minimum pension liability (235) (235)
------- ------- --------- ------ ----- --------
BALANCES AT MARCH 31, 1996 750 5 415 - (235) 935
Net income 1,549 1,549
Foreign currency translation
Adjustments (33) (33)
Equity adjustment for
Minimum pension liability (18) (18)
Accrued dividends and
Accretion of redeemable
Preferred stock (300) (300)
Issuance of common stock, net
of redemptions 300 (92) 208
------- ------- --------- ------ ----- --------
BALANCES AT MARCH 31, 1997 1,050 (28) 1,572 - (253) 2,341
Net income 5,591 5,591
Excess of purchase price over
Predecessor basis (1,079) (1,079)
Foreign currency translation
Adjustments (623) (623)
Unrealized gain on marketable
securities 969 969
Equity adjustment for
minimum pension liability 253 253
Dividends and accretion
on redeemable preferred stock (1,334) (1,334)
------ ------ --------- ------ ----- --------
BALANCES AT MARCH 31, 1998 1,050 (651) 4,750 969 6,118
Net income (unaudited) (710) (710)
Foreign currency translation
adjustments (unaudited) (5,481) (5,481)
Unrealized loss on marketable
securities (unaudited) (1,015) (1,015)
Accrued dividends and accretion
of redeemable preferred
stock (unaudited) (990) (990)
------ ------ --------- ------ ----- --------
BALANCES AT DECEMBER 31, 1998
(UNAUDITED) $ 1,050 $(6,132) $ 3,050 $ (46) $ - $(2,078)
======= ======= ========= ====== ===== ========
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-7
<PAGE> 127
OXFORD AUTOMOTIVE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLAR AMOUNTS IN THOUSANDS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMPANY
------------------------------------------------------------------------
PERIOD FROM
NINE MONTHS ENDED YEAR ENDED YEAR ENDED OCTOBER 28, 1995
DECEMBER 31, MARCH 31, MARCH 31, THROUGH
1998 1997 1998 1997 MARCH 31, 1996
<S> <C> <C> <C> <C> <C>
OPERATING ACTIVITIES
Net income (loss) $ (710) $ 4,424 $ 5,591 $ 1,549 $ 415
Adjustments to reconcile net income (loss) to
net cash provided by (used in) operating
activities
Depreciation and amortization 19,552 14,580 20,279 5,041 687
Deferred income taxes (2,968) (3,759) 137 2,136 230
Gain on sale of equipment 52 (1,586) (195) (2)
Changes in operating assets and liabilities
affecting cash
Trade receivables (11,162) 9,435 (4,615) (8,953) 6,617
Inventories (1,853) 2,832 1,496 (299) (277)
Reimbursable tooling (27,237) (909) (7,368) (1,601) 1,824
Prepaid expenses and other assets 3,396 (2,334) 569 129 1,592
Other noncurrent assets (836) 3,544
Trade accounts payable (3,772) (7,948) 11,416 (605) (6,501)
Employee compensation 169 (6,072) 309
Restructuring reserve (3,272) (1,392) (745) (398)
Accrued expenses and other liabilities 1,448 (1,143) (3,166) (1,885) (1,716)
Income taxes payable/refundable 2,914 (199)
Other noncurrent liabilities (4,589) 1,405 1,731 (39)
---------- ---------- ---------- ---------- -----------
NET CASH PROVIDED BY (USED IN)OPERATING
ACTIVITIES (31,167) 15,243 25,986 (7,847) 3,178
---------- ---------- ---------- ---------- -----------
INVESTING ACTIVITIES
Purchase of businesses, net of cash acquired (53,886) (24,145) (24,219) (9,309) (1,983)
Purchase of property, plant and equipment (20,369) (11,418) (16,723) (3,326) (3,466)
Proceeds from sale of equipment 1,050 5,433 341 33
Purchases of marketable securities (892) (7,658)
---------- ---------- ---------- ---------- -----------
NET CASH USED IN INVESTING ACTIVITIES (75,147) (34,513) (43,167) (12,294) (5,416)
---------- ---------- ---------- ---------- -----------
FINANCING ACTIVITIES
Issuance of share capital 300 750
Proceeds from borrowing arrangements 92,085 124,814 126,653 78,823 23,814
Principal payments on borrowing arrangements (92,245) (93,782) (49,186) (16,482)
Payment of preferred stock dividends (596) (597) (1,193)
Debt financing costs (2,621) (5,372)
Redemption and retirement of common stock (92)
Obligation under capital lease - net (6)
---------- ---------- ---------- ---------- -----------
NET CASH PROVIDED BY (USED IN) FINANCING
ACTIVITIES 88,868 31,972 26,306 29,845 8,076
---------- ---------- ---------- ---------- -----------
Effect of exchange rate changes on cash (557) (2,818) (475) (33)
---------- ---------- ---------- ---------- -----------
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS (18,003) 9,884 8,650 9,671 5,838
Cash and cash equivalents at beginning of
Period 18,321 9,671 9,671 (11,238)
---------- ---------- ---------- ---------- -----------
Cash and cash equivalents at end of period $ 318 $ 19,555 $ 18,321 $ 9,671 $ (5,400)
========== ========== ========== ========== ===========
Cash paid for interest $ 18,269 $ 7,033 $ 7,338 $ 3,033 $ 1,096
========== ========== ========== ========== ===========
Cash paid for income taxes $ 2,527 $ 4,190 $ 4,670 $ - $ 42
========== ========== ========== ========== ===========
<CAPTION>
PREDECESSOR
----------------
PERIOD FROM
APRIL 1, 1995
THROUGH
OCTOBER 27, 1995
<S> <C>
OPERATING ACTIVITIES
Net income (loss) $ (1,884)
Adjustments to reconcile net income (loss) to
net cash provided by (used in) operating
activities
Depreciation and amortization 919
Deferred income taxes (1,036)
Gain on sale of equipment
Changes in operating assets and liabilities
affecting cash
Trade receivables (3,311)
Inventories (259)
Reimbursable tooling (760)
Prepaid expenses and other assets (1,768)
Other noncurrent assets
Trade accounts payable 6,417
Employee compensation (493)
Restructuring reserve
Accrued expenses and other liabilities 3,504
Income taxes payable/refundable
Other noncurrent liabilities
--------
NET CASH PROVIDED BY (USED IN)OPERATING
ACTIVITIES 1,329
--------
INVESTING ACTIVITIES
Purchase of businesses, net of cash acquired
Purchase of property, plant and equipment (5,111)
Proceeds from sale of equipment 11
--------
Purchases of marketable securities
NET CASH USED IN INVESTING ACTIVITIES (5,100)
--------
FINANCING ACTIVITIES
Issuance of share capital
Proceeds from borrowing arrangements 921
Principal payments on borrowing arrangements (7,477)
Payment of preferred stock dividends
Debt financing costs
Redemption and retirement of common stock (40)
Obligation under capital lease - net (3)
--------
NET CASH PROVIDED BY (USED IN) FINANCING
ACTIVITIES (6,599)
--------
Effect of exchange rate changes on cash
--------
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS (10,370)
Cash and cash equivalents at beginning of
Period (868)
--------
Cash and cash equivalents at end of period $(11,238)
========
Cash paid for interest $ 1,048
========
Cash paid for income taxes $ 79
========
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-8
<PAGE> 128
OXFORD AUTOMOTIVE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE-RELATED DATA)
- --------------------------------------------------------------------------------
1. NATURE OF OPERATIONS
Oxford Automotive, Inc. (the Company) is a full-service supplier of metal
stampings and welded assemblies used as original equipment components
primarily by North American original equipment automotive manufacturers.
The Company's products are used in a wide variety of sport utility
vehicles, light and medium trucks, vans and passenger cars. The Company
primarily operates from thirteen plants located in the United States,
Canada and Mexico. The Company's hourly workforce is represented by
various unions.
Net sales to the Company's three primary customers as a percentage of
total sales are as follows:
<TABLE>
<CAPTION>
PERIOD FROM
OCTOBER 28, 1995
YEAR ENDED YEAR ENDED THROUGH
MARCH 31, 1998 MARCH 31, 1997 MARCH 31, 1996
<S> <C> <C> <C>
General Motors Corporation 54% 62% 67%
Ford Motor Company 31% 17% -
Chrysler Corporation 9% - -
</TABLE>
Accounts receivable from General Motors Corporation, Ford Motor Company
and Chrysler Corporation represent approximately 39%, 39% and 13%,
respectively, of the March 31, 1998 accounts receivable balance.
Although the Company is directly affected by the economic well being of
the automotive industry and customers referred to above, management does
not believe significant credit risk exists at March 31, 1998. The Company
does not require collateral to reduce such risk and historically has not
experienced significant losses related to receivables from individual
customers or groups of customers in the automotive industry.
2. SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The financial statements for the period from April 1, 1995 through
October 27, 1995 are those of BMG North America Limited (the
Predecessor), which was acquired by Oxford Automotive, Inc.
(formerly BMG-MI, Inc.) on October 28, 1995.
The consolidated financial statements as of March 31, 1998 and 1997 and
for the years then ended and for the period from October 28, 1995 through
March 31, 1996 are those of the Company and its subsidiaries. The
financial statements of the Company and the Predecessor are not
comparable in certain respects due to differences between the cost bases
of certain assets held by the Company versus that of the Predecessor,
resulting in reduced depreciation and amortization charges subsequent to
October 27, 1995, changes in accounting policies and the recording of
certain liabilities at the date of acquisition in connection with the
purchase of the Predecessor by the Company, as well as the Company's
acquisitions subsequent to October 28, 1995 discussed further in Note 3.
F-9
<PAGE> 129
OXFORD AUTOMOTIVE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE-RELATED DATA)
- --------------------------------------------------------------------------------
2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements of the Company include the accounts
of Oxford Automotive, Inc. and its wholly-owned subsidiaries, BMG
Holdings, Inc. (BMGH), Howell Industries, Inc. (Howell), Lobdell Emery
Corporation (Lobdell), RPI Holdings, Inc. (RPIH) and Oxford Automotriz de
Mexico S.A. de C.V. (Oxford Mexico). Intercompany accounts and
transactions have been eliminated.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities
and disclosures of contingent assets and liabilities at the date of the
financial statements, and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
REVENUE RECOGNITION
Revenue is recognized by the Company upon shipment of product to the
customer.
FINANCIAL INSTRUMENTS
At March 31, 1998 and 1997, the carrying amount of financial instruments
such as cash and cash equivalents, trade receivables and payables and
unexpended bond proceeds, approximated their fair values. The carrying
amount of the long-term customer receivables and borrowings at March 31,
1998 and 1997, approximated their fair values based on the variable
interest rates available to the Company for similar arrangements.
CASH EQUIVALENTS
The Company considers all highly-liquid investments with maturity of
three months or less when purchased to be cash equivalents.
INVENTORIES
Inventories are stated at the lower of cost or market. Cost is
principally determined by the last-in, first-out (LIFO) method for the
Company's United States operations and by the first-in first-out (FIFO)
method for the Company's Canadian operations.
REIMBURSABLE TOOLING
Reimbursable tooling represents net costs incurred on tooling projects
for which the Company expects to be reimbursed by customers. Ongoing
estimates of total costs to be incurred on each tooling project are made
by management. Losses, if any, are recorded when known and in cases where
billings exceed costs incurred, the related tooling gain is recognized
upon acceptance of the tooling by the customer. Certain of the Company's
tooling costs are financed through lending institutions and are
reimbursed by customers on a piece price basis. These tooling assets are
classified as either accounts receivable ($2,676, $3,695, and $1,809 at
March 31, 1998, 1997, and 1996 respectively), other noncurrent assets
(none, $3,800 and $6,734 at March 31, 1998, 1997, and 1996
respectively) or equipment depending upon the ultimate title holder of
the tooling assets.
F-10
<PAGE> 130
OXFORD AUTOMOTIVE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE-RELATED DATA)
- --------------------------------------------------------------------------------
2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
UNEXPENDED BOND PROCEEDS
Unexpended bond proceeds in the accompanying consolidated balance sheet
represent unexpended proceeds from the issuance of industrial development
revenue bonds by Creative Fabrication Corporation (Creative), a
wholly-owned subsidiary of Lobdell, as discussed in Note 8, and are
invested in allowable money market accounts and commercial paper with a
maturity of 90 days or less.
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are stated on the basis of cost and include
expenditures for improvements which materially increase the useful lives
of existing assets. Expenditures for normal repair and maintenance are
charged to operations as incurred. For federal income tax purposes,
depreciation is computed using accelerated and straight-line methods. For
financial reporting purposes, depreciation is computed principally using
the straight-line method over the following estimated useful lives:
<TABLE>
<CAPTION>
YEARS
<S> <C>
Land improvements 15
Buildings and improvements 30-40
Machinery and equipment 3-20
</TABLE>
IMPAIRMENT OF LONG-LIVED ASSETS
The Company accounts for long-lived assets in accordance with Statement
of Financial Accounting Standards No. 121, "Accounting for the Impairment
of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of". This
Statement requires that long-lived assets and certain identifiable
intangibles to be held and used by the Company be reviewed for impairment
whenever events or changes in circumstances indicate that the carrying
amount of an asset may not be fully recoverable. The Company recognizes
impairment losses for assets or groups of assets where the sum of the
estimated future cash flows (undiscounted and without interest charges)
is less than the carrying amount of the related asset or group of assets.
The amount of the impairment loss recognized is the excess of the
carrying amount over the fair value of the asset or group of assets being
measured.
MARKETABLE SECURITIES
Marketable securities at March 31, 1998, mainly composed of equity
securities, are classified as available-for-sale securities and are
reported at fair value using quoted market prices. Unrealized holding
gains and losses are included as a separate component of shareholders'
equity until realized.
F-11
<PAGE> 131
OXFORD AUTOMOTIVE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE-RELATED DATA)
- --------------------------------------------------------------------------------
2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
ENVIRONMENTAL COMPLIANCE AND REMEDIATION
Environmental expenditures that relate to current operations are expensed
or capitalized as appropriate. Expenditures that relate to an existing
condition caused by past operations which do not contribute to current or
future revenue generation are expensed. Liabilities are recorded when
environmental assessments and/or remedial efforts are probable and the
costs can be reasonably estimated. Estimated costs are based upon enacted
laws and regulations, existing technology and the most probable method of
remediation. The costs determined are not discounted and exclude the
effects of inflation and other social and economic factors.
INCOME TAXES
Deferred taxes are provided to give recognition to the effect of expected
future tax consequences of temporary differences between the carrying
amounts for financial reporting purposes and the tax bases for income tax
purposes of assets and liabilities.
FOREIGN EXCHANGE CONTRACTS
Gains and losses of foreign currency firm commitment hedges are deferred
and included in the basis of the transactions underlying the commitments.
During fiscal 1997, the Company recognized a gain of approximately $2,000
related to certain foreign currency exchange transactions terminated
during the year. The gain is included as a component of other income in
the accompanying March 31, 1997 statement of operations. Had the foreign
currency exchange transactions not been terminated, the recognized gain
would normally have been recorded as a component of sales.
FOREIGN CURRENCY TRANSLATION
The foreign currency financial statements of BMGH and Oxford Mexico,
where the local currency is the functional currency, are translated using
exchange rates in effect at period end for assets and liabilities and at
weighted average exchange rates during the period for operating statement
accounts. The resulting foreign currency translation adjustments are
recorded as a separate component of shareholders' equity. Exchange gains
and losses resulting from foreign currency transactions are included in
operating results during the period in which they occur.
PER SHARE AMOUNTS
The per share amounts of the Predecessor have not been presented as the
Company's capital structure is not comparable to that of the Predecessor.
RECLASSIFICATIONS
Certain amounts from the prior year have been reclassified to conform
with the current year presentation.
F-12
<PAGE> 132
OXFORD AUTOMOTIVE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE-RELATED DATA)
- --------------------------------------------------------------------------------
3. ACQUISITIONS
On October 28, 1995, the Company acquired all of the outstanding common
stock of BMG North America Limited (BMGNA). The acquisition was financed
through a $750 Series A promissory note. The acquisition has been
recorded in accordance with the purchase method of accounting.
Accordingly, the purchase price plus direct cost of the acquisition have
been allocated to the assets acquired and liabilities assumed based on
their estimated fair values at the date of acquisition.
On January 10, 1997, pursuant to an Agreement and Plan of Merger among
Lobdell Emery Corporation, certain shareholders of Lobdell Emery
Corporation, BMG-MI, Inc. and L-E Acquisition, Inc. as amended (the
Agreement), certain Lobdell Emery Corporation shareholders and option
holders had their respective shares and options redeemed for cash of
approximately $8,500 and all outstanding shares of common stock of
Lobdell Emery Corporation (Oldco) were exchanged for shares of preferred
stock of Oldco with a face value of approximately $40,700. In addition,
approximately $3,500 of expenses incurred by Oldco were reimbursed by
L-E Acquisition, Inc. In connection with the exchange of Oldco's common
stock for preferred stock, L-E Acquisition, Inc. was merged with and
into Lobdell Emery Corporation (Newco).
The acquisition was financed through the issuance of preferred stock
described in Note 13 and a term loan, which was subsequently refinanced,
as described in Note 8. The acquisition has been recorded in accordance
with the purchase method of accounting. Accordingly, the purchase price
plus direct cost of the acquisition have been allocated to the assets
acquired and liabilities assumed based on their estimated fair values at
the date of acquisition.
The fair market value of assets acquired and liabilities assumed, after
giving effect to the settlement described in Note 13, is summarized as
follows:
<TABLE>
<S> <C>
Current assets $ 56,993
Property, plant and equipment 129,966
Noncurrent assets 9,953
Current liabilities (50,028)
Long-term liabilities (107,130)
------------
Fair value of preferred stock $ 39,754
============
</TABLE>
In accordance with the purchase method of accounting, Lobdell's operating
results have been included with those of the Company since the date of
acquisition.
On August 13, 1997, the Company acquired all of the outstanding common
stock of Howell for approximately $23,700 in cash, including acquisition
costs. The acquisition was financed through the proceeds of the
subordinated notes described in Note 8. The acquisition has been recorded
in accordance with the purchase method of accounting. Accordingly, the
purchase price plus direct cost of the acquisition have been allocated to
the assets acquired and liabilities assumed based on their estimated fair
values at the date of acquisition.
F-13
<PAGE> 133
OXFORD AUTOMOTIVE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE-RELATED DATA)
- --------------------------------------------------------------------------------
3. ACQUISITIONS (CONTINUED)
The fair market value of assets acquired and liabilities assumed is
summarized as follows:
<TABLE>
<S> <C>
Current assets $ 22,900
Property, plant and equipment 18,100
Current liabilities (14,100)
Long-term liabilities (3,200)
------------
$ 23,700
============
</TABLE>
On November 25, 1997, Oxford purchased all of the outstanding common
stock of RPIH for $2,500 in cash. The acquisition was financed through
the proceeds of the subordinated notes described in Note 8. The
acquisition has been recorded in accordance with the purchase method of
accounting. Accordingly, the purchase price has been allocated to the
assets acquired and liabilities assumed based on their estimated fair
values at the date of acquisition. The majority shareholder of Oxford was
also the majority shareholder of RPIH.
The fair market value of assets acquired and liabilities assumed is
summarized as follows:
<TABLE>
<S> <C>
Current assets $ 3,900
Property, plant and equipment 5,000
Noncurrent assets 1,600
Current liabilities (5,400)
Long-term liabilities (3,700)
Excess of purchase price over predecessor basis 1,100
------------
$ 2,500
============
</TABLE>
The excess of purchase price over predecessor basis is a result of the
common ownership by the majority shareholder of Oxford and represents the
portion of the fair value of the net assets acquired in excess of their
book value, multiplied by the majority shareholder's ownership percentage
in RPIH. The Company has recorded this amount as a deduction from
retained earnings in the accompanying statement of changes in
shareholders' equity.
The following unaudited pro forma combined results of operations of the
Company have been prepared as if the acquisitions of Lobdell, Howell and
RPIH had occurred at the beginning of fiscal 1998 and 1997.
<TABLE>
<CAPTION>
YEAR ENDED
MARCH 31, 1998 MARCH 31, 1997
<S> <C> <C>
Net sales $ 453,685 $ 433,443
Net income $ 4,692 $ 2,364
Net income applicable to common shares $ 3,358 $ 1,052
Net income per common share $ 10.84 $ 3.40
</TABLE>
The pro forma information is not intended to be a projection of future
results.
F-14
<PAGE> 134
OXFORD AUTOMOTIVE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE-RELATED DATA)
- --------------------------------------------------------------------------------
3. ACQUISITIONS (CONTINUED)
The foregoing unaudited pro forma results of operations reflect
adjustments for additional interest expense related to the financing of
the acquisitions and the additional depreciation expense, as a result of
the write-up of property, plant and equipment, net of the related tax
benefit.
4. ACCOUNTS RECEIVABLE
Accounts receivable are comprised of the following at March 31:
<TABLE>
<CAPTION>
1998 1997 1998
<S> <C> <C> <C>
Trade receivables $ 65,673 $ 48,898 $ 8,377
Less - allowance for doubtful accounts (400) (1,272) (39)
--------- --------- --------
Trade receivables, net $ 65,273 $ 47,626 $ 8,338
========= ========= ========
</TABLE>
5. INVENTORIES
Inventories are comprised of the following at March 31:
<TABLE>
<CAPTION>
1998 1997 1996
<S> <C> <C> <C>
Raw materials $ 6,737 $ 5,688 $ 1,557
Finished goods and work-in-process 15,135 7,994 2,162
--------- --------- ---------
21,872 13,682 3,719
LIFO and other reserves (567) (271)
--------- --------- ---------
$ 21,305 $ 13,411 $ 3,719
========= ========= =========
</TABLE>
The Company does not separately identify finished goods from
work-in-process.
6. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are comprised of the following at March 31:
<TABLE>
<CAPTION>
1998 1997 1996
<S> <C> <C> <C>
Land and land improvements $ 5,432 $ 5,073 $ 779
Buildings and improvements 29,126 24,697 3,171
Machinery and equipment 140,095 117,535 7,394
Construction-in-process 12,204 4,393 8,914
----------- --------- --------
186,857 151,698 20,258
Less - accumulated depreciation (23,149) (4,920) (467)
----------- --------- --------
$ 163,708 $ 146,778 $ 19,791
=========== ========= ========
</TABLE>
F-15
<PAGE> 135
OXFORD AUTOMOTIVE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE-RELATED DATA)
- --------------------------------------------------------------------------------
6. PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
Certain machinery and equipment with a net book value of $9,900 was idle
at March 31, 1998. Management intends to redeploy these assets amongst
its operating facilities and does not believe that the net book value of
these assets is impaired at March 31, 1998. In addition, in connection
with the restructuring activities described in Note 10, management
expects that additional assets, mainly land and buildings with a net book
value of $7,300 at March 31, 1998, will be idled next year.
In March 1998, the Company sold assets acquired in connection with the
acquisition of Lobdell and recorded a gain on the sale of these assets
of $1,602.
As discussed in Note 10, certain of the Company's facilities were closed
during the year ended March 31, 1998. As management intends to sell these
facilities, the net book value of the land and buildings, approximating
$1,815, is classified in prepaid expenses and other current assets as of
March 31, 1998 in the accompanying consolidated balance sheet.
7. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
Accrued expenses and other current liabilities are comprised of the
following at March 31:
<TABLE>
<CAPTION>
1998 1997 1996
<S> <C> <C> <C>
Accrued interest $ 3,627 $ 103 $ -
Accrued workers' compensation 3,287 3,071 544
Accrued property taxes 1,454 2,350
Accrued medical benefits 1,040 1,827
Foreign exchange gain 1,975
Other 2,834 1,689 780
-------- -------- -------
$ 12,242 $ 9,040 $ 3,299
======== ======== =======
</TABLE>
F-16
<PAGE> 136
OXFORD AUTOMOTIVE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE-RELATED DATA)
- --------------------------------------------------------------------------------
8. BORROWING ARRANGEMENTS
Borrowings consist of the following at March 31:
<TABLE>
<CAPTION>
1998 1997 1996
<S> <C> <C> <C>
SERIES A 10.125% SENIOR SUBORDINATED NOTES DUE 2007, OXFORD $ 124,827 $ - $ -
INDUSTRIAL DEVELOPMENT REVENUE BONDS, CREATIVE
$8,500 issued September 27, 1995, floating rate interest (3.85% at
March 31, 1998). Quarterly principal payments based on graduated
maturity schedule. Backed by NBD Bank letter of credit 7,600 8,300
EDC TOOLING LOAN, BMGNA
Interest at a fixed rate of 7.36%. Payments based on parts shipped,
matures September 30, 1999 2,967 5,110
BANK SYNDICATE--REVOLVING CREDIT LINE, OXFORD
Interest at prime rate (8.5% at March 31, 1998), matures June 24, 2003 1,825
BANK-- TERM LOAN, LOBDELL
Interest at .625% over 90-day LIBOR (6.435% at March 31, 1998).
Quarterly principal payments of approximately $400, matures
October 1, 1998 1,233 2,833
IRDP LOAN, BMGNA
Interest at 6%. Monthly principal payments of $7 to October 31, 2000 and
$11 thereafter, matures September 1, 2002 396 467 534
BANK SYNDICATE -- TERM LOAN, LOBDELL
Interest at variable spread over prime. Quarterly principal payments
ranging from $1,250-$2,750 plus interest, repaid in full during 52,750
fiscal 1998
BANK SYNDICATE -- REVOLVING CREDIT LINE, LOBDELL
Interest at variable spread over prime, repaid in full during fiscal 1998 1,250
BANK SYNDICATE -- TERM LOAN, BMGNA
Interest at prime rate plus 1.25%. Quarterly payments of $755 plus
interest, repaid in full during fiscal 1998 14,447
REVOLVING CREDIT LINE, BMGNA
Interest at prime rate plus 1.25%, repaid in full during fiscal 1998 10,376
NATIONS BANK -- SATURN TOOLING, BMGNA
Interest at a variable spread over prime (8.71% at March 31, 1997).
Payments based on parts shipped, repaid in full during fiscal 1998 1,380 7,047
CCFL LOAN, BMGNA
Interest at 11.11%. Monthly principal payments of $21, repaid in full
during fiscal 1998 2,475 2,768
TERM LOAN, BMGNA
Interest at Canadian Index Rate plus 3% or Canadian Banker's
Acceptance Rate plue 3.95%. Quarterly principal payments
based on graduated schedule, repaid in full during fiscal 1997 7,765
REVOLVING CREDIT LINE, BMGNA
Interest at Canadian Banker's Acceptance Rate plue 3.7%,
repaid in full during fiscal 1997 2,803
BANK LOAN, BMGNA
Interest at either the Canadian Index Rate plue 2.5% or BA
rate plus 3.45%, reapid in full during fiscal 1997 2,650
TOOLING LINE, BMGNA
Interest at the Canadian Index Rate plue 3% or the Canadian
Banker's Acceptance Rate plus 3.95%, repaid in full during
fiscal 1997 2,750
SERIES A PROMISSORY NOTE, BMGH
Interest at 7%, repaid in full during fiscal 1998 441 441
OTHER 600
---------- --------- --------
Total 139,448 99,829 26,758
Less - current portion of long-term borrowings (10,965) (24,274) (11,258)
---------- --------- --------
Long-term borrowings-- less current portion $ 128,483 $ 75,555 $ 15,500
========== ========= ========
</TABLE>
F-17
<PAGE> 137
OXFORD AUTOMOTIVE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE-RELATED DATA)
- --------------------------------------------------------------------------------
8. BORROWING ARRANGEMENTS (CONTINUED)
On June 24, 1997, the Company issued $125,000 of Series A 10.125% Senior
Subordinated Notes Due 2007 (the Notes). The Notes mature on June 15,
2007 and require semi-annual interest payments of approximately $6,300.
The proceeds from the Notes were primarily used to repay certain of the
Company's indebtedness and finance the Company's acquisitions of Howell
and RPIH described in Note 3, as well as the acquisition of the assets of
the Suspension Division of Eaton Corporation described in Note 17. The
Notes are unsecured and are guaranteed by Oxford and certain of its
wholly-owned subsidiaries. See Note 18. On April 1, 1997, the Company
issued $35,000 of Series B 10.125% Senior Subordinated Notes Due 2007 as
discussed in Note 17.
Concurrent with the issuance of the Notes, the Company entered into a
credit agreement with a syndicate of banks (the Oxford Credit Agreement),
under which the Company may borrow up to $110,000, of which a maximum of
$15,000 is available for letters of credit. At March 31, 1998, $1,825 was
outstanding under the revolving line of credit and $9,437 was outstanding
under letters of credit, leaving $98,738 unused and available. The terms
of the Oxford Credit Agreement contain, amount other provisions,
requirements for maintaining defined levels of tangible net worth, total
debt to cash flows, interest coverage and fixed charge coverage. The
Oxford Credit Agreement also contains certain restrictions on the payment
of dividends. Quarterly commitment fees on the unused amounts of the
revolving credit line range from .25% to .50% of the unused portion.
Borrowings are secured by substantially all of the assets of Oxford.
The proceeds of the industrial development revenue bonds were used to
finance the real and personal property of Creative. These bonds are
backed by an NBD letter of credit, which carries a rate of 1.50% and is
collateralized by substantially all assets of Creative. The letter of
credit reimbursement agreement includes covenants requiring minimum
tangible capital, debt service coverage and limitations on other
indebtedness.
The Bank--term loan, Lobdell and EDC tooling loan, BMGNA are used to
finance customer tooling. These loans are collateralized by either a
customer purchase order or the tooling assets.
Aggregate maturities of long-term borrowings at March 31, 1998 are as
follows:
<TABLE>
<S> <C>
1999 $ 10,965
2000 2,032
2001 1,048
2002 93
2003 93
Thereafter 125,217
-----------
$ 139,448
===========
</TABLE>
F-18
<PAGE> 138
OXFORD AUTOMOTIVE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE-RELATED DATA)
- --------------------------------------------------------------------------------
9. INCOME TAXES
The Company's income tax provision (benefit) consists of the following:
<TABLE>
<CAPTION>
COMPANY PREDECESSOR
------------------------------------------------------------ ----------------
PERIOD FROM PERIOD FROM
OCTOBER 28, 1995 APRIL 1, 1995
YEAR ENDED YEAR ENDED THROUGH THROUGH
MARCH 31, 1998 MARCH 31, 1997 MARCH 31, 1996 OCTOBER 27, 1995
<S> <C> <C> <C> <C>
Current
Federal $ 3,116 $ (821) $ - $ -
State 1,098 (124)
Foreign 34 46
--------- -------- -------- --------
4,214 (945) 34 46
--------- -------- -------- --------
Deferred
Federal 2,300 899
State (608) 137
Foreign (1,832) 974 168 (984)
--------- -------- -------- --------
(140) 2,010 168 (984)
--------- -------- -------- --------
$ 4,074 $ 1,065 $ 202 $ (938)
========= ======== ======== ========
</TABLE>
The difference between the statutory rate and the Company's effective
rate was as follows:
<TABLE>
<CAPTION>
COMPANY PREDECESSOR
--------------------------------------------------------- ----------------
PERIOD FROM
PERIOD FROM APRIL 1, 1995
OCTOBER 28, 1995 THROUGH
YEAR ENDED YEAR ENDED THROUGH OCTOBER 27,
MARCH 31, 1998 MARCH 31, 1997 MARCH 31, 1996 1995
<S> <C> <C> <C> <C>
Statutory rate 35.0% 34.0% 36.0% 36.0%
Foreign rates varying from 34% (0.5) 1.8
Large corporation tax (2.8) (1.6)
State taxes, net of federal benefit 3.3 0.3
Nondeductible items 1.9 4.1 (0.5) (1.2)
Other 2.5 0.5
------ ------
Effective income tax rate 42.2% 40.7% 32.7% 33.2%
====== ====== ====== ======
</TABLE>
F-19
<PAGE> 139
OXFORD AUTOMOTIVE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE-RELATED DATA)
- --------------------------------------------------------------------------------
9. INCOME TAXES (CONTINUED
Significant components of the Company's deferred tax assets and
(liabilities) are as follows at March 31:
<TABLE>
<CAPTION>
1998 1997 1996
<S> <C> <C> <C>
Deferred tax liabilities
Tax depreciation in excess of book $ (30,930) $ (30,065) $ -
Inventory reserve (1,581) (1,292)
Other (170)
---------- --------- ---------
Gross deferred tax liabilities (32,681) (31,357)
---------- --------- ---------
Deferred tax assets
Postretirement medical benefits 14,397 13,387
Impairment reserve 22 1,200
Workers' compensation 1,345 1,089
Medical benefits accrual 473 702
Allowance for bad debts 97 502
AMT credit carryforward 3,000
Pension benefits 2,514 1,606 498
Net operating loss carryforwards 2,381 2,905 3,066
Book depreciation in excess of tax 989
Restructuring reserve 3,698 3,927 311
Foreign exchange 127 46 696
Other 3,299 2,471 579
---------- --------- ---------
Gross deferred tax assets 28,353 30,835 6,139
---------- --------- ---------
Valuation allowance (200) (200)
---------- --------- ---------
Net deferred tax asset (liability) $ (4,528) $ (722) $ 6,139
========== ========= =========
</TABLE>
A valuation allowance is provided on the tax benefits otherwise
associated with certain tax attributes unless it is considered more
likely than not that the benefit will be realized.
The Company has net operating loss carryforwards for federal income tax
purposes with potential future tax benefits of approximately $2,147 at
March 31, 1998. The federal net operating losses expire during 2011. The
Company has net operating loss carryforwards for Canadian income tax
purposes with potential future tax benefits of approximately $2,950 at
March 31, 1998. The Canadian net operating losses expire during 2004 and
2005. In addition, the Company has net operating loss carryforwards for
Mexican income tax purposes with potential future tax benefits of
approximately $1,695 at March 31, 1998. The Mexican net operating losses
expire in seven to ten years.
The Company has net operating loss carryforwards with a potential future
tax benefit of approximately $202 for state income tax purposes and
Tennessee Jobs Tax Credit carryforwards of approximately $200 at March
31, 1998, both of which expire during 2010 and 2011.
F-20
<PAGE> 140
OXFORD AUTOMOTIVE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE-RELATED DATA)
- --------------------------------------------------------------------------------
10. RESTRUCTURING RESERVES
In connection with the acquisition of Lobdell described in Note 3,
management began to formulate and assess a plan to exit certain
activities of Lobdell and, accordingly, established certain restructuring
reserves aggregating $7,050 in Lobdell's opening balance sheet.
Management's restructuring plan included the sale of certain
subsidiaries, closure of a Lobdell owned manufacturing facility and sale
of the current Lobdell owned corporate offices. Included in the
restructuring reserves at March 31, 1997 were costs for severance and
benefits for employees to be relocated and terminated ($5,052) and other
restructuring related costs ($1,998). During the year ended March 31,
1998, total payments to employees that were terminated were $1,979. As a
result of management's plans, approximately 375 employees were
terminated.
In connection with management's plans to reduce costs and improve
operating efficiencies at other facilities, the Company recorded a
provision for restructuring of $1,610 during the year ended March 31,
1998 and established restructuring reserves aggregating $1,339 in
Howell's opening balance sheet.
A summary of the restructuring activity is presented below. There was no
activity during the period from January 10, 1997 to March 31, 1997.
<TABLE>
<S> <C>
Balance at March 31, 1997 $ 7,050
1998 provision 1,610
1998 activity:
Restructuring accrual associated with the
acquisition of Howell 1,339
Reduction in workforce and other cash outflows (2,355)
Reversal of excess accruals to noncurrent assets (1,281)
----------
Balance at March 31, 1998 $ 6,363
==========
</TABLE>
The provision for restructuring recorded during the year ended March 31,
1998 represents costs associated with management's plans to close three
Company facilities. Management expects that, as a result of these
closures, approximately 160 employees will be permanently separated.
Severance costs for these employees will be recorded in 1999. Costs
recorded in 1998 primarily relate to fixed assets.
The restructuring reserve established in Howell's opening balance sheet
represents management's best estimate of the costs to be incurred in
connection with the closure of a leased Howell facility. As a result of
this closure, no employees are expected to be terminated. Management
continues to assess the future manufacturing capacity of Howell and
expects to complete its assessment and finalization of the restructuring
plan within one year of the acquisition date of Howell.
The reversal of excess accruals recorded during the year ended March 31,
1998 is due to management's finalization of its restructuring plans for
Lobdell. No future requirement for this accrual exists. These reversals
were recorded as a reduction of noncurrent assets.
F-21
<PAGE> 141
OXFORD AUTOMOTIVE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE-RELATED DATA)
- --------------------------------------------------------------------------------
10. RESTRUCTURING RESERVES (CONTINUED)
In connection with the Company's restructuring activities related to
Lobdell, certain employees of Lobdell were terminated. The termination of
certain of these employees resulted in a postretirement medical benefit
curtailment gain of $957 which, in accordance with the purchase method of
accounting, was treated as a reduction in liabilities assumed at the
acquisition date. Accordingly, no postemployment medical benefit
curtailment gain has been recognized in the Company's statement of
operations for the year ended March 31, 1997.
11. BENEFIT PLANS
The Company sponsors twelve noncontributory plans covering substantially
all employees meeting the age and length of service requirements as
specified in the plans. The plan covering salaried employees provides
pension benefits that are based on a percentage of the employee's average
monthly compensation during the five highest consecutive years out of
their last ten years, and their years of credited service up to a maximum
of 30 years. The hourly plans do not provide for increases in future
compensation levels. The Company's funding policy for the plan covering
salaried employees is to make contributions in amounts sufficient to
annually fund the plan's current service cost and the initial past
service cost, plus interest, over a period of 30 years. Plans covering
hourly employees generally provide benefits of stated amounts based on
their unique labor agreements for each year of service. The Company's
funding policy for these plans is to make at least the minimum annual
contributions required by applicable regulations.
The following table sets forth the plans' funded status and amounts
recognized on the Company's balance sheets at March 31:
<TABLE>
<CAPTION>
OVERFUNDED PLANS UNDERFUNDED PLANS
1998 1997 1996 1998 1997 1996
<S> <C> <C> <C> <C> <C> <C>
Actuarial present value of benefit obligation
Vested benefits $ 20,132 $17,573 $ 2,376 $ 43,620 $ 34,106 $ 11,539
Nonvested benefits 659 1,170 74 2,602 1,853 356
-------- ------- ------- -------- -------- --------
20,791 18,743 2,450 46,222 35,959 11,895
Effect of projected future compensation levels 2,329 4,060 1,285 3,187
-------- ------- ------- -------- -------- --------
Projected benefit obligation for service rendered 23,120 22,803 3,735 49,409 35,959 11,895
Plan assets at fair value (primarily U.S.
government (23,740) (22,854) (4,155) (47,484) (32,280) (10,525)
-------- ------- ------- -------- -------- --------
securities, bonds and notes and mutual funds)
Plan assets less (greater) than projected
benefit (620) (51) (420) 1,925 3,679 1,370
obligation
Unrecognized net loss, including asset
gains/losses not (1,663) 10 2,723 (21)
yet reflected in market values
Unrecognized prior service cost 44 (20)
Unrecognized net obligation being recognized over
15-20 years 15
Experience gains (losses) (61) 125 (392) (363)
Adjustment required to recognize minimum liability 35 472 368
-------- ------- ------- -------- -------- --------
(Prepaid) accrued pension cost $ (2,283) $ (87) $ (295) $ 4,727 $ 3,718 $ 1,375
======== ======= ======= ======== ======== ========
</TABLE>
The minimum pension liability in excess of the allowable intangible asset
has been recorded as a separate component of equity, net of tax.
F-22
<PAGE> 142
OXFORD AUTOMOTIVE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE-RELATED DATA)
- --------------------------------------------------------------------------------
11. BENEFIT PLANS (CONTINUED)
Net periodic pension cost for each year and the actuarial assumptions
used in determining the projected benefit obligation were as follows:
<TABLE>
<CAPTION>
COMPANY PREDECESSOR
------------------------------------------------- -----------------
PERIOD FROM PERIOD FROM
YEAR ENDED YEAR ENDED OCTOBER 28, 1995 APRIL 1, 1995
MARCH 31, MARCH 31, THROUGH THROUGH
1998 1997 MARCH 31, 1996 OCTOBER 27, 1995
<S> <C> <C> <C> <C>
Service cost $ 2,143 $ 1,074 $ 266 $ 344
Interest cost 4,808 2,127 530 697
Actual return on assets (12,528) (2,138) (425) (533)
Net amortization and deferral 7,505 15 60
---------- --------- --------- ---------
Net periodic pension cost $ 1,928 $ 1,078 $ 371 $ 568
========== ========= ========= =========
Discount rate
U.S. plans 7.25% 7.75%
Canadian plans 6.50% 8.00% 8.50% 8.75%
Expected return on assets
U.S. plans 8.50-9.00% 9.00%
Canadian plans 8.50% 8.50% 8.50% 7.50%
Salary progression
U.S. plans 4.50% 4.50%
Canadian plans 5.50% 5.50% 5.50% 5.50%
</TABLE>
The Company sponsors seven defined contribution 401(k) plans. The Company
generally contributes 25% of the first 6% of the base compensation that a
participant contributes to the plans.
12. POSTRETIREMENT MEDICAL BENEFITS
In addition to the Company's defined benefit pension plans, Lobdell
sponsors unfunded defined benefit medical plans that provide
postretirement medical benefits to certain full-time employees meeting
the age, length of service and contractual requirements as specified in
the plans. The plan covering salaried employees is a contributory plan
providing medical benefits to those hired before July 1, 1993. The
percentage of cost paid by the retiree currently ranges from 10% for 30
or more years of service at retirement to 55% for 15 years of service at
retirement, with Company contributions commencing upon attainment of age
62. Those retiring with less than 15 years of service and those hired
after June 30, 1993 may participate in the plan at their own cost. The
plan is currently noncontributory for those employees who retired prior
to July 1, 1993. The plans covering hourly employees provide medical
benefit plan options that are similar to those offered to active hourly
employees, with Lobdell contributions limited either to that available
under traditional coverage for Alma hourly retirees or to 87% of the
total applicable premium for Greencastle retirees.
F-23
<PAGE> 143
OXFORD AUTOMOTIVE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE-RELATED DATA)
- --------------------------------------------------------------------------------
12. POSTRETIREMENT MEDICAL BENEFITS (CONTINUED)
The following table presents the plan's funded status reconciled with
amounts recognized in the Company's balance sheet at March 31.
<TABLE>
<CAPTION>
1998 1997
<S> <C> <C>
Accumulated postretirement benefit obligation
Retirees $ 16,332 $ 14,479
Full eligible active plan participants 6,195 4,287
Other active plan participants 18,134 13,510
---------- ----------
Total unfunded obligation 40,661 32,276
Unrecognized gain (loss) (4,669) 1,191
---------- ----------
Postretirement medical benefits liability $ 35,992 $ 33,467
========== ==========
</TABLE>
Net periodic postretirement benefit cost included the following
components:
<TABLE>
<CAPTION>
FOR THE PERIOD FROM
FOR THE YEAR JANUARY 10, 1997
ENDED THROUGH
MARCH 31, 1998 MARCH 31, 1997
<S> <C> <C>
Service cost-- benefits earned during the period $ 1,025 $ 272
Interest cost on the accumulated postretirement benefit
obligation 2,711 623
---------- ----------
Net periodic postretirement benefit cost $ 3,736 $ 895
========== ==========
</TABLE>
The weighted average discount rate used in determining the accumulated
postretirement benefit obligation was 7.25% and 7.75% at March 31, 1998
and 1997, respectively. The weighted average annual assumed rate of
increase in the per capita cost of covered benefits (i.e., healthcare
cost trend rate) is 8.5% in 1998 trending to 6.5% in 2008 and thereafter
for retirees less than 65 years of age. For retirees 65 years of age and
over, the rate is 8.3% in 1998 trending to 6.5% in 2008 and thereafter.
The healthcare cost trend rate assumption has a significant effect on the
amounts reported. For example, increasing the assumed healthcare cost
trend rates by one percentage point in each year would increase the
accumulated postretirement benefit obligation as of March 31, 1998 by
approximately $5,919 and net periodic postretirement benefit cost for the
year ended March 31, 1998 by approximately $573.
F-24
<PAGE> 144
OXFORD AUTOMOTIVE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE-RELATED DATA)
- --------------------------------------------------------------------------------
13. REDEEMABLE PREFERRED STOCK
In connection with the acquisition of Lobdell described in Note 3,
redeemable preferred stock with a face value of $50,748 was issued.
Redeemable preferred stock with a face value of $40,748 was delivered to
the former shareholders of Lobdell on January 10, 1997. The remaining
redeemable preferred stock with a face value of $10,000 was placed in
escrow pending final determination of the purchase price. The preferred
stock issuance consisted of 457,541 shares of Series A $3.00 Cumulative
Preferred Stock (Series A Preferred) and 49,938 shares of Series B
Preferred Stock (Series B Preferred). On July 15, 1997, the Company
entered into a Settlement Agreement and Mutual Release with the preferred
shareholders of Lobdell (the Settlement Agreement). Pursuant to the
Settlement Agreement, 60,002 shares of Series A Preferred held in escrow
and all Series B Preferred previously issued were canceled. The remaining
39,938 shares of Series A Preferred held in escrow were released to the
preferred shareholders of Lobdell.
The annual dividend on the Series A Preferred is $3.00 per share, payable
semi-annually. Dividends on the Series A Preferred are cumulative, but do
not bear interest. Under the terms of the issuance of the Series A
Preferred (the Stock Agreement), the holders of the Series A Preferred
maintain limited voting rights. Holders are entitled to vote on any
provisions that would adversely affect their rights or privileges or
management's plans to issue any equity securities that would rank prior
to the Series A Preferred. Holders are also entitled to elect at least
one director of Lobdell, which, under certain provisions of the Stock
Agreement, may increase to two.
Lobdell is required to redeem all shares of Series A Preferred on
December 31, 2006 at a price of $100 per share, plus all declared or
accumulated but unpaid dividends. If Oxford does not commence an initial
public offering of common stock (IPO) prior to June 30, 2006, then the
redemption price of the Series A Preferred is $103 per share. If an IPO
does not occur by December 31, 2001, each holder of Series A Preferred
has the option to redeem annually a maximum of 20 percent of the shares
held at a price of $100 per share on each December 31, beginning in 2002.
Series A Preferred holders are not allowed to transfer, sell or assign
the shares prior to February 1, 1999. Subsequent to that date, Lobdell
has the right of first refusal to purchase any of the shares transferred,
sold or assigned by a holder of Series A Preferred.
Holders of Series A Preferred are entitled to convert their shares to
Oxford common stock issued in connection with an IPO. Individual holders
may convert a maximum of 50% of their shares, but the total of all Series
A Preferred shares converted may not exceed 25% of the total Series A
Preferred shares outstanding.
The Series A Preferred has been included in the accompanying consolidated
balance sheet at its fair value at the date of issuance of $39,754, and
has been adjusted for accrued dividends and accretion totaling $438 and
$258 for the years ended March 31, 1998 and 1997, respectively.
F-25
<PAGE> 145
OXFORD AUTOMOTIVE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE-RELATED DATA)
- --------------------------------------------------------------------------------
14. RELATED PARTY TRANSACTIONS
The Company is charged a fee by a related party, The Oxford Investment
Group, Inc., for consulting, finance and management services. Fees
charged to the Company by The Oxford Investment Group, Inc. approximated
$1,005 and $275 for the years ended March 31, 1998 and 1997,
respectively. In connection with the acquisitions of BMGNA, Lobdell and
Howell, investment banking fees of $200, $300 and $230, respectively,
were paid to The Oxford Investment Group, Inc., during the periods ended
March 31, 1996, 1997 and 1998, respectively.
As described in Note 3, the majority shareholder of the Company was also
the majority shareholder of RPIH.
15. COMMITMENTS AND CONTINGENCIES
OPERATING LEASES
As of March 31, 1998, the Company had long-term operating leases covering
certain machinery and equipment. The minimum rental commitments under
noncancellable operating leases with lease terms in excess of one year
are as follows as of March 31, 1998:
<TABLE>
<S> <C>
1999 $ 3,422
2000 3,480
2001 1,380
2002 3,370
2003 142
-----------
$ 11,794
===========
</TABLE>
ENVIRONMENTAL MATTERS
The Company is subject to federal, state and local laws and regulations
which govern environmental matters. These laws regulate the discharge of
materials into the environment and may require the Company to remove or
mitigate the environmental effects of the disposal or release of
petroleum or chemical substances. The Company has identified several
environmental matters resulting from prior operations. Due to the
relatively early stage of investigation of certain of these identified
matters as well as potential indemnification by other potentially
responsible parties, management is unable to reasonably estimate the
ultimate cost of remediating certain of these identified environmental
matters. The Company has recorded a liability of approximately $1,746 and
$880 at March 31, 1998 and 1997, respectively, for estimated costs of
known environmental matters.
GENERAL
The Company is subject to various claims, lawsuits and administrative
proceedings related to matters arising out of the normal course of
business. In the opinion of management, after reviewing the information
which is currently available with respect to such matters and consulting
with legal counsel, any liability which may ultimately be incurred with
respect to these matters will not materially affect the financial
position, results of operations or cash flows of the Company.
F-26
<PAGE> 146
OXFORD AUTOMOTIVE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE-RELATED DATA)
- --------------------------------------------------------------------------------
16. SEGMENT INFORMATION
The Company operates in one industry segment and all sales are to
unaffiliated customers. Net sales represent all sales to unaffiliated
customers. Net export sales represent sales to unaffiliated customers
outside of the enterprise's home country. The Company's home country is
the United States and the Predecessor's home country was Canada.
Accordingly, for the period from April 1, 1995 through October 27, 1995,
net export sales represent sales to unaffiliated customers outside of
Canada. For the period from October 28, 1995 to March 31, 1996 and for
the years ended March 31, 1997 and 1998, net export sales represent sales
to unaffiliated customers outside of the United States. Net sales by
geographic area, identifiable assets by geographic area and net export
sales by geographic area are as follows:
<TABLE>
<CAPTION>
COMPANY PREDECESSOR
------------------------------------------------- -----------------
PERIOD FROM PERIOD FROM
YEAR ENDED YEAR ENDED OCTOBER 28, 1995 APRIL 1, 1995
MARCH 31, MARCH 31, THROUGH THROUGH
1998 1997 MARCH 31, 1996 OCTOBER 27, 1995
<S> <C> <C> <C> <C>
Net Sales
United States $ 324,335 $ 54,660 $ - $ -
Canada 85,030 82,201 35,572 49,043
Mexico 956
----------- ----------- ---------- ---------
$ 410,321 $ 136,861 $ 35,572 $ 49,043
=========== =========== ========== =========
Operating Income (Loss)
United States $ 22,234 $ 1,101 $ - $
Canada (462) 2,700 1,713 (1,774)
Mexico (1,718)
----------- ----------- ---------- ---------
$ 20,054 $ 3,801 $ 1,713 $ (1,774)
=========== =========== ========== =========
Identifiable Assets
United States $ 275,039 $ 189,308 $ -
Canada 40,634 57,153 49,200
Mexico 4,948
----------- ----------- ----------
$ 320,621 $ 246,461 $ 49,200
=========== =========== ==========
Net Export Sales
Canada $ 63,985 $ 41,846 $ 16,476 $ -
United States 25,397
Mexico 52,834 13,573 1,366 664
Other 4,893 2,120
----------- ----------- ---------- ---------
$ 121,712 $ 57,539 $ 17,842 $ 26,061
=========== =========== ========== =========
</TABLE>
F-27
<PAGE> 147
OXFORD AUTOMOTIVE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE-RELATED DATA)
- --------------------------------------------------------------------------------
17. SUBSEQUENT EVENT
On April 1, 1998, the Company purchased the assets of the Suspension
Division of Eaton Corporation (Suspension) for cash of approximately
$53,500, including the investment in the Metalcar joint venture. The
acquisition was financed through the proceeds of the Notes described in
Note 8 and the issuance of $35,000 of Series B 10.125% Senior
Subordinated Notes Due 2007. The acquisition will be recorded in
accordance with the purchase method of accounting. Accordingly, the
purchase price plus direct cost of the acquisition will be allocated to
the assets acquired and liabilities assumed based on their estimated fair
values at the date of acquisition.
The estimated fair market value of assets acquired and liabilities
assumed is summarized as follows:
<TABLE>
<S> <C>
Current assets $ 22,700
Property, plant and equipment 47,200
Current liabilities (11,300)
Long-term liabilities (5,100)
------------
$ 53,500
============
</TABLE>
The unaudited pro forma combined results of operations of the Company and
Suspension for the year ended March 31, 1998 including Howell and RPIH as
if the acquisitions had occurred at the beginning of fiscal 1998 and
after giving effect to certain pro forma adjustments are as follows:
<TABLE>
<S> <C>
Net sales $ 576,163
===========
Net income $ 2,261
===========
Net income applicable to common shares $ 927
===========
Net income per common share $ 2.99
===========
</TABLE>
The pro forma information is not intended to be a projection of future
results. The foregoing unaudited pro forma results of operations reflect
adjustments for additional interest expense related to the financing of
the acquisitions and the additional depreciation expense, as a result of
the write-up of property, plant and equipment, net of the related tax
benefit.
18. CONDENSED CONSOLIDATING INFORMATION
The Notes are guaranteed by Oxford Automotive, Inc. and certain of its
wholly-owned subsidiaries, including Lobdell, Howell, BMGH and RPIH (the
Guarantor Subsidiaries). The Notes are not guaranteed by the Company's
other consolidated subsidiary, Oxford Mexico (the Non-guarantor
Subsidiary). The guarantee of the Notes by the Company and the Guarantor
Subsidiaries is full and unconditional. The following condensed
consolidated financial information presents the financial position,
results of operations and cash flows of (i) the Company as if it
accounted for its subsidiaries on the equity method, (ii) the Guarantor
Subsidiaries on a combined basis and (iii) the Non-guarantor Subsidiary.
Condensed consolidated financial information for the periods prior to
March 31, 1998 are not presented because the non-guarantors during those
periods were inconsequential, individually and in the aggregate, to the
consolidated financial statements, and management has determined that
they would not be material to investors.
F-28
<PAGE> 148
OXFORD AUTOMOTIVE, INC.
CONDENSED CONSOLIDATING BALANCE SHEETS
MARCH 31, 1998
(DOLLAR AMOUNTS IN THOUSANDS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NON-GUARANTOR GUARANTOR ELIMINATIONS/
PARENT SUBSIDIARY SUBSIDIARIES ADJUSTMENTS CONSOLIDATED
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
ASSETS
Current assets
Cash $ 13,673 $ 322 $ 4,326 $ $ 18,321
Receivables (net) 7,206 868 64,652 (7,453) 65,273
Inventories 40 21,265 21,305
Reimbursable tooling 13,315 13,315
Income taxes refundable 1,601 1,601
Deferred income taxes 92 4,307 4,399
Prepaid expenses and other 172 10 8,443 (1,663) 6,962
---------- -------- --------- -------- ----------
TOTAL CURRENT ASSETS 21,143 1,240 117,909 (9,116) 131,176
Other noncurrent assets 14,626 45 10,477 25,148
Property, plant and equipment (net) 2,141 3,663 157,904 163,708
Investment in consolidated subsidiaries 31,861 (31,861)
---------- -------- --------- -------- ----------
TOTAL ASSETS $ 69,771 $ 4,948 $ 286,290 $(40,977) $ 320,032
========== ======== ========= ======== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable $ 746 $ 351 $ 50,956 $ 161 $ 52,214
Employee compensation 1,330 3,478 4,808
Intercompany accounts (65,132) 6,041 52,986 6,105
Restructuring reserve 6,363 6,363
Accrued expenses and other 951 104 20,505 (9,318) 12,242
Current portion of borrowings 10,965 10,965
---------- -------- --------- -------- ----------
TOTAL CURRENT LIABILITIES (62,105) 6,496 145,253 (3,052) 86,592
Pension liability 4,727 4,727
Postretirement medical benefits 35,992 35,992
Deferred income taxes and other 279 (576) 18,225 17,928
Long-term borrowings 124,828 3,655 128,483
---------- -------- --------- -------- ----------
TOTAL LIABILITIES 63,002 5,920 207,852 (3,052) 273,722
---------- -------- --------- -------- ----------
Redeemable preferred stock 40,192 40,192
---------- -------- --------- -------- ----------
Shareholders' equity
Common stock 1,050 32,974 (32,974) 1,050
Foreign currency translation 147 (798) (651)
Retained earnings (accumulated deficit) 4,750 (1,119) 6,070 (4,951) 4,750
Unrealized gain on marketable securities 969 969
Equity adjustment for minimum pension
TOTAL SHAREHOLDERS' EQUITY 6,769 (972) 38,246 (37,925) 6,118
---------- -------- --------- -------- ----------
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $ 69,771 $ 4,948 $ 286,290 $(40,977) $ 320,032
========== ======== ========= ======== ==========
</TABLE>
F-29
<PAGE> 149
OXFORD AUTOMOTIVE, INC.
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
YEAR ENDED MARCH 31, 1998
(DOLLAR AMOUNTS IN THOUSANDS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NON-GUARANTOR GUARANTOR ELIMINATIONS/
PARENT SUBSIDIARY SUBSIDIARIES ADJUSTMENTS CONSOLIDATED
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Sales $ - $ 956 $ 409,365 $ - $ 410,321
Cost of sales 2,674 365,746 368,420
---------- -------- --------- -------- ----------
GROSS PROFIT (1,718) 43,619 41,901
Selling, general and administrative expenses (665) 22,504 21,839
Restructuring provision 1,610 1,610
Gain on sale of equipment (1,602) (1,602)
---------- -------- --------- -------- ----------
OPERATING INCOME 665 (1,718) 21,107 20,054
Other income (expense)
Interest expense (467) 2 (10,245) (10,710)
Other 21 300 321
---------- -------- --------- -------- ----------
INCOME BEFORE BENEFIT (PROVISION)
FOR INCOME TAXES 198 (1,695) 11,162 9,665
Benefit (provision) for income taxes (314) 576 (4,336) (4,074)
---------- -------- --------- -------- ----------
INCOME BEFORE EQUITY IN INCOME OF
CONSOLIDATED SUBSIDIARIES (116) (1,119) 6,826 5,591
Equity in income of consolidated subsidiaries 5,707 (5,707)
---------- -------- --------- -------- ----------
NET INCOME $ 5,591 $ (1,119) $ 6,826 $ (5,707) $ 5,591
========== ======== ========= ======== ==========
</TABLE>
F-30
<PAGE> 150
OXFORD AUTOMOTIVE, INC.
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
YEAR ENDED MARCH 31, 1998
(DOLLAR AMOUNTS IN THOUSANDS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NON-GUARANTOR GUARANTOR
PARENT SUBSIDIARY SUBSIDIARIES CONSOLIDATED
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
NET CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES $ (71,916) $ 3,801 $ 94,101 $ 25,986
--------- --------- ---------- ---------
INVESTING ACTIVITIES
Purchase of businesses, net of cash acquired (24,219) (24,219)
Purchase of property, plant and equipment (2,228) (3,774) (10,721) (16,723)
Proceeds from sale of equipment 5,433 5,433
Purchases of marketable securities (7,658) (7,658)
--------- --------- ---------- ----------
NET CASH USED IN INVESTING ACTIVITIES (34,105) (3,774) (5,288) (43,167)
--------- --------- ---------- ----------
FINANCING ACTIVITIES
Proceeds from borrowing arrangements 124,828 1,825 126,653
Principal payments on borrowing arrangements (93,782) (93,782)
Payment of preferred stock dividends (1,193) (1,193)
Debt financing costs (5,372) (5,372)
--------- --------- ---------- ----------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 119,456 (93,150) 26,306
--------- --------- ---------- ----------
Effect of foreign currency rate fluctuations on cash 295 (770) (475)
--------- --------- ---------- ----------
NET INCREASE (DECREASE) IN CASH 13,435 322 (5,107) 8,650
Cash at beginning of period 238 9,433 9,671
--------- --------- ---------- ----------
Cash at end of period $ 13,673 $ 322 $ 4,326 $ 18,321
========= ========= ========== ==========
</TABLE>
F-31
<PAGE> 151
OXFORD AUTOMOTIVE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE-RELATED DATA)
- --------------------------------------------------------------------------------
19. INTERIM DATA (UNAUDITED)
Basis of Presentation
The accompanying unaudited balance sheet as of December 31, 1998 and the
unaudited consolidated statements of operations, of changes in shareholders'
equity and of cash flows for the nine months ended December 31, 1998 and
1997 include all adjustments, consisting of normal recurring adjustments,
which in the opinion of management are necessary for the fair presentation
of the financial position, results of operations, and cash flows of the
Company. The results of operations for any interim period are not
necessarily indicative of the results of operations for a full year.
Senior Subordinated Notes
On April 1, 1998, the Company issued $35.0 million of unsecured 10 1/8%
Senior Subordinated Notes due 2007, Series B (the "Series B Notes"). On
December 8, 1998, the Company issued $40.0 million of unsecured 10 1/8%
Senior Subordinated Notes due 2007, Series C (the "Series C Notes"). The
Series B Notes and the Series C Notes are substantially identical to and
rank pari passu in right of payment with the $125.0 million of unsecured 10
1/8% Senior Subordinated Notes due 2007 issued by the Company on June 24,
1997 (the "Series A Notes"). The Series A Notes, the Series B Notes, and the
Series C Notes are collectively referred to as the "Notes". The Notes pay
interest semi-annually on June 15 and December 15. The Notes provide for
certain covenants, including limitations on: indebtedness, restricted
payments, distributions, sale of assets, affiliate transactions and merger
and consolidation. The Company has optional redemption rights beginning June
15, 2002.
The Notes are limited to $250.0 million aggregate principal amount. The net
proceeds to the Company from the sale of Series B Notes were approximately
$37.6 million (after the inclusion of approximately $2.0 million in premium
and accrued interest of approximately $1.0 million paid by the initial
purchaser of the Series B Notes and the deduction of estimated expenses of
approximately $0.4 million). The Company used all of the net proceeds in
connection with the acquisition of the Suspension Division of Eaton
Corporation. The net proceeds to the Company from the sale of the Series C
Note were approximately $40.8 million (after inclusion of approximately $1.5
million in premium and the deduction of expenses or approximately $0.7
million). The Company used the net proceeds to repay borrowings under the
Company's Senior Credit Facility and for working capital, acquisitions and
other general corporate purposes.
F-32
<PAGE> 152
As of December 31, 1998, the Notes are guaranteed by certain of the Company's
wholly-owned subsidiaries, including BMGH, Howell, Lobdell, Oxford Suspension,
Inc., Oxford Suspension Ltd., and RPIH (the "Guarantor Subsidiaries"). As of
December 31, 1998 the Notes were not guaranteed by the Company's other
consolidated subsidiary, Oxford Automotriz de Mexico S.A. de C.V. (the
"Non-guarantor Subsidiary").
The guarantee of the Notes by the Company and the Guarantor Subsidiaries is
full and unconditional. The following unaudited condensed consolidated
financial information presents the financial position, results of operations
and cash flows of (i) the Company as if it accounted for its subsidiaries on
the equity method, (ii) the Guarantor Subsidiaries on a combined basis and
(iii) the Non-guarantor Subsidiary.
Condensed consolidated financial information for the interim periods prior to
December 31, 1998 are not presented because the non-guarantors during those
periods were inconsequential, individually and in the aggregate, to the
consolidated financial statements, and management has determined that they would
not be material to investors
Condensed Consolidating Balance Sheets
December 31, 1998
(Dollars in thousands)
(Unaudited)
<TABLE>
<CAPTION>
Non-guarantor Guarantor Eliminations/
Parent subsidiary subsidiaries adjustments Consolidated
<S> <C> <C> <C> <C> <C>
ASSETS
Current assets
Cash and cash
equivalents $ 44 $ 71 $ 203 $ 318
Receivables (net) (1,553) (8,192) 112,300 (16,219) 86,336
Inventories 1,352 32,559 33,911
Reimbursable Tooling 1,400 83 38,754 40,237
Deferred income taxes 92 4,307 4,399
Unexpended bond
proceeds 6 6
Prepaid expenses and
other current assets 632 510 2,488 3,630
--------- --------- --------- --------- ---------
Total Current Assets $ 615 ($ 6,176) $ 190,617 ($ 16,219) $ 168,837
Marketable securities $ 8,092 $ $ $ 8,092
Other noncurrent assets 7,671 5,212 23,386 36,269
Deferred income taxes 7,918 7,918
Property, plant and
equipment, net 3,839 5,550 182,057 191,446
Investment in
consolidation
subsidiaries 44,033 (44,033)
--------- --------- --------- --------- ---------
Total Assets $ 64,250 $ 4,586 $ 403,978 ($ 60,252) $ 412,562
========= ========= ========= ========= =========
LIABILITIES AND
SHAREHOLDERS' EQUITY
Current Liabilities
Trade accounts payable $ 862 $ 7,156 $ 46,410 $ 54,428
Employee compensation 1,115 167 9,636 10,918
Intercompany accounts 16,219 (16,219)
Restructuring reserve 8 3,011 3,019
Accrued expenses and
other current
liabilities (2,342) 12,342 10,000
Current portion
of borrowings 3,411 3,411
--------- --------- --------- --------- ---------
Total Current Liabilities ($357) $ 7,323 $ 91,029 ($16,219) $ 81,776
</TABLE>
F-33
<PAGE> 153
Condensed Consolidating Balance Sheets (continued)
December 31, 1998
(Dollars in thousands)
(Unaudited)
<TABLE>
<CAPTION>
Non-guarantor Guarantor Eliminations/
Parent subsidiary subsidiaries adjustments Consolidated
<S> <C> <C> <C> <C> <C>
Pension liability $ 35 $ $ 5,435 $ 5,470
Post retirement
Medical benefits
liability 41,427 41,427
Deferred income taxes 279 (956) 14,639 13,962
Other non-current
liabilities (147,791) 151,661 3,870
Long-term borrowings
less current portion 208,030 19,519 227,549
--------- --------- --------- --------- ---------
Total liabilities $ 60,196 $ 6,367 $ 323,710 ($ 16,219) $ 374,054
Redeemable preferred
stock $ $ $ 40,586 $ 40,586
Shareholder's equity
common stock 1,050 41,371 (41,371) 1,050
Accumulated other
comprehensive
income (loss) (46) (92) (6,040) (6,178)
Retained earnings 3,050 (1,689) 4,351 (2,662) 3,050
--------- --------- --------- --------- ---------
4,054 (1,781) 39,682 (44,033) (2,078)
--------- --------- --------- --------- ---------
Total Liabilities &
Shareholder's Equity $ 64,250 $ 4,586 $ 403,978 ($60,252) $ 412,562
========= ========= ========= ========= =========
</TABLE>
F-34
<PAGE> 154
Condensed Consolidating Statement of Operations
For the Three Months ended December 31, 1998
(Dollars in thousands)
(Unaudited)
<TABLE>
<CAPTION>
Non-guarantor Guarantor Eliminations/
Parent Subsidiary Subsidiaries adjustments Consolidated
<S> <C> <C> <C> <C> <C>
Sales $ 4,449 145,285 $ 149,734
Cost of sales 4,850 130,203 135,053
------ ------------- ------------ ------------- ------------
Gross profit (401) 15,082 14,681
Selling, general and
administrative
expenses (571) 9 7,991 7,429
------ ------------- ------------ ------------- ------------
Operating income 571 (410) 7,091 7,252
Interest income 3,570 161 (3,610) 121
Interest expense (4,859) 1 (3,991) 3,610 (5,239)
Other income
(expense) 82 55 418 555
------ ------------- ------------ ------------- ------------
Income before
income taxes (636) (354) 3,679 2,689
Income taxes (254) (142) 1,471 1,075
------ ------------- ------------ ------------- ------------
Income before equity
in income of
consolidated
subsidiaries (382) (212) 2,208 1,614
Equity in income of
consolidated
subsidiaries 1,996 (1,996)
------ ------------- ------------ ------------- ------------
Net income $1,614 $ (212) $ 2,208 $(1,996) $ 1,614
====== ============= ============ ============= ============
</TABLE>
F-35
<PAGE> 155
Condensed Consolidating Statement of Operations
For the Nine Months ended December 31, 1998
(Dollars in thousands)
(Unaudited)
<TABLE>
<CAPTION>
Non-guarantor Guarantor Eliminations/
Parent Subsidiary Subsidiaries adjustments Consolidated
<S> <C> <C> <C> <C> <C>
Sales $ 7,099 401,045 $ 408,144
Cost of sales 8,025 364,587 372,612
------------ ------------- ------------ ------------- ------------
Gross profit (926) 36,458 35,532
Selling, general and
administrative
expenses $(1,857) 9 24,083 22,235
Restructuring Provision 1,176 1,176
------------ ------------- ------------ ------------- ------------
Operating income 1,857 (935) 11,199 12,121
Interest income 12,629 160 (12,595) 194
Interest expense (13,725) (13,319) 12,595 (14,449)
Other income
(expense) 226 (14) 737 949
------------ ------------- ------------ ------------- ------------
Income before 987 (949) (1,223) (1,185)
income taxes 395 (380) (490) (475)
Income taxes ------------ -------------- ----------- ------------- ------------
Income before equity
in income of
consolidated
subsidiaries 592 (569) (733) (710)
Equity in income of
consolidated
subsidiaries (1,302) 1,302
------------ ------------- ------------ ------------- ------------
Net income $ (710) $ (569) $ (733) $ 1,302 ($710)
============ ============= ============ ============= ============
</TABLE>
F-36
<PAGE> 156
Condensed Consolidating Statement of Cash Flows
For the Nine Months Ended December 31, 1998
(Dollars in thousands)
(Unaudited)
<TABLE>
<CAPTION>
Non guarantor Guarantor
Parent subsidiary subsidiaries Consolidated
<S> <C> <C> <C> <C>
Net cash provided by
(used in)
operating activities (38,174) $2,199 $4,808 ($31,167)
------- ------ ------ --------
INVESTING ACTIVITIES
Purchase of businesses,
net of cash acquired (53,886) (53,886)
Purchase of property,
plant and equipment (1,962) (2,210) (16,197) (20,369)
Purchase of Marketable
Securities (892) (892)
------- ------ ------ --------
Net cash used in
investing activities (56,740) (2,210) (16,197) (75,147)
FINANCING ACTIVITIES
Net proceeds (payments)
on borrowings 4,659 8,882 13,541
Proceeds from borrowing
arrangements 78,544 78,544
Payment of
preferred dividends (596) (596)
Debt financing costs (1,918) (703) (2,621)
------- ------ ------ --------
Net cash provided by
(used in)
financing activities 81,285 0 7,583 88,868
Effect of foreign
currency rate
fluctuation on cash (240) (317) (557)
Net increase (decrease)
in cash (13,629) (251) (4,123) (18,003)
Cash at beginning
of period 13,673 322 4,326 18,321
------- ------ ------ --------
Cash at end of period $44 $71 $203 $318
======== ====== ====== ========
</TABLE>
F-37
<PAGE> 157
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders of Lobdell Emery Corporation
In our opinion, the accompanying consolidated balance sheets and the
related consolidated statements of operations, of changes in shareholders'
equity and of cash flows after the restatement discussed in Note 16 present
fairly, in all material respects, the financial position of Lobdell Emery
Corporation and its subsidiaries (the Corporation) at December 31, 1996 and
1995, and the results of their operations and their cash flows for each of the
three years in the period ended December 31, 1996, in conformity with generally
accepted accounting principles. These financial statements are the
responsibility of the Corporation's management; our responsibility is to express
an opinion on these financial statements based on our audits. We conducted our
audits of these statements in accordance with generally accepted auditing
standards which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.
As described in Note 15, on January 10, 1997 all of the outstanding shares
of common stock of the Corporation were sold to L-E Acquisition, Inc.
Price Waterhouse LLP
Detroit, Michigan
May 19, 1997
F-38
<PAGE> 158
LOBDELL EMERY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE-RELATED DATA)
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------
1996 1995
---- ----
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents................................. $ 278 $ 716
Trade receivables -- less allowance of $1,254 and $500,
respectively........................................... 28,769 32,514
Inventories............................................... 6,083 10,212
Income taxes receivable................................... 1,282
Reimbursable tooling...................................... 47 407
Deferred income taxes..................................... 3,081 3,038
Prepaid expenses and other current assets................. 191 827
-------- --------
Total current assets................................... 39,731 47,714
-------- --------
Advance under shareholders' redemption agreement............ 1,542
Unexpended bond proceeds.................................... 3,886 4,508
Intangible pension asset.................................... 3,216 2,113
Other noncurrent assets..................................... 2,483 3,825
Deferred income taxes....................................... 2,531
Property, plant and equipment, net.......................... 72,804 72,503
-------- --------
Total Assets........................................... $126,193 $130,663
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Trade accounts payable.................................... $ 15,114 $ 11,627
Employee compensation..................................... 5,156 4,614
Accrued expenses and other current liabilities............ 6,511 6,516
Current portion of long-term borrowings................... 2,200 7,169
-------- --------
Total current liabilities.............................. 28,981 29,926
-------- --------
Pension liability........................................... 1,855 1,627
Postretirement medical benefits liability................... 19,639 16,889
Deferred income taxes....................................... 1,180
Other noncurrent liabilities................................ 1,950 1,739
-------- --------
23,444 21,435
-------- --------
Long-term borrowings -- less current portion................ 41,134 39,097
-------- --------
Total liabilities...................................... 93,559 90,458
-------- --------
Commitments and contingent liabilities (Note 13) Redeemable
Common stock, Class B nonvoting, $1 par value, outstanding
137,112 shares (Note 11).................................. 1,800 1,297
-------- --------
Shareholders' equity
Common stock, Class A voting, $1 par value, authorized
540,000 shares, outstanding 478,255 shares............. 478 478
Common stock, Class B nonvoting, $1 par value authorized
5,400,000 shares; outstanding 3,430,623 shares......... 3,431 3,431
Retained earnings......................................... 27,376 35,730
Equity adjustment for minimum pension liability........... (451) (731)
-------- --------
30,834 38,908
-------- --------
Total liabilities and shareholders' equity............. $126,193 $130,663
======== ========
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-39
<PAGE> 159
LOBDELL EMERY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE RELATED DATA)
<TABLE>
<CAPTION>
FOR THE YEAR ENDED
DECEMBER 31,
------------------------------
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Net sales................................................... $253,997 $269,260 $270,062
Cost of sales............................................... 244,129 252,671 252,275
-------- -------- --------
Gross profit................................................ 9,868 16,589 17,787
Selling, general and administrative......................... 16,395 14,949 14,438
Equipment impairment........................................ 3,000
-------- -------- --------
Operating income (loss)................................... (9,527) 1,640 3,349
Other income (expense)
Interest expense............................................ (3,557) (3,448) (2,799)
Other income.............................................. 664 744 366
-------- -------- --------
Income (loss) before benefit (provision) for income taxes... (12,420) (1,064) 916
Benefit (provision) for income taxes........................ 4,569 264 (442)
-------- -------- --------
Income (loss) before cumulative effect of accounting
change.................................................... (7,851) (800) 474
Cumulative effect of accounting change -- post-employment
benefits, net of income tax benefit ($.12 per share)...... (510)
-------- -------- --------
Net loss.................................................... $ (7,851) $ (800) $ (36)
======== ======== ========
Net loss per share.......................................... $ (1.94) $ (.19) $ (.01)
======== ======== ========
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-40
<PAGE> 160
LOBDELL EMERY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE RELATED DATA)
<TABLE>
<CAPTION>
EQUITY
ADJUSTMENT
FOR MINIMUM
CLASS A CLASS B RETAINED PENSION
VOTING NONVOTING EARNINGS LIABILITY TOTAL
------- --------- -------- ----------- -----
<S> <C> <C> <C> <C> <C>
Balances at January 1, 1994.................. $478 $3,427 $36,715 $ -- $40,620
Net loss for 1994.......................... (36) (36)
Stock option activity...................... 4 70 74
Dividends ($.06 per share)................. (257) (257)
Accretion of redeemable common stock....... (63) (63)
Minimum pension liability adjustment....... (492) (492)
---- ------ ------- ----- -------
Balances at December 31, 1994................ 478 3,431 36,429 (492) 39,846
Net loss for 1995.......................... (800) (800)
Stock option activity...................... 213 213
Dividends ($.03 per share)................. (124) (124)
Accretion of redeemable common stock....... 12 12
Minimum pension liability adjustment....... (239) (239)
---- ------ ------- ----- -------
Balances at December 31, 1995................ 478 3,431 35,730 (731) 38,908
Net loss for 1996.......................... (7,851) (7,851)
Accretion of redeemable common stock....... (503) (503)
Minimum pension liability adjustment....... 280 280
---- ------ ------- ----- -------
Balances at December 31, 1996................ $478 $3,431 $27,376 $(451) $30,834
==== ====== ======= ===== =======
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-41
<PAGE> 161
LOBDELL EMERY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLAR AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
FOR THE YEAR ENDED
DECEMBER 31,
------------------
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Operating activities
Net loss.................................................... $ (7,851) $ (800) $ (36)
Adjustments to reconcile net loss to net cash provided by
operating activities
Depreciation........................................... 13,746 12,486 12,045
Deferred income taxes.................................. (3,922) (1,332) (1,395)
Pension liability...................................... (2,230) 657 159
Postretirement medical benefits liability.............. 2,750 2,245 2,923
Equipment impairment................................... 3,000
Loss (Gain) on sale of equipment....................... (23) (34) 68
Changes in operating assets and liabilities affecting cash
Trade receivables...................................... 3,745 (644) (4,397)
Inventories............................................ 4,129 (1,594) (66)
Income taxes receivable/payable........................ (1,601) 290 (1,569)
Reimbursable tooling................................... 360 (386) (483)
Prepaid expenses and other current assets.............. 635 (649) 60
Advance under shareholders' redemption agreement....... (1,542) 500 113
Other noncurrent assets................................ 3,456 (2,948) 1,619
Trade accounts payable................................. 3,487 (1,769) (961)
Employee compensation.................................. 542 554 72
Accrued expenses and other current liabilities......... (5) 1,241 219
Other noncurrent liabilities........................... 220 9 850
-------- -------- --------
Net cash provided by operating activities......... 18,896 7,826 9,221
-------- -------- --------
Investing activities
Acquisitions of property, plant and equipment............... (16,439) (14,917) (8,696)
Proceeds from sale of equipment............................. 37 276 175
-------- -------- --------
Net cash used in investing activities............. (16,402) (14,641) (8,521)
Financing activities
Proceeds from long-term borrowing arrangements.............. 25,000 8,500 27,020
Principal payments on long-term borrowing arrangements...... (23,932) (5,618) (32,831)
Net borrowings (payments) under lines of credit............. (4,000) 5,350 5,550
Proceeds from exercise of stock options..................... 213 74
Dividends................................................... (124) (257)
Redemption and retirement of redeemable common stock........ (1,581) (903)
-------- -------- --------
Net cash used in financing activities............. (2,932) 6,740 (1,347)
-------- -------- --------
Net decrease in cash and cash equivalents................... (438) (75) (647)
Cash and cash equivalents at beginning of year.............. 716 791 1,438
-------- -------- --------
Cash and cash equivalents at end of year.................... $ 278 $ 716 $ 791
======== ======== ========
Cash paid for interest...................................... $ 3,774 $ 3,411 $ 2,732
======== ======== ========
Cash paid for income taxes.................................. $ 963 $ 291 $ 3,067
======== ======== ========
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-42
<PAGE> 162
LOBDELL EMERY CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 1996, 1995 and 1994
(dollar amounts in thousands)
NOTE 1. NATURE OF OPERATIONS
Lobdell Emery Corporation (the Corporation) is a full-service supplier of
metal stampings and welded assemblies used as original equipment components
primarily by North American original equipment automotive manufacturers. The
Corporation's products are used in a wide variety of sport utility vehicles,
light and medium trucks, vans and passenger cars. The Corporation primarily
operates from five plants located in the Midwest which account for approximately
98% of the Corporation's sales for the year ended December 31, 1996. The
Corporation's hourly workforce is represented by various locals of the United
Auto Workers.
Sales to the Corporation's two primary customers as a percentage of total
sales approximated the following for the years ended December 31:
<TABLE>
<CAPTION>
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Ford Motor Company.......................................... 43% 52% 64%
General Motors Corporation.................................. 49% 40% 29%
</TABLE>
Accounts receivable from Ford Motor Company and General Motors Corporation
represent approximately 47% and 49%, respectively, of the December 31, 1996
accounts receivable balance.
Although the Corporation is directly affected by the economic well being of
the automotive industry and customers referred to above, management does not
believe significant credit risk exists at December 31, 1996. The Corporation
does not require collateral to reduce such risk and historically has not
experienced significant losses related to receivables from individual customers
or groups of customers in the automotive industry.
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION
The consolidated balance sheets include the accounts of Lobdell Emery
Corporation and its wholly-owned subsidiaries, Lewis Emery Capital Corporation
(Lewis), Concept Management Corporation and subsidiaries (Concept), Laserweld
International (Laserweld) and Parallel Group International (Parallel). Concept
Management Corporation also includes the accounts of its wholly-owned
subsidiaries, Winchester Fabrication Corporation (Winchester) and Creative
Fabrication Corporation (Creative). Intercompany accounts and transactions have
been eliminated.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the date of the financial
statements, and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
REVENUE RECOGNITION
Revenue is recognized by the Corporation upon shipment of product to the
customer.
FINANCIAL INSTRUMENTS
At December 31, 1996, the carrying amount of financial instruments such as
cash and cash equivalents, trade receivables and payables and unexpended bond
proceeds, approximated their fair values. The carrying
F-43
<PAGE> 163
LOBDELL EMERY CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements -- Continued
December 31, 1996, 1995 and 1994
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES -- Continued
amount of the long-term customer receivables and borrowings at December 31,
1996, approximated their fair values based on the variable interest rates
available to the Corporation for similar arrangements.
CASH EQUIVALENTS
The Corporation considers all highly-liquid investments with maturity of
three months or less when purchased to be cash equivalents.
INVENTORIES
Inventories are stated at the lower of cost or market. Cost is principally
determined by the last-in, first-out (LIFO) method.
UNEXPENDED BOND PROCEEDS
Unexpended bond proceeds in the accompanying consolidated balance sheets
represent unexpended proceeds from the issuance of industrial development
revenue bonds by Creative as discussed in Note 6, and are invested in allowable
money market accounts and commercial paper with a maturity of 90 days or less.
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are stated on the basis of historical cost
and include expenditures for improvements which materially increase the useful
lives of existing assets. Expenditures for normal repair and maintenance are
charged to operations as incurred. For federal income tax purposes, depreciation
is computed using accelerated and straight-line methods. For financial reporting
purposes, depreciation is computed principally using the straight-line method
over the following estimated useful lives:
<TABLE>
<CAPTION>
YEARS
-----
<S> <C>
Land improvements........................................... 15
Buildings................................................... 30
Machinery and equipment..................................... 3-10
</TABLE>
At December 31, 1996, the Corporation had a machine in process at a vendor
location. The aggregate cost of the machine will be $5,300, for which the
Corporation has recorded approximately $2,700 in the accompanying consolidated
balance sheet. The remaining $2,600 will be recorded by the Corporation upon
final technical approval of the machine.
In accordance with the provisions of Statement of Financial Accounting
Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of," the Corporation established an impairment
reserve against certain of the assets of Laserweld in the amount of $3,000 at
December 31, 1996. The reserve represents the difference between the fair value
of the Laserweld assets, based primarily on a recent independent appraisal, and
the cost of such assets.
ENVIRONMENTAL COMPLIANCE AND REMEDIATION
Environmental expenditures that relate to current operations are expensed
or capitalized as appropriate. Expenditures that relate to an existing condition
caused by past operations which do not contribute to current or future revenue
generation are expensed. Liabilities are recorded when environmental assessments
and/or remedial efforts are probable and the costs can be reasonably estimated.
Estimated costs are based upon
F-44
<PAGE> 164
LOBDELL EMERY CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements -- Continued
December 31, 1996, 1995 and 1994
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES -- Continued
enacted laws and regulations, existing technology and the most probable method
of remediation. The costs determined are not discounted and exclude the effects
of inflation and other social and economic factors.
INCOME TAXES
Deferred taxes are provided to give recognition to the effect of expected
future tax consequences of temporary differences between the carrying amounts
for financial reporting purposes and the tax bases for income tax purposes of
assets and liabilities.
REIMBURSABLE TOOLING
Reimbursable tooling represents net costs incurred on tooling projects for
which the Corporation expects to be reimbursed by customers. Ongoing estimates
of total costs to be incurred on each tooling project are made by management and
losses, if any, are recorded when known. Under certain tooling projects,
billings exceed costs incurred and the related tooling gain is recognized upon
acceptance of the tooling by the customer.
At December 31, 1996, approximately $2,800 of reimbursable tooling was in
process at various vendor locations. These amounts, which have not been recorded
in the accompanying consolidated balance sheet, will be recorded and paid upon
the Corporation's receipt of payment from the owners of the tooling.
NET LOSS PER SHARE
Net loss per share is determined by dividing net loss by the weighted
average number of common shares outstanding during the period.
RECLASSIFICATIONS
Certain amounts from the prior year have been reclassified to conform with
the current year presentation.
NOTE 3. INVENTORIES
Inventories are comprised of the following at December 31:
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
Raw materials............................................... $ 3,851 $ 3,861
Finished goods and work-in-process.......................... 5,278 10,177
------- -------
9,129 14,038
LIFO reserve................................................ (3,046) (3,826)
------- -------
$ 6,083 $10,212
======= =======
</TABLE>
The Corporation does not separately identify finished goods from
work-in-process.
During 1996, inventory quantities were reduced. This reduction resulted in
a liquidation of LIFO inventory quantities carried at lower costs prevailing in
prior years as compared with the cost of 1996 purchases, the effect of which
increased net income by approximately $300.
F-45
<PAGE> 165
LOBDELL EMERY CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements -- Continued
December 31, 1996, 1995 and 1994
NOTE 4. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are comprised of the following at December
31:
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
Land and land improvements.................................. $ 11,130 $ 10,760
Buildings................................................... 33,515 32,801
Machinery and equipment, net of impairment reserve of $3,000
in 1996................................................... 137,914 127,389
Construction-in-process..................................... 6,495 5,216
--------- ---------
189,054 176,166
Less -- accumulated depreciation............................ (116,250) (103,663)
--------- ---------
$ 72,804 $ 72,503
========= =========
</TABLE>
NOTE 5. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
Accrued expenses and other current liabilities are comprised of the
following at December 31:
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
Accrued workers' compensation............................... $2,438 $2,438
Accrued property taxes...................................... 1,950 1,622
Accrued medical benefits.................................... 1,816 1,615
Other....................................................... 307 841
------ ------
$6,511 $6,516
====== ======
</TABLE>
NOTE 6. BORROWING ARRANGEMENTS
Borrowings consist of the following at December 31:
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
BANK SYNDICATE -- TERM LOAN, LOBDELL EMERY CORPORATION
Interest at variable spread over prime (8.25% at December
31, 1996). Quarterly principal payments of $893 plus
interest, matures September 12, 1999...................... $24,107 $21,230
BANK -- TERM LOAN, LEWIS
Interest at .625% over 90-day LIBOR (6.19% at December 31,
1996). Quarterly principal payments of approximately $400,
matures October 1, 1998................................... 3,227 4,936
BANK SYNDICATE -- REVOLVING CREDIT LINE, LOBDELL EMERY
CORPORATION
Interest at variable spread over prime (8.25% at December
31, 1996)................................................. 7,600 11,600
INDUSTRIAL DEVELOPMENT REVENUE BONDS -- CREATIVE
$8,500 issued September 27, 1995, floating rate interest
(4.35% at December 31, 1996). Quarterly principal payments
based on graduated maturity schedule. Backed by NBD Bank
letter of credit.......................................... 8,400 8,500
------- -------
Total..................................................... 43,334 46,266
Less -- current portion of long-term borrowings............. (2,200) (7,169)
------- -------
Long-term borrowings -- less current portion................ $41,134 $39,097
======= =======
</TABLE>
F-46
<PAGE> 166
LOBDELL EMERY CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements -- Continued
December 31, 1996, 1995 and 1994
NOTE 6. BORROWING ARRANGEMENTS -- Continued
Subsequent to December 31, 1996, the Bank syndicate term loan and revolving
credit line were paid in full, with accrued interest, in connection with the
merger described in Note 15. These borrowings were replaced with a $54,000 term
loan, $38,000 revolving line of credit and $3,000 swing line of credit, each
expiring on January 10, 2002. Accordingly, these amounts are classified as
long-term borrowings at December 31, 1996. The term loan bears interest at a
variable spread over 90-day LIBOR, and the revolving and swing lines of credit
bear interest at a variable spread over the prime rate. The Corporation also
entered into an $18,000 capital expenditure line of credit that expires on
January 10, 2002. The agreements contain various financial and other covenants.
Borrowings are secured by substantially all of the assets of the Corporation.
The proceeds of the Lewis term debt were used to finance customer tooling.
The debt is collateralized by a customer purchase order which allows for
recovery of the term-debt principal and interest, administrative cost and a
predetermined markup.
The proceeds of the industrial development revenue bonds were used to
finance the real and personal property of Creative. These bonds are backed by an
NBD Bank letter of credit, which carries a rate of .8% and is collateralized by
substantially all assets of Creative. The letter of credit reimbursement
agreement includes covenants requiring minimum tangible capital, debt service
coverage and limitations on other indebtedness.
NOTE 7. STOCK OPTION PLAN
The Corporation adopted a stock option plan in 1990 which provides for the
granting of discretionary and nondiscretionary options, alternative stock
appreciation rights, cash payment rights, incentive stock options, or a
combination thereof. Each option granted under the plan is for a unit consisting
of one share of Class A and ten shares of Class B common stock. During the years
ended December 31, 1995 and 1994 the Corporation recorded compensation expense
of $213 and $70, respectively. No options were granted or exercised during the
year ended December 31, 1996. Subsequent to December 31, 1996 and in connection
with the merger described in Note 15, all of the outstanding stock options were
canceled. The costs incurred by the Corporation in connection with the
cancellation of the outstanding stock options were reimbursed by L-E
Acquisition, Inc. at close. The Corporation has treated the reimbursement as a
credit to compensation expense recognized in connection with the cancellation of
the aforementioned stock options. The disclosures required under Statement of
Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation," have been omitted as all outstanding stock options were canceled
subsequent to December 31, 1996. Because the acquiring company (see Note 15) has
no stock option plan, the Corporation's management does not believe such
disclosure to be relevant to the users of the consolidated financial statements.
F-47
<PAGE> 167
LOBDELL EMERY CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements -- Continued
December 31, 1996, 1995 and 1994
NOTE 8. INCOME TAXES
The Corporation's benefit for income taxes consists of the following for
the years ended December 31:
<TABLE>
<CAPTION>
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Current
Federal................................................ $ (647) $ 399 $ 1,425
State.................................................. 371 375
------- ------- -------
(647) 770 1,800
------- ------- -------
Deferred
Federal................................................ (3,405) (869) (1,206)
State.................................................. (517) (165) (152)
------- ------- -------
(3,922) (1,034) (1,358)
------- ------- -------
$(4,569) $ (264) $ 442
======= ======= =======
</TABLE>
A reconciliation between the Corporation's income tax provision (benefit)
and the amount computed by applying the statutory income tax rate to income
before income taxes is as follows for the years ended December 31:
<TABLE>
<CAPTION>
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Statutory rate.............................................. $(4,223) $(362) $311
State taxes, net of federal benefit......................... (517) 136 147
Nondeductible items......................................... 212 104 76
Other....................................................... (41) (142) (92)
------- ----- ----
Provision (benefit) for income taxes........................ $(4,569) $(264) $442
======= ===== ====
</TABLE>
Significant components of the Corporation's deferred tax assets and
(liabilities) are as follows at December 31:
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
Deferred tax liabilities
Tax depreciation in excess of book........................ $(8,312) $(8,619)
Prepaid pension asset..................................... (427) (574)
------- -------
Gross deferred tax liabilities.............................. (8,739) (9,193)
------- -------
Deferred tax assets
Postretirement medical benefits........................... 7,463 6,418
Equipment impairment reserve.............................. 1,140
Workers' compensation..................................... 926 927
Medical benefits accrual.................................. 687 611
Allowance for bad debts................................... 477 190
Environmental reserves.................................... 334 334
Postemployment benefits................................... 323 323
AMT credit carryforward................................... 1,871 1,708
Other..................................................... 1,330 540
------- -------
Gross deferred tax assets................................... 14,551 11,051
------- -------
Valuation allowance......................................... (200)
------- -------
Net deferred tax asset...................................... $ 5,612 $ 1,858
======= =======
</TABLE>
F-48
<PAGE> 168
LOBDELL EMERY CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements -- Continued
December 31, 1996, 1995 and 1994
NOTE 8. INCOME TAXES -- Continued
A valuation allowance is provided on the tax benefits otherwise associated
with certain tax attributes unless it is considered more likely than not that
the benefit will be realized.
The Corporation has net operating loss carryforwards for state income tax
purposes with potential future tax benefits of approximately $150 at December
31, 1996, which expire during the years 2010 and 2011.
The Corporation has Tennessee Jobs Tax Credit carryforwards of
approximately $200 at December 31, 1996, which expire during the years 2010 and
2011.
NOTE 9. BENEFIT PLANS
The Corporation sponsors six noncontributory-defined benefit pension plans
covering substantially all employees meeting the age and length of service
requirements as specified in the plans. The plan covering salaried employees
provides pension benefits that are based on a percentage of the employee's
average monthly compensation during the five highest consecutive years out of
their last ten years, and their years of credited service up to a maximum of 30
years. The Corporation's hourly pension plans do not provide for increases in
future compensation levels. The Corporation's funding policy for this plan is to
make contributions in amounts sufficient to annually fund the plan's current
service cost and the initial past service cost, plus interest, over a period of
30 years. Plans covering hourly employees generally provide benefits of stated
amounts based on their unique labor agreements for each year of service. The
Corporation's funding policy for these plans is to make at least the minimum
annual contributions required by applicable regulations.
The following table sets forth the plans' funded status and amounts
recognized on the Corporation's balance sheet at December 31:
<TABLE>
<CAPTION>
1996 1995
------------------------ ------------------------
OVERFUNDED UNDERFUNDED OVERFUNDED UNDERFUNDED
PLANS PLANS PLANS PLANS
---------- ----------- ---------- -----------
<S> <C> <C> <C> <C>
Actuarial present value of benefit
obligation:
Vested benefits........................ $ 14,784 $ 21,270 $ 13,718 $ 18,926
Nonvested benefits..................... 1,174 1,468 1,143 1,597
-------- -------- -------- --------
15,958 22,738 14,861 20,523
Effect of projected future compensation
levels................................. 3,278 2,866
-------- -------- -------- --------
Projected benefit obligation for service
rendered............................... 19,236 22,738 17,727 20,523
Plan assets at fair value (primarily U.S.
government securities, bonds and notes
and mutual funds)...................... (18,857) (19,656) (17,092) (17,477)
-------- -------- -------- --------
Plan assets less than projected benefit
obligation............................. 379 3,082 635 3,046
Unrecognized net loss.................... (2,080) (865) (2,612) (1,353)
Unrecognized prior service cost.......... 174 (2,757) 227 (1,572)
Unrecognized net obligation being
recognized over 15-20 years............ 300 (346) 350 (426)
Adjustment required to recognize minimum
liability.............................. 3,968 3,332
-------- -------- -------- --------
(Prepaid) accrued pension cost........... $ (1,227) $ 3,082 $ (1,400) $ 3,027
======== ======== ======== ========
</TABLE>
F-49
<PAGE> 169
LOBDELL EMERY CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements -- Continued
December 31, 1996, 1995 and 1994
NOTE 9. BENEFIT PLANS -- Continued
The minimum pension liability in excess of the allowable intangible asset
of $751 and $1,218 at December 31, 1996 and 1995, respectively, has been
recorded as a separate component of equity, net of tax.
Net periodic pension cost included the following components for the year
ended December 31:
<TABLE>
<CAPTION>
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Service cost.............................................. $1,100 $ 857 $ 1,142
Interest cost............................................. 2,800 2,641 2,418
Actual return on plan assets.............................. (4,322) (5,867) (232)
Net amortization and deferral............................. 1,560 3,606 (1,993)
------ ------- -------
Net periodic pension cost................................. $1,138 $ 1,237 $ 1,335
====== ======= =======
</TABLE>
Actuarial assumptions used in determining the projected benefit obligation
are as follows:
<TABLE>
<CAPTION>
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Discount rate............................................... 7.5% 7.5% 8.5%
Rate of increase in future compensation..................... 4.5% 4.5% 4.5%
Expected long-term rate of return on assets................. 9.0% 9.0% 8.0%
</TABLE>
The Corporation sponsors a Supplemental Employee Retirement Plan (SERP)
which covers three key officers of the Corporation. At December 31, 1996, the
Corporation has accrued a liability of $217 related to the SERP.
The Corporation sponsors five defined contribution 401(k) plans. The
Salaried Employees' Retirement Savings Plan covers all salaried employees of the
Corporation and Winchester. The Alma Hourly Employees' Retirement Savings Plan,
the Argos Hourly Employees' Retirement Savings Plan, the Creative Fabrication
Corporation and the Greencastle Hourly Employees' Plan cover all eligible hourly
employees at the respective locations. The Corporation generally contributes 25%
of the first 6% of the base compensation that a participant contributes to the
plans.
NOTE 10. POSTRETIREMENT MEDICAL BENEFITS
In addition to the Corporation's defined benefit pension plans, the
Corporation sponsors unfunded defined benefit medical plans that provide
postretirement medical benefits to certain full-time employees meeting the age,
length of service and contractual requirements as specified in the plans. The
plan covering salaried employees is a contributory plan providing medical
benefits to those hired before July 1, 1993. The percentage of cost paid by the
retiree currently ranges from 10% for 30 or more years of service at retirement
to 55% for 15 years of service at retirement, with Corporation contributions
commencing upon attainment of age 62. Those retiring with less than 15 years of
service and those hired after June 30, 1993 may participate in the plan at their
own cost. The plan is currently noncontributory for those employees who retired
prior to July 1, 1993. The plans covering hourly employees provide medical
benefit plan options that are similar to those offered to active hourly
employees, with Corporation contributions limited either to that available under
traditional coverage for Alma hourly retirees or to 87% of the total applicable
premium for Greencastle retirees.
F-50
<PAGE> 170
LOBDELL EMERY CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements -- Continued
December 31, 1996, 1995 and 1994
NOTE 10. POSTRETIREMENT MEDICAL BENEFITS -- Continued
The following table presents the plans' funded status reconciled with
amounts recognized in the Corporation's balance sheets at December 31:
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
Accumulated postretirement benefit obligation
Retirees.................................................. $ 14,420 $ 13,132
Full eligible active plan participants.................... 4,767 4,408
Other active plan participants............................ 14,613 12,931
-------- --------
Total unfunded obligation.............................. 33,800 30,471
Unrecognized loss........................................... (2,618) (1,481)
Unrecognized transition obligation.......................... (11,543) (12,101)
-------- --------
Postretirement medical benefits liability................... $ 19,639 $ 16,889
======== ========
</TABLE>
Net periodic postretirement benefit cost included the following components
for the year ended December 31:
<TABLE>
<CAPTION>
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Service cost................................................ $ 947 $ 785 $1,088
Interest cost............................................... 2,216 2,010 2,238
Amortization of transition obligation prior losses.......... 722 643 997
------ ------ ------
Net periodic postretirement benefit cost.................... $3,885 $3,438 $4,323
====== ====== ======
</TABLE>
The weighted average discount rate used in determining the accumulated
postretirement benefit obligation was 7.5% in 1996 and 1995. The weighted
average annual assumed rate of increase in the per capita cost of covered
benefits (i.e., healthcare cost trend rate) is 9.2% in 1997 trending to 6.5% in
2008 and thereafter for retirees less than 65 years of age. For retirees 65
years of age and over, the rate is 8.9% in 1997 trending to 6.5% in 2008 and
thereafter. The healthcare cost trend rate assumption has a significant effect
on the amounts reported. For example, increasing the assumed healthcare cost
trend rates by one percentage point in each year would increase the accumulated
postretirement benefit obligation as of December 31, 1996 and net periodic
postretirement benefit cost for the year then ended by approximately $4,861 and
$496, respectively.
NOTE 11. SHAREHOLDERS' REDEMPTION AGREEMENT AND REDEEMABLE COMMON STOCK
Due to the death of a major shareholder, the Corporation entered into an
agreement in December, 1988, providing for the redemption from the estate of any
class of common stock. The Corporation shall purchase for cash certain shares of
common stock as required each year, for the payment by the estate of federal and
state taxes and other miscellaneous expenses allowed by Internal Revenue Code
Section 6166. The redemption price is based upon the fair value, as previously
determined by an independent appraisal at the date of death, adjusted for
subsequent increases or decreases in book value as defined in the agreement.
Subsequent to December 31, 1996 and in connection with the merger as described
in Note 15, a portion of the common stock owned by the estate will be redeemed
to cover payment of remaining taxes and administrative expenses. Prior to the
merger, $1,542 was advanced to the estate to effectuate a release of an Internal
Revenue Service lien. Common shares that are redeemable under that terms of the
agreement have been recorded in the consolidated balance sheets as Redeemable
Common Stock. During the years ended December 31, 1995 and 1994, the Company
redeemed 165,555 shares and 96,597 shares, respectively, at a per share price of
$9.55 and
F-51
<PAGE> 171
LOBDELL EMERY CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements -- Continued
December 31, 1996, 1995 and 1994
NOTE 11. SHAREHOLDERS' REDEMPTION AGREEMENT AND REDEEMABLE COMMON STOCK --
Continued
$9.34, respectively. The redeemable common stock has been accreted to its
redemption value in each of the accompanying consolidated balance sheets.
NOTE 12. LEWIS EMERY CAPITAL CORPORATION
Lewis was established in order to facilitate the financing of a tooling
project for Ford Motor Company (Ford). In 1993, Lewis signed a contract to
finance $8,500 of tooling. The transaction was financed with proceeds from the
term loan described in Note 6. The receivable from Ford is due in 20 quarterly
installments through October 1998.
NOTE 13. COMMITMENTS AND CONTINGENCIES
OPERATING LEASES
As of December 31, 1996, the Corporation had long-term operating leases
covering certain machinery and equipment. The minimum rental commitments under
noncancellable operating leases with lease terms in excess of one year are as
follows as of December 31, 1996:
<TABLE>
<S> <C>
1997........................................................ $ 4,690
1998........................................................ 3,241
1999........................................................ 3,367
2000........................................................ 1,178
2001........................................................ 3,355
-------
$15,831
=======
</TABLE>
ENVIRONMENTAL MATTERS
The Corporation is subject to federal, state and local laws and regulations
which govern environmental matters. These laws regulate the discharge of
materials into the environment and may require the Corporation to remove or
mitigate the environmental effects of the disposal or release of petroleum or
chemical substances. The Corporation has identified several environmental
matters resulting from prior operations. Due to the relatively early stage of
investigation of certain of these identified matters as well as potential
indemnification by other potentially responsible parties, management is unable
to reasonably estimate the ultimate cost of remediating certain of these
identified environmental matters. At December 31, 1996 and 1995, the Corporation
has a liability of approximately $880 recorded for estimated costs of known
environmental matters.
GENERAL
The Corporation is subject to various claims, lawsuits and administrative
proceedings related to matters arising out of the normal course of business. In
the opinion of management, after reviewing the information which is currently
available with respect to such matters and consulting with legal counsel, any
liability which may ultimately be incurred with respect to these matters will
not materially affect the financial position of the Corporation.
NOTE 14. RELATED-PARTY TRANSACTION
During 1996, the Corporation paid sales commissions, based upon qualified
foreign sales to Grace Emery Sales Corporation, a Domestic International Sales
Corporation (DISC) owned by the shareholders of the
F-52
<PAGE> 172
LOBDELL EMERY CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements -- Continued
December 31, 1996, 1995 and 1994
NOTE 14. RELATED-PARTY TRANSACTION -- Continued
Corporation. Commissions payable to the DISC are subject to certain
restrictions. Commissions were $369, $521 and $772 in 1996, 1995 and 1994,
respectively.
NOTE 15. SUBSEQUENT EVENT
On January 10, 1997, pursuant to an Agreement and Plan of Merger among
Lobdell Emery Corporation, certain shareholders of Lobdell Emery Corporation,
BMG-MI, Inc. and L-E Acquisition, Inc. as amended, certain Lobdell Emery
Corporation shareholders and option holders had their respective shares and
options redeemed for cash of approximately $8,500 and all outstanding shares of
common stock of Lobdell Emery Corporation (Oldco) were exchanged for shares of
preferred stock of L-E Acquisition, Inc. with a face value of approximately
$40,800. In addition, approximately $3,500 of expenses incurred by the
Corporation were reimbursed by L-E Acquisition, Inc. Subsequent to the exchange
of Oldco's common stock for preferred stock, L-E Acquisition, Inc. was merged
with and into Lobdell Emery Corporation (Newco).
NOTE 16. RESTATEMENT OF PRIOR YEAR FINANCIAL STATEMENTS
The Corporation's management has restated the consolidated financial
statements for periods prior to December 31, 1996. The consolidated financial
statements have been restated to correct the misstatement of certain assets and
liabilities including accounts receivable, accrued employee benefit related
costs and accrued environmental costs, net of related tax benefits. The effect
of the restatement was to decrease retained earnings at January 1, 1994 by
$1,987, decrease net loss by $36 ($.01 per share) for the year ended December
31, 1995, and increase net loss by $647 ($.15 per share) for the year ended
December 31, 1994.
F-53
<PAGE> 173
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and
Stockholders of Howell Industries, Inc.
In our opinion, the accompanying balance sheet and the related statement of
operations, of changes in stockholders' equity and of cash flows present fairly,
in all material respects, the financial position of Howell Industries, Inc. at
July 31, 1997, and the results of its operations and its cash flows for the year
then ended, in conformity with generally accepted accounting principles. These
financial statements are the responsibility of management; our responsibility is
to express an opinion on these financial statements based on our audit. We
conducted our audit of these statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free from
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for the opinion expressed above.
As described in Note 11, on August 13, 1997 all of the outstanding shares of
common stock of Howell Industries, Inc. were acquired by Oxford Automotive, Inc.
PRICE WATERHOUSE LLP
Bloomfield Hills, Michigan
June 15, 1998
F-54
<PAGE> 174
HOWELL INDUSTRIES, INC.
BALANCE SHEET
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE-RELATED DATA)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
JULY 31,
1997
<S> <C>
ASSETS
Current assets
Cash and cash equivalents (including interest
bearing instruments of $1,167) $ 1,997
Accounts receivable 8,583
Income taxes refundable 522
Inventories, net of LIFO reserve of $1,354
Raw material 895
Work-in-process and finished goods 5,331
--------------
Total inventories 6,226
Unbilled die costs 957
Prepaid expenses and other assets 1,095
Deferred income taxes 1,229
--------------
Total current assets 20,609
Property, plant and equipment, net 10,214
--------------
TOTAL ASSETS $ 30,823
==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $ 4,888
Accrued expenses and other liabilities 4,840
--------------
Total current liabilities 9,728
Pension liability 522
Other long-term liabilities 508
Deferred income taxes 851
--------------
Total liabilities 11,609
--------------
Stockholders' equity
Common stock, no par value, 2,500,000 shares
authorized, 622,738 issued and outstanding 594
Retained earnings 18,620
--------------
Total stockholders' equity 19,214
--------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 30,823
==============
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-55
<PAGE> 175
HOWELL INDUSTRIES, INC.
STATEMENT OF OPERATIONS
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE-RELATED DATA)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED
JULY 31, 1997
<S> <C>
Net sales $ 95,240
Cost of sales 89,410
--------------
Gross profit 5,830
Selling and administrative expenses 4,748
--------------
Operating income 1,082
Other income 142
--------------
Income before provision for income taxes 1,224
Provision for income taxes 504
--------------
Net income $ 720
==============
Net income per common share $ 1.16
==============
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-56
<PAGE> 176
HOWELL INDUSTRIES, INC.
STATEMENT OF SHAREHOLDERS' EQUITY
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE-RELATED DATA)
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMMON STOCK ISSUED
AND OUTSTANDING
-------------------- RETAINED
SHARES AMOUNT EARNINGS
<S> <C> <C> <C>
Balance, July 31, 1996 622,738 $ 594 $ 18,367
Cash dividends ($0.75 per share) (467)
Net income 720
---------- ------- ----------
Balance, July 31, 1997 622,738 $ 594 $ 18,620
========== ======= ==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-57
<PAGE> 177
HOWELL INDUSTRIES, INC.
STATEMENT OF CASH FLOWS
(DOLLAR AMOUNTS IN THOUSANDS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED
JULY 31, 1997
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 720
Adjustments to reconcile net income to net cash provided by
operating activities
Depreciation 1,590
Gain on sale of equipment (2)
Provision for deferred taxes (442)
Change in operating assets and liabilities
Accounts receivable (2,728)
Income taxes refundable (522)
Unbilled die costs 6,689
Inventories (5,414)
Prepaid expenses 377
Accounts payable (733)
Accrued expenses 3,242
Pension liability 2
Other long-term liabilities (943)
--------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 1,836
--------------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of equipment 63
Capital expenditures (4,095)
--------------
NET CASH USED IN INVESTING ACTIVITIES (4,032)
--------------
CASH FLOWS FOR FINANCING ACTIVITIES
Dividends paid (467)
--------------
NET CASH USED IN FINANCING ACTIVITIES (467)
--------------
Decrease in cash and cash equivalents (2,663)
Cash and cash equivalents at beginning of year 4,660
--------------
Cash and cash equivalents at end of year $ 1,997
==============
Cash paid for income taxes $ 1,429
==============
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-58
<PAGE> 178
HOWELL INDUSTRIES, INC.
NOTES TO FINANCIAL STATEMENTS
JULY 31, 1997
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE-RELATED DATA)
- -------------------------------------------------------------------------------
1. NATURE OF OPERATIONS
Howell Industries, Inc. ("the Company"), specializes in the production of
stamped structural components for the automotive industry, with significant
sales within the light-duty truck segment. The Company primarily operates
from two plants which are located in Michigan and Ohio.
Net sales to the Company's two primary customers as a percentage of total
net sales for the year ended July 31, 1997 are as follows:
1997
Ford Motor Company 53%
Chrysler Corporation 47%
Accounts receivable from Ford Motor Company and Chrysler Corporation
represent approximately 68% and 31%, respectively, of the July 31, 1997
accounts receivable balance.
Although the Company is directly affected by the economic well being of the
North American automotive industry and customers referred to above,
management does not believe significant credit risk exists at July 31,
1997. The Company does not require collateral to reduce such risk and
historically has not experienced significant losses related to receivables
from individual customers or groups of customers in the automotive
industry.
The Company's primary raw material in the manufacture of structural
components is steel. Although steel is available in an adequate supply from
numerous vendors, a significant increase in the price of this raw material
could affect operating results adversely.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REVENUE RECOGNITION
Revenue is recognized by the Company upon shipment of product to the
customer.
CASH EQUIVALENTS
The Company considers all highly-liquid investments with a maturity of
three month or less when purchased to be cash equivalents.
UNBILLED DIE COSTS
Unbilled die costs represents net costs incurred on tooling projects for
which the Company expects to be reimbursed by customers. Ongoing estimates
of total costs to be incurred on each tooling project are made by
management and losses, if any, are recorded when known. Tooling revenue is
recognized upon acceptance of the tooling by the customer.
F-59
<PAGE> 179
HOWELL INDUSTRIES, INC.
NOTES TO FINANCIAL STATEMENTS
JULY 31, 1997
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE-RELATED DATA)
- -------------------------------------------------------------------------------
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are stated on the basis of cost and include
expenditures for improvements which materially increase the useful lives of
existing assets. Expenditures for normal repair and maintenance are charged
to operations as incurred. For federal income tax purposes, depreciation is
computed using accelerated and straight-line methods. For financial
reporting purposes, depreciation is computed using the straight-line method
over the following estimated useful lives:
YEARS
Buildings and improvements 10-25
Machinery and equipment 5-25
Furniture and fixtures 5-7
Automobiles and trucks 3-5
USE OF ESTIMATES IN PREPARATION OF FINANCIAL STATEMENTS
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenue and expenses
during the reporting period. Actual results could differ from those
estimates.
3. PREPAID EXPENSES AND OTHER ASSETS
Prepaid expenses and other assets are comprised of the following:
<TABLE>
<CAPTION>
JULY 31,
1997
<S> <C>
Prepaid insurance $ 135
Prepaid pension costs 146
Intangible pension asset 477
Other 337
--------------
$ 1,095
==============
</TABLE>
F-60
<PAGE> 180
HOWELL INDUSTRIES, INC.
NOTES TO FINANCIAL STATEMENTS
JULY 31, 1997
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE-RELATED DATA)
- -------------------------------------------------------------------------------
4. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are comprised of the following:
<TABLE>
<CAPTION>
JULY 31,
1997
<S> <C>
Land $ 76
Buildings and improvements 4,210
Machinery and equipment 19,521
Furniture and fixtures 1,735
Automobiles and trucks 590
Construction in progress 629
--------------
26,761
Less - accumulated depreciation (16,547)
--------------
$ 10,214
==============
</TABLE>
5. ACCRUED EXPENSES AND OTHER LIABILITIES
Accrued expenses and other liabilities are comprised of the following:
<TABLE>
<CAPTION>
JULY 31,
1997
<S> <C>
Income taxes payable $ 188
Accrued die maintenance costs 2,000
Accrued salaries and wages 1,610
Accrued workers' compensation 655
Accrued property and other taxes 221
Other 166
-----------
$ 4,840
===========
</TABLE>
6. OTHER LONG-TERM LIABILITIES
Other long-term liabilities are comprised of the following:
<TABLE>
<CAPTION>
JULY 31,
1997
<S> <C>
Reserve for plant consolidation $ 120
Environmental reserve 388
-----------
Total $ 508
===========
</TABLE>
F-61
<PAGE> 181
HOWELL INDUSTRIES, INC.
NOTES TO FINANCIAL STATEMENTS
JULY 31, 1997
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE-RELATED DATA)
- -------------------------------------------------------------------------------
7. INCOME TAXES
The Company's income tax expense consists of the following:
<TABLE>
<CAPTION>
YEAR ENDED
JULY 31, 1997
<S> <C>
Current provision
Federal $ 795
State and local 112
Deferred provision (403)
---------
$ 504
=========
</TABLE>
A reconciliation of the income tax provision to that which would result by
applying the United States statutory tax rate (34%) to earnings before
taxes follows:
<TABLE>
<CAPTION>
YEAR ENDED
JULY 31, 1997
<S> <C>
Tax based on statutory tax rate $ 416
Tax-exempt income (29)
Tax deductible ESOP dividend (21)
Non-deductible expenses 64
State and local income taxes, net of
federal income tax benefit 74
---------
Taxes on income $ 504
=========
</TABLE>
Significant components of the Company's deferred tax assets and
(liabilities) are as follows:
<TABLE>
<CAPTION>
YEAR ENDED
JULY 31, 1997
<S> <C>
Deferred tax assets
Reserves recorded for financial accounting purposes, not
deductible for tax purposes until paid $ 901
Employee benefits and payroll-related deferrals 380
---------
Total deferred tax assets 1,281
---------
Deferred tax liabilities
Employee benefits and payroll-related deferrals (98)
Tax depreciation in excess of book (780)
Other (25)
---------
Total deferred tax liabilities (903)
---------
Net deferred tax asset $ 378
=========
</TABLE>
F-62
<PAGE> 182
HOWELL INDUSTRIES, INC.
NOTES TO FINANCIAL STATEMENTS
JULY 31, 1997
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE-RELATED DATA)
- -------------------------------------------------------------------------------
8. EMPLOYEE BENEFIT PLANS
The Company has three noncontributory defined benefit pension plans
covering substantially all of its employees and an unfunded noncontributory
defined contribution plan for certain officers. Benefits, which differ by
plan are based on years of service and/or the employee's five-year average
compensation. The Company's funding policy for its defined benefit plans is
to contribute annually an amount necessary to meet or exceed the Employee
Retirement Income Security Act's (ERISA) minimum funding standards.
The components of net pension cost are as follows:
<TABLE>
<CAPTION>
YEAR ENDED
JULY 31, 1997
<S> <C>
Defined benefit plans
Service cost - benefits earned during the year $ 226
Interest cost on projected benefit obligation 347
Actual return on plan assets (788)
Net amortization, deferral and other 517
--------
Total 302
Defined contribution plan 30
--------
Net pension costs $ 332
========
</TABLE>
The following table sets forth the funded status and amounts recognized in
the balance sheets for the defined benefit plans as of July 31, 1997:
<TABLE>
<CAPTION>
ASSETS ACCUMULATED
EXCEED BENEFITS
ACCUMULATED EXCEED
BENEFITS ASSETS
<S> <C> <C>
Actuarial present value of benefit obligation
Vested benefit obligation $ 1,255 $ 2,788
Nonvested benefit obligation 65 207
---------- --------
Accumulated benefit obligation 1,320 2,995
Effect of future salary increases 746
----------
Projected benefit obligation 2,066 2,995
Plan assets at fair value 2,584 2,473
---------- --------
Plan assets greater (less) than projected
benefit obligation 518 (522)
Unrecognized net gain (409) (12)
Unrecognized prior service cost 131 405
Unrecognized net transition (asset) obligation (94) 84
Adjustment required to recognize minimum liability (477)
---------- --------
Net prepaid pension cost (pension liability)
recognized in the balance sheet $ 146 $ (522)
========== ========
</TABLE>
F-63
<PAGE> 183
HOWELL INDUSTRIES, INC.
NOTES TO FINANCIAL STATEMENTS
JULY 31, 1997
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE-RELATED DATA)
- -------------------------------------------------------------------------------
8. EMPLOYEE BENEFIT PLANS (CONTINUED)
The actuarial assumptions used in determining the present value of the
projected benefit obligations are:
<TABLE>
<CAPTION>
YEAR ENDED
JULY 31, 1997
<S> <C>
Weighted average discount rate 7.4%
Increase in future compensation levels 5.0%
</TABLE>
The expected long-term rate of return on assets is 7.5%. Plan assets are
invested in a portfolio of cash, income and equity securities and a
diversified fund with guaranteed returns.
The Company also maintains an Employee Stock Ownership Plan (ESOP) and an
Employee Savings Plan (401(k) plan) covering substantially all employees
not covered by a collective bargaining agreement.
At July 31, 1997, the ESOP owned 60,005 shares of common stock, all of
which had been allocated to individual participants.
Contributions to the ESOP are authorized at the discretion of the Board of
Directors. No contributions were charged to expense during 1997. There were
no amounts accrued at July 31, 1997 for such contributions.
The Employee Savings Plan provides for participants to contribute up to 10%
of their annual compensation each year. In addition, the Company
contributes an amount equal to 25% of the first $1 contributed by the
employee, plus $0.2. Company contributions amounted to approximately $30 in
1997.
9. LINE OF CREDIT
The Company maintains a $4,000 unsecured line of credit with a 5%
compensating balance agreement. The Company did not borrow under this line
of credit in 1997.
10. OPERATING LEASES
The Company rents a warehouse under a noncancelable operating lease, and
certain facilities and equipment under cancelable leases. Total rent
expense under these leases was $361 in 1997.
11. SUBSEQUENT EVENTS
On August 13, 1997, Oxford Automotive, Inc., purchased all of the
outstanding common stock of the Company for approximately $23,000 in cash.
F-64
<PAGE> 184
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors
and Shareholders of
RPI Holdings, Inc.
In our opinion, the accompanying balance sheet and the related statements of
operations, of changes in shareholders' equity and of cash flows present
fairly, in all material respects, the financial position of RPI Holdings, Inc.,
(the Company) at March 31, 1997 and the result of its operations and cash flows
for the period from July 1, 1996 to March 31, 1997 in conformity with generally
accepted accounting principles. These financial statements are the
responsibility of the Company's management; our responsibility is to express an
opinion on these financial statements based on our audit. We conducted our
audit of these statements in accordance with generally accepted auditing
standards which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe that
our audit provides a reasonable basis for the opinion expressed above.
The financial statements of the Company as of and for the year ended June 30,
1996 were audited by other accountants whose report dated February 4, 1998
expressed an unqualified opinion on those statements.
As described in Note 2, on November 25, 1997 all of the outstanding shares of
common stock of the Company were sold to Oxford Automotive, Inc.
Price Waterhouse LLP
Detroit, Michigan
February, 6, 1998
F-65
<PAGE> 185
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors of
RPI Holdings, Inc.
We have audited the accompanying consolidated balance sheet of RPI Holdings,
Inc. and Subsidiaries as of June 30, 1996 and the related consolidated
statements of operations, stockholders' equity, and cash flows for the year
then ended. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of RPI Holdings,
Inc. and Subsidiaries as of June 30, 1996, and the consolidated results of
their operations and their cash flows for the year then ended, in conformity
with generally accepted accounting principles.
Coopers & Lybrand L.L.P.
Detroit, Michigan
February 4, 1998
F-66
<PAGE> 186
RPI HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
SEPTEMBER 30, MARCH 31, JUNE 30,
1997 1997 1996
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
Current assets
Cash $ 32,086 $ 36,145 $ 60,568
Accounts receivable, less allowance for doubtful
accounts of $66,055 in 1997 and $80,000 in 1996 1,633,602 1,755,481 1,705,609
Accounts receivable, other 6,414 33,009
Notes receivable 25,000 31,159 10,585
Refundable income taxes 254,000 254,000 300,000
Inventories
Raw material 491,219 572,015 378,776
Work-in-process 707,434 671,224 248,934
Finished goods 311,162 347,894 200,672
------------- ------------- -------------
1,509,815 1,591,133 828,382
Prepaid expenses 92,022 162,246 292,082
Deferred income taxes 47,600 62,600 47,600
------------- ------------- -------------
Total current assets 3,594,125 3,899,178 3,277,835
Property, plant and equipment, net 2,965,362 3,024,876 2,764,259
Deferred income taxes 484,500
------------- ------------- -------------
TOTAL ASSETS $ 7,043,987 $ 6,924,054 $ 6,042,094
============= ============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Current maturities of long-term debt $ 4,269,842 $ 2,937,611 $ 410,092
Accounts payable 2,340,402 2,482,615 1,435,794
Accrued expenses and other liabilities 333,296 416,520 437,939
------------- ------------- -------------
Total current liabilities 6,943,540 5,836,746 2,283,825
Long-term debt, less current maturities 474,337 509,720 2,504,550
Notes payable to shareholders 364,760 364,760 364,760
Deferred income taxes 63,200 150,300
------------- ------------- -------------
Total liabilities 7,782,637 6,774,426 5,303,435
Commitments and contingent liabilities (Note 6)
Shareholders' equity (deficit)
Common stock (no par value; 60,000
shares authorized, 752.8 shares issued
and outstanding) 373,295 373,295 373,295
Retained (deficit) earnings (1,111,945) (223,667) 365,364
------------- ------------- -------------
Total shareholders' equity (738,650) 149,628 738,659
------------- ------------- -------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT) $ 7,043,987 $ 6,924,054 $ 6,042,094
============= ============= =============
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-67
<PAGE> 187
RPI HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
FOR THE SIX MONTHS FOR THE PERIOD FROM FOR THE YEAR
ENDED SEPTEMBER 30, JULY 1, 1996 TO ENDED
1997 1996 MARCH 31, 1997 JUNE 30, 1996
(UNAUDITED)
<S> <C> <C> <C>
Net sales $ 6,938,452 $ 5,021,666 $ 8,823,948 $ 9,819,907
Cost of sales 7,985,430 4,620,341 9,037,409 8,826,609
------------ ----------- ----------- ------------
Gross profit (1,046,978) 401,325 (213,461) 993,298
Selling and administrative expenses 143,793 614,816 535,017 1,264,314
------------ ----------- ----------- ------------
Operating loss (1,190,771) (213,491) (748,478) (271,016)
Other income (expense)
Interest expense (203,081) (155,360) (251,585) (404,322)
Miscellaneous income (expense) (22,426) 63,911 54,932 (38,740)
------------ ----------- ----------- ------------
Loss before income taxes (1,416,278) (304,940) (945,131) (714,078)
Income tax benefit 528,000 128,000 356,100 300,000
------------ ----------- ----------- ------------
Net loss $ (888,278) $ (176,940) $ (589,031) $ (414,078)
============ ========== ========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-68
<PAGE> 188
RPI HOLDINGS, INC.
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
COMMON COMMON RETAINED
STOCK STOCK EARNINGS TOTAL
<S> <C> <C> <C> <C>
Balances at July 1, 1995 770 $ 383,845 $ 779,442 $ 1,163,287
Net loss (414,078) (414,078)
Redemption of common stock (17) (10,550) (10,550)
--- ----------- ------------- ------------
Balances at June 30, 1996 753 373,295 365,364 738,659
Net loss (589,031) (589,031)
--- ----------- ------------- ------------
Balances at March 31, 1997 753 373,295 (223,667) 149,628
Net loss (unaudited) (888,278) (888,278)
--- ----------- ------------- ------------
Balances at September 30, 1997 (unaudited) 753 $ 373,295 $ (1,111,945) $ (738,650)
=== =========== ============= ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-69
<PAGE> 189
RPI HOLDINGS, INC.
Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>
FOR THE SIX MONTHS FOR THE PERIOD FROM FOR THE YEAR
ENDED SEPTEMBER 30, JULY 1, 1996 TO ENDED
1997 1996 MARCH 31, 1997 JUNE 30, 1996
(UNAUDITED)
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (888,278) $ (176,940) $ (589,031) $ (414,078)
Adjustments to reconcile net loss to net
cash used in operating activities
Depreciation and amortization 153,111 105,256 202,051 213,050
Loss on sale of property and equipment 4,800
Deferred income taxes (532,700) 164,410 (102,100) 12,700
Changes in operating assets and liabilities
Accounts receivable 128,293 (272,998) (49,872) 278,413
Accounts receivable, other 26,595 63,479
Notes receivable 6,159 (10,586) (20,574) 3,529
Refundable income taxes 46,000 (300,000)
Inventories 81,318 (45,306) (762,751) 290,684
Prepaid expenses and other current assets 75,463 157,560 129,836 (60,560)
Accounts payable (142,213) 260,756 1,046,821 33,095
Accrued expenses and other liabilities (88,463) (191,506) (21,419) (204,769)
----------- ---------- ---------- -----------
NET CASH USED IN OPERATING ACTIVITIES (1,207,310) (9,354) (89,644) (84,457)
----------- ---------- ---------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment (93,597) (224,814) (671,758) (250,007)
proceeds from sale of assets 204,290
----------- ---------- ---------- -----------
NET CASH USED IN INVESTING ACTIVITIES (93,597) (224,814) (467,468) (250,007)
----------- ---------- ---------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Principal borrowings on revolving line of
credit, net (65,069) 157,575 515,049 390,475
Proceeds from debt obligations 58,303 792,252 274,757
Principal payments of debt obligations (223,677) (774,612) (350,775)
Advances from related party 1,585,594
Redemption of common stock (10,550)
----------- ---------- ---------- -----------
NET CASH PROVIDED BY FINANCING ACTIVITIES 1,296,848 215,878 532,689 303,907
----------- ---------- ---------- -----------
Net decrease in cash (4,059) (18,290) (24,423) (30,557)
Cash, beginning of year 36,145 78,575 60,568 91,125
----------- ---------- ---------- -----------
Cash, end of year $ 32,086 $ 60,285 $ 36,145 $ 60,568
=========== ========== ========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-70
<PAGE> 190
RPI HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. NATURE OF OPERATIONS
RPI Holdings, Inc. (the Company), specializes in the production of
roll-formed pieces, metal stampings with clinch or welded fasteners and
welded assemblies of functional and decorative trim for the automotive
industry. The Company primarily operates from two plants located in
Michigan.
Net sales to the Company's two primary customers as a percentage of total
sales are as follows:
<TABLE>
<CAPTION>
FOR THE PERIOD
FROM JULY 1, 1996 FOR THE YEAR ENDED
TO MARCH 31, 1997 JUNE 30, 1996
<S> <C> <C>
General Motors Corporation 63% 46%
Johnson Controls International 19% 19%
</TABLE>
Accounts receivable from General Motors Corporation and Johnson Controls
International represent approximately 53% and 23%, respectively, of the
March 31, 1997 accounts receivable balance.
Although the Company is directly affected by the economic well being of
the automotive industry and customers referred to above, management does
not believe significant credit risk exists at March 31, 1997. The Company
does not require collateral to reduce such risk and historically has not
experienced significant losses related to receivables from individual
customers or groups of customers in the automotive industry.
2. SUBSEQUENT EVENTS
Subsequent to March 31, 1997, the Company was advanced $1,500,000 in
various installments from Lobdell Emery Corporation, a wholly-owned
subsidiary of Oxford Automotive, Inc. (Oxford). The advances were used to
support the ongoing operations of the Company. The majority shareholder
of Oxford is also the majority shareholder of the Company.
On November 25, 1997, Oxford purchased all of the outstanding common stock
of the Company for $2,500,000 in cash. In connection with the
acquisition, the notes payable to shareholders of $364,760 and the RPI,
Inc. revolving credit, bank term, revolving equipment and revolving
tooling loans described in Note 4 were repaid.
3. SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
During the period ended March 31, 1997, the Company changed its fiscal
year end to March 31. Previously, the Company's fiscal year ended on June
30.
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements of the Company include the accounts
of RPI Holdings, Inc. and its wholly-owned subsidiaries, RPI, Inc. and
Prudenville Manufacturing, Inc. (PMI). RPI Holdings, Inc. and PMI had no
revenues or operations during the periods presented.
REVENUE RECOGNITION
Revenue is recognized by the Company upon shipment of product to the
customer.
F-71
<PAGE> 191
RPI HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
CASH EQUIVALENTS The Company considers all highly-liquid investments
with maturity of three months or less when purchased to be cash
equivalents.
INVENTORIES Inventories are stated at the lower of cost or market
with cost determined on a first-in, first-out basis ("FIFO").
REIMBURSABLE TOOLING Reimbursable tooling represents net costs incurred
on tooling projects for which the Company expects to be reimbursed by
customers. Ongoing estimates of total costs to be incurred on each
tooling project are made by management and losses, if any, are recorded
when known. Generally, tooling revenue is recognized upon acceptance of
the tooling by the customer. At March 31, 1997 and June 30, 1996, all
reimbursable tooling is recorded in prepaid expenses.
PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment are
stated on the basis of cost and include expenditures for improvements
which materially increase the useful lives of existing assets.
Expenditures for normal repair and maintenance are charged to operations
as incurred. For federal income tax purposes, depreciation is computed
using accelerated and straight-line methods. For financial reporting
purposes, depreciation is computed using the straight-line method over
the following estimated useful lives:
<TABLE>
<CAPTION>
YEARS
<S> <C>
Land improvements 30
Buildings 30-40
Machinery and equipment 3-20
Furniture and fixtures 7-10
</TABLE>
IMPAIRMENT OF LONG-LIVED ASSETS The Company accounts for long-lived
assets in accordance with Statement of Financial Accounting Standards
No._121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed of". This Statement requires that
long-lived assets and certain identifiable intangibles to be held and
used by the Company be reviewed for impairment whenever events or changes
in circumstances indicate that the carrying amount of an asset may not be
fully recoverable. The Company recognizes impairment losses for assets
or groups of assets where the sum of the estimated future cash flows
(undiscounted and without interest charges) is less than the carrying
amount of the related asset or group of assets. The amount of the
impairment loss recognized is the excess of the carrying amount over the
fair value of the asset or group of assets being measured.
NOTES PAYABLE TO SHAREHOLDERS The notes payable to shareholders
accrue interest at an annual rate of 6%, payable quarterly. As described
in Note 2, the notes payable to shareholders were repaid in connection
with the acquisition of the Company by Oxford.
F-72
<PAGE> 192
RPI HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
INCOME TAXES Deferred taxes are provided to give recognition to the
effect of expected future tax consequences of temporary differences
between the carrying amounts for financial reporting purposes and the tax
bases for income tax purposes of assets and liabilities.
FAIR VALUE OF FINANCIAL INSTRUMENTS At March 31, 1997 and June 30,
1996, the carrying amount of financial instruments such as cash and cash
equivalents and trade receivables and payables approximated their fair
values. Based upon the borrowing rates currently available to the
Company, the carrying value of debt approximates fair value.
USE OF ESTIMATES The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosures of contingent assets and liabilities at the
date of the financial statements, and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ
from those estimates.
4. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are comprised of the following:
<TABLE>
<CAPTION>
MARCH 31, JUNE 30,
1997 1996
<S> <C> <C>
Land and land improvements $ 104,272 $ 113,243
Buildings 1,379,118 1,460,792
Machinery and equipment 2,167,939 1,654,716
Furniture and fixtures 203,748 216,545
------------ ------------
3,855,077 3,445,296
Less - accumulated depreciation (830,201) (681,037)
------------ ------------
$ 3,024,876 $ 2,764,259
============ ============
</TABLE>
5. ACCRUED EXPENSES AND OTHER LIABILITIES
Accrued expenses and other liabilities are composed of the following:
<TABLE>
<CAPTION>
MARCH 31, JUNE 30,
1997 1996
<S> <C> <C>
Accrued interest $ 67,919 $ 53,873
Accrued salaries and wages 91,172 68,595
Accrued professional fees 87,382 94,636
Accrued commissions 62,545 130,012
Other 107,502 90,823
----------- -----------
$ 416,520 $ 437,939
=========== ===========
</TABLE>
F-73
<PAGE> 193
RPI HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
6. BORROWING ARRANGEMENTS
<TABLE>
<CAPTION>
MARCH 31, 1997 JUNE 30, 1996
<S> <C>
REVOLVING CREDIT LOAN - RPI, INC.
Interest at prime rate plus .5% (9% at March_31, 1997),
matures December 31, 1997 $ 1,359,961 $ 844,912
BANK TERM LOAN - RPI, INC.
Interest at prime rate plus 1% (9.5% at March 31, 1997),
Monthly principal payments of $20,833, matures
December 31, 1997 598,011 885,508
REVOLVING EQUIPMENT LOAN - RPI, INC.
Interest at prime rate plus 1% (9.5% at March 31, 1997),
Monthly principal payments of $15,511, matures
December 31, 1997 707,192 347,510
REVOLVING TOOLING LOAN - RPI, INC.
Interest at prime rate plus 1% (9.5% at March 31, 1997),
matures December 31, 1997 151,787 222,280
TERM NOTE PAYABLE - PMI
Interest at 6% payable annually. Monthly principal
payments of $2,500, matures April_30, 1999 477,500 500,000
LAND CONTRACT - PMI
Interest at 8%. Monthly payments of $3,000, matures
May 31, 1999 77,766 104,766
OTHER 75,114 9,666
-------------- -------------
3,447,331 2,914,642
Less - current portion (2,937,611) (410,092)
-------------- -------------
$ 509,720 $ 2,504,550
============== =============
</TABLE>
Borrowing under the revolving credit and bank term loan agreements are
subject to certain limitations determined by a formula based on 80% of
eligible accounts receivable and 35% of eligible inventories, or a
maximum of $500,000. Upon the occurrence of any default, interest
accrues on the unpaid principal balance at an annual rate of four
percent above the bank's prime rate. The financing is collateralized
by all assets of RPI, Inc.
The Company was in default of certain provisions of the revolving credit
loan, bank term loan, revolving equipment loan and revolving tooling
loan agreements as of March 31, 1997. The agreements were amended
subsequent to March 31, 1997. Under the new terms, the amount available
under the revolving credit loan decreased from $3,250,000 to $2,600,000,
additional advances under the revolving equipment loan and revolving
tooling loan were terminated, certain covenants were amended and the
balances of the revolving credit loan, bank term loan, revolving
equipment loan and revolving tooling loan were due October 15, 1997.
Subsequent to this amendment, the due date was extended to
December 31, 1997.
F-74
<PAGE> 194
RPI HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
6. BORROWING ARRANGEMENTS (CONTINUED)
As described in Note 2, the revolving credit loan, bank term
loan, revolving equipment loan and revolving tooling loan were repaid in
full in connection with the acquisition of the Company on November 25,
1997.
Scheduled maturities of long-term debt, after giving effect to the
amendments described above, are as follows:
<TABLE>
<CAPTION>
YEARS ENDING
MARCH 31
<S> <C>
1998 $ 2,937,611
1999 71,844
2000 429,110
2001 5,844
2002 2,922
-------------
$ 3,447,331
=============
</TABLE>
Cash paid for interest during the nine month period ended March 31, 1997
and for the year ended June 30, 1996 approximated $238,000 and $375,000,
respectively.
7. COMMITMENTS AND CONTINGENCIES
OPERATING LEASES
The Company leases certain buildings and equipment under
operating lease agreements. The future minimum lease payments under these
operating leases are:
<TABLE>
<CAPTION>
YEARS ENDING
MARCH 31
<S> <C>
1998 $ 200,111
1999 154,030
2000 90,730
------------
Total minimum lease payments $ 444,871
============
</TABLE>
Rental expense for the nine month period ended March 31, 1997 and for
the year ended June 30, 1996 approximated $178,000 and $218,000,
respectively.
GENERAL
The Company is subject to various claims, lawsuits and administrative
proceedings related to matters arising out of the normal course of
business, including an audit of the Company's June 30, 1996 tax return by
the Internal Revenue Service. In the opinion of management, after
reviewing the information which is currently available with respect to
such matters and consulting with legal counsel, any liability which may
ultimately be incurred with respect to these matters will not materially
affect the financial position, results of operations or cash flows of the
Company.
F-75
<PAGE> 195
RPI HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
8. INCOME TAXES
The Company's income tax benefit consists of the following:
<TABLE>
<CAPTION>
FOR THE PERIOD FROM FOR THE YEAR
JULY 1, 1996 TO ENDED
MARCH 31, 1997 JUNE 30, 1996
<S> <C> <C>
Current benefit $ 254,000 $ 312,700
Deferred benefit (provision) 102,100 (12,700)
----------- ----------
$ 356,100 $ 300,000
=========== ===========
</TABLE>
A reconciliation between the Company's income tax benefit and the amount
computed by applying the statutory income tax rate to income before income
taxes is as follows:
<TABLE>
<CAPTION>
FOR THE PERIOD FROM FOR THE YEAR
JULY 1, 1996 TO ENDED
MARCH 31, 1997 JUNE 30, 1996
<S> <C> <C>
Statutory rate $ 321,300 $ 242,800
Net operating loss carryforward 71,800
Inventory adjustment (20,500)
Other (16,500) 57,200
---------- -----------
Income tax benefit $ 356,100 $ 300,000
=========== ===========
</TABLE>
Significant components of the Company's deferred tax assets and
(liabilities) are as follows:
<TABLE>
<CAPTION>
MARCH 31, JUNE 30,
1997 1996
<S> <C> <C>
Deferred tax liabilities
Tax depreciation in excess of book $ (161,000) $ (150,300)
----------- -----------
Deferred tax assets
Net operating loss carrryforward 71,800
Inventory 38,400
AMT credit carryforward 26,000
Allowance for doubtful accounts 22,500 27,200
Other 1,700 20,400
----------- -----------
Gross deferred tax assets 160,400 47,600
----------- -----------
Net deferred tax liability $ (600) $ (102,700)
=========== ============
</TABLE>
F-76
<PAGE> 196
RPI HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
8. INCOME TAXES (CONTINUED)
The Company has a net operating loss carryforward for federal income
tax purposes with potential future tax benefits of approximately $72,000,
which expires during 2012. In addition, the Company has Alternative
Minimum Tax credit carryforwards aggregating $26,000 at March 31,
1997 which can be carried forward indefinitely. Due to the subsequent
acquisition of the Company, as more fully described in Note 2, there are
annual limitations on the amount of the carryforwards which can be
utilized. Management believes that it is more likely than not that the
benefit of these tax benefits will be realized and, therefore, no
valuation allowance is provided at March 31, 1997.
The Company paid no income taxes for both the nine month period ended
March 31, 1997 and the year ended June 30, 1996.
9. RELATED PARTY TRANSACTIONS
The Company is charged fees by a related party, The Oxford Investment
Group, Inc., for consulting, finance and management services and a sales
representative agreement. These fees approximated $116,000 and $325,000
for the nine month period ended March 31, 1997 and for the year ended
June 30, 1996, respectively.
10. INTERIM DATA (UNAUDITED)
The accompanying unaudited balance sheet as of September 30, 1997 and the
unaudited consolidated statements of operations and cash flows for the
six-month periods ended September 30, 1997 and 1996 include all
adjustments, consisting of normal recurring adjustments, which in the
opinion of management are necessary for the fair presentation of the
financial position, results of operations and cash flows. The results of
operations for any interim period are not necessarily indicative of the
results of operations for a full year.
F-77
<PAGE> 197
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and
Directors of Oxford Automotive, Inc.
In our opinion, the accompanying combined balance sheet and the related combined
statements of operations and of cash flows present fairly, in all material
respects, the financial position of the Suspension Division (Suspension), a
Division of Eaton Corporation (Eaton), at December 31, 1997, and the results of
its operations and its cash flows for the year ended December 31, 1997, in
conformity with generally accepted accounting principles. These financial
statements are the responsibility of the management of Suspension; our
responsibility is to express an opinion on these financial statements based on
our audit. We conducted our audit of these statements in accordance with
generally accepted auditing standards which require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audit provides a reasonable basis for the opinion expressed
above.
Our engagement as auditors of Suspension was subsequent to December 31, 1997.
Therefore, we were not present to observe physical inventories taken on or prior
to that date, the amounts of which entered into the determination of cost of
goods sold for the year ended December 31, 1997. However, we observed physical
inventories subsequent to December 31, 1997 and performed such other procedures
as we deemed appropriate.
Suspension, as disclosed in Note 2 to the accompanying financial statements, is
a division of Eaton and has extensive transactions and relationships with Eaton.
Because of these relationships, it is possible that the terms of these
transactions are not the same as those that would result from transactions among
wholly unrelated parties.
As discussed in Note 14, on April 1, 1998, Eaton sold certain net assets of
Suspension to Oxford Automotive, Inc. The accompanying financial statements do
not give effect to this purchase transaction.
Price Waterhouse LLP
Detroit, Michigan
June 11, 1998
F-78
<PAGE> 198
SUSPENSION DIVISION
A DIVISION OF EATON CORPORATION
COMBINED BALANCE SHEETS
(DOLLARS IN THOUSANDS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1998 1997
(UNAUDITED)
<S> <C> <C>
ASSETS
Current assets
Cash $ 2 $ 7
Accounts receivable 11,784 13,115
Inventories 11,704 9,574
Prepaid expenses 30 21
----------- ------------
Total current assets 23,520 22,717
Property, plant and equipment, net 26,869 26,808
Prepaid pension asset 5,078 4,770
Other assets 3,575 3,346
----------- ------------
TOTAL ASSETS $ 59,042 $ 57,641
=========== ============
LIABILITIES AND EATON INVESTMENT
Current liabilities
Accounts payable $ 6,002 $ 7,164
Employee compensation 2,869 2,381
Accrued expenses and other current liabilities 1,750 1,798
----------- ------------
Total current liabilities 10,621 11,343
Deferred income taxes 2,059 2,059
Postretirement benefits liability 2,554 2,360
Environmental commitments and contingencies (Note 12) 1,557 1,557
----------- ------------
Total liabilities 16,791 17,319
Eaton investment 42,251 40,322
----------- ------------
TOTAL LIABILITIES AND EATON INVESTMENT $ 59,042 $ 57,641
=========== ============
</TABLE>
See accompanying notes to combined financial statements.
F-79
<PAGE> 199
SUSPENSION DIVISION
A DIVISION OF EATON CORPORATION
COMBINED STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
THREE MONTHS ENDED YEAR ENDED
MARCH 31, DECEMBER 31,
1998 1997 1997
(UNAUDITED)
<S> <C> <C> <C>
Sales $ 30,261 $ 33,559 $ 125,776
Cost of goods sold 28,808 30,572 116,485
----------- ---------- -----------
Gross profit 1,453 2,987 9,291
Selling, general and administrative expense 1,740 1,799 7,214
----------- ---------- -----------
Operating income (loss) (287) 1,188 2,077
----------- ---------- -----------
Equity in income of Metalcar 226 39 741
Interest expense (291) (273) (1,015)
Other income (expense) (248) 100 280
----------- ---------- -----------
Income (loss) before provision (benefit)
for income taxes (600) 1,054 2,083
Provision (benefit) for income taxes (237) 416 827
----------- ---------- -----------
Net income (loss) $ (363) $ 638 $ 1,256
=========== ========== ===========
</TABLE>
See accompanying notes to combined financial statements.
F-80
<PAGE> 200
SUSPENSION DIVISION
A DIVISION OF EATON CORPORATION
COMBINED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
THREE MONTHS ENDED YEAR ENDED
MARCH 31, DECEMBER 31,
1998 1997 1997
(UNAUDITED)
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ (363) $ 638 $ 1,256
Adjustments to reconcile net income (loss) to net
cash provided by (used for) operating activities
Depreciation and amortization 957 1,024 4,317
Loss on disposal of fixed assets 8 49 451
Income of affiliate, net of dividend received (226) (59) (238)
Deferred income taxes 516
Changes in assets and liabilities
Accounts receivable 1,399 (2,228) 236
Inventories (2,067) 407 (1,158)
Prepaid expenses (9) (202) 1
Other noncurrent assets (308) (318) (1,243)
Accounts payable (1,198) (1,079) 1,907
Employee compensation 473 641 (287)
Accrued expenses and other current liabilities (93) 510 683
Postretirement benefits liability 194 (50) 355
Environmental commitments and contingencies 37 (23) (20)
--------- --------- ----------
NET CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES (1,196) (690) 6,776
--------- --------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property, plant and equipment (919) (152) (4,994)
--------- --------- ----------
NET CASH USED FOR INVESTING ACTIVITIES (919) (152) (4,994)
--------- --------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES
Intercompany activity 2,292 644 (3,024)
--------- --------- ----------
NET CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES 2,292 644 (3,024)
--------- --------- ----------
Effect of exchange rate changes on cash (182) 198 1,248
--------- --------- ----------
NET DECREASE IN CASH (5) - 6
--------- --------- ----------
Cash at beginning of the period 7 1 1
--------- --------- ----------
Cash at end of the period $ 2 $ 1 $ 7
========= ========= ==========
</TABLE>
See accompanying notes to combined financial statements.
F-81
<PAGE> 201
SUSPENSION DIVISION
A DIVISION OF EATON CORPORATION
NOTES TO COMBINED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS)
- --------------------------------------------------------------------------------
1. DESCRIPTION OF BUSINESS
The Suspension Division (Suspension) of Eaton Corporation (Eaton) is a
leading tier one North American supplier of leaf spring suspension systems
for automotive applications. Suspension's products are primarily sold to
original equipment manufacturers (OEMs) of passenger cars, light trucks and
heavy trucks.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
These financial statements present the historical financial position,
results of operations and cash flows of Suspension previously included in
the Eaton consolidated financial statements. Suspension's financial
information included herein is not necessarily indicative of the financial
position, results of operations and cash flows of Suspension in the future
or of the results which would have been reported if Suspension had operated
as an unaffiliated enterprise.
Transactions between Eaton and Suspension (and Eaton's other business units)
are herein referred to as "intercompany" or "related party" transactions.
If Suspension was operated as an independent, unaffiliated entity, it may
not be able to obtain raw material and other goods and services at
historical price levels obtained when purchasing as a part of Eaton's
worldwide purchasing process.
Suspension accounts for its investment in the Metalurgica Carabobo, S.A.
(Metalcar) joint venture under the equity method of accounting. Metalcar is
included in the combined financial statements on the basis of its September
30, 1997 fiscal year end.
CONCENTRATION OF CREDIT RISK
Suspension's customer base is primarily comprised of OEMs. Sales to
Suspension's three largest customers aggregated 71%, 14% and 8% of 1997
sales. Financial instruments which potentially expose Suspension to a
concentration of credit risk consist primarily of accounts receivable. At
December 31, 1997, the aforementioned customers represented approximately
50%, 24% and 21% of trade accounts receivable.
Although Suspension is directly affected by the economic well being of the
automotive industry, as well as its major customers, management does not
believe significant credit risk exists at December 31, 1997. Suspension does
not require collateral to reduce such credit risk and historically has not
experienced significant losses related to receivables.
FOREIGN CURRENCY TRANSLATION
The functional currency of the Canadian operations is the local currency.
Financial statements for these operations are translated into United States
dollars at year-end exchange rates as to assets and liabilities and
weighted-average exchange rates as to revenues and expenses. The resulting
translation adjustments are recorded as a component of Eaton investment.
F-82
<PAGE> 202
SUSPENSION DIVISION
A DIVISION OF EATON CORPORATION
NOTES TO COMBINED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS)
- --------------------------------------------------------------------------------
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
INVENTORIES
Inventories are carried at lower of cost or market using the first-in,
first-out (FIFO) method.
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are stated on the basis of cost and include
expenditures for improvements which materially increase the useful lives of
existing assets. Expenditures for normal repairs and maintenance are charged
to operations as incurred. For federal income tax purposes, depreciation is
computed using accelerated methods. For financial reporting purposes,
depreciation is computed principally using the straight-line method over the
following estimated useful lives:
<TABLE>
<CAPTION>
YEARS
<S> <C>
Land improvements 40
Buildings and building improvements 10-40
Machinery and equipment 3-10
</TABLE>
VALUATION OF LONG-LIVED ASSETS
In accordance with Statement of Financial Accounting Standards No. 121,
Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets
to be disposed of, Suspension periodically evaluates the carrying value of
long-lived assets to be held and used. The carrying value of a long-lived
asset is considered impaired when the anticipated undiscounted cash flow
from such asset is separately identifiable and is less than its carrying
value. In that event, a loss is recognized based on the amount by which the
carrying value exceeds the fair market value of the long-lived asset. Fair
market value is determined primarily using the anticipated cash flows
discounted at a rate commensurate with the risk involved or independent
appraisal.
REVENUE RECOGNITION
Sales and related cost of sales are recognized when products are shipped.
INCOME TAXES
Suspension's United States and Canadian locations are included in the
consolidated federal income tax returns of Eaton Corporation and Eaton Yale
Limited, respectively. In preparing its combined financial statements,
Suspension has determined its tax provision on a separate return basis.
Income taxes payable and refundable income taxes are recorded as a component
of Eaton investment. Deferred tax liabilities or assets reflect the impact
of temporary differences between amounts of assets and liabilities for
financial and tax reporting. Such amounts are subsequently adjusted, as
appropriate, to reflect changes in tax rates expected to be in effect when
the temporary differences reverse. A valuation allowance on deferred tax
assets is provided if it is considered more likely than not that such
deferred tax assets will not be realized.
ESTIMATES
Preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
in certain circumstances that affect amounts reported in the accompanying
combined financial statements and notes. Actual results could differ from
these estimates.
F-83
<PAGE> 203
SUSPENSION DIVISION
A DIVISION OF EATON CORPORATION
NOTES TO COMBINED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS)
- --------------------------------------------------------------------------------
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
ENVIRONMENTAL
Suspension expenses environmental expenditures related to existing
conditions resulting from past or current operations and from which no
current or future benefit is discernible. Expenditures which extend the life
of the related property or mitigate or prevent future environmental
contamination are capitalized. Suspension records a liability for
remediation costs at the time when it is probable and can be reasonably
estimated. The estimated liability of Suspension is not discounted or
reduced for possible recoveries from insurance carriers.
3. ACCOUNTS RECEIVABLE
Accounts receivable comprises the following:
<TABLE>
<CAPTION>
DECEMBER 31,
1997
<S> <C>
Trade $ 12,811
Other 304
--------
$ 13,115
========
</TABLE>
4. INVENTORIES
Inventories comprise the following:
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1998 1997
(UNAUDITED)
<S> <C> <C>
Raw materials $ 7,694 $ 5,633
Work-in-process 3,141 2,768
Finished goods 1,298 1,600
------- -------
12,133 10,001
Less - inventory reserve (429) (427)
------- -------
$11,704 $ 9,574
======= =======
</TABLE>
F-84
<PAGE> 204
SUSPENSION DIVISION
A DIVISION OF EATON CORPORATION
NOTES TO COMBINED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS)
- --------------------------------------------------------------------------------
5. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment comprise the following:
<TABLE>
<CAPTION>
DECEMBER 31,
1997
<S> <C>
Land and land improvements $ 503
Buildings and building improvements 10,817
Machinery and equipment 47,238
Construction-in-progress 3,562
---------
62,120
Less - Accumulated depreciation (35,312)
---------
$ 26,808
</TABLE> =========
6. OTHER ASSETS
Other assets comprise the following:
<TABLE>
<CAPTION>
DECEMBER 31,
1997
<S> <C>
Equity investment in Metalcar $ 3,284
Other 62
---------
$ 3,346
=========
</TABLE>
The table below contains the summarized financial information of Metalcar
for the year ended September 30, 1997:
<TABLE>
<S> <C>
Net sales $ 15,737
=========
Operating income $ 2,581
=========
Net income $ 1,509
=========
Current assets $ 6,174
Non-current assets 4,336
---------
Total assets $ 10,510
=========
Current liabilities $ 3,725
Non-current liabilities 81
Shareholders equity 6,704
---------
Total liabilities and equity $ 10,510
=========
</TABLE>
F-85
<PAGE> 205
SUSPENSION DIVISION
A DIVISION OF EATON CORPORATION
NOTES TO COMBINED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS)
- --------------------------------------------------------------------------------
6. OTHER ASSETS (CONTINUED)
Suspension has a 49% joint venture interest in Metalcar, a Venezuelan
manufacturer of conventional leaf springs and coil springs for both light
and heavy trucks.
7. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
Accrued expenses and other current liabilities comprise the following:
<TABLE>
<CAPTION>
DECEMBER 31,
1997
<S> <C>
Utilities $ 561
Warranty 458
Other 779
-------
$ 1,798
</TABLE> =======
8. EMPLOYEE BENEFIT PLANS
PENSIONS
Substantially all salaried employees of Suspension participate in
defined benefit pension plans covering all Eaton salaried employees. Plan
benefits are generally based on years of service and the employee's
compensation. Solely for the purpose of these financial statements,
Suspension salaried employees are considered to have participated in
multi-employer pension plans. Suspension recorded net periodic pension
benefits of $30 for the year ended December 31, 1997, related to its
participation in the Eaton defined benefit pension plans.
In addition, Suspension sponsors two noncontributory defined benefit
pension plans covering substantially all hourly employees at Suspension's
two Canadian manufacturing facilities. These plans are subject to collective
bargaining agreements and provide pension benefits that are based on a fixed
rate applied to the hourly employees' years of credited service up to a
maximum of 30 years. The hourly plans do not provide for increases in future
compensation levels. Suspension's funding policy for these plans is to make
contributions in amounts sufficient to fund the plan's current service cost
and any going concern unfunded actuarial liabilities and/or solvency
deficiencies.
F-86
<PAGE> 206
SUSPENSION DIVISION
A DIVISION OF EATON CORPORATION
NOTES TO COMBINED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS)
- --------------------------------------------------------------------------------
8. EMPLOYEE BENEFIT PLANS (CONTINUED)
The following table sets forth the Canadian hourly plans' funded status and
amounts recognized on Suspension's combined balance sheet at December 31,
1997:
<TABLE>
<S> <C>
Actuarial present value of benefit obligation
Vested benefits $ 19,236
Nonvested benefits 724
--------
Projected benefit obligation 19,960
Plan assets at fair value (primarily U.S. government securities,
bonds, notes and mutual funds) 22,821
--------
Plan assets greater than projected benefit obligation 2,861
Unrecognized net gains (543)
Unrecognized prior service cost 2,902
Unrecognized net asset being recognized over 15-20 years (450)
--------
Prepaid pension cost $ 4,770
========
</TABLE>
Net periodic pension cost for 1997 and the actuarial assumptions used in
determining the projected benefit obligation are as follows:
<TABLE>
<S> <C>
Service cost $ 636
Interest cost 1,367
Actual return on assets (3,589)
Net amortization and deferral 2,074
--------
Net periodic pension cost $ 488
========
Discount rate 7.25%
Expected return on assets 9.25%
</TABLE>
POSTRETIREMENT BENEFITS OTHER THAN PENSIONS
U.S. retiree medical programs cover employees who retire with eligibility
for hospital, professional and other medical services. Most of the programs
require deductibles and copayments and virtually all are integrated with
Medicare. Retiree contributions are generally required based on length of
service, location, coverage type, plan and Medicare eligibility. For U.S.
salaried employees, Eaton also sponsors retiree life insurance programs
which generally provide a benefit as a percent of pay.
Solely for the purposes of these financial statements, Suspension's U.S.
salaried employees are considered to have participated in a multi-employer
postretirement benefit plan. Suspension charged $128 to expense for the year
ended December 31, 1997, related to its participation in this plan.
F-87
<PAGE> 207
SUSPENSION DIVISION
A DIVISION OF EATON CORPORATION
NOTES TO COMBINED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS)
- --------------------------------------------------------------------------------
8. EMPLOYEE BENEFIT PLANS (CONTINUED)
In addition to the aforementioned defined benefit plans, Suspension also
sponsors several defined benefit postretirement plans covering substantially
all Canadian salaried and hourly employees. These plans provide health care
and life insurance benefits for eligible retirees and are noncontributory.
Provisions of the benefit plans for hourly employees are subject to
collective bargaining agreements. Both Canadian salaried and hourly
postretirement medical benefits are supplements to Canadian government
sponsored benefits. Suspension's postretirement health care and life
insurance plans are unfunded.
The following table presents the Canadian salaried and hourly employee
funded status reconciled with amounts recognized in Suspension's December
31, 1997 combined balance sheet.
<TABLE>
<S> <C>
Accumulated postretirement benefit obligations
Retirees $ 1,449
Full eligible active plan participants 1,240
Non-eligible plan participants 2,339
-----------
Accumulated postretirement benefit obligation 5,028
Unrecognized prior service cost (2,673)
Unrecognized gain 5
-----------
Accrued postretirement medical benefit obligation $ 2,360
===========
</TABLE>
Net periodic postretirement benefit cost for 1997 included the following
components:
<TABLE>
<S> <C>
Service cost benefits earned during the period $ 143
Amortization of prior service cost 155
Interest cost on the accumulated postretirement
benefit obligation 258
-----------
Net periodic postretirement benefit cost $ 556
===========
</TABLE>
The weighted average discount rate used in determining the accumulated
postretirement benefit obligation was 7.0%. The weighted average annual
assumed rate of increase in the per capita cost of covered benefits (i.e.,
healthcare cost trend rate) is 10.0% in 1998 trending to 5.0% in 2003. The
healthcare cost trend rate assumption has a significant effect on the
amounts reported. For example, increasing the assumed healthcare cost trend
rates by one percentage point in each year would increase the accumulated
postretirement benefit obligation as of December 31, 1997 by approximately
$905 and net periodic postretirement benefit cost for the period from
January 1, 1997 to December 31, 1997 by approximately $147.
F-88
<PAGE> 208
SUSPENSION DIVISION
A DIVISION OF EATON CORPORATION
NOTES TO COMBINED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS)
- --------------------------------------------------------------------------------
9. INCOME TAXES
The provision for income taxes comprises:
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
1997
<S> <C>
Income (loss) before taxes on income:
United States $ (3,916)
Canada 5,999
----------
$ 2,083
==========
Taxes (benefit) on income:
United States $ (1,332)
Canada 2,159
----------
$ 827
==========
Taxes (benefit) on income consist of:
Current
United States $ (1,417)
Canada 1,728
----------
$ 311
==========
Deferred
United States $ 85
Canada 431
----------
$ 516
==========
</TABLE>
The principal items accounting for the difference in taxes on income
computed at the U.S. statutory rate and as recorded on an overall basis
are as follows:
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
1997
<S> <C>
Statutory U.S. federal income tax rate 35.0%
-----
Taxes on foreign earnings over
U.S. tax rate 2.9
Effect of U.S. graduated rates 1.8
-----
39.7%
=====
</TABLE>
F-89
<PAGE> 209
SUSPENSION DIVISION
A DIVISION OF EATON CORPORATION
NOTES TO COMBINED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS)
- --------------------------------------------------------------------------------
9. INCOME TAXES (CONTINUED)
The temporary differences which give rise to deferred tax assets and
(liabilities) are as follows:
<TABLE>
<CAPTION>
DECEMBER 31,
1997
<S> <C>
Deferred tax assets
Postretirement benefits $ 849
Environmental reserve 560
Other 215
----------
Gross deferred tax assets 1,624
----------
Deferred tax liabilities
Property, plant and equipment (1,966)
Pension benefits (1,717)
----------
Gross deferred tax liabilities (3,683)
----------
Net deferred tax liability $ (2,059)
==========
</TABLE>
10. INTERCOMPANY TRANSACTIONS AND ALLOCATIONS
CASH MANAGEMENT
Suspension utilizes Eaton's centralized cash management services. Under this
arrangement, Suspension's accounts receivable are collected and its cash
disbursements are funded by Eaton on a daily basis. Net activity between
Eaton and Suspension is reflected in Eaton's investment in Suspension.
CORPORATE SERVICES
Eaton allocates costs associated with certain corporate overhead, including
executive salaries, risk management, sales and marketing, human resources,
corporate finance and accounting, treasury and public affairs to its
divisions through a corporate assessment charge which is allocated based on
operating capital which consists primarily of current assets, capital assets
and current liabilities. Charges from Eaton for such costs aggregated $1,563
for the year ended December 31, 1997 and are included in selling, general
and administrative expenses in the accompanying combined statement of
operations.
Eaton charges its divisions interest expense based on Eaton's overall debt
structure as well as the net cash used or provided by the divisions.
Interest charges from Eaton aggregated $1,015 for the year ended December
31, 1997.
F-90
<PAGE> 210
SUSPENSION DIVISION
A DIVISION OF EATON CORPORATION
NOTES TO COMBINED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS)
- --------------------------------------------------------------------------------
10. INTERCOMPANY TRANSACTIONS AND ALLOCATIONS (CONTINUED)
Eaton provides various information systems assistance, employee payroll
processing, accounts receivable processing, accounts payable processing,
payment processing and fixed asset processing. These costs are allocated to
Suspension based on certain criteria, including invoices or checks
processed, headcount, fixed asset line items maintained, predetermined rates
or on actual services provided. Charges from Eaton for such costs aggregated
$423 for the year ended December 31, 1997 and are included in selling,
general and administrative expenses in the accompanying combined statement
of operations.
Eaton manages employee medical, dental, life insurance, pension,
postretirement and postemployment benefits on a consolidated basis. Eaton
charges Suspension for its share of such employee-related costs based upon
Suspension's estimated experience or headcount, depending on the nature of
the cost. Charges for such costs are disclosed in the related footnotes
herein with the exception of self insured medical charges for U.S. employees
which aggregated $454 in 1997.
Eaton provides certain research and development and manufacturing technology
services to its divisions. Eaton allocates these costs based on hours
applicable to the respective division. Charges from Eaton to Suspension for
such services aggregated $1,369 for the year ended December 31, 1997. Of
this amount, $271 is included in selling, general and administrative and
$1,098 is included in cost of goods sold in the accompanying statement of
operations.
Suspension shares certain facilities with other Eaton divisions. Eaton
allocates rent expense to Suspension based on square footage occupied. These
charges aggregated $150 in 1997.
Management believes that the methods utilized to allocate costs to
Suspension, as discussed above, are reasonable. However, the terms of
transactions between Eaton and Suspension, including allocated costs, may
differ from those that would result from transactions with unrelated
parties.
INTERCOMPANY PURCHASES
Suspension purchased approximately $471 of inventory from Eaton Japan, a
related party. This inventory is used in the leaf spring manufacturing
process from which the related products are sold to a Japanese transplant.
F-91
<PAGE> 211
SUSPENSION DIVISION
A DIVISION OF EATON CORPORATION
NOTES TO COMBINED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS)
- --------------------------------------------------------------------------------
10. INTERCOMPANY TRANSACTIONS AND ALLOCATIONS (CONTINUED)
EATON INVESTMENT
The Eaton investment balance represents the cumulative transaction
adjustment, cumulative intercompany activity from transactions, cost
allocations, cash management and other charges and credits, between
Suspension and Eaton (and its other business units). A summary of changes in
Eaton investment follows.
<TABLE>
<CAPTION>
THREE MONTHS YEAR ENDED
ENDED DECEMBER 31,
MARCH 31, 1998 1997
(UNAUDITED)
<S> <C> <C>
Beginning Eaton investment $ 40,322 $ 42,090
Net (loss) income (363) 1,256
Intercompany activity 2,292 (3,024)
---------- ----------
Ending Eaton investment $ 42,251 $ 40,322
========== ==========
</TABLE>
11. LEASE COMMITMENTS
Suspension leases certain buildings and equipment under operating lease
agreements. Future minimum lease payments under operating leases having
initial or remaining noncancellable lease terms in excess of one year are as
follows for the year ended December 31:
<TABLE>
<S> <C>
1998 $ 284
1999 117
2000 58
2001 53
-----
$ 512
=====
</TABLE>
Rent expense for the year ended December 31, 1997 was $476.
12. COMMITMENTS AND CONTINGENCIES
ENVIRONMENTAL
Suspension is subject to federal, state and local regulations which govern
environmental matters. Suspension has recorded amounts aggregating $1,557
which, in management's best estimate, will be sufficient to provide for
anticipated costs of known environmental matters, which consist primarily of
remediation requirements at Suspension's Canadian facilities.
The effect of resolution of environmental matters on results of operations
cannot be predicted due to the uncertainty concerning both the amount and
timing of future expenditures and future results of operations. However,
management believes, on the basis of presently-available information, that
resolution of these matters will not materially affect the financial
condition of Suspension.
F-92
<PAGE> 212
SUSPENSION DIVISION
A DIVISION OF EATON CORPORATION
NOTES TO COMBINED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS)
- --------------------------------------------------------------------------------
13. GEOGRAPHIC AREAS - FINANCIAL DATA
<TABLE>
<CAPTION>
UNITED
STATES CANADA TOTAL
<S> <C> <C> <C> <C>
Net sales 1997 $ 15,941 $ 109,835 $ 125,776
Net income (loss) 1997 (2,584) 3,840 1,256
Assets 1997 14,536 43,105 57,641
Liabilities 1997 2,625 14,694 17,319
</TABLE>
Sales between geographic areas approximate market and are not significant.
Suspension corporate office income, expenses, assets and liabilities are
included in the United States column.
14. SUBSEQUENT EVENTS
On April 1, 1998, Eaton sold substantially all of the net assets of
Suspension to Oxford Automotive, Inc. The accompanying financial statements
do not give effect to this transaction.
F-93
<PAGE> 213
COFIMETA SA
CONSOLIDATED FINANCIAL STATEMENTS AS OF SEPTEMBER 30, 1998
CONSOLIDATED ASSETS
<TABLE>
<CAPTION>
------------------------------------------------
SEPTEMBER 30, 1998
- ---------------------------------------------------------------------------------------------------------------
In Thousand French Francs NOTES GROSS AMORT. & NET
DEPRECIATION
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
FIXED ASSETS
- - Intangible assets 2 8,239.4 7,837.2 402.2
- - Tangible assets 2 608,636.3 454,238.5 154,397.8
- - Financial assets 2 6,768.1 867.8 5,900.3
- ---------------------------------------------------------------------------------------------------------------
TOTAL 623,643.8 462,943.5 160,700.3
- ---------------------------------------------------------------------------------------------------------------
CURRENT ASSETS
- - Inventories 3 125,448.3 16,556.8 108,891.5
- - Payments on account on orders - 3,587.0 3,587.0
- - Trade accounts receivable and related
accounts 4 165,542.4 4,585.4 160,957.0
- - Other debtors 5 280,859.7 3,181.9 277,677.8
- - Cash and banks - 48,586.5 1,039.1 47,547.4
- - Deferred charges - 2,607.2 2,607.2
- ---------------------------------------------------------------------------------------------------------------
TOTAL 626,631.1 25,363.2 601,267.9
- ---------------------------------------------------------------------------------------------------------------
- - Realizable exchange losses - 0.8 0.8
- ---------------------------------------------------------------------------------------------------------------
TOTAL 1,250,275.7 488,306.7 761,969.0
- ---------------------------------------------------------------------------------------------------------------
<CAPTION>
--------------------------------------------------
DECEMBER 31, 1997
- -----------------------------------------------------------------------------------------
In Thousand French Francs
GROSS AMORT. & NET
DEPRECIATION
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C>
FIXED ASSETS
- - Intangible assets 8,095.2 7,591.4 503.8
- - Tangible assets 591,857.4 421,365.0 170,492.4
- - Financial assets 6,638.0 871.0 5,767.0
- -----------------------------------------------------------------------------------------
TOTAL 606,590.6 429,827.4 176,763.2
- -----------------------------------------------------------------------------------------
CURRENT ASSETS
- - Inventories 124,147.0 16,691.4 107,455.6
- - Payments on account on orders 2,335.4 2,335.4
- - Trade accounts receivable
and related accounts 216,182.0 5,124.0 211,058.0
- - Other debtors 203,629.0 2,893.0 200,736.0
- - Cash and banks 84,684.9 1,539.0 83,145.9
- - Deferred charges 1,616.9 1,616.9
- -----------------------------------------------------------------------------------------
TOTAL 632,595.2 26,247.4 606,347.8
- -----------------------------------------------------------------------------------------
- - Realizable exchange losses 14.0 14.0
- -----------------------------------------------------------------------------------------
TOTAL 1,239,199.8 456,074.8 783,125.0
- -----------------------------------------------------------------------------------------
</TABLE>
F-95
<PAGE> 214
COFIMETA SA
CONSOLIDATED FINANCIAL STATEMENTS AS OF SEPTEMBER 30, 1998
CONSOLIDATED LIABILITIES
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------- ---------------------------
In Thousand French Francs NOTES SEPTEMBER 30, 1998 DECEMBER 31, 1997
- ----------------------------------------------------------------------------------------- ---------------------------
<S> <C> <C> <C>
EQUITY
- - Share capital 6 25,113.3 25,113.3
- - Premiums on share issues 6 66,800.9 66,800.9
- - Reserves 6 80.0 80.0
- - Consolidated Group reserves 6 2,954.3 74,182.8
- - Losses carried forward 6 (116,911.1) (48,856.2)
- - Group net income 6 10,447.4 (139,283.4)
- ----------------------------------------------------------------------------------------- ---------------------------
TOTAL (11,515.2) (21,962.6)
- ----------------------------------------------------------------------------------------- ---------------------------
Minority interests 6 (3.3) (3.9)
- ----------------------------------------------------------------------------------------- ---------------------------
PROVISIONS
- - Provisions for liabilities 7 76,686.6 83,117.1
- - Provisions for charges 7 2,835.1 4,643.7
- - Provisions for deferred taxes -
- ----------------------------------------------------------------------------------------- ---------------------------
TOTAL 79,521.7 87,760.8
- ----------------------------------------------------------------------------------------- ---------------------------
LIABILITIES
- - Financial liabilities 8 2,989.6 3,910.4
- - Trade accounts payable and related accounts - 155,924.4 110,607.6
- - Tax and social liabilities - 74,323.7 68,745.7
- - Other liabilities 9 460,294.7 534,067.0
- - Deferred income - 433.4
- ----------------------------------------------------------------------------------------- ---------------------------
TOTAL 693,965.8 717,330.7
- ----------------------------------------------------------------------------------------- ---------------------------
- - Realizable exchange losses -
- ----------------------------------------------------------------------------------------- ---------------------------
TOTAL LIABILITIES 761,969.0 783,125.0
- ----------------------------------------------------------------------------------------- ---------------------------
</TABLE>
F-96
<PAGE> 215
COFIMETA SA
CONSOLIDATED FINANCIAL STATEMENTS AS OF SEPTEMBER 30, 1998
CONSOLIDATED INCOME STATEMENTS
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------- ---------------------- ---------------------
NINE MONTHS ENDED
In Thousand French Francs NOTES SEPTEMBER 30, 1998 DECEMBER 31, 1997 DECEMBER 31, 1996
- -------------------------------------------------------------------------------- ---------------------- ---------------------
<S> <C> <C> <C> <C>
- - Net sales 10 945,069.9 1,219,552.0 1,044,918.0
- - Change in work in progress and finished goods
inventories - (4,665.1) (61,639.0) 41,882.0
- - Own work capitalized - 110.0 389.0 3,038.0
- - Other income 11 16,319.2 40,569.0 8,762.0
- -------------------------------------------------------------------------------- ---------------------- ---------------------
TOTAL OPERATING INCOME 956,834.0 1,198,871.0 1,098,600.0
- -------------------------------------------------------------------------------- ---------------------- ---------------------
- - Consumption of raw materials and supplies - 481,163.7 563,885.0 532,228.0
- - External services - 170,513.1 231,350.0 207,003.0
- - Taxes, levies and similar payments - 22,974.5 29,140.0 28,492.0
- - Personnel costs - 222,905.5 335,950.0 336,442.0
- - Depreciation and provisions - 44,139.0 65,828.0 79,422.0
- - Other charges - 1,189.2 4,938.0 10,995.0
- -------------------------------------------------------------------------------- ---------------------- ---------------------
TOTAL OPERATING CHARGES 942,885.0 1,231,091.0 1,194,582.0
- -------------------------------------------------------------------------------- ---------------------- ---------------------
OPERATING INCOME / (LOSS) 13,949.0 (32,220.0) (95,982.0)
- -------------------------------------------------------------------------------- ---------------------- ---------------------
- - Financial income 12 5,332.5 7,057.0 2,876.0
- - Financial charges 12 9,561.7 18,965.0 17,093.0
- -------------------------------------------------------------------------------- ---------------------- ---------------------
FINANCIAL INCOME / (LOSS) (4,229.2) (11,908.0) (14,217.0)
- -------------------------------------------------------------------------------- ---------------------- ---------------------
EARNINGS FROM OPERATIONS BEFORE INCOME TAX 9,719.8 (44,128.0) (110,199.0)
- -------------------------------------------------------------------------------- ---------------------- ---------------------
- - Extraordinary income 13 44,652.1 4,102.0 15,233.0
- - Extraordinary charges 13 43,400.3 99,205.0 32,576.0
- -------------------------------------------------------------------------------- ---------------------- ---------------------
EXTRAORDINARY INCOME / (LOSS) 1,251.8 (95,103.0) (17,343.0)
- -------------------------------------------------------------------------------- ---------------------- ---------------------
- - Employee profit share -
- - Income tax - 523.6 75.0 509.0
- -------------------------------------------------------------------------------- ---------------------- ---------------------
NET INCOME / (LOSS) 14 10,448.0 (139,306.0) (128,051.0)
- -------------------------------------------------------------------------------- ---------------------- ---------------------
GROUP NET INCOME / (LOSS) 10,447.4 (139,283.4) (128,036.0)
- -------------------------------------------------------------------------------- ---------------------- ---------------------
Minority interest net income / (loss) 0.6 (22.6) (15.0)
- -------------------------------------------------------------------------------- ---------------------- ---------------------
</TABLE>
F-97
<PAGE> 216
COFIMETA SA
CONSOLIDATED FINANCIAL STATEMENTS AS OF SEPTEMBER 30, 1998
CONSOLIDATED CASH FLOW STATEMENTS
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------- --------------------- ---------------------
CASH FLOWS FROM OPERATING ACTIVITIES SEPTEMBER 30, 1998 DECEMBER 31, 1997 DECEMBER 31, 1996
- ----------------------------------------------------------------------------------- --------------------- ---------------------
<S> <C> <C> <C>
NET INCOME 10,448.0 (139,306.0) (128,051.0)
Elimination of charges and income with no effect on cash or
non operating:
- Depreciation and amortization expense 35,704.7 50,592.0 51,302.0
- Current assets depreciation 7,509.8 10,110.0 -
- Provision for risks 27,801.8 87,543.0 -
- Reversals and transfers of charges (41,692.1) (28,876.5) -
- Sales/write off of fixed assets (383.7) (348.3) (1,812.0)
Working capital :
(Increase)/decrease in inventory (1,301.7) 59,154.0 (27,554.0)
(Increase)/decrease in trade accounts receivable 50,639.6 15,496.0 46,481.0
(Increase)/decrease in other debtors (78,482.6) (110,932.4) -
(Increase)/decrease in deferred charges (991.2) 159.1 910.0
Increase/(decrease) in trade accounts payable 45,315.6 (205,911.4) 49,380.0
Increase/(decrease) in other creditors (68,195.8) 385,589.5 5,044.0
Increase/(decrease) in deferred income 433.4 (244.0) 244.0
TOTAL CASH FLOWS FROM OPERATING ACTIVITIES (13,194.3) 123,025.0 (4,056.0)
- ---------------------------------------------------------------------------------- --------------------- ---------------------
CASH FLOWS FROM INVESTING ACTIVITIES
- --------------------------------------------------------------
Purchases of fixed assets (22,215.7) (11,020.6) (62,865.0)
Purchases of intangible assets (144.2) (264.9)
Sales of fixed assets 568.0 1,822.9 2,357.0
TOTAL CASH FLOWS FROM INVESTING ACTIVITIES (21,791.9) (9,462.6) (60,508.0)
- ---------------------------------------------------------------------------------- --------------------- ---------------------
CASH FLOWS FROM FINANCING ACTIVITIES
- --------------------------------------------------------------
Payments of dividends
Increase in financial assets (192.0) 4,816.0 5,641.0
Increase in medium-term debt 480.0 1,214.8 1,026.0
Reimbursement of medium-term debt (47,857.0)
Increase of capital 34,999.8
TOTAL CASH FLOWS FROM FINANCING ACTIVITIES 288.0 41,030.6 41,030.6
- ---------------------------------------------------------------------------------- --------------------- ---------------------
TOTAL CASH FLOWS (34,698.2) 154,593.0 (105,754.0)
- ---------------------------------------------------------------------------------- --------------------- ---------------------
Cash balance - beginning 81,990.0 (72,603.0) 33,151.0
Cash balance - ending 47,291.8 81,990.0 (72,603.0)
FLUCTUATIONS (34,698.2) 154,593.0 (105,754.0)
- ---------------------------------------------------------------------------------- --------------------- ---------------------
</TABLE>
F-98
<PAGE> 217
COFIMETA SA
CONSOLIDATED FINANCIAL STATEMENTS AS OF SEPTEMBER 30, 1998
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
OF GROUP COFIMETA SA
AS OF SEPTEMBER 30, 1998
----------------------------------
NOTE 1
The consolidated financial statements have been prepared using the full
consolidation method and include all the subsidiaries of Cofimeta SA.
SUBSIDIARIES
The following subsidiaries have been included:
% shareholding
--------------
- - AUBRY SA 99.9
- - ECRIM SA 99.9
- - SOMENOR SA 99.9
- - SOCORI Technologies SA 99.9
CLOSING DATE OF THE ACCOUNTS
All the subsidiaries have their normal year-end as of December 31.
However, as part of the current changes taking place at the level of COFIMETA
shareholding, the attached consolidated financial statements have been prepared
at an interim date which covers the nine month period ended September 30, 1998
using the same methods and principles of their normal year-end.
It is intended that the financial statements will continue to be prepared for
their usual December 31 year-end.
CONTINUATION PLAN
The COFIMETA Group was declared under a legal continuation plan as at January
29, 1997. The legal observation period ended on June 26, 1997 with the judgement
allowing the companies to continue their business under certain obligations.
F-99
<PAGE> 218
COFIMETA SA
CONSOLIDATED FINANCIAL STATEMENTS AS OF SEPTEMBER 30, 1998
The accounts payable shown under "Continuation Plan Liabilities" for each
company are those accounts payable which have been formally admitted to be part
of the company's liabilities. The first installment payment took place on June
26, 1998 for an amount of 18,5 million FF including the specific requirements
which have been accepted by the Court.
The reimbursement of the "Continuation Plan Liabilities" will be made in
accordance with the following timetable:
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
YEAR 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Option 1 1.2% 1.2% 3.32% 6.40% 12.56% 12.56% 12.56% 16.73% 16.73% 16.73%
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
Option 2 1.2% 1.2% 3.32% 6.40% 12.56% 12.56% 12.56% 16.73% 16.73% 16.73%
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
REFUSALS 0.50% 0.50% 1.20% 3.20% 12.56% 12.56% 12.56% 18.97% 18.97% 18.97%
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
ACCOUNTING PRINCIPLES AND EVALUATION METHODS
The consolidated financial statements have been prepared in accordance with
accounting principles generally accepted in France.
Under French law, COFIMETA is exempted from the preparation of consolidated
financial statements provided that the accounts of the company and its
subsidiaries ("the COFIMETA Group") are themselves included in the consolidated
financial statements of the company holding the shares of COFIMETA or in those
of the ultimate owner.
As at December 31, 1996 and for the year then ended, the COFIMETA Group accounts
were included in those of Groupe ARBEL, a company incorporated in France and of
which Coopers & Lybrand Audit were the co-statutory auditors together with
Cabinet Constantin.
On December 30, 1997, Groupe VALFOND acquired 80.1% of the COFIMETA shares.
As at December 31, 1997, the Groupe VALFOND included in its consolidated
accounts the consolidated Balance Sheet of the COFIMETA Group. The consolidated
accounts of Groupe VALFOND are audited by Calan, Ramolino et Associes and
ATC-SOFIRAC.
Groupe VALFOND accounting principles differ in certain material respects from
those of Groupe ARBEL and the consolidated balance sheet as at December 31, 1997
as well as the related statement income for the year ended at that date have
been prepared in accordance with the accounting principles of Groupe VALFOND.
The impact of the change has been recorded as a credit to the Group reserves in
the Shareholder's equity and described in Note 6 to the consolidated financial
statements.
F-100
<PAGE> 219
COFIMETA SA
CONSOLIDATED FINANCIAL STATEMENTS AS OF SEPTEMBER 30, 1998
INTANGIBLE ASSETS
Purchased goodwill is stated at historical cost and is not depreciated.
Software costs are depreciated over 1 to 5 years under the straight-line
depreciation method.
TANGIBLE ASSETS
Tangible assets are stated at historical cost and are generally depreciated
using the straight-line depreciation method. The accelerated method of
depreciation has been utilized for certain fixed assets when it better reflects
the industrial usage of the fixed assets.
The average rates of depreciation are :
- Buildings 20 years
- Light Buildings 10 years
- Fixtures and fittings 10 years
- Technical installations 8 to 10 years
- Industrial equipment and toolings 10 years
- Other tangible assets 3 to 10 years
INVENTORIES
Inventories are carried at the lower of average cost or market value.
Cost of goods purchased for resale and raw materials include the purchase price
and incidental expenses.
Cost of finished goods include production cost represented by raw materials,
direct and indirect charges (including depreciation costs of the related fixed
assets).
Financial costs are excluded from inventories.
Market value is represented either by the current market value or the selling
price after deduction of direct selling costs.
RECEIVABLES
Receivables are stated at nominal value. A provision is recorded when book value
is higher than net realizable value.
Factored receivables are excluded from the balance sheet. An harmonization of
methods took place as of September 30, 1998 in the various subsidiaries of
COFIMETA which decreased the accounts receivable by 54.3 million FF in 1998.
F-101
<PAGE> 220
COFIMETA SA
CONSOLIDATED FINANCIAL STATEMENTS AS OF SEPTEMBER 30, 1998
PROVISIONS
An amount of 12 million FF was provided as of December 31, 1997 to cover
"warranties given to customers". This amount was directly debited to retained
earnings.
Potential risks on litigations with customers and suppliers are provided for in
the accounts.
Provisions related to litigations with employees are recorded when the risk is
known or when individual measures are anticipated.
Accounts receivable related to 1995, 1996 and 1997, for which full documentation
has not yet been completed have been provided for.
Provisions for restructuring include indemnities due to employees and related
costs, costs of cancellation of leases and write-down of fixed assets related to
those activities which are being restructured.
RETIREMENT INDEMNITIES
Retirement indemnities are not booked but disclosed and the evaluation is based
on an actuarial computation.
These indemnities are calculated in accordance with the projected unit credit
method, employee by employee, by applying probability mortality rates as well as
seniority at the date of retirement to the accumulated rights as of September
30, 1998, with an actualisation rate (interest rate less salary progression) of
3%.
LEASES
Fixed assets purchased under financial lease agreements have not been
capitalized.
TAXATION
The "Tax consolidation Group" as of September 30, 1998 only includes COFIMETA,
ECRIM and SOCORI Technologies.
Because of the magnitude of net loss carry forwards, no income tax has been
booked except for the compulsory lump-sum taxes paid by the companies.
F-102
<PAGE> 221
COFIMETA SA
CONSOLIDATED FINANCIAL STATEMENTS AS OF SEPTEMBER 30, 1998
Addresses of the legal entities part of Group COFIMETA are the following :
COFIMETA SA
68, rue de Villiers
92300 Levallois-Perret
tel. 01 40 89 69 00
SIREN 334.924.677
AUBRY SA
Avenue Jean Jaures
18400 St Florent sur Cher
tel. 02 48 23 70 50
SIREN 572.175.701
ECRIM SA
Chemin de Chambrais
La Vespiere
14290 Orbec
tel. 02 31 48 47 46
SIREN 300.759.412
SOMENOR SA
194, boulevard Faidherbe
59500 Douai
tel. 03 27 93 39 39
SIREN 337.853.337
SOCORI TECHNOLOGIES SA
515, avenue Roland Garros
78530 Buc
Tel. 01 39 24 13 30
SIREN 340.086.339
F-103
<PAGE> 222
COFIMETA SA
CONSOLIDATED FINANCIAL STATEMENTS AS OF SEPTEMBER 30, 1998
NOTE 2 - FIXED ASSETS
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
SEPTEMBER 30, 1998
- -------------------------------------------------------------------------------------------------------------------
GROSS BOOK GROSS BOOK NET BOOK
INTANGIBLE ASSETS VALUE AS OF ACQUISITIONS VALUE AS OF AMORTIZ. VALUE AS OF
In Thousand French Francs JAN 1, 1998 SEPT 30, 1998 SEPT 30, 1998
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
- - Concessions, patents, licences 5,241.7 124.4 5,366.1 4,986.7 379.4
- - Goodwill 743.8 743.8 743.8
- - Others 2,109.7 19.8 2,129.5 2,106.7 22.8
- -------------------------------------------------------------------------------------------------------------------
TOTAL 8,095.2 144.2 8,239.4 7,837.2 402.2
- -------------------------------------------------------------------------------------------------------------------
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
GROSS BOOK GROSS BOOK NET BOOK
TANGIBLE ASSETS VALUE AS OF ACQUISITIONS DISPOSALS VALUE AS OF AMORTIZ. VALUE AS OF
In Thousand French Francs JAN 1, 1998 SEPT 30, 1998 SEPT 30, 1998
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
- - Land 12,281.7 326.0 12,607.7 3,449.3 9,158.4
- - Buildings 99,911.5 512.2 240.0 100,183.7 74,173.2 26,010.5
- - Plant and machinery, tools and
equipment 450,454.6 18,374.2 155.5 468,673.3 356,861.3 111,812.0
- - Other tangible assets 24,635.3 708.8 690.8 24,653.3 19,754.7 4,898.6
- - Assets in course of construction 4,280.9 2,294.5 4,280.9 2,294.5 2,294.5
- - Payments on account 293.4 69.6 223.8 223.8
- -------------------------------------------------------------------------------------------------------------------
TOTAL 591,857.4 22,215.7 5,436.8 608,636.3 454,238.5 154,397.8
- -------------------------------------------------------------------------------------------------------------------
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
GROSS BOOK GROSS BOOK NET BOOK
FINANCIAL ASSETS VALUE AS OF ACQUISITIONS DISPOSALS VALUE AS OF DEPRECIATION VALUE AS OF
In Thousand French Francs JAN 1, 1998 SEPT 30, 1998 SEPT 30, 1998
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
- - Other investments held as
fixed assets 631.4 631.4 602.8 28.6
- - Loans 5,021.7 13.7 5,008.0 5,008.0
- - Other financial assets 984.9 192.0 48.2 1,128.7 265.0 863.7
- -------------------------------------------------------------------------------------------------------------------
TOTAL 6,638.0 192.0 61.9 6,768.1 867.8 5,900.3
- -------------------------------------------------------------------------------------------------------------------
<CAPTION>
--------------------------------------------------------------------------------
DECEMBER 31, 1997
- -------------------------------------------------------------------------------------------------------------------
GROSS BOOK GROSS BOOK NET BOOK
INTANGIBLE ASSETS VALUE AS OF ACQUISITIONS DISPOSALS VALUE AS OF AMORTIZ. VALUE AS OF
In Thousand French Francs JAN 1, 1997 DEC 31, 1997 DEC 31, 1997
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
- - Concessions, patents, licences 4,997.3 251.9 7.5 5,241.7 4,802.1 439.6
- - Goodwill 743.8 743.8 743.8
- - Others 2,096.7 13.0 2,109.7 2,045.5 64.2
- -------------------------------------------------------------------------------------------------------------------
TOTAL 7,837.8 264.9 7.5 8,095.2 7,591.4 503.8
- -------------------------------------------------------------------------------------------------------------------
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
GROSS BOOK GROSS BOOK NET BOOK
TANGIBLE ASSETS VALUE AS OF ACQUISITIONS DISPOSALS VALUE AS OF AMORTIZ. VALUE AS OF
In Thousand French Francs JAN 1, 1997 DEC 31, 1997 DEC 31, 1997
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
- - Land 12,501.7 220.0 12,281.7 3,316.8 8,964.9
- - Buildings 99,537.4 1,161.1 787.0 99,911.5 70,094.5 29,817.0
- - Plant and machinery, tools and
equipment 430,967.9 23,898.6 4,411.9 450,454.6 328,340.6 122,114.0
- - Other tangible assets 24,020.1 2,019.2 1,404.0 24,635.3 19,613.1 5,022.2
- - Assets in course of construction 25,136.1 4,425.4 25,280.6 4,280.9 4,280.9
- - Payments on account 293.4 (0.0) 293.4 293.4
- -------------------------------------------------------------------------------------------------------------------
TOTAL 592,163.2 31,797.7 32,103.5 591,857.4 421,365.0 170,492.4
- -------------------------------------------------------------------------------------------------------------------
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
GROSS BOOK GROSS BOOK NET BOOK
FINANCIAL ASSETS VALUE AS OF ACQUISITIONS DISPOSALS VALUE AS OF AMORTIZ. VALUE AS OF
In Thousand French Francs JAN 1, 1997 DEC 31, 1997 DEC 31, 1997
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
- - Other investments held as
fixed assets 630.3 1.7 0.6 631.4 606.0 25.4
- - Loans 4,859.0 201.3 38.6 5,021.7 5,021.7
- - Other financial assets 985.0 365.0 365.1 984.9 265.0 719.9
- -------------------------------------------------------------------------------------------------------------------
TOTAL 6,474.3 568.0 404.3 6,638.0 871.0 5,767.0
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
F-104
<PAGE> 223
COFIMETA SA
CONSOLIDATED FINANCIAL STATEMENTS AS OF SEPTEMBER 30, 1998
NOTE 3 - INVENTORIES
<TABLE>
<CAPTION>
----------------------------------------------------------------------
SEPTEMBER 30, 1998
- ---------------------------------------------------------------------------------------------------------------------
OPENING GROSS CHANGE INVENTORY CLOSING
INVENTORIES NET BOOK IN INVENTORY RESERVE NET BOOK
In Thousand French Francs VALUE VALUE
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
- - Raw materials 46,758.7 5,966.9 424.4 52,301.2
- - Work in progress 29,334.6 (4,650.5) 99.2 24,584.9
- - Semi-processed and finished goods 31,362.3 (14.7) (657.8) 32,005.4
- ---------------------------------------------------------------------------------------------------------------------
TOTAL 107,455.6 1,301.7 (134.2) 108,891.5
- ---------------------------------------------------------------------------------------------------------------------
<CAPTION>
----------------------------------------------------------------------
DECEMBER 31, 1997
- ----------------------------------------------------------------------------------------------------------------------
OPENING GROSS CHANGE INVENTORY CLOSING
INVENTORIES NET BOOK IN INVENTORY RESERVE NET BOOK
In Thousand French Francs VALUE VALUE
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
- - Raw materials 44,847.0 2,485.7 574.0 46,758.7
- - Work in progress 67,674.0 (51,863.4) (13,524.0) 29,334.6
- - Semi-processed and finished goods 36,268.0 (9,776.7) (4,871.0) 31,362.3
- ----------------------------------------------------------------------------------------------------------------------
TOTAL 148,789.0 (59,154.4) (17,821.0) 107,455.6
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTE 4 - TRADE ACCOUNTS RECEIVABLE
<TABLE>
<CAPTION>
SEPTEMBER 30, 1998
- ---------------------------------------------------------------------------------------------------------------------
OPENING CHANGE IN BAD DEBT CLOSING
TRADE ACCOUNTS RECEIVABLE NET BOOK GROSS VALUE RESERVE NET BOOK
In Thousand French Francs VALUE VALUE
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
- - Trade accounts receivable 211,058.0 (50,639.6) (538.6) 160,957.0
- ---------------------------------------------------------------------------------------------------------------------
TOTAL 211,058.0 (50,639.6) (538.6) 160,957.0
- ---------------------------------------------------------------------------------------------------------------------
<CAPTION>
DECEMBER 31, 1997
- ---------------------------------------------------------------------------------------------------------------------
OPENING CHANGE IN BAD DEBT CLOSING
TRADE ACCOUNTS RECEIVABLE NET BOOK GROSS VALUE RESERVE NET BOOK
In Thousand French Francs VALUE VALUE
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
- - Trade accounts receivable 227,812.0 (15,497.0) 1,257.0 211,058.0
- ---------------------------------------------------------------------------------------------------------------------
TOTAL 227,812.0 (15,497.0) 1,257.0 211,058.0
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
F-105
<PAGE> 224
COFIMETA SA
CONSOLIDATED FINANCIAL STATEMENTS AS OF SEPTEMBER 30, 1998
NOTE 5 - OTHER DEBTORS
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------- -----------------------
DESIGNATION AMOUNT AMOUNT
In Thousand French Francs SEPTEMBER 30, 1998 DECEMBER 31, 1997
- ----------------------------------------------------------------------------------------- -----------------------
<S> <C> <C>
- - Social accounts receivable 763.6 2,470.4
- - Tax accounts receivable 43,642.8 51,804.2
- - Fixed asset accounts receivable 800.0 800.0
- - Reserves on sale of receivables schemes (factoring and Dailly) 166,867.0 64,304.2
- - Supplier prepayments 20,308.8 13,036.9
- - Other debtors 45,295.6 68,320.3
- ----------------------------------------------------------------------------------------- -----------------------
TOTAL 277,677.8 200,736.0
- ----------------------------------------------------------------------------------------- -----------------------
</TABLE>
F-106
<PAGE> 225
COFIMETA SA
CONSOLIDATED FINANCIAL STATEMENTS AS OF SEPTEMBER 30, 1998
NOTE 6 - NET EQUITY CHANGES
<TABLE>
<CAPTION>
-------------------------------------------------------
AS OF SEPTEMBER 30, 1998
- ----------------------------------------------------------------------------------------
OPENING PRIOR YEAR-END NET INCOME FOR CLOSING
DESIGNATION BALANCE INCOME 9 MONTHS ENDED BALANCE
In Thousand French Francs ALLOCATION SEPT 30, 1998
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Share capital 25,113.3 25,113.3
Premiums on share issues 66,800.9 66,800.9
Legal reserves 72.2 72.2
Regimented reserves 7.8 7.8
Group reserves 74,182.8 (71,228.5) 2,954.3
Losses carried forward (48,856.2) (68,054.9) (116,911.1)
Group net income (139,283.4) 139,283.4 10,447.4 10,447.4
- ----------------------------------------------------------------------------------------
TOTAL SHAREHOLDER'S EQUITY (21,962.6) (0.0) 10,447.4 (11,515.2)
- ----------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------
OPENING PRIOR YEAR-END NET INCOME FOR CLOSING
DESIGNATION BALANCE INCOME 9 MONTHS ENDED BALANCE
In Thousand French Francs ALLOCATION SEPT 30, 1998
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Minority interest reserves 18.7 (22.6) (3.9)
Minority interest income / (loss) (22.6) 22.6 0.6 0.6
- ----------------------------------------------------------------------------------------
TOTAL MINORITY INTEREST (3.9) 0.0 0.6 (3.3)
- ----------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------
AS OF DECEMBER 31, 1997
- ----------------------------------------------------------------------------------------------------------------------
OPENING CAPITAL PRIOR YEAR-END OTHERS NET INCOME FOR CLOSING
DESIGNATION BALANCE CHANGES INCOME CHANGES (1) 12 MONTHS ENDED BALANCE
In Thousand French Francs ALLOCATION DEC 31, 1997
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Share capital 5,909.0 19,204.3 25,113.3
Premiums on share issues 63,005.4 15,795.5 (12,000.0) 66,800.9
Legal reserves 72.2 72.2
Regimented reserves 7.8 7.8
Group reserves 152,213.2 (89,906.6) 11,876.2 74,182.8
Losses carried forward (10,727.3) (38,128.9) (48,856.2)
Group net income (128,035.5) 128,035.5 (139,283.4) (139,283.4)
- ----------------------------------------------------------------------------------------------------------------------
TOTAL SHAREHOLDER'S EQUITY 82,444.8 34,999.8 0.0 (123.8) (139,283.4) (21,962.6)
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
OPENING CAPITAL PRIOR YEAR-END OTHERS NET INCOME FOR CLOSING
DESIGNATION BALANCE CHANGES INCOME CHANGES 12 MONTHS ENDED BALANCE
In Thousand French Francs ALLOCATION DEC 31, 1997
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Minority interest reserves 157.0 (15.0) (123.3) 18.7
Minority interest income / (loss) (15.0) 15.0 (22.6) (22.6)
- ----------------------------------------------------------------------------------------------------------------------
TOTAL MINORITY INTEREST 142.0 0.0 0.0 (123.3) (22.6) (3.9)
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) As at December 1997, the accounting principles applied by Groupe VALFOND
differred from those previously applied by Groupe ARBEL. The impact of the
changes which has been recorded as an adjustment to shareholder's equity is
summarized as follows:
<TABLE>
<CAPTION>
---------------------------
THOUSANDS OF FF
- -------------------------------------------------------------------------------------
<S> <C>
Change from accelerated method of depreciation to straight-line method
on certain fixed assets 6,394
- -------------------------------------------------------------------------------------
Groupe VALFOND policy is to maintain as an asset the long-terms loans
to employees previously expensed 4,654
- -------------------------------------------------------------------------------------
Groupe VALFOND policy is not to capitalize leases which was the
policy previously adopted -133
- -------------------------------------------------------------------------------------
Groupe VALFOND did not record the impact of a
negative goodwill which arose at Groupe ARBEL level 1,073
- -------------------------------------------------------------------------------------
Other -112
- -------------------------------------------------------------------------------------
TOTAL 11,876
- -------------------------------------------------------------------------------------
</TABLE>
F-107
<PAGE> 226
COFIMETA SA
CONSOLIDATED FINANCIAL STATEMENTS AS OF SEPTEMBER 30, 1998
NOTE 7 - PROVISIONS FOR LIABILITIES AND CHARGES
<TABLE>
<CAPTION>
----------------------------------------------------------------
AS OF SEPTEMBER 30, 1998
- ----------------------------------------------------------------------------------------------------------------------------
OPENING CLOSING
DESIGNATION BALANCE ADDITIONS REVERSALS BALANCE
In Thousand French Francs
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
PROVISIONS FOR LIABILITIES
Risks and disputes 15,653.0 15,122.2 9,519.9 21,255.3
Customer warranty 12,000.0 12,000.0
Restructuring provisions 55,019.0 4,909.0 16,868.7 43,059.3
Major maintenance expenses 252.1 252.1
Other 445.1 24.0 349.2 119.9
- ----------------------------------------------------------------------------------------------------------------------------
SUB-TOTAL 83,117.1 20,307.3 26,737.8 76,686.6
- ----------------------------------------------------------------------------------------------------------------------------
PROVISIONS FOR CHARGES
Risks and disputes 680.0 110.0 570.0
Restructuring provisions 1,282.1 350.0 642.1 990.0
Other 2,681.6 1,406.5 1,275.1
- ----------------------------------------------------------------------------------------------------------------------------
SUB-TOTAL 4,643.7 350.0 2,158.6 2,835.1
- ----------------------------------------------------------------------------------------------------------------------------
TOTAL 87,760.8 20,657.3 28,896.4 79,521.7
- ----------------------------------------------------------------------------------------------------------------------------
<CAPTION>
-----------------------------------------------------------------
AS OF DECEMBER 31, 1997
- -------------------------------------------------------------------------------------------------------------------------
OPENING CLOSING
DESIGNATION BALANCE ADDITIONS REVERSALS BALANCE
In Thousand French Francs
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
PROVISIONS FOR LIABILITIES
Risks and disputes 5,192.0 12,323.1 1,862.1 15,653.0
Customer warranty 12,000.0 12,000.0
Restructuring provisions 1,750.0 53,719.0 450.0 55,019.0
Major maintenance expenses
Other 30.2 414.9 445.1
- -------------------------------------------------------------------------------------------------------------------------
SUB-TOTAL 6,972.2 78,457.0 2,312.1 83,117.1
- -------------------------------------------------------------------------------------------------------------------------
PROVISIONS FOR CHARGES
Risks and disputes 550.0 130.0 680.0
Restructuring provisions 1,282.1 1,282.1
Other 309.4 2,421.9 49.7 2,681.6
- -------------------------------------------------------------------------------------------------------------------------
SUB-TOTAL 859.4 3,834.0 49.7 4,643.7
- -------------------------------------------------------------------------------------------------------------------------
TOTAL 7,831.6 82,291.0 2,361.8 87,760.8
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
F-108
<PAGE> 227
COFIMETA SA
CONSOLIDATED FINANCIAL STATEMENTS AS OF SEPTEMBER 30, 1998
NOTE 8 - FINANCIAL LIABILITIES
<TABLE>
<CAPTION>
--------------------------------------------------------------------------
AS OF SEPTEMBER 30, 1998
- -------------------------------------------------------------------------------------------------------------------
TERM BANK BANK GROUP OTHER TOTAL
In Thousand French Francs OVERDRAFTS LOANS
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
- - Less than one year 1,294.8 1,214.8 2,509.6
- - Between one and five years 120.0 120.0
- - Over five years 360.0 360.0
- -------------------------------------------------------------------------------------------------------------------
TOTAL 1,294.8 1,694.8 2,989.6
- -------------------------------------------------------------------------------------------------------------------
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
LESSORS LEGAL INITIAL REMAINING REMAINING FUTURE
In Thousand French Francs ENTITY AMOUNT CAPITAL DURATION INTEREST
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Cicobail Aubry 12,626.1 8,207.0 19.5 semesters 1,827.9
Sovac Aubry 109.7 40.9 6 quarters 2.9
Bail Materiel Socori 1,580.0 669.9 21 months 48.3
- -------------------------------------------------------------------------------------------------------------------
TOTAL 14,315.8 8,917.8 1,879.1
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
--------------------------------------------------------------------------
AS OF DECEMBER 31, 1997
- ----------------------------------------------------------------------------------------------------------------
TERM BANK BANK GROUP OTHER TOTAL
In Thousand French Francs OVERDRAFTS LOANS
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
- - Less than one year 2,695.6 1,214.8 3,910.4
- - Between one and five years
- - Over five years
- ----------------------------------------------------------------------------------------------------------------
TOTAL 2,695.6 1,214.8 3,910.4
- ----------------------------------------------------------------------------------------------------------------
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
LESSORS LEGAL INITIAL REMAINING REMAINING FUTURE
In Thousand French Francs ENTITY AMOUNT CAPITAL DURATION INTEREST
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Cicobail Aubry 12,626.1 9,048.6 21.5 semesters 2,211.4
Sovac Aubry 109.7 61.4 9 quarters 4.4
Bail Materiel Socori 1,580.0 900.2 30 months 92.0
- ----------------------------------------------------------------------------------------------------------------
TOTAL 14,315.8 10,010.2 2,307.7
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
F-109
<PAGE> 228
COFIMETA SA
CONSOLIDATED FINANCIAL STATEMENTS AS OF SEPTEMBER 30, 1998
NOTE 9 - OTHER LIABILITIES
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------- -----------------------
DESIGNATION MONTANT MONTANT
In Thousand French Francs AU 30/09/1998 AU 31/12/1997
- ----------------------------------------------------------------------------------------- -----------------------
<S> <C> <C>
- - Customer prepayments 12,018.1 59,156.3
- - Continuation plan liabilities 386,768.6
- - Other liabilities 61,508.0 474,910.7
- ----------------------------------------------------------------------------------------- -----------------------
TOTAL 460,294.7 534,067.0
- ----------------------------------------------------------------------------------------- -----------------------
</TABLE>
The "Continuation Plan Liabilities" do not take into account the subsequent
modifications of these liabilities after September 30, 1998. As of December 31,
1998, "Continuation Plan Liabilities" amount to 371.278.2 thousand French
Francs.
Reimbursement terms of the "Continuation Plan Liabilities" are mentioned in the
notes.
F-110
<PAGE> 229
COFIMETA SA
CONSOLIDATED FINANCIAL STATEMENTS AS OF SEPTEMBER 30, 1998
NOTE 10 - SALES
<TABLE>
<CAPTION>
------------------------------------------------
AS OF SEPTEMBER 30, 1998
- -------------------------------------------------------------------------------------------------------------
CONSOLIDATED
SALES BY ENTITY TOTAL SALES GROUP SALES SALES
In Thousand French Francs 1 2 1-2
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
- - COFIMETA 39,995.1 39,580.1 415.0
- - AUBRY 214,147.2 4,317.0 209,830.2
- - ECRIM 242,279.4 29,760.6 212,518.8
- - SOMENOR 534,049.8 21,136.3 512,913.5
- - SOCORI 10,997.7 1,605.3 9,392.4
- -------------------------------------------------------------------------------------------------------------
TOTAL 1,041,469.2 96,399.3 945,069.9
- -------------------------------------------------------------------------------------------------------------
</TABLE>
CONSOLIDATED SALES BY NATURE
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
SALES OF
SALES BY NATURE GOODS FOR PRODUCTION SERVICES TOTAL
In Thousand French Francs RESALE SOLD
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
- - COFIMETA 415.0 415.0
- - AUBRY 209,333.9 496.3 209,830.2
- - ECRIM 7,908.6 204,590.0 20.2 212,518.8
- - SOMENOR 511,907.8 1,005.7 512,913.5
- - SOCORI 9,392.4 9,392.4
- -------------------------------------------------------------------------------------------------------------
TOTAL 8,323.6 925,831.7 10,914.6 945,069.9
- -------------------------------------------------------------------------------------------------------------
</TABLE>
CONSOLIDATED SALES BY ZONE
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
SALES BY GEOGRAPHICAL ZONE FRANCE EU OTHERS TOTAL
In thousands French Francs
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
- - COFIMETA 415.0 415.0
- - AUBRY 188,773.5 21,056.7 209,830.2
- - ECRIM 164,295.7 39,509.4 8,713.7 212,518.8
- - SOMENOR 490,319.9 13,909.8 8,683.8 512,913.5
- - SOCORI 9,392.4 9,392.4
- -------------------------------------------------------------------------------------------------------------
TOTAL 853,196.5 74,475.9 17,397.5 945,069.9
- -------------------------------------------------------------------------------------------------------------
</TABLE>
F-111
<PAGE> 230
COFIMETA SA
CONSOLIDATED FINANCIAL STATEMENTS AS OF SEPTEMBER 30, 1998
NOTE 10 - SALES
<TABLE>
<CAPTION>
---------------------------------------------
AS OF DECEMBER 31, 1997
- ----------------------------------------------------------------------------------------------------------------------
CONSOLIDATED
SALES BY ENTITY TOTAL SALES GROUP SALES sales
In thousands French Francs 1 2 1-2
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
- - COFIMETA 21,922.5 20,191.1 1,731.4
- - AUBRY 310,958.0 5,567.9 305,390.1
- - ECRIM 313,997.6 18,287.1 295,710.5
- - SOMENOR 677,572.4 81,023.7 596,548.7
- - SOCORI 22,117.2 1,945.9 20,171.3
- ----------------------------------------------------------------------------------------------------------------------
TOTAL 1,346,567.7 127,015.7 1,219,552.0
</TABLE>
CONSOLIDATED SALES BY NATURE
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
SALES OF
SALES BY NATURE GOODS FOR PRODUCTION SERVICES TOTAL
In thousands French Francs RESALE SOLD
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
- - COFIMETA 514.6 1,216.8 1,731.4
- - AUBRY 305,225.5 164.6 305,390.1
- - ECRIM 43,045.9 251,974.9 689.7 295,710.5
- - SOMENOR 596,390.3 158.4 596,548.7
- - SOCORI 20,171.3 20,171.3
- --------------------------------------------------------------------------------------------------------------------------
TOTAL 43,560.5 1,153,590.7 22,400.8 1,219,552.0
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
CONSOLIDATED SALES BY ZONES
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
SALES BY GEOGRAPHICAL ZONE FRANCE EU OTHERS TOTAL
In thousands French Francs
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
- - COFIMETA 1,731.4 1,731.4
- - AUBRY 271,536.8 32,412.4 1,440.9 305,390.1
- - ECRIM 239,522.1 46,661.2 9,527.2 295,710.5
- - SOMENOR 580,963.9 8,369.4 7,215.4 596,548.7
- - SOCORI 20,171.3 20,171.3
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL 1,113,925.5 87,443.0 18,183.5 1,219,552.0
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
F-112
<PAGE> 231
COFIMETA SA
CONSOLIDATED FINANCIAL STATEMENTS AS OF SEPTEMBER 30, 1998
NOTE 10 - SALES
<TABLE>
<CAPTION>
-----------------------------------------------
AS OF DECEMBER 31, 1996
- ------------------------------------------------------------------------------------------------------------------------
SALES BY ENTITY CONSOLIDATED
In thousands French Francs TOTAL SALES GROUP SALES SALES
1 2 1-2
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> f<C>
- - COFIMETA 36,393.7 29,867.7 6,526.0
- - AUBRY 207,885.5 4,321.5 203,564.0
- - ECRIM 265,428.5 8,098.5 257,330.0
- - SOMENOR 613,844.8 58,194.8 555,650.0
- - SOCORI 31,563.7 9,715.7 21,848.0
- ------------------------------------------------------------------------------------------------------------------------
TOTAL 1,155,116.2 110,198.2 1,044,918.0
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
CONSOLIDATED SALES BY NATURE
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
SALES BY NATURE SALES OF
In thousands French Francs GOODS FOR PRODUCTION SERVICES TOTAL
RESALE SOLD
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
- - COFIMETA 2,785.9 3,740.1 6,526.0
- - AUBRY 201,873.8 1,690.2 203,564.0
- - ECRIM 42,838.7 213,754.2 737.1 257,330.0
- - SOMENOR 554,149.2 1,500.8 555,650.0
- - SOCORI 343.0 21,505.0 21,848.0
- -----------------------------------------------------------------------------------------------------------------------
TOTAL 45,967.6 969,777.1 29,173.3 1,044,918.0
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
CONSOLIDATED SALES BY ZONE
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
SALES BY ZONE FRANCE OTHERS TOTAL
In thousands French Francs
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
- - COFIMETA 5,711.8 814.2 6,526.0
- - AUBRY 170,062.5 33,501.5 203,564.0
- - ECRIM 207,565.8 49,764.2 257,330.0
- - SOMENOR 532,446.1 23,203.9 555,650.0
- - SOCORI 21,814.6 33.4 21,848.0
- --------------------------------------------------------------------------------------------------------------------------------
TOTAL 937,600.7 107,317.3 1,044,918.0
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
F-113
<PAGE> 232
COFIMETA SA
CONSOLIDATED FINANCIAL STATEMENTS AS OF SEPTEMBER 30, 1998
NOTE 11 - OTHER INCOME
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------- ----------------- ------------------
DESIGNATION AMOUNT AMOUNT AMOUNT
In Thousand French Francs SEPTEMBER 30, 1998 DECEMBER 31, 1997 DECEMBER 31, 1996
- ---------------------------------------------------------------------------------- ----------------- ------------------
<S> <C> <C> <C>
- - Operating subsidies 163.5 279.0 1,139.0
- - Reversals on depreciation, amortization and transfer of charges 11,971.8 38,473.0 7,568.0
- - Other income 4,183.9 1,817.0 55.0
- --------------------------------------------------------------------------------- ----------------- ------------------
TOTAL OTHER INCOME 16,319.2 40,569.0 8,762.0
- --------------------------------------------------------------------------------- ----------------- ------------------
</TABLE>
F-114
<PAGE> 233
COFIMETA SA
CONSOLIDATED FINANCIAL STATEMENTS AS OF SEPTEMBER 30, 1998
NOTE 12 - BREAKDOWN OF FINANCIAL INCOME / (LOSS)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------- ----------------- -----------------
DESIGNATION AMOUNT AMOUNT AMOUNT
In Thousand French Francs SEPTEMBER 30, 1998 DECEMBER 31, 1997 DECEMBER 31, 1996
- ---------------------------------------------------------------------------------- ----------------- -----------------
<S> <C> <C> <C>
- - Short term investments 250.8 450.0 3.0
- - Other interest income and related income 5,058.1 5,842.0 1,527.0
- - Reversal of depreciation and transfer of charges 6.0 657.0
- - Currency exchange gains 17.6 108.0 1,346.0
- ----------------------------------------------------------------------------------- ----------------- -----------------
TOTAL FINANCIAL INCOME 5,332.5 7,057.0 2,876.0
- ----------------------------------------------------------------------------------- ----------------- -----------------
- - Increase in depreciation and transfer of charges 295.0 987.0
- - Interest expense and related charges 9,515.5 18,172.0 16,071.0
- - Currency exchange losses 46.2 498.0 35.0
- ----------------------------------------------------------------------------------- ----------------- -----------------
TOTAL FINANCIAL CHARGES 9,561.7 18,965.0 17,093.0
- ----------------------------------------------------------------------------------- ----------------- -----------------
FINANCIAL INCOME / (LOSS) (4,229.2) (11,908.0) (14,217.0)
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
F-115
<PAGE> 234
COFIMETA SA
CONSOLIDATED FINANCIAL STATEMENTS AS OF SEPTEMBER 30, 1998
NOTE 13 - BREAKDOWN OF EXTRAORDINARY INCOME / (LOSS)
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
DESIGNATION AMOUNT AMOUNT AMOUNT
In Thousand French Francs SEPTEMBER 30, 1998 DECEMBER 31, 1997 DECEMBER 31, 1996
- -------------------------------------------------------------------------------- ----------------- -----------------
<S> <C> <C> <C>
Extraordinary income from operating transactions 14,250.1 1,700.0 7,745.0
Extraordinary income from capital transactions 693.2 1,902.0 2,460.0
Reversal of extraordinary provisions and depreciation 29,708.8 500.0 5,028.0
- -------------------------------------------------------------------------------- ----------------- -----------------
TOTAL EXTRAORDINARY INCOME 44,652.1 4,102.0 15,233.0
- -------------------------------------------------------------------------------- ----------------- -----------------
Extraordinary charges from operating transactions 17,216.2 27,602.0 20,122.0
Extraordinary charges from capital transactions 960.5 1,481.0 5,132.0
Additions to extraordinary provisions and depreciation 25,223.6 70,122.0 7,322.0
- -------------------------------------------------------------------------------- ----------------- -----------------
TOTAL EXTRAORDINARY CHARGES 43,400.3 99,205.0 32,576.0
- -------------------------------------------------------------------------------- ----------------- -----------------
EXTRAORDINARY INCOME / (LOSS) 1,251.8 (95,103.0) (17,343.0)
- -------------------------------------------------------------------------------- ----------------- -----------------
</TABLE>
Extraordinary income mainly includes :
- - utilization of provisions for restructuring
- - utilization of provisions for customer and supplier litigations
- - supplier accounts which have not been claimed under the Continuation Plan and
are no longer considered as valid claims.
- - insurance indemnities.
Extraordinary charges mainly include :
- - restructuring costs (mainly employee costs)
- - legal fees in connection with the Continuation Plan
- - provisions for depreciation of old accounts receivable
F-116
<PAGE> 235
COFIMETA SA
CONSOLIDATED FINANCIAL STATEMENTS AS OF SEPTEMBER 30, 1998
NOTE 14 - NET INCOME
The contribution of each legal entity to the consolidated net income is as
follows :
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------- ------------------- -------------------
LEGAL ENTITIES NET INCOME / (LOSS) NET INCOME / (LOSS) NET INCOME / (LOSS)
In Thousand French Francs SEPTEMBER 30, 1998 DECEMBER 31, 1997 DECEMBER 31, 1996
- -------------------------------------------------------------------------- ------------------- -------------------
<S> <C> <C> <C>
- - COFIMETA 6,547.4 (40,315.5) (1,386.0)
- - AUBRY 1,645.8 (5,709.2) (40,395.0)
- - ECRIM 98.4 3,207.6 (3,103.0)
- - SOMENOR 4,148.1 (68,628.7) (74,976.0)
- - SOCORI (1,991.7) (27,860.2) (8,191.0)
- ------------------------------------------------------------------------ ------------------ ------------------
CONSOLIDATED NET INCOME 10,448.0 (139,306.0) (128,051.0)
- ------------------------------------------------------------------------ ------------------ ------------------
</TABLE>
F-117
<PAGE> 236
COFIMETA SA
CONSOLIDATED FINANCIAL STATEMENTS AS OF SEPTEMBER 30, 1998
NOTE 15 - HEADCOUNT
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------
AS OF SEPTEMBER 30, 1998
--------------------------------------------------------------------------------------
DEFINED
CATEGORIES MANAGERS EMPLOYEES WORKERS TERM TOTAL INTERIM
CONTRACTS REGISTERED
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
- - COFIMETA 26 5 2 33
- - AUBRY 12 63 253 328 64
- - ECRIM 10 59 237 18 324 56
- - SOMENOR 25 109 574 708 43
- - SOCORI 11 31 1 43 1
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL HEADCOUNT 84 267 1,064 21 1,436 164
- ------------------------------------------------------------------------------------------------------------------------------
As of December 31, 1997 106 264 1,035 8 1,413 45
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
No compensation is given to members of the management board
F-118
<PAGE> 237
COFIMETA SA
CONSOLIDATED FINANCIAL STATEMENTS AS OF SEPTEMBER 30, 1998
NOTE 16 - EXISTING AMOUNTS RECEIVABLE AND PAYABLE BETWEEN COFIMETA AND GROUPS
ARBEL AND VALFOND
As of September 30, 1998 the amounts receivable from Group ARBEL are as follows:
- ARBEL INDUSTRIE 43,210 thousand FF,
- other ARBEL affiliates 4,775 thousand FF.
As of February 3rd, 1999, the amounts are as follows :
- ARBEL INDUSTRIE 43,832 thousand FF,
- other ARBEL affiliates 2,115 thousand FF.
Accounts payable to Group VALFOND amount to :
- as of September 30, 1998 53,498 thousand FF,
- as of February 3rd, 1999 52,966 thousand FF.
Those accounts receivable and payable will be paid or compensated at the date of
closing which will take place on February 5th, 1999.
F-119
<PAGE> 238
COFIMETA SA
CONSOLIDATED FINANCIAL STATEMENTS AS OF SEPTEMBER 30, 1998
NOTE 17 - DIFFERENCES BETWEEN GENERALLY ACCEPTED PRINCIPLES IN FRANCE
AND IN THE UNITED STATES
Differences between generally accepted accounting principles in France and in
the United States.
The consolidated financial statements of COFIMETA S.A. and its subsidiaries have
been prepared in accordance with French accounting principles which differ in
certain material respects from generally accepted accounting principles in the
United States. The principal differences as they relate to the consolidated net
income and the consolidated equity of COFIMETA and its subsidiaries are
summarized below :
Reconciliation of net income to US GAAP
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
Nine months period Year ended
In thousands of FRF ended September 30, December 31, 1997
1998
- ------------------------------------------------------------------------------------------------------
<S> <C> <C>
Net income (loss) as reported 10,447 (139,283)
1. Provisions for restructuring (2,700) 37,052
recorded in the year-ended 31
December 1997
2. Provisions for restructuring 3,878
recorded in the nine-month period
ended 30 September 1998
3. Mark-to-market adjustment on 247
Investment Funds shares
- ------------------------------------------------------------------------------------------------------
Net income (loss) as adjusted for 11,872 (102,231)
US GAAP
- ------------------------------------------------------------------------------------------------------
</TABLE>
1 - In 1997, provisions for restructuring reserves have been recorded under
French GAAP, however since they do not meet the EITF 94-3 criteria, they are
not allowed under US GAAP.
During the nine-month period ended September 30, 1998, an amount of KFF 2
700 has been taken back into income under French GAAP and therefore should
be deducted from the net income for US GAAP purposes.
F-120
<PAGE> 239
COFIMETA SA
CONSOLIDATED FINANCIAL STATEMENTS AS OF SEPTEMBER 30, 1998
2- Additional provisions for restructuring have been recorded as at September
30, 1998 for an amount of KFF 3 878 which do not meet the EITF 94-3 criteria
and therefore are not allowed under US GAAP.
3- A potential gain of KFF 247 on Investments Funds shares could not be
recorded under French GAAP but should be recorded in income following the
mark-to-market rule under US GAAP.
Reconciliation of Shareholder's equity to US GAAP
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
In thousands of FRF September 30, 1998 December 31, 1997
- ------------------------------------------------------------------------------------------------------
<S> <C> <C>
Shareholder's equity as reported (21,963) 117,321
1. Retirement indemnities (15,772) (15,772)
2. Adjustments to equity (11,876) (11,876)
- -----------------------------------------------------------------------------------------------------
Shareholder's equity as adjusted for (49,611) 89,673
US GAAP
- -----------------------------------------------------------------------------------------------------
</TABLE>
1 - Retirement liabilities are disclosed in the footnotes but not recorded as
permitted by French GAAP ; under US GAAP, they must be recorded.
2 - As described in Note 1, Groupe VALFOND acquired Groupe COFIMETA in December
30, 1997. As permitted by French GAAP, Groupe VALFOND did not allocate the
purchase price to the fair values of assets acquired and liabilities
assumed. VALFOND carried over the historical net book values of assets and
liabilities of COFIMETA and recorded a cumulative adjustment for KF 11,876.
The difference of KF 52,520 between the purchase price of COFIMETA and the
net book value of net assets acquired was recorded as Goodwill in the
financial statements of VALFOND. It was not pushed down to COFIMETA.
Under US GAAP, the purchase price should be allocated to the fair values of
the assets acquired and liabilities assumed, and such cumulative effects
adjustments would not be permitted. The excess purchase price would
therefore generally result in the step up of certain assets, with the
residual amount recorded as goodwill.
F-121
<PAGE> 240
COFIMETA SA
CONSOLIDATED FINANCIAL STATEMENTS AS OF SEPTEMBER 30, 1998
Also, in general the purchase price of a company should be pushed down
(reflected) in its separate financial statements if at least 95% of its
shares have been acquired by another company. Such pushdown accounting is
not permitted if less than 80% of its shares have been purchased. If between
80% and 95% of its shares have been purchased, pushdown accounting is
optional.
Had this excess purchase price been pushed down to COFIMETA and so allocated
to certain assets and goodwill with an average estimated remaining useful
life of 20 years, under US GAAP there would be an additional annual charge
for depreciation and amortization of approximately KF 2,600 (9 months :
1,950). If this entire excess purchase price were considered to be Goodwill
with a 40 years life the additional annual amortization charge would be
approximately KF 1,300 (9 months : 975).
F-122
<PAGE> 241
COFIMETA SA
CONSOLIDATED FINANCIAL STATEMENTS AS OF SEPTEMBER 30, 1998
NOTE 18 - CONTINGENT LIABILITIES (EXCEPT FOR CAPITAL LEASES)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------- -------------------------
DESIGNATION AMOUNT AMOUNT
In Thousand French Francs SEPTEMBER 30, 1998 DECEMBER 31, 1997
- ------------------------------------------------------------------------------------- -------------------------
<S> <C> <C>
- - Retirement indemnities 15,771.6 15,771.6
- - Discounted notes not yet matured 18,915.8 -
- ------------------------------------------------------------------------------------- -------------------------
TOTAL 34,687.4 15,771.6
- ------------------------------------------------------------------------------------- -------------------------
</TABLE>
F-123
<PAGE> 242
COFIMETA SA
CONSOLIDATED FINANCIAL STATEMENTS AS OF SEPTEMBER 30, 1998
NOTE 19 - POST BALANCE SHEETS EVENTS
As at 5th February 1999, OXFORD AUTOMOTIVE has acquired 100% of the shares of
COFIMETA S.A. As part of closing of this transaction, the accounts receivable
and payable between COFIMETA, Groupe VALFOND and Groupe ARBEL have been settled.
The shareholders should also agree to change the year-end of the Company to 31st
March.
F-124
<PAGE> 243
WE HAVE NOT AUTHORIZED ANY DEALER, SALESPERSON OR OTHER PERSON TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS. YOU MUST NOT RELY ON ANY UNAUTHORIZED INFORMATION. THIS PROSPECTUS
DOES NOT OFFER TO SELL OR BUY ANY SECURITIES IN ANY JURISDICTION WHERE IT IS
UNLAWFUL. THIS PROSPECTUS IS CURRENT AS OF _______, 1999.
---------------
TABLE OF CONTENTS
PAGE
Available Information...........................
Summary.........................................
Risk Factors....................................
Use of Proceeds.................................
Capitalization..................................
Pro Forma Combined Financial Data...............
Selected Consolidated Historical
Financial Data................................
Management's Discussion and Analysis of
Financial Condition and Results of
Operations....................................
The Exchange Offer..............................
Business........................................
Management......................................
Principal Shareholders..........................
Certain Transactions............................
Description of Certain Indebtedness and
Preferred Stock...............................
Description of the Notes........................
Certain Federal Income Tax Considerations......
Plan of Distribution............................
Legal Matters...................................
Experts.........................................
Index to Consolidated Financial Statements...... F-1
$200,000,000
OXFORD AUTOMOTIVE, INC.
OXFORD
AUTOMOTIVE
LOGO
10 1/8% SENIOR SUBORDINATED
NOTES DUE 2007, SERIES D
PROSPECTUS
OFFER TO EXCHANGE
10 1/8% SENIOR SUBORDINATED
NOTES DUE 2007
Dated ________, 1999
<PAGE> 244
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Sections 561 through 571 of the Michigan Business Corporation Act (the "MBCA")
set forth the conditions and limitations governing the indemnification of
officers, directors and other persons by Michigan corporations.
In general, the MBCA allows Michigan corporations to indemnify a person who was
or is a party or is threatened to be made a party to a threatened, pending or
completed action, suit, or proceeding, whether civil, criminal, administrative,
or investigative and whether formal or informal, other than an action by or in
the right of the corporation, by reason of the fact that such person is or was a
director, employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, partner, trustee, employee,
or agent of another enterprise, against expenses, including attorneys' fees,
judgments, penalties, fines and amounts paid in settlement actually and
reasonably incurred in connection therewith, if such person acted in good faith
and in a manner reasonably believed to be in or not opposed to the best
interests of the corporation or its shareholders, and with respect to a criminal
action or proceeding, had no reasonable cause to believe his or her conduct was
unlawful.
The MBCA also allows Michigan corporations to indemnify such a person who was or
is a party or is threatened to be made a party to a threatened, pending or
completed action or suit by or in the right of the corporation against expenses,
including actual and reasonable attorneys' fees, and amounts paid in settlement
actually and reasonably incurred by the person in connection with the action or
suit, if such person acted in good faith and in a manner reasonably believed to
be in or not opposed to the best interests of the corporation or its
shareholders. However, indemnification shall not be made for a claim, issue or
matter in which the person is found liable to the corporation unless and only to
the extent that a court of competent jurisdiction has determined that, despite
the adjudication of liability but in view of all circumstances of the case, the
person is fairly and reasonably entitled to indemnification for the expenses
which the court considers proper.
The MBCA also allows Michigan corporations to indemnify a director without a
determination that the director has met the standard for conduct described
above, provided that no indemnification may be made (except by court order) if
the director received a financial benefit to which he or she is not entitled,
intentionally inflicted harm on the corporation or its shareholders, made an
unlawful distribution, or intentionally violated criminal law.
The Bylaws of Oxford Automotive require Oxford Automotive to indemnify directors
and officers to the extent permitted by the MBCA.
Oxford Automotive has entered into an agreement with each of its directors under
which Oxford Automotive agrees to indemnify the director against certain
liabilities and expenses incurred by the director by reason of serving as a
director of Oxford Automotive or in certain other capacities at the request of
Oxford Automotive. In general, under the agreements, Oxford Automotive agrees to
indemnify the director to the extent permitted by the MBCA subject to the
following: (a) Oxford Automotive agrees to reimburse the director for expenses
incurred prior to the final disposition of the matter or proceeding, subject to
certain limitations; and (b) the director may file a suit against Oxford
Automotive if Oxford Automotive refuses to indemnify the director,
and the court is authorized to determine whether the director is entitled to be
indemnified whether or not a determination in such respect has or has not been
made by the Board of Directors, independent legal counsel, or the shareholders
of Oxford Automotive.
II-1
<PAGE> 245
The MBCA permits a corporation to purchase and maintain insurance on behalf of
any person who is or was a director, officer, employee, or agent of the
corporation against liabilities arising out of such person's positions with the
corporation, whether or not the corporation would have the power to indemnify
such person against liability under the MBCA.
Oxford Automotive carries a directors and officers liability insurance policy
which insures directors and officers of Oxford Automotive against certain
liability by reason of certain acts or omissions in connection with their duties
for Oxford Automotive and which insures Oxford Automotive against certain
amounts for which it is legally obligated to pay or for which it has agreed or
is required to indemnify the directors or officers. During each policy year, the
aggregate limit of liability under the policy is $10,000,000, and the insurer is
generally obligated to pay for any loss experienced by a director or officer and
for any loss in excess of $250,000 experienced by Oxford Automotive. The
insurance policy is in effect until October 25, 1998.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits. A list of exhibits included as part of this Registration
Statement is set forth in the Exhibit Index which immediately precedes
such exhibits and is incorporated herein by reference.
(b) Financial Statement Schedules.
II - Valuation and Qualifying Accounts.
ITEM 22. UNDERTAKINGS.
Each undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the
information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in volume
of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than a 20%
change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective
registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
II-2
<PAGE> 246
(3) To remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of
the offering.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
registrants pursuant to the provisions described under Item 20 or otherwise, the
registrants have been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by a
co-registrant of expenses incurred or paid by a director, officer or controlling
person of such co-registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, such co-registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
Each undersigned registrant hereby undertakes:
To respond to requests for information that is incorporated by reference
into the prospectus pursuant to Item 4, 10(b), 11 or 13 of this Form, within one
business day of receipt of such request, and to send the incorporated documents
by first class mail or other equally prompt means. This includes information
contained in documents filed subsequent to the effective date of the
registration statement through the date of responding to the request.
To supply by means of a post-effective amendment all information
concerning a transaction, and the company being acquired involved therein, that
was not the subject of and included in the registration statement when it became
effective.
II-3
<PAGE> 247
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized in the City of Troy and
State of Michigan on April 5, 1999.
OXFORD AUTOMOTIVE, INC.
By:/s/ Steven M. Abelman
--------------------------------
Steven M. Abelman
President and Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Selwyn
Isakow and Rex E. Schlaybaugh, Jr., and each of them, his attorneys-in-fact for
him in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the same,
with exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as might or could be done in
person, hereby ratifying and confirming all that each of said attorneys-in-fact
and agents, or his substitute or substitutes, may do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities indicated on April 5, 1999.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
/s/ Selwyn Isakow Chairman of the Board and Director
- --------------------------------------
Selwyn Isakow
/s/ Rex E. Schlaybaugh, Jr. Vice Chairman of the Board and Director
- --------------------------------------
Rex E. Schlaybaugh, Jr.
/s/ Steven M. Abelman President, Chief Executive Officer and Director
- --------------------------------------
Steven M. Abelman
/s/ Aurelian Bukatko Senior Vice President-Chief Financial Officer
- ------------------------------------- (Principal Accounting and Financial Officer)
Aurelian Bukatko
/s/ Manfred J. Walt Director
- --------------------------------------
Manfred J. Walt
Director
- --------------------------------------
Dennis K. Pawley
</TABLE>
II-4
<PAGE> 248
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized in the City of Troy and
State of Michigan on April 5, 1999.
LOBDELL EMERY CORPORATION
By: /s/ Steven M. Abelman
-------------------------------------
Steven M. Abelman, President
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Selwyn
Isakow and Rex E. Schlaybaugh, Jr., and each of them, his attorneys-in-fact for
him in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the same,
with exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as might or could be done in
person, hereby ratifying and confirming all that each of said attorneys-in-fact
and agents, or his substitute or substitutes, may do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities indicated on April 5, 1999.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
/s/ Steven M. Abelman President (Principal Executive Officer) and
- -------------------------------------- Director
Steven M. Abelman
/s/ Aurelian Bukatko Vice President-Chief Financial Officer, Treasurer
- -------------------------------------- (Principal Accounting and Financial Officer)
Aurelian Bukatko and Director
/s/ John H. Ferguson Director
- --------------------------------------
John H. Ferguson
- -------------------------------------- Director
John F. Hiemenz, Jr.
</TABLE>
II-5
<PAGE> 249
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized in the City of Troy and
State of Michigan on April 5, 1999.
BMG NORTH AMERICA LIMITED
By:/s/ Steven M. Abelman
-------------------------------------
Steven M. Abelman, President
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Selwyn
Isakow and Rex E. Schlaybaugh, Jr., and each of them, his attorneys-in-fact for
him in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the same,
with exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as might or could be done in
person, hereby ratifying and confirming all that each of said attorneys-in-fact
and agents, or his substitute or substitutes, may do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities indicated on April 5, 1999.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
/s/ Steven M. Abelman President (Principal Executive Officer) and
- --------------------------------------- Director
Steven M. Abelman
/s/ Aurelian Bukatko Vice President-Chief Financial Officer and Treasurer
- --------------------------------------- (Principal Accounting and Financial Officer)
Aurelian Bukatko
- --------------------------------------- Director
James W. Robinson
/s/ Manfred J. Walt Director
- ---------------------------------------
Manfred J. Walt
</TABLE>
II-6
<PAGE> 250
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized in the City of Troy and
State of Michigan on April 5, 1999.
BMG HOLDINGS, INC.
By: /s/ Steven M. Abelman
---------------------------------------
Steven M. Abelman, President
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Selwyn
Isakow and Rex E. Schlaybaugh, Jr., and each of them, his attorneys-in-fact for
him in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the same,
with exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as might or could be done in
person, hereby ratifying and confirming all that each of said attorneys-in-fact
and agents, or his substitute or substitutes, may do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities indicated on April 5, 1999.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
/s/ Steven M. Abelman President (Principal Executive Officer) and
- --------------------------------------- Director
Steven M. Abelman
/s/ Aurelian Bukatko Vice President-Chief Financial Officer and
- --------------------------------------- Treasurer (Principal Accounting and Financial Officer)
Aurelian Bukatko
Director
- ---------------------------------------
James W. Robinson
/s/ Manfred J. Walt Director
- ---------------------------------------
Manfred J. Walt
</TABLE>
II-7
<PAGE> 251
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized in the City of Troy and
State of Michigan on April 5, 1999.
WINCHESTER FABRICATION CORPORATION
CREATIVE FABRICATION CORPORATION
PARALLEL GROUP INTERNATIONAL, INC.
CONCEPT MANAGEMENT CORPORATION
LEWIS EMERY CAPITAL CORPORATION
HOWELL INDUSTRIES, INC.
RPI HOLDINGS, INC.
RPI, INC.
PRUDENVILLE MANUFACTURING, INC.
OXFORD SUSPENSION, INC.
OASP, INC.
OASP II, INC.
By: /s/ Steven M. Abelman
----------------------------------------------
Steven M. Abelman, President of each of
the entities listed above
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Selwyn
Isakow and Rex E. Schlaybaugh, Jr., and each of them, his attorneys-in-fact for
him in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the same,
with exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as might or could be done in
person, hereby ratifying and confirming all that each of said attorneys-in-fact
and agents, or his substitute or substitutes, may do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities indicated on April 5, 1999.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
/s/ Steven M. Abelman President (Principal Executive Officer) and
- --------------------------------- Director of each of the entities listed above
Steven M. Abelman
/s/ Aurelian Bukatko Vice President-Chief Financial Officer, Treasurer
- --------------------------------- (Principal Accounting and Financial Officer) and
Aurelian Bukatko Director of each of
the entities listed above
/s/ John H. Ferguson Director of each of the entities listed above
- ---------------------------------
John H. Ferguson
</TABLE>
II-8
<PAGE> 252
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized in the City of Troy and
State of Michigan on April 5, 1999.
LASERWELD INTERNATIONAL, L.L.C.
By: Lobdell Emery Corporation, its sole member
By: /s/ Steven M. Abelman
---------------------------------------
Steven M. Abelman, President
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Selwyn
Isakow and Rex E. Schlaybaugh, Jr., and each of them, his attorneys-in-fact for
him in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the same,
with exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as might or could be done in
person, hereby ratifying and confirming all that each of said attorneys-in-fact
and agents, or his substitute or substitutes, may do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities indicated on April 5, 1999.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
/s/ Steven M. Abelman President (Principal Executive Officer) and
- -------------------------------- Director of Lobdell Emery Corporation
Steven M. Abelman
/s/ Aurelian Bukatko Vice President-Chief Financial Officer, Treasurer
- -------------------------------- (Principal Accounting and Financial Officer)
Aurelian Bukatko and Director of Lobdell Emery Corporation
/s/ John H. Ferguson Director of Lobdell Emery Corporation
- --------------------------------
John H. Ferguson
</TABLE>
II-9
<PAGE> 253
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized in the City of Troy and
State of Michigan on April 5, 1999.
OXFORD SUSPENSION LTD.
By: /s/ Steven M. Abelman
--------------------------------
Steven M. Abelman, President
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Selwyn
Isakow and Rex E. Schlaybaugh, Jr., and each of them, his attorneys-in-fact for
him in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the same,
with exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as might or could be done in
person, hereby ratifying and confirming all that each of said attorneys-in-fact
and agents, or his substitute or substitutes, may do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities indicated on April 5, 1999.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
/s/ Steven M. Abelman President (Principal Executive Officer) and
- ------------------------------------- Director
Steven M. Abelman
/s/ Aurelian Bukatko Vice President-Chief Financial Officer, Treasurer
- ------------------------------------- (Principal Accounting and Financial Officer)
Aurelian Bukatko and Director
/s/ Manfred J. Walt Director
- -------------------------------------
Manfred J. Walt
- ------------------------------------- Director
James W. Robinson
</TABLE>
II-10
<PAGE> 254
OXFORD AUTOMOTIVE, INC.
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
(DOLLAR AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
PERIOD FROM PERIOD FROM
OCTOBER 28, APRIL 1,
YEAR YEAR 1995 1995
ENDED ENDED THROUGH THROUGH
MARCH 31, MARCH 31, MARCH 31, OCTOBER 27,
1998 1997 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Balance, beginning of period 1,272 39 31 25
Additions
Acquisition 200 1,254 -- --
Provision for additional allowance -- 12 8 5
Deductions
Currency translation adjustments (1) -- -- 1
Reversals (644) -- -- --
Doubtful accounts (charged) recovered (427) (33) -- --
------ ------ ------ ------
Balance, end of period 400 1,272 39 31
====== ------ ====== ======
</TABLE>
S-1
<PAGE> 255
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
2.1 Agreement and Plan of Merger by and among Howell Industries,
Inc., the Company and HI Acquisition, Inc., dated May 21, 1997
(previously filed as Exhibit 2.1 to the Registrant's
Registration Statement on Form S-4, File No. 333-32975, and
incorporated herein by reference).
2.2 Shareholders Agreement by and among the Company, HI
Acquisition, Inc., and NBD Bank and Morton Schiff, co-trustees
of the Herbert H. Freedland Marital Trusts, dated May 21, 1997
(previously filed as Exhibit 2.2 to the Registrant's
Registration Statement on Form S-4, File No. 333-32975, and
incorporated herein by reference).
2.3 Agreement and Plan of Merger dated as of November 14, 1996, by
and between Lobdell Emery Corporation, BMG-MI, Inc. (now known
as "Oxford Automotive, Inc."), L-E Acquisition, Inc., the
Shareholders of Lobdell Emery Corporation, and D. Kennedy
Fesenmyer, as Shareholders' Agent (previously filed as Exhibit
2.3 to the Registrant's Registration Statement on Form S-4,
Registration No. 333-32975).
2.4 Amendment to Agreement and Plan of Merger, dated December 27,
1996 by and among Lobdell Emery Corporation, BMG-MI, Inc. (now
known as "Oxford Automotive, Inc."), L-E Acquisition, Inc., D.
Kennedy Fesenmyer, as Shareholders' Agent, and Lobdell
Holdings, Inc. (previously filed as Exhibit 2.4 to the
Registrant's Registration Statement on Form S-4, Registration
No. 333-32975)
2.5 Agreement and Plan of Merger, dated as of January 8, 1997
among Lobdell Holdings, Inc. and BMG-MI, Inc. (now known as
"Oxford Automotive, Inc.") (previously filed as Exhibit 2.5 to
the Registrant's Registration Statement on Form S-4,
Registration No. 333-32975).
2.6 Stock Purchase Agreement, dated as of November 25, 1997, by
and among Oxford Automotive, Inc. and the Shareholders of RPI
Holdings, Inc. (previously filed as Exhibit 2.1 to the
Registrant's Form 8-K dated November 25, 1997, and
incorporated herein by reference)
2.7 Asset Purchase Agreement, dated as of March 13, 1998, between
Oxford Automotive, Inc. and Eaton Corporation. (previously
filed as Exhibit 2.1 to the Registrant's Form 8-K dated April
1, 1998, and incorporated herein by reference)
2.8 Share and Debt Purchase and Sale Agreement (the "Purchase
Agreement") between Oxford Automotive France SAS and Groupe
Valfond SA, dated December 15, 1998 (previously filed as
Exhibit 2.1 to the Registrant's Quarterly Report on Form 10-Q
for the fiscal quarter ended December 31, 1998, File No.
333-58131, and incorporated herein by reference).
2.9 *Amendments No. 1 and 2 to the Share and Debt Purchase and
Sale Agreement, dated December 20, 1998 and December 28, 1998,
respectively, by and between Oxford Automotive France SAS and
Groupe Valfond SA.
3.1 Articles of Incorporation of the Company (previously filed as
Exhibit 3.1 to the Registrant's Registration Statement on Form
S-4, File No. 333-32975, and incorporated herein by reference)
3.2 Articles of Incorporation of Lobdell Emery Corporation
(previously filed as Exhibit 3.2 to the Registrant's
Registration Statement on Form S-4, File No. 333-32975, and
incorporated herein by reference)
3.3 Articles of Incorporation of BMG North America Limited
(previously filed as Exhibit 3.3 to the Registrant's
Registration Statement on Form S-4, File No. 333-32975, and
incorporated herein by reference)
</TABLE>
E-1
<PAGE> 256
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
3.4 Articles of Incorporation of BMG Holdings, Inc. (previously
filed as Exhibit 3.4 to the Registrant's Registration
Statement on Form S-4, File No. 333-32975, and incorporated
herein by reference)
3.5 Articles of Incorporation of Winchester Fabrication
Corporation (previously filed as Exhibit 3.5 to the
Registrant's Registration Statement on Form S-4, File No.
333-32975, and incorporated herein by reference)
3.6 Articles of Incorporation of Creative Fabrication Corporation
(previously filed as Exhibit 3.6 to the Registrant's
Registration Statement on Form S-4, File No. 333-32975, and
incorporated herein by reference)
3.7 Articles of Incorporation of Parallel Group International,
Inc. (previously filed as Exhibit 3.7 to the Registrant's
Registration Statement on Form S-4, File No. 333-32975, and
incorporated herein by reference)
3.8 Articles of Organization of Laserweld International, L.L.C.
(previously filed as Exhibit 3.8 to the Registrant's
Registration Statement on Form S-4, File No. 333-32975, and
incorporated herein by reference)
3.9 Articles of Incorporation of Concept Management Corporation
(previously filed as Exhibit 3.9 to the Registrant's
Registration Statement on Form S-4, File No. 333-32975, and
incorporated herein by reference)
3.10 Articles of Incorporation of Lewis Emery Capital Corporation
(previously filed as Exhibit 3.10 to the Registrant's
Registration Statement on Form S-4, File No. 333-32975, and
incorporated herein by reference)
3.11 Bylaws of the Company (previously filed as Exhibit 3.11 to the
Registrant's Registration Statement on Form S-4, File No.
333-32975, and incorporated herein by reference)
3.12 Bylaws of Lobdell Emery Corporation (previously filed as
Exhibit 3.12 to the Registrant's Registration Statement on
Form S-4, File No. 333-32975, and incorporated herein by
reference)
3.13 Bylaws of BMG North America Limited (previously filed as
Exhibit 3.13 to the Registrant's Registration Statement on
Form S-4, File No. 333-32975, and incorporated herein by
reference)
3.14 Bylaws of BMG Holdings, Inc. (previously filed as Exhibit 3.14
to the Registrant's Registration Statement on Form S-4, File
No. 333-32975, and incorporated herein by reference)
3.15 Bylaws of Winchester Fabrication Corporation (previously filed
as Exhibit 3.15 to the Registrant's Registration Statement on
Form S-4, File No. 333-32975, and incorporated herein by
reference)
3.16 Bylaws of Creative Fabrication Corporation (previously filed
as Exhibit 3.16 to the Registrant's Registration Statement on
Form S-4, File No. 333-32975, and incorporated herein by
reference)
3.17 Bylaws of Parallel Group International, Inc. (previously filed
as Exhibit 3.17 to the Registrant's Registration Statement on
Form S-4, File No. 333-32975, and incorporated herein by
reference)
3.18 Bylaws of Concept Management Corporation (previously filed as
Exhibit 3.18 to the Registrant's Registration Statement on
Form S-4, File No. 333-32975, and incorporated herein by
reference)
3.19 Bylaws of Lewis Emery Capital Corporation (previously filed as
Exhibit 3.19 to the Registrant's Registration Statement on
Form S-4, File No. 333-32975, and incorporated herein by
reference)
3.20 Articles of Incorporation of RPI Holdings, Inc. (previously
filed as Exhibit 3.20 to the Registrant's Registration
Statement on Form S-4, File No. 333-58131, and incorporated
herein by reference)
</TABLE>
E-2
<PAGE> 257
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
3.21 Bylaws of RPI Holdings, Inc. (previously filed as Exhibit 3.21
to the Registrant's Registration Statement on Form S-4, File
No. 58131, and incorporated herein by reference)
3.22 Restated Articles of Incorporation of Howell Industries, Inc.
(previously filed as Exhibit 3.20 to the Registrant's
Registration Statement on Form S-4, File No. 333-32975).
3.23 Bylaws of Howell Industries, Inc. (previously filed as Exhibit
3.21 to the Registrant's Registration Statement on Form S-4,
File No. 333-32975).
3.24 *Articles of Incorporation of Prudenville Manufacturing, Inc.
3.25 *Bylaws of Prudenville Manufacturing, Inc.
3.26 *Articles of Incorporation of Oxford Suspension, Inc.
3.27 *Bylaws of Oxford Suspension, Inc.
3.28 *Articles of Incorporation of Oxford Suspension Ltd.
3.29 *Bylaws of Oxford Suspension Ltd.
3.30 *Articles of Incorporation of RPI, Inc.
3.31 *Bylaws of RPI, Inc.
3.32 *Articles of Incorporation of OASP, Inc.
3.33 *Bylaws of OASP, Inc.
3.34 *Articles of Incorporation of OASP II, Inc.
3.35 *Bylaws of OASP II, Inc.
4.1 Indenture, dated as of June 15, 1997, by and among the
Company, the Subsidiary Guarantors and First National Trust
Association, as Trustee (including form of the 10 1/8% Senior
Subordinated Notes Due 2007, form of the Guaranty, and form of
Supplemental Indenture) (previously filed as Exhibit 4.1 to
the Registrant's Registration Statement on Form S-4, File No.
333-32975, and incorporated herein by reference)
4.2 *Amended and Restated Credit Agreement between the Company and
NBD Bank, as agent, dated February 4, 1999.
4.3 Security Agreement between the Company and NBD Bank, as agent,
dated June 24, 1997 (previously filed as Exhibit 4.3 to the
Registrant's Registration Statement on Form S-4, File No.
333-32975, and incorporated herein by reference)
4.4 Security Agreement between 829500 Ontario Limited and First
Chicago NBD Bank Canada dated June 24, 1997 (previously filed
as Exhibit 4.4 to the Registrant's Registration Statement on
Form S-4, File No. 333-32975, and incorporated herein by
reference)
</TABLE>
E-3
<PAGE> 258
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
4.5 Security Agreement between 976459 Ontario Limited and First
Chicago NBD Bank Canada dated June 24, 1997 (previously filed
as Exhibit 4.5 to the Registrant's Registration Statement on
Form S-4, File No. 333-32975, and incorporated herein by
reference)
4.6 Security Agreement between BMG Holdings, Inc. and First
Chicago NBD Bank Canada dated June 24, 1997 (previously filed
as Exhibit 4.6 to the Registrant's Registration Statement on
Form S-4, File No. 333-32975, and incorporated herein by
reference)
4.7 Security Agreement between BMG North America Limited and First
Chicago NBD Bank Canada dated June 24, 1997 (previously filed
as Exhibit 4.7 to the Registrant's Registration Statement on
Form S-4, File No. 333-32975, and incorporated herein by
reference)
4.8 Security Agreement among Lobdell Emery and its subsidiaries
and NBD Bank, as agent, dated June 24, 1997 (previously filed
as Exhibit 4.8 to the Registrant's Registration Statement on
Form S-4, File No. 333-32975, and incorporated herein by
reference)
4.9 Guarantee Agreement among 829500 Ontario Limited, 976459
Ontario Limited, BMG Holdings, Inc. and NBD Bank, as agent,
dated June 24, 1997 (previously filed as Exhibit 4.9 to the
Registrant's Registration Statement on Form S-4, File No.
333-32975, and incorporated herein by reference)
4.10 Guarantee Agreement between BMG North America Limited and NBD
Bank, as agent, dated June 24, 1997 (previously filed as
Exhibit 4.10 to the Registrant's Registration Statement on
Form S-4, File No. 333-32975, and incorporated herein by
reference)
4.11 Guarantee Agreement among Lobdell Emery and its subsidiaries
and NBD Bank, as agent, dated June 24, 1997 (previously filed
as Exhibit 4.11 to the Registrant's Registration Statement on
Form S-4, File No. 333-32975, and incorporated herein by
reference)
4.12 Pledge Agreement and Irrevocable Proxy between the Company and
NBD Bank, as agent, dated June 24, 1997 (previously filed as
Exhibit 4.12 to the Registrant's Registration Statement on
Form S-4, File No. 333-32975, and incorporated herein by
reference)
4.13 Pledge Agreement and Irrevocable Proxy between Lobdell Emery
and NBD Bank, as agent, dated June 24, 1997 (previously filed
as Exhibit 4.13 to the Registrant's Registration Statement on
Form S-4, File No. 333-32975, and incorporated herein by
reference)
4.14 Pledge Agreement and Irrevocable Proxy between Concept
Management Corporation and NBD Bank, as agent, dated June 24,
1997 (previously filed as Exhibit 4.14 to the Registrant's
Registration Statement on Form S-4, File No. 333-32975, and
incorporated herein by reference)
4.15 Subrogation and Contribution Agreement among the Company and
the Guarantors, dated June 24, 1997 (previously filed as
Exhibit 4.15 to the Registrant's Registration Statement on
Form S-4, File No. 333-32975, and incorporated herein by
reference)
4.16 *Pledge Agreement and Irrevocable Proxy between the Company
and NBD Bank, as agent, dated February 4, 1999.
4.17 *Pledge Agreement and Irrevocable Proxy between OASP, Inc. and
NBD Bank, as agent, dated February 4, 1999.
4.18 *Joinder Agreement among the Company, certain subsidiaries of
the Company, certain lenders, and NBD Bank, as agent, dated
February 4, 1999.
</TABLE>
E-4
<PAGE> 259
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
4.19 *Consent and Amendment of Security Documents among the
Company, certain subsidiaries of the Company, and NBD Bank, as
agent, dated February 4, 1999.
4.20 Registration Rights Agreement dated April 1, 1998 by and among
the Company, the Subsidiary Guarantors and the Initial
Purchaser (previously filed as Exhibit 4.3 to the Registrant's
Annual Report on Form 10-K for the fiscal year ended March 31,
1998, and incorporated herein by reference)
4.21 Indenture, dated as of December 1, 1998, by and among the
Company, the Subsidiary Guarantors and U.S. Bank Trust
National Association, as Trustee (including form of the 10
1/8% Senior Subordinated Notes Due 2007, Series C, form of
Guaranty, and form of Supplemental Indenture) (previously
filed as Exhibit 4.1 to the Registrant's Quarterly Report on
Form 10-Q for the fiscal quarter ended December 31, 1998, File
No. 333-58131, and incorporated herein by reference)
4.22 Registration Rights Agreement dated December 8, 1998 by and
among the Registrant, the Subsidiary Guarantors and the
Initial Purchasers of the 10 1/8% Senior Subordinated Notes
Due 2007, Series C (previously filed as Exhibit 4.2 to the
Registrant's Quarterly Report on Form 10-Q for the fiscal
quarter ended December 31, 1998, File No. 333-58131, and
incorporated herein by reference)
4.23 *Amended and Restated Credit Agreement between the Company and
NBD Bank, as agent, dated March 31, 1999.
4.24 *Consent and Amendment of Security Documents among the Company,
certain subsidiaries of the Company, and NBD Bank, as agent,
dated March 31, 1999.
5.1 *Opinion of Dykema Gossett PLLC
5.2 *Opinion of Fasken Campbell Godfrey
10.1 Form of RPI Note (previously filed as Exhibit 10.1 to the
Registrant's Registration Statement on Form S-4, File No.
333-32975, and incorporated herein by reference)
10.2 Form of Director Indemnification Agreement (previously filed
as Exhibit 10.2 to the Registrant's Registration Statement on
Form S-4, File No. 333-32975, and incorporated herein by
reference)
10.3 Employment and Noncompetition Agreement between the Company
and Steven M. Abelman (previously filed as Exhibit 10.3 to the
Registrant's Registration Statement on Form S-4, File No.
333-32975, and incorporated herein by reference)
10.4 Employment Agreement between BMG North America and Larry C.
Cornwall (previously filed as Exhibit 10.5 to the Registrant's
Registration Statement on Form S-4, File No. 333- 32975, and
incorporated herein by reference)
10.5 Shareholders Agreement among certain of the Shareholders of
the Company and BMG-MI, Inc. (now known as Oxford Automotive,
Inc.), dated October 23, 1995 (previously filed as Exhibit
10.6 to the Registrant's Registration Statement on Form S-4,
File No. 333-32975, and incorporated herein by reference)
10.6 Shareholders Agreement among certain of the Shareholders of
the Company and the Company dated January 10, 1997 (previously
filed as Exhibit 10.7 to the Registrant's Registration
Statement on Form S-4, File No. 333-32975, and incorporated
herein by reference)
10.7 Management and Consulting Agreement ("Management Agreement")
between the Company and The Oxford Investment Group, Inc.,
dated June 24, 1997 (previously filed as Exhibit 10.8 to the
Registrant's Registration Statement on Form S-4, File No.
333-32975, and incorporated herein by reference)
10.8 Settlement Agreement and Mutual Release, dated July 15, 1997,
regarding Lobdell Preferred Shareholders (previously filed as
Exhibit 10.9 to the Registrant's Registration Statement on
Form S-4, File No. 333-32975, and incorporated herein by
reference)
</TABLE>
E-5
<PAGE> 260
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
10.9 Amendment to Management Agreement, dated November 24, 1997
(previously filed as Exhibit 10.10 to the Registrant's Annual
Report on Form 10-K for the fiscal year ended March 31, 1998,
and incorporated herein by reference)
10.10 Form of Purchase Agreement among the Company and the Initial
Purchasers of the 10 1/8% Senior Subordinated Notes
(previously filed as Exhibit 10.11 to the Registrant's Annual
Report on Form 10-K for the fiscal year ended March 31, 1998,
and incorporated herein by reference)
10.11 Purchase Agreement among the Registrant and the Initial
Purchasers of the 10 1/8% Senior Subordinated Notes Due 2007,
Series C, dated December 1, 1998 (previously filed as Exhibit
10.1 to the Registrant's Quarterly Report on Form 10-Q for the
fiscal Quarter ended December 31, 1998, File No. 333-58131,
and incorporated herein by reference)
12 *Statement regarding computation of ratios
21 *Subsidiaries of the Registrant
23.1 *Consent of PricewaterhouseCoopers LLP
23.2 *Consent of PricewaterhouseCoopers LLP
23.3 *Consent of PricewaterhouseCoopers LLP
23.4 *Consent of PricewaterhouseCoopers LLP
23.5 *Consent of PricewaterhouseCoopers LLP
23.6 *Consent of PricewaterhouseCoopers LLP
23.7 *Consent of Deloitte & Touche LLP
23.7 *Consent of Dykema Gossett PLLC (included in Exhibit 5.1
hereof)
23.8 *Consent of Fasken Campbell Godfrey (included in Exhibit 5.2
hereof)
24 *Powers of Attorney (included on signature pages to this
Registration Statement)
25 *Form T-1 Statement of Eligibility and Qualification on Form
T-1 of U.S. Bank Trust, National Association (formerly known
as First Trust National Association)
99.1 *Form of Letter of Transmittal
99.2 *Form of Notice of Guaranteed Delivery
- ----------
</TABLE>
* Filed herewith
E-6
<PAGE> 1
EXHIBIT 2.9
AMENDMENT NO. 1
TO THE SHARE AND DEBT PURCHASE AND SALE AGREEMENT
DATED DECEMBER 15, 1998
-----------------------
The Share and Debt Purchase and Sale Agreement dated December 15, 1998
entered into between Valfond (as defined therein) and OAF (as defined therein)
is hereby amended as follows:
1. Amendment to Article 8.3 - Termination
The date of January 15, 1999 referred to in paragraph (a)(i) of Article
8.3 is replaced by January 21, 1999.
Dated: December 28, 1998
Signed Signed
- ----------------------------- ------------------------------
Herve Guillaume Rex E. Schlaybaugh, Jr.
on behalf of Valfond for Oxford Automotive, Inc.
in the name and on behalf of
Oxford Automotive France SAS
<PAGE> 2
AMENDMENT NO. 2
TO THE SHARE AND DEBT PURCHASE AND SALE AGREEMENT
DATED DECEMBER 15, 1998
-----------------------
The Share and Debt Purchase and Sale Agreement dated December 15, 1998
entered into between Valfond (as defined therein) and OAF (as defined therein),
as amended by the Amendment No. 1 dated December 28, 1998 between Valfond and
OAF (the "Amendment No. 1"), is hereby amended as follows:
1. Amendment to Article 8.3 - Termination
The date of January 21, 1999 referred to in paragraph (a)(i) of Article
8.3 as amended by the Amendment No. 1 is replaced by February 5, 1999.
Dated: January 20, 1999
Signed Signed
- ----------------------------- -----------------------------
Herve Guillaume Rex E. Schlaybaugh, Jr.
on behalf of Groupe Valfond S.A. for Oxford Automotive, Inc. in
the name and on behalf of
Oxford Automotive France SAS
<PAGE> 1
EXHIBIT 3.24
ARTICLES OF INCORPORATION
FOR USE BY DOMESTIC PROFIT CORPORATIONS
Pursuant to Act 284, Public Acts of 1972, as amended, the undersigned
corporation executes the following Articles:
ARTICLE I
The name of the corporation is Prudenville Manufacturing, Inc.
ARTICLE II
The purpose for which the corporation is formed is to engage in any activity
within the purposes for which corporations may be formed under the Business
Corporation act of Michigan.
ARTICLE III
The total authorized shares are 60,000.
ARTICLE IV
The address and mailing address of the registered office is: 505 North Woodward
Avenue, Suite 3000, Bloomfield Hills, Michigan 48304-2967. The name of the
resident agent at the registered office is Rex. E. Schlaybaugh, Jr.
ARTICLE V
The name and address of the incorporator is: Stuart D. Logan, 400 Renaissance
Center, L-2, Detroit, Michigan 48243.
<PAGE> 2
ARTICLE VI
When a compromise or arrangement or a plan of reorganization of this corporation
is proposed between this corporation and its creditors or any class of them or
between this corporation and its shareholders or any class of them, a court of
equity jurisdiction within the state, on application of this corporation or of a
creditor or shareholder thereof, or on application of a receiver appointed for
the corporation, may order a meeting of the creditors or class of creditors or
of the shareholders or class of shareholders to be affected by the proposed
compromise or arrangement or reorganization, to be summoned in such manner as
the court directs. If a majority in number representing three-fourths in value
of the creditors or class of creditors, or of the shareholders or class of
shareholders to be affected by the proposed compromise or arrangement or a
reorganization agree to a compromise or arrangement or a reorganization of this
corporation as a consequence of the compromise or arrangement, the compromise or
arrangement and the reorganization, if sanctioned by the court to which the
application has been made, shall be binding on all the creditors or class of
creditors, or on all the shareholders or class of shareholders and also on this
corporation.
ARTICLE VII
Any action required or permitted by the Act to be taken at an annual or special
meeting of shareholders may be taken without a meeting, without prior notice and
without a vote, if consents in writing, setting forth the action so taken, are
signed by the holders of outstanding shares having not less than the minimum
number of votes that would be necessary to authorize or take the action at a
meeting at which all shares entitled to vote on the action were present and
voted. The written consents shall bear the date of signature of each shareholder
who signs the consent. No written consent shall be effective to take the
corporate action referred to unless, within 60 days after the record date for
determining shareholders entitled to express consent to or to dissent from a
proposal without a meeting, written consents signed by a sufficient number of
shareholders to take the action are delivered to the corporation. Delivery shall
be to the corporation's registered office, its principal place of business, or
an officer or agent of the corporation having custody of the minutes of the
proceedings of its shareholders. Deliveries made to a corporation's registered
office shall be by hand or by certified or registered mail, return receipt
requested.
Prompt notice of the taking of the corporate action without a meeting by less
than unanimous written consent shall be given to shareholders who have not
consented in writing.
2
<PAGE> 3
ARTICLE VIII
The corporation shall not be governed by Chapter 7a of the Michigan Business
Corporation Act. This Article VIII may be altered, amended or repealed by the
affirmative vote of a majority of the outstanding shares of stock of the
corporation entitled to vote thereon.
ARTICLE IX
No director of the corporation shall be personally liable to the corporation or
its shareholders for monetary damages for breach of fiduciary duty as a
director, provided that the foregoing shall not eliminate or limit the liability
of a director for any of the following: (i) a breach of the director's duty of
loyalty to the corporation or its shareholders, (ii) acts or omissions not in
good faith or that involve intentional misconduct or knowing violation of law,
(iii) a violation of Section 551(1) of the Michigan Business Corporation Act or
(iv) a transaction from which the director derived an improper personal benefit.
If the Michigan business Corporation Act hereafter is amended to authorize the
further elimination or limitation of the liability of directors, then the
liability of a director of the corporation, in addition to the limitation on
personal liability contained herein, shall be eliminated or limited to the
fullest extent permitted by the Michigan Business Corporation Act as so amended.
No amendment or repeal of this Article IX shall apply to or have any effect on
the liability or alleged liability of any director of the corporation for or
with respect to any acts or omissions of such director occurring prior to the
effective date of any such amendment or repeal.
ARTICLE X
The initial members of the board of the directors of the corporation shall be
Steven Lord, Clark Headley, Martin Stevenson and William Murray.
ARTICLE XI
Once shares of corporation common stock have been issued, no further shares of
such stock shall be issued by the corporation without the consent of the
shareholders of the corporation, as expressed by a majority vote of all issued
and outstanding shares.
3
<PAGE> 4
I, THE INCORPORATOR, SIGN MY NAME THIS 21ST DAY OF MARCH, 1994.
------------------------------------
Stuart D. Logan
Please return filed Articles to:
Stuart D. Logan
Dykema Gossett
400 Renaissance Center
Detroit, Michigan 48243
4
<PAGE> 1
EXHIBIT 3.25
BYLAWS
OF
PRUDENVILLE MANUFACTURING, INC.
ARTICLE I
OFFICES
1.01 Principal Office. The principal office of the corporation shall be at
such place within the State of Michigan as the board of directors of the
corporation (the "Board") shall determine from time to time.
1.02 Other Offices. The corporation also may have offices at such other
places as the Board from time to time determines or the business of the
corporation requires.
ARTICLE II
SEAL
2.01 Seal. The corporation may have a seal in such form as the Board may
from time to time determine. The seal may be used by causing it or a facsimile
to be impressed, affixed, reproduced or otherwise.
ARTICLE III
CAPITAL STOCK
3.01 Issuance of Shares. The shares of capital stock of the corporation
shall be issued in such amounts, at such times, for such consideration and on
such terms and conditions as the Board shall deem advisable, subject to the
Articles of Incorporation and any requirements of the laws of the State of
Michigan.
3.02 Certificates for Shares. The shares of the corporation shall be
represented by certificates signed by the Chairman of the Board, President or a
Vice President and also may be signed by the Treasurer, Assistant Treasurer,
Secretary or Assistant Secretary of the corporation, and may be sealed with the
seal of the corporation or a facsimile thereof. A certificate representing
shares shall state upon its face that the corporation is formed under the laws
of the State of Michigan, the name of the person to whom it is issued, the
number and class of shares, and the designation of
<PAGE> 2
the series, if any, which the certificate represents, and such other provisions
as may be required by the laws of the State of Michigan.
3.03 Transfer of Shares. The shares of the capital stock of the
corporation are transferable only on the books of the corporation upon surrender
of the certificate therefor, properly endorsed for transfer, and the
presentation of such evidences of ownership and validity of the assignment as
the corporation may require.
3.04 Registered Shareholders. The corporation shall be entitled to treat
the person in whose name any share of stock is registered as the owner thereof
for purposes of dividends and other distributions in the course of business, or
in the course of recapitalization, merger, plan of share exchange,
reorganization, sale of assets, liquidation or otherwise and for the purpose of
votes, approvals and consents by shareholders, and for the purpose of notices to
shareholders, and for all other purposes whatever, and shall not be bound to
recognize any equitable or other claim to or interest in such shares on the part
of any other person, whether or not the corporation shall have notice thereof,
save as expressly required by the laws of the State of Michigan.
3.05 Lost or Destroyed Certificates. Upon the presentation to the
corporation of a proper affidavit attesting the loss, destruction or mutilation
of any certificate or certificates for shares of stock of the corporation, the
Board shall direct the issuance of a new certificate or certificates to replace
the certificates so alleged to be lost, destroyed or mutilated. The Board may
require as a condition precedent to the issuance of new certificates a bond or
agreement of indemnity, in such form and amount and with such sureties, or
without sureties, as the Board may direct or approve.
ARTICLE IV
MEETINGS OF SHAREHOLDERS
4.01 Place of Meetings. All meetings of shareholders shall be held at the
principal office of the corporation or at such other place as shall be
determined by the Board and stated in the notice of meeting.
4.02 Annual Meeting. The annual meeting of the shareholders of the
corporation shall be held on the last Monday of the fourth calendar month after
the end of the corporation's fiscal year at 2 o'clock in the afternoon.
Directors shall be elected at each annual meeting and such other business
transacted as may come before the meeting.
4.03 Special Meetings. Special meetings of shareholders may be called by
the Board, the Chairman of the Board (if such office is filled) or the President
and shall be called by the President or Secretary at the written request of
shareholders holding a majority of the shares of stock of the
2
<PAGE> 3
corporation outstanding and entitled to vote. The request shall state the
purpose or purposes for which the meeting is to be called.
4.04 Notice of Meetings. Except as otherwise provided by statute, written
notice of the time, place and purposes of a meeting of shareholders shall be
given not fewer than 10 nor more than 60 days before the date of the meeting to
each shareholder of record entitled to vote at the meeting, either personally or
by mailing such notice to his last address as it appears on the books of the
corporation. No notice need be given of an adjourned meeting of the shareholders
provided the time and place to which such meeting is adjourned are announced at
the meeting at which the adjournment is taken and at the adjourned meeting only
such business is transacted as might have been transacted at the original
meeting. However, if after the adjournment a new record date is fixed for the
adjourned meeting a notice of the adjourned meeting shall be given to each
shareholder of record on the new record date entitled to notice as provided in
this Bylaw.
4.05 Record Dates. The Board may fix in advance a date as the record date
for the purpose of determining shareholders entitled to notice of and to vote at
a meeting of shareholders or an adjournment thereof, or to express consent or to
dissent from a proposal without a meeting, or for the purpose of determining
shareholders entitled to receive payment of a dividend or allotment of a right,
or for the purpose of any other action. The date fixed shall not be more than 60
nor fewer than 10 days before the date of the meeting, nor more than 60 days
before any other action. In such case only such shareholders as shall be
shareholders of record on the date so fixed shall be entitled to notice of and
to vote at such meeting or adjournment thereof, or to express consent or to
dissent from such proposal, or to receive payment of such dividend or to receive
such allotment of rights, or to participate in any other action, as the case may
be, notwithstanding any transfer of any stock on the books of the corporation,
or otherwise, after any such record date. Nothing in this Bylaw shall affect the
rights of a shareholder and his transferee or transferor as between themselves.
4.06 List of Shareholders. The Secretary of the corporation or the agent
of the corporation having charge of the stock transfer records for shares of the
corporation shall make and certify a complete list of the shareholders entitled
to vote at a shareholders' meeting or any adjournment thereof. The list shall be
arranged alphabetically within each class and series, with the address of, and
the number of shares held by, each shareholder; be produced at the time and
place of the meeting; be subject to inspection by any shareholder during the
whole time of the meeting; and be prima facie evidence as to who are the
shareholders entitled to examine the list or vote at the meeting.
4.07 Quorum. Unless a greater or lesser quorum is required in the Articles
of Incorporation or by the laws of the State of Michigan, the shareholders
present at a meeting in person or by proxy who, as of the record date for such
meeting, were holders of a majority of the outstanding shares of the corporation
entitled to vote at the meeting shall constitute a quorum at the meeting.
Whether or not a quorum is present, a meeting of shareholders may be adjourned
by a vote of the shares present in person or by proxy. When the holders of a
class or series of shares are
3
<PAGE> 4
entitled to vote separately on an item of business, this Bylaw applies in
determining the presence of a quorum of such class or series for transaction of
such item of business.
4.08 Proxies. A shareholder entitled to vote at a meeting of shareholders
or to express consent or dissent without a meeting may authorize other persons
to act for the shareholder by proxy. A proxy shall be signed by the shareholder
or the shareholder's authorized agent or representative and shall not be valid
after the expiration of three years from its date unless otherwise provided in
the proxy. A proxy is revocable at the pleasure of the shareholder executing it
except as otherwise provided by the laws of the State of Michigan.
4.09 Voting. Each outstanding share is entitled to one vote on each matter
submitted to a vote, unless otherwise provided in the Articles of Incorporation.
Votes may be cast orally or in writing, but if more than 25 shareholders of
record are entitled to vote, then votes shall be cast in writing signed by the
shareholder or the shareholder's proxy. When an action, other than the election
of directors, is to be taken by a vote of the shareholders, it shall be
authorized by a majority of the votes cast by the holders of shares entitled to
vote thereon, unless a greater vote is required by the Articles of Incorporation
or by the laws of the State of Michigan. Except as otherwise provided by the
Articles of Incorporation, directors shall be elected by a plurality of the
votes cast at any election.
ARTICLE V
DIRECTORS
5.01 Number. The business and affairs of the corporation shall be managed
by a Board of not fewer than one, nor more than nine, directors, as such number
shall be set from time to time by the Board. The directors need not be residents
of Michigan or shareholders of the corporation.
5.02 Election, Resignation and Removal. Directors shall be elected at each
annual meeting of the shareholders, each to hold office until the next annual
meeting of shareholders and until the director's successor is elected and
qualified, or until the director's resignation or removal. A director may resign
by written notice to the corporation. The resignation is effective upon its
receipt by the corporation or a subsequent time as set forth in the notice of
resignation. A director or the entire Board may be removed, with or without
cause, by vote of the holders of a majority of the shares entitled to vote at an
election of directors.
5.03 Vacancies. Vacancies in the Board occurring by reason of death,
resignation, removal, increase in the number of directors or otherwise shall be
filled by the affirmative vote of a majority of the remaining directors though
fewer than a quorum of the Board, unless filled by proper action of the
shareholders of the corporation. Each person so elected shall be a director for
a term of office continuing only until the next election of directors by the
shareholders. A vacancy that will occur at a specific date, by reason of a
resignation effective at a later date or otherwise, may
4
<PAGE> 5
be filled before the vacancy occurs, but the newly elected director may not take
office until the vacancy occurs.
5.04 Annual Meeting. The Board shall meet each year immediately after the
annual meeting of the shareholders, or within three days of such time excluding
Sundays and legal holidays if such later time is deemed advisable, at the place
where such meeting of the shareholders has been held or such other place as the
Board may determine, for the purpose of election of officers and consideration
of such business that may properly be brought before the meeting; provided, that
if less than a majority of the directors appear for an annual meeting of the
Board the holding of such annual meeting shall not be required and the matters
which might have been taken up therein may be taken up at any later special or
annual meeting, or by consent resolution.
5.05 Regular and Special Meetings. Regular meetings of the Board may be
held at such times and places as the majority of the directors may from time to
time determine at a prior meeting or as shall be directed or approved by the
vote or written consent of all the directors. Special meetings of the Board may
be called by the Chairman of the Board (if such office is filled) or the
President and shall be called by the President or Secretary upon the written
request of any two directors.
5.06 Notices. No notice shall be required for annual or regular meetings
of the Board or for adjourned meetings, whether regular or special. Three days'
written notice shall be given for special meetings of the Board, and such notice
shall state the time, place and purpose or purposes of the meeting.
5.07 Quorum. A majority of the Board then in office, or of the members of
a committee thereof, constitutes a quorum for the transaction of business. The
vote of a majority of the directors present at any meeting at which there is a
quorum shall be the acts of the Board or of the committee, except as a larger
vote may be required by the laws of the State of Michigan. A member of the Board
or of a committee designated by the Board may participate in a meeting by means
of conference telephone or similar communications equipment by means of which
all persons participating in the meeting can communicate with each other.
Participation in a meeting in this manner constitutes presence in person at the
meeting.
5.08 Executive and Other Committees. The Board may, by resolution passed
by a majority of the whole Board, appoint three or more members of the Board as
an executive committee to exercise all powers and authorities of the Board in
management of the business and affairs of the corporation, except that the
committee shall not have power or authority to (a) amend the Articles of
Incorporation; (b) adopt an agreement of merger or consolidation; (c) recommend
to shareholders the sale, lease or exchange of all or substantially all of the
corporation's property and assets; (d) recommend to shareholders a dissolution
of the corporation or revocation of a dissolution; (e) amend these Bylaws; (f)
fill vacancies in the Board; or (g) unless expressly authorized by the Board,
declare a dividend or authorize the issuance of stock.
5
<PAGE> 6
The Board from time to time may, by like resolution, appoint such other
committees of one or more directors to have such authority as shall be specified
by the Board in the resolution making such appointments. The Board may designate
one or more directors as alternate members of any committee who may replace an
absent or disqualified member at any meeting thereof.
5.09 Dissents. A director who is present at a meeting of the Board, or a
committee thereof of which the director is a member, at which action on a
corporate matter is taken is presumed to have concurred in that action unless
the director's dissent is entered in the minutes of the meeting or unless the
director files a written dissent to the action with the person acting as
secretary of the meeting before the adjournment thereof or shall forward such
dissent by registered mail to the Secretary of the corporation promptly after
the adjournment of the meeting. Such right to dissent does not apply to a
director who voted in favor of such action. A director who is absent from a
meeting of the Board, or a committee thereof of which the director is a member,
at which any such action is taken is presumed to have concurred in the action
unless the director files a written dissent with the Secretary of the
corporation within a reasonable time after the director has knowledge of the
action.
5.10 Compensation. The Board, by affirmative vote of a majority of
directors in office and irrespective of any personal interest of any of them,
may establish reasonable compensation of directors for services to the
corporation as directors or officers.
ARTICLE VI
NOTICE AND MANNER OF ACTING
6.01 Notices. All notices of meetings required to be given to
shareholders, directors or any committee of directors may be given by mail,
telecopy, telegram, radiogram or cablegram to any shareholder, director or
committee member at his last address as it appears on the books of the
corporation. Such notice shall be deemed to be given at the time when the same
shall be mailed or otherwise dispatched.
6.02 Waiver of Notice. Notice of the time, place and purpose of any
meeting of shareholders, directors or committee of directors may be waived by
telecopy, telegram, radiogram, cablegram or other writing, either before or
after the meeting, or in such other manner as may be permitted by the laws of
the State of Michigan. Attendance of a person at any meeting of shareholders, in
person or by proxy, or at any meeting of directors or of a committee of
directors, constitutes a waiver of notice of the meeting except as follows:
(a) In the case of a shareholder, unless the shareholder at the
beginning of the meeting objects to holding the meeting or transacting
business at the meeting, or unless with respect to consideration of a
particular matter at the meeting that is not within the purpose
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or purposes described in the meeting notice, the shareholder objects to
considering the matter when it is presented.
(b) In the case of a director, unless he or she at the beginning of
the meeting, or upon his or her arrival, objects to the meeting or the
transacting of business at the meeting and does not thereafter vote for or
assent to any action taken at the meeting.
6.03 Action Without a Meeting. Except as may be provided otherwise in the
Articles of Incorporation for action to be taken by shareholders, any action
required or permitted at any meeting of shareholders or directors or committee
of directors may be taken without a meeting, without prior notice and without a
vote, if all of the shareholders or directors or committee members entitled to
vote thereon consent thereto in writing, before or after the action is taken.
ARTICLE VII
OFFICERS
7.01 Number. The Board shall elect or appoint a President, a Secretary and
a Treasurer, and may select a Chairman of the Board, and one or more Vice
Presidents, Assistant Secretaries or Assistant Treasurers. The President and
Chairman of the Board, if any, shall be members of the Board. Any two or more of
the above offices, except those of President and Vice President, may be held by
the same person. No officer shall execute, acknowledge or verify an instrument
in more than one capacity if the instrument is required by law, the Articles of
Incorporation or these Bylaws to be executed, acknowledged, or verified by one
or more officers.
7.02 Term of Office, Resignation and Removal. An officer shall hold office
for the term for which he is elected or appointed and until his successor is
elected or appointed and qualified, or until his resignation or removal. An
officer may resign by written notice to the corporation. The resignation is
effective upon its receipt by the corporation or at a subsequent time specified
in the notice of resignation. An officer may be removed by the Board with or
without cause. The removal of an officer shall be without prejudice to his
contract rights, if any. The election or appointment of an officer does not of
itself create contract rights.
7.03 Vacancies. The Board may fill any vacancies in any office occurring
for whatever reason.
7.04 Authority. All officers, employees and agents of the corporation
shall have such authority and perform such duties in the conduct and management
of the business and affairs of the corporation as may be designated by the Board
and these Bylaws.
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ARTICLE VIII
DUTIES OF OFFICERS
8.01 Chairman of the Board. The Chairman of the Board, if such office is
filled, shall preside at all meetings of the shareholders and of the Board at
which the Chairman is present.
8.02 President. The President shall be the chief executive officer of the
corporation. The President shall see that all orders and resolutions of the
Board are carried into effect, and the President shall have the general powers
of supervision and management usually vested in the chief executive officer of a
corporation, including the authority to vote all securities of other
corporations and business organizations held by the corporation. In the absence
or disability of the Chairman of the Board, or if that office has not been
filled, the President also shall perform the duties of the Chairman of the Board
as set forth in these Bylaws.
8.03 Vice Presidents. The Vice Presidents, in order of their seniority,
shall, in the absence or disability of the President, perform the duties and
exercise the powers of the President and shall perform such other duties as the
Board or the President may from time to time prescribe.
8.04 Secretary. The Secretary shall attend all meetings of the Board and
of shareholders and shall record all votes and minutes of all proceedings in a
book to be kept for that purpose, shall give or cause to be given notice of all
meetings of the shareholders and of the Board, and shall keep in safe custody
the seal of the corporation and, when authorized by the Board, affix the same to
any instrument requiring it, and when so affixed it shall be attested by the
signature of the Secretary, or by the signature of the Treasurer or an Assistant
Secretary. The Secretary may delegate any of the duties, powers and authorities
of the Secretary to one or more Assistant Secretaries, unless such delegation is
disapproved by the Board.
8.05 Treasurer. The Treasurer shall have the custody of the corporate
funds and securities; shall keep full and accurate accounts of receipts and
disbursements in books of the corporation; and shall deposit all moneys and
other valuable effects in the name and to the credit of the corporation in such
depositories as may be designated by the Board. The Treasurer shall render to
the President and directors, whenever they may require it, an account of his or
her transactions as Treasurer and of the financial condition of the corporation.
The Treasurer may delegate any of his or her duties, powers and authorities to
one or more Assistant Treasurers unless such delegation is disapproved by the
Board.
8.06 Assistant Secretaries and Treasurers. The Assistant Secretaries, in
order of their seniority, shall perform the duties and exercise the powers and
authorities of the Secretary in case of the Secretary's absence or disability.
The Assistant Treasurers, in the order of their seniority, shall perform the
duties and exercise the powers and authorities of the Treasurer in case of the
Treasurer's absence or disability. The Assistant Secretaries and Assistant
Treasurers shall also perform such
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duties as may be delegated to them by the Secretary and Treasurer, respectively,
and also such duties as the Board may prescribe.
ARTICLE IX
SPECIAL CORPORATE ACTS
9.01 Orders for Payment of Money. All checks, drafts, notes, bonds, bills
of exchange and orders for payment of money of the corporation shall be signed
by such officer or officers or such other person or persons as the Board may
from time to time designate.
9.02 Contracts and Conveyances. The Board of the corporation may in any
instance designate the officer and/or agent who shall have authority to execute
any contract, conveyance, mortgage or other instrument on behalf of the
corporation, or may ratify or confirm any execution. When the execution of any
instrument has been authorized without specification of the executing officers
or agents, the Chairman of the Board, the President or any Vice President, and
the Secretary or Assistant Secretary or Treasurer or Assistant Treasurer, may
execute the same in the name and on behalf of this corporation and may affix the
corporate seal thereto.
ARTICLE X
BOOKS AND RECORDS
10.01 Maintenance of Books and Records. The proper officers and agents of
the corporation shall keep and maintain such books, records and accounts of the
corporation's business and affairs, minutes of the proceedings of its
shareholders, Board and committees, if any, and such stock ledgers and lists of
shareholders, as the Board shall deem advisable, and as shall be required by the
laws of the State of Michigan and other states or jurisdictions empowered to
impose such requirements. Books, records and minutes may be kept within or
without the State of Michigan in a place which the Board shall determine.
10.02 Reliance on Books and Records. In discharging his or her duties, a
director or an officer of the corporation, when acting in good faith, may rely
upon information, opinions, reports, or statements, including financial
statements and other financial data, if prepared or presented by any of the
following:
(a) One or more directors, officers, or employees of the
corporation, or of a business organization under joint control or common
control, whom the director or officer reasonably believes to be reliable
and competent in the matters presented.
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(b) Legal counsel, public accountants, engineers, or other persons
as to matters the director or officer reasonably believes are within the
person's professional or expert competence.
(c) A committee of the board of which he or she is not a member if
the director or officer reasonably believes the committee merits
confidence.
A director or officer is not entitled to rely on the information set forth above
if he or she has knowledge concerning the matter in question that makes reliance
otherwise permitted unwarranted.
ARTICLE XI
INDEMNIFICATION
11.01 Non-Derivative Actions. Subject to all of the other provisions of
this Article XI, the corporation shall indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative and whether formal or informal (other than an action by or in the
right of the corporation) by reason of the fact that the person is or was a
director or officer of the corporation, or is or was serving at the request of
the corporation as a director, officer, partner, trustee, employee, or agent of
another foreign or domestic corporation, partnership, joint venture, trust or
other enterprise, whether for profit or not, against expenses (including actual
and reasonable attorneys' fees), judgments, penalties, fines, and amounts paid
in settlement actually and reasonably incurred by him or her in connection with
such action, suit or proceeding if the person acted in good faith and in a
manner the person reasonably believed to be in or not opposed to the best
interests of the corporation or its shareholders, and with respect to any
criminal action or proceeding, if the person had no reasonable cause to believe
his or her conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction, or upon a plea of nolo
contendere or its equivalent, shall not, of itself, create a presumption that
the person did not act in good faith and in a manner which the person reasonably
believed to be in or not opposed to the best interests of the corporation or its
shareholders, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his or her conduct was unlawful.
11.02 Derivative Actions. Subject to all of the provisions of this Article
XI, the corporation shall indemnify any person who was or is a party to or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the corporation to procure a judgment in its favor by
reason of the fact that the person is or was a director or officer of the
corporation, or is or was serving at the request of the corporation as a
director, officer, partner, trustee, employee, or agent of another corporation,
or of a partnership, joint venture, trust or other enterprise, whether for
profit or not, against expenses (including attorneys' fees) and amounts paid in
settlement actually and reasonably incurred by the person in connection with
such action or suit
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if the person acted in good faith and in a manner the person reasonably believed
to be in or not opposed to the best interests of the corporation or its
shareholders. However, indemnification shall not be made for any claim, issue or
matter in which such person has been found liable to the corporation unless and
only to the extent that the court in which such action or suit was brought has
determined upon application that, despite the adjudication of liability but in
view of all circumstances of the case, such person is fairly and reasonably
entitled to indemnification for the reasonable expenses incurred.
11.03 Expenses of Successful Defense. To the extent that a person has been
successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in Section 11.01 or 11.02 of these Bylaws, or in defense
of any claim, issue or matter in the action, suit or proceeding, the person
shall be indemnified against actual and reasonable expenses (including
attorneys' fees) incurred by such person in connection with the action, suit or
proceeding and any action, suit or proceeding brought to enforce the mandatory
indemnification provided by this Section 11.03.
11.04 Definition. For the purposes of Sections 11.01 and 11.02, "other
enterprises" shall include employee benefit plans; "fines" shall include any
excise taxes assessed on a person with respect to an employee benefit plan; and
"serving at the request of the corporation" shall include any service as a
director, officer, employee, or agent of the corporation which imposes duties
on, or involves services by, the director or officer with respect to an employee
benefit plan, its participants or beneficiaries; and a person who acted in good
faith and in a manner the person reasonably believed to be in the interest of
the participants and beneficiaries of an employee benefit plan shall be
considered to have acted in a manner "not opposed to the best interests of the
corporation or its shareholders" as referred to in Sections 11.01 and 11.02.
11.05 Contract Right; Limitation on Indemnity. The right to
indemnification conferred in this Article XI shall be a contract right, and
shall apply to services of a director or officer as an employee or agent of the
corporation as well as in such person's capacity as a director or officer.
Except as provided in Section 11.03 of these Bylaws, the corporation shall have
no obligations under this Article XI to indemnify any person in connection with
any proceeding, or part thereof, initiated by such person without authorization
by the Board.
11.06 Determination That Indemnification is Proper. Any indemnification
under Section 11.01 or 11.02 of these Bylaws (unless ordered by a court) shall
be made by the corporation only as authorized in the specific case upon a
determination that indemnification of the person is proper in the circumstances
because the person has met the applicable standard of conduct set forth in
Section 11.01 or 11.02, whichever is applicable, and upon an evaluation of the
reasonableness of expenses and amount paid in settlement. Such determination and
evaluation shall be made in any of the following ways:
(a) By a majority vote of a quorum of the Board consisting of
directors who are not parties or threatened to be made parties to such
action, suit or proceeding.
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(b) If the quorum described in clause (a) above is not obtainable,
then by a majority vote of a committee of directors duly designated by the
Board and consisting solely of two or more directors who are not at the
time parties or threatened to be made parties to the action, suit or
proceeding.
(c) By independent legal counsel in a written opinion which counsel
shall be selected in one of the following ways: (i) by the board or its
committee in the manner prescribed in subparagraph (a) or (b); or (ii) if
a quorum of the board cannot be obtained under subparagraph (a) and a
committee cannot be designated under subparagraph (b), by the board.
(d) By the shareholders, but shares held by directors or officers
who are parties or threatened to be made parties to the action, suit or
proceeding may not be voted.
11.07 Proportionate Indemnity. If a person is entitled to indemnification
under Section 11.01 or 11.02 of these Bylaws for a portion of expenses,
including attorneys' fees, judgments, penalties, fines, and amounts paid in
settlement, but not for the total amount thereof, the corporation shall
indemnify the person for the portion of the expenses, judgments, penalties,
fines, or amounts paid in settlement for which the person is entitled to be
indemnified.
11.08 Expense Advance. The corporation may pay or reimburse the reasonable
expenses incurred by a person referred to in Section 11.01 or 11.02 of these
bylaws who is a party or threatened to be made a party to an action, suit, or
proceeding in advance of final disposition of the proceeding if all of the
following apply: (a) the person furnishes the corporation a written affirmation
of his or her good faith belief that he or she has met the applicable standard
of conduct set forth in Section 11.01 or 11.02; (b) the person furnishes the
corporation a written undertaking executed personally, or on his or her behalf,
to repay the advance if it is ultimately determined that he or she did not meet
the standard of conduct; (c) the authorization of payment is made in the manner
specified in Section 11.06; and (d) a determination is made that the facts then
known to those making the determination would not preclude indemnification under
Section 11.01 or 11.02. The undertaking shall be an unlimited general obligation
of the person on whose behalf advances are made but need not be secured.
11.09 Non-Exclusivity of Rights. The indemnification or advancement of
expenses provided under this Article XI is not exclusive of other rights to
which a person seeking indemnification or advancement of expenses may be
entitled under a contractual arrangement with the corporation. However, the
total amount of expenses advanced or indemnified from all sources combined shall
not exceed the amount of actual expenses incurred by the person seeking
indemnification or advancement of expenses.
11.10 Indemnification of Employees and Agents. The corporation may, to the
extent authorized from time to time by the Board, grant rights to
indemnification and to the advancement of expenses to any employee or agent of
the corporation to the fullest extent of the provisions of this
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Article XI with respect to the indemnification and advancement of expenses of
directors and officers of the corporation.
11.11 Former Directors and Officers. The indemnification provided in this
Article XI continues as to a person who has ceased to be a director or officer
and shall inure to the benefit of the heirs, executors and administrators of
such person.
11.12 Insurance. The corporation may purchase and maintain insurance on
behalf of any person who is or was a director, officer, partner, trustee,
employee or agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against any liability
asserted against the person and incurred by him or her in any such capacity or
arising out of his or her status as such, whether or not the corporation would
have power to indemnify the person against such liability under these Bylaws or
the laws of the State of Michigan.
11.13 Changes in Michigan Law. In the event of any change of the Michigan
statutory provisions applicable to the corporation relating to the subject
matter of this Article XI, then the indemnification to which any person shall be
entitled hereunder shall be determined by such changed provisions, but only to
the extent that any such change permits the corporation to provide broader
indemnification rights than such provisions permitted the corporation to provide
prior to any such change. Subject to Section 11.14, the Board is authorized to
amend these Bylaws to conform to any such changed statutory provisions.
11.14 Amendment or Repeal of Article XI. No amendment or repeal of this
Article XI shall apply to or have any effect on any director or officer of the
corporation for or with respect to any acts or omissions of such director or
officer occurring prior to such amendment or repeal.
ARTICLE XII
AMENDMENTS
12.01 Amendments. The Bylaws of the corporation may be amended, altered or
repealed, in whole or in part, by the shareholders or by the Board at any
meeting duly held in accordance with these Bylaws, provided that notice of the
meeting includes notice of the proposed amendment, alteration or repeal.
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EXHIBIT 3.26
ARTICLES OF INCORPORATION
(domestic profit corporation)
These Articles of Incorporation are signed by the incorporator for the
purpose of forming a profit corporation pursuant to the provisions of Act 284,
Public Acts of 1972, as amended, as follows:
ARTICLE I
Name
The name of the corporation is Oxford Suspension, Inc. (the
"Corporation").
ARTICLE II
Purpose
The purpose or purposes for which the Corporation is organized is to
engage in any activity within the purposes for which corporations may be
organized under the Michigan Business Corporation Act ("the MBCA").
ARTICLE III
Authorized Capital
The total authorized capital is 60,000 shares of Common Stock. Each share
is entitled to one vote on all matters submitted to the shareholders of the
Corporation and each share shall have all the share rights and preferences as
each other share.
ARTICLE IV
Registered Office and Resident Agent
The address of the initial registered office is 1250 Stephenson Highway,
Troy, Michigan 48083. The mailing address of the initial registered office is
1250 Stephenson Highway, Troy, Michigan 48083. The name of the initial resident
agent is Clifford Suing.
ARTICLE V
Limitation of Director Liability
No director of the Corporation shall be personally liable to the
Corporation or its shareholders for money damages for any action taken, or any
failure to take any action, except liability for any of the following: (1) the
amount of a financial benefit received by a director to which he or she is not
entitled; (2) intentional infliction of harm on the Corporation or its
shareholders; (3) a violation of Section 551 of the MBCA, MCLA 450.1551, MSA
21.200(551); or (4) an intentional violation of criminal law. If the MBCA is
amended to authorize the
<PAGE> 2
further elimination or limitation of the liability of directors, then the
liability of a director of the Corporation, in addition to the limitation on
personal liability contained in these articles of incorporation, shall be
eliminated or limited to the fullest extent permitted by the MBCA as so amended.
No amendment or repeal of this article shall apply to or have any effect on the
liability or alleged liability of any director of the Corporation for or with
respect to any acts or omissions of any director occurring before the effective
date of any such amendment or repeal.
ARTICLE VI
Compromise, Arrangement, or Plan of Reorganization
When a compromise or arrangement or a plan of reorganization of the
Corporation is proposed between the Corporation and its creditors or any class
of them or between the Corporation and its shareholders or any class of them, a
court of equity jurisdiction within the state, on application of the Corporation
or of a creditor or shareholder of it, or on application of a receiver appointed
for the Corporation, may order a meeting of the creditors or class of creditors
or of the shareholders or class of shareholders to be affected by the proposed
compromise or arrangement or reorganization, to be summoned in the manner that
the court directs. If a majority in number representing 3/4 in value of the
creditors or class of creditors, or of the shareholders or class of shareholders
to be affected by the proposed compromise or arrangement or a reorganization,
agree to a compromise or arrangement or a reorganization of the Corporation as a
consequence of the compromise or arrangement, the compromise or arrangement and
the reorganization, if sanctioned by the court to which the application has been
made, shall be binding on all the creditors or class of creditors, or on all the
shareholders or class of shareholders, and also on the Corporation.
ARTICLE VII
Corporate Action Without Meeting of Shareholders
Any action required or permitted by the Michigan Business Corporation Act
to be taken at any annual or special meeting of shareholders may be taken
without a meeting, without prior notice and without a vote, if a consent in
writing, setting forth the action so taken, is signed by the holders of
outstanding stock having not less than the minimum number of votes that would be
necessary to authorize or take the action at a meeting at which all shares
entitled to vote thereon were present and voted.
Prompt notice of the taking of the corporate action without a meeting by
less than unanimous written consent shall be given to shareholders who have not
consented in writing.
ARTICLE VIII
Incorporator
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The name and business address of the incorporator is Brendan J. Cahill,
Dykema Gossett PLLC, 1577 North Woodward Avenue, Suite 300, Bloomfield Hills,
Michigan 48304.
I, the incorporator, sign my name this 20th day of January, 1998.
/s/ Brendan J. Cahill
Brendan J. Cahill, Incorporator
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EXHIBIT 3.27
BYLAWS
OF
OXFORD SUSPENSION, INC.
ARTICLE I
Offices
1.01 Principal Office. The principal office of Oxford Suspension, Inc., a
Michigan corporation (the "Corporation") shall be at such place as the Board of
Directors shall from time to time determine.
1.02 Other Offices. The Corporation also may have offices at such other
places as the board of directors from time to time determines or the business of
the Corporation requires.
ARTICLE II
Seal
2.01 Seal. The Corporation may have a seal in the form that the board of
directors may from time to time determine. The seal may be used by causing it or
a facsimile to be impressed, affixed or otherwise reproduced.
ARTICLE III
Capital Stock
3.01 Issuance of Shares. The shares of capital stock of the Corporation
shall be issued in the amounts, at the times, for the consideration, and on the
terms and conditions that the board of directors shall deem advisable, subject
to the articles of incorporation and any requirements of the laws of the state
of Michigan.
3.02 Certificates for Shares. The shares of the Corporation shall be
represented by certificates signed by the chairperson of the board of directors,
the president, or a vice president, and also may be signed by the treasurer,
assistant treasurer, secretary, or assistant secretary, and may be sealed with
the seal of the Corporation, if any, or a facsimile of it. The signatures of the
officers may be facsimiles if the certificate is countersigned by a transfer
agent or registered by a registrar other than the Corporation itself or its
employee. In case an officer who has signed or whose facsimile signature has
been placed upon a certificate ceases to be such officer before the certificate
is issued, it may be issued by the Corporation with the same effect as if he or
she were such officer at the date of issuance. A certificate representing shares
shall state on its face that the
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Corporation is formed under the laws of the state of Michigan and shall also
state the name of the person to whom it is issued, the number and class of
shares and the designation of the series, if any, that the certificate
represents, and any other provisions that may be required by the laws of the
state of Michigan.
3.03 Transfer of Shares. The shares of the capital stock of the
Corporation are transferable only on the books of the Corporation upon surrender
of the certificate for the shares, properly endorsed for transfer, and the
presentation of the evidences of ownership and validity of the assignment that
the Corporation may require.
3.04 Registered Shareholders. The Corporation shall be entitled to treat
the person in whose name any share of stock is registered as the owner of it for
the purpose of dividends and other distributions or for any recapitalization,
merger, plan of share exchange, reorganization, sale of assets, or liquidation,
for the purpose of votes, approvals, and consents by shareholders, for the
purpose of notices to shareholders, and for all other purposes whatever, and
shall not be bound to recognize any equitable or other claim to or interest in
the shares by any other person, whether or not the Corporation shall have notice
of it, except as expressly required by the laws of the state of Michigan.
3.05 Lost or Destroyed Certificates. On the presentation to the
Corporation of a proper affidavit attesting to the loss, destruction, or
mutilation of any certificate or certificates for shares of stock of the
Corporation, the board of directors shall direct the issuance of a new
certificate or certificates to replace the certificates so alleged to be lost,
destroyed, or mutilated. The board of directors may require as a condition
precedent to the issuance of new certificates a bond or agreement of indemnity,
in the form and amount and with or without sureties, as the board of directors
may direct or approve.
ARTICLE IV
Shareholders and Meetings of Shareholders
4.01 Place of Meetings. All meetings of shareholders shall be held at the
principal office of the Corporation or at any other place that shall be
determined by the board of directors and stated in the meeting notice.
4.02 Annual Meeting. The annual meeting of the shareholders of the
Corporation shall be held on the first Thursday of April or at such other time
as the board of directors may select. Directors shall be elected at each annual
meeting and such other business transacted as may come before the meeting.
4.03 Special Meetings. Special meetings of shareholders may be called by
the board of directors, the chairperson of the board of directors (if the office
is filled) or the president and shall be called by the president or secretary at
the written request of shareholders holding a majority of
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the outstanding shares of stock of the Corporation entitled to vote. The request
shall state the purpose or purposes for which the meeting is to be called.
4.04 Notice of Meetings. Except as otherwise provided by statute, written
notice of the time, place, and purposes of a shareholders meeting shall be given
not less than 10 nor more than 60 days before the date of the meeting to each
shareholder of record entitled to vote at the meeting, either personally or by
mailing the notice to his or her last address as it appears on the books of the
Corporation. The notice shall include notice of proposals from shareholders that
are proper subjects for shareholder action and are intended to be presented by
shareholders who have so notified the Corporation in accordance with Section
4.10. No notice need be given of an adjourned meeting of the shareholders
provided that the time and place to which the meeting is adjourned are announced
at the meeting at which the adjournment is taken, and at the adjourned meeting
the only business to be transacted is business that might have been transacted
at the original meeting. However, if after the adjournment a new record date is
fixed for the adjourned meeting, a notice of the adjourned meeting shall be
given to each shareholder of record entitled to notice on the new record date as
provided in this bylaw.
4.05 Record Dates. The board of directors may fix in advance a record date
for the purpose of determining shareholders entitled to notice of and to vote at
a meeting of shareholders or an adjournment of the meeting or to express consent
to or to dissent from a proposal without a meeting; for the purpose of
determining shareholders entitled to receive payment of a dividend or an
allotment of a right; or for the purpose of any other action. The date fixed
shall not be more than 60 nor less than 10 days before the date of the meeting,
nor more than 60 days before any other action. In such case only the
shareholders that shall be shareholders of record on the date so fixed shall be
entitled to notice of and to vote at the meeting or an adjournment of the
meeting or to express consent to or to dissent from the proposal; to receive
payment of the dividend or the allotment of rights; or to participate in any
other action, notwithstanding any transfer of any stock on the books of the
Corporation, after any such record date. Nothing in this bylaw shall affect the
rights of a shareholder and his or her transferee or transferor as between
themselves.
4.06 List of Shareholders. The secretary or the agent of the Corporation
having charge of the stock transfer records for shares of the Corporation shall
make and certify a complete list of the shareholders entitled to vote at a
shareholders meeting or any adjournment of it. The list shall be arranged
alphabetically within each class and series and include the address of, and the
number of shares held by, each shareholder; be produced at the time and place of
the meeting; be subject to inspection by any shareholder during the whole time
of the meeting; and be prima facie evidence of which shareholders are entitled
to examine the list or vote at the meeting.
4.07 Quorum. Unless a greater or lesser quorum is required in the articles
of incorporation or by the laws of the state of Michigan, the shareholders
present at a meeting in person or by proxy who, as of the record date for the
meeting, were holders of a majority of the outstanding shares of the Corporation
entitled to vote at the meeting, shall constitute a quorum at the meeting.
Whether or not a quorum is present, a meeting of shareholders may be adjourned
by a vote of the shares
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present in person or by proxy. When the holders of a class or series of shares
are entitled to vote separately on an item of business, this bylaw applies in
determining the presence of a quorum of the class or series for transacting the
item of business.
4.08 Proxies. A shareholder entitled to vote at a shareholders meeting or
to express consent or to dissent without a meeting may authorize other persons
to act for the shareholder by proxy. A proxy shall be signed by the shareholder
or the shareholder's authorized agent or representative and shall not be valid
after the expiration of three years from its date unless otherwise provided in
the proxy. A proxy is revocable at the pleasure of the shareholder executing it
except as otherwise provided by the laws of the state of Michigan.
4.09 Voting. Each outstanding share is entitled to one vote on each matter
submitted to a vote, unless the articles of incorporation provide otherwise.
Votes may be cast orally or in writing, but if more than 25 shareholders of
record are entitled to vote, then votes shall be cast in writing signed by the
shareholder or the shareholder's proxy. When an action, other than the election
of directors, is to be taken by a vote of the shareholders, it shall be
authorized by a majority of the votes cast by the holders of shares entitled to
vote on it, unless a greater vote is required by the articles of incorporation
or by the laws of the state of Michigan. Except as otherwise provided by the
articles of incorporation, directors shall be elected by a plurality of the
votes cast at any election.
4.10 Notice of Shareholder Proposals. A shareholder may cause the
Corporation to include in the notice for any meeting of shareholders, notice of
proposals under Section 4.04, by giving timely written notice to the secretary
at the principal executive offices of the Corporation. To be timely, (a) with
respect to an annual meeting of shareholders pursuant to Section 4.02 (an
"Annual Meeting"), a shareholder's notice must be delivered or mailed and
received by the secretary not less than 90 days prior to the date set for the
Annual Meeting in such Section 4.02; and (b) with respect to a meeting which is
a special meeting pursuant to Section 4.03 (a "Special Meeting"), not less than
five days after the earlier of (i) the announcement by the Corporation of the
intention to call a Special Meeting; or (ii) if no such announcement is made,
the date that notice of such meeting Special Meeting is given personally or is
mailed by the Corporation pursuant to Section 4.04, in which event, the
Corporation shall promptly provide or mail a revised notice of such Special
Meeting that includes the shareholder's proposal if it qualifies for inclusion
therein as set forth in Section 4.04 and this Section 4.10. A shareholder's
notice to the secretary shall set forth, as to each matter the shareholder
proposes to bring before such meeting, (x) a brief description of the business
to be brought before the meeting; (y) the name and address, as they appear on
the Corporation's books, of the shareholder(s) proposing the business; and (z)
any material interest of such shareholder(s) in such business. All
determinations under this Section 4.10 shall be made by the board of directors,
which determinations shall be conclusive. This Section 4.10 shall be of no force
and effect during any time when the Corporation has a class of securities
registered under Section 12 of the Securities Exchange Act of 1934, as amended.
4.11 Conduct of Meeting. At each meeting of shareholders, a chair shall
preside. In the absence of a specific selection by the board of directors, the
chair shall be the Chairperson of the
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board of directors as provided in Section 8.01. The chair shall determine the
order of business and shall have the authority to establish rules for the
conduct of the meeting which are fair to shareholders. The chair of the meeting
shall announce at the meeting when the polls close for each matter voted upon.
If no announcement is made, the polls shall be deemed to have closed upon the
final adjournment of the meeting. After the polls close, no ballots, proxies or
votes, nor any revocations or changes thereto may be accepted.
4.12 Inspectors of Election. The board of directors, or the chairman of
the board of directors presiding at any shareholders' meeting, may appoint one
or more inspectors. If appointed, the inspectors shall determine the number of
shares outstanding and the voting power of each, the shares represented at the
meeting, the existence of a quorum and the validity and effect of proxies, and
shall receive votes, ballots or consents, hear and determine challenges or
consents, determine the result, and do such acts as are proper to conduct the
election or vote with fairness to all shareholders. On request of the person
presiding at the meeting, the inspectors shall make and execute a written report
to the person presiding at the meeting of any of the facts found by them and
matters determined by them. The report shall be prima facie evidence of the
facts stated and of the vote as certified by the inspectors.
ARTICLE V
Directors
5.01 Number. The business and affairs of the Corporation shall be managed
by or under the direction of a board of not less than one nor more than nine
directors, as shall be fixed from time to time by the board of directors. The
directors need not be residents of Michigan or shareholders of the Corporation.
5.02 Election, Resignation, and Removal. Directors shall be elected at
each annual shareholders meeting, each director to hold office until the next
annual shareholders meeting and until the director's successor is elected and
qualified, or until the director's resignation or removal. A director may resign
by written notice to the Corporation. The resignation is effective on its
receipt by the Corporation or at a subsequent time as set forth in the notice of
resignation. A director or the entire board of directors may be removed, with or
without cause, by vote of the holders of a majority of the shares entitled to
vote at an election of directors.
5.03 Vacancies. Vacancies in the board of directors occurring by reason of
death, resignation, removal, increase in the number of directors, or otherwise
shall be filled by the affirmative vote of a majority of the remaining directors
though less than a quorum of the board of directors, unless filled by proper
action of the shareholders of the Corporation. Each person so elected shall be a
director for a term of office continuing only until the next election of
directors by the shareholders. A vacancy that will occur at a specific date, by
reason of a resignation effective at a later date or otherwise, may be filled
before the vacancy occurs, but the newly elected director may not take office
until the vacancy occurs.
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5.04 Annual Meeting. The board of directors shall meet each year
immediately after the annual meeting of the shareholders, or within three days
of such time, excluding Sundays and legal holidays, if the later time is deemed
advisable, at the place where the shareholders meeting has been held or any
other place that the board of directors may determine, for the purpose of
electing officers and considering such business that may properly be brought
before the meeting; provided that, if less than a majority of the directors
appear for an annual meeting of the board of directors, the holding of the
annual meeting shall not be required and the matters that might have been taken
up in it may be taken up at any later special or annual meeting, or by consent
resolution.
5.05 Regular and Special Meetings. Regular meetings of the board of
directors may be held at the times and places that the majority of the directors
may from time to time determine at a prior meeting or as shall be directed or
approved by the vote or written consent of all the directors. Special meetings
of the board of directors may be called by the chairperson of the board of
directors (if the office is filled) or the president, and shall be called by the
president or secretary on the written request of any two directors.
5.06 Notices. No notice shall be required for annual or regular meetings
of the board of directors or for adjourned meetings, whether regular or special.
Three days written notice or 24-hour telephonic notice shall be given for
special meetings of the board of directors, and the notice shall state the time,
place, and purpose or purposes of the meeting.
5.07 Quorum. A majority of the board of directors then in office, or of
the members of a board committee, constitutes a quorum for the transaction of
business. The vote of a majority of the directors present at any meeting at
which there is a quorum constitutes the action of the board of directors or of
the committee, except when a larger vote may be required by the laws of the
state of Michigan. A member of the board of directors or of a committee
designated by the board of directors may participate in a meeting by conference
telephone or similar communications equipment through which all persons
participating in the meeting can communicate with each other. Participation in a
meeting in this manner constitutes presence in person at the meeting.
5.08 Dissents. A director who is present at a meeting of the board of
directors, or a board committee of which the director is a member, at which
action on a corporate matter is taken, is presumed to have concurred in that
action unless the director's dissent is entered in the minutes of the meeting or
unless the director files a written dissent to the action with the person acting
as secretary of the meeting before the adjournment of it or forwards the dissent
by registered mail to the secretary of the Corporation promptly after the
adjournment of the meeting. The right to dissent does not apply to a director
who voted in favor of the action. A director who is absent from a meeting of the
board of directors or a board committee of which the director is a member, at
which any such action is taken, is presumed to have concurred in the action
unless he or she files a written dissent with the secretary within a reasonable
time after the director has knowledge of the action.
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5.09 Compensation. The board of directors, by affirmative vote of a
majority of directors in office and irrespective of any personal interest of any
of them, may establish reasonable compensation of directors for services to the
Corporation as directors or officers.
5.10 Executive and Other Committees. The board of directors may, by
resolution passed by a majority of the whole board of directors, appoint three
or more members of the board of directors as an executive committee to exercise
all powers and authorities of the board of directors in managing the business
and affairs of the Corporation, except that the committee shall not have power
or authority to (a) amend the articles of incorporation, except that a committee
may prescribe the relative rights and preferences of the shares of a series if
the articles of incorporation authorize the board of directors to do so; (b)
adopt an agreement of merger or plan of share exchange; (c) recommend to
shareholders the sale, lease, or exchange of all or substantially all of the
Corporation's property and assets; (d) recommend to shareholders a dissolution
of the Corporation or revocation of a dissolution; (e) amend these bylaws; (f)
fill vacancies in the board of directors; or (g) declare a dividend or authorize
the issuance of stock, unless expressly authorized by the board of directors.
The board of directors from time to time may, by like resolution, appoint
any other committees of one or more directors to have the authority that shall
be specified by the board of directors in the resolution making the
appointments. The board of directors may designate one or more directors as
alternate members of any committee to replace an absent or disqualified member
at any committee meeting.
ARTICLE VI
Notices, Waivers of Notice, and Manner of Acting
6.01 Notices. All notices of meetings required to be given to
shareholders, directors, or any committee of directors may be given by mail,
telecopy, telegram, radiogram, or cablegram to any shareholder, director, or
committee member at his or her last address as it appears on the books of the
Corporation. The notice shall be deemed to be given at the time it is mailed or
otherwise dispatched. Telephonic notice may be given for special meetings of the
board of directors as provided in Section 5.06.
6.02 Waiver of Notice. Notice of the time, place, and purpose of any
meeting of shareholders, directors, or committee of directors may be waived by
telecopy, telegram, radiogram, cablegram, or other writing, either before or
after the meeting, or in any other manner that may be permitted by the laws of
the state of Michigan. Attendance of a person at any shareholders meeting, in
person or by proxy, or at any meeting of directors or of a committee of
directors, constitutes a waiver of notice of the meeting except as follows:
(a) In the case of a shareholder, unless the shareholder at the
beginning of the meeting objects to holding the meeting or transacting business
at the meeting, or unless with respect to consideration of a particular matter
at the meeting that is not within the purpose or purposes
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described in the meeting notice, the shareholder objects to considering the
matter when it is presented; or
(b) In the case of a director, unless he or she at the beginning of
the meeting, or upon his or her arrival, objects to the meeting or the
transacting of business at the meeting and does not thereafter vote for or
assent to any action taken at the meeting.
6.03 Action Without a Meeting. Except as the articles of incorporation may
otherwise provide for action to be taken by shareholders, any action required or
permitted at any meeting of shareholders, directors, or a committee of directors
may be taken without a meeting, without prior notice, and without a vote, if all
of the shareholders, directors, or committee members entitled to vote on it
consent to it in writing, before or after the action is taken.
ARTICLE VII
Officers
7.01 Number. The board of directors shall elect or appoint a president, a
secretary, and a treasurer, and may select a chairperson of the board of
directors and one or more vice presidents, assistant secretaries, or assistant
treasurers. Any two or more of the preceding offices, except those of president
and vice president, may be held by the same person. No officer shall execute,
acknowledge, or verify an instrument in more than one capacity if the instrument
is required by law, the articles of incorporation, or these bylaws to be
executed, acknowledged, or verified by one or more officers.
7.02 Term of Office, Resignation, and Removal. An officer shall hold
office for the term for which he or she is elected or appointed and until his or
her successor is elected or appointed and qualified, or until his or her
resignation or removal. An officer may resign by written notice to the
Corporation. The resignation is effective on its receipt by the Corporation or
at a subsequent time specified in the notice of resignation. An officer may be
removed by the board of directors with or without cause. The removal of an
officer shall be without prejudice to his or her contract rights, if any. The
election or appointment of an officer does not of itself create contract rights.
7.03 Vacancies. The board of directors may fill any vacancies in any
office occurring for whatever reason.
7.04 Authority. All officers, employees, and agents of the Corporation
shall have the authority and perform the duties to conduct and manage the
business and affairs of the Corporation that may be designated by the board of
directors and these bylaws.
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ARTICLE VIII
Duties of Officers
8.01 Chairperson of the Board. The chairperson of the board of directors,
if the office is filled, shall preside at all meetings of the shareholders and
of the board of directors at which the chairperson is present.
8.02 President. The president shall be the chief executive officer of the
Corporation. The president shall see that all orders and resolutions of the
board of directors are carried into effect, and the president shall have the
general powers of supervision and management usually vested in the chief
executive officer of a corporation, including the authority to vote all
securities of other corporations and business organizations held by the
Corporation. In the absence or disability of the chairperson of the board of
directors, or if that office has not been filled, the president also shall
perform the duties of the chairperson of the board of directors as set forth in
these bylaws.
8.03 Vice Presidents. The vice presidents, in order of their seniority,
shall, in the absence or disability of the president, perform the duties and
exercise the powers of the president and shall perform any other duties that the
board of directors or the president may from time to time prescribe.
8.04 Secretary. The secretary shall attend all meetings of the board of
directors and shareholders and shall record all votes and minutes of all
proceedings in a book to be kept for that purpose; shall give or cause to be
given notice of all meetings of the shareholders and the board of directors; and
shall keep in safe custody the seal of the Corporation, if any, and, when
authorized by the board of directors, affix it to any instrument requiring it,
and when so affixed it shall be attested to by the signature of the secretary or
by the signature of the treasurer or an assistant secretary. The secretary may
delegate any of the duties, powers, and authorities of the secretary to one or
more assistant secretaries, unless the delegation is disapproved by the board of
directors.
8.05 Treasurer. The treasurer shall have the custody of the corporate
funds and securities, shall keep full and accurate accounts of receipts and
disbursements in the books of the Corporation, and shall deposit all moneys and
other valuable effects in the name and to the credit of the Corporation in the
depositories that may be designated by the board of directors. The treasurer
shall render to the president and directors, whenever they may require it, an
account of his or her transactions as treasurer and of the financial condition
of the Corporation. The treasurer may delegate any of his or her duties, powers,
and authorities to one or more assistant treasurers unless the delegation is
disapproved by the board of directors.
8.06 Assistant Secretaries and Treasurers. The assistant secretaries, in
order of their seniority, shall perform the duties and exercise the powers and
authorities of the secretary in case of the secretary's absence or disability.
The assistant treasurers, in the order of their seniority, shall perform the
duties and exercise the powers and authorities of the treasurer in case of the
treasurer's absence or disability. The assistant secretaries and assistant
treasurers shall also perform the duties
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that may be delegated to them by the secretary and treasurer, respectively, and
also the duties that the board of directors may prescribe.
ARTICLE IX
Special Corporate Acts
9.01 Orders for Payment of Money. All checks, drafts, notes, bonds, bills
of exchange, and orders for payment of money of the Corporation shall be signed
by the officer or officers or any other person or persons that the board of
directors may from time to time designate.
9.02 Contracts and Conveyances. The board of directors of the Corporation
may in any instance designate the officer and/or agent who shall have authority
to execute any contract, conveyance, mortgage, or other instrument on behalf of
the Corporation, or may ratify or confirm any execution. When the execution of
any instrument has been authorized without specification of the executing
officers or agents, the chairperson of the board of directors, the president or
any vice president, and the secretary, assistant secretary, treasurer, or
assistant treasurer may execute the instrument in the name and on behalf of the
Corporation and may affix the corporate seal, if any, to it.
ARTICLE X
Books and Records
10.01 Maintenance of Books and Records. The proper officers and agents of
the Corporation shall keep and maintain the books, records, and accounts of the
Corporation's business and affairs, minutes of the proceedings of its
shareholders, board of directors, and committees, if any, and the stock ledgers
and lists of shareholders, as the board of directors shall deem advisable and as
shall be required by the laws of the state of Michigan and other states or
jurisdictions empowered to impose such requirements. Books, records, and minutes
may be kept within or without the state of Michigan in a place that the board of
directors shall determine.
10.02 Reliance on Books and Records. In discharging his or her duties, a
director or an officer of the Corporation, when acting in good faith, may rely
on information, opinions, reports, or statements, including financial statements
and other financial data, if prepared or presented by any of the following:
(a) One or more directors, officers, or employees of the
Corporation, or of a business organization under joint control or common
control, whom the director or officer reasonably believes to be reliable and
competent in the matters presented;
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(b) Legal counsel, public accountants, engineers, or other persons
as to matters the director or officer reasonably believes are within the
person's professional or expert competence; or
(c) A committee of the board of directors of which he or she is not
a member if the director or officer reasonably believes the committee merits
confidence.
A director or officer is not entitled to rely on the information set forth
above if he or she has knowledge concerning the matter in question that makes
reliance otherwise permitted unwarranted.
ARTICLE XI
Indemnification
11.01 Nonderivative Actions. Subject to all of the other provisions of
Article XI, the Corporation shall indemnify any person who was or is a party to
or is threatened to be made a party to any threatened, pending, or completed
action, suit, or proceeding, whether civil, criminal, administrative, or
investigative, formal or informal (other than an action by or in the right of
the Corporation), by reason of the fact that the person is or was a director or
officer of the Corporation, or, while serving as 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 foreign or domestic
corporation, partnership, joint venture, trust, or other enterprise, whether for
profit or not, against expenses (including actual and reasonable attorney fees),
judgments, penalties, fines, and amounts paid in settlement actually and
reasonably incurred by him or her in connection with such action, suit, or
proceeding, if the person acted in good faith and in a manner the person
reasonably believed to be in or not opposed to the best interests of the
Corporation or its shareholders, and with respect to any criminal action or
proceeding, if the person had no reasonable cause to believe his or her conduct
was unlawful. The termination of any action, suit, or proceeding by judgment,
order, settlement, conviction, or on a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that the person did not
act in good faith and in a manner that the person reasonably believed to be in
or not opposed to the best interests of the Corporation or its shareholders and,
with respect to any criminal action or proceeding, had reasonable cause to
believe that his or her conduct was unlawful.
11.02 Derivative Actions. Subject to all of the provisions of Article XI,
the Corporation shall indemnify any person who was or is a party to or is
threatened to be made a party to any threatened, pending, or completed action or
suit by or in the right of the Corporation to procure a judgment in its favor by
reason of the fact that the person is or was a director or officer of the
Corporation or, while serving as 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 foreign or domestic corporation,
partnership, joint venture, trust, or other enterprise, whether for profit or
not, against expenses (including attorney fees) and amounts paid in settlement
actually and reasonably incurred by the person in connection with the action or
suit, if the person acted in good
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faith and in a manner the person reasonably believed to be in or not opposed to
the best interests of the Corporation or its shareholders. However,
indemnification shall not be made for any claim, issue, or matter in which the
person has been found liable to the Corporation unless and only to the extent
that the court in which the action or suit was brought has determined on
application that, despite the adjudication of liability but in view of all
circumstances of the case, the person is fairly and reasonably entitled to
indemnification for the reasonable expenses incurred.
11.03 Expenses of Successful Defense. To the extent that a person has been
successful on the merits or otherwise in defense of any action, suit, or
proceeding referred to in Sections 11.01 or 11.02, or in defense of any claim,
issue, or matter in the action, suit, or proceeding, the person shall be
indemnified against actual and reasonable expenses (including attorney fees)
incurred by the person in connection with the action, suit, or proceeding and
any action, suit, or proceeding brought to enforce the mandatory indemnification
provided by this Section 11.03.
11.04 Definition. For the purposes of Sections 11.01 and 11.02, "other
enterprises" shall include employee benefit plans; "fines" shall include any
excise taxes assessed on a person with respect to an employee benefit plan; and
"serving at the request of the Corporation" shall include any service as a
director, officer, employee, or agent of the Corporation that imposes duties on,
or involves services by, the director or officer with respect to an employee
benefit plan, its participants, or its beneficiaries; and a person who acted in
good faith and in a manner the person reasonably believed to be in the interest
of the participants and beneficiaries of an employee benefit plan shall be
considered to have acted in a manner "not opposed to the best interests of the
Corporation or its shareholders" as referred to in Sections 11.01 and 11.02.
11.05 Contract Right; Limitation on Indemnity. The right to
indemnification conferred in Article XI shall be a contract right and shall
apply to services of a director or officer as an employee or agent of the
Corporation as well as in the person's capacity as a director or officer. Except
as provided in Section 11.03, the Corporation shall have no obligations under
Article XI to indemnify any person in connection with any proceeding, or part
thereof, initiated by the person without authorization by the board of
directors.
11.06 Determination That Indemnification Is Proper. Any indemnification
under Sections 11.01 or 11.02 (unless ordered by a court) shall be made by the
Corporation only as authorized in the specific case upon a determination that
indemnification of the person is proper in the circumstances because the person
has met the applicable standard of conduct set forth in Sections 11.01 or 11.02,
whichever is applicable, and upon an evaluation of the reasonableness of expense
and amounts paid in settlement. The determination and evaluation shall be made
in any of the following ways:
(a) By a majority vote of a quorum of the board of directors
consisting of directors who are not parties or threatened to be made parties to
the action, suit, or proceeding;
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(b) If the quorum described in clause (a) above is not obtainable,
then by majority vote of a committee of directors duly designated by the board
of directors and consisting solely of two or more directors who are not at the
time parties or threatened to be made parties to the action, suit, or
proceeding;
(c) By independent legal counsel in a written opinion, which counsel
shall be selected in one of the following ways: (i) by the board of directors or
its committee in the manner prescribed in subparagraph (a) or (b); or (ii) if a
quorum of the board of directors cannot be obtained under subparagraph (a) and a
committee cannot be designated under subparagraph (b), by the board of
directors; or
(d) By the shareholders, but shares held by directors, officers,
employees, or agents who are parties or threatened to be made parties to the
action, suit, or proceeding may not be voted.
11.07 Authorizations of Payment.
(a) Authorizations of payment under Sections 11.01 and 11.02 shall
be made in any of the following ways:
(i) by the board of directors:
(A) if there are two or more directors who are not
parties or threatened to be made parties to the action, suit or
proceeding, by a majority vote of all such directors (a majority of whom
shall for this purpose constitute a quorum)or by a majority of the members
of a committee of two or more directors who are not parties or threatened
to be made parties to the action, suit or proceeding;
(B) if the Corporation has one or more independent
directors who are not parties or threatened to be made parties to the
action, suit or proceeding, by a majority vote of all such directors (a
majority of whom shall for this purpose constitute a quorum); or
(C) if there are no independent directors and fewer than
two directors who are not parties or threatened to be made parties to the
action, suit or proceeding, by the vote necessary for action by the board
of directors in accordance with Section 3.07, in which authorization all
directors may participate; or
(ii) by the shareholders, but shares held by directors,
officers, employees, or agents who are parties or threatened to be made parties
to the action, suit, or proceeding may not be voted on the authorization.
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(b) To the extent that the articles of incorporation include a
provision eliminating or limiting the liability of a director pursuant to MBCA
450.1209(1)(c), MSA 21.200(209)(1), the Corporation may indemnify a director for
the expenses and liabilities described below without a determination that the
director has met the standard of conduct set forth in Sections 11.01 and 11.02,
but no indemnification may be made except to the extent authorized in MBCA
450.1564c, MSA 21.200(564c), if the director received a financial benefit to
which he or she was not entitled, intentionally inflicted harm on the
Corporation or its shareholders, violated MBCA 450.1551, MSA 21.200(551), or
intentionally violated criminal law. In connection with an action or suit by or
in the right of the Corporation, as described in Section 11.02, indemnification
under this Section 11.07(2)may be for expenses, including attorneys' fees,
actually and reasonably incurred. In connection with an action, suit or
proceeding other than one by or in the right of the Corporation, as described in
Section 11.01, indemnification under this Section 11.07(2) may be for expenses,
including attorneys' fees, actually and reasonably incurred, and for judgments,
penalties, fines, and amounts paid in settlement actually and reasonably
incurred.
11.08 Proportionate Indemnity. If a person is entitled to indemnification
under Sections 11.01 or 11.02 for a portion of expenses, including attorney
fees, judgments, penalties, fines, and amounts paid in settlement, but not for
the total amount, the Corporation shall indemnify the person for the portion of
the expenses, judgments, penalties, fines, or amounts paid in settlement for
which the person is entitled to be indemnified.
11.09 Expense Advance. The Corporation may pay or reimburse the reasonable
expenses incurred by a person referred to in Sections 11.01 or 11.02 who is a
party or threatened to be made a party to an action, suit, or proceeding in
advance of final disposition of the proceeding if both of the following apply:
(a) the person furnishes the Corporation a written affirmation of his or her
good faith belief that he or she has met the applicable standard of conduct set
forth in Sections 11.01 or 11.02; and (b) the person furnishes the Corporation a
written undertaking executed personally, or on his or her belief, to repay the
advance if it is ultimately determined that he or she did not meet the standard
of conduct. Determinations and evaluations under this Section 11.09 shall be
made as specified in Section 11.06, and authorizations shall be made in the
manner specified in Section 11.07. A provision in the articles of incorporation,
these bylaws, a resolution by the board of directors or the shareholders, or an
agreement making indemnification mandatory shall also make advancement of
expenses mandatory unless the provision specifically provides otherwise.
11.10 Non-Exclusivity of Rights. The indemnification or advancement of
expenses provided under this article is not exclusive of other rights to which a
person seeking indemnification or advancement of expenses may be entitled under
a contractual arrangement with the Corporation. However, the total amount of
expenses advanced or indemnified from all sources combined shall not exceed the
amount of actual expenses incurred by the person seeking indemnification or
advancement of expenses.
11.11 Indemnification of Employees and Agents of the Corporation. The
Corporation may, to the extent authorized from time to time by the board of
directors, grant rights to indemnification
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and to the advancement of expenses to any employee or agent of the Corporation
to the fullest extent of the provisions of Article XI with respect to the
indemnification and advancement of expenses of directors and officers of the
Corporation.
11.12 Former Directors and Officers. The indemnification provided in
Article XI continues for a person who has ceased to be a director or officer and
shall inure to the benefit of the heirs, executors, and administrators of the
person.
11.13 Insurance. The Corporation may purchase and maintain insurance on
behalf of any person who is or was a director, officer, employee, or agent of
the Corporation, or is or was serving at the request of the Corporation as a
director, officer, partner, trustee, employee, or agent of another corporation,
partnership, joint venture, trust, or other enterprise, against any liability
asserted against the person and incurred by him or her in any such capacity or
arising out of his or her status as such, whether or not the Corporation would
have power to indemnify the person against the liability under these bylaws or
the laws of the state of Michigan.
11.14 Changes in Michigan Law. If there is any change of the Michigan
statutory provisions applicable to the Corporation relating to the subject
matter of Article XI, then the indemnification to which any person shall be
entitled under this article shall be determined by the changed provisions, but
only to the extent that the change permits the Corporation to provide broader
indemnification rights than the provisions permitted the Corporation to provide
before the change. Subject to Section 11.15, the board of directors is
authorized to amend these bylaws to conform to any such changed statutory
provisions.
11.15 Amendment or Repeal of Article XI. No amendment or repeal of Article
XI shall apply to or have any effect on any director or officer of the
Corporation for or with respect to any acts or omissions of the director or
officer occurring before the amendment or repeal.
ARTICLE XII
Amendments
12.01 Amendments. The bylaws of the Corporation may be amended, altered,
or repealed, in whole or in part, by the shareholders or by the board of
directors at any meeting duly held in accordance with these bylaws, provided
that notice of the meeting includes notice of the proposed amendment,
alteration, or repeal.
Effective: January 22, 1998
15
<PAGE> 1
EXHIBIT 3.28
PROVINCE OF ONTARIO
MINISTRY OF CONSUMER AND COMMERCIAL RELATIONS
ARTICLES OF INCORPORATION
1. The name of the corporation is:
Oxford Suspension Ltd.
2. The address of the registered office is:
1574 Eagle Street North, Cambridge
Waterloo, Ontario N3H 4S5
3. Number (or minimum and maximum number) of directors is:
A minimum of 3 and a maximum of 11.
4. The first director(s) is/are:
<TABLE>
<CAPTION>
Residence address, giving street & No. or R.R. Resident Canadian
First name, initials and surname No. or municipality and postal code State Yes or No
- -------------------------------- ----------------------------------- ---------------
<S> <C> <C>
Steven M. Abelman 3709 Merriweather Lane No
Rochester Hills, MI 48306
Manfred Walt 152 Bradgate Drive Yes
Thornhill, Ontario L3T 7L8
James W. Robinson 66 Ashwood Drive Yes
Cambridge, Ontario N3C 3H9
</TABLE>
5. Restrictions, if any, on business the corporation may carry on or on
powers the corporation may exercise:
There are no restrictions on the business the Corporation may carry on or
on the powers the Corporation may exercise.
6. The classes and any maximum number of shares that the corporation is
authorized to issue:
The Corporation is authorized to issue an unlimited number of shares of 1
class designated as common shares.
7. Rights, privileges, restrictions and conditions (if any) attaching to each
class of shares and directors authority with respect to any class of
shares which may be issued in series:
Not applicable.
<PAGE> 2
8. The issue, transfer or ownership of shares (is/is not restricted and the
restrictions (if any) are as follows:
The right to transfer shares of the Corporation shall be restricted in
that no shares shall be transferred without either:
(a) the consent of the directors of the Corporation, expressed by a
resolution passed by the directors or by an instrument or instruments in
writing signed by a majority of the directors, which consent may be given
either prior or subsequent to the time of transfer of such shares; or
(b) the consent of the holder or holders of shares of the Corporation to
which are attached at least a majority of the votes attached to all shares
of the Corporation for the time being outstanding carrying a voting right
either under all circumstances or under circumstances that have occurred
and are continuing, expressed by a resolution passed by such holder or
holders, which consent may be given either prior or subsequent to the time
of transfer of such shares.
9. Other provisions, if any, are:
(a) that the number of shareholders of the Corporation, exclusive of
persons who are in the employment of the Corporation and exclusive of
persons who, having been formerly in the employment of the Corporation,
were, while in that employment, and have continued after the termination
of that employment to be shareholders of the Corporation, is limited to
not more than 50, 2 or more persons who are the joint registered owners of
1 or more shares being counted as 1 shareholder; and
(b) that any invitation to the public to subscribe for any securities of
the Corporation is hereby prohibited.
10. The names and addresses of the Full residence address or address of
incorporators are registered office or of principal place
First Name, initials and last of business giving street & No. or
name or corporate name R.R. No., municipality and postal code
---------------------- --------------------------------------
Steven M. Abelman 3709 Merriweather Lane
Rochester Hills, MI 48306
Manfred Walt 152 Bradgate Drive
Thornhill, Ontario L3T 7L8
2
<PAGE> 3
James W. Robinson 66 Ashwood Drive
Cambridge, Ontario N3C 3H9
These articles are signed in duplicate.
Signatures of incorporators
/s/ Steven M. Abelman
---------------------------------
Steven M. Abelman
/s/ Manfred Walt
---------------------------------
Manfred Walt
/s/ James W. Robinson
---------------------------------
James W. Robinson
3
<PAGE> 1
Exhibit 3.29
BY-LAW NUMBER 1
A BY-LAW RELATING TO THE BUSINESS AND AFFAIRS OF
OXFORD SUSPENSION LTD.
ARTICLE 1
INTERPRETATION
1.01 DEFINITIONS
In this by-law:
"Act" means the Business Corporations Act (Ontario) and the
regulations enacted pursuant to it and any statute and regulations
that may be substituted for them, as amended from time to time;
"articles" means the articles, as that term is defined in the Act,
of the Corporation;
"auditor" means the auditor of the Corporation;
"board" means the board of directors of the Corporation;
"by-law" means a by-law of the Corporation;
"Corporation" means the corporation incorporated on February 26,
1998 under the name OXFORD SUSPENSION LTD.;
"director" means a director of the Corporation;
"officer" means an officer of the Corporation, and reference to any
specific officer is to the individual holding that office of the
Corporation;
"person" means an individual, body corporate, partnership, joint
venture, trust, unincorporated organization, association, the Crown
or any agency or instrumentality thereof, or any entity recognized
by law;
"proxyholder" means an individual holding a valid proxy for a
shareholder;
"resident Canadian" has the meaning ascribed to that phrase in the
Act;
"shareholder" means a shareholder of the Corporation; and
<PAGE> 2
"voting person" means, in respect of a meeting of shareholders, an
individual who is either a shareholder entitled to vote at that
meeting, a duly authorized representative of a shareholder entitled
to vote at the meeting or a proxyholder entitled to vote at that
meeting.
1.02 NUMBER, GENDER AND HEADINGS
In this by-law, words in the singular include the plural and
vice-versa and words in one gender include all genders. The insertion of
headings in this by-law and its division into articles, sections and other
subdivisions are for convenience of reference only, and shall not affect the
interpretation of this by-law.
1.03 BY-LAW SUBORDINATE TO OTHER DOCUMENTS
This by-law is subordinate to, and should be read in conjunction
with, the Act, the articles and any unanimous shareholder agreement of the
Corporation.
1.04 COMPUTATION OF TIME
The computation of time and any period of days shall be determined
in accordance with the Act.
ARTICLE 2
DIRECTORS
2.01 NOTICE OF MEETING
Any director or the president may call a meeting of the board by
giving notice stating the time and place of the meeting to each of the directors
other than the director giving that notice. Notices sent by delivery or
electronic means shall be sent no less than 48 hours before the time of the
meeting. Notices sent by mail shall be sent no less than 5 days before the day
of the meeting.
The board may appoint, by resolution, dates, time and places for
meetings of the board. A copy of any such resolution shall be sent to each
director forthwith after being passed, but no other notice is required for any
such meeting.
2.02 MEETINGS WITHOUT NOTICE
A meeting of the board may be held without notice immediately
following the first or any annual meeting of shareholders.
2
<PAGE> 3
2.03 PLACE OF MEETING
A meeting of the board may be held at any place within or outside
Ontario, and no such meeting need be held at a place within Canada.
2.04 NO NOTICE TO NEWLY APPOINTED DIRECTOR
An individual need not be given notice of the meeting at which that
individual is appointed by the other directors to fill a vacancy on the board,
if that individual is present at that meeting.
2.05 QUORUM FOR BOARD MEETINGS
If there are 1 or 2 directors, all of the directors constitute a
quorum at a meeting of the board. If there are 3, 4 or 5 directors, a majority
of the directors constitute a quorum at a meeting of the board. Otherwise, such
a quorum consists of the next whole number not less than 2/5ths of the number of
directors. In this section, the "number of directors" is either:
(a) the number of directors specified in the articles; or
(b) if a minimum and maximum number of directors is provided for in the
articles, the number determined from time to time by special
resolution or, if the special resolution empowers the directors to
determine the number, by resolution of the directors, or if no such
resolution has been passed, the number of directors named in the
articles.
2.06 CHAIRMAN OF BOARD MEETINGS
The chairman of a meeting of the board must be a director present at
the meeting who consents to preside as chairman. The first-mentioned of the
chairman of the board, the managing director or the president who so qualifies
shall preside as chairman of the meeting. If none of them is so qualified, the
directors present at the meeting shall choose a director to preside as chairman
of the meeting.
2.07 VOTES AT BOARD MEETINGS
Each director present at a meeting of the board shall have 1 vote on
each motion arising. Motions arising at meetings of the board shall be decided
by a majority vote. The chairman of the meeting shall not have a second or
casting vote.
3
<PAGE> 4
2.08 OFFICERS
Each officer shall hold office during the pleasure of the board. Any
officer may, however, resign at any time by giving notice to the Corporation.
ARTICLE 3
MEETINGS OF SHAREHOLDERS
3.01 NOTICE OF SHAREHOLDERS' MEETINGS
The board may call a meeting of shareholders by causing notice of
the time and place of the meeting to be sent to each shareholder entitled to
vote at the meeting, each director and the auditor. Such notice shall be sent no
less than 21 days and no more than 50 days before the meeting, if the
Corporation is an offering corporation (as defined in the Act), or no less than
10 days and no more than 50 days before the meeting if the Corporation is not an
offering corporation.
3.02 QUORUM AT MEETINGS OF SHAREHOLDERS
If the Corporation has only 1 shareholder entitled to vote at a
meeting of shareholders, that shareholder constitutes a quorum. Otherwise, any 2
voting persons present shall constitute a quorum, but only to appoint a chairman
and adjourn the meeting. For all other purposes, a quorum consists of at least 2
voting persons present and authorized to cast in the aggregate not less than 25%
of the total number of votes attaching to all shares carrying the right to vote
at that meeting.
3.03 CHAIRMAN'S VOTE
The chairman of any meeting of shareholders shall not have a second
or casting vote.
3.04 VOTING
Unless the chairman of a meeting of shareholders directs a ballot,
or a voting person demands one, each motion shall be voted upon by a show of
hands. Each voting person has 1 vote in a vote by show of hands. A ballot may be
directed or demanded either before or after a vote by show of hands. If a ballot
is taken, a prior vote by show of hands has no effect.
3.05 SCRUTINEERS
The chairman of a meeting of shareholders may appoint for that
meeting 1 or more scrutineers, who need not be voting persons.
4
<PAGE> 5
3.06 WHO MAY ATTEND SHAREHOLDERS' MEETING
The only persons entitled to attend a meeting of shareholders are
voting persons, the directors, the auditor and, if any, the chairman, the
managing director and the President, as well as others permitted by the chairman
of the meeting.
ARTICLE 4
SECURITY CERTIFICATES, PAYMENTS
4.01 CERTIFICATES
Security certificates shall be in such form as the board may approve
or the Corporation adopt. The president or the board may order the cancellation
of any security certificate that has become defaced and the issuance of a
replacement certificate for it when the defaced certificate is delivered to the
Corporation or to a transfer agent or branch transfer agent of the Corporation.
4.02 CHEQUES
Any amount portable in cash to shareholders (including dividends
payable in cash) may be paid by cheque drawn on any of the Corporation's bankers
to the order of each registered holder of shares of the class or series in
respect of which such amount is to be paid. Cheques may be sent by delivery or
first class mail to such registered holder at that holder's address appearing on
the register of shareholders, unless that holder otherwise directs in writing.
By sending a cheque, as provided in this by-law, in the amount of the dividend
less any tax that the Corporation is required to withhold, the Corporation
discharges its liability to pay the amount of that dividend, unless the cheque
is not paid on due presentation.
4.03 CHEQUES TO JOINT SHAREHOLDERS
Cheques payable to joint shareholders shall be made payable to the
order of all such joint shareholders unless such joint shareholders direct
otherwise. Such cheques may be sent to the joint shareholders at the address
appearing on the register of shareholders in respect of that joint holding, to
the first address so appearing if there is more than one, or to such other
address as those joint shareholders direct in writing.
4.04 NON-RECEIPT OF CHEQUES
The Corporation shall issue a replacement cheque in the same amount
to any person who does not receive a cheque sent as provided in this by-law, if
that person has satisfied the
5
<PAGE> 6
conditions regarding indemnity, evidence of non-receipt and title set by the
board from time to time, either generally or for that particular case.
4.05 CURRENCY OF DIVIDENDS
Dividends or other distributions payable in cash may be paid to some
shareholders in Canadian currency and to other shareholders in equivalent
amounts of a currency or currencies other than Canadian currency. The board may
declare dividends or other distributions in any currency or in alternative
currencies and make such provisions as it deems advisable for the payment of
such dividends or other distributions.
ARTICLE 5
SIGNATORIES, INFORMATION
5.01 SIGNATORIES
The following are the only persons authorized to sign any document
on behalf of the Corporation, other than in the usual and ordinary course of the
Corporation's business:
(a) any individual appointed by resolution of the board to sign a
specific document, that type of document or generally on behalf of
the Corporation; or
(b) any director or any officer appointed to office by the board.
Any document so signed may, but need not, have the corporate seal
applied, if there is one.
5.02 FACSIMILE SIGNATURES
The signature of any individual authorized to sign on behalf of the
Corporation may, if specifically authorized by resolution of the board, be
written, printed, stamped, engraved, lithographed or otherwise mechanically
reproduced. Anything so signed shall be as valid as if it had been signed
manually, even if that individual has ceased to hold office when anything so
signed is issued or delivered, until revoked by resolution of the board.
5.03 RESTRICTION ON INFORMATION DISCLOSED
Except as required by the Act or authorized by the board, no
shareholder is entitled by virtue of being a shareholder to disclosure of any
information, document or records respecting the Corporation or its business.
6
<PAGE> 7
ARTICLE 6
PROTECTION AND INDEMNITY
6.01 TRANSACTIONS WITH THE CORPORATION
No director or officer shall be disqualified, by virtue of being a
director, or by holding any other office of, or place of profit under, the
Corporation or any body corporate in which the Corporation is a shareholder or
is otherwise interested, from entering into, or from being concerned or
interested in any manner in, any contract, transaction or arrangement made, or
proposed to be made, with the Corporation or any body corporate in which the
Corporation is interested and no such contract, transaction or arrangement shall
be void or voidable for any such reason. No director or officer shall be liable
to account to the Corporation for any profit arising from any such office or
place of profit or realized in respect of any such contract, transaction or
arrangement. Except as required by the Act, no director or officer must make any
declaration or disclosure of interest or, in the case of a director, refrain
from voting in respect of any such contract, transaction or arrangement.
6.02 LIMITATION OF LIABILITY
Subject to the Act, no director or officer shall be liable for:
(a) the acts, receipts, neglects or defaults of any other person;
(b) joining in any receipt or act for conformity;
(c) any loss, damage or expense to the Corporation arising from the
insufficiency or deficiency of title to any property acquired by or
on behalf of the Corporation;
(d) the insufficiency or deficiency of any security in or upon which any
moneys of the Corporation are invested;
(e) any loss, damage or expense arising from the bankruptcy, insolvency,
act or omission of any person with whom any moneys, securities or
other property of the Corporation are lodged or deposited;
(f) any loss, damage or expense occasioned by any error of judgment or
oversight; or
(g) any other loss, damage or expense related to the performance or
non-performance of the duties of that individual's office.
7
<PAGE> 8
6.03 CONTRACTS ON BEHALF OF THE CORPORATION
Subject to the Act, any contract entered into, or action taken or
omitted, by or on behalf of the Corporation shall, if duly approved by a
resolution of the shareholders, be deemed for all purposes to have had the prior
authorization of the shareholders.
6.04 INDEMNITY OF DIRECTORS AND OFFICERS
As required or permitted by the Act, the Corporation shall indemnify
each Indemnified Person (as defined in this section) against all costs, charges
and expenses, including an amount paid to settle an action or satisfy a
judgment, which that Indemnified Person reasonably incurs in respect of any
civil, criminal or administrative action or proceeding to which that Indemnified
Person is made a party by reason of being or having been a director or officer
of the Corporation or of a body corporate of which the Corporation is or was a
shareholder or creditor if:
(a) the Indemnified Person acted honestly and in good faith with a view
to the best interests of the Corporation; and
(b) in the case of a criminal or administrative action or proceeding
that is enforced by a monetary penalty, the Indemnified Person had
reasonable grounds for believing that the conduct was lawful.
"Indemnified Person" means
(a) each director and former director of the Corporation;
(b) each officer and former officer of the Corporation;
(c) each individual who acts or acted at the Corporation's request as a
director or officer of a body corporate of which the Corporation is
or was a shareholder or creditor; and
(d) the respective heirs and legal representatives of each of the
persons designated in the preceding paragraphs (a) through (c).
6.05 INDEMNITIES NOT LIMITING
The provisions of this Article 6 shall be in addition to and not in
substitution for any rights, immunities and protections to which an Indemnified
Person is otherwise entitled.
8
<PAGE> 9
ARTICLE 7
NOTICES
7.01 PROCEDURE FOR SENDING NOTICES
Notice shall be deemed to have been sufficiently sent if sent in
writing to the address of the addressee on the books of the Corporation and
delivered in person, sent by prepaid first class mail or sent by any electronic
means of sending messages, including telex or facsimile transmission, which
produces a paper record. Notice shall not be sent by mail if there is any
general interruption of postal services in the municipality in which or to which
it is mailed. Each notice so sent shall be deemed to have been received on the
day it was delivered or sent by electronic means or on the fifth day after it
was mailed.
7.02 NOTICES TO SUCCESSORS IN TITLE
Notice to a shareholder is sufficient notice to each successor in
title to that shareholder until the name and address of that successor have been
entered on the Corporation's share register.
7.03 NOTICE TO JOINT SHAREHOLDERS
Notice to one joint shareholder is sufficient notice to all of them.
Such notice shall be addressed to all such joint shareholders and sent to the
address for them on the Corporation's register of shareholders, or to the first
such address if there is more than one.
7.04 FACSIMILE SIGNATURES ON NOTICES
The signature on any notice or other communication or document to be
sent by the Corporation may be written, printed, stamped, engraved, lithographed
or otherwise mechanically reproduced.
7.05 OMISSION OF NOTICE DOES NOT INVALIDATE ACTIONS
All actions taken at a meeting in respect of which a notice has been
sent shall be valid even if:
(a) by accident, notice was not sent to any person;
(b) notice was not received by any person; or
(c) there was an error in a notice that did not affect the substance of
that notice.
9
<PAGE> 10
7.06 WAIVER OF NOTICE
Any person entitled to notice under the Act, the articles or the
by-laws may waive that notice. Waiver, either before or after the event referred
to in the notice, shall cure any default in sending that notice.
ARTICLE 8
REPEAL OF FORMER BY-LAWS
8.01 FORMER BY-LAWS MAY BE REPEALED
The board may repeal one or more by-laws by passing a by-law that
contains provisions to that effect.
8.02 EFFECT OF REPEAL OF BY-LAWS
The repeal of any by-law in whole or part shall not in any way
affect the validity of any act done or right, privilege, obligation or liability
acquired or incurred thereunder prior to such repeal. All directors, officers
and other persons acting under any by-law repealed in whole or part shall
continue to act as if elected or appointed under the provisions of this by-law.
MADE by the board on the 26th day of February, 1998.
- ------------------------------ ------------------------------
President Secretary
10
<PAGE> 1
Exhibit 3.30
MICHIGAN DEPARTMENT OF COMMERCE - CORPORATION AND SECURITIES BUREAU
ARTICLES OF INCORPORATION
Domestic Profit Corporation
ARTICLE I
The name of the corporation is: RPI, Inc.
ARTICLE II
The purpose or purposes for which the corporation is organized is to engage in
any activity within the purposes for which corporations may be formed under the
Business Corporation Act of Michigan.
ARTICLE III
The total authorized capital stock is:
1. Common Shares: 600,000 No Par Value
3. A statement of all or any of the relative rights, preferences and
limitations of the shares of each class is as follows:
None.
ARTICLE IV
1. The address of the registered office is:
2343 Delta Road
Bay City, Michigan 48706
2. The mailing address of the registered office if different than above is:
P.O. Box 338
Bay City, Michigan 48707
3. The name of the resident agent at the registered office is: Craig Rattray
<PAGE> 2
ARTICLE V
The name(s) and address(es) of the incorporator(s) is (are) as follows:
Bernard Mason
4716 Arndt Court
Auburn, Michigan 48611
ARTICLE VI
When a compromise or arrangement or a plan of reorganization of this corporation
is proposed between this corporation and its creditors or any class of them or
between this corporation and its shareholders or any class of them, a court of
equity jurisdiction within the state, on application of this corporation or of a
creditor or shareholder thereof, or on application of a receiver appointed for
the corporation, may order a meeting of the creditors or class of creditors or
of the shareholders or class of shareholders to be affected by the proposed
compromise or arrangement or reorganization, to be summoned in such manner as
the court directs. If a majority in number representing 3/4 in value of the
creditors or class of creditors, or of the shareholders or class of shareholders
to be affected by the proposed compromise or arrangement or a reorganization,
agree to a compromise or arrangement or a reorganization of this corporation as
a consequence of the compromise or arrangement, the compromise or arrangement
and the reorganization, if sanctioned by the court to which the application has
been made, shall be binding on all the creditors or class of creditors, or on
all the shareholders or class of shareholders and also on this corporation.
ARTICLE VII
Any action required or permitted by this act to be taken at an annual or special
meeting of shareholders may be taken without a meeting, without prior notice and
without a vote, if a consent in writing, setting forth the action so taken, is
signed by the holders of outstanding stock having not less than the minimum
number of votes that would be necessary to authorize or take the action at a
meeting at which all shares entitled to vote on the action were present and
voted.
Prompt notice of the taking of the corporate action without a meeting by less
than unanimous written consent shall be given to shareholders who have not
consented in writing.
I (We), the incorporator(s) sign my (our) name(s) this 17th day of September,
1983.
/s/ Bernard Mason
------------------------------
Bernard Mason
2
<PAGE> 1
Exhibit 3.31
BYLAWS
OF
RPI, INC.
ARTICLE I
OFFICES
1.01 Principal Office. The principal office of the corporation shall be at
such place within the State of Michigan as the board of directors of the
corporation (the "Board") shall determine from time to time.
1.02 Other Offices. The corporation also may have offices at such other
places as the Board from time to time determines or the business of the
corporation requires.
ARTICLE II
SEAL
2.01 Seal. The corporation may have a seal in such form as the Board may
from time to time determine. The seal may be used by causing it or a facsimile
to be impressed, affixed, reproduced or otherwise.
ARTICLE III
CAPITAL STOCK
3.01 Issuance of Shares. The shares of capital stock of the corporation
shall be issued in such amounts, at such times, for such consideration and on
such terms and conditions as the Board shall deem advisable, subject to the
Articles of Incorporation and any requirements of the laws of the State of
Michigan.
3.02 Certificates for Shares. The shares of the corporation shall be
represented by certificates signed by the Chairman of the Board, President or a
Vice President and also may be signed by the Treasurer, Assistant Treasurer,
Secretary or Assistant Secretary of the corporation, and may be sealed with the
seal of the corporation or a facsimile thereof. A certificate representing
shares shall state upon its face that the corporation is formed under the laws
of the State of Michigan, the name of the person to whom it is issued, the
number and class of shares, and the designation of
<PAGE> 2
the series, if any, which the certificate represents, and such other provisions
as may be required by the laws of the State of Michigan.
3.03 Transfer of Shares. The shares of the capital stock of the
corporation are transferable only on the books of the corporation upon surrender
of the certificate therefor, properly endorsed for transfer, and the
presentation of such evidences of ownership and validity of the assignment as
the corporation may require.
3.04 Registered Shareholders. The corporation shall be entitled to treat
the person in whose name any share of stock is registered as the owner thereof
for purposes of dividends and other distributions in the course of business, or
in the course of recapitalization, merger, plan of share exchange,
reorganization, sale of assets, liquidation or otherwise and for the purpose of
votes, approvals and consents by shareholders, and for the purpose of notices to
shareholders, and for all other purposes whatever, and shall not be bound to
recognize any equitable or other claim to or interest in such shares on the part
of any other person, whether or not the corporation shall have notice thereof,
save as expressly required by the laws of the State of Michigan.
3.05 Lost or Destroyed Certificates. Upon the presentation to the
corporation of a proper affidavit attesting the loss, destruction or mutilation
of any certificate or certificates for shares of stock of the corporation, the
Board shall direct the issuance of a new certificate or certificates to replace
the certificates so alleged to be lost, destroyed or mutilated. The Board may
require as a condition precedent to the issuance of new certificates a bond or
agreement of indemnity, in such form and amount and with such sureties, or
without sureties, as the Board may direct or approve.
ARTICLE IV
MEETINGS OF SHAREHOLDERS
4.01 Place of Meetings. All meetings of shareholders shall be held at the
principal office of the corporation or at such other place as shall be
determined by the Board and stated in the notice of meeting.
4.02 Annual Meeting. The annual meeting of the shareholders of the
corporation shall be held on the last Monday of the fourth calendar month after
the end of the corporation's fiscal year at 2 o'clock in the afternoon.
Directors shall be elected at each annual meeting and such other business
transacted as may come before the meeting.
4.03 Special Meetings. Special meetings of shareholders may be called by
the Board, the Chairman of the Board (if such office is filled) or the President
and shall be called by the President or Secretary at the written request of
shareholders holding a majority of the shares of stock of the
2
<PAGE> 3
corporation outstanding and entitled to vote. The request shall state the
purpose or purposes for which the meeting is to be called.
4.04 Notice of Meetings. Except as otherwise provided by statute, written
notice of the time, place and purposes of a meeting of shareholders shall be
given not fewer than 10 nor more than 60 days before the date of the meeting to
each shareholder of record entitled to vote at the meeting, either personally or
by mailing such notice to his last address as it appears on the books of the
corporation. No notice need be given of an adjourned meeting of the shareholders
provided the time and place to which such meeting is adjourned are announced at
the meeting at which the adjournment is taken and at the adjourned meeting only
such business is transacted as might have been transacted at the original
meeting. However, if after the adjournment a new record date is fixed for the
adjourned meeting a notice of the adjourned meeting shall be given to each
shareholder of record on the new record date entitled to notice as provided in
this Bylaw.
4.05 Record Dates. The Board may fix in advance a date as the record date
for the purpose of determining shareholders entitled to notice of and to vote at
a meeting of shareholders or an adjournment thereof, or to express consent or to
dissent from a proposal without a meeting, or for the purpose of determining
shareholders entitled to receive payment of a dividend or allotment of a right,
or for the purpose of any other action. The date fixed shall not be more than 60
nor fewer than 10 days before the date of the meeting, nor more than 60 days
before any other action. In such case only such shareholders as shall be
shareholders of record on the date so fixed shall be entitled to notice of and
to vote at such meeting or adjournment thereof, or to express consent or to
dissent from such proposal, or to receive payment of such dividend or to receive
such allotment of rights, or to participate in any other action, as the case may
be, notwithstanding any transfer of any stock on the books of the corporation,
or otherwise, after any such record date. Nothing in this Bylaw shall affect the
rights of a shareholder and his transferee or transferor as between themselves.
4.06 List of Shareholders. The Secretary of the corporation or the agent
of the corporation having charge of the stock transfer records for shares of the
corporation shall make and certify a complete list of the shareholders entitled
to vote at a shareholders' meeting or any adjournment thereof. The list shall be
arranged alphabetically within each class and series, with the address of, and
the number of shares held by, each shareholder; be produced at the time and
place of the meeting; be subject to inspection by any shareholder during the
whole time of the meeting; and be prima facie evidence as to who are the
shareholders entitled to examine the list or vote at the meeting.
4.07 Quorum. Unless a greater or lesser quorum is required in the Articles
of Incorporation or by the laws of the State of Michigan, the shareholders
present at a meeting in person or by proxy who, as of the record date for such
meeting, were holders of a majority of the outstanding shares of the corporation
entitled to vote at the meeting shall constitute a quorum at the meeting.
Whether or not a quorum is present, a meeting of shareholders may be adjourned
by a vote of the shares present in person or by proxy. When the holders of a
class or series of shares are
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entitled to vote separately on an item of business, this Bylaw applies in
determining the presence of a quorum of such class or series for transaction of
such item of business.
4.08 Proxies. A shareholder entitled to vote at a meeting of shareholders
or to express consent or dissent without a meeting may authorize other persons
to act for the shareholder by proxy. A proxy shall be signed by the shareholder
or the shareholder's authorized agent or representative and shall not be valid
after the expiration of three years from its date unless otherwise provided in
the proxy. A proxy is revocable at the pleasure of the shareholder executing it
except as otherwise provided by the laws of the State of Michigan.
4.09 Voting. Each outstanding share is entitled to one vote on each matter
submitted to a vote, unless otherwise provided in the Articles of Incorporation.
Votes may be cast orally or in writing, but if more than 25 shareholders of
record are entitled to vote, then votes shall be cast in writing signed by the
shareholder or the shareholder's proxy. When an action, other than the election
of directors, is to be taken by a vote of the shareholders, it shall be
authorized by a majority of the votes cast by the holders of shares entitled to
vote thereon, unless a greater vote is required by the Articles of Incorporation
or by the laws of the State of Michigan. Except as otherwise provided by the
Articles of Incorporation, directors shall be elected by a plurality of the
votes cast at any election.
ARTICLE V
DIRECTORS
5.01 Number. The business and affairs of the corporation shall be managed
by a Board of not fewer than one, nor more than nine, directors, as such number
shall be set from time to time by the Board. The directors need not be residents
of Michigan or shareholders of the corporation.
5.02 Election, Resignation and Removal. Directors shall be elected at each
annual meeting of the shareholders, each to hold office until the next annual
meeting of shareholders and until the director's successor is elected and
qualified, or until the director's resignation or removal. A director may resign
by written notice to the corporation. The resignation is effective upon its
receipt by the corporation or a subsequent time as set forth in the notice of
resignation. A director or the entire Board may be removed, with or without
cause, by vote of the holders of a majority of the shares entitled to vote at an
election of directors.
5.03 Vacancies. Vacancies in the Board occurring by reason of death,
resignation, removal, increase in the number of directors or otherwise shall be
filled by the affirmative vote of a majority of the remaining directors though
fewer than a quorum of the Board, unless filled by proper action of the
shareholders of the corporation. Each person so elected shall be a director for
a term of office continuing only until the next election of directors by the
shareholders. A vacancy that will occur at a specific date, by reason of a
resignation effective at a later date or otherwise, may
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be filled before the vacancy occurs, but the newly elected director may not take
office until the vacancy occurs.
5.04 Annual Meeting. The Board shall meet each year immediately after the
annual meeting of the shareholders, or within three days of such time excluding
Sundays and legal holidays if such later time is deemed advisable, at the place
where such meeting of the shareholders has been held or such other place as the
Board may determine, for the purpose of election of officers and consideration
of such business that may properly be brought before the meeting; provided, that
if less than a majority of the directors appear for an annual meeting of the
Board the holding of such annual meeting shall not be required and the matters
which might have been taken up therein may be taken up at any later special or
annual meeting, or by consent resolution.
5.05 Regular and Special Meetings. Regular meetings of the Board may be
held at such times and places as the majority of the directors may from time to
time determine at a prior meeting or as shall be directed or approved by the
vote or written consent of all the directors. Special meetings of the Board may
be called by the Chairman of the Board (if such office is filled) or the
President and shall be called by the President or Secretary upon the written
request of any two directors.
5.06 Notices. No notice shall be required for annual or regular meetings
of the Board or for adjourned meetings, whether regular or special. Three days'
written notice shall be given for special meetings of the Board, and such notice
shall state the time, place and purpose or purposes of the meeting.
5.07 Quorum. A majority of the Board then in office, or of the members of
a committee thereof, constitutes a quorum for the transaction of business. The
vote of a majority of the directors present at any meeting at which there is a
quorum shall be the acts of the Board or of the committee, except as a larger
vote may be required by the laws of the State of Michigan. A member of the Board
or of a committee designated by the Board may participate in a meeting by means
of conference telephone or similar communications equipment by means of which
all persons participating in the meeting can communicate with each other.
Participation in a meeting in this manner constitutes presence in person at the
meeting.
5.08 Executive and Other Committees. The Board may, by resolution passed
by a majority of the whole Board, appoint three or more members of the Board as
an executive committee to exercise all powers and authorities of the Board in
management of the business and affairs of the corporation, except that the
committee shall not have power or authority to (a) amend the Articles of
Incorporation; (b) adopt an agreement of merger or consolidation; (c) recommend
to shareholders the sale, lease or exchange of all or substantially all of the
corporation's property and assets; (d) recommend to shareholders a dissolution
of the corporation or revocation of a dissolution; (e) amend these Bylaws; (f)
fill vacancies in the Board; or (g) unless expressly authorized by the Board,
declare a dividend or authorize the issuance of stock.
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The Board from time to time may, by like resolution, appoint such other
committees of one or more directors to have such authority as shall be specified
by the Board in the resolution making such appointments. The Board may designate
one or more directors as alternate members of any committee who may replace an
absent or disqualified member at any meeting thereof.
5.09 Dissents. A director who is present at a meeting of the Board, or a
committee thereof of which the director is a member, at which action on a
corporate matter is taken is presumed to have concurred in that action unless
the director's dissent is entered in the minutes of the meeting or unless the
director files a written dissent to the action with the person acting as
secretary of the meeting before the adjournment thereof or shall forward such
dissent by registered mail to the Secretary of the corporation promptly after
the adjournment of the meeting. Such right to dissent does not apply to a
director who voted in favor of such action. A director who is absent from a
meeting of the Board, or a committee thereof of which the director is a member,
at which any such action is taken is presumed to have concurred in the action
unless the director files a written dissent with the Secretary of the
corporation within a reasonable time after the director has knowledge of the
action.
5.10 Compensation. The Board, by affirmative vote of a majority of
directors in office and irrespective of any personal interest of any of them,
may establish reasonable compensation of directors for services to the
corporation as directors or officers.
ARTICLE VI
NOTICE AND MANNER OF ACTING
6.01 Notices. All notices of meetings required to be given to
shareholders, directors or any committee of directors may be given by mail,
telecopy, telegram, radiogram or cablegram to any shareholder, director or
committee member at his last address as it appears on the books of the
corporation. Such notice shall be deemed to be given at the time when the same
shall be mailed or otherwise dispatched.
6.02 Waiver of Notice. Notice of the time, place and purpose of any
meeting of shareholders, directors or committee of directors may be waived by
telecopy, telegram, radiogram, cablegram or other writing, either before or
after the meeting, or in such other manner as may be permitted by the laws of
the State of Michigan. Attendance of a person at any meeting of shareholders, in
person or by proxy, or at any meeting of directors or of a committee of
directors, constitutes a waiver of notice of the meeting except as follows:
(a) In the case of a shareholder, unless the shareholder at the
beginning of the meeting objects to holding the meeting or transacting
business at the meeting, or unless with respect to consideration of a
particular matter at the meeting that is not within the purpose
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or purposes described in the meeting notice, the shareholder objects to
considering the matter when it is presented.
(b) In the case of a director, unless he or she at the beginning of
the meeting, or upon his or her arrival, objects to the meeting or the
transacting of business at the meeting and does not thereafter vote for or
assent to any action taken at the meeting.
6.03 Action Without a Meeting. Except as may be provided otherwise in the
Articles of Incorporation for action to be taken by shareholders, any action
required or permitted at any meeting of shareholders or directors or committee
of directors may be taken without a meeting, without prior notice and without a
vote, if all of the shareholders or directors or committee members entitled to
vote thereon consent thereto in writing, before or after the action is taken.
ARTICLE VII
OFFICERS
7.01 Number. The Board shall elect or appoint a President, a Secretary and
a Treasurer, and may select a Chairman of the Board, and one or more Vice
Presidents, Assistant Secretaries or Assistant Treasurers. The President and
Chairman of the Board, if any, shall be members of the Board. Any two or more of
the above offices, except those of President and Vice President, may be held by
the same person. No officer shall execute, acknowledge or verify an instrument
in more than one capacity if the instrument is required by law, the Articles of
Incorporation or these Bylaws to be executed, acknowledged, or verified by one
or more officers.
7.02 Term of Office, Resignation and Removal. An officer shall hold office
for the term for which he is elected or appointed and until his successor is
elected or appointed and qualified, or until his resignation or removal. An
officer may resign by written notice to the corporation. The resignation is
effective upon its receipt by the corporation or at a subsequent time specified
in the notice of resignation. An officer may be removed by the Board with or
without cause. The removal of an officer shall be without prejudice to his
contract rights, if any. The election or appointment of an officer does not of
itself create contract rights.
7.03 Vacancies. The Board may fill any vacancies in any office occurring
for whatever reason.
7.04 Authority. All officers, employees and agents of the corporation
shall have such authority and perform such duties in the conduct and management
of the business and affairs of the corporation as may be designated by the Board
and these Bylaws.
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ARTICLE VIII
DUTIES OF OFFICERS
8.01 Chairman of the Board. The Chairman of the Board, if such office is
filled, shall preside at all meetings of the shareholders and of the Board at
which the Chairman is present.
8.02 President. The President shall be the chief executive officer of the
corporation. The President shall see that all orders and resolutions of the
Board are carried into effect, and the President shall have the general powers
of supervision and management usually vested in the chief executive officer of a
corporation, including the authority to vote all securities of other
corporations and business organizations held by the corporation. In the absence
or disability of the Chairman of the Board, or if that office has not been
filled, the President also shall perform the duties of the Chairman of the Board
as set forth in these Bylaws.
8.03 Vice Presidents. The Vice Presidents, in order of their seniority,
shall, in the absence or disability of the President, perform the duties and
exercise the powers of the President and shall perform such other duties as the
Board or the President may from time to time prescribe.
8.04 Secretary. The Secretary shall attend all meetings of the Board and
of shareholders and shall record all votes and minutes of all proceedings in a
book to be kept for that purpose, shall give or cause to be given notice of all
meetings of the shareholders and of the Board, and shall keep in safe custody
the seal of the corporation and, when authorized by the Board, affix the same to
any instrument requiring it, and when so affixed it shall be attested by the
signature of the Secretary, or by the signature of the Treasurer or an Assistant
Secretary. The Secretary may delegate any of the duties, powers and authorities
of the Secretary to one or more Assistant Secretaries, unless such delegation is
disapproved by the Board.
8.05 Treasurer. The Treasurer shall have the custody of the corporate
funds and securities; shall keep full and accurate accounts of receipts and
disbursements in books of the corporation; and shall deposit all moneys and
other valuable effects in the name and to the credit of the corporation in such
depositories as may be designated by the Board. The Treasurer shall render to
the President and directors, whenever they may require it, an account of his or
her transactions as Treasurer and of the financial condition of the corporation.
The Treasurer may delegate any of his or her duties, powers and authorities to
one or more Assistant Treasurers unless such delegation is disapproved by the
Board.
8.06 Assistant Secretaries and Treasurers. The Assistant Secretaries, in
order of their seniority, shall perform the duties and exercise the powers and
authorities of the Secretary in case of the Secretary's absence or disability.
The Assistant Treasurers, in the order of their seniority, shall perform the
duties and exercise the powers and authorities of the Treasurer in case of the
Treasurer's absence or disability. The Assistant Secretaries and Assistant
Treasurers shall also perform such
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duties as may be delegated to them by the Secretary and Treasurer, respectively,
and also such duties as the Board may prescribe.
ARTICLE IX
SPECIAL CORPORATE ACTS
9.01 Orders for Payment of Money. All checks, drafts, notes, bonds, bills
of exchange and orders for payment of money of the corporation shall be signed
by such officer or officers or such other person or persons as the Board may
from time to time designate.
9.02 Contracts and Conveyances. The Board of the corporation may in any
instance designate the officer and/or agent who shall have authority to execute
any contract, conveyance, mortgage or other instrument on behalf of the
corporation, or may ratify or confirm any execution. When the execution of any
instrument has been authorized without specification of the executing officers
or agents, the Chairman of the Board, the President or any Vice President, and
the Secretary or Assistant Secretary or Treasurer or Assistant Treasurer, may
execute the same in the name and on behalf of this corporation and may affix the
corporate seal thereto.
ARTICLE X
BOOKS AND RECORDS
10.01 Maintenance of Books and Records. The proper officers and agents of
the corporation shall keep and maintain such books, records and accounts of the
corporation's business and affairs, minutes of the proceedings of its
shareholders, Board and committees, if any, and such stock ledgers and lists of
shareholders, as the Board shall deem advisable, and as shall be required by the
laws of the State of Michigan and other states or jurisdictions empowered to
impose such requirements. Books, records and minutes may be kept within or
without the State of Michigan in a place which the Board shall determine.
10.02 Reliance on Books and Records. In discharging his or her duties, a
director or an officer of the corporation, when acting in good faith, may rely
upon information, opinions, reports, or statements, including financial
statements and other financial data, if prepared or presented by any of the
following:
(a) One or more directors, officers, or employees of the
corporation, or of a business organization under joint control or common
control, whom the director or officer reasonably believes to be reliable
and competent in the matters presented.
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(b) Legal counsel, public accountants, engineers, or other persons
as to matters the director or officer reasonably believes are within the
person's professional or expert competence.
(c) A committee of the board of which he or she is not a member if
the director or officer reasonably believes the committee merits
confidence.
A director or officer is not entitled to rely on the information set forth above
if he or she has knowledge concerning the matter in question that makes reliance
otherwise permitted unwarranted.
ARTICLE XI
INDEMNIFICATION
11.01 Non-Derivative Actions. Subject to all of the other provisions of
this Article XI, the corporation shall indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative and whether formal or informal (other than an action by or in the
right of the corporation) by reason of the fact that the person is or was a
director or officer of the corporation, or is or was serving at the request of
the corporation as a director, officer, partner, trustee, employee, or agent of
another foreign or domestic corporation, partnership, joint venture, trust or
other enterprise, whether for profit or not, against expenses (including actual
and reasonable attorneys' fees), judgments, penalties, fines, and amounts paid
in settlement actually and reasonably incurred by him or her in connection with
such action, suit or proceeding if the person acted in good faith and in a
manner the person reasonably believed to be in or not opposed to the best
interests of the corporation or its shareholders, and with respect to any
criminal action or proceeding, if the person had no reasonable cause to believe
his or her conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction, or upon a plea of nolo
contendere or its equivalent, shall not, of itself, create a presumption that
the person did not act in good faith and in a manner which the person reasonably
believed to be in or not opposed to the best interests of the corporation or its
shareholders, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his or her conduct was unlawful.
11.02 Derivative Actions. Subject to all of the provisions of this Article
XI, the corporation shall indemnify any person who was or is a party to or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the corporation to procure a judgment in its favor by
reason of the fact that the person is or was a director or officer of the
corporation, or is or was serving at the request of the corporation as a
director, officer, partner, trustee, employee, or agent of another corporation,
or of a partnership, joint venture, trust or other enterprise, whether for
profit or not, against expenses (including attorneys' fees) and amounts paid in
settlement actually and reasonably incurred by the person in connection with
such action or suit
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if the person acted in good faith and in a manner the person reasonably believed
to be in or not opposed to the best interests of the corporation or its
shareholders. However, indemnification shall not be made for any claim, issue or
matter in which such person has been found liable to the corporation unless and
only to the extent that the court in which such action or suit was brought has
determined upon application that, despite the adjudication of liability but in
view of all circumstances of the case, such person is fairly and reasonably
entitled to indemnification for the reasonable expenses incurred.
11.03 Expenses of Successful Defense. To the extent that a person has been
successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in Section 11.01 or 11.02 of these Bylaws, or in defense
of any claim, issue or matter in the action, suit or proceeding, the person
shall be indemnified against actual and reasonable expenses (including
attorneys' fees) incurred by such person in connection with the action, suit or
proceeding and any action, suit or proceeding brought to enforce the mandatory
indemnification provided by this Section 11.03.
11.04 Definition. For the purposes of Sections 11.01 and 11.02, "other
enterprises" shall include employee benefit plans; "fines" shall include any
excise taxes assessed on a person with respect to an employee benefit plan; and
"serving at the request of the corporation" shall include any service as a
director, officer, employee, or agent of the corporation which imposes duties
on, or involves services by, the director or officer with respect to an employee
benefit plan, its participants or beneficiaries; and a person who acted in good
faith and in a manner the person reasonably believed to be in the interest of
the participants and beneficiaries of an employee benefit plan shall be
considered to have acted in a manner "not opposed to the best interests of the
corporation or its shareholders" as referred to in Sections 11.01 and 11.02.
11.05 Contract Right; Limitation on Indemnity. The right to
indemnification conferred in this Article XI shall be a contract right, and
shall apply to services of a director or officer as an employee or agent of the
corporation as well as in such person's capacity as a director or officer.
Except as provided in Section 11.03 of these Bylaws, the corporation shall have
no obligations under this Article XI to indemnify any person in connection with
any proceeding, or part thereof, initiated by such person without authorization
by the Board.
11.06 Determination That Indemnification is Proper. Any indemnification
under Section 11.01 or 11.02 of these Bylaws (unless ordered by a court) shall
be made by the corporation only as authorized in the specific case upon a
determination that indemnification of the person is proper in the circumstances
because the person has met the applicable standard of conduct set forth in
Section 11.01 or 11.02, whichever is applicable, and upon an evaluation of the
reasonableness of expenses and amount paid in settlement. Such determination and
evaluation shall be made in any of the following ways:
(a) By a majority vote of a quorum of the Board consisting of
directors who are not parties or threatened to be made parties to such
action, suit or proceeding.
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(b) If the quorum described in clause (a) above is not obtainable,
then by a majority vote of a committee of directors duly designated by the
Board and consisting solely of two or more directors who are not at the
time parties or threatened to be made parties to the action, suit or
proceeding.
(c) By independent legal counsel in a written opinion which counsel
shall be selected in one of the following ways: (i) by the board or its
committee in the manner prescribed in subparagraph (a) or (b); or (ii) if
a quorum of the board cannot be obtained under subparagraph (a) and a
committee cannot be designated under subparagraph (b), by the board.
(d) By the shareholders, but shares held by directors or officers
who are parties or threatened to be made parties to the action, suit or
proceeding may not be voted.
11.07 Proportionate Indemnity. If a person is entitled to indemnification
under Section 11.01 or 11.02 of these Bylaws for a portion of expenses,
including attorneys' fees, judgments, penalties, fines, and amounts paid in
settlement, but not for the total amount thereof, the corporation shall
indemnify the person for the portion of the expenses, judgments, penalties,
fines, or amounts paid in settlement for which the person is entitled to be
indemnified.
11.08 Expense Advance. The corporation may pay or reimburse the reasonable
expenses incurred by a person referred to in Section 11.01 or 11.02 of these
bylaws who is a party or threatened to be made a party to an action, suit, or
proceeding in advance of final disposition of the proceeding if all of the
following apply: (a) the person furnishes the corporation a written affirmation
of his or her good faith belief that he or she has met the applicable standard
of conduct set forth in Section 11.01 or 11.02; (b) the person furnishes the
corporation a written undertaking executed personally, or on his or her behalf,
to repay the advance if it is ultimately determined that he or she did not meet
the standard of conduct; (c) the authorization of payment is made in the manner
specified in Section 11.06; and (d) a determination is made that the facts then
known to those making the determination would not preclude indemnification under
Section 11.01 or 11.02. The undertaking shall be an unlimited general obligation
of the person on whose behalf advances are made but need not be secured.
11.09 Non-Exclusivity of Rights. The indemnification or advancement of
expenses provided under this Article XI is not exclusive of other rights to
which a person seeking indemnification or advancement of expenses may be
entitled under a contractual arrangement with the corporation. However, the
total amount of expenses advanced or indemnified from all sources combined shall
not exceed the amount of actual expenses incurred by the person seeking
indemnification or advancement of expenses.
11.10 Indemnification of Employees and Agents. The corporation may, to the
extent authorized from time to time by the Board, grant rights to
indemnification and to the advancement of expenses to any employee or agent of
the corporation to the fullest extent of the provisions of this
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Article XI with respect to the indemnification and advancement of expenses of
directors and officers of the corporation.
11.11 Former Directors and Officers. The indemnification provided in this
Article XI continues as to a person who has ceased to be a director or officer
and shall inure to the benefit of the heirs, executors and administrators of
such person.
11.12 Insurance. The corporation may purchase and maintain insurance on
behalf of any person who is or was a director, officer, partner, trustee,
employee or agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against any liability
asserted against the person and incurred by him or her in any such capacity or
arising out of his or her status as such, whether or not the corporation would
have power to indemnify the person against such liability under these Bylaws or
the laws of the State of Michigan.
11.13 Changes in Michigan Law. In the event of any change of the Michigan
statutory provisions applicable to the corporation relating to the subject
matter of this Article XI, then the indemnification to which any person shall be
entitled hereunder shall be determined by such changed provisions, but only to
the extent that any such change permits the corporation to provide broader
indemnification rights than such provisions permitted the corporation to provide
prior to any such change. Subject to Section 11.14, the Board is authorized to
amend these Bylaws to conform to any such changed statutory provisions.
11.14 Amendment or Repeal of Article XI. No amendment or repeal of this
Article XI shall apply to or have any effect on any director or officer of the
corporation for or with respect to any acts or omissions of such director or
officer occurring prior to such amendment or repeal.
ARTICLE XII
AMENDMENTS
12.01 Amendments. The Bylaws of the corporation may be amended, altered or
repealed, in whole or in part, by the shareholders or by the Board at any
meeting duly held in accordance with these Bylaws, provided that notice of the
meeting includes notice of the proposed amendment, alteration or repeal.
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Exhibit 3.32
MICHIGAN DEPARTMENT OF CONSUMER AND INDUSTRY SERVICES
CORPORATION, SECURITIES AND LAND DEVELOPMENT BUREAU
ARTICLES OF INCORPORATION
(domestic profit corporation)
These Articles of Incorporation are signed by the incorporator for the
purpose of forming a profit corporation pursuant to the provisions of Act 284,
Public Acts of 1972, as amended, as follows:
ARTICLE I
Name
The name of the corporation is OASP, Inc. (the "Corporation").
ARTICLE II
Purpose
The purpose or purposes for which the Corporation is organized is to
engage in any activity within the purposes for which corporations may be
organized under the Michigan Business Corporation Act (the "MBCA").
<PAGE> 2
ARTICLE III
Authorized Capital
The total authorized capital is 60,000 shares of Common Stock. Each share
is entitled to one vote on all matters submitted to the shareholders of the
Corporation and each share shall have all the share rights and preferences as
each other share.
ARTICLE IV
Registered Office and Resident Agent
The address of the initial registered office is 1250 Stephenson Highway,
Troy, Michigan 48083. The mailing address of the initial registered office is
1250 Stephenson Highway, Troy, Michigan 48083. The name of the initial resident
agent is Clifford C. Suing.
ARTICLE V
Limitation of Director Liability
No director of the Corporation shall be personally liable to the
Corporation or its shareholders for money damages for any action taken, or any
failure to take any action, except liability for any of the following: (1) the
amount of a financial benefit received by a director to which he or she is not
entitled; (2) intentional infliction of harm on the Corporation or its
shareholders; (3) a violation of Section 551 of the MBCA, MCLA 450.1551, MSA
21.200(551); or (4) an intentional violation of criminal law. If the MBCA is
amended to authorize the further elimination or limitation of the liability of
directors, then the liability of a director of the Corporation, in addition to
the limitation on personal liability contained in these articles of
incorporation, shall be eliminated or limited to the fullest extent permitted by
the MBCA as so amended. No amendment or repeal of this article shall apply to or
have any effect on the liability or alleged liability of any director of the
Corporation for or with respect to any acts or omissions of any director
occurring before the effective date of any such amendment or repeal.
ARTICLE VI
Compromise, Arrangement, or Plan of Reorganization
When a compromise or arrangement or a plan of reorganization of the
Corporation is proposed between the Corporation and its creditors or any class
of them or between the Corporation and its shareholders or any class of them, a
court of equity jurisdiction within the state, on application of the Corporation
or of a creditor or shareholder of it, or on application of a receiver appointed
for the
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Corporation, may order a meeting of the creditors or class of creditors or of
the shareholders or class of shareholders to be affected by the proposed
compromise or arrangement or reorganization, to be summoned in the manner that
the court directs. If a majority in number representing 3/4 in value of the
creditors or class of creditors, or of the shareholders or class of shareholders
to be affected by the proposed compromise or arrangement or a reorganization,
agree to a compromise or arrangement or a reorganization of the Corporation as a
consequence of the compromise or arrangement, the compromise or arrangement and
the reorganization, if sanctioned by the court to which the application has been
made, shall be binding on all the creditors or class of creditors, or on all the
shareholders or class of shareholders, and also on the Corporation.
ARTICLE VII
Corporate Action Without Meeting of Shareholders
Any action required or permitted by the MBCA to be taken at any annual or
special meeting of shareholders may be taken without a meeting, without prior
notice and without a vote, if a consent in writing, setting forth the action so
taken, is signed by the holders of outstanding stock having not less than the
minimum number of votes that would be necessary to authorize or take the action
at a meeting at which all shares entitled to vote thereon were present and
voted.
Prompt notice of the taking of the corporate action without a meeting by
less than unanimous written consent shall be given to shareholders who have not
consented in writing.
ARTICLE VIII
Incorporator
The name and business address of the incorporator is Robert E. Smith.
I, the incorporator, sign my name this 11th day November, 1998.
/s/ Robert E. Smith
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Robert E. Smith, Incorporator
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EXHIBIT 3.33
BYLAWS
OF
OASP, INC.
ARTICLE I
Offices
1.01 Principal Office. The principal office of OASP, Inc., a Michigan
corporation (the "Corporation") shall be at such place as the Board of Directors
of the Corporation (the "Board") shall from time to time determine.
1.02 Other Offices. The Corporation also may have offices at such other
places as the Board from time to time determines or the business of the
Corporation requires.
ARTICLE II
Seal
2.01 Seal. The Corporation may have a seal in the form that the Board may
from time to time determine. The seal may be used by causing it or a facsimile
to be impressed, affixed or otherwise reproduced.
ARTICLE III
Capital Stock
3.01 Issuance of Shares. The shares of capital stock of the Corporation
shall be issued in the amounts, at the times, for the consideration, and on the
terms and conditions that the Board shall deem advisable, subject to the
Articles of Incorporation of the Corporation (the "Articles of Incorporation")
and any requirements of the laws of the State of Michigan.
3.02 Certificates for Shares. The shares of the capital stock of the
Corporation shall be represented by certificates signed by the chairperson of
the Board, the president, or a vice president, and also may be signed by the
treasurer, assistant treasurer, secretary, or assistant secretary, and may be
sealed with the seal of the Corporation, if any, or a facsimile of it. The
signatures of the officers may be facsimiles if the certificate is countersigned
by a transfer agent or registered by a registrar other than the Corporation
itself or its employee. In case an officer who has signed or whose facsimile
signature has been placed upon a certificate ceases to be such officer before
the certificate is issued, it may be issued by the Corporation with the same
effect as if he or she were such officer at the date of issuance. A certificate
representing shares shall state the name of the person to whom
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it is issued, the number and class of shares and the designation of the series,
if any, that the certificate represents, and any other provisions that may be
required by the laws of the State of Michigan.
3.03 Transfer of Shares. The shares of the capital stock of the
Corporation are transferable only on the books of the Corporation upon surrender
of the certificate for the shares, properly endorsed for transfer, and the
presentation of the evidences of ownership and validity of the assignment that
the Corporation may require.
3.04 Registered Shareholders. The Corporation shall be entitled to treat
the person in whose name any share of stock is registered as the owner of it for
the purpose of dividends and other distributions or for any recapitalization,
merger, plan of share exchange, reorganization, sale of assets, or liquidation,
for the purpose of votes, approvals, and consents by the shareholders of the
Corporation (the "Shareholders"), for the purpose of notices to Shareholders,
and for all other purposes whatever, and shall not be bound to recognize any
equitable or other claim to or interest in the shares by any other person,
whether or not the Corporation shall have notice of it, except as expressly
required by the laws of the state of Michigan.
3.05 Lost or Destroyed Certificates. On the presentation to the
Corporation of a proper affidavit attesting to the loss, destruction, or
mutilation of any certificate or certificates for shares of stock of the
Corporation, the Board shall direct the issuance of a new certificate or
certificates to replace the certificates so alleged to be lost, destroyed, or
mutilated. The Board may require as a condition precedent to the issuance of new
certificates a bond or agreement of indemnity, in the form and amount and with
or without sureties, as the Board may direct or approve.
ARTICLE IV
Shareholders and Meetings of Shareholders
4.01 Place of Meetings. All meetings of Shareholders shall be held at the
principal office of the Corporation or at any other place that shall be
determined by the Board and stated in the meeting notice.
4.02 Annual Meeting. The annual meeting of the Shareholders shall be held
on the first Thursday of April or at such other time as the Board may select.
Directors shall be elected at each annual meeting and such other business
transacted as may come before the meeting.
4.03 Special Meetings. Special meetings of Shareholders may be called by
the Board, the chairperson of the Board (if the office is filled) or the
president and shall be called by the president or secretary at the written
request of Shareholders holding a majority of the outstanding shares of stock of
the Corporation entitled to vote. The request shall state the purpose or
purposes for which the meeting is to be called.
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4.04 Notice of Meetings. Except as otherwise provided by statute, written
notice of the time, place, and purposes of a Shareholders meeting shall be given
not less than 10 nor more than 60 days before the date of the meeting to each
shareholder of record entitled to vote at the meeting, either personally or by
mailing the notice to his or her last address as it appears on the books of the
Corporation. The notice shall include notice of proposals from Shareholders that
are proper subjects for shareholder action and are intended to be presented by
Shareholders who have so notified the Corporation in accordance with Section
4.10. No notice need be given of an adjourned meeting of the Shareholders
provided that the time and place to which the meeting is adjourned are announced
at the meeting at which the adjournment is taken, and at the adjourned meeting
the only business to be transacted is business that might have been transacted
at the original meeting. However, if after the adjournment a new record date is
fixed for the adjourned meeting, a notice of the adjourned meeting shall be
given to each shareholder of record entitled to notice on the new record date as
provided in this bylaw.
4.05 Record Dates. The Board may fix in advance a record date for the
purpose of determining shareholders entitled to notice of and to vote at a
meeting of Shareholders or an adjournment of the meeting or to express consent
to or to dissent from a proposal without a meeting; for the purpose of
determining shareholders entitled to receive payment of a dividend or an
allotment of a right; or for the purpose of any other action. The date fixed
shall not be more than 60 nor less than 10 days before the date of the meeting,
nor more than 60 days before any other action. In such case only the
Shareholders that shall be shareholders of record on the date so fixed shall be
entitled to notice of and to vote at the meeting or an adjournment of the
meeting or to express consent to or to dissent from the proposal; to receive
payment of the dividend or the allotment of rights; or to participate in any
other action, notwithstanding any transfer of any stock on the books of the
Corporation, after any such record date. Nothing in this bylaw shall affect the
rights of a Shareholder and his or her transferee or transferor as between
themselves.
4.06 List of Shareholders. The secretary or the agent of the Corporation
having charge of the stock transfer records for shares of the Corporation shall
make and certify a complete list of the Shareholders entitled to vote at a
Shareholders meeting or any adjournment of it. The list shall be arranged
alphabetically within each class and series and include the address of, and the
number of shares held by, each Shareholder; be produced at the time and place of
the meeting; be subject to inspection by any Shareholder during the whole time
of the meeting; and be prima facie evidence of which shareholders are entitled
to examine the list or vote at the meeting.
4.07 Quorum. Unless a greater or lesser quorum is required in the Articles
of Incorporation or by the laws of the state of Michigan, the Shareholders
present at a meeting in person or by proxy who, as of the record date for the
meeting, were holders of a majority of the outstanding shares of the Corporation
entitled to vote at the meeting, shall constitute a quorum at the meeting.
Whether or not a quorum is present, a meeting of Shareholders may be adjourned
by a vote of the shares present in person or by proxy. When the holders of a
class or series of shares are entitled to vote separately on an item of
business, this bylaw applies in determining the presence of a quorum of the
class or series for transacting the item of business.
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4.08 Proxies. A Shareholder entitled to vote at a Shareholders meeting or
to express consent or to dissent without a meeting may authorize other persons
to act for the Shareholder by proxy. A proxy shall be signed by the Shareholder
or the Shareholder's authorized agent or representative and shall not be valid
after the expiration of three years from its date unless otherwise provided in
the proxy. A proxy is revocable at the pleasure of the Shareholder executing it
except as otherwise provided by the laws of the state of Michigan.
4.09 Voting. Each outstanding share is entitled to one vote on each matter
submitted to a vote, unless the Articles of Incorporation provide otherwise.
Votes may be cast orally or in writing, but if more than 25 Shareholders of
record are entitled to vote, then votes shall be cast in writing signed by the
Shareholder or the Shareholder's proxy. When an action, other than the election
of directors, is to be taken by a vote of the Shareholders, it shall be
authorized by a majority of the votes cast by the holders of shares entitled to
vote on it, unless a greater vote is required by the Articles of Incorporation
or by the laws of the state of Michigan. Except as otherwise provided by the
Articles of Incorporation, directors shall be elected by a plurality of the
votes cast at any election.
4.10 Notice of Shareholder Proposals. A Shareholder may cause the
Corporation to include in the notice for any meeting of Shareholders, notice of
proposals under Section 4.04, by giving timely written notice to the secretary
at the principal executive offices of the Corporation. To be timely, (a) with
respect to an annual meeting of Shareholders pursuant to Section 4.02 (an
"Annual Meeting"), a Shareholder's notice must be delivered or mailed and
received by the secretary not less than 90 days prior to the date set for the
Annual Meeting in such Section 4.02; and (b) with respect to a meeting which is
a special meeting pursuant to Section 4.03 (a "Special Meeting"), not less than
five days after the earlier of (i) the announcement by the Corporation of the
intention to call a Special Meeting; or (ii) if no such announcement is made,
the date that notice of such meeting Special Meeting is given personally or is
mailed by the Corporation pursuant to Section 4.04, in which event, the
Corporation shall promptly provide or mail a revised notice of such Special
Meeting that includes the Shareholder's proposal if it qualifies for inclusion
therein as set forth in Section 4.04 and this Section 4.10. A Shareholder's
notice to the secretary shall set forth, as to each matter the Shareholder
proposes to bring before such meeting, (x) a brief description of the business
to be brought before the meeting; (y) the name and address, as they appear on
the Corporation's books, of the Shareholder(s) proposing the business; and (z)
any material interest of such Shareholder(s) in such business. All
determinations under this Section 4.10 shall be made by the Board, which
determinations shall be conclusive. This Section 4.10 shall be of no force and
effect during any time when the Corporation has a class of securities registered
under Section 12 of the Securities Exchange Act of 1934, as amended.
4.11 Conduct of Meeting. At each meeting of Shareholders, a chairperson
shall preside. In the absence of a specific selection by the Board, the chair
shall be the Chairperson of the Board as provided in Section 8.01. The chair
shall determine the order of business and shall have the authority to establish
rules for the conduct of the meeting which are fair to Shareholders. The chair
of the meeting shall announce at the meeting when the polls close for each
matter voted upon. If no announcement is made, the polls shall be deemed to have
closed upon the final adjournment of the
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meeting. After the polls close, no ballots, proxies or votes, nor any
revocations or changes thereto may be accepted.
4.12 Inspectors of Election. The Board, or the chairperson of the Board
presiding at any Shareholders' meeting, may appoint one or more inspectors. If
appointed, the inspectors shall determine the number of shares outstanding and
the voting power of each, the shares represented at the meeting, the existence
of a quorum and the validity and effect of proxies, and shall receive votes,
ballots or consents, hear and determine challenges or consents, determine the
result, and do such acts as are proper to conduct the election or vote with
fairness to all Shareholders. On request of the person presiding at the meeting,
the inspectors shall make and execute a written report to the person presiding
at the meeting of any of the facts found by them and matters determined by them.
The report shall be prima facie evidence of the facts stated and of the vote as
certified by the inspectors.
ARTICLE V
Directors
5.01 Number. The business and affairs of the Corporation shall be managed
by or under the direction of a board of not less than one nor more than nine
directors, as shall be fixed from time to time by the Board. The directors need
not be residents of Michigan or Shareholders.
5.02 Election, Resignation, and Removal. Directors shall be elected at
each annual Shareholders meeting, each director to hold office until the next
annual Shareholders meeting and until the director's successor is elected and
qualified, or until the director's resignation or removal. A director may resign
by written notice to the Corporation. The resignation is effective on its
receipt by the Corporation or at a subsequent time as set forth in the notice of
resignation. A director or the entire Board may be removed, with or without
cause, by vote of the holders of a majority of the shares entitled to vote at an
election of directors.
5.03 Vacancies. Vacancies in the Board occurring by reason of death,
resignation, removal, increase in the number of directors, or otherwise shall be
filled by the affirmative vote of a majority of the remaining directors though
less than a quorum of the Board, unless filled by proper action of the
Shareholders. Each person so elected shall be a director for a term of office
continuing only until the next election of directors by the Shareholders. A
vacancy that will occur at a specific date, by reason of a resignation effective
at a later date or otherwise, may be filled before the vacancy occurs, but the
newly elected director may not take office until the vacancy occurs.
5.04 Annual Meeting. The Board shall meet each year immediately after the
annual meeting of the Shareholders, or within three days of such time, excluding
Sundays and legal holidays, if the later time is deemed advisable, at the place
where the Shareholders meeting has been held or any other place that the Board
may determine, for the purpose of electing officers and considering such
business that may properly be brought before the meeting; provided that, if less
than a majority of the directors appear for an annual meeting of the Board, the
holding of the annual
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meeting shall not be required and the matters that might have been taken up in
it may be taken up at any later special or annual meeting, or by consent
resolution.
5.05 Regular and Special Meetings. Regular meetings of the Board may be
held at the times and places that the majority of the directors may from time to
time determine at a prior meeting or as shall be directed or approved by the
vote or written consent of all the directors. Special meetings of the Board may
be called by the chairperson of the Board (if the office is filled) or the
president, and shall be called by the president or secretary on the written
request of any two directors.
5.06 Notices. No notice shall be required for annual or regular meetings
of the Board or for adjourned meetings, whether regular or special. Three days
written notice or 24-hour telephonic notice shall be given for special meetings
of the Board, and the notice shall state the time, place, and purpose or
purposes of the meeting.
5.07 Quorum. A majority of the members of the Board then in office, or of
the members of a board committee, constitutes a quorum for the transaction of
business. The vote of a majority of the directors present at any meeting at
which there is a quorum constitutes the action of the Board or of the committee,
except when a larger vote may be required by the laws of the state of Michigan.
A member of the Board or of a committee designated by the Board may participate
in a meeting by conference telephone or similar communications equipment through
which all persons participating in the meeting can communicate with each other.
Participation in a meeting in this manner constitutes presence in person at the
meeting.
5.08 Dissents. A director who is present at a meeting of the Board, or a
board committee of which the director is a member, at which action on a
corporate matter is taken, is presumed to have concurred in that action unless
the director's dissent is entered in the minutes of the meeting or unless the
director files a written dissent to the action with the person acting as
secretary of the meeting before the adjournment of it or forwards the dissent by
registered mail to the secretary of the Corporation promptly after the
adjournment of the meeting. The right to dissent does not apply to a director
who voted in favor of the action. A director who is absent from a meeting of the
Board or a board committee of which the director is a member, at which any such
action is taken, is presumed to have concurred in the action unless he or she
files a written dissent with the secretary within a reasonable time after the
director has knowledge of the action.
5.09 Compensation. The Board, by affirmative vote of a majority of
directors in office and irrespective of any personal interest of any of them,
may establish reasonable compensation of directors for services to the
Corporation as directors or officers.
5.10 Executive and Other Committees. The Board may, by resolution passed
by a majority of the whole Board, appoint three or more members of the Board as
an executive committee to exercise all powers and authorities of the Board in
managing the business and affairs of the Corporation, except that the committee
shall not have power or authority to (a) amend the Articles of Incorporation,
except that a committee may prescribe the relative rights and preferences of the
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shares of a series if the Articles of Incorporation authorize the Board to do
so; (b) adopt an agreement of merger or plan of share exchange; (c) recommend to
Shareholders the sale, lease, or exchange of all or substantially all of the
Corporation's property and assets; (d) recommend to Shareholders a dissolution
of the Corporation or revocation of a dissolution; (e) amend these bylaws; (f)
fill vacancies on the Board; or (g) declare a dividend or authorize the issuance
of stock, unless expressly authorized by the Board.
The Board from time to time may, by like resolution, appoint any other
committees of one or more directors to have the authority that shall be
specified by the Board in the resolution making the appointments. The Board may
designate one or more directors as alternate members of any committee to replace
an absent or disqualified member at any committee meeting.
ARTICLE VI
Notices, Waivers of Notice, and Manner of Acting
6.01 Notices. All notices of meetings required to be given to
Shareholders, directors, or any committee of directors may be given by mail,
telecopy, telegram, radiogram, or cablegram to any Shareholder, director, or
committee member at his or her last address as it appears on the books of the
Corporation. The notice shall be deemed to be given at the time it is mailed or
otherwise dispatched. Telephonic notice may be given for special meetings of the
Board as provided in Section 5.06.
6.02 Waiver of Notice. Notice of the time, place, and purpose of any
meeting of Shareholders, directors, or committee of directors may be waived by
telecopy, telegram, radiogram, cablegram, or other writing, either before or
after the meeting, or in any other manner that may be permitted by the laws of
the state of Michigan. Attendance of a person at any Shareholders meeting, in
person or by proxy, or at any meeting of directors or of a committee of
directors, constitutes a waiver of notice of the meeting except as follows:
(a) In the case of a Shareholder, unless the Shareholder at the
beginning of the meeting objects to holding the meeting or transacting business
at the meeting, or unless with respect to consideration of a particular matter
at the meeting that is not within the purpose or purposes described in the
meeting notice, the Shareholder objects to considering the matter when it is
presented; or
(b) In the case of a director, unless he or she at the beginning of
the meeting, or upon his or her arrival, objects to the meeting or the
transacting of business at the meeting and does not thereafter vote for or
assent to any action taken at the meeting.
6.03 Action Without a Meeting. Except as the Articles of Incorporation may
otherwise provide for action to be taken by shareholders, any action required or
permitted at any meeting of Shareholders, directors, or a committee of directors
may be taken without a meeting, without prior
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notice, and without a vote, if all of the Shareholders, directors, or committee
members entitled to vote on it consent to it in writing, before or after the
action is taken.
ARTICLE VII
Officers
7.01 Number. The Board shall elect or appoint a president, a secretary,
and a treasurer, and may select a chairperson of the Board and one or more vice
presidents, assistant secretaries, or assistant treasurers. Any two or more of
the preceding offices, except those of president and vice president, may be held
by the same person. No officer shall execute, acknowledge, or verify an
instrument in more than one capacity if the instrument is required by law, the
Articles of Incorporation, or these bylaws to be executed, acknowledged, or
verified by one or more officers.
7.02 Term of Office, Resignation, and Removal. An officer shall hold
office for the term for which he or she is elected or appointed and until his or
her successor is elected or appointed and qualified, or until his or her
resignation or removal. An officer may resign by written notice to the
Corporation. The resignation is effective on its receipt by the Corporation or
at a subsequent time specified in the notice of resignation. An officer may be
removed by the Board with or without cause. The removal of an officer shall be
without prejudice to his or her contract rights, if any. The election or
appointment of an officer does not of itself create contract rights.
7.03 Vacancies. The Board may fill any vacancies in any office occurring
for whatever reason.
7.04 Authority. All officers, employees, and agents of the Corporation
shall have the authority and perform the duties to conduct and manage the
business and affairs of the Corporation that may be designated by the Board and
these bylaws.
ARTICLE VIII
Duties of Officers
8.01 Chairperson of the Board. The chairperson of the Board, if the office
is filled, shall preside at all meetings of the Shareholders and of the Board at
which the chairperson is present.
8.02 President. The president shall be the chief executive officer of the
Corporation. The president shall see that all orders and resolutions of the
Board are carried into effect, and the president shall have the general powers
of supervision and management usually vested in the chief executive officer of a
corporation, including the authority to vote all securities of other
corporations and business organizations held by the Corporation. In the absence
or disability of the chairperson of the Board, or if that office has not been
filled, the president also shall perform the duties of the chairperson of the
Board as set forth in these bylaws.
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8.03 Vice Presidents. The vice presidents, in order of their seniority,
shall, in the absence or disability of the president, perform the duties and
exercise the powers of the president and shall perform any other duties that the
Board or the president may from time to time prescribe.
8.04 Secretary. The secretary shall attend all meetings of the Board and
Shareholders and shall record all votes and minutes of all proceedings in a book
to be kept for that purpose; shall give or cause to be given notice of all
meetings of the Shareholders and the Board; and shall keep in safe custody the
seal of the Corporation, if any, and, when authorized by the Board, affix it to
any instrument requiring it, and when so affixed it shall be attested to by the
signature of the secretary or by the signature of the treasurer or an assistant
secretary. The secretary may delegate any of the duties, powers, and authorities
of the secretary to one or more assistant secretaries, unless the delegation is
disapproved by the Board.
8.05 Treasurer. The treasurer shall have the custody of the corporate
funds and securities, shall keep full and accurate accounts of receipts and
disbursements in the books of the Corporation, and shall deposit all moneys and
other valuable effects in the name and to the credit of the Corporation in the
depositories that may be designated by the Board. The treasurer shall render to
the president and directors, whenever they may require it, an account of his or
her transactions as treasurer and of the financial condition of the Corporation.
The treasurer may delegate any of his or her duties, powers, and authorities to
one or more assistant treasurers unless the delegation is disapproved by the
Board.
8.06 Assistant Secretaries and Treasurers. The assistant secretaries, in
order of their seniority, shall perform the duties and exercise the powers and
authorities of the secretary in case of the secretary's absence or disability.
The assistant treasurers, in the order of their seniority, shall perform the
duties and exercise the powers and authorities of the treasurer in case of the
treasurer's absence or disability. The assistant secretaries and assistant
treasurers shall also perform the duties that may be delegated to them by the
secretary and treasurer, respectively, and also the duties that the Board may
prescribe.
ARTICLE IX
Special Corporate Acts
9.01 Orders for Payment of Money. All checks, drafts, notes, bonds, bills
of exchange, and orders for payment of money of the Corporation shall be signed
by the officer or officers or any other person or persons that the Board may
from time to time designate.
9.02 Contracts and Conveyances. The Board may in any instance designate
the officer and/or agent who shall have authority to execute any contract,
conveyance, mortgage, or other instrument on behalf of the Corporation, or may
ratify or confirm any execution. When the execution of any instrument has been
authorized without specification of the executing officers or agents, the
chairperson of the Board, the president or any vice president, and the
secretary, assistant
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secretary, treasurer, or assistant treasurer may execute the instrument in the
name and on behalf of the Corporation and may affix the corporate seal, if any,
to it.
ARTICLE X
Books and Records
10.01 Maintenance of Books and Records. The proper officers and agents of
the Corporation shall keep and maintain the books, records, and accounts of the
Corporation's business and affairs, minutes of the proceedings of its
Shareholders, the Board, and committees, if any, and the stock ledgers and lists
of Shareholders, as the Board shall deem advisable and as shall be required by
the laws of the state of Michigan and other states or jurisdictions empowered to
impose such requirements. Books, records, and minutes may be kept within or
without the state of Michigan in a place that the Board shall determine.
10.02 Reliance on Books and Records. In discharging his or her duties, a
director or an officer of the Corporation, when acting in good faith, may rely
on information, opinions, reports, or statements, including financial statements
and other financial data, if prepared or presented by any of the following:
(a) One or more directors, officers, or employees of the
Corporation, or of a business organization under joint control or common
control, whom the director or officer reasonably believes to be reliable and
competent in the matters presented;
(b) Legal counsel, public accountants, engineers, or other persons
as to matters the director or officer reasonably believes are within the
person's professional or expert competence; or
(c) A committee of the Board of which he or she is not a member if
the director or officer reasonably believes the committee merits confidence.
A director or officer is not entitled to rely on the information set forth
above if he or she has knowledge concerning the matter in question that makes
reliance otherwise permitted unwarranted.
ARTICLE XI
Indemnification
11.01 Nonderivative Actions. Subject to all of the other provisions of
Article XI, the Corporation shall indemnify any person who was or is a party to
or is threatened to be made a party to any threatened, pending, or completed
action, suit, or proceeding, whether civil, criminal, administrative, or
investigative, formal or informal (other than an action by or in the right of
the Corporation), by reason of the fact that the person is or was a director or
officer of the Corporation,
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or, while serving as 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 foreign or domestic corporation, partnership,
joint venture, trust, or other enterprise, whether for profit or not, against
expenses (including actual and reasonable attorney fees), judgments, penalties,
fines, and amounts paid in settlement actually and reasonably incurred by him or
her in connection with such action, suit, or proceeding, if the person acted in
good faith and in a manner the person reasonably believed to be in or not
opposed to the best interests of the Corporation or the Shareholders, and with
respect to any criminal action or proceeding, if the person had no reasonable
cause to believe his or her conduct was unlawful. The termination of any action,
suit, or proceeding by judgment, order, settlement, conviction, or on a plea of
nolo contendere or its equivalent, shall not, of itself, create a presumption
that the person did not act in good faith and in a manner that the person
reasonably believed to be in or not opposed to the best interests of the
Corporation or the Shareholders and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his or her conduct was
unlawful.
11.02 Derivative Actions. Subject to all of the provisions of Article XI,
the Corporation shall indemnify any person who was or is a party to or is
threatened to be made a party to any threatened, pending, or completed action or
suit by or in the right of the Corporation to procure a judgment in its favor by
reason of the fact that the person is or was a director or officer of the
Corporation or, while serving as 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 foreign or domestic corporation,
partnership, joint venture, trust, or other enterprise, whether for profit or
not, against expenses (including attorney fees) and amounts paid in settlement
actually and reasonably incurred by the person in connection with the action or
suit, if the person acted in good faith and in a manner the person reasonably
believed to be in or not opposed to the best interests of the Corporation or the
Shareholders. However, indemnification shall not be made for any claim, issue,
or matter in which the person has been found liable to the Corporation unless
and only to the extent that the court in which the action or suit was brought
has determined on application that, despite the adjudication of liability but in
view of all circumstances of the case, the person is fairly and reasonably
entitled to indemnification for the reasonable expenses incurred.
11.03 Expenses of Successful Defense. To the extent that a person has been
successful on the merits or otherwise in defense of any action, suit, or
proceeding referred to in Sections 11.01 or 11.02, or in defense of any claim,
issue, or matter in the action, suit, or proceeding, the person shall be
indemnified against actual and reasonable expenses (including attorney fees)
incurred by the person in connection with the action, suit, or proceeding and
any action, suit, or proceeding brought to enforce the mandatory indemnification
provided by this Section 11.03.
11.04 Definition. For the purposes of Sections 11.01 and 11.02, "other
enterprises" shall include employee benefit plans; "fines" shall include any
excise taxes assessed on a person with respect to an employee benefit plan; and
"serving at the request of the Corporation" shall include any service as a
director, officer, employee, or agent of the Corporation that imposes duties on,
or involves services by, the director or officer with respect to an employee
benefit plan, its participants,
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or its beneficiaries; and a person who acted in good faith and in a manner the
person reasonably believed to be in the interest of the participants and
beneficiaries of an employee benefit plan shall be considered to have acted in a
manner "not opposed to the best interests of the Corporation or the
Shareholders" as referred to in Sections 11.01 and 11.02.
11.05 Contract Right; Limitation on Indemnity. The right to
indemnification conferred in Article XI shall be a contract right and shall
apply to services of a director or officer as an employee or agent of the
Corporation as well as in the person's capacity as a director or officer. Except
as provided in Section 11.03, the Corporation shall have no obligations under
Article XI to indemnify any person in connection with any proceeding, or part
thereof, initiated by the person without authorization by the Board.
11.06 Determination That Indemnification Is Proper. Any indemnification
under Sections 11.01 or 11.02 (unless ordered by a court) shall be made by the
Corporation only as authorized in the specific case upon a determination that
indemnification of the person is proper in the circumstances because the person
has met the applicable standard of conduct set forth in Sections 11.01 or 11.02,
whichever is applicable, and upon an evaluation of the reasonableness of expense
and amounts paid in settlement. The determination and evaluation shall be made
in any of the following ways:
(a) By a majority vote of a quorum of the Board consisting of
directors who are not parties or threatened to be made parties to the action,
suit, or proceeding;
(b) If the quorum described in clause (a) above is not obtainable,
then by majority vote of a committee of directors duly designated by the Board
and consisting solely of two or more directors who are not at the time parties
or threatened to be made parties to the action, suit, or proceeding;
(c) By independent legal counsel in a written opinion, which counsel
shall be selected in one of the following ways: (i) by the Board or its
committee in the manner prescribed in subparagraph (a) or (b); or (ii) if a
quorum of the Board cannot be obtained under subparagraph (a) and a committee
cannot be designated under subparagraph (b), by the Board; or
(d) By the Shareholders, but shares held by directors, officers,
employees, or agents who are parties or threatened to be made parties to the
action, suit, or proceeding may not be voted.
11.07 Authorizations of Payment.
(a) Authorizations of payment under Sections 11.01 and 11.02 shall
be made in any of the following ways:
(i) by the Board:
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(A) if there are two or more directors who are not
parties or threatened to be made parties to the action, suit or
proceeding, by a majority vote of all such directors (a majority of whom
shall for this purpose constitute a quorum)or by a majority of the members
of a committee of two or more directors who are not parties or threatened
to be made parties to the action, suit or proceeding;
(B) if the Corporation has one or more independent
directors who are not parties or threatened to be made parties to the
action, suit or proceeding, by a majority vote of all such directors (a
majority of whom shall for this purpose constitute a quorum); or
(C) if there are no independent directors and fewer than
two directors who are not parties or threatened to be made parties to the
action, suit or proceeding, by the vote necessary for action by the Board
in accordance with Section 3.07, in which authorization all directors may
participate; or
(ii) by the Shareholders, but shares held by directors,
officers, employees, or agents who are parties or threatened to be made parties
to the action, suit, or proceeding may not be voted on the authorization.
(b) To the extent that the Articles of Incorporation include a
provision eliminating or limiting the liability of a director pursuant to MCLA
450.1209(1)(c), MSA 21.200(209)(1), the Corporation may indemnify a director for
the expenses and liabilities described below without a determination that the
director has met the standard of conduct set forth in Sections 11.01 and 11.02,
but no indemnification may be made except to the extent authorized in MCLA
450.1564c, MSA 21.200(564c), if the director received a financial benefit to
which he or she was not entitled, intentionally inflicted harm on the
Corporation or the Shareholders, violated MCLA 450.1551, MSA 21.200(551), or
intentionally violated criminal law. In connection with an action or suit by or
in the right of the Corporation, as described in Section 11.02, indemnification
under this Section 11.07(b) may be for expenses, including attorneys' fees,
actually and reasonably incurred. In connection with an action, suit or
proceeding other than one by or in the right of the Corporation, as described in
Section 11.01, indemnification under this Section 11.07(b) may be for expenses,
including attorneys' fees, actually and reasonably incurred, and for judgments,
penalties, fines, and amounts paid in settlement actually and reasonably
incurred.
11.08 Proportionate Indemnity. If a person is entitled to indemnification
under Sections 11.01 or 11.02 for a portion of expenses, including attorney
fees, judgments, penalties, fines, and amounts paid in settlement, but not for
the total amount, the Corporation shall indemnify the person for the portion of
the expenses, judgments, penalties, fines, or amounts paid in settlement for
which the person is entitled to be indemnified.
11.09 Expense Advance. The Corporation may pay or reimburse the reasonable
expenses incurred by a person referred to in Sections 11.01 or 11.02 who is a
party or threatened to be made
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a party to an action, suit, or proceeding in advance of final disposition of the
proceeding if both of the following apply: (a) the person furnishes the
Corporation a written affirmation of his or her good faith belief that he or she
has met the applicable standard of conduct set forth in Sections 11.01 or 11.02;
and (b) the person furnishes the Corporation a written undertaking executed
personally, or on his or her belief, to repay the advance if it is ultimately
determined that he or she did not meet the standard of conduct. Determinations
and evaluations under this Section 11.09 shall be made as specified in Section
11.06, and authorizations shall be made in the manner specified in Section
11.07. A provision in the Articles of Incorporation, these bylaws, a resolution
by the Board or the Shareholders, or an agreement making indemnification
mandatory shall also make advancement of expenses mandatory unless the provision
specifically provides otherwise.
11.10 Non-Exclusivity of Rights. The indemnification or advancement of
expenses provided under this article is not exclusive of other rights to which a
person seeking indemnification or advancement of expenses may be entitled under
a contractual arrangement with the Corporation. However, the total amount of
expenses advanced or indemnified from all sources combined shall not exceed the
amount of actual expenses incurred by the person seeking indemnification or
advancement of expenses.
11.11 Indemnification of Employees and Agents of the Corporation. The
Corporation may, to the extent authorized from time to time by the Board, grant
rights to indemnification and to the advancement of expenses to any employee or
agent of the Corporation to the fullest extent of the provisions of Article XI
with respect to the indemnification and advancement of expenses of directors and
officers of the Corporation.
11.12 Former Directors and Officers. The indemnification provided in
Article XI continues for a person who has ceased to be a director or officer and
shall inure to the benefit of the heirs, executors, and administrators of the
person.
11.13 Insurance. The Corporation may purchase and maintain insurance on
behalf of any person who is or was a director, officer, employee, or agent of
the Corporation, or is or was serving at the request of the Corporation as a
director, officer, partner, trustee, employee, or agent of another corporation,
partnership, joint venture, trust, or other enterprise, against any liability
asserted against the person and incurred by him or her in any such capacity or
arising out of his or her status as such, whether or not the Corporation would
have power to indemnify the person against the liability under these bylaws or
the laws of the state of Michigan.
11.14 Changes in Michigan Law. If there is any change of the Michigan
statutory provisions applicable to the Corporation relating to the subject
matter of Article XI, then the indemnification to which any person shall be
entitled under this article shall be determined by the changed provisions, but
only to the extent that the change permits the Corporation to provide broader
indemnification rights than the provisions permitted the Corporation to provide
before the change. Subject to Section 11.15, the Board is authorized to amend
these bylaws to conform to any such changed statutory provisions.
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11.15 Amendment or Repeal of Article XI. No amendment or repeal of Article
XI shall apply to or have any effect on any director or officer of the
Corporation for or with respect to any acts or omissions of the director or
officer occurring before the amendment or repeal.
ARTICLE XII
AMENDMENTS
12.01 Amendments. The bylaws of the Corporation may be amended, altered,
or repealed, in whole or in part, by the Shareholders or by the Board at any
meeting duly held in accordance with these bylaws, provided that notice of the
meeting includes notice of the proposed amendment, alteration, or repeal.
Effective: November 30, 1998
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EXHIBIT 3.34
MICHIGAN DEPARTMENT OF CONSUMER AND INDUSTRY SERVICES
CORPORATION, SECURITIES AND LAND DEVELOPMENT BUREAU
ARTICLES OF INCORPORATION
(domestic profit corporation)
These Articles of Incorporation are signed by the incorporator for the
purpose of forming a profit corporation pursuant to the provisions of Act 284,
Public Acts of 1972, as amended, as follows:
ARTICLE I
Name
The name of the corporation is OASP II, Inc. (the "Corporation").
ARTICLE II
Purpose
The purpose or purposes for which the Corporation is organized is to
engage in any activity within the purposes for which corporations may be
organized under the Michigan Business Corporation Act ("the MBCA").
<PAGE> 2
ARTICLE III
Authorized Capital
The total authorized capital is 60,000 shares of Common Stock. Each share
is entitled to one vote on all matters submitted to the shareholders of the
Corporation and each share shall have all the share rights and preferences as
each other share.
ARTICLE IV
Registered Office and Resident Agent
The address of the initial registered office is 1250 Stephenson Highway,
Troy, Michigan 48083. The mailing address of the initial registered office is
1250 Stephenson Highway, Troy, Michigan 48083. The name of the initial resident
agent is Clifford C. Suing.
ARTICLE V
Limitation of Director Liability
No director of the Corporation shall be personally liable to the
Corporation or its shareholders for money damages for any action taken, or any
failure to take any action, except liability for any of the following: (1) the
amount of a financial benefit received by a director to which he or she is not
entitled; (2) intentional infliction of harm on the Corporation or its
shareholders; (3) a violation of Section 551 of the MBCA, MCLA 450.1551, MSA
21.200(551); or (4) an intentional violation of criminal law. If the MBCA is
amended to authorize the further elimination or limitation of the liability of
directors, then the liability of a director of the Corporation, in addition to
the limitation on personal liability contained in these articles of
incorporation, shall be eliminated or limited to the fullest extent permitted by
the MBCA as so amended. No amendment or repeal of this article shall apply to or
have any effect on the liability or alleged liability of any director of the
Corporation for or with respect to any acts or omissions of any director
occurring before the effective date of any such amendment or repeal.
ARTICLE VI
Compromise, Arrangement, or Plan of Reorganization
When a compromise or arrangement or a plan of reorganization of the
Corporation is proposed between the Corporation and its creditors or any class
of them or between the Corporation and its shareholders or any class of them, a
court of equity jurisdiction within the state, on application of the Corporation
or of a creditor or shareholder of it, or on application of a receiver appointed
for the
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Corporation, may order a meeting of the creditors or class of creditors or of
the shareholders or class of shareholders to be affected by the proposed
compromise or arrangement or reorganization, to be summoned in the manner that
the court directs. If a majority in number representing 3/4 in value of the
creditors or class of creditors, or of the shareholders or class of shareholders
to be affected by the proposed compromise or arrangement or a reorganization,
agree to a compromise or arrangement or a reorganization of the Corporation as a
consequence of the compromise or arrangement, the compromise or arrangement and
the reorganization, if sanctioned by the court to which the application has been
made, shall be binding on all the creditors or class of creditors, or on all the
shareholders or class of shareholders, and also on the Corporation.
ARTICLE VII
Corporate Action Without Meeting of Shareholders
Any action required or permitted by the MBCA to be taken at any annual or
special meeting of shareholders may be taken without a meeting, without prior
notice and without a vote, if a consent in writing, setting forth the action so
taken, is signed by the holders of outstanding stock having not less than the
minimum number of votes that would be necessary to authorize or take the action
at a meeting at which all shares entitled to vote thereon were present and
voted.
Prompt notice of the taking of the corporate action without a meeting by
less than unanimous written consent shall be given to shareholders who have not
consented in writing.
ARTICLE VIII
Incorporator
The name and business address of the incorporator is Robert E. Smith.
I, the incorporator, sign my name this 24th day November, 1998.
/s/ Robert E. Smith
---------------------------------
Robert E. Smith, Incorporator
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EXHIBIT 3.35
BYLAWS
OF
OASP II, INC.
ARTICLE I
Offices
1.01 Principal Office. The principal office of OASP II, Inc., a Michigan
corporation (the "Corporation") shall be at such place as the Board of Directors
of the Corporation (the "Board") shall from time to time determine.
1.02 Other Offices. The Corporation also may have offices at such other
places as the Board from time to time determines or the business of the
Corporation requires.
ARTICLE II
Seal
2.01 Seal. The Corporation may have a seal in the form that the Board may
from time to time determine. The seal may be used by causing it or a facsimile
to be impressed, affixed or otherwise reproduced.
ARTICLE III
Capital Stock
3.01 Issuance of Shares. The shares of capital stock of the Corporation
shall be issued in the amounts, at the times, for the consideration, and on the
terms and conditions that the Board shall deem advisable, subject to the
Articles of Incorporation of the Corporation (the "Articles of Incorporation")
and any requirements of the laws of the State of Michigan.
3.02 Certificates for Shares. The shares of the capital stock of the
Corporation shall be represented by certificates signed by the chairperson of
the Board, the president, or a vice president, and also may be signed by the
treasurer, assistant treasurer, secretary, or assistant secretary, and may be
sealed with the seal of the Corporation, if any, or a facsimile of it. The
signatures of the officers may be facsimiles if the certificate is countersigned
by a transfer agent or registered by a registrar other than the Corporation
itself or its employee. In case an officer who has signed or whose facsimile
signature has been placed upon a certificate ceases to be such officer before
the certificate is issued, it may be issued by the Corporation with the same
effect as if he or she were such officer at the date of issuance. A certificate
representing shares shall state the name of the person to whom
<PAGE> 2
it is issued, the number and class of shares and the designation of the series,
if any, that the certificate represents, and any other provisions that may be
required by the laws of the State of Michigan.
3.03 Transfer of Shares. The shares of the capital stock of the
Corporation are transferable only on the books of the Corporation upon surrender
of the certificate for the shares, properly endorsed for transfer, and the
presentation of the evidences of ownership and validity of the assignment that
the Corporation may require.
3.04 Registered Shareholders. The Corporation shall be entitled to treat
the person in whose name any share of stock is registered as the owner of it for
the purpose of dividends and other distributions or for any recapitalization,
merger, plan of share exchange, reorganization, sale of assets, or liquidation,
for the purpose of votes, approvals, and consents by the shareholders of the
Corporation (the "Shareholders"), for the purpose of notices to Shareholders,
and for all other purposes whatever, and shall not be bound to recognize any
equitable or other claim to or interest in the shares by any other person,
whether or not the Corporation shall have notice of it, except as expressly
required by the laws of the state of Michigan.
3.05 Lost or Destroyed Certificates. On the presentation to the
Corporation of a proper affidavit attesting to the loss, destruction, or
mutilation of any certificate or certificates for shares of stock of the
Corporation, the Board shall direct the issuance of a new certificate or
certificates to replace the certificates so alleged to be lost, destroyed, or
mutilated. The Board may require as a condition precedent to the issuance of new
certificates a bond or agreement of indemnity, in the form and amount and with
or without sureties, as the Board may direct or approve.
ARTICLE IV
Shareholders and Meetings of Shareholders
4.01 Place of Meetings. All meetings of Shareholders shall be held at the
principal office of the Corporation or at any other place that shall be
determined by the Board and stated in the meeting notice.
4.02 Annual Meeting. The annual meeting of the Shareholders shall be held
on the first Thursday of April or at such other time as the Board may select.
Directors shall be elected at each annual meeting and such other business
transacted as may come before the meeting.
4.03 Special Meetings. Special meetings of Shareholders may be called by
the Board, the chairperson of the Board (if the office is filled) or the
president and shall be called by the president or secretary at the written
request of Shareholders holding a majority of the outstanding shares of stock of
the Corporation entitled to vote. The request shall state the purpose or
purposes for which the meeting is to be called.
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4.04 Notice of Meetings. Except as otherwise provided by statute, written
notice of the time, place, and purposes of a Shareholders meeting shall be given
not less than 10 nor more than 60 days before the date of the meeting to each
shareholder of record entitled to vote at the meeting, either personally or by
mailing the notice to his or her last address as it appears on the books of the
Corporation. The notice shall include notice of proposals from Shareholders that
are proper subjects for shareholder action and are intended to be presented by
Shareholders who have so notified the Corporation in accordance with Section
4.10. No notice need be given of an adjourned meeting of the Shareholders
provided that the time and place to which the meeting is adjourned are announced
at the meeting at which the adjournment is taken, and at the adjourned meeting
the only business to be transacted is business that might have been transacted
at the original meeting. However, if after the adjournment a new record date is
fixed for the adjourned meeting, a notice of the adjourned meeting shall be
given to each shareholder of record entitled to notice on the new record date as
provided in this bylaw.
4.05 Record Dates. The Board may fix in advance a record date for the
purpose of determining shareholders entitled to notice of and to vote at a
meeting of Shareholders or an adjournment of the meeting or to express consent
to or to dissent from a proposal without a meeting; for the purpose of
determining shareholders entitled to receive payment of a dividend or an
allotment of a right; or for the purpose of any other action. The date fixed
shall not be more than 60 nor less than 10 days before the date of the meeting,
nor more than 60 days before any other action. In such case only the
Shareholders that shall be shareholders of record on the date so fixed shall be
entitled to notice of and to vote at the meeting or an adjournment of the
meeting or to express consent to or to dissent from the proposal; to receive
payment of the dividend or the allotment of rights; or to participate in any
other action, notwithstanding any transfer of any stock on the books of the
Corporation, after any such record date. Nothing in this bylaw shall affect the
rights of a Shareholder and his or her transferee or transferor as between
themselves.
4.06 List of Shareholders. The secretary or the agent of the Corporation
having charge of the stock transfer records for shares of the Corporation shall
make and certify a complete list of the Shareholders entitled to vote at a
Shareholders meeting or any adjournment of it. The list shall be arranged
alphabetically within each class and series and include the address of, and the
number of shares held by, each Shareholder; be produced at the time and place of
the meeting; be subject to inspection by any Shareholder during the whole time
of the meeting; and be prima facie evidence of which shareholders are entitled
to examine the list or vote at the meeting.
4.07 Quorum. Unless a greater or lesser quorum is required in the Articles
of Incorporation or by the laws of the state of Michigan, the Shareholders
present at a meeting in person or by proxy who, as of the record date for the
meeting, were holders of a majority of the outstanding shares of the Corporation
entitled to vote at the meeting, shall constitute a quorum at the meeting.
Whether or not a quorum is present, a meeting of Shareholders may be adjourned
by a vote of the shares present in person or by proxy. When the holders of a
class or series of shares are entitled to vote separately on an item of
business, this bylaw applies in determining the presence of a quorum of the
class or series for transacting the item of business.
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4.08 Proxies. A Shareholder entitled to vote at a Shareholders meeting or
to express consent or to dissent without a meeting may authorize other persons
to act for the Shareholder by proxy. A proxy shall be signed by the Shareholder
or the Shareholder's authorized agent or representative and shall not be valid
after the expiration of three years from its date unless otherwise provided in
the proxy. A proxy is revocable at the pleasure of the Shareholder executing it
except as otherwise provided by the laws of the state of Michigan.
4.09 Voting. Each outstanding share is entitled to one vote on each matter
submitted to a vote, unless the Articles of Incorporation provide otherwise.
Votes may be cast orally or in writing, but if more than 25 Shareholders of
record are entitled to vote, then votes shall be cast in writing signed by the
Shareholder or the Shareholder's proxy. When an action, other than the election
of directors, is to be taken by a vote of the Shareholders, it shall be
authorized by a majority of the votes cast by the holders of shares entitled to
vote on it, unless a greater vote is required by the Articles of Incorporation
or by the laws of the state of Michigan. Except as otherwise provided by the
Articles of Incorporation, directors shall be elected by a plurality of the
votes cast at any election.
4.10 Notice of Shareholder Proposals. A Shareholder may cause the
Corporation to include in the notice for any meeting of Shareholders, notice of
proposals under Section 4.04, by giving timely written notice to the secretary
at the principal executive offices of the Corporation. To be timely, (a) with
respect to an annual meeting of Shareholders pursuant to Section 4.02 (an
"Annual Meeting"), a Shareholder's notice must be delivered or mailed and
received by the secretary not less than 90 days prior to the date set for the
Annual Meeting in such Section 4.02; and (b) with respect to a meeting which is
a special meeting pursuant to Section 4.03 (a "Special Meeting"), not less than
five days after the earlier of (i) the announcement by the Corporation of the
intention to call a Special Meeting; or (ii) if no such announcement is made,
the date that notice of such meeting Special Meeting is given personally or is
mailed by the Corporation pursuant to Section 4.04, in which event, the
Corporation shall promptly provide or mail a revised notice of such Special
Meeting that includes the Shareholder's proposal if it qualifies for inclusion
therein as set forth in Section 4.04 and this Section 4.10. A Shareholder's
notice to the secretary shall set forth, as to each matter the Shareholder
proposes to bring before such meeting, (x) a brief description of the business
to be brought before the meeting; (y) the name and address, as they appear on
the Corporation's books, of the Shareholder(s) proposing the business; and (z)
any material interest of such Shareholder(s) in such business. All
determinations under this Section 4.10 shall be made by the Board, which
determinations shall be conclusive. This Section 4.10 shall be of no force and
effect during any time when the Corporation has a class of securities registered
under Section 12 of the Securities Exchange Act of 1934, as amended.
4.11 Conduct of Meeting. At each meeting of Shareholders, a chairperson
shall preside. In the absence of a specific selection by the Board, the chair
shall be the Chairperson of the Board as provided in Section 8.01. The chair
shall determine the order of business and shall have the authority to establish
rules for the conduct of the meeting which are fair to Shareholders. The chair
of the meeting shall announce at the meeting when the polls close for each
matter voted upon. If no announcement is made, the polls shall be deemed to have
closed upon the final adjournment of the
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meeting. After the polls close, no ballots, proxies or votes, nor any
revocations or changes thereto may be accepted.
4.12 Inspectors of Election. The Board, or the chairperson of the Board
presiding at any Shareholders' meeting, may appoint one or more inspectors. If
appointed, the inspectors shall determine the number of shares outstanding and
the voting power of each, the shares represented at the meeting, the existence
of a quorum and the validity and effect of proxies, and shall receive votes,
ballots or consents, hear and determine challenges or consents, determine the
result, and do such acts as are proper to conduct the election or vote with
fairness to all Shareholders. On request of the person presiding at the meeting,
the inspectors shall make and execute a written report to the person presiding
at the meeting of any of the facts found by them and matters determined by them.
The report shall be prima facie evidence of the facts stated and of the vote as
certified by the inspectors.
ARTICLE V
Directors
5.01 Number. The business and affairs of the Corporation shall be managed
by or under the direction of a board of not less than one nor more than nine
directors, as shall be fixed from time to time by the Board. The directors need
not be residents of Michigan or Shareholders.
5.02 Election, Resignation, and Removal. Directors shall be elected at
each annual Shareholders meeting, each director to hold office until the next
annual Shareholders meeting and until the director's successor is elected and
qualified, or until the director's resignation or removal. A director may resign
by written notice to the Corporation. The resignation is effective on its
receipt by the Corporation or at a subsequent time as set forth in the notice of
resignation. A director or the entire Board may be removed, with or without
cause, by vote of the holders of a majority of the shares entitled to vote at an
election of directors.
5.03 Vacancies. Vacancies in the Board occurring by reason of death,
resignation, removal, increase in the number of directors, or otherwise shall be
filled by the affirmative vote of a majority of the remaining directors though
less than a quorum of the Board, unless filled by proper action of the
Shareholders. Each person so elected shall be a director for a term of office
continuing only until the next election of directors by the Shareholders. A
vacancy that will occur at a specific date, by reason of a resignation effective
at a later date or otherwise, may be filled before the vacancy occurs, but the
newly elected director may not take office until the vacancy occurs.
5.04 Annual Meeting. The Board shall meet each year immediately after the
annual meeting of the Shareholders, or within three days of such time, excluding
Sundays and legal holidays, if the later time is deemed advisable, at the place
where the Shareholders meeting has been held or any other place that the Board
may determine, for the purpose of electing officers and considering such
business that may properly be brought before the meeting; provided that, if less
than a majority of the directors appear for an annual meeting of the Board, the
holding of the annual
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meeting shall not be required and the matters that might have been taken up in
it may be taken up at any later special or annual meeting, or by consent
resolution.
5.05 Regular and Special Meetings. Regular meetings of the Board may be
held at the times and places that the majority of the directors may from time to
time determine at a prior meeting or as shall be directed or approved by the
vote or written consent of all the directors. Special meetings of the Board may
be called by the chairperson of the Board (if the office is filled) or the
president, and shall be called by the president or secretary on the written
request of any two directors.
5.06 Notices. No notice shall be required for annual or regular meetings
of the Board or for adjourned meetings, whether regular or special. Three days
written notice or 24-hour telephonic notice shall be given for special meetings
of the Board, and the notice shall state the time, place, and purpose or
purposes of the meeting.
5.07 Quorum. A majority of the members of the Board then in office, or of
the members of a board committee, constitutes a quorum for the transaction of
business. The vote of a majority of the directors present at any meeting at
which there is a quorum constitutes the action of the Board or of the committee,
except when a larger vote may be required by the laws of the state of Michigan.
A member of the Board or of a committee designated by the Board may participate
in a meeting by conference telephone or similar communications equipment through
which all persons participating in the meeting can communicate with each other.
Participation in a meeting in this manner constitutes presence in person at the
meeting.
5.08 Dissents. A director who is present at a meeting of the Board, or a
board committee of which the director is a member, at which action on a
corporate matter is taken, is presumed to have concurred in that action unless
the director's dissent is entered in the minutes of the meeting or unless the
director files a written dissent to the action with the person acting as
secretary of the meeting before the adjournment of it or forwards the dissent by
registered mail to the secretary of the Corporation promptly after the
adjournment of the meeting. The right to dissent does not apply to a director
who voted in favor of the action. A director who is absent from a meeting of the
Board or a board committee of which the director is a member, at which any such
action is taken, is presumed to have concurred in the action unless he or she
files a written dissent with the secretary within a reasonable time after the
director has knowledge of the action.
5.09 Compensation. The Board, by affirmative vote of a majority of
directors in office and irrespective of any personal interest of any of them,
may establish reasonable compensation of directors for services to the
Corporation as directors or officers.
5.10 Executive and Other Committees. The Board may, by resolution passed
by a majority of the whole Board, appoint three or more members of the Board as
an executive committee to exercise all powers and authorities of the Board in
managing the business and affairs of the Corporation, except that the committee
shall not have power or authority to (a) amend the Articles of Incorporation,
except that a committee may prescribe the relative rights and preferences of the
6
<PAGE> 7
shares of a series if the Articles of Incorporation authorize the Board to do
so; (b) adopt an agreement of merger or plan of share exchange; (c) recommend to
Shareholders the sale, lease, or exchange of all or substantially all of the
Corporation's property and assets; (d) recommend to Shareholders a dissolution
of the Corporation or revocation of a dissolution; (e) amend these bylaws; (f)
fill vacancies on the Board; or (g) declare a dividend or authorize the issuance
of stock, unless expressly authorized by the Board.
The Board from time to time may, by like resolution, appoint any other
committees of one or more directors to have the authority that shall be
specified by the Board in the resolution making the appointments. The Board may
designate one or more directors as alternate members of any committee to replace
an absent or disqualified member at any committee meeting.
ARTICLE VI
Notices, Waivers of Notice, and Manner of Acting
6.01 Notices. All notices of meetings required to be given to
Shareholders, directors, or any committee of directors may be given by mail,
telecopy, telegram, radiogram, or cablegram to any Shareholder, director, or
committee member at his or her last address as it appears on the books of the
Corporation. The notice shall be deemed to be given at the time it is mailed or
otherwise dispatched. Telephonic notice may be given for special meetings of the
Board as provided in Section 5.06.
6.02 Waiver of Notice. Notice of the time, place, and purpose of any
meeting of Shareholders, directors, or committee of directors may be waived by
telecopy, telegram, radiogram, cablegram, or other writing, either before or
after the meeting, or in any other manner that may be permitted by the laws of
the state of Michigan. Attendance of a person at any Shareholders meeting, in
person or by proxy, or at any meeting of directors or of a committee of
directors, constitutes a waiver of notice of the meeting except as follows:
(a) In the case of a Shareholder, unless the Shareholder at the
beginning of the meeting objects to holding the meeting or transacting business
at the meeting, or unless with respect to consideration of a particular matter
at the meeting that is not within the purpose or purposes described in the
meeting notice, the Shareholder objects to considering the matter when it is
presented; or
(b) In the case of a director, unless he or she at the beginning of
the meeting, or upon his or her arrival, objects to the meeting or the
transacting of business at the meeting and does not thereafter vote for or
assent to any action taken at the meeting.
6.03 Action Without a Meeting. Except as the Articles of Incorporation may
otherwise provide for action to be taken by shareholders, any action required or
permitted at any meeting of Shareholders, directors, or a committee of directors
may be taken without a meeting, without prior
7
<PAGE> 8
notice, and without a vote, if all of the Shareholders, directors, or committee
members entitled to vote on it consent to it in writing, before or after the
action is taken.
ARTICLE VII
Officers
7.01 Number. The Board shall elect or appoint a president, a secretary,
and a treasurer, and may select a chairperson of the Board and one or more vice
presidents, assistant secretaries, or assistant treasurers. Any two or more of
the preceding offices, except those of president and vice president, may be held
by the same person. No officer shall execute, acknowledge, or verify an
instrument in more than one capacity if the instrument is required by law, the
Articles of Incorporation, or these bylaws to be executed, acknowledged, or
verified by one or more officers.
7.02 Term of Office, Resignation, and Removal. An officer shall hold
office for the term for which he or she is elected or appointed and until his or
her successor is elected or appointed and qualified, or until his or her
resignation or removal. An officer may resign by written notice to the
Corporation. The resignation is effective on its receipt by the Corporation or
at a subsequent time specified in the notice of resignation. An officer may be
removed by the Board with or without cause. The removal of an officer shall be
without prejudice to his or her contract rights, if any. The election or
appointment of an officer does not of itself create contract rights.
7.03 Vacancies. The Board may fill any vacancies in any office occurring
for whatever reason.
7.04 Authority. All officers, employees, and agents of the Corporation
shall have the authority and perform the duties to conduct and manage the
business and affairs of the Corporation that may be designated by the Board and
these bylaws.
ARTICLE VIII
Duties of Officers
8.01 Chairperson of the Board. The chairperson of the Board, if the office
is filled, shall preside at all meetings of the Shareholders and of the Board at
which the chairperson is present.
8.02 President. The president shall be the chief executive officer of the
Corporation. The president shall see that all orders and resolutions of the
Board are carried into effect, and the president shall have the general powers
of supervision and management usually vested in the chief executive officer of a
corporation, including the authority to vote all securities of other
corporations and business organizations held by the Corporation. In the absence
or disability of the chairperson of the Board, or if that office has not been
filled, the president also shall perform the duties of the chairperson of the
Board as set forth in these bylaws.
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8.03 Vice Presidents. The vice presidents, in order of their seniority,
shall, in the absence or disability of the president, perform the duties and
exercise the powers of the president and shall perform any other duties that the
Board or the president may from time to time prescribe.
8.04 Secretary. The secretary shall attend all meetings of the Board and
Shareholders and shall record all votes and minutes of all proceedings in a book
to be kept for that purpose; shall give or cause to be given notice of all
meetings of the Shareholders and the Board; and shall keep in safe custody the
seal of the Corporation, if any, and, when authorized by the Board, affix it to
any instrument requiring it, and when so affixed it shall be attested to by the
signature of the secretary or by the signature of the treasurer or an assistant
secretary. The secretary may delegate any of the duties, powers, and authorities
of the secretary to one or more assistant secretaries, unless the delegation is
disapproved by the Board.
8.05 Treasurer. The treasurer shall have the custody of the corporate
funds and securities, shall keep full and accurate accounts of receipts and
disbursements in the books of the Corporation, and shall deposit all moneys and
other valuable effects in the name and to the credit of the Corporation in the
depositories that may be designated by the Board. The treasurer shall render to
the president and directors, whenever they may require it, an account of his or
her transactions as treasurer and of the financial condition of the Corporation.
The treasurer may delegate any of his or her duties, powers, and authorities to
one or more assistant treasurers unless the delegation is disapproved by the
Board.
8.06 Assistant Secretaries and Treasurers. The assistant secretaries, in
order of their seniority, shall perform the duties and exercise the powers and
authorities of the secretary in case of the secretary's absence or disability.
The assistant treasurers, in the order of their seniority, shall perform the
duties and exercise the powers and authorities of the treasurer in case of the
treasurer's absence or disability. The assistant secretaries and assistant
treasurers shall also perform the duties that may be delegated to them by the
secretary and treasurer, respectively, and also the duties that the Board may
prescribe.
ARTICLE IX
Special Corporate Acts
9.01 Orders for Payment of Money. All checks, drafts, notes, bonds, bills
of exchange, and orders for payment of money of the Corporation shall be signed
by the officer or officers or any other person or persons that the Board may
from time to time designate.
9.02 Contracts and Conveyances. The Board may in any instance designate
the officer and/or agent who shall have authority to execute any contract,
conveyance, mortgage, or other instrument on behalf of the Corporation, or may
ratify or confirm any execution. When the execution of any instrument has been
authorized without specification of the executing officers or agents, the
chairperson of the Board, the president or any vice president, and the
secretary, assistant
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secretary, treasurer, or assistant treasurer may execute the instrument in the
name and on behalf of the Corporation and may affix the corporate seal, if any,
to it.
ARTICLE X
Books and Records
10.01 Maintenance of Books and Records. The proper officers and agents of
the Corporation shall keep and maintain the books, records, and accounts of the
Corporation's business and affairs, minutes of the proceedings of its
Shareholders, the Board, and committees, if any, and the stock ledgers and lists
of Shareholders, as the Board shall deem advisable and as shall be required by
the laws of the state of Michigan and other states or jurisdictions empowered to
impose such requirements. Books, records, and minutes may be kept within or
without the state of Michigan in a place that the Board shall determine.
10.02 Reliance on Books and Records. In discharging his or her duties, a
director or an officer of the Corporation, when acting in good faith, may rely
on information, opinions, reports, or statements, including financial statements
and other financial data, if prepared or presented by any of the following:
(a) One or more directors, officers, or employees of the
Corporation, or of a business organization under joint control or common
control, whom the director or officer reasonably believes to be reliable and
competent in the matters presented;
(b) Legal counsel, public accountants, engineers, or other persons
as to matters the director or officer reasonably believes are within the
person's professional or expert competence; or
(c) A committee of the Board of which he or she is not a member if
the director or officer reasonably believes the committee merits confidence.
A director or officer is not entitled to rely on the information set forth
above if he or she has knowledge concerning the matter in question that makes
reliance otherwise permitted unwarranted.
ARTICLE XI
Indemnification
11.01 Nonderivative Actions. Subject to all of the other provisions of
Article XI, the Corporation shall indemnify any person who was or is a party to
or is threatened to be made a party to any threatened, pending, or completed
action, suit, or proceeding, whether civil, criminal, administrative, or
investigative, formal or informal (other than an action by or in the right of
the Corporation), by reason of the fact that the person is or was a director or
officer of the Corporation,
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or, while serving as 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 foreign or domestic corporation, partnership,
joint venture, trust, or other enterprise, whether for profit or not, against
expenses (including actual and reasonable attorney fees), judgments, penalties,
fines, and amounts paid in settlement actually and reasonably incurred by him or
her in connection with such action, suit, or proceeding, if the person acted in
good faith and in a manner the person reasonably believed to be in or not
opposed to the best interests of the Corporation or the Shareholders, and with
respect to any criminal action or proceeding, if the person had no reasonable
cause to believe his or her conduct was unlawful. The termination of any action,
suit, or proceeding by judgment, order, settlement, conviction, or on a plea of
nolo contendere or its equivalent, shall not, of itself, create a presumption
that the person did not act in good faith and in a manner that the person
reasonably believed to be in or not opposed to the best interests of the
Corporation or the Shareholders and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his or her conduct was
unlawful.
11.02 Derivative Actions. Subject to all of the provisions of Article XI,
the Corporation shall indemnify any person who was or is a party to or is
threatened to be made a party to any threatened, pending, or completed action or
suit by or in the right of the Corporation to procure a judgment in its favor by
reason of the fact that the person is or was a director or officer of the
Corporation or, while serving as 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 foreign or domestic corporation,
partnership, joint venture, trust, or other enterprise, whether for profit or
not, against expenses (including attorney fees) and amounts paid in settlement
actually and reasonably incurred by the person in connection with the action or
suit, if the person acted in good faith and in a manner the person reasonably
believed to be in or not opposed to the best interests of the Corporation or the
Shareholders. However, indemnification shall not be made for any claim, issue,
or matter in which the person has been found liable to the Corporation unless
and only to the extent that the court in which the action or suit was brought
has determined on application that, despite the adjudication of liability but in
view of all circumstances of the case, the person is fairly and reasonably
entitled to indemnification for the reasonable expenses incurred.
11.03 Expenses of Successful Defense. To the extent that a person has been
successful on the merits or otherwise in defense of any action, suit, or
proceeding referred to in Sections 11.01 or 11.02, or in defense of any claim,
issue, or matter in the action, suit, or proceeding, the person shall be
indemnified against actual and reasonable expenses (including attorney fees)
incurred by the person in connection with the action, suit, or proceeding and
any action, suit, or proceeding brought to enforce the mandatory indemnification
provided by this Section 11.03.
11.04 Definition. For the purposes of Sections 11.01 and 11.02, "other
enterprises" shall include employee benefit plans; "fines" shall include any
excise taxes assessed on a person with respect to an employee benefit plan; and
"serving at the request of the Corporation" shall include any service as a
director, officer, employee, or agent of the Corporation that imposes duties on,
or involves services by, the director or officer with respect to an employee
benefit plan, its participants,
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or its beneficiaries; and a person who acted in good faith and in a manner the
person reasonably believed to be in the interest of the participants and
beneficiaries of an employee benefit plan shall be considered to have acted in a
manner "not opposed to the best interests of the Corporation or the
Shareholders" as referred to in Sections 11.01 and 11.02.
11.05 Contract Right; Limitation on Indemnity. The right to
indemnification conferred in Article XI shall be a contract right and shall
apply to services of a director or officer as an employee or agent of the
Corporation as well as in the person's capacity as a director or officer. Except
as provided in Section 11.03, the Corporation shall have no obligations under
Article XI to indemnify any person in connection with any proceeding, or part
thereof, initiated by the person without authorization by the Board.
11.06 Determination That Indemnification Is Proper. Any indemnification
under Sections 11.01 or 11.02 (unless ordered by a court) shall be made by the
Corporation only as authorized in the specific case upon a determination that
indemnification of the person is proper in the circumstances because the person
has met the applicable standard of conduct set forth in Sections 11.01 or 11.02,
whichever is applicable, and upon an evaluation of the reasonableness of expense
and amounts paid in settlement. The determination and evaluation shall be made
in any of the following ways:
(a) By a majority vote of a quorum of the Board consisting of
directors who are not parties or threatened to be made parties to the action,
suit, or proceeding;
(b) If the quorum described in clause (a) above is not obtainable,
then by majority vote of a committee of directors duly designated by the Board
and consisting solely of two or more directors who are not at the time parties
or threatened to be made parties to the action, suit, or proceeding;
(c) By independent legal counsel in a written opinion, which counsel
shall be selected in one of the following ways: (i) by the Board or its
committee in the manner prescribed in subparagraph (a) or (b); or (ii) if a
quorum of the Board cannot be obtained under subparagraph (a) and a committee
cannot be designated under subparagraph (b), by the Board; or
(d) By the Shareholders, but shares held by directors, officers,
employees, or agents who are parties or threatened to be made parties to the
action, suit, or proceeding may not be voted.
11.07 Authorizations of Payment.
(a) Authorizations of payment under Sections 11.01 and 11.02 shall
be made in any of the following ways:
(i) by the Board:
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(A) if there are two or more directors who are not
parties or threatened to be made parties to the action, suit or
proceeding, by a majority vote of all such directors (a majority of whom
shall for this purpose constitute a quorum)or by a majority of the members
of a committee of two or more directors who are not parties or threatened
to be made parties to the action, suit or proceeding;
(B) if the Corporation has one or more independent
directors who are not parties or threatened to be made parties to the
action, suit or proceeding, by a majority vote of all such directors (a
majority of whom shall for this purpose constitute a quorum); or
(C) if there are no independent directors and fewer than
two directors who are not parties or threatened to be made parties to the
action, suit or proceeding, by the vote necessary for action by the Board
in accordance with Section 3.07, in which authorization all directors may
participate; or
(ii) by the Shareholders, but shares held by directors,
officers, employees, or agents who are parties or threatened to be made parties
to the action, suit, or proceeding may not be voted on the authorization.
(b) To the extent that the Articles of Incorporation include a
provision eliminating or limiting the liability of a director pursuant to MCLA
450.1209(1)(c), MSA 21.200(209)(1), the Corporation may indemnify a director for
the expenses and liabilities described below without a determination that the
director has met the standard of conduct set forth in Sections 11.01 and 11.02,
but no indemnification may be made except to the extent authorized in MCLA
450.1564c, MSA 21.200(564c), if the director received a financial benefit to
which he or she was not entitled, intentionally inflicted harm on the
Corporation or the Shareholders, violated MCLA 450.1551, MSA 21.200(551), or
intentionally violated criminal law. In connection with an action or suit by or
in the right of the Corporation, as described in Section 11.02, indemnification
under this Section 11.07(b) may be for expenses, including attorneys' fees,
actually and reasonably incurred. In connection with an action, suit or
proceeding other than one by or in the right of the Corporation, as described in
Section 11.01, indemnification under this Section 11.07(b) may be for expenses,
including attorneys' fees, actually and reasonably incurred, and for judgments,
penalties, fines, and amounts paid in settlement actually and reasonably
incurred.
11.08 Proportionate Indemnity. If a person is entitled to indemnification
under Sections 11.01 or 11.02 for a portion of expenses, including attorney
fees, judgments, penalties, fines, and amounts paid in settlement, but not for
the total amount, the Corporation shall indemnify the person for the portion of
the expenses, judgments, penalties, fines, or amounts paid in settlement for
which the person is entitled to be indemnified.
11.09 Expense Advance. The Corporation may pay or reimburse the reasonable
expenses incurred by a person referred to in Sections 11.01 or 11.02 who is a
party or threatened to be made
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a party to an action, suit, or proceeding in advance of final disposition of the
proceeding if both of the following apply: (a) the person furnishes the
Corporation a written affirmation of his or her good faith belief that he or she
has met the applicable standard of conduct set forth in Sections 11.01 or 11.02;
and (b) the person furnishes the Corporation a written undertaking executed
personally, or on his or her belief, to repay the advance if it is ultimately
determined that he or she did not meet the standard of conduct. Determinations
and evaluations under this Section 11.09 shall be made as specified in Section
11.06, and authorizations shall be made in the manner specified in Section
11.07. A provision in the Articles of Incorporation, these bylaws, a resolution
by the Board or the Shareholders, or an agreement making indemnification
mandatory shall also make advancement of expenses mandatory unless the provision
specifically provides otherwise.
11.10 Non-Exclusivity of Rights. The indemnification or advancement of
expenses provided under this article is not exclusive of other rights to which a
person seeking indemnification or advancement of expenses may be entitled under
a contractual arrangement with the Corporation. However, the total amount of
expenses advanced or indemnified from all sources combined shall not exceed the
amount of actual expenses incurred by the person seeking indemnification or
advancement of expenses.
11.11 Indemnification of Employees and Agents of the Corporation. The
Corporation may, to the extent authorized from time to time by the Board, grant
rights to indemnification and to the advancement of expenses to any employee or
agent of the Corporation to the fullest extent of the provisions of Article XI
with respect to the indemnification and advancement of expenses of directors and
officers of the Corporation.
11.12 Former Directors and Officers. The indemnification provided in
Article XI continues for a person who has ceased to be a director or officer and
shall inure to the benefit of the heirs, executors, and administrators of the
person.
11.13 Insurance. The Corporation may purchase and maintain insurance on
behalf of any person who is or was a director, officer, employee, or agent of
the Corporation, or is or was serving at the request of the Corporation as a
director, officer, partner, trustee, employee, or agent of another corporation,
partnership, joint venture, trust, or other enterprise, against any liability
asserted against the person and incurred by him or her in any such capacity or
arising out of his or her status as such, whether or not the Corporation would
have power to indemnify the person against the liability under these bylaws or
the laws of the state of Michigan.
11.14 Changes in Michigan Law. If there is any change of the Michigan
statutory provisions applicable to the Corporation relating to the subject
matter of Article XI, then the indemnification to which any person shall be
entitled under this article shall be determined by the changed provisions, but
only to the extent that the change permits the Corporation to provide broader
indemnification rights than the provisions permitted the Corporation to provide
before the change. Subject to Section 11.15, the Board is authorized to amend
these bylaws to conform to any such changed statutory provisions.
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11.15 Amendment or Repeal of Article XI. No amendment or repeal of Article
XI shall apply to or have any effect on any director or officer of the
Corporation for or with respect to any acts or omissions of the director or
officer occurring before the amendment or repeal.
ARTICLE XII
Amendments
12.01 Amendments. The bylaws of the Corporation may be amended, altered,
or repealed, in whole or in part, by the Shareholders or by the Board at any
meeting duly held in accordance with these bylaws, provided that notice of the
meeting includes notice of the proposed amendment, alteration, or repeal.
Effective: November ____, 1998
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Exhibit 4.2
February 4, 1999
OXFORD AUTOMOTIVE, INC.
------------------------------------------
AMENDED AND RESTATED CREDIT AGREEMENT
dated as of February 4, 1999
------------------------------------------
THE BORROWING SUBSIDIARIES PARTY HERETO,
THE LENDERS PARTY HERETO
and
NBD BANK, as Agent
ARRANGED BY FIRST CHICAGO CAPITAL MARKETS, INC.
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Article Page
- ------- ----
<S> <C> <C>
I. DEFINITIONS. ....................................................................................
1.1 Certain Definitions.....................................................................
1.2 Other Definitions; Rules of Construction................................................
II. THE COMMITMENTS, THE SWINGLINE FACILITY
AND THE ADVANCES.................................................................................
2.1 Commitment of the Lenders and Canadian and
Swingline Facility......................................................................
2.2 Termination and Reduction of Commitments................................................
2.3 Fees....................................................................................
2.4 Disbursement of Advances................................................................
2.5 Conditions for First Disbursement.......................................................
2.6 Further Conditions for Disbursement.....................................................
2.7 Subsequent Elections as to Borrowings...................................................
2.8 Limitation of Requests and Elections....................................................
2.9 Minimum Amounts; Limitation on Number of Borrowings; Etc................................
2.10 Borrowing Base Adjustment...............................................................
2.11 Security and Collateral.................................................................
III. PAYMENTS AND PREPAYMENTS OF ADVANCES.............................................................
3.1 Principal Payments and Prepayments......................................................
3.2 Interest Payments.......................................................................
3.3 Letters of Credit and Acceptances.......................................................
3.4 Additional Terms for Acceptances........................................................
3.5 Payment Method..........................................................................
3.6 No Setoff or Deduction..................................................................
3.7 Payment on Non-Business Day; Payment Computations.......................................
3.8 Additional Costs........................................................................
3.9 Illegality and Impossibility............................................................
3.10 Indemnification.........................................................................
3.11 Taxes...................................................................................
3.12 Substitution of Lender..................................................................
IV. REPRESENTATIONS AND WARRANTIES...................................................................
4.1 Corporate Existence and Power...........................................................
4.2 Corporate Authority.....................................................................
4.3 Binding Effect..........................................................................
4.4 Subsidiaries............................................................................
4.5 Litigation..............................................................................
4.6 Financial Condition.....................................................................
4.7 Use of Advances.........................................................................
4.8 Consents, Etc...........................................................................
4.9 Taxes...................................................................................
4.10 Title to Properties.....................................................................
4.11 Borrowing Base..........................................................................
4.12 ERISA...................................................................................
4.13 Disclosure..............................................................................
</TABLE>
<PAGE> 3
<TABLE>
<CAPTION>
<S> <C>
4.14 Environmental Matters...................................................................
4.15 Solvency................................................................................
4.16 No Defaults under Certain Agreements....................................................
4.17 Intellectual Property...................................................................
4.18 Preferred Stock.........................................................................
4.19 Investment Company Act; Other Regulations...............................................
4.20 Senior Subordinated Debt................................................................
4.21 Unrestricted Subsidiaries...............................................................
4.22 Acquisitions............................................................................
4.23 Material Agreement......................................................................
4.24 Compliance With Laws....................................................................
4.25 Year 2000...............................................................................
V. COVENANTS........................................................................................
5.1 Affirmative Covenants...................................................................
(a) Preservation of Corporate Existence, Etc.......................................
(b) Compliance with Laws, Etc......................................................
(c) Maintenance of Properties; Insurance...........................................
(d) Reporting Requirements.........................................................
(e) Accounting; Access to Records, Books, Etc......................................
(f) Maintenance of Business Lines..................................................
(g) Additional Security and Collateral.............................................
(h) Further Assurances.............................................................
(i) Year 2000......................................................................
5.2 Negative Covenants......................................................................
(a) Net Worth......................................................................
(b) Total Debt to Adjusted EBITDA Ratio............................................
(c) Fixed Charge Coverage Ratio....................................................
(d) Interest Coverage Ratio........................................................
(e) Indebtedness...................................................................
(f) Liens..........................................................................
(g) Merger; Acquisitions; Etc......................................................
(h) Disposition of Assets; Etc.....................................................
(i) Nature of Business.............................................................
(j) Dividends and Other Restricted Payments........................................
(k) Capital Expenditures...........................................................
(l) Loans, Advances and Investments................................................
(m) Transactions with Affiliates...................................................
(n) Sale and Leaseback Transactions................................................
(o) Negative Pledge Limitation.....................................................
(p) FSC Commissions................................................................
(q) Inconsistent Agreements........................................................
(r) Subsidiary Dividends...........................................................
(s) Preferred Stock................................................................
(t) Other Indebtedness and Agreements..............................................
(u) Management Fees................................................................
(v) Restricted Subsidiaries........................................................
5.3 Additional Covenants....................................................................
VI. DEFAULT..........................................................................................
6.1 Events of Default.......................................................................
(a) Nonpayment.....................................................................
</TABLE>
<PAGE> 4
<TABLE>
<CAPTION>
<S> <C>
(b) Misrepresentation..............................................................
(c) Certain Covenants..............................................................
(d) Other Defaults.................................................................
(e) Cross Defaults.................................................................
(f) Judgments......................................................................
(g) ERISA..........................................................................
(h) Insolvency, Etc................................................................
(i) Security Documents.............................................................
(j) Control........................................................................
6.2 Remedies................................................................................
6.3 Distribution of Proceeds of Collateral..................................................
VII. THE AGENT AND THE LENDERS........................................................................
7.1 Appointment and Authorization...........................................................
7.2 Agent and Affiliates....................................................................
7.3 Scope of Agent's Duties.................................................................
7.4 Reliance by Agent.......................................................................
7.5 Default ...............................................................................
7.6 Liability of Agent......................................................................
7.7 Nonreliance on Agent and Other Lenders..................................................
7.8 Indemnification.........................................................................
7.9 Successor Agent.........................................................................
7.10 Sharing of Payments.....................................................................
VIII. MISCELLANEOUS....................................................................................
8.1 Amendments, Etc.........................................................................
8.2 Notices ...............................................................................
8.3 No Waiver By Conduct; Remedies Cumulative...............................................
8.4 Reliance on and Survival of Various Provisions..........................................
8.5 Expenses; Indemnification...............................................................
8.6 Successors and Assigns..................................................................
8.7 Counterparts............................................................................
8.8 Governing Law...........................................................................
8.9 Table of Contents and Headings..........................................................
8.10 Construction of Certain Provisions......................................................
8.11 Integration and Severability............................................................
8.12 Independence of Covenants...............................................................
8.13 Interest Rate Limitation................................................................
8.14 Judgment and Payment....................................................................
8.15 Acknowledgments.........................................................................
8.16 Waiver of Jury Trial....................................................................
</TABLE>
EXHIBITS
Exhibit A - Borrowing Base Certificate
Exhibit B - Company Security Agreement
Exhibit C - Environmental Certificate
Exhibit D - Guaranty
<PAGE> 5
Exhibit E - Guarantor Security Agreement
Exhibit F - Revolving Credit Note
Exhibit G - Swingline Note
Exhibit H - Term Note
Exhibit I - Tooling Revolving Credit Note
Exhibit J - Disbursement of Advances
Exhibit K - Disbursement of Swingline Loans
Exhibit L - Subsequent Elections as to Borrowings
Exhibit M - Assignment and Acceptance
SCHEDULES
Schedule 1.1(A) - Existing Letters of Credit
Schedule 1.1 (B) - Mexican Subsidiaries
Schedule 1.1(C) - Existing Restricted Subsidiaries
Schedule 1.1(D) - Senior Subordinated Debt Documents
Schedule 4.4 - Subsidiaries
Schedule 4.5 - Litigation
Schedule 4.17 - Intellectual Property
Schedule 4.18 - Lobdell Preferred Stock
Schedule 4.22 - Cofimeta Indebtedness
Schedule 4.26 - OPI Acquisition
Schedule 5.2(e) - Indebtedness
Schedule 5.2(f) - Liens
Schedule 5.2(o) - Negative Pledges
Schedule 5.2(u) - Management Fees
<PAGE> 6
THIS AMENDED AND RESTATED CREDIT AGREEMENT, dated as of
February 4, 1999 (this "Agreement"), is by and among OXFORD AUTOMOTIVE, INC., a
Michigan corporation (the "Company"), each of the Subsidiaries of the Company
designated in Section 1.1 as a Borrowing Subsidiary (a "Borrowing Subsidiary"
and collectively with the Company the "Borrowers"), the lenders set forth on the
signature pages hereof, their successors and assigns, and each other Person
becoming a lender hereunder from time to time (collectively, together with any
Affiliates of such Lenders designated by such Lenders to make Canadian Advances
hereunder, the "Lenders" and individually a "Lender"), and NBD BANK, a Michigan
banking corporation, as agent (in such capacity, and collectively with any of
its Affiliates designated by it to administer any of its functions hereunder at
any time, the "Agent") for the Lenders.
RECITAL
The Company, the subsidiary borrowers and lenders party thereto, and
NBD Bank, as Agent, are parties to a Credit Agreement dated as of June 24, 1997
(as amended, the "Existing Credit Agreement"), and the parties hereto desire to
amend and restate the Existing Credit Agreement as set forth herein.
The parties hereto agree to amend and restate the Existing Credit
Agreement in its entirety as follows:
ARTICLE I.
DEFINITIONS
1.1 Certain Definitions. As used herein the following terms shall
have the following respective meanings:
"Acceptance" shall mean Bankers' Acceptances and BA Equivalent
Loans.
"Acceptance Fee" shall mean the fee payable at the time of the
acceptance of Bankers' Acceptances established by multiplying the face amount of
such Bankers' Acceptances by the Applicable Margin and by multiplying the
product so obtained by a fraction having a numerator equal to the number of days
in the term of such Bankers' Acceptances and a denominator of 365.
"Acquisition" is defined in Section 5.2(g).
"Adjusted EBITDA" shall mean, for any period, EBITDA for such
period, provided that, to adjust for the impact on Net Income due to the General
Motors Corporation strike, (a) $3,200,000 shall be added to the amount of EBITDA
determined for the second calendar quarter of 1998, (b) $3,300,000 shall be
added to the amount of EBITDA determined for the third calendar quarter of 1998
and (c) $1,300,000 shall be subtracted from the amount of EBITDA determined for
the fourth calendar quarter of 1998.
"Advance" shall mean any Loan, any acceptance of any Bankers'
Acceptance, any BA Equivalent Loan, and any Letter of Credit Advance.
<PAGE> 7
"Affiliate", when used with respect to any Person, shall mean
any other Person which, directly or indirectly, controls or is controlled by or
is under common control with such Person. For purposes of this definition
"control" (including the correlative meanings of the terms "controlled by" and
"under common control with"), with respect to any Person, shall mean possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of such Person, whether through the ownership of voting
securities or by contract or otherwise, and a Person shall be deemed to control
another Person if the controlling Person owns 10% or more of any class of voting
Capital Stock of the controlled Person.
"Applicable Lending Office" shall mean, with respect to any
Loan made by any Lender or with respect to such Lender's Commitments, the office
or branch of such Lender or of any Affiliate of such Lender located at the
address specified as the applicable lending office for such Lender set forth
next to the name of such Lender in the signature pages hereof or any other
office, branch or Affiliate of such Lender or of any Affiliate of such Lender
hereafter selected and notified in writing to the Company and the Agent by such
Lender. Any Affiliate of any such Lender so selected and notified shall have all
rights of a Lender hereunder.
"Applicable Margin" shall mean, with respect to any Floating
Rate Loan, Bankers' Acceptance, LIBOR Loan, commitment fee payable under Section
2.3(a) and Letter of Credit fee payable pursuant to Section 2.3(b), as the case
may be, the per annum rate (expressed as a percentage) in accordance with the
following:
<TABLE>
<CAPTION>
==================================================================================================
Total Debt to Floating Rate Loans Bankers' Facility Fees
Adjusted EBITDA Ratio Acceptances,Letter
of Credit Fees
andLIBOR Loans
==================================================================================================
<S> <C> <C> <C>
>4.75 1.50% 2.25% 0.50%
==================================================================================================
>4.00 but <4.75 1.25% 2.00% 0.50%
-
==================================================================================================
>3.50 but <4.00 1.00% 1.80% 0.45%
-
==================================================================================================
>3.00 but <3.50 0.50% 1.375% 0.375%
-
==================================================================================================
<3.00 0.25% 1.125% 0.375%
- -
==================================================================================================
</TABLE>
2
<PAGE> 8
The Applicable Margin shall be based upon the Total Debt to
Adjusted EBITDA Ratio as calculated as of the last day of each fiscal quarter of
the Company and the Applicable Margin shall be adjusted on (a) the last day of
the second month following the close of the fiscal quarter for the first three
fiscal quarters, and (b) the last day of the fourth month following the close of
the last fiscal quarter, based on the financial statements of the Company and
related compliance certificate pursuant to Section 5.1(d) to the Lenders;
provided that, (i) as of the Effective Date, the Applicable Margin shall be
based on a Total Debt to Adjusted EBITDA Ratio of greater than 4.00 to 1.00 but
less than or equal to 4.75 and (ii) upon the occurrence and during the
continuance of any Event of Default the Applicable Margin shall be based on a
Total Debt to Adjusted EBITDA Ratio of greater than 4.75 to 1.00, in each case
regardless of the actual Total Debt to Adjusted EBITDA Ratio.
"Arranger" shall mean First Chicago Capital Markets, Inc.
"Assignment and Acceptance" is defined in Section 8.6(d).
"BA Equivalent Loan" shall mean a Loan contemplated as such in
Section 3.4.
"BA Rate" shall mean the rate per annum determined as being
the arithmetic average (rounded upwards, if necessary, to the nearest .01%) of
the rates quoted for First Chicago/NBD Canada for one month bankers' acceptances
as appears on the Reuters Screen CDOR (Certificate of Deposit Offered Rate)
page, as determined as at 10:00 a.m. (Toronto time) on the relevant Business Day
(for non-Business Days, and if no CDOR rate is available for a given Business
Day, the CDOR rate for the immediately previous Business Day for which a CDOR
rate is available shall be used)
"BA Interest Period" shall mean, relative to any Bankers
Acceptance or BA Equivalent Loan, the period beginning on (and including) the
date on which such Bankers Acceptance is accepted or continued or such BA
Equivalent Loan is made or continued to (but excluding) the date which is 30, 60
or 90 days thereafter, as selected by the Company.
"Bankers' Acceptance" shall mean a non-interest bearing bill
of exchange in a form satisfactory to the Agent, denominated in CAD, drawn and
endorsed by a Canadian Borrowing Subsidiary and presented to each Canadian
Lender for acceptance pursuant to this Agreement.
"BMG" shall mean BMG North America Limited, a corporation
incorporated under the laws of the Province of Ontario, Canada.
"Board of Directors" shall mean the board of directors of the
Company.
"Borrowing" shall mean the aggregation of Advances, including
each Letter of Credit and Bankers' Acceptance issuance, of the Lenders made to
any Borrower, or continuations and conversions of any Advances, made pursuant to
Article II on a single date and, in the case of any LIBOR Loans or Bankers'
Acceptances, for a single Interest Period, which Borrowings may be classified
for purposes of this Agreement by reference to the type of Loans or the type of
Advance comprising the related Borrowing, e.g.,
3
<PAGE> 9
a "LIBOR Borrowing" is a Borrowing comprised of LIBOR Loans and a "Letter of
Credit Borrowing" is an Advance comprised of a single Letter of Credit.
"Borrowing Base" shall mean, as of any date, the sum of:
(a) an amount equal to 85% of the value of Eligible Accounts
Receivable, plus
(b) an amount equal to 50% of the value of Eligible Deferred
Tooling Reimbursement Payments, plus
(c) an amount equal to 50% of the value of Eligible Inventory,
plus
(d) an amount of fixed asset reliance equal to the sum of the
following: (i) $113,562,000, (ii) 50% of the net book value of Eligible Fixed
Assets acquired after the Effective Date but prior to March 31, 2000, plus (iii)
an amount equal to the sum of 70% of the orderly liquidation value determined by
the Agent for equipment which constitutes Eligible Fixed Assets acquired after
the Effective Date in an Acquisition permitted by Section 5.2(g) and 70% of the
fair market value determined by the Agent for real estate which constitutes
Eligible Fixed Assets acquired in an Acquisition permitted by Section 5.2(g)
consummated after the Effective Date; minus
(e) $30,000,000; minus
(f) until such time as the construction and acquisition of the
Mexican Manufacturing Facility has been substantially completed, an amount equal
to the remaining cost to complete the acquisition, construction and equipping of
the Mexican Manufacturing Facility, and as described by the Company to the Agent
prior to the Effective Date (it being acknowledged that as of the Effective Date
the cost of such acquisition, construction and equipping is approximately
$65,000,0000, and the cost to complete is $65,000,000 minus the amount paid for
such acquisition or construction as of the date of any Borrowing Base
determination), exclusive of any portion of such amount which has been financed
by an operating lease satisfactory to the Agent or other financing transaction
satisfactory to the Agent, all as determined by the Agent;
"Borrowing Base Certificate" for any date shall mean an
appropriately completed report as of such date in substantially the form of
Exhibit A hereto, certified as true and correct as of such date by the Chief
Financial Officer or Treasurer of the Company.
"Borrowing Subsidiary" shall mean any Subsidiary designated by
the Company to the Agent as a "Borrowing Subsidiary" hereunder so long as (a)
each of the Company and each Guarantor guarantees the obligation of such
Borrowing Subsidiary pursuant to a Guaranty, and grants a first priority lien
and security interest on its assets to the extent required under Section 2.11 to
secure such Guaranty and all obligations of such Borrowing Subsidiary, (b) such
Borrowing Subsidiary delivers all corporate or organizational documents and
authorizing resolutions and legal opinions requested by the Agent and (c) such
Borrowing Subsidiary executes all agreements, instruments and documents and
takes such other action requested by the Agent, including without limitation
becoming bound by the terms hereof as a Borrowing
4
<PAGE> 10
Subsidiary and granting a first priority lien and security interest on its
assets to the extent required under Section 2.11 to secure all Advances and
other obligations of such Borrowing Subsidiary to the Lenders and the Agent. As
of the Effective Date, the only Borrowing Subsidiaries are BMG and Oxford
Suspension Ltd..
"Business Day" shall mean a day other than a Saturday, Sunday
or other day on which the Agent is not open to the public for carrying on
substantially all of its banking functions in Detroit, Michigan or, with respect
to any Canadian Advance, First Chicago/NBD Canada is not open to the public for
carrying on substantially all of its banking functions in Toronto, Ontario.
"CAD" or "C$" shall mean the lawful money of Canada.
"Canadian Advances" shall mean all Loans, including
Acceptances, denominated in CAD.
"Canadian Borrowing Subsidiary" shall mean any Borrowing
Subsidiary which is also a Canadian Subsidiary.
"Canadian Lender" shall mean any Lender which, whether
directly or through an Affiliate of such Lender, can make Canadian Advances
hereunder free of withholding taxes of Canada and that is designated from time
to time by the Agent and the Company, with the consent of such Lender, as a
Canadian Lender.
"Canadian Percentage" of any Canadian Lender as of any date,
shall mean a fraction (expressed as a percentage), the numerator of which is the
Commitment of such Canadian Lender and the denominator which is the aggregate
Commitments of all Canadian Lenders.
"Canadian Subsidiary" shall mean any Subsidiary of the Company
organized under the laws of Canada or any Province thereof.
"Capital Expenditures" shall mean, without duplication, any
expenditures, other than under a Capital Lease, for any purchase or other
acquisition of any asset which would be classified as a fixed or capital asset
on a consolidated balance sheet of the Company and its Subsidiaries prepared in
accordance with Generally Accepted Accounting Principles.
"Capital Lease" of any Person shall mean any lease which, in
accordance with Generally Accepted Accounting Principles, is or should be
capitalized on the books of such Person.
"Capital Stock" shall mean (i) in the case of any corporation,
all capital stock and any securities exchangeable for or convertible into
capital stock and any warrants, rights or other options to purchase or otherwise
acquire capital stock or such securities or any other form of equity securities,
(ii) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
corporate stock, (iii) in the case of a partnership or limited liability
company, partnership or membership interests (whether general or limited) and
(iv) any other interest or participation that confers on a Person the right to
receive a share of the profits and losses of, or distribution of assets of, the
issuing Person.
5
<PAGE> 11
"Change in Control" shall mean:
(a) prior to a primary sale or sales of shares of Capital
Stock of the Company resulting in the sale of more than 50% of each class of
outstanding Capital Stock of the Company pursuant to any one or more public
offerings thereof (a "Majority IPO"), (i) Permitted Holders shall cease to
control, directly or indirectly, in each case free and clear of all Liens, at
least 35% (on a fully diluted basis) of the issued and outstanding shares of
Voting Stock of the Company and have the right and authority to appoint,
designate or otherwise elect at least 51% of the members of the Board of
Directors of the Company or (ii) other than the Permitted Holders, any Person,
or two or more Persons acting in concert, acquire or own beneficial ownership
(within the meaning of Rule 13d-3 of the Securities and Exchange Commission
under the Securities Exchange Act of 1934) of an amount of the outstanding
shares of Voting Stock of the Company on a fully diluted basis which is equal to
or greater than the amount owned by the Permitted Holders;
(b) after a Majority IPO, (i) Permitted Holders shall cease to
control, directly or indirectly, in each case free and clear of all Liens, at
least 20% (on a fully diluted basis) of the issued and outstanding shares of
Voting Stock of the Company and have the right and authority to appoint,
designate or otherwise elect at least 20% of the members of the Board of
Directors of the Company or (ii) any Person, or two or more Persons acting in
concert, acquire or own beneficial ownership (within the meaning of Rule 13d-3
of the Securities and Exchange Commission under the Securities Exchange Act of
1934) of an amount of the outstanding shares of Voting Stock of the Company on a
fully diluted basis which is equal to or greater than the amount owned by the
Permitted Holders; or
(c) after the first public offering of Capital Stock of the
Company, during any period of two consecutive years, individuals who at the
beginning of such period constituted the Board of directors (together with any
new directors whose election by such Board of Directors or whose nomination for
election by the shareholders of the Company was approved by a majority vote of
the directors of the Company then still in office who were either directors at
the beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of the
Board of Directors then in office; or
(d) any "Change of Control" as defined in the Senior
Subordinated Note Indenture.
"Code" shall mean the Internal Revenue Code of 1986, as
amended, and the regulations thereunder.
"Cofimeta" shall mean Cofimeta, S.A., a societe anonyme
organized and existing under the laws of France.
"Cofimeta Acquisition" shall mean the Acquisition to be
completed pursuant to the Cofimeta Acquisition Documents.
"Cofimeta Acquisition Date" shall mean the date on which the
Cofimeta Acquisition is completed, as determined by the Agent which shall occur
on or before the Effective Date.
6
<PAGE> 12
"Cofimeta Acquisition Documents" shall mean the agreements to
be dated on or about December 15, 1998 between the Company and Groupe Valfond,
together with all agreements, documents and instruments executed in connection
therewith or otherwise pursuant thereto, under which the French Acquisition
Company will acquire 100% of the Capital Stock of Cofimeta.
"Commitments" shall mean, collectively, the Revolving Credit
Commitments, the Tooling Revolving Credit Commitments and the Term Loan
Commitments.
"Company Security Agreement" shall mean the security agreement
entered into by the Company for the benefit of the Agent and the Lenders
pursuant to this Agreement in substantially the form of Exhibit B hereto, as
amended or modified from time to time.
"Consolidated" or "consolidated" shall mean, when used with
reference to any financial term in this Agreement, the aggregate for two or more
Persons of the amounts signified by such term for all such Persons determined on
a consolidated basis in accordance with Generally Accepted Accounting
Principles.
"Contingent Liabilities" of any Person shall mean, as of any
date and without duplication, all obligations of others for which such Person is
contingently liable, as guarantor, surety, accommodation party, partner or in
any other capacity, or in respect of which obligations such Person assures a
creditor against loss or agrees to take any action to prevent any such loss
(other than endorsements of negotiable instruments for collection in the
ordinary course of business), including without limitation all reimbursement
obligations of such Person in respect of any letters of credit, surety bonds or
similar obligations and all obligations of such Person to advance funds to, or
to purchase assets, property or services from, any other Person in order to
maintain the financial condition of such other Person.
"Creative" shall mean Creative Fabrication Corporation, a
Tennessee corporation.
"Creative Letter of Credit" shall mean the irrevocable letter
of credit number 442 issued by NBD Bank on September 27, 1995 for the account of
Creative, as renewed or extended or otherwise modified from time to time.
"Creative Revenue Bond" shall mean the $8,500,000 Industrial
Development Revenue Bond (Creative Fabrication Corporation Project), Series 1995
issued by the Industrial Development Board of the County of McMinn, a public
non-profit corporation and public instrumentality of the County of McMinn,
Tennessee.
"Creative Revenue Bond Documents" shall mean the indenture of
trust, loan agreement, reimbursement agreement, irrevocable letter of credit,
pledge and security agreement, deed of trust, security agreement, fixture filing
and assignment of rents, security agreement, guarantor security agreement,
irrevocable guaranty agreement and all other agreements and documents executed
or issued in connection with the Creative Revenue Bond, all as amended or
modified from time to time.
7
<PAGE> 13
"Default" shall mean any event or condition which might become
an Event of Default with notice or lapse of time or both.
"Defaulting Lender" shall mean any Lender that fails to make
available to the Agent such Lender's Loans required to be made hereunder or
shall have not made a payment required to be made to the Agent hereunder. Once a
Lender becomes a Defaulting Lender, such Lender shall continue as a Defaulting
Lender until such time as such Defaulting Lender makes available to the Agent
the amount of such Defaulting Lender's Loans and all other amounts required to
be paid to the Agent pursuant to this Agreement.
"Discount Rate" shall mean with respect to Bankers'
Acceptances issued pursuant to this Agreement with the same maturity date, the
rate determined by the Agent as being the discount rate, calculated on the basis
of a year of 365 days, of the Agent established in accordance with its normal
practices at or about 10:00 a.m. on the date of issue of such Bankers'
Acceptances, for bankers' acceptances having a comparable face value and an
identical maturity date to the face value and maturity date of the Agent's
portion of such issue of Bankers' Acceptances.
"Discounted Proceeds" shall mean in respect of any Bankers'
Acceptance to be accepted and purchased by a Lender hereunder on any day, an
amount (rounded to the nearest whole cent, and with one-half of one cent being
rounded up) calculated on such day by multiplying (i) the face amount of such
Bankers' Acceptance by (ii) the price, where the price is determined by dividing
one by the sum of one plus the product of (A) the Discount Rate (expressed as a
decimal) and (B) a fraction, the numerator of which is the number of days in the
term of such Bankers' Acceptance and the denominator of which is 365.
"Disqualified Stock" shall mean any Capital Stock that, by its
terms (or by the terms of any security into which it is convertible or for which
it is exchangeable), or upon the happening of any event, matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
redeemable at the option of the holder thereof, in whole or in part, or which
otherwise has any mandatory payments with respect thereto.
"Dollar Equivalent" shall mean as of any date, with respect to
any amount in a currency other than Dollars, the sum in Dollars resulting from
the conversion of such amount from such currency into Dollars at the spot
exchange rate determined by the Agent to be available to it for the purchase of
such currency with Dollars at approximately 11:00 a.m. local time of the
Applicable Lending Office on such date as a determination of the Dollar
Equivalent is made.
"Documents" shall have the meaning ascribed thereto in Section
3.3(b).
"Dollars" and "$" shall mean the lawful money of the United
States of America.
"Domestic Subsidiary" shall mean each present and future
Subsidiary of the Company which is not a Foreign Subsidiary.
8
<PAGE> 14
"Dutch Holding Company" shall mean a Subsidiary of the Company
and wholly owned directly by the Company or by a Guarantor, which Subsidiary is
organized under the laws of the Netherlands and formed after the Effective Date
to, among other purposes, own 100% of the Capital Stock, free and clear of any
Liens other than in favor of the Agent, of the French Acquisition Company,
provided that such Subsidiary satisfies all the requirements of this Agreement.
The Dutch Holding Company shall be deemed a Restricted Subsidiary.
"EBITDA" shall mean, for any period, the Net Income for such
period plus, without duplication, all amounts deducted in determining such Net
Income on account of (a) Interest Expense, (b) income tax expense (including
Michigan Single Business Tax expense), (c) depreciation and amortization
expense, and (d) all other non cash items reducing Net Income (other than items
that will require cash payments and for which an accrual or reserve is, or is
required under Generally Accepted Accounting Principles to be, made, except as
otherwise consented to by the Agent), and minus all non cash items increasing
Net Income, in each case for such period, all as determined for the Company and
its Subsidiaries on a consolidated basis in accordance with Generally Accepted
Accounting Principles.
"Effective Date" shall mean the effective date specified in
the final paragraph of this Agreement.
"Eligible Accounts Receivable" shall mean, as of any date and
without duplication, those trade accounts receivable owned by a Borrower or a
Guarantor that are payable in Dollars, CAD or any other readily available and
freely tradable currency acceptable to the Agent and in which such Borrower or
Guarantor has granted to the Agent for the benefit of the Lenders and the Agent
a first-priority perfected security interest pursuant to the Security
Agreements, subject to only such Liens as are permitted Section 5.2(f)(i),
valued at the face amount thereof less sales, excise or similar taxes and less
returns, discounts, claims, credits and allowances of any nature at any time
issued, owing, granted, outstanding, available or claimed, but shall not include
any such account receivable (a) that is not a bona fide existing obligation
created by the sale and actual delivery of inventory, goods or other property,
or the furnishing of services or other good and sufficient consideration to
customers of a Borrower or a Guarantor in the ordinary course of business, (b)
that is more than 90 days past due or that remains outstanding more than 90 days
after the earlier of the date of the invoice or the shipment of the related
inventory, goods or other property or the furnishing of the related services or
other consideration, (c) that is subject to any dispute, contra-account,
defense, offset or counterclaim or any Lien (except those in favor of the Agent
for the benefit of the Lenders and the Agent under the Security Documents), or
the inventory, goods, property, services or other consideration of which such
account receivable constitutes proceeds is subject to any such Lien, (d) in
respect of which the inventory, goods, property, services or other consideration
have been rejected, (e) that is due from any Affiliate or Subsidiary of any
Borrower or Guarantor, (f) that has been classified by any Borrower or Guarantor
as doubtful or has otherwise failed to meet established or customary credit
standards of any Borrower or Guarantor, (g) that is payable by any Person
located outside the United States or Canada (which shall not be deemed to
include any territories of the United States or Canada), other than a Subsidiary
of General Motors Corporation, Ford Motor Company or DaimlerChrysler AG, or any
other substantial auto manufacturer or supplier approved by the Agent, (h) with
respect to which any representation or warranty contained in Section 4.11 is
incorrect at any time, (i) that is payable by the United States or any of its
departments, agencies or instrumentalities or by any state or other governmental
entity unless such Borrower
9
<PAGE> 15
or Guarantor shall have notified the Agent thereof and shall have executed and
delivered any and all instruments and documents and taken such other action
required by the Agent to duly effect the assignment thereof to the Agent under
the Federal Assignment of Claims Act, as amended, or other applicable law now or
hereafter in effect, (j) that is payable by any Person as to which 30% or more
of the accounts receivable payable by such Person to any Borrower or Guarantor
do not otherwise constitute Eligible Accounts Receivable, (k) that is payable by
any Person that is the subject of any proceeding seeking to adjudicate it a
bankrupt or insolvent or seeking liquidation, winding up or reorganization,
arrangement, adjustment, protection, relief or composition of it or its debts
under any law relating to bankruptcy, insolvency or reorganization or relief or
protection of debtors or seeking the appointment of a receiver, trustee,
custodian or other similar official for it or for any substantial part of its
property, or that is not generally paying its debts as they become due or has
admitted in writing its inability to pay its debts generally or has made a
general assignment for the benefit of creditors, (l) that is evidenced by a
promissory note or other instrument, (m) that is subordinate or junior in right
or priority of payment to any other obligation or claim, (n) arising as a result
of or relating to Tooling if such account receivable is not currently due or
arising as a result of or relating to Tooling if it arises under any Tooling
Contract financed by any lender other than by Advances by the Lenders under this
Agreement, or (o) that for any other reason is at any time reasonably deemed by
the Agent to be ineligible.
"Eligible Deferred Tooling Reimbursement Payments" shall mean
such portion assets, net of any payments received thereon, of a Borrower or
Guarantor which consists of Tooling reimbursement payments provided that each of
the following conditions are satisfied: (a) the sale of the related Tooling is
covered under specific written purchase orders or agreements between a Borrower
or Guarantor and the purchaser of such Tooling, and the terms and provisions of
all such purchase orders and agreements and the purchaser thereof must be
satisfactory to the Agent, (b) the Agent has a first priority, perfected and
enforceable security interest in the Borrower's or Guarantor's interest in such
assets, including without limitation, any account receivable or other proceeds
of a Borrower or Guarantor relating to such long term assets, subject to only
such Liens as are permitted by Section 5.2(f)(i), (c) the unpaid balance of such
Tooling as represented by a Borrower or Guarantor is not subject to any defense,
counterclaim, setoff, contra-account, credit, allowance or adjustment and (d)
such Tooling has been constructed in accordance with the requirements and other
terms of such purchase orders and other agreements relating thereto and the
purchaser thereof has approved such Tooling and is not disputing the
acceptability of such Tooling. For purposes of this definition, all Tooling
reimbursement payments of a Borrower or Guarantor which are the subject of any
Tooling Contract financed by any lender other than by Advances by the Lenders
under this Agreement shall be excluded from this definition and no (i) Eligible
Inventory or (ii) accounts receivable included within Eligible Accounts
Receivable shall be included as part of Eligible Deferred Tooling Reimbursement
Payments.
"Eligible Fixed Assets" shall mean, as of any date, those
tangible fixed assets owned by a Borrower or a Guarantor in which such Borrower
or Guarantor has granted to the Agent and Lenders a first-priority perfected
security interest pursuant to the Security Agreements, subject to only such
Liens as are permitted Section 5.2(f)(i),but not including any such fixed asset
(a) that is not usable in the business of a Borrower or Guarantor, (b) that is
located outside the United States or Canada or such other jurisdiction approved
by the Agent, (c) that is subject to, or any accounts or other proceeds
resulting from the sale or other disposition thereof could be subject to, any
Lien (except those in favor of the Agent and the Lenders
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under the Security Agreements), (d) that is not in the possession of the
Company, (e) that is held for sale or lease or is the subject of any lease, (f)
that is subject to any trademark, trade name or licensing arrangement, or any
law, rule or regulation, that could limit or impair the ability of the Agent and
the Lenders to promptly exercise all rights of the Agent and the Lenders under
the Security Agreements, (g) if such fixed asset is located on premises not
owned by the Company and the landlord or other owner of such premises shall not
have waived its distraint, lien and similar rights with respect to such fixed
asset, and shall not have agreed to permit the Agent to enter such premises
after the occurrence of an Event of Default pursuant to a waiver and agreement
of such Person in favor of and in form and substance acceptable to the Agent,
(h) with respect to which any insurance proceeds are not payable to the Agent as
a lender loss payee or are payable to any loss payee other than the Agent or a
Borrower or Guarantor, and (i) that for any other reason is at any time
reasonably deemed by the Agent to be ineligible.
"Eligible Inventory" shall mean, as of any date, that
inventory owned by a Borrower or a Guarantor that constitutes raw materials,
work-in-process or finished goods in which such Borrower or Guarantor has
granted to the Agent for the benefit of the Lenders and the Agent a
first-priority perfected security interest pursuant to the Security Agreements,
subject to only such Liens as are permitted Section by 5.2(f)(i), valued at the
lower of cost or market on a FIFO basis, but shall not include any such
inventory (a) that does not constitute raw materials, work-in-process or
finished goods readily salable or usable in the business of a Borrower or a
Guarantor, (b) that is located outside the United States or Canada (which shall
not be deemed to include any territories of the United States or Canada) or such
other jurisdiction approved by the Agent, (c) that is subject to, or any
accounts or other proceeds resulting from the sale or other disposition thereof
could be subject to, any Lien (except those in favor of the Agent for the
benefit of the Lenders and the Agent under the Security Documents), including
any sale on approval or sale or return transaction or any consignment, (d) that
is not in the possession of such Borrower or Guarantor, (e) that is held for
lease or is the subject of any lease, (f) that is subject to any trademark,
trade name or licensing arrangement, or any law, rule or regulation, that could
limit or impair the ability of the Agent to promptly exercise all rights of the
Agent under the Security Documents, (g) if such inventory is located on premises
not owned by such Borrower or Guarantor and the landlord or other owner of such
premises shall not have waived its distraint, lien and similar rights with
respect to such inventory and shall not have agreed to permit the Lenders and
the Agent to enter such premises pursuant to a waiver and agreement of such
Person in favor of and in form and substance acceptable to the Lenders and the
Agent or any other substantial auto manufacturer or supplier approved by the
Agent, (h) with respect to which any insurance proceeds are not payable to the
Agent for the benefit of the Lenders as a lender loss payee or are payable to
any loss payee other than the Agent or such Borrower or Guarantor, (i) that is
classified as Eligible Deferred Tooling Reimbursement Payments, (j) that is
Tooling unless such Tooling qualifies as Eligible Tooling, or (k) that for any
other reason is at any time reasonably deemed by the Agent to be ineligible.
"Eligible Tooling" shall mean such portion of assets, net of
any payments received thereon, of a Borrower or Guarantor which consists of
Tooling, provided that each of the following conditions is satisfied: (a) the
sale of such Tooling is covered under specific written purchase orders or
agreements between a Borrower or Guarantor and the purchaser of such Tooling,
and the terms and provisions of all such purchase orders and agreements and the
purchaser thereof must be satisfactory to the Agent, (b) the Agent has a first
priority, perfected and enforceable security interest in such Borrower's or
Guarantor's interest in such Tooling and any account receivable or other
proceeds of a Borrower or Guarantor relating to such
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<PAGE> 17
Tooling, subject to only such Liens as are permitted by Section 5.2(f)(i), and
(c) the unpaid balance of such Tooling as represented by a Borrower or Guarantor
is not subject to any defense, counterclaim, setoff, contra-account, credit,
allowance or adjustment. For purposes of this definition, all Tooling of a
Borrower or Guarantor which is the subject of any Tooling Contract financed by
any lender other than by Advances by the Lenders under this Agreement shall be
excluded from this definition, and no (i) accounts receivable included within
Eligible Accounts Receivable, or (ii) Eligible Deferred Tooling Reimbursement
Payments shall be included as part of Eligible Tooling.
"Environmental Certificate" shall mean the environmental
certificate given by the Borrowers and the Guarantors to the Agent for the
benefit of the Lenders pursuant to this Agreement in substantially the form of
Exhibit C hereto.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended from time to time, and the regulations thereunder.
"ERISA Affiliate" shall mean, with respect to any Person, any
trade or business (whether or not incorporated) which, together with such Person
or any Subsidiary of such Person, would be treated as a single employer under
Section 414 of the Code and the regulations promulgated thereunder.
"Event of Default" shall mean any of the events or conditions
described in Section 6.1.
"Existing Credit Agreement" is defined in the recital
paragraph of this Agreement.
"Existing Letters of Credit" shall mean the letters of credit
set forth on Schedule 1.1(A).
"Federal Funds Rate" shall mean the per annum rate established
and announced by the Agent from time to time as the opening federal funds rate
paid by the Agent in its regional federal funds market for overnight borrowings
from other banks, which Federal Funds Rate shall change simultaneously with any
change in such announced rates.
"First Chicago/NBD Canada" shall mean First Chicago NBD Bank,
Canada, a Canadian chartered bank, and its successors and assigns.
"Fixed Charges" shall mean, for any period, the sum, without
duplication, of (a) Interest Expense for such period, plus (b) all payments of
principal or other sums paid or payable during such period by the Company or its
Restricted Subsidiaries with respect to Indebtedness of the Company or its
Restricted Subsidiaries, other than payments on the Revolving Credit Advances
and Tooling Revolving Credit Advances, plus (c) Rental Charges paid or payable
during such period by the Company and its Restricted Subsidiaries, plus (d) all
dividends, distributions and other obligations paid with respect to any class of
the Company's Capital Stock or any dividend, payment or distribution paid in
connection with the redemption, purchase, retirement or other acquisition,
directly or indirectly, of any shares of the Company's Capital Stock, plus (e)
all net income taxes accrued in such period by the Company or its Restricted
Subsidiaries, plus (f) all payments of principal or other sums paid or payable,
whether directly or indirectly, during such
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<PAGE> 18
period by the Company or any of its Restricted Subsidiaries with respect to
Indebtedness of any Unrestricted Subsidiary.
"Fixed Charge Coverage Ratio" shall mean, as of the end of any
fiscal quarter of the Company, the ratio of (a) Adjusted EBITDA for the four
consecutive fiscal quarters of the Company then ending, plus Rental Charges for
the four consecutive fiscal quarters of the Company then ending, minus Capital
Expenditures (exclusive of (i) the Permitted Mexican Manufacturing Facility
Expenditures, (ii) up to $5,000,000 of Capital Expenditures for the Saturn
Innovate program in the fiscal year of the Company ending March 31, 1999, (iii)
up to $5,000,000 of Capital Expenditures for the Mexican GMT 250 program in the
fiscal year of the Company ending March 31, 1999, (iv) up to $10,000,000 in
aggregate amount of Capital Expenditures for productivity improvement programs
acceptable to the Agent in the fiscal years of the Company ending March 31, 1999
and 2000 on a combined basis, and (v) up to $10,000,000 in aggregate amount of
Capital Expenditures for program specific Capital Expenditures for programs not
yet awarded or for changes to existing programs which occur after the Effective
Date, in each case acceptable to the Agent and for the fiscal years of the
Company ending March 31, 2001 and 2002 on a combined basis) for the four
consecutive fiscal quarters of the Company then ending, to (b) the Fixed Charges
for the four consecutive fiscal quarters of the Company then ending.
"Floating Rate" shall mean the per annum rate equal to the sum
of (a) the Applicable Margin, plus (b) (i) with respect to U.S. Advances and
other obligations denominated in Dollars, the greater of (x) the Prime Rate in
effect from time to time, and (y) the sum of one half of one percent (1/2%) per
annum plus the Federal Funds Rate in effect from time to time; and (ii) with
respect to Canadian Advances and other obligations denominated in CAD, the
greater of (x) the per annum rate of interest quoted, published and commonly
known as the "prime rate" of First Chicago/NBD Canada which First Chicago/NBD
Canada establishes as the reference rate of interest in order to determine
interest rates for loans to its Canadian commercial borrowers, which rate is not
necessarily the lowest rate of interest offered by First Chicago/NBD Canada in
connection with extensions of credit; and (y) the BA Rate plus 1/2 of 1% per
annum; in each case adjusted automatically with each quoted or published change
in such rate, all without the necessity of any notice to any Borrower, which
Floating Rate shall change simultaneously with any change in any such rates.
"Floating Rate Loan" shall mean any Loan which bears interest
at the Floating Rate.
"Foreign Subsidiary" shall mean any Subsidiary incorporated or
formed in any jurisdiction other than any State of the United States of America.
"French Acquisition Company" shall mean Oxford Automotive
France, SAS, a societe par actions simplifiee organized and existing under the
laws of France.
"Generally Accepted Accounting Principles" shall mean
generally accepted accounting principles applied on a basis consistent with that
reflected in the financial statements referred to in Section 4.6.
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<PAGE> 19
"Guaranties" shall mean each guaranty entered into by the
Guarantors for the benefit of the Agent and the Lenders pursuant to this
Agreement in substantially the form of Exhibit D hereto, as amended or modified
from time to time.
"Guarantor Security Agreement" shall mean each security
agreement entered into by the Guarantors for the benefit of the Agent and the
Lenders pursuant to this Agreement in substantially the form of Exhibit E
hereto, as amended or modified from time to time.
"Guarantors" shall mean each Domestic Subsidiary of the
Company existing as of the Effective Date, each Canadian Subsidiary, the Company
(in its capacity as guarantor of the Borrowing Subsidiaries), and each Person
becoming a Restricted Subsidiary of the Company after the Effective Date or
otherwise entering into a Guaranty from time to time; provided, however, that
the Dutch Holding Company, French Acquisition Company, the Mexican Subsidiaries,
OPI, Cofimeta and the Subsidiaries of Cofimeta existing as of the Effective Date
shall not be required to become Guarantors hereunder.
"Hedging Agreement" shall mean an agreement, device or
arrangement entered into by the Company or any of its Restricted Subsidiaries
providing for payments which are related to fluctuations of interest rates,
currency exchange rates or forward rates, including, but not limited to,
dollar-denominated or cross-currency interest rate exchange agreements, forward
currency exchange agreements, interest rate cap or collar protection agreements,
forward rate currency or interest rate options, puts and warrants.
"Hedging Obligations" of a Person shall mean any and all
obligations of such Person, whether absolute or contingent and howsoever and
whensoever created, arising, evidenced or acquired (including all renewals,
extensions and modifications thereof and substitutions therefor), under (i) any
and all Hedging Agreements, and (ii) any and all cancellations, buy backs,
reversals, terminations or assignments of any Hedging Agreement.
"Howell" shall mean Howell Industries, Inc., a Michigan
corporation.
"Indebtedness" of any Person shall mean, as of any date, (a)
all obligations of such Person for borrowed money, and similar monetary
obligations evidenced by bonds, notes, debentures, Capital Lease obligations,
bankers acceptances or otherwise, (b) all obligations of such Person as lessee
under any Capital Lease, (c) all obligations which are secured by any Lien
existing on any asset or property of such Person whether or not the obligation
secured thereby shall have been assumed by such Person, (d) all obligations of
such Person for the unpaid purchase price for goods, property or services
acquired by such Person, except for trade accounts payable and taxes arising in
the ordinary course of business that are not past due, (e) all obligations of
such Person to purchase goods, property or services where payment therefor is
required regardless of whether delivery of such goods or property or the
performance of such services is ever made or tendered (generally referred to as
"take or pay contracts"), (f) all Hedging Obligations, and (g) all Contingent
Liabilities.
"Intercreditor Agreement" shall mean the Intercreditor
Agreement dated on or about the Effective Date in form and substance
satisfactory to the Agent among the Agent, BMG and all other material lenders to
BMG or any of its Subsidiaries, as amended or modified from time to time.
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<PAGE> 20
"Interest Coverage Ratio" shall mean, as of the end of any
fiscal quarter of the Company, the ratio of (a) Adjusted EBITDA for the four
consecutive fiscal quarters of the Company then ending to (b) Interest Expense
for the four consecutive fiscal quarters of the Company then ending.
"Interest Expense" shall mean, for any period, the total
interest expense of the Company and its consolidated Restricted Subsidiaries,
plus, to the extent not included in such total interest expense, and to the
extent incurred by the Company or its Restricted Subsidiaries, (i) interest
expense attributable to Capital Lease obligations, (ii) amortization of debt
discount, (iii) capitalized interest, (iv) non-cash interest expense, (v)
commissions, discounts and other fees and charges owed with respect to letters
of credit and bankers' acceptance financing, (vi) net costs associated with
Hedging Agreements (including amortization of fees), (vii) Preferred Stock
dividends in respect of all Preferred Stock held by Persons other than the
Company or a Restricted Subsidiary, and (viii) interest actually paid by the
Company or any Restricted Subsidiary on any Indebtedness of any other Person.
Notwithstanding the foregoing, net interest expense attributable to deferred
reimbursement tooling indebtedness, i.e., only that portion of Tooling
Indebtedness to be paid by the purchaser of the related Tooling in the piece
price over the term of the related tooling contract consistent with current
practice, shall not be included in Interest Expense.
"Interest Payment Date" shall mean (a) with respect to any
LIBOR Loan or Acceptance, the last day of each Interest Period with respect
thereto and, in the case of any Interest Period exceeding three months, those
days that occur during such Interest Period at intervals of three months after
the first day of such Interest Period, and (b) in all other cases, the last
Business Day of each March, June, September and December occurring after the
date hereof, commencing with the first such Business Day occurring after the
date of this Agreement.
"Interest Period" shall mean any BA Interest Period or LIBOR
Interest Period.
"Letter of Credit" shall mean a standby or commercial letter
of credit issued by the Agent on behalf of the Lenders for the account of the
Company under an application and/or other documentation acceptable to the Agent
requiring, among other things, immediate reimbursement by the Company to the
Agent in respect of all drafts or other demand for payment honored thereunder
and all expenses paid or incurred by the Agent relative thereto, and shall
include the Creative Letter of Credit and all other Existing Letters of Credit.
"Letter of Credit Advance" shall mean each issuance of a
Letter of Credit.
"LIBOR" shall mean, with respect to any LIBOR Loan and the
related LIBOR Interest Period, the per annum rate that is equal to the sum of:
(a) the Applicable Margin, plus
(b) the rate per annum obtained by dividing (i) the per annum
rate of interest at which deposits in Dollars for such LIBOR Interest Period and
in an aggregate amount comparable to the amount of such LIBOR Loan to be made by
the Agent in its capacity as a Lender hereunder are offered to the Agent
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<PAGE> 21
by other prime banks in the London interbank market, at approximately 11:00 a.m.
London time, on the second LIBOR Business Day prior to the first day of such
LIBOR Interest Period by (ii) an amount equal to one minus the stated maximum
rate (expressed as a decimal) of all reserve requirements (including, without
limitation, any marginal, emergency, supplemental, special or other reserves)
that are specified on the first day of such LIBOR Interest Period by the Board
of Governors of the Federal Reserve System (or any successor agency thereto) for
determining the maximum reserve requirement with respect to eurocurrency funding
(currently referred to as "Eurocurrency liabilities" in Regulation D of such
Board) maintained by a member bank of such System; all as conclusively
determined by the Agent, such sum to be rounded up, if necessary, to the nearest
whole multiple of one one-hundredth of one percent (1/100 of 1%).
"LIBOR Business Day" shall mean, with respect to any LIBOR
Loan, a day which is both a Business Day and a day on which dealings in Dollar
deposits are carried out in the London interbank market.
"LIBOR Interest Period" shall mean, with respect to any LIBOR
Loan, the period commencing on the day such LIBOR Loan is made or converted to a
LIBOR Loan and ending on the day which is one, two, three or six months
thereafter (or such longer period requested by the Company and acceptable to the
Lenders), as the Company may elect under this Agreement, and each subsequent
period commencing on the last day of the immediately preceding LIBOR Interest
Period and ending on the day which is one, two or three months thereafter (or
such longer period requested by the Company and acceptable to the Lenders), as
the Company may elect under this Agreement, provided, however, that (a) any
LIBOR Interest Period which commences on the last LIBOR Business Day of a
calendar month (or on any day for which there is no numerically corresponding
day in the appropriate subsequent calendar month) shall end on the last LIBOR
Business Day of the appropriate subsequent calendar month, (b) each LIBOR
Interest Period which would otherwise end on a day which is not a LIBOR Business
Day shall end on the next succeeding LIBOR Business Day or, if such next
succeeding LIBOR Business Day falls in the next succeeding calendar month, on
the next preceding LIBOR Business Day, and (c) no LIBOR Interest Period which
would end after the Revolving Credit Termination Date with respect to any
Revolving Credit Loan, after the Maturity Date with respect to the Term Loan or
after the Tooling Revolving Credit Termination Date with respect to any Tooling
Revolving Credit Loan shall be permitted.
"LIBOR Loan" shall mean any Loan which bears interest at
LIBOR.
"Lien" shall mean any pledge, assignment, hypothecation,
mortgage, security interest, deposit arrangement, option, conditional sale or
title retaining contract, sale and leaseback transaction, financing statement
filing, lessor's or lessee's interest under any lease, subordination of any
claim or right, or any other type of lien, charge, encumbrance, preferential
arrangement or other claim or right.
"Loan" shall mean any Revolving Credit Loan, any Tooling
Revolving Credit Loan, the Term Loan and any Swingline Loan. Any such Loan or
any portion thereof may also be denominated as a Floating Rate Loan, a Bankers'
Acceptance or BA Equivalent Loan or a LIBOR Loan and such Loans are referred to
herein as "types" of Loans.
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"Loan Documents" shall mean, collectively, this Agreement, the
Notes, the Security Documents, any Hedging Agreements among any of the Borrowers
and any of the Lenders and any other agreement, instrument or document executed
in connection with any of the foregoing at any time, all as amended or modified
from time to time.
"Lobdell" shall mean Lobdell Emery Corporation, a Michigan
corporation.
"Lobdell Preferred Stock" shall mean all existing preferred
stock issued by Lobdell, including the Series B Preferred Stock and Series A
Preferred Stock, in the aggregate amount of $50,700,000.
"Lobdell Preferred Stock Documents" shall mean all stock
certificates, agreements and other documents relating to the terms of the
Preferred Stock or otherwise relating to the Preferred Stock.
"Material Adverse Effect" shall mean (i) a material adverse
effect on the property, business, operations, financial condition, liabilities
or capitalization of the Company and its Restricted Subsidiaries, taken as a
whole, (ii) a material adverse effect on the ability of the Company or any
Guarantor to perform its obligations under the Loan Documents or (iii) a
material adverse effect on the rights and remedies of the Agent or the Lenders
under the Loan Documents.
"Maturity Date" shall mean the earlier to occur of (a) the
date on which the maturity of the Term Loan is accelerated pursuant to Section
6.2 and (b) July 31, 2004.
"Mexican Manufacturing Facility" shall mean the Ramos Arizape
manufacturing facility of the Company to be located in Mexico as described by
the Company to the Agent prior to the Effective Date.
"Mexican Subsidiaries" shall mean Subsidiaries of the Company
described on Schedule 1.1(B), which are, the only Subsidiaries of the Company
located in Mexico or organized or existing under the laws of Mexico or any
political subdivision thereof as of the Effective Date.
"Mexico" shall mean the United Mexican States.
"Multiemployer Plan" shall mean any "multiemployer plan" as
defined in Section 4001(a)(3) of ERISA or Section 414(f) of the Code.
"Net Cash Proceeds" shall mean, without duplication (a) in
connection with any sale or other disposition of any asset or any settlement by,
or receipt of payment in respect of, any property insurance claim or
condemnation award, the cash proceeds (including any cash payments received by
way of deferred payment of principal pursuant to a note or installment
receivable or purchase price adjustment receivable or otherwise, but only as and
when received) of such sale, settlement or payment, net of reasonable and
documented attorneys' fees, accountants' fees, investment banking fees, amounts
required to be applied to the repayment of Indebtedness secured by a Lien
expressly permitted hereunder on any asset which is the subject of such sale,
insurance claim or condemnation award (other than any Lien in favor of the Agent
for the benefit of the Agent and the Lenders) and other customary fees actually
incurred in connection therewith
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<PAGE> 23
and net of taxes paid or reasonably estimated to be payable as a result thereof
and (b) in connection with any issuance or sale of any equity securities or debt
securities or instruments or the incurrence of loans, the cash proceeds received
from such issuance or incurrence, net of investment banking fees, reasonable and
documented attorneys' fees, accountants' fees, underwriting discounts and
commissions and other reasonable and customary fees and expenses actually
incurred in connection therewith.
"Net Income" shall mean, for any period, the net income of the
Company and its consolidated Restricted Subsidiaries; provided, however, that
there shall not be included in such Net Income: (i) any net income (or loss) of
any Person if such Person is not a Restricted Subsidiary, except that subject to
the exclusion contained in clause (iv) below, the Company's equity in the net
income of any such Person for such period shall be included in such Net Income
up to the aggregate amount of cash actually distributed by such Person during
such period to the Company or a Restricted Subsidiary as a dividend or other
distribution (subject, in the case of a dividend or other distribution paid to a
Restricted Subsidiary, to the limitations contained in clause (ii) below); (ii)
any net income of any Restricted Subsidiary if such Restricted Subsidiary is
subject to restrictions, directly or indirectly, on the payment of dividends or
the making of distributions by such Restricted Subsidiary, directly or
indirectly, to the Company, except that (A) subject to the exclusion contained
in clause (iii) below, the Company's equity in the net income of any such
Restricted Subsidiary for such period shall be included in such Net Income up to
the aggregate amount of cash that could have been distributed by such Restricted
Subsidiary consistent with such restriction during such period to the Company or
another Restricted Subsidiary as a dividend or other distribution (subject, in
the case of a dividend or other distribution paid to another Restricted
Subsidiary, to the limitation contained in this clause) and (B) the Company's
equity in a net loss of any such Restricted Subsidiary for such period shall be
included in determining such Net Income; (iii) any gain (or loss) realized upon
the sale or other disposition of any assets of the Company or its consolidated
Subsidiaries (including pursuant to any sale-and-leaseback arrangement) which is
not sold or otherwise disposed of in the ordinary course of business and any
gain (or loss) realized upon the sale or other disposition of any Capital Stock
of any Person; (iv) extraordinary or nonrecurring gains or non-cash losses; and
(v) the cumulative effect of a change in accounting principles.
"Net Worth" of any Person shall mean, as of any date, the
amount of any capital stock, paid in capital and similar equity accounts plus
(or minus in the case of a deficit) the capital surplus and retained earnings of
such Person, less treasury stock, all as determined under Generally Accepted
Accounting Principles; provided, however, that any foreign currency translation
adjustment account of the Company and its Subsidiaries shall be disregarded in
the calculation of Net Worth.
"Note" shall mean any Revolving Credit Note, any Tooling
Revolving Credit Note, any Term Loan Note or the Swingline Note.
"OASP I" shall mean OASP, Inc., a Michigan corporation, and
wholly-owned Subsidiary of the Company.
"OASP II" shall mean OASP II, Inc., a Michigan corporation,
and wholly owned Subsidiary of the Company.
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<PAGE> 24
"OPI" is defined on Schedule 4.26.
"OPI Acquisition" shall mean the Acquisition of all
outstanding shares of OPI by the Company, a Guarantor (either an existing
Guarantor or a Guarantor to be formed after the date hereof), the French
Acquisition Company, Cofimeta or a wholly owned Foreign Subsidiary which is a
Restricted Subsidiary, provided that if any such Subsidiary is not a Guarantor
such Subsidiary and each Subsidiary which is not a Guarantor owning such
Subsidiary, directly or indirectly, shall not incur or maintain any Indebtedness
(except as otherwise permitted by this Agreement if such Subsidiary is the
French Acquisition Company or Cofimeta) and at least 65% of the Capital Stock of
the Subsidiary owning OPI, directly or indirectly, which is owned directly by a
Guarantor or the Company shall be pledged to the Agent, for the benefit of
itself and the Lenders on a first priority basis, by such Guarantor or the
Company, as the case may be, and all as further described on Schedule 4.26.
"Overdue Rate" shall mean (a) in respect of principal of
Floating Rate Loans, a rate per annum that is equal to the sum of three percent
(3%) per annum plus the Floating Rate, (b) in respect of principal of LIBOR
Loans, a rate per annum that is equal to the sum of three percent (3%) per annum
plus the per annum rate in effect thereon until the end of the then current
Interest Period for such Loan and, thereafter, a rate per annum that is equal to
the sum of three percent (3%) per annum plus the Floating Rate, and (c) in
respect of other amounts payable by the Company hereunder (other than interest),
a per annum rate that is equal to the sum of three percent (3%) per annum plus
the Floating Rate.
"Oxford" shall mean The Oxford Investment Group, Inc., a
Michigan corporation.
"Oxford Suspension Ltd." shall mean Oxford Suspension Ltd., a
corporation incorporated under the laws of the Province of Ontario, Canada.
"PBGC" shall mean the Pension Benefit Guaranty Corporation and
any entity succeeding to any or all of its functions under ERISA.
"Permitted Disqualified Stock" is defined is Section 5.2(j).
"Permitted Holders" shall mean (i) any of Selwyn Isakow, his
spouse and any of his lineal descendants and their respective spouses
(collectively, the "Isakow Family") whether acting in their own name or as one
or as a majority of Persons having the power to exercise the voting rights
attached to, or having investment power over, shares held by others, (ii) any
Person wholly owned and controlled by any member of the Isakow Family, (iii) any
trust solely for the benefit of one or more members of the Isakow Family
(whether or not any member of the Isakow Family is a trustee of such trust) and
(iv) the individuals that are holders on the Effective Date of the voting common
stock of the Company.
"Permitted Liens" shall mean Liens permitted by Section 5.2(f)
hereof.
"Permitted Mexican Manufacturing Facility Expenditures" shall
mean the aggregate expenditures of any kind (including, without limitation,
whether by the Company, any Mexican Subsidiary or any other Subsidiary directly
or indirectly) to acquire, construct and equip the Mexican Manufacturing
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<PAGE> 25
Facility which are not in excess of $65,000,000 and are made in accordance with
the terms of this Agreement.
"Person" shall include an individual, a corporation, an
association, a partnership, a limited liability company, a trust or estate, a
joint stock company, an unincorporated organization, a joint venture, a trade or
business (whether or not incorporated), a government (foreign or domestic) and
any agency or political subdivision thereof, or any other entity.
"Plan" shall mean, with respect to any Person, any pension
plan (including a Multiemployer Plan) subject to Title IV of ERISA or to the
minimum funding standards of Section 412 of the Code which has been established
or maintained by such Person, any Subsidiary of such Person or any ERISA
Affiliate, or by any other Person if such Person, any Subsidiary of such Person
or any ERISA Affiliate could have liability with respect to such pension plan.
"Planned Asset Sales" shall mean the manufacturing facility of
Creative in Athens, Tennessee and the manufacturing facility of Winchester
Fabrication Corporation in Winchester, Indiana.
"Pledge Agreement" shall mean each pledge agreement entered
into by the Company or any Guarantor for the benefit of the Agent and the
Lenders pursuant to this Agreement in form and substance satisfactory to the
Agent, as amended or modified from time to time.
"Preferred Stock" shall mean all Lobdell Preferred Stock and
all other preferred stock or similar Capital Stock issued by the Company or any
of its Restricted Subsidiaries at any time.
"Prime Rate" shall mean the per annum rate announced by the
Agent from time to time as its "prime rate" (it being acknowledged that such
announced rate may not necessarily be the lowest rate charged by the Agent to
any of its customers); which Prime Rate shall change simultaneously with any
change in such announced rate.
"Prohibited Transaction" shall mean any transaction involving
any Plan which is proscribed by Section 406 of ERISA or Section 4975 of the
Code.
"Rental Charges" shall mean the maximum amount of all rents
and other payments (exclusive of property taxes, property and liability
insurance premiums and maintenance costs) paid or required to be paid by the
Company or its Restricted Subsidiaries during such period under any lease of
real or personal property in respect of which the Company or its Restricted
Subsidiaries is obligated as a lessee or user, other than any Capital Lease.
"Reportable Event" shall mean a reportable event as described
in Section 4043(b) of ERISA including those events as to which the thirty (30)
day notice period is waived under Part 2615 of the regulations promulgated by
the PBGC under ERISA.
"Required Lenders" shall mean Lenders holding not less than
(i) 51% (or 100% where required pursuant to Section 8.1) of the Commitments
(provided that, after the Term Loan is made, the
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amount of the Term Loan Commitment shall be deemed equal to the outstanding
principal balance of the Term Loan for purposes of this definition), or (ii) 51%
(or 100% where required pursuant to Section 8.1) of the Advances if the
Commitments have expired or been terminated.
"Restricted Subsidiary" shall mean each Subsidiary of the
Company existing as of the Effective Date and described on Schedule 1.1(C)
(including the Guarantors and the Borrowing Subsidiaries) and each other
Subsidiary of the Company that is designated by the Company as a Restricted
Subsidiary.
"Revolving Credit Advance" shall mean any Revolving Credit
Loan and any Letter of Credit Advance.
"Revolving Credit Commitments" shall mean, with respect to
each Lender, the commitment of each such Lender to make Revolving Credit Loans,
and to participate in Letter of Credit Advances and Swingline Loans, in amounts
not exceeding in the aggregate principal or face amount outstanding at any time
the Revolving Credit Commitment amount for such Lender set forth next to the
name of such Lender on the signature pages hereof, or, as to any Lender becoming
a party hereto after the Effective Date, as set forth in the applicable
Assignment and Acceptance, in each case as reduced pursuant to Section 2.2 or
modified pursuant to Section 8.6.
"Revolving Credit Loan" shall mean any borrowing, including
any Bankers' Acceptance, under Section 2.4 evidenced by Revolving Credit Notes
and made pursuant to Section 2.1(a).
"Revolving Credit Note" shall mean any promissory note of a
Borrower evidencing the Revolving Credit Loans made to it in substantially the
form annexed hereto as Exhibit F, as amended or modified from time to time and
together with any promissory note or notes issued in exchange or replacement
therefor.
"Revolving Credit Termination Date" shall mean the earlier to
occur of (a) July 31, 2004 and (b) the date on which the Revolving Credit
Commitments shall be terminated pursuant to Section 2.2 or Section 6.2.
"Security Agreements" shall mean the Company Security
Agreement and the Guarantor Security Agreements.
"Security Documents" shall mean, collectively, the Security
Agreements, the Documents, the Environmental Certificate, the Creative Bond
Documents, the Guaranties, the Pledge Agreements, the subrogation and
contribution agreement among the Company and the Guarantors, any consent and
amendment of security documents executed by the Company or any of the Guarantors
and all other related agreements and documents, including mortgages, deeds of
trust, financing statements and similar documents, delivered pursuant to this
Agreement or otherwise entered into by any Person to secure or guarantee the
Advances or otherwise relating hereto, all as amended or modified from time to
time.
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"Senior Subordinated Debt Documents" shall mean the Senior
Subordinated Note Indentures, the Senior Subordinated Notes and all agreements
and documents executed in connection therewith at any time, including without
limitation those agreements and documents listed on Schedule 1.1(D) hereto.
"Senior Subordinated Notes" shall mean the Senior Subordinated
Notes issued by the Company in the aggregate principal amount of $200,000,000
due 2007 issued pursuant to the Senior Subordinated Note Indentures.
"Senior Subordinated Note Indentures" shall mean,
collectively, the Senior Subordinated Indenture between the Company, the
subsidiary guarantors named therein and First Trust National Association, as
trustee, dated as of June 24, 1997, as amended or modified from time to time and
the Indenture between the Company, the subsidiary guarantors named therein, and
U.S. Bank Trust National Association, as trustee, dated as of December 1, 1998,
as amended or modified from time to time.
"Solvent" when used with respect to any Person, shall mean
that, as of any date of determination, (a) the amount of the "present fair
saleable value" of the assets of such Person will, as of such date, exceed the
amount of all "liabilities of such Person, contingent or otherwise," as of such
date, as such quoted terms are determined in accordance with applicable federal
and state laws governing determinations of the insolvency of debtors, (b) the
present fair saleable value of the assets of such Person will, as of such date,
be greater than the amount that will be required to pay the liability of such
Person on its debts as such debts become absolute and matured, (c) such Person
will not have, as of such date, an unreasonably small amount of capital with
which to conduct its business, and (d) such Person will be able to pay its debts
as they mature. For purposes of this definition, (i) "debt" means liability on a
"claim", and (ii) "claim" means any (x) right to payment, whether or not such a
right is reduced to judgment, liquidated, unliquidated, fixed, contingent,
matured, unmatured, disputed, undisputed, legal, equitable, secured or unsecured
or (y) right to an equitable remedy for breach of performance if such breach
gives rise to a right to payment, whether or not such right to an equitable
remedy is reduced to judgment, fixed, contingent, matured or unmatured,
disputed, undisputed, secured or unsecured.
"Subordinated Debt" of any Person shall mean, as of any date,
that Indebtedness of such Person for borrowed money which is expressly
subordinate and junior in right and priority of payment to the Advances and
other Indebtedness of such Person to the Lenders in manner and by agreement
satisfactory in form and substance to the Agent and subject to such other terms
and provisions, including without limitation maturities, covenants, defaults,
rates and fees, acceptable to the Agent, and shall include, without limitation,
all indebtedness owing pursuant to the Senior Subordinated Debt Documents and
any Permitted Disqualified Stock.
"Subordinated Debt Documents" shall mean the Senior
Subordinated Debt Documents and any other agreement or document evidencing or
relating to any Subordinated Debt, whether under the Senior Subordinated Notes
or any other Subordinated Debt.
"Subsidiary" of any Person shall mean any other Person
(whether now existing or hereafter organized or acquired) in which (other than
directors qualifying shares required by law) at least a majority of the
securities or other ownership interests of each class having ordinary voting
power or analogous right
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<PAGE> 28
(other than securities or other ownership interests which have such power or
right only by reason of the happening of a contingency), at the time as of which
any determination is being made, are owned, beneficially and of record, by such
Person or by one or more of the other Subsidiaries of such Person or by any
combination thereof. Unless otherwise specified, reference to "Subsidiary" shall
mean a Subsidiary of the Company.
"Swingline Facility" shall have the meaning specified in
Section 2.1(d).
"Swingline Loan" shall mean any loan under Section 2.4
evidenced by a Swingline Note and made by the Agent (including First Chicago/NBD
Canada) to a Borrower pursuant to Section 2.1(d).
"Swingline Note" shall mean any promissory note of a Borrower
evidencing the Swingline Loans in substantially the form of Exhibit G hereto, as
amended or modified from time to time and together with any promissory note or
notes issued in exchange or replacement therefor.
"Tax Sharing Agreement" shall mean any tax sharing or similar
agreement, if any, entered into between the Company and its Subsidiaries at any
time, as amended or modified from time to time.
"Term Loan" shall mean the single borrowing under Section 2.4
evidenced by the Term Notes and made to the Company pursuant to Section 2.1(c).
"Term Loan Commitment" shall mean, with respect to each
Lender, the commitment of each Lender to make a portion of the Term Loan in an
amount not exceeding in the aggregate principal amount outstanding at any time
the Term Loan Commitment amount for such Lender set forth next to the name of
such Lender on the signature pages hereof, or, as to any Lender becoming a party
hereto after the Effective Date, as set forth in the applicable Assignment and
Acceptance, in each case as reduced by payments on the Term Loan or modified
pursuant to Section 8.6.
"Term Loan Notes" shall mean the promissory notes of the
Company evidencing the Term Loan, in substantially the form of Exhibit H, as
amended or modified from time to time and together with any promissory note or
notes issued in exchange or replacement therefor.
"Tooling" shall mean dies, molds, tooling and similar items.
"Tooling Contract" shall mean any contract for the fabrication
or purchase of Tooling.
"Tooling Indebtedness" shall mean all present and future
Indebtedness of the Company and its Restricted Subsidiaries the proceeds of
which are utilized to finance Tooling for which the sales of such Tooling is
covered under specific written purchase orders or agreements between the Company
or any Subsidiary and the purchaser of such Tooling, which Indebtedness can be
and is being fully serviced by payments for such Tooling so financed and which
payments are not in dispute, all as determined by the Agent, and which
Indebtedness can be classified as "Tooling Indebtedness" under the Senior
Subordinated Debt Documents.
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"Tooling Revolving Credit Borrowing Base" shall mean as of any
day, the sum of (a) an amount equal to 100% of the value of Eligible Deferred
Tooling Reimbursement Payments, plus (b) an amount equal to 100% of the value of
Eligible Tooling.
"Tooling Revolving Credit Commitments" shall mean, with
respect to each Lender, the commitment of each such Lender to make Tooling
Revolving Credit Loans in amounts not exceeding in the aggregate principal
outstanding at any time the Tooling Revolving Credit Commitment amount for such
Lender set forth next to the name of such Lender on the signature pages hereof,
or, as to any Lender becoming a party hereto after the Effective Date, as set
forth in the applicable Assignment and Acceptance, in each case as reduced
pursuant to Section 2.2 or modified pursuant to Section 8.6.
"Tooling Revolving Credit Loan" shall mean any borrowing under
Section 2.4 evidenced by the Tooling Revolving Credit Notes and made pursuant to
Section 2.1(b) for Tooling Indebtedness.
"Tooling Revolving Credit Notes" shall mean the promissory
notes of the Company evidencing the Tooling Revolving Credit Loans, in
substantially the form annexed hereto as Exhibit I, respectively, as amended or
modified from time to time and together with any promissory note or notes issued
in exchange or replacement therefor.
"Tooling Revolving Credit Termination Date" shall mean the
earlier to occur of (a) the date on which the maturity of the Tooling Revolving
Credit Loans is accelerated pursuant to Section 6.2 and (b) July 31, 2004.
"Total Debt" shall mean, as of any date, each of the
following, on a consolidated basis for the Company and its Restricted
Subsidiaries without duplication: (a) all Indebtedness for borrowed money and
similar monetary obligations evidenced by bonds, notes, debentures, Capital
Lease obligations, bankers acceptances or otherwise, including without
limitation all assumed Indebtedness and all obligations in respect of the
deferred purchase price of properties or assets and the factoring of accounts
receivable, in each case whether direct or indirect; plus (b) all liabilities
secured by any Lien existing on property owned or acquired subject thereto,
whether or not the liability secured thereby shall have been assumed; plus
(c) all reimbursements obligations under outstanding letters of credit in
respect of drafts which may be presented or have been presented and have not yet
been paid and are not included in clause (a) above; plus (d) Permitted
Disqualified Stock; plus (e) all guarantees and all other Contingent Liabilities
with respect to any of the indebtedness, obligations or liabilities described in
the foregoing clauses (a), (b), (c) or (d), including without limitation all
guarantees and other Contingent Liabilities of the Company or any Restricted
Subsidiary with respect to any such indebtedness, obligations or liabilities of
any Unrestricted Subsidiaries; less (f) unexpended proceeds of the Creative
Revenue Bond; less (g) deferred reimbursement tooling indebtedness, i.e., only
that portion of Tooling Indebtedness to be paid by the purchaser of the related
Tooling in the piece price over the term of the related tooling contract
consistent with current practice; less (h) cash equivalents acceptable to the
Agent and cash of the Company and its Restricted Subsidiaries, less any book
overdrafts, bank overdrafts or similar items.
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"Total Debt to Adjusted EBITDA Ratio" shall mean, as of the
end of any fiscal quarter of the Company, the ratio of (a) Total Debt as of the
end of such fiscal quarter to (b) Adjusted EBITDA for the four consecutive
fiscal quarters of the Company then ending.
"U.S. Advances" shall mean all Loans denominated in Dollars
and all Letters of Credit.
"U.S. Percentage" of any Lender as of any date, shall mean a
fraction (expressed as a percentage), the numerator of which is the difference
of (a) the Revolving Credit Commitment of such Lender on such date minus (b) the
Canadian Advances made by such Lender (including any Affiliate of such Lender)
which are outstanding as of such date, after giving effect to any Canadian
Advances to be made as of such date, and the denominator of which is the
difference of (i) the aggregate Revolving Credit Commitments of all Lenders
minus (ii) the aggregate Canadian Advances which are outstanding as of such
date.
"Unfunded Benefit Liabilities" shall mean, with respect to any
Plan as of any date, the net pension liability as determined under FAS 87.
"Unrestricted Guaranties" shall mean all Contingent
Liabilities of the Company or of any Guarantor with respect to any Indebtedness
of any Unrestricted Subsidiaries, which Contingent Liabilities shall be deemed
outstanding in an amount equal to the maximum amount that could be payable
thereunder.
"Unrestricted Subsidiary" shall mean any Subsidiary of the
Company (including any newly acquired or newly formed Subsidiary) which is not a
Restricted Subsidiary.
"Voting Stock" of a Person shall mean all classes of Capital
Stock of such Person then outstanding and normally entitled (without regard to
the occurrence of any contingency) to vote in the election of directors,
managers, trustees or similar individuals thereof.
"Wholly Owned Subsidiary" shall mean a Subsidiary all the
Capital Stock of which (other than directors' qualifying shares) is owned by the
Company and/or one or more other Wholly Owned Subsidiaries.
"Working Capital" of any Person shall mean, as of any date,
the amount, if any, by which the current assets of such Person exceeds the
current liabilities (exclusive of the current portion of long term debt) of such
Person, all as determined in accordance with Generally Accepted Accounting
Principles.
"Year 2000 Issues" shall mean anticipated costs, problems and
uncertainties associated with the inability of certain computer applications to
effectively handle data including dates on and after January 1, 2000, as such
inability affects the business, operations and financial condition of the
Company and its Subsidiaries and of the Company and its Subsidiaries' material
customers, suppliers and vendors.
"Year 2000 Program" is defined in Section 4.25.
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Other Definitions; Rules of Construction. As used herein, the
terms "Agent", "Lender", "Lenders", "Company", "Borrowing Subsidiary",
"Borrowers" and "this Agreement" shall have the respective meanings ascribed
thereto in the introductory paragraph of this Agreement. Such terms, together
with the other terms defined in Section 1.1, shall include both the singular and
the plural forms thereof and shall be construed accordingly. All computations
required hereunder and all financial terms used herein shall be made or
construed in accordance with Generally Accepted Accounting Principles unless
such principles are inconsistent with the express requirements of this
Agreement; provided that, if the Company notifies the Agent that the Company
wishes to amend any covenant in Article V to eliminate the effect of any change
in Generally Accepted Accounting Principles in the operation of such covenant
(or if the Agent notifies the Company that the Required Lenders wish to amend
Article V for such purpose), then the Company's compliance with such covenant
shall be determined on the basis of Generally Accepted Accounting Principles in
effect immediately before the relevant change in Generally Accepted Accounting
Principles became effective, until either such notice is withdrawn or such
covenant is amended in a manner satisfactory to the Company and the Required
Lenders. Use of the terms "herein", "hereof", and "hereunder" shall be deemed
references to this Agreement in its entirety and not to the Section or clause in
which such term appears. References to "Sections" and "subsections" shall be to
Sections and subsections, respectively, of this Agreement unless otherwise
specifically provided. Notwithstanding anything herein, in any financial
statements of the Company or in Generally Accepted Accounting Principles to the
contrary, for purposes of calculating the Applicable Margin and of calculating
and determining compliance with the financial covenants (both actual and pro
forma) in Sections 5.2(a), (b), (c) and (d), including defined terms used
therein, (i) no Unrestricted Subsidiary shall be consolidated with the Company
and its other Subsidiaries and each Unrestricted Subsidiary shall be treated as
if it were an investment in an unconsolidated Subsidiary and all income,
liabilities and assets of each Unrestricted Subsidiary shall be excluded from
all such calculations and determinations thereunder except to the extent
expressly provided herein, and (ii) any Acquisitions made by the Company or any
of its Subsidiaries, including through mergers or consolidations and including
the incurrence of all Total Debt related thereto and any other related financial
transactions, during the period for which such financial covenants were
calculated shall be deemed to have occurred on the first day of the relevant
period for which such financial covenants and the Applicable Margin were
calculated on a pro forma basis acceptable to the Agent. Without limiting the
foregoing, Adjusted EBITDA, EBITDA, Fixed Charges and Interest Expense, for
purposes of the financial covenants contained in Sections 5.2(b), (c) and (d)
and of calculating the Applicable Margin, shall be calculated as if the Cofimeta
Acquisition and all Indebtedness incurred in connection therewith shall have
occurred on the first day of the relevant period for which such financial
covenants and the Applicable Margin were calculated on a pro forma basis
acceptable to the Agent.
ARTICLE I.
THE COMMITMENTS, THE SWINGLINE FACILITY
AND THE ADVANCES
2.1 Commitments of the Lenders and Canadian and Swingline
Facility.
(a) Revolving Credit Advances.
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(i) U.S. Advances. Each Lender agrees, for
itself only, subject to the terms and conditions of this Agreement, to make
Revolving Credit Loans to the Company or any Borrowing Subsidiary pursuant to
Section 2.4 and to participate in Letter of Credit Advances to the Company or
any Borrowing Subsidiary pursuant to Section 2.4 and Section 3.3, from time to
time from and including the Effective Date to but excluding the Revolving Credit
Termination Date, denominated in Dollars and not to exceed in aggregate
principal amount at any time outstanding the respective amounts determined
pursuant to Section 2.1(e).
(ii) Canadian Advances. (A) Each Canadian
Lender agrees, for itself only, subject to the terms and conditions of this
Agreement, to make Canadian Advances to the Company or the Canadian Borrowing
Subsidiaries pursuant to Section 2.4, from time to time from and including the
Effective Date to but excluding the Revolving Credit Termination Date,
denominated in CAD not to exceed an aggregate principal amount at any time
outstanding to the Company and the Canadian Borrowing Subsidiaries the
respective amounts determined pursuant to Section 2.1(e).
(B) If on any date a Canadian
Advance is to be made to the Company or a Canadian Borrowing Subsidiary (x) such
Canadian Advance may not be made because the aggregate Revolving Credit
Commitments of the Canadian Lenders would be exceeded and (y) the amount by
which such Revolving Credit Commitments of the Canadian Lenders would be
exceeded is less than or equal to the aggregate unused Revolving Credit
Commitments of Lenders that are not Canadian Lenders, each Lender that is not a
Canadian Lender shall make a U.S. Advance to the Company on such date, if the
conditions for such an Advance are satisfied, and the proceeds of such U.S.
Advance shall be simultaneously applied to repay the outstanding U.S. Advances
of the Canadian Lenders, in each case in amounts such that, after giving effect
to such Borrowing and repayments and the Borrowing from the Canadian Lenders of
the requested Canadian Advance, the provisions of Section 2.1(e) will not be
violated. If any Borrowing of U.S. Advances is required pursuant to this Section
2.1(a)(ii)(B), the Company shall notify the Agent in the manner provided for
U.S. Advances in Section 2.4 and the Agent will notify each Lender of the amount
to be advanced by such Lender.
(b) Tooling Revolving Credit Loans. Each Lender
agrees, for itself only, subject to the terms and conditions of this Agreement,
to make Tooling Revolving Credit Loans to the Company or any Borrowing
Subsidiary pursuant to Section 2.4 from time to time from and including the
Effective Date to but excluding the Tooling Revolving Credit Termination Date,
denominated in Dollars or Canadian Dollars and not to exceed in aggregate
principal amount at any time outstanding the amount determined pursuant to
Section 2.1(e).
(c) Term Loan. Each Lender agrees, for itself only,
subject to the terms and conditions of this Agreement, to make its portion of
the Term Loan to the Company at one time on or within five Business Days after
the Effective Date in an amount equal to its Term Loan Commitment.
(d) Swingline Loans. (i) Any Borrower may request the
Agent to make, and the Agent may, in its sole discretion, make Swingline Loans
to the Borrowers from time to time on any Business Day during the period from
the Effective Date until the Revolving Credit Termination Date in an aggregate
principal amount for all Borrowers not to exceed at any time the lesser of (A)
the Dollar
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<PAGE> 33
Equivalent of $30,000,000 (the "Swingline Facility") and (B) the aggregate
amount of Revolving Credit Advances that could be but is not borrowed as of such
date. Each Lender's Revolving Credit Commitment shall be deemed utilized by an
amount equal to such Lender's pro rata share (based on such Lender's Revolving
Credit Commitment) of the Dollar Equivalent of each Swingline Loan for purposes
of determining the amount of Revolving Credit Advances required to be made by
such Lender, but no Lender's (including NBD Bank's) Revolving Credit Commitment,
shall be deemed utilized for purposes of determining commitment fees under
Section 2.3(a). Swingline Loans shall bear interest at the Floating Rate. Within
the limits of the Swingline Facility, so long as the Agent, in its sole
discretion, elects to make Swingline Loans, the Borrowers may borrow and
reborrow under this Section 2.1(d)(i). Swingline Loans to the Borrowing
Subsidiaries will be made by the Agent through its Affiliate First Chicago/NBD
Canada.
(ii) The Agent may at any time in its sole
and absolute discretion require that any Swingline Loan be refunded by a
Revolving Credit Loan which is a Floating Rate Borrowing from the Lenders (or
the Canadian Lenders in the case of a Swingline Loan to a Borrowing Subsidiary),
and upon written notice thereof by the Agent to such Lenders and the relevant
Borrower, such Borrower shall be deemed to have requested a Floating Rate
Borrowing in an amount equal to the amount of such Swingline Loan, and such
Floating Rate Borrowing shall be made to refund such Swing Line Loan. Each such
Lender shall be absolutely and unconditionally obligated to fund its pro rata
share (based on such Lender's Revolving Credit Commitment) of such Floating Rate
Borrowing or, if applicable, purchase a participating interest in the Swingline
Loans pursuant to Section 2.1(d)(iii) and such obligation shall not be affected
by any circumstance, including, without limitation, (A) any set-off,
counterclaim, recoupment, defense or other right which such Lender has or may
have against the Agent, First Chicago/NBD Canada or the Company or any if its
Subsidiaries or anyone else for any reason whatsoever; (B) the occurrence or
continuance of a Default or an Event of Default, subject to Section 2.1(d)(iii);
(C) any adverse change in the condition (financial or otherwise) of the Company
or any of its Subsidiaries; (D) any breach of this Agreement or any other
agreement by any other Lender, the Company or any Guarantor; or (E) any other
circumstance, happening or event whatsoever, whether or not similar to any of
the foregoing (including without limitation the Company's failure to satisfy any
conditions contained in Article II or any other provision of this Agreement).
(iii) If Floating Rate Loans may not be made
by the Lenders as described in Section 2.1(d)(ii) due to any Event of Default
pursuant to Section 6.1(h) or if the Lenders are otherwise legally prohibited
from making such Floating Rate Loans, then effective on the date each such
Floating Rate Loan would otherwise have been made, each Lender (or the Canadian
Lenders in the case of a Swingline Loan to a Borrowing Subsidiary) severally
agrees that it shall unconditionally and irrevocably, without regard to the
occurrence of any Default or Event of Default or any other circumstances, in
lieu of deemed disbursement of Loans, to the extent of such Lender's Revolving
Credit Commitment, purchase a participating interest in the Swingline Loans by
paying its participation percentage thereof. Each such Lender will immediately
transfer to the Agent, in same day funds, the amount of its participation. After
such payment to the Agent, each Lender shall share on a pro rata basis
(calculated by reference to its Revolving Credit Commitment) in any interest
which accrues thereon and in all repayments thereof. If and to the extent that
any such Lender shall not have so made the amount of such participating interest
available to the Agent, such Lender and the Borrowers severally agree to pay to
the Agent forthwith on demand such amount together with interest thereon, for
each day from the date of demand by the Agent until the date such amount
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is paid to the Agent, at (A) in the case of the Borrowers, the interest rate
specified above and (B) in the case of such Lender, the Federal Funds Rate for
the first five days after the date of demand by the Agent and thereafter at the
interest rate specified above.
(e) Limitation on Amount of Advances. Notwithstanding
anything in this Agreement to the contrary, (i) the Dollar Equivalent of the
aggregate principal amount of the Revolving Credit Advances made or participated
in by any Lender (which for any Lender includes all U.S. Advances and all
Canadian Advances by such Lender, whether directly by such Lender or through an
Affiliate of such Lender in the case of Canadian Advances) at any time
outstanding shall not exceed the amount of its respective Revolving Credit
Commitment as of the date any such Advance is made, (ii) the aggregate principal
amount of Letter of Credit Advances outstanding at any time shall not exceed
$30,000,000 (iii) the aggregate Dollar Equivalent of all Canadian Advances shall
not exceed $40,000,000 at any time, (iv) the sum of the Dollar Equivalent of the
aggregate Revolving Credit Advances plus the Dollar Equivalent of the aggregate
amount of Unrestricted Guaranties shall not exceed the aggregate Revolving
Credit Commitments, (v) the sum of the Dollar Equivalent of the aggregate
Revolving Credit Advances, the aggregate Tooling Revolving Credit Loans plus the
aggregate Dollar Equivalent of the Unrestricted Guaranties plus the outstanding
Swingline Loans shall not exceed the amount of the Borrowing Base, (vi) the
aggregate principal amount of the Tooling Revolving Credit Loans made by any
Lender at any time outstanding shall not exceed the amount of its respective
Tooling Revolving Credit Commitment as of the date any such Loan is made, (vii)
the aggregate Tooling Revolving Credit Loans shall not exceed the amount of the
Tooling Revolving Credit Borrowing Base, and (viii) the principal amount of the
Term Loan made by any Lender shall not exceed the amount of such Lenders Term
Loan Commitment as of the date the Term Loan is made.
(f) Amendment and Restatement. This Agreement amends
and restates the Existing Credit Agreement, and all Advances and Letters of
Credit outstanding under the Existing Credit Agreement shall constitute Advances
and Letters of Credit under this Agreement and all fees and other obligations
accrued under the Existing Credit Agreement will continue to accrue and be paid
under this Agreement, subject to the rates and amounts specified in this
Agreement. As stated in the Notes and the Security Documents, the Advances and
other obligations pursuant hereto are issued in exchange and replacement for the
Advances and other obligations under the Existing Credit Agreement, shall not be
a novation or satisfaction thereof and shall be entitled to the same collateral,
plus additional collateral as specified herein, with the same priority.
2.2 Termination and Reduction of Commitments. (a) The Company
shall have the right to terminate or reduce the Revolving Credit Commitments or
the Tooling Revolving Credit Commitments at any time and from time to time,
provided that (i) the Company shall give three Business Days' prior written
notice of such termination or reduction to the Agent specifying the amount and
effective date thereof, (ii) each partial reduction thereof shall be in a
minimum amount of $5,000,000 and in an integral multiple of $1,000,000 and shall
reduce such Commitments of all of the Lenders proportionately in accordance with
the respective Commitment amounts for each such Lender, (iii) no such
termination or reduction shall be permitted with respect to any portion of any
such Commitments as to which a request for an Advance pursuant to Section 2.4 is
then pending, (iv) the Revolving Credit Commitments may not be terminated if any
Revolving Credit Advances are then outstanding and may not be reduced below the
principal amount of Revolving Credit Advances and Swingline Loans then
outstanding, and (v) the Tooling
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<PAGE> 35
Revolving Credit Commitments may not be terminated if any Tooling Revolving
Credit Loans are then outstanding and may not be reduced below the principal
amount of the Tooling Revolving Credit Loans then outstanding. The Revolving
Credit Commitments or Tooling Revolving Credit Commitments or any portion
thereof terminated or reduced pursuant to this Section 2.2, whether optional or
mandatory, may not be reinstated
(b) For purposes of this Agreement, a Letter of
Credit Advance (i) shall be deemed outstanding in an amount equal to the sum of
the maximum amount available to be drawn under the related Letter of Credit on
or after the date of determination and on or before the stated expiry date
thereof plus the amount of any draws under such Letter of Credit that have not
been reimbursed as provided in Section 3.3 and (ii) shall be deemed outstanding
at all times on and before such stated expiry date or such earlier date on which
all amounts available to be drawn under such Letter of Credit have been fully
drawn, and thereafter until all related reimbursement obligations have been paid
pursuant to Section 3.3. As provided in Section 3.3, upon each payment made by
the Agent in respect of any draft or other demand for payment under any Letter
of Credit, the amount of any Letter of Credit Advance outstanding immediately
prior to such payment shall be automatically reduced by the amount of each Loan
deemed advanced, if any, in respect of the related reimbursement obligation of
the Company.
2.3 Fees. (a) The Company agrees to pay to the Agent, for the
benefit of each Lender, a facility fee on the daily average amount (whether used
or unused) of its respective Revolving Credit Commitment and Tooling Revolving
Credit Commitment during each calendar quarter or portion thereof, for the
period from the Effective Date to but excluding the Revolving Credit Termination
Date with respect to the Revolving Credit Commitments and the Tooling Revolving
Credit Termination Date with respect to the Tooling Revolving Credit
Commitments, at a rate equal to the Applicable Margin in effect. Accrued
facility fees shall be payable quarterly in arrears on the last Business Day of
each March, June, September and December, commencing on the first such Business
Day occurring after the Effective Date, and on the Revolving Credit Termination
Date and Tooling Revolving Credit Termination Date.
(b) The Company agrees to pay to the Agent (i) with
respect to Letters of Credit, a fee computed at the Applicable Margin calculated
on the maximum amount available to be drawn from time to time under a Letter of
Credit, which fee shall be paid quarterly in arrears on the last Business Day of
each March, June, September and December and on the Termination Date, which fees
shall be for the pro rata benefit of the Lenders and (ii) in addition to all
other fees, with respect to all Letters of Credit, a fee computed at the rate of
0.25% per annum calculated on the face amount of each Letter of Credit, which
fee shall be paid quarterly in arrears on the last Business Day of each March,
June September and December and on the Termination Date, and shall be solely for
the account of the Agent. Such fees are nonrefundable. The Company further
agrees to pay to the Agent, on demand, such other customary administrative fees,
charges and expenses of the Agent in respect of the issuance, negotiation,
acceptance, amendment, transfer and payment of such Letter of Credit or
otherwise payable pursuant to the application and related documentation under
which such Letter of Credit is issued. Notwithstanding anything in the Creative
Revenue Bond Documents to the contrary, the fees payable for the Creative Letter
of Credit shall be governed by this Section 2.3(b).
30
<PAGE> 36
(c) The Company further agrees to pay to the Agent,
the Arranger and/or their Affiliates such fees in such amounts as may from time
to time be agreed upon in writing by the Company, the Agent and the Arranger.
2.4 Disbursement of Advances. (a) The applicable Borrower
shall give the Agent notice of its request for an Advance in substantially the
form of Exhibit J hereto not later than 1:00 p.m. Detroit time (i) three LIBOR
Business Days prior to the date such Borrowing is requested to be made if such
Borrowing is to be made as a LIBOR Borrowing, (ii) five Business Days prior to
the date any Letter of Credit Borrowing is requested to be made, (iii) three
Business Days prior to the date such Borrowing is requested to be made if such
Borrowing is to be made as an Acceptance Borrowing and (iv) one Business Day
prior to the date such Borrowing is requested to be made in all other cases
(other than Swingline Loans), which notice shall specify whether a LIBOR
Borrowing, Floating Rate Borrowing, Acceptance or Letter of Credit Borrowing is
requested and, in the case of each requested LIBOR Borrowing or Acceptance
Borrowing, the Interest Period to be initially applicable to such Borrowing and,
in the case of each Letter of Credit Borrowing, such information as may be
necessary for the issuance thereof by the Agent. The Applicable Borrower shall
give the Agent notice of its request for each Swingline Loan in substantially
the form of Exhibit K hereto not later than 1:00 p.m. Detroit time on the same
Business Day such Swingline Loan is requested to be made. The Agent, not later
than the Business Day next succeeding the day such notice is given, shall
provide notice of such requested Borrowing (not including Swingline Loans) to
each Lender. Subject to the terms and conditions of this Agreement, the proceeds
of each such requested Borrowing or Swingline Loan shall be made available to
such Borrower by depositing the proceeds thereof in immediately available funds,
in an account maintained and designated by such Borrower at the principal office
of the Agent in the case of U.S. Advances and at the principal office of First
Chicago/NBD Canada in the case of Canadian Advances. Subject to the terms and
conditions of this Agreement, the Agent shall, on the date any Letter of Credit
Borrowing is requested to be made, issue the related Letter of Credit on behalf
of the Lenders for the account of the Company. Notwithstanding anything herein
to the contrary, the Agent may decline to issue any requested Letter of Credit
on the basis that the beneficiary, the purpose of issuance or the terms or the
conditions of drawing are unacceptable to it in its reasonable discretion.
(b) Each Lender, on the date any Borrowing is
requested to be made, shall make its pro rata share of such Borrowing available
in immediately available funds for disbursement to the applicable Borrower
pursuant to the terms and conditions of this Agreement. Unless the Agent shall
have received notice from any Lender prior to the date such Borrowing is
requested to be made under this Section 2.4 that such Lender will not make
available to the Agent such Lender's pro rata portion of such Borrowing, the
Agent may assume that such Lender has made such portion available to the Agent
on the date such Borrowing is requested to be made in accordance with this
Section 2.4. Each Lender's pro rata share of any U.S. Advance shall be based on
its U.S. Percentage, and each Canadian Advance shall be made by the Canadian
Lenders (either directly or through an Affiliate) based on its Canadian
Percentage. If and to the extent such Lender shall not have so made such pro
rata portion available to the Agent, the Agent may (but shall not be obligated
to) make such amount available to such Borrower , and such Lender and such
Borrower severally agree to pay to the Agent forthwith on demand such amount
together with interest thereon, for each day from the date such amount is made
available to such Borrower by the Agent until the date such amount is repaid to
the Agent, at a rate per annum equal to the interest rate applicable to such
Borrowing during such period. If such Lender shall pay such amount to the Agent
together with interest,
31
<PAGE> 37
such amount so paid shall constitute a Loan by such Lender as a part of such
Borrowing for purposes of this Agreement. The failure of any Lender to make its
pro rata portion of any such Borrowing available to the Agent shall not relieve
any other Lender of its obligations to make available its pro rata portion of
such Borrowing on the date such Borrowing is requested to be made, but no Lender
shall be responsible for failure of any other Lender to make such pro rata
portion available to the Agent on the date of any such Borrowing.
(c) All Revolving Credit Loans made under this
Section 2.4 to the Borrowers shall be evidenced by the Revolving Credit Notes
issued by the Borrowers, all Tooling Revolving Credit Loans shall be evidenced
by the Tooling Revolving Credit Notes issued by the Borrowers, the Term Loan
shall be evidenced by the Term Notes issued by the Company and all Swingline
Loans under this Section 2.4 shall be evidenced by the Swingline Notes issued by
the Borrowers, and all such Loans shall be due and payable and bear interest as
provided in Article III. Each Lender is hereby authorized by the Borrowers to
record on the schedules attached to the Notes or in its books and records, the
date, amount and type of each Loan and the duration of the related Interest
Period (if applicable), the amount of each payment or prepayment of principal
thereon, and the other information provided for on such schedule, which schedule
or books and records, as the case may be, shall constitute prima facie evidence
of the information so recorded, provided, however, that failure of any Lender to
record, or any error in recording, any such information shall not relieve the
Borrowers of their obligations to repay the outstanding principal amount of the
Loans, all accrued interest thereon and other amounts payable with respect
thereto in accordance with the terms of the Notes and this Agreement. Subject to
the terms and conditions of this Agreement, the Borrowers may borrow Loans under
this Section 2.4 and under Section 3.3, prepay Loans pursuant to Section 3.1 and
reborrow Revolving Credit Advances and Tooling Revolving Credit Advances, but
not the Term Loan, under this Section 2.4 and under Section 3.3.
(d) Nothing in this Agreement shall be construed to
require or authorize any Lender to issue any Letter of Credit, it being
recognized that the Agent has the sole obligation under this Agreement to issue
Letters of Credit on behalf of the Lenders. Upon each issuance, extension and
renewal by the Agent, each Lender shall automatically and unconditionally
acquire a pro rata risk participation interest in such Letter of Credit Advance
based on the amount of its respective Revolving Credit Commitment, and each
Existing Letter of Credit shall be deemed issued hereunder and each Lender shall
automatically and unconditionally acquire a pro rata risk participation interest
therein based on the amount of its respective Revolving Credit Commitment, upon
becoming a Lender hereunder. If the Agent shall honor a draft or other demand
for payment presented or made under any Letter of Credit, the Agent shall
provide notice thereof to each Lender promptly after such draft or demand is
honored unless the Company shall have satisfied its reimbursement obligation
under Section 3.3 by payment to the Agent on such date. Each Lender, on the date
of such notice, shall absolutely and unconditionally make its pro rata share
(based on its Revolving Credit Commitment) of the amount paid by the Agent
available in immediately available funds at the principal office of the Agent
for the account of the Agent. If and to the extent such Lender shall not have
made such pro rata portion available to the Agent, such Lender and the Company
severally agree to pay to the Agent forthwith on demand such amount together
with interest thereon, for each day from the date such amount was paid by the
Agent until such amount is so made available to the Agent at a per annum rate
equal to the interest rate applicable during such period to the Floating Rate
Loans. If a Loan has been disbursed in respect to the reimbursement obligation
of the Company under Section 3.3 in the case of Letter of Credit, then if such
Lender shall pay such amount to the Agent together with such interest, such
amount
32
<PAGE> 38
so paid shall constitute a Loan by such Lender as part of such Borrowing
disbursed in respect of the reimbursement obligation of the Company under
Section 3.3 for purposes of this Agreement. The failure of any Lender to make
its pro rata portion of any such amount paid by the Agent available to the Agent
shall not relieve any other Lender of its obligation to make available its pro
rata portion of such amount, but no Lender shall be responsible for failure of
any other Lender to make such pro rata portion available to the Agent.
2.5 Conditions for First Disbursement. The obligation of the
Lenders to make the first Borrowing hereunder is subject to receipt by each
Lender and the Agent of the following documents and completion of the following
matters, in form and substance satisfactory to each Lender and the Agent:
(a) Charter Documents. Certificates of recent date of
the appropriate authority or official of each Borrower and each Guarantor's
respective state or province of organization (listing all charter documents of
each Borrower and each Guarantor, respectively, on file in that office if such
listing is available) and certifying as to the good standing and existence of
each Borrower and each Guarantor, respectively, together with copies of such
charter documents of each Borrower and each Guarantor, certified as of a recent
date by such authority or official and certified as true and correct as of the
Effective Date by a duly authorized officer of each Borrower and each Guarantor,
respectively;
(b) Operating Agreements, By-Laws and Corporate
Authorizations. Copies of the operating agreements or article of incorporation,
as the case may be, and by-laws of each Borrower and each Guarantor together
with all authorizing resolutions and evidence of other corporate action taken by
each Borrower and each Guarantor to authorize the execution, delivery and
performance by each Borrower and each Guarantor of the Loan Documents to which
each Borrower and such Guarantor, respectively, is a party and the consummation
by each Borrower and such Guarantor, respectively, of the transactions
contemplated hereby, certified as true and correct as of the Effective Date by a
duly authorized officer of each Borrower and each Guarantor, respectively;
(c) Incumbency Certificate. Certificates of
incumbency of each Borrower and each Guarantor containing, and attesting to the
genuineness of, the signatures of those officers authorized to act on behalf of
each Borrower and such Guarantor in connection with the Loan Documents to which
each Borrower or such Guarantor is a party and the consummation by each Borrower
and such Guarantor of the transactions contemplated hereby, certified as true
and correct as of the Effective Date by a duly authorized officer of each
Borrower and each Guarantor, respectively;
(d) Notes. The Notes duly executed on behalf of the
Borrowers for each Lender and the Swingline Notes duly executed on behalf of the
Borrowers for the Agent and First Chicago/NBD Canada;
(e) Security Documents. The Security Agreements duly
executed on behalf of the Company and the Guarantors, the Pledge Agreements duly
executed by the Company and, to the extent applicable, each Guarantor and the
Guaranties duly executed on behalf of each Guarantor, granting to the Lenders
and the Agent the collateral and security intended to be provided pursuant to
Section 2.11, together with:
33
<PAGE> 39
(i) Recording, Filing, Etc. Evidence of the
recordation, filing and other action (including payment of any applicable taxes
or fees) in such jurisdictions as the Lenders or the Agent may deem necessary or
appropriate with respect to the Security Documents, including the filing of
financing statements, financing statement assignments, financing statement
amendments and similar documents which the Lenders and the Agent may deem
necessary or appropriate to create, preserve or perfect the liens, security
interests and other rights intended to be granted to the Lenders or the Agent
thereunder, together with Uniform Commercial Code record and other searches in
such offices as the Lenders or the Agent may request;
(ii) Leased Property; Landlord Waivers. A
schedule setting forth all real property leased by the Company and each
Guarantor, together with copies of the related leases, certified as true and
correct as of the Effective Date by a duly authorized officer of the Company,
and an agreement of each landlord under such leases, in form and substance
acceptable to the Lenders and the Agent, waiving its distraint, lien and similar
rights with respect to any property subject to the Security Documents and
agreeing to permit the Lenders and the Agent to enter such premises in
connection therewith;
(iii) Casualty and Other Insurance. Evidence
that the casualty and other insurance required pursuant to Section 5.1(c) and
the Security Agreements is in full force and effect;
(iv) Stock. The original stock certificates
of any Capital Stock which is required to be pledged pursuant to Section 2.11
and appropriate stock powers, together with any recordings or other filings
required by law and any consents and waivers requested by the Agent with respect
to the exercise of any rights under the Pledge Agreements, including without
limitation any shareholders' and board of directors' consents so requested; and
(v) Environmental Matters. The Environmental
Certificate duly executed on behalf of the Borrowers and each of the Guarantors;
(f) Legal Opinion. The favorable written opinion of
Dykema Gossett PLLC, Fasken Campell Godfrey and Salans Hertzfeld & Heilbronn,
counsels for the Borrowers and Guarantors, with respect to such matters as the
Agent may request;
(g) Consents, Approvals, Etc. Copies of all
governmental and nongovernmental consents, approvals, authorizations,
declarations, registrations or filings, if any, required on the part of the
Company or any Guarantor in connection with the execution, delivery and
performance of the Loan Documents or the transactions contemplated hereby or as
a condition to the legality, validity or enforceability of the Loan Documents,
certified as true and correct and in full force and effect as of the Effective
Date by a duly authorized officer of the Company, or, if none is required, a
certificate of such officer to that effect;
(h) Fees. Payment of the fees described in Section
2.3(c);
(i) Solvency Certificate. A solvency certificate duly
executed by the Company and its Subsidiaries in form and substance satisfactory
to the Agent;
34
<PAGE> 40
(j) Subordinated Debt. Evidence satisfactory to the
Agent, including without limitation legal opinions of the Company's counsel,
that all transactions contemplated pursuant to this Agreement, including without
limitation making of all Advances and all transactions contemplated pursuant to
the Cofimeta Acquisition Documents, are in compliance with, and do not cause any
breach or other default under, any of the Senior Subordinated Debt Documents;
(k) Intercreditor Agreement. The Intercreditor
Agreement duly executed by all parties thereto, together with any documents
required in connection therewith by the Agent;
(l) Acquisition/Due Diligence. The satisfactory
completion of the Cofimeta Acquisition and all due diligence with respect to the
Company, its Subsidiaries, Cofimeta and the Cofimeta Acquisition, including, but
not limited to, the satisfactory review of all Cofimeta Acquisition Documents,
all terms, conditions and provisions of the Cofimeta Acquisition, all final
projections, all pro forma and prospective financial statements, all sources and
uses statements, pro forma borrowing base and covenant compliance projections
and certificates, appraisals, new business awards and contracts of the Company
and its Subsidiaries, the organizational structure of the Company and its
Subsidiaries after the Cofimeta Acquisition, all environmental matters relating
to Cofimeta, the continuance plan relating to Cofimeta and all required court
and other approvals required in connection with the Cofimeta Acquisition, and
the form and structure, including the financial, legal, accounting, tax and all
other aspects of the Cofimeta Acquisition, all of which shall be satisfactory to
the Agent and its counsel; and
(m) Miscellaneous. Such other documents, and
completion of such other matters, as the Agent may reasonably request.
2.6 Further Conditions for Disbursement. The obligation
of the Lenders to make any Advance (including the first Advance), or any
continuation or conversion under Section 2.7, is further subject to the
satisfaction of the following conditions precedent:
(a) The representations and warranties contained
herein and in the other Loan Documents shall be true and correct on and as of
the date such Advance is made (both before and after such Advance is made) as if
such representations and warranties were made on and as of such date;
(b) No Default or Event of Default shall exist or
shall have occurred and be continuing on the date such Advance is made (whether
before or after such Advance is made);
(c) The Agent shall have received the Borrowing Base
Certificate if required pursuant to Section 5.1(d)(v) as of the close of
business on the last day of the month next preceding the date such Advance is
made; and
(d) In the case of any Letter of Credit Advance, the
Company shall have delivered to the Agent an application for the related Letter
of Credit and other related documentation requested by and acceptable to the
Agent appropriately completed and duly executed on behalf of the Company; and
35
<PAGE> 41
(e) In the case of any Acceptance, the Borrowing
Subsidiary shall have delivered all documents and agreements required pursuant
to Section 3.4.
The Borrowers shall be deemed to have made a representation and warranty to the
Lenders at the time of the making of, and the continuation or conversion of,
each Advance to the effects set forth in clauses (a) and (b). For purposes of
this Section 2.6 the representations and warranties contained in Section 4.6
hereof shall be deemed made with respect to both the financial statements
referred to therein and the most recent financial statements delivered pursuant
to Section 5.1(d)(ii) and (iii).
2.7 Subsequent Elections as to Borrowings. The applicable
Borrower may elect (a) to continue a LIBOR Borrowing, or a portion thereof, as a
LIBOR Borrowing or (b) to convert a LIBOR Borrowing or a portion thereof to a
Floating Rate Borrowing, (c) to convert a Floating Rate Borrowing to a LIBOR
Borrowing, (d) to continue an Acceptance or a portion thereof, as an Acceptance
or (e) to convert an Acceptance or a portion thereof to a Floating Rate
Borrowing, in each case by giving notice thereof to the Agent (with sufficient
executed copies for each Lender) in substantially the form of Exhibit L hereto
not later than 1:00 p.m. Detroit time three LIBOR Business Days prior to the
date any such continuation of or conversion to a LIBOR Borrowing is to be
effective, not later than 1:00 p.m. Toronto time three Business Days prior to
the date any such continuation of or conversion to an Acceptance is to be
effective and not later than 1:00 p.m. Detroit time one Business Day prior to
the date of any such continuation or conversion is to be effective in all other
cases, provided that an outstanding LIBOR Borrowing or Acceptance Borrowing may
only be converted on the last day of the then current Interest Period with
respect to such Borrowing, and provided, further, if a continuation of a
Borrowing as, or a conversion of a Borrowing to, a LIBOR Borrowing or Acceptance
Borrowing is requested, such notice shall also specify the Interest Period to be
applicable thereto upon such continuation or conversion. The Agent, not later
than the Business Day next succeeding the day such notice is given, shall
provide notice of such election to the Lenders. If the applicable Borrower shall
not timely deliver such a notice with respect to any outstanding LIBOR Borrowing
or Acceptance Borrowing, such Borrower shall be deemed to have elected to
convert such LIBOR Borrowing or Acceptance Borrowing to a Floating Rate
Borrowing on the last day of the then current Interest Period with respect to
such Borrowing.
2.8 Limitation of Requests and Elections. Notwithstanding any
other provision of this Agreement to the contrary, (a) if, upon receiving a
request for a LIBOR Borrowing pursuant to Section 2.4, or a request for a
continuation of a LIBOR Borrowing or a request for a conversion of a Floating
Rate Borrowing to a LIBOR Borrowing pursuant to Section 2.7, (i) deposits in
Dollars for periods comparable to the LIBOR Interest Period elected by the
Company are not available to any Lender in the relevant interbank market, or
(ii) LIBOR will not adequately and fairly reflect the cost to any Lender of
making, funding or maintaining the related LIBOR Loan or (iii) by reason of
national or international financial, political or economic conditions or by
reason of any applicable law, treaty or other international agreement, rule or
regulation (whether domestic or foreign) now or hereafter in effect, or the
interpretation or administration thereof by any governmental authority charged
with the interpretation or administration thereof, or compliance by any Lender
with any guideline, request or directive of such authority (whether or not
having the force of law), including without limitation exchange controls, it is
impracticable, unlawful or impossible for, or shall limit or impair the ability
of, any Lender to make or fund the relevant Loan or to
36
<PAGE> 42
so continue or convert such Loan then the Company shall not be entitled, so long
as such circumstances continue, to request such a Borrowing pursuant to Section
2.4 or a continuation of or conversion to such a Borrowing pursuant to Section
2.7 and (b) if the Agent shall have determined that by reason of circumstances
affecting the money market, there is no market for Acceptances, then the right
of the Borrowing Subsidiaries to request Acceptances and the acceptance thereof
shall be suspended until the Agent determines that the circumstances causing
such suspension no longer exists and the Agent so notifies the Borrowing
Subsidiaries. In the event that such circumstances no longer exist, the Lenders
shall again consider requests for such Borrowings pursuant to Section 2.4, and
requests for continuations of and conversions to such Borrowings pursuant to
Section 2.7.
2.9 Minimum Amounts; Limitation on Number of Borrowings; Etc.
Except for (a) Borrowings which exhaust the entire remaining amount of the
relevant Commitments, and (b) payments required pursuant to Section 3.1(c), each
Floating Rate Borrowing denominated in Dollars and each prepayment thereof shall
be in a minimum amount of $500,000 and in an integral multiple of $100,000, each
LIBOR Borrowing and each continuation or conversion thereof pursuant to Section
2.7 shall be in a minimum amount of $2,000,000 and in an integral multiple of
$500,000, each Letter of Credit Advance shall be in a minimum amount of
$100,000, each Floating Rate Borrowing denominated in CAD and each prepayment
thereof shall be in a minimum amount of CAD $500,000 and in integral multiple of
CAD $100,000, and each Acceptance and each continuation or conversion thereof
pursuant to Section 2.7 shall be in a minimum amount of CAD $2,000,000 and in an
integral multiple of CAD $500,000. The aggregate number of LIBOR Borrowings and
Acceptance Borrowings outstanding at any one time under this Agreement may not
exceed eight (8). The aggregate number of Letter of Credit Advances outstanding
at any time under this Agreement may not exceed five (5). No Letter of Credit
shall have a stated expiry date later than the earlier to occur of (i) the first
anniversary of its date of issuance or (ii) the fifth Business Day before the
Revolving Credit Termination Date.
2.10 Borrowing Base Adjustments. The Borrowers agree that if
at any time any trade account receivable, fixed asset, tooling reimbursement
obligation or any inventory of the Borrowers or any Guarantor fails to
constitute Eligible Accounts Receivable, Eligible Fixed Assets, Eligible
Inventory, Eligible Tooling or Eligible Deferred Tooling Reimbursement Payments,
as the case may be, for any reason, the Agent may, at any time upon written
notice to the Company and notwithstanding any prior classification of
eligibility, classify such asset or property as ineligible and exclude the same
from the computation of the Borrowing Base without in any way impairing the
rights of the Lenders and the Agent, in and to the same under the Security
Agreements. The Borrowers agree that real estate shall only be included in the
Borrowing Base if the Borrowers shall have delivered an appraisal acceptable to
the Agent performed by an independent third party appraiser acceptable to the
Agent; it being acknowledged that any real estate appraisals delivered prior to
the Effective Date are acceptable to the Agent.
2.11 Security and Collateral. To secure the payment when due
of the Notes and all other obligations of the Borrower under this Agreement, any
Hedging Agreement or any other Loan Document to the Lenders and the Agent, the
Company shall execute and deliver, or cause to be executed and delivered, to the
Lenders and the Agent Security Documents granting the following:
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<PAGE> 43
(a) Security interests in all present and future
accounts, inventory, equipment, general intangibles, instruments, chattel paper,
documents, fixtures and all other personal property of each Borrower and each
Guarantor, which security interests shall secure all present and future
indebtedness, obligations and liabilities of each of the Borrowers to the
Lenders and the Agent, provided that such security interests granted by any
Borrower which is a Foreign Subsidiary and not a Canadian Subsidiary shall
secure only the present and future indebtedness, obligations and liabilities of
such Borrower to the Lenders and the Agent.
(b) Guarantees of all Guarantors, which Guarantees
shall guarantee all present and future indebtedness, obligations and liabilities
of the Borrowers to the Lenders and the Agent.
(c) (i) Pledges of 100% of the Capital Stock of all
Domestic Subsidiaries and Canadian Subsidiaries which are Restricted
Subsidiaries owned directly or indirectly by the Company and (ii) pledges of 65%
of the Capital Stock of Foreign Subsidiaries which are not Canadian Subsidiaries
and are Restricted Subsidiaries and are owned by the Company or any Domestic
Subsidiaries, provided that such pledges granted by any Borrower which is a
Foreign Subsidiary and not a Guarantor shall secure only the present and future
indebtedness, obligations and liabilities of such Borrower to the Lenders and
the Agent.
(d) Liens on all present and future real property of
each Borrower and Guarantor, other than the real property of Lobdell to the
extent Lobdell is prohibited from granting such a Lien under the existing terms
of the Lobdell Preferred Stock Documents, provided that such Liens granted by
any Borrower which is a Foreign Subsidiary and not a Canadian Subsidiary shall
secure only the present and future indebtedness, obligations and liabilities of
such Borrower to the Lenders and the Agent. The Borrowers acknowledge and agree
that they will, and will cause each Guarantor, to execute and deliver on or
before 60 days after the Effective Date, all mortgages, deeds of trust,
mortgagee title policies, surveys and other documents reasonably required by the
Agent in connection with the granting of a first priority lien and security
interest on the real property described in this Section 2.11(d).
(e) All other security and collateral described in
the Security Documents.
ARTICLE.
PAYMENTS AND PREPAYMENTS OF ADVANCES
3.1 Principal Payments and Prepayments.
(a) Unless earlier payment is required under this
Agreement, the Borrowers shall pay to the Lenders on the Revolving Credit
Termination Date the entire outstanding principal amount of the Revolving Credit
Advances.
(b) Unless earlier payment is required under this
Agreement, the Borrowers shall pay the Lenders on the Tooling Revolving Credit
Termination Date the entire principal amount of the Tooling Revolving Credit
Loans.
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<PAGE> 44
(c) The Company shall pay to the Agent for the pro
rata account of each Lender the unpaid principal amount of the Term Loan in 22
quarterly principal payments as follows:
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
Payment Date Principal Installment
- ---------------------------------------------------------------------------------------------------------------------
<S> <C>
July 31, 1999 $500,000
- ---------------------------------------------------------------------------------------------------------------------
October 31, 1999 $500,000
- ---------------------------------------------------------------------------------------------------------------------
January 31, 2000 $500,000
- ---------------------------------------------------------------------------------------------------------------------
April 30, 2000 $1,125,000
- ---------------------------------------------------------------------------------------------------------------------
July 31, 2000 $1,125,000
- ---------------------------------------------------------------------------------------------------------------------
October 31, 2000 $1,125,000
- ---------------------------------------------------------------------------------------------------------------------
January 31, 2001 $1,125,000
- ---------------------------------------------------------------------------------------------------------------------
April 30, 2001 $1,500,000
- ---------------------------------------------------------------------------------------------------------------------
July 31, 2001 $1,500,000
- ---------------------------------------------------------------------------------------------------------------------
October 31, 2001 $1,500,000
- ---------------------------------------------------------------------------------------------------------------------
January 31, 2002 $1,500,000
- ---------------------------------------------------------------------------------------------------------------------
April 30, 2002 $1,500,000
- ---------------------------------------------------------------------------------------------------------------------
July 31, 2002 $1,500,000
- ---------------------------------------------------------------------------------------------------------------------
October 31, 2002 $1,500,000
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
39
<PAGE> 45
<TABLE>
<CAPTION>
<S> <C>
January 31, 2003 $1,500,000
- ---------------------------------------------------------------------------------------------------------------------
April 30, 2003 $1,875,000
- ---------------------------------------------------------------------------------------------------------------------
July 31, 2003 $1,875,000
- ---------------------------------------------------------------------------------------------------------------------
October 31, 2003 $1,875,000
- ---------------------------------------------------------------------------------------------------------------------
January 31, 2004 $1,875,000
- ---------------------------------------------------------------------------------------------------------------------
April 30, 2004 $2,250,000
- ---------------------------------------------------------------------------------------------------------------------
July 31, 2004 $2,250,000
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
The Term Loan shall be paid in full on the Maturity Date.
(d) In addition to all other payments of the Advances
required hereunder, the Borrowers shall prepay the Advances by an amount equal
to 100% of all of the Net Cash Proceeds, payable upon receipt of such Net Cash
Proceeds, from any sale or other disposition of any assets (exclusive of the
sale of inventory and the factoring of accounts receivable to the extent
permitted under Section 5.2(e)(x) in the ordinary course of business upon
customary credit terms, sales of scrap or obsolete material or equipment which
are not material in the aggregate and transfers of assets to the Mexican
Subsidiaries to the extent permitted by Section 5.2(l)(v)), in excess of
$2,000,000 in aggregate amount in any fiscal year, provided that (i) the
Borrowers shall not be required to prepay the Advances from the Net Cash
Proceeds from the sale or any disposition of assets if such Net Cash Proceeds
will be used within 180 days (or 360 days if such sale involves the Planned
Asset Sales) of their receipt to purchase similar assets of comparable value and
(ii) the Borrower shall not be required to prepay the Advances in connection
with the transfer of any assets to a joint venture in accordance with Section
5.2(l) and it is acknowledged that the Borrowing Base shall be immediately
decreased by the value of such assets being transferred which were included in
the Borrowing Base. The Company shall provide a certificate to the Agent within
20 days after each sale of assets, which, but for the above proviso, would cause
a prepayment under this Section 3.1(d), which certificate shall describe such
sale of assets and estimate when such Net Cash Proceeds will be used to purchase
similar assets of comparable value; and if such Net Cash Proceeds are not used
within 180 days (or 360 days if such sale involves the Planned Asset Sales)
after such sale or such earlier date when the Company has determined not to
purchase similar assets of comparable value with such Net Cash Proceeds the
Company will then prepay the Advances with such Net Cash Proceeds.
Notwithstanding the foregoing, upon and during the continuance of any Event of
Default, 100% of all the Net Cash Proceeds from any sale or other disposition of
any assets shall be used to prepay the Advances. Such mandatory prepayments
shall be applied first to the Term Loan (applied pro rata to all remaining
principal installments on the Term Loan) until paid in full,
40
<PAGE> 46
and thereafter applied pro rata to the other Advances, provided that such
prepayments on the Advances other than the Term Loans will not reduce the
Commitments relating thereto.
(e) The Company may at any time and from time to time
prepay all or a portion of the Loans, without premium or penalty, provided that
(i) the Company may not prepay any portion of any Borrowing as to which an
election for a continuation of or a conversion to a LIBOR Borrowing or
Acceptance Borrowing is pending pursuant to Section 2.7, and (ii) unless earlier
payment is required under this Agreement, any LIBOR Borrowing or Acceptance
Borrowing may only be prepaid on the last day of the then current Interest
Period with respect to such Borrowing.
(f) In addition to all other payments of Advances
required hereunder, if at any time the aggregate outstanding principal amount of
the Advances shall exceed any of the limits provided under Section 2.1(e), the
Borrowers shall forthwith pay to the Lenders an amount for application to the
outstanding principal amount of the Loans, or provide to the Lenders cash
collateral in respect of outstanding Letters of Credit in an amount, such that
the aggregate amount of such payments with respect to the Loans and such cash
collateral is not less than the amount of such excess.
3.2 Interest Payments. The Borrowers shall pay interest to the
Lenders on the unpaid principal amount of each Loan made to them, for the period
commencing on the date such Loan is made until such Loan is paid in full, on
each Interest Payment Date and at maturity (whether at stated maturity, by
acceleration or otherwise), and thereafter on demand, at, in the case of
Swingline Loans, the Floating Rate and, in all other cases, the following rates
per annum:
(a) During such periods that such Loan is a Floating
Rate Loan, the Floating Rate.
(b) During such periods that such Loan is a LIBOR
Loan, the LIBOR applicable to such Loan for each related LIBOR Interest Period.
(c) During such periods such Loan is a BA Equivalent
Loan, the applicable rate specified in Section 3.4.
Notwithstanding the foregoing, the Borrowers shall pay interest on demand by the
Agent at the Overdue Rate on the outstanding principal amount of any Loan and
any other amount payable by the Borrowers hereunder (other than interest) which
is not paid in full when due (whether at stated maturity, by acceleration or
otherwise) for the period commencing on the due date thereof until the same is
paid in full.
For the purposes of the Interest Act (Canada) and Canadian Advances hereunder:
(i) whenever any interest or fee under this Agreement is
calculated using a rate based on a year of 360 days or 365
days, such rate determined pursuant to such calculation, when
expressed as an annual rate, is equivalent to (X) the
applicable rate based on a year of 360
41
<PAGE> 47
days or 365 days, as the case may be, (Y) multiplied by the
actual number of days in the relevant calendar year, and (Z)
divided by 360 or 365 as the case may be;
(ii) the principle of deemed reinvestment of interest does not
apply to any interest calculation under this Agreement; and
(iii) the rates of interest stipulated in this Agreement are
intended to be nominal rates and not effective rates or
yields.
3.3 Letters of Credit and Acceptances. (a) (i) The Borrowers
agree to pay to the Lenders, on the day on which the Agent shall honor a draft
or other demand for payment presented or made under any Letter of Credit and on
the maturity date of each Bankers' Acceptance, an amount equal to the amount
paid by the Agent in respect of such draft or other demand under such Letter of
Credit, an amount equal to the face value of each Bankers' Acceptance accepted
by such Lender maturing on that day (notwithstanding that a Lender may be the
holder thereof at maturity) and all reasonable expenses paid or incurred by the
Agent relative thereto. Unless the Borrowers shall have made such payment to the
Lenders on such day, upon each such payment by the Agent with respect to a
Letter of Credit and each such maturity date of each Banker's Acceptance, the
Agent shall be deemed to have disbursed to the relevant Borrowers, and such
Borrowers shall be deemed to have elected to satisfy its reimbursement and
payment obligation by, a Revolving Credit Borrowing bearing interest at the
Floating Rate for the account of the Lenders in an amount equal to the amount so
paid by the Agent in respect of such draft or other demand under such Letter of
Credit or in the face value of such Banker's Acceptance then maturing. Such
Revolving Credit Borrowing shall be disbursed notwithstanding any failure to
satisfy any conditions for disbursement of any Loan set forth in Article II
hereof and, to the extent of the Revolving Credit Borrowing so disbursed, the
reimbursement and payment obligation of the Company under this Section 3.3(a)(i)
shall be deemed satisfied; provided, however, that nothing in this Section 3.3
shall be deemed to constitute a waiver of any Default or Event of Default caused
by the failure to the conditions for disbursement or otherwise.
(i) If, for any reason (including without
limitation as a result of the occurrence of an Event of Default with respect to
the Company pursuant to Section 6.1(g)), Floating Rate Loans may not be made by
the Lenders as described in Section 3.3(a)(i), then (A) the Borrowers agree that
each amount not paid pursuant to the first sentence of Section 3.3(a)(i) shall
bear interest, payable on demand by the Agent, at the interest rate then
applicable to Floating Rate Borrowings, and (B) effective on the date each such
Floating Rate Borrowing would otherwise have been made, each Lender severally
agrees that it shall unconditionally and irrevocably, without regard to the
occurrence of any Default or Event of Default, in lieu of deemed disbursement of
Floating Rate Loans, to the extent of such Lender's Revolving Credit Commitment
in the case of Letters of Credit, purchase a participating interest in each
reimbursement amount paid by the Agent with respect to Letters of Credit. Each
Lender will immediately transfer to the Agent, in same day funds, the amount of
its participation. Each Lender shall share on a pro rata basis (calculated by
reference to its Revolving Credit Commitment) in any interest which accrues
thereon and in all repayments thereof. If and to the extent that any Lender
shall not have so made the amount of such participating interest
42
<PAGE> 48
available to the Agent, such Lender and the Borrowers severally agree to pay to
the Agent forthwith on demand such amount together with interest thereon, for
each day from the date of demand by the Agent until the date such amount is paid
to the Agent, at (x) in the case of the Borrowers, the interest rate then
applicable to Floating Rate Borrowings and (y) in the case of such Lender, the
Federal Funds Rate for the first five days after the date of demand by the Agent
and thereafter at the interest rate then applicable to Floating Rate Borrowings.
(b) The reimbursement and other payment obligations
of the Borrowers under this Section 3.3 shall be absolute, unconditional and
irrevocable and shall remain in full force and effect until all obligations of
the Borrowers to the Lenders hereunder shall have been satisfied, and such
obligations of the Borrowers shall not be affected, modified or impaired upon
the happening of any event, including without limitation, any of the following,
whether or not with notice to, or the consent of, the Borrowers:
(i) Any lack of validity or enforceability
of any Letter of Credit, Acceptance or any documentation relating to any Letter
of Credit, any Acceptance or to any transaction related in any way thereto (the
"Documents");
(ii) Any amendment, modification, waiver,
consent, or any substitution, exchange or release of or failure to perfect any
interest in collateral or security, with respect to any of the Documents;
(iii) The existence of any claim, setoff,
defense or other right which the Company or any of its Subsidiaries may have at
any time against any beneficiary or any transferee of any Letter of Credit or
Acceptance (or any Persons or entities for whom any such beneficiary, transferee
or holder may be acting), the Agent or any Lender or any other Person or entity,
whether in connection with any of the Documents, the transactions contemplated
herein or therein or any unrelated transactions;
(iv) Any draft or other statement or
document presented under any Letter of Credit or Acceptance proving to be
forged, fraudulent, invalid or insufficient in any respect or any statement
therein being untrue or inaccurate in any respect;
(v) Payment by the Agent to the beneficiary
under any Letter of Credit against presentation of documents which do not comply
with the terms of the Letter of Credit, including failure of any documents to
bear any reference or adequate reference to such Letter of Credit;
(vi) Any failure, omission, delay or lack on
the part of the Agent or any Lender or any party to any of the Documents to
enforce, assert or exercise any right, power or remedy conferred upon the Agent,
any Lender or any such party under this Agreement or any of the Documents, or
any other acts or omissions on the part of the Agent, any Lender or any such
party;
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<PAGE> 49
(vii) Any defense based on the lack of
presentment for payment and any other defense to payment of any amounts due to a
Lender in respect of any Acceptance accepted by it pursuant to this Agreement
which might exist solely by reason of such Acceptance being held, at the
maturity thereof, by such Lender in its own right;
(viii) Any other event or circumstance that
would, in the absence of this clause, result in the release or discharge by
operation of law or otherwise of the Company from the performance or observance
of any obligation, covenant or agreement contained in this Section 3.3.
No setoff, counterclaim, reduction or diminution of any
obligation or any defense of any kind or nature which any Borrower has or may
have against the beneficiary or holder of any Letter of Credit or Acceptance
shall be available hereunder to any Borrower against the Agent or any Lender.
Nothing in this Section 3.3 shall limit the liability, if any, of the Agent and
the Lenders to the Company pursuant to Section 8.5(b).
3.4 Additional Terms for Acceptances. Subject to the terms and
conditions hereof, upon giving to the Agent prior written notice in accordance
with Section 2.4 hereof, on any Business Day a Borrowing Subsidiary may borrow
from the Lenders by way of Acceptances, provided that:
(a) (i) each Lender shall have received a Bankers'
Acceptance or Bankers' Acceptances in the aggregate principal amount of such
Borrowing from such Lender in due and proper form duly completed and executed by
the Borrowing Subsidiary and presented for acceptance to such Lender prior to
10:00 a.m. (Toronto time) on the date for such Borrowing, together with such
other document or documents as such Lender may reasonably require (including the
execution by the Borrowing Subsidiary of such Lender's usual form of bankers'
acceptances) and the Acceptance Fee shall have been paid to such Lender at or
prior to such time;
(ii) each Bankers' Acceptance shall be
stated to mature on a Business Day, no later than the Revolving Credit
Termination Date, which is 30, 60 or 90 days from the date of its acceptance;
(iii) each Bankers' Acceptance shall be
stated to mature on a Business Day in such a way that no Lender will be required
to incur any costs for the redeployment of funds as a consequence of any
repayment required during any period for which such Bankers' Acceptance is
outstanding;
(iv) no days of grace shall be permitted on
any Bankers' Acceptance; and
(v) the aggregate face amount of the
Bankers' Acceptances to be accepted by a Lender shall be determined by the Agent
by reference to the respective relevant Revolving
44
<PAGE> 50
Credit Commitments of the Lenders, except that, if the face amount of a Bankers'
Acceptance which would otherwise be accepted by a Lender would not be $100,000
or a whole multiple thereof, such face amount shall be increased or reduced by
the Agent in its sole discretion to $100,000 or the nearest whole multiple of
that amount, as appropriate.
(b) Each Borrowing Subsidiary acknowledges, agrees
and confirms that each Lender may at any time and from time to time hold, sell,
rediscount or otherwise dispose of any Acceptance accepted and purchased by it
hereunder. Each Borrowing Subsidiary acknowledges, agrees and confirms with the
Lenders that the records of each Lender in respect of payment of any Banker's
Acceptance by such Lender shall be binding on the Borrowing Subsidiary and shall
be conclusive evidence (in the absence of manifest error) of a Floating Rate
Loan to the Borrowing Subsidiary and of an amount owing by the Borrowing
Subsidiary to such lender.
(c) In the event a Lender is unable to accept
Bankers' Acceptances, such Lender shall have the right at the time of accepting
drafts to require the Borrowing Subsidiary to accept a Loan from such Lender in
lieu of the issue and acceptance of a Bankers' Acceptance requested by the
Borrowing Subsidiary to be accepted so that there shall be outstanding while the
Bankers' Acceptances are outstanding BA Equivalent Loans from such Lender as
contemplated herein. The principal amount of each BA Equivalent Loan shall be
that amount which, when added to the amount of interest (calculated at the
applicable Discount Rate) which will accrue during the BA Equivalent Interest
Period shall be equal, at maturity, to the face amount of the drafts which would
have been accepted by such Lender had it accepted Bankers' Acceptances. The "BA
EQUIVALENT INTEREST PERIOD" for each BA Equivalent Loan shall be equal to the
Interest Period of the drafts presented for acceptance as Bankers' Acceptances
on the relevant date of Borrowing. On the relevant date of the Borrowing the
Borrowing Subsidiary shall pay to the Agent a fee equal to the Acceptance Fee
which would have been payable to such Lender if it were a Lender accepting
drafts having a term to maturity equal to the applicable BA Equivalent Interest
Period and an aggregate face amount equal to the sum of the principal amount of
the BA Equivalent Loan and the interest payable thereon by the Borrowing
Subsidiary for the Applicable BA Equivalent Interest Period. The provisions of
this Agreement dealing with Bankers' Acceptances shall apply, mutatis mutandis,
to BA Equivalent Loans.
(d) Each Bankers' Acceptance issued pursuant to this
Agreement shall be purchased by the Lender accepting such Bankers' Acceptance
for the Discounted Proceeds thereof. Concurrent with the acceptance of each
Bankers' Acceptance, each Lender shall make available to the Agent the
Discounted Proceeds thereof for disbursement to the Borrowing Subsidiary in
accordance with the terms hereof. In each case, upon receipt of such Discounted
Proceeds from the Lenders and upon fulfilment of the applicable conditions set
forth herein, the Agent shall make such funds available to the Borrowing
Subsidiary in accordance with this Agreement. Upon each issue of Bankers'
Acceptances as a result of the conversion of outstanding Borrowings into
Bankers' Acceptances, the Borrowing Subsidiary shall, concurrently with the
conversion, pay in advance to the Agent on behalf of the Lenders, the amount by
which the face value of such Bankers' Acceptances exceeds the Discounted
Proceeds of such Bankers' Acceptances, to be applied
45
<PAGE> 51
against the principal amount of the Borrowing being so converted. The Borrowing
Subsidiary shall at the same time pay to the Agent the applicable Acceptance
Fee.
(e) To enable the Lenders to make Advances in the
manner specified in this Section 3.4, the Borrowing Subsidiary shall, in
accordance with the request of each Lender either (i) provide a power of
attorney to complete, sign, endorse and issue Bankers' Acceptances, in such form
as such Lender may require; or (ii) supply each Lender with such number of
drafts as such Lender may reasonably request, duly endorsed and executed on
behalf of the Borrowing Subsidiary. Each Lender shall exercise such care in the
custody and safekeeping of drafts as it would exercise in the custody and
safekeeping of similar property owned by it. Each Lender will, upon request by
the Borrowing Subsidiary, promptly advise the Borrowing Subsidiary of the number
and designations, if any, of the uncompleted drafts then held by it.
3.5 Payment Method. (a) All payments with respect to U.S.
Advances to be made by the Borrowers hereunder will be made in Dollars and all
payments with respect to Canadian Advances to made by the Borrowers hereunder
shall be made in CAD, and in each case in immediately available funds to the
Agent for the account of the relevant Lenders at its address referred to in
Section 8.2 not later than 1:00 p.m. Detroit time on the date on which such
payment shall become due and, with respect to Canadian Advances, to First
Chicago/NBD Canada for the account of the relevant Lenders at its address
referred to in Section 8.2 not later than 1:00 p.m. Toronto time on the date on
which such payment shall become due. Payments received after 1:00 p.m. shall be
deemed to be payments made prior to 1:00 p.m. on the next succeeding Business
Day. The Borrowers hereby authorize the Agent (including First Chicago/NBD
Canada) to charge their accounts with the Agent (including First Chicago/NBD
Canada) in order to cause timely payment of amounts due hereunder to be made
(subject to sufficient funds being available in such accounts for that purpose).
(b) At the time of making each such payment, the
Borrowers shall, subject to the other terms and conditions of this Agreement,
specify to the Agent that Borrowing or other obligation of the Borrowers
hereunder to which such payment is to be applied. In the event that the
Borrowers fails to so specify the relevant obligation or if an Event of Default
shall have occurred and be continuing, the Agent may apply such payments as it
may determine in its sole discretion.
(c) On the day such payments are deemed received, the
Agent shall remit to the Lenders their pro rata shares of such payments in
immediately available funds. In the case of payments of principal and interest
on any Borrowing, such pro rata shares shall be determined with respect to each
such Lender by the ratio which the outstanding principal balance of its Loan
included in such Borrowing bears to the outstanding principal balance of the
Loans of all of the Lenders included in such Borrowing, in the case of fees paid
pursuant to Section 2.3 and other amounts payable hereunder (other than the
Agent's fees and amounts payable to any Lender under Section 3.8), such pro rata
shares shall be determined with respect to each such Lender by the ratio which
the Commitments of such Lender bears to the Commitments of all the Lenders or
such other pro rata shares as specified in this Agreement.
3.6 No Setoff or Deduction. Subject to Section 3.11, all
payments of principal of and interest on the Advances and other amounts payable
by the Borrowers hereunder shall be made by the
46
<PAGE> 52
Borrowers without setoff or counterclaim and, subject to the next succeeding
sentence, free and clear of, and without deduction or withholding for, or on
account of, any present or future taxes, levies, imposts, duties, fees,
assessments, or other charges of whatever nature, imposed by any governmental
authority, or by any department, agency or other political subdivision or taxing
authority. Subject to Section 3.11, any such taxes, levies, imposts, duties,
fees, assessments or other charges are imposed, the Borrowers will pay such
additional amounts as may be necessary so that payment of principal and of
interest on the Loans and other amounts payable hereunder, after withholding or
deduction for or on account thereof, will not be less than any amount provided
to be paid hereunder and, in any such case, the Borrowers will furnish to the
Lenders certified copies of all tax receipts evidencing the payment of such
amounts within 45 days after the date any such payment is due pursuant to
applicable law.
3.7 Payment on Non-Business Day; Payment Computations. Except
as otherwise provided in this Agreement to the contrary, whenever any
installment of principal of, or interest on, any Loan or any other amount due
hereunder becomes due and payable on a day which is not a Business Day, the
maturity thereof shall be extended to the next succeeding Business Day and, in
the case of any installment of principal, interest shall be payable thereon at
the rate per annum determined in accordance with this Agreement during such
extension. Computations of interest and other amounts due under this Agreement
shall be made on the basis of a year of 360 days (or 365 days when determining
the Floating Rate or rates or fees with respect to Acceptances) for the actual
number of days elapsed, including the first day but excluding the last day of
the relevant period.
3.8 Additional Costs. (a) In the event that any applicable
law, treaty or other international agreement, rule or regulation (whether
domestic or foreign) now or hereafter in effect and whether or not presently
applicable to any Lender or the Agent, or any interpretation or administration
thereof by any governmental authority charged with the interpretation or
administration thereof, or compliance by any Lender or the Agent with any
guideline, request or directive of any such authority (whether or not having the
force of law), shall (i) affect the basis of taxation of payments to any Lender
or the Agent of any amounts payable by the Borrowers under this Agreement (other
than taxes imposed on the overall net income of any Lender or the Agent, by the
jurisdiction, or by any political subdivision or taxing authority of any such
jurisdiction, in which any Lender or the Agent, as the case may be, has its
principal office), (ii) shall impose, modify or deem applicable any reserve,
special deposit or similar requirement against assets of, deposits with or for
the account of, or credit extended by any Lender or the Agent, or (iii) shall
impose any other condition with respect to this Agreement, or any of the
Commitments, the Notes or the Loans or any Letter of Credit, and the result of
any of the foregoing is to increase the cost to any Lender or the Agent, as the
case may be, of making, funding or maintaining any LIBOR Loan Acceptance, or any
Letter of Credit or to reduce the amount of any sum receivable by any Lender or
the Agent, as the case may be, thereon, then the Borrowers shall pay to such
Lender or the Agent, as the case may be, from time to time, upon request by such
Lender (with a copy of such request to be provided to the Agent) or the Agent,
additional amounts sufficient to compensate such Lender or the Agent, as the
case may be, for such increased cost or reduced sum receivable to the extent, in
the case of any LIBOR Loan, such Lender or the Agent is not compensated therefor
in the computation of the interest rate applicable to such LIBOR Loan. A
statement as to the amount of such increased cost or reduced sum receivable,
prepared in good faith and in reasonable detail by such Lender or the Agent, as
the case may be, and submitted by such Lender or the Agent, as the case may be,
to the relevant Borrower, shall be prima facie evidence thereof.
47
<PAGE> 53
(b) In the event that any applicable law, treaty or other
international agreement, rule or regulation (whether domestic or foreign) now or
hereafter in effect and whether or not presently applicable to any Lender or the
Agent, or any interpretation or administration thereof by any governmental
authority charged with the interpretation or administration thereof, or
compliance by any Lender or the Agent with any guideline, request or directive
of any such authority (whether or not having the force of law), including any
risk-based capital guidelines, affects or would affect the amount of capital
required or expected to be maintained by such Lender or the Agent (or any
corporation controlling such Lender or the Agent) and such Lender or the Agent,
as the case may be, determines that the amount of such capital is increased by
or based upon the existence of such Lender's or the Agent's obligations
hereunder and such increase has the effect of reducing the rate of return on
such Lender's or the Agent's (or such controlling corporation's) capital as a
consequence of such obligations hereunder to a level below that which such
Lender or the Agent (or such controlling corporation) could have achieved but
for such circumstances (taking into consideration its policies with respect to
capital adequacy) by an amount deemed by such Lender or the Agent to be
material, then the Borrowers shall pay to such Lender or the Agent, as the case
may be, from time to time, upon request by such Lender (with a copy of such
request to be provided to the Agent) or the Agent, additional amounts sufficient
to compensate such Lender or the Agent (or such controlling corporation) for any
increase in the amount of capital and reduced rate of return which such Lender
or the Agent reasonably determines to be allocable to the existence of such
Lender's or the Agent's obligations hereunder. A statement as to the amount of
such compensation, prepared in good faith and in reasonable detail by such
Lender or the Agent, as the case may be, and submitted by such Lender or the
Agent to the relevant Borrower, shall be prima facie evidence thereof.
3.9 Illegality and Impossibility. In the event that any applicable law,
treaty or other international agreement, rule or regulation (whether domestic or
foreign) now or hereafter in effect and whether or not presently applicable to
any Lender, or any interpretation or administration thereof by any governmental
authority charged with the interpretation or administration thereof, or
compliance by any Lender with any guideline, request or directive of such
authority (whether or not having the force of law), including without limitation
exchange controls, shall make it unlawful or impossible for any Lender to
maintain any Loan under this Agreement, the relevant Borrower shall upon receipt
of notice thereof from such Lender repay in full the then outstanding principal
amount of each Loan so affected, together with all accrued interest thereon to
the date of payment and all amounts owing to such Lender under Section 3.10, (a)
on the last day of the then current Interest Period applicable to such Loan if
such Lender may lawfully continue to maintain such Loan to such day, or (b)
immediately if such Lender may not continue to maintain such Loan to such day.
3.10 Indemnification. If any Borrower makes any payment of principal
with respect to any LIBOR Loan on any other date than the last day of a LIBOR
Interest Period applicable thereto (whether pursuant to Section 3.1(c), Section
3.9, Section_6.2 or otherwise), or if any Borrower fails to borrow any
LIBOR Loan after notice has been given to the Lenders in accordance with Section
2.4, or if any Borrower fails to make any payment of principal or interest in
respect of a LIBOR Loan when due, such Borrower shall reimburse each Lender on
demand for any resulting loss or expense incurred by each such Lender, including
without limitation any loss incurred in obtaining, liquidating or employing
deposits from third parties, whether or not such Lender shall have funded or
committed to fund such Loan. A statement as to the amount
48
<PAGE> 54
of such loss or expense, prepared in good faith and in reasonable detail by such
Lender and submitted by such Lender to the relevant Borrower, shall be
conclusive and binding for all purposes absent manifest error in computation.
Calculation of all amounts payable to such Lender under this Section 3.10 shall
be made as though such Lender shall have actually funded or committed to fund
the relevant LIBOR Loan through the purchase of an underlying deposit in an
amount equal to the amount of such Loan in the relevant market and having a
maturity comparable to the related Interest Period and through the transfer of
such deposit to a domestic office of such Lender in the United States; provided,
however, that such Lender may fund any LIBOR Loan in any manner it sees fit and
the foregoing assumption shall be utilized only for the purpose of calculation
of amounts payable under this Section 3.10.
3.11 Taxes. (a) Each Lender (which, for purposes of this Section 3.11,
shall not include any Affiliate of such Lender used to make Canadian Advances
hereunder) that is not organized and incorporated under the laws of the United
States or any State thereof making U.S. Advances agrees to file with the Agent
and the Company, in duplicate, (a) on or before the later of (i) the Effective
Date and (ii) the date such Lender becomes a Lender under this Agreement and (b)
thereafter, for each taxable year of such Lender (in the case of a Form 4224) or
for each third taxable year of such Lender (in the case of any other form)
during which interest or fees arising under this Agreement and the Notes are
received, unless not legally able to do so as a result of a change in the United
States income tax enacted, or treaty promulgated, after the date specified in
the preceding clause (a), on or prior to the immediately following due date of
any payment by the Company hereunder, a properly completed and executed copy of
either Internal Revenue Service Form 4224 or Internal Revenue Service Form 1001
and Internal Revenue Service Form W-8 or Internal Revenue Service Form W-9 and
any additional form necessary for claiming complete exemption from United States
withholding taxes (or such other form as is required to claim complete exemption
from United States withholding taxes), if and as provided by the Code or other
pronouncements of the United States Internal Revenue Service, and such Lender
warrants to the Company that the form so filed will be true and complete;
provided that such Lender's failure to complete and execute such Form 4224 or
Form 1001, or Form W-8 or Form W-9, as the case may be, and any such additional
form (or any successor form or forms) shall not relieve the Company of any of
its obligations under this Agreement, except as otherwise provided in this
Section 3.11.
(b) Notwithstanding anything herein to the contrary, for any
period with respect to which a Lender has failed to provide the Company with the
appropriate form pursuant to Section 3.11(a) (unless such failure is due to a
change in treaty, law or regulation occurring subsequent to the date on which a
form originally was required to be provided), such Lender shall not be entitled
to indemnification under Section 3.6 with respect to withholding taxes imposed
by the United States; provided, however, that should a Lender, which is
otherwise exempt from or subject to a reduced rate of withholding tax, become
subject to withholding because of its failure to deliver a form required
hereunder, the Borrowers shall take such steps as such Lender shall reasonably
request to assist such Lender to recover such taxes.
(c) Each Canadian Lender that is created or organized under
the laws of a jurisdiction other than Canada or a Province thereof making
Canadian Advances shall deliver, or have its designated Affiliate to be used to
make Canadian Advances deliver, to the Company and the Agent on the Effective
Date (or on the date on which such Canadian Lender becomes a Lender hereunder),
evidence that the Minister of National Revenue is satisfied that payments made
to such Lender hereunder are not subject
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to Taxes pursuant to Regulation 805(2) of the Income Tax Act ("Evidence of
Canadian Tax Exemption"). In addition, from time to time after the Effective
Date (or the date on which such Canadian Lender becomes a Lender hereunder) upon
the reasonable request of the Company, each such Canadian Lender further agrees
to deliver to the Company and the Agent further Evidence of Canadian Tax
Exemption, unless any change in treaty, law, regulation or official
interpretation thereof prevents such Lender from duly providing same.
Notwithstanding anything in this Section 3.11 to the contrary, the Company shall
not have any obligation to pay any withholding taxes or to indemnify any
Canadian Lender for any withholding taxes to the extent that such taxes result
from the failure of such Lender to comply with its obligations under this
paragraph.
(d) Notwithstanding anything herein to the contrary, for any
period with respect to which a Canadian Lender has failed to provide the Company
with the appropriate form pursuant to Section 3.11(c) (unless such failure is
due to a change in treaty, law or regulation occurring subsequent to the date on
which a form originally was required to be provided), such Canadian Lender shall
not be entitled to indemnification under Section 3.6 with respect to withholding
taxes imposed by Canada; provided however, that should a Canadian Lender, which
is otherwise exempt from or subject to a reduced rate of withholding tax, become
subject to withholding taxes because of its failure to deliver a form required
hereunder, the Company shall take such steps as such Lender shall reasonably
request to assist such Lender to recover such Taxes.
(e) If any Borrower is required to pay additional amounts to
or for the account of any Lender pursuant to Section 3.6, and each Lender which
is not a Canadian Lender shall be entitled to such amounts if it is ever
required to make or participate in Canadian Advances under this Agreement, then
such Lender will change the jurisdiction of its Applicable Lending Office so as
to eliminate or reduce any such additional payment which may thereafter accrue
if such change, in the judgment of such Lender, is not otherwise disadvantageous
to such Lender. For the purposes of making any Canadian Advances, any Lender may
designate any Affiliate of such Lender in Canada to make such Canadian Advances
on its behalf, provided that such designation is made in writing to the Agent
and the Borrowers. Upon such designation, such Affiliate shall have all rights
as a Lender with respect to such Canadian Advances.
3.12 Substitution of Lender. If (i) the obligation of any Lender to
make or maintain LIBOR Loans has been suspended pursuant to Section 3.9 when not
all Lenders' obligations have been suspended, (ii) any Lender has demanded
compensation under Section 3.8 when all Lenders have not done so or (iii) any
Lender is a Defaulting Lender, the Company shall have the right, if no Default
or Event of Default then exists, to replace such Lender (a "Replaced Lender")
with one or more other lenders (collectively, the "Replacement Lender")
acceptable to the Agent, provided that (x) at the time of any replacement
pursuant to this Section 3.12, the Replacement Lender shall enter into one or
more Assignment and Acceptances, pursuant to which the Replacement Lender shall
acquire the Commitments and outstanding Advances and other obligations of the
Replaced Lender and, in connection therewith, shall pay to the Replaced Lender
in respect thereof an amount equal to the sum of (A) the amount of principal of,
and all accrued interest on, all outstanding Loans of the Replaced Lender, (B)
the amount of all accrued, but theretofore unpaid, fees owing to the Replaced
Lender under Section 2.3 and (C) the amount which would be payable by the
Company to the Replaced Lender pursuant to Section 3.10 if the Company prepaid
at the time of such replacement all of the Loans of such Replaced Lender
outstanding at such time and (y) all obligations of the Company then owing to
the Replaced Lender (other than those specifically described in
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clause (x) above in respect of which the assignment purchase price has been, or
is concurrently being, paid) shall be paid in full to such Replaced Lender
concurrently with such replacement. Upon the execution of the respective
Assignment and Acceptances, the payment of amounts referred to in clauses (x)
and (y) above and, if so requested by the Replacement Lender, delivery to the
Replacement Lender of the appropriate Note or Notes executed by the Company, the
Replacement Lender shall become a Lender hereunder and the Replaced Lender shall
cease to constitute a Lender hereunder. The provisions of this Agreement
(including without limitation Sections 3.10 and 8.5) shall continue to govern
the rights and obligations of a Replaced Lender with respect to any Loans made
or any other actions taken by such lender while it was a Lender. Nothing herein
shall release any Defaulting Lender from any obligation it may have to any
Borrower, the Agent or any other Lender.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES
The Borrowers represent and warrant to the Lenders and the Agent that:
4.1 Corporate Existence and Power. Each of the Borrowers and the
Guarantors is a corporation or other organization duly organized, validly
existing and in good standing under the laws of its respective jurisdiction of
incorporation or formation, and is duly qualified to do business, and is in good
standing, in all additional jurisdictions where such qualification is necessary
under applicable law, except for jurisdictions where their failure to be so
qualified would not result in any Material Adverse Effect. Each of the Company
and the Guarantors has all requisite corporate or other organizational power to
own or lease the properties used in its business and to carry on its business as
now being conducted and as proposed to be conducted, and to execute and deliver
the Loan Documents to which it is a party and to engage in the transactions
contemplated by this Agreement.
4.2 Corporate Authority. The execution, delivery and performance by
each of the Borrowers and the Guarantors of the Loan Documents to which each of
them is a party have been duly authorized by all necessary corporate or other
organizational action and are not in contravention of any law, rule or
regulation, or any judgment, decree, writ, injunction, order or award of any
arbitrator, court or governmental authority, or of the terms of such Borrower's
or such Guarantor's charter, operating agreement or by-laws, or of any contract
or undertaking to which such Borrower or such Guarantor is a party or by which
such Borrower or such Guarantor or any of their property may be bound or
affected and will not result in the imposition of any Lien on any of such
Borrower's or such Guarantor's property or of any of such Borrower's or such
Guarantor's property, except for Permitted Liens.
4.3 Binding Effect. These Loan Documents to which each of the Borrowers
and the Guarantors is a party are the legal, valid and binding obligations of
such Borrower and such Guarantor, respectively, enforceable against each of them
in accordance with their respective terms.
4.4 Subsidiaries. Schedule 4.4 hereto correctly sets forth the
corporate name, jurisdiction of incorporation or formation and ownership of each
Subsidiary of the Company. Each such
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Subsidiary and each corporation or other organization becoming a Subsidiary of
the Company after the date hereof is and will be a corporation or other
organization duly organized, validly existing and in good standing under the
laws of its jurisdiction of incorporation and is and will be duly qualified to
do business in each additional jurisdiction where such qualification is or may
be necessary under applicable law, except for such failure which could not have
a Material Adverse Effect. Each Subsidiary of the Company has and will have all
requisite corporate or other organizational power to own or lease the properties
used in its business and to carry on its business as now being conducted and as
proposed to be conducted. All outstanding shares of Capital Stock of each
Subsidiary of the Company have been and will be validly issued and are and will
be fully paid and nonassessable and, except with respect to the Lobdell
Preferred Stock or as disclosed in writing to and approved by the Agent from
time to time, are and will be owned, beneficially and of record, by the Company
or another Subsidiary of the Company free and clear of any Liens.
4.5 Litigation. Except as set forth in Schedule 4.5 hereto, there is no
action, suit or proceeding pending or, to the best of the Company's knowledge,
threatened against or affecting the Company or any of its Subsidiaries before or
by any court, governmental authority or arbitrator, which if adversely decided
might result, either individually or collectively, in any Material Adverse
Effect and, to the best of the Company's knowledge, there is no basis for any
such action, suit or proceeding.
4.6 Financial Condition. The consolidated and consolidating balance
sheet of the Company and its Subsidiaries and the consolidated and consolidating
statements of income, retained earnings and cash flows of the Company and its
Subsidiaries for the fiscal year ended March 31, 1998 and reported on by Price
Waterhouse LLP, independent certified public accountants, copies of which have
been furnished to the Lenders, fairly present, and the financial statements of
the Company and its Subsidiaries delivered pursuant to Section 5.1(d) will
fairly present, the consolidated financial position of the Company and its
Subsidiaries as at the respective dates thereof, and the consolidated results of
operations of the Company and its Subsidiaries for the respective periods
indicated, all in accordance with Generally Accepted Accounting Principles
consistently applied (subject, in the case of said interim statements, to
year-end audit adjustments). There has been no Material Adverse Effect since
March_31, 1998. There is no Contingent Liability of the Company or any of
its Subsidiaries that is not reflected in such financial statements or in the
notes thereto which could have a Material Adverse Effect. Neither the Company
nor any Restricted Subsidiary is liable directly or indirectly, for any of the
Indebtedness or other liabilities of any Unrestricted Subsidiary or for any
Contingent Liabilities with respect to any Unrestricted Subsidiary except as
permitted by Section 5.2(e).
4.7 Use of Advances. The Company will use the proceeds of the Advances
to complete the Cofimeta Acquisition, to refinance existing indebtedness of the
Guarantors, and for its and the Guarantors' general corporate purposes. Neither
the Company nor any of its Subsidiaries extends or maintains, in the ordinary
course of business, credit for the purpose, whether immediate, incidental, or
ultimate, of buying or carrying margin stock (within the meaning of Regulations
T, U or X of the Board of Governors of the Federal Reserve System), and no part
of the proceeds of any Advance will be used for the purpose, whether immediate,
incidental, or ultimate, of buying or carrying any such margin stock or
maintaining or extending credit to others for such purpose. The Capital Stock of
Cofimeta is not "margin stock" within the meaning of Regulations T, U or X of
the Board of Governors of the Federal Reserve System and is not "marginable OTC
stock" or "foreign margin stock" within the meaning of Regulation T of the Board
of Governors of the Federal Reserve System. After applying the proceeds of each
Advance,
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such margin stock will not constitute more than 25% of the value of the assets
(either of the Company alone or of the Company and its Subsidiaries on a
consolidated basis) that are subject to any provisions of any Loan Document that
may cause the Advances to be deemed secured, directly or indirectly, by margin
stock.
4.8 Consents, Etc. Except for such consents, approvals, authorizations,
declarations, registrations or filings delivered by the Company pursuant to
Section_2.5(g), if any, each of which is in full force and effect, no consent,
approval or authorization of or declaration, registration or filing with any
governmental authority or any nongovernmental Person or entity, including
without limitation any creditor, lessor or stockholder of the Company or any of
its Subsidiaries, is required on the part of any Borrower or any Guarantor in
connection with the execution, delivery and performance of the Loan Documents or
the transactions contemplated hereby or as a condition to the legality, validity
or enforceability of any of the Loan Documents.
4.9 Taxes. The Company and its Subsidiaries have filed all tax returns
(federal, state and local) required to be filed and have paid all taxes shown
thereon to be due, including interest and penalties, or have established
adequate financial reserves on their respective books and records for payment
thereof. Neither the Company nor any of its Subsidiaries knows of any actual or
proposed tax assessment or any basis therefor, and no extension of time for the
assessment of deficiencies in any federal or state tax has been granted by the
Company or any such Subsidiary. The Company will not amend any Tax Sharing
Agreement without the prior approval of the Agent except to add wholly owned
Subsidiaries to any such Tax Sharing Agreement.
4.10 Title to Properties. Except as otherwise disclosed in the latest
balance sheet referred to in Section 4.6 or delivered pursuant to Section
5.1(d), the Company or one or more of its Subsidiaries have good and marketable
fee simple title (or the equivalent thereto in any relevant foreign
jurisdiction) to all of the real property, and a valid and indefeasible
ownership or leasehold interest in all of the other properties and assets
(including, without limitation, the collateral subject to the Security Documents
to which any of them is a party) reflected in said balance sheet or subsequently
acquired by the Company or any such Subsidiary. All of such properties and
assets are free and clear of any Lien, except for Permitted Liens. The Security
Documents grant a first priority, perfected and enforceable lien and security
interest in all collateral described therein, subject only to Permitted Liens.
4.11 Borrowing Base. All trade accounts receivable, fixed assets and
inventory of the Borrowers and the Guarantors represented or reported by the
Company to be, or otherwise included in, Eligible Accounts Receivable, Eligible
Deferred Tooling Reimbursement Payments, Eligible Fixed Assets and Eligible
Inventory, comply in all respects with the requirements therefor set forth in
the respective definitions thereof, and the computation of the Borrowing Base
set forth in each Borrowing Base Certificate is true and correct. The aggregate
amount of all Revolving Credit Advances, plus all Tooling Revolving Credit Loans
plus all Unrestricted Guarantees is equal to or less than the Borrowing Base and
the aggregate amount of all Tooling Revolving Credit Loans is equal to or less
than the Tooling Revolving Credit Borrowing Base.
4.12 ERISA. The Company and its ERISA Affiliates and their respective
Plans are in compliance in all material respects with those provisions of ERISA
and of the Code which are applicable
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with respect to any Plan. No Prohibited Transaction and no Reportable Event has
occurred with respect to any such Plan which could, in the aggregate, result in
any liability to the Company or any of its ERISA Affiliates in excess of
$2,000,000. None of the Company or any of its ERISA Affiliates is an employer
with respect to any Multiemployer Plan. The Company and its ERISA Affiliates
have met or are meeting in compliance with all laws and regulations the minimum
funding requirements under ERISA and the Code with respect to each of their
respective Plans, if any, and have not incurred any liability to the PBGC or any
Plan. The execution, delivery and performance of the Loan Documents does not
constitute a Prohibited Transaction. There is no Unfunded Benefit Liability,
with respect to any Plan of the Company or its ERISA Affiliates which could have
a Material Adverse Effect.
4.13 Disclosure. No report or other information furnished in writing by
or on behalf of the Company or any of its Subsidiaries to any Lender or the
Agent in connection with the negotiation or administration of this Agreement
contains any material misstatement of fact or omits to state any material fact
or any fact necessary to make the statements contained therein not misleading in
light of the circumstances in which they were made. No Loan Document nor any
other document, certificate, or report or statement or other information
furnished to any Lender or the Agent by or on behalf of the Company or any of
its Subsidiaries in connection with the transactions contemplated hereby
contains any untrue statement of a material fact or omits to state a material
fact in order to make the statements contained herein and therein not misleading
in light of the circumstances in which they were made. There is no fact known to
the Company which materially and adversely affects, or which in the future may
(so far as the Company can now reasonably foresee) materially and adversely
affect, the business, properties, operations or condition, financial or
otherwise, of the Company or any of its Subsidiaries, which has not been set
forth in this Agreement (including without limitation the schedules hereto) or
in the other documents, certificates, statements, reports and other information
furnished in writing to the Lenders by or on behalf of the Company or any of its
Subsidiaries in connection with the transactions contemplated hereby.
4.14 Environmental Matters. The representations and warranties set
forth in the Environmental Certificate are true and complete.
4.15 Solvency. The Company and its Subsidiaries are and, after giving
effect to the transactions described herein and the Subordinated Debt Documents
and to the incurrence or assumption of all obligations being incurred or assumed
in connection herewith, will be Solvent.
4.16 No Defaults under Certain Agreements. Neither the Company nor any
of its Subsidiaries is in default or has received any written notice of default
under or with respect to any contract or agreement to which it is a party or by
which it is bound, including without limitation any agreements for the
incurrence of any indebtedness or any tooling or purchase contracts, which could
have a Material Adverse Effect. No Default or Event of Default has occurred and
is continuing.
4.17 Intellectual Property. Set forth on Schedule 4.17 is a complete
and accurate list of all patents, trademarks, trade names, service marks and
copyrights, and all applications therefor and licenses thereof, of the Company
and each of its Subsidiaries showing as of the Effective Date the jurisdiction
in which registered, the registration number and the date of registration. The
Company and each of its Subsidiaries owns, or is licensed to use, all
trademarks, tradenames, service marks, copyrights, technology,
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know-how and processes necessary for the conduct of its business as currently
conducted (the "Intellectual Property") except for those the failure to own or
license which could not reasonably be expected to have a Material Adverse
Effect. No claim has been asserted and is pending by any Person challenging or
questioning the use of any such Intellectual Property or the validity or
effectiveness of any such Intellectual Property, nor does the Company or any of
its Subsidiaries know of any valid basis for any such claim, the use of such
Intellectual Property by the Company and each of its Subsidiaries does not
infringe on the rights of any Person, and, to the knowledge of the Company, no
Intellectual Property has been infringed, misappropriated or diluted by any
other Person except for such claims, infringements, misappropriation and
dilutions that, in the aggregate, could not have a Material Adverse Effect.
4.18 Preferred Stock. All Lobdell Preferred Stock Documents are listed
on Schedule 4.18 hereto, and true, correct and complete copies of all Lobdell
Preferred Stock Documents have been delivered to the Agent. All dividends,
distributions, redemptions and other payments required on the Lobdell Preferred
Stock are described on Schedule 4.18. Other than the Lobdell Preferred Stock,
there is no other Preferred Stock as of the Effective Date.
4.19 Investment Company Act; Other Regulations. Neither the Company nor
any of its Subsidiaries is an "investment company", or a company "controlled" by
an "investment company", within the meaning of the Investment Company Act of
1940, as amended. Neither the Company nor any of its Subsidiaries is subject to
regulation under any federal or state statute or regulation which limits its
ability to incur Indebtedness.
4.20 Senior Subordinated Debt Documents. All representations and
warranties of the Company contained in any Senior Subordinated Debt Document are
true and correct in all material respects. The Company has received net proceeds
in the approximate amount of $120,800,000 on June 24, 1997 and in the
approximate amount of $36,400,000 on April 1, 1998 and $40,600,000 on December
8, 1998 from its issuance of the Senior Subordinated Notes, and all agreements,
instruments and documents executed or delivered pursuant to the issuance of the
Senior Subordinated Notes are described on Schedule 1.1 hereto. All Advances and
all other present and future indebtedness, obligations and liabilities pursuant
to the Loan Documents and all Hedging Obligations of each Borrower and each
Guarantor owed to any Lender is "Senior Debt " and "Designated Senior Debt" as
defined in the Senior Subordinated Debt Documents and, other than the Advances
and all other present and future indebtedness, obligations and liabilities
pursuant to the Loan Documents, there is no other "Designated Senior Debt"
thereunder. There is no Event of Default or event or condition which could
become an Event of Default with notice or lapse of time or both, under the
Senior Subordinated Debt Documents and each of the Senior Subordinated Debt
Documents is in full force and effect. Other than pursuant to the Senior
Subordinated Notes, there is no obligation pursuant to any Senior Subordinated
Debt Document or other document or agreement evidencing or relating to any
Subordinated Debt outstanding or to be outstanding on the Effective Date which
obligates the Company to pay any principal or interest or redeem any of its
Capital Stock or incur any other monetary obligation. The Term Loan is and will
be incurred pursuant to, and in full compliance with, Section 4.3(a) of the
Senior Subordinated Note Indenture, and the Term Loan is classified as
Indebtedness incurred under Section 4.3(a) of the Senior Subordinated Note
Indenture and are not classified as Indebtedness outstanding or incurred
pursuant to Section 4.3(b) of the Senior Subordinated Note Indenture. All
Tooling Revolving Credit Loans constitute "Tooling Indebtedness" as defined in
the Senior Subordinated Note Indenture and are incurred
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pursuant to Section 4.3 (b) of the Senior Subordinated Note Indenture and do not
need to meet the requirements of Section 4.3(a). All Revolving Credit Advances,
up to the full amount of the aggregate Revolving Credit Commitments, are
incurred pursuant to Section 4.3(b) of the Senior Subordinated Note Indenture
and do not need to meet the requirements of Section 4.3(a).
4.21 Unrestricted Subsidiaries. Other than the guaranties permitted by
Section 5.2(e)(x), and for the Permitted Mexican Manufacturing Facility
Expenditures, neither the Company nor any Restricted Subsidiary of the Company
is liable, directly or indirectly, for any of the Indebtedness or other
liabilities of any Unrestricted Subsidiary or has any Contingent Liabilities
with respect to any Unrestricted Subsidiary, other than trade payables for the
sale of goods in the ordinary course of business and in compliance with Section
5.2(m).
4.22 Acquisitions. Within three Business Days of the Effective Date,
the Company will complete the Cofimeta Acquisition in accordance with the
Cofimeta Acquisition Documents and in accordance with all laws and regulations
and all other Requirements of Law, and will acquire, free and clear of all
Liens, good and marketable title to 100% of the Capital Stock of Cofimeta.
Complete and correct copies of all Cofimeta Acquisition Documents have been
delivered to the Agent on or before the Cofimeta Acquisition Date, and the
Company has satisfied all conditions precedent required as of closing under the
Cofimeta Acquisition to complete the Cofimeta Acquisition, including without
limitation all conditions to the Cofimeta Acquisition required under Section
5.2(g). The Company directly owns, free and clear of all Liens, 100% of the
Capital Stock of the OASP I and OASP II, OASP I directly owns, free and clear of
all Liens, 99.4% of the Capital Stock of the French Acquisition Company, OASP II
directly owns, free and clear of all Liens, 0.6% of the Capital Stock of the
French Acquisition Company and the French Acquisition Company directly owns,
free and clear of all Liens, 100% of the Capital Stock of Cofimeta. Neither OASP
I, OASP II nor the French Acquisition Company has or will have any Indebtedness
other than as set forth on Schedule 4.22(a) and the aggregate amount of the
Indebtedness of Cofimeta and its Subsidiaries immediately after giving effect to
the Cofimeta Acquisition is set forth on Schedule 4.22(b). The aggregate
consideration paid or payable, including without limitation any Indebtedness
assumed in connection with the Cofimeta Acquisition or the OPI Acquisition or
other guarantees or other liabilities incurred in connection therewith on a
consolidated basis, will not exceed the Dollar Equivalent of (a) $72,000,000
(which includes the assumption of the Total Debt as set forth on Schedule
4.22(c)) plus 140,000,000 French Francs of factored receivable Indebtedness in
connection with the Cofimeta Acquisition or (b) $12,000,000 in connection with
the OPI Acquisition.
4.23 Material Agreements. Neither the Company nor any Subsidiary is a
party to any agreement or instrument or subject to any charter or other
corporate restriction which could reasonably be expected to have a Material
Adverse Effect. Neither the Company nor any Subsidiary is in default in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any agreement to which it is a party, which default
could reasonably be expected to have a Material Adverse Effect.
4.24 Compliance With Laws. The Company and its Subsidiaries have
complied with all applicable statutes, rules, regulations, orders and
restrictions of any domestic or foreign government or any
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instrumentality or agency thereof having jurisdiction over the conduct of their
respective businesses or the ownership of their respective property except for
any failure to comply with any of the foregoing which could not reasonably be
expected to have a Material Adverse Effect.
4.25 Year 2000. The Company has made a full and complete assessment of
the Year 2000 Issues and has a realistic and achievable program for remediating
the Year 2000 Issues on a timely basis (the "Year 2000 Program"). Based on such
assessment and on the Year 2000 Program, the Company does not reasonably
anticipate that Year 2000 Issues will have a Material Adverse Effect.
4.26 OPI Acquisition. If consummated, the OPI Acquisition will be
completed on substantially the terms described on Schedule 4.26 hereto and
described to the Agent prior to the Effective Date.
ARTICLE V
COVENANTS
5.1 Affirmative Covenants. The Company covenants and agrees that, until
the termination of all Commitments and Letters of Credit and thereafter until
payment in full of the principal of and accrued interest on the Notes and the
payment and performance of all other obligations of the Company under this
Agreement, any Hedging Agreement with any Lender and any other Loan Document,
unless the Required Lenders shall otherwise consent in writing, it shall, and
shall cause each of its Restricted Subsidiaries to:
(a) Preservation of Corporate Existence, Etc. Do or cause to
be done all things necessary to preserve, renew and keep in full force and
effect its legal existence and its qualification as a foreign corporation or
other organization in good standing in each jurisdiction in which such
qualification is necessary under applicable law, and the rights, licenses,
permits (including those required under Environmental Laws), franchises,
patents, copyrights, trademarks and trade names material to the conduct of its
businesses, except to the extent any of the foregoing would not have a Material
Adverse Effect; and defend all of the foregoing against all claims, actions,
demands, suits or proceedings at law or in equity or by or before any
governmental instrumentality or other agency or regulatory authority.
(b) Compliance with Laws, Etc. Comply in all respects with all
applicable laws, rules, regulations and orders of any governmental authority,
whether federal, state, local or foreign (including without limitation ERISA,
the Code and Environmental Laws), in effect from time to time, except to the
extent any of the foregoing would not have a Material Adverse Effect; and pay
and discharge promptly when due all taxes, assessments and governmental charges
or levies imposed upon it or upon its income, revenues or property, before the
same shall become delinquent or in default, as well as all lawful claims for
labor, materials and supplies or otherwise, which, if unpaid, might give rise to
Liens upon such properties or any portion thereof, except to the extent that
payment of any of the foregoing is then being contested in good faith by
appropriate legal proceedings and with respect to which adequate financial
reserves have been established on the books and records of the Company or any of
its Restricted Subsidiaries.
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(c) Maintenance of Properties; Insurance. Maintain, preserve
and protect all property that is material to the conduct of the business of the
Company or any of its Restricted Subsidiaries and keep such property in good
repair, working order and condition and from time to time make, or cause to be
made all needful and proper repairs, renewals, additions, improvements and
replacements thereto necessary in order that the business carried on in
connection therewith may be properly conducted at all times in accordance with
customary and prudent business practices for similar businesses, except to the
extent any of the foregoing would not have a Material Adverse Effect; and
maintain in full force and effect insurance with responsible and reputable
insurance companies or associations in such amounts, on such terms and covering
such risks, including fire and other risks insured against by extended coverage,
as is usually carried by companies engaged in similar businesses and owning
similar properties similarly situated and maintain in full force and effect
public liability insurance, insurance against claims for personal injury or
death or property damage occurring in connection with any of its activities or
any properties owned, occupied or controlled by it, in such amount as it shall
reasonably deem necessary, and maintain such other insurance as may be required
by law or as may be reasonably requested by the Required Lenders for purposes of
assuring compliance with this Section 5.1(c).
(d) Reporting Requirements. Furnish to the Lenders and the
Agent the following:
(i) Promptly and in any event within three calendar
days after becoming aware of the occurrence of (A) any Default or Event of
Default, (B) the commencement of any material litigation against, by or
affecting the Company or any of its Restricted Subsidiaries, and any material
developments therein, or (C) entering into any material contract or undertaking
that is not entered into in the ordinary course of business or (D) any
development in the business or affairs of the Company or any of its Restricted
Subsidiaries which has resulted in or which is likely in the reasonable judgment
of the Company, to result in a Material Adverse Effect, a statement of the Chief
Financial Officer or Treasurer of the Company setting forth details of each such
Default or Event of Default or such litigation, material contract or undertaking
or development and the action which the Company or such Subsidiary, as the case
may be, has taken and proposes to take with respect thereto;
(ii) As soon as available and in any event within 45
days after the end of each of the first three fiscal quarters of the Company,
the consolidated and consolidating balance sheets of the Company and its
Restricted Subsidiaries as of the end of such quarter, and the related
consolidated and consolidating statements of income, retained earnings and
changes in cash flows for the period commencing at the end of the previous
fiscal year and ending with the end of such quarter, setting forth in each case
in comparative form the corresponding figures for the corresponding date or
period of the preceding fiscal year, all in reasonable detail and duly certified
(subject to year-end audit adjustments) by the Chief Financial Officer or
Treasurer of the Company as having been prepared in accordance with Generally
Accepted Accounting Principles, together with a certificate of the Chief
Financial Officer or Treasurer of the Company stating (A) that no Default or
Event of Default has occurred and is continuing or, if a Default or Event of
Default has occurred and is continuing, a statement setting forth the details
thereof and the action which the Company has taken and proposes to take with
respect thereto, and (B) that a computation (which computation shall accompany
such certificate and shall be in reasonable detail) showing compliance with
Section 5.2(a), (b), (c) and (d) hereof is in conformity with the terms of this
Agreement;
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(iii) As soon as available and in any event within
115 days after the end of each fiscal year of the Company, a copy of the
consolidated balance sheet of the Company and its Subsidiaries as of the end of
such fiscal year and the related consolidated statements of income, retained
earnings and changes in cash flows of the Company and its Subsidiaries for such
fiscal year, with a customary audit report of PricewaterhouseCoopers LLP, or
other independent certified public accountants selected by the Company and
acceptable to the Agent, without qualifications unacceptable to the Agent, and
including a unaudited schedule in form acceptable to the Agent prepared by such
accountants setting forth the consolidating balance sheet of the Company and its
Restricted Subsidiaries as of the end of such fiscal year and the related
consolidating statements of income, retained earnings and changes in cash flows
of the Company and its Restricted Subsidiaries for such fiscal year, together
with a certificate of the Chief Financial Officer or the Treasurer of the
Company stating (A) that no Default or Event of Default has occurred and is
continuing and, if such a Default or Event of Default exists and is continuing,
a statement setting forth the nature and status thereof, and (B) that a
computation (which computation shall accompany such certificate and shall be in
reasonable detail) showing compliance with Sections 5.2(a), (b), (c) and (d)
hereof is in conformity with the terms of this Agreement and showing such other
matters as required by the Agent from time to time, all in form and substance
satisfactory to the Agent;
(iv) Promptly after the sending or filing thereof,
copies of all reports, proxy statements and financial statements which the
Company or any of its Subsidiaries sends to or files with any of their
respective security holders or any securities exchange or the Securities and
Exchange Commission or any successor agency thereof;
(v) On or before the 30th day after the end of each
month during which the Advances (other than the Term Loan) exceeded $35,000,000
on any date during such month and at least two Business Days prior to any
request for an Advance which would cause the aggregate Advances (other than the
Term Loan) to exceed $35,000,000, a Borrowing Base Certificate prepared as of
the close of business on the last day of such month or the most recently ended
month, as the case may be, together with supporting schedules, in form and
detail satisfactory to the Agent, setting forth such information as the Agent
may request with respect to the aging, value, location and other information
relating to the computation of the Borrowing Base and the eligibility of any
property or assets included in such computation together with a report with
respect to the Company setting forth a summary and aging of accounts payable of
the Company, a listing of any checks held after the due date of the related
vendor invoice and setting forth the corresponding due dates of such invoices,
in form and detail satisfactory to the Agent, certified as true and correct by
the Chief Financial Officer or Treasurer of the Company;
(vi) As soon as available and in any event at least
30 days prior to the end of each fiscal year of the Company, copies of
preliminary capital and operating budgets and financial forecasts for the
Company and its Subsidiaries for the following fiscal year, and as soon as
available in any event within 30 days after the end of each fiscal year of the
Company, copies of the final capital and operating budgets and financial
forecasts for the Company and its Subsidiaries for such fiscal year, in each
case prepared on both a consolidated and consolidating basis and for a
twelve-month period on a month by month basis (or more frequent period if so
prepared by the Company in the ordinary course) by or under the direction of the
Chief Financial Officer or Treasurer of the Company in form and detail
satisfactory to the
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Agent, and, promptly and in any event within 10 days after preparation thereof,
copies of any revisions to such budgets and forecasts;
(vii) Promptly and in any event within 10 calendar
days after receiving or becoming aware thereof (A) a copy of any notice of
intent to terminate any Plan of the Company its Subsidiaries or any ERISA
Affiliate filed with the PBGC, (B) a statement of the Chief Financial Officer or
Treasurer of the Company setting forth the details of the occurrence of any
Reportable Event with respect to any such Plan, (C) a copy of any notice that
the Company, any of its Subsidiaries or any ERISA Affiliate may receive from the
PBGC relating to the intention of the PBGC to terminate any such Plan or to
appoint a trustee to administer any such Plan, or (D) a copy of any notice of
failure to make a required installment or other payment within the meaning of
Section 412(n) of the Code or Section 302(f) of ERISA with respect to any such
Plan;
(viii) Promptly and in any event within 10 days after
receipt, a copy of any management letter or comparable analysis prepared by the
auditors for the Company or any of its Subsidiaries; and
(ix) Promptly, such other information respecting the
business, properties, operations or condition, financial or otherwise, of the
Company or any of its Restricted Subsidiaries or any of its Unrestricted
Subsidiaries with respect to which the Company or any of its Restricted
Subsidiaries has any Contingent Liabilities as any Lender or the Agent may from
time to time reasonably request.
(e) Accounting; Access to Records, Books, Etc. Maintain a
system of accounting established and administered in accordance with sound
business practices to permit preparation of financial statements in accordance
with Generally Accepted Accounting Principles and to comply with the
requirements of this Agreement and, at any reasonable time and from time to
time, (i) during regular business hours, permit any Lender or the Agent or any
agents or representatives thereof to examine and make copies of and abstracts
from the records and books of account of, and visit the properties of, the
Company and its Subsidiaries, and to discuss the affairs, finances and accounts
of the Company and its Subsidiaries with their respective directors, officers,
employees and independent auditors, and by this provision the Company hereby
authorizes such Persons to discuss such affairs, finances and accounts with any
Lender or the Agent and (ii) during regular business hours, permit the Agent or
any of its agents or representatives to conduct a comprehensive field audit of
its and its Subsidiaries' books, records, properties and assets, including
without limitation all collateral subject to the Security Documents, provided
that prior to an Event of Default no more than one such field audit (exclusive
of any field audits prior to the Effective Date, which are at the expense of the
Company) per fiscal year shall be at the expense of the Company.
(f) Maintenance of Business Lines. Maintain all principal
lines of business in which the Company or any of its Restricted Subsidiaries is
presently engaged.
(g) Additional Security and Collateral. Promptly (i) execute
and deliver, and cause each Restricted Subsidiary of the Company to execute and
deliver, additional Security Documents, within 30 days after request therefor by
the Lenders and the Agent, sufficient to grant to the Agent for the benefit of
the Lenders and the Agent liens and security interests in any after acquired
property of the type
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described in Section 2.11 and (ii) except as otherwise provided in this
Agreement, cause each Person becoming a Restricted Subsidiary of the Company
from time to time to execute and deliver to the Agent, within 30 days after such
Person becomes a Restricted Subsidiary, a Guaranty and Security Documents,
together with other related documents described in Section 2.5 sufficient to
grant to the Agent for the benefit of the Lenders and the Agent liens and
security interests in all collateral of the type described in Section 2.11. The
Company shall notify the Agent, within 10 days after the occurrence thereof, of
the acquisition of any property by the Company or any Restricted Subsidiary that
is not subject to the existing Security Documents, any Person's becoming a
Restricted Subsidiary and any other event or condition that may require
additional action of any nature in order to preserve the effectiveness and
perfected status of the liens and security interests of the Lenders and the
Agent with respect to such property pursuant to the Security Documents.
(h) Further Assurances. Execute and deliver, and cause each
Restricted Subsidiary of the Company to execute and deliver, within 30 days
after request therefor by the Lenders and the Agent, all further instruments and
documents and take all further action that may be necessary or desirable, or
that the Agent may request, in order to give effect to, and to aid in the
exercise and enforcement of the rights and remedies of the Lenders under, the
Loan Documents, including without limitation causing each lessor of real
property to the Company or any of its Restricted Subsidiaries to execute and
deliver to the Agent, prior to or upon the commencement of any tenancy, an
agreement in form and substance acceptable to the Lenders and the Agent duly
executed on behalf of such lessor waiving any distraint, lien and similar rights
with respect to any property subject to the Security Documents and agreeing to
permit the Lenders and the Agent to enter such premises in connection therewith.
The Company further agrees to take all necessary action to ensure that the Agent
and the Lenders may rely on the audited financial statements of the Company and
its Subsidiaries, including without limitation any necessary acknowledgments or
other consents from the Company's auditors as may be required under applicable
law.
(i) Year 2000. Take, and cause each of its Subsidiaries to
take, all such actions as are reasonably necessary to successfully implement the
Year 2000 Program and to assure that Year 2000 Issues will not have a Material
Adverse Effect. At the request of the Agent, the Company will provide a
description of the Year 2000 Program, together with any updates or progress
reports with respect thereto.
5.2 Negative Covenants. Until the termination of all Commitments and
Letters of Credit and thereafter until payment in full of the principal of and
accrued interest on the Notes and the payment and performance of all other
obligations of the Company under this Agreement, any Hedging Agreement with any
Lender and any other Loan Document, the Company agrees that, unless the Required
Lenders shall otherwise consent in writing, it shall not, and shall not permit
any of its Restricted Subsidiaries to:
(a) Net Worth. Permit or suffer the Consolidated Net Worth of
the Company and its Restricted Subsidiaries to be less than (i) 90% of the
Consolidated Net Worth of the Company and its Restricted Subsidiaries as of
December 31, 1998, provided that such Consolidated Net Worth shall be greater
than the amount thereof as of September 30, 1998, plus (ii) an amount equal to
50% of Consolidated net income of the Company and its Subsidiaries (without
reduction for a net loss) for the three month period ending March 31, 1999 and
for each fiscal year of the Company subsequent to its fiscal year ended March
31, 1999, plus (iii) an amount equal to 100% of the Net Cash Proceeds in
connection with the issuance or other sale by the Company of any of its Capital
Stock.
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(b) Total Debt to Adjusted EBITDA Ratio. Permit or suffer the
Total Debt to Adjusted EBITDA Ratio, to be greater than (i) 5.25 to 1.00 as of
the end of any fiscal quarter of the Company ending on or prior to September 30,
1999, (ii) 5.00 to 1.00 as of the end of any fiscal quarter of the Company
ending at any time from and including December 31, 1999 to and including
September 30, 2000, (iii) 4.75 to 1.0 as of the end of any fiscal quarter of the
Company and again at any time from and including December 31, 2000 to and
including September 30, 2001, (iv) 4.5 to 1.0 as of the end of any fiscal
quarter of the Company ending at any time from and including December 31, 2001
to and including September 30, 2002, (v) 4.25 to 1.0 as of the end of any fiscal
quarter of the Company ending at any time from and including December 31, 2002
to and including September 30, 2003, or (vi) 4.00 to 1.00 as of the end of any
fiscal quarter thereafter.
(c) Fixed Charge Coverage Ratio. Permit or suffer the Fixed
Charge Coverage Ratio to be less than (i) 1.00 to 1.00 as of the end of any
fiscal quarter of the Company ending on or before September 30, 2000, (ii) 1.05
to 1.00 as of the end of any fiscal quarter ending at any time from and
including December 31, 2000 to and including September 30, 2002, or (iii) 1.10
to 1.0 as of the end of any fiscal quarter thereafter.
(d) Interest Coverage Ratio. Permit or suffer the Interest
Coverage Ratio to be less than (i) 2.00 to 1.0 as of the end of any fiscal
quarter ending on or before September 30, 1999, (ii) 2.10 to 1.0 as of the end
of any fiscal quarter of the Company ending at any time from and including
December 31, 1999 to and including September 30, 2000, (iii) 2.25 to 1.00 as of
the end of any fiscal quarter of the Company ending at any time from and
including December 31, 2000 to and including September 30, 2001, (iv) 2.50 to
1.0 at any time from and including December 31, 2001 to and including September
30, 2002 or (v) 2.75 to 1.00 as of the end of any fiscal quarter thereafter.
(e) Indebtedness. Create, incur, assume or in any manner
become liable in respect of, or suffer to exist, any Indebtedness other than:
(i) The Advances and the other obligations and
liabilities pursuant to any of the Loan Documents;
(ii) The Indebtedness described in Schedule 5.2(e),
including Contingent Liabilities, provided that no increase in the principal
amount thereof (as such amount is reduced from time to time) shall be permitted
and no modifications of the terms thereof which would result in an earlier final
maturity date or decreased weighted average life thereof shall be permitted;
(iii) Indebtedness of the Company or any Restricted
Subsidiary owing to the Company or any Guarantor, provided that any such
Indebtedness owing by the Company shall be fully subordinate to all Advances and
all other obligations of the Company to the Agent and the Lenders, by written
agreement pursuant to terms and conditions satisfactory to the Agent and the
Required Lenders;
(iv) Indebtedness constituting purchase money debt or
Capital Leases in aggregate outstanding principal amount not exceeding
$15,000,000 at any time;
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(v) Subordinated Debt under the Senior Subordinated
Notes in aggregate principal amount not to exceed $200,000,000;
(vi) Other Subordinated Debt of the Company or any
Guarantor, provided that (A) after giving effect to such Subordinated Debt, the
Company is able to borrow at least $25,000,000 of additional Loans, (B) both
before and after giving effect to such Subordinated Debt, no Event of Default or
Default exists or would be caused thereby, (C) after giving effect to such
Subordinated Debt, the pro forma Total Debt to Adjusted EBITDA Ratio is at least
0.25 below the level required under Section 5.2(b), on a pro forma basis
acceptable to the Agent;
(vii) Tooling Indebtedness (in addition to the
Tooling Revolving Credit Advances) on terms and in amounts acceptable to the
Agent;
(viii) Hedging Agreements with any Lender or other
Person acceptable to the Agent, provided that no Hedging Agreement shall be
entered into for purposes of financial speculation;
(ix) Indebtedness of the Restricted Subsidiaries of
BMG in aggregate principal amount not to exceed $2,500,000 and secured by the
real property owned by such Subsidiaries as of the Effective Date, provided that
the terms of such Indebtedness are no more onerous on such Subsidiaries as the
terms of the Indebtedness of such Subsidiaries secured by such real property
that existed immediately prior to the Effective Date;
(x) Guarantees by the Company of the Indebtedness of
Unrestricted Subsidiaries to the extent permitted by, and subject to the terms
of, Section 5.2(l)(viii); and
(xi) Indebtedness solely in connection with the
factoring of receivables by Foreign Subsidiaries of the Company which are not
Canadian Subsidiaries, in each case in the ordinary course of business and on
customary terms and conditions; provided that such factoring arrangements are
acceptable to the Agent and the aggregate outstanding amount thereof does not
exceed the sum of the amount thereof outstanding as of the last day of the month
prior to the Effective Date plus $30,000,000.
Notwithstanding the above or anything else herein to the contrary, neither OASP
I, OASP II, the Dutch Holding Company nor the French Acquisition Company shall
have any Indebtedness other than a guaranty by OASP I and OASP II of the
Advances and other obligations owing pursuant to any Loan Document, a
subordinated guaranty by OASP I and OASP II in favor of the holders of the
obligations owing under the Senior Subordinated Notes and a guarantee by the
French Acquisition Company in the amount of 66,000,000 French Francs of the debt
of Cofimeta Defeasance Company incurred in connection with the closing of the
Cofimeta Acquisition as further described on Schedule 4.22, and the aggregate
amount of the Indebtedness of Cofimeta and its Subsidiaries shall be limited to
(x) existing Indebtedness of Cofimeta and its Subsidiaries described on Schedule
5.2(e) hereto, as reduced from time to time, (y) other Indebtedness allowed
under Section 5.2(e)(xi) above and (z) future unsecured and secured (to the
extent secured by assets acceptable to the Agent) Indebtedness for working
capital and capital expenditures, provided that the aggregate amount
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permitted pursuant to the foregoing clauses (y) and (z) shall not exceed
$30,000,000 in aggregate amount or such greater amount consented to in writing
by the Agent in its sole discretion.
(f) Liens. Create, incur or suffer to exist any Lien on any of
the assets, rights, revenues or property, real, personal or mixed, tangible or
intangible, whether now owned or hereafter acquired, of the Company or any of
its Restricted Subsidiaries, other than:
(i) Liens for taxes not delinquent or for taxes being
contested in good faith by appropriate proceedings and as to which adequate
financial reserves have been established on its books and records;
(ii) Liens (other than any Lien imposed by ERISA or
any Environmental Law) created and maintained in the ordinary course of business
which do not secure obligations material in the aggregate and which would not
have a Material Adverse Effect and which constitute (A) pledges or deposits
under worker's compensation laws, unemployment insurance laws or similar
legislation, (B) good faith deposits in connection with bids, tenders, contracts
or leases to which the Company or any of its Subsidiaries is a party for a
purpose other than borrowing money or obtaining credit, including rent security
deposits, (C) liens imposed by law, such as those of carriers, warehousemen and
mechanics, if payment of the obligation secured thereby is not yet due, (D)
Liens securing taxes, assessments or other governmental charges or levies not
yet subject to penalties for nonpayment, and (E) pledges or deposits to secure
public or statutory obligations of the Company or any of its Subsidiaries, or
surety, customs or appeal bonds to which the Company or any of its Subsidiaries
is a party;
(iii) Liens affecting real property which constitute
minor survey exceptions or defects or irregularities in title, minor
encumbrances, easements or reservations of, or rights of others for, rights of
way, sewers, electric lines, telegraph and telephone lines and other similar
purposes, or zoning or other restrictions as to the use of such real property,
provided that all of the foregoing, in the aggregate, do not at any time
materially detract from the value of said properties or materially impair their
use in the operation of the businesses of the Company or any of its
Subsidiaries;
(iv) Liens created pursuant to the Security Documents
and Liens expressly permitted by the Security Documents;
(v) Each Lien described in Schedule 5.2(f) hereto may
be suffered to exist upon the same terms as those existing on the date hereof,
but no increase in the principal amount thereof shall be permitted;
(vi) Any Lien created to secure payment of a portion
of the purchase price of, or existing at the time of acquisition of, any
tangible fixed asset acquired by the Company or any of its Restricted
Subsidiaries may be created or suffered to exist upon such fixed asset if the
outstanding principal amount of the Indebtedness secured by such Lien does not
at any time exceed 100% of the purchase price paid by the Company or such
Restricted Subsidiary for such fixed asset and the aggregate principal amount of
all Indebtedness secured by such Liens does not exceed the amount permitted
under Section 5.2(e)(iv), provided that such Lien does not encumber any other
asset at any time owned by the Company
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or such Restricted Subsidiary, and provided, further, that not more than one
such Lien shall encumber such fixed asset at any one time and neither OASP I,
OASP II, the Dutch Holding Company nor the French Acquisition Company shall
incur or permit or suffer any such Lien to exist;
(vii) Liens in favor of the Company or any Guarantor
as security for Indebtedness of any Subsidiary to the Company or another
Restricted Subsidiary, provided that any such Liens are subordinated to the
Liens in favor of the Agent on terms satisfactory to the Agent;
(viii) The interest or title of a lessor under any
operating lease otherwise permitted under this Agreement with respect to the
property subject to such lease to the extent performance of the obligations of
the Company or its Restricted Subsidiary thereunder are not delinquent;
(ix) Liens on the real property owned by Restricted
Subsidiaries of BMG as of the Effective Date securing the Indebtedness permitted
by Section 5.2(e)(ix); and
(x) Liens on accounts receivable of Foreign
Subsidiaries which are not Canadian Subsidiaries securing the Indebtedness
permitted by Section 5.2(e)(xi) and other Liens on the assets of Cofimeta and
its Subsidiaries to the extent permitted by the proviso to Section 5.2(e).
(g) Merger; Acquisitions; Etc. Purchase or otherwise acquire,
whether in one or a series of transactions, directly or indirectly, by merger or
otherwise, all or a substantial portion of the business assets, rights, revenues
or property, real, personal or mixed, tangible or intangible, of any Person, or
all or a substantial portion of the Capital Stock of any other Person (an
"Acquisition"); nor merge or consolidate or amalgamate with any other Person or
take any other action having a similar effect; provided, however, that this
Section 5.2(g) shall not prohibit any merger or acquisition if (i) such merger
involves the Company, the Company shall be the surviving or continuing
corporation thereof, (ii) immediately before and after giving effect to such
merger or acquisition, no Default or Event of Default shall exist or shall have
occurred and be continuing and the representations and warranties contained in
Article IV and in the other Loan Documents shall be true and correct on and as
of the date thereof (both before and after such merger or acquisition is
consummated) as if made on the date such merger or acquisition is consummated,
(iii) at least 10 Business Days' prior to the consummation of such merger or
acquisition, the Company shall have provided to the Lenders an opinion of
counsel and a certificate of the Chief Financial Officer or Treasurer of the
Company (attaching pro forma computations acceptable to the Agent to demonstrate
compliance with all financial covenants hereunder), each stating that such
merger or acquisition complies with this Section 5.2(g), all laws and
regulations and that any other conditions under this Agreement relating to such
transaction have been satisfied, and such certificate shall contain such other
information and certifications as requested by the Agent and be in form and
substance satisfactory to the Agent, (iv) at least 10 Business Days' prior to
the consummation of such merger or acquisition, the Company shall have delivered
all acquisition documents and other agreements and documents relating to such
merger or acquisition, and the Agent shall have completed a satisfactory review
thereof and completed such other due diligence satisfactory to the Agent,
provided that if such acquisition is being done by an Unrestricted Subsidiary or
such merger involves Unrestricted Subsidiaries only, then the requirements of
this clause (iv) will be satisfied if the Company provides the Lenders with a
certificate representing that neither the Company nor any Restricted Subsidiary
shall be liable, directly or indirectly, for any of the Indebtedness or other
liabilities of such
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Unrestricted Subsidiary or for any Contingent Liabilities with respect to any
such Unrestricted Subsidiary except as permitted by Section 5.2(e), (v)
immediately before and after giving effect to such merger or acquisition, the
pro forma Total Debt to Adjusted EBITDA Ratio is less than or equal to the
lesser of 4.5 to 1.0 or 0.25 below the level required under Section 5.2(b), on a
pro forma basis acceptable to the Agent, (vi) both before and after giving
effect to such merger and acquisition, the Company is able to borrow at least
$25,000,000 of additional Loans on a pro forma basis acceptable to the Agent,
(vii) the Company shall, at least 10 Business Days prior to the consummation of
merger or acquisition, provide such other certificates and documents as
requested by the Agent, in form and substance satisfactory to the Agent, (viii)
the target of such merger or acquisition is in the same line of business as the
Company, (ix) the target of such merger or acquisition is located in the United
States of America or Canada, (x) the Board of Directors (or similar governing
body) and the management of the target of such merger or acquisition has
approved such merger or acquisition and (xi) the aggregate consideration paid or
payable in connection with all Acquisitions permitted by this proviso (excluding
the Cofimeta Acquisition and the OPI Acquisition and amounts paid or payable
solely by Unrestricted Subsidiaries (other than OPI or the Mexican Subsidiaries)
and investments and other transactions permitted by Section 5.2(l)(viii)),
including without limitation any Indebtedness assumed in connection therewith or
guarantees or other liabilities incurred in connection therewith, shall not
exceed $75,000,000. Notwithstanding the foregoing, (x) the requirements listed
in clauses (ii), (iii), (iv), (v), (vi), (vii) and (ix) of this Section 5.2(g)
shall not be required to be satisfied in connection with any acquisition done
solely by an Unrestricted Subsidiary, provided that the terms of Section 5.2(e),
Section 5.2(l) and all other terms and provisions hereof shall be applicable,
(y) the requirements listed in clauses (v) and (vi) shall not apply to the
Cofimeta Acquisition or the OPI Acquisition if the OPI Acquisition occurs on or
before January 31, 2000, the aggregate consideration paid or payable in
connection with the OPI Acquisition, including without limitation any
Indebtedness assumed in connection therewith or guarantees or other liabilities
incurred in connection therewith, will not exceed the Dollar Equivalent of
$12,000,000 and provided that all other terms and provisions hereof shall be
applicable and (z) neither OPI nor any Mexican Subsidiary will make, directly or
indirectly, any Acquisition or otherwise assist or be involved in any
Acquisition.
(h) Disposition of Assets; Etc. Sell, lease, license,
transfer, assign or otherwise dispose of all or any portion of its business,
assets, rights, revenues or property, real, personal or mixed, tangible or
intangible, whether in one or a series of transactions, other than inventory
sold in the ordinary course of business upon customary credit terms, the sale of
accounts receivable in connection with the factoring of accounts receivable in
the ordinary course of business of Foreign Subsidiaries which are not Canadian
Subsidiaries on customary terms and conditions and otherwise allowed pursuant
hereto and sales of scrap or obsolete material or equipment which are not
material in the aggregate, and shall not permit or suffer any Restricted
Subsidiary, Mexican Subsidiary or OPI to do any of the foregoing; provided,
however, that this Section 5.2(h) shall not prohibit any such sale, lease,
license, transfer, assignment or other disposition if (i) the consolidated book
value (disregarding any write-downs of such book value other than ordinary
depreciation and amortization) of all of the business, assets, rights, revenues
and property of the Company and its Restricted Subsidiaries disposed of in any
consecutive twelve-month period shall be less than 10% of the consolidated book
value of the assets of the Company and its Restricted Subsidiaries as of the
beginning of such twelve month period and the aggregate book value of all assets
disposed of after the Effective Date shall be less than 25% of the consolidated
book value of assets of the Company and its Restricted Subsidiaries at the time
of any such disposition and if, immediately after such transaction, no
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Default or Event of Default shall exist or shall have occurred and be
continuing, (ii) sales as to which proceeds are used within 180 days (or 360
days if such sale involves the Planned Asset Sales) to purchase or construct
assets of at least equivalent value to those sold, (iii) transfers of assets
from any Subsidiary to the Company or a Guarantor which is a Wholly Owned
Subsidiary, (iv) any transfer of assets to the Mexican Subsidiaries to the
extent permitted by Section 5.2(l)(v), and (v) any transfer of all of the
Capital Stock of the French Acquisition Company owned by OASP I and OASP II to
the Dutch Holding Company in exchange for 100% of the Capital Stock of the Dutch
Holding Company and otherwise in conformance with all of the terms of this
Agreement; provided, however, in the case of any of the foregoing permitted
sales, leases, licenses, transfers, assignments or other dispositions under this
Section 5.2(h) (an "Asset Sale") the Company shall not, and shall not permit any
of its Restricted Subsidiaries to, consummate an Asset Sale, other than pursuant
to clauses (iii), (iv) or (v) of this Section 5.2(h), unless (A) the Company (or
the Subsidiary, as the case may be) receives consideration at the time of such
Asset Sale at least equal to the fair market value (evidenced by a resolution of
the Board of Directors set forth in an officer's certificate delivered to the
Agent) of the assets and (B) at least 75% of the consideration therefor received
by the Company or such Subsidiary is in the form of cash, provided that cash
equivalents and the assumption of Indebtedness of the Company or any Guarantor
and the unconditional release of the Company or such Guarantor from such
Indebtedness in connection with such Asset Sale, in each case acceptable to the
Agent, shall be considered cash for purposes of this Section 5.2(h); provided
that the amount of (x) any liabilities (as shown on the Company's or such
Subsidiary's most recent balance sheet), of the Company or any Subsidiary that
are assumed by the transferee of any such assets such that the Company or such
Subsidiary have no further liability and (y) any securities, notes or other
obligations received by the Company or any such Subsidiary from such transferee
that are converted by the Company or such Subsidiary into cash (to the extent of
the cash received), shall be deemed to be cash for purposes of this provision
and the definition of Net Cash Proceeds, and the Agent promptly shall obtain a
first priority security interest in any non cash consideration for any Asset
Sale.
(i) Nature of Business. Make any material change in the nature
of its business from that engaged in on the date of this Agreement or engage in
any other businesses other than those in which it is engaged on the date of this
Agreement.
(j) Dividends and Other Restricted Payments. Make, pay,
declare or authorize any dividend, payment or other distribution in respect of
any class of its Capital Stock or any dividend, payment or distribution in
connection with the redemption, purchase, retirement or other acquisition,
directly or indirectly, of any Capital Stock other than such dividends, payments
or other distributions (i) to the extent payable solely in shares of common
stock of the Company, (ii) to the extent payable to the Company by a Restricted
Subsidiary of the Company, (iii) dividends and distributions on Preferred Stock
to the extent permitted under Section 5.2(s), (iv) if no Event of Default or
Default exists or would be caused thereby, an aggregate amount not to exceed
$1,000,000 made after the Effective Date, (v) which in aggregate amount do not
exceed 25% of the Net Income accrued during fiscal quarters ending after the
Effective Date for which the Total Debt to Adjusted EBITDA Ratio was not greater
than 3.0 to 1.0, provided that both before and after the making or declaration
of such dividend, payment or other distribution (A) the pro forma Total Debt to
Adjusted EBITDA Ratio is not greater than 3.0 to 1.0, on a pro forma basis
acceptable to the Agent, (B) the Company is able to borrow at least $25,000,000
of additional Loans on a pro forma basis acceptable to the Agent and (C) no
Default or Event of Default shall have occurred or be caused thereby, and (vi)
if no
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Event of Default or Default exists or would be caused thereby, an aggregate
amount not to exceed $2,500,000 for all employees made after the Effective Date
for the purpose of redeeming the Capital Stock of the Company owned by any
employees of the Company, other than a Permitted Holder, upon the termination of
the employment by the Company or any of its Restricted Subsidiaries of such
employee, provided that (A) any amounts used to redeem such Capital Stock under
this clause (vi) shall first reduce the amount allowed or accumulated under
Section 5.2(j)(iv) until the amount allowed thereunder is exhausted and then
shall reduce the amount allowed under Section 5.2(j)(v) and (B) the amounts
payable for the redemption of such Capital Stock will not be paid any sooner or
in any greater amount than contractually required. The Company will not, and
will not permit any of its Restricted Subsidiaries, to issue any Preferred Stock
or any Disqualified Stock, other than (1) any Preferred Stock which does not
require any dividends, payments, redemptions or other distributions of any kind
until at least one year after the later of the Revolving Credit Termination
Date, the Tooling Revolving Credit Termination Date or the Maturity Date, (2)
the existing Lobdell Preferred Stock and (3) any other Preferred Stock or
Disqualified Stock which meets all of the requirements for the issuance by the
Company of Subordinated Debt (i.e. all payments and other obligations thereunder
are expressly subordinate and junior in right and priority of payment to the
Advances and other Indebtedness of such Person to the Lenders in manner and by
agreement satisfactory in form and substance to the Agent and such Preferred
Stock or Disqualified Stock is subject to such other terms and provisions,
including without limitation maturities, covenants, defaults, rates and fees,
acceptable to the Agent), and such Preferred Stock and Disqualified Stock
allowed under this clause (3) shall be treated as if it were Subordinated Debt
for all purposes of this Agreement and is defined herein as "Permitted
Disqualified Stock".
(k) Capital Expenditures. Acquire or contract to acquire any
fixed asset or make any other Capital Expenditure if the aggregate purchase
price and other acquisition costs of all such fixed assets acquired and other
Capital Expenditures made by the Company or any of its Restricted Subsidiaries
during any fiscal year of the Company would exceed, on a consolidated basis, an
amount equal to $37,500,000 for the fiscal year of the Company ending March 31,
1999, $47,000,000 for the fiscal year of the Company ending March 31, 2000, or
$50,000,000 for any fiscal year thereafter, plus the sum of (i) 20% of the net
book value, or, if appraisals of such fixed assets have been obtained, 15% of
the orderly liquidation value of such fixed assets which consist of equipment
and of the fair market value of real property which consists of real estate (in
each case, as determined by an appraisal acceptable to the Agent) acquired in an
Acquisition (other than the Cofimeta Acquisition) permitted hereunder by the
Company and its Restricted Subsidiaries, to be added as of the effective date of
such Acquisition (and on a pro rata basis for the fiscal year in which such
Acquisition occurs), plus (ii) the amount of Capital Expenditures allowed for
the previous fiscal year (with giving effect to any increase in the amount
thereof caused by this clause (ii), commencing with the fiscal year ending March
31, 1999) minus the amount of actual Capital Expenditures for the previous
fiscal year. For purposes of this Section 5.2(k), the Permitted Mexican
Manufacturing Facility Expenditures shall not be considered Capital Expenditures
or an Acquisition; provided that the Company represents and agrees that (x) the
aggregate Permitted Mexican Manufacturing Facility Expenditures will completely
acquire, construct and equip the Mexican Manufacturing Facility and will not
exceed $65,000,000, (y) Permitted Mexican Manufacturing Facility Expenditures
for the acquisition of machinery and equipment shall be limited to the equipment
described in writing by the Company to the Agent prior to the Effective Date and
(z) neither the Company nor any of its Subsidiaries will transfer any assets of
any kind to the Mexican Subsidiaries except to the extent described in the
foregoing clauses (x) and
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(y) plus the transfer of other fixed assets to the Mexican Subsidiaries provided
that the aggregate fair market value of all such other fixed assets transferred
to the Mexican Subsidiaries, does not exceed $20,000,000.
(l) Loans, Advances and Investments. Make any loan or advance,
including without limitation any transfer, of any of its funds or property or
make any other extension of credit to, or increase its investment or acquire any
additional interest whatsoever in, any Person, or enter into any joint venture
or similar arrangement with any other Person, or permit any Mexican Subsidiary
or OPI to do any of the foregoing, other than each of the following if no Event
of Default exists:
(i) loans and advances to Guarantors which are evidenced by promissory
notes payable on demand and in form and substance satisfactory to the Agent and
which are pledged to the Agent for the benefit of the Lenders and investments in
Guarantors;
(ii) loans and advances to, and investments in, the French Acquisition
Company to be made on or within three Business Days of the Effective Date to
consummate the Cofimeta Acquisition in an aggregate amount not to exceed
$72,000,000 and as described in the Cofimeta Acquisition Documents, provided
that if any of the foregoing are loans or advances they shall be evidenced by a
promissory note payable on demand and in form and substance satisfactory to the
Agent and pledged on a first priority basis and pursuant to documents acceptable
to the Agent for the benefit of itself and the Lenders;
(iii) additional loans and advances to, and investments in, the French
Acquisition Company, Cofimeta and/or OPI in an aggregate amount not to exceed
$10,000,000, provided that if any of the foregoing is a loan or advance it shall
be evidenced by a promissory note payable on demand and in form and substance
satisfactory to the Agent and pledged, on a first priority basis and pursuant to
documents acceptable to the Agent, to the Agent for the benefit of itself and
the Lenders;
(iv) loans and advances in an aggregate amount not to exceed
$12,000,000 to a wholly owned Subsidiary which is a Restricted Subsidiary,
whether currently existing or to be formed in the future, to consummate the OPI
Acquisition, provided that if any such loan or advance is to a Subsidiary which
is not a Guarantor such Subsidiary and each Subsidiary which is not a Guarantor
owning such Subsidiary, directly or indirectly, shall not incur or maintain any
Indebtedness (except as otherwise permitted by this Agreement if such Subsidiary
is the French Acquisition Company or Cofimeta) and at least 65% of the Capital
Stock of the Subsidiary owning OPI, directly or indirectly, which is owned
directly by a Guarantor or the Company shall be pledged to the Agent, for the
benefit of itself and the Lenders on a first priority basis, by such Guarantor
or the Company, as the case may be;
(v) (A) loans and advances or transfers (with the value of such
transfer to be based upon the fair market value of the assets transferred) to
the Mexican Subsidiaries for the purpose of making the Permitted Mexican
Manufacturing Facility Expenditures, provided that (x) the Permitted Mexican
Manufacturing Facility Expenditures are made in accordance with the terms of
this Agreement, and (y) such loans and advances are evidenced by promissory
notes payable on demand and in form and substance satisfactory to the Agent and
which are pledged, on a first priority basis and pursuant to documents
acceptable to the Agent, to the Agent for the benefit of itself and the Lenders,
and (B) transfers of fixed
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assets by the Company and its Subsidiaries provided that the aggregate fair
market value of such fixed assets does not exceed $20,000,000;
(vi) advances of Tooling Revolving Credit Loans borrowed by the Company
to Cofimeta, OPI or the Mexican Subsidiaries in aggregate outstanding amount not
to exceed $35,000,000 for the sole purpose of financing Tooling Contracts of
Cofimeta, OPI or the Mexican Subsidiaries, provided that such Indebtedness of
Cofimeta, OPI or the Mexican Subsidiaries to the Company would constitute
Tooling Indebtedness, no assets relating to such Tooling Contracts are included
in the Tooling Revolving Credit Borrowing Base or the Borrowing Base and such
advances are evidenced by promissory notes payable on demand and in form and
substance satisfactory to the Agent and which are pledged, on a first priority
basis and pursuant to documents acceptable to the Agent, to the Agent for the
benefit of itself and the Lenders;
(vii) transfer of all of the Capital Stock of the French Acquisition
Company owned by OASP I and OASP II to the Dutch Holding Company in exchange for
100% of the Capital Stock of the Dutch Holding Company, provided that (A) OASP I
shall grant to the Agent for the benefit of itself and the Lenders a first
priority enforceable pledge on 65% of the Capital Stock of the Dutch Holding
Company, (B) the pledge of 65% of the Capital Stock of the French Acquisition
Company shall be released and (C) the Company shall deliver such documents and
opinions in connection therewith as requested by the Agent and all other terms
of this Agreement relating to the Dutch Holding Company and its formation are
satisfied; provided that it is acknowledged that if the Dutch Holding Company
owns any Unrestricted Subsidiary formed or acquired after the Effective Date
(other than OPI) the Agent and the Company shall mutually agree on a method by
which the pledge of the Dutch Holding Company is non recourse to such
Unrestricted Subsidiary;
(viii) other loans and advances to, and investments in and guarantees
by the Company (valued at the maximum amount that could be payable thereunder,
and provided that all such guarantees shall be collection guarantees, not
payment guarantees, and be on terms and conditions satisfactory to the Agent),
of the Indebtedness of Unrestricted Subsidiaries, Restricted Subsidiaries which
are not Wholly Owned Subsidiaries or joint ventures which do not exceed
$20,000,000 for all of the foregoing in aggregate outstanding amount (with the
outstanding amount thereof being deemed decreased by any cash repayments of such
loans or advances or cash dividends paid to the Company or any Restricted
Subsidiary with respect to any such investments), provided that (A) if such
transaction involves a loan or advance, such loans and advances are evidenced by
promissory notes payable on demand and in form and substance satisfactory to the
Agent and which are pledged, on a first priority basis and pursuant to documents
acceptable to the Agent, to the Agent for the benefit of itself and the Lenders,
(B) both before and after giving effect to such loan, advance or investment, the
pro forma Total Debt to Adjusted EBITDA Ratio is less than or equal to the
lesser of 4.50 to 1.0 or 0.25 below the level required under Section 5.2(b), on
a pro forma basis acceptable to the Agent, (C) both before and after giving
effect to such loan or advance the Company is able to borrow at least
$25,000,000 of additional Loans on a pro forma basis acceptable to the Agent,
and (D) no Event of Default or Default exists or would be caused thereby and the
Company provides such certificates and legal opinions as requested by the Agent
in connection therewith; and
(ix) loans, advances, and investments described on Schedule 5.2(l)
hereto, but no increase in the amount thereof as such loans, advances and
investments may be reduced from time to time.
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(m) Transactions with Affiliates. Other than as permitted by
Section 5.2(u), enter into or permit to exist any transaction or series of
related transactions (including without limitation the purchase, sale, lease or
exchange of any property, employee compensation arrangements or rendering of any
service) with any Affiliate of the Company (an "Affiliate Transaction") unless
the terms of such transaction (i) are no less favorable to the Company or such
Restricted Subsidiary than those that could be obtained at the time of such
transaction in a comparable transaction in arm's-length dealings with a Person
who is not such an Affiliate, (ii) if such Affiliate Transaction (or series of
related Affiliated Transactions) involves aggregate payments in an amount in
excess of $1,000,000 in any one year, (A) are set forth in writing, (B) comply
with clause (i) of this Section 5.2(m) and (C) have been approved by a majority
of disinterested members of the Board of Directors of the Company, and (iii) if
such Affiliate Transaction (or series of related Affiliate Transactions)
involves aggregate payments in an amount in excess of $5,000,000 in any one
year, (A) comply with clause (ii) and (B) have been determined by a nationally
recognized investment banking firm to be fair, from a financial standpoint, to
the Company and its Restricted Subsidiaries.
(n) Sale and Leaseback Transactions. Become or remain liable
in any way, whether directly or by assignment or as a guarantor or other
contingent obligor, for the obligations of the lessee or user under any lease or
contract for the use of any real or personal property if such property is owned
on the date of this Agreement or thereafter acquired by the Company or any of
its Subsidiaries and has been or is to be sold or transferred to any other
Person and was, is or will be used by the Company or any such Subsidiary for
substantially the same purpose as such property was used by the Company or such
Subsidiary prior to such sale or transfer, other than the manufacturing facility
of the Company and its Subsidiaries to be located in Mexico and described to the
Agent prior to the Effective Date, provided that the lease in connection with
such sale and leaseback shall be classified as an operating lease under
Generally Accepted Accounting Principles and the other terms and provisions of
such sale leaseback are acceptable to the Agent.
(o) Negative Pledge Limitation. Enter into any agreement with
any Person, other than the Lenders or the Agent pursuant hereto and other than
the existing provisions without amendment contained in the Lobdell Preferred
Stock Documents and in the agreements listed on Schedule 5.2(o), which prohibits
or limits the ability of the Company or any Restricted Subsidiary to create,
incur, assume or suffer to exist any Lien upon any of its assets, rights,
revenues or property, real, personal or mixed, tangible or intangible, whether
now owned or hereafter acquired.
(p) FSC Commissions. Pay or become obligated for the payment
during any fiscal year of the Company, commissions to all related wholly owned
foreign sales corporations in excess of an amount acceptable to the Agent in
aggregate amount plus reimbursement of the reasonable administrative expenses of
such wholly owned foreign sales corporations.
(q) Inconsistent Agreements. Enter into any agreement
containing any provision which would be violated or breached by this Agreement
or any of the transactions contemplated hereby or by performance by the Company
or any of its Subsidiaries of its obligations in connection therewith.
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(r) Subsidiary Dividends. Other than those restrictions
existing as of the Effective Date or described in Schedule 5.2(o) without giving
effect to any amendment thereof on or after the Effective Date, permit any of
its Restricted Subsidiaries, directly or indirectly, to create or otherwise
cause or suffer to exist or become effective any consensual encumbrance or
restriction which by its terms materially restricts the ability of any such
Subsidiary to (i) pay dividends or make any other distributions on such
Restricted Subsidiary's Capital Stock, (ii) pay any Indebtedness owed to the
Company or any of its other Restricted Subsidiaries, (iii) make any loans or
advances to the Company or any of such other Restricted Subsidiaries or (iv)
transfer any material portion of its assets to the Company or any of such other
Restricted Subsidiaries.
(s) Preferred Stock. Make any amendment or modification to any
Lobdell Preferred Stock Document, other than the adjustment in the price of the
Lobdell Preferred Stock made prior to the Effective Date based on post closing
adjustments and which do not result in any additional obligations of Lobdell or
of the Company or any of its Restricted Subsidiaries, or enter into any other
agreement or document relating thereto other than the documents listed on
Schedule 4.18 hereto or make, pay, declare or authorize any dividend, payment or
other distribution with respect to any Preferred Stock or any dividend, payment
or distribution in connection with the redemption, purchase, retirement or other
acquisition, directly or indirectly, of any Preferred Stock other than as
required under the Lobdell Preferred Stock Documents listed on Schedule 4.18
hereto, provided that no dividend, payment or other distribution in respect to
the Preferred Stock or dividend, payment or distribution in connection with the
redemption, purchase, retirement or other acquisition, directly or indirectly,
of any Preferred Stock, including those required under the Lobdell Preferred
Stock Documents, will be made if any Event of Default exists under Section
6.1(a) or would be caused thereby.
(t) Other Indebtedness and Agreements. Make any amendment or
modification to any indenture, note or other agreement evidencing or governing
any Indebtedness (other than Indebtedness hereunder of the Company or any of its
Subsidiaries) or to any Tax Sharing Agreement, or directly or indirectly
voluntarily prepay, defease or in substance defease, purchase, redeem, retire or
otherwise acquire any such Indebtedness, (except, when no Default or Event of
Default exists, for the prepayment of Subordinated Debt solely from the Net Cash
Proceeds received by the Company from the primary sale or sales of shares of
common stock (which may not be Disqualified Stock) of the Company pursuant to
any one or more public offerings thereof), or designate any Indebtedness (other
than the Indebtedness under the Loan Documents and under Hedging Agreements with
Lenders) as "Designated Senior Debt" under the Senior Subordinated Debt
Documents.
(u) Management Fees. Pay any management, consulting or similar
fees or amounts to any of its Affiliates other than (i) to the Company or a
Guarantor and (ii) as described on Schedule 5.2(u), without giving effect to any
amendment or modification of the agreement described on Schedule 5.2(u),
provided that no such management, consulting or similar fees or amounts (other
than out of pocket expenses) shall be paid pursuant to this clause (ii) if any
Event of Default or Default exists or would be caused thereby, and Oxford
Investment has acknowledged and agreed that no such management, consulting or
similar fees or amounts (other than out of pocket expenses) will be so paid.
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(v) Restricted Subsidiaries. Except with the consent of the
Agent, which consent will not be unreasonably withheld, permit or suffer any
Restricted Subsidiary to not be a Wholly Owned Subsidiary, other than Laserweld
International, L.L.C. ("Laserweld") or Creative, provided that no loans or
advances to, investments in or sales or other transfers of assets to Creative or
Laserweld have been or will be made by the Company or any Restricted Subsidiary
at any time on or after the Effective Date, and the Company represents that
neither Laserweld nor Creative is operating as of the Effective Date.
5.3 Additional Covenants.
(a) Other Terms. If at any time any Borrower or Guarantor
shall enter into or be a party to any instrument or agreement with respect to
any Indebtedness which in the aggregate, together with any related Indebtedness,
exceeds $500,000, including all such instruments or agreements in existence as
of the date hereof and all such instruments or agreements entered into after the
date hereof, relating to or amending any terms or conditions applicable to any
of such Indebtedness which includes covenants, terms, conditions or defaults not
substantially provided for in this Agreement or more favorable to the lender or
lenders thereunder than those provided for in this Agreement, then the Company
shall promptly so advise the Agent and the Lenders. Thereupon, if the Agent
shall request, upon notice to the Company, the Agent and the Lenders shall enter
into an amendment to this Agreement or an additional agreement (as the Agent may
request), providing for substantially the same covenants, terms, conditions and
defaults as those provided for in such instrument or agreement to the extent
required and as may be selected by the Agent. In addition to the foregoing, any
covenants or defaults or similar provisions (which include without limitation
any provisions requiring any mandatory prepayments or defeasance under the
Senior Subordinated Debt Documents) not substantially provided for in this
Agreement or more favorable to the holders of Subordinated Debt issued in
connection therewith are hereby incorporated by reference into this Agreement to
the same extent as if set forth fully herein, and no subsequent amendment,
waiver, termination or modification thereof shall affect any such covenants,
terms, conditions or defaults as incorporated herein.
(b) Restricted and Unrestricted Subsidiaries. Neither the
Company nor any Restricted Subsidiary of the Company shall be liable at any
time, directly or indirectly, for any of the Indebtedness or other liabilities
of any such Unrestricted Subsidiary or for any Contingent Liabilities with
respect to any Unrestricted Subsidiary except as permitted by Section 5.2(e). No
Restricted Subsidiary may be designated as an Unrestricted Subsidiary at any
time without the prior written approval of the Agent and the Required Lenders.
Any Unrestricted Subsidiary may be designated as a Restricted Subsidiary by the
Company at any time provided that such designation is approved by the Agent.
Neither OPI, any Mexican Subsidiary, the Dutch Holding Company, the French
Acquisition Company, Cofimeta nor any of their Subsidiaries is or will be a
guarantor or otherwise directly or contingently liable for any of the
Indebtedness or other obligations pursuant to the Senior Subordinated Debt
Documents, and the Borrowers are and will be at all times in compliance with all
terms and conditions under the Senior Subordinated Debt Documents.
ARTICLE VI.
DEFAULT
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6.1 Events of Default. The occurrence of any one of the following
events or conditions shall be deemed an "Event of Default" hereunder unless
waived pursuant to Section 8.1:
(a) Nonpayment. The Company shall fail to pay when due,
whether at stated maturity, by acceleration or otherwise, any principal on the
Loans or any reimbursement obligation under Section 3.3 (whether by deemed
disbursement of a Revolving Credit Borrowing or otherwise), or, within five days
after becoming due, any interest on the Loans or any fees or any other amount
payable hereunder; or
(b) Misrepresentation. Any representation or warranty made by
the Company or any of the Guarantors in Article IV hereof, or in any Security
Document, or any other certificate, report, financial statement or other
document furnished by or on behalf of the Company or any of the Guarantors in
connection with this Agreement, shall prove to have been incorrect in any
material respect when made or deemed made; or
(c) Certain Covenants. The Company shall fail to perform or
observe any term, covenant or agreement contained in Article V hereof; or
(d) Other Defaults. Any default which remains uncured beyond
any applicable cure period shall exist under any material purchase or tooling
contract that could have a Material Adverse Effect, or the Company or any
Guarantor shall fail to perform or observe any other term, covenant or agreement
contained in this Agreement or in any other Loan Document, and any such failure
shall remain unremedied for 15 calendar days after written notice thereof shall
have been given to the Company by the Agent; or
(e) Cross Default. (i) Failure of the Company or any of its
Restricted Subsidiaries to pay when due any Indebtedness aggregating in excess
of $3,000,000 ("Material Indebtedness") or the default by the Company or any of
its Restricted Subsidiaries in the observance or performance (beyond the
applicable grace period with respect thereto, if any) of any term, provision or
condition contained in any agreement under which any such Material Indebtedness
was created or is governed, or any other event shall occur or condition exist,
the effect of which default or event is to cause, or to permit the holder or
holders of such Material Indebtedness to cause, such Material Indebtedness to
become due prior to its stated maturity; or any Material Indebtedness of the
Company or any of its Restricted Subsidiaries shall be declared to be due and
payable or required to be prepaid or repurchased (other than by a regularly
scheduled payment) prior to the stated maturity thereof; or (ii) Failure of any
Mexican Subsidiary (as long as they are Unrestricted Subsidiaries, it being
acknowledged that they shall be covered by clause (i) of this Section 6.1(e)
when they are Restricted Subsidiaries) to pay when due any Indebtedness
aggregating in excess of $5,000,000 ("Mexican Material Indebtedness") or the
default by any Mexican Subsidiary (as long as they are Unrestricted
Subsidiaries, it being acknowledged that they shall be covered by clause (i) of
this Section 6.1(e) when they are Restricted Subsidiaries) in the observance or
performance (beyond the applicable grace period with respect thereto, if any) of
any term, provision or condition contained in any agreement under which any such
Mexican Material Indebtedness was created or is governed, or any other event
shall occur or condition exist, the effect of which default or event is to
cause, or to permit the holder or holders of such Mexican Material Indebtedness
to cause, such Mexican Material
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Indebtedness to become due prior to its stated maturity; or any Mexican Material
Indebtedness of any Mexican Subsidiary (as long as they are Unrestricted
Subsidiaries, it being acknowledged that they shall be covered by clause (i) of
this Section 6.1(e) when they are Restricted Subsidiaries) shall be declared to
be due and payable or required to be prepaid or repurchased (other than by a
regularly scheduled payment) prior to the stated maturity thereof; or
(f) Judgments. One or more judgments or orders for the payment
of money in an aggregate amount of $4,000,000 shall be rendered against the
Company or any of its Restricted Subsidiaries, or any other judgment or order
(whether or not for the payment of money) shall be rendered against or shall
affect the Company or any of its Restricted Subsidiaries which causes or could
cause a Material Adverse Effect, and either (i) such judgment or order shall
have remained unsatisfied and the Company or such Restricted Subsidiary shall
not have taken action necessary to stay enforcement thereof by reason of pending
appeal or otherwise, prior to the expiration of the applicable period of
limitations for taking such action or, if such action shall have been taken, a
final order denying such stay shall have been rendered, or (ii) enforcement
proceedings shall have been commenced by any creditor upon any such judgment or
order; or
(g) ERISA. The occurrence of a Reportable Event that results
in or could result in liability of the Company or any of its ERISA Affiliates to
the PBGC or to any Plan and such Reportable Event is not corrected within 30
days after the occurrence thereof; or the occurrence of any Reportable Event
which could constitute grounds for termination of any Plan of the Company or any
of its ERISA Affiliates by the PBGC or for the appointment by the appropriate
United States District Court of a trustee to administer any such Plan and such
Reportable Event is not corrected within 30 days after the occurrence thereof;
or the Company or any of its ERISA Affiliates shall fail to pay when due any
liability to the PBGC or to a Plan; or any Person engages in a Prohibited
Transaction with respect to any Plan which results in or could result in
liability of the Company, any of its ERISA Affiliates, any Plan of the Company
or any of its ERISA Affiliates or any fiduciary of any such Plan; or the PBGC
shall have instituted proceedings to terminate, or to cause a trustee to be
appointed to administer, any Plan of the Company or any of its ERISA Affiliates;
or failure by the Company or any of their ERISA Affiliates to make a required
installment or other payment to any Plan within the meaning of Section 302(f) of
ERISA or Section 412(n) of the Code that results in or could result in liability
of the Company or any of their ERISA Affiliates to the PBGC or any Plan; or the
withdrawal of the Company or any of its ERISA Affiliates from a Plan during a
plan year in which it was a "substantial employer" as defined in Section
4001(9a)(2) of ERISA; or the Company or any of its ERISA Affiliates becomes an
employer with respect to any Multiemployer Plan without the prior written
consent of the Agent, and in each case above, such event or condition, together
with all other events or conditions, if any, could subject the Company and its
Restricted Subsidiaries to any tax, penalties or other liability which in the
aggregate may exceed $4,000,000; or
(h) Insolvency, Etc. The Company or any of its Restricted
Subsidiaries or Mexican Subsidiaries shall be dissolved or liquidated (or any
judgment, order or decree therefor shall be entered), or shall generally not pay
its debts as they become due, or shall admit in writing its inability to pay its
debts generally, or shall make a general assignment for the benefit of
creditors, or shall institute, or there shall be instituted against the Company
or any of its Restricted Subsidiaries or Mexican Subsidiaries any proceeding or
case seeking to adjudicate it a bankrupt or insolvent or seeking liquidation,
winding up,
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reorganization, arrangement, adjustment, protection, relief or composition of it
or its debts under any law relating to bankruptcy, insolvency or reorganization
or relief or protection of debtors or seeking the entry of an order for relief,
or the appointment of a receiver, trustee, custodian or other similar official
for it or for any substantial part of its assets, rights, revenues or property,
and, if such proceeding is instituted against the Company or such Restricted
Subsidiary or Mexican Subsidiary and is being contested by the Company or such
Restricted Subsidiary or Mexican Subsidiary, as the case may be, in good faith
by appropriate proceedings, such proceeding shall remain undismissed or unstayed
for a period of 60 days; or the Company or such Restricted Subsidiary or Mexican
Subsidiary shall take any action (corporate or other) to authorize or further
any of the actions described above in this subsection; or
(i) Security Documents. Any event of default described in any
Loan Document shall have occurred and be continuing, or any material provision
of any Loan Document shall at any time for any reason cease to be valid and
binding and enforceable against any obligor thereunder, or the validity, binding
effect or enforceability thereof shall be contested by any Person, or any
obligor, shall deny that it has any or further liability or obligation
thereunder, or any material provision thereof shall be terminated, invalidated
or set aside, or be declared ineffective or inoperative or in any way cease to
give or provide to the Lenders and the Agent the benefits purported to be
created thereby; or
(j) Control. Any Change of Control shall occur; or
(k) Cofimeta Acquisition. (i) the Cofimeta Acquisition shall
not be consummated in accordance with this Agreement and the Cofimeta
Acquisition Documents concurrently or within one Business Day of the making of
the initial Loans, or the Cofimeta Acquisition shall be unwound, reversed or
otherwise rescinded in whole or in any material part for any reason, or (ii)
Company shall agree to any material amendment to, or waiver any of its material
rights under, or otherwise change any material terms of, any of the Cofimeta
Acquisition Documents as in effect on the Effective Date, in a manner adverse to
Company or any of its Subsidiaries or to Lenders without the prior written
consent of Agent.
6.2 Remedies. (a) Upon the occurrence and during the continuance of any
Event of Default, the Agent may and, upon being directed to do so by the
Required Lenders, shall by written notice to the Company (i) terminate the
Commitments or (ii) declare the outstanding principal of, and accrued interest
on, the Notes, all unpaid reimbursement obligations in respect of drawings under
Letters of Credit and all other amounts owing under this Agreement to be
immediately due and payable, or (iii) demand immediate delivery of cash
collateral, and the Company agrees to deliver such cash collateral upon demand,
in an amount equal to the maximum amount that may be available to be drawn at
any time prior to the stated expiry of all outstanding Letters of Credit, or any
one or more of the foregoing, whereupon the Commitments shall terminate
forthwith and all such amounts, including such cash collateral, shall become
immediately due and payable, provided that in the case of any event or condition
described in Section 6.1(h) with respect to the Company or any Guarantor, the
Commitments shall automatically terminate forthwith and all such amounts,
including such cash collateral, shall automatically become immediately due and
payable without notice; in all cases without demand, presentment, protest,
diligence, notice of dishonor or other formality, all of which are hereby
expressly waived. Such cash collateral delivered in respect of outstanding
Letters of Credit shall be deposited in a special cash collateral account to be
held by the Agent as collateral security
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for the payment and performance of the Company's obligations under this
Agreement to the Lenders and the Agent.
(b) The Agent may and, upon being directed to do so by the
Required Lenders, shall, in addition to the remedies provided in Section 6.2(a),
exercise and enforce any and all other rights and remedies available to it or
the Lenders, whether arising under any Loan Document or under applicable law, in
any manner deemed appropriate by the Agent, including suit in equity, action at
law, or other appropriate proceedings, whether for the specific performance (to
the extent permitted by law) of any covenant or agreement contained in any Loan
Document or in aid of the exercise of any power granted in any Loan Document.
(c) Upon the occurrence and during the continuance of any
Event of Default, each Lender may at any time and from time to time, without
notice to the Company (any requirement for such notice being expressly waived by
the Company) set off and apply against any and all of the obligations of the
Company now or hereafter existing under this Agreement, whether owing to such
Lender or any other Lender or the Agent, any and all deposits (general or
special, time or demand, provisional or final) at any time held and other
indebtedness at any time owing by such Lender to or for the credit or the
account of the Company and any property of the Company from time to time in
possession of such Lender, irrespective of whether or not such Lender shall have
made any demand hereunder and although such obligations may be contingent and
unmatured. The Company hereby grants to the Lenders and the Agent a lien on and
security interest in all such deposits, indebtedness and property as collateral
security for the payment and performance of the obligations of the Company under
this Agreement. The rights of such Lender under this Section 6.2(c) are in
addition to other rights and remedies (including, without limitation, other
rights of setoff) which such Lender may have.
(d) Notwithstanding anything in this Agreement or any Loan
Document to the contrary, on the Revolving Credit Termination Date each Lender
agrees, unconditionally and irrevocably, that it will purchase, either through
an assignment or a participation or such other manner required by the Agent, an
interest in all of the Revolving Credit Advances then outstanding, including all
U.S. Advances and all Canadian Advances (whether or not such Lender is a
Canadian Lender), such that each Lender's share of each Revolving Credit Advance
is equal to its pro rata share thereof based on the amount its Revolving Credit
Commitment bears to the aggregate Revolving Credit Commitment of all Lenders.
Such assignments and participations will be made pursuant to such procedures and
documents required by the Agent, and all appropriate adjustments among the
Lenders will be made. Each Lender shall be absolutely and unconditionally
obligated under this Section 6.2(d) and such obligation shall not be affected by
any circumstance, including, without limitation, (A) any set-off, counterclaim,
recoupment, defense or other right which such Lender has or may have against the
Agent, First Chicago/NBD Canada or the Company or any if its Subsidiaries or
anyone else for any reason whatsoever; (B) the occurrence or continuance of a
Default or an Event of Default; (C) any adverse change in the condition
(financial or otherwise) of the Company or any of its Subsidiaries; (D) any
breach of this Agreement or any other agreement by any other Lender (provided
that any Defaulting Lender shall not be entitled to receive any payments or
other transfers under this Section 6.2(d) and the Agent will make all
appropriate adjustments hereunder), the Company or any Guarantor; or (E) any
other circumstance, happening or event whatsoever, whether or not similar to any
of
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the foregoing. The Borrowers shall be liable, jointly and severally, for any
withholding taxes, if any, which may be payable under Section 3.6 as a result of
such participations or assignments.
6.3 Distribution of Proceeds of Collateral. All proceeds of any
realization on the collateral pursuant to the Security Documents and any
payments received by the Agent or any Lender subsequent to and during the
continuance of any Event of Default, shall be allocated and distributed by the
Agent as follows:
(a) First, to the payment of all costs and expenses and other
amounts owing to the Agent, including without limitation all attorneys' fees, in
connection with the enforcement of the Security Documents and otherwise
administering this Agreement;
(b) Second, to the payment of all fees, including commitment
fees, owing to the Lenders pursuant to this Agreement and the Notes on a pro
rata basis (other than Acceptance Fees and fees which are payable solely to the
Agent or any Lender directly) in accordance with the respective Advances of the
Lenders or any other amounts owing to the Agent, for application to payment of
such liabilities;
(c) Third, to the Lenders on a pro rata basis in accordance
with the respective Advances of the Lenders consisting of interest owing to the
Lenders under this Agreement and the Notes and net obligations and liabilities
relating to Hedging Agreements, for application to payment of such liabilities;
(d) Fourth, to the Lenders on a pro rata basis in accordance
with the respective Advances of the Lenders consisting of principal (including
without limitation any cash collateral for any outstanding Letters of Credit),
for application to payment of such liabilities;
(e) Fifth, to the payment of any and all other amounts owing
to the Lenders under this Agreement on a pro rata basis in accordance with the
respective Advances of the Lenders for application to payment of such
liabilities; and
(f) Sixth, to the Company, its Restricted Subsidiaries or such
other Person as may be legally entitled thereto.
Notwithstanding the foregoing, no payments of principal, interest or fees
delivered to the Agent for the account of any Defaulting Lender shall be
delivered by the Agent to such Defaulting Lender. Instead, such payments shall,
for so long as such Defaulting Lender shall be a Defaulting Lender, be held by
the Agent, and the Agent is hereby authorized and directed by all parties hereto
to hold such funds in escrow and apply such funds as follows:
(i) First, if applicable to any payments due to the
Agent, and
(ii) Second, to Loans required to be made by such
Defaulting Lender on any borrowing date to the extent such Defaulting Lender
fails to make such Loans.
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Notwithstanding the foregoing, upon the termination of all Commitments and the
payment and performance of all of the Advances and other obligations owing
hereunder (other than those owing to a Defaulting Lender), any funds then held
in escrow by the Agent pursuant to the preceding sentence shall be distributed
to each Defaulting Lender, pro rata in proportion to amounts that would be due
to each Defaulting Lender but for the fact that it is a Defaulting Lender.
ARTICLE VII.
THE AGENT AND THE LENDERS
7.1 Appointment and Authorization. Each Lender hereby irrevocably
appoints and authorizes the Agent to take such action as agent on its behalf and
to exercise such powers under the Loan Documents as are delegated to the Agent
by the terms hereof or thereof, together with all such powers as are reasonably
incidental thereto. The provisions of this Article VII are solely for the
benefit of the Agent and the Lenders, and the Borrowers shall not have any
rights as a third party beneficiary of any of the provisions hereof. In
performing its functions and duties under this Agreement, the Agent shall act
solely as agent of the Lenders and does not assume and shall not be deemed to
have assumed any obligation towards or relationship of agency or trust with or
for any Borrower.
7.2 Agent and Affiliates. NBD Bank in its capacity as a Lender
hereunder shall have the same rights and powers hereunder as any other Lender
and may exercise or refrain from exercising the same as though it were not the
Agent. NBD Bank and its Affiliates may (without having to account therefor to
any Lender) accept deposits from, lend money to, and generally engage in any
kind of banking, trust, financial advisory or other business with the Company or
any of its Subsidiaries as if it were not acting as Agent hereunder, and may
accept fees and other consideration therefor without having to account for the
same to the Lenders.
7.3 Scope of Agent's Duties. The Agent shall have no duties or
responsibilities except those expressly set forth herein, and shall not, by
reason of this Agreement, have a fiduciary relationship with any Lender, and no
implied covenants, responsibilities, duties, obligations or liabilities shall be
read into this Agreement or shall otherwise exist against the Agent. As to any
matters not expressly provided for by this Agreement (including, without
limitation, collection and enforcement actions under the Notes and the Security
Documents), the Agent shall not be required to exercise any discretion or take
any action, but the Agent shall take such action or omit to take any action
pursuant to the reasonable written instructions of the Required Lenders and may
request instructions from the Required Lenders. The Agent shall in all cases be
fully protected in acting, or in refraining from acting, pursuant to the written
instructions of the Required Lenders (or all of the Lenders, as the case may be,
in accordance with the requirements of this Agreement), which instructions and
any action or omission pursuant thereto shall be binding upon all of the
Lenders; provided, however, that the Agent shall not be required to act or omit
to act if, in the judgment of the Agent, such action or omission may expose the
Agent to personal liability or is contrary to the Loan Documents or applicable
law.
7.4 Reliance by Agent. The Agent shall be entitled to rely upon any
certificate, notice, document or other communication (including any cable,
telegram, telex, facsimile transmission or oral
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communication) believed by it to be genuine and correct and to have been sent or
given by or on behalf of a proper Person. The Agent may treat the payee of any
Note as the holder thereof unless and until the Agent receives written notice of
the assignment thereof pursuant to the terms of this Agreement signed by such
payee and the Agent receives the written agreement of the assignee that such
assignee is bound hereby to the same extent as if it had been an original party
hereto. The Agent may employ agents (including without limitation collateral
agents and including without limitation First Chicago/NBD Canada with respect to
administering the Canadian Advances, acting as collateral agent in Canada and
enforcing any of the Agent's rights and remedies under the Loan Documents in
Canada) and may consult with legal counsel (who may be counsel for the
Borrowers), independent public accountants and other experts selected by it and
shall not be liable to the Lenders, except as to money or property received by
it or its authorized agents, for the negligence or misconduct of any such agent
selected by it with reasonable care or for any action taken or omitted to be
taken by it in good faith in accordance with the advice of such counsel,
accountants or experts. In performing any of the functions of the Agent, First
Chicago/NBD Canada or any other Affiliate of the Agent shall be entitled to all
of the same powers, immunities, exculpations, indemnifications and other rights
of the Agent described in this Article VII and otherwise in the Loan Documents.
It is acknowledged and agreed that First Chicago/NBD Canada will be acting as
collateral agent for the Lenders with respect to all collateral in Canada, and
all liens and security interests in Canada will be in favor of First Chicago/NBD
Canada for the benefit of itself and each of the Lenders, and as administrative
agent for payments and fundings of Canadian Advances.
7.5 Default. The Agent shall not be deemed to have knowledge of the
occurrence of any Default or Event of Default, unless the Agent has received
written notice from a Lender or the Borrowers specifying such Default or Event
of Default and stating that such notice is a "Notice of Default". In the event
that the Agent receives such a notice, the Agent shall give written notice
thereto to the Lenders.
7.6 Liability of Agent. Neither the Agent nor any of its directors,
officers, agents, or employees shall be liable to the Lenders for any action
taken or not taken by it or them in connection herewith with the consent or at
the request of the Required Lenders or in the absence of its or their own gross
negligence or willful misconduct. Neither the Agent nor any of its directors,
officers, agents or employees shall be responsible for or have any duty to
ascertain, inquire into or verify (i) any recital, statement, warranty or
representation contained in any Loan Document, or in any certificate, report,
financial statement or other document furnished in connection with this
Agreement, (ii) the performance or observance of any of the covenants or
agreements of the Borrowers or any Guarantor, (iii) the satisfaction of any
condition specified in Article II hereof, or (iv) the validity, effectiveness,
legal enforceability, value or genuineness of any Loan Document or any
collateral subject thereto or any other instrument or document furnished in
connection herewith.
7.7 Nonreliance on Agent and Other Lenders. Each Lender acknowledges
and agrees that it has, independently and without reliance on the Agent or any
other Lender, and based on such documents and information as it has deemed
appropriate, made its own credit analysis of the Company and its Subsidiaries
and decision to enter into this Agreement and that it will, independently and
without reliance upon the Agent or any other Lender, and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own analysis and decision in taking or not taking action under this Agreement.
The Agent shall not be required to keep itself informed as to the performance or
observance
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by the Company or any of its Subsidiaries of the Loan Documents or any other
documents referred to or provided for herein or to inspect the properties or
books of the Company or any of its Subsidiaries and, except for notices, reports
and other documents and information expressly required to be furnished to the
Lenders by the Agent hereunder, the Agent shall not have any duty or
responsibility to provide any Lender with any information concerning the
affairs, financial condition or business of the Company or any of its
Subsidiaries which may come into the possession of the Agent or any of its
affiliates.
7.8 Indemnification. The Lenders agree to indemnify the Agent (to the
extent not reimbursed by the Borrowers, but without limiting any obligation of
the Borrowers to make such reimbursement), ratably according to the respective
principal amounts of the Advances then outstanding made by each of them (or if
no Advances are at the time outstanding, ratably according to the respective
amounts of their Commitments), from and against any and all claims, damages,
losses, liabilities, costs or expenses of any kind or nature whatsoever
(including, without limitation, fees and disbursements of counsel) which may be
imposed on, incurred by, or asserted against the Agent in any way relating to or
arising out of this Agreement or the transactions contemplated hereby or any
action taken or omitted by the Agent under this Agreement, provided, however,
that no Lender shall be liable for any portion of such claims, damages, losses,
liabilities, costs or expenses resulting from the Agent's gross negligence or
willful misconduct. Without limitation of the foregoing, each Lender agrees to
reimburse the Agent promptly upon demand for its ratable share of any
out-of-pocket expenses (including without limitation fees and expenses of
counsel) incurred by the Agent in connection with the preparation, execution,
delivery, administration, modification, amendment or enforcement (whether
through negotiations, legal proceedings or otherwise) of, or legal advice in
respect of rights or responsibilities under, this Agreement, to the extent that
the Agent is not reimbursed for such expenses by the Borrowers, but without
limiting the obligation of the Borrowers to make such reimbursement. Each Lender
agrees to reimburse the Agent promptly upon demand for its ratable share of any
amounts owing to the Agent by the Lenders pursuant to this Section. If the
indemnity furnished to the Agent under this Section shall, in the judgment of
the Agent, be insufficient or become impaired, the Agent may call for additional
indemnity from the Lenders and cease, or not commence, to take any action until
such additional indemnity is furnished.
7.9 Successor Agent. The Agent may resign as such at any time upon ten
days' prior written notice to the Company and the Lenders. In the event of any
such resignation, the Required Lenders shall, by an instrument in writing
delivered to the Company and the Agent, appoint a successor (which successor
shall be approved by the Company provided no Default or Event of Default then
exists), which shall be a commercial bank organized under the laws of the United
States or any State thereof and having a combined capital and surplus of at
least $500,000,000. If a successor is not so appointed or does not accept such
appointment before the Agent's resignation becomes effective, the retiring Agent
may appoint a temporary successor to act until such appointment by the Required
Lenders is made and accepted or if no such temporary successor is appointed as
provided above by the retiring Agent, the Required Lenders shall thereafter
perform all the duties of the Agent hereunder until such appointment by the
Required Lenders is made and accepted. Any successor to the Agent shall execute
and deliver to the Borrowers and the Lenders an instrument accepting such
appointment and thereupon such successor Agent, without further act, deed,
conveyance or transfer shall become vested with all of the properties, rights,
interests, powers, authorities and obligations of its predecessor hereunder with
like effect as if originally named as Agent hereunder. Upon request of such
successor Agent, the Borrowers and the retiring Agent shall execute and deliver
such
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instruments of conveyance, assignment and further assurance and do such other
things as may reasonably be required for more fully and certainly vesting and
confirming in such successor Agent all such properties, rights, interests,
powers, authorities and obligations. The provisions of this Article VII shall
thereafter remain effective for such retiring Agent with respect to any actions
taken or omitted to be taken by such Agent while acting as the Agent hereunder.
7.10 Sharing of Payments. The Lenders agree among themselves that, in
the event that any Lender shall obtain payment in respect of any Advance or any
other obligation owing to the Lenders under this Agreement through the exercise
of a right of set-off, banker's lien, counterclaim or otherwise in excess of its
ratable share of payments received by all of the Lenders on account of the
Advances and other obligations (or if no Advances are outstanding, ratably
according to the respective amounts of the Commitments), such Lender shall
promptly purchase from the other Lenders participations in such Advances and
other obligations in such amounts, and make such other adjustments from time to
time, as shall be equitable to the end that all of the Lenders share such
payment in accordance with such ratable shares. The Lenders further agree among
themselves that if payment to a Lender obtained by such Lender through the
exercise of a right of set-off, banker's lien, counterclaim or otherwise as
aforesaid shall be rescinded or must otherwise be restored, each Lender which
shall have shared the benefit of such payment shall, by repurchase of
participations theretofore sold, return its share of that benefit to each Lender
whose payment shall have been rescinded or otherwise restored. The Borrowers
agree that any Lender so purchasing such a participation may, to the fullest
extent permitted by law, exercise all rights of payment, including set-off,
banker's lien or counterclaim, with respect to such participation as fully as if
such Lender were a holder of such Advance or other obligation in the amount of
such participation. The Lenders further agree among themselves that, in the
event that amounts received by the Lenders and the Agent hereunder are
insufficient to pay all such obligations or insufficient to pay all such
obligations when due, the fees and other amounts owing to the Agent in such
capacity shall be paid therefrom before payment of obligations owing to the
Lenders under this Agreement. Except as otherwise expressly provided in this
Agreement, if any Lender or the Agent shall fail to remit to the Agent or any
other Lender an amount payable by such Lender or the Agent to the Agent or such
other Lender pursuant to this Agreement on the date when such amount is due,
such payments shall be made together with interest thereon for each date from
the date such amount is due until the date such amount is paid to the Agent or
such other Lender at a rate per annum equal to the rate at which borrowings are
available to the payee in its overnight federal funds market. It is further
understood and agreed among the Lenders and the Agent that if the Agent shall
engage in any other transactions with the Borrowers and shall have the benefit
of any collateral or security therefor which does not expressly secure the
obligations arising under this Agreement except by virtue of a so-called dragnet
clause or comparable provision, the Agent shall be entitled to apply any
proceeds of such collateral or security first in respect of the obligations
arising in connection with such other transaction before application to the
obligations arising under this Agreement.
ARTICLE VIII.
MISCELLANEOUS
8.1 Amendments, Etc. (a) No amendment, modification, termination or
waiver of any provision of this Agreement nor any consent to any departure
therefrom shall be effective unless the same
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shall be in writing and signed by the Required Lenders and, to the extent any
rights or duties of the Agent may be affected thereby, the Agent, provided,
however, that no such amendment, modification, termination, waiver or consent
shall, without the consent of the Agent and all of the Lenders, (i) authorize or
permit the extension of time for, or any reduction of the amount of, any payment
of the principal of, or interest on, the Notes or any Letter of Credit
reimbursement obligation, or any fees or other amount payable hereunder, (ii)
amend or extend the respective Commitments of any Lender set forth on the
signature pages hereof or modify the provisions of this Section regarding the
taking of any action under this Section or the provisions of Section 6.3 or
Section 7.10 or the definition of Required Lenders or any provision of this
Agreement requiring the consent of all of the Lenders, (iii) provide for the
discharge of any material Guarantor under the Guaranties or the release of any
substantial amount of the collateral subject to any Security Document, other
than the release of Liens on Collateral that is permitted to be sold by this
Agreement, and the Agent is hereby authorized to release any such Liens, or (iv)
modify any other provision of this Agreement which by its terms requires the
consent of all of the Lenders.
(b) Any such amendment, waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given.
(c) Notwithstanding anything herein to the contrary, no
Defaulting Lender shall be entitled to vote (whether to consent or to withhold
its consent) with respect to any amendment, modification, termination or waiver
of any provision of this Agreement or any departure therefrom or any direction
from the Lenders to the Agent, and, for purposes of determining the Required
Lenders at any time, the Commitments and the Advances of each Defaulting Lenders
shall be disregarded.
8.2 Notices. (a) Except as otherwise provided in Section 8.2(c) hereof,
all notices and other communications hereunder shall be in writing and shall be
delivered or sent to the Borrowers at 1250 Stephenson Highway, Troy, Michigan
48083, Attention: President, Facsimile No. (248) 577-3455, Telephone No. (248)
577-1400, and to the Agent and the Lenders at the respective addresses for
notices set forth on the signatures pages hereof, or to such other address as
may be designated by the Borrowers, the Agent or any Lender by notice to the
other parties hereto. All notices and other communications shall be deemed to
have been given at the time of actual delivery thereof to such address, or,
unless sooner delivered, (i) if sent by certified or registered mail, postage
prepaid, to such address, on the third day after the date of mailing, or (ii) if
sent by facsimile transmission, upon confirmation of receipt by telephone at the
number specified for confirmation, provided, however, that notices to the Agent
shall not be effective until received. Each Borrowing Subsidiary agrees that the
Company may give any notices or other requests on its behalf under this
Agreement, including without limitation requests for Advances, and the Borrowing
Subsidiary will be bound thereby.
(b) Notices by the Borrowers to the Agent with respect to
terminations or reductions of the Commitments pursuant to Section 2.2, requests
for Borrowings pursuant to Section 2.4, requests for continuations or
conversions of Borrowings pursuant to Section 2.7 and notices of prepayment
pursuant to Section 3.1 shall be irrevocable and binding on the Borrowers.
(c) Any notice to be given by the Borrowers to the Agent
pursuant to Sections 2.4, 2.7 or 3.1 and any notice to be given by the Agent or
any Lender hereunder, may be given by telephone,
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and all such notices must be immediately confirmed in writing in the manner
provided in Section 8.2(a). Any such notice given by telephone shall be deemed
effective upon receipt thereof by the party to whom such notice is to be given.
The Borrowers shall indemnify and hold harmless the Lenders and the Agent from
any and all losses, damages, liabilities and claims arising from their good
faith reliance on any such telephone notice.
8.3 No Waiver By Conduct; Remedies Cumulative. No course of dealing on
the part of the Agent or any Lender, nor any delay or failure on the part of the
Agent or any Lender in exercising any right, power or privilege hereunder shall
operate as a waiver of such right, power or privilege or otherwise prejudice the
Agent's or such Lender's rights and remedies hereunder; nor shall any single or
partial exercise thereof preclude any further exercise thereof or the exercise
of any other right, power or privilege. No right or remedy conferred upon or
reserved to the Agent or any Lender under any Loan Document is intended to be
exclusive of any other right or remedy, and every right and remedy shall be
cumulative and in addition to every other right or remedy granted thereunder or
now or hereafter existing under any applicable law. Every right and remedy
granted by any Loan Document or by applicable law to the Agent or any Lender may
be exercised from time to time and as often as may be deemed expedient by the
Agent or any Lender and, unless contrary to the express provisions of any Loan
Document, irrespective of the occurrence or continuance of any Default or Event
of Default.
8.4 Reliance on and Survival of Various Provisions. All terms,
covenants, agreements, representations and warranties of any Borrower or
Guarantor made herein or in any Security Document or in any certificate, report,
financial statement or other document furnished by or on behalf of any Borrower
or Guarantor in connection with this Agreement shall be deemed to be material
and to have been relied upon by the Lenders, notwithstanding any investigation
heretofore or hereafter made by any Lender or on such Lender's behalf, and those
covenants and agreements of the Borrowers set forth in Sections 3.8, 3.10 and
8.5 hereof shall survive the repayment in full of the Advances and the
termination of the Commitments.
8.5 Expenses; Indemnification. (a) The Borrowers jointly and severally
agree to pay, or reimburse the Agent for the payment of, on demand, (i) the
reasonable fees and expenses of counsel to the Agent, including without
limitation the fees and expenses of Dickinson Wright PLLC, in connection with
the preparation, execution, delivery and administration of the Loan Documents
and in connection with advising the Agent as to its rights and responsibilities
with respect thereto, and in connection with any amendments, waivers or consents
in connection therewith, (ii) all stamp and other taxes and fees payable or
determined to be payable in connection with the execution, delivery, filing or
recording of the Loan Documents (or the verification of filing, recording,
perfection or priority thereof) or the consummation of the transactions
contemplated hereby, and any and all liabilities with respect to or resulting
from any delay in paying or omitting to pay such taxes or fees, (iii) all
reasonable costs and expenses of the Agent and the Lenders (including reasonable
fees and expenses of counsel and whether incurred through negotiations, legal
proceedings or otherwise)) in connection with any Default or Event of Default or
the enforcement of, or the exercise or preservation of any rights under, any
Loan Document or in connection with any refinancing or restructuring of the
credit arrangements provided under this Agreement in connection with any Event
of Default and (iv) all reasonable costs and expenses of the Agent (including
reasonable fees and expenses of counsel) in connection with any action or
proceeding relating to a court order, injunction or other process or decree
restraining or seeking to restrain the Agent from paying any amount under, or
otherwise relating
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in any way to, any Letter of Credit and any and all costs and expenses which any
of them may incur relative to any payment under any Letter of Credit.
(b) The Borrowers jointly and severally hereby indemnify and
agree to hold harmless the Lenders and the Agent, and their respective officers,
directors, employees and agents, from and against any and all claims, damages,
losses, liabilities, costs or expenses of any kind or nature whatsoever which
the Lenders or the Agent or any such Person may incur or which may be claimed
against any of them by reason of or in connection with any Letter of Credit, and
neither any Lender nor the Agent or any of their respective officers, directors,
employees or agents shall be liable or responsible for: (i) the use which may be
made of any Letter of Credit or for any acts or omissions of any beneficiary in
connection therewith; (ii) the validity, sufficiency or genuineness of documents
or of any endorsement thereon, even if such documents should in fact prove to be
in any or all respects invalid, insufficient, fraudulent or forged; (iii)
payment by the Agent to the beneficiary under any Letter of Credit against
presentation of documents which do not comply with the terms of any Letter of
Credit, including failure of any documents to bear any reference or adequate
reference to such Letter of Credit; (iv) any error, omission, interruption or
delay in transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Letter of Credit; or (v) any other event or
circumstance whatsoever arising in connection with any Letter of Credit;
provided, however, that the Company shall not be required to indemnify the
Lenders and the Agent and such other Persons, and the Lenders shall be liable to
the Company to the extent, but only to the extent, of any direct, as opposed to
consequential or incidental, damages suffered by the Company which were caused
by (A) the Agent's wrongful dishonor of any Letter of Credit after the
presentation to it by the beneficiary thereunder of a draft or other demand for
payment and other documentation strictly complying with the terms and conditions
of such Letter of Credit, or (B) the payment by the Agent to the beneficiary
under any Letter of Credit against presentation of documents which do not comply
with the terms of the Letter of Credit to the extent, but only to the extent,
that such payment constitutes gross negligence of willful misconduct of the
Agent. It is understood that in making any payment under a Letter of Credit the
Agent will rely on documents presented to it under such Letter of Credit as to
any and all matters set forth therein without further investigation and
regardless of any notice or information to the contrary, and such reliance and
payment against documents presented under a Letter of Credit substantially
complying with the terms thereof shall not be deemed gross negligence or willful
misconduct of the Agent in connection with such payment. It is further
acknowledged and agreed that the Company may have rights against the beneficiary
or others in connection with any Letter of Credit with respect to which the
Lenders are alleged to be liable and it shall be a precondition of the assertion
of any liability of the Lenders under this Section that the Company shall first
have exhausted all remedies in respect of the alleged loss against such
beneficiary and any other parties obligated or liable in connection with such
Letter of Credit and any related transactions.
(c) Each Borrower hereby jointly and severally indemnifies and
agrees to hold harmless the Lenders and the Agent, and their respective
officers, directors, employees and agents, from and against any and all claims,
damages, losses, liabilities, costs or expenses of any kind or nature whatsoever
(including reasonable attorneys fees and disbursements incurred in connection
with any investigative, administrative or judicial proceeding whether or not
such Person shall be designated as a party thereto) which the Lenders or the
Agent or any such Person may incur or which may be claimed against any of them
by reason of or in connection with entering into this Agreement or the
transactions contemplated hereby, including without limitation those arising in
connection with or relating to any acquisition and the
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transactions contemplated thereby and under Environmental Laws; provided,
however, that the Borrowers shall not be required to indemnify any such Lender
and the Agent or such other Person, to the extent, but only to the extent, that
such claim, damage, loss, liability, cost or expense is attributable to the
gross negligence or willful misconduct of such Lender or the Agent, as the case
may be.
(d) In consideration of the execution and delivery of this
Agreement by each Lender and the extension of the Commitments, each Borrower
hereby jointly and severally indemnifies, exonerates and holds the Agent, each
Lender and each of their respective affiliates, officers, directors, employees
and agents (collectively, the "Indemnified Parties") free and harmless from and
against any and all actions, causes of action, suits, losses, costs, liabilities
and damages, and expenses incurred in connection therewith (irrespective of
whether any such Indemnified Party is a party to the action for which
indemnification hereunder is sought), including reasonable attorneys' fees and
disbursements (collectively, the "Indemnified Liabilities"), incurred by the
Indemnified Parties or any of them as a result of, or arising out of, or
relating to:
(i) any transaction financed or to be financed in
whole or in part, directly or indirectly, with the proceeds of any Advance;
(ii) the entering into and performance of this
Agreement and any other agreement or instrument executed in connection herewith
by any of the Indemnified Parties (including any action brought by or on behalf
of any Borrower as the result of any determination by the Required Lenders not
to fund any Advance unless such determination is determined by a final non
appealable order by of competent jurisdiction to be wrongful);
(iii) any investigation, litigation or proceeding
related to any acquisition or proposed acquisition by the Company or any of its
Subsidiaries of any portion of the stock or assets of any Person or any merger,
investment, issuance of Capital Stock or any transaction related thereto by the
Company or any of its Subsidiaries, whether or not the Agent or such Lender is
party thereto;
(iv) any investigation, litigation or proceeding
related to any environmental cleanup, audit, compliance or other matter relating
to the protection of the environment or the release by the Company or any of its
Subsidiaries of any Hazardous Material; or
(v) the presence on or under, or the escape, seepage,
leakage, spillage, discharge, emission, discharging or releasing from, any real
property owned or operated by the Company or any of its Subsidiaries of any
Hazardous Material (including any losses, liabilities, damages, injuries, costs,
expenses or claims asserted or arising under any Environmental Law), regardless
of whether caused by, or within the control of, the Company or such Subsidiary,
except for any such Indemnified Liabilities arising for the account of a
particular Indemnified Party by reason of the activities of the Indemnified
Party on the property of the Company or such Subsidiary conducted subsequent to
a foreclosure on such property by the Lenders or by reason of the relevant
Indemnified Party's gross negligence or willful misconduct or breach of this
Agreement, and if and to the extent that the foregoing undertaking may be
unenforceable for any reason, the Company hereby agrees to make the maximum
contribution to the payment and satisfaction of each of the Indemnified
Liabilities which is permissible under applicable law. The Company shall be
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obligated to indemnify the Indemnified Parties for all Indemnified Liabilities
subject to and pursuant to the foregoing provisions, regardless of whether the
Company or any of its Subsidiaries had knowledge of the facts and circumstances
giving rise to such Indemnified Liability.
8.6 Successors and Assigns. (a) This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns, provided that the Borrowers may not, without the prior consent of
the Lenders, assign their rights or obligations hereunder or under the Notes or
any Security Document and the Lenders shall not be obligated to make any Advance
hereunder to any entity other than the Borrowers.
(b) Any Lender may sell to any financial institution or
institutions, and such financial institution or institutions may further sell, a
participation interest (undivided or divided) in, the Advances and such Lender's
rights and benefits under the Loan Documents, and to the extent of that
participation interest such participant or participants shall have the same
rights and benefits against the Borrowers under Section 3.8, 3.10 and 6.2(c) as
it or they would have had if such participant or participants were the Lender
making the Advances to the Borrowers hereunder, provided, however, that (i) such
Lender's obligations under this Agreement shall remain unmodified and fully
effective and enforceable against such Lender, (ii) such Lender shall remain
solely responsible to the other parties hereto for the performance of such
obligations, (iii) such Lender shall remain the holder of its Notes for all
purposes of this Agreement, (iv) the Borrowers, the Agent and the other Lenders
shall continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Agreement, and (v) such Lender
shall not grant to its participant any rights to consent or withhold consent to
any action taken by such Lender or the Agent under this Agreement other than
action requiring the consent of all of the Lenders hereunder.
(c) The Agent from time to time in its sole discretion may
appoint agents for the purpose of servicing and administering this Agreement and
the transactions contemplated hereby and enforcing or exercising any rights or
remedies of the Agent provided under any Loan Documents or otherwise. In
furtherance of such agency, the Agent may from time to time direct that the
Borrowers provide notices, reports and other documents contemplated by this
Agreement (or duplicates thereof) to such agent. The Borrowers hereby consent to
the appointment of such agent and agrees to provide all such notices, reports
and other documents and to otherwise deal with such agent acting on behalf of
the Agent in the same manner as would be required if dealing with the Agent
itself.
(d) Each Lender may, with the prior consent of the Company
(which shall not be unreasonably withheld and shall not be required if an Event
of Default has occurred and is continuing or if such assignment is to another
Lender or an Affiliates of a Lender) and the Agent, assign to one or more banks
or other entities all or a portion of its rights and obligations under this
Agreement (including, without limitation, all or a portion of its Commitments,
the Advances owing to it and the Notes held by it); provided, however, that (i)
each such assignment shall be of a uniform, and not a varying, percentage of all
rights and obligations, (ii) except in the case of an assignment of all of a
Lender's rights and obligations under this Agreement, the amount of the
Commitments of the assigning Lender being assigned pursuant to each such
assignment (determined as of the date of the Assignment and Acceptance with
respect to such assignment) shall in no event be less than $5,000,000, and in
integral multiples of $1,000,000 thereafter, or such lesser amount as the
Company and the Agent may consent, (iii) the parties to each such assignment
shall execute
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and deliver to the Agent, for its acceptance and recording in the Register, an
Assignment and Acceptance in the form of Exhibit M hereto (an "Assignment and
Acceptance"), together with any Note or Notes subject to such assignment and a
processing and recordation fee of $5,000, and (iv) any Lender may without the
consent of the Company or the Agent, and without paying any fee, assign to any
Affiliate of such Lender that is a bank or financial institution all of its
rights and obligations under this Agreement. Upon such execution, delivery,
acceptance and recording, from and after the effective date specified in such
Assignment and Acceptance, (x) the assignee thereunder shall be a party hereto
and, to the extent that rights and obligations hereunder have been assigned to
it pursuant to such Assignment and Acceptance, have the rights and obligations
of a Lender hereunder and (y) the Lender assignor thereunder shall, to the
extent that rights and obligations hereunder have been assigned by it pursuant
to such Assignment and Acceptance, relinquish its rights and be released from
its obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all of the remaining portion of an assigning Lender's rights
and obligations under this Agreement, such Lender shall cease to be a party
hereto).
(e) By executing and delivering an Assignment and Acceptance,
the Lender assignor thereunder and the assignee thereunder confirm to and agree
with each other and the other parties hereto as follows: (i) other than as
provided in such Assignment and Acceptance, such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or any other instrument or document
furnished pursuant hereto; (ii) such assigning Lender makes no representation or
warranty and assumes no responsibility with respect to the financial condition
of the Company and its Subsidiaries or the performance or observance by the
Borrowers and the Guarantors of any of their obligations under this Agreement or
any other instrument or document furnished pursuant hereto; (iii) such assignee
confirms that it has received a copy of this Agreement, together with copies of
the financial statements referred to in Section 4.6 and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance; (iv) such assignee will,
independently and without reliance upon the Agent, such assigning Lender or any
other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement; (v) such assignee appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers and discretion under this Agreement as are delegated to the Agent by
the terms hereof, together with such powers and discretion as are reasonably
incidental thereto; and (vi) such assignee agrees that it will perform in
accordance with their terms all of the obligations that by the terms of this
Agreement are required to be performed by it as a Lender.
(f) The Agent shall maintain at its address designated on the
signature pages hereof a copy of each Assignment and Acceptance delivered to and
accepted by it and a register for the recordation of the names and addresses of
the Lenders and the Commitments of, and principal amount of the Advances owing
to, each Lender from time to time (the "Register"). The entries in the Register
shall be conclusive and binding for all purposes, absent manifest error, and the
Borrowers, the Agent and the Lenders may treat each Person whose name is
recorded in the Register as a Lender hereunder for all purposes of this
Agreement. The Register shall be available for inspection by the Borrowers or
any Lender at any reasonable time and from time to time upon reasonable prior
notice.
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(g) Upon its receipt of an Assignment and Acceptance executed
by an assigning Lender and an assignee, together with any Note or Notes subject
to such assignment, the Agent shall, if such Assignment and Acceptance has been
completed, (i) accept such Assignment and Acceptance, (ii) record the
information contained therein in the Register and (iii) give prompt notice
thereof to the Company. Within five Business Days after its receipt of such
notice, the Borrowers, at its own expense, shall execute and deliver to the
Agent in exchange for the surrendered Note or Notes a new Note or Notes to the
order of such assignee in an amount equal to the Commitments assumed by it
pursuant to such Assignment and Acceptance and, if the assigning Lender has
retained a Commitment hereunder, a new Note to the order of the assigning Lender
in an amount equal to the Commitments retained by it hereunder. Such new Note or
Notes shall be in an aggregate principal amount equal to the aggregate principal
amount of such surrendered Note or Notes, shall be dated the effective date of
such Assignment and Acceptance and shall otherwise be in substantially the form
of Exhibit M hereto.
(h) The Borrowers shall not be liable for any costs or
expenses of any Lender in effectuating any participation or assignment under
this Section 8.6.
(i) The Lenders may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
8.6, disclose to the assignee or participant or proposed assignee or participant
any information relating to the Company and its Subsidiaries.
(j) Notwithstanding any other provision set forth in this
Agreement, any Lender may at any time create a security interest in, or assign,
all or any portion of its rights under this Agreement (including, without
limitation, the Advances owing to it and the Note or Notes held by it) in favor
of any Federal Reserve Lender in accordance with Regulation A of the Board of
Governors of the Federal Reserve System; provided that such creation of a
security interest or assignment shall not release such Lender from its
obligations under this Agreement.
8.7 Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument, and any of the parties hereto may execute this Agreement by signing
any such counterpart.
8.8 Governing Law. This Agreement is a contract made under, and shall
be governed by and construed in accordance with, the law of the State of
Michigan applicable to contracts made and to be performed entirely within such
State and without giving effect to choice of law principles of such State. The
Borrowers and the Lenders further agrees that any legal or equitable action or
proceeding with respect to any Loan Document or the transactions contemplated
hereby shall be brought in any court of the State of Michigan, or in any court
of the United States of America sitting in Michigan, and each of the Borrowers
and the Lenders hereby submits to and accepts generally and unconditionally the
jurisdiction of those courts with respect to its Person and property, and, in
the case of each Borrower irrevocably appoints the Company as its agent for
service of process and irrevocably consents to the service of process in
connection with any such action or proceeding by personal delivery to such agent
or to the Company, as the case may be, or by the mailing thereof by registered
or certified mail, postage prepaid to the Company at its address for notices
pursuant to Section 8.2. The Borrowers shall at all times maintain such an agent
in Michigan for such purpose and shall notify the Lenders and the Agent of such
agent's address in Michigan within ten days of
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any change of address. Nothing in this paragraph shall affect the right of the
Lenders and the Agent to serve process in any other manner permitted by law or
limit the right of the Lenders or the Agent to bring any such action or
proceeding against the Borrowers or any property in the courts of any other
jurisdiction. The Borrowers and the Lenders hereby irrevocably waives any
objection to the laying of venue of any such action or proceeding in the above
described courts.
8.9 Table of Contents and Headings. The table of contents and the
headings of the various subdivisions hereof are for the convenience of reference
only and shall in no way modify any of the terms or provisions hereof.
8.10 Construction of Certain Provisions. If any provision of this
Agreement refers to any action to be taken by any Person, or which such Person
is prohibited from taking, such provision shall be applicable whether such
action is taken directly or indirectly by such Person, whether or not expressly
specified in such provision.
8.11 Integration and Severability. The Loan Documents embody the entire
agreement and understanding between the Borrowers, the Agent and the Lenders,
and supersede all prior agreements and understandings, relating to the subject
matter hereof, other than any commitment letter and fee letter among the
Company, the Arranger and the Agent with respect to matters among the Company,
the Arranger and the Agent. In case any one or more of the obligations of the
Borrowers under the Loan Document shall be invalid, illegal or unenforceable in
any jurisdiction, the validity, legality and enforceability of the remaining
obligations of the Borrowers shall not in any way be affected or impaired
thereby, and such invalidity, illegality or unenforceability in one jurisdiction
shall not affect the validity, legality or enforceability of the obligations of
the Borrowers under any Loan Document in any other jurisdiction.
8.12 Independence of Covenants. All covenants hereunder shall be given
independent effect so that if a particular action or condition is not permitted
by any such covenant, the fact that it would be permitted by an exception to, or
would be otherwise within the limitations of, another covenant shall not avoid
the occurrence of a Default or an Event of Default if such action is taken or
such condition exists.
8.13 Interest Rate Limitation. Notwithstanding any provisions of any
Loan Document, in no event shall the amount of interest paid or agreed to be
paid by the Borrowers exceed an amount computed at the highest rate of interest
permissible under applicable law. If, from any circumstances whatsoever,
fulfillment of any provision of any Loan Document at the time performance of
such provision shall be due, shall involve exceeding the interest rate
limitation validly prescribed by law which a court of competent jurisdiction may
deem applicable hereto, then, ipso facto, the obligations to be fulfilled shall
be reduced to an amount computed at the highest rate of interest permissible
under applicable law, and if for any reason whatsoever any Lender shall ever
receive as interest an amount which would be deemed unlawful under such
applicable law such interest shall be automatically applied to the payment of
principal of the Advances outstanding hereunder (whether or not then due and
payable) and not to the payment of interest, or shall be refunded to the
relevant Borrower if such principal and all other obligations of the Borrowers
to the Lenders have been paid in full.
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8.14 Judgment and Payment. (a) If, for the purpose of obtaining
judgment in any court, it is necessary to convert a sum owing hereunder by any
Borrower in one currency into another currency, such Borrower agrees, to the
fullest extent that it may effectively do so, that the rate of exchange used
shall be that at which in accordance with normal banking procedures in the
relevant jurisdiction the relevant Lender could purchase the first currency with
such other currency for the first currency on the Business Day immediately
preceding the day on which the final judgment is given.
(b) The obligations of any Borrower in respect of any sum due
to any party hereto or any holder of the obligations owing hereunder (the
"Applicable Creditor") shall, notwithstanding any payment obligation or judgment
in a currency (the "Payment Currency") other than applicable currency, be
discharged only to the extent that, on the Business Day following receipt by the
Applicable Creditor of any sum adjudged to be so due in the Payment Currency,
the Applicable Creditor may in accordance with normal banking procedures in the
relevant jurisdiction purchase applicable currency with the Payment Currency; if
the amount of applicable currency so purchased is less than the sum originally
due to the Applicable Creditor in applicable currency, each Borrower agrees, as
a separate obligation and notwithstanding any such judgment, to indemnify the
Applicable Creditor against such loss. The obligations of the Borrowers
contained in this Section 8.14 shall survive the termination of this Agreement
and the payment of all other amounts owing hereunder.
8.15 Acknowledgments. The Company hereby acknowledges that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the other Loan Documents;
(b) none of the Agent or any Lender has any fiduciary
relationship with or duty to the Company arising out of or in connection with
this Agreement or any of the other Loan Documents, and the relationship between
the Agent and the Lenders, on the one hand, and the Company, on the other hand,
in connection herewith or therewith is solely that of debtor and creditor;
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions contemplated hereby
among the Lenders or among the Company and the Lenders; and
(d) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or proceeding referred
to in this subsection any special, exemplary, punitive or consequential damages.
8.16 WAIVER OF JURY TRIAL. THE LENDERS AND THE AGENT AND THE BORROWERS,
AFTER CONSULTING OR HAVING HAD THE OPPORTUNITY TO CONSULT WITH COUNSEL,
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT ANY OF THEM MAY HAVE TO
A TRIAL BY JURY IN ANY LITIGATION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR
ANY RELATED INSTRUMENT OR AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED BY
THIS AGREEMENT OR ANY
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COURSE OF CONDUCT, DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF
ANY OF THEM. NEITHER ANY LENDER, THE AGENT, NOR THE BORROWERS SHALL SEEK TO
CONSOLIDATE, BY COUNTERCLAIM OR OTHERWISE, ANY SUCH ACTION IN WHICH A JURY TRIAL
HAS BEEN WAIVED WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT
BEEN WAIVED. THESE PROVISIONS SHALL NOT BE DEEMED TO HAVE BEEN MODIFIED IN ANY
RESPECT OR RELINQUISHED BY ANY PARTY HERETO EXCEPT BY A WRITTEN INSTRUMENT
EXECUTED BY SUCH PARTY.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the day and year first above written, which
shall be the Effective Date of this Agreement.
OXFORD AUTOMOTIVE, INC.
By:____________________________
Its:________________________
BMG NORTH AMERICA LIMITED
By:____________________________
Its:________________________
OXFORD SUSPENSION LTD.
By:____________________________
Its:________________________
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<TABLE>
<S> <C>
Address for Notices: NBD BANK, as a Lender and as Agent
NBD Bank
611 Woodward Avenue By:____________________________
Detroit, Michigan 48226
Its:________________________
Attention: Rick Ellis
Facsimile No.: (313) 226-0855
Facsimile
Confirmation No.: (313) 225-3743
Revolving Credit Commitment: $110,000,000
Tooling Revolving Credit Commitment: $35,000,000
Term Loan Commitment: $30,000,000
Percentage of
Total Commitments: 100%
Applicable Lending Office:
NBD Bank
611 Woodward Avenue
Detroit, Michigan 48226
Address for Notices: FIRST CHICAGO NBD BANK, CANADA, as
the Affiliate designated by NBD Bank to make
Canadian Advances on its behalf and as
Agent for the purposes specified in this Agreement
161 Bay Street, Suite 4240
Toronto, Ontario M5J 2S1 By:
Attention: Michael Bauer
Its:
Facsimile No.: (416) 363-7574
Facsimile
Confirmation No.: (416) 865-0466
</TABLE>
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<PAGE> 1
Exhibit 4.16
PLEDGE AGREEMENT AND IRREVOCABLE PROXY
THIS PLEDGE AGREEMENT dated as of February 4, 1999 (this "Pledge
Agreement"), is given by OXFORD AUTOMOTIVE, INC., a Michigan corporation (the
"Company"), in favor of NBD Bank, a Michigan banking corporation, as agent (in
such capacity, the "Agent") for the benefit of itself and the lenders (the
"Lenders") now or hereafter parties to the Credit Agreement described below.
RECITALS
A. The Company (also occasionally referred to as the "Borrower") and the
Borrowing Subsidiary identified from time to time therein (collectively, the
"Borrowing Subsidiary") have entered into an Amended and Restated Credit
Agreement, dated as of the date hereof (as amended or modified from time to
time, including any agreement entered into in substitution therefor, the "Credit
Agreement"), with the Lenders parties thereto and the Agent pursuant to which
the Lenders may make Advances (as therein defined) to the Borrower and the
Borrowing Subsidiary.
B. As a condition precedent to the effectiveness of the Lenders'
obligations under the Credit Agreement, the Company has agreed to pledge to the
Agent, for the benefit of the Lenders, and grant a first-priority security
interest to the Agent, for the benefit of the Lenders, in and to the collateral
described herein and to execute this Pledge Agreement.
For value received and pursuant to the Credit Agreement, the Company
hereby grants a first-priority security interest to the Agent, for the benefit
of the Lenders, in and to all of the outstanding capital stock of the companies
listed on the schedule attached hereto as Schedule 1 (the "Pledged
Subsidiaries", and said shares of stock, together with any other shares and
securities from time to time receivable or otherwise distributed in respect of
or in exchange for any or all of such shares, being called the "Pledged Stock"),
to secure, (a) the prompt and complete payment of all indebtedness and other
obligations of the Company or any Subsidiary now or hereafter owing to the
Lenders or the Agent under or on account of the Credit Agreement, any other Loan
Document or any letters of credit, notes or other instruments issued to the
Agent or Lenders pursuant thereto, (b) the performance of the covenants under
the Credit Agreement and the Security Documents and any monies expended by the
Agent in connection therewith payable under the Credit Agreement and (c) the
prompt and complete payment of all obligations and performance of all covenants
of the Company or any Subsidiary under any interest rate or currency swap
agreements or similar transactions with any Lender (all of the aforesaid
indebtedness, obligations and liabilities of the Company and its Subsidiaries
being herein called the "Secured Obligations", and all of the documents,
agreements and instruments among the Company, the Subsidiaries, the Agent, the
Lenders, or any of them, evidencing or securing the repayment of, or otherwise
pertaining to, the Secured Obligations being herein collectively called the
"Operative Documents"). The Company is herewith delivering to the Agent for the
benefit of the Lenders originals of all stock certificates of the Pledged Stock
or taking such other action acceptable to the Agent and the Required Lenders to
perfect the security interest in the Pledged Stock granted hereby.
The Company further represents and warrants to, and agrees with, the Agent
for the benefit of the Lenders as follows:
1. Representations and Warranties. The Company represents and warrants
that the Pledged Stock is represented by the stock certificate or certificates
or shares described on Schedule 1 hereto, and that
<PAGE> 2
such stock certificate or certificates, accompanied by an instrument of
assignment or transfer duly executed in blank by the Company as the owner named
in such stock certificate or certificates, have been delivered to the Agent by
the Company. The Company further represents and warrants that (a) the Pledged
Stock is duly authorized and validly issued, fully paid and nonassessable and
constitutes 100% of all of the issued and outstanding shares of the capital
stock of each Pledged Subsidiary (except with respect to Lobdell Emery
Corporation which has Preferred Stock outstanding), (b) the Company is the legal
and beneficial owner of the Pledged Stock, free and clear of all Liens other
than the Lien of Agent hereunder, with requisite right and power to deliver,
pledge and assign the Pledged Stock to the Agent hereunder, and (c) the pledge
of the Pledged Stock pursuant to this Pledge Agreement creates in favor of the
Agent a valid and perfected first-priority security interest in the Pledged
Stock enforceable against the Company and all third parties and securing the
payment of the Secured Obligations.
2. Title; Stock Rights, Dividends, Etc. The Company will warrant and
defend the Agent's title to the Pledged Stock, and the security interest herein
created, against all claims of all persons, and will maintain and preserve such
security interest. It is understood and agreed that the collateral hereunder
includes any stock rights, stock dividends, liquidating dividends, new
securities, payments, distributions and proceeds (including cash dividends and
sale proceeds) and other property to which the Company may become entitled by
reason of the ownership of the Pledged Stock during the existence of this Pledge
Agreement, and any such property received by the Company shall be held in trust
and forthwith delivered to the Agent to be held hereunder in accordance with the
terms of this Pledge Agreement.
3. Registration Rights. If any Pledged Subsidiary at any time or from time
to time proposes to register any of its securities under the Securities Act of
1933, the Company will at each such time give notice to the Agent of such
Pledged Subsidiary's intentions so to do. Upon the request of the Agent given 30
days after receipt of such notice, the Company will cause all Pledged Stock of
such Pledged Subsidiary to be included in the registration statement proposed to
be filed, all to the extent requisite to permit the public sale or other public
disposition of such Pledged Stock so registered by the holders thereof. The
costs and expenses of all such registrations and qualifications under said Act
shall be paid by the Company or such Pledged Subsidiary, except that
underwriting discounts and commissions in respect of any Pledged Stock sold
pursuant to any such registration statement shall be borne by the sellers
thereof. As expeditiously as possible after the effective date of any such
registration statement, the Company will deliver in exchange for any
certificates representing shares of Pledged Stock so registered pursuant to such
registration, which bear any restrictive legend, new Pledged Stock certificates
not bearing such legend or any similar legend. In the event of any such
registration, the Company hereby agrees to indemnify and hold harmless the Agent
and the Lenders as pledgee of the Pledged Stock against any losses, claims,
damages or liabilities to which the Agent and the Lenders may become subject to
the extent that such losses, claims, damages or liabilities arise out of or are
based upon any untrue statement or alleged untrue statement of any material fact
contained in any such registration statement, and any preliminary prospectus or
filed prospectus, or in any amendment or supplement thereto, or arise out of or
are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse the Agent and the Lenders for any legal or other
expenses reasonably incurred by the Agent and the Lenders in connection with
investigating or defending any such loss, claim, damage or liability. The
indemnifications contained in this paragraph shall include each person, if any,
who controls the Agent or any Lender.
4. Events of Default; Remedies.
PLEDGE AGREEMENT AND IRREVOCABLE PROXY
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<PAGE> 3
(a) Upon the occurrence of any Event of Default under the Credit
Agreement, which has not been remedied by the Company, the Borrower, or the
Borrowing Subsidiary within fifteen (15) days after the Borrower or the
Borrowing Subsidiary receives written notice of such occurrence from the Agent
(the "Cure Period"), an Event of Default shall be deemed to have occurred
hereunder and the Agent shall have all of the rights, remedies and
responsibilities provided by law and/or by this Pledge Agreement, including but
not limited to all of the rights, remedies and responsibilities of a secured
party under the Michigan Uniform Commercial Code, and the Company hereby
authorizes the Agent, in accordance with the Michigan Uniform Commercial Code,
to sell all or any part of the Pledged Stock at public or private sale and to
apply the proceeds of such sale to the costs and expenses thereof (including the
reasonable attorneys' fees and disbursements incurred by the Agent) and then to
the payment of the other Secured Obligations. Any requirement of reasonable
notice in connection with such sale shall be met if the Agent sends such notice
to the Company, by registered or certified mail, at least 5 days prior to the
date of sale, disposition or other event giving rise to the required notice. The
Agent or any Lender may be the purchaser at any such sale. The Agent shall be
under no obligation to preserve rights against prior parties.
(b) The Company hereby waives as to the Agent and the Lenders any right of
subrogation or marshalling of such stock and other collateral for indebtedness
or other obligations owed to the Agent and the Lenders. To this end, the Company
hereby expressly agrees that any such collateral or other security of the
Company or any other party which the Agent or any Lender may hold, or which may
come to any of their possession, may be dealt with in all respects and
particulars as though this Pledge Agreement were not in existence. The Company
agrees and acknowledges that because of applicable securities laws, the Agent
may not be able to effect a public sale of the Pledged Stock and sales at a
private sale may be on terms less favorable than if such securities were sold at
a public sale and may be at a price less favorable than a public sale.
(c) The Company irrevocably designates, makes, constitutes and appoints
the Agent (and all persons designated by the Agent) as its true and lawful
attorney (and agent-in-fact) and the Agent, or the Agent's agent, may, upon and
after an Event of Default hereunder which has not been waived, with notice to
the Company if the Secured Obligations have not been accelerated and without
notice if the Secured Obligations have been accelerated, take any action as the
Agent reasonably deems necessary under the circumstances to enforce or otherwise
take action in respect to the Pledged Stock as required hereby, or to carry out
any other obligation or duty of the Company under this Agreement.
(d) Notwithstanding the foregoing, the Agent, on behalf of the Lenders,
agrees that it shall not exercise any remedy hereunder, including the remedies
set forth in Section 5, until such time as Agent has exercised its remedies
under the Company Security Agreement and Guarantor Security Agreement and has
realized upon substantially all of the assets subject thereto to the extent
permitted by law; provided that the Agent and the Lenders may exercise all
rights and remedies hereunder immediately upon the occurrence of, and nothing in
this Section 4(d) shall limit or otherwise impair any of the Agent's and the
Lenders' interests, rights and remedies in, any bankruptcy, insolvency or
similar proceeding.
5. Additional Remedies; Irrevocable Proxy.
After satisfaction of the sale provisions of Section 4 but subject to
Section 4(d) herein, the Agent may transfer into its name, or into the name of
its nominee or nominees, any or all of the Pledged Stock and may vote any or all
of the Pledged Stock (whether or not so transferred) and may otherwise act with
respect
PLEDGE AGREEMENT AND IRREVOCABLE PROXY
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<PAGE> 4
thereto as though it were the outright owner thereof, the Company hereby
irrevocably constituting and appointing the Agent as the proxy and
attorney-in-fact of the Company, with full power of substitution, to do so.
(a) Upon the occurrence of the events described in Section 5(a) above, the
Agent may vote the Pledged Stock to remove the directors and officers of any
Pledged Subsidiary, and to elect new directors and officers of any Pledged
Subsidiary, who thereafter shall manage the affairs of such Pledged Subsidiary,
operate its properties and carry on its business and otherwise take any action
with respect to the business, properties and affairs of such Pledged Subsidiary
which such new directors shall deem necessary or appropriate, including, but not
limited to, the maintenance, repair, renewal or alteration of any or all of the
properties of such Pledged Subsidiary, the leasing, subleasing, sale or other
disposition of any or all of such properties, the borrowing of money on the
credit of such Pledged Subsidiary, and the employment of attorneys, agents or
other employees deemed by such new directors to be necessary for the proper
operation, conduct, winding up or liquidation of the business, properties and
affairs of such Pledged Subsidiary, and all revenues from the operation,
conduct, winding up or liquidation of the business, properties and affairs of
such Pledged Subsidiary after the payment of expenses thereof shall be applied
to the payment of the Secured Obligations.
(b) The Company agrees that the proxy granted in this paragraph 5 is
coupled with an interest and is and shall be both valid and irrevocable so long
as the Pledged Stock is subject to this Pledge Agreement. The Company further
acknowledges that the term of said proxy may exceed three years from the date
hereof.
6. Remedies Cumulative. No right or remedy conferred upon or reserved to
the Agent and the Lenders under any Operative Document is intended to be
exclusive of any other right or remedy, and every right and remedy shall be
cumulative in addition to every other right or remedy given hereunder or now or
hereafter existing under any applicable law. Every right and remedy of the Agent
and the Lenders under any Operative Document or under applicable law may be
exercised from time to time and as often as may be deemed expedient by the Agent
and the Lenders. To the extent that it lawfully may, the Company agrees that it
will not at any time insist upon, plead, or in any manner whatever claim or take
any benefit or advantage of any applicable present or future stay, extension or
moratorium law, which may affect observance or performance of any provisions of
any Operative Document; nor will it claim, take or insist upon any benefit or
advantage of any present or future law providing for the valuation or appraisal
of any security for its obligations under any Operative Document prior to any
sale or sales thereof which may be made under or by virtue of any instrument
governing the same; nor will it, after any such sale or sales, claim or exercise
any right, under any applicable law to redeem any portion of such security so
sold.
7. Conduct No Waiver. No waiver of default shall be effective unless in
writing executed by the Agent and waiver of any default or forbearance on the
part of the Agent in enforcing any of its rights under this Pledge Agreement
shall not operate as a waiver of any other default or of the same default on a
future occasion or of such right.
8. Governing Law; Definitions. This Pledge Agreement is a contract made
under, and shall be governed by and construed in accordance with, the law of the
State of Michigan applicable to contracts made and to be performed entirely
within such State and without giving effect to choice of law principles of such
State. The Company agrees that any legal action or proceeding with respect to
this Pledge Agreement
PLEDGE AGREEMENT AND IRREVOCABLE PROXY
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<PAGE> 5
or the transactions contemplated hereby may be brought in any court of the State
of Michigan, or in any court of the United States of America sitting in
Michigan, and the Company hereby submits to and accepts generally and
unconditionally the jurisdiction of those courts with respect to its person and
property, and irrevocably appoints the Chief Financial Officer of the Company,
at the Company's address set forth in the Credit Agreement, as its agent for
service of process and irrevocably consents to the service of process in
connection with any such action or proceeding by personal delivery to such agent
or to the Company or by the mailing thereof by registered or certified mail,
postage prepaid to the Company at its address set forth in the Credit Agreement.
Nothing in this paragraph shall affect the right of the Agent to serve process
in any other manner permitted by law or limit the right of the Agent to bring
any such action or proceeding against the Company or its property in the courts
of any other jurisdiction. The Company hereby irrevocably waives any objection
to the laying of venue of any such suit or proceeding in the above described
courts. Terms used but not defined herein shall have the respective meanings
ascribed thereto in the Credit Agreement. Unless otherwise defined herein or in
the Credit Agreement, terms used in Article 9 of the Uniform Commercial Code in
the State of Michigan are used herein as therein defined on the date hereof. The
headings of the various subdivisions hereof are for convenience of reference
only and shall in no way modify any of the terms or provisions hereof.
9. Notices. All notices, demands, requests, consents and other
communications hereunder shall be delivered in the manner described in the
Credit Agreement.
10. Rights Not Construed as Duties. The Agent neither assumes nor shall it
have any duty of performance or other responsibility under any contracts in
which the Agent has or obtains a security interest hereunder. If the Company
fails to perform any agreement contained herein, the Agent may but is in no way
obligated to itself perform, or cause performance of, such agreement, and the
reasonable expenses of the Agent incurred in connection therewith shall be
payable by the Company under paragraph 13. The powers conferred on the Agent
hereunder are solely to protect its interests in the Pledged Stock and shall not
impose any duty upon it to exercise any such powers. Except for the safe custody
of any Pledged Stock in its possession and accounting for monies actually
received by it hereunder, the Agent shall have no duty as to any Pledged Stock
or as to the taking of any necessary steps to preserve rights against prior
parties or any other rights pertaining to any Pledged Stock.
11. Amendments. None of the terms and provisions of this Pledge Agreement
may be modified or amended in any way except by an instrument in writing
executed by each of the parties hereto.
12. Severability. If any one or more provisions of this Pledge Agreement
should be invalid, illegal or unenforceable in any respect under any applicable
law, the validity, legality and enforceability of the remaining provisions
contained herein shall not in any way be affected, impaired or prejudiced
thereby.
13. Expenses.
(a) The Company agrees to indemnify the Agent from and against any and all
claims, losses and liabilities growing out of or resulting from this Pledge
Agreement (including, without limitation, enforcement of this Pledge Agreement),
except claims, losses or liabilities resulting from the Agent's gross negligence
or willful misconduct.
PLEDGE AGREEMENT AND IRREVOCABLE PROXY
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<PAGE> 6
(b) The Company will, upon written demand, pay to the Agent an amount of
any and all reasonable and documented expenses, including the reasonable fees
and disbursements of its counsel and of any experts and agents, which the Agent
may incur in connection with (i) the administration of this Pledge Agreement,
(ii) the custody, preservation, use or operation of, or the sale of, collection
from or other realization upon, any of the Pledged Stock, (iii) the exercise or
enforcement of any of the rights of the Agent hereunder or under the Operative
Documents, or (iv) the failure of the Company to perform or observe any of the
provisions hereof.
14. Successors and Assigns; Termination. This Pledge Agreement shall
create a continuing security interest in the Pledged Stock and shall be binding
upon the Company, its successors and assigns, and inure, together with the
rights and remedies of the Agent hereunder, to the benefit of the Agent and its
successors, transferees and assigns. Upon the payment in full in immediately
available funds of all of the Secured Obligations and the termination of all
commitments to lend under the Operative Documents, the security interest granted
hereunder shall terminate and upon such termination the Agent shall assign,
transfer and deliver without recourse and without warranty the Pledged Stock to
the Company (and any property received in respect thereof) as has not
theretofore been sold or otherwise applied pursuant to the provisions of this
Pledge Agreement.
15. Waiver of Jury Trial. The Agent and the Lenders, in accepting this
Pledge Agreement, and the Company, after consulting or having had the
opportunity to consult with counsel, knowingly, voluntarily and intentionally
waive any right any of them may have to a trial by jury in any litigation based
upon or arising out of this Pledge Agreement or any related instrument or
agreement or any of the transactions contemplated by this Pledge Agreement or
any course of conduct, dealing, statements (whether oral or written) or actions
of any of them. Neither the Agent, the Lenders, nor the Company shall seek to
consolidate, by counterclaim or otherwise, any such action in which a jury trial
has been waived with any other action in which a jury trial cannot be or has not
been waived. These provisions shall not be deemed to have been modified in any
respect or relinquished by either the Agent and the Lenders or the Company
except by a written instrument executed by all of them.
IN WITNESS WHEREOF, the Company has caused this Pledge Agreement to be
duly executed as of the day and year first above written.
OXFORD AUTOMOTIVE, INC.
By:
Its:
Accepted and Agreed:
NBD BANK, as Agent
PLEDGE AGREEMENT AND IRREVOCABLE PROXY
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<PAGE> 7
By:
Its:
PLEDGE AGREEMENT AND IRREVOCABLE PROXY
-7-
<PAGE> 8
SCHEDULE 1
<TABLE>
<CAPTION>
Percentage
of total common
Jurisdiction Number Number of shares of
Name of of of Issued Stock Pledged Percentage
Subsidiary Incorporation Shares Certificates Subsidiary Owned
- ---------- ------------- ------ ------------ ---------- -----
<S> <C> <C> <C> <C> <C>
OASP, Inc. Michigan 1,000 No. 1 100%
100%
OASP II, Inc. Michigan 1,000 No. 1 100%
100%
</TABLE>
PLEDGE AGREEMENT AND IRREVOCABLE PROXY
-8-
<PAGE> 1
Exhibit 4.17
PLEDGE AGREEMENT AND IRREVOCABLE PROXY
THIS PLEDGE AGREEMENT dated as of February 4, 1999 (this "Pledge
Agreement"), is given by OASP, Inc., a Michigan corporation (the "Company"), in
favor of NBD Bank, a Michigan banking corporation, as agent (in such capacity,
the "Agent") for the benefit of itself and the lenders (the "Lenders") now or
hereafter parties to the Credit Agreement described below.
RECITALS
A. Oxford Automotive, Inc., a Michigan corporation (the "Borrower") and
the Borrowing Subsidiaries identified from time to time therein (collectively,
the "Borrowing Subsidiary") have entered into an Amended and Restated Credit
Agreement, dated as of the date hereof, (as amended or modified from time to
time, including any agreement entered into in substitution therefor, the "Credit
Agreement"), with the Lenders parties thereto and the Agent pursuant to which
the Lenders may make Advances (as therein defined) to the Borrower and the
Borrowing Subsidiary.
B. The Company is a subsidiary of the Borrower, and is engaged in a common
enterprise with the Borrower and other subsidiaries of the Borrower.
C. The Company, together with the other subsidiaries of the Company, has
guaranteed the Borrower's and the Borrowing Subsidiary's obligations under the
Credit Agreement pursuant to a Guaranty Agreement (as hereinafter amended,
modified or restated, the "Guaranty").
D. As a condition precedent to the effectiveness of the Lenders'
obligations under the Credit Agreement, the Company has agreed to pledge to the
Agent, for the benefit of the Lenders, and grant a first-priority security
interest to the Agent, for the benefit of the Lenders, in and to the collateral
described herein and to execute this Pledge Agreement.
For value received and pursuant to the Credit Agreement, the Company
hereby grants a first-priority security interest to the Agent, for the benefit
of the Lenders, in and to all (or 65% in the case of a Foreign Subsidiary which
is not a Canadian Subsidiary) of the outstanding Capital Stock of the companies
listed on the schedule attached hereto as Schedule 1 (the "Pledged
Subsidiaries", and said shares of stock, together with any other shares and
securities from time to time receivable or otherwise distributed in respect of
or in exchange for any or all of such shares, being called the "Pledged Stock"),
to secure, (a) the prompt and complete payment of all indebtedness and other
obligations of the Company or any Subsidiary now or hereafter owing to the
Lenders or the Agent under or on account of the Credit Agreement, any other Loan
Document or any letters of credit, notes or other instruments issued to the
Agent or Lenders pursuant thereto, (b) the performance of the covenants under
the Credit Agreement and the Security Documents and any monies expended by the
Agent in connection therewith payable under the Credit Agreement and (c) the
prompt and complete payment of all obligations and performance of all covenants
of the Company or any Subsidiary under any interest rate or currency swap
agreements or similar transactions with any Lender (all of the aforesaid
indebtedness, obligations and liabilities of the Company and its Subsidiaries
being herein called the "Secured Obligations", and all of the documents,
agreements and instruments among the Company, the Subsidiaries, the Agent, the
Lenders, or any of them, evidencing or securing the repayment of, or otherwise
pertaining to, the Secured Obligations being herein collectively called the
"Operative Documents"). The Company is herewith delivering to the Agent for the
benefit of the Lenders originals of
<PAGE> 2
all stock certificates of the Pledged Stock or taking such other action
acceptable to the Agent and the Required Lenders to perfect the security
interest in the Pledged Stock granted hereby.
The Company further represents and warrants to, and agrees with, the Agent
for the benefit of the Lenders as follows:
1. Representations and Warranties. The Company represents and warrants
that the Pledged Stock is represented by the stock certificate or certificates
or shares described on Schedule 1 hereto, and that such stock certificate or
certificates, accompanied by an instrument of assignment or transfer duly
executed in blank by the Company as the owner named in such stock certificate or
certificates, have been delivered to the Agent by the Company. The Company
further represents and warrants that (a) the Pledged Stock is duly authorized
and validly issued, fully paid and nonassessable and constitutes 100% of all of
the issued and outstanding shares of the Capital Stock of each Pledged
Subsidiary which is a Domestic Subsidiary and 65% of all of the issued and
outstanding shares of the Capital Stock of each Pledged Subsidiary which is a
Foreign Subsidiary, (b) the Company is the legal and beneficial owner of the
Pledged Stock, free and clear of all Liens other than the Lien of Agent
hereunder, with requisite right and power to deliver, pledge and assign the
Pledged Stock to the Agent hereunder, and (c) the pledge of the Pledged Stock
pursuant to this Pledge Agreement creates in favor of the Agent a valid and
perfected first-priority security interest in the Pledged Stock enforceable
against the Company and all third parties and securing the payment of the
Secured Obligations.
2. Title; Stock Rights, Dividends, Etc. The Company will warrant and
defend the Agent's title to the Pledged Stock, and the security interest herein
created, against all claims of all persons, and will maintain and preserve such
security interest. It is understood and agreed that the collateral hereunder
includes any stock rights, stock dividends, liquidating dividends, new
securities, payments, distributions and proceeds (including cash dividends and
sale proceeds) and other property to which the Company may become entitled by
reason of the ownership of the Pledged Stock during the existence of this Pledge
Agreement, and any such property received by the Company shall be held in trust
and forthwith delivered to the Agent to be held hereunder in accordance with the
terms of this Pledge Agreement.
3. Registration Rights. If any Pledged Subsidiary at any time or from time
to time proposes to register any of its securities under the Securities Act of
1933, the Company will at each such time give notice to the Agent of such
Pledged Subsidiary's intentions so to do. Upon the request of the Agent given 30
days after receipt of such notice, the Company will cause all Pledged Stock of
such Pledged Subsidiary to be included in the registration statement proposed to
be filed, all to the extent requisite to permit the public sale or other public
disposition of such Pledged Stock so registered by the holders thereof. The
costs and expenses of all such registrations and qualifications under said Act
shall be paid by the Company or such Pledged Subsidiary, except that
underwriting discounts and commissions in respect of any Pledged Stock sold
pursuant to any such registration statement shall be borne by the sellers
thereof. As expeditiously as possible after the effective date of any such
registration statement, the Company will deliver in exchange for any
certificates representing shares of Pledged Stock so registered pursuant to such
registration, which bear any restrictive legend, new Pledged Stock certificates
not bearing such legend or any similar legend. In the event of any such
registration, the Company hereby agrees to indemnify and hold harmless the Agent
and the Lenders as pledgee of the Pledged Stock
PLEDGE AGREEMENT AND IRREVOCABLE PROXY
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<PAGE> 3
against any losses, claims, damages or liabilities to which the Agent and the
Lenders may become subject to the extent that such losses, claims, damages or
liabilities arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any such registration
statement, and any preliminary prospectus or filed prospectus, or in any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and will
reimburse the Agent and the Lenders for any legal or other expenses reasonably
incurred by the Agent and the Lenders in connection with investigating or
defending any such loss, claim, damage or liability. The indemnifications
contained in this paragraph shall include each person, if any, who controls the
Agent or any Lender.
4. Events of Default; Remedies.
(a) Upon the occurrence of any Event of Default under the Credit
Agreement, which has not been remedied by the Company, the Borrower, or the
Borrowing Subsidiary within fifteen (15) days after the Borrower or the
Borrowing Subsidiary receives written notice of such occurrence from the Agent
(the "Cure Period"), an Event of Default shall be deemed to have occurred
hereunder and the Agent shall have all of the rights, remedies and
responsibilities provided by law and/or by this Pledge Agreement, including but
not limited to all of the rights, remedies and responsibilities of a secured
party under the Michigan Uniform Commercial Code, and the Company hereby
authorizes the Agent, in accordance with the Michigan Uniform Commercial Code,
to sell all or any part of the Pledged Stock at public or private sale and to
apply the proceeds of such sale to the costs and expenses thereof (including the
reasonable attorneys' fees and disbursements incurred by the Agent) and then to
the payment of the other Secured Obligations. Any requirement of reasonable
notice in connection with such sale shall be met if the Agent sends such notice
to the Company, by registered or certified mail, at least 5 days prior to the
date of sale, disposition or other event giving rise to the required notice. The
Agent or any Lender may be the purchaser at any such sale. The Agent shall be
under no obligation to preserve rights against prior parties.
(b) The Company hereby waives as to the Agent and the Lenders any right of
subrogation or marshalling of such stock and other collateral for indebtedness
or other obligations owed to the Agent and the Lenders. To this end, the Company
hereby expressly agrees that any such collateral or other security of the
Company or any other party which the Agent or any Lender may hold, or which may
come to any of their possession, may be dealt with in all respects and
particulars as though this Pledge Agreement were not in existence. The Company
agrees and acknowledges that because of applicable securities laws, the Agent
may not be able to effect a public sale of the Pledged Stock and sales at a
private sale may be on terms less favorable than if such securities were sold at
a public sale and may be at a price less favorable than a public sale.
(c) The Company irrevocably designates, makes, constitutes and appoints
the Agent (and all persons designated by the Agent) as its true and lawful
attorney (and agent-in-fact) and the Agent, or the Agent's agent, may, upon and
after an Event of Default hereunder which has not been waived, with notice to
the Company if the Secured Obligations have not been accelerated and without
notice if the Secured Obligations have been accelerated, take any action as the
Agent reasonably deems necessary under the circumstances to enforce or otherwise
take action in respect to the Pledged Stock as required hereby, or to carry out
any other obligation or duty of the Company under this Agreement.
PLEDGE AGREEMENT AND IRREVOCABLE PROXY
-3-
<PAGE> 4
(d) Notwithstanding the foregoing, the Agent, on behalf of the Lenders,
agrees that it shall not exercise any remedy hereunder, including the remedies
set forth in Section 5, until such time as Agent has exercised its remedies
under the Company Security Agreement and Guarantor Security Agreement and has
realized upon substantially all of the assets subject thereto to the extent
permitted by law; provided that the Agent and the Lenders may exercise all
rights and remedies hereunder immediately upon the occurrence of, and nothing in
this Section 4(d) shall limit or otherwise impair any of the Agent's and the
Lenders' interests, rights and remedies in, any bankruptcy, insolvency or
similar proceeding.
5. Additional Remedies; Irrevocable Proxy.
(a) After satisfaction of the sale provisions of Section 4, but subject to
Section 4(d) herein, the Agent may transfer into its name, or into the name of
its nominee or nominees, any or all of the Pledged Stock and may vote any or all
of the Pledged Stock (whether or not so transferred) and may otherwise act with
respect thereto as though it were the outright owner thereof, the Company hereby
irrevocably constituting and appointing the Agent as the proxy and
attorney-in-fact of the Company, with full power of substitution, to do so.
(b) Upon the occurrence of the events described in Section 5(a) above, the
Agent may vote the Pledged Stock to remove the directors and officers of any
Pledged Subsidiary, and to elect new directors and officers of any Pledged
Subsidiary, who thereafter shall manage the affairs of such Pledged Subsidiary,
operate its properties and carry on its business and otherwise take any action
with respect to the business, properties and affairs of such Pledged Subsidiary
which such new directors shall deem necessary or appropriate, including, but not
limited to, the maintenance, repair, renewal or alteration of any or all of the
properties of such Pledged Subsidiary, the leasing, subleasing, sale or other
disposition of any or all of such properties, the borrowing of money on the
credit of such Pledged Subsidiary, and the employment of attorneys, agents or
other employees deemed by such new directors to be necessary for the proper
operation, conduct, winding up or liquidation of the business, properties and
affairs of such Pledged Subsidiary, and all revenues from the operation,
conduct, winding up or liquidation of the business, properties and affairs of
such Pledged Subsidiary after the payment of expenses thereof shall be applied
to the payment of the Secured Obligations.
(c) The Company agrees that the proxy granted in this paragraph 5 is
coupled with an interest and is and shall be both valid and irrevocable so long
as the Pledged Stock is subject to this Pledge Agreement. The Company further
acknowledges that the term of said proxy may exceed three years from the date
hereof.
6. Remedies Cumulative. No right or remedy conferred upon or reserved to
the Agent and the Lenders under any Operative Document is intended to be
exclusive of any other right or remedy, and every right and remedy shall be
cumulative in addition to every other right or remedy given hereunder or now or
hereafter existing under any applicable law. Every right and remedy of the Agent
and the Lenders under any Operative Document or under applicable law may be
exercised from time to time and as often as may be deemed expedient by the Agent
and the Lenders. To the extent that it lawfully may, the Company agrees that it
will not at any time insist upon, plead, or in any manner whatever claim or take
any benefit or advantage of any applicable present or future stay, extension or
moratorium law, which may affect observance or performance of any provisions of
any Operative Document; nor will it
PLEDGE AGREEMENT AND IRREVOCABLE PROXY
-4-
<PAGE> 5
claim, take or insist upon any benefit or advantage of any present or future law
providing for the valuation or appraisal of any security for its obligations
under any Operative Document prior to any sale or sales thereof which may be
made under or by virtue of any instrument governing the same; nor will it, after
any such sale or sales, claim or exercise any right, under any applicable law to
redeem any portion of such security so sold.
7. Conduct No Waiver. No waiver of default shall be effective unless in
writing executed by the Agent and waiver of any default or forbearance on the
part of the Agent in enforcing any of its rights under this Pledge Agreement
shall not operate as a waiver of any other default or of the same default on a
future occasion or of such right.
8. Governing Law; Definitions. This Pledge Agreement is a contract made
under, and shall be governed by and construed in accordance with, the law of the
State of Michigan applicable to contracts made and to be performed entirely
within such State and without giving effect to choice of law principles of such
State. The Company agrees that any legal action or proceeding with respect to
this Pledge Agreement or the transactions contemplated hereby may be brought in
any court of the State of Michigan, or in any court of the United States of
America sitting in Michigan, and the Company hereby submits to and accepts
generally and unconditionally the jurisdiction of those courts with respect to
its person and property, and irrevocably appoints the Chief Financial Officer of
the Company, at the Company's address set forth in the Credit Agreement, as its
agent for service of process and irrevocably consents to the service of process
in connection with any such action or proceeding by personal delivery to such
agent or to the Company or by the mailing thereof by registered or certified
mail, postage prepaid to the Company at its address set forth in the Credit
Agreement. Nothing in this paragraph shall affect the right of the Agent to
serve process in any other manner permitted by law or limit the right of the
Agent to bring any such action or proceeding against the Company or its property
in the courts of any other jurisdiction. The Company hereby irrevocably waives
any objection to the laying of venue of any such suit or proceeding in the above
described courts. Terms used but not defined herein shall have the respective
meanings ascribed thereto in the Credit Agreement. Unless otherwise defined
herein or in the Credit Agreement, terms used in Article 9 of the Uniform
Commercial Code in the State of Michigan are used herein as therein defined on
the date hereof. The headings of the various subdivisions hereof are for
convenience of reference only and shall in no way modify any of the terms or
provisions hereof.
9. Notices. All notices, demands, requests, consents and other
communications hereunder shall be delivered in the manner described in the
Credit Agreement.
10. Rights Not Construed as Duties. The Agent neither assumes nor shall it
have any duty of performance or other responsibility under any contracts in
which the Agent has or obtains a security interest hereunder. If the Company
fails to perform any agreement contained herein, the Agent may but is in no way
obligated to itself perform, or cause performance of, such agreement, and the
reasonable expenses of the Agent incurred in connection therewith shall be
payable by the Company under paragraph 13. The powers conferred on the Agent
hereunder are solely to protect its interests in the Pledged Stock and shall not
impose any duty upon it to exercise any such powers. Except for the safe custody
of any Pledged Stock in its possession and accounting for monies actually
received by it hereunder, the Agent shall have no duty as to any Pledged Stock
or as to the taking of any necessary steps to preserve rights against prior
parties or any other rights pertaining to any Pledged Stock.
PLEDGE AGREEMENT AND IRREVOCABLE PROXY
-5-
<PAGE> 6
11. Amendments. None of the terms and provisions of this Pledge Agreement
may be modified or amended in any way except by an instrument in writing
executed by each of the parties hereto.
12. Severability. If any one or more provisions of this Pledge Agreement
should be invalid, illegal or unenforceable in any respect under any applicable
law (including without limitation French law), the validity, legality and
enforceability of the remaining provisions contained herein shall not in any way
be affected, impaired or prejudiced thereby. If there is any conflict between
the terms and provisions of this Pledge Agreement and French law, the terms and
provisions of the statement of pledge (declaration de gage de compte d'
instruments financiers) (the "Statement of Pledge") and the certificate of
pledge (the "Certificate of Pledge") governed by French law and executed in
connection with the Loan Agreement shall control.
13. Expenses.
(a) The Company agrees to indemnify the Agent from and against any and all
claims, losses and liabilities growing out of or resulting from this Pledge
Agreement (including, without limitation, enforcement of this Pledge Agreement),
except claims, losses or liabilities resulting from the Agent's gross negligence
or willful misconduct.
(b) The Company will, upon written demand, pay to the Agent an amount of
any and all reasonable and documented expenses, including the reasonable fees
and disbursements of its counsel and of any experts and agents, which the Agent
may incur in connection with (i) the administration of this Pledge Agreement,
(ii) the custody, preservation, use or operation of, or the sale of, collection
from or other realization upon, any of the Pledged Stock, (iii) the exercise or
enforcement of any of the rights of the Agent hereunder or under the Operative
Documents, or (iv) the failure of the Company to perform or observe any of the
provisions hereof.
14. Successors and Assigns; Termination. This Pledge Agreement shall
create a continuing security interest in the Pledged Stock and shall be binding
upon the Company, its successors and assigns, and inure, together with the
rights and remedies of the Agent hereunder, to the benefit of the Agent and its
successors, transferees and assigns. Upon the payment in full in immediately
available funds of all of the Secured Obligations and the termination of all
commitments to lend under the Operative Documents, the security interest granted
hereunder shall terminate and upon such termination the Agent shall assign,
transfer and deliver without recourse and without warranty the Pledged Stock to
the Company (and any property received in respect thereof) as has not
theretofore been sold or otherwise applied pursuant to the provisions of this
Pledge Agreement.
15. Waiver of Jury Trial. The Agent and the Lenders, in accepting this
Pledge Agreement, and the Company, after consulting or having had the
opportunity to consult with counsel, knowingly, voluntarily and intentionally
waive any right any of them may have to a trial by jury in any litigation based
upon or arising out of this Pledge Agreement or any related instrument or
agreement or any of the transactions contemplated by this Pledge Agreement or
any course of conduct, dealing, statements (whether oral or written) or actions
of any of them. Neither the Agent, the Lenders, nor the Company shall seek to
consolidate, by counterclaim or otherwise, any such action in which a jury trial
has been waived with any other action in which a jury trial cannot be or has not
been waived. These provisions
PLEDGE AGREEMENT AND IRREVOCABLE PROXY
-6-
<PAGE> 7
shall not be deemed to have been modified in any respect or relinquished by
either the Agent and the Lenders or the Company except by a written instrument
executed by all of them.
IN WITNESS WHEREOF, the Company has caused this Pledge Agreement to be
duly executed as of the day and year first above written.
OASP, INC.
By:
Its:
Accepted and Agreed:
NBD BANK, as Agent
By:
Its:
PLEDGE AGREEMENT AND IRREVOCABLE PROXY
-7-
<PAGE> 8
SCHEDULE 1
<TABLE>
<CAPTION>
Name of Jurisdiction Total Number Total Number of Total Number
Subsidiary of of Issued Shares of Issued Shares
Incorporation Issued Shares Owned by the Pledged hereunder
Company
<S> <C> <C> <C> <C>
Oxford Automotive France 2,500 2,485 1,625
France SAS
</TABLE>
PLEDGE AGREEMENT AND IRREVOCABLE PROXY
-8-
<PAGE> 1
Exhibit 4.18
JOINDER AGREEMENT
[OASP, INC. and OASP II, INC.]
THIS JOINDER AGREEMENT, dated as of February 4, 1999, is entered
into pursuant to the Credit Agreement dated as of June 24, 1997, as amended and
restated by the Amended and Restated Credit Agreement dated as of the date
hereof (as so amended and restated and as further amended or modified from time
to time, the "Credit Agreement"), among Oxford Automotive, Inc. (the "Company"),
each of the Borrowing Subsidiaries and Lenders party thereto, and NBD Bank, as
agent for the Lenders (in such capacity, the "Agent").
WITNESSETH:
WHEREAS, pursuant to the terms of the Credit Agreement, among other
subsidiaries of the Company, OASP, Inc and OASP II, Inc. (the "New Guarantors")
are required to guarantee all indebtedness, obligations and liabilities of the
Borrowers, to grant a lien and security interest in all of their assets to
secure such guaranty and such indebtedness, obligations and liabilities and to
join the other Loan Documents as a Guarantor; and
WHEREAS, the New Guarantors have determined that it is in their best
interest and to their financial benefit to execute and deliver this Joinder
Agreement;
NOW, THEREFORE, in consideration of the premises, the parties hereto
hereby agree as follows:
1. Each New Guarantor hereby acknowledges that it has received and
reviewed a copy of the Credit Agreement and the other Loan Documents and
approved each of the foregoing, and acknowledges that it has received and
reviewed all other financial statements, agreements and documents as it has
deemed appropriate in order to enter into this Joinder Agreement.
2. Each New Guarantor unconditionally agrees hereby to: (a) join, as
a Guarantor, the Guaranty Agreement dated as of June 24, 1997 (as amended by the
Consent and Amendment of Security Documents dated the date hereof and as further
amended or modified from time to time, the "Guaranty") among the Guarantors
party thereto in favor of the Lenders and the Agent, join, as a Grantor, the
Guarantor Security Agreement dated as of June 24, 1997 (as amended by the
Consent and Amendment of Security Documents dated the date hereof and as further
amended or modified from time to time, the "Guarantor Security Agreement") among
the Grantors party thereto in favor of the Lenders and the Agent and join, in
the same capacity as each of the Guarantors party thereto, each other Loan
Document to which the Guarantors are a party, in the same capacity as such
Guarantors, (b) be bound by, and hereby ratifies and confirms, all covenants,
agreements, consents, submissions, appointments, acknowledgments and other terms
and provisions, including without limitation all guarantees and all grants of
liens and security interests, attributable to a Guarantor and/or Grantor in the
Guaranty, the Guarantor Security Agreement and all other Loan Documents, in each
case as amended by the Consent and Amendment of Security Documents dated the
date hereof and as further amended or modified from time to time (which
includes, without limitation, the Subrogation and Contribution Agreement dated
as of June 24, 1997, as amended, among the Company and the Guarantors party
thereto) to which any Guarantor is a party; and (c) perform all obligations
required of it as a Guarantor and/or Grantor in the Guaranty, the Guarantor
Security Agreement and all other Loan Documents to which any Guarantor is a
party.
3. Each New Guarantor hereby represents and warrants that (a)
attached hereto as
<PAGE> 2
Schedule 1 is a complete and accurate description of all names used by each New
Guarantor, of the chief executive office and all other offices and other
locations of any assets owned by each New Guarantor and a list of any patents,
trademarks, copyrights or other intellectual property owned by each New
Guarantor and (b) the representations and warranties with respect to it
contained in, or made or deemed made by it in, the Guaranty, the Guarantor
Security Agreement and any other Loan Document are true and correct on the date
hereof. Each of the New Guarantors and the other Guarantors party hereto
represents and warrants that (i) the execution, delivery and performance by it
of this Joinder Agreement are within its corporate and other powers, have been
duly authorized by all necessary corporate and other action, require no action
by or in respect of, or filing with, any governmental body and do not
contravene, or constitute a default under, any provision of applicable law or
regulation or of the articles of incorporation or other charter documents or
bylaws of it, or of any agreement, judgment, injunction, order, decree or other
instrument binding upon it or its property; and (ii) this Joinder Agreement has
been duly executed and constitutes a legal, valid and binding obligation of it,
enforceable against it in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to creditors' rights and except that
the remedy of specific performance and injunctive and other forms of equitable
relief are subject to equitable defenses and to the discretion of the court for
which any proceedings may be brought.
4. Each of the New Guarantors and each of the other Guarantors party
hereto hereby acknowledge and agree that each reference in the Guaranty and in
the Guarantor Security Agreement, and any separate Guaranty Agreement or
Guarantor Security Agreement executed by any other Guarantor, to "the Borrowing
Subsidiary" shall mean and include, collectively, all present and future
Borrowing Subsidiaries under the Credit Agreement and that the "Guaranteed
Obligations" under the Guaranty or any other separate Guaranty Agreement
executed by any other Guarantor and the "Secured Obligations" under the
Guarantor Security Agreement or any other separate Guarantor Security Agreement
executed by any other Guarantor include, without limitation, all present and
future indebtedness, obligations and liabilities of each present and future
Borrowing Subsidiary under the Credit Agreement in addition to all other
indebtedness, obligations and liabilities described therein, notwithstanding
anything in any agreement to the contrary.
5. Each New Guarantor agrees to execute and deliver such financing
statements, resolutions and such other documents requested by the Agent as may
be necessary or desirable in order to give effect to, and to aid in the exercise
and enforcement of the rights and remedies of the Agent and the Lenders pursuant
to the Loan Documents to which such New Guarantor is a party.
6. Each New Guarantor, each other Guarantor party hereto and the
Company agree that the Guaranty, the Guarantor Security Agreement and each other
Loan Document, including without limitation any separate Guaranty Agreement or
Guarantor Security Agreement executed by any of the undersigned, to which the
undersigned are a party are ratified and confirmed and shall remain in full
force and effect and that they have no setoff, counterclaim or other defense or
dispute with respect to any of the foregoing.
7. This Joinder Agreement shall be governed by, and construed and
interpreted in accordance with, the laws of the State of Michigan.
8. Capitalized terms used but not defined herein shall have the
meanings ascribed thereto in the Credit Agreement.
2
<PAGE> 3
IN WITNESS WHEREOF, each of the undersigned has caused this Joinder
Agreement to be duly executed and delivered as of the day and year set forth
above.
OASP, INC.
OASP II, INC.
OXFORD SUSPENSION, INC.
RPI, INC.
PRUDENVILLE MANUFACTURING, INC.
RPI HOLDINGS, INC.
LOBDELL EMERY CORPORATION
CREATIVE FABRICATION CORPORATION
WINCHESTER FABRICATION CORPORATION
PARALLEL GROUP INTERNATIONAL, INC.
CONCEPT MANAGEMENT CORPORATION
LEWIS EMERY CAPITAL CORPORATION
HOWELL INDUSTRIES, INC.
OXFORD AUTOMOTIVE, INC.
By:_________________________________
Their:___________________________
LASERWELD INTERNATIONAL, L.L.C.
By: Lobdell Emery Corporation, its
sole member
By:_________________________________
Its:_____________________________
Accepted and Agreed:
NBD BANK, as Agent on behalf
of the Lenders
3
<PAGE> 4
By:
Its:
4
<PAGE> 5
SCHEDULE 1
List of each name, chief executive office, other office, location of any assets
and list of intellectual property of each New Guarantor.
Name of each New Guarantor
1. OASP, Inc.
2. OASP II, Inc.
Offices of each New Guarantor
1. OASP, Inc.
c/o Oxford Automotive, Inc.
1250 Stephenson Highway
Troy, MI 48083
(chief executive office)
or
c/o Oxford Automotive, Inc.
850 Stephenson Highway
Troy, MI 48083
2. OASP II, Inc.
c/o Oxford Automotive, Inc.
1250 Stephenson Highway
Troy, MI 48083
(chief executive office)
or
c/o Oxford Automotive, Inc.
850 Stephenson Highway
Troy, MI 48083
5
<PAGE> 6
Location of Assets
1. OASP, Inc.
c/o Oxford Automotive, Inc.
1250 Stephenson Highway
Troy, MI 48083
or
c/o Oxford Automotive, Inc.
850 Stephenson Highway
Troy, MI 48083
2. OASP II, Inc.
c/o Oxford Automotive, Inc.
1250 Stephenson Highway
Troy, MI 48083
or
c/o Oxford Automotive, Inc.
850 Stephenson Highway
Troy, MI 48083
Intellectual Property of each New Guarantor
1. OASP, Inc.
None.
2. OASP II, Inc.
None
6
<PAGE> 1
EXHIBIT 4.19
CONSENT AND AMENDMENT OF SECURITY DOCUMENTS
THIS AGREEMENT, dated as of February 4, 1999, is by each of the
undersigned in favor of NBD Bank, as Agent (as defined below) for the Lenders
(as defined below) and in favor of each of the Lenders.
RECITALS:
A. Oxford Automotive, Inc. (the "Company"), the borrowing subsidiaries
and lenders party thereto and NBD Bank, as agent, executed a Credit Agreement
dated as of June 24, 1997 (as amended, the "Existing Credit Agreement").
B. In connection with the Existing Credit Agreement, each of the
undersigned executed the agreements and documents described on Schedule 1 hereto
(the "Security Documents").
C. Pursuant to an Amended and Restated Credit Agreement dated as of the
date hereof (as amended, modified, restated or refinanced from time to time the
"Credit Agreement") among the Company, the borrowing subsidiaries party thereto
(the "Borrowing Subsidiaries", and collectively with the Company, the
"Borrowers"), the lenders party thereto (the "Lenders") and NBD Bank, as agent
for the Lenders (in such capacity, the "Agent"). The indebtedness and
obligations under the Credit Agreement are the same indebtedness and obligations
existing under the Existing Credit Agreement plus additional indebtedness, and
all indebtedness and other obligations pursuant to the Credit Agreement are
entitled to the same collateral with the same priority as all indebtedness and
obligations pursuant to the Existing Credit Agreement.
D. Each of the undersigned and the Lenders desire to amend the Security
Documents as stated herein.
AGREEMENT
Based upon these recitals, each of the undersigned hereby agrees as
follows:
SECTION 1. Amendments. Each of the undersigned agrees that the Security
Documents shall be amended as follows: Any reference in any Security Document to
(a) the Existing Credit Agreement shall be deemed a reference to the Credit
Agreement, (b) any promissory notes shall be deemed a reference to the term
"Notes" as defined in the Credit Agreement, (c) the terms "Loan", "Loans",
"Advance" or "Advances" shall be deemed references to "Loan", "Loans", "Advance"
or "Advances" as such terms are defined in the Credit Agreement, (d) the terms
"Security Document" or "Security Documents" shall be deemed references to
"Security Document" or "Security Documents" as such terms are defined in the
Credit Agreement, (e) the term "Lenders" shall be deemed a reference to the
Lenders under the Credit Agreement, (f) the
<PAGE> 2
term "Agent" shall be deemed a reference to the Agent under the Credit
Agreement, and (g) any Event of Default under the Credit Agreement shall be
deemed an Event of Default or event of default or default, as the case may be,
under each Security Document.
SECTION 2. Representations. Each of the undersigned hereby represents
and warrants that after giving effect to the Credit Agreement, the
representations and warranties contained in each of the Security Documents are
true and correct in all material respects on and as of the effective date hereof
with the same force and effect as if made on such effective date.
SECTION 3. Ratification. Except as amended hereby, each Security
Document is hereby ratified and confirmed and shall remain in full force and
effect, and each of the undersigned hereby acknowledge that, as of the date
hereof, it has no defense, offset, counterclaim or other claim or dispute with
respect to any Security Document.
SECTION 4. Continuation of Security Interests, Etc. Each of the
undersigned acknowledges, agrees and represents that (a) all collateral granted
by the Security Documents continues with the same priority as originally granted
and secures, among other liabilities, all present and future indebtedness,
obligations and liabilities pursuant to the Credit Agreement, the Notes, the
Hedging Agreements with any Lender and the Security Documents and other Loan
Documents, including without limitation all Loans made, and Letters of Credit
issued, pursuant thereto and all fees and expenses owing thereunder and (b) the
initial Advances under the Credit Agreement refinance, and are issued in
exchange and replacement for and shall not be deemed a novation or satisfaction
of, among other secured debt, the indebtedness and other liabilities thereunder
for purposes of the Security Documents. If there is any conflict between the
Security Documents and the Credit Agreement as to the order of the application
of the proceeds of any collateral, the provisions of the Credit Agreement shall
control.
SECTION 5. Defined Terms. All the terms used but not defined herein
shall have the meaning ascribed thereto in the Credit Agreement.
SECTION 6. Counterparts, Etc. This Agreement may be executed in any
number of counterparts, and any of the parties hereto may execute this Agreement
by executing any such counterpart. In case any provision contained herein is
invalid or unenforceable, such invalidity or unenforceability shall not in any
way affect the legality, validity or enforceability of any other provision.
2
<PAGE> 3
IN WITNESS WHEREOF, each of the undersigned has caused this Agreement
to be duly executed as of the day and year first above written.
OXFORD AUTOMOTIVE, INC.
By:
------------------------------------
Its:
-----------------------------------
BIG NORTH AMERICA LIMITED
OXFORD SUSPENSION LTD.
BIG HOLDINGS INC.
976459 ONTARIO LIMITED
829500 ONTARIO LIMITED
RPI HOLDINGS, INC.
LOBDELL EMERY CORPORATION
CREATIVE FABRICATION CORPORATION
WINCHESTER FABRICATION CORPORATION
PARALLEL GROUP INTERNATIONAL, INC.
CONCEPT MANAGEMENT CORPORATION
LEWIS EMERY CAPITAL CORPORATION
HOWELL INDUSTRIES, INC.
OXFORD SUSPENSION, INC.
RPI, INC.
PRUDENVILLE MANUFACTURING, INC.
OASP, INC.
OASP II, INC.
By:
------------------------------------
Their:
---------------------------------
LASERWELD INTERNATIONAL, L.L.C.
By: Lobdell Emery Corporation,
its sole member
By:
------------------------------------
Its:
-----------------------------------
3
<PAGE> 4
Consent and Amendment of Security Documents
dated as of February 4, 1999
DISCLOSURE SCHEDULES
4
<PAGE> 5
Schedule 1(b)
(i) Location of Debtor's Chief Executive Offices
Oxford Automotive, Inc.
1250 Stephenson Highway
Troy, Michigan 48083
Tax Identification No. 38-3262809
Michigan corporation
(ii) Other Offices and Facilities
(a) Oxford Automotive, Inc.
850 Stephenson Highway
Troy, Michigan 48083
(b) Butler Metal Products
1574 Eagle Street North
Cambridge, Ontario N3H 4S5
Canada
(c) Del-Tech Metal Products
1 Butler Drive
Delhi, Ontario N4B 2W8
Canada
(d) Lobdell Emery Corporation
1325 East Superior
Alma, Michigan 48801
(e) Laserweld International, L.L.C.
950 JFK Drive
North Vernon, Indiana 47265
(f) Winchester Fabrication Corporation
200 Inks Drive
P.O. Box 270
Winchester, Indiana 47394
5
<PAGE> 6
(g) Creative Fabrication Corporation
3000 George Price Blvd.
Athens, Tennessee 37371
(h) 10850 West 17th Street
Argos, Indiana 46501
(i) 2190 Landmark Avenue
Corydon, Indiana 47112
(j) 520 Republic Street
Alma, Michigan 48801
(k) 370 Manhattan Road
Greencastle, Indiana 46135
(l) 401 Republic Street
Alma, Michigan 48801
(m) Lapeer
100 East Fair Street
Lapeer, Michigan 48446
(n) Masury
County Road 26
Masury, Ohio 44438
(o) Silao
Paseo de Los Industriales
Ple. Lotes 15-19
Parque Industrial Fipasi
Silao, Guanajualo, Mexico 36100
(p) Saltillo
Valle de Saltillo #312
Fracc. Valle de Saltillo
Saltillo, Coahulia 25107
Mexico
(q) Prudenville
1700 Short Drive
Prudenville, Michigan 48651
6
<PAGE> 7
(r) Oscoda
4775 N. Sunset
Oscoda, Michigan 48750
(s) Chatham
566 Riverview Drive
Chatham, Ontario N7M 5L9
Canada
(t) Wallaceburg
100 Mason Street
Wallaceburg, Ontario N8A 4L7
Canada
(u) Hamilton
P.O. Box 70
7825 South Homestead Drive
Hamilton, Indiana 46742
7
<PAGE> 8
Schedule 1(c)
(i) Location of Inventory
(a) Butler Metal Products
1574 Eagle Street North
Cambridge, Ontario N3H 4S5
Canada
(b) Del-Tech Metal Products
1 Butler Drive
Delhi, Ontario N4B 2W8
Canada
(c) Winchester Fabrication Corporation
200 Inks Drive
P.O. Box 270
Winchester, Indiana 47394
(d) Creative Fabrication Corporation
3000 George Price Blvd.
Athens, Tennessee 37371
(e) 10850 West 17th Street
Argos, Indiana 46501
(f) 2190 Landmark Avenue
Corydon, Indiana 47112
(g) 135 North Fearing Road
PO Box 3416
Toledo, Ohio 43607
(h) 520 Republic Street
Alma, Michigan 48801
(i) 401 Republic Street
Alma, Michigan 48801
(j) 370 Manhattan Road
Greencastle, Indiana 46135
8
<PAGE> 9
(ii) Locations of Fixtures, Machinery and Equipment
(a) See (i) above.
(b) Lindert Tool & Die
23 Raglan Place
Cambridge, Ontario
Canada
(c) Fincore
10 Melford Drive
Units 1-8
Scarborough, Ontario M1B 2G1
Canada
(d) Hinderliter Heat Treating Ltd.
9 Shirley Avenue
Kitchener, Ontario
Canada
(e) Easton Coatings Corporation
97 Easton Road
Brantford, Ontario N3P 1J4
Canada
(f) Camtron Coatings
-----------------------------
-----------------------------
(g) Tube Mill
Heidtman Steel Processing
Butler, Indiana
(h) Danly Presses
Days Corporation
Elkhart, Indiana
(i) Southwest Warehouse
240 Raleigh Street
Chatham, Ontario N7J 5E8
Canada
9
<PAGE> 10
(j) Central Detroit Warehouse
18765 Seaway Drive
Melvindale, Michigan 48122
(k) Mid States Steel
________ Inks Drive
Winchester, Indiana 47394
(l) Huncilman
P.O. Box 1027
2072 McDonald Avenue
New Albany, Indiana 47151-1027
(m) Fruchey's Warehouse
Fort Wayne, Indiana
(n) Humphrey Express
Baseline Street
Wallaceburg, Ontario
Canada
(o) Humphrey Express
Gillard Street
Wallaceburg, Ontario
10
<PAGE> 11
Schedule 1(h)
See Amended and Restated Credit Agreement Disclosure Schedules.
<PAGE> 1
EXHIBIT 4.23
OXFORD AUTOMOTIVE, INC.
------------------------------------------
AMENDED AND RESTATED CREDIT AGREEMENT
dated as of March 31, 1999
------------------------------------------
THE BORROWING SUBSIDIARIES PARTY HERETO,
THE LENDERS PARTY HERETO
and
NBD BANK, as Agent
ARRANGED BY FIRST CHICAGO CAPITAL MARKETS, INC.
i
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Article Page
- ------- ----
<S> <C> <C>
I. DEFINITIONS......................................................................................
1.1 Certain Definitions.....................................................................
1.2 Other Definitions; Rules of Construction................................................
II. THE COMMITMENTS, THE SWINGLINE FACILITY AND THE ADVANCES.........................................
2.1 Commitment of the Lenders and Canadian and Swingline Facility...........................
2.2 Termination and Reduction of Commitments................................................
2.3 Fees....................................................................................
2.4 Disbursement of Advances................................................................
2.5 Conditions for First Disbursement.......................................................
2.6 Further Conditions for Disbursement.....................................................
2.7 Subsequent Elections as to Borrowings...................................................
2.8 Limitation of Requests and Elections....................................................
2.9 Minimum Amounts; Limitation on Number of Borrowings; Etc................................
2.10 Borrowing Base Adjustment...............................................................
2.11 Security and Collateral.................................................................
III. PAYMENTS AND PREPAYMENTS OF ADVANCES.............................................................
3.1 Principal Payments and Prepayments......................................................
3.2 Interest Payments.......................................................................
3.3 Letters of Credit and Acceptances.......................................................
3.4 Additional Terms for Acceptances........................................................
3.5 Payment Method..........................................................................
3.6 No Setoff or Deduction..................................................................
3.7 Payment on Non-Business Day; Payment Computations.......................................
3.8 Additional Costs........................................................................
3.9 Illegality and Impossibility............................................................
3.10 Indemnification.........................................................................
3.11 Taxes...................................................................................
3.12 Substitution of Lender..................................................................
IV. REPRESENTATIONS AND WARRANTIES...................................................................
4.1 Corporate Existence and Power...........................................................
4.2 Corporate Authority.....................................................................
4.3 Binding Effect..........................................................................
4.4 Subsidiaries............................................................................
4.5 Litigation..............................................................................
4.6 Financial Condition.....................................................................
4.7 Use of Advances.........................................................................
4.8 Consents, Etc...........................................................................
4.9 Taxes...................................................................................
4.10 Title to Properties.....................................................................
4.11 Borrowing Base..........................................................................
4.12 ERISA...................................................................................
4.13 Disclosure..............................................................................
4.14 Environmental Matters...................................................................
4.15 Solvency................................................................................
4.16 No Defaults under Certain Agreements....................................................
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C> <C>
4.17 Intellectual Property...................................................................
4.18 Preferred Stock.........................................................................
4.19 Investment Company Act; Other Regulations...............................................
4.20 Senior Subordinated Debt................................................................
4.21 Unrestricted Subsidiaries...............................................................
4.22 Acquisitions............................................................................
4.23 Material Agreement......................................................................
4.24 Compliance With Laws....................................................................
4.25 Year 2000...............................................................................
4.26 OPI Acquisition.........................................................................
4.27 Mexican Facility........................................................................
V. COVENANTS........................................................................................
5.1 Affirmative Covenants...................................................................
(a) Preservation of Corporate Existence, Etc.......................................
(b) Compliance with Laws, Etc......................................................
(c) Maintenance of Properties; Insurance...........................................
(d) Reporting Requirements.........................................................
(e) Accounting; Access to Records, Books, Etc......................................
(f) Maintenance of Business Lines..................................................
(g) Additional Security and Collateral.............................................
(h) Further Assurances.............................................................
(i) Year 2000......................................................................
5.2 Negative Covenants......................................................................
(a) Net Worth......................................................................
(b) Total Covenant Obligations to Total Covenant EBITDA Ratio......................
(c) Fixed Charge Coverage Ratio....................................................
(d) Interest Coverage Ratio........................................................
(e) Indebtedness...................................................................
(f) Liens..........................................................................
(g) Merger; Acquisitions; Etc......................................................
(h) Disposition of Assets; Etc.....................................................
(i) Nature of Business.............................................................
(j) Dividends and Other Restricted Payments........................................
(k) Capital Expenditures...........................................................
(l) Loans, Advances and Investments................................................
(m) Transactions with Affiliates...................................................
(n) Sale and Leaseback Transactions and other Financing Transactions...............
(o) Negative Pledge Limitation.....................................................
(p) FSC Commissions................................................................
(q) Inconsistent Agreements........................................................
(r) Subsidiary Dividends...........................................................
(s) Preferred Stock................................................................
(t) Other Indebtedness and Agreements..............................................
(u) Management Fees................................................................
(v) Restricted Subsidiaries........................................................
5.3 Additional Covenants....................................................................
VI. DEFAULT..........................................................................................
6.1 Events of Default.......................................................................
(a) Nonpayment.....................................................................
(b) Misrepresentation..............................................................
(c) Certain Covenants..............................................................
(d) Other Defaults.................................................................
</TABLE>
ii
<PAGE> 4
<TABLE>
<S> <C> <C>
(e) Cross Defaults.................................................................
(f) Judgments......................................................................
(g) ERISA..........................................................................
(h) Insolvency, Etc................................................................
(i) Security Documents.............................................................
(j) Control........................................................................
(k) Cofimeta Acquisition; Mexican Facility.........................................
6.2 Remedies................................................................................
6.3 Distribution of Proceeds of Collateral..................................................
VII. THE AGENT AND THE LENDERS........................................................................
7.1 Appointment and Authorization...........................................................
7.2 Agent and Affiliates....................................................................
7.3 Scope of Agent's Duties.................................................................
7.4 Reliance by Agent.......................................................................
7.5 Default.................................................................................
7.6 Liability of Agent......................................................................
7.7 Nonreliance on Agent and Other Lenders..................................................
7.8 Indemnification.........................................................................
7.9 Successor Agent.........................................................................
7.10 Sharing of Payments.....................................................................
VIII. MISCELLANEOUS....................................................................................
8.1 Amendments, Etc.........................................................................
8.2 Notices.................................................................................
8.3 No Waiver By Conduct; Remedies Cumulative...............................................
8.4 Reliance on and Survival of Various Provisions..........................................
8.5 Expenses; Indemnification...............................................................
8.6 Successors and Assigns..................................................................
8.7 Counterparts............................................................................
8.8 Governing Law...........................................................................
8.9 Table of Contents and Headings..........................................................
8.10 Construction of Certain Provisions......................................................
8.11 Integration and Severability............................................................
8.12 Independence of Covenants...............................................................
8.13 Interest Rate Limitation................................................................
8.14 Judgment and Payment....................................................................
8.15 Acknowledgments.........................................................................
8.16 Waiver of Jury Trial....................................................................
</TABLE>
EXHIBITS
Exhibit A - Borrowing Base Certificate
Exhibit B - Company Security Agreement
Exhibit C - Environmental Certificate
Exhibit D - Guaranty
Exhibit E - Guarantor Security Agreement
Exhibit F - Revolving Credit Note
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<PAGE> 5
Exhibit G - Swingline Note
Exhibit H - Term Note
Exhibit I - Tooling Revolving Credit Note
Exhibit J - Disbursement of Advances
Exhibit K - Disbursement of Swingline Loans
Exhibit L - Subsequent Elections as to Borrowings
Exhibit M - Assignment and Acceptance
SCHEDULES
Schedule 1.1(A) - Existing Letters of Credit
Schedule 1.1(B) - Mexican Facility Documents
Schedule 1.1(C) - Mexican Subsidiaries
Schedule 1.1(D) - Existing Restricted Subsidiaries
Schedule 1.1(E) - Senior Subordinated Debt Documents
Schedule 4.4 - Subsidiaries
Schedule 4.5 - Litigation
Schedule 4.17 - Intellectual Property
Schedule 4.18 - Lobdell Preferred Stock
Schedule 4.22 - Cofimeta Indebtedness
Schedule 4.26 - OPI Acquisition
Schedule 5.2(e) - Indebtedness
Schedule 5.2(f) - Liens
Schedule 5.2(o) - Negative Pledges
Schedule 5.2(u) - Management Fees
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<PAGE> 6
THIS AMENDED AND RESTATED CREDIT AGREEMENT, dated as of March 31,
1999 (this "Agreement"), is by and among OXFORD AUTOMOTIVE, INC., a Michigan
corporation (the "Company"), each of the Subsidiaries of the Company designated
in Section 1.1 as a Borrowing Subsidiary (a "Borrowing Subsidiary" and
collectively with the Company the "Borrowers"), the lenders set forth on the
signature pages hereof, their successors and assigns, and each other Person
becoming a lender hereunder from time to time (collectively, together with any
Affiliates of such Lenders designated by such Lenders to make Canadian Advances
hereunder, the "Lenders" and individually a "Lender"), and NBD BANK, a Michigan
banking corporation, as agent (in such capacity, and collectively with any of
its Affiliates designated by it to administer any of its functions hereunder at
any time, the "Agent") for the Lenders.
RECITAL
The Company, the subsidiary borrowers and lenders party thereto, and
NBD Bank, as Agent, are parties to an Amended and Restated Credit Agreement
dated as of February 4, 1999 (as amended, the "Existing Credit Agreement"), and
the parties hereto desire to amend and restate the Existing Credit Agreement as
set forth herein.
The parties hereto agree to amend and restate the Existing Credit
Agreement in its entirety as follows:
ARTICLE I.
DEFINITIONS
1.1 Certain Definitions. As used herein the following terms shall
have the following respective meanings:
"Acceptance" shall mean Bankers' Acceptances and BA Equivalent
Loans.
"Acceptance Fee" shall mean the fee payable at the time of the
acceptance of Bankers' Acceptances established by multiplying the face amount of
such Bankers' Acceptances by the Applicable Margin and by multiplying the
product so obtained by a fraction having a numerator equal to the number of days
in the term of such Bankers' Acceptances and a denominator of 365.
"Acquisition" is defined in Section 5.2(g).
"Advance" shall mean any Loan, any acceptance of any Bankers'
Acceptance, any BA Equivalent Loan, and any Letter of Credit Advance.
"Affiliate", when used with respect to any Person, shall mean any
other Person which, directly or indirectly, controls or is controlled by or is
under common control with such Person. For purposes of this definition "control"
(including the correlative meanings of the terms "controlled by" and "under
common control with"), with respect to any Person, shall mean possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of such Person, whether through the ownership of voting
securities or by contract or otherwise, and a Person shall be deemed to control
another Person if the controlling Person owns 10% or more of any class of voting
Capital Stock of the controlled Person.
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<PAGE> 7
"Applicable Lending Office" shall mean, with respect to any Loan
made by any Lender or with respect to such Lender's Commitments, the office or
branch of such Lender or of any Affiliate of such Lender located at the address
specified as the applicable lending office for such Lender set forth next to the
name of such Lender in the signature pages hereof or any other office, branch or
Affiliate of such Lender or of any Affiliate of such Lender hereafter selected
and notified in writing to the Company and the Agent by such Lender. Any
Affiliate of any such Lender so selected and notified shall have all rights of a
Lender hereunder.
"Applicable Margin" shall mean, with respect to any Floating Rate
Loan, Bankers' Acceptance, LIBOR Loan, commitment fee payable under Section
2.3(a) and Letter of Credit fee payable pursuant to Section 2.3(b), as the case
may be, the per annum rate (expressed as a percentage) in accordance with the
following:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
Bankers'
Total Covenant Acceptances,
Obligations to Letter of Credit
Total Covenant Fees and
EBITDA Ratio Floating Rate Loans LIBOR Loans Facility Fees
- --------------------------------------------------------------------------------------
<S> <C> <C> <C>
>4.75 1.00% 2.25% 0.50%
- --------------------------------------------------------------------------------------
>4.00 but <4.75 0.75% 2.00% 0.50%
-
- --------------------------------------------------------------------------------------
>3.50 but <4.00 0.50% 1.80% 0.45%
-
- --------------------------------------------------------------------------------------
>3.00 but <3.50 0.125% 1.375% 0.375%
-
- --------------------------------------------------------------------------------------
<3.00 0.00% 1.125% 0.375%
- -
- --------------------------------------------------------------------------------------
</TABLE>
The Applicable Margin shall be based upon the Total Covenant
Obligations to Total Covenant EBITDA Ratio as calculated as of the last day of
each fiscal quarter of the Company and the Applicable Margin shall be adjusted
on (a) the last day of the second month following the close of the fiscal
quarter for the first three fiscal quarters, and (b) the last day of the fourth
month following the close of the last fiscal quarter, based on the financial
statements of the Company and related compliance certificate pursuant to Section
5.1(d) to the Lenders; provided that, (i) as of the Effective Date, the
Applicable Margin shall be based on a Total Covenant Obligations to Total
Covenant EBITDA Ratio of greater than 4.00 to 1.00 but less than or equal to
4.75 and (ii) upon the occurrence and during the continuance of any Event of
Default the Applicable Margin shall be based on a Total Covenant Obligations to
Total Covenant EBITDA Ratio of greater than 4.75 to 1.00, in each case
regardless of the actual Total Covenant Obligations to Total Covenant EBITDA
Ratio.
"Arranger" shall mean First Chicago Capital Markets, Inc.
"Assignment and Acceptance" is defined in Section 8.6(d).
"BA Equivalent Loan" shall mean a Loan contemplated as such in
Section 3.4.
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<PAGE> 8
"BA Rate" shall mean the rate per annum determined as being the
arithmetic average (rounded upwards, if necessary, to the nearest .01%) of the
rates quoted for First Chicago/NBD Canada for one month bankers' acceptances as
appears on the Reuters Screen CDOR (Certificate of Deposit Offered Rate) page,
as determined as at 10:00 a.m. (Toronto time) on the relevant Business Day (for
non-Business Days, and if no CDOR rate is available for a given Business Day,
the CDOR rate for the immediately previous Business Day for which a CDOR rate is
available shall be used)
"BA Interest Period" shall mean, relative to any Bankers
Acceptance or BA Equivalent Loan, the period beginning on (and including) the
date on which such Bankers Acceptance is accepted or continued or such BA
Equivalent Loan is made or continued to (but excluding) the date which is 30, 60
or 90 days thereafter, as selected by the Company.
"Bankers' Acceptance" shall mean a non-interest bearing bill of
exchange in a form satisfactory to the Agent, denominated in CAD, drawn and
endorsed by a Canadian Borrowing Subsidiary and presented to each Canadian
Lender for acceptance pursuant to this Agreement.
"BMG" shall mean BMG North America Limited, a corporation
incorporated under the laws of the Province of Ontario, Canada.
"BMO" shall mean Bank of Montreal, a Canadian chartered bank.
"Board of Directors" shall mean the board of directors of the
Company.
"Borrowing" shall mean the aggregation of Advances, including each
Letter of Credit and Bankers' Acceptance issuance, of the Lenders made to any
Borrower, or continuations and conversions of any Advances, made pursuant to
Article II on a single date and, in the case of any LIBOR Loans or Bankers'
Acceptances, for a single Interest Period, which Borrowings may be classified
for purposes of this Agreement by reference to the type of Loans or the type of
Advance comprising the related Borrowing, e.g., a "LIBOR Borrowing" is a
Borrowing comprised of LIBOR Loans and a "Letter of Credit Borrowing" is an
Advance comprised of a single Letter of Credit.
"Borrowing Base" shall mean, as of any date, the sum of:
(a) an amount equal to 85% of the value of Eligible Accounts
Receivable, plus
(b) an amount equal to 50% of the value of Eligible Deferred
Tooling Reimbursement Payments, plus
(c) an amount equal to 50% of the value of Eligible Inventory,
plus
(d) an amount of fixed asset reliance equal to the sum of the
following: (i) $113,562,000, (ii) 50% of the net book value of Eligible Fixed
Assets acquired after February 4, 1999 but prior to March 31, 2000, plus (iii)
an amount equal to the sum of 70% of the orderly liquidation value determined by
the Agent for equipment which constitutes Eligible Fixed Assets acquired after
February 4, 1999 in an Acquisition permitted by Section 5.2(g) and 70% of the
fair market value determined by the Agent for real estate which constitutes
Eligible Fixed Assets acquired in an Acquisition permitted by Section 5.2(g)
consummated after February 4, 1999; minus
(e) $30,000,000; minus
3
<PAGE> 9
(f) until such time as the construction and acquisition of the
Mexican Manufacturing Facility has been substantially completed, an amount equal
to the remaining cost to complete the acquisition, construction and equipping of
the Mexican Manufacturing Facility, and as described by the Company to the Agent
prior to the Effective Date (it being acknowledged that as of the Effective Date
the cost of such acquisition, construction and equipping is approximately
$75,000,000, and the cost to complete is $75,000,000 minus the amount paid for
such acquisition, construction or equipping from financing under the Mexican
Facility as of the date of any Borrowing Base determination).
"Borrowing Base Certificate" for any date shall mean an
appropriately completed report as of such date in substantially the form of
Exhibit A hereto, certified as true and correct as of such date by the Chief
Financial Officer or Treasurer of the Company.
"Borrowing Subsidiary" shall mean any Subsidiary designated by the
Company to the Agent as a "Borrowing Subsidiary" hereunder so long as (a) each
of the Company and each Guarantor guarantees the obligation of such Borrowing
Subsidiary pursuant to a Guaranty, and grants a first priority lien and security
interest on its assets to the extent required under Section 2.11 to secure such
Guaranty and all obligations of such Borrowing Subsidiary, (b) such Borrowing
Subsidiary delivers all corporate or organizational documents and authorizing
resolutions and legal opinions requested by the Agent and (c) such Borrowing
Subsidiary executes all agreements, instruments and documents and takes such
other action requested by the Agent, including without limitation becoming bound
by the terms hereof as a Borrowing Subsidiary and granting a first priority lien
and security interest on its assets to the extent required under Section 2.11 to
secure all Advances and other obligations of such Borrowing Subsidiary to the
Lenders and the Agent. As of the Effective Date, the only Borrowing Subsidiaries
are BMG and Oxford Suspension Ltd..
"Business Day" shall mean a day other than a Saturday, Sunday or
other day on which the Agent is not open to the public for carrying on
substantially all of its banking functions in Detroit, Michigan or, with respect
to any Canadian Advance, First Chicago/NBD Canada is not open to the public for
carrying on substantially all of its banking functions in Toronto, Ontario.
"CAD" or "C$" shall mean the lawful money of Canada.
"Canadian Advances" shall mean all Loans, including Acceptances,
denominated in CAD.
"Canadian Borrowing Subsidiary" shall mean any Borrowing
Subsidiary which is also a Canadian Subsidiary.
"Canadian Intercreditor Agreement" shall mean the intercreditor
agreement in form and substance satisfactory to the Agent among the Agent, BMG
and all other material lenders to BMG or any of its Subsidiaries, as amended or
modified from time to time.
"Canadian Lender" shall mean any Lender which, whether directly or
through an Affiliate of such Lender, can make Canadian Advances hereunder free
of withholding taxes of Canada and that is designated from time to time by the
Agent and the Company, with the consent of such Lender, as a Canadian Lender.
4
<PAGE> 10
"Canadian Percentage" of any Canadian Lender as of any date, shall
mean a fraction (expressed as a percentage), the numerator of which is the
Commitment of such Canadian Lender and the denominator which is the aggregate
Commitments of all Canadian Lenders.
"Canadian Subsidiary" shall mean any Subsidiary of the Company
organized under the laws of Canada or any Province thereof.
"Capital Expenditures" shall mean, without duplication, any
expenditures, other than under a Capital Lease, for any purchase or other
acquisition of any asset which would be classified as a fixed or capital asset
on a consolidated balance sheet of the Company and its Subsidiaries prepared in
accordance with Generally Accepted Accounting Principles.
"Capital Lease" of any Person shall mean any lease which, in
accordance with Generally Accepted Accounting Principles, is or should be
capitalized on the books of such Person.
"Capital Stock" shall mean (i) in the case of any corporation, all
capital stock and any securities exchangeable for or convertible into capital
stock and any warrants, rights or other options to purchase or otherwise acquire
capital stock or such securities or any other form of equity securities, (ii) in
the case of an association or business entity, any and all shares, interests,
participations, rights or other equivalents (however designated) of corporate
stock, (iii) in the case of a partnership or limited liability company,
partnership or membership interests (whether general or limited) and (iv) any
other interest or participation that confers on a Person the right to receive a
share of the profits and losses of, or distribution of assets of, the issuing
Person.
"Change in Control" shall mean:
(a) prior to a primary sale or sales of shares of Capital Stock
of the Company resulting in the sale of more than 50% of each class of
outstanding Capital Stock of the Company pursuant to any one or more public
offerings thereof (a "Majority IPO"), (i) Permitted Holders shall cease to
control, directly or indirectly, in each case free and clear of all Liens, at
least 35% (on a fully diluted basis) of the issued and outstanding shares of
Voting Stock of the Company and have the right and authority to appoint,
designate or otherwise elect at least 51% of the members of the Board of
Directors of the Company or (ii) other than the Permitted Holders, any Person,
or two or more Persons acting in concert, acquire or own beneficial ownership
(within the meaning of Rule 13d-3 of the Securities and Exchange Commission
under the Securities Exchange Act of 1934) of an amount of the outstanding
shares of Voting Stock of the Company on a fully diluted basis which is equal to
or greater than the amount owned by the Permitted Holders;
(b) after a Majority IPO, (i) Permitted Holders shall cease to
control, directly or indirectly, in each case free and clear of all Liens, at
least 20% (on a fully diluted basis) of the issued and outstanding shares of
Voting Stock of the Company and have the right and authority to appoint,
designate or otherwise elect at least 20% of the members of the Board of
Directors of the Company or (ii) any Person, or two or more Persons acting in
concert, acquire or own beneficial ownership (within the meaning of Rule 13d-3
of the Securities and Exchange Commission under the Securities Exchange Act of
1934) of an amount of the outstanding shares of Voting Stock of the Company on a
fully diluted basis which is equal to or greater than the amount owned by the
Permitted Holders; or
(c) after the first public offering of Capital Stock of the
Company, during any period of two consecutive years, individuals who at the
beginning of such period constituted the Board of
5
<PAGE> 11
directors (together with any new directors whose election by such Board of
Directors or whose nomination for election by the shareholders of the Company
was approved by a majority vote of the directors of the Company then still in
office who were either directors at the beginning of such period or whose
election or nomination for election was previously so approved) cease for any
reason to constitute a majority of the Board of Directors then in office; or
(d) any "Change of Control" as defined in the Senior Subordinated
Note Indenture.
"Code" shall mean the Internal Revenue Code of 1986, as amended,
and the regulations thereunder.
"Cofimeta" shall mean Cofimeta, S.A., a societe anonyme organized
and existing under the laws of France.
"Cofimeta Acquisition" shall mean the Acquisition to be completed
pursuant to the Cofimeta Acquisition Documents.
"Cofimeta Acquisition Date" shall mean February 5, 1999, the date
on which the Cofimeta Acquisition was completed.
"Cofimeta Acquisition Documents" shall mean the agreements dated
on or about December 15, 1998 between the Company and Groupe Valfond, together
with all agreements, documents and instruments executed in connection therewith
or otherwise pursuant thereto, under which the French Acquisition Company will
acquire 100% of the Capital Stock of Cofimeta.
"Commitments" shall mean, collectively, the Revolving Credit
Commitments, the Tooling Revolving Credit Commitments and the Term Loan
Commitments.
"Company Security Agreement" shall mean the security agreement
entered into by the Company for the benefit of the Agent and the Lenders
pursuant to this Agreement in substantially the form of Exhibit B hereto, as
amended or modified from time to time.
"Consolidated" or "consolidated" shall mean, when used with
reference to any financial term in this Agreement, the aggregate for two or more
Persons of the amounts signified by such term for all such Persons determined on
a consolidated basis in accordance with Generally Accepted Accounting
Principles.
"Contingent Liabilities" of any Person shall mean, as of any date
and without duplication, all obligations of others for which such Person is
contingently liable, as guarantor, surety, accommodation party, partner or in
any other capacity, or in respect of which obligations such Person assures a
creditor against loss or agrees to take any action to prevent any such loss
(other than endorsements of negotiable instruments for collection in the
ordinary course of business), including without limitation all reimbursement
obligations of such Person in respect of any letters of credit, surety bonds or
similar obligations and all obligations of such Person to advance funds to, or
to purchase assets, property or services from, any other Person in order to
maintain the financial condition of such other Person.
"Creative" shall mean Creative Fabrication Corporation, a
Tennessee corporation.
6
<PAGE> 12
"Creative Letter of Credit" shall mean the irrevocable letter of
credit number 442 issued by NBD Bank on September 27, 1995 for the account of
Creative, as renewed or extended or otherwise modified from time to time.
"Creative Revenue Bond" shall mean the $8,500,000 Industrial
Development Revenue Bond (Creative Fabrication Corporation Project), Series 1995
issued by the Industrial Development Board of the County of McMinn, a public
non-profit corporation and public instrumentality of the County of McMinn,
Tennessee.
"Creative Revenue Bond Documents" shall mean the indenture of
trust, loan agreement, reimbursement agreement, irrevocable letter of credit,
pledge and security agreement, deed of trust, security agreement, fixture filing
and assignment of rents, security agreement, guarantor security agreement,
irrevocable guaranty agreement and all other agreements and documents executed
or issued in connection with the Creative Revenue Bond, all as amended or
modified from time to time.
"Default" shall mean any event or condition which might become an
Event of Default with notice or lapse of time or both.
"Defaulting Lender" shall mean any Lender that fails to make
available to the Agent such Lender's Loans required to be made hereunder or
shall have not made a payment required to be made to the Agent hereunder. Once a
Lender becomes a Defaulting Lender, such Lender shall continue as a Defaulting
Lender until such time as such Defaulting Lender makes available to the Agent
the amount of such Defaulting Lender's Loans and all other amounts required to
be paid to the Agent pursuant to this Agreement.
"Discount Rate" shall mean with respect to Bankers' Acceptances
issued pursuant to this Agreement with the same maturity date, the rate
determined by the Agent as being the discount rate, calculated on the basis of a
year of 365 days, of the Agent established in accordance with its normal
practices at or about 10:00 a.m. on the date of issue of such Bankers'
Acceptances, for bankers' acceptances having a comparable face value and an
identical maturity date to the face value and maturity date of the Agent's
portion of such issue of Bankers' Acceptances.
"Discounted Proceeds" shall mean in respect of any Bankers'
Acceptance to be accepted and purchased by a Lender hereunder on any day, an
amount (rounded to the nearest whole cent, and with one-half of one cent being
rounded up) calculated on such day by multiplying (i) the face amount of such
Bankers' Acceptance by (ii) the price, where the price is determined by dividing
one by the sum of one plus the product of (A) the Discount Rate (expressed as a
decimal) and (B) a fraction, the numerator of which is the number of days in the
term of such Bankers' Acceptance and the denominator of which is 365.
"Disqualified Stock" shall mean any Capital Stock that, by its
terms (or by the terms of any security into which it is convertible or for which
it is exchangeable), or upon the happening of any event, matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
redeemable at the option of the holder thereof, in whole or in part, or which
otherwise has any mandatory payments with respect thereto.
"Dollar Equivalent" shall mean as of any date, with respect to any
amount in a currency other than Dollars, the sum in Dollars resulting from the
conversion of such amount from such currency into Dollars at the spot exchange
rate determined by the Agent to be available to it for the purchase of such
7
<PAGE> 13
currency with Dollars at approximately 11:00 a.m. local time of the Applicable
Lending Office on such date as a determination of the Dollar Equivalent is made.
"Documents" shall have the meaning ascribed thereto in Section
3.3(b).
"Dollars" and "$" shall mean the lawful money of the United States
of America.
"Domestic Subsidiary" shall mean each present and future
Subsidiary of the Company which is not a Foreign Subsidiary.
"Dutch Holding Company" shall mean a Subsidiary of the Company and
wholly owned directly by the Company or by a Guarantor, which Subsidiary is
organized under the laws of the Netherlands and formed after the Effective Date
to, among other purposes, own 100% of the Capital Stock, free and clear of any
Liens other than in favor of the Agent, of the French Acquisition Company,
provided that such Subsidiary satisfies all the requirements of this Agreement.
The Dutch Holding Company shall be deemed a Restricted Subsidiary.
"EBITDA" shall mean, for any period, the Net Income for such
period plus, without duplication, all amounts deducted in determining such Net
Income on account of (a) Interest Expense, (b) income tax expense (including
Michigan Single Business Tax expense), (c) depreciation and amortization
expense, and (d) all other non cash items reducing Net Income (other than items
that will require cash payments and for which an accrual or reserve is, or is
required under Generally Accepted Accounting Principles to be, made, except as
otherwise consented to by the Agent), and minus all non cash items increasing
Net Income, in each case for such period, all as determined for the Company and
its Subsidiaries on a consolidated basis in accordance with Generally Accepted
Accounting Principles.
"Effective Date" shall mean the effective date specified in the
final paragraph of this Agreement.
"Eligible Accounts Receivable" shall mean, as of any date and
without duplication, those trade accounts receivable owned by a Borrower or a
Guarantor that are payable in Dollars, CAD or any other readily available and
freely tradable currency acceptable to the Agent and in which such Borrower or
Guarantor has granted to the Agent for the benefit of the Lenders and the Agent
a first-priority perfected security interest pursuant to the Security
Agreements, subject to only such Liens as are permitted Section 5.2(f)(i),
valued at the face amount thereof less sales, excise or similar taxes and less
returns, discounts, claims, credits and allowances of any nature at any time
issued, owing, granted, outstanding, available or claimed, but shall not include
any such account receivable (a) that is not a bona fide existing obligation
created by the sale and actual delivery of inventory, goods or other property,
or the furnishing of services or other good and sufficient consideration to
customers of a Borrower or a Guarantor in the ordinary course of business, (b)
that is more than 90 days past due or that remains outstanding more than 90 days
after the earlier of the date of the invoice or the shipment of the related
inventory, goods or other property or the furnishing of the related services or
other consideration, (c) that is subject to any dispute, contra-account,
defense, offset or counterclaim or any Lien (except those in favor of the Agent
for the benefit of the Lenders and the Agent under the Security Documents), or
the inventory, goods, property, services or other consideration of which such
account receivable constitutes proceeds is subject to any such Lien, (d) in
respect of which the inventory, goods, property, services or other consideration
have been rejected, (e) that is due from any Affiliate or Subsidiary of any
Borrower or Guarantor, (f) that has been classified by any Borrower or Guarantor
as doubtful or has otherwise failed to meet established or customary credit
standards of any Borrower or Guarantor, (g) that is payable
8
<PAGE> 14
by any Person located outside the United States or Canada (which shall not be
deemed to include any territories of the United States or Canada), other than a
Subsidiary of General Motors Corporation, Ford Motor Company or DaimlerChrysler
AG, or any other substantial auto manufacturer or supplier approved by the
Agent, (h) with respect to which any representation or warranty contained in
Section 4.11 is incorrect at any time, (i) that is payable by the United States
or any of its departments, agencies or instrumentalities or by any state or
other governmental entity unless such Borrower or Guarantor shall have notified
the Agent thereof and shall have executed and delivered any and all instruments
and documents and taken such other action required by the Agent to duly effect
the assignment thereof to the Agent under the Federal Assignment of Claims Act,
as amended, or other applicable law now or hereafter in effect, (j) that is
payable by any Person as to which 30% or more of the accounts receivable payable
by such Person to any Borrower or Guarantor do not otherwise constitute Eligible
Accounts Receivable, (k) that is payable by any Person that is the subject of
any proceeding seeking to adjudicate it a bankrupt or insolvent or seeking
liquidation, winding up or reorganization, arrangement, adjustment, protection,
relief or composition of it or its debts under any law relating to bankruptcy,
insolvency or reorganization or relief or protection of debtors or seeking the
appointment of a receiver, trustee, custodian or other similar official for it
or for any substantial part of its property, or that is not generally paying its
debts as they become due or has admitted in writing its inability to pay its
debts generally or has made a general assignment for the benefit of creditors,
(l) that is evidenced by a promissory note or other instrument, (m) that is
subordinate or junior in right or priority of payment to any other obligation or
claim, (n) arising as a result of or relating to Tooling if such account
receivable is not currently due or arising as a result of or relating to Tooling
if it arises under any Tooling Contract financed by any lender other than by
Advances by the Lenders under this Agreement, or (o) that for any other reason
is at any time reasonably deemed by the Agent to be ineligible.
"Eligible Deferred Tooling Reimbursement Payments" shall mean such
portion assets, net of any payments received thereon, of a Borrower or Guarantor
which consists of Tooling reimbursement payments provided that each of the
following conditions are satisfied: (a) the sale of the related Tooling is
covered under specific written purchase orders or agreements between a Borrower
or Guarantor and the purchaser of such Tooling, and the terms and provisions of
all such purchase orders and agreements and the purchaser thereof must be
satisfactory to the Agent, (b) the Agent has a first priority, perfected and
enforceable security interest in the Borrower's or Guarantor's interest in such
assets, including without limitation, any account receivable or other proceeds
of a Borrower or Guarantor relating to such long term assets, subject to only
such Liens as are permitted by Section 5.2(f)(i), (c) the unpaid balance of such
Tooling as represented by a Borrower or Guarantor is not subject to any defense,
counterclaim, setoff, contra-account, credit, allowance or adjustment and (d)
such Tooling has been constructed in accordance with the requirements and other
terms of such purchase orders and other agreements relating thereto and the
purchaser thereof has approved such Tooling and is not disputing the
acceptability of such Tooling. For purposes of this definition, all Tooling
reimbursement payments of a Borrower or Guarantor which are the subject of any
Tooling Contract financed by any lender other than by Advances by the Lenders
under this Agreement shall be excluded from this definition and no (i) Eligible
Inventory or (ii) accounts receivable included within Eligible Accounts
Receivable shall be included as part of Eligible Deferred Tooling Reimbursement
Payments.
"Eligible Fixed Assets" shall mean, as of any date, those tangible
fixed assets owned by a Borrower or a Guarantor in which such Borrower or
Guarantor has granted to the Agent and Lenders a first-priority perfected
security interest pursuant to the Security Agreements, subject to only such
Liens as are permitted Section 5.2(f)(i), but not including any such fixed asset
(a) that is not usable in the business of a Borrower or Guarantor, (b) that is
located outside the United States or Canada or such other jurisdiction approved
by the Agent, (c) that is subject to, or any accounts or other proceeds
resulting
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<PAGE> 15
from the sale or other disposition thereof could be subject to, any Lien
(except those in favor of the Agent and the Lenders under the Security
Agreements), (d) that is not in the possession of the Company, (e) that is held
for sale or lease or is the subject of any lease, (f) that is subject to any
trademark, trade name or licensing arrangement, or any law, rule or regulation,
that could limit or impair the ability of the Agent and the Lenders to promptly
exercise all rights of the Agent and the Lenders under the Security Agreements,
(g) if such fixed asset is located on premises not owned by the Company and the
landlord or other owner of such premises shall not have waived its distraint,
lien and similar rights with respect to such fixed asset, and shall not have
agreed to permit the Agent to enter such premises after the occurrence of an
Event of Default pursuant to a waiver and agreement of such Person in favor of
and in form and substance acceptable to the Agent, (h) with respect to which
any insurance proceeds are not payable to the Agent as a lender loss payee or
are payable to any loss payee other than the Agent or a Borrower or Guarantor,
and (i) that for any other reason is at any time reasonably deemed by the Agent
to be ineligible.
"Eligible Inventory" shall mean, as of any date, that inventory
owned by a Borrower or a Guarantor that constitutes raw materials,
work-in-process or finished goods in which such Borrower or Guarantor has
granted to the Agent for the benefit of the Lenders and the Agent a
first-priority perfected security interest pursuant to the Security Agreements,
subject to only such Liens as are permitted Section by 5.2(f)(i), valued at the
lower of cost or market on a FIFO basis, but shall not include any such
inventory (a) that does not constitute raw materials, work-in-process or
finished goods readily salable or usable in the business of a Borrower or a
Guarantor, (b) that is located outside the United States or Canada (which shall
not be deemed to include any territories of the United States or Canada) or such
other jurisdiction approved by the Agent, (c) that is subject to, or any
accounts or other proceeds resulting from the sale or other disposition thereof
could be subject to, any Lien (except those in favor of the Agent for the
benefit of the Lenders and the Agent under the Security Documents), including
any sale on approval or sale or return transaction or any consignment, (d) that
is not in the possession of such Borrower or Guarantor, (e) that is held for
lease or is the subject of any lease, (f) that is subject to any trademark,
trade name or licensing arrangement, or any law, rule or regulation, that could
limit or impair the ability of the Agent to promptly exercise all rights of the
Agent under the Security Documents, (g) if such inventory is located on premises
not owned by such Borrower or Guarantor and the landlord or other owner of such
premises shall not have waived its distraint, lien and similar rights with
respect to such inventory and shall not have agreed to permit the Lenders and
the Agent to enter such premises pursuant to a waiver and agreement of such
Person in favor of and in form and substance acceptable to the Lenders and the
Agent or any other substantial auto manufacturer or supplier approved by the
Agent, (h) with respect to which any insurance proceeds are not payable to the
Agent for the benefit of the Lenders as a lender loss payee or are payable to
any loss payee other than the Agent or such Borrower or Guarantor, (i) that is
classified as Eligible Deferred Tooling Reimbursement Payments, (j) that is
Tooling unless such Tooling qualifies as Eligible Tooling, or (k) that for any
other reason is at any time reasonably deemed by the Agent to be ineligible.
"Eligible Tooling" shall mean such portion of assets, net of any
payments received thereon, of a Borrower or Guarantor which consists of Tooling,
provided that each of the following conditions is satisfied: (a) the sale of
such Tooling is covered under specific written purchase orders or agreements
between a Borrower or Guarantor and the purchaser of such Tooling, and the terms
and provisions of all such purchase orders and agreements and the purchaser
thereof must be satisfactory to the Agent, (b) the Agent has a first priority,
perfected and enforceable security interest in such Borrower's or Guarantor's
interest in such Tooling and any account receivable or other proceeds of a
Borrower or Guarantor relating to such Tooling, subject to only such Liens as
are permitted by Section 5.2(f)(i), and (c) the unpaid balance of such Tooling
as represented by a Borrower or Guarantor is not
10
<PAGE> 16
subject to any defense, counterclaim, setoff, contra-account, credit, allowance
or adjustment. For purposes of this definition, all Tooling of a Borrower or
Guarantor which is the subject of any Tooling Contract financed by any lender
other than by Advances by the Lenders under this Agreement shall be excluded
from this definition, and no (i) accounts receivable included within Eligible
Accounts Receivable, or (ii) Eligible Deferred Tooling Reimbursement Payments
shall be included as part of Eligible Tooling.
"Environmental Certificate" shall mean the environmental
certificate given by the Borrowers and the Guarantors to the Agent for the
benefit of the Lenders pursuant to this Agreement in substantially the form of
Exhibit C hereto.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations thereunder.
"ERISA Affiliate" shall mean, with respect to any Person, any
trade or business (whether or not incorporated) which, together with such Person
or any Subsidiary of such Person, would be treated as a single employer under
Section 414 of the Code and the regulations promulgated thereunder.
"Event of Default" shall mean any of the events or conditions
described in Section 6.1.
"Existing Credit Agreement" is defined in the recital paragraph of
this Agreement.
"Existing Letters of Credit" shall mean the letters of credit set
forth on Schedule 1.1(A).
"Federal Funds Rate" shall mean the per annum rate established and
announced by the Agent from time to time as the opening federal funds rate paid
by the Agent in its regional federal funds market for overnight borrowings from
other banks, which Federal Funds Rate shall change simultaneously with any
change in such announced rates.
"First Chicago/NBD Canada" shall mean First Chicago NBD Bank,
Canada, a Canadian chartered bank, and its successors and assigns.
"Fixed Charges" shall mean, for any period, the sum, without
duplication, of (a) Total Covenant Interest Expense for such period, plus (b)
all payments of principal or other sums paid or payable during such period by
the Company or its Restricted Subsidiaries with respect to Indebtedness of the
Company or its Restricted Subsidiaries, other than payments on the Revolving
Credit Advances and Tooling Revolving Credit Advances, plus (c) Rental Charges
paid or payable during such period by the Company and its Restricted
Subsidiaries, plus (d) all dividends, distributions and other obligations paid
with respect to any class of the Company's Capital Stock or any dividend,
payment or distribution paid in connection with the redemption, purchase,
retirement or other acquisition, directly or indirectly, of any shares of the
Company's Capital Stock, plus (e) all net income taxes accrued in such period by
the Company or its Restricted Subsidiaries, plus (f) all payments of principal
or other sums paid or payable, whether directly or indirectly, during such
period by the Company or any of its Restricted Subsidiaries with respect to
Indebtedness of any Unrestricted Subsidiary, plus (g) all payments on the
Mexican Facility Obligations allocable to principal.
"Fixed Charge Coverage Ratio" shall mean, as of the end of any
fiscal quarter of the Company, the ratio of (a) Total Covenant EBITDA for the
four consecutive fiscal quarters of the
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<PAGE> 17
Company then ending, plus, to the extent not added back to such Total Covenant
EBITDA, Rental Charges for the four consecutive fiscal quarters of the Company
then ending, minus Capital Expenditures (exclusive of (i) for purposes of this
definition, the Mexican Facility Obligations in an amount not to exceed
$75,000,000 shall not constitute Capital Expenditures, (ii) up to $5,000,000 of
Capital Expenditures for the Saturn Innovate program in the fiscal year of the
Company ending March 31, 1999, (iii) up to $5,000,000 of Capital Expenditures
for the Mexican GMT 250 program in the fiscal year of the Company ending March
31, 1999, (iv) up to $10,000,000 in aggregate amount of Capital Expenditures for
productivity improvement programs acceptable to the Agent in the fiscal years of
the Company ending March 31, 1999 and 2000 on a combined basis, and (v) up to
$10,000,000 in aggregate amount of Capital Expenditures for program specific
Capital Expenditures for programs not yet awarded or for changes to existing
programs which occur after the Effective Date, in each case acceptable to the
Agent and for each of the fiscal years of the Company ending March 31, 2001 and
2002) for the four consecutive fiscal quarters of the Company then ending, to
(b) the Fixed Charges for the four consecutive fiscal quarters of the Company
then ending.
"Floating Rate" shall mean the per annum rate equal to the sum of
(a) the Applicable Margin, plus (b) (i) with respect to U.S. Advances and other
obligations denominated in Dollars, the greater of (x) the Prime Rate in effect
from time to time, and (y) the sum of one half of one percent (1/2%) per annum
plus the Federal Funds Rate in effect from time to time; and (ii) with respect
to Canadian Advances and other obligations denominated in CAD, the greater of
(x) the per annum rate of interest quoted, published and commonly known as the
"prime rate" of First Chicago/NBD Canada which First Chicago/NBD Canada
establishes as the reference rate of interest in order to determine interest
rates for loans to its Canadian commercial borrowers, which rate is not
necessarily the lowest rate of interest offered by First Chicago/NBD Canada in
connection with extensions of credit; and (y) the BA Rate plus 1/2 of 1% per
annum; in each case adjusted automatically with each quoted or published change
in such rate, all without the necessity of any notice to any Borrower, which
Floating Rate shall change simultaneously with any change in any such rates.
"Floating Rate Loan" shall mean any Loan which bears interest at
the Floating Rate.
"Foreign Subsidiary" shall mean any Subsidiary incorporated or
formed in any jurisdiction other than any State of the United States of America.
"French Acquisition Company" shall mean Oxford Automotive France,
SAS, a societe par actions simplifiee organized and existing under the laws of
France.
"Generally Accepted Accounting Principles" shall mean generally
accepted accounting principles applied on a basis consistent with that reflected
in the financial statements referred to in Section 4.6.
"Guaranties" shall mean each guaranty entered into by the
Guarantors for the benefit of the Agent and the Lenders pursuant to this
Agreement in substantially the form of Exhibit D hereto, as amended or modified
from time to time.
"Guarantor Security Agreement" shall mean each security agreement
entered into by the Guarantors for the benefit of the Agent and the Lenders
pursuant to this Agreement in substantially the form of Exhibit E hereto, as
amended or modified from time to time.
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<PAGE> 18
"Guarantors" shall mean each Domestic Subsidiary of the Company
existing as of the Effective Date, each Canadian Subsidiary, the Company (in its
capacity as guarantor of the Borrowing Subsidiaries), and each Person becoming a
Restricted Subsidiary of the Company after the Effective Date or otherwise
entering into a Guaranty from time to time; provided, however, that the Dutch
Holding Company, French Acquisition Company, the Mexican Subsidiaries, OPI,
Cofimeta and the Subsidiaries of Cofimeta existing as of the Effective Date
shall not be required to become Guarantors hereunder.
"Hedging Agreement" shall mean an agreement, device or arrangement
entered into by the Company or any of its Restricted Subsidiaries providing for
payments which are related to fluctuations of interest rates, currency exchange
rates or forward rates, including, but not limited to, dollar-denominated or
cross-currency interest rate exchange agreements, forward currency exchange
agreements, interest rate cap or collar protection agreements, forward rate
currency or interest rate options, puts and warrants.
"Hedging Obligations" of a Person shall mean any and all
obligations of such Person, whether absolute or contingent and howsoever and
whensoever created, arising, evidenced or acquired (including all renewals,
extensions and modifications thereof and substitutions therefor), under (i) any
and all Hedging Agreements, and (ii) any and all cancellations, buy backs,
reversals, terminations or assignments of any Hedging Agreement.
"Howell" shall mean Howell Industries, Inc., a Michigan
corporation.
"Indebtedness" of any Person shall mean, as of any date, (a) all
obligations of such Person for borrowed money, and similar monetary obligations
evidenced by bonds, notes, debentures, Capital Lease obligations, bankers
acceptances or otherwise, (b) all obligations of such Person as lessee under any
Capital Lease, (c) all obligations which are secured by any Lien existing on any
asset or property of such Person whether or not the obligation secured thereby
shall have been assumed by such Person, (d) all obligations of such Person for
the unpaid purchase price for goods, property or services acquired by such
Person, except for trade accounts payable and taxes arising in the ordinary
course of business that are not past due, (e) all obligations of such Person to
purchase goods, property or services where payment therefor is required
regardless of whether delivery of such goods or property or the performance of
such services is ever made or tendered (generally referred to as "take or pay
contracts"), (f) all Hedging Obligations, and (g) all Contingent Liabilities.
"Interest Coverage Ratio" shall mean, as of the end of any fiscal
quarter of the Company, the ratio of (a) Total Covenant EBITDA for the four
consecutive fiscal quarters of the Company then ending to (b) Total Covenant
Interest Expense for the four consecutive fiscal quarters of the Company then
ending.
"Interest Expense" shall mean, for any period, the total interest
expense of the Company and its consolidated Restricted Subsidiaries, plus, to
the extent not included in such total interest expense, and to the extent
incurred by the Company or its Restricted Subsidiaries, (i) interest expense
attributable to Capital Lease obligations, (ii) amortization of debt discount,
(iii) capitalized interest, (iv) non-cash interest expense, (v) commissions,
discounts and other fees and charges owed with respect to letters of credit and
bankers' acceptance financing, (vi) net costs associated with Hedging Agreements
(including amortization of fees), (vii) Preferred Stock dividends in respect of
all Preferred Stock held by Persons other than the Company or a Restricted
Subsidiary, and (viii) interest actually paid by the Company or any Restricted
Subsidiary on any Indebtedness of any other Person. Notwithstanding the
foregoing, net interest expense attributable to deferred reimbursement tooling
indebtedness, i.e., only that
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<PAGE> 19
portion of Tooling Indebtedness to be paid by the purchaser of the related
Tooling in the piece price over the term of the related tooling contract
consistent with current practice, shall not be included in Interest Expense.
"Interest Payment Date" shall mean (a) with respect to any LIBOR
Loan or Acceptance, the last day of each Interest Period with respect thereto
and, in the case of any Interest Period exceeding three months, those days that
occur during such Interest Period at intervals of three months after the first
day of such Interest Period, and (b) in all other cases, the last Business Day
of each March, June, September and December occurring after the date hereof,
commencing with the first such Business Day occurring after the date of this
Agreement.
"Interest Period" shall mean any BA Interest Period or LIBOR
Interest Period.
"Letter of Credit" shall mean a standby or commercial letter of
credit issued by the Agent on behalf of the Lenders for the account of the
Company under an application and/or other documentation acceptable to the Agent
requiring, among other things, immediate reimbursement by the Company to the
Agent in respect of all drafts or other demand for payment honored thereunder
and all expenses paid or incurred by the Agent relative thereto, and shall
include the Creative Letter of Credit and all other Existing Letters of Credit.
"Letter of Credit Advance" shall mean each issuance of a Letter of
Credit.
"LIBOR" shall mean, with respect to any LIBOR Loan and the related
LIBOR Interest Period, the per annum rate that is equal to the sum of:
(a) the Applicable Margin, plus
(b) the rate per annum obtained by dividing (i) the per annum
rate of interest at which deposits in Dollars for such LIBOR Interest Period and
in an aggregate amount comparable to the amount of such LIBOR Loan to be made by
the Agent in its capacity as a Lender hereunder are offered to the Agent by
other prime banks in the London interbank market, at approximately 11:00 a.m.
London time, on the second LIBOR Business Day prior to the first day of such
LIBOR Interest Period by (ii) an amount equal to one minus the stated maximum
rate (expressed as a decimal) of all reserve requirements (including, without
limitation, any marginal, emergency, supplemental, special or other reserves)
that are specified on the first day of such LIBOR Interest Period by the Board
of Governors of the Federal Reserve System (or any successor agency thereto) for
determining the maximum reserve requirement with respect to eurocurrency funding
(currently referred to as "Eurocurrency liabilities" in Regulation D of such
Board) maintained by a member bank of such System; all as conclusively
determined by the Agent, such sum to be rounded up, if necessary, to the nearest
whole multiple of one one-hundredth of one percent (1/100 of 1%).
"LIBOR Business Day" shall mean, with respect to any LIBOR Loan, a
day which is both a Business Day and a day on which dealings in Dollar deposits
are carried out in the London interbank market.
"LIBOR Interest Period" shall mean, with respect to any LIBOR
Loan, the period commencing on the day such LIBOR Loan is made or converted to a
LIBOR Loan and ending on the day which is one, two, three or six months
thereafter (or such longer period requested by the Company and acceptable to the
Lenders), as the Company may elect under this Agreement, and each subsequent
period
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<PAGE> 20
commencing on the last day of the immediately preceding LIBOR Interest Period
and ending on the day which is one, two or three months thereafter (or such
longer period requested by the Company and acceptable to the Lenders), as the
Company may elect under this Agreement, provided, however, that (a) any LIBOR
Interest Period which commences on the last LIBOR Business Day of a calendar
month (or on any day for which there is no numerically corresponding day in the
appropriate subsequent calendar month) shall end on the last LIBOR Business Day
of the appropriate subsequent calendar month, (b) each LIBOR Interest Period
which would otherwise end on a day which is not a LIBOR Business Day shall end
on the next succeeding LIBOR Business Day or, if such next succeeding LIBOR
Business Day falls in the next succeeding calendar month, on the next preceding
LIBOR Business Day, and (c) no LIBOR Interest Period which would end after the
Revolving Credit Termination Date with respect to any Revolving Credit Loan,
after the Maturity Date with respect to the Term Loan or after the Tooling
Revolving Credit Termination Date with respect to any Tooling Revolving Credit
Loan shall be permitted.
"LIBOR Loan" shall mean any Loan which bears interest at LIBOR.
"Lien" shall mean any pledge, assignment, hypothecation, mortgage,
security interest, deposit arrangement, option, conditional sale or title
retaining contract, sale and leaseback transaction, financing statement filing,
lessor's or lessee's interest under any lease, subordination of any claim or
right, or any other type of lien, charge, encumbrance, preferential arrangement
or other claim or right.
"Loan" shall mean any Revolving Credit Loan, any Tooling Revolving
Credit Loan, the Term Loan and any Swingline Loan. Any such Loan or any portion
thereof may also be denominated as a Floating Rate Loan, a Bankers' Acceptance
or BA Equivalent Loan or a LIBOR Loan and such Loans are referred to herein as
"types" of Loans.
"Loan Documents" shall mean, collectively, this Agreement, the
Notes, the Security Documents, any Hedging Agreements among any of the Borrowers
and any of the Lenders and any other agreement, instrument or document executed
in connection with any of the foregoing at any time, all as amended or modified
from time to time.
"Lobdell" shall mean Lobdell Emery Corporation, a Michigan
corporation.
"Lobdell Preferred Stock" shall mean all existing preferred stock
issued by Lobdell, including the Series B Preferred Stock and Series A Preferred
Stock, in the aggregate amount of $50,700,000.
"Lobdell Preferred Stock Documents" shall mean all stock
certificates, agreements and other documents relating to the terms of the
Preferred Stock or otherwise relating to the Preferred Stock.
"Material Adverse Effect" shall mean (i) a material adverse effect
on the property, business, operations, financial condition, liabilities or
capitalization of the Company and its Restricted Subsidiaries, taken as a whole,
(ii) a material adverse effect on the ability of the Company or any Guarantor to
perform its obligations under the Loan Documents or (iii) a material adverse
effect on the rights and remedies of the Agent or the Lenders under the Loan
Documents.
"Maturity Date" shall mean the earlier to occur of (a) the date on
which the maturity of the Term Loan is accelerated pursuant to Section 6.2 and
(b) July 31, 2004.
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<PAGE> 21
"Mexican Facility" shall mean the $75,000,000 Cross-Border Asset
Usage Facility of the Mexican Subsidiaries pursuant to the Mexican Facility
Documents.
"Mexican Facility Documents" shall mean the agreements and
documents described on Schedule 1.1(B).
"Mexican Facility Guaranty" shall mean the Guaranty dated March
31, 1999 executed by the Company in favor of the Mexican Trust guaranteeing the
lease payments of the Mexican Subsidiaries under the Asset Usage Agreement (as
defined on Schedule 1.1 (B)).
"Mexican Facility Obligations" shall mean all present and future
obligations and liabilities of any kind, direct, contingent or otherwise,
pursuant to the Mexican Facility Documents or otherwise under the Mexican
Facility.
"Mexican Facility Tranche A Lenders" shall mean the lenders of the
Mexican Facility Tranche A Loans.
"Mexican Facility Tranche A Guaranty" shall mean that portion of
the Mexican Facility Guaranty allocable to the Mexican Facility Tranche A Loans.
"Mexican Facility Tranche A Loans" shall mean the up to
$63,000,000 of Tranche A Loans made or to be made under, and as defined in, the
Mexican Facility Documents.
"Mexican Intercreditor Agreement" shall mean the intercreditor
agreement dated on or about the Effective Date in form and substance
satisfactory to the Agent among the Agent, BMO and all parties thereto, as
amended or modified from time to time.
"Mexican Manufacturing Facility" shall mean the Ramos Arizape
manufacturing facility of the Company to be located in Mexico as described by
the Company to the Agent prior to the Effective Date.
"Mexican Subsidiaries" shall mean Subsidiaries of the Company
described on Schedule 1.1(C), which are the only Subsidiaries of the Company
located in Mexico or organized or existing under the laws of Mexico or any
political subdivision thereof as of the Effective Date. The Mexican Subsidiaries
shall be deemed Restricted Subsidiaries.
"Mexican Trust" shall mean Oxford Automotive Business Trust
1999-A, a special purpose trust, and lessor under the Mexican Facility.
"Mexico" shall mean the United Mexican States.
"Multiemployer Plan" shall mean any "multiemployer plan" as
defined in Section 4001(a)(3) of ERISA or Section 414(f) of the Code.
"Net Cash Proceeds" shall mean, without duplication (a) in
connection with any sale or other disposition of any asset or any settlement by,
or receipt of payment in respect of, any property insurance claim or
condemnation award, the cash proceeds (including any cash payments received by
way of deferred payment of principal pursuant to a note or installment
receivable or purchase price adjustment receivable or otherwise, but only as and
when received) of such sale, settlement or payment, net of
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<PAGE> 22
reasonable and documented attorneys' fees, accountants' fees, investment banking
fees, amounts required to be applied to the repayment of Indebtedness secured by
a Lien expressly permitted hereunder on any asset which is the subject of such
sale, insurance claim or condemnation award (other than any Lien in favor of the
Agent for the benefit of the Agent and the Lenders) and other customary fees
actually incurred in connection therewith and net of taxes paid or reasonably
estimated to be payable as a result thereof and (b) in connection with any
issuance or sale of any equity securities or debt securities or instruments or
the incurrence of loans, the cash proceeds received from such issuance or
incurrence, net of investment banking fees, reasonable and documented attorneys'
fees, accountants' fees, underwriting discounts and commissions and other
reasonable and customary fees and expenses actually incurred in connection
therewith.
"Net Income" shall mean, for any period, the net income of the
Company and its consolidated Restricted Subsidiaries; provided, however, that
there shall not be included in such Net Income: (i) any net income (or loss) of
any Person if such Person is not a Restricted Subsidiary, except that subject to
the exclusion contained in clause (iv) below, the Company's equity in the net
income of any such Person for such period shall be included in such Net Income
up to the aggregate amount of cash actually distributed by such Person during
such period to the Company or a Restricted Subsidiary as a dividend or other
distribution (subject, in the case of a dividend or other distribution paid to a
Restricted Subsidiary, to the limitations contained in clause (ii) below); (ii)
any net income of any Restricted Subsidiary if such Restricted Subsidiary is
subject to restrictions, directly or indirectly, on the payment of dividends or
the making of distributions by such Restricted Subsidiary, directly or
indirectly, to the Company, except that (A) subject to the exclusion contained
in clause (iii) below, the Company's equity in the net income of any such
Restricted Subsidiary for such period shall be included in such Net Income up to
the aggregate amount of cash that could have been distributed by such Restricted
Subsidiary consistent with such restriction during such period to the Company or
another Restricted Subsidiary as a dividend or other distribution (subject, in
the case of a dividend or other distribution paid to another Restricted
Subsidiary, to the limitation contained in this clause) and (B) the Company's
equity in a net loss of any such Restricted Subsidiary for such period shall be
included in determining such Net Income; (iii) any gain (or loss) realized upon
the sale or other disposition of any assets of the Company or its consolidated
Subsidiaries (including pursuant to any sale-and-leaseback arrangement) which is
not sold or otherwise disposed of in the ordinary course of business and any
gain (or loss) realized upon the sale or other disposition of any Capital Stock
of any Person; (iv) extraordinary or nonrecurring gains or non-cash losses; and
(v) the cumulative effect of a change in accounting principles.
"Net Worth" of any Person shall mean, as of any date, the amount
of any capital stock, paid in capital and similar equity accounts plus (or minus
in the case of a deficit) the capital surplus and retained earnings of such
Person, less treasury stock, all as determined under Generally Accepted
Accounting Principles; provided, however, that any foreign currency translation
adjustment account of the Company and its Subsidiaries shall be disregarded in
the calculation of Net Worth.
"Note" shall mean any Revolving Credit Note, any Tooling Revolving
Credit Note, any Term Loan Note or the Swingline Note.
"OASP I" shall mean OASP, Inc., a Michigan corporation, and
wholly-owned Subsidiary of the Company.
"OASP II" shall mean OASP II, Inc., a Michigan corporation, and
wholly owned Subsidiary of the Company.
"OPI" is defined on Schedule 4.26.
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"OPI Acquisition" shall mean the Acquisition of all outstanding
shares of OPI by the Company, a Guarantor (either an existing Guarantor or a
Guarantor to be formed after the date hereof), the French Acquisition Company,
Cofimeta or a wholly owned Foreign Subsidiary which is a Restricted Subsidiary,
provided that if any such Subsidiary is not a Guarantor such Subsidiary and each
Subsidiary which is not a Guarantor owning such Subsidiary, directly or
indirectly, shall not incur or maintain any Indebtedness (except as otherwise
permitted by this Agreement if such Subsidiary is the French Acquisition Company
or Cofimeta) and at least 65% of the Capital Stock of the Subsidiary owning OPI,
directly or indirectly, which is owned directly by a Guarantor or the Company
shall be pledged to the Agent, for the benefit of itself and the Lenders on a
first priority basis, by such Guarantor or the Company, as the case may be, and
all as further described on Schedule 4.26.
"Overdue Rate" shall mean (a) in respect of principal of Floating
Rate Loans, a rate per annum that is equal to the sum of three percent (3%) per
annum plus the Floating Rate, (b) in respect of principal of LIBOR Loans, a rate
per annum that is equal to the sum of three percent (3%) per annum plus the per
annum rate in effect thereon until the end of the then current Interest Period
for such Loan and, thereafter, a rate per annum that is equal to the sum of
three percent (3%) per annum plus the Floating Rate, and (c) in respect of other
amounts payable by the Company hereunder (other than interest), a per annum rate
that is equal to the sum of three percent (3%) per annum plus the Floating Rate.
"Oxford" shall mean The Oxford Investment Group, Inc., a Michigan
corporation.
"Oxford Suspension Ltd." shall mean Oxford Suspension Ltd., a
corporation incorporated under the laws of the Province of Ontario, Canada.
"PBGC" shall mean the Pension Benefit Guaranty Corporation and any
entity succeeding to any or all of its functions under ERISA.
"Permitted Disqualified Stock" is defined is Section 5.2(j).
"Permitted Holders" shall mean (i) any of Selwyn Isakow, his
spouse and any of his lineal descendants and their respective spouses
(collectively, the "Isakow Family") whether acting in their own name or as one
or as a majority of Persons having the power to exercise the voting rights
attached to, or having investment power over, shares held by others, (ii) any
Person wholly owned and controlled by any member of the Isakow Family, (iii) any
trust solely for the benefit of one or more members of the Isakow Family
(whether or not any member of the Isakow Family is a trustee of such trust) and
(iv) the individuals that are holders on the Effective Date of the voting common
stock of the Company.
"Permitted Liens" shall mean Liens permitted by Section 5.2(f)
hereof.
"Person" shall include an individual, a corporation, an
association, a partnership, a limited liability company, a trust or estate, a
joint stock company, an unincorporated organization, a joint venture, a trade or
business (whether or not incorporated), a government (foreign or domestic) and
any agency or political subdivision thereof, or any other entity.
"Plan" shall mean, with respect to any Person, any pension plan
(including a Multiemployer Plan) subject to Title IV of ERISA or to the minimum
funding standards of Section 412
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of the Code which has been established or maintained by such Person, any
Subsidiary of such Person or any ERISA Affiliate, or by any other Person if such
Person, any Subsidiary of such Person or any ERISA Affiliate could have
liability with respect to such pension plan.
"Planned Asset Sales" shall mean the manufacturing facility of
Creative in Athens, Tennessee.
"Pledge Agreement" shall mean each pledge agreement entered into
by the Company or any Guarantor for the benefit of the Agent and the Lenders
pursuant to this Agreement in form and substance satisfactory to the Agent, as
amended or modified from time to time.
"Preferred Stock" shall mean all Lobdell Preferred Stock and all
other preferred stock or similar Capital Stock issued by the Company or any of
its Restricted Subsidiaries at any time.
"Prime Rate" shall mean the per annum rate announced by the Agent
from time to time as its "prime rate" (it being acknowledged that such announced
rate may not necessarily be the lowest rate charged by the Agent to any of its
customers); which Prime Rate shall change simultaneously with any change in such
announced rate.
"Prohibited Transaction" shall mean any transaction involving any
Plan which is proscribed by Section 406 of ERISA or Section 4975 of the Code.
"Rental Charges" shall mean the maximum amount of all rents and
other payments (exclusive of property taxes, property and liability insurance
premiums and maintenance costs) paid or required to be paid by the Company or
its Restricted Subsidiaries during such period under any lease of real or
personal property in respect of which the Company or its Restricted Subsidiaries
is obligated as a lessee or user, other than any Capital Lease.
"Reportable Event" shall mean a reportable event as described in
Section 4043(b) of ERISA including those events as to which the thirty (30) day
notice period is waived under Part 2615 of the regulations promulgated by the
PBGC under ERISA.
"Required Lenders" shall mean Lenders holding not less than (i)
51% (or 100% where required pursuant to Section 8.1) of the Commitments
(provided that, after the Term Loan is made, the amount of the Term Loan
Commitment shall be deemed equal to the outstanding principal balance of the
Term Loan for purposes of this definition), or (ii) 51% (or 100% where required
pursuant to Section 8.1) of the Advances if the Commitments have expired or been
terminated.
"Restricted Subsidiary" shall mean each Subsidiary of the Company
existing as of the Effective Date and described on Schedule 1.1(D) (including
the Guarantors and the Borrowing Subsidiaries) and each other Subsidiary of the
Company that is designated by the Company as a Restricted Subsidiary.
"Revolving Credit Advance" shall mean any Revolving Credit Loan
and any Letter of Credit Advance.
"Revolving Credit Commitments" shall mean, with respect to each
Lender, the commitment of each such Lender to make Revolving Credit Loans, and
to participate in Letter of Credit Advances and Swingline Loans, in amounts not
exceeding in the aggregate principal or face amount
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outstanding at any time the Revolving Credit Commitment amount for such Lender
set forth next to the name of such Lender on the signature pages hereof, or, as
to any Lender becoming a party hereto after the Effective Date, as set forth in
the applicable Assignment and Acceptance, in each case as reduced pursuant to
Section 2.2 or modified pursuant to Section 8.6.
"Revolving Credit Loan" shall mean any borrowing, including any
Bankers' Acceptance, under Section 2.4 evidenced by Revolving Credit Notes and
made pursuant to Section 2.1(a).
"Revolving Credit Note" shall mean any promissory note of a
Borrower evidencing the Revolving Credit Loans made to it in substantially the
form annexed hereto as Exhibit F, as amended or modified from time to time and
together with any promissory note or notes issued in exchange or replacement
therefor.
"Revolving Credit Termination Date" shall mean the earlier to
occur of (a) July 31, 2004 and (b) the date on which the Revolving Credit
Commitments shall be terminated pursuant to Section 2.2 or Section 6.2.
"Security Agreements" shall mean the Company Security Agreement
and the Guarantor Security Agreements.
"Security Documents" shall mean, collectively, the Security
Agreements, the Documents, the Environmental Certificate, the Creative Bond
Documents, the Guaranties, the Pledge Agreements, the subrogation and
contribution agreement among the Company and the Guarantors, any consent and
amendment of security documents executed by the Company or any of the Guarantors
and all other related agreements and documents, including mortgages, deeds of
trust, financing statements and similar documents, delivered pursuant to this
Agreement or otherwise entered into by any Person to secure or guarantee the
Advances or otherwise relating hereto, all as amended or modified from time to
time.
"Senior Subordinated Debt Documents" shall mean the Senior
Subordinated Note Indentures, the Senior Subordinated Notes and all agreements
and documents executed in connection therewith at any time, including without
limitation those agreements and documents listed on Schedule 1.1(E) hereto.
"Senior Subordinated Notes" shall mean the Senior Subordinated
Notes issued by the Company in the aggregate principal amount of $200,000,000
due 2007 issued pursuant to the Senior Subordinated Note Indentures.
"Senior Subordinated Note Indentures" shall mean, collectively,
the Senior Subordinated Indenture between the Company, the subsidiary guarantors
named therein and First Trust National Association, as trustee, dated as of June
24, 1997, as amended or modified from time to time and the Indenture between the
Company, the subsidiary guarantors named therein, and U.S. Bank Trust National
Association, as trustee, dated as of December 1, 1998, as amended or modified
from time to time.
"Solvent" when used with respect to any Person, shall mean that,
as of any date of determination, (a) the amount of the "present fair saleable
value" of the assets of such Person will, as of such date, exceed the amount of
all "liabilities of such Person, contingent or otherwise," as of such date, as
such quoted terms are determined in accordance with applicable federal and state
laws governing determinations of the insolvency of debtors, (b) the present fair
saleable value of the assets of such
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Person will, as of such date, be greater than the amount that will be required
to pay the liability of such Person on its debts as such debts become absolute
and matured, (c) such Person will not have, as of such date, an unreasonably
small amount of capital with which to conduct its business, and (d) such Person
will be able to pay its debts as they mature. For purposes of this definition,
(i) "debt" means liability on a "claim", and (ii) "claim" means any (x) right to
payment, whether or not such a right is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed,
legal, equitable, secured or unsecured or (y) right to an equitable remedy for
breach of performance if such breach gives rise to a right to payment, whether
or not such right to an equitable remedy is reduced to judgment, fixed,
contingent, matured or unmatured, disputed, undisputed, secured or unsecured.
"Subordinated Debt" of any Person shall mean, as of any date, that
Indebtedness of such Person for borrowed money which is expressly subordinate
and junior in right and priority of payment to the Advances and other
Indebtedness of such Person to the Lenders in manner and by agreement
satisfactory in form and substance to the Agent and subject to such other terms
and provisions, including without limitation maturities, covenants, defaults,
rates and fees, acceptable to the Agent, and shall include, without limitation,
all indebtedness owing pursuant to the Senior Subordinated Debt Documents and
any Permitted Disqualified Stock.
"Subordinated Debt Documents" shall mean the Senior Subordinated
Debt Documents and any other agreement or document evidencing or relating to any
Subordinated Debt, whether under the Senior Subordinated Notes or any other
Subordinated Debt.
"Subsidiary" of any Person shall mean any other Person (whether
now existing or hereafter organized or acquired) in which (other than directors
qualifying shares required by law) at least a majority of the securities or
other ownership interests of each class having ordinary voting power or
analogous right (other than securities or other ownership interests which have
such power or right only by reason of the happening of a contingency), at the
time as of which any determination is being made, are owned, beneficially and of
record, by such Person or by one or more of the other Subsidiaries of such
Person or by any combination thereof. Unless otherwise specified, reference to
"Subsidiary" shall mean a Subsidiary of the Company.
"Swingline Facility" shall have the meaning specified in Section
2.1(d).
"Swingline Loan" shall mean any loan under Section 2.4 evidenced
by a Swingline Note and made by the Agent (including First Chicago/NBD Canada)
to a Borrower pursuant to Section 2.1(d).
"Swingline Note" shall mean any promissory note of a Borrower
evidencing the Swingline Loans in substantially the form of Exhibit G hereto, as
amended or modified from time to time and together with any promissory note or
notes issued in exchange or replacement therefor.
"Tax Sharing Agreement" shall mean any tax sharing or similar
agreement, if any, entered into between the Company and its Subsidiaries at any
time, as amended or modified from time to time. "Term Loan" shall mean the
single borrowing under Section 2.4 evidenced by the Term Notes and made to the
Company pursuant to Section 2.1(c).
"Term Loan Commitment" shall mean, with respect to each Lender,
the commitment of each Lender to make a portion of the Term Loan in an amount
not exceeding in the aggregate principal amount outstanding at any time the Term
Loan Commitment amount for such Lender set forth next to the
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name of such Lender on the signature pages hereof, or, as to any Lender becoming
a party hereto after the Effective Date, as set forth in the applicable
Assignment and Acceptance, in each case as reduced by payments on the Term Loan
or modified pursuant to Section 8.6.
"Term Loan Notes" shall mean the promissory notes of the Company
evidencing the Term Loan, in substantially the form of Exhibit H, as amended or
modified from time to time and together with any promissory note or notes issued
in exchange or replacement therefor.
"Tooling" shall mean dies, molds, tooling and similar items.
"Tooling Contract" shall mean any contract for the fabrication or
purchase of Tooling.
"Tooling Indebtedness" shall mean all present and future
Indebtedness of the Company and its Restricted Subsidiaries the proceeds of
which are utilized to finance Tooling for which the sales of such Tooling is
covered under specific written purchase orders or agreements between the Company
or any Subsidiary and the purchaser of such Tooling, which Indebtedness can be
and is being fully serviced by payments for such Tooling so financed and which
payments are not in dispute, all as determined by the Agent, and which
Indebtedness can be classified as "Tooling Indebtedness" under the Senior
Subordinated Debt Documents.
"Tooling Revolving Credit Borrowing Base" shall mean as of any
day, the sum of (a) an amount equal to 100% of the value of Eligible Deferred
Tooling Reimbursement Payments, plus (b) an amount equal to 100% of the value of
Eligible Tooling.
"Tooling Revolving Credit Commitments" shall mean, with respect to
each Lender, the commitment of each such Lender to make Tooling Revolving Credit
Loans in amounts not exceeding in the aggregate principal outstanding at any
time the Tooling Revolving Credit Commitment amount for such Lender set forth
next to the name of such Lender on the signature pages hereof, or, as to any
Lender becoming a party hereto after the Effective Date, as set forth in the
applicable Assignment and Acceptance, in each case as reduced pursuant to
Section 2.2 or modified pursuant to Section 8.6.
"Tooling Revolving Credit Loan" shall mean any borrowing under
Section 2.4 evidenced by the Tooling Revolving Credit Notes and made pursuant to
Section 2.1(b) for Tooling Indebtedness.
"Tooling Revolving Credit Notes" shall mean the promissory notes
of the Company evidencing the Tooling Revolving Credit Loans, in substantially
the form annexed hereto as Exhibit I, respectively, as amended or modified from
time to time and together with any promissory note or notes issued in exchange
or replacement therefor.
"Tooling Revolving Credit Termination Date" shall mean the earlier
to occur of (a) the date on which the maturity of the Tooling Revolving Credit
Loans is accelerated pursuant to Section 6.2 and (b) July 31, 2004.
"Total Covenant EBITDA" shall mean, for any period, EBITDA for
such period, provided that:
(a) to adjust for the impact on Net Income due to the
General Motors Corporation strike, (i) $3,200,000 shall be added to the amount
of EBITDA determined for the second calendar quarter of 1998; (b) (ii)
$3,300,000 shall be added to the amount of EBITDA determined for the
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third calendar quarter of 1998 and (iii) $1,300,000 shall be subtracted from the
amount of EBITDA determined for the fourth calendar quarter of 1998;
(b) to the extent deducted from such EBITDA and allowed
hereunder, payments by the Company and the Mexican Subsidiaries on the Mexican
Facility Obligations shall be added to Total Covenant EBITDA; and
(c) for any fiscal quarter ending on or before March 31,
2000, EBITDA, for purposes of determining Total Covenant EBITDA, EBITDA shall be
calculated excluding the Mexican Subsidiaries, provided that Total Covenant
EBITDA shall be reduced to the extent EBITDA as calculated for the Mexican
Subsidiaries only is less than any of the following amounts for the fiscal
quarter indicated: (i) negative $900,000 for the fiscal quarter ending March 31,
1999, (ii) negative $800,000 for the fiscal quarter ending June 30, 1999, (iii)
negative $600,000 for the fiscal quarter ending September 30, 1999, (iv)
negative $500,000 for the fiscal quarter ending December 31, 1999, and (v)
negative $600,000 for the fiscal quarter ending March 31, 2000.
"Total Covenant Interest Expense" shall mean, for any period,
Interest Expense, plus, to the extent not included in Interest Expense, the
interest component of all payments on the Mexican Facility Obligations, for such
period.
"Total Debt" shall mean, as of any date, each of the following, on
a consolidated basis for the Company and its Restricted Subsidiaries without
duplication: (a) all Indebtedness for borrowed money and similar monetary
obligations evidenced by bonds, notes, debentures, Capital Lease obligations,
bankers acceptances or otherwise, including without limitation all assumed
Indebtedness and all obligations in respect of the deferred purchase price of
properties or assets and the factoring of accounts receivable, in each case
whether direct or indirect; plus (b) all liabilities secured by any Lien
existing on property owned or acquired subject thereto, whether or not the
liability secured thereby shall have been assumed; plus (c) all reimbursements
obligations under outstanding letters of credit in respect of drafts which may
be presented or have been presented and have not yet been paid and are not
included in clause (a) above; plus (d) Permitted Disqualified Stock; plus (e)
all guarantees and all other Contingent Liabilities with respect to any of the
indebtedness, obligations or liabilities described in the foregoing clauses (a),
(b), (c) or (d), including without limitation all guarantees and other
Contingent Liabilities of the Company or any Restricted Subsidiary with respect
to any such indebtedness, obligations or liabilities of any Unrestricted
Subsidiaries; less (f) deferred reimbursement tooling indebtedness, i.e., only
that portion of Tooling Indebtedness to be paid by the purchaser of the related
Tooling in the piece price over the term of the related tooling contract
consistent with current practice; less (g) cash equivalents acceptable to the
Agent and cash of the Company and its Restricted Subsidiaries, less any book
overdrafts, bank overdrafts or similar items.
"Total Covenant Obligations" shall mean, as of any date, each of
the following, on a consolidated basis for the Company and its Restricted
Subsidiaries, without duplication: (a) Total Debt; plus (b) the outstanding
amount of all Mexican Facility Obligations.
"Total Covenant Obligations to Total Covenant EBITDA Ratio" shall
mean, as of the end of any fiscal quarter of the Company, the ratio of (a) Total
Covenant Obligations as of the end of such fiscal quarter to (b) Total Covenant
EBITDA for the four consecutive fiscal quarters of the Company then ending.
"U.S. Advances" shall mean all Loans denominated in Dollars and
all Letters of Credit.
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"U.S. Percentage" of any Lender as of any date, shall mean a
fraction (expressed as a percentage), the numerator of which is the difference
of (a) the Revolving Credit Commitment of such Lender on such date minus (b) the
Canadian Advances made by such Lender (including any Affiliate of such Lender)
which are outstanding as of such date, after giving effect to any Canadian
Advances to be made as of such date, and the denominator of which is the
difference of (i) the aggregate Revolving Credit Commitments of all Lenders
minus (ii) the aggregate Canadian Advances which are outstanding as of such
date.
"Unfunded Benefit Liabilities" shall mean, with respect to any
Plan as of any date, the net pension liability as determined under FAS 87.
"Unrestricted Guaranties" shall mean all Contingent Liabilities of
the Company or of any Guarantor with respect to any Indebtedness of any
Unrestricted Subsidiaries, which Contingent Liabilities shall be deemed
outstanding in an amount equal to the maximum amount that could be payable
thereunder.
"Unrestricted Subsidiary" shall mean any Subsidiary of the Company
(including any newly acquired or newly formed Subsidiary) which is not a
Restricted Subsidiary.
"Voting Stock" of a Person shall mean all classes of Capital Stock
of such Person then outstanding and normally entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers,
trustees or similar individuals thereof.
"Wholly Owned Subsidiary" shall mean a Subsidiary all the Capital
Stock of which (other than directors' qualifying shares) is owned by the Company
and/or one or more other Wholly Owned Subsidiaries.
"Working Capital" of any Person shall mean, as of any date, the
amount, if any, by which the current assets of such Person exceeds the current
liabilities (exclusive of the current portion of long term debt) of such Person,
all as determined in accordance with Generally Accepted Accounting Principles.
"Year 2000 Issues" shall mean anticipated costs, problems and
uncertainties associated with the inability of certain computer applications to
effectively handle data including dates on and after January 1, 2000, as such
inability affects the business, operations and financial condition of the
Company and its Subsidiaries and of the Company and its Subsidiaries' material
customers, suppliers and vendors.
"Year 2000 Program" is defined in Section 4.25.
1.2 Other Definitions; Rules of Construction. As used herein, the
terms "Agent", "Lender", "Lenders", "Company", "Borrowing Subsidiary",
"Borrowers" and "this Agreement" shall have the respective meanings ascribed
thereto in the introductory paragraph of this Agreement. Such terms, together
with the other terms defined in Section 1.1, shall include both the singular and
the plural forms thereof and shall be construed accordingly. All computations
required hereunder and all financial terms used herein shall be made or
construed in accordance with Generally Accepted Accounting Principles unless
such principles are inconsistent with the express requirements of this
Agreement; provided that, if the Company notifies the Agent that the Company
wishes to amend any covenant in Article V to eliminate the effect of any change
in Generally Accepted Accounting Principles in the
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operation of such covenant (or if the Agent notifies the Company that the
Required Lenders wish to amend Article V for such purpose), then the Company's
compliance with such covenant shall be determined on the basis of Generally
Accepted Accounting Principles in effect immediately before the relevant change
in Generally Accepted Accounting Principles became effective, until either such
notice is withdrawn or such covenant is amended in a manner satisfactory to the
Company and the Required Lenders. Use of the terms "herein", "hereof", and
"hereunder" shall be deemed references to this Agreement in its entirety and not
to the Section or clause in which such term appears. References to "Sections"
and "subsections" shall be to Sections and subsections, respectively, of this
Agreement unless otherwise specifically provided. Notwithstanding anything
herein, in any financial statements of the Company or in Generally Accepted
Accounting Principles to the contrary, for purposes of calculating the
Applicable Margin and of calculating and determining compliance with the
financial covenants (both actual and pro forma) in Sections 5.2(a), (b), (c) and
(d), including defined terms used therein, (i) no Unrestricted Subsidiary shall
be consolidated with the Company and its other Subsidiaries and each
Unrestricted Subsidiary shall be treated as if it were an investment in an
unconsolidated Subsidiary and all income, liabilities and assets of each
Unrestricted Subsidiary shall be excluded from all such calculations and
determinations thereunder except to the extent expressly provided herein, and
(ii) any Acquisitions made by the Company or any of its Subsidiaries, including
through mergers or consolidations and including the incurrence of all Total
Covenant Obligations related thereto and any other related financial
transactions, during the period for which such financial covenants were
calculated shall be deemed to have occurred on the first day of the relevant
period for which such financial covenants and the Applicable Margin were
calculated on a pro forma basis acceptable to the Agent. Without limiting the
foregoing, EBITDA, Fixed Charges, Interest Expense, Total Covenant EBITDA and
Total Covenant Obligations, for purposes of the financial covenants contained in
Sections 5.2(b), (c) and (d) and of calculating the Applicable Margin, shall be
calculated as if the Cofimeta Acquisition and all Indebtedness incurred in
connection therewith shall have occurred on the first day of the relevant period
for which such financial covenants and the Applicable Margin were calculated on
a pro forma basis acceptable to the Agent.
ARTICLE II.
THE COMMITMENTS, THE SWINGLINE FACILITY
AND THE ADVANCES
2.1 Commitments of the Lenders and Canadian and Swingline
Facility.
(a) Revolving Credit Advances.
(i) U.S. Advances. Each Lender agrees, for itself only,
subject to the terms and conditions of this Agreement, to make Revolving Credit
Loans to the Company or any Borrowing Subsidiary pursuant to Section 2.4 and to
participate in Letter of Credit Advances to the Company or any Borrowing
Subsidiary pursuant to Section 2.4 and Section 3.3, from time to time from and
including the Effective Date to but excluding the Revolving Credit Termination
Date, denominated in Dollars and not to exceed in aggregate principal amount at
any time outstanding the respective amounts determined pursuant to Section
2.1(e).
(ii) Canadian Advances. (A) Each Canadian Lender agrees,
for itself only, subject to the terms and conditions of this Agreement, to make
Canadian Advances to the Company or the Canadian Borrowing Subsidiaries pursuant
to Section 2.4, from time to time from and including the Effective Date to but
excluding the Revolving Credit Termination Date, denominated in
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CAD not to exceed an aggregate principal amount at any time outstanding to the
Company and the Canadian Borrowing Subsidiaries the respective amounts
determined pursuant to Section 2.1(e).
(B) If on any date a Canadian Advance is to be made
to the Company or a Canadian Borrowing Subsidiary (x) such Canadian Advance may
not be made because the aggregate Revolving Credit Commitments of the Canadian
Lenders would be exceeded and (y) the amount by which such Revolving Credit
Commitments of the Canadian Lenders would be exceeded is less than or equal to
the aggregate unused Revolving Credit Commitments of Lenders that are not
Canadian Lenders, each Lender that is not a Canadian Lender shall make a U.S.
Advance to the Company on such date, if the conditions for such an Advance are
satisfied, and the proceeds of such U.S. Advance shall be simultaneously applied
to repay the outstanding U.S. Advances of the Canadian Lenders, in each case in
amounts such that, after giving effect to such Borrowing and repayments and the
Borrowing from the Canadian Lenders of the requested Canadian Advance, the
provisions of Section 2.1(e) will not be violated. If any Borrowing of U.S.
Advances is required pursuant to this Section 2.1(a)(ii)(B), the Company shall
notify the Agent in the manner provided for U.S. Advances in Section 2.4 and the
Agent will notify each Lender of the amount to be advanced by such Lender.
(b) Tooling Revolving Credit Loans. Each Lender agrees, for
itself only, subject to the terms and conditions of this Agreement, to make
Tooling Revolving Credit Loans to the Company or any Borrowing Subsidiary
pursuant to Section 2.4 from time to time from and including the Effective Date
to but excluding the Tooling Revolving Credit Termination Date, denominated in
Dollars or Canadian Dollars and not to exceed in aggregate principal amount at
any time outstanding the amount determined pursuant to Section 2.1(e).
(c) Term Loan. Each Lender agrees, for itself only, subject to
the terms and conditions of this Agreement, to make its portion of the Term Loan
to the Company at one time on or within five Business Days after the Effective
Date in an amount equal to its Term Loan Commitment.
(d) Swingline Loans. (i) Any Borrower may request the Agent to
make, and the Agent may, in its sole discretion, make Swingline Loans to the
Borrowers from time to time on any Business Day during the period from the
Effective Date until the Revolving Credit Termination Date in an aggregate
principal amount for all Borrowers not to exceed at any time the lesser of (A)
the Dollar Equivalent of $30,000,000 (the "Swingline Facility") and (B) the
aggregate amount of Revolving Credit Advances that could be but is not borrowed
as of such date. Each Lender's Revolving Credit Commitment shall be deemed
utilized by an amount equal to such Lender's pro rata share (based on such
Lender's Revolving Credit Commitment) of the Dollar Equivalent of each Swingline
Loan for purposes of determining the amount of Revolving Credit Advances
required to be made by such Lender, but no Lender's (including NBD Bank's)
Revolving Credit Commitment, shall be deemed utilized for purposes of
determining commitment fees under Section 2.3(a). Swingline Loans shall bear
interest at the Floating Rate. Within the limits of the Swingline Facility, so
long as the Agent, in its sole discretion, elects to make Swingline Loans, the
Borrowers may borrow and reborrow under this Section 2.1(d)(i). Swingline Loans
to the Borrowing Subsidiaries will be made by the Agent through its Affiliate
First Chicago/NBD Canada.
(ii) The Agent may at any time in its sole and absolute
discretion require that any Swingline Loan be refunded by a Revolving Credit
Loan which is a Floating Rate Borrowing from the Lenders (or the Canadian
Lenders in the case of a Swingline Loan to a Borrowing Subsidiary), and upon
written notice thereof by the Agent to such Lenders and the relevant Borrower,
such Borrower shall be deemed to have requested a Floating Rate Borrowing in an
amount equal to the
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amount of such Swingline Loan, and such Floating Rate Borrowing shall be made to
refund such Swing Line Loan. Each such Lender shall be absolutely and
unconditionally obligated to fund its pro rata share (based on such Lender's
Revolving Credit Commitment) of such Floating Rate Borrowing or, if applicable,
purchase a participating interest in the Swingline Loans pursuant to Section
2.1(d)(iii) and such obligation shall not be affected by any circumstance,
including, without limitation, (A) any set-off, counterclaim, recoupment,
defense or other right which such Lender has or may have against the Agent,
First Chicago/NBD Canada or the Company or any if its Subsidiaries or anyone
else for any reason whatsoever; (B) the occurrence or continuance of a Default
or an Event of Default, subject to Section 2.1(d)(iii); (C) any adverse change
in the condition (financial or otherwise) of the Company or any of its
Subsidiaries; (D) any breach of this Agreement or any other agreement by any
other Lender, the Company or any Guarantor; or (E) any other circumstance,
happening or event whatsoever, whether or not similar to any of the foregoing
(including without limitation the Company's failure to satisfy any conditions
contained in Article II or any other provision of this Agreement).
(iii) If Floating Rate Loans may not be made by the Lenders
as described in Section 2.1(d)(ii) due to any Event of Default pursuant to
Section 6.1(h) or if the Lenders are otherwise legally prohibited from making
such Floating Rate Loans, then effective on the date each such Floating Rate
Loan would otherwise have been made, each Lender (or the Canadian Lenders in the
case of a Swingline Loan to a Borrowing Subsidiary) severally agrees that it
shall unconditionally and irrevocably, without regard to the occurrence of any
Default or Event of Default or any other circumstances, in lieu of deemed
disbursement of Loans, to the extent of such Lender's Revolving Credit
Commitment, purchase a participating interest in the Swingline Loans by paying
its participation percentage thereof. Each such Lender will immediately transfer
to the Agent, in same day funds, the amount of its participation. After such
payment to the Agent, each Lender shall share on a pro rata basis (calculated by
reference to its Revolving Credit Commitment) in any interest which accrues
thereon and in all repayments thereof. If and to the extent that any such Lender
shall not have so made the amount of such participating interest available to
the Agent, such Lender and the Borrowers severally agree to pay to the Agent
forthwith on demand such amount together with interest thereon, for each day
from the date of demand by the Agent until the date such amount is paid to the
Agent, at (A) in the case of the Borrowers, the interest rate specified above
and (B) in the case of such Lender, the Federal Funds Rate for the first five
days after the date of demand by the Agent and thereafter at the interest rate
specified above.
(e) Limitation on Amount of Advances. Notwithstanding anything in
this Agreement to the contrary, (i) the Dollar Equivalent of the aggregate
principal amount of the Revolving Credit Advances made or participated in by any
Lender (which for any Lender includes all U.S. Advances and all Canadian
Advances by such Lender, whether directly by such Lender or through an Affiliate
of such Lender in the case of Canadian Advances) at any time outstanding shall
not exceed the amount of its respective Revolving Credit Commitment as of the
date any such Advance is made, (ii) the aggregate principal amount of Letter of
Credit Advances outstanding at any time shall not exceed $30,000,000 (iii) the
aggregate Dollar Equivalent of all Canadian Advances shall not exceed
$40,000,000 at any time, (iv) the sum of the Dollar Equivalent of the aggregate
Revolving Credit Advances plus the Dollar Equivalent of the aggregate amount of
Unrestricted Guaranties shall not exceed the aggregate Revolving Credit
Commitments, (v) the sum of the Dollar Equivalent of the aggregate Revolving
Credit Advances, plus the aggregate Tooling Revolving Credit Loans, plus the
aggregate Dollar Equivalent of the Unrestricted Guaranties, plus the outstanding
Swingline Loans and plus the aggregate outstanding amount of the Mexican
Facility Tranche A Loans shall not exceed the amount of the Borrowing Base, (vi)
the aggregate principal amount of the Tooling Revolving Credit Loans made by any
Lender at any time outstanding shall not exceed the amount of its respective
Tooling Revolving Credit Commitment as
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of the date any such Loan is made, (vii) the aggregate Tooling Revolving
Credit Loans shall not exceed the amount of the Tooling Revolving Credit
Borrowing Base, and (viii) the principal amount of the Term Loan made by any
Lender shall not exceed the amount of such Lenders Term Loan Commitment as of
the date the Term Loan is made.
(f) Amendment and Restatement. This Agreement amends and restates
the Existing Credit Agreement, and all Advances and Letters of Credit
outstanding under the Existing Credit Agreement shall constitute Advances and
Letters of Credit under this Agreement and all fees and other obligations
accrued under the Existing Credit Agreement will continue to accrue and be paid
under this Agreement, subject to the rates and amounts specified in this
Agreement. As stated in the Notes and the Security Documents, the Advances and
other obligations pursuant hereto are issued in exchange and replacement for the
Advances and other obligations under the Existing Credit Agreement, shall not be
a novation or satisfaction thereof and shall be entitled to the same collateral,
plus additional collateral as specified herein, with the same priority.
2.2 Termination and Reduction of Commitments. (a) The Company shall
have the right to terminate or reduce the Revolving Credit Commitments or the
Tooling Revolving Credit Commitments at any time and from time to time, provided
that (i) the Company shall give three Business Days' prior written notice of
such termination or reduction to the Agent specifying the amount and effective
date thereof, (ii) each partial reduction thereof shall be in a minimum amount
of $5,000,000 and in an integral multiple of $1,000,000 and shall reduce such
Commitments of all of the Lenders proportionately in accordance with the
respective Commitment amounts for each such Lender, (iii) no such termination or
reduction shall be permitted with respect to any portion of any such Commitments
as to which a request for an Advance pursuant to Section 2.4 is then pending,
(iv) the Revolving Credit Commitments may not be terminated if any Revolving
Credit Advances are then outstanding and may not be reduced below the principal
amount of Revolving Credit Advances and Swingline Loans then outstanding, and
(v) the Tooling Revolving Credit Commitments may not be terminated if any
Tooling Revolving Credit Loans are then outstanding and may not be reduced below
the principal amount of the Tooling Revolving Credit Loans then outstanding. The
Revolving Credit Commitments or Tooling Revolving Credit Commitments or any
portion thereof terminated or reduced pursuant to this Section 2.2, whether
optional or mandatory, may not be reinstated
(b) For purposes of this Agreement, a Letter of Credit Advance
(i) shall be deemed outstanding in an amount equal to the sum of the maximum
amount available to be drawn under the related Letter of Credit on or after the
date of determination and on or before the stated expiry date thereof plus the
amount of any draws under such Letter of Credit that have not been reimbursed as
provided in Section 3.3 and (ii) shall be deemed outstanding at all times on and
before such stated expiry date or such earlier date on which all amounts
available to be drawn under such Letter of Credit have been fully drawn, and
thereafter until all related reimbursement obligations have been paid pursuant
to Section 3.3. As provided in Section 3.3, upon each payment made by the Agent
in respect of any draft or other demand for payment under any Letter of Credit,
the amount of any Letter of Credit Advance outstanding immediately prior to such
payment shall be automatically reduced by the amount of each Loan deemed
advanced, if any, in respect of the related reimbursement obligation of the
Company.
2.3 Fees. (a) The Company agrees to pay to the Agent, for the benefit
of each Lender, a facility fee on the daily average amount (whether used or
unused) of its respective Revolving Credit Commitment and Tooling Revolving
Credit Commitment during each calendar quarter or portion thereof, for the
period from the Effective Date to but excluding the Revolving Credit Termination
Date with respect to the Revolving Credit Commitments and the Tooling Revolving
Credit Termination Date
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with respect to the Tooling Revolving Credit Commitments, at a rate equal to the
Applicable Margin in effect. Accrued facility fees shall be payable quarterly in
arrears on the last Business Day of each March, June, September and December,
commencing on the first such Business Day occurring after the Effective Date,
and on the Revolving Credit Termination Date and Tooling Revolving Credit
Termination Date.
(b) The Company agrees to pay to the Agent (i) with respect to
Letters of Credit, a fee computed at the Applicable Margin calculated on the
maximum amount available to be drawn from time to time under a Letter of Credit,
which fee shall be paid quarterly in arrears on the last Business Day of each
March, June, September and December and on the Termination Date, which fees
shall be for the pro rata benefit of the Lenders and (ii) in addition to all
other fees, with respect to all Letters of Credit, a fee computed at the rate of
0.25% per annum calculated on the face amount of each Letter of Credit, which
fee shall be paid quarterly in arrears on the last Business Day of each March,
June September and December and on the Termination Date, and shall be solely for
the account of the Agent. Such fees are nonrefundable. The Company further
agrees to pay to the Agent, on demand, such other customary administrative fees,
charges and expenses of the Agent in respect of the issuance, negotiation,
acceptance, amendment, transfer and payment of such Letter of Credit or
otherwise payable pursuant to the application and related documentation under
which such Letter of Credit is issued. Notwithstanding anything in the Creative
Revenue Bond Documents to the contrary, the fees payable for the Creative Letter
of Credit shall be governed by this Section 2.3(b).
(c) The Company further agrees to pay to the Agent, the Arranger
and/or their Affiliates such fees in such amounts as may from time to time be
agreed upon in writing by the Company, the Agent and the Arranger.
2.4 Disbursement of Advances. (a) The applicable Borrower shall give
the Agent notice of its request for an Advance in substantially the form of
Exhibit J hereto not later than 1:00 p.m. Detroit time (i) three LIBOR Business
Days prior to the date such Borrowing is requested to be made if such Borrowing
is to be made as a LIBOR Borrowing, (ii) five Business Days prior to the date
any Letter of Credit Borrowing is requested to be made, (iii) three Business
Days prior to the date such Borrowing is requested to be made if such Borrowing
is to be made as an Acceptance Borrowing and (iv) one Business Day prior to the
date such Borrowing is requested to be made in all other cases (other than
Swingline Loans), which notice shall specify whether a LIBOR Borrowing, Floating
Rate Borrowing, Acceptance or Letter of Credit Borrowing is requested and, in
the case of each requested LIBOR Borrowing or Acceptance Borrowing, the Interest
Period to be initially applicable to such Borrowing and, in the case of each
Letter of Credit Borrowing, such information as may be necessary for the
issuance thereof by the Agent. The Applicable Borrower shall give the Agent
notice of its request for each Swingline Loan in substantially the form of
Exhibit K hereto not later than 1:00 p.m. Detroit time on the same Business Day
such Swingline Loan is requested to be made. The Agent, not later than the
Business Day next succeeding the day such notice is given, shall provide notice
of such requested Borrowing (not including Swingline Loans) to each Lender.
Subject to the terms and conditions of this Agreement, the proceeds of each such
requested Borrowing or Swingline Loan shall be made available to such Borrower
by depositing the proceeds thereof in immediately available funds, in an account
maintained and designated by such Borrower at the principal office of the Agent
in the case of U.S. Advances and at the principal office of First Chicago/NBD
Canada in the case of Canadian Advances. Subject to the terms and conditions of
this Agreement, the Agent shall, on the date any Letter of Credit Borrowing is
requested to be made, issue the related Letter of Credit on behalf of the
Lenders for the account of the Company. Notwithstanding anything herein to the
contrary, the Agent may decline to
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issue any requested Letter of Credit on the basis that the beneficiary, the
purpose of issuance or the terms or the conditions of drawing are unacceptable
to it in its reasonable discretion.
(b) Each Lender, on the date any Borrowing is requested to be
made, shall make its pro rata share of such Borrowing available in immediately
available funds for disbursement to the applicable Borrower pursuant to the
terms and conditions of this Agreement. Unless the Agent shall have received
notice from any Lender prior to the date such Borrowing is requested to be made
under this Section 2.4 that such Lender will not make available to the Agent
such Lender's pro rata portion of such Borrowing, the Agent may assume that such
Lender has made such portion available to the Agent on the date such Borrowing
is requested to be made in accordance with this Section 2.4. Each Lender's pro
rata share of any U.S. Advance shall be based on its U.S. Percentage, and each
Canadian Advance shall be made by the Canadian Lenders (either directly or
through an Affiliate) based on its Canadian Percentage. If and to the extent
such Lender shall not have so made such pro rata portion available to the Agent,
the Agent may (but shall not be obligated to) make such amount available to such
Borrower , and such Lender and such Borrower severally agree to pay to the Agent
forthwith on demand such amount together with interest thereon, for each day
from the date such amount is made available to such Borrower by the Agent until
the date such amount is repaid to the Agent, at a rate per annum equal to the
interest rate applicable to such Borrowing during such period. If such Lender
shall pay such amount to the Agent together with interest, such amount so paid
shall constitute a Loan by such Lender as a part of such Borrowing for purposes
of this Agreement. The failure of any Lender to make its pro rata portion of any
such Borrowing available to the Agent shall not relieve any other Lender of its
obligations to make available its pro rata portion of such Borrowing on the date
such Borrowing is requested to be made, but no Lender shall be responsible for
failure of any other Lender to make such pro rata portion available to the Agent
on the date of any such Borrowing.
(c) All Revolving Credit Loans made under this Section 2.4 to the
Borrowers shall be evidenced by the Revolving Credit Notes issued by the
Borrowers, all Tooling Revolving Credit Loans shall be evidenced by the Tooling
Revolving Credit Notes issued by the Borrowers, the Term Loan shall be evidenced
by the Term Notes issued by the Company and all Swingline Loans under this
Section 2.4 shall be evidenced by the Swingline Notes issued by the Borrowers,
and all such Loans shall be due and payable and bear interest as provided in
Article III. Each Lender is hereby authorized by the Borrowers to record on the
schedules attached to the Notes or in its books and records, the date, amount
and type of each Loan and the duration of the related Interest Period (if
applicable), the amount of each payment or prepayment of principal thereon, and
the other information provided for on such schedule, which schedule or books and
records, as the case may be, shall constitute prima facie evidence of the
information so recorded, provided, however, that failure of any Lender to
record, or any error in recording, any such information shall not relieve the
Borrowers of their obligations to repay the outstanding principal amount of the
Loans, all accrued interest thereon and other amounts payable with respect
thereto in accordance with the terms of the Notes and this Agreement. Subject to
the terms and conditions of this Agreement, the Borrowers may borrow Loans under
this Section 2.4 and under Section 3.3, prepay Loans pursuant to Section 3.1 and
reborrow Revolving Credit Advances and Tooling Revolving Credit Advances, but
not the Term Loan, under this Section 2.4 and under Section 3.3.
(d) Nothing in this Agreement shall be construed to require or
authorize any Lender to issue any Letter of Credit, it being recognized that the
Agent has the sole obligation under this Agreement to issue Letters of Credit on
behalf of the Lenders. Upon each issuance, extension and renewal by the Agent,
each Lender shall automatically and unconditionally acquire a pro rata risk
participation interest in such Letter of Credit Advance based on the amount of
its respective Revolving
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Credit Commitment, and each Existing Letter of Credit shall be deemed issued
hereunder and each Lender shall automatically and unconditionally acquire a pro
rata risk participation interest therein based on the amount of its respective
Revolving Credit Commitment, upon becoming a Lender hereunder. If the Agent
shall honor a draft or other demand for payment presented or made under any
Letter of Credit, the Agent shall provide notice thereof to each Lender promptly
after such draft or demand is honored unless the Company shall have satisfied
its reimbursement obligation under Section 3.3 by payment to the Agent on such
date. Each Lender, on the date of such notice, shall absolutely and
unconditionally make its pro rata share (based on its Revolving Credit
Commitment) of the amount paid by the Agent available in immediately available
funds at the principal office of the Agent for the account of the Agent. If and
to the extent such Lender shall not have made such pro rata portion available to
the Agent, such Lender and the Company severally agree to pay to the Agent
forthwith on demand such amount together with interest thereon, for each day
from the date such amount was paid by the Agent until such amount is so made
available to the Agent at a per annum rate equal to the interest rate applicable
during such period to the Floating Rate Loans. If a Loan has been disbursed in
respect to the reimbursement obligation of the Company under Section 3.3 in the
case of Letter of Credit, then if such Lender shall pay such amount to the Agent
together with such interest, such amount so paid shall constitute a Loan by such
Lender as part of such Borrowing disbursed in respect of the reimbursement
obligation of the Company under Section 3.3 for purposes of this Agreement. The
failure of any Lender to make its pro rata portion of any such amount paid by
the Agent available to the Agent shall not relieve any other Lender of its
obligation to make available its pro rata portion of such amount, but no Lender
shall be responsible for failure of any other Lender to make such pro rata
portion available to the Agent.
2.5 Conditions for First Disbursement. The obligation of the Lenders
to make the first Borrowing hereunder is subject to receipt by each Lender and
the Agent of the following documents and completion of the following matters, in
form and substance satisfactory to each Lender and the Agent:
(a) Charter Documents. Certificates of recent date of the
appropriate authority or official of each Borrower and each Guarantor's
respective state or province of organization (listing all charter documents of
each Borrower and each Guarantor, respectively, on file in that office if such
listing is available) and certifying as to the good standing and existence of
each Borrower and each Guarantor, respectively, together with copies of such
charter documents of each Borrower and each Guarantor, certified as of a recent
date by such authority or official and certified as true and correct as of the
Effective Date by a duly authorized officer of each Borrower and each Guarantor,
respectively;
(b) Operating Agreements, By-Laws and Corporate Authorizations.
Copies of the operating agreements or article of incorporation, as the case may
be, and by-laws of each Borrower and each Guarantor together with all
authorizing resolutions and evidence of other corporate action taken by each
Borrower and each Guarantor to authorize the execution, delivery and performance
by each Borrower and each Guarantor of the Loan Documents to which each Borrower
and such Guarantor, respectively, is a party and the consummation by each
Borrower and such Guarantor, respectively, of the transactions contemplated
hereby, certified as true and correct as of the Effective Date by a duly
authorized officer of each Borrower and each Guarantor, respectively;
(c) Incumbency Certificate. Certificates of incumbency of each
Borrower and each Guarantor containing, and attesting to the genuineness of, the
signatures of those officers authorized to act on behalf of each Borrower and
such
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Guarantor in connection with the Loan Documents to which each Borrower or such
Guarantor is a party and the consummation by each Borrower and such Guarantor of
the transactions contemplated hereby, certified as true and correct as of the
Effective Date by a duly authorized officer of each Borrower and each Guarantor,
respectively;
(d) Notes. The Notes duly executed on behalf of the Borrowers for
each Lender and the Swingline Notes duly executed on behalf of the Borrowers for
the Agent and First Chicago/NBD Canada;
(e) Security Documents. The Security Agreements duly executed on
behalf of the Company and the Guarantors, the Pledge Agreements duly executed by
the Company and, to the extent applicable, each Guarantor and the Guaranties
duly executed on behalf of each Guarantor, granting to the Lenders and the Agent
the collateral and security intended to be provided pursuant to Section 2.11,
together with:
(i) Recording, Filing, Etc. Evidence of the recordation,
filing and other action (including payment of any applicable taxes or fees) in
such jurisdictions as the Lenders or the Agent may deem necessary or appropriate
with respect to the Security Documents, including the filing of financing
statements, financing statement assignments, financing statement amendments and
similar documents which the Lenders and the Agent may deem necessary or
appropriate to create, preserve or perfect the liens, security interests and
other rights intended to be granted to the Lenders or the Agent thereunder,
together with Uniform Commercial Code record and other searches in such offices
as the Lenders or the Agent may request;
(ii) Leased Property; Landlord Waivers. A schedule setting
forth all real property leased by the Company and each Guarantor, together with
copies of the related leases, certified as true and correct as of the Effective
Date by a duly authorized officer of the Company, and an agreement of each
landlord under such leases, in form and substance acceptable to the Lenders and
the Agent, waiving its distraint, lien and similar rights with respect to any
property subject to the Security Documents and agreeing to permit the Lenders
and the Agent to enter such premises in connection therewith;
(iii) Casualty and Other Insurance. Evidence that the
casualty and other insurance required pursuant to Section 5.1(c) and the
Security Agreements is in full force and effect;
(iv) Stock. The original stock certificates of any Capital
Stock which is required to be pledged pursuant to Section 2.11 and appropriate
stock powers, together with any recordings or other filings required by law and
any consents and waivers requested by the Agent with respect to the exercise of
any rights under the Pledge Agreements, including without limitation any
shareholders' and board of directors' consents so requested; and
(v) Environmental Matters. The Environmental Certificate
duly executed on behalf of the Borrowers and each of the Guarantors;
(f) Legal Opinion. The favorable written opinion of Dykema
Gossett PLLC, Fasken Campell Godfrey and Salans Hertzfeld & Heilbronn, counsels
for the Borrowers and Guarantors, with respect to such matters as the Agent may
request;
(g) Consents, Approvals, Etc. Copies of all governmental and
nongovernmental consents, approvals, authorizations, declarations, registrations
or filings, if any,
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required on the part of the Company or any Guarantor in connection with the
execution, delivery and performance of the Loan Documents or the transactions
contemplated hereby or as a condition to the legality, validity or
enforceability of the Loan Documents, certified as true and correct and in full
force and effect as of the Effective Date by a duly authorized officer of the
Company, or, if none is required, a certificate of such officer to that effect;
(h) Fees. Payment of the fees described in Section 2.3(c);
(i) Solvency Certificate. A solvency certificate duly executed by
the Company and its Subsidiaries in form and substance satisfactory to the
Agent;
(j) Subordinated Debt. Evidence satisfactory to the Agent,
including without limitation legal opinions of the Company's counsel, that all
transactions contemplated pursuant to this Agreement, including without
limitation making of all Advances and all transactions contemplated pursuant to
the Cofimeta Acquisition Documents, are in compliance with, and do not cause any
breach or other default under, any of the Senior Subordinated Debt Documents;
(k) Canadian Intercreditor Agreement. The Canadian Intercreditor
Agreement duly executed by all parties thereto, together with any documents
required in connection therewith by the Agent;
(l) Mexican Intercreditor Agreement. The Mexican Intercreditor
Agreement duly executed by all parties thereto, together with any documents
required in connection therewith by the Agent;
(m) Mexican Facility. The Mexican Facility shall close on the
Effective Date in accordance with the form of Mexican Facility Documents
delivered to the Agent prior to the Effective Date.
(n) Due Diligence. The satisfactory completion of the Cofimeta
Acquisition and all due diligence with respect to the Company, the Mexican
Subsidiaries, Cofimeta, its other Subsidiaries, the Cofimeta Acquisition and the
Mexican Facility, including, but not limited to, the satisfactory review of all
Mexican Facility Documents and Cofimeta Acquisition Documents, all terms,
conditions and provisions of the Mexican Facility and the Cofimeta Acquisition,
all final projections, all pro forma and prospective financial statements, all
sources and uses statements, pro forma borrowing base and covenant compliance
projections and certificates, appraisals, new business awards and contracts of
the Company and its Subsidiaries, the organizational structure of the Company
and its Subsidiaries after the Mexican Facility and the Cofimeta Acquisition,
all environmental matters relating to Cofimeta, the continuance plan relating to
Cofimeta and all required court and other approvals required in connection with
the Cofimeta Acquisition, and the form and structure, including the financial,
legal, accounting, tax and all other aspects of the Mexican Facility and the
Cofimeta Acquisition, all of which shall be satisfactory to the Agent and its
counsel; and
(o) Miscellaneous. Such other documents, and completion of such
other matters, as the Agent may reasonably request.
It is acknowledged and agreed by the Borrowers that all Notes, Guaranties,
Security Documents and other Loan Documents executed in connection with the
Existing Credit Agreement continue in full force and effect and are ratified and
confirmed, and, among other terms and provisions contained therein,
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continue to evidence, secure and guarantee, as the case may be, all of the
Advances and Lender Indebtedness and shall be considered Notes, Guaranties,
Security Documents and Loan Documents as defined herein, provided that the
Borrowers agree to execute and deliver, and cause each of their Subsidiaries to
execute and deliver, all appropriate amendments and other documents, if any, and
additional Security Documents and other Loan Documents as may be required by the
Agent in connection herewith, and all such additional agreements and documents
shall be promptly executed and delivered to the Agent, and no event later than
10 days after requested by the Agent.
2.6 Further Conditions for Disbursement. The obligation of the Lenders
to make any Advance (including the first Advance), or any continuation or
conversion under Section 2.7, is further subject to the satisfaction of the
following conditions precedent:
(a) The representations and warranties contained herein and in
the other Loan Documents shall be true and correct on and as of the date such
Advance is made (both before and after such Advance is made) as if such
representations and warranties were made on and as of such date;
(b) No Default or Event of Default shall exist or shall have
occurred and be continuing on the date such Advance is made (whether before or
after such Advance is made);
(c) The Agent shall have received the Borrowing Base Certificate
if required pursuant to Section 5.1(d)(v) as of the close of business on the
last day of the month next preceding the date such Advance is made; and
(d) In the case of any Letter of Credit Advance, the Company
shall have delivered to the Agent an application for the related Letter of
Credit and other related documentation requested by and acceptable to the Agent
appropriately completed and duly executed on behalf of the Company; and
(e) In the case of any Acceptance, the Borrowing Subsidiary shall
have delivered all documents and agreements required pursuant to Section 3.4.
The Borrowers shall be deemed to have made a representation and warranty to the
Lenders at the time of the making of, and the continuation or conversion of,
each Advance to the effects set forth in clauses (a) and (b). For purposes of
this Section 2.6 the representations and warranties contained in Section 4.6
hereof shall be deemed made with respect to both the financial statements
referred to therein and the most recent financial statements delivered pursuant
to Section 5.1(d)(ii) and (iii).
2.7 Subsequent Elections as to Borrowings. The applicable Borrower may
elect (a) to continue a LIBOR Borrowing, or a portion thereof, as a LIBOR
Borrowing or (b) to convert a LIBOR Borrowing or a portion thereof to a Floating
Rate Borrowing, (c) to convert a Floating Rate Borrowing to a LIBOR Borrowing,
(d) to continue an Acceptance or a portion thereof, as an Acceptance or (e) to
convert an Acceptance or a portion thereof to a Floating Rate Borrowing, in each
case by giving notice thereof to the Agent (with sufficient executed copies for
each Lender) in substantially the form of Exhibit L hereto not later than 1:00
p.m. Detroit time three LIBOR Business Days prior to the date any such
continuation of or conversion to a LIBOR Borrowing is to be effective, not later
than 1:00 p.m. Toronto time three Business Days prior to the date any such
continuation of or conversion to an Acceptance is to be effective and not later
than 1:00 p.m. Detroit time one Business Day prior to the date of any such
continuation or conversion is to be effective in all other cases, provided that
an outstanding LIBOR Borrowing or Acceptance Borrowing may only be converted on
the last day of the then current Interest
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<PAGE> 40
Period with respect to such Borrowing, and provided, further, if a continuation
of a Borrowing as, or a conversion of a Borrowing to, a LIBOR Borrowing or
Acceptance Borrowing is requested, such notice shall also specify the Interest
Period to be applicable thereto upon such continuation or conversion. The Agent,
not later than the Business Day next succeeding the day such notice is given,
shall provide notice of such election to the Lenders. If the applicable Borrower
shall not timely deliver such a notice with respect to any outstanding LIBOR
Borrowing or Acceptance Borrowing, such Borrower shall be deemed to have elected
to convert such LIBOR Borrowing or Acceptance Borrowing to a Floating Rate
Borrowing on the last day of the then current Interest Period with respect to
such Borrowing.
2.8 Limitation of Requests and Elections. Notwithstanding any other
provision of this Agreement to the contrary, (a) if, upon receiving a request
for a LIBOR Borrowing pursuant to Section 2.4, or a request for a continuation
of a LIBOR Borrowing or a request for a conversion of a Floating Rate Borrowing
to a LIBOR Borrowing pursuant to Section 2.7, (i) deposits in Dollars for
periods comparable to the LIBOR Interest Period elected by the Company are not
available to any Lender in the relevant interbank market, or (ii) LIBOR will not
adequately and fairly reflect the cost to any Lender of making, funding or
maintaining the related LIBOR Loan or (iii) by reason of national or
international financial, political or economic conditions or by reason of any
applicable law, treaty or other international agreement, rule or regulation
(whether domestic or foreign) now or hereafter in effect, or the interpretation
or administration thereof by any governmental authority charged with the
interpretation or administration thereof, or compliance by any Lender with any
guideline, request or directive of such authority (whether or not having the
force of law), including without limitation exchange controls, it is
impracticable, unlawful or impossible for, or shall limit or impair the ability
of, any Lender to make or fund the relevant Loan or to so continue or convert
such Loan then the Company shall not be entitled, so long as such circumstances
continue, to request such a Borrowing pursuant to Section 2.4 or a continuation
of or conversion to such a Borrowing pursuant to Section 2.7 and (b) if the
Agent shall have determined that by reason of circumstances affecting the money
market, there is no market for Acceptances, then the right of the Borrowing
Subsidiaries to request Acceptances and the acceptance thereof shall be
suspended until the Agent determines that the circumstances causing such
suspension no longer exists and the Agent so notifies the Borrowing
Subsidiaries. In the event that such circumstances no longer exist, the Lenders
shall again consider requests for such Borrowings pursuant to Section 2.4, and
requests for continuations of and conversions to such Borrowings pursuant to
Section 2.7.
2.9 Minimum Amounts; Limitation on Number of Borrowings; Etc. Except
for (a) Borrowings which exhaust the entire remaining amount of the relevant
Commitments, and (b) payments required pursuant to Section 3.1(c), each Floating
Rate Borrowing denominated in Dollars and each prepayment thereof shall be in a
minimum amount of $500,000 and in an integral multiple of $100,000, each LIBOR
Borrowing and each continuation or conversion thereof pursuant to Section 2.7
shall be in a minimum amount of $2,000,000 and in an integral multiple of
$500,000, each Letter of Credit Advance shall be in a minimum amount of
$100,000, each Floating Rate Borrowing denominated in CAD and each prepayment
thereof shall be in a minimum amount of CAD $500,000 and in integral multiple of
CAD $100,000, and each Acceptance and each continuation or conversion thereof
pursuant to Section 2.7 shall be in a minimum amount of CAD $2,000,000 and in an
integral multiple of CAD $500,000. The aggregate number of LIBOR Borrowings and
Acceptance Borrowings outstanding at any one time under this Agreement may not
exceed eight (8). The aggregate number of Letter of Credit Advances outstanding
at any time under this Agreement may not exceed five (5). No Letter of Credit
shall have a stated expiry date later than the earlier to occur of (i) the first
anniversary of its date of issuance or (ii) the fifth Business Day before the
Revolving Credit Termination Date.
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<PAGE> 41
2.10 Borrowing Base Adjustments. The Borrowers agree that if at any
time any trade account receivable, fixed asset, tooling reimbursement obligation
or any inventory of the Borrowers or any Guarantor fails to constitute Eligible
Accounts Receivable, Eligible Fixed Assets, Eligible Inventory, Eligible Tooling
or Eligible Deferred Tooling Reimbursement Payments, as the case may be, for any
reason, the Agent may, at any time upon written notice to the Company and
notwithstanding any prior classification of eligibility, classify such asset or
property as ineligible and exclude the same from the computation of the
Borrowing Base without in any way impairing the rights of the Lenders and the
Agent, in and to the same under the Security Agreements. The Borrowers agree
that real estate shall only be included in the Borrowing Base if the Borrowers
shall have delivered an appraisal acceptable to the Agent performed by an
independent third party appraiser acceptable to the Agent; it being acknowledged
that any real estate appraisals delivered prior to the Effective Date are
acceptable to the Agent.
2.11 Security and Collateral. To secure the payment when due of the
Notes and all other obligations of the Borrowers under this Agreement, any
Hedging Agreement or any other Loan Document to the Lenders and the Agent and of
the Company under the Mexican Facility Tranche A Guaranty, the Company shall
execute and deliver, or cause to be executed and delivered, to the Agent
Security Documents granting the following:
(a) Security interests in all present and future accounts,
inventory, equipment, general intangibles, instruments, chattel paper,
documents, fixtures and all other personal property of each Borrower and each
Guarantor, which security interests shall secure all present and future
indebtedness, obligations and liabilities of each of the Borrowers to the
Lenders and the Agent, provided that such security interests granted by any
Borrower which is a Foreign Subsidiary and not a Canadian Subsidiary shall
secure only the present and future indebtedness, obligations and liabilities of
such Borrower to the Lenders and the Agent.
(b) Guarantees of all Guarantors, which Guarantees shall
guarantee all present and future indebtedness, obligations and liabilities of
the Borrowers to the Lenders and the Agent.
(c) (i) Pledges of 100% of the Capital Stock of all Domestic
Subsidiaries and Canadian Subsidiaries which are Restricted Subsidiaries owned
directly or indirectly by the Company and (ii) pledges of 65% of the Capital
Stock of Foreign Subsidiaries which are not Canadian Subsidiaries and are
Restricted Subsidiaries and are owned by the Company or any Domestic
Subsidiaries, provided that such pledges granted by any Borrower which is a
Foreign Subsidiary and not a Guarantor shall secure only the present and future
indebtedness, obligations and liabilities of such Borrower to the Lenders and
the Agent.
(d) Liens on all present and future real property of each
Borrower and Guarantor, other than the real property of Lobdell to the extent
Lobdell is prohibited from granting such a Lien under the existing terms of the
Lobdell Preferred Stock Documents, provided that such Liens granted by any
Borrower which is a Foreign Subsidiary and not a Canadian Subsidiary shall
secure only the present and future indebtedness, obligations and liabilities of
such Borrower to the Lenders and the Agent. The Borrowers acknowledge and agree
that they will, and will cause each Guarantor, to execute and deliver on or
before 30 days after the Effective Date, all mortgages, deeds of trust,
mortgagee title policies, surveys and other documents reasonably required by the
Agent in connection with the granting of a first priority lien and security
interest on the real property described in this Section 2.11(d).
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<PAGE> 42
(e) All other security and collateral described in the Security
Documents.
ARTICLE III.
PAYMENTS AND PREPAYMENTS OF ADVANCES
3.1 Principal Payments and Prepayments.
(a) Unless earlier payment is required under this Agreement, the
Borrowers shall pay to the Lenders on the Revolving Credit Termination Date the
entire outstanding principal amount of the Revolving Credit Advances.
(b) Unless earlier payment is required under this Agreement, the
Borrowers shall pay the Lenders on the Tooling Revolving Credit Termination Date
the entire principal amount of the Tooling Revolving Credit Loans.
(c) The Company shall pay to the Agent for the pro rata account
of each Lender the unpaid principal amount of the Term Loan in 22 quarterly
principal payments as follows:
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------
Payment Date Principal Installment
- ---------------------------------------------------------------------------
<S> <C>
July 31, 1999 $ 500,000
- ---------------------------------------------------------------------------
October 31, 1999 $ 500,000
- ---------------------------------------------------------------------------
January 31, 2000 $ 500,000
- ---------------------------------------------------------------------------
April 30, 2000 $1,125,000
- ---------------------------------------------------------------------------
July 31, 2000 $1,125,000
- ---------------------------------------------------------------------------
October 31, 2000 $1,125,000
- ---------------------------------------------------------------------------
January 31, 2001 $1,125,000
- ---------------------------------------------------------------------------
April 30, 2001 $1,500,000
- ---------------------------------------------------------------------------
July 31, 2001 $1,500,000
- ---------------------------------------------------------------------------
October 31, 2001 $1,500,000
- ---------------------------------------------------------------------------
January 31, 2002 $1,500,000
- ---------------------------------------------------------------------------
April 30, 2002 $1,500,000
- ---------------------------------------------------------------------------
July 31, 2002 $1,500,000
- ---------------------------------------------------------------------------
October 31, 2002 $1,500,000
- ---------------------------------------------------------------------------
January 31, 2003 $1,500,000
- ---------------------------------------------------------------------------
April 30, 2003 $1,875,000
- ---------------------------------------------------------------------------
July 31, 2003 $1,875,000
- ---------------------------------------------------------------------------
October 31, 2003 $1,875,000
- ---------------------------------------------------------------------------
January 31, 2004 $1,875,000
- ---------------------------------------------------------------------------
April 30, 2004 $2,250,000
- ---------------------------------------------------------------------------
July 31, 2004 $2,250,000
- ---------------------------------------------------------------------------
</TABLE>
The Term Loan shall be paid in full on the Maturity Date.
(d) In addition to all other payments of the Advances required
hereunder, the Borrowers shall prepay the Advances by an amount equal to 100% of
all of the Net Cash Proceeds, payable upon receipt of such Net Cash Proceeds,
from any sale or other disposition of any assets (exclusive of the
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<PAGE> 43
sale of inventory and the factoring of accounts receivable to the extent
permitted under Section 5.2(e)(x) in the ordinary course of business upon
customary credit terms, sales of scrap or obsolete material or equipment which
are not material in the aggregate and transfers of assets to the Mexican
Subsidiaries to the extent permitted by Section 5.2(l)(v)), in excess of
$2,000,000 in aggregate amount in any fiscal year, provided that (i) the
Borrowers shall not be required to prepay the Advances from the Net Cash
Proceeds from the sale or any disposition of assets if such Net Cash Proceeds
will be used within 180 days (or 360 days if such sale involves the Planned
Asset Sales) of their receipt to purchase similar assets of comparable value and
(ii) the Borrower shall not be required to prepay the Advances in connection
with the transfer of any assets to a joint venture in accordance with Section
5.2(l) and it is acknowledged that the Borrowing Base shall be immediately
decreased by the value of such assets being transferred which were included in
the Borrowing Base. The Company shall provide a certificate to the Agent within
20 days after each sale of assets, which, but for the above proviso, would cause
a prepayment under this Section 3.1(d), which certificate shall describe such
sale of assets and estimate when such Net Cash Proceeds will be used to purchase
similar assets of comparable value; and if such Net Cash Proceeds are not used
within 180 days (or 360 days if such sale involves the Planned Asset Sales)
after such sale or such earlier date when the Company has determined not to
purchase similar assets of comparable value with such Net Cash Proceeds the
Company will then prepay the Advances with such Net Cash Proceeds.
Notwithstanding the foregoing, upon and during the continuance of any Event of
Default, 100% of all the Net Cash Proceeds from any sale or other disposition of
any assets shall be used to prepay the Advances. Such mandatory prepayments
shall be applied first to the Term Loan (applied pro rata to all remaining
principal installments on the Term Loan) until paid in full, and thereafter
applied pro rata to the other Advances, provided that such prepayments on the
Advances other than the Term Loans will not reduce the Commitments relating
thereto.
(e) The Company may at any time and from time to time prepay all
or a portion of the Loans, without premium or penalty, provided that (i) the
Company may not prepay any portion of any Borrowing as to which an election for
a continuation of or a conversion to a LIBOR Borrowing or Acceptance Borrowing
is pending pursuant to Section 2.7, and (ii) unless earlier payment is required
under this Agreement, any LIBOR Borrowing or Acceptance Borrowing may only be
prepaid on the last day of the then current Interest Period with respect to such
Borrowing.
(f) In addition to all other payments of Advances required
hereunder, if at any time the aggregate outstanding principal amount of the
Advances shall exceed any of the limits provided under Section 2.1(e), the
Borrowers shall forthwith pay to the Lenders an amount for application to the
outstanding principal amount of the Loans, or provide to the Lenders cash
collateral in respect of outstanding Letters of Credit in an amount, such that
the aggregate amount of such payments with respect to the Loans and such cash
collateral is not less than the amount of such excess.
3.2 Interest Payments. The Borrowers shall pay interest to the Lenders
on the unpaid principal amount of each Loan made to them, for the period
commencing on the date such Loan is made until such Loan is paid in full, on
each Interest Payment Date and at maturity (whether at stated maturity, by
acceleration or otherwise), and thereafter on demand, at, in the case of
Swingline Loans, the Floating Rate and, in all other cases, the following rates
per annum:
(a) During such periods that such Loan is a Floating Rate Loan,
the Floating Rate.
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<PAGE> 44
(b) During such periods that such Loan is a LIBOR Loan, the LIBOR
applicable to such Loan for each related LIBOR Interest Period.
(c) During such periods such Loan is a BA Equivalent Loan, the
applicable rate specified in Section 3.4.
Notwithstanding the foregoing, the Borrowers shall pay interest on demand by the
Agent at the Overdue Rate on the outstanding principal amount of any Loan and
any other amount payable by the Borrowers hereunder (other than interest) which
is not paid in full when due (whether at stated maturity, by acceleration or
otherwise) for the period commencing on the due date thereof until the same is
paid in full.
For the purposes of the Interest Act (Canada) and Canadian Advances hereunder:
(i) whenever any interest or fee under this Agreement is calculated
using a rate based on a year of 360 days or 365 days, such rate
determined pursuant to such calculation, when expressed as an annual
rate, is equivalent to (X) the applicable rate based on a year of 360
days or 365 days, as the case may be, (Y) multiplied by the actual
number of days in the relevant calendar year, and (Z) divided by 360 or
365 as the case may be;
(ii) the principle of deemed reinvestment of interest does not apply
to any interest calculation under this Agreement; and
(iii) the rates of interest stipulated in this Agreement are intended
to be nominal rates and not effective rates or yields.
3.3 Letters of Credit and Acceptances. (a) (i) The Borrowers agree to
pay to the Lenders, on the day on which the Agent shall honor a draft or other
demand for payment presented or made under any Letter of Credit and on the
maturity date of each Bankers' Acceptance, an amount equal to the amount paid by
the Agent in respect of such draft or other demand under such Letter of Credit,
an amount equal to the face value of each Bankers' Acceptance accepted by such
Lender maturing on that day (notwithstanding that a Lender may be the holder
thereof at maturity) and all reasonable expenses paid or incurred by the Agent
relative thereto. Unless the Borrowers shall have made such payment to the
Lenders on such day, upon each such payment by the Agent with respect to a
Letter of Credit and each such maturity date of each Banker's Acceptance, the
Agent shall be deemed to have disbursed to the relevant Borrowers, and such
Borrowers shall be deemed to have elected to satisfy its reimbursement and
payment obligation by, a Revolving Credit Borrowing bearing interest at the
Floating Rate for the account of the Lenders in an amount equal to the amount so
paid by the Agent in respect of such draft or other demand under such Letter of
Credit or in the face value of such Banker's Acceptance then maturing. Such
Revolving Credit Borrowing shall be disbursed notwithstanding any failure to
satisfy any conditions for disbursement of any Loan set forth in Article II
hereof and, to the extent of the Revolving Credit Borrowing so disbursed, the
reimbursement and payment obligation of the Company under this Section 3.3(a)(i)
shall be deemed satisfied; provided, however, that nothing in this Section 3.3
shall be deemed to constitute a waiver of any Default or Event of Default caused
by the failure to the conditions for disbursement or otherwise.
(ii) If, for any reason (including without limitation as a
result of the occurrence of an Event of Default with respect to the Company
pursuant to Section 6.1(g)), Floating Rate Loans may not be made by the Lenders
as described in Section 3.3(a)(i), then (A) the Borrowers agree
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<PAGE> 45
that each amount not paid pursuant to the first sentence of Section 3.3(a)(i)
shall bear interest, payable on demand by the Agent, at the interest rate then
applicable to Floating Rate Borrowings, and (B) effective on the date each such
Floating Rate Borrowing would otherwise have been made, each Lender severally
agrees that it shall unconditionally and irrevocably, without regard to the
occurrence of any Default or Event of Default, in lieu of deemed disbursement of
Floating Rate Loans, to the extent of such Lender's Revolving Credit Commitment
in the case of Letters of Credit, purchase a participating interest in each
reimbursement amount paid by the Agent with respect to Letters of Credit. Each
Lender will immediately transfer to the Agent, in same day funds, the amount of
its participation. Each Lender shall share on a pro rata basis (calculated by
reference to its Revolving Credit Commitment) in any interest which accrues
thereon and in all repayments thereof. If and to the extent that any Lender
shall not have so made the amount of such participating interest available to
the Agent, such Lender and the Borrowers severally agree to pay to the Agent
forthwith on demand such amount together with interest thereon, for each day
from the date of demand by the Agent until the date such amount is paid to the
Agent, at (x) in the case of the Borrowers, the interest rate then applicable to
Floating Rate Borrowings and (y) in the case of such Lender, the Federal Funds
Rate for the first five days after the date of demand by the Agent and
thereafter at the interest rate then applicable to Floating Rate Borrowings.
(b) The reimbursement and other payment obligations of the
Borrowers under this Section 3.3 shall be absolute, unconditional and
irrevocable and shall remain in full force and effect until all obligations of
the Borrowers to the Lenders hereunder shall have been satisfied, and such
obligations of the Borrowers shall not be affected, modified or impaired upon
the happening of any event, including without limitation, any of the following,
whether or not with notice to, or the consent of, the Borrowers:
(i) Any lack of validity or enforceability of any Letter
of Credit, Acceptance or any documentation relating to any Letter of Credit, any
Acceptance or to any transaction related in any way thereto (the "Documents");
(ii) Any amendment, modification, waiver, consent, or any
substitution, exchange or release of or failure to perfect any interest in
collateral or security, with respect to any of the Documents;
(iii) The existence of any claim, setoff, defense or other
right which the Company or any of its Subsidiaries may have at any time against
any beneficiary or any transferee of any Letter of Credit or Acceptance (or any
Persons or entities for whom any such beneficiary, transferee or holder may be
acting), the Agent or any Lender or any other Person or entity, whether in
connection with any of the Documents, the transactions contemplated herein or
therein or any unrelated transactions;
(iv) Any draft or other statement or document presented
under any Letter of Credit or Acceptance proving to be forged, fraudulent,
invalid or insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(v) Payment by the Agent to the beneficiary under any
Letter of Credit against presentation of documents which do not comply with the
terms of the Letter of Credit, including failure of any documents to bear any
reference or adequate reference to such Letter of Credit;
(vi) Any failure, omission, delay or lack on the part of
the Agent or any Lender or any party to any of the Documents to enforce, assert
or exercise any right, power or
40
<PAGE> 46
remedy conferred upon the Agent, any Lender or any such party under this
Agreement or any of the Documents, or any other acts or omissions on the part of
the Agent, any Lender or any such party;
(vii) Any defense based on the lack of presentment for
payment and any other defense to payment of any amounts due to a Lender in
respect of any Acceptance accepted by it pursuant to this Agreement which might
exist solely by reason of such Acceptance being held, at the maturity thereof,
by such Lender in its own right;
(viii) Any other event or circumstance that would, in the
absence of this clause, result in the release or discharge by operation of law
or otherwise of the Company from the performance or observance of any
obligation, covenant or agreement contained in this Section 3.3.
No setoff, counterclaim, reduction or diminution of any obligation or
any defense of any kind or nature which any Borrower has or may have against the
beneficiary or holder of any Letter of Credit or Acceptance shall be available
hereunder to any Borrower against the Agent or any Lender. Nothing in this
Section 3.3 shall limit the liability, if any, of the Agent and the Lenders to
the Company pursuant to Section 8.5(b).
3.4 Additional Terms for Acceptances. Subject to the terms and
conditions hereof, upon giving to the Agent prior written notice in accordance
with Section 2.4 hereof, on any Business Day a Borrowing Subsidiary may borrow
from the Lenders by way of Acceptances, provided that:
(a) (i) each Lender shall have received a Bankers' Acceptance or
Bankers' Acceptances in the aggregate principal amount of such Borrowing from
such Lender in due and proper form duly completed and executed by the Borrowing
Subsidiary and presented for acceptance to such Lender prior to 10:00 a.m.
(Toronto time) on the date for such Borrowing, together with such other document
or documents as such Lender may reasonably require (including the execution by
the Borrowing Subsidiary of such Lender's usual form of bankers' acceptances)
and the Acceptance Fee shall have been paid to such Lender at or prior to such
time;
(ii) each Bankers' Acceptance shall be stated to mature on
a Business Day, no later than the Revolving Credit Termination Date, which is
30, 60 or 90 days from the date of its acceptance;
(iii) each Bankers' Acceptance shall be stated to mature on
a Business Day in such a way that no Lender will be required to incur any costs
for the redeployment of funds as a consequence of any repayment required during
any period for which such Bankers' Acceptance is outstanding;
(iv) no days of grace shall be permitted on any Bankers'
Acceptance; and
(v) the aggregate face amount of the Bankers' Acceptances
to be accepted by a Lender shall be determined by the Agent by reference to the
respective relevant Revolving Credit Commitments of the Lenders, except that, if
the face amount of a Bankers' Acceptance which would otherwise be accepted by a
Lender would not be $100,000 or a whole multiple thereof, such face amount shall
be increased or reduced by the Agent in its sole discretion to $100,000 or the
nearest whole multiple of that amount, as appropriate.
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<PAGE> 47
(b) Each Borrowing Subsidiary acknowledges, agrees and confirms
that each Lender may at any time and from time to time hold, sell, rediscount or
otherwise dispose of any Acceptance accepted and purchased by it hereunder. Each
Borrowing Subsidiary acknowledges, agrees and confirms with the Lenders that the
records of each Lender in respect of payment of any Banker's Acceptance by such
Lender shall be binding on the Borrowing Subsidiary and shall be conclusive
evidence (in the absence of manifest error) of a Floating Rate Loan to the
Borrowing Subsidiary and of an amount owing by the Borrowing Subsidiary to such
lender.
(c) In the event a Lender is unable to accept Bankers'
Acceptances, such Lender shall have the right at the time of accepting drafts to
require the Borrowing Subsidiary to accept a Loan from such Lender in lieu of
the issue and acceptance of a Bankers' Acceptance requested by the Borrowing
Subsidiary to be accepted so that there shall be outstanding while the Bankers'
Acceptances are outstanding BA Equivalent Loans from such Lender as contemplated
herein. The principal amount of each BA Equivalent Loan shall be that amount
which, when added to the amount of interest (calculated at the applicable
Discount Rate) which will accrue during the BA Equivalent Interest Period shall
be equal, at maturity, to the face amount of the drafts which would have been
accepted by such Lender had it accepted Bankers' Acceptances. The "BA EQUIVALENT
INTEREST PERIOD" for each BA Equivalent Loan shall be equal to the Interest
Period of the drafts presented for acceptance as Bankers' Acceptances on the
relevant date of Borrowing. On the relevant date of the Borrowing the Borrowing
Subsidiary shall pay to the Agent a fee equal to the Acceptance Fee which would
have been payable to such Lender if it were a Lender accepting drafts having a
term to maturity equal to the applicable BA Equivalent Interest Period and an
aggregate face amount equal to the sum of the principal amount of the BA
Equivalent Loan and the interest payable thereon by the Borrowing Subsidiary for
the Applicable BA Equivalent Interest Period. The provisions of this Agreement
dealing with Bankers' Acceptances shall apply, mutatis mutandis, to BA
Equivalent Loans.
(d) Each Bankers' Acceptance issued pursuant to this Agreement
shall be purchased by the Lender accepting such Bankers' Acceptance for the
Discounted Proceeds thereof. Concurrent with the acceptance of each Bankers'
Acceptance, each Lender shall make available to the Agent the Discounted
Proceeds thereof for disbursement to the Borrowing Subsidiary in accordance with
the terms hereof. In each case, upon receipt of such Discounted Proceeds from
the Lenders and upon fulfilment of the applicable conditions set forth herein,
the Agent shall make such funds available to the Borrowing Subsidiary in
accordance with this Agreement. Upon each issue of Bankers' Acceptances as a
result of the conversion of outstanding Borrowings into Bankers' Acceptances,
the Borrowing Subsidiary shall, concurrently with the conversion, pay in advance
to the Agent on behalf of the Lenders, the amount by which the face value of
such Bankers' Acceptances exceeds the Discounted Proceeds of such Bankers'
Acceptances, to be applied against the principal amount of the Borrowing being
so converted. The Borrowing Subsidiary shall at the same time pay to the Agent
the applicable Acceptance Fee.
(e) To enable the Lenders to make Advances in the manner
specified in this Section 3.4, the Borrowing Subsidiary shall, in accordance
with the request of each Lender either (i) provide a power of attorney to
complete, sign, endorse and issue Bankers' Acceptances, in such form as such
Lender may require; or (ii) supply each Lender with such number of drafts as
such Lender may reasonably request, duly endorsed and executed on behalf of the
Borrowing Subsidiary. Each Lender shall exercise such care in the custody and
safekeeping of drafts as it would exercise in the custody and safekeeping of
similar property owned by it. Each Lender will, upon request by the Borrowing
Subsidiary, promptly advise the Borrowing Subsidiary of the number and
designations, if any, of the uncompleted drafts then held by it.
3.5 Payment Method. (a) All payments with respect to U.S. Advances to
be made by the Borrowers hereunder will be made in Dollars and all payments with
respect to Canadian Advances
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<PAGE> 48
to made by the Borrowers hereunder shall be made in CAD, and in each case in
immediately available funds to the Agent for the account of the relevant Lenders
at its address referred to in Section 8.2 not later than 1:00 p.m. Detroit time
on the date on which such payment shall become due and, with respect to Canadian
Advances, to First Chicago/NBD Canada for the account of the relevant Lenders at
its address referred to in Section 8.2 not later than 1:00 p.m. Toronto time on
the date on which such payment shall become due. Payments received after 1:00
p.m. shall be deemed to be payments made prior to 1:00 p.m. on the next
succeeding Business Day. The Borrowers hereby authorize the Agent (including
First Chicago/NBD Canada) to charge their accounts with the Agent (including
First Chicago/NBD Canada) in order to cause timely payment of amounts due
hereunder to be made (subject to sufficient funds being available in such
accounts for that purpose).
(b) At the time of making each such payment, the Borrowers shall,
subject to the other terms and conditions of this Agreement, specify to the
Agent that Borrowing or other obligation of the Borrowers hereunder to which
such payment is to be applied. In the event that the Borrowers fails to so
specify the relevant obligation or if an Event of Default shall have occurred
and be continuing, the Agent may apply such payments as it may determine in its
sole discretion.
(c) On the day such payments are deemed received, the Agent shall
remit to the Lenders their pro rata shares of such payments in immediately
available funds. In the case of payments of principal and interest on any
Borrowing, such pro rata shares shall be determined with respect to each such
Lender by the ratio which the outstanding principal balance of its Loan included
in such Borrowing bears to the outstanding principal balance of the Loans of all
of the Lenders included in such Borrowing, in the case of fees paid pursuant to
Section 2.3 and other amounts payable hereunder (other than the Agent's fees and
amounts payable to any Lender under Section 3.8), such pro rata shares shall be
determined with respect to each such Lender by the ratio which the Commitments
of such Lender bears to the Commitments of all the Lenders or such other pro
rata shares as specified in this Agreement.
3.6 No Setoff or Deduction. Subject to Section 3.11, all payments of
principal of and interest on the Advances and other amounts payable by the
Borrowers hereunder shall be made by the Borrowers without setoff or
counterclaim and, subject to the next succeeding sentence, free and clear of,
and without deduction or withholding for, or on account of, any present or
future taxes, levies, imposts, duties, fees, assessments, or other charges of
whatever nature, imposed by any governmental authority, or by any department,
agency or other political subdivision or taxing authority. Subject to Section
3.11, any such taxes, levies, imposts, duties, fees, assessments or other
charges are imposed, the Borrowers will pay such additional amounts as may be
necessary so that payment of principal and of interest on the Loans and other
amounts payable hereunder, after withholding or deduction for or on account
thereof, will not be less than any amount provided to be paid hereunder and, in
any such case, the Borrowers will furnish to the Lenders certified copies of all
tax receipts evidencing the payment of such amounts within 45 days after the
date any such payment is due pursuant to applicable law.
3.7 Payment on Non-Business Day; Payment Computations. Except as
otherwise provided in this Agreement to the contrary, whenever any installment
of principal of, or interest on, any Loan or any other amount due hereunder
becomes due and payable on a day which is not a Business Day, the maturity
thereof shall be extended to the next succeeding Business Day and, in the case
of any installment of principal, interest shall be payable thereon at the rate
per annum determined in accordance with this Agreement during such extension.
Computations of interest and other amounts due under this Agreement shall be
made on the basis of a year of 360 days (or 365 days when determining the
Floating
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Rate or rates or fees with respect to Acceptances) for the actual number of days
elapsed, including the first day but excluding the last day of the relevant
period.
3.8 Additional Costs. (a) In the event that any applicable law, treaty
or other international agreement, rule or regulation (whether domestic or
foreign) now or hereafter in effect and whether or not presently applicable to
any Lender or the Agent, or any interpretation or administration thereof by any
governmental authority charged with the interpretation or administration
thereof, or compliance by any Lender or the Agent with any guideline, request or
directive of any such authority (whether or not having the force of law), shall
(i) affect the basis of taxation of payments to any Lender or the Agent of any
amounts payable by the Borrowers under this Agreement (other than taxes imposed
on the overall net income of any Lender or the Agent, by the jurisdiction, or by
any political subdivision or taxing authority of any such jurisdiction, in which
any Lender or the Agent, as the case may be, has its principal office), (ii)
shall impose, modify or deem applicable any reserve, special deposit or similar
requirement against assets of, deposits with or for the account of, or credit
extended by any Lender or the Agent, or (iii) shall impose any other condition
with respect to this Agreement, or any of the Commitments, the Notes or the
Loans or any Letter of Credit, and the result of any of the foregoing is to
increase the cost to any Lender or the Agent, as the case may be, of making,
funding or maintaining any LIBOR Loan Acceptance, or any Letter of Credit or to
reduce the amount of any sum receivable by any Lender or the Agent, as the case
may be, thereon, then the Borrowers shall pay to such Lender or the Agent, as
the case may be, from time to time, upon request by such Lender (with a copy of
such request to be provided to the Agent) or the Agent, additional amounts
sufficient to compensate such Lender or the Agent, as the case may be, for such
increased cost or reduced sum receivable to the extent, in the case of any LIBOR
Loan, such Lender or the Agent is not compensated therefor in the computation of
the interest rate applicable to such LIBOR Loan. A statement as to the amount of
such increased cost or reduced sum receivable, prepared in good faith and in
reasonable detail by such Lender or the Agent, as the case may be, and submitted
by such Lender or the Agent, as the case may be, to the relevant Borrower, shall
be prima facie evidence thereof.
(b) In the event that any applicable law, treaty or other
international agreement, rule or regulation (whether domestic or foreign) now or
hereafter in effect and whether or not presently applicable to any Lender or the
Agent, or any interpretation or administration thereof by any governmental
authority charged with the interpretation or administration thereof, or
compliance by any Lender or the Agent with any guideline, request or directive
of any such authority (whether or not having the force of law), including any
risk-based capital guidelines, affects or would affect the amount of capital
required or expected to be maintained by such Lender or the Agent (or any
corporation controlling such Lender or the Agent) and such Lender or the Agent,
as the case may be, determines that the amount of such capital is increased by
or based upon the existence of such Lender's or the Agent's obligations
hereunder and such increase has the effect of reducing the rate of return on
such Lender's or the Agent's (or such controlling corporation's) capital as a
consequence of such obligations hereunder to a level below that which such
Lender or the Agent (or such controlling corporation) could have achieved but
for such circumstances (taking into consideration its policies with respect to
capital adequacy) by an amount deemed by such Lender or the Agent to be
material, then the Borrowers shall pay to such Lender or the Agent, as the case
may be, from time to time, upon request by such Lender (with a copy of such
request to be provided to the Agent) or the Agent, additional amounts sufficient
to compensate such Lender or the Agent (or such controlling corporation) for any
increase in the amount of capital and reduced rate of return which such Lender
or the Agent reasonably determines to be allocable to the existence of such
Lender's or the Agent's obligations hereunder. A statement as to the amount of
such compensation, prepared in good faith and in reasonable detail by such
Lender or the Agent, as the case
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may be, and submitted by such Lender or the Agent to the relevant Borrower,
shall be prima facie evidence thereof.
3.9 Illegality and Impossibility. In the event that any applicable
law, treaty or other international agreement, rule or regulation (whether
domestic or foreign) now or hereafter in effect and whether or not presently
applicable to any Lender, or any interpretation or administration thereof by
any governmental authority charged with the interpretation or administration
thereof, or compliance by any Lender with any guideline, request or directive
of such authority (whether or not having the force of law), including without
limitation exchange controls, shall make it unlawful or impossible for any
Lender to maintain any Loan under this Agreement, the relevant Borrower shall
upon receipt of notice thereof from such Lender repay in full the then
outstanding principal amount of each Loan so affected, together with all
accrued interest thereon to the date of payment and all amounts owing to such
Lender under Section 3.10, (a) on the last day of the then current Interest
Period applicable to such Loan if such Lender may lawfully continue to maintain
such Loan to such day, or (b) immediately if such Lender may not continue to
maintain such Loan to such day.
3.10 Indemnification. If any Borrower makes any payment of principal
with respect to any LIBOR Loan on any other date than the last day of a LIBOR
Interest Period applicable thereto (whether pursuant to Section 3.1(c), Section
3.9, Section 6.2 or otherwise), or if any Borrower fails to borrow any LIBOR
Loan after notice has been given to the Lenders in accordance with Section 2.4,
or if any Borrower fails to make any payment of principal or interest in respect
of a LIBOR Loan when due, such Borrower shall reimburse each Lender on demand
for any resulting loss or expense incurred by each such Lender, including
without limitation any loss incurred in obtaining, liquidating or employing
deposits from third parties, whether or not such Lender shall have funded or
committed to fund such Loan. A statement as to the amount of such loss or
expense, prepared in good faith and in reasonable detail by such Lender and
submitted by such Lender to the relevant Borrower, shall be conclusive and
binding for all purposes absent manifest error in computation. Calculation of
all amounts payable to such Lender under this Section 3.10 shall be made as
though such Lender shall have actually funded or committed to fund the relevant
LIBOR Loan through the purchase of an underlying deposit in an amount equal to
the amount of such Loan in the relevant market and having a maturity comparable
to the related Interest Period and through the transfer of such deposit to a
domestic office of such Lender in the United States; provided, however, that
such Lender may fund any LIBOR Loan in any manner it sees fit and the foregoing
assumption shall be utilized only for the purpose of calculation of amounts
payable under this Section 3.10.
3.11 Taxes. (a) Each Lender (which, for purposes of this Section 3.11,
shall not include any Affiliate of such Lender used to make Canadian Advances
hereunder) that is not organized and incorporated under the laws of the United
States or any State thereof making U.S. Advances agrees to file with the Agent
and the Company, in duplicate, (a) on or before the later of (i) the Effective
Date and (ii) the date such Lender becomes a Lender under this Agreement and (b)
thereafter, for each taxable year of such Lender (in the case of a Form 4224) or
for each third taxable year of such Lender (in the case of any other form)
during which interest or fees arising under this Agreement and the Notes are
received, unless not legally able to do so as a result of a change in the United
States income tax enacted, or treaty promulgated, after the date specified in
the preceding clause (a), on or prior to the immediately following due date of
any payment by the Company hereunder, a properly completed and executed copy of
either Internal Revenue Service Form 4224 or Internal Revenue Service Form 1001
and Internal Revenue Service Form W-8 or Internal Revenue Service Form W-9 and
any additional form necessary for claiming complete exemption from United States
withholding taxes (or such other form as is required to claim complete exemption
from United States withholding taxes), if and as provided by the Code or
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other pronouncements of the United States Internal Revenue Service, and such
Lender warrants to the Company that the form so filed will be true and complete;
provided that such Lender's failure to complete and execute such Form 4224 or
Form 1001, or Form W-8 or Form W-9, as the case may be, and any such additional
form (or any successor form or forms) shall not relieve the Company of any of
its obligations under this Agreement, except as otherwise provided in this
Section 3.11.
(b) Notwithstanding anything herein to the contrary, for any
period with respect to which a Lender has failed to provide the Company with the
appropriate form pursuant to Section 3.11(a) (unless such failure is due to a
change in treaty, law or regulation occurring subsequent to the date on which a
form originally was required to be provided), such Lender shall not be entitled
to indemnification under Section 3.6 with respect to withholding taxes imposed
by the United States; provided, however, that should a Lender, which is
otherwise exempt from or subject to a reduced rate of withholding tax, become
subject to withholding because of its failure to deliver a form required
hereunder, the Borrowers shall take such steps as such Lender shall reasonably
request to assist such Lender to recover such taxes.
(c) Each Canadian Lender that is created or organized under the
laws of a jurisdiction other than Canada or a Province thereof making Canadian
Advances shall deliver, or have its designated Affiliate to be used to make
Canadian Advances deliver, to the Company and the Agent on the Effective Date
(or on the date on which such Canadian Lender becomes a Lender hereunder),
evidence that the Minister of National Revenue is satisfied that payments made
to such Lender hereunder are not subject to Taxes pursuant to Regulation 805(2)
of the Income Tax Act ("Evidence of Canadian Tax Exemption"). In addition, from
time to time after the Effective Date (or the date on which such Canadian Lender
becomes a Lender hereunder) upon the reasonable request of the Company, each
such Canadian Lender further agrees to deliver to the Company and the Agent
further Evidence of Canadian Tax Exemption, unless any change in treaty, law,
regulation or official interpretation thereof prevents such Lender from duly
providing same. Notwithstanding anything in this Section 3.11 to the contrary,
the Company shall not have any obligation to pay any withholding taxes or to
indemnify any Canadian Lender for any withholding taxes to the extent that such
taxes result from the failure of such Lender to comply with its obligations
under this paragraph.
(d) Notwithstanding anything herein to the contrary, for any
period with respect to which a Canadian Lender has failed to provide the Company
with the appropriate form pursuant to Section 3.11(c) (unless such failure is
due to a change in treaty, law or regulation occurring subsequent to the date on
which a form originally was required to be provided), such Canadian Lender shall
not be entitled to indemnification under Section 3.6 with respect to withholding
taxes imposed by Canada; provided however, that should a Canadian Lender, which
is otherwise exempt from or subject to a reduced rate of withholding tax, become
subject to withholding taxes because of its failure to deliver a form required
hereunder, the Company shall take such steps as such Lender shall reasonably
request to assist such Lender to recover such Taxes.
(e) If any Borrower is required to pay additional amounts to or
for the account of any Lender pursuant to Section 3.6, and each Lender which is
not a Canadian Lender shall be entitled to such amounts if it is ever required
to make or participate in Canadian Advances under this Agreement, then such
Lender will change the jurisdiction of its Applicable Lending Office so as to
eliminate or reduce any such additional payment which may thereafter accrue if
such change, in the judgment of such Lender, is not otherwise disadvantageous to
such Lender. For the purposes of making any Canadian Advances, any Lender may
designate any Affiliate of such Lender in Canada to make such Canadian Advances
on its
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behalf, provided that such designation is made in writing to the Agent and the
Borrowers. Upon such designation, such Affiliate shall have all rights as a
Lender with respect to such Canadian Advances.
3.12 Substitution of Lender. If (i) the obligation of any Lender to
make or maintain LIBOR Loans has been suspended pursuant to Section 3.9 when not
all Lenders' obligations have been suspended, (ii) any Lender has demanded
compensation under Section 3.8 when all Lenders have not done so or (iii) any
Lender is a Defaulting Lender, the Company shall have the right, if no Default
or Event of Default then exists, to replace such Lender (a "Replaced Lender")
with one or more other lenders (collectively, the "Replacement Lender")
acceptable to the Agent, provided that (x) at the time of any replacement
pursuant to this Section 3.12, the Replacement Lender shall enter into one or
more Assignment and Acceptances, pursuant to which the Replacement Lender shall
acquire the Commitments and outstanding Advances and other obligations of the
Replaced Lender and, in connection therewith, shall pay to the Replaced Lender
in respect thereof an amount equal to the sum of (A) the amount of principal of,
and all accrued interest on, all outstanding Loans of the Replaced Lender, (B)
the amount of all accrued, but theretofore unpaid, fees owing to the Replaced
Lender under Section 2.3 and (C) the amount which would be payable by the
Company to the Replaced Lender pursuant to Section 3.10 if the Company prepaid
at the time of such replacement all of the Loans of such Replaced Lender
outstanding at such time and (y) all obligations of the Company then owing to
the Replaced Lender (other than those specifically described in clause (x) above
in respect of which the assignment purchase price has been, or is concurrently
being, paid) shall be paid in full to such Replaced Lender concurrently with
such replacement. Upon the execution of the respective Assignment and
Acceptances, the payment of amounts referred to in clauses (x) and (y) above
and, if so requested by the Replacement Lender, delivery to the Replacement
Lender of the appropriate Note or Notes executed by the Company, the Replacement
Lender shall become a Lender hereunder and the Replaced Lender shall cease to
constitute a Lender hereunder. The provisions of this Agreement (including
without limitation Sections 3.10 and 8.5) shall continue to govern the rights
and obligations of a Replaced Lender with respect to any Loans made or any other
actions taken by such lender while it was a Lender. Nothing herein shall release
any Defaulting Lender from any obligation it may have to any Borrower, the Agent
or any other Lender.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES
The Borrowers represent and warrant to the Lenders and the Agent that:
4.1 Corporate Existence and Power. Each of the Borrowers and the
Guarantors is a corporation or other organization duly organized, validly
existing and in good standing under the laws of its respective jurisdiction of
incorporation or formation, and is duly qualified to do business, and is in good
standing, in all additional jurisdictions where such qualification is necessary
under applicable law, except for jurisdictions where their failure to be so
qualified would not result in any Material Adverse Effect. Each of the Company
and the Guarantors has all requisite corporate or other organizational power to
own or lease the properties used in its business and to carry on its business as
now being conducted and as proposed to be conducted, and to execute and deliver
the Loan Documents to which it is a party and to engage in the transactions
contemplated by this Agreement.
4.2 Corporate Authority. The execution, delivery and performance by
each of the Borrowers and the Guarantors of the Loan Documents to which each of
them is a party have been duly authorized by all necessary corporate or other
organizational action and are not in contravention of any
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law, rule or regulation, or any judgment, decree, writ, injunction, order or
award of any arbitrator, court or governmental authority, or of the terms of
such Borrower's or such Guarantor's charter, operating agreement or by-laws, or
of any contract or undertaking to which such Borrower or such Guarantor is a
party or by which such Borrower or such Guarantor or any of their property may
be bound or affected and will not result in the imposition of any Lien on any of
such Borrower's or such Guarantor's property or of any of such Borrower's or
such Guarantor's property, except for Permitted Liens.
4.3 Binding Effect. These Loan Documents to which each of the
Borrowers and the Guarantors is a party are the legal, valid and binding
obligations of such Borrower and such Guarantor, respectively, enforceable
against each of them in accordance with their respective terms.
4.4 Subsidiaries. Schedule 4.4 hereto correctly sets forth the
corporate name, jurisdiction of incorporation or formation and ownership of each
Subsidiary of the Company. Each such Subsidiary and each corporation or other
organization becoming a Subsidiary of the Company after the date hereof is and
will be a corporation or other organization duly organized, validly existing and
in good standing under the laws of its jurisdiction of incorporation and is and
will be duly qualified to do business in each additional jurisdiction where such
qualification is or may be necessary under applicable law, except for such
failure which could not have a Material Adverse Effect. Each Subsidiary of the
Company has and will have all requisite corporate or other organizational power
to own or lease the properties used in its business and to carry on its business
as now being conducted and as proposed to be conducted. All outstanding shares
of Capital Stock of each Subsidiary of the Company have been and will be validly
issued and are and will be fully paid and nonassessable and, except with respect
to the Lobdell Preferred Stock or as disclosed in writing to and approved by the
Agent from time to time, are and will be owned, beneficially and of record, by
the Company or another Subsidiary of the Company free and clear of any Liens.
4.5 Litigation. Except as set forth in Schedule 4.5 hereto, there is
no action, suit or proceeding pending or, to the best of the Company's
knowledge, threatened against or affecting the Company or any of its
Subsidiaries before or by any court, governmental authority or arbitrator, which
if adversely decided might result, either individually or collectively, in any
Material Adverse Effect and, to the best of the Company's knowledge, there is no
basis for any such action, suit or proceeding.
4.6 Financial Condition. The consolidated and consolidating balance
sheet of the Company and its Subsidiaries and the consolidated and consolidating
statements of income, retained earnings and cash flows of the Company and its
Subsidiaries for the fiscal year ended March 31, 1998 and reported on by Price
Waterhouse LLP, independent certified public accountants, copies of which have
been furnished to the Lenders, fairly present, and the financial statements of
the Company and its Subsidiaries delivered pursuant to Section 5.1(d) will
fairly present, the consolidated financial position of the Company and its
Subsidiaries as at the respective dates thereof, and the consolidated results of
operations of the Company and its Subsidiaries for the respective periods
indicated, all in accordance with Generally Accepted Accounting Principles
consistently applied (subject, in the case of said interim statements, to
year-end audit adjustments). There has been no Material Adverse Effect since
March 31, 1998. There is no Contingent Liability of the Company or any of its
Subsidiaries that is not reflected in such financial statements or in the notes
thereto which could have a Material Adverse Effect. Neither the Company nor any
Restricted Subsidiary is liable directly or indirectly, for any of the
Indebtedness or other liabilities of any Unrestricted Subsidiary or for any
Contingent Liabilities with respect to any Unrestricted Subsidiary except as
permitted by Section 5.2(e).
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4.7 Use of Advances. The Company will use the proceeds of the Advances
to complete the Cofimeta Acquisition, to refinance existing indebtedness of the
Guarantors, and for its and the Guarantors' general corporate purposes. Neither
the Company nor any of its Subsidiaries extends or maintains, in the ordinary
course of business, credit for the purpose, whether immediate, incidental, or
ultimate, of buying or carrying margin stock (within the meaning of Regulations
T, U or X of the Board of Governors of the Federal Reserve System), and no part
of the proceeds of any Advance will be used for the purpose, whether immediate,
incidental, or ultimate, of buying or carrying any such margin stock or
maintaining or extending credit to others for such purpose. The Capital Stock of
Cofimeta is not "margin stock" within the meaning of Regulations T, U or X of
the Board of Governors of the Federal Reserve System and is not "marginable OTC
stock" or "foreign margin stock" within the meaning of Regulation T of the Board
of Governors of the Federal Reserve System. After applying the proceeds of each
Advance, such margin stock will not constitute more than 25% of the value of the
assets (either of the Company alone or of the Company and its Subsidiaries on a
consolidated basis) that are subject to any provisions of any Loan Document that
may cause the Advances to be deemed secured, directly or indirectly, by margin
stock.
4.8 Consents, Etc. Except for such consents, approvals,
authorizations, declarations, registrations or filings delivered by the Company
pursuant to Section 2.5(g), if any, each of which is in full force and effect,
no consent, approval or authorization of or declaration, registration or filing
with any governmental authority or any nongovernmental Person or entity,
including without limitation any creditor, lessor or stockholder of the Company
or any of its Subsidiaries, is required on the part of any Borrower or any
Guarantor in connection with the execution, delivery and performance of the Loan
Documents or the transactions contemplated hereby or as a condition to the
legality, validity or enforceability of any of the Loan Documents.
4.9 Taxes. The Company and its Subsidiaries have filed all tax returns
(federal, state and local) required to be filed and have paid all taxes shown
thereon to be due, including interest and penalties, or have established
adequate financial reserves on their respective books and records for payment
thereof. Neither the Company nor any of its Subsidiaries knows of any actual or
proposed tax assessment or any basis therefor, and no extension of time for the
assessment of deficiencies in any federal or state tax has been granted by the
Company or any such Subsidiary. The Company will not amend any Tax Sharing
Agreement without the prior approval of the Agent except to add wholly owned
Subsidiaries to any such Tax Sharing Agreement.
4.10 Title to Properties. Except as otherwise disclosed in the latest
balance sheet referred to in Section 4.6 or delivered pursuant to Section
5.1(d), the Company or one or more of its Subsidiaries have good and marketable
fee simple title (or the equivalent thereto in any relevant foreign
jurisdiction) to all of the real property, and a valid and indefeasible
ownership or leasehold interest in all of the other properties and assets
(including, without limitation, the collateral subject to the Security Documents
to which any of them is a party) reflected in said balance sheet or subsequently
acquired by the Company or any such Subsidiary. All of such properties and
assets are free and clear of any Lien, except for Permitted Liens. The Security
Documents grant a first priority, perfected and enforceable lien and security
interest in all collateral described therein, subject only to Permitted Liens.
4.11 Borrowing Base. All trade accounts receivable, fixed assets and
inventory of the Borrowers and the Guarantors represented or reported by the
Company to be, or otherwise included in, Eligible Accounts Receivable, Eligible
Deferred Tooling Reimbursement Payments, Eligible Fixed Assets and Eligible
Inventory, comply in all respects with the requirements therefor set forth in
the respective definitions thereof, and the computation of the Borrowing Base
set forth in each Borrowing
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Base Certificate is true and correct. The aggregate amount of all Revolving
Credit Advances, plus all Tooling Revolving Credit Loans, plus all Unrestricted
Guarantees, plus the outstanding Swingline Loans and plus the outstanding amount
of all Mexican Facility Tranche A Loans is equal to or less than the Borrowing
Base and the aggregate amount of all Tooling Revolving Credit Loans is equal to
or less than the Tooling Revolving Credit Borrowing Base.
4.12 ERISA. The Company and its ERISA Affiliates and their respective
Plans are in compliance in all material respects with those provisions of ERISA
and of the Code which are applicable with respect to any Plan. No Prohibited
Transaction and no Reportable Event has occurred with respect to any such Plan
which could, in the aggregate, result in any liability to the Company or any of
its ERISA Affiliates in excess of $2,000,000. None of the Company or any of its
ERISA Affiliates is an employer with respect to any Multiemployer Plan. The
Company and its ERISA Affiliates have met or are meeting in compliance with all
laws and regulations the minimum funding requirements under ERISA and the Code
with respect to each of their respective Plans, if any, and have not incurred
any liability to the PBGC or any Plan. The execution, delivery and performance
of the Loan Documents do not constitute a Prohibited Transaction. There is no
Unfunded Benefit Liability, with respect to any Plan of the Company or its ERISA
Affiliates which could have a Material Adverse Effect.
4.13 Disclosure. No report or other information furnished in writing by
or on behalf of the Company or any of its Subsidiaries to any Lender or the
Agent in connection with the negotiation or administration of this Agreement
contains any material misstatement of fact or omits to state any material fact
or any fact necessary to make the statements contained therein not misleading in
light of the circumstances in which they were made. No Loan Document nor any
other document, certificate, or report or statement or other information
furnished to any Lender or the Agent by or on behalf of the Company or any of
its Subsidiaries in connection with the transactions contemplated hereby
contains any untrue statement of a material fact or omits to state a material
fact in order to make the statements contained herein and therein not misleading
in light of the circumstances in which they were made. There is no fact known to
the Company which materially and adversely affects, or which in the future may
(so far as the Company can now reasonably foresee) materially and adversely
affect, the business, properties, operations or condition, financial or
otherwise, of the Company or any of its Subsidiaries, which has not been set
forth in this Agreement (including without limitation the schedules hereto) or
in the other documents, certificates, statements, reports and other information
furnished in writing to the Lenders by or on behalf of the Company or any of its
Subsidiaries in connection with the transactions contemplated hereby.
4.14 Environmental Matters. The representations and warranties set
forth in the Environmental Certificate are true and complete.
4.15 Solvency. The Company and its Subsidiaries are and, after giving
effect to the transactions described herein and the Subordinated Debt Documents
and to the incurrence or assumption of all obligations being incurred or assumed
in connection herewith, will be Solvent.
4.16 No Defaults under Certain Agreements. Neither the Company nor any
of its Subsidiaries is in default or has received any written notice of default
under or with respect to any contract or agreement to which it is a party or by
which it is bound, including without limitation any agreements for the
incurrence of any indebtedness or any tooling or purchase contracts, which could
have a Material Adverse Effect. No Default or Event of Default has occurred and
is continuing.
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4.17 Intellectual Property. Set forth on Schedule 4.17 is a complete
and accurate list of all patents, trademarks, trade names, service marks and
copyrights, and all applications therefor and licenses thereof, of the Company
and each of its Subsidiaries showing as of the Effective Date the jurisdiction
in which registered, the registration number and the date of registration. The
Company and each of its Subsidiaries owns, or is licensed to use, all
trademarks, tradenames, service marks, copyrights, technology, know-how and
processes necessary for the conduct of its business as currently conducted (the
"Intellectual Property") except for those the failure to own or license which
could not reasonably be expected to have a Material Adverse Effect. No claim has
been asserted and is pending by any Person challenging or questioning the use of
any such Intellectual Property or the validity or effectiveness of any such
Intellectual Property, nor does the Company or any of its Subsidiaries know of
any valid basis for any such claim, the use of such Intellectual Property by the
Company and each of its Subsidiaries does not infringe on the rights of any
Person, and, to the knowledge of the Company, no Intellectual Property has been
infringed, misappropriated or diluted by any other Person except for such
claims, infringements, misappropriation and dilutions that, in the aggregate,
could not have a Material Adverse Effect.
4.18 Preferred Stock. All Lobdell Preferred Stock Documents are listed
on Schedule 4.18 hereto, and true, correct and complete copies of all Lobdell
Preferred Stock Documents have been delivered to the Agent. All dividends,
distributions, redemptions and other payments required on the Lobdell Preferred
Stock are described on Schedule 4.18. Other than the Lobdell Preferred Stock,
there is no other Preferred Stock as of the Effective Date.
4.19 Investment Company Act; Other Regulations. Neither the Company nor
any of its Subsidiaries is an "investment company", or a company "controlled" by
an "investment company", within the meaning of the Investment Company Act of
1940, as amended. Neither the Company nor any of its Subsidiaries is subject to
regulation under any federal or state statute or regulation which limits its
ability to incur Indebtedness.
4.20 Senior Subordinated Debt Documents. All representations and
warranties of the Company contained in any Senior Subordinated Debt Document are
true and correct in all material respects. The Company has received net proceeds
in the approximate amount of $120,800,000 on June 24, 1997 and in the
approximate amount of $36,400,000 on April 1, 1998 and $40,600,000 on December
8, 1998 from its issuance of the Senior Subordinated Notes, and all agreements,
instruments and documents executed or delivered pursuant to the issuance of the
Senior Subordinated Notes are described on Schedule 1.1(D) hereto. All Advances
and all other present and future indebtedness, obligations and liabilities
pursuant to the Loan Documents and all Hedging Obligations of each Borrower and
each Guarantor owed to any Lender is "Senior Debt " and "Designated Senior Debt"
as defined in the Senior Subordinated Debt Documents and, other than the
Advances and all other present and future indebtedness, obligations and
liabilities pursuant to the Loan Documents, there is no other "Designated Senior
Debt" thereunder. There is no Event of Default or event or condition which could
become an Event of Default with notice or lapse of time or both, under the
Senior Subordinated Debt Documents and each of the Senior Subordinated Debt
Documents is in full force and effect. Other than pursuant to the Senior
Subordinated Notes, there is no obligation pursuant to any Senior Subordinated
Debt Document or other document or agreement evidencing or relating to any
Subordinated Debt outstanding or to be outstanding on the Effective Date which
obligates the Company to pay any principal or interest or redeem any of its
Capital Stock or incur any other monetary obligation. The Term Loan is and will
be incurred pursuant to, and in full compliance with, Section 4.3(a) of the
Senior Subordinated Note Indenture, and the Term Loan is classified as
Indebtedness incurred under Section 4.3(a) of the Senior Subordinated Note
Indenture and are not classified as Indebtedness outstanding or incurred
pursuant to Section 4.3(b) of the Senior Subordinated Note Indenture. All
Tooling Revolving Credit Loans constitute "Tooling Indebtedness" as defined in
the Senior Subordinated Note Indenture and
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are incurred pursuant to Section 4.3 (b) of the Senior Subordinated Note
Indenture and do not need to meet the requirements of Section 4.3(a). All
Revolving Credit Advances, up to the full amount of the aggregate Revolving
Credit Commitments, are incurred pursuant to Section 4.3(b) of the Senior
Subordinated Note Indenture and do not need to meet the requirements of Section
4.3(a).
4.21 Unrestricted Subsidiaries. Other than the guaranties permitted by
Section 5.2(e)(x), neither the Company nor any Restricted Subsidiary of the
Company is liable, directly or indirectly, for any of the Indebtedness or other
liabilities of any Unrestricted Subsidiary or has any Contingent Liabilities
with respect to any Unrestricted Subsidiary, other than trade payables for the
sale of goods in the ordinary course of business and in compliance with Section
5.2(m).
4.22 Acquisitions. The Company has completed the Cofimeta Acquisition
in accordance with the Cofimeta Acquisition Documents and in accordance with all
laws and regulations and all other Requirements of Law, and has acquired, free
and clear of all Liens, good and marketable title to 100% of the Capital Stock
of Cofimeta. Complete and correct copies of all Cofimeta Acquisition Documents
have been delivered to the Agent on or before the Cofimeta Acquisition Date, and
the Company has satisfied all conditions precedent required as of closing under
the Cofimeta Acquisition to complete the Cofimeta Acquisition, including without
limitation all conditions to the Cofimeta Acquisition required under Section
5.2(g). The Company directly owns, free and clear of all Liens, 100% of the
Capital Stock of the OASP I and OASP II, OASP I directly owns, free and clear of
all Liens, 99.4% of the Capital Stock of the French Acquisition Company, OASP II
directly owns, free and clear of all Liens, 0.6% of the Capital Stock of the
French Acquisition Company and the French Acquisition Company directly owns,
free and clear of all Liens, 100% of the Capital Stock of Cofimeta. Neither OASP
I, OASP II nor the French Acquisition Company has or will have any Indebtedness
other than as set forth on Schedule 4.22(a) and the aggregate amount of the
Indebtedness of Cofimeta and its Subsidiaries immediately after giving effect to
the Cofimeta Acquisition is set forth on Schedule 4.22(b). The aggregate
consideration paid or payable, including without limitation any Indebtedness
assumed in connection with the Cofimeta Acquisition or the OPI Acquisition or
other guarantees or other liabilities incurred in connection therewith on a
consolidated basis, will not exceed the Dollar Equivalent of (a) $73,000,000
(which includes the assumption of the Total Covenant Obligations as set forth on
Schedule 4.22(c)) plus 140,000,000 French Francs of factored receivable
Indebtedness in connection with the Cofimeta Acquisition or (b) $12,000,000 in
connection with the OPI Acquisition.
4.23 Material Agreements. Neither the Company nor any Subsidiary is a
party to any agreement or instrument or subject to any charter or other
corporate restriction which could reasonably be expected to have a Material
Adverse Effect. Neither the Company nor any Subsidiary is in default in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any agreement to which it is a party, which default
could reasonably be expected to have a Material Adverse Effect.
4.24 Compliance With Laws. The Company and its Subsidiaries have
complied with all applicable statutes, rules, regulations, orders and
restrictions of any domestic or foreign government or any instrumentality or
agency thereof having jurisdiction over the conduct of their respective
businesses or the ownership of their respective property except for any failure
to comply with any of the foregoing which could not reasonably be expected to
have a Material Adverse Effect.
4.25 Year 2000. The Company has made a full and complete assessment of
the Year 2000 Issues and has a realistic and achievable program for remediating
the Year 2000 Issues on a timely basis (the "Year 2000 Program"). Based on such
assessment and on the Year 2000 Program, the
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Company does not reasonably anticipate that Year 2000 Issues will have a
Material Adverse Effect.
4.26 OPI Acquisition. If consummated, the OPI Acquisition will be
completed on substantially the terms described on Schedule 4.26 hereto and
described to the Agent prior to the Effective Date.
4.27 Mexican Facility. All representations and warranties of the
Company or any of its Subsidiaries contained in any Mexican Facility Document
are true and correct in all material respects. All agreements, instruments and
documents executed or delivered pursuant to the Mexican Facility are described
on Schedule 1.1(B) hereto. There is no Event of Default or event or condition
which could become an Event of Default with notice or lapse of time or both,
under the Mexican Facility Documents and each of the Mexican Facility Documents
is in full force and effect. The Mexican Facility provides an aggregate of
$75,000,000 of financing and provides sufficient financing to complete the
acquisition, construction and equipping of the Mexican Manufacturing Facility.
No commitment to lend or otherwise advance funds has been terminated under the
Mexican Facility Documents. The maximum amount of the Mexican Facility Tranche A
Loans is $63,000,000. The obligations and liabilities under the Mexican Facility
Tranche A Guaranty do not and will not exceed the outstanding amount of the
Mexican Facility Tranche A Loans and, other than the Mexican Facility Guaranty,
there are no, and will not be any, liabilities or obligations, direct,
contingent or otherwise, of any kind owing by the Company or any of its
Subsidiaries (other than the Mexican Subsidiaries) pursuant to the Mexican
Facilities.
ARTICLE V.
COVENANTS
5.1 Affirmative Covenants. The Company covenants and agrees that,
until the termination of all Commitments and Letters of Credit and thereafter
until payment in full of the principal of and accrued interest on the Notes and
the payment and performance of all other obligations of the Company under this
Agreement, any Hedging Agreement with any Lender and any other Loan Document,
unless the Required Lenders shall otherwise consent in writing, it shall, and
shall cause each of its Restricted Subsidiaries to:
(a) Preservation of Corporate Existence, Etc. Do or cause to be
done all things necessary to preserve, renew and keep in full force and effect
its legal existence and its qualification as a foreign corporation or other
organization in good standing in each jurisdiction in which such qualification
is necessary under applicable law, and the rights, licenses, permits (including
those required under Environmental Laws), franchises, patents, copyrights,
trademarks and trade names material to the conduct of its businesses, except to
the extent any of the foregoing would not have a Material Adverse Effect; and
defend all of the foregoing against all claims, actions, demands, suits or
proceedings at law or in equity or by or before any governmental instrumentality
or other agency or regulatory authority.
(b) Compliance with Laws, Etc. Comply in all respects with all
applicable laws, rules, regulations and orders of any governmental authority,
whether federal, state, local or foreign (including without limitation ERISA,
the Code and Environmental Laws), in effect from time to time, except to the
extent any of the foregoing would not have a Material Adverse Effect; and pay
and discharge promptly when due all taxes, assessments and governmental charges
or levies imposed upon it or upon its income, revenues or property, before the
same shall become delinquent or in default, as well as all lawful claims for
labor, materials and supplies or otherwise, which, if unpaid, might give rise to
Liens upon such properties or any portion thereof, except to the extent that
payment of any of the
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foregoing is then being contested in good faith by appropriate legal proceedings
and with respect to which adequate financial reserves have been established on
the books and records of the Company or any of its Restricted Subsidiaries.
(c) Maintenance of Properties; Insurance. Maintain, preserve and
protect all property that is material to the conduct of the business of the
Company or any of its Restricted Subsidiaries and keep such property in good
repair, working order and condition and from time to time make, or cause to be
made all needful and proper repairs, renewals, additions, improvements and
replacements thereto necessary in order that the business carried on in
connection therewith may be properly conducted at all times in accordance with
customary and prudent business practices for similar businesses, except to the
extent any of the foregoing would not have a Material Adverse Effect; and
maintain in full force and effect insurance with responsible and reputable
insurance companies or associations in such amounts, on such terms and covering
such risks, including fire and other risks insured against by extended coverage,
as is usually carried by companies engaged in similar businesses and owning
similar properties similarly situated and maintain in full force and effect
public liability insurance, insurance against claims for personal injury or
death or property damage occurring in connection with any of its activities or
any properties owned, occupied or controlled by it, in such amount as it shall
reasonably deem necessary, and maintain such other insurance as may be required
by law or as may be reasonably requested by the Required Lenders for purposes of
assuring compliance with this Section 5.1(c).
(d) Reporting Requirements. Furnish to the Lenders and the Agent
the following:
(i) Promptly and in any event within three calendar days
after becoming aware of the occurrence of (A) any Default or Event of Default,
(B) the commencement of any material litigation against, by or affecting the
Company or any of its Restricted Subsidiaries, and any material developments
therein, or (C) entering into any material contract or undertaking that is not
entered into in the ordinary course of business or (D) any development in the
business or affairs of the Company or any of its Restricted Subsidiaries which
has resulted in or which is likely in the reasonable judgment of the Company, to
result in a Material Adverse Effect, a statement of the Chief Financial Officer
or Treasurer of the Company setting forth details of each such Default or Event
of Default or such litigation, material contract or undertaking or development
and the action which the Company or such Subsidiary, as the case may be, has
taken and proposes to take with respect thereto;
(ii) As soon as available and in any event within 45 days
after the end of each of the first three fiscal quarters of the Company, the
consolidated and consolidating balance sheets of the Company and its Restricted
Subsidiaries as of the end of such quarter, and the related consolidated and
consolidating statements of income, retained earnings and changes in cash flows
for the period commencing at the end of the previous fiscal year and ending with
the end of such quarter, setting forth in each case in comparative form the
corresponding figures for the corresponding date or period of the preceding
fiscal year, all in reasonable detail and duly certified (subject to year-end
audit adjustments) by the Chief Financial Officer or Treasurer of the Company as
having been prepared in accordance with Generally Accepted Accounting
Principles, together with a certificate of the Chief Financial Officer or
Treasurer of the Company stating (A) that no Default or Event of Default has
occurred and is continuing or, if a Default or Event of Default has occurred and
is continuing, a statement setting forth the details thereof and the action
which the Company has taken and proposes to take with respect thereto, and (B)
that a computation (which computation shall accompany such
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certificate and shall be in reasonable detail) showing compliance with Section
5.2(a), (b), (c) and (d) hereof is in conformity with the terms of this
Agreement;
(iii) As soon as available and in any event within 115 days
after the end of each fiscal year of the Company, a copy of the consolidated
balance sheet of the Company and its Subsidiaries as of the end of such fiscal
year and the related consolidated statements of income, retained earnings and
changes in cash flows of the Company and its Subsidiaries for such fiscal year,
with a customary audit report of PricewaterhouseCoopers LLP, or other
independent certified public accountants selected by the Company and acceptable
to the Agent, without qualifications unacceptable to the Agent, and including a
unaudited schedule in form acceptable to the Agent prepared by such accountants
setting forth the consolidating balance sheet of the Company and its Restricted
Subsidiaries as of the end of such fiscal year and the related consolidating
statements of income, retained earnings and changes in cash flows of the Company
and its Restricted Subsidiaries for such fiscal year, together with a
certificate of the Chief Financial Officer or the Treasurer of the Company
stating (A) that no Default or Event of Default has occurred and is continuing
and, if such a Default or Event of Default exists and is continuing, a statement
setting forth the nature and status thereof, and (B) that a computation (which
computation shall accompany such certificate and shall be in reasonable detail)
showing compliance with Sections 5.2(a), (b), (c) and (d) hereof is in
conformity with the terms of this Agreement and showing such other matters as
required by the Agent from time to time, all in form and substance satisfactory
to the Agent;
(iv) Promptly after the sending or filing thereof, copies
of all reports, proxy statements and financial statements which the Company or
any of its Subsidiaries sends to or files with any of their respective security
holders or any securities exchange or the Securities and Exchange Commission or
any successor agency thereof;
(v) On or before the 30th day after the end of each month
during which the Advances (other than the Term Loan) exceeded $35,000,000 on any
date during such month and at least two Business Days prior to any request for
an Advance which would cause the aggregate Advances (other than the Term Loan)
to exceed $35,000,000, a Borrowing Base Certificate prepared as of the close of
business on the last day of such month or the most recently ended month, as the
case may be, together with supporting schedules, in form and detail satisfactory
to the Agent, setting forth such information as the Agent may request with
respect to the aging, value, location and other information relating to the
computation of the Borrowing Base and the eligibility of any property or assets
included in such computation together with a report with respect to the Company
setting forth a summary and aging of accounts payable of the Company, a listing
of any checks held after the due date of the related vendor invoice and setting
forth the corresponding due dates of such invoices, in form and detail
satisfactory to the Agent, certified as true and correct by the Chief Financial
Officer or Treasurer of the Company;
(vi) As soon as available and in any event at least 30 days
prior to the end of each fiscal year of the Company, copies of preliminary
capital and operating budgets and financial forecasts for the Company and its
Subsidiaries for the following fiscal year, and as soon as available in any
event within 30 days after the end of each fiscal year of the Company, copies of
the final capital and operating budgets and financial forecasts for the Company
and its Subsidiaries for such fiscal year, in each case prepared on both a
consolidated and consolidating basis and for a twelve-month period on a month by
month basis (or more frequent period if so prepared by the Company in the
ordinary course) by or under the direction of the Chief Financial Officer or
Treasurer of the Company in form and
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detail satisfactory to the Agent, and, promptly and in any event within 10 days
after preparation thereof, copies of any revisions to such budgets and
forecasts;
(vii) Promptly and in any event within 10 calendar days
after receiving or becoming aware thereof (A) a copy of any notice of intent to
terminate any Plan of the Company its Subsidiaries or any ERISA Affiliate filed
with the PBGC, (B) a statement of the Chief Financial Officer or Treasurer of
the Company setting forth the details of the occurrence of any Reportable Event
with respect to any such Plan, (C) a copy of any notice that the Company, any of
its Subsidiaries or any ERISA Affiliate may receive from the PBGC relating to
the intention of the PBGC to terminate any such Plan or to appoint a trustee to
administer any such Plan, or (D) a copy of any notice of failure to make a
required installment or other payment within the meaning of Section 412(n) of
the Code or Section 302(f) of ERISA with respect to any such Plan;
(viii) Promptly and in any event within 10 days after
receipt, a copy of any management letter or comparable analysis prepared by the
auditors for the Company or any of its Subsidiaries;
(ix) Promptly after the sending or filing thereof, copies
of all reports, financial statements and other documents which the Company or
any of its Subsidiaries is required to deliver pursuant to the Mexican Facility
Documents; and
(x) Promptly, such other information respecting the
business, properties, operations or condition, financial or otherwise, of the
Company or any of its Restricted Subsidiaries or any of its Unrestricted
Subsidiaries with respect to which the Company or any of its Restricted
Subsidiaries has any Contingent Liabilities as any Lender or the Agent may from
time to time reasonably request.
(e) Accounting; Access to Records, Books, Etc. Maintain a system
of accounting established and administered in accordance with sound business
practices to permit preparation of financial statements in accordance with
Generally Accepted Accounting Principles and to comply with the requirements of
this Agreement and, at any reasonable time and from time to time, (i) during
regular business hours, permit any Lender or the Agent or any agents or
representatives thereof to examine and make copies of and abstracts from the
records and books of account of, and visit the properties of, the Company and
its Subsidiaries, and to discuss the affairs, finances and accounts of the
Company and its Subsidiaries with their respective directors, officers,
employees and independent auditors, and by this provision the Company hereby
authorizes such Persons to discuss such affairs, finances and accounts with any
Lender or the Agent and (ii) during regular business hours, permit the Agent or
any of its agents or representatives to conduct a comprehensive field audit of
its and its Subsidiaries' books, records, properties and assets, including
without limitation all collateral subject to the Security Documents, provided
that prior to an Event of Default no more than one such field audit (exclusive
of any field audits prior to the Effective Date, which are at the expense of the
Company) per fiscal year shall be at the expense of the Company.
(f) Maintenance of Business Lines. Maintain all principal lines
of business in which the Company or any of its Restricted Subsidiaries is
presently engaged.
(g) Additional Security and Collateral. Promptly (i) execute and
deliver, and cause each Restricted Subsidiary of the Company to execute and
deliver, additional Security Documents, within 30 days after request therefor by
the Lenders and the Agent, sufficient to grant to the
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Agent for the benefit of the Lenders and the Agent liens and security interests
in any after acquired property of the type described in Section 2.11 and (ii)
except as otherwise provided in this Agreement, cause each Person becoming a
Restricted Subsidiary of the Company from time to time to execute and deliver to
the Agent, within 30 days after such Person becomes a Restricted Subsidiary, a
Guaranty and Security Documents, together with other related documents described
in Section 2.5 sufficient to grant to the Agent for the benefit of the Lenders
and the Agent liens and security interests in all collateral of the type
described in Section 2.11. The Company shall notify the Agent, within 10 days
after the occurrence thereof, of the acquisition of any property by the Company
or any Restricted Subsidiary that is not subject to the existing Security
Documents, any Person's becoming a Restricted Subsidiary and any other event or
condition that may require additional action of any nature in order to preserve
the effectiveness and perfected status of the liens and security interests of
the Lenders and the Agent with respect to such property pursuant to the Security
Documents.
(h) Further Assurances. Execute and deliver, and cause each
Restricted Subsidiary of the Company to execute and deliver, within 30 days
after request therefor by the Lenders and the Agent, all further instruments and
documents and take all further action that may be necessary or desirable, or
that the Agent may request, in order to give effect to, and to aid in the
exercise and enforcement of the rights and remedies of the Lenders under, the
Loan Documents, including without limitation causing each lessor of real
property to the Company or any of its Restricted Subsidiaries to execute and
deliver to the Agent, prior to or upon the commencement of any tenancy, an
agreement in form and substance acceptable to the Lenders and the Agent duly
executed on behalf of such lessor waiving any distraint, lien and similar rights
with respect to any property subject to the Security Documents and agreeing to
permit the Lenders and the Agent to enter such premises in connection therewith.
The Company further agrees to take all necessary action to ensure that the Agent
and the Lenders may rely on the audited financial statements of the Company and
its Subsidiaries, including without limitation any necessary acknowledgments or
other consents from the Company's auditors as may be required under applicable
law.
(i) Year 2000. Take, and cause each of its Subsidiaries to take,
all such actions as are reasonably necessary to successfully implement the Year
2000 Program and to assure that Year 2000 Issues will not have a Material
Adverse Effect. At the request of the Agent, the Company will provide a
description of the Year 2000 Program, together with any updates or progress
reports with respect thereto.
5.2 Negative Covenants. Until the termination of all Commitments and
Letters of Credit and thereafter until payment in full of the principal of and
accrued interest on the Notes and the payment and performance of all other
obligations of the Company under this Agreement, any Hedging Agreement with any
Lender and any other Loan Document, the Company agrees that, unless the Required
Lenders shall otherwise consent in writing, it shall not, and shall not permit
any of its Restricted Subsidiaries to:
(a) Net Worth. Permit or suffer the Consolidated Net Worth of the
Company and its Restricted Subsidiaries to be less than (i) 90% of the
Consolidated Net Worth of the Company and its Restricted Subsidiaries as of
December 31, 1998, provided that such Consolidated Net Worth shall be greater
than the amount thereof as of September 30, 1998, plus (ii) an amount equal to
50% of Consolidated net income of the Company and its Subsidiaries (without
reduction for a net loss) for the three month period ending March 31, 1999 and
for each fiscal year of the Company subsequent to its fiscal year ended March
31, 1999, plus (iii) an amount equal to 100% of the Net Cash Proceeds in
connection with the issuance or other sale by the Company of any of its Capital
Stock.
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(b) Total Covenant Obligations to Total Covenant EBITDA Ratio.
Permit or suffer the Total Covenant Obligations to Total Covenant EBITDA Ratio,
to be greater than (i) 5.25 to 1.00 as of the end of any fiscal quarter of the
Company ending on or prior to December 31, 1999, (ii) 5.00 to 1.00 as of the end
of any fiscal quarter of the Company ending at any time from and including March
31, 2000 to and including December 31, 2000, (iii) 4.75 to 1.0 as of the end of
any fiscal quarter of the Company and again at any time from and including March
31, 2001 to and including December 31, 2001, (iv) 4.5 to 1.0 as of the end of
any fiscal quarter of the Company ending at any time from and including March
31, 2002 to and including December 31, 2002, (v) 4.25 to 1.0 as of the end of
any fiscal quarter of the Company ending at any time from and including March
31, 2003 to and including December 31, 2003, or (vi) 4.00 to 1.00 as of the end
of any fiscal quarter thereafter.
(c) Fixed Charge Coverage Ratio. Permit or suffer the Fixed
Charge Coverage Ratio to be less than (i) 1.00 to 1.00 as of the end of any
fiscal quarter of the Company ending on or before December 31, 2000, (ii) 1.05
to 1.00 as of the end of any fiscal quarter ending at any time from and
including March 31, 2001 to and including December 31, 2002, or (iii) 1.10 to
1.0 as of the end of any fiscal quarter thereafter.
(d) Interest Coverage Ratio. Permit or suffer the Interest
Coverage Ratio to be less than (i) 2.00 to 1.0 as of the end of any fiscal
quarter ending on or before December 31, 1999, (ii) 2.10 to 1.0 as of the end of
any fiscal quarter of the Company ending at any time from and including March
31, 2000 to and including December 31, 2000, (iii) 2.25 to 1.00 as of the end of
any fiscal quarter of the Company ending at any time from and including March
31, 2001 to and including December 31, 2001, (iv) 2.50 to 1.0 at any time from
and including March 31, 2002 to and including December 31, 2002 or (v) 2.75 to
1.00 as of the end of any fiscal quarter thereafter.
(e) Indebtedness. Create, incur, assume or in any manner become
liable in respect of, or suffer to exist, any Indebtedness other than:
(i) The Advances and the other obligations and liabilities
pursuant to any of the Loan Documents;
(ii) The Indebtedness described in Schedule 5.2(e),
including Contingent Liabilities, provided that no increase in the principal
amount thereof (as such amount is reduced from time to time) shall be permitted
and no modifications of the terms thereof which would result in an earlier final
maturity date or decreased weighted average life thereof shall be permitted;
(iii) Indebtedness of the Company or any Restricted
Subsidiary owing to the Company or any Guarantor, provided that any such
Indebtedness owing by any Borrower shall be fully subordinate to all Advances
and all other obligations of the Company to the Agent and the Lenders, by
written agreement pursuant to terms and conditions satisfactory to the Agent and
the Required Lenders;
(iv) Indebtedness constituting purchase money debt or
Capital Leases in aggregate outstanding principal amount not exceeding
$15,000,000 at any time;
(v) Subordinated Debt under the Senior Subordinated Notes
in aggregate principal amount not to exceed $200,000,000;
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(vi) Other Subordinated Debt of the Company or any
Guarantor, provided that (A) after giving effect to such Subordinated Debt, the
Company is able to borrow at least $25,000,000 of additional Loans, (B) both
before and after giving effect to such Subordinated Debt, no Event of Default or
Default exists or would be caused thereby, (C) after giving effect to such
Subordinated Debt, the pro forma Total Covenant Obligations to Total Covenant
EBITDA Ratio is at least 0.25 below the level required under Section 5.2(b), on
a pro forma basis acceptable to the Agent;
(vii) Tooling Indebtedness (in addition to the Tooling
Revolving Credit Advances) on terms and in amounts acceptable to the Agent;
(viii) Hedging Agreements with any Lender or other Person
acceptable to the Agent, provided that no Hedging Agreement shall be entered
into for purposes of financial speculation;
(ix) Indebtedness of the Restricted Subsidiaries of BMG in
aggregate principal amount not to exceed $2,500,000 and secured by the real
property owned by such Subsidiaries as of the Effective Date, provided that the
terms of such Indebtedness are no more onerous on such Subsidiaries as the terms
of the Indebtedness of such Subsidiaries secured by such real property that
existed immediately prior to the Effective Date;
(x) Guarantees by the Company of the Indebtedness of
Unrestricted Subsidiaries to the extent permitted by, and subject to the terms
of, Section 5.2(l)(viii); and
(xi) Indebtedness solely in connection with the factoring
of receivables by Foreign Subsidiaries of the Company which are not Canadian
Subsidiaries, in each case in the ordinary course of business and on customary
terms and conditions; provided that such factoring arrangements are acceptable
to the Agent and the aggregate outstanding amount thereof does not exceed the
sum of the amount thereof outstanding as of January 31, 1999 plus $30,000,000
minus the amount of the "Tranche B Loans" and "Tranche C Certificates" under,
and as defined in, the Mexican Facility Documents.
Notwithstanding the above or anything else herein to the contrary, neither OASP
I, OASP II, the Dutch Holding Company nor the French Acquisition Company shall
have any Indebtedness other than a guaranty by OASP I and OASP II of the
Advances and other obligations owing pursuant to any Loan Document, a
subordinated guaranty by OASP I and OASP II in favor of the holders of the
obligations owing under the Senior Subordinated Notes and a guarantee by the
French Acquisition Company in the amount of 66,000,000 French Francs of the debt
of Cofimeta Defeasance Company incurred in connection with the closing of the
Cofimeta Acquisition as further described on Schedule 4.22, and the aggregate
amount of the Indebtedness of Cofimeta and its Subsidiaries shall be limited to
(x) existing Indebtedness of Cofimeta and its Subsidiaries described on Schedule
5.2(e) hereto, as reduced from time to time, (y) other Indebtedness allowed
under Section 5.2(e)(xi) above and (z) future unsecured and secured (to the
extent secured by assets acceptable to the Agent) Indebtedness for working
capital and capital expenditures, provided that the aggregate amount permitted
pursuant to the foregoing clauses (y) and (z) shall not exceed $30,000,000 minus
the amount of the "Tranche B Loans" and "Tranche C Certificates", under, and as
defined in, the Mexican Facility Documents, in aggregate amount or such greater
amount consented to in writing by the Agent in its sole discretion.
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(f) Liens. Create, incur or suffer to exist any Lien on any of
the assets, rights, revenues or property, real, personal or mixed, tangible or
intangible, whether now owned or hereafter acquired, of the Company or any of
its Restricted Subsidiaries, other than:
(i) Liens for taxes not delinquent or for taxes being
contested in good faith by appropriate proceedings and as to which adequate
financial reserves have been established on its books and records;
(ii) Liens (other than any Lien imposed by ERISA or any
Environmental Law) created and maintained in the ordinary course of business
which do not secure obligations material in the aggregate and which would not
have a Material Adverse Effect and which constitute (A) pledges or deposits
under worker's compensation laws, unemployment insurance laws or similar
legislation, (B) good faith deposits in connection with bids, tenders, contracts
or leases to which the Company or any of its Subsidiaries is a party for a
purpose other than borrowing money or obtaining credit, including rent security
deposits, (C) liens imposed by law, such as those of carriers, warehousemen and
mechanics, if payment of the obligation secured thereby is not yet due, (D)
Liens securing taxes, assessments or other governmental charges or levies not
yet subject to penalties for nonpayment, and (E) pledges or deposits to secure
public or statutory obligations of the Company or any of its Subsidiaries, or
surety, customs or appeal bonds to which the Company or any of its Subsidiaries
is a party;
(iii) Liens affecting real property which constitute minor
survey exceptions or defects or irregularities in title, minor encumbrances,
easements or reservations of, or rights of others for, rights of way, sewers,
electric lines, telegraph and telephone lines and other similar purposes, or
zoning or other restrictions as to the use of such real property, provided that
all of the foregoing, in the aggregate, do not at any time materially detract
from the value of said properties or materially impair their use in the
operation of the businesses of the Company or any of its Subsidiaries;
(iv) Liens created pursuant to the Security Documents and
Liens expressly permitted by the Security Documents;
(v) Each Lien described in Schedule 5.2(f) hereto may be
suffered to exist upon the same terms as those existing on the date hereof, but
no increase in the principal amount thereof shall be permitted;
(vi) Any Lien created to secure payment of a portion of the
purchase price of, or existing at the time of acquisition of, any tangible fixed
asset acquired by the Company or any of its Restricted Subsidiaries may be
created or suffered to exist upon such fixed asset if the outstanding principal
amount of the Indebtedness secured by such Lien does not at any time exceed 100%
of the purchase price paid by the Company or such Restricted Subsidiary for such
fixed asset and the aggregate principal amount of all Indebtedness secured by
such Liens does not exceed the amount permitted under Section 5.2(e)(iv),
provided that such Lien does not encumber any other asset at any time owned by
the Company or such Restricted Subsidiary, and provided, further, that not more
than one such Lien shall encumber such fixed asset at any one time and neither
OASP I, OASP II, the Dutch Holding Company nor the French Acquisition Company
shall incur or permit or suffer any such Lien to exist;
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(vii) Liens in favor of the Company or any Guarantor as
security for Indebtedness of any Subsidiary to the Company or another Restricted
Subsidiary, provided that any such Liens are subordinated to the Liens in favor
of the Agent on terms satisfactory to the Agent;
(viii) The interest or title of a lessor under any operating
lease otherwise permitted under this Agreement with respect to the property
subject to such lease to the extent performance of the obligations of the
Company or its Restricted Subsidiary thereunder are not delinquent;
(ix) Liens on the real property owned by Restricted
Subsidiaries of BMG as of the Effective Date securing the Indebtedness permitted
by Section 5.2(e)(ix); and
(x) Liens on accounts receivable of Foreign Subsidiaries
which are not Canadian Subsidiaries securing the Indebtedness permitted by
Section 5.2(e)(xi) and other Liens on the assets of Cofimeta and its
Subsidiaries to the extent permitted by the proviso to Section 5.2(e).
(g) Merger; Acquisitions; Etc. Purchase or otherwise acquire,
whether in one or a series of transactions, directly or indirectly, by merger or
otherwise, all or a substantial portion of the business assets, rights, revenues
or property, real, personal or mixed, tangible or intangible, of any Person, or
all or a substantial portion of the Capital Stock of any other Person (an
"Acquisition"); nor merge or consolidate or amalgamate with any other Person or
take any other action having a similar effect; provided, however, that this
Section 5.2(g) shall not prohibit any merger or acquisition if (i) such merger
involves the Company, the Company shall be the surviving or continuing
corporation thereof, (ii) immediately before and after giving effect to such
merger or acquisition, no Default or Event of Default shall exist or shall have
occurred and be continuing and the representations and warranties contained in
Article IV and in the other Loan Documents shall be true and correct on and as
of the date thereof (both before and after such merger or acquisition is
consummated) as if made on the date such merger or acquisition is consummated,
(iii) at least 10 Business Days' prior to the consummation of such merger or
acquisition, the Company shall have provided to the Lenders an opinion of
counsel and a certificate of the Chief Financial Officer or Treasurer of the
Company (attaching pro forma computations acceptable to the Agent to demonstrate
compliance with all financial covenants hereunder), each stating that such
merger or acquisition complies with this Section 5.2(g), all laws and
regulations and that any other conditions under this Agreement relating to such
transaction have been satisfied, and such certificate shall contain such other
information and certifications as requested by the Agent and be in form and
substance satisfactory to the Agent, (iv) at least 10 Business Days' prior to
the consummation of such merger or acquisition, the Company shall have delivered
all acquisition documents and other agreements and documents relating to such
merger or acquisition, and the Agent shall have completed a satisfactory review
thereof and completed such other due diligence satisfactory to the Agent,
provided that if such acquisition is being done by an Unrestricted Subsidiary or
such merger involves Unrestricted Subsidiaries only, then the requirements of
this clause (iv) will be satisfied if the Company provides the Lenders with a
certificate representing that neither the Company nor any Restricted Subsidiary
shall be liable, directly or indirectly, for any of the Indebtedness or other
liabilities of such Unrestricted Subsidiary or for any Contingent Liabilities
with respect to any such Unrestricted Subsidiary except as permitted by Section
5.2(e), (v) immediately before and after giving effect to such merger or
acquisition, the pro forma Total Covenant Obligations to Total Covenant EBITDA
Ratio is less than or equal to the lesser of 4.5 to 1.0 or 0.25 below the level
required under Section 5.2(b), on a pro forma basis acceptable to the Agent,
(vi) both before and after giving effect to such merger and acquisition, the
Company is able to borrow at least $25,000,000 of additional Loans on a pro
forma basis acceptable to the Agent, (vii) the Company shall, at least 10
Business Days prior to the consummation of merger or acquisition, provide
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such other certificates and documents as requested by the Agent, in form and
substance satisfactory to the Agent, (viii) the target of such merger or
acquisition is in the same line of business as the Company, (ix) the target of
such merger or acquisition is located in the United States of America or Canada,
(x) the Board of Directors (or similar governing body) and the management of the
target of such merger or acquisition has approved such merger or acquisition and
(xi) the aggregate consideration paid or payable in connection with all
Acquisitions permitted by this proviso (excluding the Cofimeta Acquisition and
the OPI Acquisition and amounts paid or payable solely by Unrestricted
Subsidiaries (other than OPI) and investments and other transactions permitted
by Section 5.2(l)(viii)), including without limitation any Indebtedness assumed
in connection therewith or guarantees or other liabilities incurred in
connection therewith, shall not exceed $75,000,000. Notwithstanding the
foregoing, (x) the requirements listed in clauses (ii), (iii), (iv), (v), (vi),
(vii) and (ix) of this Section 5.2(g) shall not be required to be satisfied in
connection with any acquisition done solely by an Unrestricted Subsidiary,
provided that the terms of Section 5.2(e), Section 5.2(l) and all other terms
and provisions hereof shall be applicable, (y) the requirements listed in
clauses (v) and (vi) shall not apply to the Cofimeta Acquisition or the OPI
Acquisition if the OPI Acquisition occurs on or before January 31, 2000, the
aggregate consideration paid or payable in connection with the OPI Acquisition,
including without limitation any Indebtedness assumed in connection therewith or
guarantees or other liabilities incurred in connection therewith, will not
exceed the Dollar Equivalent of $12,000,000 and provided that all other terms
and provisions hereof shall be applicable and (z) neither OPI nor any Mexican
Subsidiary will make, directly or indirectly, any Acquisition or otherwise
assist or be involved in any Acquisition.
(h) Disposition of Assets; Etc. Sell, lease, license, transfer,
assign or otherwise dispose of all or any portion of its business, assets,
rights, revenues or property, real, personal or mixed, tangible or intangible,
whether in one or a series of transactions, other than inventory sold in the
ordinary course of business upon customary credit terms, the sale of accounts
receivable in connection with the factoring of accounts receivable in the
ordinary course of business of Foreign Subsidiaries which are not Canadian
Subsidiaries on customary terms and conditions and otherwise allowed pursuant
hereto and sales of scrap or obsolete material or equipment which are not
material in the aggregate, and shall not permit or suffer any Restricted
Subsidiary or OPI to do any of the foregoing; provided, however, that this
Section 5.2(h) shall not prohibit any such sale, lease, license, transfer,
assignment or other disposition if (i) the consolidated book value (disregarding
any write-downs of such book value other than ordinary depreciation and
amortization) of all of the business, assets, rights, revenues and property of
the Company and its Restricted Subsidiaries disposed of in any consecutive
twelve-month period shall be less than 10% of the consolidated book value of the
assets of the Company and its Restricted Subsidiaries as of the beginning of
such twelve month period and the aggregate book value of all assets disposed of
after the Effective Date shall be less than 25% of the consolidated book value
of assets of the Company and its Restricted Subsidiaries at the time of any such
disposition and if, immediately after such transaction, no Default or Event of
Default shall exist or shall have occurred and be continuing, (ii) sales as to
which proceeds are used within 180 days (or 360 days if such sale involves the
Planned Asset Sales) to purchase or construct assets of at least equivalent
value to those sold, (iii) transfers of assets from any Subsidiary to the
Company or a Guarantor which is a Wholly Owned Subsidiary, (iv) any transfer of
assets to the Mexican Subsidiaries to the extent permitted by Section 5.2(l)(v),
and (v) any transfer of all of the Capital Stock of the French Acquisition
Company owned by OASP I and OASP II to the Dutch Holding Company in exchange for
100% of the Capital Stock of the Dutch Holding Company and otherwise in
conformance with all of the terms of this Agreement; provided, however, in the
case of any of the foregoing permitted sales, leases, licenses, transfers,
assignments or other dispositions under this Section 5.2(h) (an "Asset Sale")
the Company shall not, and shall not permit any of its Restricted Subsidiaries
to, consummate an Asset Sale, other than pursuant to clauses (iii), (iv) or (v)
of this Section 5.2(h), unless (A) the Company (or the Subsidiary, as the case
may be) receives consideration at the time of such Asset Sale at least equal to
the
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fair market value (evidenced by a resolution of the Board of Directors set forth
in an officer's certificate delivered to the Agent) of the assets and (B) at
least 75% of the consideration therefor received by the Company or such
Subsidiary is in the form of cash, provided that cash equivalents and the
assumption of Indebtedness of the Company or any Guarantor and the unconditional
release of the Company or such Guarantor from such Indebtedness in connection
with such Asset Sale, in each case acceptable to the Agent, shall be considered
cash for purposes of this Section 5.2(h); provided that the amount of (x) any
liabilities (as shown on the Company's or such Subsidiary's most recent balance
sheet), of the Company or any Subsidiary that are assumed by the transferee of
any such assets such that the Company or such Subsidiary have no further
liability and (y) any securities, notes or other obligations received by the
Company or any such Subsidiary from such transferee that are converted by the
Company or such Subsidiary into cash (to the extent of the cash received), shall
be deemed to be cash for purposes of this provision and the definition of Net
Cash Proceeds, and the Agent promptly shall obtain a first priority security
interest in any non cash consideration for any Asset Sale.
(i) Nature of Business. Make any material change in the nature of
its business from that engaged in on the date of this Agreement or engage in any
other businesses other than those in which it is engaged on the date of this
Agreement.
(j) Dividends and Other Restricted Payments. Make, pay, declare
or authorize any dividend, payment or other distribution in respect of any class
of its Capital Stock or any dividend, payment or distribution in connection with
the redemption, purchase, retirement or other acquisition, directly or
indirectly, of any Capital Stock other than such dividends, payments or other
distributions (i) to the extent payable solely in shares of common stock of the
Company, (ii) to the extent payable to the Company by a Restricted Subsidiary of
the Company, (iii) dividends and distributions on Preferred Stock to the extent
permitted under Section 5.2(s), (iv) if no Event of Default or Default exists or
would be caused thereby, an aggregate amount not to exceed $1,000,000 made after
the Effective Date, (v) which in aggregate amount do not exceed 25% of the Net
Income accrued during fiscal quarters ending after the Effective Date for which
the Total Covenant Obligations to Total Covenant EBITDA Ratio was not greater
than 3.0 to 1.0, provided that both before and after the making or declaration
of such dividend, payment or other distribution (A) the pro forma Total Covenant
Obligations to Total Covenant EBITDA Ratio is not greater than 3.0 to 1.0, on a
pro forma basis acceptable to the Agent, (B) the Company is able to borrow at
least $25,000,000 of additional Loans on a pro forma basis acceptable to the
Agent and (C) no Default or Event of Default shall have occurred or be caused
thereby, and (vi) if no Event of Default or Default exists or would be caused
thereby, an aggregate amount not to exceed $2,500,000 for all employees made
after the Effective Date for the purpose of redeeming the Capital Stock of the
Company owned by any employees of the Company, other than a Permitted Holder,
upon the termination of the employment by the Company or any of its Restricted
Subsidiaries of such employee, provided that (A) any amounts used to redeem such
Capital Stock under this clause (vi) shall first reduce the amount allowed or
accumulated under Section 5.2(j)(iv) until the amount allowed thereunder is
exhausted and then shall reduce the amount allowed under Section 5.2(j)(v) and
(B) the amounts payable for the redemption of such Capital Stock will not be
paid any sooner or in any greater amount than contractually required. The
Company will not, and will not permit any of its Restricted Subsidiaries, to
issue any Preferred Stock or any Disqualified Stock, other than (1) any
Preferred Stock which does not require any dividends, payments, redemptions or
other distributions of any kind until at least one year after the later of the
Revolving Credit Termination Date, the Tooling Revolving Credit Termination Date
or the Maturity Date, (2) the existing Lobdell Preferred Stock and (3) any other
Preferred Stock or Disqualified Stock which meets all of the requirements for
the issuance by the Company of Subordinated Debt (i.e. all payments and other
obligations thereunder are expressly subordinate and junior in right and
priority of payment to the Advances and other Indebtedness of such
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Person to the Lenders in manner and by agreement satisfactory in form and
substance to the Agent and such Preferred Stock or Disqualified Stock is subject
to such other terms and provisions, including without limitation maturities,
covenants, defaults, rates and fees, acceptable to the Agent), and such
Preferred Stock and Disqualified Stock allowed under this clause (3) shall be
treated as if it were Subordinated Debt for all purposes of this Agreement and
is defined herein as "Permitted Disqualified Stock".
(k) Capital Expenditures. Acquire or contract to acquire any
fixed asset or make any other Capital Expenditure if the aggregate purchase
price and other acquisition costs of all such fixed assets acquired and other
Capital Expenditures made by the Company or any of its Restricted Subsidiaries
during any fiscal year of the Company would exceed, on a consolidated basis, an
amount equal to $37,500,000 for the fiscal year of the Company ending March 31,
1999, $47,000,000 for the fiscal year of the Company ending March 31, 2000, or
$50,000,000 for any fiscal year thereafter, plus the sum of (i) 20% of the net
book value, or, if appraisals of such fixed assets have been obtained, 15% of
the orderly liquidation value of such fixed assets which consist of equipment
and of the fair market value of real property which consists of real estate (in
each case, as determined by an appraisal acceptable to the Agent) acquired in an
Acquisition (other than the Cofimeta Acquisition) permitted hereunder by the
Company and its Restricted Subsidiaries, to be added as of the effective date of
such Acquisition (and on a pro rata basis for the fiscal year in which such
Acquisition occurs), plus (ii) the amount of Capital Expenditures allowed for
the previous fiscal year (with giving effect to any increase in the amount
thereof caused by this clause (ii), commencing with the fiscal year ending March
31, 1999) minus the amount of actual Capital Expenditures for the previous
fiscal year. For purposes of this Section 5.2(k), the Mexican Facility
Obligations in an amount not to exceed $75,000,000 shall not constitute Capital
Expenditures.
(l) Loans, Advances and Investments. Make any loan or advance,
including without limitation any transfer, of any of its funds or property or
make any other extension of credit to, or increase its investment or acquire any
additional interest whatsoever in, any Person, or enter into any joint venture
or similar arrangement with any other Person, or permit OPI to do any of the
foregoing, other than each of the following if no Event of Default exists:
(i) loans and advances to Guarantors which are evidenced by
promissory notes payable on demand and in form and substance satisfactory to the
Agent and which are pledged to the Agent for the benefit of the Lenders and
investments in Guarantors;
(ii) loans and advances to, and investments in, the French
Acquisition Company to be made on or within three Business Days of the Effective
Date to consummate the Cofimeta Acquisition in an aggregate amount not to exceed
$73,000,000 and as described in the Cofimeta Acquisition Documents, provided
that if any of the foregoing are loans or advances they shall be evidenced by a
promissory note payable on demand and in form and substance satisfactory to the
Agent and pledged on a first priority basis and pursuant to documents acceptable
to the Agent for the benefit of itself and the Lenders;
(iii) additional loans and advances to, and investments in, the French
Acquisition Company, Cofimeta and/or OPI in an aggregate amount not to exceed
$10,000,000, provided that if any of the foregoing is a loan or advance it shall
be evidenced by a promissory note payable on demand and in form and substance
satisfactory to the Agent and pledged, on a first priority basis and pursuant to
documents acceptable to the Agent, to the Agent for the benefit of itself and
the Lenders;
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(iv) loans and advances in an aggregate amount not to exceed
$12,000,000 to a wholly owned Subsidiary which is a Restricted Subsidiary,
whether currently existing or to be formed in the future, to consummate the OPI
Acquisition, provided that if any such loan or advance is to a Subsidiary which
is not a Guarantor such Subsidiary and each Subsidiary which is not a Guarantor
owning such Subsidiary, directly or indirectly, shall not incur or maintain any
Indebtedness (except as otherwise permitted by this Agreement if such Subsidiary
is the French Acquisition Company or Cofimeta) and at least 65% of the Capital
Stock of the Subsidiary owning OPI, directly or indirectly, which is owned
directly by a Guarantor or the Company shall be pledged to the Agent, for the
benefit of itself and the Lenders on a first priority basis, by such Guarantor
or the Company, as the case may be;
(v) transfers of fixed assets by the Company and its Subsidiaries to
the Mexican Subsidiaries for the purpose of completing the Mexican Manufacturing
Facility, provided that the aggregate fair market value of such fixed assets
does not exceed $20,000,000;
(vi) advances of Tooling Revolving Credit Loans borrowed by the
Company to Cofimeta, OPI or the Mexican Subsidiaries in aggregate outstanding
amount not to exceed $35,000,000 for the sole purpose of financing Tooling
Contracts of Cofimeta, OPI or the Mexican Subsidiaries, provided that such
Indebtedness of Cofimeta, OPI or the Mexican Subsidiaries to the Company would
constitute Tooling Indebtedness, no assets relating to such Tooling Contracts
are included in the Tooling Revolving Credit Borrowing Base or the Borrowing
Base and such advances are evidenced by promissory notes payable on demand and
in form and substance satisfactory to the Agent and which are pledged, on a
first priority basis and pursuant to documents acceptable to the Agent, to the
Agent for the benefit of itself and the Lenders;
(vii) transfer of all of the Capital Stock of the French Acquisition
Company owned by OASP I and OASP II to the Dutch Holding Company in exchange for
100% of the Capital Stock of the Dutch Holding Company, provided that (A) OASP I
shall grant to the Agent for the benefit of itself and the Lenders a first
priority enforceable pledge on 65% of the Capital Stock of the Dutch Holding
Company, (B) the pledge of 65% of the Capital Stock of the French Acquisition
Company shall be released and (C) the Company shall deliver such documents and
opinions in connection therewith as requested by the Agent and all other terms
of this Agreement relating to the Dutch Holding Company and its formation are
satisfied; provided that it is acknowledged that if the Dutch Holding Company
owns any Unrestricted Subsidiary formed or acquired after the Effective Date
(other than OPI) the Agent and the Company shall mutually agree on a method by
which the pledge of the Dutch Holding Company is non recourse to such
Unrestricted Subsidiary;
(viii) other loans and advances to, and investments in and guarantees
by the Company (valued at the maximum amount that could be payable thereunder,
and provided that all such guarantees shall be collection guarantees, not
payment guarantees, and be on terms and conditions satisfactory to the Agent),
of the Indebtedness of Unrestricted Subsidiaries, Restricted Subsidiaries which
are not Wholly Owned Subsidiaries or joint ventures which do not exceed
$30,000,000 for all of the foregoing in aggregate outstanding amount (with the
outstanding amount thereof being deemed decreased by any cash repayments of such
loans or advances or cash dividends paid to the Company or any Restricted
Subsidiary with respect to any such investments), provided that (A) if such
transaction involves a loan or advance, such loans and advances are evidenced by
promissory notes payable on demand or on such other terms acceptable to the
Agent and in form and substance satisfactory to the Agent and which are pledged,
on a first priority basis and pursuant to documents acceptable to the Agent, to
the Agent for the benefit of itself and the Lenders, (B) both before and after
giving effect to such loan, advance or investment, the pro forma Total Covenant
Obligations to Total Covenant EBITDA Ratio is less than or
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equal to the lesser of 4.50 to 1.0 or 0.25 below the level required under
Section 5.2(b), on a pro forma basis acceptable to the Agent, (C) both before
and after giving effect to such loan or advance the Company is able to borrow at
least $25,000,000 of additional Loans on a pro forma basis acceptable to the
Agent, and (D) no Event of Default or Default exists or would be caused thereby
and the Company provides such certificates and legal opinions as requested by
the Agent in connection therewith; and
(ix) loans, advances, and investments described on Schedule 5.2(l)
hereto, but no increase in the amount thereof as such loans, advances and
investments may be reduced from time to time.
(m) Transactions with Affiliates. Other than as permitted by
Section 5.2(u), enter into or permit to exist any transaction or series of
related transactions (including without limitation the purchase, sale, lease or
exchange of any property, employee compensation arrangements or rendering of any
service) with any Affiliate of the Company (an "Affiliate Transaction") unless
the terms of such transaction (i) are no less favorable to the Company or such
Restricted Subsidiary than those that could be obtained at the time of such
transaction in a comparable transaction in arm's-length dealings with a Person
who is not such an Affiliate, (ii) if such Affiliate Transaction (or series of
related Affiliated Transactions) involves aggregate payments in an amount in
excess of $1,000,000 in any one year, (A) are set forth in writing, (B) comply
with clause (i) of this Section 5.2(m) and (C) have been approved by a majority
of disinterested members of the Board of Directors of the Company, and (iii) if
such Affiliate Transaction (or series of related Affiliate Transactions)
involves aggregate payments in an amount in excess of $5,000,000 in any one
year, (A) comply with clause (ii) and (B) have been determined by a nationally
recognized investment banking firm to be fair, from a financial standpoint, to
the Company and its Restricted Subsidiaries.
(n) Sale and Leaseback and other Financing Transactions. Other
than the Mexican Facility pursuant to the terms of the Mexican Facility
Documents delivered to the Agent prior to the Effective Date, (i) become or
remain liable in any way, whether directly or by assignment or as a guarantor or
other contingent obligor, for the obligations of the lessee or user under any
lease or contract for the use of any real or personal property if such property
is owned on the date of this Agreement or thereafter acquired by the Company or
any of its Subsidiaries and has been or is to be sold or transferred to any
other Person and was, is or will be used by the Company or any such Subsidiary
for substantially the same purpose as such property was used by the Company or
such Subsidiary prior to such sale or transfer, or (ii) enter into or become or
remain liable in any way, whether directly or by assignment or as a guarantor or
other contingent obligor or otherwise, any synthetic lease, tax
ownership/operating lease, off balance sheet financing or similar financing,
provided that it is acknowledged that this clause (ii) does not prohibit normal
operating leases entered into in the ordinary course of business as determined
by the Agent. It is acknowledged and agreed by the Borrowers that (x) the
aggregate outstanding amount under the Mexican Facility or otherwise pursuant to
the Mexican Facility Documents shall not exceed $75,000,000, as reduced from
time to time, (y) the obligations and liabilities under the Mexican Facility
Tranche A Guaranty will not exceed the outstanding amount of the Mexican
Facility Tranche A Loans, as reduced from time to time, and (z) other than the
Mexican Facility Guaranty, there are no liabilities or obligations, direct,
contingent or otherwise, of any kind owing by the Company of any of its
Subsidiaries (other than the Mexican Subsidiaries) pursuant to the Mexican
Facilities.
(o) Negative Pledge Limitation. Enter into any agreement with any
Person, other than the Lenders or the Agent pursuant hereto and other than the
existing provisions without amendment contained in the Lobdell Preferred Stock
Documents and in the agreements listed on Schedule 5.2(o), which prohibits or
limits the ability of the Company or any Restricted Subsidiary to
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create, incur, assume or suffer to exist any Lien upon any of its assets,
rights, revenues or property, real, personal or mixed, tangible or intangible,
whether now owned or hereafter acquired.
(p) FSC Commissions. Pay or become obligated for the payment
during any fiscal year of the Company, commissions to all related wholly owned
foreign sales corporations in excess of an amount acceptable to the Agent in
aggregate amount plus reimbursement of the reasonable administrative expenses of
such wholly owned foreign sales corporations.
(q) Inconsistent Agreements. Enter into any agreement containing
any provision which would be violated or breached by this Agreement or any of
the transactions contemplated hereby or by performance by the Company or any of
its Subsidiaries of its obligations in connection therewith.
(r) Subsidiary Dividends. Other than those restrictions existing
as of the Effective Date or described in Schedule 5.2(o) without giving effect
to any amendment thereof on or after the Effective Date, permit any of its
Restricted Subsidiaries, directly or indirectly, to create or otherwise cause or
suffer to exist or become effective any consensual encumbrance or restriction
which by its terms materially restricts the ability of any such Subsidiary to
(i) pay dividends or make any other distributions on such Restricted
Subsidiary's Capital Stock, (ii) pay any Indebtedness owed to the Company or any
of its other Restricted Subsidiaries, (iii) make any loans or advances to the
Company or any of such other Restricted Subsidiaries or (iv) transfer any
material portion of its assets to the Company or any of such other Restricted
Subsidiaries.
(s) Preferred Stock. Make any amendment or modification to any
Lobdell Preferred Stock Document, other than the adjustment in the price of the
Lobdell Preferred Stock made prior to the Effective Date based on post closing
adjustments and which do not result in any additional obligations of Lobdell or
of the Company or any of its Restricted Subsidiaries, or enter into any other
agreement or document relating thereto other than the documents listed on
Schedule 4.18 hereto or make, pay, declare or authorize any dividend, payment or
other distribution with respect to any Preferred Stock or any dividend, payment
or distribution in connection with the redemption, purchase, retirement or other
acquisition, directly or indirectly, of any Preferred Stock other than as
required under the Lobdell Preferred Stock Documents listed on Schedule 4.18
hereto, provided that no dividend, payment or other distribution in respect to
the Preferred Stock or dividend, payment or distribution in connection with the
redemption, purchase, retirement or other acquisition, directly or indirectly,
of any Preferred Stock, including those required under the Lobdell Preferred
Stock Documents, will be made if any Event of Default exists under Section
6.1(a) or would be caused thereby.
(t) Other Indebtedness and Agreements. Make any amendment or
modification to any indenture, note or other agreement evidencing or governing
any Indebtedness (other than Indebtedness hereunder of the Company or any of its
Subsidiaries) or to any Tax Sharing Agreement or any Mexican Facility Document,
or directly or indirectly voluntarily prepay, defease or in substance defease,
purchase, redeem, retire or otherwise acquire any such Indebtedness or any
Mexican Facility Obligation, (except, when no Default or Event of Default
exists, for the prepayment of Subordinated Debt solely from the Net Cash
Proceeds received by the Company from the primary sale or sales of shares of
common stock (which may not be Disqualified Stock) of the Company pursuant to
any one or more public offerings thereof), or designate any Indebtedness (other
than the Indebtedness under the Loan Documents and under Hedging Agreements with
Lenders) as "Designated Senior Debt" under the Senior Subordinated Debt
Documents.
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(u) Management Fees. Pay any management, consulting or similar
fees or amounts to any of its Affiliates other than (i) to the Company or a
Guarantor and (ii) as described on Schedule 5.2(u), without giving effect to any
amendment or modification of the agreement described on Schedule 5.2(u),
provided that no such management, consulting or similar fees or amounts (other
than out of pocket expenses) shall be paid pursuant to this clause (ii) if any
Event of Default or Default exists or would be caused thereby, and Oxford
Investment has acknowledged and agreed that no such management, consulting or
similar fees or amounts (other than out of pocket expenses) will be so paid.
(v) Restricted Subsidiaries. Except with the consent of the
Agent, which consent will not be unreasonably withheld, permit or suffer any
Restricted Subsidiary to not be a Wholly Owned Subsidiary, other than Laserweld
International, L.L.C. ("Laserweld") or Creative, provided that no loans or
advances to, investments in or sales or other transfers of assets to Creative or
Laserweld have been or will be made by the Company or any Restricted Subsidiary
at any time on or after the Effective Date, and the Company represents that
neither Laserweld nor Creative is operating as of the Effective Date.
5.3 Additional Covenants.
(a) Other Terms. If at any time any Borrower or Guarantor shall
enter into or be a party to any instrument or agreement with respect to any
Indebtedness which in the aggregate, together with any related Indebtedness,
exceeds $500,000, including all such instruments or agreements in existence as
of the date hereof and all such instruments or agreements entered into after the
date hereof, relating to or amending any terms or conditions applicable to any
of such Indebtedness which includes covenants, terms, conditions or defaults not
substantially provided for in this Agreement or more favorable to the lender or
lenders thereunder than those provided for in this Agreement, then the Company
shall promptly so advise the Agent and the Lenders. Thereupon, if the Agent
shall request, upon notice to the Company, the Agent and the Lenders shall enter
into an amendment to this Agreement or an additional agreement (as the Agent may
request), providing for substantially the same covenants, terms, conditions and
defaults as those provided for in such instrument or agreement to the extent
required and as may be selected by the Agent. In addition to the foregoing, any
covenants or defaults or similar provisions (which include without limitation
any provisions requiring any mandatory prepayments or defeasance under the
Senior Subordinated Debt Documents or the Mexican Facility Documents) contained
in any Senior Subordinated Debt Document or Mexican Facility Documents not
substantially provided for in this Agreement or more favorable to the holders of
Subordinated Debt or Mexican Facility Obligations issued in connection therewith
are hereby incorporated by reference into this Agreement to the same extent as
if set forth fully herein, and no subsequent amendment, waiver, termination or
modification thereof shall affect any such covenants, terms, conditions or
defaults as incorporated herein.
(b) Restricted and Unrestricted Subsidiaries. Neither the Company
nor any Restricted Subsidiary of the Company shall be liable at any time,
directly or indirectly, for any of the Indebtedness or other liabilities of any
such Unrestricted Subsidiary or for any Contingent Liabilities with respect to
any Unrestricted Subsidiary except as permitted by Section 5.2(e). No Restricted
Subsidiary may be designated as an Unrestricted Subsidiary at any time without
the prior written approval of the Agent and the Required Lenders. Any
Unrestricted Subsidiary may be designated as a Restricted Subsidiary by the
Company at any time provided that such designation is approved by the Agent.
Neither OPI, any Mexican Subsidiary, the Dutch Holding Company, the French
Acquisition Company, Cofimeta nor any of their Subsidiaries is or will be a
guarantor or otherwise directly or contingently liable for any of the
Indebtedness or other obligations pursuant to the Senior Subordinated Debt
Documents, and the Borrowers are and will be at all times in compliance with all
terms and conditions under the Senior Subordinated Debt Documents.
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ARTICLE VI.
DEFAULT
6.1 Events of Default. The occurrence of any one of the following
events or conditions shall be deemed an "Event of Default" hereunder unless
waived pursuant to Section 8.1:
(a) Nonpayment. The Company shall fail to pay when due, whether
at stated maturity, by acceleration or otherwise, any principal on the Loans or
any reimbursement obligation under Section 3.3 (whether by deemed disbursement
of a Revolving Credit Borrowing or otherwise), or, within five days after
becoming due, any interest on the Loans or any fees or any other amount payable
hereunder; or
(b) Misrepresentation. Any representation or warranty made by the
Company or any of the Guarantors in Article IV hereof, or in any Security
Document, or any other certificate, report, financial statement or other
document furnished by or on behalf of the Company or any of the Guarantors in
connection with this Agreement, shall prove to have been incorrect in any
material respect when made or deemed made; or
(c) Certain Covenants. The Company shall fail to perform or
observe any term, covenant or agreement contained in Article V hereof; or
(d) Other Defaults. Any default which remains uncured beyond any
applicable cure period shall exist under any material purchase or tooling
contract that could have a Material Adverse Effect, or the Company or any
Guarantor shall fail to perform or observe any other term, covenant or agreement
contained in this Agreement or in any other Loan Document, and any such failure
shall remain unremedied for 15 calendar days after written notice thereof shall
have been given to the Company by the Agent; or
(e) Cross Default. Failure of the Company or any of its
Restricted Subsidiaries to pay when due any Indebtedness aggregating in excess
of $3,000,000 or any Mexican Facility Obligations ("Material Obligations") or
the default by the Company or any of its Restricted Subsidiaries in the
observance or performance (beyond the applicable grace period with respect
thereto, if any) of any term, provision or condition contained in any agreement
under which any such Material Obligations was created or is governed, or any
other event shall occur or condition exist, the effect of which default or event
is to cause, or to permit the holder or holders of such Material Obligations to
cause, such Material Indebtedness to become due prior to its stated maturity; or
any Material Obligations of the Company or any of its Restricted Subsidiaries
shall be declared to be due and payable or required to be prepaid or repurchased
(other than by a regularly scheduled payment) prior to the stated maturity
thereof; or
(f) Judgments. One or more judgments or orders for the payment of
money in an aggregate amount of $4,000,000 shall be rendered against the Company
or any of its Restricted Subsidiaries, or any other judgment or order (whether
or not for the payment of money) shall be rendered against or shall affect the
Company or any of its Restricted Subsidiaries which causes or could cause a
Material Adverse Effect, and either (i) such judgment or order shall have
remained unsatisfied and the Company or such Restricted Subsidiary shall not
have taken action necessary to stay enforcement thereof by reason of pending
appeal or otherwise, prior to the expiration of the applicable period of
limitations
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for taking such action or, if such action shall have been taken, a final order
denying such stay shall have been rendered, or (ii) enforcement proceedings
shall have been commenced by any creditor upon any such judgment or order; or
(g) ERISA. The occurrence of a Reportable Event that results in
or could result in liability of the Company or any of its ERISA Affiliates to
the PBGC or to any Plan and such Reportable Event is not corrected within 30
days after the occurrence thereof; or the occurrence of any Reportable Event
which could constitute grounds for termination of any Plan of the Company or any
of its ERISA Affiliates by the PBGC or for the appointment by the appropriate
United States District Court of a trustee to administer any such Plan and such
Reportable Event is not corrected within 30 days after the occurrence thereof;
or the Company or any of its ERISA Affiliates shall fail to pay when due any
liability to the PBGC or to a Plan; or any Person engages in a Prohibited
Transaction with respect to any Plan which results in or could result in
liability of the Company, any of its ERISA Affiliates, any Plan of the Company
or any of its ERISA Affiliates or any fiduciary of any such Plan; or the PBGC
shall have instituted proceedings to terminate, or to cause a trustee to be
appointed to administer, any Plan of the Company or any of its ERISA Affiliates;
or failure by the Company or any of their ERISA Affiliates to make a required
installment or other payment to any Plan within the meaning of Section 302(f) of
ERISA or Section 412(n) of the Code that results in or could result in liability
of the Company or any of their ERISA Affiliates to the PBGC or any Plan; or the
withdrawal of the Company or any of its ERISA Affiliates from a Plan during a
plan year in which it was a "substantial employer" as defined in Section
4001(9a)(2) of ERISA; or the Company or any of its ERISA Affiliates becomes an
employer with respect to any Multiemployer Plan without the prior written
consent of the Agent, and in each case above, such event or condition, together
with all other events or conditions, if any, could subject the Company and its
Restricted Subsidiaries to any tax, penalties or other liability which in the
aggregate may exceed $4,000,000; or
(h) Insolvency, Etc. The Company or any of its Restricted
Subsidiaries or Mexican Subsidiaries shall be dissolved or liquidated (or any
judgment, order or decree therefor shall be entered), or shall generally not pay
its debts as they become due, or shall admit in writing its inability to pay its
debts generally, or shall make a general assignment for the benefit of
creditors, or shall institute, or there shall be instituted against the Company
or any of its Restricted Subsidiaries or Mexican Subsidiaries any proceeding or
case seeking to adjudicate it a bankrupt or insolvent or seeking liquidation,
winding up, reorganization, arrangement, adjustment, protection, relief or
composition of it or its debts under any law relating to bankruptcy, insolvency
or reorganization or relief or protection of debtors or seeking the entry of an
order for relief, or the appointment of a receiver, trustee, custodian or other
similar official for it or for any substantial part of its assets, rights,
revenues or property, and, if such proceeding is instituted against the Company
or such Restricted Subsidiary or Mexican Subsidiary and is being contested by
the Company or such Restricted Subsidiary or Mexican Subsidiary, as the case may
be, in good faith by appropriate proceedings, such proceeding shall remain
undismissed or unstayed for a period of 60 days; or the Company or such
Restricted Subsidiary or Mexican Subsidiary shall take any action (corporate or
other) to authorize or further any of the actions described above in this
subsection; or
(i) Security Documents. Any event of default described in any
Loan Document shall have occurred and be continuing, or any material provision
of any Loan Document shall at any time for any reason cease to be valid and
binding and enforceable against any obligor thereunder, or the validity, binding
effect or enforceability thereof shall be contested by any Person, or any
obligor, shall deny that it has any or further liability or obligation
thereunder, or any material provision thereof
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shall be terminated, invalidated or set aside, or be declared ineffective or
inoperative or in any way cease to give or provide to the Lenders and the Agent
the benefits purported to be created thereby; or
(j) Control. Any Change of Control shall occur; or
(k) Cofimeta Acquisition; Mexican Facility. (i) the Cofimeta
Acquisition shall be unwound, reversed or otherwise rescinded in whole or in any
material part for any reason, (ii) Company shall agree to any material amendment
to, or waiver any of its material rights under, or otherwise change any material
terms of, any of the Cofimeta Acquisition Documents as in effect on February 4,
1999, in a manner adverse to Company or any of its Subsidiaries or to Lenders
without the prior written consent of Agent, or (iii) any commitment to lend or
other obligation to advance funds pursuant to the Mexican Facility or otherwise
under the Mexican Facility Documents shall be terminated for any reason or any
Loan Agreement Event of Default or other default shall occur under the Mexican
Facility Documents.
6.2 Remedies. (a) Upon the occurrence and during the continuance of
any Event of Default, the Agent may and, upon being directed to do so by the
Required Lenders, shall by written notice to the Company (i) terminate the
Commitments or (ii) declare the outstanding principal of, and accrued interest
on, the Notes, all unpaid reimbursement obligations in respect of drawings under
Letters of Credit and all other amounts owing under this Agreement to be
immediately due and payable, or (iii) demand immediate delivery of cash
collateral, and the Company agrees to deliver such cash collateral upon demand,
in an amount equal to the maximum amount that may be available to be drawn at
any time prior to the stated expiry of all outstanding Letters of Credit, or any
one or more of the foregoing, whereupon the Commitments shall terminate
forthwith and all such amounts, including such cash collateral, shall become
immediately due and payable, provided that in the case of any event or condition
described in Section 6.1(h) with respect to the Company or any Guarantor, the
Commitments shall automatically terminate forthwith and all such amounts,
including such cash collateral, shall automatically become immediately due and
payable without notice; in all cases without demand, presentment, protest,
diligence, notice of dishonor or other formality, all of which are hereby
expressly waived. Such cash collateral delivered in respect of outstanding
Letters of Credit shall be deposited in a special cash collateral account to be
held by the Agent as collateral security for the payment and performance of the
Company's obligations under this Agreement to the Lenders and the Agent.
(b) The Agent may and, upon being directed to do so by the
Required Lenders, shall, in addition to the remedies provided in Section 6.2(a),
exercise and enforce any and all other rights and remedies available to it or
the Lenders, whether arising under any Loan Document or under applicable law, in
any manner deemed appropriate by the Agent, including suit in equity, action at
law, or other appropriate proceedings, whether for the specific performance (to
the extent permitted by law) of any covenant or agreement contained in any Loan
Document or in aid of the exercise of any power granted in any Loan Document.
(c) Upon the occurrence and during the continuance of any Event
of Default, each Lender may at any time and from time to time, without notice to
the Company (any requirement for such notice being expressly waived by the
Company) set off and apply against any and all of the obligations of the Company
now or hereafter existing under this Agreement, whether owing to such Lender or
any other Lender or the Agent, any and all deposits (general or special, time or
demand, provisional or final) at any time held and other indebtedness at any
time owing by such Lender to or for the credit or the account of the Company and
any property of the Company from time to time in possession of such Lender,
irrespective of whether or not such Lender shall have made any demand
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hereunder and although such obligations may be contingent and unmatured. The
Company hereby grants to the Lenders and the Agent a lien on and security
interest in all such deposits, indebtedness and property as collateral security
for the payment and performance of the obligations of the Company under this
Agreement. The rights of such Lender under this Section 6.2(c) are in addition
to other rights and remedies (including, without limitation, other rights of
setoff) which such Lender may have.
(d) Notwithstanding anything in this Agreement or any Loan
Document to the contrary, on the Revolving Credit Termination Date each Lender
agrees, unconditionally and irrevocably, that it will purchase, either through
an assignment or a participation or such other manner required by the Agent, an
interest in all of the Revolving Credit Advances then outstanding, including all
U.S. Advances and all Canadian Advances (whether or not such Lender is a
Canadian Lender), such that each Lender's share of each Revolving Credit Advance
is equal to its pro rata share thereof based on the amount its Revolving Credit
Commitment bears to the aggregate Revolving Credit Commitment of all Lenders.
Such assignments and participations will be made pursuant to such procedures and
documents required by the Agent, and all appropriate adjustments among the
Lenders will be made. Each Lender shall be absolutely and unconditionally
obligated under this Section 6.2(d) and such obligation shall not be affected by
any circumstance, including, without limitation, (A) any set-off, counterclaim,
recoupment, defense or other right which such Lender has or may have against the
Agent, First Chicago/NBD Canada or the Company or any if its Subsidiaries or
anyone else for any reason whatsoever; (B) the occurrence or continuance of a
Default or an Event of Default; (C) any adverse change in the condition
(financial or otherwise) of the Company or any of its Subsidiaries; (D) any
breach of this Agreement or any other agreement by any other Lender (provided
that any Defaulting Lender shall not be entitled to receive any payments or
other transfers under this Section 6.2(d) and the Agent will make all
appropriate adjustments hereunder), the Company or any Guarantor; or (E) any
other circumstance, happening or event whatsoever, whether or not similar to any
of the foregoing. The Borrowers shall be liable, jointly and severally, for any
withholding taxes, if any, which may be payable under Section 3.6 as a result of
such participations or assignments.
6.3 Distribution of Proceeds of Collateral. All proceeds of any
realization on the collateral pursuant to the Security Documents and any
payments received by the Agent or any Lender subsequent to and during the
continuance of any Event of Default, shall be allocated and distributed by the
Agent as follows:
(a) First, to the payment of all costs and expenses and other
amounts owing to the Agent, including without limitation all attorneys' fees, in
connection with the enforcement of the Security Documents and otherwise
administering this Agreement;
(b) Second, to the payment of all fees, including commitment
fees, owing to the Lenders pursuant to this Agreement and the Notes on a pro
rata basis (other than Acceptance Fees and fees which are payable solely to
the Agent or any Lender directly) in accordance with the respective Advances of
the Lenders or any other amounts owing to the Agent, for application to payment
of such liabilities;
(c) Third, to the Lenders and beneficiaries of the Mexican
Facility Tranche A Guaranty on a pro rata basis in accordance with the
respective Advances of the Lenders consisting of interest owing to the Lenders
under this Agreement and the Notes, the obligations under the Mexican Facility
Tranche A Guaranty allocable to interest on the Mexican Facility Tranche A Loans
and net obligations and liabilities relating to Hedging Agreements, for
application to payment of such liabilities;
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(d) Fourth, to the Lenders and beneficiaries of the Mexican
Facility Tranche A Guaranty on a pro rata basis in accordance with the
respective Advances of the Lenders consisting of principal (including without
limitation any cash collateral for any outstanding Letters of Credit) and the
respective obligations under the Mexican Facility Tranche A Guaranty allocable
to principal on the Mexican Facility Tranche A Loans, for application to payment
of such liabilities;
(e) Fifth, to the payment of any and all other amounts owing to
the Lenders under this Agreement on a pro rata basis in accordance with the
respective Advances of the Lenders for application to payment of such
liabilities; and
(f) Sixth, to the Company, its Restricted Subsidiaries or such
other Person as may be legally entitled thereto.
Notwithstanding the foregoing, no payments of principal, interest or fees
delivered to the Agent for the account of any Defaulting Lender shall be
delivered by the Agent to such Defaulting Lender. Instead, such payments shall,
for so long as such Defaulting Lender shall be a Defaulting Lender, be held by
the Agent, and the Agent is hereby authorized and directed by all parties hereto
to hold such funds in escrow and apply such funds as follows:
(i) First, if applicable to any payments due to the Agent,
and
(ii) Second, to Loans required to be made by such
Defaulting Lender on any borrowing date to the extent such Defaulting Lender
fails to make such Loans.
Notwithstanding the foregoing, upon the termination of all Commitments and the
payment and performance of all of the Advances and other obligations owing
hereunder (other than those owing to a Defaulting Lender), any funds then held
in escrow by the Agent pursuant to the preceding sentence shall be distributed
to each Defaulting Lender, pro rata in proportion to amounts that would be due
to each Defaulting Lender but for the fact that it is a Defaulting Lender.
ARTICLE VII.
THE AGENT AND THE LENDERS
7.1 Appointment and Authorization. Each Lender hereby irrevocably
appoints and authorizes the Agent to take such action as agent on its behalf and
to exercise such powers under the Loan Documents as are delegated to the Agent
by the terms hereof or thereof, together with all such powers as are reasonably
incidental thereto. The provisions of this Article VII are solely for the
benefit of the Agent and the Lenders, and the Borrowers shall not have any
rights as a third party beneficiary of any of the provisions hereof. In
performing its functions and duties under this Agreement, the Agent shall act
solely as agent of the Lenders and does not assume and shall not be deemed to
have assumed any obligation towards or relationship of agency or trust with or
for any Borrower.
7.2 Agent and Affiliates. NBD Bank in its capacity as a Lender
hereunder shall have the same rights and powers hereunder as any other Lender
and may exercise or refrain from exercising the same as though it were not the
Agent. NBD Bank and its Affiliates may (without having to account therefor to
any Lender) accept deposits from, lend money to, and generally engage in any
kind of banking, trust, financial advisory or other business with the Company or
any of its Subsidiaries as if it
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were not acting as Agent hereunder, and may accept fees and other consideration
therefor without having to account for the same to the Lenders.
7.3 Scope of Agent's Duties. The Agent shall have no duties or
responsibilities except those expressly set forth herein, and shall not, by
reason of this Agreement, have a fiduciary relationship with any Lender, and no
implied covenants, responsibilities, duties, obligations or liabilities shall be
read into this Agreement or shall otherwise exist against the Agent. As to any
matters not expressly provided for by this Agreement (including, without
limitation, collection and enforcement actions under the Notes and the Security
Documents), the Agent shall not be required to exercise any discretion or take
any action, but the Agent shall take such action or omit to take any action
pursuant to the reasonable written instructions of the Required Lenders and may
request instructions from the Required Lenders. The Agent shall in all cases be
fully protected in acting, or in refraining from acting, pursuant to the written
instructions of the Required Lenders (or all of the Lenders, as the case may be,
in accordance with the requirements of this Agreement), which instructions and
any action or omission pursuant thereto shall be binding upon all of the
Lenders; provided, however, that the Agent shall not be required to act or omit
to act if, in the judgment of the Agent, such action or omission may expose the
Agent to personal liability or is contrary to the Loan Documents or applicable
law.
7.4 Reliance by Agent. The Agent shall be entitled to rely upon any
certificate, notice, document or other communication (including any cable,
telegram, telex, facsimile transmission or oral communication) believed by it to
be genuine and correct and to have been sent or given by or on behalf of a
proper Person. The Agent may treat the payee of any Note as the holder thereof
unless and until the Agent receives written notice of the assignment thereof
pursuant to the terms of this Agreement signed by such payee and the Agent
receives the written agreement of the assignee that such assignee is bound
hereby to the same extent as if it had been an original party hereto. The Agent
may employ agents (including without limitation collateral agents and including
without limitation First Chicago/NBD Canada with respect to administering the
Canadian Advances, acting as collateral agent in Canada and enforcing any of the
Agent's rights and remedies under the Loan Documents in Canada) and may consult
with legal counsel (who may be counsel for the Borrowers), independent public
accountants and other experts selected by it and shall not be liable to the
Lenders, except as to money or property received by it or its authorized agents,
for the negligence or misconduct of any such agent selected by it with
reasonable care or for any action taken or omitted to be taken by it in good
faith in accordance with the advice of such counsel, accountants or experts. In
performing any of the functions of the Agent, First Chicago/NBD Canada or any
other Affiliate of the Agent shall be entitled to all of the same powers,
immunities, exculpations, indemnifications and other rights of the Agent
described in this Article VII and otherwise in the Loan Documents. It is
acknowledged and agreed that First Chicago/NBD Canada will be acting as
collateral agent for the Lenders with respect to all collateral in Canada, and
all liens and security interests in Canada will be in favor of First Chicago/NBD
Canada for the benefit of itself and each of the Lenders, and as administrative
agent for payments and fundings of Canadian Advances.
7.5 Default. The Agent shall not be deemed to have knowledge of the
occurrence of any Default or Event of Default, unless the Agent has received
written notice from a Lender or the Borrowers specifying such Default or Event
of Default and stating that such notice is a "Notice of Default". In the event
that the Agent receives such a notice, the Agent shall give written notice
thereto to the Lenders.
7.6 Liability of Agent. Neither the Agent nor any of its directors,
officers, agents, or employees shall be liable to the Lenders for any action
taken or not taken by it or them in connection herewith with the consent or at
the request of the Required Lenders or in the absence of its or their own
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gross negligence or willful misconduct. Neither the Agent nor any of its
directors, officers, agents or employees shall be responsible for or have any
duty to ascertain, inquire into or verify (i) any recital, statement, warranty
or representation contained in any Loan Document, or in any certificate, report,
financial statement or other document furnished in connection with this
Agreement, (ii) the performance or observance of any of the covenants or
agreements of the Borrowers or any Guarantor, (iii) the satisfaction of any
condition specified in Article II hereof, or (iv) the validity, effectiveness,
legal enforceability, value or genuineness of any Loan Document or any
collateral subject thereto or any other instrument or document furnished in
connection herewith.
7.7 Nonreliance on Agent and Other Lenders. Each Lender acknowledges
and agrees that it has, independently and without reliance on the Agent or any
other Lender, and based on such documents and information as it has deemed
appropriate, made its own credit analysis of the Company and its Subsidiaries
and decision to enter into this Agreement and that it will, independently and
without reliance upon the Agent or any other Lender, and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own analysis and decision in taking or not taking action under this Agreement.
The Agent shall not be required to keep itself informed as to the performance or
observance by the Company or any of its Subsidiaries of the Loan Documents or
any other documents referred to or provided for herein or to inspect the
properties or books of the Company or any of its Subsidiaries and, except for
notices, reports and other documents and information expressly required to be
furnished to the Lenders by the Agent hereunder, the Agent shall not have any
duty or responsibility to provide any Lender with any information concerning the
affairs, financial condition or business of the Company or any of its
Subsidiaries which may come into the possession of the Agent or any of its
affiliates.
7.8 Indemnification. The Lenders agree to indemnify the Agent (to the
extent not reimbursed by the Borrowers, but without limiting any obligation of
the Borrowers to make such reimbursement), ratably according to the respective
principal amounts of the Advances then outstanding made by each of them (or if
no Advances are at the time outstanding, ratably according to the respective
amounts of their Commitments), from and against any and all claims, damages,
losses, liabilities, costs or expenses of any kind or nature whatsoever
(including, without limitation, fees and disbursements of counsel) which may be
imposed on, incurred by, or asserted against the Agent in any way relating to or
arising out of this Agreement or the transactions contemplated hereby or any
action taken or omitted by the Agent under this Agreement, provided, however,
that no Lender shall be liable for any portion of such claims, damages, losses,
liabilities, costs or expenses resulting from the Agent's gross negligence or
willful misconduct. Without limitation of the foregoing, each Lender agrees to
reimburse the Agent promptly upon demand for its ratable share of any
out-of-pocket expenses (including without limitation fees and expenses of
counsel) incurred by the Agent in connection with the preparation, execution,
delivery, administration, modification, amendment or enforcement (whether
through negotiations, legal proceedings or otherwise) of, or legal advice in
respect of rights or responsibilities under, this Agreement, to the extent that
the Agent is not reimbursed for such expenses by the Borrowers, but without
limiting the obligation of the Borrowers to make such reimbursement. Each Lender
agrees to reimburse the Agent promptly upon demand for its ratable share of any
amounts owing to the Agent by the Lenders pursuant to this Section. If the
indemnity furnished to the Agent under this Section shall, in the judgment of
the Agent, be insufficient or become impaired, the Agent may call for additional
indemnity from the Lenders and cease, or not commence, to take any action until
such additional indemnity is furnished.
7.9 Successor Agent. The Agent may resign as such at any time upon ten
days' prior written notice to the Company and the Lenders. In the event of any
such resignation, the Required
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Lenders shall, by an instrument in writing delivered to the Company and the
Agent, appoint a successor (which successor shall be approved by the Company
provided no Default or Event of Default then exists), which shall be a
commercial bank organized under the laws of the United States or any State
thereof and having a combined capital and surplus of at least $500,000,000. If a
successor is not so appointed or does not accept such appointment before the
Agent's resignation becomes effective, the retiring Agent may appoint a
temporary successor to act until such appointment by the Required Lenders is
made and accepted or if no such temporary successor is appointed as provided
above by the retiring Agent, the Required Lenders shall thereafter perform all
the duties of the Agent hereunder until such appointment by the Required Lenders
is made and accepted. Any successor to the Agent shall execute and deliver to
the Borrowers and the Lenders an instrument accepting such appointment and
thereupon such successor Agent, without further act, deed, conveyance or
transfer shall become vested with all of the properties, rights, interests,
powers, authorities and obligations of its predecessor hereunder with like
effect as if originally named as Agent hereunder. Upon request of such successor
Agent, the Borrowers and the retiring Agent shall execute and deliver such
instruments of conveyance, assignment and further assurance and do such other
things as may reasonably be required for more fully and certainly vesting and
confirming in such successor Agent all such properties, rights, interests,
powers, authorities and obligations. The provisions of this Article VII shall
thereafter remain effective for such retiring Agent with respect to any actions
taken or omitted to be taken by such Agent while acting as the Agent hereunder.
7.10 Sharing of Payments. The Lenders agree among themselves that, in
the event that any Lender shall obtain payment in respect of any Advance or any
other obligation owing to the Lenders under this Agreement through the exercise
of a right of set-off, banker's lien, counterclaim or otherwise in excess of its
ratable share of payments received by all of the Lenders on account of the
Advances and other obligations (or if no Advances are outstanding, ratably
according to the respective amounts of the Commitments), such Lender shall
promptly purchase from the other Lenders participations in such Advances and
other obligations in such amounts, and make such other adjustments from time to
time, as shall be equitable to the end that all of the Lenders share such
payment in accordance with such ratable shares. The Lenders further agree among
themselves that if payment to a Lender obtained by such Lender through the
exercise of a right of set-off, banker's lien, counterclaim or otherwise as
aforesaid shall be rescinded or must otherwise be restored, each Lender which
shall have shared the benefit of such payment shall, by repurchase of
participations theretofore sold, return its share of that benefit to each Lender
whose payment shall have been rescinded or otherwise restored. The Borrowers
agree that any Lender so purchasing such a participation may, to the fullest
extent permitted by law, exercise all rights of payment, including set-off,
banker's lien or counterclaim, with respect to such participation as fully as if
such Lender were a holder of such Advance or other obligation in the amount of
such participation. The Lenders further agree among themselves that, in the
event that amounts received by the Lenders and the Agent hereunder are
insufficient to pay all such obligations or insufficient to pay all such
obligations when due, the fees and other amounts owing to the Agent in such
capacity shall be paid therefrom before payment of obligations owing to the
Lenders under this Agreement. Except as otherwise expressly provided in this
Agreement, if any Lender or the Agent shall fail to remit to the Agent or any
other Lender an amount payable by such Lender or the Agent to the Agent or such
other Lender pursuant to this Agreement on the date when such amount is due,
such payments shall be made together with interest thereon for each date from
the date such amount is due until the date such amount is paid to the Agent or
such other Lender at a rate per annum equal to the rate at which borrowings are
available to the payee in its overnight federal funds market. It is further
understood and agreed among the Lenders and the Agent that if the Agent shall
engage in any other transactions with the Borrowers and shall have the benefit
of any collateral or security therefor which does not expressly secure the
obligations arising under this Agreement except by virtue of a so-called
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dragnet clause or comparable provision, the Agent shall be entitled to apply any
proceeds of such collateral or security first in respect of the obligations
arising in connection with such other transaction before application to the
obligations arising under this Agreement.
ARTICLE VIII. MISCELLANEOUS
8.1 Amendments, Etc. (a) No amendment, modification, termination or
waiver of any provision of this Agreement nor any consent to any departure
therefrom shall be effective unless the same shall be in writing and signed by
the Required Lenders and, to the extent any rights or duties of the Agent may be
affected thereby, the Agent, provided, however, that no such amendment,
modification, termination, waiver or consent shall, without the consent of the
Agent and all of the Lenders, (i) authorize or permit the extension of time for,
or any reduction of the amount of, any payment of the principal of, or interest
on, the Notes or any Letter of Credit reimbursement obligation, or any fees or
other amount payable hereunder, (ii) amend or extend the respective Commitments
of any Lender set forth on the signature pages hereof or modify the provisions
of this Section regarding the taking of any action under this Section or the
provisions of Section 6.3 or Section 7.10 or the definition of Required Lenders
or any provision of this Agreement requiring the consent of all of the Lenders,
(iii) provide for the discharge of any material Guarantor under the Guaranties
or the release of any substantial amount of the collateral subject to any
Security Document, other than the release of Liens on Collateral that is
permitted to be sold by this Agreement, and the Agent is hereby authorized to
release any such Liens, or (iv) modify any other provision of this Agreement
which by its terms requires the consent of all of the Lenders.
(b) Any such amendment, waiver or consent shall be effective only
in the specific instance and for the specific purpose for which given.
(c) Notwithstanding anything herein to the contrary, no
Defaulting Lender shall be entitled to vote (whether to consent or to withhold
its consent) with respect to any amendment, modification, termination or waiver
of any provision of this Agreement or any departure therefrom or any direction
from the Lenders to the Agent, and, for purposes of determining the Required
Lenders at any time, the Commitments and the Advances of each Defaulting Lenders
shall be disregarded.
8.2 Notices. (a) Except as otherwise provided in Section 8.2(c)
hereof, all notices and other communications hereunder shall be in writing and
shall be delivered or sent to the Borrowers at 1250 Stephenson Highway, Troy,
Michigan 48083, Attention: President, Facsimile No. (248) 577-3455, Telephone
No. (248) 577-1400, and to the Agent and the Lenders at the respective
addresses for notices set forth on the signatures pages hereof, or to such
other address as may be designated by the Borrowers, the Agent or any Lender by
notice to the other parties hereto. All notices and other communications shall
be deemed to have been given at the time of actual delivery thereof to such
address, or, unless sooner delivered, (i) if sent by certified or registered
mail, postage prepaid, to such address, on the third day after the date of
mailing, or (ii) if sent by facsimile transmission, upon confirmation of
receipt by telephone at the number specified for confirmation, provided,
however, that notices to the Agent shall not be effective until received. Each
Borrowing Subsidiary agrees that the Company may give any notices or other
requests on its behalf under this Agreement, including without limitation
requests for Advances, and the Borrowing Subsidiary will be bound thereby.
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(b) Notices by the Borrowers to the Agent with respect to
terminations or reductions of the Commitments pursuant to Section 2.2, requests
for Borrowings pursuant to Section 2.4, requests for continuations or
conversions of Borrowings pursuant to Section 2.7 and notices of prepayment
pursuant to Section 3.1 shall be irrevocable and binding on the Borrowers.
(c) Any notice to be given by the Borrowers to the Agent pursuant
to Sections 2.4, 2.7 or 3.1 and any notice to be given by the Agent or any
Lender hereunder, may be given by telephone, and all such notices must be
immediately confirmed in writing in the manner provided in Section 8.2(a). Any
such notice given by telephone shall be deemed effective upon receipt thereof by
the party to whom such notice is to be given. The Borrowers shall indemnify and
hold harmless the Lenders and the Agent from any and all losses, damages,
liabilities and claims arising from their good faith reliance on any such
telephone notice.
8.3 No Waiver By Conduct; Remedies Cumulative. No course of dealing on
the part of the Agent or any Lender, nor any delay or failure on the part of the
Agent or any Lender in exercising any right, power or privilege hereunder shall
operate as a waiver of such right, power or privilege or otherwise prejudice the
Agent's or such Lender's rights and remedies hereunder; nor shall any single or
partial exercise thereof preclude any further exercise thereof or the exercise
of any other right, power or privilege. No right or remedy conferred upon or
reserved to the Agent or any Lender under any Loan Document is intended to be
exclusive of any other right or remedy, and every right and remedy shall be
cumulative and in addition to every other right or remedy granted thereunder or
now or hereafter existing under any applicable law. Every right and remedy
granted by any Loan Document or by applicable law to the Agent or any Lender may
be exercised from time to time and as often as may be deemed expedient by the
Agent or any Lender and, unless contrary to the express provisions of any Loan
Document, irrespective of the occurrence or continuance of any Default or Event
of Default.
8.4 Reliance on and Survival of Various Provisions. All terms,
covenants, agreements, representations and warranties of any Borrower or
Guarantor made herein or in any Security Document or in any certificate, report,
financial statement or other document furnished by or on behalf of any Borrower
or Guarantor in connection with this Agreement shall be deemed to be material
and to have been relied upon by the Lenders, notwithstanding any investigation
heretofore or hereafter made by any Lender or on such Lender's behalf, and those
covenants and agreements of the Borrowers set forth in Sections 3.8, 3.10 and
8.5 hereof shall survive the repayment in full of the Advances and the
termination of the Commitments.
8.5 Expenses; Indemnification. (a) The Borrowers jointly and severally
agree to pay, or reimburse the Agent for the payment of, on demand, (i) the
reasonable fees and expenses of counsel to the Agent, including without
limitation the fees and expenses of Dickinson Wright PLLC, in connection with
the preparation, execution, delivery and administration of the Loan Documents
and in connection with advising the Agent as to its rights and responsibilities
with respect thereto, and in connection with any amendments, waivers or consents
in connection therewith, (ii) all stamp and other taxes and fees payable or
determined to be payable in connection with the execution, delivery, filing or
recording of the Loan Documents (or the verification of filing, recording,
perfection or priority thereof) or the consummation of the transactions
contemplated hereby, and any and all liabilities with respect to or resulting
from any delay in paying or omitting to pay such taxes or fees, (iii) all
reasonable costs and expenses of the Agent and the Lenders (including reasonable
fees and expenses of counsel and whether incurred through negotiations, legal
proceedings or otherwise)) in connection with any Default or Event of Default or
the enforcement of, or the exercise or preservation of any rights under, any
Loan Document or in connection with any refinancing or restructuring of the
credit arrangements provided under this
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Agreement in connection with any Event of Default and (iv) all reasonable costs
and expenses of the Agent (including reasonable fees and expenses of counsel) in
connection with any action or proceeding relating to a court order, injunction
or other process or decree restraining or seeking to restrain the Agent from
paying any amount under, or otherwise relating in any way to, any Letter of
Credit and any and all costs and expenses which any of them may incur relative
to any payment under any Letter of Credit.
(b) The Borrowers jointly and severally hereby indemnify and
agree to hold harmless the Lenders and the Agent, and their respective officers,
directors, employees and agents, from and against any and all claims, damages,
losses, liabilities, costs or expenses of any kind or nature whatsoever which
the Lenders or the Agent or any such Person may incur or which may be claimed
against any of them by reason of or in connection with any Letter of Credit, and
neither any Lender nor the Agent or any of their respective officers, directors,
employees or agents shall be liable or responsible for: (i) the use which may be
made of any Letter of Credit or for any acts or omissions of any beneficiary in
connection therewith; (ii) the validity, sufficiency or genuineness of documents
or of any endorsement thereon, even if such documents should in fact prove to be
in any or all respects invalid, insufficient, fraudulent or forged; (iii)
payment by the Agent to the beneficiary under any Letter of Credit against
presentation of documents which do not comply with the terms of any Letter of
Credit, including failure of any documents to bear any reference or adequate
reference to such Letter of Credit; (iv) any error, omission, interruption or
delay in transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Letter of Credit; or (v) any other event or
circumstance whatsoever arising in connection with any Letter of Credit;
provided, however, that the Company shall not be required to indemnify the
Lenders and the Agent and such other Persons, and the Lenders shall be liable to
the Company to the extent, but only to the extent, of any direct, as opposed to
consequential or incidental, damages suffered by the Company which were caused
by (A) the Agent's wrongful dishonor of any Letter of Credit after the
presentation to it by the beneficiary thereunder of a draft or other demand for
payment and other documentation strictly complying with the terms and conditions
of such Letter of Credit, or (B) the payment by the Agent to the beneficiary
under any Letter of Credit against presentation of documents which do not comply
with the terms of the Letter of Credit to the extent, but only to the extent,
that such payment constitutes gross negligence of willful misconduct of the
Agent. It is understood that in making any payment under a Letter of Credit the
Agent will rely on documents presented to it under such Letter of Credit as to
any and all matters set forth therein without further investigation and
regardless of any notice or information to the contrary, and such reliance and
payment against documents presented under a Letter of Credit substantially
complying with the terms thereof shall not be deemed gross negligence or willful
misconduct of the Agent in connection with such payment. It is further
acknowledged and agreed that the Company may have rights against the beneficiary
or others in connection with any Letter of Credit with respect to which the
Lenders are alleged to be liable and it shall be a precondition of the assertion
of any liability of the Lenders under this Section that the Company shall first
have exhausted all remedies in respect of the alleged loss against such
beneficiary and any other parties obligated or liable in connection with such
Letter of Credit and any related transactions.
(c) Each Borrower hereby jointly and severally indemnifies and
agrees to hold harmless the Lenders and the Agent, and their respective
officers, directors, employees and agents, from and against any and all claims,
damages, losses, liabilities, costs or expenses of any kind or nature whatsoever
(including reasonable attorneys fees and disbursements incurred in connection
with any investigative, administrative or judicial proceeding whether or not
such Person shall be designated as a party thereto) which the Lenders or the
Agent or any such Person may incur or which may be claimed against any of them
by reason of or in connection with entering into this Agreement or the
transactions contemplated hereby, including without limitation those arising in
connection with or relating to any
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acquisition and the transactions contemplated thereby and under Environmental
Laws; provided, however, that the Borrowers shall not be required to indemnify
any such Lender and the Agent or such other Person, to the extent, but only to
the extent, that such claim, damage, loss, liability, cost or expense is
attributable to the gross negligence or willful misconduct of such Lender or the
Agent, as the case may be.
(d) In consideration of the execution and delivery of this
Agreement by each Lender and the extension of the Commitments, each Borrower
hereby jointly and severally indemnifies, exonerates and holds the Agent, each
Lender and each of their respective affiliates, officers, directors, employees
and agents (collectively, the "Indemnified Parties") free and harmless from and
against any and all actions, causes of action, suits, losses, costs, liabilities
and damages, and expenses incurred in connection therewith (irrespective of
whether any such Indemnified Party is a party to the action for which
indemnification hereunder is sought), including reasonable attorneys' fees and
disbursements (collectively, the "Indemnified Liabilities"), incurred by the
Indemnified Parties or any of them as a result of, or arising out of, or
relating to:
(i) any transaction financed or to be financed in whole or
in part, directly or indirectly, with the proceeds of any Advance;
(ii) the entering into and performance of this Agreement
and any other agreement or instrument executed in connection herewith by any of
the Indemnified Parties (including any action brought by or on behalf of any
Borrower as the result of any determination by the Required Lenders not to fund
any Advance unless such determination is determined by a final non appealable
order by of competent jurisdiction to be wrongful);
(iii) any investigation, litigation or proceeding related to
any acquisition or proposed acquisition by the Company or any of its
Subsidiaries of any portion of the stock or assets of any Person or any merger,
investment, issuance of Capital Stock or any transaction related thereto by the
Company or any of its Subsidiaries, whether or not the Agent or such Lender is
party thereto;
(iv) any investigation, litigation or proceeding related to
any environmental cleanup, audit, compliance or other matter relating to the
protection of the environment or the release by the Company or any of its
Subsidiaries of any Hazardous Material; or
(v) the presence on or under, or the escape, seepage,
leakage, spillage, discharge, emission, discharging or releasing from, any real
property owned or operated by the Company or any of its Subsidiaries of any
Hazardous Material (including any losses, liabilities, damages, injuries, costs,
expenses or claims asserted or arising under any Environmental Law), regardless
of whether caused by, or within the control of, the Company or such Subsidiary,
except for any such Indemnified Liabilities arising for the account of a
particular Indemnified Party by reason of the activities of the Indemnified
Party on the property of the Company or such Subsidiary conducted subsequent to
a foreclosure on such property by the Lenders or by reason of the relevant
Indemnified Party's gross negligence or willful misconduct or breach of this
Agreement, and if and to the extent that the foregoing undertaking may be
unenforceable for any reason, the Company hereby agrees to make the maximum
contribution to the payment and satisfaction of each of the Indemnified
Liabilities which is permissible under applicable law. The Company shall be
obligated to indemnify the Indemnified Parties for all Indemnified Liabilities
subject to and pursuant to the foregoing provisions, regardless of whether
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the Company or any of its Subsidiaries had knowledge of the facts and
circumstances giving rise to such Indemnified Liability.
8.6 Successors and Assigns. (a) This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns, provided that the Borrowers may not, without the prior consent of
the Lenders, assign their rights or obligations hereunder or under the Notes or
any Security Document and the Lenders shall not be obligated to make any Advance
hereunder to any entity other than the Borrowers.
(b) Any Lender may sell to any financial institution or
institutions, and such financial institution or institutions may further sell, a
participation interest (undivided or divided) in, the Advances and such Lender's
rights and benefits under the Loan Documents, and to the extent of that
participation interest such participant or participants shall have the same
rights and benefits against the Borrowers under Section 3.8, 3.10 and 6.2(c) as
it or they would have had if such participant or participants were the Lender
making the Advances to the Borrowers hereunder, provided, however, that (i) such
Lender's obligations under this Agreement shall remain unmodified and fully
effective and enforceable against such Lender, (ii) such Lender shall remain
solely responsible to the other parties hereto for the performance of such
obligations, (iii) such Lender shall remain the holder of its Notes for all
purposes of this Agreement, (iv) the Borrowers, the Agent and the other Lenders
shall continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Agreement, and (v) such Lender
shall not grant to its participant any rights to consent or withhold consent to
any action taken by such Lender or the Agent under this Agreement other than
action requiring the consent of all of the Lenders hereunder.
(c) The Agent from time to time in its sole discretion may
appoint agents for the purpose of servicing and administering this Agreement and
the transactions contemplated hereby and enforcing or exercising any rights or
remedies of the Agent provided under any Loan Documents or otherwise. In
furtherance of such agency, the Agent may from time to time direct that the
Borrowers provide notices, reports and other documents contemplated by this
Agreement (or duplicates thereof) to such agent. The Borrowers hereby consent to
the appointment of such agent and agrees to provide all such notices, reports
and other documents and to otherwise deal with such agent acting on behalf of
the Agent in the same manner as would be required if dealing with the Agent
itself.
(d) Each Lender may, with the prior consent of the Company (which
shall not be unreasonably withheld and shall not be required if an Event of
Default has occurred and is continuing or if such assignment is to another
Lender or an Affiliates of a Lender) and the Agent, assign to one or more banks
or other entities all or a portion of its rights and obligations under this
Agreement (including, without limitation, all or a portion of its Commitments,
the Advances owing to it and the Notes held by it); provided, however, that (i)
each such assignment shall be of a uniform, and not a varying, percentage of all
rights and obligations, (ii) except in the case of an assignment of all of a
Lender's rights and obligations under this Agreement, the amount of the
Commitments of the assigning Lender being assigned pursuant to each such
assignment (determined as of the date of the Assignment and Acceptance with
respect to such assignment) shall in no event be less than $5,000,000, and in
integral multiples of $1,000,000 thereafter, or such lesser amount as the
Company and the Agent may consent, (iii) the parties to each such assignment
shall execute and deliver to the Agent, for its acceptance and recording in the
Register, an Assignment and Acceptance in the form of Exhibit M hereto (an
"Assignment and Acceptance"), together with any Note or Notes subject to such
assignment and a processing and recordation fee of $5,000, and (iv) any Lender
may without the consent of the Company or the Agent, and without paying any fee,
assign to any Affiliate of such Lender that is a bank or
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financial institution all of its rights and obligations under this Agreement.
Upon such execution, delivery, acceptance and recording, from and after the
effective date specified in such Assignment and Acceptance, (x) the assignee
thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Assignment and
Acceptance, have the rights and obligations of a Lender hereunder and (y) the
Lender assignor thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment and Acceptance,
relinquish its rights and be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all of the remaining
portion of an assigning Lender's rights and obligations under this Agreement,
such Lender shall cease to be a party hereto).
(e) By executing and delivering an Assignment and Acceptance, the
Lender assignor thereunder and the assignee thereunder confirm to and agree with
each other and the other parties hereto as follows: (i) other than as provided
in such Assignment and Acceptance, such assigning Lender makes no representation
or warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement or any other instrument or document furnished pursuant
hereto; (ii) such assigning Lender makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the Company
and its Subsidiaries or the performance or observance by the Borrowers and the
Guarantors of any of their obligations under this Agreement or any other
instrument or document furnished pursuant hereto; (iii) such assignee confirms
that it has received a copy of this Agreement, together with copies of the
financial statements referred to in Section 4.6 and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance; (iv) such assignee will,
independently and without reliance upon the Agent, such assigning Lender or any
other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement; (v) such assignee appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers and discretion under this Agreement as are delegated to the Agent by
the terms hereof, together with such powers and discretion as are reasonably
incidental thereto; and (vi) such assignee agrees that it will perform in
accordance with their terms all of the obligations that by the terms of this
Agreement are required to be performed by it as a Lender.
(f) The Agent shall maintain at its address designated on the
signature pages hereof a copy of each Assignment and Acceptance delivered to and
accepted by it and a register for the recordation of the names and addresses of
the Lenders and the Commitments of, and principal amount of the Advances owing
to, each Lender from time to time (the "Register"). The entries in the Register
shall be conclusive and binding for all purposes, absent manifest error, and the
Borrowers, the Agent and the Lenders may treat each Person whose name is
recorded in the Register as a Lender hereunder for all purposes of this
Agreement. The Register shall be available for inspection by the Borrowers or
any Lender at any reasonable time and from time to time upon reasonable prior
notice.
(g) Upon its receipt of an Assignment and Acceptance executed by
an assigning Lender and an assignee, together with any Note or Notes subject to
such assignment, the Agent shall, if such Assignment and Acceptance has been
completed, (i) accept such Assignment and Acceptance, (ii) record the
information contained therein in the Register and (iii) give prompt notice
thereof to the Company. Within five Business Days after its receipt of such
notice, the Borrowers, at its own expense, shall execute and deliver to the
Agent in exchange for the surrendered Note or Notes a new Note or Notes to the
order of such assignee in an amount equal to the Commitments assumed by it
pursuant to such Assignment and Acceptance and, if the assigning Lender has
retained a Commitment
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hereunder, a new Note to the order of the assigning Lender in an amount equal to
the Commitments retained by it hereunder. Such new Note or Notes shall be in an
aggregate principal amount equal to the aggregate principal amount of such
surrendered Note or Notes, shall be dated the effective date of such Assignment
and Acceptance and shall otherwise be in substantially the form of Exhibit M
hereto.
(h) The Borrowers shall not be liable for any costs or expenses
of any Lender in effectuating any participation or assignment under this Section
8.6.
(i) The Lenders may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
8.6, disclose to the assignee or participant or proposed assignee or participant
any information relating to the Company and its Subsidiaries.
(j) Notwithstanding any other provision set forth in this
Agreement, any Lender may at any time create a security interest in, or assign,
all or any portion of its rights under this Agreement (including, without
limitation, the Advances owing to it and the Note or Notes held by it) in favor
of any Federal Reserve Lender in accordance with Regulation A of the Board of
Governors of the Federal Reserve System; provided that such creation of a
security interest or assignment shall not release such Lender from its
obligations under this Agreement.
8.7 Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument, and any of the parties hereto may execute this Agreement by signing
any such counterpart.
8.8 Governing Law. This Agreement is a contract made under, and shall
be governed by and construed in accordance with, the law of the State of
Michigan applicable to contracts made and to be performed entirely within such
State and without giving effect to choice of law principles of such State. The
Borrowers and the Lenders further agrees that any legal or equitable action or
proceeding with respect to any Loan Document or the transactions contemplated
hereby shall be brought in any court of the State of Michigan, or in any court
of the United States of America sitting in Michigan, and each of the Borrowers
and the Lenders hereby submits to and accepts generally and unconditionally the
jurisdiction of those courts with respect to its Person and property, and, in
the case of each Borrower irrevocably appoints the Company as its agent for
service of process and irrevocably consents to the service of process in
connection with any such action or proceeding by personal delivery to such agent
or to the Company, as the case may be, or by the mailing thereof by registered
or certified mail, postage prepaid to the Company at its address for notices
pursuant to Section 8.2. The Borrowers shall at all times maintain such an agent
in Michigan for such purpose and shall notify the Lenders and the Agent of such
agent's address in Michigan within ten days of any change of address. Nothing in
this paragraph shall affect the right of the Lenders and the Agent to serve
process in any other manner permitted by law or limit the right of the Lenders
or the Agent to bring any such action or proceeding against the Borrowers or any
property in the courts of any other jurisdiction. The Borrowers and the Lenders
hereby irrevocably waives any objection to the laying of venue of any such
action or proceeding in the above described courts.
8.9 Table of Contents and Headings. The table of contents and the
headings of the various subdivisions hereof are for the convenience of reference
only and shall in no way modify any of the terms or provisions hereof.
8.10 Construction of Certain Provisions. If any provision of this
Agreement refers to any action to be taken by any Person, or which such Person
is prohibited from taking, such provision
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shall be applicable whether such action is taken directly or indirectly by such
Person, whether or not expressly specified in such provision.
8.11 Integration and Severability. The Loan Documents embody the entire
agreement and understanding between the Borrowers, the Agent and the Lenders,
and supersede all prior agreements and understandings, relating to the subject
matter hereof, other than any commitment letter and fee letter among the
Company, the Arranger and the Agent with respect to matters among the Company,
the Arranger and the Agent. In case any one or more of the obligations of the
Borrowers under the Loan Document shall be invalid, illegal or unenforceable in
any jurisdiction, the validity, legality and enforceability of the remaining
obligations of the Borrowers shall not in any way be affected or impaired
thereby, and such invalidity, illegality or unenforceability in one jurisdiction
shall not affect the validity, legality or enforceability of the obligations of
the Borrowers under any Loan Document in any other jurisdiction.
8.12 Independence of Covenants. All covenants hereunder shall be given
independent effect so that if a particular action or condition is not permitted
by any such covenant, the fact that it would be permitted by an exception to, or
would be otherwise within the limitations of, another covenant shall not avoid
the occurrence of a Default or an Event of Default if such action is taken or
such condition exists.
8.13 Interest Rate Limitation. Notwithstanding any provisions of any
Loan Document, in no event shall the amount of interest paid or agreed to be
paid by the Borrowers exceed an amount computed at the highest rate of interest
permissible under applicable law. If, from any circumstances whatsoever,
fulfillment of any provision of any Loan Document at the time performance of
such provision shall be due, shall involve exceeding the interest rate
limitation validly prescribed by law which a court of competent jurisdiction may
deem applicable hereto, then, ipso facto, the obligations to be fulfilled shall
be reduced to an amount computed at the highest rate of interest permissible
under applicable law, and if for any reason whatsoever any Lender shall ever
receive as interest an amount which would be deemed unlawful under such
applicable law such interest shall be automatically applied to the payment of
principal of the Advances outstanding hereunder (whether or not then due and
payable) and not to the payment of interest, or shall be refunded to the
relevant Borrower if such principal and all other obligations of the Borrowers
to the Lenders have been paid in full.
8.14 Judgment and Payment. (a) If, for the purpose of obtaining
judgment in any court, it is necessary to convert a sum owing hereunder by any
Borrower in one currency into another currency, such Borrower agrees, to the
fullest extent that it may effectively do so, that the rate of exchange used
shall be that at which in accordance with normal banking procedures in the
relevant jurisdiction the relevant Lender could purchase the first currency with
such other currency for the first currency on the Business Day immediately
preceding the day on which the final judgment is given.
(b) The obligations of any Borrower in respect of any sum due to
any party hereto or any holder of the obligations owing hereunder (the
"Applicable Creditor") shall, notwithstanding any payment obligation or judgment
in a currency (the "Payment Currency") other than applicable currency, be
discharged only to the extent that, on the Business Day following receipt by the
Applicable Creditor of any sum adjudged to be so due in the Payment Currency,
the Applicable Creditor may in accordance with normal banking procedures in the
relevant jurisdiction purchase applicable currency with the Payment Currency; if
the amount of applicable currency so purchased is less than the sum originally
due to the Applicable Creditor in applicable currency, each Borrower agrees, as
a separate obligation and notwithstanding any such judgment, to indemnify the
Applicable Creditor against such
84
<PAGE> 90
loss. The obligations of the Borrowers contained in this Section 8.14 shall
survive the termination of this Agreement and the payment of all other amounts
owing hereunder.
8.15 Acknowledgments. The Company hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution
and delivery of this Agreement and the other Loan Documents;
(b) none of the Agent or any Lender has any fiduciary
relationship with or duty to the Company arising out of or in connection with
this Agreement or any of the other Loan Documents, and the relationship between
the Agent and the Lenders, on the one hand, and the Company, on the other hand,
in connection herewith or therewith is solely that of debtor and creditor;
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions contemplated hereby
among the Lenders or among the Company and the Lenders; and
(d) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or proceeding referred
to in this subsection any special, exemplary, punitive or consequential damages.
8.16 WAIVER OF JURY TRIAL. THE LENDERS AND THE AGENT AND THE BORROWERS,
AFTER CONSULTING OR HAVING HAD THE OPPORTUNITY TO CONSULT WITH COUNSEL,
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT ANY OF THEM MAY HAVE TO
A TRIAL BY JURY IN ANY LITIGATION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR
ANY RELATED INSTRUMENT OR AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED BY
THIS AGREEMENT OR ANY COURSE OF CONDUCT, DEALING, STATEMENTS (WHETHER ORAL OR
WRITTEN) OR ACTIONS OF ANY OF THEM. NEITHER ANY LENDER, THE AGENT, NOR THE
BORROWERS SHALL SEEK TO CONSOLIDATE, BY COUNTERCLAIM OR OTHERWISE, ANY SUCH
ACTION IN WHICH A JURY TRIAL HAS BEEN WAIVED WITH ANY OTHER ACTION IN WHICH A
JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. THESE PROVISIONS SHALL NOT BE
DEEMED TO HAVE BEEN MODIFIED IN ANY RESPECT OR RELINQUISHED BY ANY PARTY HERETO
EXCEPT BY A WRITTEN INSTRUMENT EXECUTED BY SUCH PARTY.
85
<PAGE> 91
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the day and year first above written, which
shall be the Effective Date of this Agreement.
OXFORD AUTOMOTIVE, INC.
By:
----------------------------
Its:
------------------------
BMG NORTH AMERICA LIMITED
By:
----------------------------
Its:
------------------------
OXFORD SUSPENSION LTD.
By:
----------------------------
Its:
------------------------
86
<PAGE> 92
Address for Notices: NBD BANK, as a Lender and as Agent
NBD Bank
611 Woodward Avenue By:
Detroit, Michigan 48226 ----------------------------
Its:
Attention: Rick Ellis ------------------------
Facsimile No.: (313) 226-0855
Facsimile
Confirmation No.: (313) 225-3743
Revolving Credit Commitment: $110,000,000
Tooling Revolving Credit Commitment: $35,000,000
Term Loan Commitment: $30,000,000
Percentage of
Total Commitments: 100%
Applicable Lending Office:
NBD Bank
611 Woodward Avenue
Detroit, Michigan 48226
Address for Notices: FIRST CHICAGO NBD BANK, CANADA,
as the Affiliate designated by NBD
Bank to make Canadian Advances on
its behalf and as Agent for the
purposes specified in this Agreement
161 Bay Street, Suite 4240
Toronto, Ontario M5J 2S1 By:
Attention: Michael Bauer ---------------------------------
Its:
----------------------------
Facsimile No.: (416) 363-7574
Facsimile
Confirmation No.: (416) 865-0466
87
<PAGE> 1
EXHIBIT 4.24
CONSENT AND AMENDMENT OF SECURITY DOCUMENTS
THIS AGREEMENT, dated as of March 31, 1999, is by each of the
undersigned in favor of NBD Bank, as Agent (as defined below) for the Lenders
(as defined below) and in favor of each of the Lenders.
RECITALS:
A. Oxford Automotive, Inc. (the "Company"), the borrowing subsidiaries
and lenders party thereto and NBD Bank, as agent, executed an Amended and
Restated Credit Agreement dated as of February 4, 1999 (the "Existing Credit
Agreement").
B. In connection with the Existing Credit Agreement, each of the
undersigned executed, amended and/or confirmed various Notes, Guaranties,
Security Documents and other Loan Documents, as those terms are defined in the
Existing Credit Agreement, and including without limitation those agreements and
documents amended and confirmed pursuant the Consent and Amendment of Security
Documents executed pursuant to the Existing Credit Agreement (all of he
foregoing collectively referred to as the "Existing Loan Documents").
C. Pursuant to an Amended and Restated Credit Agreement dated as of the
date hereof (as amended, modified, restated or refinanced from time to time the
"Credit Agreement") among the Company, the borrowing subsidiaries party thereto
( the "Borrowing Subsidiaries", and collectively with the Company, the
"Borrowers"), the lenders party thereto (the "Lenders") and NBD Bank, as agent
for the Lenders (in such capacity, the "Agent"). The indebtedness and
obligations under the Credit Agreement are the same indebtedness and obligations
existing under the Existing Credit Agreement, and all indebtedness and other
obligations pursuant to the Credit Agreement are entitled to the same collateral
and guaranties with the same priority as all indebtedness and obligations
pursuant to the Existing Credit Agreement.
D. Each of the undersigned and the Lenders desire to amend and confirm
the Existing Loan Documents as stated herein.
AGREEMENT
Based upon these recitals, each of the undersigned hereby agrees as
follows:
SECTION 1. Amendments. Each of the undersigned agrees that the Existing
Loan Documents shall be amended as follows: Any reference in any Existing Loan
Document to (a) the Existing Credit Agreement shall be deemed a reference to the
Credit Agreement, (b) any promissory notes shall be deemed a reference to the
term "Notes" as defined in the Credit Agreement, (c) the terms "Loan", "Loans",
"Advance" or Advances" shall be deemed references to "Loan", "Loans", "Advance"
or "Advances" as such terms are defined in the Credit Agreement, (d) the terms
"Security Document" or "Security Documents" shall be deemed references to
"Security Document" or "Security Documents" as such terms are defined in the
Credit Agreement, (e) the term "Lenders" shall be deemed a reference to the
Lenders under the Credit Agreement, (f) the term "Agent" shall be deemed a
reference to the Agent under the Credit Agreement, (g)
CONSENT AND AMENDMENT OF SECURITY DOCUMENTS Page 1
<PAGE> 2
any Event of Default under the Credit Agreement shall be deemed an Event of
Default or event of default or default, as the case may be, under each Existing
Loan Document, and (h) each "Note" issued pursuant to the Existing Credit
Agreement shall be deemed the Notes issued and outstanding pursuant to the
Credit Agreement.
SECTION 2. Representations. Each of the undersigned hereby represents
and warrants that after giving effect to the Credit Agreement, the
representations and warranties contained in each of the Existing Loan Documents
are true and correct in all material respects on and as of the effective date
hereof with the same force and effect as if made on such effective date.
SECTION 3. Ratification. Except as amended hereby, each Existing Loan
Document is hereby ratified and confirmed and shall remain in full force and
effect, and each of the undersigned hereby acknowledges that, as of the date
hereof, it has no defense, offset, counterclaim or other claim or dispute with
respect to any Existing Loan Document.
SECTION 4. Continuation of Security Interests, Etc. Each of the
undersigned acknowledges, agrees and represents that (a) all collateral granted
by the Existing Loan Documents continues with the same priority as originally
granted and secures, among other liabilities, all present and future
indebtedness, obligations and liabilities pursuant to the Credit Agreement, the
Notes, the Hedging Agreements with any Lender and the Security Documents and
other Loan Documents, including without limitation all Loans made, and Letters
of Credit issued, pursuant thereto and all fees and expenses owing thereunder
and (b) the Advances under the Existing Credit Agreement are now deemed
outstanding under the Credit Agreement and the advances outstanding under the
Credit Agreement are the same advances outstanding under the Existing Credit
Agreement and shall not be deemed a novation or satisfaction of, among other
secured debt, the indebtedness and other liabilities under the Existing Credit
Agreement and constitute the same indebtedness and other liabilities thereunder
for purposes of the Existing Loan Documents. If there is any conflict between
the Existing Loan Documents and the Credit Agreement as to the order of the
application of the proceeds of any collateral, the provisions of the Credit
Agreement shall control.
SECTION 5. Defined Terms. All the terms used but not defined herein
shall have the meaning ascribed thereto in the Credit Agreement.
SECTION 6. Counterparts, Etc. This Agreement may be executed in any
number of counterparts, and any of the parties hereto may execute this Agreement
by executing any such counterpart. In case any provision contained herein is
invalid or unenforceable, such invalidity or unenforceability shall not in any
way affect the legality, validity or enforceability of any other provision.
CONSENT AND AMENDMENT OF SECURITY DOCUMENTS Page 2
<PAGE> 3
IN WITNESS WHEREOF, each of the undersigned has caused this
Agreement to be duly executed as of the day and year first above written.
OXFORD AUTOMOTIVE, INC.
By:
-------------------------------------------
Its:
--------------------------------------
BMG NORTH AMERICA LIMITED
OXFORD SUSPENSION LTD.
BMG HOLDINGS INC.
976459 ONTARIO LIMITED
829500 ONTARIO LIMITED
RPI HOLDINGS, INC.
LOBDELL EMERY CORPORATION
CREATIVE FABRICATION CORPORATION
WINCHESTER FABRICATION CORPORATION
PARALLEL GROUP INTERNATIONAL, INC.
CONCEPT MANAGEMENT CORPORATION
LEWIS EMERY CAPITAL CORPORATION
HOWELL INDUSTRIES, INC.
OXFORD SUSPENSION, INC.
RPI, INC.
PRUDENVILLE MANUFACTURING, INC.
OASP, INC.
OASP II, INC.
By:
-------------------------------------------
Their:
----------------------------------------
LASERWELD INTERNATIONAL, L.L.C.
By: Lobdell Emery Corporation, its sole member
By:
-------------------------------------------
Its:
--------------------------------------
CONSENT AND AMENDMENT OF SECURITY DOCUMENTS Page 3
<PAGE> 1
EXHIBIT 5.1
[DYKEMA GOSSETT LETTERHEAD]
April 5, 1999
Oxford Automotive, Inc.
1250 Stephenson Highway
Troy, Michigan 48083
Re: Registration Statement on S-4 in connection with the Exchange
Offer of 10 1/8% Senior Subordinated Notes Due 2007, Series D
for 10 1/8% Senior Subordinated Notes Due 2007, Series A, B and C
Ladies and Gentlemen:
We have acted as counsel for Oxford Automotive, Inc., a Michigan
corporation (the "Company") and Lobdell Emery Corporation, a Michigan
corporation, Winchester Fabrication Corporation, a Michigan corporation,
Creative Fabrication Corporation, a Tennessee corporation, Parallel Group
International, Inc., an Indiana corporation, Laserweld International LLC, an
Indiana limited liability company, Concept Management Corporation, a Michigan
corporation, Lewis Emery Capital Corporation, a Michigan corporation, Howell
Industries, Inc., a Michigan corporation, RPI Holdings, Inc., a Michigan
corporation, RPI, Inc., a Michigan corporation, Prudenville Manufacturing, Inc.,
a Michigan corporation, Oxford Suspension, Inc., a Michigan corporation, OASP,
Inc., a Michigan corporation and OASP II, Inc., a Michigan corporation (each a
"Subsidiary Guarantor" and together the "Subsidiary Guarantors") in connection
with the preparation and filing with the Securities and Exchange Commission
under the Securities Act of 1933, as amended (the "Act"), of a Registration
Statement on Form S-4 (the "Registration Statement") relating to the Exchange
Offer by the Company of up to $200,000,000 aggregate principal amount of 10 1/8%
Senior Subordinated Notes due 2007, Series D (the "Notes") for $125,000,000
aggregate of 10 1/8% Senior Subordinated Notes due 2007, Series A, $35,000,000
aggregate of 10% Senior Subordinated Notes due 2007, Series B and $40,000,000
aggregate of 10 1/8% Senior Subordinated Notes due 2007, Series C. The Notes are
to be issued pursuant to an Indenture (the "Indenture") by and among the Company
and U.S. Bank Trust National Association, as Trustee.
In so acting, we have examined and relied upon the originals, or copies
certified or otherwise identified to our satisfaction, of such company records,
documents, certificates and other instruments as in our judgment are necessary
or appropriate to enable us to render the opinions expressed below.
Based upon the foregoing, we are of the opinion that:
<PAGE> 2
[DYKEMA GOSSETT LETTERHEAD]
Oxford Automotive, Inc.
April 5, 1999
Page 2
1. The Notes, when executed and authenticated in
accordance with the terms of the Indenture, and upon
issuance in accordance with the terms of the Exchange
Offer in the Prospectus constituting a part of the
Registration Statement, will be valid and binding
obligations of the Company, enforceable against the
Company in accordance with their terms, except as (a)
the enforceability thereof may be limited by or
subject to bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium or other
similar laws now or hereafter affecting creditors'
rights generally and (b) rights of acceleration and
the availability of equitable remedies may be limited
by equitable principles of general applicability.
2. Each guaranty of the Subsidiary Guarantors, when
executed and authenticated in accordance with the
terms of the Indenture, and upon issuance in
accordance with the terms of the Exchange Offer in
the Prospectus constituting a part of the
Registration Statement, will be a valid and binding
obligation of each Subsidiary Guarantor, enforceable
against such Subsidiary Guarantor in accordance with
its terms, except as (a) the enforceability thereof
may be limited by or subject to bankruptcy,
insolvency, fraudulent conveyance, reorganization,
moratorium or other similar laws now or hereafter
affecting creditors' rights generally and (b) rights
of acceleration and the availability of equitable
remedies may be limited by equitable principles of
general applicability.
In rendering the opinions set forth above, we have assumed that the
laws of the State of New York as to the enforceability of the Notes and the
guaranties of the Subsidiary Guarantors are not different from the laws of the
State of Michigan (excluding the choice of law rules).
We hereby consent to the use of this opinion as an Exhibit to the
Registration Statement, and to the reference to our firm under the heading
"Legal Matters" in the Prospectus constituting a part of the Registration
Statement. In giving such consent, we do not concede that we are experts within
the meaning of the Act or the rules or regulations thereunder or that this
consent is required by Section 7 of the Act.
Very truly yours,
DYKEMA GOSSETT PLLC
/s/ Dykema Gossett PLLC
<PAGE> 1
EXHIBIT 5.2
[FASKEN CAMPBELL GODFREY LETTERHEAD]
April 5, 1999
Oxford Automotive, Inc.
1250 Stephenson Highway
Troy, Michigan 48083
U.S.A.
Attention: The President
- -------------------------
Dear Sirs:
10 1/8% SENIOR SUBORDINATED NOTES DUE 2007
ISSUED AND SOLD BY OXFORD AUTOMOTIVE, INC., AND
GUARANTEED BY BMG NORTH AMERICA LIMITED AND OTHERS
We have acted as special Ontario counsel for BMG Holdings Inc. ("HOLDINGS") BMG
North America Limited ("BMG") and Oxford Suspension Ltd. ("SUSPENSION")
(collectively, the "GUARANTORS" and each, a "GUARANTOR") in connection with the
execution and delivery by them of certain documents relating to the issue and
sale by Oxford Automotive, Inc. ("OXFORD AUTOMOTIVE") of U.S. $125,000,000 10
1/8% Senior Subordinated Notes due 2007, Series A (the "SERIES A NOTES"), U.S.
$35,000,000 10 1/8% Senior Subordinated Notes due 2007, Series B (the "SERIES B
NOTES"), and U.S. $40,000,000 10 1/8% Senior Subordinated Notes due 2007, Series
C (the "SERIES C NOTES", and together with the Series A Notes and the Series B
Notes, the "OLD NOTES"), and in connection with the offer by Oxford Automotive
(the "EXCHANGE OFFER") to exchange U.S. $200,000,000 of its 10 1/8% Senior
Subordinated Notes due 2007, Series D (the "EXCHANGE NOTES", and together with
the Old Notes, the "NOTES") for any and all of the outstanding Old Notes.
You have informed us that the Series C Notes have been, and the Exchange Notes
will be, issued pursuant to (i) an Indenture (the "INDENTURE") dated as of
December 1, 1998 between Oxford Automotive, certain of its subsidiaries
(including the Guarantors) as guarantors and U.S. Bank Trust National
Association as trustee for the holders of the Notes (the "TRUSTEE"), (ii) a
Purchase Agreement (the "PURCHASE AGREEMENT") dated December 1, 1998 among
Oxford Automotive, certain of its subsidiaries (including the Guarantors) as
guarantors, and Bear, Stearns & Co. Inc., BT Alex Brown Incorporated and Morgan
Stanley & Co. Incorporated, as the purchasers of the Series C Notes (the
"INITIAL PURCHASERS"), and (iii) a Registration Rights Agreement (the
"REGISTRATION RIGHTS AGREEMENT") dated December 8, 1998, among Oxford
Automotive, the guarantors of the Notes and the Initial Purchasers. The
Guarantees, the Indenture, the Purchase Agreement and the Registration Rights
Agreement are hereinafter collectively referred to as the "DOCUMENTS", and each
a "DOCUMENT").
<PAGE> 2
The opinions given in this letter are limited to the law applicable in the
Province of Ontario, and the statutes and regulations of the Province of Ontario
and of Canada applicable in Ontario (collectively, "ONTARIO LAW"). Accordingly,
we do not express any opinion with respect to the laws of any jurisdiction other
than Ontario Law in force as at the date of this opinion letter.
We have made the following assumptions specific to this transaction:
(A) under New York Law, the chosen governing law of each of the Documents,
(i) none of the Documents imposes any obligation, liability
or indebtedness, whether actual or contingent, present
or future, primary or secondary (collectively,
"LIABILITIES") on any of the Guarantors in relation to
any Liabilities of any other person, other than
Liabilities of Oxford Automotive in respect of the
Notes, and
(ii) none of the Documents creates any mortgage, charge,
lien, encumbrance, security interest or other right in
the way of security in or on any real or personal
property of either Guarantor, except in relation to its
Guarantee;
(B) each party to the Documents is a body corporate duly organized and
incorporated and validly existing under the laws of its jurisdiction of
incorporation, has all requisite capacity, power and authority to
execute, deliver and perform each of the Documents to which it is a
party, has taken all necessary corporate, statutory, regulatory and other
action to authorize the execution, delivery and performance by it of each
such Document and duly authorized signing officers of each such party
have executed and delivered each such Document (other than the Exchange
Notes) on each such party's behalf in accordance with all applicable
laws;
(C) the Trustee and each of the Initial Purchasers is resident in a
jurisdiction outside of Canada and does not have a permanent
establishment or tangible assets in Canada, a representative office in
Canada, or employees ordinarily resident in Canada, and, while the
Trustee and some of the Initial Purchasers or their representatives may
have discussed financing proposals in Canada or may have discussed the
financing contemplated by the Documents in general terms in Canada with
Oxford Automotive and the Guarantors (or any of them), none of the
Trustee and the Initial Purchasers conducted negotiations in Canada with
Oxford Automotive and the Guarantors (or any of them) with respect to the
Documents or the transactions contemplated thereby and the decision of
the Trustee and each of the Initial Purchasers to participate in such
transactions was not made in Canada;
(D) the foregoing assumptions in this letter, are true accurate and complete
with respect to the matters addressed in them as of the time and date of
execution of the Exchange Notes by the issuers thereof, and there has
been no change in Ontario Law or any other applicable law, or the facts
assumed by or known to us at the date thereof; and
(E) the Exchange Notes will be duly executed and delivered by Oxford
Automotive in accordance with all applicable laws and in the form or
substantially in the form of the Note set out in a Schedule or Exhibit to
the Indenture, and on each date of execution and delivery of an
<PAGE> 3
Exchange Note, each Guarantor will be a wholly-owned subsidiary (for the
purposes of section 20 of the Ontario Business Corporations Act) of
Oxford Automotive.
Based upon and relying on the foregoing and subject to the assumptions and
qualifications set out herein, we are of the opinion that:
1. An action to enforce each Guarantee could be commenced by the Trustee in
a court of competent jurisdiction in the Province of Ontario (an "ONTARIO
COURT"), in which event an Ontario Court would recognize the choice of
the laws of the State of New York ("NEW YORK LAW") as a valid choice of
law to govern the Guarantee and would apply New York Law to all issues
that an Ontario Court characterized as substantive under the conflict of
laws' rules of Ontario Law, assuming that:
(a) such choice of law is legal under New York Law;
(b) such choice of law was made bona fide, and, without limiting the
foregoing, such choice of law was not made for the purpose of
avoiding the mandatory laws of any other jurisdiction;
(c) there is no reason for avoiding such choice of law on the
grounds of public policy in the Province of Ontario as
determined by an Ontario Court;
(d) New York Law is not an assertion of sovereign power of a
political nature by the State of New York or the United States
of America; and
(e) New York Law was specifically pleaded and proved as a question
of fact before the Ontario Court.
An Ontario Court will, however, apply Ontario Law to those issues that the
Ontario Court characterizes as procedural or administrative under the conflict
of laws' rules of Ontario Law. In addition, no opinion is expressed as to
whether remedies available under New York Law would be available from an Ontario
Court.
2. Any judgment (a "NEW YORK JUDGMENT") obtained by the Trustee against any
of the Guarantors in any action taken in the courts of the State of New
York (the "NEW YORK COURT") to enforce a payment obligation of that
Guarantor under its Guarantee would be recognized and enforced by an
Ontario Court in a separate Ontario action without re-examination of the
merits of the New York action, if each of the following criteria is
satisfied:
(a) the New York Judgment is for a debt or fixed sum of money other
than a judgment in proceedings of a revenue, expropriatory,
penal, criminal or similar nature;
(b) the New York Judgment is final, conclusive and enforceable where
rendered;
<PAGE> 4
(c) the New York Court that renders the New York Judgment has
jurisdiction over the Guarantor and the subject matter of its
Guarantee;
(d) the New York Judgment does not conflict with another final and
conclusive judgment in the same cause of action;
(e) the New York Judgment is not obtained by fraud or trick;
(f) the claim for relief on which the New York Judgment is based and
enforcement of the New York Judgment in Ontario are not
repugnant to public policy under Ontario Law;
(g) the New York Court rendering the New York Judgment is impartial
and provides procedures compatible with the due process
standards of an Ontario Court, and without limiting the
foregoing:
(i) the proceedings leading to the New York Judgment
are not contrary to the rules of natural justice, and
(ii) the relevant Guarantor received sufficient notice of
the proceedings in the New York Court to enable it to
defend the action in which the New York Judgment is
rendered;
(h) if the New York Judgment is obtained by default, there has been
no manifest error in the granting of such judgment;
(i) the proceedings in the New York Court are not contrary to an
agreement between the parties under which the dispute in
question is to be settled otherwise than by proceedings in the
New York Court;
(j) if the jurisdiction in the New York Court is based on personal
service alone, the New York Court is not a seriously
inconvenient forum for the trial of the action;
(k) the procedural rules for commencement and maintenance of the
enforcement proceedings in Ontario are observed;
(l) no new, admissible evidence relevant to the New York Judgment is
discovered before the Ontario Court renders judgment;
(m) no order restricting enforcement of the New York Judgment has
been made by the Attorney General of Canada under the Foreign
Extraterritorial Measures Act (Canada);
<PAGE> 5
(n) no order has been made by the Competition Tribunal established
under the Competition Act (Canada) restricting implementation of
the New York Judgment as adversely affecting competition in
Canada or domestic or foreign trade and commerce in Canada; and
(o) the action to enforce the New York Judgment in an Ontario Court
is commenced within six years of the date of such judgment.
3. The express submission by each Guarantor to the non-exclusive
jurisdiction of a New York Court in respect of its Guarantee would be
regarded by an Ontario Court as sufficient under Ontario Law to grant
personal jurisdiction over the Guarantor to a New York Court. Under
Ontario Law, an Ontario Court would recognize that a New York Court has
jurisdiction over the subject matter of the relevant Guarantee.
4. None of the Guarantors is entitled to any sovereign immunity under
Ontario Law.
5. No stamp duty, value added tax, document duty or other similar charge is
payable under Ontario Law on any New York Judgment in order to introduce
it into evidence before an Ontario Court, or to enforce a New York
Judgment, in an action of the nature referred to in paragraph 2. above
The opinions expressed above are subject to the following qualifications:
(a) the enforceability of each Guarantee or any judgment (including,
without limitation, any New York Judgment) arising out of or in
connection with each Guarantee may be limited by applicable
bankruptcy, insolvency, winding-up, reorganization, arrangement,
moratorium or other laws affecting creditors' rights generally.
Without limiting the generality of the foregoing,
(i) the ability to recover or claim for certain costs or
expenses may be subject to judicial discretion,
(ii) section 347 of the Criminal Code (Canada) prohibits the
payment of "interest" at a "criminal rate" (as such
terms are defined therein),
(iii) any action on any Guarantee may be proscribed by the
Limitations Act (Ontario) after the applicable
limitation period has expired, and
(iv) a money judgment by an Ontario Court may be awarded
only in Canadian currency and may be based on a rate of
exchange in existence on a date other than the date of
payment;
(b) the enforceability of each Guarantee may be limited by general
principles of equity, and no opinion is given as to any specific
remedy that may be granted, imposed or rendered (including
equitable remedies such as specific performance and injunction);
<PAGE> 6
(c) an Ontario Court reserves the right to decline jurisdiction
in any action relating to a Guarantee on the basis that Ontario
is an inconvenient forum or if concurrent proceedings are being
brought elsewhere, notwithstanding any waiver of the right to
raise such objection or defence in the Documents;
(d) provisions in any Document permitting service of legal process
by posting or transmission of copies thereof in accordance with
the notice clause of such document may not be recognized as good
service by an Ontario court;
(e) section 4 of the Interest Act (Canada) may restrict the amount
of interest payable by the Guarantors to the rate or percentage
of five per cent per annum; and
(f) no opinion is expressed in this letter on the effect of the
securities laws of the Province of Ontario on any of the
Documents or on the Exchange Offer.
We hereby consent to the use of this opinion as an Exhibit to the Registration
Statement on Form S-4 (the "REGISTRATION Statement") relating to the Exchange
Offer, and to the reference to our firm under the heading "Legal Matters" in the
Prospectus constituting a part of the Registration Statement. In giving such
consent, we do not concede that we are experts within the meaning of the
Securities Act of 1933 or the rules or regulations thereunder, or that this
consent is required by Section 7 of that Act.
Yours truly,
FASKEN CAMPBELL GODFREY
<PAGE> 1
EXHIBIT 12
COMPUTATION OF RATIOS
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
10/28/95- 4/1/95-
3/31/98 3/31/97 3/31/96 10/27/95 3/31/95 3/31/94
------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Income (loss) before income taxes $ 9,665 $2,614 $ 617 ($2,822) ($1,615) $2,133
ADD:
Portion of rents
representative of interest factor 1,736 440 54 73 143 105
Interest on indebtedness 10,710 3,388 1,096 1,048 1,267 1,658
------- ------ ------ ------- ------- ------
$22,111 $6,442 $1,767 ($1,701) ($205) $3,896
======= ====== ====== ======= ======= ======
FIXED CHARGES
Portion of rents
representative of interest factor 1,736 440 54 73 143 105
Interest on indebtedness 10,710 3,388 1,096 1,048 1,267 1,658
------- ------ ----- ------- ------- ------
$12,446 $3,828 $1,150 $ 1,121 $ 1,410 $1,763
======= ====== ====== ======= ======= ======
Ratio of Earnings to Fixed Charges $ 1.8 1.7 1.5 -- -- 2.2
======= ====== ====== ======= ======= ======
Deficiency of Earnings over
fixed charges -- -- -- ($2,822) ($1,615) --
======= =======
<CAPTION>
Nine Months Nine Months
Ended Ended
December 31 December 31
1998 1997
--------------------------
<S> <C> <C>
Income (loss) before income taxes $(1,185) $ 7,373
ADD:
Portion of rents
representative of interest factor 1,059 1,167
Interest on indebtedness 14,449 8,937
------- -------
$14,323 $17,477
======= ======
FIXED CHARGES
Portion of rents
representative of interest factor 1,059 1,167
Interest on indebtedness 14,449 8,937
------- ------
$15,508 $10,104
======= ======
Ratio of Earnings to Fixed Charges $ -- 1.7
Deficiency of Earnings over
fixed charges $(1,185) --
=======
</TABLE>
<PAGE> 1
EXHIBIT 21
SUBSIDIARIES OF THE COMPANY
<TABLE>
<CAPTION>
Jurisdiction of Percent Assumed
Name of Subsidiary Incorporation Owned Names
------------------ ------------- ----- -----
<S> <C> <C> <C>
Lobdell Emery Corporation ("Lobdell") Michigan 100% The Lobdell-Emery
Manufacturing Company
Laserweld International, L.L.C. Indiana 100%-Lobdell
Concept Management Corporation ("CMC") Michigan 100%-Lobdell
Creative Fabrication Corporation Tennessee 100%-CMC Oxford Automotive
BMG Holdings, Inc. ("BMGH") Ontario, Canada 100%
BMG North America Limited ("BMG") Ontario, Canada 100%-BMGH
829500 Ontario Limited Ontario, Canada 100%-BMG
976459 Ontario Limited Ontario, Canada 100%-BMG
Howell Industries, Inc. Michigan 100%
Oxford Suspension Ltd. Ontario, Canada 100%
Oxford Suspension, Inc. ("OSI") Michigan 100%
Metalurgica Carabobo S.A. Venezuela 49%-OSI
RPI Holdings, Inc. ("RPIH") Michigan 100%
RPI, Inc. Michigan 100%-RPIH
Prudenville Manufacturing, Inc. Michigan 100%-RPIH
Oxford Automotriz de Mexico S.A. de C.V. ("OAM") Mexico, D.F. 100%
Oxford Automotriz Silao S.A. de C.V. Mexico, D.F. 100% - OAM
Oxford Automotriz Saltillo S.A. de C.V. Mexico, D.F. 100% - OAM
Oxford Automotriz Administrativos S.A. de C.V. Mexico, D.F. 100% - OAM
OASP, Inc. ("OASP") Michigan 100%
Oxford Automotive France SAS ("OAF") France 99%-OASP
Cofimeta S.A. France 100%-OAF
Sominor S.A. France 99%-OAF
Aubry S.A. France 99%-OAF
Ecrim S.A. France 99%-OAF
Socori Technology S.A. France 99%-OAF
OASP II, Inc. Michigan 100%
</TABLE>
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in the Prospectus constituting part of this
Registration Statement on Form S-4 of Oxford Automotive, Inc. of our report
dated June 22, 1998, relating to the financial statements of Oxford Automotive,
Inc. which appears in such Prospectus. We also consent to the application of
such report to the Financial Statement Schedule for the years ended March 31,
1998 and 1997 listed under Item 21 of this Registration Statement when such
schedule is read in conjunction with the financial statements referred to in our
report. The audits referred to in such report also included this schedule. We
also consent to the references to us under the headings "Experts" and "Selected
Consolidated Historical Financial Data" in such Prospectus. However, it should
be noted that PricewaterhouseCoopers LLP has not prepared or certified such
"Selected Consolidated Historical Financial Data."
PRICEWATERHOUSECOOPERS LLP
Bloomfield Hills, Michigan
April 5, 1999
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in the Prospectus constituting part of this
Registration Statement on Form S-4 of Oxford Automotive, Inc. of our report
dated May 19, 1997 relating to the financial statements of Lobdell Emery
Corporation as of December 31, 1996 and 1995 and for each year in the three-year
period ended December 31, 1996, which appears in such Prospectus. We also
consent to the reference to us under the heading "Experts" in such Prospectus.
PRICEWATERHOUSECOOPERS LLP
Bloomfield Hills, Michigan
April 5, 1999
<PAGE> 1
EXHIBIT 23.3
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in the Prospectus constituting part of this
Registration Statement on Form S-4 of Oxford Automotive, Inc. of our report
dated June 15, 1998 relating to the financial statements of Howell Industries,
Inc. as of and for the year ended July 31, 1997, which appears in such
Prospectus. We also consent to the reference to us under the heading "Experts"
in such Prospectus.
PRICEWATERHOUSECOOPERS LLP
Bloomfield Hills, Michigan
April 5, 1999
<PAGE> 1
EXHIBIT 23.4
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in the Prospectus constituting part of this
Registration Statement on Form S-4 of Oxford Automotive, Inc. of our report
dated February 4, 1998 relating to the financial statements of RPI Holdings,
Inc. as of and for the year ended June 30, 1996 and our report dated February 6,
1998 relating to the financial statements of RPI Holdings, Inc. as of March 31,
1997 and for the period from July 1, 1996 to March 31, 1997, which appear in
such Prospectus. We also consent to the reference to us under the heading
"Experts" in such Prospectus.
PRICEWATERHOUSECOOPERS LLP
Bloomfield Hills, Michigan
April 5, 1999
<PAGE> 1
EXHIBIT 23.5
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in the Prospectus constituting part of this
Registration Statement on Form S-4 of Oxford Automotive, Inc. of our report
dated June 11, 1998 relating to the financial statements of the Suspension
Division of Eaton Corporation as of and for the year ended December 31, 1997,
which appears in such Prospectus. We also consent to the reference to us under
the heading "Experts" in such Prospectus.
PRICEWATERHOUSECOOPERS LLP
Bloomfield Hills, Michigan
April 5, 1999
<PAGE> 1
EXHIBIT 23.6
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in the Prospectus constituting part of this
Registration Statement on Form S-4 of Oxford Automotive, Inc. of our report
dated March 31, 1999 relating to the financial statements of Cofimeta S.A. and
its subsidiaries as of and for the nine months ended September 30, 1998 and as
of and for the years ended December 31, 1997 and 1996, which appears in such
Prospectus. We also consent to the reference to us under the heading "Experts"
in such Prospectus.
Coopers & Lybrand Audit
Paris, France
April 5, 1999
<PAGE> 1
Exhibit 23.7
CONSENT OF INDEPENDENT AUDITORS
We consent to the use in this Registration Statement on Form S-4 of Oxford
Automotive, Inc. of our report dated May 21, 1996, appearing in the Prospectus,
which is part of this Registration Statement, and to the reference to us under
the headings "Experts" and "Selected Consolidated Historical Financial Data" in
such Prospectus.
Our audits of the financial statements referred to in our aforementioned report
also include the financial statement schedule of Oxford Automotive, Inc., and
BMG North America Limited, for the period October 28, 1995 to March 31, 1996 and
April 1, 1995 to October 27, 1995 listed in Item 21. This financial statement
schedule is the responsibility of the Corporation's management. Our
responsibility is to express an opinion based on our audits. In our opinion,
such financial statement schedule, when considered in relation to the basic
financial statements taken as a whole, present fairly in all material respects
the information set forth therein.
Deloitte & Touche LLP
Chartered Accountants
Kitchener, Ontario
April 1, 1999
<PAGE> 1
EXHIBIT 25
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------
FORM T-1
STATEMENT OF ELIGIBILITY UNDER
THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
Check if an Application to Determine Eligibility of
a Trustee Pursuant to Section 305(b)(2)_
----------
U.S. BANK TRUST NATIONAL ASSOCIATION
(Exact name of Trustee as specified in its charter)
111 EAST WACKER DRIVE, SUITE 3000
CHICAGO, ILLINOIS 60601 36-4046888
(Address of principal executive offices) (Zip Code) I.R.S. Employer
Identification No.
Michael T. Goodwin
111 East Wacker Drive, Suite 3000
Chicago, Illinois 60601
Telephone (312) 228-9455
(Name, address and telephone number of agent for service)
OXFORD AUTOMOTIVE, INC.
(Exact name of obligor as specified in its charter)
MICHIGAN 38-3262809
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1250 STEPHENSON HIGHWAY
TROY, MICHIGAN 48083
(Address of Principal Executive Offices) (Zip Code)
DEBT SECURITIES
(Title of the Indenture Securities)
================================================================================
<PAGE> 2
FORM T- I
ITEM 1. GENERAL INFORMATION. Furnish the following information as to the
Trustee.
a) Name and address of each examining or supervising authority to
which it is subject.
Comptroller of the Currency
Washington, D.C.
b) Whether it is authorized to exercise corporate trust powers.
Yes
ITEM 2. AFFILIATIONS WITH OBLIGOR. If the obligor is an affiliate of the
Trustee, describe each such affiliation.
None
ITEMS 3-15 There is not nor has there been a default with respect to
the securities under this Indenture. The Trustee is a Trustee
under other Indentures under which securities issued by the
obligor are outstanding. There is not and there has not been a
default with respect to the securities outstanding under such
other Indentures.
ITEM 16. LIST OF EXHIBITS: List below all exhibits filed as a part of this
statement of eligibility and qualification.
1. A copy of the Articles of Association of the Trustee now in
effect, incorporated herein by reference to Exhibit 1 to Item
16 of Form T-1, Registration No. 333-18235*
2. A copy of the certificate of authority of the Trustee to
commence business, incorporated herein by reference to Exhibit
2 to Item 16 of Form T-1, Registration No. 333-18235*
3. A copy of the certificate of authority of the Trustee to
exercise corporate trust powers, incorporated herein by
reference to Exhibit 3 to Item 16 of Form T-1, Registration
No. 333-18235*
4. A copy of the existing bylaws of the Trustee, as now in
effect, incorporated herein by reference to Exhibit 4 to Item
16 of Form T-1, Registration No. 333-18235*
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the
Trust Indenture Act of 1939, incorporated herein by reference
to Exhibit 6 of Form T-1, Registration No. 333-18235*
7. A copy of the latest report of condition of the Trustee
published pursuant to law or the requirements of its
supervising or examining authority, filed herewith.
8. Not applicable.
9. Not applicable.
*See* at top of page 3
2
<PAGE> 3
*Exhibits thus designated are incorporated herein by reference to Exhibits
bearing identical numbers in Item 16 of the Form T-1 filed by the Trustee with
the Securities and Exchange Commission with the specific references noted.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as amended, the
Trustee, U.S. BANK TRUST NATIONAL ASSOCIATION, a national banking association
organized and existing under the laws of the United States of America, has duly
caused this statement of eligibility and qualification to be signed on its
behalf by the undersigned, thereunto duly authorized, all in the City of
Chicago, State of Illinois on the day of April 5, 1999.
U.S. BANK TRUST NATIONAL ASSOCIATION
By: /s/ Michael T. Goodwin
----------------------------------------
Michael T. Goodwin
Assistant Vice President and Assistant Secretary
3
<PAGE> 4
<TABLE>
<S> <C> <C> <C> <C>
Legal Title of Bank: U.S. Bank Trust National Association Call Date: ST-BK: FFIEC 031
Address: 400 North Michigan Avenue Page RC-1
City, State Zip: Chicago, IL 60611
Transit No. 09600069
-----------
</TABLE>
Consolidated Report of Condition for Insured Commercial
and State-Chartered Savings Banks for December 31, 1998
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding as of the last business day of the
quarter.
Schedule RC--Balance Sheet
__________
<TABLE>
<CAPTION>
----------
| C200 | (-
------------ --------
Dollar Amounts in Thousands | RCFD Bil Mil Thou |
- ------------------------------------------------------------------------------------------------- --------------------
<S> <C> <C> <C>
ASSETS | ////////////////// |
1. Cash and balances due from depository institutions (from Schedule RC-A): | ////////////////// |
a. Noninterest-bearing balances and currency and coin(1) ................................... | 0081 11,111 | 1.a.
b. Interest-bearing balances(2) ............................................................ | 0071 48,890 | 1.b.
2. Securities: | ////////////////// |
a. Held-to-maturity securities (from Schedule RC-B, column A) .............................. | 1754 0 | 2.a.
b. Available-for-sale securities (from Schedule RC-B, column D) ............................ | 1773 3,735 | 2.b.
3. Federal funds sold and securities purchased under agreements to resell in domestic offices | ////////////////// |
of the bank and of its Edge and Agreement subsidiaries, and in IBFs: | ////////////////// |
a. Federal funds sold ...................................................................... | 0 | 3.a.
b. Securities purchased under agreements to resell ......................................... | 1350 0 | 3.b.
4. Loans and lease financing receivables: ____________________________| ////////////////// |
a. Loans and leases, net of unearned income (from Schedule RC-C) | RCFD 2122 | 0 | ////////////////// | 4.a.
b. LESS: Allowance for loan and lease losses ................... | RCFD 3123 | 0 | ////////////////// | 4.b.
c. LESS: Allocated transfer risk reserve ....................... | RCFD 3128 | 0 | ////////////////// | 4.c.
----------------------------
d. Loans and leases, net of unearned income, | ////////////////// |
allowance, and reserve (item 4.a minus 4.b and 4.c) ..................................... | 2125 0 | 4.d.
5. Trading assets (from Schedule RC-D) ........................................................ | 3545 0 | 5.
6. Premises and fixed assets (including capitalized leases) ................................... | 2145 82 | 6.
7. Other real estate owned (from Schedule RC-M) ............................................... | 2150 0 | 7.
8. Investments in unconsolidated subsidiaries and associated companies (from Schedule RC-M) ... | 2130 0 | 8.
9. Customers' liability to this bank on acceptances outstanding ............................... | 2155 0 | 9.
10. Intangible assets (from Schedule RC-M) ..................................................... | 2143 44,547 | 10.
11. Other assets (from Schedule RC-F) .......................................................... | 2160 2,739 | 11.
12. Total assets (sum of items 1 through 11) ................................................... | 2170 111,104 | 12.
----------------------
</TABLE>
____________
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
11
<PAGE> 5
<TABLE>
<S> <C> <C> <C> <C>
Legal Title of Bank: U.S. Bank Trust National Association Call Date: ST-BK: FFIEC 031
Address: 400 North Michigan Avenue Page RC-2
City, State Zip: Chicago, IL 60611
Transit No. 09600069
-----------
</TABLE>
Schedule RC--Continued
<TABLE>
<CAPTION>
---------------------------
Dollar Amounts in Thousands | ///////// Bil Mil Thou |
- ----------------------------------------------------------------------------------------------- -------------------------
<S> <C> <C> <C> <C> <C>
LIABILITIES | /////////////////////// |
13. Deposits: | /////////////////////// |
a. In domestic offices (sum of totals of columns A and C from Schedule RC-E, part I) ..... | 0 | 13.a.
----------------------------
(1) Noninterest-bearing(1) ................................ | RCON 6631 0 | /////////////////////// | 13.a.(1)
(2) Interest-bearing ...................................... | RCON 6636 0 | /////////////////////// | 13.a.(2)
----------------------------
b. In foreign offices, Edge and Agreement subsidiaries, and IBFs (from Schedule RC-E, | /////////////////////// |
part II) .............................................................................. | 0 | 13.b.
----------------------------
(1) Noninterest-bearing ................................... | RCFN 6631 0 | /////////////////////// | 13.b.(1)
(2) Interest-bearing ...................................... | RCFN 6636 0 | /////////////////////// | 13.b.(2)
----------------------------
14. Federal funds purchased and securities sold under agreements to repurchase in domestic | 2800 |
offices of the bank and of its Edge and Agreement subsidiaries, and in IBFs: | /////////////////////// |
a. Federal funds purchased ............................................................... | 0 | 14.a.
b. Securities sold under agreements to repurchase ........................................ | 0 | 14.b.
15. a. Demand notes issued to the U.S. Treasury .............................................. | RCON 2840 0 | 15.a.
b. Trading liabilities (from Schedule RC-D) .............................................. | RCFD 3548 0 | 15.b.
16. Other borrowed money: | /////////////////////// |
a. With original maturity of one year or less ............................................ | RCFD 2332 0 | 16.a.
b. With original maturity of more than one year .......................................... | 0 | 16.b.
17. Mortgage indebtedness and obligations under capitalized leases ........................... | 0 | 17.
18. Bank's liability on acceptances executed and outstanding ................................. | RCFD 2920 0 | 18.
19. Subordinated notes and debentures ........................................................ | RCFD 3200 0 | 19.
20. Other liabilities (from Schedule RC-G) ................................................... | RCFD 2930 2,627 | 20.
21. Total liabilities (sum of items 13 through 20) ........................................... | RCFD 2948 2,627 | 21.
| /////////////////////// |
22. Limited-life preferred stock and related surplus ......................................... | 0 | 22.
EQUITY CAPITAL | /////////////////////// |
23. Perpetual preferred stock and related surplus ............................................ | RCFD 3838 0 | 23.
24. Common stock ............................................................................. | RCFD 3230 1,000 | 24.
25. Surplus (exclude all surplus related to preferred stock).................................. | RCFD 3839 106,712 | 25.
26. a. Undivided profits and capital reserves ................................................ | RCFD 3632 762 | 26.a.
b. Net unrealized holding gains (losses) on available-for-sale securities ................ | RCFD 8434 3 | 26.b.
27. Cumulative foreign currency translation adjustments ...................................... | 0 | 27.
28. Total equity capital (sum of items 23 through 27) ........................................ | RCFD 3210 108,477 | 28.
29. Total liabilities, limited-life preferred stock, and equity capital (sum of items 21, 22, | /////////////////////// |
and 28) .................................................................................. | RCFD 3300 111,104 | 29.
---------------------------
</TABLE>
<TABLE>
<S> <C> <C>
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below that Number
best describes the most comprehensive level of auditing work performed ----------------
for the bank by independent external auditors as of any date during 1997 ........................... | RCFD 6724 N/A | M.1.
-----------------
</TABLE>
<TABLE>
<S> <C>
1 = Independent audit of the bank conducted in accordance 4 = Directors' examination of the bank performed by other
with generally accepted auditing standards by a certified external auditors (may be required by state chartering
public accounting firm which submits a report on the bank authority)
2 = Independent audit of the bank's parent holding company 5 = Review of the bank's financial statements by external
conducted in accordance with generally accepted auditing auditors
standards by a certified public accounting firm which 6 = Compilation of the bank's financial statements by external
submits a report on the consolidated holding company auditors
(but not on the bank separately) 7 = Other audit procedures (excluding tax preparation work)
3 = Directors' examination of the bank conducted in accordance 8 = No external audit work
with generally accepted auditing standards by a certified
public accounting firm (may be required by state
chartering authority)
- ------------
</TABLE>
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
(2) Includes limited life preferred stock and related surplus.
12
<PAGE> 6
<TABLE>
<S> <C> <C> <C> <C>
Legal Title of Bank: U.S. Bank Trust National Association Call Date: ST-BK: FFIEC 031
Address: 400 North Michigan Avenue Page RC-3
City, State Zip: Chicago, IL 60611
Transit NO. 09600069
-----------
</TABLE>
Schedule RC-A--Cash and Balances Due From Depository Institutions
Exclude assets held for trading.
<TABLE>
<CAPTION>
----------
| C405 | (-
--------------------------------- --------
| (Column A) | (Column B) |
| Consolidated | Domestic |
| Bank | Offices |
-------------------------------------------
Dollar Amounts in Thousands | RCFD Bil Mil Thou | RCON Bil Mil Thou |
- ----------------------------------------------------------------------------- -------------------- --------------------
<S> <C> <C> <C>
1. Cash items in process of collection, unposted debits, and currency and | ////////////////// | ////////////////// |
coin .................................................................... | 0020 0 | ////////////////// | 1.
a. Cash items in process of collection and unposted debits .............. | 0080 | 0 | 1.a.
b. Currency and coin .................................................... | ////////////////// | 0 | 1.b.
2. Balances due from depository institutions in the U.S. ................... | ////////////////// | 0 | 2.
a. U.S. branches and agencies of foreign banks (including their IBFs) ... | 0083 | ////////////////// | 2.a.
b. Other commercial banks in the U.S. and other depository institutions | ////////////////// | ////////////////// |
in the U.S. (including their IBFs) ................................... | 0085 60,001 | ////////////////// | 2.b.
3. Balances due from banks in foreign countries and foreign central banks .. | ////////////////// | 0 | 3.
a. Foreign branches of other U.S. banks ................................. | 0073 0 | ////////////////// | 3.a.
b. Other banks in foreign countries and foreign central banks ........... | 0074 0 | ////////////////// | 3.b.
4. Balances due from Federal Reserve Banks ................................. | 0090 0 | 0090 0 | 4.
5. Total (sum of items 1 through 4) (total of column A must equal | ////////////////// | ////////////////// |
Schedule RC, sum of items 1.a and 1.b) .................................. | 0010 60,001 | 0010 60,001 | 5.
-------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
---------------------
Memorandum Dollar Amounts in Thousands RCOW Bil Mil Thou
- -------------------------------------------------------------------------------------------------- --------------------
<S> <C> <C>
1. Noninterest-bearing balances due from commercial banks in the U.S. (included in item 2, | ////////////////// |
column B above) .............................................................................. | 0050 11,111 | M.1.
----------------------
</TABLE>
13
<PAGE> 1
EXHIBIT 99.1
OXFORD AUTOMOTIVE, INC.
LETTER OF TRANSMITTAL
10 1/8% SENIOR SUBORDINATED NOTES DUE 2007
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON ________
___, 1999, UNLESS EXTENDED (THE "EXPIRATION DATE"). EXISTING NOTES TENDERED IN
THE EXCHANGE OFFER MAY BE WITHDRAWN AT ANY TIME PRIOR TO 5:00 P.M., NEW YORK
CITY TIME, ON THE BUSINESS DAY PRIOR TO THE EXPIRATION DATE.
Deliver to the Exchange Agent:
U.S. BANK TRUST NATIONAL ASSOCIATION
<TABLE>
<S> <C>
By Registered, Certified or Overnight Mail: By First Class Mail:
U.S. Bank Trust National Association U.S. Bank Trust National Association
Attn: Specialized Finance P. O. Box 64485
180 East Fifth Street St. Paul, MN 55164-9549
St. Paul, MN 55101
By Hand (New York depositary only): By Hand (all others):
U.S. Bank Trust National Association U.S. Bank Trust National Association
100 Wall Street, 20th Floor Fourth Floor - Bond Drop Window
New York, NY 10005 180 East Fifth Street
St. Paul, MN 55101
By Facsimile: Telephone Number
(612) 244-1537 (For Eligible Institutions Only) (800) 934-6802 Bondholder Services
</TABLE>
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE
OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER THAN THE ONE LISTED
ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. THE INSTRUCTIONS ACCOMPANYING THIS
LETTER OF TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL
IS COMPLETED.
HOLDERS WHO WISH TO BE ELIGIBLE TO RECEIVE SERIES D NOTES FOR THEIR
EXISTING NOTES PURSUANT TO THE EXCHANGE OFFER MUST VALIDLY TENDER (AND NOT
WITHDRAW) THEIR EXISTING NOTES TO THE EXCHANGE AGENT PRIOR TO THE EXPIRATION
DATE.
The undersigned hereby acknowledges receipt and review of the
Prospectus dated ________ ___, 1999 (the "Prospectus") of Oxford Automotive,
Inc., a Michigan corporation (the "Company"), and this Letter of Transmittal
(the "Letter of Transmittal"), which together describe the Company's offer (the
"Exchange Offer") to exchange its 10 1/8% Senior Subordinated Notes Due 2007,
Series D (the "Series D Notes"), which have been registered under the Securities
Act of 1933, as amended (the "Securities Act"), pursuant to a Registration
Statement of which the Prospectus is a part, for a like principal amount of its
issued and outstanding 10 1/8% Senior Subordinated Notes Due 2007, Series A (the
"Series A Notes"), 10 1/8% Senior Subordinated Notes Due 2007, Series B (the
"Series B Notes") and 10 1/8% Senior Subordinated Notes Due 2007, Series C (the
"Series C Notes," together with the Series A Notes and the Series B Notes, the
"Existing Notes"). The CUSIP for the Series A Notes and the Series B Notes is
69093AC3. The CUSIP for the Series C Notes is 69093AG4. Capitalized terms used
but not defined herein have the respective meaning given to them in the
Prospectus.
Interest on the Series D Notes will accrue from the last interest
payment date on which interest was paid on the Existing Notes surrendered in
exchange or, if no interest has been paid on the Existing Notes, from the date
of original issue of the Existing Notes. The Company reserves the right, at any
time or from time to time, to extend the Exchange Offer at its discretion, which
in no event shall be later than ________ ___, 1999, in which event the term
"Expiration Date" shall mean the latest time and date in which the Exchange
Offer is extended. The Company shall notify the holders of the Existing Notes
<PAGE> 2
of any extension by written notice no later than 9:00 a.m., New York City time,
on the next business day after the previously scheduled Expiration Date.
This Letter of Transmittal is to be used by a Holder either if original
Existing Notes are to be forwarded herewith or if delivery of Existing Notes, if
available, is to be made by book-entry transfer to the account maintained by the
Exchange Agent at The Depository Trust Company ("DTC") pursuant to the
procedures set forth in the Prospectus under the caption "The Exchange Offer --
Book-Entry Transfer." Holders of Existing Notes whose Existing Notes are not
immediately available, or who are unable to deliver their Existing Notes and all
other documents required by this Letter of Transmittal to the Exchange Agent on
or prior to the Expiration Date, or who are unable to complete the procedure for
book entry transfer on a timely basis, must tender their Existing Notes
according to the guaranteed delivery procedures set forth in the Prospectus
under the caption "The Exchange Offer -- Guaranteed Delivery Procedures." See
Instruction 2. DELIVERY OF DOCUMENTS TO DTC DOES NOT CONSTITUTE DELIVERY TO THE
EXCHANGE AGENT.
The term "Holder" with respect to the Exchange Offer means any person
(i) in whose name Existing Notes are registered on the books of the Company or
any other person who has obtained a properly completed bond power from the
registered Holder, or (ii) whose Existing Notes are held of record by DTC who
desires to deliver such Existing Notes by book-entry transfer at DTC. The
undersigned has completed, executed and delivered this Letter of Transmittal to
indicate the action the undersigned desires to take with respect to the Exchange
Offer. HOLDERS WHO WISH TO TENDER THEIR EXISTING NOTES MUST COMPLETE THIS LETTER
OF TRANSMITTAL IN ITS ENTIRETY.
The undersigned has checked the appropriate boxes below and signed this
Letter of Transmittal to indicate the action the undersigned desires to take
with respect to the Exchange Offer.
PLEASE READ THE ENTIRE LETTER OF TRANSMITTAL AND THE PROSPECTUS
CAREFULLY BEFORE CHECKING ANY BOX BELOW. THE INSTRUCTIONS INCLUDED WITH THIS
LETTER OF TRANSMITTAL MUST BE FOLLOWED. QUESTIONS AND REQUESTS FOR ASSISTANCE OR
FOR ADDITIONAL COPIES OF THE PROSPECTUS AND THIS LETTER OF TRANSMITTAL MAY BE
DIRECTED TO THE EXCHANGE AGENT.
List below the Existing Notes to which this Letter of Transmittal
relates. If the space below is inadequate, list the registered numbers and
principal amounts on a separate signed schedule and affix the list to this
Letter of Transmittal.
DESCRIPTION OF EXISTING NOTES TENDERED
--------------------------------------
<TABLE>
<CAPTION>
NAME(S) AND ADDRESS(ES) OF REGISTERED CUSIP/ AGGREGATE PRINCIPAL PRINCIPAL AMOUNT
HOLDER(S) REGISTERED AMOUNT REPRESENTED BY TENDERED**
EXACTLY AS NAME(S) APPEAR(S) ON NOTE(S) NUMBER(S)* NOTE(S) (IF LESS THAN ALL)
(PLEASE FILL IN, IF BLANK) ---------- --------------------- ------------------
<S> <C> <C> <C>
TOTAL
</TABLE>
* Need not be completed by book-entry Holders.
** Unless otherwise indicated, any tendering Holder of Existing Notes will be
deemed to have tendered the entire aggregate principal amount represented by
such Existing Notes. If the space provided is inadequate, list the
certificate numbers and principal amounts on a separate signed schedule and
affix the list to this Letter of Transmittal. All tenders must be in
integral multiples of $1,000.
/ / CHECK HERE IF TENDERED EXISTING NOTES ARE ENCLOSED HEREWITH.
2
<PAGE> 3
/ / CHECK HERE IF TENDERED EXISTING NOTES ARE BEING DELIVERED BY BOOK-ENTRY
TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH DTC AND
COMPLETE THE FOLLOWING (FOR USE BY ELIGIBLE INSTITUTIONS ONLY):
Name of Tendering Institution: _______________________________________________
Account Number: _______________________________________________
Transaction Code Number: _______________________________________________
/ / CHECK HERE IF TENDERED EXISTING NOTES ARE BEING DELIVERED PURSUANT TO
A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT
AND COMPLETE THE FOLLOWING (FOR USE BY ELIGIBLE INSTITUTIONS ONLY):
Name(s) of Registered Holder(s) of Existing Notes:______________________________
Date of Execution of Notice of Guaranteed Delivery: __________________________
Window Ticket Number (if available): __________________________
Name of Eligible Institution that Guaranteed Delivery: _________________________
Account Number (if delivered by book-entry transfer): _________________________
SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
Subject to the terms and conditions of the Exchange Offer, the
undersigned hereby tenders to the Company for exchange the principal amount of
Existing Notes indicated above. Subject to and effective upon the acceptance for
exchange of the principal amount of Existing Notes tendered in accordance with
this Letter of Transmittal, the undersigned hereby exchanges, assigns and
transfers to the Company all right, title and interest in and to the Existing
Notes tendered for exchange hereby. The undersigned hereby irrevocably
constitutes and appoints the Exchange Agent, the agent and attorney-in-fact of
the undersigned (with full knowledge that the Exchange Agent also acts as the
agent of the Company in connection with the Exchange Offer) with respect to the
tendered Existing Notes with full power of substitution to (i) deliver such
Existing Notes, or transfer ownership of such Existing Notes on the account
books maintained by DTC, to the Company and deliver all accompanying evidences
of transfer and authenticity, and (ii) present such Existing Notes for transfer
on the books of the Company and receive all benefits and otherwise exercise all
rights of beneficial ownership of such Existing Notes, all in accordance with
the terms of the Exchange Offer. The power of attorney granted in this paragraph
shall be deemed to be irrevocable and coupled with an interest.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, exchange, assign and transfer the Existing
Notes tendered hereby and to acquire the Series D Notes issuable upon the
exchange of such tendered Existing Notes, and that the Company will acquire good
and unencumbered title thereto, free and clear of all liens, restrictions,
charges and encumbrances and not subject to any adverse claim, when the same are
accepted for exchange by the Company. The undersigned hereby further represents
to the Company that (i) any Series D Notes acquired in exchange for Existing
Notes tendered hereby are being acquired in the ordinary course of business of
the person receiving such Series D Notes, (ii) neither the undersigned nor any
such other person is engaging in or intends to engage in a distribution of the
Series D Notes, (iii) neither the undersigned nor any such other person has an
arrangement or understanding with any person to participate in the distribution
of such Series D Notes, and (iv) neither the Holder nor any such other person is
an "affiliate," as defined in Rule 405 under the Securities Act, of the Company
or any of its subsidiaries.
3
<PAGE> 4
The undersigned also acknowledges that this Exchange Offer is being
made in reliance upon interpretations contained in no-action letters issued to
third parties by the staff of the Securities and Exchange Commission (the
"Commission") that the Series D Notes issued in exchange for the Existing Notes
pursuant to the Exchange Offer may be offered for resale, resold and otherwise
transferred by Holders thereof (other than any such Holder that is an
"affiliate" of the Company within the meaning of Rule 405 under the Securities
Act), without compliance with the registration and prospectus delivery
provisions of the Securities Act, provided that such Series D Notes are acquired
in the ordinary course of such Holders' business and such Holders are not
engaging in and do not intend to engage in a distribution of the Series D Notes
and have no arrangement or understanding with any person to participate in a
distribution of such Series D Notes. If the undersigned or the person receiving
the Series D Notes is a broker-dealer that is receiving Series D Notes for its
own account in exchange for Existing Notes that were acquired as a result of
market-making activities or other trading activities, the undersigned
acknowledges that it or such other person will deliver a prospectus in
connection with any resale of such Series D Notes; however, by so acknowledging
and by delivering a prospectus, the undersigned will not be deemed to admit that
the undersigned or such other person is an "underwriter" within the meaning of
the Securities Act. The undersigned acknowledges that if the undersigned is
participating in the Exchange Offer for the purpose of distributing the Series D
Notes (i) the undersigned cannot rely on the position of the staff of the
Commission in certain no-action letters and, in the absence of an exemption
therefrom, must comply with the registration and prospectus delivery
requirements of the Securities Act in connection with a secondary resale
transaction of the Series D Notes, in which case the registration statement must
contain the information required by the Securities Act, and (ii) failure to
comply with such requirements in such instance could result in the undersigned
incurring liability under the Securities Act for which the undersigned is not
indemnified by the Company.
If the undersigned or the person receiving the Series D Notes is an
"affiliate" (as defined in Rule 405 under the Securities Act), the undersigned
represents to the Company that the undersigned understands and acknowledges that
the Series D Notes may not be offered for resale, resold or otherwise
transferred by the undersigned or such other person without registration under
the Securities Act or an exemption therefrom.
The undersigned will, upon request, execute and deliver any additional
documents deemed by the Exchange Agent or the Company to be necessary or
desirable to complete the exchange, assignment and transfer of the Existing
Notes tendered hereby, including the transfer of such Existing Notes on the
account books maintained by DTC. All authority conferred or agreed to be
conferred by this Letter of Transmittal shall survive the death, incapacity or
dissolution of the undersigned, and every obligation of the undersigned under
this Letter of Transmittal shall be binding upon the undersigned's heirs,
personal representatives, successors and assigns. This Letter of Transmittal may
be withdrawn only in accordance with the provisions set forth in the "Exchange
Offer -- Withdrawal Rights" section of the Prospectus.
For purposes of the Exchange Offer, the Company shall be deemed to have
accepted for exchange validly tendered Existing Notes when, as and if the
Company gives oral or written notice thereof to the Exchange Agent. Any tendered
Existing Notes that are not accepted for exchange pursuant to the Exchange Offer
for any reason will be returned, without expense, to the undersigned at the
address shown below or at a different address as may be indicated herein under
"Special Delivery Instructions" as promptly as practicable after the Expiration
Date. The undersigned acknowledges that the Company's acceptance of properly
tendered Existing Notes pursuant to the procedures described under the caption
"The Exchange Offer -- Procedures for Tendering Existing Notes" in the
Prospectus and in the instructions hereto will constitute a binding agreement
between the undersigned and the Company upon the terms and subject to the
conditions of the Exchange Offer.
Unless otherwise indicated under "Special Issuance Instructions,"
please issue the Series D Notes issued in exchange for the Existing Notes
accepted for exchange and return any Existing Notes not tendered or not
exchanged, in the name(s) of the undersigned (or, in either such event, in the
case of the Existing Notes tendered by DTC, by credit to the undersigned's
account at DTC). Similarly, unless otherwise indicated under "Special Delivery
Instructions," please mail or deliver the Series D Notes issued in exchange for
the Existing Notes accepted for exchange and any Existing Notes not tendered or
not exchanged (and accompanying documents, as appropriate) to the undersigned at
the address shown below the undersigned's signature(s). In the event that both
"Special Issuance Instructions" and "Special Delivery Instructions" are
completed, please issue the Series D Notes issued in exchange for the Existing
Notes accepted for exchange in the name(s) of, and return any Existing Notes not
tendered or not exchanged to, the person(s) so indicated. The undersigned
recognizes that the Company has no obligation pursuant to the "Special Issuance
Instructions" and "Special Delivery Instructions" to transfer any Existing Notes
from the name of the registered holder(s) thereof if the Company does not accept
for exchange any of the Existing Notes so tendered for exchange.
4
<PAGE> 5
SPECIAL ISSUANCE INSTRUCTIONS
(SEE INSTRUCTIONS 4, 5 AND 6)
To be completed ONLY (i) if Existing Notes in a principal amount not tendered,
or Series D Notes issued in in exchange for Existing Notes accepted for
exchange, are to be issued in the name of someone other than the undersigned, or
(ii) if the Existing Notes tendered by book-entry transfer which are not
exchanged are to be returned by credit to an account maintained by DTC.
Issue Series D Notes and/or Existing Notes to:
Name(s):_____________________________________________
(Please Type or Print)
Address:_____________________________________________
_____________________________________________
(Include Zip Code)
_____________________________________________
(Tax Identification or Social Security No.)
(Complete Substitute Form W-9)
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 4, 5 AND 6)
To be completed ONLY if Existing Notes in a principal amount not tendered, or
Series D Notes issued in exchange for Existing Notes accepted for exchange, are
to be mailed or delivered to someone other than the undersigned, or to
undersigned at an address other than that shown below the undersigned's
signature.
Mail or deliver Series D Notes and/or Existing Notes to:
Name: ______________________________________
(Please Type or Print)
Address:______________________________________
______________________________________
(Include Zip Code)
PLEASE SIGN HERE WHETHER OR NOT EXISTING NOTES ARE BEING PHYSICALLY TENDERED
HEREBY (COMPLETE ACCOMPANYING SUBSTITUTE FORM W-9)
X_______________________________________________________________________________
Date
X_______________________________________________________________________________
Signature(s) of Registered Holder(s) or Authorized Signatory Date
Area Code and Telephone Number: ________________________________
The above lines must be signed by the registered Holder(s) of Existing Notes as
(Include Zip Code) name(s) appear(s) on the Existing Notes or on a security
position listing, or by person(s) authorized to become registered Holder(s) by a
properly completed bond power from the registered Holder(s), a copy of which
must be transmitted with this Letter of Transmittal. If the Existing Notes to
which this Letter of Transmittal relate are held of record by two or more joint
Holders, then all such Holders must sign this Letter of Transmittal. If
signature is by a trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation or other person acting in a fiduciary or representative
capacity, then such person must (i) set forth his or her full title below, and
(ii) unless waived by the Company, submit evidence satisfactory to the Company
of such person's authority so to act. See Instruction 5 regarding the completion
of this Letter of Transmittal, printed below.
Name(s): ______________________________________________________________________
______________________________________________________________________
(Please Type or Print)
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<PAGE> 6
Capacity: ___________________________________________________________________
Address: ___________________________________________________________________
(Include Zip Code)
SIGNATURE GUARANTEE
(If Required by Instruction 5)
Certain signatures must be Guaranteed by an Eligible Institution.
Signature(s) Guaranteed by an Eligible Institution:
________________________________ _________________________________________
Authorized Signature Name of Firm
________________________________ _________________________________________
Title Address, Include Zip Code
_________________________________________
Area Code and Telephone Number
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER
1. Delivery of this Letter of Transmittal and Existing Notes or Book-Entry
Confirmations. All physically delivered Existing Notes or any confirmation of a
book-entry transfer to the Exchange Agent's account at DTC of Existing Notes
tendered by book-entry transfer (a "Book-Entry Confirmation"), as well as a
properly completed and duly executed copy of this Letter of Transmittal or
facsimile hereof, and any other documents required by this Letter of
Transmittal, must be received by the Exchange Agent at its address set forth
herein prior to 5:00 p.m., New York City time, on the Expiration Date. The
method of delivery of the tendered Existing Notes, this Letter of Transmittal
and all other required documents to the Exchange Agent is at the election and
risk of the Holder and, except as otherwise provided below, the delivery will be
deemed made only when actually received or confirmed by the Exchange Agent. If
such delivery is by mail, it is recommended that registered mail, properly
insured, with return receipt requested, be used. In all cases, sufficient time
should be allowed to assure delivery to the Exchange Agent before the Expiration
Date. No Letter of Transmittal or Existing Notes should be sent to the Company.
See "The Exchange Offer" section of the Prospectus.
2. Guaranteed Delivery Procedures. Holders who wish to tender their Existing
Notes and (i) whose Existing Notes are not immediately available, or (ii) who
cannot deliver their Existing Notes, this Letter of Transmittal or any other
documents required hereby to the Exchange Agent prior to the Expiration Date, or
(iii) who are unable to complete the procedure for book-entry transfer on a
timely basis, must tender their Existing Notes according to the guaranteed
delivery procedures set forth in the Prospectus. Pursuant to such procedures:
(i) such tender must be made by or through a firm which is a member of a
registered national securities exchange or of the National Association of
Securities Dealers Inc. or a commercial bank or a trust company having an office
or correspondent in the United States (an "Eligible Institution"); (ii) prior to
the Expiration Date, the Exchange Agent must have received from the Eligible
Institution a properly completed and duly executed Notice of Guaranteed Delivery
(by facsimile transmission, mail or hand delivery) setting forth the name and
address of the Holder of the Existing Notes, the registration number(s) and
CUSIP of such Existing Notes and the principal amount of Existing Notes
tendered, stating that the tender is being made thereby and guaranteeing that
this Letter of Transmittal (or facsimile hereof) and all other documents
required by this Letter, together with certificates for the Existing Notes, in
proper form for transfer (or a Book entry Confirmation) in proper form for
transfer, will be received by the Exchange Agent within three (3) New York Stock
Exchange trading days after the Expiration Date.
6
<PAGE> 7
Any Holder of Existing Notes who wishes to tender Existing Notes pursuant
to the guaranteed delivery procedures described above must ensure that the
Exchange Agent receives the Notice of Guaranteed Delivery prior to 5:00 p.m.,
New York City time, on the Expiration Date. Upon request of the Exchange Agent,
a Notice of Guaranteed Delivery will be sent to Holders who wish to tender their
Existing Notes according to the guaranteed delivery procedures set forth above.
See "The Exchange Offer - Guaranteed Delivery Procedures" section of the
Prospectus.
3. Tender by Holder. Only a Holder of Existing Notes may tender such
Existing Notes in the Exchange Offer. Any beneficial Holder of Existing Notes
who is not the registered Holder and who wishes to tender should arrange with
the registered Holder to execute and deliver this Letter of Transmittal on its
behalf or must, prior to completing and executing this Letter of Transmittal and
delivering its Existing Notes, either make appropriate arrangements to register
ownership of the Existing Notes in such Holder's name or obtain a properly
completed bond power from the registered Holder.
4. Partial Tenders. Tenders of Existing Notes will be accepted only in
integral multiples of $1,000. If less than the entire principal amount of any
Existing Notes is tendered, the tendering Holder should fill in the principal
amount tendered in the fourth column, entitled "Principal Amount Tendered," of
the box entitled "Description of Existing Notes Tendered" above. The entire
principal amount of Existing Notes delivered to the Exchange Agent will be
deemed to have been tendered unless otherwise indicated. If the entire principal
amount of all Existing Notes is not tendered, then Existing Notes for the
principal amount of Existing Notes not tendered and Series D Notes issued in
exchange for any Existing Notes accepted will be sent to the Holder at its
registered address, unless a different address is provided in the appropriate
box on this Letter of Transmittal, promptly after the Existing Notes are
accepted for exchange.
5. Signatures on This Letter of Transmittal; Bond Powers and Endorsements;
Guarantee of Signatures. If this Letter of Transmittal (or facsimile hereof) is
signed by the record Holder(s) of the Existing Notes tendered hereby, the
signature must correspond with the name(s) as written on the face of the
Existing Notes without alteration, enlargement or any change whatsoever. If this
Letter of Transmittal is signed by a participant in DTC, the signature must
correspond with the name as it appears on the security position listing as the
Holder of the Existing Notes. If any tendered Existing Notes are owned of record
by two or more joint owners, all such owners must sign this Letter of
Transmittal.
If this Letter of Transmittal (or facsimile hereof) is signed by the
registered Holder or Holders of Existing Notes listed and tendered hereby and
the Series D Notes issued in exchange therefor are to be issued (or any
untendered principal amount of Existing Notes is to be reissued) to the
registered Holder, the said Holder need not and should not endorse any tendered
Existing Notes, nor provide a separate bond power. In any other case, such
Holder must either properly endorse the Existing Notes tendered or transmit a
properly completed separate bond power with this Letter of Transmittal, with the
signatures on the endorsement or bond power guaranteed by an Eligible
Institution.
If this Letter of Transmittal (or facsimile hereof) is signed by a person
other than the registered Holder or Holders of any Existing Notes listed, such
Existing Notes must be endorsed or accompanied by appropriate bond powers, in
each case signed as the name of the registered Holder or Holders appears on the
Existing Notes.
If this Letter of Transmittal (or facsimile hereof) or any Existing Notes
or bond powers are signed by trustees, executors, administrators, guardians,
attorneys-in-fact, or officers of corporations or others acting in a fiduciary
or representative capacity, such persons should so indicate when signing, and,
unless waived by the Company, evidence satisfactory to the Company of their
authority so to act must be submitted with this Letter of Transmittal.
Endorsements on Existing Notes or signatures on bond powers required by
this Instruction 5 must be guaranteed by an Eligible Institution.
No signature guarantee is required if (i) this Letter of Transmittal is
signed by the registered Holder(s) of the Existing Notes tendered herewith (or
by a participant in DTC whose name appears on a security position listing as the
owner of the tendered Existing Notes) and the issuance of Series D Notes (and
any Existing Notes not tendered or not accepted) are to be issued directly to
such registered Holder(s) (or, if signed by a participant in DTC, any Series D
Notes or Existing Notes not tendered or not accepted are to be deposited to such
participant's account at DTC) and neither the box entitled "Special Delivery
Instructions" nor the box entitled "Special Issuance Instructions" has been
completed, or (ii) such Existing Notes are
7
<PAGE> 8
tendered for the account of an Eligible Institution. In all other cases, all
signatures on this Letter of Transmittal must be guaranteed by an Eligible
Institution.
6. Special Issuance and Delivery Instructions. Tendering Holders should
indicate, in the applicable box or boxes, the name and address (or account at
DTC) to which Series D Notes or substitute Existing Notes for principal amounts
not tendered or not accepted for exchange are to be issued or sent, if different
from the name and address of the person signing this Letter of Transmittal. In
the case of issuance in a different name, the taxpayer identification or social
security number of the person named must also be indicated.
7. Transfer Taxes. The Company will pay all transfer taxes, if any,
applicable to the exchange of Existing Notes pursuant to the Exchange Offer. If,
however, Series D Notes or Existing Notes for principal amounts not tendered or
accepted for exchange are to be delivered to, or are to be registered or issued
in the name of, any person other than the registered Holder of the Existing
Notes tendered hereby, or if tendered Existing Notes are registered in the name
of any person other than the person signing this Letter of Transmittal, or if a
transfer tax is imposed for any reason other than the exchange of Existing Notes
pursuant to the Exchange Offer, then the amount of any such transfer taxes
(whether imposed on the registered Holder or any other persons) will be payable
by the tendering Holder. If satisfactory evidence of payment of such taxes or
exemption therefrom is not submitted with this Letter of Transmittal, the amount
of such transfer taxes will be billed directly to such tendering Holder.
Except as provided in this Instruction 7, it will not be necessary for transfer
tax stamps to be affixed to the Existing Notes listed in this Letter of
Transmittal.
8. Tax Identification Number. Federal income tax law requires that a Holder
of any Existing Notes which are accepted for exchange must provide the Company
(as payor) with its correct taxpayer identification number ("TIN"), which, in
the case of a Holder who is an individual is his or her social security number.
If the Company is not provided with the correct TIN or an adequate basis for
exemption, the Holder may be subject to a $50 penalty imposed by Internal
Revenue Service (the "IRS") and payments made with respect to Existing Notes
purchased pursuant to the exchange may be subject to backup withholding at a 31%
rate. If withholding results in an over-payment of taxes, a refund may be
obtained. Certain Holders (including, among others, all corporations and certain
foreign individuals) are not subject to these backup withholding and reporting
requirements. See the enclosed "Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9" for additional instructions.
To prevent backup withholding, each exchanging Holder must provide such
Holder's correct TIN by completing the Substitute Form W-9 attached to this
Letter of Transmittal, certifying that (i) the TIN provided is correct (or that
such Holder is awaiting a TIN), and (ii) the Holder is not subject to backup
withholding because (A) the Holder is exempt from backup withholding, (B) the
Holder has not been notified by the IRS that such Holder is subject to backup
withholding as a result of failure to report all interest or dividends, or (C)
the IRS has notified the Holder that such Holder is no longer subject to backup
withholding. If the Existing Notes are registered in more than one name or are
not in the name of the actual owner, see the enclosed "Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9" for
information on which TIN to report.
The Company reserves the right in its sole discretion to take whatever
steps are necessary to comply with the Company's obligation regarding backup
withholding.
9. Validity of Tenders. All questions as to the validity, form, eligibility
(including time of receipt), and acceptance of tendered Existing Notes will be
determined by the Company, in its sole discretion, which determination will be
final and binding. The Company reserves the right to reject any and all Existing
Notes not validly tendered or any Existing Notes, the Company's acceptance of
which would, in the opinion of the Company or its counsel, be unlawful. The
Company also reserves the right to waive any conditions of the Exchange Offer or
defects or irregularities in tenders of Existing Notes as to any ineligibility
of any Holder who seeks to tender Existing Notes in the Exchange Offer. The
interpretation of the terms and conditions of the Exchange Offer (including this
Letter of Transmittal and the instructions hereto) by the Company shall be final
and binding on all parties. Unless waived, any defects or irregularities in
connection with tenders of Existing Notes must be cured within such reasonable
period of time as the Company shall determine. The Company will use reasonable
efforts to
8
<PAGE> 9
give notification of defects or irregularities with respect to tenders of
Existing Notes, but not be under any duty to give such notification nor shall it
incur any liability for failure to give such notification.
10. Waiver of Conditions. The Company reserves the absolute right to waive,
in whole or part, any of the conditions to the Exchange Offer set forth in the
Prospectus.
11. No Conditional Tender. No alternative, conditional, irregular or
contingent tender of Existing Notes or transmittal of this Letter of Transmittal
will be accepted. All tendering Holders, by execution of this Letter of
Transmittal, shall waive any right to receive notice of acceptance of their
Existing Notes for exchange.
12. Mutilated, Lost, Stolen or Destroyed Existing Notes. Any Holder whose
Existing Notes have been mutilated, lost, stolen or destroyed should contact the
Exchange Agent at the address indicated above for further instructions.
13. Requests for Assistance or Additional Copies. Requests for assistance or
for additional copies of the Prospectus or this Letter of Transmittal may be
directed to the Exchange Agent at the address or telephone number set forth on
the cover page of this Letter of Transmittal. Holders may also contact their
broker, dealer, commercial bank, trust company or other nominee for assistance
concerning the Exchange Offer.
14. Acceptance of Tendered Existing Notes and Issuance of Series D Notes;
Return of Existing Notes. Subject to the terms and conditions of the Exchange
Offer, the Company will accept for exchange all validly tendered Existing Notes
as soon as practicable after the Expiration Date and will issue Series D Notes
therefor as soon as practicable thereafter. For purposes of the Exchange Offer,
the Company shall be deemed to have accepted tendered Existing Notes when, as
and if the Company has given written and oral notice thereof to the Exchange
Agent. If any tendered Existing Notes are not exchanged pursuant to the Exchange
Offer for any reason, such unexchanged Existing Notes will be returned, without
expense, to the undersigned at the address shown above (or credited to the
undersigned's account at DTC designated above) or at a different address as may
be indicated under the box entitled "Special Delivery Instructions."
15. Withdrawal. Tenders may be withdrawn only pursuant to the limited
withdrawal rights set forth in the Prospectus under the caption "The Exchange
Offer - Withdrawal Rights."
IMPORTANT: THIS LETTER OF TRANSMITTAL OR A MANUALLY SIGNED FACSIMILE HEREOF,
TOGETHER WITH THE EXISTING NOTES (WHICH MUST BE DELIVERED BY BOOK-ENTRY TRANSFER
OR IN ORIGINAL HARD COPY FORM) OR THE NOTICE OF GUARANTEED DELIVERY MUST BE
RECEIVED BY THE EXCHANGE AGENT PRIOR TO THE EXPIRATION DATE.
IMPORTANT TAX INFORMATION
Under U.S. Federal income tax law, a Holder of Existing Notes whose Existing
Notes are accepted for exchange may be subject to backup withholding unless the
Holder provides the Exchange Agent with either (a) (i) such holder's correct
taxpayer identification number ("TIN") on Substitute Form W-9 attached to this
Letter of Transmittal, certifying that the TIN provided on Substitute Form W-9
is correct (or that such holder of Existing Notes is awaiting a TIN), or (ii)
the Holder is not subject to backup withholding because (A) the Holder is exempt
from backup withholding, (B) the Holder has not been notified by the IRS that
such Holder is subject to backup withholding as a result of failure to report
all interest or dividends, or (C) the IRS has notified the Holder that such
Holder is no longer subject to backup withholding, or (b) another adequate basis
for exception from backup withholding. If such Holder of Existing Notes is an
individual, the TIN is such Holder's social security member. If the Exchange
Agent is not provided with the correct TIN, the holder of Existing Notes may be
subject to certain penalties imposed by the Internal Revenue Service (the
"IRS").
Certain holders of Existing Notes (including, among others, all corporations
and certain foreign individuals) are not subject to these backup withholding and
reporting requirements. Exempt Holders of Existing Notes should indicate their
exempt status on Substitute Form W-9. In order for a foreign individual to
qualify as an exempt recipient, the holder must submit a Form W-8, signed under
penalties of perjury, attesting to that individual's exempt status. A Form W-8
can be obtained from the Exchange Agent. See the enclosed "Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9" for more
instructions.
9
<PAGE> 10
If backup withholding applies, the Exchange Agent is required to withhold
31% of any such payments made to the Holder of Existing Notes or other payees.
Backup withholding is not an additional tax. Rather, the tax liability of
persons subject to backup withholding will be reduced by the amount of tax
withheld. If withholding results in an overpayment of taxes, a refund may be
obtained from the IRS.
The box in Part 3 of the Substitute Form W-9 may be checked if the
surrendering Holder of Existing Notes has not been issued a TIN and has applied
for a TIN or intends to apply for a TIN in the near future. If the box in Part 3
is checked, the holder of Existing Notes or other payee must also complete the
Certificate of Awaiting Taxpayer Identification Number below in order to avoid
backup withholding. Notwithstanding that the box in Part 3 is checked and the
Certificate of Awaiting Taxpayer Identification Number is completed, the
Exchange Agent will withhold 31% of all payments made prior to the time a
properly certified TIN is provided to the Exchange Agent.
The holder of Existing Notes is required to give the Exchange Agent the TIN
(e.g., social security number or employer identification number) of the record
owner of the Existing Notes. If the Existing Notes are in more than one name or
are not in the name of the actual owner, consult the enclosed "Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9" for
additional guidance on which number to report.
(TO BE COMPLETED BY ALL TENDERING HOLDERS (SEE INSTRUCTION 8))
PAYOR'S NAME: U.S. BANK TRUST NATIONAL ASSOCIATION, AS PAYING AGENT
-------------------------------------------------------------------
<TABLE>
<S> <C>
SUBSTITUTE PART 1 - PLEASE PROVIDE YOUR TIN IN THE SPACE AT SOCIAL SECURITY NUMBER(S) OR
RIGHT AND CERTIFY BY SIGNING AND DATING BELOW. EMPLOYER IDENTIFICATION
NUMBER(S)
FORM W-9 _____________________________
DEPARTMENT OF THE TREASURY _____________________________________________________________________________________________
INTERNAL REVENUE SERVICE ("IRS") PART 2 - FOR PAYEES EXEMPT FROM BACKUP
WITHHOLDING, SEE THE ENCLOSED GUIDELINES FOR
CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9 AND THEREIN
COMPLETE AS INSTRUCTED.
PAYOR'S REQUEST FOR ______________________________________________________________________________________________
TAXPAYER IDENTIFICATION
NUMBER ("TIN") PART 3 - AWAITING TIN | |
______________________________________________________________________________________________
CERTIFICATION - UNDER PENALTIES OF PERJURY, I CERTIFY THAT:
(1) THE NUMBER SHOWN ON THIS FORM IS MY CORRECT TAXPAYER IDENTIFICATION NUMBER (OR I AM
WAITING FOR A NUMBER TO BE ISSUED TO ME), AND
(2) I AM NOT SUBJECT TO BACKUP WITHHOLDING BECAUSE (A) I AM EXEMPT FROM BACKUP
WITHHOLDING, OR (B) I HAVE NOT BEEN NOTIFIED BY THE IRS THAT I AM SUBJECT TO BACKUP
WITHHOLDING AS A RESULT OF A FAILURE TO REPORT ALL INTEREST OR DIVIDENDS, OR (C) THE
IRS HAS NOTIFIED ME THAT I AM NO LONGER SUBJECT TO BACKUP WITHHOLDING.
CERTIFICATION RESTRICTIONS - YOU MUST CROSS OUT ITEM (2) ABOVE IF YOU HAVE BEEN NOTIFIED
BY THE IRS THAT YOU ARE CURRENTLY SUBJECT TO BACKUP WITHHOLDING BECAUSE OF UNDERREPORTING
INTEREST OR DIVIDENDS ON YOUR TAX RETURN.
Signature__________________________
Date_______________________________
</TABLE>
10
<PAGE> 1
EXHIBIT 99.2
NOTICE OF GUARANTEED DELIVERY
FOR
10 1/8% SENIOR SUBORDINATED NOTES DUE 2007
OF
OXFORD AUTOMOTIVE, INC.
As set forth in the Prospectus dated ________ ___, 1999 (the
"Prospectus") of OXFORD AUTOMOTIVE, INC. (the "Company"), and in the
accompanying Letter of Transmittal and instructions thereto (the "Letter of
Transmittal"), this form or one substantially equivalent hereto must be used to
accept the Company's Exchange Offer (the "Exchange Offer") to exchange all of
its outstanding 10 1/8% Senior Subordinated Notes Due 2007, Series A (the
"Series A Notes"), 10 1/8% Senior Subordinated Notes Due 2007, Series B (the
"Series B Notes"), and 10 1/8% Senior Subordinated Notes Due 2007, Series C (the
"Series C Notes," together with the Series A Notes and the Series B Notes, the
"Existing Notes") for its 10 1/8% Senior Subordinated Notes Due 2007, Series D,
which have been registered under the Securities Act of 1933, as amended, if
certificates for the Existing Notes are not immediately available or if the
Existing Notes, the Letter of Transmittal or any other documents required
thereby cannot be delivered to the Exchange Agent, or the procedure for
book-entry transfer cannot be completed, prior to 5:00 p.m., New York City time,
on the Expiration Date (as defined below). This form may be delivered by an
Eligible Institution by hand or transmitted by facsimile transmission, overnight
courier or mail to the Exchange Agent as set forth below prior to the Expiration
Date. Capitalized terms used but not defined herein have the meaning given to
them in the Prospectus or the Letter of Transmittal.
- --------------------------------------------------------------------------------
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON ______
___, 1999, UNLESS THE OFFER IS EXTENDED (THE "EXPIRATION DATE"). TENDERS OF
EXISTING NOTES MAY BE WITHDRAWN AT ANY TIME PRIOR TO 5:00 P.M. NEW YORK CITY
TIME ON THE BUSINESS DAY PRIOR TO THE EXPIRATION DATE.
- --------------------------------------------------------------------------------
The Exchange Agent for the Exchange Offer is:
U.S. BANK TRUST NATIONAL ASSOCIATION
<TABLE>
<S> <C>
By Registered, Certified or Overnight Mail: By First Class Mail:
U.S. Bank Trust National Association U.S. Bank Trust National Association
Attn: Specialized Finance P. O. Box 64485
180 East Fifth Street St. Paul, MN 55164-9549
St. Paul, MN 55101
By Hand (New York depositary only): By Hand (all others):
U.S. Bank Trust National Association U.S. Bank Trust National Association
100 Wall Street, 20th Floor Fourth Floor - Bond Drop Window
New York, NY 10005 180 East Fifth Street
St. Paul, MN 55101
By Facsimile:
(For Eligible Institutions Only)
(612) 244-1537
Telephone Number
(800) 934-6802 Bondholder Services
</TABLE>
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS, OR TRANSMISSION OF
INSTRUCTIONS VIA FACSIMILE, OTHER THAN AS SET FORTH ABOVE, WILL NOT CONSTITUTE A
VALID DELIVERY.
THIS FORM IS NOT TO BE USED TO GUARANTEE SIGNATURES. IF A SIGNATURE ON
THE LETTER OF TRANSMITTAL TO BE USED TO TENDER EXISTING NOTES IS REQUIRED TO BE
GUARANTEED BY AN "ELIGIBLE INSTITUTION" UNDER THE INSTRUCTIONS THERETO, SUCH
SIGNATURE GUARANTEE MUST APPEAR IN THE APPLICABLE SPACE PROVIDED IN THE LETTER
OF TRANSMITTAL.
<PAGE> 2
Ladies and Gentlemen:
The undersigned hereby tenders to OXFORD AUTOMOTIVE, INC., a Michigan
corporation (the "Company"), upon the terms and subject to the conditions set
forth in the Prospectus and the Letter of Transmittal (which together constitute
the "Exchange Offer"), receipt of which is hereby acknowledged, the principal
amount of Existing Notes set forth below pursuant to the guaranteed delivery
procedures set forth in Instruction 2 of the Letter of Transmittal.
The undersigned understands that tenders of Existing Notes will be
accepted only in principal amounts equal to $1,000 or integral multiples
thereof. The undersigned understands that tenders of Existing Notes pursuant to
the Exchange Offer may not be withdrawn after 5:00 p.m., New York City time, on
the business day prior to the Expiration Date.
All authority herein conferred or agreed to be conferred by this Notice
of Guaranteed Delivery shall survive the death, incapacity or dissolution of the
undersigned and every obligation of the undersigned under this Notice of
Guaranteed Delivery shall be binding upon the heirs, personal representatives,
executors, administrators, successors, assigns, trustees in bankruptcy and
other legal representatives of the undersigned.
NOTE: SIGNATURES MUST BE PROVIDED WHERE INDICATED BELOW.
<TABLE>
<CAPTION>
Certificate No(s). and CUSIP for Existing Principal Amount
Notes (if available) or Account Number at Book-Entry Facility Represented By Existing Notes
- ------------------------------------------------------------- -----------------------------
<S> <C>
__________________________________ _____________________________
__________________________________ _____________________________
</TABLE>
PLEASE SIGN AND COMPLETE
- --------------------------------------------------------------------------------
Signatures of Registered Holder(s) or Date: ______________________
Authorized Signatory: Address:______________________
______________________
_______________________________ ______________________
_______________________________ Area Code and
Name(s) of Registered Holder(s): Telephone No._________________
_______________________________
_______________________________
- --------------------------------------------------------------------------------
This Notice of Guaranteed Delivery must be signed by the registered
holder(s) of Existing Notes exactly as its (their) name(s) appear(s) on
certificates for Existing Notes or on a security position listing as the owner
of Existing Notes, or by person(s) authorized to become registered holder(s) by
endorsements and documents transmitted with this Notice of Guaranteed Delivery.
If signature is by a trustee, executor, administrator, guardian,
attorney-in-fact, officer or other person acting in a fiduciary or
representative capacity, such person must provide the following information:
Please print name(s) and address(es)
Name(s): ___________________________________________________________________
___________________________________________________________________
Capacity: ___________________________________________________________________
Address(es): ___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
<PAGE> 3
- --------------------------------------------------------------------------------
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a member firm of a registered national securities exchange
or of the National Association of Securities Dealers, Inc., or a commercial bank
or trust company having an office or correspondent in the United States or an
"eligible guarantor institution" within the meaning of Rule 17Ad-15 under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), hereby (a)
represents that the above named person(s) "own(s)" the Existing Notes tendered
hereby within the meaning of Rule 14e-4 under the Exchange Act, (b) represents
that such tender of Existing Notes complies with Rule 14e-4 under the Exchange
Act, and (c) guarantees that delivery to the Exchange Agent of certificates for
the Existing Notes tendered hereby, in proper form for transfer (or confirmation
of the book-entry transfer of such Existing Notes into the Exchange Agent's
Account at the Depository Trust Company, pursuant to the procedures for
book-entry transfer set forth in the Prospectus), with delivery of a properly
completed and duly executed Letter of Transmittal (or manually signed facsimile
thereof) with any required signatures and any other required documents, will be
received by the Exchange Agent at one of its addresses set forth above within
three New York Stock Exchange trading days after the Expiration Date.
THE UNDERSIGNED ACKNOWLEDGES THAT IT MUST DELIVER THE LETTER OF TRANSMITTAL
AND EXISTING NOTES TENDERED HEREBY TO THE EXCHANGE AGENT WITHIN THE TIME PERIOD
SET FORTH AND THAT FAILURE TO DO SO COULD RESULT IN FINANCIAL LOSS TO THE
UNDERSIGNED.
Name of Firm:___________________________________________________________________
Address:________________________________________________________________________
(Include Zip Code)
Area Code and Telephone Number:_________________________________________________
Authorized Signature:___________________________________________________________
Name:___________________________________________________________________________
Title:__________________________________________________________________________
(Please Type or Print)
Date:______________________, 1999
DO NOT SEND YOUR NOTES WITH THIS FORM; YOUR NOTES SHOULD BE SENT WITH YOUR
LETTER OF TRANSMITTAL SO THAT THEY ARE RECEIVED BY THE EXCHANGE AGENT WITHIN
THREE NEW YORK STOCK EXCHANGE TRADING DAYS AFTER THE EXPIRATION DATE.
<PAGE> 4
INSTRUCTIONS FOR NOTICE OF GUARANTEED DELIVERY
1. DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY. A properly completed
and duly executed copy of this Notice of Guaranteed Delivery and any other
documents required by this Notice of Guaranteed Delivery must be received by the
Exchange Agent at its address set forth herein prior to the Expiration Date. The
method of delivery of this Notice of Guaranteed Delivery and any other required
documents to the Exchange Agent is at the election and sole risk of the holder,
and the delivery will be deemed made only when actually received by the Exchange
Agent. If delivery is by mail, registered mail with return receipt requested,
properly insured, is recommended. As an alternative to delivery by mail the
holders may wish to consider using an overnight or hand delivery service. In all
cases, sufficient time should be allowed to assure timely delivery. For a
description of the guaranteed delivery procedures, see Instruction 2 of the
Letter of Transmittal.
2. SIGNATURES ON THIS NOTICE OF GUARANTEED DELIVERY. If this Notice of
Guaranteed Delivery is signed by the registered holder(s) of the Existing Notes,
the signature must correspond with the name(s) written on the face of the
Existing Notes without alteration, enlargement, or any change whatsoever. If
this Notice of Guaranteed Delivery is signed by a participant of the Book-Entry
Transfer Facility whose name appears on a security position listing as the owner
of the Existing Notes, the signature must correspond with the name shown on the
security position listing as the owner of the Existing Notes.
If this Notice of Guaranteed Delivery is signed by a person other than the
registered holder(s) of any Existing Notes listed or a participant of the
Book-Entry Transfer Facility, this Notice of Guaranteed Delivery must be
accompanied by appropriate bond powers, signed as the name of the registered
holder(s) appears on the Existing Notes or signed as the name of the participant
shown on the Book-Entry Transfer Facility's security position listing.
If this Notice of Guaranteed Delivery is signed by a trustee, executor,
administrator, guardian, attorney-in-fact, officer of a corporation, or other
person acting in a fiduciary or representative capacity, such person should so
indicate when signing and submit with the Letter of Transmittal evidence
satisfactory to the Company of such person's authority to so act.
3. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions and requests
for assistance and requests for additional copies of the Prospectus may be
directed to the Exchange Agent at the address specified in the Prospectus.
Holders may also contact their broker, dealer, commercial bank, trust company,
or other nominee for assistance concerning the Exchange Offer.
